Budget to spur economic development
And that just about sums up the package of economic development initiatives on its way to Atlantic Canada, courtesy of Paul Martin and his finance minister Ralph Goodale.
Acknowledging that our region “has made progress in recent years diversifying into knowledge-based industries”, Wednesday’s federal budget commits $708 million over the next five years to support economic development in Canada’s four most easterly provinces.
Review the numbers, and the balance sheet looks like this: a $41 million increase in the annual operating budget of the Atlantic Canada Opportunities Agency; new funding of approximately $95 million over the period; about $290 million allocated from ACOA’s current account; and an infusion of $110 million over the next five years to the National Research Council of Canada.
ACOA will also administer about $8.4 million on behalf of the Atlantic Association of Community Business Development Corporations.
A closer look at the math, however, reveals that only about $418 million of the total commitment comprise new funds – certainly nothing to sneeze at, but also far less than the $1 billion some had hoped would be channelled our way.
According to Elizabeth Beale, President of the Atlantic Provinces Economic Council, this budget actually posts a decrease in new spending on economic development initiatives in the region. “There is new money, but certainly less than (what was being) asked for, and certainly less than we were getting (from the past budget),” she said in a news report yesterday.
To be sure, but if Budget 2005 is remarkable for anything, it is the even-handedness of its regional commitments. As Atlantic Canada gets a modest bump, so does Quebec ($300 million over the next five years), Ontario ($88 million), Western Canada ($186 million), and the northern territories ($120 million).
The reason has as much to do with politics as it does economics. This is, after all, a minority government. And with this broad and balanced fiscal approach adopted by the Department of Finance – an approach that also provides almost $13 billion for the military, $5 billion for a new national child-care program, $5 billion for the nation’s cities, $41.3 billion to health care, and more than $33 billion to equalization – the ruling Liberals have undoubtedly averted a non-confidence vote leading to a snap election that, by some estimates, could have cost taxpayers $250 million.
As it is, the budget’s East Coast initiative will strengthen existing programs designed to diversify the economies of vulnerable, largely rural communities, and bolster trade, investment and tourism in the region. Its NRC funding will propel new research and development on promising sectors like information technology, life sciences and ocean technologies. And its renewed $300-million Atlantic Innovation Fund will support the growth of university research, technology commercialization, and private sector innovation. In fact, there is compelling evidence to suggest that initiatives like these are already working, and working well, in Atlantic Canada.
Since July, 2002, two rounds of federal innovation funding have provided close to $300 million to more than 100 projects in the region. To date, these investments have leveraged an additional $330 million from universities and research institutes, Atlantic provincial governments, and other national programs.
Meanwhile, researchers and other academic professionals are partnering with business, and with each other, at a level not seen before. The AIF has shifted the emphasis of university R&D in the region towards commercialization. Clusters of new and emerging industries are being advanced more effectively.
Under the circumstances, the budget’s economic development overtures to Atlantic Canada, while not as fulsome as they might have been, are still welcome news.
Less than what some of us want, they are nevertheless what most of us need.
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