Torquing Pork
Author:
Victor Vrsnik
1999/12/08
Manitoba's top politicians - no strangers to doublespeak - are torquing the debate over subsidies for meat packers into a question of fairness and equality.
J.M. Schneider wants the province and Winnipeg to pay part of a $125 million expansion project with tax cuts and subsidy concessions similar in value to the $19.5 million that the Maple Leaf plant in Brandon received. It's a rotten deal for Manitoba taxpayers.
Premier Gary Doer said that it wouldn't be fair for one community to be given preferential treatment over another. Is he suggesting that every municipality in the province be entitled to the same bonanza as was awarded to Maple Leaf The province would go into receivership.
Besides, how is it fair to the tens of thousands of Manitoba businesses that pay through the nose in taxes but get nothing in subsidies The pork barrel handouts lead one to conclude - not unlike Orwell's Animal Farm - that all businesses are equal but some businesses are more equal than others.
Winnipeg Mayor Glen Murray says the deal must provide "a net benefit to the taxpayer." How thoughtful of the Mayor to look out for the little guy.
What's puzzling is how does the average taxpayer benefit in any tangible way by subsidizing Schneider Do they get any dividends No.
Will taxpayers pay less at the super market for Schneider meats Not likely, since subsidies tend to distort the market, erode productivity and drive prices up. But given the choice, most consumers will end up buying their bacon from the major pork processors. After all they already paid for it once before in subsidies.
Will property and business taxes be affected Yes, because a subsidy or tax break for one business comes at a cost to the other businesses and individuals in the same property tax base. A tax cut or subsidy to Schneider makes it all the more difficult for governments to say 'no' to the growing queue of businesses expecting the same privileged treatment. Broad-based tax relief for property and business is the first casualty.
Will taxpayers feel all warm and fuzzy inside knowing Schneider is expanding in their community Perhaps, but the price comes too high.
A "net benefit to the taxpayer" is realized when the city issues a lower property tax bill to homeowners this year than last year. It's not rocket science.
Mercifully, Schneider isn't hamming up the alleged benefits for Winnipeg taxpayers. Their beef is with the unleveled playing field with Maple Leaf.
You can't fault Schneider for trying to wring concessions out of politicians. Its job is to maximize shareholder earnings. You can, however, berate the politicians for selling off the farm.
Schneider is right to demand lower property and business taxes, but everyone should share in the same fortune. A "level playing field" in tax relief should be extended to all taxpayers.
Government has no business singling out select businesses like Schneider to keep their production costs competitive with Maple Leaf. Leave that to the free market. But our top politicians seem to have more faith in the dead hand of corporate welfare.
The thirteen Councillors who voted unanimously in 1996 for a $2.5 million subsidy to Schneiders are still around today. Even Councillor Smith - a new member - caved in to the pork processor.
One way to force Winnipeg and the province to scrub the deal is for every business in the province to call up their Councillor and MLA and demand a slice of the corporate welfare pie. The magnitude of such a costly proposition would bankrupt the system.
The city and the province should call Schneider's bluff. If the meat packers were serious and leave the city on account of high property and business taxes, no one will cheer. But on a brighter note, the city and the province may come to realize one day that high taxes make for bad business.