The federal government operates a department known as "Western Economic Diversification" (WED). Although politicians publicly tout WED as an important agent in spurring economic growth in Western Canada, it is nothing more than a giant political slush fund.

Since its inception in 1987, WED has handed out $3.9 billion to 21,340 recipients in western provinces. About $3.1 billion of that were straight handouts, while $800 million were categorized as "loans." Not surprisingly, only $415 million has actually been paid back - a repayment rate of 51 per cent. If a private sector lender had this type of repayment rate, it would have gone out of business long ago. You can imagine who has to pick up the tab for the unpaid loans.

Like most political slush funds, WED is a true dog`s breakfast when it comes to the types of projects it funds. From grants for chopstick manufacturing plants, airport lighting, investment schemes and wall murals, the department will fund just about anything. In some cases WED bureaucrats review and fund the same projects that bureaucrats in other departments are reviewing and funding. Talk about overlap.

The politics behind the department's funding is evident when one looks at the handout timing. In fact, a report released by the Canadian Taxpayers Federation (CTF) in early 2009 showed a striking relationship between the department's funding levels and election calls over the past twenty years. More recently, WED handouts spiked just before the 1997, 2000, 2004 and 2006 federal elections.

Not only does WED use tax dollars to buy votes, it has no idea whether it fulfills its mandate -- job creation. When the CTF asks for details on the number of jobs created, the response is: "Western Economic Diversification does not track estimated jobs created or estimated jobs maintained."

Except WED does claim that since 1995, Western Canada's Community Futures organizations, which it provides massive funding for, have created or maintained 60,000 jobs in western communities. However, the auditor general's 2001 report stated, "WED has no procedures for assessing the accuracy of these assertions or auditing the results claimed, for example, numbers of jobs created or maintained by [Community Futures] activities."

Here in B.C., WED has thrown around a fair chunk of change over the years. Since 1987, our province has received $1.2 billion in WED grants and $300 million in loans. In keeping with the coincidental timing of WED funding announcements, the Prince George Airport Authority was given $11 million right before the 2008 federal election and the Prince Rupert Port Authority received $30 million right before the 2006 federal election. However, B.C.`s all-time WED jackpot - $268 million for infrastructure to the Province of B.C. - came in October 10, 2000, just in time for the November 2000 federal election.

Certainly not all of WED`s funding would be categorized as vote-buying. After all, who would criticize funding cancer research? However, it would be more appropriate for legitimate projects, such as cancer research, to be funded through more appropriate departments, such as the department of health. Further, legitimate projects shouldn't have to wait for an election to roll around to get funding.

Government hands out money from hard working taxpayers for political, not economic reasons and WED is a classic example. It should come as no surprise WED has no idea whether its spending is effective and why should it? Spending is used to buy votes, not for economic development. To provide true economic development, the government should eliminate WED and use the savings to deliver broad-based business tax relief. Doing so would leave more money in the hands of those who drive any successful economy -- entrepreneurs.