Is It Time To Retire The Term "Corporate Welfare"?
By Brad James
A few weeks ago, Bombardier made the news, in all the wrong ways. The corporation made a decision (later partly rescinded) to fork over fat pay hikes to some already well-paid senior executives. This was after it had received hefty federal and Quebec government subsidies. An angry chorus of “corporate welfare” call-outs lit up social media and mainstream news sites.
The “corporate welfare” charge gets used a lot. It’s been part of progressive commentary criticizing the federal government’s plan to fund public infrastructure via a private equity supported “infrastructure bank.” The plan is an “an enormous corporate welfare scheme at the expense of the middle class” said one pundit in the Toronto Sun.
The popular (or populist?) “corporate welfare” label is a landmark phrase in Canadian political history. It has pride of place in the hit 1972 book by NDP leader David Lewis, Louder Voices: The Corporate Welfare Bums, and is said to have been invented by Ralph Nader a decade and a half earlier.
For progressives, calling out “corporate welfare” often feels right.
But after a 50-year run, there’s a case to be made for gently easing the term into retirement.
A key reason is the “corporate welfare” epithet is an overt nod to the grimly enduring stereotype about “welfare” for people. We all know the regrettable lingo: welfare bums, welfare queens (the more niche slam with a bigoted edge, more popular in the U.S.), a free ride and something for nothing while the rest of us "hardworking people" get taxed to death, and so on.
“Corporate welfare” uses “welfare” as a pejorative. It surfs on the stereotype about welfare recipients and maybe amplifies it.
But progressives defend welfare as something we owe to others; it shouldn’t be used in a derogatory way, even to critique offensive corporate conduct.
And throwing around the “corporate welfare” condemnation serves to build up the right wing case that government is cronyistic, wasteful and not to be trusted.
When it was first deployed so many years ago by progressives, the “corporate welfare” slogan likely hit the mark most of the time.
But now? After five decades of growth in public policy tools and programs, “corporate welfare” seems overbroad - an all-purpose catchphrase. Anything and everything a private sector operator might receive from government, from tax abatements and training subsidies to regional development grants, can get tagged as corporate welfare.
Next, given our common inclination toward indignation that fits our biases, exactly what gets pronounced as “corporate welfare” depends on who’s doing the pronouncing. One pundit’s or interest group’s “smart investment in jobs/communities/innovation” is another’s “corporate welfare.” For example, no progressive commentator that I can find put the “corporate welfare” tag on the $150 million in recent federal and Ontario government support that will be going to Ford Motor Co.’s Windsor auto plant.
On the other side of the spectrum, conservatives have enthusiastically appropriated the “corporate welfare” label. The Canadian Taxpayers Federation targets “corporate welfare” in its campaign to slash taxes at all levels with a briefing document unsubtly titled “On the Dole.” Stephen Harper started playing the corporate welfare card way back in 2004. Maxime Bernier says if he’s chosen to lead the Conservative Party of Canada, it’s the end of the line for the corporate welfare gravy train.
The NDP has long advocated for various forms of pubic support for private businesses. Witness the party's proposed tax credits for hiring. Even the last federal NDP campaign's heralded tax cuts for small business might be termed small-corporate welfare. Per capita provincial spending in support of private enterprise is highest in Quebec and Saskatchewan, two provinces with histories of progressive PQ and NDP governments. How much of this is (or isn’t) “corporate welfare”?
Of course the use of public money by private companies should always be closely scrutinized; sometimes it will be smart spending, sometimes it won’t. Companies that pocket public funds instead of expanding or hiring - or that leave the country - should be called to account.
But just reflexively making the charge of “corporate welfare” denigrates something that’s good (welfare for real people). “Corporate welfare” gets aimed at countless targets. It is eagerly pressed into service by the left and the right. With all the work it is being forced to do, it’s no wonder “corporate welfare” is tattered and tired.
Let’s give it a rest.