Canada's State Capitalist Success

The tax breaks and tax credits given out to Bombadier and others in the Aerospace industry are one of the principle elements of the the Post WWII Keynesian economics that the Neo-liberals have not wanted to privatize. It is too expensive, private capital would not take this kind of risk, without state funding.

So much for the theory that the private sector can do it all, or that the private sector is more efficient than government, or that old canard, Business creates jobs governments don't. Under state capitalism government funds the jobs business creates the product and sells it, business takes the profits, government guarntees loss protection and gets taxes. It's like win-win.

Big Business and Big Government fit togther like a horse and carriage. Any attempt to divorce them in a mixed economy like Canada's is bound to be a disaster. In the US it is known as the Military Industrial Complex.

Canada 'success' in aerospace

By BERTRAND MAROTTE

MONTREAL – No nation can be a serious player in the global aerospace business without government support and Canada is one of the best and most successful in the game of state funding, according to a new report by an independent British consultant.

"No one country can afford to abandon state support; it's not possible to compete unilaterally without it. For the future, investment mechanisms may evolve, but this looks like an industry unlikely to kick the habit of dependence," says the 78-page study by Counterpoint Market Intelligence Ltd.

Indeed, co-authors George Burton and Richard Apps say there is a direct correlation between the pecking order of national aerospace industries and the level of government support they receive.

"Canada must be regarded as one of the success stories for the state funding of aerospace," particularly in terms of tax credits for research and development -- "one of the most generous R&D funding regimes in the world, with a 20-per-cent tax credit for every [dollar] spent," the report says.

Canada -- which claims bragging rights to the world's fourth-largest aerospace industry -- "punches above its weight," Mr. Burton said in a telephone interview yesterday.

"It's a sort of model as to how it can be done."

Funding of the aerospace sector in Canada -- particularly to Montreal-based regional jet maker Bombardier Inc. -- has been under fire for years from different quarters, including critics in the federal Conservative Party, which is now leading the governing Liberals in opinion polls in the current election campaign.

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economy
Bombardier
areospace industry

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