Ontario Progressive Conservative Leader Patrick Brown delivers a speech to introduce PC candidate Lorne Coe after he won the provincial byelection in the Whitby-Oshawa, in Whitby, Ont., on Thursday, February 11, 2016. (Photo: Chris Young/CP)
"It's time the government clears the air on these grants and comes clean to Ontario taxpayers."
Fears of 'crony capitalism'
Liberals proud of programs"The programs...are administered by 14 different ministries and are not centrally organized or broadly marketed, making it difficult for many firms to find and apply for these programs," the report concluded. It cost the government $85 million just to administer all its business support programs, according to Lysyk. A recent survey by the Ontario Chamber of Commerce found that over 50 per cent of businesses planning an expansion sought some form of government financing. The auditor said the cost per job per year from the government grants ranged from $718 to $16,981 depending on the funding program, several of which were consolidated in 2015 into the new $2.8-billion Jobs and Prosperity Fund.
Big companies reaped rewardsMcNaughton said Parrish and Heimbecker Ltd. got a $5-million grant late last year to build a flour mill in Hamilton that would create 15 jobs, which he calculated works out to more than $300,000 per job. The auditor said the government gave only four per cent of the total funding to small- and medium-sized businesses, which account for one-third of Ontario's gross domestic product, and did not support any new startups. Much of the money went to big companies. Ubisoft, a video games company based in France, got a $263-million grant to open a development studio in Toronto, while Linamar got $50 million to expand its auto parts plant in Guelph. Ford of Canada was promised up to $70.9 million in 2013, Toyota got a $42.1-million grant in 2015, and the government committed up to $85.7 million in Honda's plant in Alliston.
Corporate tax credits, tooMcNaughton said the owner of a frozen food company in Woodstock was upset when a competitor got a $3.5-million grant from the province. "The owner of this small business that employs about 50 people called me and asked: 'Why am I paying higher taxes and more fees in order to fund my direct competitor?'" said McNaughton. "To me, that makes no economic sense." The Ministry of Finance also provides financial support to business, in the form of corporate tax credits, which cost the province $2.87 billion in 2014/15 alone. The auditor found that the Ministry of Economic Development, Employment and Infrastructure rarely considers which companies benefited from the Ministry of Finance's targeted tax credits when it gives out grants and loans.
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