Pierre Trudeau once said that the government has no business in the bedrooms of the nation. But Ottawa has no business being in Canada's boardrooms either. Yet according to a recent study by the Canadian Taxpayers Federation on Western Economic Development (WED) - the federal government's regional development agency - the feds are in bed with big business big time.

Data for the study, entitled "WED, Wasted Effort and Dollars?" was complied using dozens of Access to Information requests for the 13 years since WED came into existence. The study chronicles massive corporate welfare to business and industry lobby groups, other levels of government agencies, and some of Canada's largest and most profitable businesses, all in the name of "promoting the development and diversification of the western Canadian economy."

A total of 13,776 transactions worth $2 billion were disbursed from April 1, 1987 to March 31, 2000. From this data the CTF found that:

Over 62% of all funds disbursed were non-repayable grants and contributions;


Transfers to other governments and institutions accounted for over $670 million or 33% of all funds disbursed;


A Who's Who of corporate Canada received $96 million in grants, contributions, or loans including companies such as CP Hotels, Bristol Aerospace, Canadian Airlines, Sherritt Inc., C.N. Rail, Pratt & Whitney, and Bombardier;


WED has forked out over $132 million in conditionally repayable loans but has received repayments of only $4.5 million (a paltry 3.4%);


Over $77 million was allocated to big city Chambers of Commerce and other business and industry associations, including the Calgary Chamber of Commerce, the Edmonton Chamber of Commerce, the Vancouver Board of Trade, the Winnipeg Chamber of Commerce, and the Saskatoon Chamber of Commerce;


More than $3.3 million was distributed to golf courses, fairs, resorts, yacht clubs, and food and wine festivals.

No doubt, the wisdom of government business subsidy programs has again been called into question with the recent job grants scandal at the federal Human Resources Department. More fundamentally, however, corporate welfare programs fail to deliver the promised goods; there is no solid evidence that these types of programs work (see, for instance, the 1995 Federal Auditor's Report)

While the economic benefits are hazy, the political benefits are clear. Corporate welfare programs allow politicians to take credit for addressing public concern over economic growth and jobs through a plethora of high profile photo-ops and sod-turning events.

But the public never hears about the real cost. Never mind that the government's job creation forecasts from these projects are overly optimistic and double count, but they fail to consider the number of jobs that would have been create elsewhere in the economy had that money been left in the hanks of investors, consumers, and entrepreneurs. Worse yet, the business sector becomes so dependent upon and adept at securing government help that they lose sight of their core competencies: creating wealth for shareholders, jobs for workers, and value for customers. Business becomes better lobbyists then businesspeople.

Countries around the globe that are experiencing substantive economic growth have abandoned the regional subsidy approach. Canada should do the same.