corporate welfare

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Alberta’s provincial government has provided plenty of political theatre as of late, with, as I write, three resignations from the government, including that of Alison Redford as premier. However, the Redford resignation may not be the end of her influence on Alberta’s future, and in particular, upon the Alberta Heritage Savings and Trust Fund.


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Back in late 2011 after the Occupy Wall Street protests, Fiat-Chrysler CEO Sergio Marchionne gave a speech in Toronto to decry what he called "the most inane displays of greed." The reference was to behaviour he had observed while serving on various company boards over the years.


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The federal government recently poured $36.3 million into the Northleaf Venture Catalyst Fund the first of many soon-to-come government-sponsored funds comprising Ottawa's $400 million Venture Capital Action Plan. The plan, conceived with the view that Canada's lacklustre venture capital industry requires a government solution, ignores Canadian evidence that shows government-sponsored venture capital is ineffective. More fundamentally though, it represents a further blurring of the lines between pro-market and pro-business government policy.


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In the land of government plenty that vast landscape populated with the tax dollars of Canadians there is no shortage of politicians willing to hand out and defend subsidies to business and no dearth of corporations willing to take the cash.


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In his 1946 essay, Politics and the English Language, George Orwell argued that, political speech and writing are largely the defence of the indefensible. Orwell's quip came to mind again recently after reading Bombardier's defence of taxpayer subsidies to business, this in response to my recent study on the matter.


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Back in 1962 John F. Kennedy had been president of the United States for one year, four lads from Liverpool were about to hit it big in the music world, and a Saskatchewan lawyer, John Diefenbaker, was in his fifth year as Prime Minister of Canada.

In retrospect, 1962 was also notable for another reason: it was the start of a trail identifying corporate welfare recipients, many of whom have sought subsidies from the federal government ever since.


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Canada is a superb creation and initial credit for that must, obviously, go to Canada's fathers of Confederation. How we came about is a fascinating tale of seemingly intractable regional disputes resolved, at least for a time, by new institutions and a new country.


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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,” academic lingo for subsidies to business, and this as if governments had not already long practised such policy, and at a considerable cost to taxpayers.


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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.

The taxpayer bailout was part of the court-supervised restructuring process for the two companies, egged on by the Obama administration. Behind the scenes, the White House made clear that any restructured versions of the companies might leave Canada if taxpayers in this country did not ante up.