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MINISTERIAL STATEMENT

by

Honourable Beaton Tulk
Minister of Development and Rural Renewal

November 24, 1998


Mr. Speaker. In order to grow and diversify the economy of this Province, and thereby generate the tax revenues needed to sustain critically important social programs and public services, it is important that Government invest in strategic sectors of the economy, including the small business sector.

That is why Government has allocated $7 million for the Department of Development and Rural Renewal's Strategic Enterprise Development Fund in each of the past two years. This investment fund is designed to assist small and medium sized businesses take advantage of emerging opportunities in the provincial economy. This is especially important in rural areas, where business information, financing, counselling and other small business supports are not often readily available through the private sector.

Mr. Speaker. Almost 90% of the business investments made through the Strategic Enterprise Development Fund since the Department of Development and Rural Renewal was formed in 1996 have been under $100,000. These 500 investments have helped create or maintain approximately 3500 jobs in our economy. This equates to a cost per direct job of about $5,600, not taking into account any repayments on the portfolio, and not taking into account the spin-off benefits in the local economy. As well, historical write-offs have been less than 10% on average. The commercial lending sector writes off an average of 5% each year on small business loans. Individual investment decisions are made carefully, but by their very nature they are risk investments and developmental in nature where the commercial banks are not prepared to participate.

Mr. Speaker. It is inevitable that some investments will not succeed. However, we must not let this deter us from continuing to provide support, in the appropriate circumstances, to private sector initiatives that offer opportunities to expand and diversify the economy and create new jobs for the people of our Province. This is a wise investment of the taxpayers= money.

Mr. Speaker. For every bump in the night, there are many, many success stories that, regretfully, do not always get profiled by the media in the same way the occasional failure does. I can point to hundreds of successes. Weathershore Windows in Trepassey, Genesis Organic in Corner Brook, United Bolero in Buchans, Northco Forest Products in Baie Verte, Hi-Point Peat in Bishop's Falls, Woodpick Enterprises in Wareham, Terry's Tents in Happy Valley-Goose Bay, Innova Multimedia in Stephenville, and C & W Welding in Bay Bulls are just some examples.

Mr. Speaker. This Government is committed to growing the small business sector and using its business investment resources prudently and strategically. It would be very easy to take the safe route and not invest in the business community at all, but that would be the surest way to failure in rebuilding the economy. Leadership is about vision and determination, and that is what this Government is about.

And as I indicated in this House last week there are encouraging signs from recent provincial employment indicators that our efforts are starting to yield real dividends. We need to forge ahead - one step at a time - and do so by working together to rebuild the economy in all parts of this Province.

Thank you.


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