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Latest subsidy to Bombardier a reminder of the many problems with corporate welfare

The federal government’s recent announcement that it will provide Bombardier, a Canadian aerospace company, with interest-free loans totalling $372.5 million is a piercing reminder of the problems with targeted business subsidies.For starters, Brazil has already filed a complaint with the World Trade Organization (WTO) against Canada on grounds of distorting the competitiveness of the global aerospace industry. The complaint claims that Bombardier has received “at least $2.5-billion in government support.”The trade ramifications of the federal government’s actions are important on their own but the bigger issue is that business subsidies (so-called “corporate welfare”) are a failed approach to industrial policy.

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