Dougald Lamont and the Manitoba Liberal Party announced in a media release, they will work to end corporate welfare in the form of “free money” grants and boutique tax deals by creating a politically-independent Manitoba Business Development Bank (MBDB) that would focus only on helping Manitoba businesses and farmers build and grow, with equity share purchases instead of loans.
The release said “The Manitoba Business Development Bank represents a different approach to business development in Manitoba – one that is based exclusively on investing in independent Manitoba businesses and farms in order to make Manitoba ownership a cornerstone of job and wealth creation in the province. The MBDB would be started with $100-million in its first year.”
“Manitoba Liberals have a plan to invest in Manitobans. We have the talent, we have the skills, we have ideas – what’s missing has been the commitment to grassroots, local, economic growth in this province,” said Lamont. “We want to avoid corporate welfare as we’ve seen in Manitoba in the form of massive tax breaks or grants. The NDP and PCs have often bent over backwards to subsidize some of the richest corporations in the world, while doing nothing for Manitoba businesses. We’re offering real change, real growth, and a better return on investment.”
Lamont said other jurisdictions already have their own public banks, including Alberta and North Dakota. Scotland is also developing its own business development bank. The release listed how the MBDB is different.
1) Lower Risk Finance to Increase Business Success Instead of focusing on loans and debt, the MBDB will focus more on buying shares from companies – equity investments known as “patient capital”. When businesses take on debt, they need to pay it back whether they are profitable or not. Equity investments increase success because owners can start paying back once the business starts making money.
2) Politically Independent, Public, Transparent Decision-Making Manitoba Liberals want to take partisan politics out of local business development. The Board will be a mix of non-partisan experts and board applicants will be hired based on qualifications.
3) Better Access to Capital Means More Businesses and Better Local Jobs Investments will be made on the basis of business plans and ability to deliver, not access to collateral. Too many entrepreneurs in Manitoba can’t get financing at all because they are expected to mortgage their house or put it on credit cards before a bank will help. This has hurt entrepreneurs across the board. Women, newcomers, and Indigenous entrepreneurs face even greater challenges. The MBDB will ensure that these challenged are recognized and overcome.
4) Investing in Manitobans and instead of Spending on Corporate Welfare. The Manitoba Government – PC and NDP alike – has been too willing to engage in corporate welfare with massive tax breaks and grants to companies that effectively subsidize some of the largest and most profitable companies in the world. As a consequence, Manitoba taxpayers are effectively paying to send money out of the province. The Manitoba Liberals will review and reduce tax breaks, grants and other giveaways, and ensure that Manitobans get a return on their investment in businesses. By buying company shares, the MBDB will see better returns from dividends. If a company is highly successful, MBDB and the public will benefit.
5) Local independent businesses deliver better Community Return on Investment For the entrepreneur, equity means they do not face monthly interest and debt repayments, reducing risk and making success more likely, while also making it easier to raise further investment. If the business is successful, the bank gets paid in dividends or can sell the shares at a profit so the public gets a direct return on their investment. For many Manitoba entrepreneurs, this would be a game-changer. Whether you are in downtown Winnipeg, a small town, or a First Nation, we’re offering a real choice for real change for empowering entrepreneurs and driving grassroots economic development in Manitoba.”
The next provincial election is scheduled for this October 3rd.
