Business trumps politics in funding calls: Alward

By CBC News – link to original article

The New Brunswick government should not be using politics to decide what companies receive provincial funds, Premier David Alward said Tuesday.

Alward listened to a speech by Chris Ramsey, the co-founder of Radian6, the Fredericton-based social media monitoring company on Tuesday that was sold for $326 million in March.

Radian6 is a major success story for the province's technology sector, employing roughly 300 people. But the New Brunswick government was not one of the early investors in the company when it started in 2006.

Instead, it was the New Brunswick Innovation Foundation, which uses some taxpayer funds but is run by a board of businesspeople, that offered financial assistance early on to Radian6.

In fact, Alward's new economic agency, Invest NB, will also feature a board of mostly private-sector entrepreneurs deciding on what companies should be funded.

Alward said some companies will fail but it is important the decisions on whether to invest aren't tainted by politics.

“It should not be based on political decisions. What it needs to be based on is sound business decisions,” Alward said.

The province's innovation foundation invested $300,000 in Radian6, but no one will say what the foundation made on its investment when the company was sold earlier this year.

Alward said that approach paid off with the success of Radian6 and he'll use it again with Invest NB.

“Having outstanding leadership from different aspects of business at that table to make the decisions, I believe will allow better decisions to be made,” Alward said.

The creation of Invest NB was a central plank in Alward's economic development platform when he campaigned in the last election.

The premier found himself facing criticism from the opposition when he appointed Robert MacLeod, Alward's former leadership rival and co-chairman of the party's election campaign, as the first president of the Crown corporation.

Alward defended the appointment saying MacLeod has a long history of working in the private sector, most recently at G.E. Barbour Inc.

The uncertainty of the investment community can often keep politicians away from putting aside funds for start-up companies, according to a well-known New Brunswick businessman.

Gerry Pond, the former president of NB Tel, was an early Radian6 investor, said job creation failures can scare off politicians from investing in potentially risky companies.

“It can have a very dampening effect on the public at large,” Pond said.