98 to be rehired at DEW

DEW to rehire 98 employees with new contract and payroll rebate investment from province.

Yesterday Premier Brian Gallant and DEW Engineering President Ian marsh were on hand in Miramichi to announce an expansion of operations at the Miramichi facilitiy with the help of an investment from the provincial government.

DEW provides armour systems for civilian police cars, vehicle upgrades and life extensions, as well as mobile shelter systems for military purposes.  It currently employs about 40 people, and will be taking on another 98 people with it's expansion.  The company has invested over $3 million in new equipment, and Opportunities NB will contribute $400,000 in the form of a payroll rebate. The Regional Development Corporation will contribute $100,000 through the Miramichi Regional Economic Development and Innovation Fund for capital expenditures. The project will increase the provincial GDP by $6 million annually.

Marsh says the 98 jobs will not bring employment levels up to where thay have been in the past. 

DEW's workforce has always fluctuated over the years with the ebb and flow of its defence contracts.  At times there were more than 150 people working at the facility building things like military shelters and panels for armoured vehicles.  A post on the government website says the average salary of jobs at DEW is $32,000 a year.

Premier Gallant says he is continually trying to convince companies to operate in New Brunswick, and touts the eager and talented workforce in the province. Gallant was asked if payroll rebates was a safe way of investing in economic development, and if the province plans to continue with this strategy.

"What is important is to have the right incentive to encourage people to invest in the province.  For us you will see a lot of those mechanisms be forgivable loans and rebates.  The reason for that is that we can out competitive incentive packages on the table to compete with other jurisdictions, all the states and provinces in North America.  With these incentive packages, we want to give the business a reason to invest here, but also protect the tax payers money.  And thats what conditional incentives like payroll rebates and forgivable loans do."

Paying wages is a normal cost of doing business.  Payroll rebates help attract and, in this case, keep companies in New Brunswick with no risk to the taxpayer.

Recently Nova Scotia Business Inc issued payroll rebates of more than $5.8 million to TD Insurance, Canadian Maritime Engineering and U.S.-based Mobivity Holdings, to create a total of 420 jobs during the next five years.   The move was criticized in a business column in the Herald Chronicle:  "offering corporate welfare to banks and insurance companies also stinks for plain moral reasons, because these businesses don’t need the money." 

An example of a payroll rebate offer not being cashed in on was Cormer.  In January 2013 Cormer Defence Industries announced it was creating 80 jobs in Miramichi with contributions from the Provincial Government of $5.2 million in loan guarantees and wage subsidies. ACOA was to contribute $1 million.

A building in Miramichi was purchased and renovated, but Minister Bill Fraser says Cormer did not get a contract it was expecting and was unable to generate the jobs it had anticipated. (See Link HERE)