Lies, damn lies and corporate welfare
Each passing day reminds me just how much the government takes us for idiots – by playing with words.
Take the case of corporate welfare. In a recent press release, the government said it was granting a « non-repayable loan » (you can’t make this stuff up) to a multinational. Translation: they « lent » millions of your tax dollars to IBM or Warner Brothers, but those companies have no obligation to reimburse you.
What do you expect? If politicians told you that they take your money to give to millionaires, they would have a hard time getting re-elected.
But it gets worse. A study by the Frontier Centre reveals that even the money (your money) they give to multinationals in loans that are « repayable » … still doesn’t get paid back!
Since 1982, Industry Canada has loaned more than 18 billion of your tax dollars to hundreds of companies – the equivalent of 360,000 years of hard labour at $50,000 a year. Many of these companies are multinationals that pay their CEOs millions of dollars. They’re usually well connected politically, or located in counties where the government wants to buy votes.
Bah! Who cares, you say. These are loans. The money will come back eventually, right?
In 28 years, Canadian companies have paid back only $1.9 billion of the $18 billion loaned out – just 10% of the total. Keep in mind that these loans are often granted without interest. Collectively, we therefore sacrifice millions of dollars we could earn by investing that money elsewhere.
Even worse: since our government is drowning in debt, it must borrow from the markets – at interest – to find the money. The total bill for taxpayers therefore ends up much higher than the $18 billion « loan. »
Meanwhile, each day brings another misleading press release. On March 31, 2009, Industry Canada announced a « repayable investment » of $250 million to CAE, a provider of flight simulators. But when you dig a little, you discover that this gift is repayable … « conditionally. » If CAE sells enough simulators, the company will reimburse us. Otherwise, kiss that money goodbye.
Heads they win, tails you lose.
We can argue about the effectiveness of corporate subsidies. (They’re a waste of money, but that’s for another column.) But if politicians prefer giving our tax dollars to big business instead of improving health care or lowering taxes, they should bite the bullet and do so openly and honestly.
David Descôteaux est chercheur associé à l’Institut économique de Montréal.