Mirror, mirror on the wall, who’s the biggest subsidy-laden province of all?

There is nothing more incendiary than discussions of government subsidies to industry so I feel compelled to point out (again) that NB is not a big doler out of subsidy monies compared to the rest of Canada. The following chart shows the comparative data.  Subsidies include agriculture, subsidies on products/production, etc.   I don’t think it includes loans because they are paid back.   It does not include tax breaks although it may include refundable tax breaks (i.e you get the cash whether you pay tax or not).

As would be expected, the agriculture heavy provinces – Alberta, Sask, etc. are heavy subsidy provinces.

It’s fair game to criticize subsidies but everything in perspective, folks.

Total Government Subsidies to Industry – Per Capita (federal, provincial and local)

2009

Five year avg.

10 year avg.

Since 1981

PEI

$850

$735

$735

$626

NS

$333

$351

$328

$358

NB

$376

$340

$273

$306

QC

$993

$890

$800

$554

ON

$381

$344

$309

$250

MB

$509

$584

$529

$557

SK

$682

$955

$1,132

$1,127

AB

$385

$517

$607

$661

BC

$402

$369

$346

$303

Statistics Canada: CANSIM Table 384-0010. Government subsidies and capital transfers, provincial economic accounts, annual (Dollars), 1981 to 2009.

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8 Responses to Mirror, mirror on the wall, who’s the biggest subsidy-laden province of all?

  1. John Percy says:

    I must admit that, much to the consternation of many of my supporters, I find your economic insights to be cogent and relevant to local circumstances. Dragging citizens kicking and screaming into 21st century reality is a thankless and ongoing task that yields little fruit in the short term.

    Subsidies and tax relief for industry must show a legitimate and real value ROI, and there must be a plan to wean successful industries off the subsidy teat rather than create and prolong a false sense of entitlement which continues long after an industry loses its relevance in the modern economic frame.

    Sustaining unsustainable 19th and 20th century industries with subsidies that shore up poor economic performance is itself unsustainable. What did wheelwrights, coopers and ferriers do when the car emerged as an economic force? Did they moan about losing relevance or did they get a job in the auto industry and adapt their skills to the new reality?

    A lot of the subsidy debate could be defused with a flexible and common sense approach devoid of ideological claptrap and spin that is little more than justification for unjustifiable actions.

    Just my 8.35 cents, adjusted for inflation.

  2. Throwing agricultural subsidies into the statistics distorts them. I’d be curious to see what they look like with agricultural subsidies properly sectioned off.

  3. Mike E says:

    @Stephen Downes
    Why should Agriculture be sectioned off? It’s an industry the same as any other. Much of the production is done by large multinational firms.

  4. Mike E says:

    This shows a distorted picture of government subsidies to industry. It really should show a full picture including loans, loan guarantees, tax credits, joint research etc. Show the total amount being used to subsidize private industry’s costs. For things like loans, it shouldn’t be the value of the loan, but the expected loss on the portfolio and the savings realized by the companies by not seeking private financing. I bet if we considered all of these things as a total package, the small province’s would be well behind the large ones, especially if it was subsidies/GDP

  5. The problem is the data you seek is not readily available. It would take a lot of work to compile all that data. When the Fraser Institute did its study on subsidization of industry it used the data presented here.

  6. Richard Reeleder says:

    “It really should show a full picture including loans, loan guarantees, tax credits, joint research etc.”

    A ‘full picture’ would include any ROI as well. That is, if the purpose of these investments (or subsidies, or whatever you want to call them) is to stimulate economic activity or create jobs, then the impact of those investments should be included. That’s the only way to determine if the investment is worthwhile.

    “What did wheelwrights, coopers and ferriers do when the car emerged as an economic force?”

    They moved to Ontario, where various subsidies and trade agreements led to the creation of a multi-billion dollar industry. The point being that sometimes the right mix of investments by govt can build a sector and make it a global player. Are there any economies out there where investments/subsidies have not played a major role in developing that economy’s growth? The problem is picking the right sector and measuring the impact of the investment.

  7. Simon Lono says:

    I notice that NL does not appear in the tables and I’m curious why. But even if NL did, would it include implicit subsidies such as UI for fisherman?

  8. NL was an oversight. That province offered about $350/per capita in subsidies in 2009 and has been slightly less than that on average back to the early 1990s putting the province at the low end but it doesn’t include EI or other income transfer programs to individuals.

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