NLIS 27
March 21, 2005
(Executive Council)
(Innovation, Trade and Rural Development)


Economic growth and diversification: An investment in our future

The future success of Newfoundland and Labrador hinges on strategic investments that grow and diversify the economy, while optimizing opportunities and building on proven strengths. Premier Danny Williams, also Minister responsible for Business, and Kathy Dunderdale, Minister of Innovation, Trade and Rural Development and Minister responsible for the Rural Secretariat, today announced a number of Budget 2005 initiatives that focus on innovation, and fostering and sustaining economic growth and diversification.

Premier Williams said that small and medium-sized businesses (SMEs) play the lead role in creating employment and income in this province. "Over the past year, government has been laying the groundwork to create an environment which promotes the growth of small and medium-sized businesses," said Premier Williams. "I know the challenges associated with starting and growing small companies, and I am confident that our initiatives to assist this sector will result in more successful and prosperous businesses in Newfoundland and Labrador."

Minister Dunderdale said that the future of the province lies in economic development. "This government has developed a budget which meets challenges head on and maps an exciting course for the province�s future," she said. "Our government is committed to addressing the challenges businesses face, particularly in rural areas. For example, access to capital is key for these businesses, and Budget 2005 makes significant strides in addressing this and many other concerns."

SME Revolving Fund
Government will establish a $10 million revolving fund to provide loans and equity investments to small and medium-sized businesses. The financing will allow eligible businesses the opportunity to start up and expand, thereby helping them create and retain long-term sustainable jobs. To establish the revolving fund, government has added $7.9 million to the $2.1 million previously allocated for the Seed Capital Equity Program, for a total budget of $10 million. Details on program criteria will be released in the coming weeks.

The fund will be administered through the Business Investment Corporation (BIC), and the revenue collected from the fund will be retained by the BIC for reinvestment. The fund will target strategic growth sectors, such as manufacturing with special emphasis on value-added production, IT, secondary processing, aquaculture and tourism. In particular, the fund will target businesses which have export potential and need assistance to enter or expand in external markets.

Business and Market Development Program
In Budget 2005, government has also doubled the budget for the Business and Market Development Program (BMDP) from $500,000 to $1 million. The increase provides more assistance to new entrepreneurs and expanding small businesses to pursue new business ideas and new markets, including product development, implementing market strategies and advancing new technologies.

Centre for Environmental Excellence
In moving forward with its Blueprint commitment to create the Centre of Environmental Excellence in Corner Brook, government is allocating $500,000 in Budget 2005 for a master plan and feasibility studies. Working with Memorial University's Sir Wilfred Grenfell College and the Corner Brook campus of the College of the North Atlantic, government will build on the significant environmental industry activity underway in the western region of the province to create the centre and anchor Newfoundland and Labrador as an international leader in applied environmental research and development.

Innovation Strategy
"Government is meeting its Blueprint commitment to develop an innovation strategy for the province, a strategy that will take into account the needs of all the regions of the province," Minister Dunderdale said. "Government has allocated $1 million in Budget 2005 for the implementation of the provincial innovation strategy."

The strategy is currently being developed in cooperation with the federal government, the Newfoundland and Labrador Association of Technology Industries (Nati), major firms in the province, Memorial University, College of the North Atlantic, regional development agencies and other key stakeholders.

Ireland Business Partnerships
In November, the provincial government announced it would increase funding for the Ireland Business Partnerships by $200,000, to $300,000, to increase efforts to identify, foster and promote trade and partnership opportunities with Ireland in the areas of business, education and culture. Budget 2005 continues that funding commitment.

"These initiatives complement others we have taken including red tape reduction and our branding strategy. They will help increase the province�s competitiveness with other jurisdictions and help resolve access to capital problems faced by businesses," said Premier Williams. "This funding helps fulfil government�s mandate to assist SMEs in targeted growth sectors throughout the province, in their startup and development, thus helping create long-term, sustainable jobs."
These are the latest of several initiatives which demonstrate government's commitment to providing an array of tools to support the growth and development of businesses in the province.

Media contact:
Elizabeth Matthews, Premier�s Office, (709) 729-3960, 690-5500
Lynn Evans, Innovation, Trade and Rural Development (709) 729-4570, 690-6290

2005 03 21                        3:30 p.m.


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