Left and right can unite to end corporate welfare - thestar.com

By Mark Milke - from the Toronto Star


“While they publicly denounce increased government expenditure, particularly in the form of social welfare, these champions of free enterprise actively lobby the government for incentive grants, research grants and tax concessions, and all manner of assistance at the individual taxpayer’s expense.”
— Then federal NDP leader David Lewis, on corporations and corporate welfare, in his 1972 book, Louder Voices: The Corporate Welfare Bums


Over the last three years, federal Conservatives have run up $102 billion in new debt, with the forecast for the next four years at another $59 billion. In total, that’s $161 billion in new red ink over seven years.


Given the rancour likely to occur over various attempts to balance the books with a Tory majority government and an NDP opposition in Parliament, here’s a modest proposal they should jointly act on: end corporate welfare.



By corporate welfare, think of direct cash payments to business — not for goods or services, but simply because a government wishes to retain or attract a particular business or industry. Sometimes the money is a grant, or a “repayable” loan (often never repaid), but it’s the same strategy: Governments pick winners and losers in the marketplace. Grants and loans to the aerospace and automotive sector are prime examples.


There are plenty of reasons to stop the practice, starting with the cost to taxpayers. Between 1994 and 2007, Ottawa, the provinces and municipalities spent $203 billion on corporate welfare, or $15,216 over that 13-year period for every tax filer who paid tax. (At just the federal level alone, Ottawa doled out $67 billion during that time.)


Beyond the cost, consider other reasons. Corporate welfare creates an uneven playing field between businesses and industries that do not receive taxpayer support and those that do. The result is an artificial, politically created advantage. When Chrysler and GM received a bailout in 2009, it came at the expense of additional sales that would have gone to a more prudent and better-run Ford or Toyota. Money is thus taxed away from all of us and given to a specific company — and diverted from more productive uses.


Read more...




Left and right can unite to end corporate welfare - thestar.com