AIMS is releasing its second ACOA Watch, a series of publications examining the role the federal Atlantic Canada Opportunities Agency plays in the economic development of the region. In this edition, Brian Lee Crowley and Bruce Winchester consider the recent work by Jack Mintz and Michael Smart of the C.D. Howe Institute (www.cdhowe.org).
The Mintz-Smart paper, Brooking no Favorites, is critical of ACOA, noting that much of the decision making about where to spend the Agency’s hundreds of millions of dollars appears to be politically motivated. This assessment is not new to Atlantic Canadians; however until now these assertions have been based more on conjecture and anecdotal evidence. The Mintz-Smart paper is the first that analyses and documents the politicization of ACOA spending in detail.
ACOA Watch highlights elements of the CD Howe study dealing with the coincidence of ACOA grant increases and spending just prior to federal elections during the period from 1988 to 2000. It also outlines how spending is disproportionate in ridings held by government members and in “swing ridings”, those won with a narrow plurality. The research finds that, since 1994, spending on ridings held by members of the governing party is, on average, 40% higher than spending in opposition ridings.
AIMS president and co-author of ACOA Watch Brian Lee Crowley today said, “The Mintz-Smart study is a welcome addition to the emerging consensus that ACOA, as currently organized, cannot be an effective instrument of genuine regional economic growth. AIMS’ papers and commentary have regularly called for changes to ACOA. Moreover, AIMS authors have frequently observed that a lower federal tax burden in the region would be a far more effective stimulus to economic activity than ACOA’s regional economic development spending. The Mintz-Smart paper documents devastatingly why this sort of discretionary spending is invariably captured by politics.”
In their paper Mintz and Smart propose replacing much regional economic development spending with a broad-based investment tax credit for the region.
To read the complete ACOA Watch, click here.
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Director of Communications and Development