Invest New Brunswick’s decision to contribute $3.8 million in payroll rebates to Radian6 created minor rumblings in the tweetosphere yesterday as tweeters debated the wisdom of government aid to businesses.

First the facts:  Economic Development Minister Paul Robichaud announced Wednesday the government would provide up to $12,000 per job in rebates to help the social media monitoring company expand its workforce in Fredericton and Saint John. Radian6, which was purchased by San Francisco-based Salesforce.com for about $370 million last year, plans to expand by about 300 positions in New Brunswick.

The announcement sparked a brief debate on twitter about whether the government should be handing money to a business that is doing just fine on its own. “These subsidies are just [a] race to the bottom,” said Kevin Lacey, the Atlantic Canada director for the Canadian Taxpayers Federation. “Better to save NB tax money than outbid others.” He added a better path to economic growth would be to cut overall taxes and eliminate red tape.

Susan Holt, CEO of the New Brunswick Business Council countered: “The competition for the R6's of the world is fierce. Do we want them here, or in NS or US or elsewhere?”

Much as I respect the great work done by the Taxpayers Federation, I have to take issue with Lacey on this case. First of all, if any government in the region deserves credit for having the courage to cut taxes it is that of New Brunswick. And what’s impressive is the tax cuts were initiated by a Liberal government and maintained by its Conservative successors.

But that’s not the point. The point is that the announcement means that the province’s tech segment in New Brunswick and the Atlantic region will expand by a few hundred people, all at a cost of $3.8 million. This program will allow more people – mainly young people – to work in a segment of the economy that is growing, export driven and environmentally sustainable.

Digital technology is ideally suited to the Atlantic Canadian economy because it requires relatively little capital (we don’t have much) and lots of brainpower (which we do have). What Invest New Brunswick is doing is expanding capacity in an industry that can make a difference in the region.

There are good and bad examples of government assistance to businesses, and I’d argue that expanding this vital sector at a cost of just $3.8 million is a case of the government getting good value for money.