GOLDSTEIN: Corporate welfare is strangling Canadian economy: study
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Orsign-inif you have an account. Corporate welfare by Canada’s federal and provincial governments has more than tripled since 2015 and is strangling economic growth, according to a new study by the Fraser Institute. Photo by DAVE CHAN/AFP via Getty ImagesSee more Toronto Sun on Google —save as a Preferred SourceSubscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. 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Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsCorporate welfare by Canada’s federal and provincial governments has more than tripled since 2015 and is strangling economic growth, according to a new study by the Fraser Institute. It found corporate subsidies totalled $87. 7 billion in 2024 alone, with $44. 7 billion coming from the federal government and $43 billion from the provincial governments combined. That more than tripled the 2015 level of $25. 1 billion, adjusted for inflation and population growth. Despite all of this spending, the study said, “an extensive body of research shows there is little connection between sustained, widespread economic growth or job creation and corporate subsidies. ”“The massive recent increase in government spending on corporate welfare should concern all Canadians,” said Alex Whelan, co-author of the study by the fiscally conservative think tank, Eliminating Corporate Subsidies in Canada: An Opportunity to Boost Growth. “It’s wasteful spending at the expense of Canadian taxpayers and places government in the position of picking favoured businesses. Better policies exist to drive economic growth. ”Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Your Midday Sun will soon be in your inbox. We encountered an issue signing you up. Please try againGov’t could lower business taxes by more than 80%: StudyThe study argues that by eliminating corporate welfare and applying the savings to broad-based corporate income tax relief, the federal and provincial governments could lower business taxes today by more than 80%, removing another anchor on the Canadian economy. During the total study period from 2007 to 2024, the study found provincial governments spent $474. 4 on corporate welfare while the federal government spent $312. 9 billion, for a total of $787. 3 billion. It said that while some of this was due to the economic impact of the COVID-19 pandemic in 2020 and 2021, the amount of corporate welfare today far exceeds the amounts given away in pre-pandemic years. The root problem, the study says, is that instead of improving their goods and services and how efficiently they produce them in order to compete and boost profits, corporate welfare incentivizes businesses to keep seeking government subsidies, known as “rent seeking”, instead of increasing productivity through research and development. Low productivity has been described as a “break the glass emergency” by Bank of Canada senior deputy governor Carolyn Rogers. Ontario surpasses Quebec in corporate subsidies, new report saysDAGRES: Ontario is the new corporate welfare king70% of Canadians say crushing taxes destroying standard of living: PollThe Organization for Economic Co-operation and Development has warned that if nothing changes, Canada’s real GDP per person — a measure of the standard of living — will be the lowest among its 38-member industrialized countries from 2020 to 2060. Prime Minister Mark Carney is trying to turn this around by doubling the amount of foreign investment in Canada within a decade, to reduce our economic reliance on the United States. But it will be a slow process. Carney presided over the worst record of economic growth in Canada during his first year in office of any prime minister in more than half a century — negative growth of 0. 5%, as reported by Bloomberg News. RECOMMENDED VIDEOJoin the ConversationCanadaToronto Blue JaysSunshine GirlsSunshine GirlsCelebrityThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more aboutcookies here. By continuing to use our site, you agree to ourTerms of UseandPrivacy Policy.