Private Sector to Lead Economic Growth
Government is changing how its economic development department and agencies do business, positioning the private sector to lead economic growth.
Michel Samson, Minister of Economic and Rural Development and Tourism, announced changes today, July 17, that will enable business experts to make more decisions and allow government to focus on improving the economic conditions for the private sector, social enterprises, and communities to thrive.
The changes are based on recommendations from the oneNS report and independent reviews on economic development funding programs.
"The private sector has told us, and the oneNS Commission confirmed, that government needs to be more responsive to the needs of business," said Mr. Samson. "This means having experts who understand solid business cases and the need for quick turnaround. This also means supporting more, and smarter, investments in capital and technology startup companies.
"Politicians should not be picking winners and losers in the economy. Instead, government will focus on broader economic objectives, like workforce, sector and regional development, as well as having the right policies, laws, and accountability measures to foster private-sector growth."
Nova Scotia Business Inc. (NSBI) will be responsible for business development and for delivering assistance programs now located at the department including the Capital Investment Rebate and the Small Business Development Program.
NSBI will make decisions on which businesses meet funding eligibility, and provide advice and support to businesses in accessing other government programs and private sector financing.
In his review of Nova Scotia's financial assistance programs, Tom Traves supported more arm's-length decision-making and noted the importance of capital investment that leverages private-sector funding and is aligned with economic development principles.
To encourage existing small- and medium-sized companies to make significant capital investments in the province, government will review the Capital Investment Rebate Program to ensure it meets the needs of businesses today. This will consider whether the current maximum of $1 million per year should be increased.
Eligibility requirements will be strengthened to ensure substantial private-sector investments are made first, before provincial funding is rebated. Funding would also need to be clearly tied to economic principles such as productivity improvements, competitiveness, and innovation.
The NSBI board will have authority to approve business proposals with higher funding amounts, without cabinet approval, another recommendation of the Traves report. This is expected to significantly improve response time to businesses.
Accountability has already increased with the requirement to post all decisions, and more information about those decisions, on the new accountability website.
NSBI will now assume responsibility as the front-line trade team, delivering provincial trade programs to businesses, a responsibility previously shared with the department. Trade programs are also under review with the goal of encouraging more exports and more exporters.
NSBI and the department will no longer make equity investments in Nova Scotia companies. Innovacorp will continue to be empowered to take on equity in technology-based startups. Innovacorp will speed up its investment process and decision-making, and strengthen its incubation program to better support business acceleration.
Government will create a new venture capital fund to augment existing venture capital initiatives in the market. A request for proposals will be issued in the fall to find innovative ideas about how the public and private sectors can work together to improve access to venture capital for direct investment in high-potential, high-growth companies.
Gilles Duruflé, a leading venture capital consultant who was hired to conduct an independent review, said young, innovative startups will play an increasingly important role in the economy, and with some adjustments, Nova Scotia can better support these businesses for long-term success.
"A well-designed venture capital program with access to funding, mentorship, and resources can help more startups become successful companies that generate wealth, employment, and new talent," said Mr. Duruflé.
Economic and Rural Development and Tourism will focus on broad economic climate goals, such as sector and regional development, and policies and programs that support workforce, exports, productivity, competitiveness, innovation, entrepreneurship, and social enterprises. The soon-to-be-established Invest Nova Scotia Board will make decisions on economic incentives to support government's work on these broader priorities.
The minister will introduce legislation this fall that will confirm the roles for economic development agencies.
"We have closed the Jobs Fund, passed a new accountability act, and will soon establish the Invest Nova Scotia Board," said Mr. Samson. "We are now ready to take the next steps - doing government business differently so businesses can get on with their business - creating jobs and driving economic growth."