The problem with the promise to end corporate welfare isn’t the idea, but the definition. And since Andrew Scheer can’t define it, it’s hard to take it seriously.
It is the Conservative version of Justin Trudeau’s 2015 electoral-reform promise: It sounds pleasing, but the difficult “how” is so vague one should doubt it will ever happen.
What is Mr. Scheer actually promising? A review. He doesn’t promise to cut any specific program or type of program, but rather a review to identify what should be cut. And he has decided that will add up to $1.5-billion a year.
What will not be cut? Useful grants and loans. What will be cut? Useless grants and loans. What’s the difference? That will be reviewed.
Make no mistake, reviewing these programs is a good idea. But if you want to see a party that plans to cut them, you will be disappointed. There is no plan here. And political history shows us vague promises to cut “waste” or “corporate welfare” often come up empty.
So caveat emptor. There’s a whole lot of muddification here that doesn’t allow voters to decide what Mr. Scheer would actually do. He used this promise to signal that he’s against crony capitalism, and to claim he’ll make savings that will help pay for his other promises. But politicians have repeatedly balked at reforming business subsidies because it is politically difficult.
Of course, muddy election promises are not, by any means, a uniquely Conservative problem.
Liberal Leader Justin Trudeau’s vague 2015 electoral-reform pledge is not precisely the same thing, because he clearly made a promise there would be no more first-past-the-post elections, and then broke it. But the first clue that it wouldn’t happen was that he didn’t say what reform he was promising.
In this election campaign, Mr. Trudeau is even falling short on his 2015 transparency promises. He promised a system where parties submit policy proposals to the Parliamentary Budget Officer for costing, to “help Canadians make informed decisions during elections.” Now the Liberals say they will only submit big-ticket items for costing and are delaying the release of PBO analyses until their whole platform is out.
Mr. Scheer’s Conservatives have done better on that, submitting campaign proposals so the PBO can calculate and report costs in a timely way.
But in the case of the promise to end corporate welfare, the calculation was hilariously simple: The Conservatives say they will cut $1.5-billion a year, in some unspecific way, so that adds up to, er, $1.5-billion a year. What is there to calculate?
Is Mr. Scheer talking about cutting grants for automobile plants? Or aircraft companies such as Bombardier? The Conservative Leader said he would “put an end to handouts to wealthy executives, shareholders, and foreign companies,” so you might think so. But he also said they would focus on “strategic industries and long-term competitiveness,” so who knows?
Mr. Scheer came armed with a list of stupid or unpopular subsidies issued under the Liberals, like $40-million for BlackBerry or $20-million for Maple Leaf Foods. But they didn’t add up to anything close to $1.5-billion a year. He didn’t outline criteria for what the review would seek to reduce.
When politicians talk about billions in corporate subsidies, it’s not wrong, whatever the quibbles about numbers. But those figures include tax breaks and other things politicians will never touch such as the small-business tax deduction and farm-industry supports. Many in the field believe research and development tax credits should be revamped and reduced, but governments don’t want the headache. Stakeholders squeal if governments cut anything else.
A review? Of course there should be. Margaret Dalziel, an associate professor at the University of Waterloo’s Conrad School of Entrepreneurship and Business, said good studies in the field typically require many years of data. Luckily, there have already been studies on what kinds of things work. If you’re a political party hoping to take government, you might want to have an idea about what kind of criteria you propose, or at least what you are reviewing, and for what purpose – before you count the savings.