- CTF Report Shows Majority of Non-Repayable WED Funds Went to Big Government and Big Business Interests -

CTF Study

WINNIPEG: The Canadian Taxpayers Federation (CTF) today released a study of thirteen years of financial assistance authorized by Western Economic Diversification (WED) to businesses, business and industry lobby groups, other levels of government and government agencies and individuals. The study is entitled WED: Wasted Effort and Dollars - A 13-Year Quantitative Analysis of Western Economic Diversification. The information was compiled using data obtained through multiple Access to Information requests.

"Yet again we have unearthed more evidence of boondoggle spending on golf courses and yacht clubs, corporate welfare to some of Canada's most successful companies and more subsidies to Chambers of Commerce and other business and industry lobby groups," noted CTF Federal Director, Walter Robinson.

"Combined with the revelations about HRDC and our previous studies on Corporate Welfare, it is clear that Ottawa has a lot to answer for," added Robinson. "Regional development spending is being misdirected and squandered, it's time for Ottawa to get of the business of business."

Main Findings

Thirteen years of data - obtained through Access to Information - from fiscal year 1987-1988 (the year of WED's inception) to 1999-2000 were analyzed. 13,776 contributions for a total $2.003 billion was disbursed during the period from April 1, 1987 to March 31, 2000. From this data, the CTF determined that:

• Over 62.7% of all funds disbursed - some $1.25 billion - was in the form of non-repayable grants and contributions (Note: $34 million of this amount is flood relief to which the CTF does not object.);
• Transfers to other federal, provincial, post-secondary and municipal institutions (some which are not subject to Access to Information or Freedom of Information) accounted for over $670 million or 33% of all funds disbursed;
• The Who's Who of Western Corporate Canada received $101 million in grants, contributions or loans including companies such as Canadian Pacific Hotels, Domtar, Harris Canada, Ballard Power Systems, Bristol Aerospace, Canadian Airlines, Inex Pharmaceuticals, Sherritt Inc., Western Star Trucks, Canadian National Railways, along with perennial corporate welfare recipients Pratt & Whitney and Bombardier;
• WED has loaned out over $132 million in conditionally repayable contributions but has only received $4.5 million in repayments for a paltry 3.4% return on these royalty or level of sales based agreements. (Note: This paltry return was also found in a CTF study of $2.5 billion in conditionally repayable loans from Industry Canada between 1982 and 1997 where a mere 4.87% had been repaid);
• Over $77 million was allocated to Chambers of Commerce and other business and industry organizations. Indeed, the Chambers of Commerce in all of Western Canada's major cities received funds including the Calgary Chamber of Commerce, Edmonton Chamber of Commerce, Vancouver Board of Trade, Winnipeg Chamber of Commerce, and the Saskatoon Chamber of Commerce; and
• Over $3.3 million was distributed to golf courses, fairs, resorts, yacht clubs and wine and food festivals.

"Jurisdictions around the globe that are experiencing substantive economic prosperity have abandoned the regional subsidies approach. Canada should do the same," stated Robinson. "The federal government continues to apply 19th century industrial policies in this 21st century environment with disastrous consequences. It's time for a new approach."

"Mr. Trudeau once said that Ottawa has no business in the bedroom's of the nation. To take it further, Ottawa has no business in Canada's boardrooms either," concluded Robinson.