/ Ken Storie: Policy
Development Incentives :
Costs and Benefits
A quick glance
at our provincial government’s web site reveals that the message
we have been sending is “We are open for business”.
We want companies to locate here. We’re
willing to be “flexible” and “supportive” in
order to encourage new business. And
that’s not a bad thing.. unless it reflects a system of misplaced
priorities that places economic development on
a pedestal as a goal unto itself. The goal should be the creation and
maintenance of a society built upon a consensus of values. Economic
development should serve that. I think there is cause for concern that
we have been led towards blindly accepting
that economic growth as measured by traditional yardsticks is
automatically a good thing.
What an irony
it is that at the we always seem to be on our knees begging (not to say
offering gifts and bribes) some call centre company to relocate here so
that it can offer dead-end soul-destroying jobs, so that the government
can pretend that it is helping boost employment, so that we can
continue to condone and support those annoying intrusions and
promotional phone calls; at the same time we are allowing (for one
example) our soft drink and beer producers to create their product out
of province, and then allowing them to use (and destroy) our publicly
funded highways to truck the stuff back here. We’ve
paid them to move away! We’ve encouraged (in the name of free
trade) some businesses (usually union shops with full time real jobs)
actually producing something ) to leave while begging others to move
in. (Call centres, Big Box stores - offering part time work at low
Saul comments that “...economic activity is less a cause than an
effect - of geographic and climatic necessity, family and wider social
structures...” p115 Doubter’s
The correct way
would be to decide, starting at the community level, what kind of a
world we want, what standards we would like to see upheld in the areas
of environment, human rights, education, health, and standard of
living, and then look at what we can do to provide them.
person or entrepreneur worth having wants to expand, wants to innovate,
wants to create new products and markets,... WANTS TO MAKE MONEY! And
good for them - they are the ones we want. They
don’t need our corporate welfare and cozy deals. They don’t
need to be mollycoddled either. We do need
the private sector, and we need a system that encourages and takes
advantage of the private sector. But we also need a government that
takes a look at what we want as a society and then sets the rules -
rules that allow the private sector to make a justly deserved profit
(not an easy one, not an automatic profit, not an exploitive profit),
and rules that allow for a lifestyle we want on our communities.
that’s not what’s been happening.
We need to
examine the complete balance sheet. Yes a
certain number of jobs are created, that’s good. Yes the company
pays taxes (if we don’t bargain all that away). Yes some people
will move to Brandon and perhaps that’s also good. The questions
is what are the costs? More people means the city will be required more
services - education, health, street repairs, and above all - hopefully
sewage treatment so that the nice folks downstream don’t have to
pay for our good fortune.
What has been happening is that in
making our development decisions we have not been doing a complete
cost-benefit analysis. Admittedly, real
cost-benefit analysis is a difficult task and imprecise at best. But we
should at least be making the effort. Instead we are accepting new
development based on the ideology that all growth is automatically
Okay, so we
shouldn't expect something crazy like that – but they’ve
gone up at a slower rate than otherwise? Right.
question which community will have the higher taxes – city or
question: Is that what we mean when we say bigger is better?
also about jobs.
The purpose of
enterprise is the generation of wealth for owners and indeed much of
that has incidentally been beneficial for the country. But don’t
tell me you’re doing it for me! I
don’t expect to benefit from your investment of time and energy.
All I want is to make sure that your efforts don’t harm me in
some way. And for that I’d like to depend on government to set
rules that ensure that new development is of the sort that does enhance
my community rather than detract from it.
What then is the
proper role of government?
Is the movement
to save our rural areas
through “entrpreneurship and supported development" any
different than the “boosterism” that existed at the turn of
the previous century? ? What should
we make of
What should we make ofthe government’s emphasis on attracting business?
It was the
tendency of the business elite of small towns
and aspiring cities to get everyone to buy in to the “Growth, All
Growth, and Any Growth is Good” philosophy. Perhaps
it was a necessary optimism generator in the birthing process of our
modern rural society. Perhaps it did more harm than good, that’s
hard to measure.
Well, it’s back
in a new set of
clothes. And it now seems to be government policy (or rather it takes
the place of government action.)
Now it’s called
First - these
disappearing off of the face of the earth, they’re not dead or
dying, they’re not languishing in some urban purgatory
- they just decided to MOVE AWAY! And
usually if not always ... BECAUSE THEY WANTED TO!
Take a drive, south from Brandon, on Highway #10 at about eight in the morning. If there is a real trend to rural depopulation you wouldn’t know it from the traffic on this stretch of two-lane blacktop. If there is no one down on the farm, maybe it’s because they are all on this road!
Well that’s partly true.
They are all heading into Brandon: many to work, some for medical, legal, or business appointments, and some to just shop. They are caught in an economic Catch-22. There are not adequate services, goods, and jobs in their home towns so they make regular trips to Brandon. Or... because they make regular trips to Brandon it’s not profitable for local businesses in their home town to provide services, goods, and.. jobs.
The small town Chambers of Commerce and the municipal and village councils have been grappling with the problem with varying degrees of success since the sixties.
“Shop at Home” promotions were common. The most recent of which has local banks offering interest free loans for Christmas shopping - on the condition that you spend it locally.
Another interesting twist is the attempt to lure not only business, but inhabitants. In the late 1980’s the village of Rossburn advertised in Toronto papers and attracted some permanent residents. In 1999 their Internet Home Page contained two telling items : “Wanted Resident Dentist” and “Commercial Property For Sale : Incentives may be available.”
Other towns tried selling building lots for $1, on the condition that you built a home a resided there.
And some of these promotions worked. After all there are some real benefits to small town life in Manitoba. You can sell your expensive city home and buy a comparable one for a low as half the amount. If you don’t need the city for your livelihood, if you are retired, able to telecommute or self-employed in an industry with low transportation overhead, lower housing costs can mean an enhanced lifestyle. Additional benefits include intangibles like a lower crime rate and a sense of community. And despite the size, some services are easier to access.
As rural centres stand on the brink of a possible revitalization they are shooting themselves in the foot by being lured into environmentally unsound agricultural expansion in the form of large hog barns, giant grain terminals, both of which have impacts that have not been carefully considered.