This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, January 26, 2024
With Canadian GDP per capita dropping like a stone, what would you expect our minister of finance, Chrystia Freeland, to say last week at the elite Davos confab? “Come to Canada! We have $135 billion to give you!” is what she did say. Given our poor investment performance, it seems the only way to attract capital is to offer billions of tax dollars to foreign multinationals.
But not just to any company that might want to invest in Canada. Freeland’s $15-billion Canada Growth Plan and $120 billion in tax credits constitute an industrial policy skewed toward clean energy, critical mining (e.g., lithium, nickel and copper) and retooling manufacturing, largely in voter-rich Central Canada. It is a huge number to spend, equivalent to a year and half of federal corporate tax collections.
If you are mining for iron ore and gold, however, you’re out of luck since these are not critical minerals. As for agriculture and forestry, they don’t count, either. Service sectors like construction, communications and transportation also take a back seat. And forget about greenfield oil and gas investments like liquified natural gas plants. Instead, tell Germany to fly a kite in Qatar rather than have reliable Canadian supply.
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