Sound investment or ‘corporate welfare’ debate

BY MARC LALONDE

marc.lalonde@transcontinental.ca

The state must sometimes get involved in private business and help out for one reason or another and it’s his job to manage what the government deems a priority, Investissement Quebec director general Jacques Daoust said last Wednesday.

The keynote speaker at a West Island of Montreal Chamber of Commerce luncheon, Daoust, who heads the government-funded business-development office, said government aid to private business often comes with strings attached; it’s his job to enforce the conditions of such funding and manage the portfolio.

“When an industry is helped out, very often you’re going to see conditions, such as funds for an expansion of facilities must add 500 jobs (to the facility), with certain conditions of construction with respect to worker safety and comfort. When an industry is helped out in that way, it’s our job to manage it and we have to apply the conditions,” he said.

On the heels of corporate-welfare reports indicating profitable companies are getting millions in handouts from the government, Daoust said such programs are sometimes a necessary part of life when business and community life are intertwined — as was the case when two textile plants in Huntingdon, Que., closed within weeks of one another last year, devastating the town — and are at the core of the relationship between government and private business.

Taxpayers revolted

The Canadian Taxpayers Federation — a national taxpayers’ advocacy organization in Ottawa — recently decried the level of “corporate welfare’ being doled out on a regular basis to companies such as Pratt & Whitney Canada ($1.5 billion of government handouts between 1982 and 1995) and Bombardier ($745 million over the same span).

“These companies are among the most profitable companies in the world,” said CTF research director Keith Taylor. “The thirst for our tax dollars has become insatiable and they’ve taken up permanent residency at the trough. A lot of the time, government money is handed over with conditions, but it’s often hard to tie that money to jobs and job creation. There’s no way to enforce it. Often, companies get that money and they lay people off in Canada and add jobs in Mexico, so taxpayers are essentially paying to take jobs out of Canada,” he said, adding the only way to stop the practice is for Canadians to make their outrage known.

“Yes, we know we need to attract top businesses to Canada, but we feel that in a low-tax business climate, they’ll come just as easily,” Taylor said. “We’re hoping that is we at least keep talking about the wastefulness of these programs, the people whose money is being wasted will be more outraged,” he added.

West Island of Montreal Chamber of Commerce president Marco Del Dotto said different geographical areas sometimes compete for business and government must weigh the balances of handouts “delicately.”

“There’s no magic formula, but we need to sell the attributes and the advantages of doing business in a given location. Of course there has to be some balance and money must be tied to jobs, and corporations sometimes get additional funding for expansion and other such projects. It’s a standard practice in the industry,” he said.

Del Dotto lauded the provincially-funded Conseil Local de Developpement West Island (CLD) for its involvement in attracting businesses to the West Island — and helping small and medium-sized businesses grow.

“The CLD’s a perfect example of government involvement in bringing business to the area,” he said.