Hmmm, how much of our tax dollar is sunk down the bottomless pit of corporate handouts?
Way back in 1972, David Lewis, leader of the federal NDP, used the term corporate welfare bums to describe big corporations that demanded and received millions of dollars in government subsidies. I wonder if, even in his wildest dreams or nightmares, he foresaw how far down that road of no return we would wander in the next fifty years.
I did some quick and dirty Google research to get a sense of the scope of the handouts. Canadian federal, provincial and local governments gave out the equivalent $352 billion to select big businesses from 2007 to 2019. That does not include other forms of government support such as loan guarantees, direct investments and regulatory privileges.
A Fraser Institute report indicated that in the year 2019 alone, the Government of Ontario spent $11 billion on corporate welfare handouts.
Prime Minister Justin Trudeau and Ontario Premier Doug Ford rolled out the largest corporate welfare deal in history when they promised $14 billion to Volkswagen to entice them to build a $7 billion electric vehicle battery plant in St. Thomas, Ontario. The math is puzzling in this case as the money handed out is double the value of the plant itself.
Trudeau and Ford seem to be all-in on the tactic. They also teamed up to give huge buckets of money to Ford Motor Company, Stellantis and Toyota to subsidize their manufacture of electric car batteries in Ontario. When the Stellantis deal almost went sideways, the Feds had to pony up even richer subsidies to salvage the deal.
Politicians like corporate welfare because they can claim credit for job creation and investment. But from what I have read, there is a body of research that indicates corporate welfare does little to create economic growth.
This week the story broke that LG Energy Solutions, the South Korean company who is a Stellantis partner in the electric battery plant, may be planning to bring in hundreds of temporary foreign workers to build the plant. So much for job creation.
One more hand reaching into the public pocket. Bell Media is pressing our national broadcasting regulator to create a news fund that would provide financial assistance to Canadian broadcasters. Translation: We can’t figure out how to compete so you are going to have to subsidize us.
Let us be clear about this. The mega corporations do not need financial handouts to undertake these projects. They all have massive financial war chests. Most if not all of the money the government hands out to them arguably goes direct to their bottom line. Regrettably, we have reached a point where governments have to bribe big business to locate within their borders.
In a time when many people are struggling to keep a roof over their head and put food on the table, in my humble opinion handing out billions to corporate welfare bums is irresponsible – particularly when the business case for doing so may not hold water.
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Tags: Bell Media · corporate welfare · Ford Motor Company · LG Energy Solutions · metaphor · Michael Robert Dyet · Stellantis · Toyota · VolkswagenNo Comments