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HomeMy WebLinkAboutClinton News Record, 2015-12-16, Page 5Wednesday, December 16, 2015 • News Record 5 www.clintonnewsrecord.com The lucrative business of buying subsidies Andrew Coyne Postmedia Network The other day I happened to be in Ottawa. I happened to have a lunch at a downtown restaurant where I happened to overhear a conversation between two businessmen. The subject of their conversation, as it happened, was how to get money out of the federal government The one was a lobbyist, the other was his client The lobby- ist was reporting back on his discussions with a ministerial staffer regarding the grant his client was seeking. The staffer had advised him on the kind of supporting documentation the client would need to supply — mostly about job creation — to ensure the money flowed. It didn't sound like it would be a particularly hard sell. I imagine this sort of conver- sation goes on every day in res- taurants all over the city, as it did under the previous govem- ment, as it will under the next. It is the same conversation that goes on in every provincial cap- ital and every city of any size in the country. Itis, perhaps, Can- ada's largest industry, but of a peculiar kind. For those employed in it are not in the business of selling products to consumers. They are in the business of buying subsidies from governments. The name of the company involved in the exchange I over- heard does not matter. It might be any one of a thousand. It may advertise itself as being in a particular business — cars, or planes, or ships. And it is true that that is the product it makes. But it does not make it to sell to others — that is only a second- ary consideration. Its primary value is as a medium of exchange — for the subsidies it can purchase from government For the company is not just making cars, or planes, or what have you. Itis making things the politician really wants: jobs, usually, or at least the claims of them, but also association with prestigious technologies, or green cred — anything that will make the politician feel impor- tant, or get him elected, or both. And whereas the firm is typi- cally unable to persuade con- sumers in competitive markets to pay it enough to cover the costs of making its notional product — hence the need for subsidy — the same product will buy it millions of dollars in subsidies. Indeed, the longer it keeps at it, the more the terms of trade tend to move in its favour. In time, the firm finds it no longer has to create more jobs to keep the subsidies coming. It can simply threaten to withdraw those it has. Subsidies in the past thus become the chief argument for subsidies in the future. For then the politician is implicated. Jobs that are never created never make headlines. But workers, once employed, make admirable hostages. All this is byway of prelude to last week's extraordinary dou- ble whammy of industrial -pol- icy ineptitude. First came news that the price of constructing 15 new naval warships — part of the much -heralded National Shipbuilding Procurement Strategy— had more than dou- bled from initial estimates, to $30 billion from $14 billion, with further cost overruns likely to come. This was, you'll recall, supposed to be the "good" pro- curement project, after the string of fiascos — helicopters, submarines, fighter jets — that preceded it. Instead, it is shap- ing up to be the biggest pro- curement disaster yet The head of the Royal Cana- dian Navy, Vice -Adm. Mark Norman, confessed to the CBC that nobody involved on either side of the exchange had the first clue of what it cost to build the things. "We didn't have the mature industry and so there was a lot of guessing and specu- lation going on. And to be quite blunt, we got a lot of it wrong," he said. Whether the govem- ment will cough up the extra $16 billion, or whether the navy will have to make do with half the ships, remains to be seen. But surely the real question is: why, rather than design and build the ships from scratch in Canada, we did not just pur- chase them off the shelf from countries with competent mili- tary-industrial complexes? And the answer is that governments in this country are not really in the business of buying the best ships for the least money, any more than the companies involved are in the business of supplying them. Rather, it is about, on the one hand, jobs and industrial development, and sucking cash out of the gov- ernment overnment on the other. But while we were still reeling from that came news of an even -larger raid on the public till: the $37 billion that Ontario's auditor general reports the province has overcharged con- sumers for electricity over eight years. The policy dysfunction was comprehensive and mani- fold. The Ontario government subsidized companies to pro- duce power, and it subsidized consumers to conserve it. And when it found itself, not surpris- ingly, with a huge and growing power surplus, it sold it off at a loss to foreign buyers — effec- tively subsidizing them to take it. But at the heart of it was a coterie of companies, ostensi- bly in the renewable energy business, whom the govern- ment massively overpaid for power, recouping the costs from consumers on their elec- tricity bills. The fortunes made must be astounding: if con- sumers were out $37 billion — almost 1,000 times as much as the sums involved in the sponsorship scandal — some- body was in for a good chunk of that. It may be doubted whether consumers would be willing to pay, as the Liberal government did, twice the market price for wind power or more than three times mar- ket price for solar. But then, if the companies involved were interested in selling to willing consumers, they'd be in another line of work. They're not in the energy business. They're in the subsidy business. from the archives 15 Years Ago... • When a call went out to the citizens of this community to help the people of Lab- rador, it was answered in abigway. Two members of the Vanastra Community Christian Reformed Church, Bill and Pam Stevenson, had been living among the peo- ple of Labrador, andworkingwithNative people, for about 2 years. It was request for assistance by this couple which prompted the collection of clothing and toys for Lab- rador. Bill was previously a principal at Vanastra Community School. His wife, who was ordained as an Anglican priest in 1988, worked locallywith the Huron Employ- ment Liaison Program and with the Chil- dren's Aid Society for Huron County. • The Annual 4-H ceremony was held on November 19. The year's top scoring mem- ber in the Huron 4-H Agricultural Machin- ery Club was David VandenHoven. The top novice Agricultural Machinery Club mem- ber was Nathaniel Peel. Friends of 4-H Cer- tificates were presented to Gay Lea, Sea - forth Agriculture Society, Huron County Women's Institute, Cargill Limited, For- mosa Insurance Company, Ivomec, Huron Dairy Producers, Brussels Livestock Yard, Brussels Show and Sale Committee, Westem Ontario Lamb Producers and Howick Mutual Insurance Company. The winners of the Press Reporter Competition, sponsored by Signal Star Publishing were Natalie Romjin and Stacey Reinsma of Clin- ton. Second place went to Tonya Drost and third went to Melinda Scott. 25 Years Ago... • Over $19,000 in merchandise was stolen from Lee's Shopping Centre. Clinton Police Chief Mitch Latham explained that entry was gained into the store, after business hours, through a second floor fire door. The thieves never ventured down to the first floor, taking instead only men's wear from the second floor. Among the items stolen were jeans, jean jackets, winter jackets, suits, socks and underwear, and sweaters. • In another theft of large magnitude, reported on the same day as that of Lee's, $3,887was stolen from the safe at the Target Food Store. Chief Latham noted that the store, because it is open 24 hours a day, was attended at the time of the theft. There were no signs of forced entry on the safe. • The revamping of Huronviewwill be complete by October of 1992 if everything goes to a plan adopted at the Huron County Council meeting. In a recorded vote, 20-13, councilors passed a recommendation from the Huronview Committee (HC) which schedules the start of construction of a new, 62 -bed home in Brussels for June 1991 with work at the Clinton site slated forApri11991. At the county council meeting, councilors engaged in a lengthy debate about the mer- its of the adopted plan and another, which would have seen construction on the Huronview site start a year later when more provincial funding had been released. 35 Years Ago... • Slushy, slippery roads are being blamed as the cause of an accident that sent two pedestrians to hospital with major injuries. The Clinton Police reported that the two ladies, Agnes Carbert, 77 and Margaret Renalds, 67, both of Clinton, were crossing Victoria Street when theywere struck by an oncoming car. The car, driven by Thomas Vance, 16, of Goderich was unable to stop for the pedestrians when they stepped from the curb onto the icy, snow covered high- way. Thewomenwere taken to Clinton Public Hospital where both are in satisfac- tory condition. Damage to the Vance vehi- cle was set at $50 and no charges were laid. • Lloyd Eisler Jr., 17, of Egmondville and his partner Lori Baier, 17, of Mitchell have been representing Canada in the 1981 world junior figure skating championships in London, Ontario and have captured the second place silver medal. Although this was the third time the skaters have com- peted in the world junior championships, it was the first time Lloyd's family has been on hand for the intemational competition. This competition was the last time the pair was allowed to compete in a world junior event, since couples must be under 18years of age. • In November, the retail price of beef increased to $2.75 per pound, 11 cents more than the October price of $2.64 per pound. The farm -gate price dropped four cents per pound. The retail price of pork was up six cents per pound from $1.75 a month ago. The farm -gate price declined one cent per pound. Chicken prices at the retail level remained unchanged while the farm -gate price increased two cents per pound. Retail price of turkey increased 20 cents per pound over last month's "special" prices during Thanks- giving. The farm -gate price increased approximately three cents per pound. Egg prices moved up four cents per dozen at the retail level and three cents per dozen at the farm -gate.