Ontario governments spent more than $27.7 billion on corporate welfare

The Fraser Institute says Ontario governments are addicted to dispensing corporate welfare.

A new study released by the right-wing think tank claims that between 1991 and 2009, Ontario governments spent more than $27.7 billion on direct subsidies to corporations, costing each Ontario taxpayer $424 per year.

"Subsidies to businesses, whether bailouts, loans that may not be repaid, or straight grants are all forms of corporate welfare and do nothing to benefit Ontario families," Mark Milke, the author of the report, wrote in an accompanying press release.

In the report, Milke cites several instances of corporate giveaways by Ontario governments of all political stripes.

Ontario's Ministry of Economic Development and Trade, for example, gave $45 million to the wine industry in recent years and $9 milllion to Ontario's craft brewers to support the "growth and development" of their industry.

They've also given $708 million to the manufacturing sector, $1.9 billion to the agriculture sector, and hundreds of millions of dollars in green energy subsidies.

Corporate handouts are also prevalent in other parts of the country.

A 2007 study pegged the national corporate welfare bill at $15.6 billion a year, which led one journalist to suggest expenditures on corporate welfare are almost twice that of expenditures on social welfare.

And 'here's the kicker:' the corporate subsidies don't create jobs.

Milke's report points out that virtually all peer-reviewed research on business subsidies concludes that corporate welfare does not have a demonstrable positive impact upon the economy, employment, or tax revenues because of the substitution effect. In other words, subsidy meant to "create" manufacturing jobs in Ontario may simply shift intended investment away from Quebec or British Columbia.

"Even though research does not support claims that corporate welfare contributes to widespread economic growth, governments continue to pursue these policies because they want to be seen to be doing something," Milke says.

"In light of the Occupy protests that sprang up this fall and the concerns over perceived favours to individual corporations, Ontario politicians should rethink their propensity to spend millions of tax dollars on corporate bailouts and risky business ventures."