Corporate welfare is fueling government debt. And it’s time for it to stop. Photo Credit: Shutterstock.
Canadians are worried about government debt and axing corporate welfare is the closest thing to a silver bullet politicians have to solve the problem.
Canada’s politicians spent $89 billion handing out taxpayer cash to corporations in 2021, the last year for which figures are available, according to the Fraser Institute.
To get a handle on swelling government debt at both the federal and provincial levels, it’s time to put corporate welfare on the chopping block.
And those who think taxpayers don’t care about government debt are sorely mistaken.
A recent Leger poll shows 81 per cent of Ontarians are concerned about the debt dive the province has taken over the past decade.
No doubt Canadian taxpayers are just as alarmed about the doubling of Canada’s federal debt during Prime Minister Justin Trudeau’s nine years running Parliament Hill.
When an individual has a debt problem, the first step is to stop digging. The same is true of governments.
This year, just two of Canada’s 10 provinces are running balanced budgets. And Ottawa is nowhere close.
But look at the corporate welfare numbers and a path to solving Canada’s run-away government debt problem begins to emerge.
Take Ontario.
Ontario’s politicians have racked up $145 billion in new debt over the past decade, including more than $80 billion over the past six years under Premier Doug Ford.
Thanks to years of mismanagement, Ontario taxpayers will spend $13.9 billion on debt interest payments this year. That’s more than the province spends on post-secondary education.
And this year’s deficit is a whopping $9.8 billion.
Ontarians are concerned. And rightly so.
But take a quick gander at the Fraser Institute’s report and a path toward balance becomes clear.
The Ford government spent $22.1 billion in taxpayer handouts to corporations in 2021.
If this year’s handouts are even half of what they were in 2021, the Ford government could wipe out its deficit and produce a surplus by eliminating corporate welfare alone.
It’s unfair to place more and more debt at the feet of our children and grandchildren to give wealthy companies handouts.
It’s also unfair to pick winners and losers. The Ford government is taxing hardworking Ontarians, as well as small businesses, and handing billions over to wealthy corporations that don’t need taxpayer help.
Over the past few years, the Ford government has teamed up with the Trudeau Liberals to give billions to wealthy companies like Honda, Volkswagen, the Ford Motor Company, Stellantis, and many others.
Each year, Ottawa and Queen’s Park ran big deficits while handing out taxpayer cash to wealthy companies like candy. In many cases, taxpayers are paying millions of dollars for every job created.
Corporate welfare is fueling government debt. And it’s time for it to stop.
Not only is corporate welfare insanely costly, but it simply doesn’t work.
Between 2011 and 2021, the Ontario government spent $100 billion on corporate welfare. Yet inflation-adjusted economic growth in Ontario was below one per cent, on average, during that decade.
If handing out billions to create jobs and grow the economy worked, surely, we’d have the evidence by now.
Queen’s Park isn’t the only place where the budget could be turned around if corporate welfare were a thing of the past.
The Trudeau government also spent $47 billion on corporate welfare in 2021, which roughly equates to its budget deficit this year.
If 2024 corporate welfare numbers are in line with 2021, the Trudeau government could balance its budget in one fell swoop.
Taxpayers are rightly concerned about growing government debt across the country. Ending handouts to wealthy companies is an obvious solution to the debt binge.
After all, you cannot borrow and subsidize your way to prosperity.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
