Government has no business handing out tax dollars to industry favourites. Period. It's not the job of government to stick handle winners and losers. That's what consumers do. All government can do and should do is ensure an attractive investment climate and a level playing field so businesses can compete for our dollars in a fair environment. Getting government out and keeping government out of the corporate welfare business, however, is much easier said than done. Witness: the provincial government.

The BC Liberals were elected in 2001 on a slate of promises including the elimination of business subsidies. In their first year, the government scrapped over 22 different subsidy programs. As Minister of Competition, Science and Enterprise Rick Thorpe rightly proclaimed, "ending these unfair subsidies is key to revitalizing prosperity and restoring sound fiscal management. Without these subsidies, individual businesses can now compete fairly on a level playing field."

Oh, how quickly things can change. The first big announcement to come from the now re-elected Liberal government is a promise for special treatment for the biotechnology sector. To be sure, the biotech industry is an important contributor to the provincial economy but does that mean it should enjoy its own set of rules How does preferential tax treatment for one industry stack up against the Liberal promise of a level playing field Doesn't a level playing field, by definition, mean that everyone has to play by the same rules

The news release put out by the premier's office states that "the government will expand the International Financial Activity Program that provides refunds of provincial corporate income taxes paid on certain international financial activities." Hmmm-sounds an awful lot like corporate welfare.

No doubt the chorus of defenders will soon start bleating that the biotech industry "is unique, it faces special challenges and means jobs for British Columbians." Didn't the film industry use that same argument And that's the point. Every industry faces its own "unique challenges" as does every small business owner. But why should taxpayers be forced subsidize every business that can plead its case Is this the role of government, to hand out tax dollars to industry favourites

It was not too long ago, that the film industry asked taxpayers to cough up more money for their labour costs. In a matter of days, the same provincial government that was committed to a so-called level playing field caved to the demands of film executives and hiked their refundable tax credit, (which is basically a cash payment from the treasury).

According to Budget 2005 documents, an additional $30 million was set aside for the increased film tax credit. Last year, the film and video tax credit totaled $27 million. Other provincial tax credit programs include: the scientific research and experimental development tax credit ($95 million in 2004/5), the production services tax credit ($43 million), the mining exploration tax credit ($3 million) and the international financial business tax refund ($7 million).

All in all, preferential tax treatment "cost" provincial taxpayers over $175 million in 2004/5. That number will, of course, increase this year if the government makes good on its promise to kick back some corporate tax refunds to the bio-tech industry.

Instead of complicating the tax code with more credits, exemptions and rebates that favour some industries over others, the government should look back to its commendable 2001 policy of subsidy elimination. At the time, the provincial government defined a subsidy as: "a government program or activity that transfers a benefit to an individual for-profit business, or a selected group of businesses, beyond what would normally be provided by the marketplace." It's not hard to see that refunding corporate income taxes for a group of businesses would not normally be provided in the marketplace.

Whether it's called the international financial activity program, the industrial incentive fund, or whatever other euphemism they come up with---it's corporate welfare all the same.