corporate welfare

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For those who might have missed what’s happening in the city where Wayne Gretzky first made his mark in professional hockey, another round of taxpayer subsidies might soon be delivered to for-profit professional hockey in Edmonton.

The background: In 2011, Edmonton Oilers’ owner Daryl Katz convinced city council to deliver up taxpayer cash for a new $450 million arena.

More recently, Katz demanded more tax dollars and then visited Seattle to drop hints that he may move the Oilers to that west coast city if Edmonton City Council doesn’t agree to his latest “request.”


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With the recent first anniversary of Occupy Wall Street, consider one beef from protesters that was legitimate: crony capitalism.

In general, Occupy Wall Street types could be described as a little too naïve about the downside of more government power, and too critical of people who exchange goods and services in markets.

But insofar as any protester was annoyed with politicians who like to subsidize specific businesses—corporate welfare in other words, and which is an accurate example of abused capitalism, hand me a protest sign and give me a tent.


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The well-known quip - The definition of insanity is doing the same thing over and over again and expecting different results - is often attributed to Albert Einstein or Mark Twain. Accurate attribution has never been confirmed.


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Around Labour Day, a plethora of news stories focus on the state of unions, and often, their interaction with business. Given the name of the holiday, the attention is understandable.

However, the focus on unions and corporations, especially where governments are involved to set policy and create legislation, often misses two other critical groups: consumers and taxpayers.

It is those two cohorts that are often overlooked and whose interests are damaged when governments assume, on purpose or by accident, that only the interests of organized labour and business matter.


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Canada’s mining industry is globally competitive, and has long succeeded without much in the way of government subsidies. It even thrived in the last recession by responding to market demand. Yet instead of letting markets drive mining investment in Quebec, the provincial government is bailing out the asbestos industry using taxpayer money - and this for a product that is harmful to human health.


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From the federal government to provincial governments, the tendency to hide information taxpayers have bought and paid for seems all too common. Regardless of the party label, few governments give up information that is potentially embarrassing without a fight.


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With sales and profits up at General Motors, proponents of the 2009 automotive bailout for GM (and Chrysler) now assert the taxpayer-financed rescue was a success. In a visit to Michigan in late January, U.S. president Barack Obama argued the deal saved jobs. Canadian politicians, including Finance Minister Jim Flaherty, who last summer incorrectly asserted taxpayers received all their money back, have made similar boasts.

Given the revisionist history in play, let’s place that 2009 deal in proper context.

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While many Canadians were on vacation this summer, including many journalists and opposition parliamentarians who might notice taxpayer cash dribbling away, our governments continued to hand out more corporate welfare.

In late August, Ontario offered up $2-million to Dana Holdings and $3-million to Centra Industries, both in Cambridge, Ontario. Predictably, the usual flawed justification was offered: taxpayer subsidies will create or preserve jobs.

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The latest deals to “save” American and Greek public finances—allowing those countries to put themselves into even deeper debt—should puncture the illusion the welfare state was ever a success. The fact is, it was always built on borrowed time and borrowed money.