Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Where the subsidies go

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I have excerpted a big slab of text from one of the WordPress posts recommended on their front page. I must admit that I had not intended dealing with this issue when I logged on, but as usual I got distracted, first by a libertarian grandma in Texas, and then a post from “Nixon is in Hell” about taxes, which starts in Toronto and fans outwards

Yet government subsidies to corporations persist. In 2004, now Prime Minister Stephen Harper vowed that a Conservative Government would “get out of the grants and subsidies game”, but Industry Canada alone continues to dispense an average of 1 billion dollars a year to various businesses. Since 1982, (when Industry Canada started keeping itemized records), the federal government has authorized 18.4 billion dollars in “grants, contributions, concessional financing and other forms of federal assistance.”

The largest beneficiaries have been Pratt & Whitney, ($1.5 billion), Bombardier, ($745 million), General Motors, ($360 million) and Bell Helicopter, ($338 million). Familiar names among the top fifty companies receiving grants and subsidies are Honeywell, ($207 million), Ford, ($104 million), Rolls Royce, ($87 million), Inco, ($60 million), Hyundai, ($55 million), IBM, ($33 million), General Dynamics, ($28 million), Goodrich, ($23 million), Lockheed Martin, ($20 million) and Magna International, ($18 million).

Ontario Premier Dalton McGuinty has pursued an economic policy towards the automobile industry meant to encourage growth and job creation. Since 2005, the province has invested more than 667 million dollars in Ontario auto manufacturers. General Motors received $235 million, Ford $100 million, DaimlerChrysler $76 million, Toyota $70 million, Navistar Truck and Engine Corporation $32 million and another $154 million went to Honda in 2006. Ontario’s plans for the automotive industry also include financial aid to the auto parts sector, another 50 million dollars. In addition, the McGuinty government initiated a five-year, 3.4 billion dollar road improvement program to “support Ontario industry by providing an efficient transportation system upon which their goods can safely travel”.

These would be the same governments that have no money to spend on transit. Can you imagine what the TTC would have been able to do to improve travel conditions in the GTA with $667M?  How much less air pollution and stress, not to mention traffic collisions – all of which show up real fast in lower health costs and higher productivity – that would have produced? Pratt and Whitney make jet engines – one the the greatest sources of greenhouse gas emissions – not to mention contrails. See a pattern here?

And as the piece points out, these corporations are both making bigger profits and laying people off. It’s not like they need the money. Just the fear that if the Canadian/Onatrio government doesn’t give them a hand out they will decamp to somewhere that will.

Of course, we are told that we should not be charitable towards those who beg on our streets. It only encourages them, and anyway they waste the money. But corporations are different, aren’t they?

Written by Stephen Rees

September 17, 2007 at 12:57 pm

Posted in Economics, transit

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