Beyond The Commons

Aaron Wherry covers all the goings-on in and around Parliament Hill. Follow Aaron on Twitter: @aaronwherry

Categories: Beyond The Commons, Capital Read

When ministers of the crown tweet

by Aaron Wherry on Tuesday, December 14, 2010 9:28am - 41 Comments

With the government announcing new funding for Pratt & Whitney yesterday, Greg Weston posted a series of questions and concerns last night about the loans involved and the jobs promised.

The government announcement also claims the deal will “create and maintain an average of more than 700 highly skilled jobs during the project work phase, and more than 2,000 jobs during the 15-year benefits phase.” The company later explained that it hopes to hire about 200 new staff for the research and development project, expected to take about five years. At $300 million from taxpayers, that works out to $300,000 a year per job.

As for the rest of the jobs, Clement’s press secretary, Lynn Meahan, explained that “hypothetically, without the project, the workforce would have shrunk.” She said the promised 2,000 long-term jobs would come from manufacturing the new engines yet to be developed, and it is not clear how many of those positions, if any, would be new.

Economist Stephen Gordon and our own Andrew Coyne duly tweeted their criticisms. And it was soon thereafter, perhaps inevitably, that Industry Minister Tony Clement attempted again, 140 precious characters at a time, to explain and defend himself.

To wit.

TonyClement_MP @acoyne @Paul_TO Rubbish! P&W also subcontracts to many other Cdn aerospace firms. Govt & business creating greener engines.

acoyne @TonyClement_MP Oh lord. Who are you, and what have you done with Tony Clement?

TonyClement_MP @stephenfgordon Why are you suddenly against Cdn govt being a part of R&D? Or do you think only academia shld receive?

acoyne @TonyClement_MP The real Tony would never fall for such bogus “spin-off” claims, cause real Tony understood the concept of opportunity costs

TonyClement_MP @acoyne I’m about where Maxime Bernier is: he created the Program in 2006.

TonyClement_MP @acoyne I do understand that concept. But I also believe business & govt must work together on R&D if we’re to be competitive.

TonyClement_MP @acoyne This is where Preston Manning is as well btw: govt & companies working on R&D together…

acoyne @TonyClement_MP You don’t fool me, Fake Tony. Real Tony would know the difference betw basic and applied research. Also would not spout…

acoyne @TonyClement_MP … rubbish about countries “competing.” Companies compete. Subsidy not about Cda vs World, but P&W vs other Cdn firms.

TonyClement_MP @acoyne Respectfully, no Cdn firm makes engines of this size & complexity; + govt policy has been about commercialization since 2007.

acoyne @TonyClement_MP As for green engines: price carbon, and subsidy unnecessary. Econ & envir both argue for true costs. Subsidy hides costs

acoyne @TonyClement_MP Who says Cdn cos should be making engines of any size? When did God decree that Cda *must* be in aerospace?

TonyClement_MP @acoyne Andrew Coyne: the new promoter of the Carbon Tax on Everything!

acoyne @TonyClement_MP Aerospace success bought at cost to other sectors. Mind, “success”? Subsidy to P&W only buys right to give it more subsidies

acoyne @TonyClement_MP They’re not really in the aeorospace biz at all. They’re in the subsidy biz, only w/ each $1bil they throw in a free engine

acoyne @TonyClement_MP By “crucial” you mean “big.” They are “big” because they are subsidized. And why are they subsidized? Because they’re big!

TonyClement_MP @acoyne Every second of every day a P&W engine is propelling a plane. Is that really a failed company?

acoyne @TonyClement_MP I’d hope they could sell some engines with $1.5-bil subsidy!But ho

TonyClement_MP @acoyne 2me this is an R&D play; 2U a subsidy play.If P&W came to me wanting a bailout for their operating,I wld have said NO,as in Nortel

acoyne @TonyClement_MP By the way, Tony (if that’s you): what did dept say was cost in jobs elsewhere in econ from diverting $1.5-bil to P&W?

acoyne @TonyClement_MP Case vs subsidy does not turn on whether a winner or loser. If economic, doesn’t need subsidy. If not, doesn’t deserve one

acoyne @TonyClement_MP To repeat: what did dept research say was opportunity cost of P&W subsidy, in jobs and investment diverted from elsewhere

TonyClement_MP @acoyne By your reckoning there would never be a case for R&D by govt w a company. I get that; it’s just not Maxime’s/my position.

acoyne @TonyClement_MP Why don’t we start from that position, then you can make a case for special exceptions? As it is, onus is on taxpayer

TonyClement_MP @acoyne Yet you are content for govt to massively redistribute wealth via a Carbon Tax. What sort of libertarian are you?

acoyne @TonyClement_MP I told you: I’m a socialist. ie, I make case for markets serving social interest, rather than govt serving private interest

TonyClement_MP @acoyne A good proposition, I cannot argue with that concept…

acoyne @TonyClement_MP Besides, carbon tax can be used to cut income taxes. Same way GST could – oh, no, right; you cut GST to keep income tax UP.

acoyne @TonyClement_MP In that vein, still waiting for what research you did on opportunity cost of P&W subsidy?

TonyClement_MP @acoyne Opportunity cost was decided when the program was created in 2006, I’m sure. So Max would know…

acoyne @TonyClement_MP EXCUSE ME? You pushed $300 million out the door for a particular engine project without any specific cost-benefit research?

TonyClement_MP @acoyne Hi I’m back. Yes of course I examined the costs and projected benefits of the loan. But my point was the program’s…./2

TonyClement_MP @acoyne …desirability and efficacy would have been decided upon generally in 2006. Sorry about the confusion. I really have to work now…

acoyne @TonyClement_MP Well, you’re the minister now. Didn’t you review the numbers? How many jobs will be destroyed in other firms to prop up P&W?

TonyClement_MP @acoyne Fewer jobs destroyed than via your Carbon Tax! Gooodnite!

Tags: Andrew coyne, Greg Weston, Industry, Pratt & Whitney, Stephen Gordon, Tony Clement, twitter

More by Aaron Wherry

Brian P

This article should be renamed, "When Ministers of the Crown 'Twit'"
c_9

Excuse me Minister, I have a question–

"CARBON TAX ON EVERYTHING OOGA BOOGA"

Okay then.

PeterboroDave

LOVE the OOOGA BOOGA. Isn't that the wording MacDonald used in Parliament when he defended his relationship with Hugh Allan in 1874 or thereabouts?

bergkamp

I don't know why Coyne even bothered with that conversation. Clement is taking talking points from CAW apparatchik, Clement is not remotely economic conservative.

" ….. seized of a fervent belief that Canada’s private sector companies are failing to use new technologies that could make the country more productive and competitive.

“Governments are doing their part. Universities are doing their part. Where’s business?” he asks with palpable frustration.

“When is business going to do its part? " Tony Clement, Globe/Mail, Nov 2010
————–
"In today’s lean-and-mean world, however, business is free-riding on the spending efforts of others. Despite tax cuts and other business-friendly policies, the private sector isn’t taking on the risks, and taking on the debt, necessary to fuel broader recovery." Jim Stanford, Globe Mail, Sept 2010

http://www.jesserosenberg.com Jesse_Rosenberg

Because it's what you do when someone disagrees with you?

McC_

not me, I shut up and support the troops.

Humble observer

Quite the Has-Been Duet there.
Mike Moffatt

I'm afraid to show this thread to my wife, lest she takes debate tips from Tony Clement.

"Hey love, it's your turn to take the dog to the vet"

"YOU SUPPORT A CARBON TAX! PERMANENT TAX ON EVERYTHING!"

In all seriousness, I have three questions for Minister Clement (which I also asked on Twitter)

1. Has he read Milton Friedman's take on/support of emissions taxes on Free to Choose? If so, what did he think of it?

2. The Federal government already has 4 carbon taxes. When does he anticipate the government removing these?

3. Speaking of carbon taxes, what happened to Tory promise to eliminate GST on gasoline?

tedbetts

"2. The Federal government already has 4 carbon taxes. When does he anticipate the government removing these?"

I've heard this before. What are those carbon taxes?

Mike Moffatt

The excise tax act.

leaded gasoline (11 cents per litre)
leaded aviation gasoline (11 cents per litre)
unleaded gasoline (10 cents per litre)
unleaded aviation gasoline (10 cents per litre)
diesel fuel (4 cents per litre)
aviation fuel (4 cents per litre)

IIRC the first 2 aren't sold any more (though I may be wrong about that), leaving 4 more.

Cats

Aren't those dedicated revenue streams to pay for specific infrastructure used by motorists ??

Serious question, did we even know about or care about global warming when they were brought it ??

Yeah. They're not carbon taxes. They're taxes that happen to fall on hydrocarbons.
So is the GST.

GST CATS!

Mike Moffatt

"Aren't those dedicated revenue streams to pay for specific infrastructure used by motorists ??"

No, they're not. Money goes into general revenue. No link between revenues and expenses.
Cats

No, no I meant that is the rationale for having these.

Everything goes into general revenue, the Liberals raiding EI funds in the 90's doesn't mean we don't pay EI for the benefit of the program.

It just means gov'ts are dishonest and gimmicky.

Gimmicks Cats.
Mike Moffatt

"Serious question, did we even know about or care about global warming when they were brought it ?? "

So, if the Liberals bring in a carbon tax for the purpose of fighting the deficit, not global warming, you'd be okay with that?
Cats

Like the US deficit reduction committee recommending an increase in the federal gas tax down there ??

No I wouldn't be OK with it because I like my gasoline.

And if it was a tax on all carbon, not specific items, well then it would be pretty transparent what their intentions were. Hidden agenda much ??

BIG difference making policy decisions POST global warming hysteria than PRE global warming awareness.

That cat can't be put back in the box.

BACK IN THE BOX CATS!

LdKitchenersOwn

I particularly enjoyed the part where Tony, cornered, threw his buddy Max under the bus.

Adrian MacNair

I found that significant as well.

Cats

Kind of your fault there.

Bloggers act like Bernier is the second coming. The TRUE conservative.

His record at Industry is pretty mainstream though.

Check his record Cats! Its what you DO not what you SAY!

danby

That explains the Harper government's outspoken commitment to accountability/transparency

ADB

Wow!
Possibly the most content rich exchange I've heard/read from a cabinet minister in some time.
Interesting to see that ministerial responsibility apparently lies with Maxime Bernier.
Sometimes I wonder what it would be like if our federal politicians actually, you know, on occasion, submitted themselves to serious media interviews.

McC_

"Interesting to see that ministerial responsibility apparently lies with Maxime Bernier."
The marionettes think that Maxime Bernier is the one pulling the strings…?!

ADB

I meant it really does look strange that the current minister does appear a little embarrassed about his ministry's decision to subsidize R&D at P&W, but to back-up his position cites Bernier's policies (while he was minister). I think that because Bernier is now (apparently) some-what to the right of the Harper Government, Clement's believes that any libertarian or small-government conservative (Coyne?) would be happy to accept on trust a policy initiated by Bernier. Obviously, that is not really an argument that this present decision makes economic sense.

While his arguments are lame, I'm just amazed that Clements participated in this public conversation.

ADB

Clement not Clements or Clement's, obviously. Sorry Tony, Mr. Clement.
McC_

I got you and I agree with you; I was just making a joke, mostly.

tedbetts

Pass the buck government. Monkey see (Harper do it), monkey do.

Amateur Hour

Conservatives prior to 2006: The Liberal government has been diverting taxpayer's money to aerospace firms. We should not be in the business of picking winners and losers. We should let the market determine that. Liberals are just trying to buy votes in Quebec and Ontario.

Conservatives after 2006: We're investing in votes, er, jobs in Ontario and Quebec. Oh, never mind. We'll probably say and do something different tomorrow, anyway.

Seriously, from transparency, income trusts, deficits, stimulus deadlines, Afghan mission extensions to industrial subsidies and more … how can anyone believe a word these mugs say? Where are those 1,000+ new RCMP officers or those 125,000 daycare spaces? Where is the "made in Canada" emissions plan? When will we see a public appointments commissioner? Naval and Coast Guard vessels? Does this government even have a foreign policy?

It would be helpful if some nice journalists made a list of what the CPC government has promised and supported and put it up against what they've actually done or not done. I think then that the idea of Harper as a competent manager would disappear in a flash of reality.

gottabesaid

Apparently, you didn't get the memo: any policy reversals were due to a) changing circumstances, or b) obstruction by the opposition, whose sole purpose is to thwart the duly-elected Prime Minister and Government of Canada, merely for petty partisan political gain. Also, a list of CPC accomplishments — which you curiously left out — would include standing up for the troops and standing up for Canada against the terrorists, Tamils, criminals, socialists, separatists, Russians and census-takers. So save your latte-sipping, bike-riding, pinko propaganda — stop slandering our government, and stand with real Canadians and support the government… and the troops!

Oh, there is something comforting about surrounding oneself with talking points. You should try it.

Richard_S_Argent

You forgot to mention walking out on a speech by Ahmedinejad.

Walking out on literally the most despised politician on the planet? Now *that* takes courage.

TJCook

TonyClement_MP @acoyne Opportunity cost was decided when the program was created in 2006, I’m sure. So Max would know…

I'm going to go out on a limb and speculate that calculation of the opportunity cost took the form of a focus group with middle-aged suburban women and other key target demographics.

Bernier was a stickler for rigorous analysis.

BCer in Mtl

No, I think it took the form of a focus group consisting of somewhat hot middle-aged women who in the past consorted with bikers . . .

sourstud

What's to say suburban women couldn't also be somewhat hot and previously have consorted with bikers?

PeteTong

Andrew Coyne is not a leader.

tedbetts

And just visiting.

Didn't visit a friend at Hahvard once?

john g

The troops. Don't forget the troops.

Emily

Capitalism was the perfect economic system for the Industrial Age, and Socialism was the reaction to Capitalism. We've gotten so used to that image no one seems to have noticed the industrial age is over, and neither system suits the era we're in.
We are left only with the myths….the Capitalist is the guy that used to be on the Monopoly game….top hat, tails, moustache, cane….he's rich, and he opens factories and builds continental railroads for the happy worker, Joe Lunchpail. 'Captains of Industry' they are, and the workplace consists of blast furnaces and huge gears like in the Chaplin movie, Modern Times. But today, people work in offices…manufacturing has left for China, and CEOs are more likely to be masters of software.

Emily

Until we get rid of the idea that we still have capitalism, and it's all a nice neat closed system where growing wheat is equivalent to building electric cars, we will have old industries with their hand out and govt more than willing to slap money into the hands.
So we let Nortel sink into oblivion, and we nearly lost the satellites, while we bail out aircraft engines and potash….even when they don't need it.

Canada, especially the govt, is more than happy to remain a resource economy, and run the branch plants of the dying industrial age. And no amount of money or subsidies will change that attitude.NAFTA helped immensely in breaking up our cosy world, and other trade agreements should do the rest, and bounce us out of the 50s era we are stuck in. One can only hope.

MostlyCivil

Said Tony:

"Sorry about the confusion. I really have to work now"

Confusion IS his work now.
madeyoulook

Yay, Andrew. Kudos to Clement for keeping pace, in a losing cause. Major anti-kudos to Clement and colleagues for yet another dumb decision with everybody's wealth.
Jenn_

"TonyClement_MP @acoyne 2me this is an R&D play; 2U a subsidy play.If P&W came to me wanting a bailout for their operating,I wld have said NO,as in Nortel"

It's great that Tony's proud of saying no to operating funding for Nortel. So he should have. Does it follow then, that R&D funding paid by the evil Liberal government before them, should be GIVEN AWAY–with zip, nada, zero benefit to Canadians unless they are shareholders? So we can expect that the next government will be happy when P&W takes the newly developed improvements as a feature to sell the entire business (including the jobs) to some foreign company?

No tax revenue, no jobs. Great investment of our funds, eh?
kcm

Coyne's a socialist! [ pulls remaining hair out ] Waugh!! He's probably a secret coalitionist too!
http://www.linkedin.com/companies/merger-law-associates-ltd. Julius C.

Don't you mean the political consultant's tweets?