As the new federal politician assigned the job of encouraging diversification of the western Canadian economy, Ron Duhamel figures he doesn’t have to look far to see the potential.
The veteran Manitoba Liberal MP, appointed secretary of state for western economic diversification in the new Liberal government, just has to look beyond the St. Boniface city limits to farm country.
“Agriculture has been an important element of the western economy and in recent years has been showing a phenomenal growth rate, well ahead of the general economic growth,” Duhamel said in an interview in his downtown Ottawa office.
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“I expect that will continue. I want western diversification to be there as a partner.”
He said the decade-old government program could begin to hit its stride, now that economic diversification has become a primary prairie focus. Since the end of grain transportation subsidies in 1995, the emphasis has been on diversifying the farm base and promoting more value-added processing.
“I would say WD is more important now than perhaps it was a few years back because it fits more clearly into the western reality now,” said Duhamel. “I think in the next three or four years, WD will grow not just in the number of projects but also in terms of its impact on the development of the Western Canadian economy.”
Promote partnerships
During the past two years, WD has evolved. It was primarily a federal agency offering interest-free loans to expanding western businesses. Now, it is an agency more involved in providing information and contacts to private businesses interested in expanding, perhaps in partnership with other businesses.
Still, it does have tens of millions of dollars to use as a lever to convince private lenders to invest in business. And it oversees hundreds of millions of dollars worth of federal spending in the West.
WD administers and funds the Community Futures Development corporations program, which specializes in counselling and small loans to prospective local businesses. Local volunteer boards run the program and WD provides operating funds and other support.
Program responsibilities
It oversees distribution of federal funds being spent on infrastructure in the western provinces.
And it operates an investment loan fund, in which WD has offered close to $40 million in “loan loss reserves” as an incentive to private lenders to provide money to businesses interested in developing, diversifying or expanding.
The federal loss-protection commitment is aimed at encouraging private lending of up to $280 million to business proposals that Western Diversification staff believe have a solid success potential. Biotechnology and agriculture value-added projects are on the list of eligible proposals for government help.
Duhamel said WD had to change the way it operates because the days of big budgets and big-dollar loans are over. Smaller budgets must be used more strategically.
He rejects the Reform party criticism that regional development programs like WD should be scrapped so the economy can develop based on business and market principles, rather than government meddling.
“We are not picking winners and losers,” said Duhamel. “The people who come to us with proposals we support have winning ideas. We help them get financing. Reform does not seem to understand how stringent a screening process we have. Reform is offering a very simple solution to a very complex problem of regional development.”
As junior minister for western diversification, science, research and development, Duhamel also is supposed to act as an advocate of “Western Canadian interests in national decision making.”
