Federal, provincial, and local government spending on business subsidies totalled $352.1 billion (inflation-adjusted) from 2007 to 2019. For perspective, Canada spent $327.5 billion (inflation-adjusted) on national defence over the period, $24.6 billion less than was spent on business subsidies.

Such spending came with significant costs to Canadian taxpayers and government budgets. Given ongoing budget deficits, and the questionable efficacy of business subsidies in achieving widespread economic growth, Canadian governments should carefully re-evaluate this area of spending.

A significant body of research finds little evidence that business subsidies generate widespread economic growth and/or job creation. In fact, business subsidies might have a negative impact on economic development as governments’ attempts to pick winners by interfering in the free market ultimately distort private decisions and misallocate resources. The questionable efficacy of business subsidies warrants a closer review of the cost of government spending in this area.

Specifically, this report puts a dollar amount on the level of subsidies delivered through government spending from 2007 to 2019. We find that, after adjusting for inflation, federal subsidies totalled $76.7 billion, provincial subsidies $223.3 billion, and local subsidies $52.1 billion. It is important to note that this is not a comprehensive measure of government support to businesses, which would include all amounts delivered through tax expenditures, loan guarantees, direct investment, and regulatory privileges extended to particular firms or industries. The true level of government support to select businesses would be even higher.

The fiscal cost of business subsidies ultimately is borne by taxpayers.

For Canadians who filed taxes from 2007 to 2019, the cost of total subsidies per tax filer by province was (in descending order): $18,785 in Saskatchewan, $18,334 in Quebec, $14,811 in Prince Edward Island, $13,285 in Alberta, $12,627 in Ontario, $11,573 in British Columbia, $11,290 in Manitoba, $8,511 in Nova Scotia, $7,057 in Newfoundland and Labrador, and $6,048 in New Brunswick. That is a significant amount of taxpayer money not available for programs and services for Canadians.