The so-called Conservative government of Canada has decided to bailout another company. This time the venerable and vulnerable Air Canada gets to receive tax-payers largess to the tune of 250 million dollars.
This is getting pathetic. A Conservative government is picking winners and losers all over the place. Luckily, I think I have discovered the magic formula the government is using to pick its winners and losers. I shall write this is "pseudo code". Hopefully this isn't too complicated for the non-technical:
if [big partisan politically active union] represents employees of [big company] then
interfere with market and pay out millions/billions
else if riding of [important and vulnerable MP/minister] then
interfere with market and pay out millions/billions
else
lecture Canadians on the evils of picking winners and losers and do nothing
I still don't understand the logic of saving a few thousand factory jobs and not a few thousand "jobs of the future that are in the knowledge economy". If we have to interfere, let us at least pick jobs that are creative, knowledge based, and drive innovation. Not jobs that insert widget A into widget B.
11 comments:
The tragedy of this is that no jobs are actually saved at all. The money needs to come from somewhere and that is either current employment or future employment in the private sector. There are no free rides and it seems no fiscal Conservatives either.
I read that this is a loan and at incredibly high interest rates of about 12%!!!
So, that is a pretty good return on investment IMHO. Especially since the government can get money at .5%.
There is a prgram where the government provides loans to businesses - always has been. It is a profit centre for the government (us taxpayers) and can be quite lucrative.
It is like what the forestry industry is asking for -brdige financing.
This is certainly not a Conservative versus Liberal program - it is a long standing government program which makes perfect fiscal sense don't you think?
Marie provide some links or I will only think you are a shill.
Montreal, Quebec (AHN) - Air Canada's efforts to get the five labor unions to agree to a 21-month moratorium on pension fund payments and new collective agreements paid off. Canada's largest airline was granted on Wednesday a $1.02 billion loan that would avert a second bankruptcy and shore up its finances battered by weakness in the global aviation industry.
The $1.02 billion loan includes $600 million from a lenders syndicate, $150 million from Export Development Canada and $100 million from Canada Account. The lenders' syndicate is made up of GE Canada Finance Holding, Aeroplan Canada and Ace Aviation Holdings. The $600 million loan carries a minimum yearly interest rate of 12.75 percent.
http://www.allheadlinenews.com/articles/7015949602?Air%20Canada%20Gets%20$1.02%20Billion%20Loan
The centrepiece of the financial package is a $600-million loan from a syndicate of lenders. Ottawa will kick in $250-million – $150-million through Export Development Canada and $100-million from the government's Canada Account, which is used for financings that are in the “national interest” but are either too risky or too large for EDC to accept on its own.
http://www.theglobeandmail.com/globe-investor/air-canada-lands-1-billion-reprieve/article1235415/
So it's a government loan. What will the government do if Air Canada defaults, force bankruptcy? When has the government ever forced any company to which it has loaned our money to live up to its obligations? Conservative government or not, the taxpayer, once again, is being scammed.
So, are you also opposed to the billions of loans provided to bail out General Motors and Chrysler?
Of the loans given to Paul Martin's CSL steamships?
Or Bombardier?
Or the forestry industry?
Or Jean Chretien's golf course?
Or Alphonso Gagliano's winery?
Or farmer's? Research and Development companies? Fishermen? Arts comnpanies? Movie producers?
Lots of money doled out in loans to prime the economic pump payable at interest rates that provide a return on investment, like a bank. Maybe we should just let the marketplace dictate instead? If they can't get bank loans let 'em go under?
Marie@2:48 thanks for the link!
Marie do you have an stats on how many companies actually pay their loans back? It seems to be big news in the US when the banks pay their TARP loans back, but I don't remember hearing that in Canada. Could be wrong though.
Also, I don't think Canada should have saved GM and Chrysler. At the end of the day, X amount of cars would still be purchased and built in NA. It doesn't really matter what company makes them.
Art and film are a little different then planes, trains, and automobiles. With art and film its (in theory) about Canadian culture, not jobs.
If picking winners and losers was about jobs, then the government would be investing in high-tech and other creative industries and not mostly unskilled manufacturing jobs. But Nortel and countless other high tech companies are allowed to fail.
If the government is going to use my tax dollars to act "like a bank", then I insist on having the option to withdraw my funds if I disagree with their investment strategy.
How can we expect Canada to have a mature, robust economy if the government is continually changing it's diapers?
Besides, picking winners and losers distorts the freedom of choice of the marketplace. It's fundamentally undemocratic.
John Doe - your comments about leaving all industry fortunes to the marketplace without government help is what lefties call far far far radical extreme right wing laissez faire let 'em fend for themselves conservative scary idealogical divisive mean spirited bully uncaring blah blah blah.
In theory sounds plausible but does not work in a world economy.
Harper is much more a centrist/realist and has to be pragmatic .
But, in fairness - Harper does not make these loans decisions- there are criteria that beuarocrats have to follow for eligibility and, of course, no decision is going to make everyone happy. That's reality - that's politics and that's why it is mjuch easier to carp and complain from the sidelines without offering any realistic solutions (Liberals, NDFP. BLOC, Greens) than it is to actually make a decision for the greater good don't you think?
As they say - everyone's a critic.
Marie, that's because most lefties are a little slow.
There is a huge difference between picking winners and losers and laissez-faire economics.
Proponents of laissez-faire little to no state intervention on economic issues, any government intervention such as competition laws, protectionism, creating legal monopolies, regulation, or taxes are not necessary.
There is a big difference between the two, let's not let the lefties engage us in intellectually dishonest arguments.
Post a Comment