Where is Ontario's corporate welfare actually going?

Where is Ontario’s corporate welfare actually going?

When you're handing out more than $900 million in business subsidies, sometimes it can get a little hard to keep track of where all that hard-earned taxpayer money is going.

One assumes, anyway.

But fear not: QP Briefing has crunched the numbers and charted where the Ontario government has allocated its corporate generosity. The map below shows where most business grants since 2013 have been promised, when the deal was made, how much public money is being committed and what party represents that riding.

Most of the projects shown are part of a recent data dump by the Liberal government. The release revealed grant recipients from three economic development funds from January 1, 2013 to March 31, 2016. The money is meant to help businesses expand their operations, increase their market access and hire more workers.

QP Briefing has also added a few grant recipients who were announced after March 31, and threw in several companies that have been promised money over the past year from the Northern Ontario Heritage Fund Corp., based off news releases.

All of the Southern Ontario grants in question are distributed under the Southwestern Ontario and Eastern Ontario development funds – which can give up to $1.5 million to businesses in their respective regions – and the 10-year, $2.7-billion Jobs and Prosperity Fund – which can hand out much more significant financial assistance, such as $50 million for Guelph-based auto parts company Linamar Corp.

The government released data about those economic development funds on Sept. 21. According to its report, the government says the three grant programs made approximately $908 million in funding commitments from January 1, 2013 to March 31, 2016. In return, the businesses getting the money have vowed to create or retain approximately 68,500 jobs. The government claims about $7.4 billion in investments has been “leveraged” with its help, which comes with conditions that must be met for the funding to flow.

The largest grants have ties to downtown Toronto, home to many large corporations, as well as Liberal MPPs. A $220-million contract signed with Cisco Systems Canada Co., for example, is connected to a Toronto and Kanata location (and represents nearly a quarter of the value of all economic development grants since 2013). Another $120 million for OpenText Corp. is linked with Kingston, Ottawa, Peterborough, Richmond Hill, Toronto and Waterloo.

In total, there are 190 grants from the two Southern Ontario regional programs and the Jobs and Prosperity Fund. Of those projects, 77 are in Liberal-held ridings (and possibly multiple and opposition-represented locations), or about 40 per cent of all the grants awarded since 2013. There are also grants being offered in swing ridings, or bordering on other districts.

Economic Development Minister Brad Duguid bristled at the notion that any of these grants were agreed to because of politics.

“We don’t give a damn about where these investments go,” Duguid said Wednesday at Queen's Park. “What we care about is creating jobs across this province.”

Approximately 68 per cent of the funding from the grants will go to a company with operations in a riding held by a Liberal MPP. The Liberals currently own 57 of the 107 seats in the Ontario legislature, or about 53 per cent of all districts.

The big grants are what push the dollar signs in the governing party’s favour. Liberal ridings have links to 73 per cent of all the Jobs and Prosperity Fund money, or $592 million of $810 million (including the $220-million Cisco chunk, and assuming all the money is eventually dispensed). Fourteen of the 20 JPF projects have ties to a Liberal-held region.

But there are several big grants in opposition-held ridings, such as nearly $86 million for Honda Canada Inc. in Alliston (PC MPP Jim Wilson's riding) and $26.5 million that will help build a new General Electric plant in Welland (NDP MPP Cindy Forster's riding).

The government says its analysis shows more grants are being awarded in opposition-held ridings than in Liberal-represented ones. There is a scorecard for the Jobs and Prosperity Fund and larger grants require Treasury Board approval.

“Geography has nothing to do with those decisions whatsoever,” Duguid said. “There’s really been no politics involved in any way in these decisions.”

From the Eastern Ontario Development Fund, 24 of the 49 projects are in Liberal ridings, for nearly $14 million in funding, or 42 per cent of the program's commitments. The Southwestern Ontario Development Fund is split even more evenly, with only 32 per cent of funding going to Liberal-held ridings, or around $29 million for 39 of the 121 projects.

The Northern Ontario Heritage Fund Corp. (NOHFC), meanwhile, is a Crown corporation that gives money to businesses and municipalities in the northern reaches of the province.

The government says the NOHFC has spent more than $1.1 billion since 2003 on more than 7,400 projects. Doing so, the government claims, has brought about another $3.9 billion in “direct economic activity” and saved or created 28,100 jobs in Northern Ontario.

The auditor general said in her 2015 annual report that Duguid's ministry had agreed to supply $2.36 billion in corporate subsidies to 374 projects from 2004 to May 31, 2015.

The auditor general also said the ministry hadn't actually checked to see if $1.4 billion of the $2.36 billion that had already been paid out "actually strengthened the economy or made recipients more competitive."

Furthermore, the AG said there was “little transparency in how funding is awarded,” as, since 2010, approximately 80 per cent of approved funding was doled out using a closed-door, invitation-only process. “The Ministry determined internally which businesses were to be invited, instead of making the funding more broadly available,” added the annual report.

Duguid disputes this, noting people can apply for grants under the Jobs and Prosperity Fund online.

To contact the reporters on this story:

Twitter: @geoffzochodne

QP Briefing Staff

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