MLA Report: Corporate welfare does not create long-term prosperity

By DREW BARNES on July 30, 2021.

With a federal election likely coming soon, we can expect to hear a lot of debate over Canada’s economy.

There’s good reason for this. Under Trudeau, the Liberal government has consistently attempted to take the shortcut to economic growth, running up billions in debt while funding massive corporate welfare schemes in the name of short-term job creation. The longer Trudeau remains in power, the more obvious it becomes that this approach won’t lead to long-term prosperity. Instead, Canada finds itself on a path to inflation, higher taxes and a debt spiral.

This certainly is not a plan anyone should seek to emulate. Yet, ironically, this is exactly what is happening in Alberta under Premier Jason Kenney.

Earlier this year, the Canadian Taxpayers Federation compiled a list of 14 corporate welfare announcements made by the Kenney government, costing taxpayers at least $5 billion. Some notable examples included subsidies, grants, loans, loan-guarantees and niche tax credits specifically directed at the petrochemical and tech sectors. While running the largest deficit in Alberta history, taking our province over $100 billion into the red, it seems there is no corporate welfare scheme too small for this premier. Like Trudeau, Kenney is trading short-term gain for long-term pain.

Corporate welfare, whether it’s the subsidization or the direct investment of taxpayer dollars in risky private sector ventures, is almost always a mistake.

Not only does it open the door to the systemic waste of taxpayer dollars, but it also interferes in markets to the detriment of all.

True fiscal conservatives like Kenney’s former boss Stephen Harper, trust individuals to make the right choices for themselves, their families and their communities. The most honest representation of these decisions is the markets. When politicians pick winners and losers in the markets, they are in essence over-ruling the will of the people. It’s one of the purest forms of elitism, and it almost always prioritizes the interests of a chosen few over the wider public.

There is a better way. If politicians want to support sustainable job creation, they should focus on reducing taxes, red tape and the overall size of government. Initiatives like the Job Creation Tax Cut, which lowered Alberta’s corporate tax rate to 8%, will do far more for our province than government handouts. Reducing taxes leads to organic economic growth, while businesses that rely on subsidies tend to disappear when the handouts run out.

Alberta needs to get back to the fiscally conservative model for “jobs, growth and long-term prosperity,” advocated by Stephen Harper.