The buzz words were flyin’, the politicians were smilin’ and all the while taxpayers were sold a false bill of goods. 

The “investment” was going to put Canada on the auto industry map. It was going to grow the economy, innovate the industry, create countless “new jobs” and lead to spin-off “employment opportunities."

At least, that’s what the government of Paul Martin was selling the public back in 2005, when federal officials gathered in Oshawa, Ont., to announce $200 million in taxpayer cash for General Motors. 

But fast forward nearly two decades and the feds can’t show a single job was created and only two per cent of the loan has been repaid, according to records obtained by the Canadian Taxpayers Federation through access-to-information requests. 

“How can the government claim its corporate welfare is a success when it doesn’t even know if it created jobs?” said Franco Terrazzano, CTF Federal Director. “The receipts show only two per cent of the money was repaid – what about the other 98 per cent?”

As of Jan. 9, 2023 – 18 years later – the feds are unable to show whether “investing” hundreds of millions of public funds into private hands created a single job.

The reason why is simple: the government didn’t require GM to report back on whether any jobs ever materialized. 

“The estimated jobs fields are not mandatory data fields in the corporate database,” a federal bureaucrat wrote in response to an access-to-information request. “Recipients were not required to report on the number of jobs.”

“Taxpayers have some questions: why promise jobs if you’re not monitoring the numbers, and why include jobs estimates on the forms if they don’t need to be filled out?” Terrazzano said. “Every field is mandatory when we pay our taxes, but bureaucrats seem a lot less diligent when they’re giving away our money.”

To make matters worse: the cheque cut to GM was a “repayable contribution,” which is a bureaucratic euphemism for a loan. But almost two decades later and federal records show just two per cent, or $4.6 million, has ever been repaid.

Table: Access-to-information records, GM “Beacon Project” corporate welfare deal

“When a normal Canadian forgets to carry the two on their tax return, the feds send the hounds after us, but they can’t be bothered to collect $195 million outstanding on a loan to a huge corporation,” Terrazzano said. “The government needs to get taxpayers’ money back.”

The feds continue to shovel buckets of taxpayer cash at GM and other auto giants – a government tradition stretching back decades. 

Throughout the 1980s, GM received four major corporate welfare deals from the feds, totalling $270 million. 

In 2009, the feds bailed out the Canadian auto industry, which included about $10.5 billion in taxpayer cash for GM. 

In 2022, the federal and Ontario governments teamed up to cut another $518 million corporate welfare cheque to GM. 

In May 2023, the federal and Quebec governments gave GM and POSCO Chemical $220 million for an EV battery plant.

“Why are the feds giving GM more money when government records show only a fraction of an older loan has been repaid?” Terrazzano said. “Two decades later and the feds are still giving buckets of cash to car companies. Does this government expect taxpayers to subsidize automakers forever?”

This year, the government gave a combined $28 billion in corporate welfare to auto giants Volkswagen and Stellantis to build EV battery plants in Ontario. 

A Parliamentary Budget Officer report published Sept. 12, 2023, shows it’ll take four times longer than claimed to receive enough revenue to offset the cost of the subsidies. 

“The break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be 20 years, significantly longer than the government’s estimate of a payback within five years for Volkswagen,” the PBO said.

“This debacle provides another painful lesson for taxpayers: don’t believe the hype when politicians cut corporate welfare cheques,” Terrazzano said. “Instead of giving taxpayer money to hand-picked corporations, the feds should cut taxes and red tape for all businesses.”