Pandemic notwithstanding, it’s been a heady few months for Canada’s auto sector. Ford Canada got a cool $590 million handout from the Ontario and federal governments in exchange for a promise to build electric vehicles in Oakville, while General Motor’s recent pledge to restart production of pick-up trucks in its mothballed Oshawa plant may also end up including taxpayer support.

As always, though, it just never seems to be enough.

“More needs to be done to secure a strong Canadian auto sector of the future,” wrote John Knubley and Robert Near recently in the Toronto Star, adding that “governments will need to invest in the entire automotive ecosystem, including parts suppliers and designers.”

Subsidies rebranded as investments? Taxpayers propping up entire industry “ecosystems”? If this house-of-cards approach to economic management sounds strikingly familiar, it’s because it’s exactly what governments did for decades for the poster child of corporate welfare in Canada: Bombardier.

Although the aerospace giant was the recipient of billions of dollars in direct subsidies, taxpayers were always on the hook for more: subsidies to suppliers; cash for Bombardier-led research consortiums; writing off debts for assets the company scooped up for a song; and underwriting cheap loans for buyers of their planes. Like an overprotective parent that just never let their kid grow up, governments kept the beleaguered plane-maker coddled and insulated from the real world for decades.

Predictably, when junior was finally evicted from the basement, the real world turned out to be a painful shock, with the company forced to give away half of its marquee C-Series project and sell off two of its divisions. Twenty years ago, Bombardier stock sold for $24 per share. This week it hit a low of 31 cents.

Confronted with this unmitigated disaster of an economic strategy, many observers, including governments, have concluded that what we really need is – wait for it! – more of the same.

The result is a provincial government in Ontario that campaigned on putting an end to corporate welfare now actually gushing about forking over hundreds of millions of dollars of such welfare to the auto industry. It’s why a federal scheme forces taxpayers to funnel $60 million to Tesla so it can sell $55,000 luxury cars. And it’s why big auto lobbyists are bullish on the prospect of seeing a waterfall of subsidies cascade over every link in the automotive supply chain.

No matter how many times these cockamamie schemes fail, some people still can’t get it through their heads: governments are simply terrible at trying to “reprogram” industries, and it isn’t for lack of trying. Piecing together the countless bits of information contained in any marketplace simply can’t be achieved by a bureaucratic army of any size, and there is no magic shortcut to cultivating an economy where every business succeeds and none ever fails. Worst of all, since politicians and bureaucrats are not gambling with their own money – unlike individuals and businesses with real skin in the game – they suffer no consequences for being catastrophically wrong.

For all the mind-numbing rhetoric and blue-sky economic spinoff factoids, the fundamental purpose of private sector economic activity is supposed to be to create value – to profit society both directly (for shareholders and employees) and indirectly (by generating tax revenue for governments to spend on public services.) When businesses consume tax revenue, they become a burden, not a contributor. A housing developer that had to pay its customers to buy its houses would go out of business almost immediately. Yet change the product to “cars” or “airplanes” and far too many people suddenly nod their heads as if self-dealing of this sort is sheer genius.

To build real houses, you need real concrete and real bricks. Governments subsidizing businesses provide neither. Instead, they slap together movie-set props and apply special effects wizardry to create the illusion of real houses when seen on screen. But when the lights go down and the camera crew leaves, these “houses” are immediately exposed for what they really are: flimsy, two-dimensional shells that collapse under the slightest gust of wind.

If governments want to create businesses and industries that will have real staying power, they need to give up the fake set-building and focus on policies that make it easier for players with skin in the game to pour more concrete, lay more bricks and make more money selling more houses. It’s not quite as sexy as dazzling voters with amazing special effects. But it would lay a far more durable foundation for Canada’s economic future – and put an end to the irresponsible house-of-cards approach that has proven so wasteful of taxpayer money.