A Twillingate processing plant that did not reopen this year got $500,000 from a business-attraction fund that has spent tens of millions of taxpayer dollars with little success.
A recent CBC News investigation found that the Newfoundland and Labrador government funnelled more than $20 million into grants, loans and the direct costs of business-attraction initiatives that provided a net benefit of fewer than 100 new jobs.
The 22 seasonal jobs created in Twillingate — plus 1.5 full-time positions — were included in that figure.
But the plant, which processed shrimp shells into arthritis medicine, did not reopen this year.
Last year, the Newfoundland and Labrador government forked over a $500,000 loan to Eastern Star Group Canada Inc., which ran the Twillingate facility.
In a statement to CBC News this week, the Department of Innovation, Business and Rural Development said it expects to get its money back and “there is no reason to believe our term loan is in jeopardy.”
Twillingate Mayor Gord Noseworthy said plant owner Hettiger Chang has returned to China where he is having health problems.
But the mayor is also confident the plant will reopen, bigger than before.
Eastern Star’s first repayment to the government was due in April.
The Progressive Conservatives made business attraction a key focus when they took office in 2003, setting up a separate department dedicated to the initiative.
But that stand alone department was abolished in 2010.
This March, in the wake of the CBC News investigation, Innovation Minister Keith Hutchings said attracting outside investment to the province takes time.
“We’ve had moderate success, but certainly, as I said, it’s a long-term process in terms of attracting businesses to the province,” Hutchings told CBC News.
“There’s always room for improvement, and I’m certainly looking forward to building on the success we have, and certainly look at new programming that moves us forward.”
In this year’s budget, the government slashed the pot of cash available for business attraction nearly in half.
The move came after 98.5 per cent of the money available in the previous fiscal year went unused.
Hutchings said in April that the province opts not to participate in many projects because of the potential risk.
The fund seems to have gone untapped in recent months. There do not appear to be any press releases on the government’s website related to business-attraction investments so far this fiscal year.
