Saturday, December 14, 2013

Why criticism of Ontario's $190 million gift to Cisco is misguided

Premier Kathleen Wynn thought she finally had an all-too-rare good news story the other day. For a mere $190 millions of taxpayer boodle, tech giant Cisco promises to spend four billion dollars in the province over the next ten years.

As a small "c" commie I find it repugnant that capitalists are able to play various jurisdictions off, one against the other, in demanding what are essentially legal kickbacks.

But while my political opinions allow me to cheerfully piss into the prevailing winds, I also live in the real world, and I realize that this is how things work.

It's how they have worked for quite some time. The reason there is a Toyota plant in Cambridge today that employs thousands of people is because thirty years ago different levels of government collaborated in luring the company to Cambridge. That meant providing a package of tax-breaks and incentives that would make Cambridge more competitive than the various other sites the company was considering all over North America. Bear in mind that they already had a plant in Kentucky at the time and could simply have expanded there.

Look at the game Boeing is playing in the US right now.  They got a $120 million kickback for a mere billion in spending in South Carolina, which makes it look like Wynn struck a relatively hard bargain with Cisco. But the real eye-opener is that once they let it be known that they are shopping a future plant around for the upcoming 777, they got offers from 54 cities in 22 states.

The reason they are shopping the plant around in the first place is part of their ongoing war with their unions. In fact, that's why they have a plant in SC. The Cisco deal has no hint of that back story. Cisco is making a commitment to a high wage, worker-friendly neighbourhood by choosing to expand their operations in Ontario.

That makes the bleatings of Tory MPP Vic Fedeli somewhat ironic. He wants to take this opportunity to brand the Ontario Conservatives as the party that is "against corporate welfare." Surely Ontario voters are not daft enough to fall for that one.

Hudak and Fedeli are "against" corporate welfare, but want to lower corporate taxes and make Ontario a right-to-work jurisdiction. Maybe he's right; that's not welfare - that's just giving away the store!

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