Nova Scotia offers Royal Bank up to $22M to open financial services centre

HALIFAX – Nova Scotia’s business development agency has agreed to offer the Royal Bank of Canada (TSX:RY) up to $22 million in payroll rebates to open a financial services centre in Halifax.

The bank is expected to create 150 new jobs this year in cheque processing, accounts payable and fixed asset accounting, Nova Scotia Business Inc. said Wednesday.

The average salary in the payroll agreement is about $60,000 annually and there is the potential for up to 500 new jobs within 10 years, the provincial agency said.

The bank is moving into property formerly used by Blackberry, which closed in October 2013 after receiving more than six years of provincial payroll rebates.

Laurel Broten, the chief executive of Nova Scotia Business Inc., said it’s good to have a new tenant in the building.

“We’re pleased to have them choose Nova Scotia as a place they want to grow,” she said in a telephone interview.

Broten said the payroll rebate is necessary because Nova Scotia was competing with other jurisdictions to attract the bank’s back-office operations.

“This has been a long conversation over a number of years. … It is a competitive space. We are competing with a number of other locations,” she said.

She declined to name specific competitors for the new centre.

Progressive Conservative finance critic Tim Houston said the Opposition isn’t in a position to judge the deal because there is a lack of public information on what factors were considered and what competing incentives were offered.

“We’re trying to answer the question of why it took $22 million of taxpayer money to get them to come here. … We don’t know enough details to know if it’s a good deal,” he said.

“At lot of people are scratching their head today, asking ‘Why does it have to work like this?’ “

NDP Leader Maureen MacDonald said the deal shows the Liberal government’s promises not to provide subsidies to large corporations were false.

But she wouldn’t comment on whether the New Democrats, who authorized similar payroll rebates to major companies when in government, opposed or supported the bank deal.

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