By Jack Mintz, January 2, 2023
What do Xi Jinping, Justin Trudeau and Alberta’s Opposition Leader Rachel Notley have in common? A belief that the best way to create economic growth is, not by keeping tax rates low, but with industrial policy that throws subsidies and targeted tax breaks to politically favoured industries.
In fairness, they aren’t the only leaders who have this philosophy. U.S. President Joe Biden is world subsidy king these days, throwing trillions of dollars at infrastructure, manufacturing and green energy while pushing for higher corporate taxes. In this country, Quebec’s politicians have for years been masters at targeted incentives. My favourite was an investment tax credit for, believe it or not, pig manure farming. It lapsed in 2013, however.
Politicians revel in playing God with other people’s money. If electric vehicles don’t make a profit for the auto companies that build them, why not use tax dollars to give them a push? If a pulp and paper company is going out of business, why not “save jobs” rather than see workers go on the dole? And if the private sector is leery of investing in moonshot technologies, why not volunteer unsuspecting taxpayers to take on the risk?