Kamil Krzaczynski / Reuters
Crony capitalists are 14% poorer than two years ago.
Bombardier is a fine Canadian-based company and one hopes it prospers in the years ahead and employs even more people -- but without taxpayer assistance. Governments should not pick winners and losers with taxpayer money or prop up industries with funds from other sectors, companies and individuals.
Recently, I asked Industry Canada for information on disbursements to businesses since the early 1960s. The result of that request revealed the hollowness of one claim often advanced in support of subsidies to business: that "acorns" will grow to "oak trees." Instead, what is evident from the data is that many "oak trees" never stop asking for handouts.
If business leaders ever wonder why a chunk of the public disdains business and calls for higher corporate taxes or sector-specific increases (e.g. higher royalty rates for energy and mining, higher stumpage fees in forestry) or just increased business taxation in general, here's a clue: too many companies are addicted to corporate welfare, a.k.a: crony capitalism.
There is apparently no shortage of politicians with a not-so-secret Hollywood love affair: they love to throw tax sweeteners and direct subsidies at the film industry, this in an effort to lure film production to their province or state. In British Columbia, the existing film tax credit hit the provincial treasury for $331 million in the last year alone.
If there was a theme in the recent federal budget, it was how chock full it was with new corporate welfare. The underlying refrain was how big government will help big business with your tax dollars....
In just the first two weeks of January, the prime minister announced another $250 million for the Automotive Innovation Fund -- a federal subsidy program that provides the auto sector with taxpayer cash for research and development. I say let companies duke it out without taxpayers being forced into the ring.
With the recent first anniversary of Occupy Wall Street, consider one beef from protesters that was legitimate: crony capitalism. But insofar as any protester was annoyed with politicians who like to subsidize specific businesses -- corporate welfare in other words -- why do the media so rarely report on it?