Ottawa is spending $1.7M for 10 new jobs at a pasta plant. Are these corporate subsidies worth it?

[CdnFox]

Ottawa is spending $1.7M for 10 new jobs at a pasta plant. Are these corporate subsidies worth it? | CBC News

Feds and Ontario also doling out $5B for 1,000 EV plant-related jobs, or $5M per job

While some economists say they understand the political motives for such corporate government subsidies, they say they make little economic sense.

"There is really no underlying economic rationale," said Robert Gillezeau, assistant professor of economics at the University of Toronto's Rotman School of Management. "I think those spends are more about politics than they are about economic development."

"You're introducing an economic inefficiency to the market." 

 

 

This is why we have rampant deficits and high inflation/interest rates. 

at 5 million a job you could literally just buy the person a  trust fund and they'd make a pretty good living doing nothing on the interest alone (125 k per year at 2.5 percent)  and you'd still have the 5 million at the end of it. 

 

How can anyone think this is a good idea. 

[Michael Hardner]

Seems dubious but this seems to be a published rationale.

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://distribution-a617274656661637473.pbo-dpb.ca/eaafeb418199ab141962f0b62dae824e9ab2efa95e5baddd1fb5ad774a3fe984&ved=2ahUKEwiqi-rtt5-GAxXHkYkEHV1XCkUQFnoECC8QAQ&usg=AOvVaw0uGiRwAzNBpo2c5D0mwmcZ

 

I may read that later, just providing a link for the discussion.

[CdnFox]

4 minutes ago, Michael Hardner said:

Seems dubious but this seems to be a published rationale.

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://distribution-a617274656661637473.pbo-dpb.ca/eaafeb418199ab141962f0b62dae824e9ab2efa95e5baddd1fb5ad774a3fe984&ved=2ahUKEwiqi-rtt5-GAxXHkYkEHV1XCkUQFnoECC8QAQ&usg=AOvVaw0uGiRwAzNBpo2c5D0mwmcZ

 

I may read that later, just providing a link for the discussion.

Thanks. 

PBO estimates a break-even timeline of 15 years for the $13.2 billion production subsidy announced for Volkswagen, and 23 years for the $15.0 billion in production subsidies for Stellantis-LGES—consistent with our previous estimate (of 20 years) based on their combined production schedules

Twenty years (averaged) to break even on the two of them. 

Twenty years -  and we'll just be at zero. 

I wonder if battery technology might possibly change in 20 years? Or whether some other form of fuel or engine will appear and make that plant no longer viable.

This is the most ridiculous investment I have ever heard of in my entire life. Not to mention that there is absolutely no guarantee that they will be kept in operation for that long. If circumstances change the company could shut the plants down and walk away tomorrow and taxpayers would be left holding the bag. Much like their pipeline purchases

[Michael Hardner]

Also Trans Mountain... That may be an example of politically AND economically infeasible.

[exPS]

On 5/21/2024 at 7:30 PM, CdnFox said:

How can anyone think this is a good idea. 

One would have to be brain dead to think it was a good idea.

Likely money aka money laundering going to who? Good buddies. What a corrupt country we live in.

[Michael Hardner]

1 hour ago, exPS said:

One would have to be brain dead to think it was a good idea.

Likely money aka money laundering going to who? Good buddies. What a corrupt country we live in.

Italpasta is money laundering?

[CdnFox]

4 hours ago, Michael Hardner said:

Italpasta is money laundering?

You don't think the mob eats pasta!??!?  

(couldn't help it, sorry.)

5 hours ago, exPS said:

One would have to be brain dead to think it was a good idea.

Likely money aka money laundering going to who? Good buddies. What a corrupt country we live in.

I would be more inclined to look at it as just good old fashioned vote buying - he thinks the people of ontario will thank him for it with votes next election.  I'm sure that he'll also get to slide the names of some contractor companies in front of them as well and pay back some 'favours'. Want to bet SNC gets some of the gig to build it?

But it's certainly not because it's good for canada