As 2015 came to a close, Nova Scotia rolled out the red carpet to business, including extending an olive branch to the film industry, which has been the target of cuts by the deficit-plagued province.

In December alone, Nova Scotia Business Inc. (NSBI), the province’s business-development agency, offered significant payroll rebates to five companies, including Bank of N.T. Butterfield & Son Ltd. of Bermuda, a provider of specialized international financial services. That bank’s shared services centre in Halifax has the potential to create 50 jobs and spend more than $10 million in salaries over the next six years. In return, the government is offering up approximately $840,000 in the form of a payroll rebate.

The financial sector is one of the key business areas targeted by NSBI for growth. IT is another. Track Group Analytics signed a deal with the province in late 2015 that could return more than $1.5 million to the tech and data company. NSBI estimates the firm will hire up to 60 people and spend almost $14 million in salaries.

The largesse is strategic. Public outcry over political expenditures to support failed businesses, often big business, over the past 20 years (and longer) have made the federal and provincial governments wary in how they support companies looking to set up shop in Nova Scotia.

NSBI believes it has found the answer in payroll rebates. According to the agency, these rebates are designed to ensure that the tax revenue generated by the new jobs that a company creates always add up to more than the amount offered in rebates. NSBI, which also disburses rebates only after a business has generated an actual payroll, contends that for every dollar a company spends on new hires, it receives between 5¢ and 10¢ back.

Whether the new deals are simply fortuitous timing or the province’s Liberal government is taking a new tack is unclear. The government certainly has changed its attitude and loosened the purse strings for the film and TV industry. In the government’s most recent budget, the province’s healthy film tax credit was axed unexpectedly to the vocal dismay of the industry. Gone is a $24-million-per-year film tax credit that offered rebates of up to 50% on labour costs. In that credit’s place is a $10-million fund that provides only 25% rebates.

Now the government has announced that Screen Nova Scotia, the organization that works to support the film industry and draw productions to the province, will receive $475,000 for infrastructure that, according to the budget, “will help the industry take a leading role in its own success.”

The two-year agreement supports Screen Nova Scotia’s efforts to address location services, including a web portal and hiring additional support. The program also will provide marketing support and help develop a long-term strategic plan. Business Minister Mark Furey is confident the province will be a box-office success.

However, some critics have argued that the government should not support an advocacy group or favour one industry over another.

© 2016 Investment Executive. All rights reserved.