Leadership hopefuls: can you fix the economy?

Published on July 12, 2014

I hope the three men vying to become premier spend a lot of time talking about Terra Nova Shoes in the next few weeks. It turns out the little company that could, can’t, and a surprise announcement this week about the company’s demise in Harbour Grace and its relocation to Ontario seems to prove it.

In less than a decade, Terra Nova Shoes went from being an example of how small manufacturing could help diversify our economy to another failed development in rural Newfoundland.

There have been so many.

The company is moving everything to Cambridge, Ont., saying it’s too expensive to manufacture footwear here and ship it to the mainland for distribution.

“The reality is, the costs to continue operating the Harbour Grace plant have become unsustainable,” says Kodiak president Kevin Huckle.

Back in 2008, the company was granted an $8-million, interest-free loan to expand operations in Harbour Grace. Then-premier Danny Williams was elated.

“The plan is to create another 50 jobs here. So it is a welcome boost to employment and economic activity in the region,” he said.

Kodiak intended to expand the workforce from 170 to 220. According to Huckle, the province’s investment would see all of Kodiak’s Canadian manufacturing moved to the Harbour Grace plant.

Two years later, we got news of a major cutback in the workforce, with 59 people losing their jobs. It was apparent to Harbour Grace Mayor Don Coombs that they wouldn’t be rehired.

“The layoff seems like a permanent thing,” he said.

The province has been quick to say government programs will be made available to this last batch of displaced workers — 80 of them — and the company says it will pay off the interest-free loan.

What does this business story have to do with the leadership hopefuls? Quite a lot, actually.

The three contenders for the province’s top job are talking about health care, education, infrastructure and the like.

They will even talk about jobs at some point, and the phrase “we must diversify our local economy” will no doubt be uttered in the same sentence.

 Forgive me if I sound cynical, but we’ve heard it all before.

To diversify our economy means to change it for the better. Our reliance on one-industry initiatives, like oil, and our inability to sustain things like small manufacturing operations is troubling in the extreme. Even big initiatives like Muskrat Falls end up being a public investment instead of a private-

sector business opportunity.

I’d love to see John Ottenheimer, Paul Davis and Steve Kent participate in a debate with just one focus: the economy. How do we create economic development and how do we diversify the economy?

After all, we always seem to fail when it comes to economic issues, with Terra Nova Shoes being the latest example.

We can’t seem to get our agriculture industry operating at a level where we can feed ourselves, let alone anyone else. We can’t find solutions to forestry issues, and even the wood pellet manufacturing idea went down the drain. We invested $12 million in that debacle.

Added-value fishery initiatives  never seem to go anywhere.

We laughed at Liberal MHA Jim Bennett when he suggested we produce and sell our own kippered herring. Remember when then fisheries minister Darin King labelled him “Captain Kipper” and we all laughed? Now the  Comprehensive Economic and Trade Agreement will hurt basic fish processing here.

Anyone got any ideas on how to address this? Governments have to create a climate for business to flourish and invest in the right infrastructure to make it happen. Our track record so far seems dismal.  

So, leadership candidates can talk all they like about education, and they can wax poetic about the need to do something for seniors, but if they can’t come up with solutions for the ailing economy and our shrinking population, everything else is moot.

Randy Simms is a political commentator and broadcaster. He can be reached at

rsimms@nf.sympatico.ca

Twitter: @RandyRsimms