With the government announcing new funding for Pratt & Whitney yesterday, Greg Weston posted a series of questions and concerns last night about the loans involved and the jobs promised.
The government announcement also claims the deal will “create and maintain an average of more than 700 highly skilled jobs during the project work phase, and more than 2,000 jobs during the 15-year benefits phase.” The company later explained that it hopes to hire about 200 new staff for the research and development project, expected to take about five years. At $300 million from taxpayers, that works out to $300,000 a year per job.
As for the rest of the jobs, Clement’s press secretary, Lynn Meahan, explained that “hypothetically, without the project, the workforce would have shrunk.” She said the promised 2,000 long-term jobs would come from manufacturing the new engines yet to be developed, and it is not clear how many of those positions, if any, would be new.
Economist Stephen Gordon and our own Andrew Coyne duly tweeted their criticisms. And it was soon thereafter, perhaps inevitably, that Industry Minister Tony Clement attempted again, 140 precious characters at a time, to explain and defend himself.
TonyClement_MP @acoyne @Paul_TO Rubbish! P&W also subcontracts to many other Cdn aerospace firms. Govt & business creating greener engines.
acoyne @TonyClement_MP Oh lord. Who are you, and what have you done with Tony Clement?
TonyClement_MP @stephenfgordon Why are you suddenly against Cdn govt being a part of R&D? Or do you think only academia shld receive?
acoyne @TonyClement_MP The real Tony would never fall for such bogus “spin-off” claims, cause real Tony understood the concept of opportunity costs
TonyClement_MP @acoyne I’m about where Maxime Bernier is: he created the Program in 2006.
TonyClement_MP @acoyne I do understand that concept. But I also believe business & govt must work together on R&D if we’re to be competitive.
TonyClement_MP @acoyne This is where Preston Manning is as well btw: govt & companies working on R&D together…
acoyne @TonyClement_MP You don’t fool me, Fake Tony. Real Tony would know the difference betw basic and applied research. Also would not spout…
acoyne @TonyClement_MP … rubbish about countries “competing.” Companies compete. Subsidy not about Cda vs World, but P&W vs other Cdn firms.
TonyClement_MP @acoyne Respectfully, no Cdn firm makes engines of this size & complexity; + govt policy has been about commercialization since 2007.
acoyne @TonyClement_MP As for green engines: price carbon, and subsidy unnecessary. Econ & envir both argue for true costs. Subsidy hides costs
acoyne @TonyClement_MP Who says Cdn cos should be making engines of any size? When did God decree that Cda *must* be in aerospace?
TonyClement_MP @acoyne Andrew Coyne: the new promoter of the Carbon Tax on Everything!
acoyne @TonyClement_MP Aerospace success bought at cost to other sectors. Mind, “success”? Subsidy to P&W only buys right to give it more subsidies
acoyne @TonyClement_MP They’re not really in the aeorospace biz at all. They’re in the subsidy biz, only w/ each $1bil they throw in a free engine
acoyne @TonyClement_MP By “crucial” you mean “big.” They are “big” because they are subsidized. And why are they subsidized? Because they’re big!
TonyClement_MP @acoyne Every second of every day a P&W engine is propelling a plane. Is that really a failed company?
acoyne @TonyClement_MP I’d hope they could sell some engines with $1.5-bil subsidy!But ho
TonyClement_MP @acoyne 2me this is an R&D play; 2U a subsidy play.If P&W came to me wanting a bailout for their operating,I wld have said NO,as in Nortel
acoyne @TonyClement_MP By the way, Tony (if that’s you): what did dept say was cost in jobs elsewhere in econ from diverting $1.5-bil to P&W?
acoyne @TonyClement_MP Case vs subsidy does not turn on whether a winner or loser. If economic, doesn’t need subsidy. If not, doesn’t deserve one
acoyne @TonyClement_MP To repeat: what did dept research say was opportunity cost of P&W subsidy, in jobs and investment diverted from elsewhere
TonyClement_MP @acoyne By your reckoning there would never be a case for R&D by govt w a company. I get that; it’s just not Maxime’s/my position.
acoyne @TonyClement_MP Why don’t we start from that position, then you can make a case for special exceptions? As it is, onus is on taxpayer
TonyClement_MP @acoyne Yet you are content for govt to massively redistribute wealth via a Carbon Tax. What sort of libertarian are you?
acoyne @TonyClement_MP I told you: I’m a socialist. ie, I make case for markets serving social interest, rather than govt serving private interest
TonyClement_MP @acoyne A good proposition, I cannot argue with that concept…
acoyne @TonyClement_MP Besides, carbon tax can be used to cut income taxes. Same way GST could – oh, no, right; you cut GST to keep income tax UP.
acoyne @TonyClement_MP In that vein, still waiting for what research you did on opportunity cost of P&W subsidy?
TonyClement_MP @acoyne Opportunity cost was decided when the program was created in 2006, I’m sure. So Max would know…
acoyne @TonyClement_MP EXCUSE ME? You pushed $300 million out the door for a particular engine project without any specific cost-benefit research?
TonyClement_MP @acoyne Hi I’m back. Yes of course I examined the costs and projected benefits of the loan. But my point was the program’s…./2
TonyClement_MP @acoyne …desirability and efficacy would have been decided upon generally in 2006. Sorry about the confusion. I really have to work now…
acoyne @TonyClement_MP Well, you’re the minister now. Didn’t you review the numbers? How many jobs will be destroyed in other firms to prop up P&W?
TonyClement_MP @acoyne Fewer jobs destroyed than via your Carbon Tax! Gooodnite!
Tuesday, December 14, 2010