Recent news of up to $13 billion in government subsidies for a new VW battery plant in southern Ontario has supercharged a never-ending debate.
Matching sky-high incentives offered by the Biden administration, the Trudeau government offered up the equivalent of more than $300 from every single Canadian. That’s a lot to digest for Westerners watching from the cheap seats, where the federal government wouldn’t dream of splashing around that kind of cash.
Is shoveling taxpayer money out the back of a truck really the best way to convince people to invest in Canada?
Government subsidies and tax breaks are powerful incentives. Any common-sense business would respond to a better return on investment thanks to an infusion of OPM: Other People’s Money.
The problem is that governments eventually run out of Other People’s Money, both literally and in the patience of the tapped-out taxpayer. The same taxpayer who is also the ratepayer, the rent-payer, the mortgage holder, and the consumer shopping with a fistful of dollars that don’t go as far as they used to.
As the world becomes increasingly competitive in a race for economic growth, it’s time for our elected representatives to focus on ways to support business and investment without relying on massive corporate handouts. To counterbalance billions in subsidies, we need a new role in government cabinets across Canada: Minister for Getting Stuff Done.
If we can have micro-targeted novelty titles like Minister of Middle Class Prosperity and Parliamentary Secretary for whatever is trending on Twitter, why not?
Getting stuff done is serious business.
The same return-on-investment calculations sweetened by government subsidies are soured by risk, complexity, and delay. And Canada's government rules and processes can be as unpredictable and frustrating as a game of snakes and ladders.
We are the country that required a decade, a government takeover, and a budget of $31B to expand the Trans Mountain Pipeline. The same pipeline that was built in 18 months for $93M in the 1950s.
Reducing risk and complexity and getting to yes faster can have the same or greater effect on investment as the unsustainable practice of paying companies to look past Canada’s seeming inability to get out of its own way.
Years into a supply crunch, housing starts across Canada have slowed dramatically just as skyrocketing immigration whips up demand. Increased interest rates have paralyzed many builders, government-imposed costs account for a quarter of the price of a home, and politicians are making slow progress on fixing some of the longest permitting timelines in the world.
The City of Kelowna’s plan to have an artificial intelligence “chatbot” review and approve new housing permits promises less delay and less red tape for homebuilders - at less cost to the taxpayer. That’s a refreshing change that suggests getting stuff done is indeed possible.
Type a few simple prompts into another chatbot available for free online, ChatGPT, and it can scour the Internet for information and draft a plan for a new business in a matter of minutes - thousands of words in natural-sounding language. But before you can launch your new venture, you’ll have to wait for the government to approve all three or four words of its name. The BC Corporate Registry currently shows a 26-day backlog to manually review proposed names - a process that could be achieved in a few seconds using readily-available technology.
The disconnect between the speed of business and the drag of bureaucratic bottlenecks is only widening as work goes digital and mobile. Fast-moving tech companies seeking the freedom to innovate have less and less reason to wait around for governments to make up their minds and complete simple tasks.
So, let’s swear in a Minister for Getting Stuff Done. Give them no taxpayer dollars to splash around, but instead a singular mandate to create stable and predictable investment conditions and get government-imposed obstacles and irritants out of the way of people who are trying to create jobs. And then let’s compare the results when what’s offered is efficiency instead of subsidy.
It doesn’t matter whether your priorities are solar panels or pipelines, or just a good job and a roof over your head. The bottom line is that we need to start getting stuff done in Canada if we want to improve the quality of life for everyone.
If Canada competed on getting stuff done instead of the subsidy race to the bottom, we would be amazed at what’s possible.
Gavin Dew is a father of two and business leader who has helped unlock billions of investment dollars and thousands of jobs on complex capital projects across Canada. He wrote his MBA thesis at Oxford on how companies earn public trust.