Here we go again. Fresh from giving hundreds of millions of dollars to Ford and General Motors, and a $150 million loan to Stelco Steel, the McGuinty government has announced that taxpayers will provide $500 million in no-interest loans to Ontario manufacturers.

Its "Advanced Manufacturing Strategy", unveiled December 16, is supposed to stem the loss of manufacturing jobs by making Ontario manufacturers more competitive in the global marketplace. Under the scheme, companies will be able to borrow up to 10% of the cost of purchasing new technology. Eligible projects include those valued at $50 million or more, or which create at least 150 "high value" jobs.

What this program actually does is reward companies who failed to modernize when the Canadian dollar was low. In past years, many Ontario manufacturers relied on our weak currency to give them a competitive advantage vis-à-vis the United States, instead of investing in up-to-date equipment and practices. Now that our dollar is hitting 85 cents US, these same companies are crying foul, and laying off workers in an effort to trim costs.

So what does the Ontario government do What it always does: throw taxpayers' money at the problem, and hope it goes away.

Of course, Economic Development and Trade Minister Joseph Cordiano fails to mention that the government's other recent experiments with corporate welfare have been dismal failures. After receiving $200 million in handouts, Ford is scaling back its Canadian operations. It is expected to close its Windsor casting plant in the fall of 2007, which employs 500 workers, for a total of 1,100 job cuts. General Motors, which has received $435 million in combined federal and provincial subsidies, is planning to close plants as well.

No one wants to see jobs leave town. But the notion that government intervention can save ailing industries, or should play favorites with certain companies, has been proven false time and time again across the country. From Devco to Sydney Steel, Atlantic Canada has seen its share of businesses that have swallowed millions of taxpayer dollars, only to close. Since 1982, Quebec aerospace manufacturer Bombardier Inc and its subsidiaries have received $36-million in federal grants and $736-million in repayable contributions - for a grand total of $772-million. Last year the company's bonds were downgraded to junk status, and today it is now musing about exporting Canadian jobs to China.

Here in Ontario, the new Advanced Manufacturers Strategy looks a lot like the federal Transformative Technologies Program, a repayable loans program which is also designed to encourage use of new technologies. Between 1996 and 2003, its predecessor, Technology Partnerships Canada, loaned out $2.1 billion in taxpayer money, of which only 5.5% has been repaid. Not a good omen for Ontario.

Beyond the dismal record of these programs, there is another question worth asking: why should companies that failed to stay competitive now get cheap loans to do what they should have done anyway (read: modernize) Why should taxpayers reward poor business practices Companies that have already updated their manufacturing won't make use of this new program. Yet through their taxes they will be subsidizing their less prudent competitors - a completely unfair situation.

Boosting Ontario's economy necessitates a level playing field for all industries. Premier Dalton McGuinty should cut red tape and lower corporate taxes - instead of canceling them as he did when he took office in 2003. He should look to Alberta, which has the lowest corporate taxes in Canada (11.5% compared to Ontario's 14%), laws prohibiting corporate welfare, and the nation's best-performing economy. Instead of throwing good public money after bad private decisions, he should let the market reward excellence and encourage success.