TORONTO – Ontario’s opposition parties say the Liberal government hands out billions of dollars in grants to profitable corporations every year, often with virtually no oversight.
The government shouldn’t be picking winners and losers, and should provide a level playing field for all companies in a sector instead of giving grants to ones the Liberals select, said Progressive Conservative economic development critic Monte McNaughton.
McNaughton complains he’s been asking for a list of companies that benefited from what he calls the Liberals’ “crony capitalism,” along with the amounts they received, since January, but has only partial results so far. There were at least 374 grants in a 10-year period, he said.
“We have no idea what the dollar amount is,” McNaughton said.
“It makes one suspicious when we have a minister who won’t even reveal to taxpayers what companies got grants and how many jobs they created.”
Those suspicions grow even more when the companies who get grants turn around and donate money to the Liberal Party of Ontario, added McNaughton.
“Quite of few of them, quite frankly, have donated to the Liberals, and it makes you suspicious about what the process is for giving out corporate welfare,” he said.
Economic Development Minister Brad Duguid defends the corporate grants as necessary to attract new business investment and expansions, and said the Liberal government has “invested” $2.8 billion in companies through its Jobs Prosperity Fund.
“That has leveraged $29 billion in private sector investment here in Ontario, rather than somewhere else in the world,” he told the legislature. “That’s 160,000 Ontarians whose jobs have either been created or supported as a result of these investments.”
The minister promised the government would make public all the corporate grants once the privacy commissioner had reviewed them and given the green light.
“We’re happy to share publicly all of the investments that we’ve made with businesses across this province,” said Duguid.
One big problem, said McNaughton, is many of the corporate grants were given out to companies that were invited by the government to apply for them, which means no other firms even had a chance to get the money.
It’s small and medium-sized businesses that create most of the jobs, not the large corporations, he added.
“We know that the largest and most successful companies across Ontario receive the lion’s share of this funding,” said McNaughton.
“What’s more, much of that money was spent with no public application process and instead the minister of economic development and the premier hand-picks companies that would receive the payouts behind closed doors by invitation only.”
The government has no real idea whether the money its giving corporations is actually creating jobs or helping retain jobs, and 80 per cent of the grants were given out with no public process, said NDP finance critic Catherine Fife.
“Aside from the process of granting these contracts, there’s no evidence that it works,” she said. “It begs the question, why is this government not trying different strategies that are at least open and transparent?”
Fife said the Liberals handing out grants to selected companies hurts chances of more investment in the province.
“If you’re not falling under the Liberals’ favour, then you’re out of the running for that money,” she said. “By the Liberals showing such favouritism around how grants are distributed, it undermines confidence in Ontario’s economy.”
McNaughton wants the Liberals to agree to have every corporate grant approved by the legislature, but he said they could be lumped together so it wouldn’t have to be an endless series of votes.
“I don’t understand why they’re doing this under a veil of secrecy and why they’re not making it fully transparent and public,” he said.