Canadian governments spent $52 billion in 2022 subsidizing businesses across all provinces—including federal, provincial, and local spending—finds a new report published Tuesday by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
Tegan Hill
“These subsidies for businesses—also known as corporate welfare—come with huge costs to government budgets and taxpayers while doing little if anything to stimulate economic growth,” said Tegan Hill, associate director of Alberta policy at the Fraser Institute and co-author of The Cost of Business Subsidies in Canada: Updated Edition.
Business subsides include unrequited government transfers to businesses but exclude other forms of government support such as loan guarantees and direct investment, it said.
“Governments should always be concerned with efficient spending, and budget deficits should particularly motivate governments to take a closer look at areas of spending; business subsidies are one important area for review. The data presented in this report show that business subsidies delivered through government spending since 1961 came with significant costs to government budgets and to Canadian taxpayers generally. To the extent that subsidies do not foster widespread economic growth—as the literature suggests is the case—business subsidies stand out as a key area for spending reform,” added the report.
The Fraser Institute said government spending on business subsidies more than doubled (after adjusting for inflation) from $24.5 billion in 2007 to $52 billion in 2022 (the latest year of available data). Total provincial subsidies experienced the highest increase over the period growing from $13.2 billion in 2007 to $35.4 billion in 2022. Federal subsidies increased from $7.4 billion to $11.2 billion over the period.
Jake Fuss
“Rather than give preferential treatment to certain companies and industries, it’s high time Canada reduce business taxes and help foster a pro-economic growth environment that gives all businesses the opportunity and incentives to succeed,” said Jake Fuss, director of fiscal policy at the Fraser Institute and study co-author.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list. He was also named by RETHINK to its global list of Top Retail Experts 2024.
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