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Budget ’09: Bailout

Just about every industry in Canada is getting some kind of handout


 

Bailout

Just about every industry in Canada will find at least something to smile about on budget day. From forestry to ship-building to tourism, Ottawa plans to spread its bailout around, albeit unevenly.

The auto sector—and the victims of its collapse—will take home the lion’s share of the money intended to soften the recession’s blow. Supplementing the government’s previous announcement of $2.7 billion in loans to the Big Three is a program to encourage Canadians to buy more cars. The newly-created Canadian Secured Credit Facility will have a $12 billion bankroll to help finance vehicle and equipment purchases by Canadian consumers and business. The southern Ontario communities most affected by the downturn in the auto industry will also receive over $1 billion over the next five years to help to diversify local economies.

Also at Macleans.ca
Budget ‘09: Tories take a final leap into the void
Budget ‘09: The Overview
Budget ‘09: Stimulus
Budget ‘09: Economic Outlook
Budget ‘09: Personal Finance

The forestry sector is also the target of significant government largesse. Ottawa will invest $170 million in the sector over two years in order to help its diversify its product base and introduce new processes. Though it’s not explicitly targeted to a specific region or industry, forestry towns will be able to draw from a separate $1 billion fund, paid out over two years, to help them survive the sector’s struggles. In his budget address to Parliament, Finance Minister Jim Flaherty said the Community Adjustment Fund “will help communities across Canada facing unique challenges, from the mountain pine beetle infestation to the declining demand for seafood.”

Though they don’t figure as prominently in the budgetary allocations, virtually every other major industry in Canada stands to receive government money in some form or another. Farmers will receive a $500 million boost over five years, in addition to a $50 million investment in the expansion of Canada’s slaughterhouse capacity; Canadian shipyards can count on $175 million worth of new orders from Ottawa; even the much-maligned arts and culture sector will get a boost, with an extra $20 million earmarked for the National Arts Training Contribution Program, and a $200-million allocation for the Canadian Television Fund. In one of its most understated moves, the Conservative government has also revived the sponsorship program with a $100 million commitment to support “marquee festivals and events that promote tourism” over two years.

Liberal leader Michael Ignatieff says opposition politicians can take credit for the budget’s more generous provisions. Though he wouldn’t reveal whether his party was willing to support the document, Ignatieff conceded “there are some positive sides to this budget.” Ontario Finance Minister Dwight Duncan was, for his part, enamoured with the money Ottawa plans to send his way to help struggling industries. The strategy to fund just about every sector imaginable was indeed intended to garner widespread support. That it will likely do so is at least partly due to the fact its fiercest ideological opponents are the ones who drafted it.


 

Budget ’09: Bailout

  1. Lemon socialism at its best/worst, depending on your view.

  2. Rise my zombie minions! Feed! Feed on the productive economy!

  3. OK, so they have nailed down the “to each according to need” part.

  4. More cars?

    What part of climate change do they think is a good idea?

  5. Alan Pater,

    How, as a Canadian can you be against ‘global warming’. Seriously, it was -29 here last week. The fact climate change is a scare tactics to increase statist regulation and taxes; and is fake, has been a real disappointment to me. I would welcome a change in climate. I (and 25% of Canadian under 30) don’t drive not because of ‘climate change’ but because cars are just big holes in the road that suck money out of us. Subsidizing those industries is wrong. If I really thought that carbon emissions would change the climate, I would buy a Hummer and rev it full blast 24/7/365.

    John

    • Ha!
      I too, have wished to see just a little more global warming, even if it ‘seems’ to give credit to Suzuki’s new found religion. I’ve yet to determine why, with his knowledge and intelligence, he’s promoting such nonsense.
      Anyone with even an elementary knowledge of the earth’s history knows full-well that so-called global warming occurs on a cyclic basis, having occurred many times in the past, and will likely continue to occur for thousands of years in the future. This is in no way a man-made phenomenon and it is nothing short of foolish to suggest otherwise. (I don’t know what an intelligent man like Suzuki [who knows better] is getting out of his government subsidized propaganda. He refused to answer this when I asked him.)
      Agreed, at the height of the warming period, life as we know it, would be severely changed just as it would be at the height of the cooling period (ice age).
      Should we take measures to help ourselves survive? Of course. If we are serious, we can start by attacking the global population explosion. However, that’s a topic for another day.
      In the interim, I hope we can prevent governments and socialists from expanding on this apparent cash cow. Like John, I’m hoping for a little ‘Florida weather’ to head our way.
      Dale (N.S.)

  6. lets continue to fund companies that produce products that the consumer doesn’t want. This is good for Canada, especially in the long run…

  7. It’s not that they’re producing products the consumer doesn’t want. No, it’s something far worse. I saw on The National the other night that GM sold the second most cars in North America this past year. If you can have the second highest sales in North America and still be in financial ruin, then something far more serious is wrong! Certainly nothing a few billions dollars in handouts is going to fix!

  8. Sometimes, bail-outs are required and they are not necessarily a bad thing. If bail-outs can save auto industry jobs then we should go for it.

    However, proper controls must be in place, to ensure the funds are not wasted. One solution is to put a government representative on the board of directors as a pre-condition to the bail-out. The government representative will exert at least some influence on how the money is spent.

    Also, as I point out in htttp://www.wecanadians.com, if we can bail-out the auto industry, why cant we bail-out companies like Nortel?

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