March 18, 2005
(Innovation, Trade and Rural Development)

Government announces regional diversification strategy

Kathy Dunderdale, Minister of Innovation Trade and Rural Development and Minister responsible for the Rural Secretariat, said the Comprehensive Regional Diversification Strategy developed by government will put all regions of the province on a path to economic prosperity. Minister Dunderdale released the details of the regional economic strategy at a news conference today.

Minister Dunderdale said government has been consulting with the people of the province over the past year to get their input into what is needed to promote and support economic development in the various regions of the province.

"What we have developed is a comprehensive plan that draws upon regional strengths and is complemented by government programs that will help develop those strengths so that they result in long-term, sustainable employment for the people of the province," said Minister Dunderdale.

Nine sustainable regions have been identified based on patterns of natural economic, social and community activity already existing in each region. Factors such as available infrastructure, number of communities, population, economic and labour market activity have been taken into account. Each region will have its own economic development strategy based on its particular strengths. Short, medium, and long-term strategies will be identified for each region that will generate new industry, small business, and employment opportunities. These strategies will be supported by advanced education and training and by applied research and development appropriate to local industrial opportunities. Over time, each region will have its own clustering of industries, businesses, health, education and government services. In this way, people living in outlying communities will have access to education, training, health care and employment within reasonable commuting times.

"Government has already developed a number of tools to enhance economic growth in the province, such as venture capital, and innovation and marine strategies, that support the implementation of the regional diversification strategy," said Minister Dunderdale. "To further support the growth of the regions, government will establish two funds which will address business financing needs and community and sectorial development."

Government will establish a $10 million revolving fund to finance small and medium-sized businesses (SMEs). The financing will allow eligible businesses the opportunity to start up and expand, thereby helping them create and retain long-term sustainable jobs. The fund will target strategic growth sectors, such as manufacturing, value-added production, IT, and tourism. In particular, the fund will target businesses which have export potential and need assistance to enter or expand in external markets.

The SME fund will be administered through the Business Investment Corporation (BIC), an arms-length agency that reports to the Minister of Innovation, Trade and Rural Development. Revenue collected from the fund's current investments will be retained by the BIC for new investments. To establish the revolving fund, government has added $7.9 million to the $2.1 million previously allocated for the Seed Capital Equity Program.

Government has also established a $5 million Regional/Sectorial Diversification Fund which will address the present funding gaps of sector organizations, economic development groups and community-based organizations involved in economic development. Through this fund, government will provide non-repayable contributions for economic development initiatives that address regional and sectorial development, diversification and innovation. Funding will be strategically allocated based upon criteria such as a project's ability to lever funding from other sources, and whether the project has tangible economic development benefits. The aim is to contribute to long-term sustainable employment and the growth of small and medium-sized enterprises in each of the nine regions. Details on program criteria for the revolving and Regional/Sectorial Diversification funds will be released in the coming weeks.

Government has also increased the budget for the department's Business and Market Development Program from $500,000 to $1 million. This increase provides more assistance to entrepreneurs and expanding small businesses to pursue new business ideas and new markets, including product development, implementing market strategies and advancing new technologies.

"As a province, we need to start thinking regionally. We need to continue to develop strong policies and effective programs which accentuate sustainable regions in all areas of the province as opposed to rural versus urban development. If we have strong regions, we will have a strong province. The plan outlined today will lead us toward that goal," said Minister Dunderdale.

Media contact: Lynn Evans, Communications, (709) 729-4570, or 690-6290

2005 03 18                     11:00 a.m.

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