Do not think about, write about or deal with human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.
Wherein we see how we contribute to things which do us no good. It’s called politics. It’s politics so of course it’s corrupt.
National Post Editorial
Donations from the rich and famous
THE SYSTEM IS NEITHER EFFICIENT NOR FAIR. BUT IT WORKS FOR INSIDERS.
Why do governments hand out money to companies? Naturally, they profess to be “creating jobs,” or aiding enterprises that are struggling but worthy. The preferred justification for pouring billions into a firm like Bombardier is the need for Canada to maintain a foothold in an advanced, high technology (and glamorous) international industry. But neither theory nor experience supports this rationale.
The l atest example of waste comes from Ontario, where t he government’s Expert Panel Examining Ontario’s Business Support Program set up in late 2013 “to review the province’s business support programs so Ontario companies have the best help possible to succeed and grow.” It reported in July 2014 about 30 per cent of the nearly $ 5 billion funnelled to corporations goes to just 200 big, well- established firms, which represent just 0.1 per cent of Ontario businesses. Often the money is directed at firms that least need it. The system is so opaque, the figures don’t include additional i ncentives offered to large, highly profitable firms like Cisco and Open Text.
The Ontario government says the report was never meant to be made public and sat on it for almost two years. Margaret Dalziel of the University of Waterloo, who chaired the investigation, disputes that claim. It’s not hard to understand why the government would be reluctant to publicize the findings.
When the federal Liberals were selling $ 500 tickets to a private reception with the justice minister organized by a major Bay Street law firm last week, they didn’t bother putting it on the list of events on their website. It’s not for little guys. It’s for insiders who can help one another.
The Ontario auditor general reported in 2015 80 per cent of businesses that received public money since 2010 were asked by t he government to apply. The criteria are complex and flexible, the programs an almost impenetrable mishmash of grants, loans and loopholes like “non- refundable tax credits,” often laundered through intermediary “hubs.” Even the list of 374 grants the auditor general examined is not publicly available. There’s nothing to see here, folks, and if there is, the government still won’t let you see it.
In a 2012 r e port on streamlining government operations, author Don Drummond deplored the seemingly random nature of the nearly four dozen grant programs he managed to locate. But it’s not really random: programs are introduced with an eye on political benefit to the party offering the handouts.
British Columbia Premier Christy Clark claimed she had no idea people were paying $ 10,000 to meet her in private. But the “donors” knew, and so did the party officials who arranged the gatherings, and both did it because they saw an advantage in it. This included real estate developers who were very keen that Clark’s government not bring in an “anti- speculation” tax on foreigners flipping fancy houses.
Likewise, Quebec Premier Philippe Couillard recently lost a cabinet minister caught feeding confidential cabinet information in 2012 to a party organizer, already tainted by the federal Liberals’ “Adscam,” who sat on the board of a company that got $19 million in provincial aid that year. Its executives, managers and their families had donated $ 20,000 to the Liberals in 2008-12.
Ontario Economic Development Minister Brad Duguid insists there’s “no way” the money companies donate back to the government could influence decision- making. Why then would lawyers, companies and lobbyists donate so much, or pay thousands of dollars for private dinners and receptions with the premiers or their ministers in Alberta, Ontario and B.C.?
When you peel away the rhetoric, you come to the same conclusion in all these examples of governments using their position to benefit favoured recipients or wheedle “donations” from constituents dependent on government favour. It’s about trading money and favours with the rich and powerful, not with the great unwashed who lack the clout to impact an election or finance a campaign.
The system is neither efficient nor fair. But it works for insiders. That’s why corporate handouts in Ontario alone have grown from $ 4.1 billion in 2011-12 to almost $ 4.9 billion. And why you didn’t get one.
Crony capitalism is not real free enterprise, it’s just another form of socialism. Special advantage for special friends of the government. Once again, we pay for something which does us harm.
Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Power Teaching: How to Find Someone to Teach Your Child when the Education System has Failed.”
Cui Bono–Cherchez les Contingencies