Province gives $3.6M to Bell Canada to create 150 jobs

Days after a new controversy about government subsidies to business, the New Brunswick government has announced it will hand over $3.6 million in taxpayer money to one of Canada's largest and most profitable companies.

Opportunities New Brunswick says Bell Canada will create "up to" 150 jobs in a new national service centre in Fredericton over the next five years thanks to payroll rebates.

The job-creation Crown corporation bragged that the position will generate $7.5 million in tax revenue for the province, earning back twice as much as what taxpayers will spend creating them.

But ONB officials refused in a technical briefing with reporters to say exactly how many of the jobs will be created in each of the five years and how much of that tax revenue would come each year.

Bell's chief financial officer Glen LeBlanc later told reporters he had no problem disclosing the specifics.

"We have no issue with transparency," LeBlanc said. "We've already hired 12 people." He said he expected 75 would be in place by this time next year and the rest of the 150 within three to five years.

He said the company will be willing to update the actual numbers in the future.

"We have no issue with being transparent on those targets," LeBlanc said.

Privacy issues

Earlier this week, ONB's CEO Stephen Lund responded to criticism from the auditor-general on job-creation secrecy by saying the Crown corporation was aiming to be more open.

"We are trying to be as transparent as we can, but there are some privacy issues," he said on Tuesday.

Auditor-General Kim MacPherson's new audit of the Atcon fiasco criticized Opportunities New Brunswick and other government job-creation agencies for not implementing most of her 2015 recommendations on avoiding another Atcon.

MacPherson zeroed in on the government practice of predicting anticipated jobs but then not disclosing how many of those positions end up being created.

"We had recommended that actual results need to be reported to assess the performance of spending on financial assistance," she said Tuesday. "It's not enough to say 'expected jobs' or 'committed jobs.' What about 'actual jobs?'"

Lund said on Tuesday that it would violate the provincial privacy law to reveal a company's precise job-creation figures.

He said Opportunities New Brunswick was looking at releasing aggregate data, such as the total number of jobs it projected among all subsidy recipients versus how many were created.

He also said the agency may release company-by-company figures on payroll rebate amounts.

Sees rebates as risk-free

"We're trying to be more transparent," Lund said. "We're looking at ways that we can start to show how much money we provided on an annual basis to companies without being specific on the actual job numbers."

He also said the agency may eventually ask companies to waive their right to keep their job numbers secret.

Lund said payroll rebates are a risk-free way of subsidizing businesses. A company that receives them must be audited on jobs created each year, and the rebates are only paid out per position after they've been created.

LeBlanc said the new Bell jobs will pay on average $75,000 a year. Of the 12 positions already filled, six employees were recruited from outside the province, which he said adds an even greater economic benefit.

Bell's parent company, BCE, earned a second-quarter profit of $762 million this year.

Ahmed Babiker, who was recruited in Montreal, told reporters he was happy to relocate to Fredericton.

"It's a much different, quieter, much much quieter than Montreal," he said. "People are really friendly."

LeBlanc said the province's forecast of $7.6 million in tax revenue from the jobs would be based on taxes from a smaller number of positions filled in year one, following by a "ramping up" in the future.

LeBlanc said he was unable to explain Opportunities New Brunswick's estimate of a total $60.3 million boost to the province's gross domestic product.

"I certainly don't have the details in front of me of how it can add up to 60.3 million, but I don't think it's a stretch to get there when you're talking about 150 jobs at the salary level I alluded to earlier," he said.

"That's a question you'll have to direct to the government. That's obviously their press release at Opportunities New Brunswick."

Lund left the announcement Friday morning before reporters could speak to him.

A spokesperson for the agency said in an email later in the day that the GDP figure was calculated using a Statistics Canada model.