“Government Spending on Corporate Welfare Soars to $52 Billion in 2022: A Closer Look at Canada’s Subsidies
In a shocking revelation, a recent study by the Fraser Institute has unveiled that the government spending on corporate welfare in Canada has surged to $52 billion in 2022. This staggering figure is more than double what it was just 15 years ago, painting a concerning picture of the state of business subsidies in the country.
The Cost of Business Subsidies in Canada: Updated Edition report highlights the dramatic increase in corporate welfare spending at all levels of government since 2007. Between 2007 and 2019, a whopping $352.1 billion was spent by federal, provincial, and municipal governments on business subsidies.
Rising Costs and Dubious Benefits: The Unraveling of Corporate Welfare
Despite the hefty price tag attached to these subsidies, the Fraser Institute’s co-author, Tegan Hill, emphasizes that they come with substantial costs to government budgets and taxpayers, without necessarily stimulating economic growth. The yearly spending on corporate welfare has more than doubled from $24.5 billion in 2007 to $52 billion in 2022 when adjusted for inflation.
While federal business subsidies skyrocketed to $88.5 billion in 2020 post-pandemic, they slightly decreased to $47 billion the following year. It is worth noting that in 2019, federal spending on corporate welfare stood at a mere $6.5 billion.
Provincial Perspective: Quebec and Prince Edward Island Lead the Pack
The provincial level saw the most significant increase in corporate welfare spending, jumping from $13.2 billion in 2007 to $35.4 billion in 2022. Interestingly, the report indicates a historical shift where provincial subsidies surpassed federal subsidies in dollar value, with Quebec and Prince Edward Island outspending their corporate tax revenues between 2007 and 2019.
The Impact on Taxpayers: A Burden Unequally Shared
As the report delves into the taxpayer burden, it reveals that Quebec taxpayers bore the most significant weight, shelling out $30,570 per person in corporate welfare taxes from all government levels. This was closely followed by Saskatchewan at $29,413 per person, while New Brunswick residents paid the least at $9,484 per person over the same period.
Transparency Issues and Impact on Economic Growth
Despite the significant costs associated with corporate welfare, the lack of government transparency remains a persistent issue. The Fraser Institute points out that the precise figures are hard to determine due to the absence of comprehensive accounting of government support to businesses in all forms.
While corporate welfare can potentially boost economic activity, the report emphasizes that it is often the Canadian taxpayers who bear the brunt of these costs, with unclear benefits in terms of nurturing economic growth. It calls for a reevaluation of the current subsidy system, proposing a reduction in business taxes to foster an environment conducive to economic growth for all businesses.
A Call for Action: Rethinking Business Subsidies in Canada
In conclusion, the Fraser Institute warns that the substantial costs associated with business subsidies necessitate a critical review and reform. Instead of favoring specific companies or industries, the focus should be on creating a level playing field that promotes economic growth for all businesses. It’s high time for Canada to rethink its approach to corporate welfare and steer towards a more sustainable and equitable path for the future.”
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