At the Trough with Laurent Carbonneau
Adam's Notes for June 12, 2025
Before we start, I just want to remind everyone that I have some new writing out in the world. I have a piece in EVENT Magazine, a review of recent fiction that looks at two new Canadian novels: Keefer Street by David Spaner (Ronsdale Press) and Johnny Delivers by Wayne Ng (Guernica Editions). Both deal with young men from immigrant backgrounds, one Jewish and one Chinese. Keefer Street follows its protagonist as he gets involved in various leftist causes throughout the twentieth century, most notably the Spanish Civil War, while Johnny Delivers focuses on its protagonist’s final year of high school in the 70s, and a scheme to sell weed from out of the family’s restaurant.
I also have a piece at the Temz Review covering Kate Beaton’s newest book (booklet? pamphlet?), Bodies of Art, Bodies of Labour (University of Alberta Press), a 70-page essay taken from a speech she gave in Edmonton in 2024, about the need for working-class art and doubling as a survey of the literature of Cape Breton. She gets into the Quest of the Folk/Helen Creighton dichotomy in Maritime art and even has a page with some kind reflections on the small town I grew up in (a town which usually gets a bad rap). It’s a great little book that meant a lot to me, but compared to Beaton’s other work, it seems to be slipping under the radar. I hope you’ll check it out.
I recently read Laurent Carbonneau’s At The Trough: The Rise and Rise of Canada's Corporate Welfare Bums, which was published as part of Sutherland House Books’ Sutherland Quarterly initiative. The book is a much-needed critique of Canada’s longstanding reliance on corporate subsidies. If a policy book sounds a bit boring, I’ll just say that it’s only a hundred pages, and that Carbonneau has both an engaging way of working the material and a fantastically dry wit. He’s a policy professional with experience on Parliament Hill and with the federal NDP. I know him a little through twitter, and he was kind enough to answer a few questions about the book (footnotes are mine).
Adam: Can you tell us a little bit about how this book came about, and what it was like working with Sutherland House?
Laurent Carbonneau: It was very out of the blue, to be honest! A few years ago Ken Whyte1 at Sutherland House reached out and asked if I’d be interested in writing a Quarterly for them about corporate welfare. I mulled on it a bit and realized that I wasn’t going to be asked unprompted to undertake a book project twice, so I put aside any concerns about workload (I was deep in wedding planning at the time) and employment (my then-employer had a very ‘seen and not heard’ approach to publicity on the part of its staff) and just said yes and jumped into it.
Adam: The first thing in the book that really stunned me was the news that more than fifty cents of every dollar collected in corporate income taxes in Canada now goes back out the door to subsidize a corporation, meanwhile business investment in R&D has fallen below Italy… That’s, uh, that’s not good, is it?
Laurent Carbonneau: Yeah it’s not ideal! There has been a lot of time (and certainly money) spent on trying to get Canadian business to be more ambitious, competitive and innovative since Confederation, more or less, with levers like the National Policy all the way through to the titanic battery plant deals made a few years ago. All for decidedly mixed results. I run through the high-level stats and even when you account for things like leisure time and social goods like healthcare we are poorer than places like Belgium despite working more or less as many hours as Americans do. I think the notions of growth and productivity have become objects of suspicion on the left, and I certainly kind of get it, since they’re so often wielded as cudgels without much empirical analysis. I think about, for instance, the Abundance psyop2 (tongue in cheek) that has become an overnight phenomenon. But it is true that there is a lot more interest in how we can redistribute than how we can grow in left of centre policy spaces right now, which I think constrains people’s analysis and options.
Adam: I’m not necessarily a proponent of a universal basic income (without rent control it just becomes a subsidy for landlords), but if you compare it to the corporate giveaways you document in the book, it seems like giving money directly to people would be better for our wellbeing and probably have about the same odds of spurring economic development. Is that the case?
Laurent Carbonneau: I’m probably even more bearish than you on universal basic income, but I do think there is a strong case around social goods—childcare is one I specifically point to in the book—being better for growth in aggregate than a lot of subsidies. There are some exceptions, though. I do think private markets are not amazing on their own at producing technology leadership, which is important on dimensions beyond just monetary returns, and there are good reasons for government to play a role there. People forget this but places like Silicon Valley in the US that are singled out as triumphs of the free market are creations of government in a lot of ways - software is downstream of computers, which are downstream of semiconductors, an industry that had the Defence Department as its biggest early customer. So particularly in Canada, where the laws of economic gravity in so many places run to the US, we do have to be smart about finding valuable niches. Free trade purists will bleat your ears off about comparative advantage, and that’s fair so far as it goes, but you can’t really get away from the reality that at bottom as a country you have the option of specializing in being rich or specializing in being poor.
Adam: The basis of your book is that Canadian governments have a bad habit, going back to Confederation, even, of subsidizing corporations in ways that enrich shareholders but have no benefit for Canadians. Not only does economic development get delayed, but you make the case that different subsidies end up overlapping and canceling out whatever good they were supposed to do in the first place. And then as this goes on, corporations become less competitive in the marketplace as they spend more time lobbying for subsidies. Is there a way out of this mess?
Laurent Carbonneau: That’s a better summary of the book’s argument than I think I’ve ever seen in one place, including in the book itself! I don’t think there’s a really easy overnight answer. The satisfying one would be to stop spending all of this money, and there are certainly programs or initiatives I would personally point to—it’s crazy to me that our big flagship Strategic Innovation Fund gives public money on very favourable terms to big foreign multinationals. But at bottom ‘favourable business climate’ is a very competitive international sport. And that’s a reality that even the best social democratic governments have had to reckon with—François Mitterand’s Socialist administration in France was super ambitious in its early years but ran into a brick wall on this, and of course the Meidner Plan-era3 Swedish Social Democrats had to curtail their employee ownership program. Competition policy to curtail our oligopolies would be a good place to focus attention to - so much of our malaise economically is down to not being super competitive globally in the big leagues, because the Venn diagram overlap of companies in Canada that work in competitive markets solving hard business and technological problems is really small. I could kinda go on all day about this and show a lot of charts but that’s the short(ish) version. And some of this goes back to the reality that it’s hard to do Euro/East Asian style industrial policy in Westminster political systems.
Adam: As a Maritimer and a connoisseur of the many boondoggles of ACOA and NSBI, it’s almost a relief to see this is a countrywide problem. Although with that said, I’m glad you touched on the infamous Bricklin sports car in New Brunswick, and the stuff on Alfred Valdmanis was fascinating—he should be a household name, but I’d never even heard of him, a former Lithuanian finance minister who became Joey Smallwood’s industrialization czar—the Rasputin of the Rock, as you put it. Is there any one project that stood out to you as particularly egregious?
Laurent Carbonneau: Honestly the more I understood the financial engineering behind the early transcontinental railroads the more maddening it got. There’s a view of the railroads as this unmitigated success on the one side or a kind of act of original sin or hubris on the other. Broadly speaking I think it’s probably good that they built it, but the premium that everyone paid to build it really fast was totally wasted. Canadians paid through the nose via tariffs (I’m so glad I don’t really have to explain why this is bad anymore) to subsidize the profits of the railways’ Canadian managers and their European and American financiers while they played all kinds of silly games to avoid any kind of financial exposure, and used their subsidies mostly to line their pockets or try to bankrupt their competitors. And because these things were so laden with financial obligations and had been built so inefficiently it locked Canada into this rip and ship pattern of extraction that we’ve never really looked back from.
Adam: You’ve worked for the NDP, any insights on how or even if the party can recover from the blow it took in the last election?
Laurent Carbonneau: Oh boy, it’s going to be tough, I think. People point to the 90s as a “we’ve done it before” example but the reality is that union donations were a thing then, and they kept the lights on. I think the upcoming leadership race is going to have to raise some pretty fundamental questions about who the party’s constituency is and what it’s really for, strategically. The confidence and supply thing was an experiment, time will tell if it was worth it. But right now the price looks like it was very high.
Adam: Thanks, Laurent!
You can find my review of Kate Beaton’s book here. Laurent Carbonneau’s book is At the Trough: The Rise and Rise of Canada's Corporate Welfare Bums—I hope you’ll check it out!
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Dumb anecdote: I just wanted to note that I got into reading about the Rehn-Meidner plan a few years ago during one of my sporadic attempts to learn economics. It’s pretty interesting, I might be misremembering but I think there was this whole thing to have corporations partially pay taxes in stock, and then have governments use the stock to put workers on the board. Anyway, I printed off a paper about it called something like “Why did the Swedish Model Fail?” and a friend saw it and gave me shit, misinterpreting the term “Swedish Model” and thinking I was going down some incel/online misogyny rabbit hole.
You know, this is the first time I've heard the concern that, without rent control, Universal Basic Income might become little more than pass-through to the rentier class for those who rent rather than own on apartments or homes.
Here in the states, that's long been a concern about college student aid, especially as more and more, more and more US universities have adopted an explicitly neoliberal business model.
And, from "Down Under," here's my take on the NDP per a couple of recent pieces I have read. https://socraticgadfly.blogspot.com/2025/06/can-canadas-ndp-survive.html