No subsidies for car companies

That’s the word from the federal government, according to the Globe and Mail:

Ontario Premier Dalton McGuinty said this morning that Prime Minister Stephen Harper made it clear when he met with the premiers last Friday that Ottawa is not prepared to inject funding into specific projects.

“He told me very directly, ‘look, I operate at the macro level. We’ll cut taxes, offer some regional incentives, but we’re not prepared to take it one step down,’” Mr. McGuinty said.

He said the two leaders have a “fundamental philosophical difference” when it comes to addressing the economic slowdown that is taking its biggest toll on a manufacturers in Ontario and Quebec.

“They think you cut taxes, sit back and allow economic fortunes to kind of play themselves out,” Mr. McGuinty said. “I think we have a heavy responsibility and that responsibility is to find ways to provide supports to those who are losing their jobs and provide incentives to businesses to make additional investments to make them stronger.

As if the businesses, especially automakers, don’t have the incentives to make those investments themselves.

I can see the argument that sometimes governments have to compete with different subsidy packages when major businesses are deciding where to locate new plants — if Ford is trying to decide whether to put a $2-billion, 3,000-job plant in Ontario or Illinois or Kentucky and a $50-million R&D subsidy fund might make the difference, I can understand why it’d be tempting for a premier to provide it. I don’t think it’s a good idea, but I get where it comes from.

Writing cheques to multibillion-dollar corporations — using money taken from individuals and much smaller companies — just to carry on business as they normally would, though, is crazy talk. Staying out of their way is the best investment a government could make.


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