Mark Milke is the author of multiple reports on the economics of government subsidies to business.
In the 1993 movie Groundhog Day, actor Bill Murray plays an arrogant television weatherman, assigned to cover “Punxsutawney Phil.” That is the groundhog that pops out of his tunnel each February to see his shadow (or not), and which signals if another six weeks of winter is on the way.
Mr. Murray’s character, Phil Connors, despises the small Pennsylvania town after which the groundhog is named and its annual event. As cosmic punishment, Connors wakes up each day to repeatedly relive yesterday – Groundhog Day in Punxsutawney – until he finally learns humility and to appreciate small-town values.
In an early February coincidence – Groundhog Day was last Thursday – Canadians might feel like Mr. Murray’s character every time another announcement of tax dollars for chronic corporate welfare recipient Bombardier is announced. On Tuesday, the Montreal-based aerospace manufacturer scooped up another $372.5-million in cash from the federal government.
Bombardier’s latest cash infusion comes on top of a $1.3-billion payment from the Quebec government in late 2015. In addition, last year, the federal government ponied up $54-million for a Bombardier-led consortium. One should assume some of that will end up in the company’s bank account.
The latest cash arrives in the form of a “repayable contribution.” In theory, that’s a loan. In practice, it might turn out to be a grant.
That is because a “repayable contribution” might have conditions attached whereby repayments might only be required if a company’s target – a certain number of airplane sales, for example – is reached. Anything short of the goal, and the federal government might not require taxpayers’ money be returned.
One problem with such government corporate support is that taxpayers will not know until much later – and perhaps never in the case of Bombardier – if repayment is likely.
Conditions of such loans are almost always secret. In addition, recent Access to Information requests, including one response delivered to me in December, routinely black out all information related to Bombardier.
The problem, as I noted recently on these pages, is that the Access to Information Act requires a department to not release potential commercially sensitive information if the company objects. And Bombardier has been in Federal Court for years to do just that. Thus, the federal government department no longer lists Bombardier in responses to Access requests.
I can partly detail what Bombardier (previously) received only due to a 2012 Access request which listed various federal payments (but not repayments) over the decades to Bombardier. (The federal government provides some public estimates for Bombardier; they are incomplete and do not include grants, or forgiven interest payments over the decades.)
In a 2014 report on subsidies for the Fraser Institute based on past Access requests, I chronicled Bombardier’s first infusion of government cash in 1966 and until 2013. The results: Bombardier, and de Havilland, which Bombardier took over in 1992, together received 83 such taxpayer-financed cheques from the federal government alone. That was worth $2.2-billion.
After 2013, taxpayers through the Quebec government have provided another “instalment” worth $1.3-billion (last year) and Tuesday’s federal allocation of $372.5-million. That adds up to 85 disbursements in total – at least that I could track. Also, the federal government wrote off $108-million in third party-loans to buyers of Bombardier aircraft in 2008.
With some updates for inflation for the above, it appears Bombardier (including de Havilland) received about $4.1-billion from the federal and Quebec governments since 1966. That assumes no other province beyond Quebec, and no federal department beyond the department of Innovation, Science and Economic Development, has disbursed additional money to Bombardier. Given the Access to Information blackouts for Bombardier, that is not a safe assumption.
Also, other countries may well have provided additional cash from their taxpayers: Bombardier has facilities in Mexico, for example, and thus may have received loans or grants from that country’s taxpayers.
Thus, reliving Groundhog Day with Bombardier year-in and year-out, may be a regular experience that extends beyond just Canada’s taxpayers.Report Typo/Error
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