McGuinty hints that he’s open to ending corporate welfare
The Ottawa Citizen
By Lee Greenberg
Ontario Premier Dalton McGuinty is opening the door to a major policy reversal, hinting Tuesday that his Liberal government could end the controversial practice of spending more than $1 billion on subsidies for select businesses across the province.
McGuinty said he was listening “to all the arguments” on grants, which his opponents have labelled corporate welfare.
He said the Liberal government has “set the table” for business success by reducing corporate taxes, adopting a value-added tax and boosting education investment and health care. “So there’s an argument that ... maybe it’s time to take a look at some of the other things we’re doing for business to see if they remain essential given the new context,” he said.
A Citizen investigation raised serious questions about one of the granting programs, the Eastern Ontario Development Fund (EODF), which has favoured businesses in Liberal ridings versus Conservative ones by a more than two-to-one ratio since it was established in 2008.
On Tuesday, the influential Task Force on Competitiveness, Prosperity and Economic Progress recommended bringing an end to all granting programs in the province.
“They’re not worth the money and in tough times like this, if governments are looking to cut their spending, I would sure look at this,” says James Milway, executive director of the Institute for Competitiveness & Prosperity, which serves as the research arm for the task force.
Milway says his research shows Ontario is spending roughly $75,000 to create one job and only about a third of investments are unambiguously successful.
“For my taxpayer dollars, I don’t know if that’s a good investment, to spend $75,000 to get a job,” he said. “That’s tax revenue you have to raise from hardworking taxpayers and businesses.”
The government began doling out money to business in 2008, when then-minister of economic development Michael Bryant announced the Liberals would be “choosing winners and losers” in business by funnelling hundreds of millions into select industries and regions.
