1.6 Removing corporate subsidies: Distorting the market

nuclear subsidy“Governments are not adept at picking winners, but losers are adept at picking governments.”

Mark Milke, A Nation of Serfs

The federal government has paid the nuclear industry $17 billion in subsidies over the last four decades. Various regional development programs (Atlantic Canada Opportunities Agency, Western Economic Diversification, and Canadian Economic Development in Quebec) have funneled billions into failed enterprises. Since 1982, Industry Canada has made grants totaling more than $5.8 billion to some of Canada’s largest corporations. Technology Partnerships Canada has swallowed up $2 billion and the accelerated capital cost allowance to the oil sands industries totals over $1.3 billion a year.

Perverse subsidies distort the market and send mixed messages: reduce carbon/use more fossil fuels; create jobs/reorganize through lay-offs. Subsidies to Canada’s oil and gas industry from 1996 to 2002 totaled $8.3 billion. From 1996-2002, the government allocated $3.7 billion to achieve its Kyoto greenhouse gas reduction targets. The funding to meet Kyoto has been abandoned, but the fossil fuel subsidies continue.

Greens want an end to corporate subsidies and a start to the green tax shifting that will make the fiscal system more coherent.

Green Party MPs will:

  • Eliminate perverse corporate subsidies and institute new taxes on corporate activities that harm the environment;
  • Introduce more effective antitrust laws in concentrated industry sectors;
  • Require corporations to provide detailed information about their records of compliance with labour, environmental, human rights, consumer, health and safety, criminal, competition, and tax laws or policies, and protect those who expose non-compliers;
  • Support broad-based, democratically-structured citizens’ watchdog groups to monitor major sectors of the economy.