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published by the Fraser Institute, federal, provincial and local governments in Canada spent $352.1 billion subsidizing firms from 2007 to 2019—more than was spent on national defence over the same period. This corporate welfare, which does little if anything to stimulate widespread economic growth, came with huge costs to government budgets and Canadian taxpayers.
Of course, taxpayers ultimately bear the cost of government spending on corporate welfare. For Canadians who filed taxes from 2007 and 2019 , the cost per tax filer ranged from a high of $18,785 in Saskatchewan to a low of $6,048 in New Brunswick. The three largest provinces were big spenders, with corporate welfare costing $18,334 per tax filer in Quebec, $13,285 in Alberta and $12,627 in Ontario. That’s a significant amount of taxpayer money unavailable for other priorities.
In fact, research suggests that business subsidies may actually hurt the economy as the government’s interference in the market ultimately distorts private decision-making and misallocates resources. When the government attempts to select winners and losers in the economy, it often makes the economy less efficient than if those decisions were left to individuals.
The same study found that government spending on corporate welfare represents a significant share of business income tax revenues. For instance, Quebec and Manitoba spent roughly the same amount of money on business subsidies as they collected in business income tax revenues from 2007 to 2019. In other words, the provincial government could have effectively eliminated provincial business income taxes if it had ended provincial corporate welfare.
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