Half-a-million taxpayer dollars will be forked over to Maple Leaf Sports and Entertainment Group, one of the largest companies in sports, in order to host the 2016 NBA All-Star game. The company doesn't need this grant, but our government simply cannot resist handing money out left, right and centre.
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.
Canadians who don't regularly track how governments spend money might be surprised to find how myths crop up about government expenditures. Exhibit A is a new report that claims Canada needs even more "industrial policy," more colloquially known as corporate welfare. Governments are less eager to be frank about the cost of corporate welfare, including chronic government failure on collecting on past loans.
It's bad enough that many municipalities are hiking property taxes this year, but the provincial government's decision to kill a light industry tax credit is piling on B.C.'s job creators -- and highlighting why such tax credits are bad policy in the first place.
Back in June 2009, the federal and Ontario governments decided to use massive amounts of taxpayer cash to rescue General Motors and Chrysler, two corporations deemed too big to fail. The cost to Canadians was US$13.7 billion: $10.8 billion to GM and $2.9 billion to Chrysler.
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.
Vancouver's Bixi public bike-share program may sound like good public policy but in the end, it will be taxpayers who will get taken for a ride. Why are they paying for bikes when the car shares have proven transportation co-ops and businesses can be sustained without taxpayer dollars?
For those who might have missed what's happening in the city where Wayne Gretzky first made his mark in professional hockey, another round of taxpayer subsidies might soon be delivered to for-profit p...
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?
Corporate welfare is a losing proposition. Peer-reviewed research on business subsidies does not support (political and recipient) claims that corporate welfare is responsible for economic growth or job creation, two of the most oft-heard claims. At best, a generous interpretation of the literature suggests that subsidies may, in very specific locations, produce some effect on local economic behaviour.