No one at Nova Scotia’s finance department would confirm if Michelin asked for a subsidy as a pre-condition for expanding production at its tire plant in Bridgewater. But a look back at the discussion in the legislature when politicians passed Bill 227 to expand the Capital Investment Tax Credit may offer some insight.   

Final reading and passage of the bill took place after 5pm on November 9, 2022. 

The amendment to the Financial Measures Act ⁠— usually debated following the introduction of a provincial budget ⁠— increased the tax credit from 15% to 25% of a company’s investment in new equipment. It also increased the subsidy from $30 million to $100 million. 

Liberal leader Zach Churchill questioned why the change to the tax credit was backdated to the previous month of October.  

“Right now, we haven’t been given any rationale for why there’s backdating on this, and that would make one wonder what the reason for that is. If there is a current deal or a promise that happened before this legislation has actually passed, certainly I think the House and Nova Scotians should know what that is,” Churchill said on November 9. 

Churchill received this answer from Finance Minister Allan MacMaster:

It’s a fair question, but I think when we’re coming up with putting these measures before the Legislature, there are reasons why we’re doing that. We have set a date. We’re trying to be transparent about it. I can’t really go into further detail on that.

I might expound, although I’m not aware because I have not been approached as a minister myself, but there could be organizations the government is dealing with that may be looking at making a capital investment in the province and may be questioning it or asking what’s available, so I will let the member take from that. That is as much as I can give the member on that matter.

So, was the Capital Investment Tax Credit bumped up to 25% so the province could offer Michelin a significant incentive to locate its new production line of EV tires here?  

We still don’t know. But what we do know from Tuesday’s announcement in Bridgewater is the multinational tire company will receive from Nova Scotia 20% of the total cost of its plant expansion. The dollar amounts work out to $61.3 million over five years from the province and $44.3 million from Ottawa. Michelin said the cost of the new tire production line is $302.7 million. 

The Examiner asked Michelin Canada senior communications advisor Nicolle Vuotto if the company had requested financial assistance from the Nova Scotia government. Vuotto did not answer the question but emailed this response: 

We’re pleased to see all levels of government working together to strengthen our economy. Programs like the Strategic Innovation Fund and the Capital Investment Tax Credit (CITC) are further enhancing Nova Scotia as a place to do business.

The Strategic Innovation Fund is the federal part of the $100 million for Michelin. An additional 70-plus full-time jobs are supposed to be created at the Bridgewater factory in a couple of years. 

Let’s take one more glance back at the November 9, 2022 debate in which NDP Halifax Chebucto member Gary Burrill expressed his concern about changing a tax measure the finance department estimated would cost the government about $35 million a year:

These measures reflect a decision to forego up to $35 million a year in provincial revenue, in terms of corporate taxation… the government will not invest $35 million this year or in any other year until 2029 in, say, improving income assistance, or making a high-dose flu vaccine available without charge, or making direct payments to households in consideration of inflation, or in ending homelessness, or in providing relief on drug costs for seniors in Nova Scotia, because the government has decided to direct these same revenues instead to another place, towards corporate tax reduction.

To Burrill’s critique, MacMaster replied, What we are trying to do is attract business to the province.”  

On Tuesday in Bridgewater Premier Tim Houston said growing the economy will provide the money required to “fix health care.”  

Jennifer Henderson is a freelance journalist and retired CBC News reporter.

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  1. History shows that giving large multi-national corporations does not grow the Nova Scotia economy. How does the Premier think that giving away taxpayer money (money that could have been spent on health care, afffordable housing or any number of other needs) is going to generate money to pay for the magical fix to our broken health care system?

  2. Gross. The province supports another anti-union (anti-worker) business under while trying to say it’s to boost the economy so we can pay for our underserved, sick and dying population.

    1. This is an investment in our province. This generates a larger tax base. This is exactly how we pay for other programs. It certainly worked for ship building. The economics of this agreement benefits all of Nova Scotia. I congratulate the Premier for the foresight of moving ahead with this agreement.