Tuesday November 13, 2018
Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday November 13, 2018
The good, the bad and the ugly of corporate welfare
Federal government investment in private business — disdainfully called “corporate welfare” by critics — can raise the blood pressure of even the most Zen taxpayer. Consider:
Last month, Ottawa wrote off a loan and other subsidies granted to Chrysler for $2.6 billion. The interest is also in the wind. Or how about the Ontario government’s $220 million investment in Toyota to create some 450 jobs (which works out to a $488,888 subsidy per job). And then, of course, there is Bombardier, the grandmother of all corporate welfare recipients.
The Quebec-based transportation company got its first government handout in the mid-1960s. By now, depending on who you believe, Bombardier has received something like $3.7 billion from Canadian taxpayers. And just to add insult to injury, the company isn’t exactly prospering.
Last week, it announced it was cutting 5,000 jobs, including 500 in Ontario, and it sold off one of its aircraft divisions. It also announced a new contract to provide rail cars to the City of Montreal, but that good news didn’t offset bad news about its stubborn corporate debt. Analysts are again speculating that Bombardier’s turnaround may be wishful thinking, and its share prices took the expected nosedive at that news.
Most galling is the reality that those billions, just like the billions in Chrysler bailout money Ottawa just wrote off, are never coming back to public coffers.
What can we do, other than get all red in the face and grind our collective teeth? It’s not like you can vote for a different party to avoid these so-called investments. All parties do them, in Bombardier’s case, pretty much equally.
Or, we can try and do what makes sense but is typically very hard for average taxpayers struggling to get by in this challenging world — look at the big picture, and look at it over time, not in the moment.
First, so-called corporate welfare is far from new. It goes back as far as the days when Canadian railroads were getting royal treatment in the form of prime pieces of real estate. But what if, back in the ’60s, the government of the day had said no to Bombardier and set the tone for the future? (Continued: Hamilton Spectator)