AIMS urges scrapping of regional development authorities
A new research paper makes the case that government has to stop subsidizing business, and it should start by doing away with regional development authorities.
In Nova Scotians Without Borders, Don McIver, director of research for the Atlantic Institute for Market Studies, argues that regional development strategies have been shown not to work and financial incentives for businesses often fail.
Often, he said, the most-challenged regions are the ones that receive the most funding and support.
Although government has a role in setting the environment for job creation, McIver said it’s through providing good leadership, services and infrastructure; trying to directly affect markets — and, specifically, second-guess them — is what’s created problems.
McIver points to the situation with the New Page Port Hawkesbury paper mill as an example.
He questions the logic of supporting an operation for more than 50 years for what amounts to about 600 direct jobs. The most recent support, a $15-million plan, comes at a time when market indicators show the likelihood of a recovery to be slim, he said in an interview Tuesday.
“At what point do the individual Nova Scotians that are in these situations recognize that there is an economic and social advantage to moving somewhere else.”
McIvor said the idea of rationalization needs to end, and the regional development authority model is flawed because government shouldn’t try to keep people in any one area.
“As a generalization, all individuals are capable of making decisions to their economic advantage and we don’t need Big Brother deciding where we would be happiest.”
There is often duplication with regional development authorities and government, said McIvor, meaning roles and responsibilities get blurred and there is a lack of accountability.
McIvor argues that areas such as Yarmouth County and Shelburne County are better off not having a regional development authority since the role is being filled one way or another.
But at least one municipal official disagrees.
Yarmouth Mayor Phil Mooney said his region has suffered without a regional development authority.
The South West Shore Development Authority shut down almost two years ago in the face of a provincial ombudsman’s report damning just about every aspect of the organization.
Mooney said although the town and surrounding municipalities have worked to encourage development on their own, it’s come at a cost.
“The process (for some projects) could have been done six or eight months or a year beforehand with a development person in place,” he said Tuesday.
Six of the former eight member municipal units of the South West Shore Development Authority are in talks with the province to have some kind of development group in place soon. Mooney expects the structure to be much less “top heavy,” with a worker in Shelburne County and one in Yarmouth County.
McIvor said the bigger issue is that the province shouldn’t be picking winners and losers in business.
Rather than funding regional development authorities or business funds, the province should focus on creating an environment that allows people and businesses to make successful decisions, he said.
That means finding the correct amount of regulation, the lowest taxes possible to maintain necessary services, and giving people every opportunity to advance their education, said McIvor.
“If you’ve got a well-trained, well-educated workforce with an appropriate taxation level and appropriate regulation level, people will flock. Businesses will flock.”