An independent review concludes the provincial government has a role to play in providing financial assistance to business, but must do it differently.
Tom Traves, appointed in January to review provincial economic development assistance programs, released his report today, March 20.
More arm’s-length decision making, investments linked to strategic economic objectives, and better evaluation and reporting are key recommendations.
“Most jurisdictions provide incentives to persuade businesses to expand or locate within its borders,” said Mr. Traves. “To compete, it appears, sometimes we must pay to play, but we must do so effectively and efficiently.
“Investments should be based on clear economic development principles such as innovation, productivity and improved exports across sectors, instead of short-term job creation,” he said.
The review says capital investment is crucial to remain competitive in the global economy and expand opportunities for export growth.
— an independent board to manage Jobs Fund investments
— capital investments that leverage additional funds and are measured against economic development principles
— strategies and projects that support companies in the same sector
— a single data-management system to streamline business applications and track clients who work with multiple departments and agencies
— greater authority, accountability and transparency for payroll rebates and loans from Nova Scotia Business Inc., tied to new job creation
— equity investments focused on early stage venture capital
— new accelerator program for start-up companies
— consolidation of trade development programs and programs to support interprovincial exporting
— an independent review of incentive programs and agencies every five years
Economic and Rural Development and Tourism Minister Michel Samson welcomed the review.
“Government committed to creating a fair and competitive business environment,” Mr. Samson said. “That means offering a mix of economic development programs that work for businesses and are accountable to taxpayers.
“I’d like to thank Mr. Traves and the research team that supported him. These findings and advice will help advance our work to better support Nova Scotia businesses and communities.”
The minister said his department will consider what programming changes are needed to best respond to Mr. Traves’s recommendations as well as the direction given by the Ivany commission. The department is also waiting for the current review of venture capital investments.
Government has already provided more information about financial assistance to businesses with the Accountability in Economic Assistance Act. On April 1, Nova Scotia will have the most open and transparent reporting requirements in the country for financial assistance to businesses.
Mr. Traves reviewed funding assistance tools including loans, loan guarantees, grants, equity, payroll rebates and venture capital used by Economic and Rural Development and Tourism, Nova Scotia Business Inc. and Innovacorp. He also worked with a leading economic development consulting firm, Millier Dickinson Blais Inc., to research programs throughout Canada and the United States.
Mr. Traves is a former president of Dalhousie University, has served on the Innovacorp board of directors and other corporate boards, and was named to the Order of Canada.
Mr. Traves’s report is online at www.gov.ns.ca/econ/publications .