government subsidies

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Souris Mayor Dave MacDonald recently told the Premier's Council on EI that recent changes to the federal EI program are killing his town.

Unfortunately, Mr. MacDonald did not note that Islanders receive three times as much as they contribute to the EI program. This was a subsidy in 2010 of about $150 million from citizens living elsewhere to people living on PEI.


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For many years, Ontario has been the quiet enabler for the vast system of subsidies the federal government provides to Atlantic Canada, Quebec and Manitoba. With rare exceptions, it has stood by as equalization grew and as the federal government incorporated subsidies to regions in more and more of its regular programming.

In recent years, evidence has been accumulating that the regional subsidy system is much bigger than it appears on the surface, unsustainable for both Alberta and Ontario and entirely counterproductive because it discourages growth in all recipient provinces.


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You might think the federal Conservatives, who added $125-billion to the federal debt since 2008 and will add another $21-billion by the end of March, might be shy about unnecessary expenditures. Alas, that’s not the case, as it appears Prime Minister Stephen Harper and his colleagues would rather hand out cash to corporate Canada instead.

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.


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Mayors and councillors across North America regularly spend taxpayer cash trying to revitalize neighbourhoods or entire cities. They often do so in expensive and ineffective ways: grand schemes that wipe away existing neighbourhoods or street markets, only to be replaced with massive convention centres (mostly unused by locals) or costly new arenas for professional sports teams.


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The well-known quip - The definition of insanity is doing the same thing over and over again and expecting different results - is often attributed to Albert Einstein or Mark Twain. Accurate attribution has never been confirmed.


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Canada’s mining industry is globally competitive, and has long succeeded without much in the way of government subsidies. It even thrived in the last recession by responding to market demand. Yet instead of letting markets drive mining investment in Quebec, the provincial government is bailing out the asbestos industry using taxpayer money - and this for a product that is harmful to human health.


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For those who look back on 2011 and wonder how European and American governments dug themselves into such a deep debt hole, consider this image as an explanation: Santa Claus.