If there was ever any doubt that corporate welfare is a bad idea, this week's headlines confirmed it. "GM likely to slash work force in Canada," cried Wednesday's Globe and Mail. That would be the same GM that just two months ago wheedled $435 million dollars out of the federal and Ontario governments, ostensibly to create 900 new jobs in three Ontario communities. While GM claims this project will go ahead, how many other jobs will be lost in its latest round of downsizing And how much more money will the company demand from taxpayers to keep its other plants open

Corporate welfare does not encourage companies to compete based on market forces. Instead, corporations compete to become better lobbyists, growing fat and lazy on the public trough. The result is that they are not prepared to deal with market downturns and technological changes. Less effort is put into modernization and anticipating trends than into cozying up to politicians.

Less effort is also put into negotiations with labour unions who demand higher and higher wages and more benefits. But as long as GM gets public money to underwrite those costs, why should the company care It can more easily agree to concessions because they won't take as big a bite from its bottom line.

In a free market economy, there is nothing wrong with unions fighting for better pay. But when public money is footing the bill, it's a different story. Through their taxes, non-unionized taxpayers who receive market wages subsidize GM's unionized workers' higher salaries. Talk about a perverse redistribution of income.

When will politicians put a stop to this nonsense In the best performing economy in the country, they already have. Alberta Premier Ralph Klein outlawed corporate welfare years ago. Rather than favouring particular companies or industries, the province simply has the lowest corporate tax rate in the country - 11.5% compared to Ontario's 14%.

Yet in Ontario, Premier Dalton McGuinty's government has taken the opposite approach, canceling corporate tax cuts and meddling in the economy as much as possible. To date, the government has earmarked $500 million for auto subsidies, hiked film tax credits, and tried to coax aerospace maker Bombardier to Toronto with public funds. This, in a province that is $125 billion in debt, where the government won't balance the books until 2009, hospitals are laying off nurses, and taxpayers are paying the highest personal income taxes in ten years.

The premier should take a lesson from the federal government's experience with corporate welfare. Since 1999, the Canadian Taxpayers Federation has chronicled more than $52 billion in subsidies to business, equivalent to $240 taken from every Canadian taxpayer. There is no proof that those dollars have generated more return on investment than if they had been left in taxpayers' pockets to spend and invest as they - not the government - chose. Technology Partnerships Canada (TPC), Industry Canada's flagship corporate welfare program, has shelled out $58 million in auto subsidies, yet since 1996 has collected less than 5% of its loan agreements. Industry Canada has a similarly dismal rate of repayment: only 21% of its loans were recouped over a twenty-year period.

Perhaps this latest GM boondoggle will make Mr. McGuinty finally realize that corporate welfare simply doesn't pay. Perhaps the Ontario Progressive Conservative opposition will speak up and offer taxpayers a lower-tax alternative to the premier's failed Soviet-era central planning model. Ontario taxpayers must demand better from their politicians - and tell them to run corporate welfare off the road.