Harper Targets Liberal Gravy

Some left-wing commentators say there is very little difference between the federal Conservatives and the federal Liberals on economic issues.

Both parties proudly trumpet their pro-business policies. And both parties have appeared quite comfortable with the rising multinational corporate presence on university campuses and in the delivery of health-related services.

The Conservatives and Liberals have each favoured free trade and promoted "labour flexibility" by cutting employment insurance.

As well, they have each demonstrated a desire to cut taxes when the budget has been balanced. In 2000, for example, the federal Liberals announced $100 billion in tax cuts over a five-year period. They were egged on by the Canadian Alliance, which evolved into the Conservative Party of Canada.

Only the NDP has proposed increasing corporate taxes, suggesting they be raised from 21 percent to 24 percent.

However, the Conservatives under Stephen Harper differ in one major area from the federal Liberals: business subsidies. And if Harper gets elected, this could have ramifications for local companies and organizations that have obtained federal assistance in the past, such as Ballard Power Systems Inc., Fuel Cells Canada, and the Vancouver Aquarium Marine Science Centre.

During a speech to the Toronto Board of Trade earlier this month, Harper promised to cut business taxes by up to $4 billion, but only if this was matched by cuts in business subsidies.

The Liberals, on the other hand, have promised in their platform to "enhance the capability of the regional agencies", such as Western Economic Diversification Canada and the Atlantic Canada Opportunities Agency.

"A Liberal government will support a comprehensive commitment to regional, rural and industrial development with $2 billion of new resources over the next five years," the party's platform states.

The Liberals have also promised to "build on the government's investment in the venture financing arm" of the Business Development Bank of Canada, a federal Crown corporation.

The Liberal platform states that the federal government has invested $13 billion of public money in research over the past decade. A significant chunk of this poured into UBC, which attracted $377 million in government and matching industry grants in 2002í‚ ­03.

In some respects, Conservative Leader Stephen Harper sounds as if he is heading a "Taxpayers' Party". He doesn't make extravagant promises about underwriting investments in infrastructure programs.

One of his Conservative MPs, Jason Kenney, is the former head of the Canadian Taxpayers Federation. One of the party's star Ontario candidates, Walter Robinson, also headed the CTF.

During Robinson's tenure, the CTF devoted lots of attention to attacking corporate welfare programs through WED and ACOA.

But it saved its greatest scorn for the federal Liberals' flagship subsidy program, Technology Partnerships Canada.

According to a 2002 CTF "audit", TPC authorized total business subsidies of approximately $1.8 billion since 1996. Robinson claimed at the time that the federal program recovered a mere 2.58 percent of the $947 million in loans.

Robinson also stated that three TPC funding announcements worth $149 million ($87 million to Bombardier Inc., $30 million to Burnaby-based Ballard Power Systems, and $32 million to CAE Electronics Ltd.) were announced before they had even been officially approved.

Not surprisingly, a great deal of the money went into ridings held by the federal Liberals. Ontario and Quebec attracted more than 90 percent of the TPC subsidies over the six-year period.

Alberta, which was represented by just two federal Liberals, obtained just 1.43 percent of the TPC subsidies over the six-year period.

B.C. has approximately 13 percent of the population but only received 8.06 percent of the TPC funding, according to the CTF study. The vast majority went to high-tech companies in Vancouver, Richmond, and Burnaby--mostly in areas represented by Liberal MPs.

The next time you hear Harper criticize business subsidies, keep in mind that the largest beneficiary under the TPC program from 1996 to 2002 was a Quebec-based company, Pratt and Whitney Canada, which collected $385.4 million.

The Conservatives aren't expected to elect many candidates in Quebec, so opposing business subsidies won't lose them any seats.

Harper has promised that a Conservative government will invest in medical and scientific research. That doesn't mean, however, that he won't apply the brakes to the federally funded Liberal gravy train to UBC. And this could have economic implications in the Lower Mainland.