Well, well, here's an interesting read by Eric Reguly from the latest Globe and Mail "Report on Business" (free registration required): how poorly the Canadian government collects on its Technology Partnerships Canada (TPC) loans:
Your tax dollars at work
Last autumn, before then-Liberal industry minister David Emerson pulled a Belinda and switched parties, he fired a bullet into Technology Partnerships Canada (TPC), a program that had funnelled fortunes into corporate research and development programs. Did Emerson, a former forestry company boss with an eye for value and little tolerance for waste, decide TPC was money ill spent? On the contrary, TPC, which dates back to 1996, is due to be replaced by TTP -- the Transformative Technologies Program (details yet to be announced). If TTP is like previous programs, the theme will be support for "strategic" R&D to make Canadian businesses more competitive...
So where's the good part?
Pratt & Whitney Canada, based in the Montreal suburb of Longueuil (Quebec is a familiar provincial address on TPC application forms), is a case in point. The company has worked federal assistance programs to magnificent success. Pratt & Whitney makes engines for helicopters and planes, and it is owned by United Technologies, the $60-billion (U.S.) American aerospace and defence giant that also manufactures Sikorsky helicopters, Otis elevators and Carrier air conditioners...
And how much of that $1.5 billion has been repaid over the past quarter century? As of March 31, just $134 million. When is the rest coming? Pratt & Whitney declined to comment on the repayment schedule, though it says the loans are repaid within 25 years. In 1983 alone, the company received $200 million. Wouldn't programs funded back then have produced sales by now? Pratt & Whitney doesn't break out its Canadian financial results, but it must be profitable. If it weren't, United Technologies would have cut it loose years ago.
What about employment? It's hard to say. Pratt & Whitney is one of Quebec's largest employers, and the high-tech, high-paying jobs are coveted. In the late 1990s, when the company was sopping up hundreds of millions of TPC loot, it had about 7,500 employees across Canada. Today, there are about 7,000...
Naturally, you should read the whole thing, but it does make one wonder whether PM Stephen Harper will be in any rush to antagonize any Quebec-based companies given that he kind of needs Quebec support to stay afloat politically. Reguly sums it up nicely in his last couple of sentences:
When the Tories were in Opposition, they were critical of corporate welfare and TPC. Will they change the program? Don't count on it. Quebec votes are at stake.