Ottawa is spending $1.7M for 10 new jobs at a pasta plant. Are these corporate subsidies worth it? | CBC News LoadedSome economists say recent government subsidies — which have ranged from $1.7 million for a Brampton, Ont., pasta plant, to billions in subsidies for EV plants — make little economic sense.Prime Minister Justin Trudeau and Ontario Premier Doug Ford announce plans for a Honda electric vehicle battery plant in Alliston, Ont., on April 25.
The $1.7 million subsidy for Italpasta Ltd., billed as the largest pasta manufacturer in Canada will help it "increase production to keep up with growing demand," according to Filomena Tassi, the minister responsible for the Federal Economic Development Agency for Southern Ontario. Meanwhile, the benefits of such government corporate subsidies on a much larger scale were trumpeted by both Prime Minister Justin Trudeau and Ontario Premier Doug Ford last month.
While the pasta plant investment works out to $170,000 per job, the $5 billion EV subsidies for 1,000 jobs means taxpayers are paying $5 million per job."It is fairly irresponsible … to be using this money and defending this on a job creation argument," said Kent Fellows,"These aren't new jobs. We don't have any evidence that the people who would be in these positions wouldn't be working in another sector otherwise.
"You could take a worker that is very productive in an industry that pays a reasonable tax rate and is making good returns on its capital and now you're allocating them to an industry that either requires a subsidy or requires a tax break to locate here," he said.