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An ACOA success story

By Moira Baird, The Telegram
October 30, 2000

The road to economic development is paved with small success stories - and Bishop's Falls is one of those stories. The central Newfoundland town's efforts to turn itself around after the railway shut down in 1988 is highlighted in a new report on economic development in Atlantic Canada.

According to the report, the town owes much to the Atlantic Canada Opportunities Agency (ACOA) and its "striking and instructive" style of working with the Bishop's Falls Development Corporation.

Community involvement

Under the federal agency's administration, the corporation made its "most prudent economic decisions," while still maintaining a bottom-up approach to community development, the report said.

Donald J. Savoie, the author of the 130-page document, is a University of Moncton professor. He has published 30 books and more than 150 articles on economic development and public administration. In his latest report, Savoie profiles four one-industry towns that might have become extinct if not for the energy and commitment of community leaders and a "helping hand" from governments.

He said there are three lessons in his report.

Lessons

"One: one size does not fit all. Two: there are communities that are going to die, and there are ways of knowing which community will survive, which community has a chance of success, and which will not," said Savoie in an interview. If Ottawa has the political will to make those tough decisions, they will save taxpayers' money."

"Thirdly, once you've decided a community has a chance of coming back...then you should trust that community. Let the local leadership take hold. Don't wrap a bureaucratic process around this thing, 'cause it's not going to work."

That third lesson wasn't lost on Bishop's Falls. When it began the hard work of diversifying its economy, the town encountered red tape and made little headway at first. As part of the 15-year, $800-million agreement when the Newfoundland Railway was closed, the town received $7 million to diversify its economy.

At its peak, the railway employed hundreds of townspeople, and Bishop's Falls was the headquarters for the railway's western division. By the time the railway closed, it employed only 75 people. Yet the impact was no less painful than if it had closed at the height of the railway's activity.

"Losing 75 stable, well-paying jobs in a town of 4,100 was bad enough, but just as bad perhaps was the psychological damage it did to a community that saw the railway as its raison d'etre...indeed, the railway gave rise to a highly skilled workforce in Bishop's Falls and was the reason companies were attracted to it..."wrote Savoie in his report.

In 1989, the Bishop's Falls Development Corporation (BFDC) was formed to review business proposals looking for money from the $7-million investment fund. But the corporation's board members did not have the power to dispense the money.

From 1989 until March 1992, the board and its investment fund fell under the "watchful eye" of the Department of Employment and Immigration - now known as the Department of Human Resources and Development (HRD). The development corporation could only review proposals and make recommendations to a community adjustment steering committee, a collection of federal and provincial officials who oversaw the corporation. Then, that committee made recommendations to Employment and Immigration Canada, which had full authority to approve spending.

Savoie's report describes this process as "cumbersome, slow, and hardly a model of consistency. The local community leadership also felt a step removed from the process, and there was only a limited sense of community ownership in the fund."

By September 30, 1993, responsibility for the investment fund was transferred to ACOA. The complicated funding approval process was no more. ACOA clearly set out "eligible costs" it would permit and give the development corporation and its board of directors responsibility for "assessing and approving" applications.

"When the transfer was made, they (townspeople) came to realize fairly quickly that ACOA was less bureaucratic, less top-down driven, and ACOA was much more prepared to say to the communities 'Give it a go, we trust you - come up with some suggestions, some ideas, and we will support you.'" said Savoie. "Whereas HRD had a number of fairly strict controls - one is to run things by remote control from St. John's or Ottawa, and it didn't work nearly as well. When the community felt that it was empowered - because ACOA gave them the tools to be empowered - it started to work."

In its first year after ACOA came on board, the development corporation approved 10 business projects worth $1.3 million in all. In 1990, there were only six companies employing 65 people in the town's small-manufacturing sector. Seven years later, there were 20 companies employing more than 200 people.

BFDC's board is an active one. In 1994, it met 54 times; by the end of 1998, it had met 93 times. A senior ACOA official sits on the development corporation's board, and according to the report, this arrangement has worked well. Community leaders see the official as a "valuable resource they can turn to for information."

The report warns, though, that every community must find its own approach. What works for one community might not work for another. "Not every community that's hard hit by an economic slowdown or shutdown will succeed," said Savoie. "In all cases, the public sector played an important role. We rarely see in the media success stories through government involvement. I thought, 'Let's look at four cases that have done well and have had a helping hand from government.'"

Also profiled in Savoie's report were the Kent region in New Brunswick; Summerside, Prince Edward Island; and Isle Madame, Nova Scotia.

"We're looking at small-scale success stories - we're not looking for the big fix or the outside investors coming in with 1,000 jobs. But they add up...and the most important lesson in community economic development is that success breeds success," said Savoie.

Entitled Community Economic Development in Atlantic Canada: False Hope or Panacea, the report is published by the Canadian Institute for Research on Regional Development which was established in 1983.

In The Press

• Local manufacturer named as one of Top 50 CEO's for 2001 in Atlantic Canada (Atlantic Business Magazine April/May 2001)
• Economic boom expected by mayor (The Advertiser October 23, 2000)
• An ACOA Success Story (The Telegram October 30, 2000)
• Nfld. Styro expansion means new opportunity (The Advertiser August 3, 2000)
• Bishop's Falls, Nfld. - Small Town with a Big Heart (Business East, February/March 2000)
• Irish manufacturing deal inked (The Advertiser)