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Industrial Expansion Fund blasted as election prop by opposition

Opposition parties accused the government of creating a $175-million, pre-election slush fund yesterday.

Opposition parties accused the government of creating a $175-million, pre-election slush fund yesterday.

The Liberals and NDP struck back at the Tories’ Tuesday announcement that it would be topping up the Industrial Expansion Fund with $175 million.

“The government knows that it is the only fund with virtually no controls and when they want to spend a lot of money quickly it’s the industrial expansion fund that they turn to,” NDP MLA Graham Steele said.

The fund allows the government to lend out money to businesses, usually to be repaid later.

Both opposition parties said the government should instead be encouraging investment through the Nova Scotia Business Inc.

The NDP have instead proposed a 10 per cent manufacturing tax credit.

“Government has a very sorry record when it comes to picking winners and losers, and a great deal of money has been wasted in the past throwing money after failing companies and failing industries. A broad-based tax credit is just a better way to go,” Steele said.

Economic and Rural Development Minister Murray Scott defended the fund, saying the opposition would scream if businesses were allowed to fail.

“It’s politics. The Liberals who were in power used the IEF. The NDP, it’s pretty obvious to me, they are not business-friendly,” Scott said.

“A lot of these programs, tax credits and all that, would not help these companies today. These companies are in trouble today and they need help now.”

Scott praised Nova Scotia Business Inc. for being proactive, but said the government also needs to be reactive to help struggling businesses.

The NDP also pointed out that the three largest fund top ups in the last twenty years were in 1993, 1999 and 2006 — all election years. Smaller top-ups occurred in 1994, 1995 and 1997.

 
 
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