Freedom Party of Ontario


For immediate release

Corporate Welfare


Contrary to John Tory's assertion, subsidies hurt the taxpayer: McKeever

May 12, 2006, Oshawa - Freedom Party leader Paul McKeever today objected to the McGuinty government's $44.5M expenditure on the expansion of the publicly-traded (TSX:LNR) Linamar Corp. auto parts plant in Guelph.  Dalton McGuinty announced the government subsidy today.

"Morally, economically, and strategically, this decision is wrong", said McKeever.

"If a private company wants to raise revenues for investment, it needs only issue shares or issue bonds.  Those individuals who think that the shares or bonds are a good investment will exchange their earnings for the shares or bonds.  If the investment is a bad one, the shares or bonds will not sell because the investors have reason to believe that they will not get a return - a return of the nature and extent that they want - on their investment.  By relieving Linamar of the normal requirement to trade shares or bonds for the money they want from Ontarians, the government is effectively stealing for Linamar.  The government is essentially declaring that coercion is morally equivalent to trade; that, in terms of ethics, thinking, working and producing an income in order to live and pursue ones own happiness is a vice, whereas it is a virtue to have a government steal money for you, from the pockets of those who earn it; a vice to take by force if you wear a fedora, a virtue to do so if you wear a crown.  But, in truth, had a Tony Soprano done this for Linamar, our moral evaluation of the government could not rationally be any different.

"Economically, the decision to subsidize Linamar is wrong because it rewards a company that cannot or will not raise its own revenues, and punishes those that can and want to do so.  When we take money from the taxpayer, the taxpayer cannot invest that money in the hundreds of corporations who can prove to investors that their shares are worth buying, and that they are corporations worthy of loans.  The result is that inefficiency, poor performance, and the like stands to gain by preventing wise investments from being made, and by preventing excellent thinkers from advancing and strengthening the economy.

"Strategically, the decision to subsidize Linamar is wrong because corporate welfare is a loser's game for government and the taxpayer.  It neither secures nor necessarily increases job numbers."

In March of 2005, the McGuinty government took $235M out of the taxpayer's pocket and handed it to General Motors (GM) for that company's Beacon Project, saying:

"This investment is great news for our economy, our prosperity and for all Ontarians who will benefit from new jobs."

and that GM's

"...$2.5-billion investment here will create 500 new jobs for Ontarians."

For its part, General Motors told the public that:

"GM Canada also announced that it would proceed with major new investments in flexible manufacturing processes and technologies at its number two Oshawa Car Assembly Plant. These investments will enable the plant to adapt quickly to customer and vehicle market changes and to produce a multitude of vehicle models and platforms on the same assembly line.
The addition of ‘flex-manufacturing’ capability at Oshawa Car Plant 2 will involve new robotics and manufacturing systems enabling quick and efficient response to market demand for future models or platforms. When implemented, the new systems will enable the plant to produce a multitude of vehicle models and platforms on the same assembly line."

Then, on November 21, 2005, a mere 8 months after McGuinty announced the GM subsidy, GM announced not only that it was reducing jobs by 3,880 people, but that Oshawa Car Plant 2 would be closed entirely by 2008. 

"Either the McGuinty government is incapable of learning from past experiences," said McKeever, "or Mr. McGuinty's money for jobs nonsense is an intentional lie; a way to make it look like the taxpayer is getting something for his money.  Interestingly, the fact that McGuinty feels the need to engage in such pretence demonstrates that even he knows it is wrong for the taxpayer to receive nothing in return for the money that was taken from him.
"Finally, Mr. Tory's comment today that 'The provincial incentives don't hurt' must be addressed.  They do not hurt the recipient, Mr. Tory, but they hurt the taxpayer, and not to recognize that fact is shameful."

For further details, contact:

Paul McKeever, Leader, Freedom Party of Ontario
e-mail: e-mail
Office: 905-721-9772
Cell: ***-***-****
Home: ***-***-****


This media release distributed to all major news media and to Ontario's MPPs.

Freedom Party of Ontario

240 Commissioners Road West
London, Ontario

Tel: 1-800-830-3301