Pork Barrel Audit 2: FedDev Ontario’s Prosperity Initiative Gives Preferentially to Conservative Ridings
As promised, the second installment in my new series of Pork Barrel audits involves the Federal Economic Development Agency for Southern Ontario (aka FedDev). This initiative got into the news over the weekend when the government excitedly announced that $10 million from its southern Ontario small business subsidy program was being diverted to a German multinational frozen pizza manufacturer, Dr. Oetker, whose Ottawa lobbyist just happens to be a Conservative insider. Don’t blame Dr. Oetker, blame the government. Dr. Oetker is just doing what any good investor does: going where the money is.
Because it’s a relatively young program and the funding announcements are just ramping up now, it’s too early to draw final conclusions. But so far it appears that this, like so many other “Economic Action Plan” programs, is seeing a disproportionate amount of funding sent to Conservative ridings. This dovetails with my last audit, which had similar findings for HRSDC’s Enabling Accessibility Fund.
FedDev set up the Prosperity Initiative in 2010. It has three different funding streams: Productivity Enhancement grants to non-profits, Regional Diversification grants to Ontario businesses with less than 1000 employees, and Competitive Advantage grants to either non-profits or Ontario corporations, all of them up to a maximum of $20 million per grant. The language implies that the business must be Ontario-based. Dr. Oetker didn’t really qualify, but if you treat Dr. Oetker Canada (the local subsidiary) as its own operation, I suppose it would qualify.
In total the Initiative has $210 million to play with, and it is all under the supervision of the government’s chief creationist, Gary Goodyear. So far it has dispensed $123 million, including a couple of grants prior to the 2011 election, but mostly a pile of announcements over the course of this spring. In addition to the Dr. Oetker frozen pizza plant, projects include a new IBM supercomputing centre, a granting program administered by a manufacturing and exporting trade association, and a couple dozen other projects.
At this point it’s hard to say how the program will wind up, but so far the evidence leads clearly in one direction. Taking southern Ontario as a region, on the whole the Prosperity Initiative has dispensed an average of $1.3 million to each Conservative riding, compared with just under $900,000 to each Opposition riding. The Opposition total would be even lower, but the government just announced a massive $20 million supercomputing extension at the University of Toronto. That project is actually a multi-university consortium and until the supercomputers are installed, the team will be using IBM’s other complex at Barrie (which is in a Conservative riding).
Without the IBM announcement, it would only have been $140,000 to each Opposition riding, or about one-tenth what Conservative ridings received. If, for the sake of fairness, we take out the biggest Conservative-riding grant as well, in a one-for-one trade, we’d still be at $1 million for each Conservative riding, compared with about one-sixth of that amount for each Opposition riding. For a program like this the averages are somewhat misleading — most projects are quite large, and so most ridings of both parties actually don’t receive anything like the “average” amount — but they are still indicative: so far, FedDev Ontario has been channeling Prosperity Initiative money to Conservative ridings at a disproportionate rate.
In addition to Dr. Oetker and the IBM-sponsored computing program, beneficiaries of the Prosperity Initiative include Ivaco Rolling Mills, Eomax Corporation, Brock University, Light Fantastic Technologies, Invotronics, Vantage Foods, Novo Plastic, BioAmber, and Gedex.
Audit No. 3 will involve a program from the Atlantic Canada Opportunities Agency (ACOA). I thought I’d throw the Conservatives a bone by showing that at least some of their Cabinet ministers are genuinely concerned with ensuring that all ridings, not just Conservatives ones, get their fair chance to play the subsidy game. In addition, the latest Grants & Contributions reports from Cabinet ministers are due in a few days, and I’ll have an update based on those reports in a couple weeks’ time, as well.Tweet