Business pork Cape Jourimain style

It is no secret that this blog is wholeheartedly against government interference into economic affairs. Here are a few reasons why:

• Market decisions should be made by the market, not by politicians, bureaucrats and their friends.
• It undermines confidence in our democratic institutions. In other words, government subsidies, while portrayed as helpful to economic growth, are perceived to be nothing more than payola for financial support at election time.
• Businesses who receive subsidies on a regular basis become more adept at securing government $$$ than they do at running a solid business (e.g. creation of wealth and maximizing product/service value).
• It creates an unhealthy culture of dependency as owners and managers of the business become so reliant on subsidies that they build expectations of such into their financial plans.
• Someone has to pay for it. Inevitably, it is individual and business taxpayers.

That being said, you can understand my beef with this recent grant awarded to Cape Jourimain Nature Centre. Let's just say this nature centre is the epitome (a model) of what happens when political interference into the economy, by way of politicians, trumps the market. Let's take a closer look, shall we.

Back in 2001, a local group in the Sackville/Port Elgin region, headed by then Liberal candidate Susan Purdy [see 2003], lobbied the federal government for funding to open the Cape Jourimain Nature Centre. With all the chess pieces working in their favour [Claudette Bradshaw, Minister of Labour and MP for Moncton-Riverview-Dieppe, Honourable Marilyn Trenholme Counsell Lieutenant Governor of New Brunswick and Honourary Patron of the project, local Liberal MP Dominic Leblanc], the group was successful in securing the funding needed from ACOA to get things rolling. Big shocker.

Yes, Lord's provincial Tories did jump on late to the project funding wise, but it was essentially the baby of the Liberals, not to mention, it was touted as a vote getter through job creation in a slow growth region. Here's a quote from Liberal Claudette Bradshaw on the project:

"It also acts as a boost for the region's economy by increasing the number of visitors to the entire area, with an ensuing increase in job creation."

So let's fast forward to 2007. The federal Liberals are no longer in power and funding for the project [corporate welfare] has decreased under the Harper Tories. So much so that the CJNC inc. issued a release stating this claim (think third & fourth bullet point above) and, in turn, hoped some level of government would bail them out.

Both levels of government have been supportive of the Centre since it opened in 2001, but that support has been diminishing. The Centre has increased efficiency over the years, and annual expenses have been substantially reduced. As a result, the profitability of the Centre has increased, however, it is clear that financial assistance is still required to maintain the Centre, deliver educational outreach programs and employ local residents.

Hmmm. Increased profitabilty??? Is that why they have to beg for more government cash wherein they even threatened to shut their doors early in August. Something doesn't make sense here. Anyway, regardless, it seems they got what they wanted from the provincial Liberals (via a $40k loan). Though just speculation, it probably didn't hurt that Liberal Sue Purdy is still on the Cape Jourimain Nature Centre board of directors (think first bullet point above).

Don't get me wrong, I'm sure their are a few who are probably celebrating this short-term victory (bail out), however, it is still very unfortunate IMHO, especially for the ppl of that region (and taxpayers) as another grant still doesn't change the fact that this project, born from political capital intended on winning votes, will likely continue to lose money and be a bottomless pit for New Brunswick taxpayers. I guess you can see why I despise the practice of corporate welfare so much as it is clear that it creates longterm economic instability, not strength and growth.