Media Release – Money for Nothing and Your Cheques for Free: Industry Canada’s Corporate Welfare Repayment Records

Frontier Centre, Press Release (historic), Public Sector, Uncategorized

 

Calgary: The Frontier Centre for Public Policy today released Money for Nothing and Your Cheques for Free: Industry Canada’s Corporate Welfare Repayment Records. The report concerns repayment records for business subsidies at the federal department of Industry.
 
The report found that since 1982, Industry Canada has authorized almost $21 billion in “assistance” to various recipients, paid out $18 billion, and collected under $1.9 billion under all past and present assistance programs, or just over 10%. The repayment records were obtained from an Access to Information request made by the Frontier Centre for Public Policy. The data obtained concerns the 27-year period from April 1, 1982 to March 19, 2009. The study and accompanying tables can be accessed here.
 
A full list of all the 21,766 authorizations over those 27 years, with names of the potential recipient and amounts authorized, can be downloaded here in an Excel file. /files/1/Industry Canada Copy of ATIP.xls   Readers of this file should note that “authorized assistance” and “expenditure” are not always one and the same. The department may have authorized a grant, loan or conditional repayable contribution and the potential recipient may have not accepted the entire authorized amount.
 
Findings: 90% of the disbursed money since 1982 has not been repaid
 
The results of the Access request show the following for the 1982–2009 period:
 
·         21,766 recipients were authorized to receive assistance from Industry Canada
·         Authorized subsidies (“assistance”) amount to almost $21 billion.
·         Disbursed amounts (“net expenditures to date”) total almost $18 billion.
·         Of the almost $18 billion in subsidies, just under $1.9 billion ($1.869 billion) has been repaid.
·         Expressed in percentage terms, only 10.4% of the $18 billion has been repaid.
 
 
Famous recipients: Examples
 
There are the usual and well-known recipients and also some odd approvals on the list, including various divisions of Bombardier in Quebec and Ontario (authorized to receive $750,249,083); Pratt & Whitney of Longueiul, Quebec and Mississauga, Ontario (authorized to receive $1,845,509,079), and Martin Pet Foods of Bromont Quebec, a division of H.J. Heinz (the ketchup maker), with an authorization approved for $720,000. Readers should note that these same companies may also have received authorizations and subsidies from other federal departments and agencies in addition to the amounts listed here.
 
Non-famous recipients: Examples
 
In addition to large corporations, a plethora of smaller businesses received subsidies from Industry Canada, such as an ice cream shop in Ontario, an automotive shop in Saskatchewan, hotels in Alberta and a tire store in British Columbia.
 
Remedy and recommendation:
 
“The path away from corporate welfare is not complicated though it can be politically difficult in selected areas” notes Mark Milke, research director for the Frontier Centre for Public Policy, and author of the report: “Trade the tens of billions in corporate welfare reductions for reductions in business tax rates.” Milke noted that Prime Minister Stephen Harper himself once criticized subsidies to business. In a 2004 speech to the Toronto Board of Trade, the then opposition leader pledged to cut taxes for business—but only in exchange for an end to welfare for business.
 
“In a budgetary predicament where the federal government produced a $53.8 billion deficit in 2009/10 and forecasts a $49.2 budget deficit in 2010/11, there is a need to switch from unproductive policy to neutral policy that doesn’t pick winners and losers,” said Milke.
 
“Subsidies to a particular business or sector are artificial and don’t deliver the jobs, economy or tax revenues too often promised. In contrast, across-the-board reductions in business taxes favour no individual firm or sector. That’s a neutral policy, unlike subsidies to specific corporations or sectors.”
 
 
Download a copy of the Money for Nothing and Your Cheques for Free: Industry Canada’s Corporate Welfare Repayment RecordsHere.
 
For more information and to arrange an interview with the study’s author, media should contact:

Mark Milke
403-630-0875
 
Gary Slywchuk
Troy Media Corporation
403-835-8192