Premier Wab Kinew is taking money from the taxpayer piggy bank and dolling it out to corporations across the province. That’s bad for taxpayers.

It’s bad for taxpayers because corporate welfare is expensive, picks winners and losers in the economy and doesn’t work the way the politicians like to promise.

Kinew has announced a whole slew of different corporate welfare handouts recently.

The government announced a handout to a bus company in Winnipeg for $23.4 million to build a new low-emission bus manufacturing facility. The Manitoba government and the feds also teamed up to give an aviation repair company more than $500,000 to train employees. The government also increased handouts in the Manitoba Mineral Development Fund by $2 million and spent about $600,000 on handouts to a bunch of companies in the last two months.

These recent handouts are only more of the same. The government announced that it would be setting up a $50 million so-called Strategic Innovation Fund to hand out more money to corporations in Budget 2024.

The government likes to claim that these handouts are needed as investments that will help the economy and create jobs, but statements like that don’t stand up to the scrutiny of a second glance.

Take the handout to the bus company NFI for example, the government news release highlights that “demand for zero-emission transit buses in NFI’s core markets is at record levels.” If that’s the case, then it simply makes good business sense for the company to start manufacturing more of these busses and that raises the question: Why does the government need to hand over all this taxpayer cash?

Short answer – it doesn’t.

If an investment makes good business sense, any smart business will make those investments themselves. If a company won’t do something without millions of dollars from the government, it isn’t a good decision to begin with.

Of course, businesses will take any money that’s offered to them, but that doesn’t mean it helps the broader economy.

Economic research shows that there is no statistically significant evidence showing that corporate welfare increases economic growth. Research also shows that low-productivity companies are more likely to get a subsidy than productive ones.

So, while a cheque from the government might help a specific company and its executives pad their coffers, it certainly doesn’t help regular Manitobans.

Instead, the government should stop wasting money on corporate welfare and use it to provide tax relief to all businesses. A tax cut helps every single industry, making the entire province more competitive, not just the specific businesses lucky or politically connected enough to get handouts.

The government of Manitoba spent $5.8 billion on corporate welfare from 2011 to 2021, according to the Fraser Institute. That’s an average of $522 million spent each year on subsidies. That’s more than half of what the government is expecting to collect in business taxes this year.

Instead of using over half of the money the government collects in business taxes every year to hand out corporate welfare, the government should cut business taxes to make all businesses in Manitoba more competitive.

And competitiveness is a big deal because Manitoba businesses are currently losing when it comes to taxes. Manitoba has a business income tax of 12 per cent. That’s the same as Saskatchewan and British Columbia, but half a percentage point more than Ontario’s and four percentage points higher than Alberta’s eight per cent rate.

Completely scrapping corporate welfare would allow the government to cut the business tax rate roughly in half from 12 to six per cent. That would give Manitoba the lowest business tax rate in the country by two per centage points. That would actually help all Manitoba businesses grow and create jobs and it would entice new businesses to move in and set up in the province.

Kinew needs to scrap corporate welfare in Manitoba. Businesses grow and thrive when taxes are low, not when they get one-time handouts paid for by tapped-out taxpayers.