Lies My Government Continues to Tell Me:
New Corporate Welfare Info Validates Successive
Canadian Taxpayers Federation Reports Denouncing Handouts

Ottawa - Tuesday, January 29, 2002 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation
Note: The Canadian Taxpayers Federation has set its sights on corporate welfare programs. Earlier this week, Southam News — using a brown-enveloped Access to Information request — reported that Industry Canada has collected a mere two per cent of over $1.6 billion it has doled out in “conditionally repayable contributions” under its flagship program, Technology Partnerships Canada (TPC).




Since TPC’s (Technology Partnerships Canada) inception in 1996, Ottawa has collected a paltry $24.48 million of the $1.6 billion it has offered up in sweetheart loan deals to corporate Canada. This sorry squandering of taxpayer dollars partly explains why many refer to Industry Canada more sarcastically but appropriately as Subsidy Canada.




These companies aren’t obscure operations; recipients of TPC largesse include companies such as IBM, Bombardier, Pratt & Whitney, CAE, Allied-Signal Aerospace, Computing Devices Canada, and dozens of other household names.




The Canadian Taxpayers Federation first raised the red flag on this taxpayer-underwritten bank for corporate welfare four years ago. In the spring of 1998, the Canadian Taxpayers Federation released two landmark reports chronicling sixteen years of Industry Canada handouts that showed a mere 15% repayment of over $3.2 billion lent out under 28 separate departmental programs including TPC.




The now defunct Defence Industry Productivity Program (DIPP) had only recouped a measly 8% of the total funds that it lent out. At the time, the Canadian Taxpayers Federation warned Industry Canada that many of the initial TPC recipients (the program was just over a year old) were also recipients under the old DIPP program.



Official responses from TPC officials and the Minister of Industry (now deputy PM John Manley) claimed the Canadian Taxpayers Federation was: using old information; raising unfounded fears about corporate non-repayment; and that the government was managing these programs better. With TPC now five years old, it is clear that government officials were wrong. Worse still, there is mounting evidence to show they (bureaucrats and politicians) were willfully and blatantly economical with the truth as they defended this program (and others).




These officials already knew that the Auditor General had sounded the alarm over “conditionally repayable contribution” programs and they were sitting on several internal audit reports that cautioned government officials that many corporate welfare recipients were uncooperative, negligent, evasive and willfully non-compliant when it came to meeting their repayment obligations.


Yet Ottawa continues to dole out funds — knowing that it will likely never be repaid — under the guise of TPC and other regional development agencies that ink “conditionally repayable contribution” deals with corporate Canada.


These loans only have to be repaid if recipients surpass pre-identified sales levels or volumes of the product being funded. But these agreements are often based on overly optimistic sales projections that never materialize, so the conditions that trigger repayment never occur, and Ottawa (read: Taxpayers) never gets its money back. All in all, it’s a clever bureaucratic trick to dress up a subsidy in a quasi-government loan program. Heck, the CIA would be proud of this level of deception.


Meanwhile, the feds issue news releases about “investments” in companies that “create or maintain” jobs. Use of the word ‘maintain’ points to level of blackmail at work: companies tell Ottawa that either they get a loan (read: Subsidy) or they close up shop. These programs have turned many entrepreneurs into grantrepreneurs: instead of seeking and making market opportunities, they seek government handouts.


Meanwhile infrastructure is left to rot and our national debt is not paid down. The time has come for an all out assault against corporate welfare.
  Walter Robinson
Federal Director