The federal Tories are addicted to picking corporate welfare winners and losers.
If there was one theme in the recent federal budget, it was how chock full it was with new corporate welfare. The underlying refrain was how big government will help big business with your tax dollars.
For example, early on in Budget 2013, it is clear that crony capitalism is scattered throughout the budget. On Page 6, Ottawa promises $1 billion to the aerospace sector over five years through the Strategic Aerospace and Defence Initiative.
In addition, the federal government promises a new program for aerospace companies with an initial cost to taxpayers of $110 million over four years and then $55 million every year after that. So, over the next five years, Canada's aerospace sector will receive almost $1.2 billion in new corporate welfare money.
That's only the start of the corporate welfare list.
From Page 7: Ottawa will deposit $920 million into the Federal Economic Development Agency for Southern Ontario, a corporate welfare slush fund, and spend $92 million on forestry businesses.
Page 9: $60 million for the Venture Capital Action Plan (in addition to $400 million announced in January), $37 million for granting councils to help business commercialize their products and $325 million will go to so-called green technologies.
Page 92: Ottawa will "partner" with the provinces to deliver $3 billion to the agricultural sector.
It's not clear how much will come from the federal government and how much from the provinces, but all such money originates with taxpayers (or future taxpayers, given Ottawa still runs red ink budgets).
Page 117: A re-announcement of earlier plans to give $250 million to the automotive sector through the Automotive Innovation Fund.
Page 118: Another $145 million for the Automotive Partnership Canada fund.
Add it all up and Budget 2013, in conjunction with a few announcements earlier this year, provides $6.4 billion in new corporate welfare, courtesy of Canadian families. That number doesn't include corporate welfare announced in previous budgets.
Budget 2013 makes the usual defences for crony capitalism: jobs are created with the help of a micromanaging federal government. In his budget speech, the finance minister asserted the Conservative budget reflects a belief of Canadians that "their government will be a benign and silent partner in their enterprise."
I have three questions for the finance minister: How do you know Canadians want you to use their tax dollars to be a "silent partner" with business? Why must government be a "partner" in any business enterprise through loans and grants? Why not just let corporations compete without dragging taxpayers into the ring?
Economists are clear that crony capitalism fails because it takes money from taxpayers and productive businesses and, in the case of businesses, transfers it to businesses in the same sector at the expense of the "giving" business.
The official title of Budget 2013 was "Jobs, Growth, and Long-Term Prosperity." It should have been "Grants, Subsidies and Eternal Business Handouts." It should also have had a price tag attached for taxpayers on the front cover: $6.4 billion in new corporate welfare.
Mark Milke is a senior fellow with the Fraser Institute and author of several studies on corporate welfare. His column was provided by Troy Media (www.troymedia.com).
