Wednesday, February 2, 2011

The Corporate Welfare State vs the Social Welfare State

The corporate welfare state is not a new phenomenon, despite the notoriety it has achieved only recently. Unlike its counter­part, the social welfare state, its gestation period has been largely unobserved by interpreters of social events. And while social welfare legislation has been subjected to the most crit­ical scrutiny as to its costs, benefits and consequences, the attention of Canadians has been deflected from any examina­tion of the other face of the mixed economy, Canadian-style: the corporate welfare state. (1)
In the above cartoon from former NDP leader David Lewis's book, The Corporate Welfare Bums, we see a mouse hole for 'small tax breaks' and a trap set to take what little they have, while the vulture of the 'corporate welfare bums' stands behind the government official to steal any morsel they can. "For Pete's sake don't waste your time on the crum [sic] eaters"

The large pie that the corporate welfare bums are feasting on, DREE, stood for the Department of Regional Economic Expansion, a government agency that was supposed to promote business, but instead for the most part, just propped up businesses. And often those already doing very well.

What's interesting, is that those words were written in 1972, and for 40 years the corporate welfare state has been allowed to expand, with very little notice.

The nature of the corporate welfare state has been obscured by the traditional moralizing of big business about the virtues of free enterprise. While they publicly denounce increased government expenditure, particularly in the form of social welfare, these champions of free enterprise actively lobby the government for incentive grants, research grants and tax concessions, and all manner of assistance at the individual taxpayer's expense. And because they have drawn a sympathetic response from Liberal and Conservative governments, which subscribe to the myth of "business confidence," their appetite for welfare continues to increase.

The traditional use of the term "mixed economy" acknowledges the co-existence of private and public enterprise within one society. In Canada, the mixed economy has advanced beyond the co-existence of the public and private spheres: it has reached the stage where private business is increasingly being supported by the public purse.

As a result, Canadian businesses, whatever their public pronouncements on the matter, not only acquiesce to government involvement in the economy but have come to depend upon it. Their "welfare cheques," in the form of grants and tax concessions, have become an integral aspect of their operation. The corporate welfare state did not emerge overnight. We may be inclined to regard the establishment of the Department of Regional Economic Expansion (DREE) in 1969 as the birth-date of business government, simply because the handouts to business during the past four years have dwarfed all previous programs. (1)

Now almost 40 years later, people are starting to take notice. When Stephen Harper called Canada 'a Northern European welfare state in the worst sense of the term', he left out the word 'corporate'. Intentionally, no doubt, since he was then heading up the corporate funded National Citizens Coalition.

David Lewis's campaign against the corporate welfare state, reduced the Trudeau government to a minority in 1972, but more importantly, because the NDP then held the balance of power in the House, they were able to move the Liberals to the left.

In a bit of irony, the National Citizens Coalition, was incorporated in 1975 on the advice of Ernest Manning, father of Reform Party leader Preston Manning, in response to what he saw as a left-wing conspiracy. Prior to that, the NCC mostly just took out ads in newspapers against social programs, especially medicare.
The connections between the National Citizens Coalition and the Reform party go back a long way. Their political agendas are virtually identical: deficit reduction, restriction of immigration, ending universal social programs, lowering taxes for corporations and high-income earners, and ending national medicare.

..."At the same time, Ernest Manning and his son were launching Ernest's book, Political Realignment, calling for a social conservative party. According to Norm Ovenden of the Edmonton Journal, Ernest was one of the 'moving forces behind the creation of the NCC ..." (2)
The corporate welfare bums were fighting back, and they had the money to do it.

Another bit of irony, is that Lewis's campaign had the support of a grassroots movement, called the Committee for an Independent Canada, led by Canadian treasure, Pierre Berton.

But this wasn't the first time that Berton caught the attention of the Western based Reform movement. In 1963, the Anglican Congress sought out this prolific writer, to create a book on Christianity in Canada. 'It was inspired by Vatican II, a modernizing of the Catholic faith, they wanted to also change focus, and become a "listening" church, "hearing" things the world around them was saying.' (3)

The book was met with outrage by Ted Byfield, one of the founders of the Reform Party, planting the seed for the Canadian Religious Right. Byfield was also involved with the Civitas Society, a right-wing group that directs much of the Harper government's policies, especially in foreign affairs.

And if you're not too dizzy, there is one more irony. Jason Kenney is also a founding member of the Civitas Society, but more importantly an active opponent to Vatican II and the modernizing of the Catholic Church. Though not born when it was implemented, he attended St. Ignatius, a Catholic high school in San Francisco, which was started to oppose Vatican II.

So we have come full circle. But we are now armed with the truth.

The social welfare state was good for Canadians, and while the corporate welfare bums are suggesting that it was that, that caused so much deficit and debt, the fact is, it was them.

And now that the corporate welfare bums have a leader in Stephen Harper, we see that they have created a record deficit and debt, which is being blamed on 'the economy'. But the mess that the economy is in, was because of gambles taken by the corporate welfare bums.

And yet they suffered no setbacks, because they stood outside the mouse hole with a vacuum cleaner and sucked out anything they could reach. We are the only ones feeling the effects of their poor judgement.

Mad Yet?

I'm glad that this is now being brought to the forefront, as we face, hopefully, another election.
Michael Ignatieff dominated the first Question Period of the year, hammering the Prime Minister over his government’s response to the crisis in Egypt and accusing him of giving tax breaks to rich corporations while ignoring Canadian families.

“They don’t see their priorities reflected in the priorities of the government,” the Liberal Leader charged Monday afternoon. “When will the government start listening to those families where the elastic is [pulled] tight and start doing something for them instead of corporations that don’t need the help.”
And remember, a recent poll showed that 90% of Canadians are opposed to more corporate tax cuts. 90%. And yet the Harper government is still going through with them, further proof that they are simply not listening to us.

It's time to return the favour.


1. Louder Voices: The Corporate Welfare Bums, By David Lewis, James Lewis & Samuel, 1972, ISBN: 0-88862-031-4, Pg. 1-2

2. Preston Manning and the Reform Party, By: Murray Dobbin Goodread Biographies/Formac Publishing, 1992, ISBN: 0-88780-161-7, Pg. 95

3. The Comfortable Pew Revisited, By Michael Creal, Catholic New Times, January 16, 2005


  1. I've been dizzy for the last two years. Can't take it anymore. MEDIC. Where's the MEDIC?