Budget '09: Bailout

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


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.

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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.