Alberta’s corporate welfare paradise

Once in a while, the Fraser Institute publishes a paper that makes their province of origin look really bad.  They don’t do it on purpose, of course, but it ends up that way.  Take their latest paper on corporate welfare.  Their idea is to hammer the concept of incentives to the auto idustry.  They put in a table of corporate welfare by province.  I added the per capita bit.  Here is the result:

Prov: $$MIL Per Capita
PQ 5,442  $  711.28
AB 1,448  $  429.60
YT 12  $  384.62
CANADA 11,073  $  339.15
SK 272  $  275.44
PE 38  $  275.36
MB 260  $  220.62
BC 948  $  219.43
ON 2,412  $  189.84
NB 111  $  148.16
NU 4  $  131.58
NF 51  $  100.02
NT 4  $    94.34
NS 71  $    75.93

Alberta has the second highest amount of corporate welfare in the country – three times the amount in New Brunswick adjusted for the size of the population.  Fun stuff.  Of course, it is way higher than that.  I include corporate tax and royalty breaks in my definition of corporate welfare (or corporate incentives the kinder definition).  If you roll in the tax/royalty breaks, Alberta would be ahead of Quebec for corporate welfare.

Oink oink oink.

The media (and the university of Calgary) has propogated this national image of Atl. Canada as the corporate welfare haven.  Look again at the chart and where Atl. Canada fits.

Funny thing – the national media doesn’t point out this simple fact. Check out the National Post here and the Toronto Star here.

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4 Responses to Alberta’s corporate welfare paradise

  1. TH says:

    I would be curious to see more detailed data, specifically:
    1) a breakdown of federal and provincial subsidies, and
    2) a breakdown of the sectors that received government subsidies.
    Without this information, it’s naive to even try to make any kind of analysis.
    It may be the case that Alberta has the highest subsidies and still gets the most bang for the buck than other provinces… (once again, we cannot make any conclusion based on the information given in the paper)

  2. mikel says:

    A good point, exactly how do you mean ‘royalty breaks’ and corporate tax? If one area has a lower municipal tax or one province charges less CIT, does that percentage make it a ‘subsidy’? The numbers for JUST direct government loans and grants and bursaries would be interesting to see, per capita.

  3. MJE says:

    I think a better measure would be to divide the initatives by the number of active corporations per province. A better gauge in my opinion.

  4. I can’t tell from this specific study but the agriculture sector tends to be a huge use of subsidies and Alberta has a large agriculture sector. Some people exclude ag subsidies from their lists but I don’t. As for royalty breaks and other tax breaks, I mean specific time-sensitive targeted cuts that only apply to specific activity (i.e. oilsands development) and that will revert back to the traditional regime at some point. I advocate this type of tax incentive for development but I get annoyed when people say that Alberta doesn’t offer any ‘subsidies’ or ‘incentives’ to industry.

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