Saturday, December 27, 2014

corporate welfare in Ontario

Decades of intervention in markets in Ontario has created unfavourable economic conditions. Unemployment is high and businesses are reluctant to invest in a locality where all of their profits will be expropriated by the state. Instead of taking the logical step of repealing the confiscatory tax rates and onerous regulation that makes Ontario such an inhospitable place for industry, the Wynne government has hit upon a brilliant plan : tax giveaways! And why not? Truly, what problem cannot be solved by spending more of the taxpayers hard earned lucre?

There's $220 million for Cisco, $110 million for Open Text Corp, some $27.7 billion in corporate subsidies in total were given away during the 90's and 00's and around $3 billion a year every year for the latest years. Keep adding up the billions and pretty soon you are talking real money. But what about the competitors of the firms who receive this gift? Why must they be taxed so that the companies the are competing against on the market may receive the subsidy? How is that fair? It seems as if the Liberals would have us revert to the mercantilism of 16th and 17th century Europe. Instead of free competition in the market they would have carefully staked out economic fiefdoms, where a few prosper at the expense of everyone else. Instead of economists being bold champions of freedom they are today toadies of those in power, rationalizing and explaining away idiotic state policy. Now, instead of business fighting to see who can provide the public with the best product at the lower price, the real battle is to see who can lobby Queen's Park for the best subsidy. Why compete on the market place when you can compete in the political arena instead? Why subject your firm to the vagaries of the open market when the proper grant from the state can ensure you of profits for decades to come?

Instead of the government picking winners and losers it would be far better for Ontario to revert to the free market. Direct these subsidies into a general reduction of taxes for all and attract business not by unfair favouritism but by a more hospitable business climate in general. Lower taxes dramatically and deregulate radically! Eliminate labour laws and special privileges for unions. Enshrine property rights in law and ensure the court system makes this it's priority in settling disputes. Then capital would flow from around the world to this province and the economy would boom. Unfortunately this corrupt gang of menshevik crooks will never make these changes. It's up to the people of Ontario to rise up, to denounce these etatist policies and shout down the voices of those who apologize for idiot economic policies. Then, and only then, we can again know prosperity.

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