home | about | archives | forum | submit

The Era of Big Government is Still with Us - But it isn't Helping Anyone You Know

Stephen Gowans

there was the GM of the Vancouver Canucks complaining that the film industry in Canada gets handouts -- oops, sorry, subsidies -- from the federal government. So why shouldn't NHL teams, he wondered.

Next it's Bombardier, inveterate recipient of low-interest and interest-free loans from the federal government, receiving yet another low-interest loan, this time to the tune of $1.7 B. US-based Air Wisconsin will get help from Ottawa -- that is, from you and me -- to cover almost three-quarters of the cost of purchasing 75 jets from Bombardier.

Industry Minister Brian Tobin, Captain Canada to his cheerleaders (among whom now count the owners of Bombardier), says the give-aways -- er, loans -- are necessary to protect 24,000 aerospace jobs. Unmentioned is that the loans go a long way toward protecting profits, too, but, apparently, profits aren't mentioned in polite company.

You might think the government would figure out that jobs could be protected for less, and that the bite taken out of the federal treasury could be reduced, were the purchase price of all those Bombardier jets purged of the fat profits that will find their way into the pockets of Bombardier's owners. In other words, if you're going to be handing out subsidies anyway, why not nationalize the company? It costs less. And you know how we have to be chary about spending taxpayers' hard earned dollars.

Were all this not enough, some of Ontario's most profitable companies -- Imperial Oil, Dofasco, Amoco, Kimberley-Clark -- are set to receive millions of dollars in taxpayer subsides in the form of low energy prices.

Ontario's Energy Minister Jim Wilson calls the handouts a transitional measure to help companies adapt to the impending competitive electricity market in Ontario. Wilson's concern for helping electricity consumers adapt doesn't, however, extend to ordinary Ontarians, who, instead, will foot the bill for the subsidies, and pay full-price for their own electricity.

The Canadian Taxpayers Federation hopes we're not seeing a return to "the bad old days of corporate welfare," as if the days of corporate welfare ever ended. But maybe they're distinguishing the bad old days from the good old days (i.e., the days when corporations received handouts and no one complained too loudly.)

What's amusing about the Canadian Taxpayers Federation's tirades against corporate welfare is that their proposed alternative -- lower corporate taxes -- ends up as a disguised subsidy, which, perhaps, is why they're so fond of tax cuts for businesses. People don't complain as loudly about tax cuts for businesses because they don't look like a subsidy. And then there's all those jobs to save.

But appearances and reality have such a fickle relationship. Bill Clinton doesn't look like a war criminal, but to the hundreds who lost loved ones, limbs, jobs and houses in the NATO air war in Kosovo, or in the ongoing, almost daily-bombings of Iraq, or in the bone-headed cruise-missile attack on a Sudanese pharmaceutical factory, appearances don't really matter.

Consider: All of the infrastructure on which businesses depend, and without which none could turn a profit -- from a public education system, to roads, to airports, to an immense military colossus in the United States which funnels oceans of cash into the high-tech, aerospace and automotive industries -- gets paid for by the public.

In other words, we subsidize business by bearing the lion's share of the tax load that underwrites the infrastructure on which business profits depend.

It's called socializing the expense and privatizing the returns. A good gig if you can get it.

And that's not all. There's the safety net of IMF bailouts, paid for by Western taxpayers, to protect high-risk overseas loans made by those who have enough spare cash laying around to lend. No one you know, I suspect.

And there's also the sale of bonds by government to raise revenue, revenue that might have been raised through progressive taxation. The selling of government bonds transfers money from taxpayers to bondholders -- usually the same people who own and control the businesses whose taxes the Canadian Taxpayer Federation want cut. This is considered better than having everyone pitch in, in accordance with their means.

Welfare as we know it has ended. The days of big government are over. Yes, for some, like you and me. But for others, welfare, and big government, are a constant -- like the income tax forms that arrive in your mailbox every year.

Steve Gowans calls himself a radical, but others just call him contrary and a pain-in-the-ass. He can be reached at

home / about / archives / forum / submit