NCPA - National Center for Policy Analysis


December 16, 2008

Canadians provided more than $182 billion in corporate welfare to businesses between 1994 and 2006; that works out to $13,639 per taxpayer over that 12-year period in 2006 alone.  Yet, politicians in Ottawa are still arguing over how much additional money the government should give business in the name of economic stimulation, says the Fraser Institute.

While corporate begging has become even more blatant this year, the fundamental truth has not changed.  Business subsidies, bailouts or loans are all forms of corporate welfare that transfer tax dollars and employment from healthy businesses to risky businesses, says Fraser.   Government intervention only delays the day of reckoning and often at the expense of other businesses and a healthy industry and economy.

Among Fraser's findings:

  • In 2006 alone, Canada's federal, provincial, and local governments spent $19.3 billion on corporate welfare, almost double the 1995 figure of $10.3 billion.
  • The total corporate welfare bill (federal, provincial, and municipal) has ranged from a low of $9.9 billion (1996) to a high of almost $20 billion (2005).
  • The cost to each taxpayer who paid income tax in 2006 was $1,291, which was 38 percent higher than the 1995 figure of $934.
  • Between 1994 and 2006, provincial governments spent $98.5 billion on corporate welfare, while the federal government spent $61.4 billion and municipal governments spent $22.5 billion.
  • Among provincial governments, Quebec disburses the most public money, with over $5.4 billion going to corporate welfare in 2006; Ontario is second with $2.4 billion, Alberta third with $1.5 billion and British Columbia fourth with just under $950 million.

With multiple companies lining up around the world for government-financed grants, loans and loan guarantees, bailouts for one company in trouble will merely make it more difficult for other healthy competitors in a tough economic environment, says Fraser.

Source: Mark Milke, "Corporate welfare: Now a $182 billion addiction," Fraser Institute, December 10, 2008.


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