The governing PC’s here in New Brunswick started their term by paying out debt to Atcon, in the neighbourhood of millions, last week they paid off UMOE for leaving us high and dry without jobs and leaving, again to the tune of millions. We still don’t know how much we may be stuck paying for breaking the “deal” over the sale of NB Power.
Now we turn around and give a loan to one of the hard core supporters of the NB Power deal to the tune of (you guessed it) more millions. Now again there is a promise of jobs, this time up to 40, however the company already hires many foreign workers including 30 Romanians “because of a shortage of locals able or willing to work”. So not only is it unlikely that New Brunswickers will be the ones getting the jobs, we are lending money again, where we have a poor track record of getting jobs in return. With recent history showing that lending to large corporations in this province is not a good idea due to the recent history of large companies recieving money from our governments leaving the province or going bankrupt, still the government turns a blind eye and lends out more money.
While every department in government is being asked to give up 2% of their budget and school districts finding it difficult to cut funds without adversely affecting students, this type of loan is realistically the last thing the province should be considering. If this project can increase plant size by 10% and sales by 25% then realistically this company should have no trouble securing private funding for this venture on it’s own. The fact that it has to come to the government, hat in hand, makes me think that the banks do not think this project is as viable as the company does.
We need to be far more careful in our lending of money and we need a guaranteed writ that a certain number of jobs will be available to New Brunswickers for a minimum specific amount of time. We also need to be certain that we are getting good collateral for any loan we agree to or guarantee for a company and we need to stop continually handing over money repeatedly anytime a large corporation asks for some. Some stuff these corporations have to start to do on their own, without the public purse to back them up. If they don’t have the confidence to pay for most of it with their own funds or private lenders that they have sourced out, then why should we as a province have more confidence in a given project then the company does itself.
Another point to think about is this. If a company owes the province 10 million and then says to the government “I need 20 million more or i will go bankrupt” the company has the government over a barrel, we are forced in this position to pay money to save a company so that we have any hope that we will see any of our investment back. The larger the figure the company owes gets, the harder it is for the government to say “ We cannot afford to do this anymore” and so we get into a position where the corporations hold more power in the province then the government itself does, simply because the province cannot afford for the company to leave.
