- CTF Report Shows Majority of ACOA Funds Went to Big Business, Big Government and Big Labour -

Click here brief overview of report

OTTAWA: The Canadian Taxpayers Federation (CTF) today released a study of ten years of financial assistance authorized by the Atlantic Canada Opportunities Agency (ACOA) to business, labour organizations, other government agencies and individuals. The study is entitled ACOA: The Lost Decade, A 10-Year Quantitative Analysis. The information was compiled using data obtained through Access to Information.

"This study deals another crushing blow to the government's credibility to effectively manage tax dollars," noted CTF Federal Director, Walter Robinson. "Along with revelations about HRDC, EDC and the CTF's previous work on Corporate Welfare, you would think the feds would shut down these grant and subsidy programs. They clearly don't work."

Main Findings

The report examines funding activities from fiscal year 1989-1990 through to 1998-1999. During this period, over 22,867 authorizations went to 11,297 separate entities for a total of $2.577 billion in disbursements. From this data, the CTF determined that:

$1.498 billion, or 58% of all funds disbursed went to just 475 recipients (4.2% of total recipients);

Transfers to other federal and provincial institutions (some which are not subject to Access to Information or Freedom of Information) accounted for over $277 million or 11% of all funds disbursed;

Over 72% of all funds disbursed - some $1.85 billion - was in the form of non-repayable grants and contributions;

National corporate giants including Bombardier, the Royal Bank, Canada Steamship Lines, Canadian Pacific Hotels, the DMR Group, Domtar, Honeywell, IBM Canada, Laidlaw Transit, Pratt & Whitney, and Westinghouse all received contributions (another form of grants);

Big labour including the CAW and other provincial labour federations and teachers associations received grants and/or contributions;

ACOA loaned out $591 million dollars in the last 10 years but has written-off the equivalent of 34% of this amount during the same period.

Over $5 million has been used to fund Chambers of Commerce and other business organizations, over $20 million has been spent on golf courses, snowmobile clubs and other recreational activities, and ACOA approved over $20.2 million in loans even though the agency, according to its own records, has no idea what the funds were to be used for!

"What the data clearly shows is that big government, big business and big labour account for the lion's share of ACOA funding," added Robinson. "Jurisdictions around the globe that are experiencing economic prosperity have abandoned the regional subsidies approach. Canada should do the same."

"This is just the tip of the iceberg," added Robinson. "Later this year we will be releasing reports on Western Diversification, FEDNOR in Ontario, and Canada Economic Development in Quebec. Sadly, our preliminary analysis of the data from these agencies reveals more of the same funding boondoggles."

"We hope the government will view this study as yet another wake-up alarm that subsidy programs for job creation do not work," concluded Robinson. "But if past experience is any indication, Ottawa will probably hit the snooze button and continue to waste precious tax dollars. Too bad its taxpayers who will continue to pay for this nightmare."