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Centre creates jobs, but little hype.

Centre creates jobs, but little hype

The Sault Ste. Marie Business Development Centre (BDC) is quietly going about promoting small-scale, but effective, economic activity.

"The mandate of the centre is the creation of long-term employment opportunities," said executive director Tom Bird.

Each year the BDC has a contract with the federal government to create a specific number of jobs on which its funding is based. This year the target is not less than 100.

The work is done through consultation, counselling, providing loans and planning for new or expanded businesses.

Bird said the entire program is being evaluated by the federal government.

"Generally, they're telling us they find the BDCs to be incredible, cost-effective developers of jobs."

Such centres create jobs for about $1,500 each.

The Sault's BDC began its fourth year of operation on April 1.

A summary of its activities over the past three years to March 31 shows a total of 337.5 jobs created or sustained. That figure includes 186 jobs created through investment, 80.5 through self-employment, incentives and 71 through counselling.

Total client contacts over the period numbered 1,434.

Job creation by the centre is followed very closely. The total is kept so up-to-date that, if a person is laid off at a company which the BDC has invested in, the job is scratched from the centre's total.

However, Bird noted that assisted businesses now employ 25-per-cent more people than when the BDC initially dealt with them.

The business development centre is run by a non-profit corporation administered by local people under the federal government's Community Futures program. It has a maximum investment fund of $1.5 million.

In theory, interest from the fund will make the centre a self-supporting entity at the end of the five years.

All lending decisions are made locally by the board, which is composed of representatives from labor and business.

In the past three years, there have been 35 investments into 32 companies, with three businesses receiving funding on two occasions.

Total BDC investment has been $921,350.

Bird explained that the BDC is a grass-roots program designed to assist small companies, not a Toyota plant. "Big companies don't need me."

It provides help to people who either wouldn't or couldn't make it on their own.

The Sault Ste. Marie centre opened in mid-1987 and was the first such centre to be established from scratch in the country. It is now one of more than 50 in Ontario.

"At the time it was set up, Algoma Steel was in a major downturn," Bird noted.

The centre serves communities from Laird in the east to Montreal River on the north shore.

Loans are made at prevailing market rates. However, the packaging of loans is based on the individual needs of the clients.

The centre will consider three major types of loans - demand loans, term loans and equity investments. Loans may be up to a maximum of $75,000 per business.

"We can only lend to a business if they absolutely can't get the money somewhere else," said Bird.

The centre will help people prepare proposals to seek other funding, either from government or private sources.

"If they can't get it, or get it all, somewhere else, then we'll go to our own funds," explained Bird.

The loans will generally be for such purposes as equipment purchases, the renovation or construction of facilities, working capital or inventory.

The centre also provides a self-employment incentive through a grant of $200 per week during the first operational year of a business. The grant, which is for personal finances, is available to unemployed workers who are eligible for unemployment insurance or social assistance.

"It's very innovative and, at this point, by any measurable standard is very successful," said Bird.

To qualify, the applicant must provide a minimum 25 per cent ($2,600) in cash or in kind, retain at least 50-per-cent control of a partnership, be legally entitled to work in Canada, reside within the area bounded by Laird to the east and Montreal River to the north, and work at a full-time, self-employment venture.

Bird said the plan removes the disincentive to work. Under other government assistance, money is deducted if a person works.

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Title Annotation:Focus on Sault Ste. Marie; Sault Ste. Marie Business Development Centre
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:May 1, 1990
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