ROB Insight is a premium commentary product offering rapid analysis of business and economic news, corporate strategy and policy, published throughout the business day. Visit the ROB Insight homepage for analysis available only to subscribers.
When the federal Conservatives were in opposition they called for an end to corporate welfare. When they came into power in 2006 they instead said they'd do a much more effective job of it. Instead, the Tories have done little better than their predecessors.
The government's Strategic Aerospace and Defence Initiative (SADI), launched in April, 2007, was meant to replace the scandal-plagued Technology Partnerships Canada (TPC) program of the prior Liberal era, with the Conservatives promising a more transparent, accountable handouts program that delivered a faster – and complete – repayment of public funds.
The track record so far? As of last November, Industry Canada had disbursed $616-million under SADI and another aid program for Bombardier's C Series airliner. Payback to date is $6.2-million, or 1 per cent.
But it's too early to expect much from a program that only started disbursements in 2008, right? Hold on: At this point in its young life – roughly four years after its first handout – TPC had recouped $21.9-million on disbursements of $1.7-billion, for a 1.3-per-cent return.
Of course, it would be premature to judge the SADI and C Series programs on payback; only about half of the 29 projects funded so far have completed their research. Certainly, TPC and the Defence Industry Productivity Program that it replaced were busts, with repayments totalling a fraction of the billions of dollars disbursed.
But the Conservatives' programs have disappointed in two areas: accountability and transparency. A report last fall by Auditor General of Canada Michael Ferguson found that for SADI's first three years, "Industry Canada had inadequate performance information to determine progress being made to achieve the [program's] objectives." Industry Canada failed to obtain annual performance reports – and didn't even request them, contrary to the terms of the agreements. Also lacking was a clear link between the objectives in funding agreements and SADI's overall program objectives.
The department did fix those issues in 2010 – but not for the C Series, for which "the department has not collected all documents required [under the funding agreements] to determine progress toward the program's objectives, so it has a more limited picture of the program's performance," the Auditor General wrote.
The government has also failed to deliver a final evaluation of the TPC program's effectiveness that was promised two years ago, and now says it will only be delivered by 2016 – too late to provide meaningful feedback for the first scheduled analysis of SADI.
As for transparency, a promised comprehensive annual benefits report has yielded just one release of limited project highlights in 2009, and an internal report in 2011 that wasn't released publicly. The government "has not followed through on its commitment" to be more transparent, the Auditor General reported.
The government has promised to do better. Let's hope so. With no end in sight to Ottawa's practice of bankrolling the aerospace sector, it would be nice for the public to know the Tories are taking the outlay of taxpayer dollars as seriously as they promised to seven years ago.
Sean Silcoff is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights, and follow Sean on Twitter at @seansilcoff .
Sean Silcoff