Study
| EST. READ TIME 1 MIN.Canada spent more than $50 billion on corporate welfare across provinces in 2022
The Cost of Business Subsidies in Canada: Updated Edition
Business subsidies delivered through government spending since 1961 came with significant costs to Canadian taxpayers.
In 2019, provincial business subsidies reached $27.0 billion ($2022). This represents the single largest year of provincial subsidies in Canadian history prior to COVID.
Federal business subsidies increased significantly as a result of COVID-related programs, reaching $88.5 billion in 2020 and $47.0 billion in 2021.
Although federal business subsidies declined in 2022, the new total ($11.2 billion) is nearly double the amount the federal government spent in the final pre-COVID year ($6.5 billion in 2019).
The cost of total subsidies—federal, provincial, and local—per taxpayer from 2007 to 2019 was highest in Quebec ($30,579), closely followed by Saskatchewan ($29,414). Total subsidies per taxpayer were lowest in New Brunswick ($9,484) over this time period.
On average, federal business subsidies represented 13.2% of federal corporate income-tax revenue over the period from 2007 to 2019.
Prince Edward Island had the highest level of provincial business subsidies as a share of corporate income-tax revenue at 160.8%, on average, from 2007 to 2019.
Two other provinces spent the equivalent of roughly all corporate income-tax revenue on provincial business subsidies from 2007 to 2019. Provincial subsidies, on average, represented 100.8% of annual provincial corporate income-tax revenue in Quebec and 97.5% in Manitoba.
The evidence suggests that business subsidies do not foster widespread economic growth and, thus, stand out as a key area of spending to be reformed.
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Tegan Hill
Director, Alberta Policy, Fraser Institute
Tegan Hill is Director, Alberta Policy at the Fraser Institute. She holds a Bachelor of Economics and a Master’s Degree inPublic Policy from the University of Calgary. Ms. Hill’s articles have appeared in major Canadian newspapers including the Globe and Mail, National Post, and Ottawa Citizen. She specializes in government spending, taxation, and debt.… Read more -
Joel Emes
Senior Economist, Fraser InstituteJoel Emes is a Senior Economist, Addington Centre for Measurement, at the Fraser Institute. Joel started his career with theFraser Institute and rejoined after a stint as a senior analyst, acting executive director and then senior advisor to British Columbia’s provincial government. Joel initiated and led several flagship projects in the areas of tax freedom and government performance, spending, debt, and unfunded liabilities. He supports many projects at the Institute in areas such as investment, equalization, school performance and fiscal policy. Joel holds a B.A. and an M.A. in economics from Simon Fraser University.… Read more -
Jake Fuss
Director, Fiscal Studies, Fraser Institute
Jake Fuss is Director of Fiscal Studies for the Fraser Institute. He holds a Bachelor of Commerce and a Master’s Degree inPublic Policy from the University of Calgary. Mr. Fuss has written commentaries appearing in major Canadian newspapers including the Globe and Mail, Toronto Sun, and National Post. His research covers a wide range of policy issues including government spending, debt, taxation, labour policy, and charitable giving.… Read more