Conservatives will review business subsidies in effort to save $1.5 billion

The federal Conservatives say they can find $1.5 billion in savings each year by eliminating some of the federal funding received by businesses.

Scheer said he'd eliminate programs that direct funds to corporate executives, foreign companies

Conservative leader Andrew Scheer is promising to find $1.5 billion in savings each year by eliminating some of the federal funding received by businesses. (Frank Gunn/The Canadian Prses)

Conservative Leader Andrew Scheer said Wednesday he will start to pay for his promised $9 billion in tax cuts and program spending by finding a way to cut $1.5 billion from annual subsidies to Canadian corporations.

Scheer spent most of Wednesday campaigning at small businesses in Hamilton and Richmond Hill, Ont., trying to drill home his campaign theme of helping the little guy rather than the rich and well-connected. He went first to a barbershop and later to a Chinese bakery.

"Hard-working Canadians are rightly offended when they see their tax dollars going to further the interests of the wealthy and well-connected friends while Justin Trudeau makes them pay more for gasoline, groceries, and home heating," Scheer said.

He said a Conservative government will review all federal business subsidies and eliminate economic-development programs in which the funds benefit shareholders, corporate executives, foreign companies, lobbyists or consultants. Those subsidies and programs total $7 billion now, he said, scattered among numerous departments.

The Conservatives would protect regional economic-development agencies, however, and make sure they're administered by ministers from those regions. They'd also give support to "strategic industries," such as aerospace, if the money stays in the country and creates or protects jobs.

Conservative Leader Andrew Scheer spoke to reporters in Hamilton on Wednesday 2:14

He cited a $12-million subsidy the government gave grocery giant Loblaw to buy more energy-efficient coolers as one example of an expense Conservatives wouldn't support.

Scheer said the Conservatives would have never spent federal funds in other ways the Liberals have, including $220 million to buy energy-efficient gas turbines for the Canada LNG project in British Columbia, and the $4.5-billion purchase of the Trans Mountain pipeline.

Infrastructure bank called 'boondoggle in waiting'

He also is gunning for what he called the $35-billion "boondoggle in waiting" Canada Infrastructure Bank. The bank is meant to use federal money to spark private investments in things like new highways, bridges and water systems, helping to find projects that could eventually spin off revenue to pay those investments back.

The Tories submitted the promise to the parliamentary budget officer, as they have others; the office said this is not the type of proposal the office can assess.

This is the first announcement Scheer has made in the week-old campaign in which he's talked about cutting government spending rather than forgoing revenue. The Conservatives have thus far pledged tax credits, cuts and grants exceeding $9 billion, which Scheer has said he will pay for by having different priorities from the Liberal government.

John Lester, a former federal government economist who now works as an executive fellow at the University of Calgary's School of Public Policy, said in a 2018 paper that there were about $14 billion in federal government business subsidies in 2014-15. The paper said Ottawa and the four largest provinces in Canada provided $29 billion in subsidies through program spending, mostly through the tax system, with Alberta leading the way at $600 per capita corporate handouts.

The total amount was about half of what the provinces and Ottawa collected in corporate income taxes.

The federal government has been promising under both the former Conservative government and the recent Liberal one to cancel federal fossil fuel subsidies — worth more than $3.3 billion a year — as part of a pledge of all G20 nations to do so. Despite the decade-old promise that Canada has recommitted to every year since, the subsidies have not been cut.

Canada recently joined with Argentina to conduct peer reviews of each other subsidies in a bid to figure out the path to eliminating them.


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