TORONTO—Ontario’s Liberal government should refuse to give Chrysler hundreds of millions of dollars in “ransom” money and end its $3-billion a year “corporate welfare” program, Progressive Conservative Leader Tim Hudak said.
Chrysler still owes the province $800-million from the bailout it received during the recession in 2009, and should not try to blackmail the federal and Ontario governments for a reported $700-million, part of a $3.6-billion investment in its plants in Windsor and Brampton, Ont., said Hudak.
“Should we pay a nine figure ransom to Chrysler? Of course not,” he said. “We should use the money to lower taxes for all, so all companies can create jobs, instead of giving handouts to the very few.”
Asked why he was using such harsh language about a large auto company that employs thousands of Ontario workers, Hudak insisted he wasn’t attacking Chrysler.
“I don’t blame the corporations for chasing the handouts,” he said. “I blame the Liberal government for being in the handout business.”
Governments should not pick winners and losers, and cutting taxes instead of giving some companies money would make it a level playing field for all, added Hudak.
“Once you say ‘Yes’ all the time, where do you ever stop,” he asked. “There is no proven economic rationale that says you can subsidize your way to prosperity.”
Premier Kathleen Wynne called Hudak “irresponsible” and accused the Conservative leader of abandoning Ontario’s automotive manufacturing sector.
“Tim Hudak’s vision of Ontario apparently doesn’t include the auto sector,” she said. “I think it’s naive to suggest that any Ontario government wouldn’t have to work with the auto sector to help them to make the investments that would make them globally competitive.”
Wynne said Ontario knows Chrysler is talking with other governments that will also offer the automaker incentives to locate in their state or country.
“The reality is that part of that environment is competing with other jurisdictions that are working in partnership with business to invest in the future,” she said.
“I don’t understand why any leader of any party in this province would think that it was a good idea to walk away from the auto sector, to make a decision that would literally put at risk hundreds of thousands of jobs.”
The Liberals like corporate welfare because it allows them to stage photo-opportunities as they hand out big cheques or open new plants, said Hudak.
“I know that Kathleen Wynne can cut a very pretty red ribbon—and no doubt it’s going to be a red ribbon because this is all about politics, but it’s not good economic policy,” he said.
Honda set up a new manufacturing plant in Alliston in 1998 without any government money because Ontario had lower taxes and electricity costs, but things are so bad under the Liberals now they have to pay companies to move here, added Hudak.
“The only way for business to open up in Ontario is you have to bribe them with hundreds of millions in taxpayer subsidies,” he said. “I think you should start saying ‘No’ to the corporate extortion that you’ve got yourself into.”
The Conservatives also complained that most of the $3-billion a year the province gives to corporations goes to large, foreign companies such as Samsung, which Hudak noted is a direct competitor to Waterloo, Ont., based BlackBerry Ltd.
“It seems like it’s never the small and medium-sized companies that are growing, and it seems like it’s never Canadian companies,” he said.
The federal Conservative government set aside an additional $500-million in the recent budget for its Automotive Innovation Fund, but did not release details.
The fund was launched in 2008 with a commitment of $250-million over five years and renewed last year for another five years.