Agreements like the one the province has made with Daewoo to build wind turbines in Trenton are good for Pictou County and will improve the province’s economy, Justice Minister Ross Landry says.
Landry is defending the Dexter government’s decision to invest $60 million in a joint venture with Korean industrial giant Daewoo Shipbuilding and Marine Engineering Ltd. (DSME) worth $90 million to build blades and towers for wind turbines at the former TrentonWorks rail car plant.
Premier Darrell Dexter signed an agreement giving DSME a 51 per cent majority stake in the venture, while the province has a 49 per cent share.
“We need jobs here and we’re taking bold steps to create them,” Landry said. “I think it’s a sound investment and I’m confident we’re heading in the right direction.”
The Pictou Centre MLA said he is disappointed in the response to the deal last week by Liberal leader Stephen McNeil, who said politics trumped business sense to reach the agreement with DSME.
“When you boil it down, Nova Scotia taxpayers have fronted two-thirds of the money for less than half of this joint venture with Daewoo,” McNeil said. “What the NDP haven’t made clear is whether Nova Scotia taxpayers are on the hook for any losses this project may incur.”
McNeil said he is wary of deals like the one for DSME Trenton, as well as a recent one with Northern Pulp in Abercrombie, being consummated through the province’s Industrial Expansion Fund.
He said the IEF should be managed by Nova Scotia Business Inc. to make sure a business case has been made for them.
McNeil’s criticism followed the announcement by Economic and Rural Development Minister Percy Paris that the province accepted the advice of the Economic Advisory Panel and was putting $75 million more to the fund before the end of March to finance the deal with Northern Pulp.
“Where is the data that assures Nova Scotians that this significant investment of their money was made wisely? We haven’t seen any,” says McNeil. “These questions would have answers if NSBI held the IEF’s purse strings.”
McNeil said he welcomed the 120 initial jobs this year, but he considers the $60 million price tag is too high.
Officials project 500 jobs at the Trenton plant in three years.
“At half a million dollars per position, these are some of the most expensive jobs ever created in Nova Scotia,” says McNeil. “We need to know that Nova Scotians are protected in the event this project doesn’t meet this government’s lofty expectations.”
“I don’t apologize to anyone for creating jobs in Pictou County,” Landry said. “I’m very disappointed Mr. McNeil would come into Pictou County and be critical of this.”
Besides the deal, Landry defended the IEF funding for it.
“We needed to get TrentonWorks up and running again and that’s the resource we had to do it,” he said. “These are good paying jobs in an emerging industry.”
Landry also said more jobs will help the province rein in its current deficit and long-term debt.
According to the Dominion Bond Rating Service, Nova Scotia’s debt in relation to its gross domestic product is projected to rise above 40 per cent in the 2010-11 fiscal year after falling to 35.5 per cent of GDP in 2007-08 and rising to 36.5 last year.
“We can reduce the deficit by cutting spending and growing the economy and increasing the population,” he said. “We need young people to take these jobs and start families here. It’s helping tremendously to move the mindset of people when agreements like this one with Daewoo come along.”
Landry said is not concerned about Dexter’s acknowledgement that the deal with DSME does not guarantee profits for the province from the agreement.
Dexter identified options, such as paying profits in dividends, retaining the earnings or reinvesting them in the company, which would benefit the province by increasing the company’s value.
Meanwhile, members of the former Progressive Conservative government were taking credit for the DSME Trenton deal, which began in the fall of 2008 when the province entered into a memorandum of understanding with the company to examine business opportunities in the province.
The Tories began looking for a buyer for TrentonWorks after its former U.S. owner, the Greenbrier Companies, closed the plant in 2007.