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Sunday, December 21, 2008
Canadian tab for corporate welfare exceeds $180 billion, not including $4 billion for automakers announced Saturday
While John Maynard Keynes – the ghost of economics past – haunts central planners and central bankers caught in the grip of stimulus mania, a new Fraser Institute report reveals that Canadian taxpayers have already spent $182 billion on corporate welfare between 1994 and 2006 – and they’re not getting much for their money.
$185 billion works out to $13,639 per taxpayer over that twelve-year period or $1,291 per taxpayer in 2006 alone.
“While corporate begging has become even more blatant this year, the fundamental truth has not changed. Business subsidies, bailouts, or loans are all forms of corporate welfare that transfer tax dollars and employment from healthy businesses to risky businesses,” said Mark Milke, author of the report, Corporate Welfare: Now a $182 Billion Addiction. “Government intervention only delays the day of reckoning and often at the expense of other businesses and a healthy industry and economy.”
With $4 billion in government loans committed on Saturday by Prime Minister Stephen Harper and Ontario premier Dalton McGuinty to the auto industry, Milke points out that since 2004 the federal and Ontario governments together gave $752 million to the automotive industry, including $200 million for Ford, $200 million for GM, and $125 million for Toyota. Will additional billions in corporate welfare really make a difference this time?
"Even though research does not support claims that corporate welfare contributes to widespread economic growth, governments continue to pursue these policies because they want to be seen to be doing something,” Milke said. “By subsidizing or bailing out failing businesses, politicians can tell voters they are saving jobs, or they can appeal to voters with interests in specific industries.”
Here are some highlights from Corporate Welfare: Now a $182 Billion Addiction:
• Between 1994 and 2006, the last year for which statistics are available, Canada’s federal, provincial, and local governments spent $182.4 billion on subsidies to business.
• In 2006 alone, Canada’s federal, provincial, and local governments spent $19.3 billion on corporate welfare, almost double the 1995 figure of $10.3 billion.
• The total corporate welfare bill (federal, provincial, and municipal) has ranged from a low of $9.9 billion in 1996 to a high of almost $20 billion in 2005. In 2006, it amounted to $19.3 billion.
• The cost to each taxpayer who paid income tax in 2006 was $1,291, which was 38% higher than the 1995 figure of $934.
• Over 12 years, the total cost per tax filer who paid tax amounted to $13,639 per person (all figures adjusted for inflation to 2008 dollars).
• Between 1994 and 2006, provincial governments spent $98.5 billion on corporate welfare, while the federal government spent $61.4 billion and municipal governments spent $22.5 billion.
• Among provincial governments, the province which disburses the most amount of public money to corporations is Quebec, with over $5.4 billion in corporate welfare in 2006. Quebec was followed by Ontario at $2.4 billion and Alberta at almost $1.5 billion, with British Columbia fourth at just under $950 million.
“With multiple companies lining up around the world for government-financed grants, loans and loan guarantees, bailouts for one company in trouble will merely make it more difficult for other healthy competitors in a tough economic environment,” Milke said.
Posted by Matthew Johnston
That $19 billion represents the resources to create 380,000 full time jobs, so this subsidizing is a huge destruction of taxpayer wealth.
If Prime Minister Harper really wants to kick start the economy, then let him end these subsidies and bring a $19 billion dollar tax cut to the table this January.
With a huge tax cut, we have a non inflationary way to support all sectors of the economy and all regions of the nation. Given 380,000 jobs is a lot of kitchen tables, there is no way Jack! Layton or Michael Ignatieff can make any coherent objections to such a plan (although logic isn't really Jack Layton's strong suit anyway).
Posted by: Thucydides | 2008-12-21 4:20:24 PM
I got a grant from the federal government for $12,000 in financial aid, see how you can get one also at
Posted by: smith | 2008-12-22 5:22:06 AM
I got a grant from the federal government for $12,000
Posted by: smith | 2008-12-22 5:22:06 AM
Just another parasite living off the backs or real producers.
Seems our government is hell bent on destroying the economy. Slash Taxes now!
Posted by: JC | 2008-12-22 6:33:19 AM
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