Tories abandoning FedNor, Northern Ontario

The Harper Conservatives continue to chip away at the Federal Economic Development Initiative for Northern Ontario (FedNor) through funding and staffing cuts.
Two different FedNor-related announcements in the past two weeks by the federal government spell trouble for businesses and communities that are looking for help to develop, diversify, and grow our economy in Northern Ontario.
Before discussing the two most recent announcements, it is worthwhile to briefly examine the history of FedNor and what changes the Conservatives have made since coming to power in 2006.
The federal government established FedNor in 1987. Its funding and contribution to development in the north gradually increased and by 2005, the year before the Harper government took power, total FedNor program funding was $79.9 million per year, according to the Library of Parliament.
Fast forward to 2012-13 and the most recent budget posted on FedNor’s website shows program funding of just $56.3 million–or $23.6 million less than when the Conservatives took power.
Last year, the Harper Conservatives also announced they were ending the highly-popular Local Initiative Contribution (LIC) grant program, which was administered by FedNor and provided up to $5,000 to not-for-profits, including municipalities, First Nations, and other groups that undertook small- to medium-scale economic development programs in their communities.
Examples of the type of projects that received LIC funding include two separate grants to assist the towns of Atikokan and Red Rock in updating their corporate websites to help attract investment.
The loss of the LIC program particularly has hurt rural communities which always have had trouble raising enough revenue for such economic development projects due to their small tax base.
This takes us to the 2013-14 federal budget and the release last week of a new strategic operating plan for Industry Canada, which oversees FedNor.
There were only two references to FedNor in the federal budget, and both were in passing. One was a new $4.4-million fund to help with the development of the “Ring of Fire,” which is to be delivered by FedNor.
New Democrats support this investment, but also believe it is insufficient in size relative the potential net benefits Northern Ontarians can realize from the $30 billion-$50 billion worth of untapped metal and mineral deposits in the region.
It also is not clear if this will be new money or if it will be carved out of FedNor’s existing budget.
The second reference to FedNor was the announcement that there would be a new minister for the economic development agencies of “northern and southern Ontario.”
Interestingly, this tidbit was found under the heading of “Helping Southern Ontario Prosper,” on page 105.
The material change? Well, according to the Salaries Act, the ministers for FedNor and FedDev will be entitled to an extra $75,516 in salary, a $2,000 car allowance, and new partisan staff to support the minister—not civil servants.
The appointment of a new minister, with new personal staff, would be all well and fine if there actually was more work, more programs, or more funding to be undertaken and distributed by FedNor.
Unfortunately, we know that the exact opposite is true.
In the week following the presentation of the federal budget, a strategic document entitled, “2013–2014 Estimates—Report on Plans and Priorities,” was released by Industry Canada, which detailed new spending cuts across that ministry.
The new plans show a large drop in funding for the Community Economic Development program–the core funding for FedNor initiatives–from $81.1 million in 2012-13 to just $60.3 million by 2014-15.
As well, the report projects employment under the Community Economic Development program also will be reduced by 20 positions during the same period–from 124 full-time positions in last year’s plan to 104 in the new version.
These planned changes represent a full 25.5 percent cut to program funding, and the elimination of 16 percent of the planned staffing for Northern Ontario economic development over a two-year period.
It’s no wonder the economic recovery constantly is being described as “fragile” by economists and members of the Harper Conservative government.
Its fragility is easily recognized and explained as the product of an incompetent and increasingly out of touch government that chooses to blow millions of tax dollars on gazebos, limos, and political staff while cutting public servant positions and economic development programs such as those delivered by FedNor.
For our part, New Democrats can—and will—offer Northern Ontarians a better choice for our region in 2015.