Federal and provincial government spending on corporate subsidies rose sharply in recent years, reaching $87.7 billion in 2024, according to a new study from the Fraser Institute.
The study says inflation-adjusted spending on corporate subsidies more than tripled between 2015 and 2024, following a substantial increase in the years after the COVID-19 pandemic.
Spending accelerates
Government spending on corporate subsidies increased 12.8 per cent between 2007 and 2015, rising from $22.2 billion to $25.1 billion in inflation-adjusted dollars, according to the study.
The pace of growth accelerated between 2015 and 2019, when spending increased by 44.2 per cent.
The increase continued following the COVID-19 pandemic, with inflation-adjusted spending reaching $87.7 billion in 2024, the most recent year for which comparable Statistics Canada data was available.
The study says the increase in spending occurred during a period of economic stagnation and has contributed to renewed interest in policies intended to promote economic growth.
"Despite their current prevalence in Canada, research has consistently shown that corporate welfare is largely wasteful and generally fails to achieve its stated goals," said Alex Whalen, director of the Atlantic Canada Prosperity Initiative at the Fraser Institute and co-author of Eliminating Corporate Subsidies in Canada: An Opportunity to Boost Growth.
Spending rises across provinces
The Fraser Institute study says corporate subsidy spending increased in every province and at the federal level between 2015 and 2024, after accounting for inflation and population growth.
"The massive recent increase in government spending on corporate welfare should concern all Canadians. It's wasteful spending at the expense of Canadian taxpayers and places government in the position of picking favoured businesses. Better policies exist to drive economic growth," said Whalen.
"Even after accounting for both inflation and population, spending on corporate subsidies increased in every province and at the federal level between 2015 and 2024."
The study was published by the Fraser Institute, which describes itself as an independent, non-partisan Canadian public policy think-tank. The organization says it does not accept government grants or contracts for research.