Fraser Institute study reports massive rise in Canadian corporate subsidies

A study by the Fraser Institute reveals that federal and provincial government spending on corporate subsidies in Canada has increased significantly. Inflation-adjusted spending rose from $22.2 billion in 2007 to $87.7 billion in 2024, representing a massive increase following the pandemic years.

The report, titled ‘Eliminating Corporate Subsidies in Canada: An Opportunity for Growth’, defines corporate welfare as government payments to private businesses intended to achieve economic objectives, such as job growth or industry boosting, rather than payments for specific goods or services. The study notes that spending has increased at both the federal and provincial levels between 2015 and 2024.

In Saskatchewan, business subsidies reached $2.3 billion last year, a more than five-fold increase from $492 million in 2007 when adjusted for inflation. Alex Whalen, director of the Atlantic Canada Prosperity Initiative at the Fraser Institute, characterized the spending as ‘wasteful’ and argued that it fails to achieve its stated goals. The study suggests that eliminating these subsidies could provide significant opportunities for business tax relief; for instance, Saskatchewan could potentially eliminate all business income taxes if it removed its corporate subsidies.