theglobeandmail.com
Canada's Corporate Welfare: A History of Failure
Laurent Carbonneau's new book, "At the Trough," reveals how Canada's history of corporate welfare, marked by massive subsidies like the \$30 billion given to Volkswagen and Stellantis, has yielded poor results despite billions spent; Canada's productivity lags, and its economic standing is weak relative to peers.
- How has Canada's history of responding to economic crises with business subsidies shaped its current economic challenges, and what specific examples illustrate this pattern?
- The book connects Canada's history of corporate welfare to its current economic challenges. While government spending on business subsidies has increased dramatically—from \$14 billion in 2015 to over \$40 billion in 2024—Canada's productivity and national wealth remain relatively low compared to other developed nations. This suggests a failure of past economic policies.
- What are the immediate economic consequences of Canada's long-standing policy of corporate welfare, and how do these consequences manifest in the country's current economic standing?
- Laurent Carbonneau's "At the Trough" details Canada's history of subsidizing businesses, arguing that this has yielded poor results. Billions of dollars in subsidies, reaching \$40 billion in 2024, haven't translated into significant economic improvements, as evidenced by Canada's productivity lagging behind the OECD average and its low ranking in national wealth.
- What alternative models of economic policy could Canada adopt to foster sustainable growth and improve its economic performance, and what are the potential benefits and challenges of such a transition?
- Carbonneau advocates for a shift in economic policy, arguing against further large subsidies, especially to foreign companies. He proposes investing in social goods like housing and healthcare, and adopting a more effective industrial policy model, drawing lessons from countries like South Korea and Finland that have successfully transitioned from agrarian or resource-based economies to innovation powerhouses.
Cognitive Concepts
Framing Bias
The article's framing is heavily critical of government subsidies, using loaded language like "corporate welfare bums" and portraying them as consistently ineffective. The headline and introduction set a negative tone, predisposing the reader to view government intervention negatively.
Language Bias
The article uses highly charged and negative language throughout, such as "sordid history," "saturation bombing," and "corporate welfare bums." These terms are not objective and create a biased portrayal of government-business relationships. More neutral alternatives could include 'government subsidies,' 'economic interventions,' or 'public investment'.
Bias by Omission
The article focuses heavily on government subsidies to businesses and their negative consequences, but omits discussion of potential benefits or successful examples of government intervention in the Canadian economy. It also doesn't explore alternative economic policies beyond those mentioned.
False Dichotomy
The article presents a false dichotomy between "big giveaways" to businesses and investments in social goods, implying these are mutually exclusive options. It overlooks the possibility of a balanced approach that invests in both.
Sustainable Development Goals
The article highlights Canada's history of ineffective corporate subsidies, leading to low productivity, poor work-life balance, and inadequate social programs. Billions in subsidies haven't translated into significant economic growth or improved quality of life for Canadians. This contradicts the SDG target of promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.