Newspaper article The Canadian Press

Just One of Three Targeted Jobs Materialize through N.S. Payroll Subsidies

Newspaper article The Canadian Press

Just One of Three Targeted Jobs Materialize through N.S. Payroll Subsidies

Article excerpt

N.S. jobs subsidies missing top targets

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HALIFAX - Just one in three potential jobs announced by Nova Scotia's economic development agency through its payroll rebate program actually materialized over the past four years, a figure rekindling debate over the impact of the incentives.

Data obtained by The Canadian Press covering April 1, 2013, until mid February this year show 2,176 people were hired out of the possible 6,575 approved for subsidies in that timeframe -- 33 per cent of those possible among companies that had active files in the time period.

For example, when Conifer Financial Services qualified for a rebate over seven years ago, the news-release headline said, "International financial services firm chooses Nova Scotia for growth."

The firm qualified for rebates worth $5.2 million if it created up to 350 jobs over seven years, and a senior executive said Halifax was among its fastest growing locations.

But three years in, the company had hired 23 people out of a possible 100 by that date, according to the database.

Similarly, the economic development agency announced three years ago that information technology giant CGI Group Inc. could earn almost $11 million in incentives if it created 450 new positions over seven years.

The most recent update for 2014-15 had the company creating 11 of 200 possible jobs up to that year, just over the minimum required to qualify for any subsidies. The company didn't respond to a request for comment.

Of the 62 firms on the government's list, three exceeded the job targets, but there were 22 that didn't list any jobs created under the program.

Laurel Broten, chief executive of NSBI, says the unused money remains in the public treasury, and the incentives -- averaging about eight per cent of salaries -- are only paid out from public coffers after an audited statement shows the positions were created and tax revenues received.

The agency has budgeted between $10 and $12 million annually for the incentives for the past three years, and the chief executive says that's about half of what is available annually to the firms under the program.

"This is a tool that protects the public money in a way that doesn't have you outlay cash and then have no jobs," she said.

She also says there is tough competition from other Canadian provinces and international locations to attract companies such as the Royal Bank of Canada, and the rebate incentives keeps Nova Scotia in contention.

However, economist Philip Leonard, who teaches at the University of New Brunswick, says he's dubious about the effectiveness of the rebate programs.

"It's an unknown. How many times do you think a company would have located in the Maritimes anyway, and then as they come in realize there is a program and say 'We might as well get it too'? …

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