 event right at the end of term you can imagine if we were near the beginning of turn how many more people will be here but this just shows how interesting this event is going to be. So I'm Laura McDonald I'm director of the Institute of Political Economy which is organizing this workshop titled Corporate Welfare Public Policies for Private Corporations and this is an event that we do every year around the work of a visiting professor. So this year we were luckily lucky enough to have with us Dr. Kevin Farnsworth from the University of Schafffield in Britain and so I'll just introduce everybody in turn but we're basically Kevin's been working on this concept of corporate welfare which is pretty fascinating one and it's great to have this theme kind of resurrecting I think which to me is reminds me of some of the politics of the 1970s in my right Kevin you know corporate welfare corporate bums that came out in Canada and we kind of lost sight of that approach to some extent but I'm hoping that Kevin and others will be bringing it back and I like the image of the fat cat capitalist who is often despite you know ideas about getting rid of the state in fact under recent versions of neoliberal capitalism we see capitalists feeding at the state trough much as they accuse the poor of doing. So today we'll have three speakers first Kevin who will speak a little longer because he is our visitor speaking on the topic of public policies for private companies okay never mind you can read the titles they'll read you the titles so Kevin as I said is a professor at the University of Schaffield he Schaffield University he did his PhD at Bath and he's the author of a couple of recent books in particular he's been working on the effects of the recent global financial crisis and teaching in that area so it's been really great to have Kevin with us and rounding out this discussion we have two other interesting people working in diverse areas that we thought would fit well in with this topic first we have Marc-André Gagnon who's a professor in the School of Public Policy and Administration here at Carleton who's very well known for his great work on the pharmaceutical industry and public policies that support private sector interests I believe we'll see and finally we have Jen Moore who's the Latin American staff program coordinator for Mining Watch Canada Jen worked for many years as a journalist in Latin America and so she has extensive research and advocacy experience and she's going to be speaking about the Ottawa support for Canadian money industries in the Americas and perhaps elsewhere so over to you Kevin. Okay could I move this up? Yeah we can edit this bit afterwards. Is that okay? If I move forward that's okay right okay well thank you so much for coming along to hear this presentation today all the series of presentations I want to say a special thank you to Laura for organizing this and in particular to Donna who has disappeared for not only organizing this but the fantastic graphic design work that she's done on this poster thank you as well to Marc-André and to Jen for coming along and sharing this session on corporate welfare I feel very privileged to have a session on corporate welfare because I've been working on this area for some time I've actually been interested in the whole issue of corporate welfare really since the mid-1990s I grew up with actually not so much with but under Thatcher and so Thatcherism and Reaganism and I was completing my PhD during the disappointing years of Blairism and new Labour and what's really interesting about this period this period of neoliberalism that transcended or each of those administrations and of course you witness your own version of that as well in Canada is is a propagation of a number of myths the first myth being that that private markets operate more efficiently than the public sector the second myth that that that social welfare is problematic for a number of reasons it's problematic because it undermines the private sector it undermines competitiveness but also undermines a social fabric and the third myth that businesses and citizens would be better off if to quote Ronald Reagan if the government got out of the way so these myths I think are really interesting and they're really interesting when we see or think about those myths in light of the financial crisis because what the financial crisis means of course is that is that the governments were forced to bail out the in some cases most successful parts of the economy to huge expense so so this got me even more interested in corporate welfare sort of since the 1990s and and as Laura said I've been doing some work on corporate welfare really over the last four years I did a comparative book which made use of comparative data comparative data actually in this area is is actually extremely poor and I'll talk a little bit about that but more recently I've been doing a case study of the UK and so what I want to do today is to share some data from those projects and I've even been able to put in some data from Canada as well so so hopefully that will also be of interest to you as Laura says the the the concept of corporate welfare actually begins in Canada in the 1970s so corporate welfare begins with with David Lewis and the NDP and and originally the term corporate welfare was coined in order to draw attention to the fact that corporations were making demands of the state but politically we actually didn't see that politically there was much more focus on on the poor so David Lewis put this issue of corporate welfare at the heart of the early 1970s election campaigns which actually through our present eyes looks pretty radical and actually far more radical than I think we were seeing in Europe at the time and certainly since and certainly far more radical than we've seen ever since the notion of corporate welfare since the 1970s has traveled two ways first of all it's traveled to the right so it's actually the political right that talk about corporate welfare now much more than the cup much more than the political left corporate welfare is a term that actually is one of those relatively unique terms that unite the left and right in opposition albeit for different reasons and I'll say a bit more about that possibly in the question time or maybe towards the end of the presentation so it's a term that's important for the left and the right there are still organizations doing work on corporate welfare the ones that leading that are leading the way now as a Cato Institute in the US and the Fraser Institute in Canada both talk a lot about corporate welfare but it's but they talk about corporate welfare in order to expose the undeserving wealthy in the same way that they might also talk about the undeserving poor and so this is a reason to or there's a justification there are the heart of the debate to keep state out of so from interfering with corporations and spending tax dollars on on corporations this is what David Lewis said in the 1970s I want to read it to you because again I think it's an incredibly radical statement the nature of the corporate welfare state has been obscured by the traditional moralizing of big business about the virtues of free enterprise while the they publicly denounce denounce increasing increased government expenditure particularly in the form of social welfare these champions of free enterprise actively lobby the government for incentive grants research grants and tax concessions and all manner of assistance so here Lewis is pointing to the problem of corporations effectively making use of the state fleecing the state and and at the same time being the case in denial about that actually obscuring the fact that that's actually what's what's what's going on so why corporate welfare then why do I want to look at corporate welfare the reason why I'm arguing that we need to bring corporate welfare in is that it's not because corporate welfare is a is an uncontroversial term it's not because it's an ideal term necessarily but it's the closest we have I think to a term that helps to bring together a number of different literatures that are that are really important in this area the subsidies literature is useful and draws attention to the various ways in which states support corporations but it's narrow it's far too narrow I think it neglects a whole range of other other public policy that that the state is responsible for industrial policy literature does highlight the importance of the state in trying to assist corporations and increase the competitiveness and productivity of corporations but it neglects social policy and then we have the welfare state literature and especially the expansion of the welfare state literature through comparative analysis to the varieties of capitalism literature that some of you will know which is really useful in making sense of the impact of social policy on issues like productivity and competitiveness but it neglects a whole range of other public policies so corporate welfare for me brings together different literatures in order to try to draw attention to corporate welfare I argue that we need a new discourse and that discourse is me it is missing now we don't even have the apparatus to begin to conceptualize the kinds of things that I'm trying to talk about here we need a new discourse which facilitates greater understanding of the relationship between business citizens and governments and we have to investigate how corporate welfare might be utilized in order to reduce corporate harm and also to increase social justice and I argue that public policies need to be designed so that they foster more responsible corporate behavior I'm not here incidentally and in this work necessarily condemning corporate welfare because actually I think that corporations need the state and this is clear actually if we if we think about the works at work of Marx but it's also in clear if we think about the work of Adam Smith corporations need the state and and they need the state so then we have to ask questions about what we can expect from corporations but we also need to ask questions about how we can provide provision to corporations which doesn't undermine social equality that doesn't undermine the needs of citizens which brings me on to the definition of corporate welfare that I'm working with corporate welfare exist where governments design or deliver public policy in such a way as to meet the specific needs and or preferences and preferences are important obviously in relation to political lobbying of private businesses or otherwise socialize the costs and risks associated with private investment and profit making another myth is that private corporations take on huge amounts of risk and are innovative in their own right actually they the risk that they bear is often shouldered throughout society more generally and in some instances they bear absolutely no risk at all or very little risk not personal risk and not risk to the corporations because the risk is socialized and again we can say a bit more about that a bit later corporate welfare assist corporations as well through their life course this is really important I think because sometimes corporations will say that they don't need the state the CEO of Northern Rock Bank two years before being taken over by the state was making this kind of argument that corporations don't need the state that the state should step to one side should actually deregulate of course the result of that was the banking crisis the point is that corporations even if they don't think they need the state at that particular time might welcome to realize that actually they do need the state and they're more likely to need the state during the early stages as well of their existence to help to remove the risk so to go on with the definition it makes possible the birth of corporations and meets their evolving needs from their youth to their maturity it provides advice mediates their risks and provides additional support during difficult times it keeps some companies in life support and assists some companies in their death again we can unpack that a bit later in the questions wider corporations sorry wider governments provide corporate welfare where we have some rich theoretical literature here of course for Marx government's always actually interests ultimately of capital or business and for neo-Marxist to the interest of the state and governing parties are tied to the interests of business the more successful is business the higher is in levels of investment the more likely political parties are going to win reelection and incidentally it's not just Marxist that are arguing this Charles Limblon is a pluralist one of the major pluralists actually that actually helped to put pluralism on the political agenda writing with Dahl Limblon made a very similar argument he actually argue actually stated that that they were wrong in assuming that business with just any old lobby group and instead argued that business is a privileged interest but tried to but made this argument based on a kind of structural argument that actually governments need investment citizens need corporate investment they need companies to be profitable at least within capitalism otherwise everyone suffers so it's this kind of argument organized business is also incredibly powerful though because they're able to make use of a wide range of resources in order to try to squeeze more provision from the state lower taxation lower regulations and higher benefits and something that I argue is that in responding to this governments actually helped to help to create needs if government if businesses have an investment model based on low regulations low taxation low wage cost then that's what they need they will continue to need that and actually if they don't get that then some of them of course will will will either will either reduce their levels of investment or go elsewhere so so these two arguments are really important but I also argue that institutions do matter here that the power of business is variable over time and between policy areas and between countries as well the reason is that business power is mediated by political institutions the needs of business also can be satisfied in different ways the basic need of business is to make money it's profit but that begs a question of how much profit they need to make and it also raises the question of how they make profit and they might make profit in different ways and public policy might facilitate the making of that profit in different ways governments pursue different economic strategies I argue and those strategies themselves shape business strategies and business needs as I've already mentioned and social policies can help to reconcile what otherwise can be quite fiercely contested needs of citizens and business they help to reconcile these two the needs of both of these groups from the theoretical to I suppose the more normative wider governments provide corporate welfare they provide corporate welfare in order to induce or facilitate new investment to boost national and international productivity or competitiveness and profitability they provide corporate welfare in order to protect and preserve strategically important businesses in certain sectors they do so in order to socialize the risks that otherwise confront business which I've already talked about they do so in order to protect employment and this is also something that's important not to forget the discussion of corporate welfare that does exist I think often assumes that actually it's businesses that are arguing for higher levels of corporate welfare and sometimes it is but actually sometimes it's trade unions because obviously subsidies can actually make the difference between a job loss or continuing employment and that's I think really important really important in fact the biggest tensions can sometimes exist within the business community not necessarily between capital labor and I think that's something that we need to take into account business governments provide provision in order to influence production and manipulate markets a key area and long-established area of corporate welfare here is the agricultural sector where huge amounts of subsidies are paid out they might do in order to assist corporate friends and they might do so in order to offset the costs associated with taxation the argument here is that governments can aid corporations in different ways even if they tax them they can actually provide provision that actually helps to offset that taxation and they might do in order to increase legitimacy and this goes back to the sort of the arguments of have a mess and James O'Connor so governments can intervene in different ways to to provide provision they might intervene through taxation through regulation through provision and they and there is space here there is there is capacity for governments to provide in one area not another in other words this there's capacity for trade-offs and that's also important so business so governments might service the needs of business in very different ways and different states have different patterns of public policy that helped us to service the needs of business in different ways some states choose to go down the low cost low tax low regulation route and other states don't they go down the route of higher levels of productivity the both our systems fulfill the needs of business but they fulfill different needs and again that's one of the arguments I think we need to engage in how they might more effectively meet those needs in order to also meet the needs of citizens something else I argue in the book and map out is that actually corporate welfare exists with social welfare along the continuum that actually although the assumption is often made that the state will make this kind of provision and this kind of provision only services of the needs of either capital or labor I think that's not quite right again what this diagram lays out is that social welfare exists or might be perceived to exist at different forms of the different sort of extents of the continuum but that actually in terms of the provision that we see very few forms of provision exclusively service either in the interests of business or the interests of capital and here we have to make another distinction between business needs in general and the needs of individual corporations so there is provision that's necessary for capital in general infrastructure spending legal instruments without these corporations couldn't exist but when we look down at the level of the individual corporation I think this is going to be elaborated in the in subsequent talks there is a whole range of provision that that benefits individual corporations but doesn't necessarily benefit all corporations in the same way so in setting out the continuum I want to emphasize the the possible trade-offs and the relationship between different forms of provision the most the purest form of corporate welfare I think is a subsidy or grant but I've already indicated that a subsidy or grant could actually be beneficial to citizens as well at least to people working in within a corporation the goals are going to be costs to that as well but but they could be benefits there and then the personal social services being the purest form of social welfare that brings fewest benefits to corporations but not corporations that contract with the state in order to deliver social care services mind you so here again you know there's a difference between individual capital and or capital's individual corporations and corporations in general okay that's the the sort of the background in the next 10 minutes and hopefully I'll be able to do this in 10 minutes I want to turn to the data and I want to I want to first of all emphasize something which is really important here my academic background is the social policy in the welfare state and the welfare state is one of those controversial areas of the state or contested area of the state where there's huge amounts of work I could I could tell you almost anything about a welfare someone on social welfare we have research to tell us what time people on benefits get up out of bed in the morning what they do with their life whether they feel whether they're incentivized or disincentivized by the benefits they receive we're pretty aware about how much all benefits cost although most people over overestimate how much is actually paid on social welfare because of the political environment in which we exist we know very little about corporate welfare we know very little about corporate subsidies these issues are not placed on the political agenda in the same way they appear much more on the political agenda in North America mind you in Europe corporate welfare isn't really utilized at all but that doesn't mean that other other other terms are used and substitute for corporate welfare the fact is actually subsidies we know very little about even the most obvious form of corporate welfare we know very little about and so there's very little work so this is what I've been trying to do over the last few years as I said in trying to look at corporate welfare and try to measure corporate welfare somehow so not just looking at the purpose of corporate welfare but trying to balance the debate by looking at how much corporate welfare is worth I can tell you that it's extremely difficult the data is either incomplete or it doesn't exist it's often shrouded in secrecy and comparative data is really problematic as well because why do we have international data the WTO and the European Commission collect subsidy data but they're mainly interested in trade distortion they're mainly interested in big subsidies that go to corporations that distort trade they're not really interested in looking beyond that actually what corporations extract from the state so the data is really problematic I've got around that by beginning to look at individual case studies and that's and my first case study is the UK and I'm gonna share some data from the UK before that though I want to share some more comparative data looking at what we do know and I want to begin with the crisis the economic crisis that struck from 2007 2008 and I want to remind you of the costs of that crisis this is the within a period of neoliberal globalization where corporations don't need the state I want to draw your attention to the huge costs of that assumption the huge costs of withdrawing regulations from corporations because corporations do better without the state and I want to draw your attention in particular to to the UK because the UK took one of the hardest hits as a result of the economic crisis the 81.6% of GDP is the IMF estimate of the UK's exposure to the crisis this is twice as much as the entire government spends in any one year on everything it does so that's 81% that's 81.6% Canada which largely escaped the banking crisis 25% of GDP now this isn't necessarily real it's exposure but it's not real money but upfront government financing is and here I want to draw your attention to Canada 10% of GDP is the upfront costs that the Canadian government spent in order to try to buy its way out of crisis which I believe is around is about the same as the costs of the entire health budget the UK at almost 20% of GDP worth about 250 to 300 billion pounds equivalent which is equivalent to the health and education budgets and a bit of social security thrown in you know these are huge amounts of money and the real cost of course is actually in the cuts to social welfare that have been made now enrolled off the world across a number of countries so that's the crisis but the crisis is a blip isn't it it's it's just one of those things that happen you know very infrequently this is the worst crisis since the 1930s so so governments don't often don't don't usually put this amount of money into their economy and bailing out corporations well they don't but they do make provision in other areas and this is comparative data again either my eyesight is getting worse or this is slightly blurry it's perfectly clear on my screen but the but I think you can see the figures here this is subsidies vast underestimate of what governments actually the provision that governments make to corporations but nonetheless it's the best data that we have what we see is that subsidies over time are reasonably static and what this also interestingly illustrates is that the crisis doesn't make much difference why because as I said subsidy data doesn't include a whole range of things that governments do it doesn't include capital grants it doesn't include no it doesn't include governments buying shares in corporations necessarily doesn't include a whole range of things that governments do so this is subsidies from one under researched area but let me talk about much more over researched area unemployment benefits and let's make some comparisons with unemployment benefits Sweden one of the most generous welfare systems in the in the world provides more in subsidies than it does in unemployment benefits Germany provides more sorry in Germany subsidies slightly lower than than than unemployment benefits in the US unemployment benefits higher than subsidies but mainly because of the crisis and the expansion of unemployment benefits why as part of the stimulus package not because of the needs of people in in Canada Canada spends more on subsidies than it does on unemployment benefits and the UK spends more in subsidies than it does on unemployment benefits and subsidies as I said only present a very partial picture this looks at subsidies the lighter blue color but also looks at capital grant so this is provision that's given to companies in order to subsidize investment and you can see that that inflates the overall value of the package quite significantly and then we have issues like tax expenditures tax expenditures so tax benefits given to corporations the UK is an outlier here this is from the OECD and a study from the OECD which actually didn't include many countries the UK it looks like a generous tax benefits system especially compared to to Germany but the OECD explained this away by saying that the UK was probably just been a bit more upfront about what it was providing rather than actually that it was it was it was such an outlier okay I'm running out of time a little bit so I'm gonna have to really speed up here it turns I want to just quickly run through a number of other benefits government loans government loans and guarantees the private sector the government the government's provide loans typically at below market rates to corporations that results in a subsidy here worth 4.6 billion pounds in the UK in 2011-2012 but it also provides provision which subsidizes which would especially as a result of the globe of the crisis provides cheap money to banks which then can be loaned on at more expensive rate so there's a subsidy from consumers governments during this particular time as well are typically lending at a higher rate from external sources at a higher rate of interest and they're subsequently providing to the banks which results in another subsidy I'm not going to go through the figures because I haven't got time equity financing buying up shares which are likely to be worth a lot less when governments actually come round to sell them especially when they're taking over bad assets from from from banks wage subsidies is a really interesting one active social policy which has been rolled across rolled out across the world is a way of trying to use the welfare benefits system to price people into work the result of that in the UK is that half of those in employment sorry sorry half of the total income of the of 20% of workers is provided by the state in tax credits and housing benefits is a massive wage subsidy to individuals 40% of all workers receive some form of state top-up benefit in the UK now corporate taxation I've already talked about tax breaks tax avoidance we also have to factor in that into this health the public health service in in in countries like the UK and Canada save corporations money especially when compared with the US and the amount that we're looking at is about five billion pounds for the UK in savings and that's after taking into account the contributions that corporations make we have insurance services advocacy and support education and training and procurement the overall estimate that I reached is about 160 billion pound in the UK loan which is equivalent to 10% of UK GDP roughly the size of the combined health and defense budgets and it's about 60 billion pounds more than corporations contributing taxation so again you know we have to really take these things into account the last couple of minutes I want to share some some data that that I looked at specifically for this well I in the in the case of Canada this on the on the left hand side these are the biggest corporate beneficiaries of state provision direct state provision in the UK in the on the right hand side the the biggest beneficiaries of state largest in Canada it's it's from the Sprazer Institute and covers a larger sort of time period what's really interesting here is actually not just looking at the numbers these are really significant mind you but also Rolls-Royce Bombardier and Ford are currently not only having contributions from the UK government but also the Canadian government this is again something else we something that's really under research and I think it would be really useful to look at this to look at actually corporate provision in a number of difference in number of different states and I want to second to last slide talk about Amazon because Amazon is really interesting case study Amazon was recently accused along with Google and Starbucks in the UK of using aggressive tax avoidance measures Amazon paid 1.8 million pounds in tax on sales of 3.3.5 billion pounds in 2011 in the UK effective an effective corporate tax rate of 0.05% corporate tax in the UK is low but it's not that low they should have been paying about 23% that same year though it also made a claim and was awarded 7.7 million pounds from the Scottish government and 11 million pounds from the Welsh Assembly to help build two new warehouses again we have to look at the complete picture here if Amazon want that provision then surely they have to contribute more and that brings them to the conclusions as I mentioned before corporate welfare I think is essential it's essential to modern capitalism that's not a new thing corporations couldn't exist without form without state assistance its value to business and and cost of the taxpayers is largely hidden though subsidies and direct grants cost more than unemployment benefits in many states businesses extract far more from the UK and I'm sure else were than they presently contribute corporate welfare I think can be used in a way that would actually underpin stability and socially sustainable investment but it can also facilitate short-termism and predatory capitalism and that's a debate that I get debate again that I think we need to have we need to research corporate welfare and engage in a more informed debate about what would constitute the appropriate balance between corporate welfare and social welfare in terms of tax contributions and overall consumption and and how corporate welfare might be utilized in order to underpin more sustainable and more equitable growth in future one of the things that we could do is make corporate welfare more conditional on faith so paid to corporate citizens or made to corporate citizens who fulfill particular duties and maybe again we can we can discuss that in the questions later okay I'm going to hand out over to more thank you I like these mics remind me reminds me when I was in a punk rock band at the time just weird things happening Jason I'm counting on you so I need to use this one yeah well everybody it's a real pleasure yeah you can take it it's a real pleasure for me to be here thank you very much cussing that the Canadian pharmaceutical sector I went from a knowledge-based economy to corporate welfare so this is a bit less conceptual a bit more empirical about what's going on here in Canada so in terms of outline how is the Canadian pharmaceutical sex sector a success story what went wrong and then the cost and benefits of what we call innovation policy or we could see the corporate welfare in the sector and then just a quick look at emerging trends the strength of the knowledge-based economy in the pharmaceutical sector is just you know narrative it's a well before 1987 the focus was on the generic sector you we had stuff like compulsory licensing so it's a possibility to circumvent patents for drugs and under Maloney they decided to beef up the old intellectual property law in Canada when it comes to brand name drugs and it allows the real development of the brand name pharmaceutical sector so we created an innovative knowledge-based sector with a surge in R&D investment in the creation of thousands of job in the brand name pharmaceutical sector and yes absolutely we did that because at the time under Brian Maloney we said okay we accept to beef up the patent law in order to help you guys in the brand name pharmaceutical sector but in exchange what we want is we want you to invest 10% of all your cells in Canada into R&D in Canada as well in order to develop the sector it was a bit of a gentleman's agreement but it worked so what we saw if the main indicator we use to measure the intensity of R&D this is the R&D to sales ratio so it went from 6% to 11.5% when we look at all patentees RX&D patentees this is RX&D this is the lobby group for the brand name pharmaceutical sector so so the larger pharmaceutical companies in Canada. Support the pharmaceutical sector yes Quebec is the main cheerleader keep in mind generic sector it's mostly in Ontario so Ontario was trying to slow down this idea of beefing up the patent law and Quebec was saying no we want this it's a coalition of entrepreneurs industrial lobbies and policymakers strongly advocated we need to beef up patent law in Canada beyond what the Eastman Commission was suggesting in 1984 and so yes we change the patent law but Canada also implemented very important tax credits for research and development as well we do have also a very generous pricing policy when we beef up the patent law we said well we'll have this watchdog of the industry which is the PMPRB the Patent and Medicine Price Review Board to make sure that these companies do not abuse their monopoly power so we decided to regulate the way we price brand name drugs patented drugs in Canada and the problem is that we decided to price the drugs we use seven comparator countries the one that had the highest r&d to sales ratio and we decided okay the maximum we can have in terms of prices in Canada it's the median of these seven countries problem the basket included the four most expensive countries in the world when it comes to patented drugs so we have an official policy in Canada which is still the same to always be the fourth the world's fourth fourth most expensive country which is kind of weird Quebec implemented what we call a 15 years rule so even if there is an expiry of the patent for a specific drug we give 15 years of exclusivity in Quebec it was repeal in last January I was very happy about that I was with a bit of a fight and also a lot of direct subsidies both in Quebec and Ontario we'll see that a bit more closely later on so if we look in terms of comparison with other countries so this is Quebec in Canada sorry this is in French this is total per capita expenditures in prescription drugs so this is not just brand name this is all prescription drugs and the thing is after the United States Quebec Canada were the second most costly country in terms of cost per capita but thing is all the other OECD countries well almost all others OECD country do have universal pharmacare so do have much better access to prescription drugs than what we do in Canada so in fact we're paying more it's not because people have better access no we have less access than many other countries if we compare just the retail prices for the same volume of pharmaceuticals in OECD countries this is a bit dated but for different reasons it's better for this to be dated than the newer comparisons we have what we see is that Canada and Quebec their relative retail prices it's even more important than what it is in the United States especially when it comes to generics we're still protecting a lot the generic sector in Canada and still the generic generics in Canada cost twice as much than the prices you see in the United States so in terms of much higher prices yes Canada as much higher prices than most OECD countries and what for me is more stressful it's this real yearly growth in per capita drug costs so this is the growth in drug costs in real terms per capita and there's two countries among OECD countries before well I excluded Eastern Europe but otherwise we only have two countries Ireland and Greece but this isn't in purchasing power parity so this is not because the prices increase so much in these countries it's just there was a collapse of the purchasing power parity so for me this is very problematic we're paying the highest cost per capita when it comes to drug and at the same time we have one of the most important growth in drug cost so a success story yes until the mid 1990s but then afterwards basically a collapse of this whole sector in Canada and what is the response if we have a collapse of the sector well let's shovel more money to drug companies in order for them to to try to keep up and continue employing people so when it comes to RX R&D to sales ratio in 2011 Canada I mean we're here 5.6% as compared to I mean we're behind countries like you know Croatia Cyprus Spain Romania so we need to stop thinking that oh wow where this power hub in terms of innovation and development in the pharmaceutical sector so what went wrong for example in Quebec we last we lost almost half of the employment in that sector it's in the rest of Canada we lost 18% a bit of an increase for generation and keep in mind when we talk about employment in the pharmaceutical sector I mean 17% it's R&D the bulk it's marketing and administration this is 57 plus distribution 59% so keep in mind that this is what we're talking about first and especially that the if you're a sales rep you're being paid 30% more than if you're a researcher in the sector so so what we saw you we saw the collapse in this R&D to sales ratio so this is R&D that was well leveling up a bit of a decline at the end but revenues continue to increase during all this time so it's not a question of we need to shovel more money to the sector and by some kind of magic employment will grow back and investment in the sector will come back to Canada I mean they're making a lot of money it's a this is something different this is a comparison I like to do this is based on the fortune 500 it's impossible to have profit rates for Canadian drug companies I mean these are global companies so based on the fortune 500 so this is a comparison of the rate return revenues for dominant drug companies in blue so drug companies appearing in the fortune 500 as compared to returns on revenues for the dominant corporations in other industrial sectors and what we see is that since the mid 1980s some things going on is just wow there is this increase in terms of profitability in the sector and even if things and they say well it's that going very well we have a lot of cost-cutting we need to lay off people well 2012 is still the third most profitable year ever for this sector so we need to keep that in mind as well so something is happening and yes especially when it comes to intellectual property policy we beefed up exclusivity monopoly power for the knowledge based sector but when we look in terms of innovation problem is when it comes to innovation it's very difficult to measure innovation in therapeutic terms so what it means in terms of health outcomes for the population one standard for that is not a very good one it's the introduction of new molecular entities the global introductions would decrease but the thing is in 1960s it was way easier to introduce something on the market than today this is for me way more important this is thank you this is what visit independent physicians without any conflict of interest think in terms of what do these drugs represent in terms of their therapeutic advance as compared to the drugs that are already on the market so the blue proportion it's the drugs that have positive therapeutic value in red no additional therapeutic value and in green negative therapeutic value the risks are dwarfing the benefits so these drugs just shouldn't be on the market so in fact the this is based on the the medical journal prescrire and for them it's not clear if we have an improvement or a regression of the pharmacopeia I won't go into the more conceptual stuff basically I like to use a lot torstein veblen to think about corporate welfare we need to disconnect the business capacity to increase their earnings versus the industrial production good that produce material welfare to the community for veblen basically we need to disconnect the two and business income is based on the logic of regulatory capture the way you can influence science you can influence media the way you can build your power institutionally by shaping the dominant discourse and the dominant agenda so I use the blend a lot I won't go into that and if the blend in Foucault in fact to understand structural power is just as compared to Foucault Foucault saying we cannot accumulate power there is no center so you cannot just accumulate power I think that with the figure of the corporation you have these huge entities that can deploy all these strategies to I like to call this this political economy of influence in every interstice of our society to realign the discourse in order to serve their own interests a bit better so it's not perfect but you do have these strategies in place and this is what I think it's important to understand very quickly on this cost and benefit of innovation policy so we mentioned there is tax credits the cost of pricing policy for patented drugs in Canada the 15 years rule direct subsidies I won't go into the calculation in terms of the pricing policy it depends to which country you compare yourself well Kevin is here if we compare yourself to the UK the UK represent 2.5 percent of the world market share when it comes to prescription drugs this is UK is almost double the population than what we have in Canada and the universal pharma care and everybody the rates in terms of the people not having access to prescription drugs because of financial reasons is way more lower in the UK than what it is in Canada Canada have the population we represent 2.6 percent of the world market shares when it comes to prescription drugs so if we had for example prices like in the UK so something like 30% less no we pay 30% more here than in the UK so 20% less more or less if we compare yourself to New Zealand in New Zealand they pay 45% less than what it is in Canada so it depends which country you come and what I did I decided to remain very conservative if we go from the from the fourth most expensive country in the world to the world's six most expensive country savings could be something like 1.95 billion per year in additional costs for patented drugs 15 years old in Quebec the cost 193 millions direct subsidies well Ontario announces biopharmaceutical investment program 2008 the year after Quebec you know we need to do the same because otherwise Ontario will be stealing some investment from us so they arrive with the new investment biopharmaceutical so a couple of millions as well so if we put that in the table tax subsidies for R&D this is all the stuff we do to attract investment R&D investment in the pharmaceutical sector so tax subsidies for R&D in terms of the tax credits 461 millions additional costs due to higher prices under the most conservative assumptions almost two billions Quebec 15 years rule direct public subsidies the minimum 57 million so in the end 2.6 billion in terms of direct and indirect public financial support now let's compare that to the benefits to the spin-offs we get from this sector all this is to attract R&D investment well total R&D in 2011 was 960 million of which we paid 461 million in tax credits so the total private spending in R&D net of tax credits half a billion more or less so we just paid so if we if we take out the tax subsidies we take the rest we just paid 2.2 billion in public financial support under the most conservative assumptions in order to generate half a billion in private R&D expenditures and of tax credits if we use New Zealand style pricing policy we could have saved up to 8.3 billion when it comes to the price of patented drugs while still respecting the basic patent law with TRIPS agreements and everything so what are the emerging trends well it's it's going bad we have a problem we need to do something about that so what do we do well we just announced the new CETA agreement just oh the problem is that Canada was not at par with Europe in terms of patent policy so let's increase patent protection by two years and also well a right of appeal I won't go into that we did the estimate that what it means is that starting in 2023 it will artificially inflate the price of drugs in Canada by seven percent so which is the way to cope with this problem of oh we don't have enough investment let's just shovel more money what we see as well it's most countries develop one of the reasons that in some countries it's not going so well with the pharmaceutical sector is that most countries realize that well you know more than 80 percent of the new drugs that arrive in the market do not represent any theoretic advance so some countries decided let's build the institutional capacity to get value for money so this is what we call health technology assessment so if I'm paying this amount of money for your drug maybe I would be better spending this money in an alternative treatment that would have better health outcomes so I refuse to pay for some something that is more expensive and that do not provide additional therapeutic benefits and what we see right now it's systematically frontal attacks against this capacity of health technology assessment with the nice national institute for clinical excellence in the UK in BC with what is happening with the therapeutic initiatives okay they're filming I won't let's just say that they revised the pharmaceutical policy in BC which was a bit more progressive than in other provinces and the pharmaceutical task force that was put in place to revise the BC pharmaceutical policy committee nine people five of them with huge conflict of interest with the drug companies and the chair of the task force was the the chair of rxnd the industrial lobby group for the sector so they are yes they have new policy now in BC especially the elimination of the health technology assessment the clinical assessment being done by this tabletics initiative they just announced recently that the TI will get back some of its funding but basically it's it's not working the way it was doing before something like vioxx never entered BC because you had an organization like TI that was there to say no this drug is very expensive you have huge adverse effects linked to this drug we should not be paying for that so it did not enter how many people died because of vioxx in the united states you know there was this recall of two attackers two years ago because the pill was getting stuck how many people died because of that we leave between 35 and 40 people estimation for vioxx 40 000 people died because of taking vioxx instead of an alternative treatment so you and this is not something that the doctor can know this is based on the capture of the science of measuring the benefits versus the adverse effects and you need institutional capacity to be able to measure that now what we have deeper regulatory capture astroturf organization to increase prices i'm i'm still being filmed on on this i won't go into the details many patient-vocacy groups are simply funded by drug companies especially the larger one doesn't mean that these are bad organizations most of these organizations they have fantastic people trying to do right thing but conflicts of interest is just everywhere and sometimes in the way they shape their own discourse it's really they see their their purpose as to shame the governments in order to make sure that the government accept to reimburse any drugs at any price and this is something that has been very very efficient to make sure that we pay for very expensive prices for drugs that sometimes do not represent any therapeutic advance thank you just last point and the growing influence on public institution while rising dependency of university of corporate funding and the reorientation of public research in favor of commercial needs is just when we talk about this university industry collaboration keep in mind that the business model of the industry when it comes to research it's not about basic research it's really about product development and when we talk about industry university collaboration most of the time it's to put the the the priority the commercial priorities inside the the public research and this is something we need to take into account so the response to it's going it's not going well well it it has been until now just deeper regulatory capture oh yes i wrote that for for kevin i need to to quote this in corporate capitalism value is not produced only by the production of material wealth but also and foremost by the transformations of social structures norms legislation regulations and culture from their capital accumulation is less the accumulation of production goods than a process of social transformation actively influenced by dominant corporations so this is to sum up my whole approach when i'm talking about these issues i think that more theoretically that sums it well thank you well that's interesting how do i do this oh good okay is there a way i can see it there too yep it's weird all right well i can't see it on the screen here so i'm just going to also refer to what i can see here that's fine um first of all thank you very much for the invitation to participate in this workshop um i was very excited to see the title and have an opportunity to talk about corporate welfare in the mining sector particularly um using a political perspective i'm going to talk less about the economic elements which are absolutely substantial and important to consider um but recently we've been quite caught up in just the depth to which our state is captured by the mining industry and very much inclusion and complicity with mining companies and the sorts of abuses that we're seeing consistently overseas i'm also going to take a focus mostly on on our foreign policy as opposed to a domestic mining policy although i think there's important elements there as well to explore further so first of all just to give a really broad and quick picture of what the globalization of the canadian mining sector has amounted to canada over the past 25 years has really specialized as a source of equity financing for the most speculative uh parts of the mining the world the global mining sector currently canada's home to uh well 75 percent of the world's mining companies are registered in canada that doesn't mean the headquarter here and some 60 list on canadian stock exchanges what that um breaking that out just a little bit um canada provides as much equity financing to the global mining industry as london does more or less but we provide more than 80 percent of the equity individual equity financings what that boils down to is that canada has really specialized in financing the junior mining sector or the exploration phase of mining so this is one of the reasons why canadian companies are often the face the first face that communities encounter when mining activities start to take place on their lands because the canadian stock exchanges which are loosely regulated have really fostered and facilitated a casino style financing of the mining industry facilitating fast money for some of the most speculative actors particularly in the precious metals sector so gold and silver uh figure more than say some of the industrial metals that said we do have our complement of large-scale actors too so we've got some 60 hundred plus companies uh registered here in canada and more than half of their projects are here in canada so there's important ways in which the canadian uh government and in systems particularly in mining and canada is regulated at the provincial level so talking about uh mining in canada note so out of canada involves some different elements um but nonetheless we have done lots to facilitate mining expansion here at home as much as we're doing abroad so i want to focus on some of the the the political uh sides of this and um this is a quote from a columbian activist lawyer unionist francisco ramires cuillard who a number of years ago said when companies say they obey the law they mean their law and it's important to note that throughout the last 30 years as um there's been a whole neoliberal series of neoliberal reforms to mining laws around the world implemented in some hundred countries backed by the world bank agenda very much supported by canada most directly in some companies such as columbia where we actually financed um mining law reforms in the mid 1990s that were approved in 2001 that involved a dismantling of state companies where they existed and sort of loosening up of the administrative and environmental assessment regimes that would enable new projects to be approved and literally um vast swaths of national territory granted in mining concessions to foreign mining companies um literally 20 percent of peruvian territory is currently under mining concession uh when we talk about potentially if impacted mining communities in that that country we're talking of upwards of 50 percent of campesino communities in the highlands of that country so major um territorial uh capture potential capture in in these countries and what this has given rise to and i think and and where i want to go in terms of the focusing some of the the anecdotes i'd like to share in terms of the sort of political supports that we're seeing today and the re-entrenchment and deepening entrenchment of this model both neoliberal model but also neocolonial model very importantly um has been the rise of tremendous conflict uh tremendous pushback one of the biggest um i think it was Ernst um Ernst and what's his friend uh anyway major analyst group this year uh and every year i analyze what the sort of top 10 problems are for the mining industry worldwide and i think number four on that was was social license so the lack of community support for new mining projects and um this was a quite an important conflict that arose in tempo grande through the late 1990s uh northern peru and uh early early 2000s where mango and lemon farmers contested that half of their town was going to be moved in order to dig it up to build a big open pit gold mine um and they successfully sent Manhattan minerals running after consistent five or six years of of tough struggle in which they managed to win their municipality and uh basically shut down the country but nonetheless it's in the context of increasing the conflict both at the very local level but they also become very national in many countries and throughout latin america which is where i focus um we've seen localized conflicts start to push back on the neoliberal mining reforms that have been instituted in their countries be it in some of the most neoliberal staunchly neoliberal countries or in some of the more uh so-called post-neoliberal states and it's in that context that i think we're seeing ever-deepening support of uh political supports from the canadian state to canadian mining companies and this was a quote that was um actually cited by dr tony bevington from manchester university when he testified to canadian parliamentary commission that was hearing on the role of the private sector in uh overseas development assistance uh a year ago and he got this quote from a latin american ministry of mines and energy who said as far as i can tell the canadian ambassador here is a representative for canadian mining companies and this has been something that we've started to uh get a little bit more insight into through a series of access to information requests um just this last year we were able to publish a report and i i think it's worth telling this story about blackfire exploration in Chiapas Mexico um this is a very small company i think with questionable social benefit to anybody aside from the two brothers that are the major owners of this private company based in calgary operated a relatively small open pit barite mine in Chiapas the first open pit operation to get started in the state uh from 2007 to 2009 we started to hear about this conflict uh in late 2009 and particularly around the time in november of that year when mariano abarca a notable community leader was assassinated the mine was closed several days later by the state environmental authority for environmental and social impacts and revelations were published in the global mail um about the company having paid made systematic payments directly into the personal bank account with the local mayor um and this came to light when the company complained uh that it was being extorted by the mayor and that the mayor was asking for too many favors including a night with this former playboy model new york marcos in response we sent a delegation to Chiapas at that time what we knew about what was going on with the embassy was that the embassy was taking sort of a backseat position saying oh well the investigation of the murder that's responsibility of the mexican state um there was actually a very high level delegation that happened to go down at the same time with minister then who was then the foreign minister uh peter kent the governor general michelle at the time they refused to meet with those who are affected um and peter kent uh who's said a number of charming things at that time reinforced his belief in the responsibility of how responsible Canadian mining companies are and we had information at this time that the embassy had sent a political counselor uh to chiapas at the end of january and actually spoke with some of the affected communities um at the time and so when we sent a delegation to chiapas together with the united steel workers and common frontiers in march of that year to interview local communities to meet with the embassy we tried to get a copy of that report we wanted to know what the embassy knew and why or how they were responding the way they did we weren't able to get the report so some months later we submitted an access to information requested information to access requests and 18 months after that um received 960 pages which gave us a good sense of what was going on not just post murder but actually starting from before the mine the mine was actually installed and i think this is really notable in terms of this this concept that companies don't need the state we actually saw the embassy holding black fires hand um and this isn't gold core this isn't bear gold this is a two-bit private company from calgary um and what we saw is that the embassy hadn't just visited the mine in january but had actually visited at least three times before starting from before the mine went into installation um and and that within the first year the absolute essential nature of the embassy supports in terms of having that mine opened in mexico you have a situation where the federal government controls mining regulation so the state has very little incentive to actually involve itself so the embassy was needed to put pressure on to the state government to say hey you guys need to support this mine and that's what they did and so as of september of 2008 shortly after the mine finally gets started up shortly after the mine the mining company manages to get a couple agreements with local communities the we there's an email from blackfire to the embassy political counselor saying say thanks to the ambassador for us because we couldn't have done it without you um the embassy is absolutely aware of growing opposition to the mine throughout 2008 is absolutely aware that thousands of people are marching in the street against the the operations and in 2009 this is a very crucial moment because this is a time at which uh delegation travels 13 hours from Chiapas to Mexico City to protest in front of the canadian embassy and mariano abarca who's later murdered uh talks directly to a canadian embassy official and says there are uh shock troops that are people that are armed who are working for the mining company who are intimidating those of us who are opposed in questioning the mine operation 1400 letters are received by the embassy that's information that we found out through these documentation this documentation expressing dire worry for the life of mariano abarca when he is arrested off of the street two weeks later the embassy and as opposed to taking action to make sure that mariano's life is is is respected and recognizing and knowing or there's indications that the the embassy knew that the charges that were laid trumped up charges that were laid in order to get mariano uh arrested were actually filed by the company representatives itself op response in in response to secure the workers and the interests of the company based on a single email from the company that same month they make a visit to Chiapas a couple of months later when they visit the mine site and talk to state officials but um make no effort to talk to or investigate the serious allegations that they've heard about um opponents to the mine being threatened and intimidated a couple months later we have the murder and most importantly even post murder post mine closure and post evidence that the company has been bribing the local mayor which has led to an rcmp investigation that's still open we see another uh evidence that the embassy continues to stand up for the company and even advise it on how to use NAFTA to sue the Chiapas government so and in august of this year i had an opportunity to visit the embassy with members of the abarca family and who who stated their concern to the embassy officials asking for them to push for justice in mariano's case to push for finalization of the corruption and investigation against blackfire and to ensure that the lives of other mexican activists who are being threatened and criminalized as a result of canadian mining operations um that they would help to protect them the embassy made no effort to defend its actions in fact and when we asked them what could they do in the case of uh of other serious threats against mexican activists they said that that would be tantamot talking to mexican officials on on the behalf of other mexicans that would be threatened would be tantamot to infuriate in sovereignty meanwhile pressuring the Chiapas state was not uh considered interfering in state sovereignty so we're seeing i think this is a micro example but it's one of many examples we've been able to at least document 12 other examples in which the canadian embassy has intervened on canadian corporations behalf in situations of conflict where there's either direct opposition from communities or serious abuses that have been made evident or in which there are efforts to make progressive reforms to mining laws and we've got at least 12 that we've been able to document i think some of the bigger corporations have uh very particular actors working on their behalf and this is where i wanted to get a little bit into the revolving door it's notable um that fresh out of office in 1993 brian mulroney was appointed to the international advisory committee of barrett gold where he remains john kretien now working for ivenhole resources notable for its investments in in berma gold cor has a former diplomat on its board of directors and also has its own private jet with which it can get parliamentarians to go down to guatemala when it needs needs them to such as we saw this time last year but also just the level of what's happening with canadian foreign policy um the one one of the big things that mining watch canada has been consistently advocating for is that we need mandatory regulation to control the overseas operations from canada of the overseas operations of of canadian mining companies what we have though is a voluntary um regimen that's been called the corporate social responsibility strategy which is very well designed to protect business um to better promote its interests and not to do anything to shore up um to to restrict to deal with abuses or to to limit them at all anyway um and and i think i'll just focus on on two elements of this one that's been very controversial and in the media in the last couple of years has been how the canadian international development agency which is now being incorporated into the department of foreign affairs uh has an expanded mandate to promote strategic relationships between ngo's and the mining sector and mining companies in countries in which they're involved this is um not just a way of trying to gain a foothold into local communities i think it's also a very convenient way to divide civil society here in canada um and right now in terms of the process of of the merger that's happening uh with with the restructuring happening within foreign affairs we've in the last month it's come to light that rio tinto elcan the ceo is also on the advising board for that process and and i think in terms of policy change and the deepening and entrenching further entrenchment of neocolonial and neoliberal policies in in in the mining sector in different countries in which canada is invested it's absolutely horrendous to see that the canadian government has really taken the lead in terms of having a seven-year moratorium on new mining projects in honduras lifted this last year with a c to sponsored mining law that was approved in january of this year which is not only going to open the mining sector once again in a country that is now the murder capital of of of the region and in which we just saw uh elections take place on sunday where foreign observers were intimidated and threatened where members of the opposition party the new party libre were a couple were killed on on friday night um that this is the country which canada has chosen to uh really get involved deeply in terms of policy change including a two percent tax on new mining operations that would be given for security uh in a moment in which the police service is being militarized and we're now seeing soldiers uh being trained and going out with police in order to protect uh economic interests um and just finally uh i think sort of the lock and key on on these policies and this has been ongoing the last 20 plus years from oroni right through to harper has been the free trade agenda which extractive industry companies have been very um happy to to use um we saw this happen in the the case with black fire in chiapas they threatened an 800 million lawsuit against against the state pacific remining another junior mining company based in vancouver is currently suing the state of el Salvador for $315 million dollars uh in the world bank international tribunal for the state not having granted it a permit to put an open pit mine into operation in the northern part of that country where local communities were tremendously opposed because of the impacts that they've seen of large-scale mining on the lives of other communities infinito gold another private calgary based firm that's threatening costarico with a billion dollar suit and peru which is already facing six billion dollars in suits also facing threats from another junior company in vancouver what does that up to where's this all going nowhere good we saw uh two days ago the launch of canada's global markets action plan which included as part of its um planned to further promote canadian economic interest abroad the coining of the concept of economic diplomacy what does this mean all diplomatic assets of the government of canada will be marshaled on behalf of the private sector in order to achieve the stated objectives within key foreign markets i don't know how they could further marshal the diplomatic service on on behalf of canadian mining companies but whatever it takes they're going to do it and i think the costs of this aside from the externalization of of the cost of large-scale mining which is part and parcel of the model of mining that that we live with here at home and that people are living with abroad in terms of the in terms of the externalization of both the social and environmental impacts i think we're also seeing the undermining of democracy and a real costs to democracy both here and and and in other countries in which canadian mining companies are operating we heard the news a month and a half ago around how our overseas spy service is gathering intelligence on mines and energy in ministries such as in brazil um we know that the spy agencies the federal agency federal government and private uh extractive companies have been meeting regularly to share information um including that and that they've stepped up surveillance of indigenous and environmental groups that are opposed to the tar sands um wouldn't be surprised with other projects as well and that there's an ever closer association we're seeing this discursive change in the last two years where the federal government is now um making a closer association between the concept of economic interest and national interest which then justifies and implies that those opposed are now a security threat to canada um this reduction of funding on the NGO sector and millions being spent on auditing to carry to witch hunt to try to intimidate civil society organizations here in canada uh to not participate in political activity and a silencing of federal scientists we could also talk about the real retrograde setbacks in terms of environmental legislation here and other efforts to try to privatize indigenous lands in canada et cetera so i think that's the end of the depressing picture and i would agree in terms of the the need to advocate for uh stronger institutions and and and stronger legislation in canada i'm just think that we've got a tremendous political problem that we have to get over first thanks so my question is primarily directed towards kevin um i was wondering because especially during this bailout phase when banks are being bailed out for financial uh misgivings and whatnot there were some who voiced um let's say opposition to this saying that the bank should not have been bailed out at all whereas others you know i guess a less vocal crowd have said something to the effect of there should have been a bailout but of the individuals and communities that were most affected by the financial crisis i'm just wondering if you think this is something that's rhetorical something you can really only say after the fact or if there's any validity to that concept in itself i think i i think it's a really good question and it's um and it's and it's and it's one that actually is that is quite difficult to answer because um if the government if governments hadn't bailed out the banks i think that individuals would have suffered hugely and um and and so in a way governments needed to bail out the banks i think to look at we have to look though deeper into that problem i think that um the uh the issue is um should we've had a banking system that was too big to fail i think that's a really important question and um and could governments have done something about that and of course they could have and um and once then once governments bail out the banks what do they do um and the worst thing i think they can do is simply allow them to continue as they were before and um and to be and to and to be quick to um reprivatize them and because that's the things to be that seems to be happening now um governments do um are keen to um to to reprivatize um without real without many conditions and um and i think it would be would make much more sense to actually break up the banks um since the crisis there's actually been a concentration of the financial sector and i think that governments actually in controlling um bank assets uh could do something about that um in in in terms of but i think in terms of should they shouldn't they have bailed out i i think they didn't really i think i think most governments probably didn't really have a choice and the world would look a lot worse today probably if they hadn't have bailed them out then um then the fact that they did uh but of course uh i think that's a very that's that that's a difficult statement to make because actually i i don't necessarily want to see public resources going to bailing out banks um but maybe actually as i said what what what should have been done is that we should have um we should have bailed out the banks but then we um then we should have imposed much tighter controls over them and actually saw them as state estate assets uh so that we're actually nationalizing the banking sector as opposed to providing um as opposed to simply bailing them out and then as i said being in a rush to reprivatize them so just a question it sounded from your presentation that Kevin that you were speaking to the rehabilitation of the term or the widening of the term corporate welfare it's usually been used as a cudgel with a fairly narrow focus uh and i just wondered perhaps from from the different members of the panel to what extent um the concept of corporate welfare might be useful in the different areas that you're tackling so from from the mining sector it feels to me more like criminal behavior as opposed to welfare but but you could uh so i'm just trying to get a sense of to what extent is this term useful uh politically to uh to widen the cracks or to or to find a weak chink uh just quickly i um i am trying to widen the term especially in the way that the term is used in in a north american sense so i'm definitely i'm trying to broaden it that um is it useful to do so um politically actually corporate welfare as a term just actually just play quite well in um in in highlighting the fact that corporations get a huge amount from the state so politically i think it's i think it's it's it's a loaded term and that's both a good and a bad thing um what i think is important is that um we view corporate welfare alongside social welfare as i said and we actually see these two things as um as as being um part of just what the state does and um and so that's why for me it's it's useful um i i did i i was reluctant to use this term though for some time and i did try and think about other terms that might be used um corporate-centered social policy corporate-centered public policy those kind of playing around with eyes those ideas but i actually seem to me to be it seemed to me to be more useful to reconceptualize and to um integrate within um the sort of academic discourse the notion of corporate welfare in the same way that the welfare state was integrated into academic discourse but obviously that takes time and there is a risk especially in north america where corporate welfare means something in in europe corporate welfare means much less so it's actually easier to reconceptualize corporate welfare um in north america obviously it doesn't mean something it means something slightly or it's it's it's defined uh more completely but it's and it's and it's defined unfortunately by the right and so there there is a i do accept there's a risk um but i i can't think of a better term at the moment no it's an interesting question uh and in order to to to kind of uh bring back the concept in academic terms i i leave it to kevin this this is not what i'm trying to do uh but i i think this is an interesting thing to do it's just the way usually i academically i discuss these things it's more about trying to understand the nature of what i what i call corporate capitalism so what are the dynamics of capital accumulation in a society dominated by dominant corporations that have huge influencing power over uh existing institutions but politically i must say the the use of corporate welfare can be very useful it's just when i meet with the policy makers this is the type of term i like to use corporate welfare regulatory capture and i like to present myself you know as a fiscal conservative i want to have value for the money i'm spending you know uh and also uh when it comes to to to to is more specifically to drugs it's just well i i do want to have more market competition by its essence market competition lowers profit rates uh and what we see in the dynamics in corporate capitalism it's all these capacity to circumvent market competition in a series of different strategies and what i like to say no no i want to we we should have a tendering process for most of the drugs i think should be it could be a great idea to lower down the prices this is what they do in new zealand for example and how to adapt the mechanism of market competition and this is kind of a i sound kind of very conservative and right-wing here but but these uh politically and strategically these terms can also be very fruitful in order to convince it when i'm doing uh interviews with uh radio shows in calgary is just i talk about market competition and because if i defend universal pharma care is just oh this is the big state big programs no i'm talking about market competition right now you we're fixing prices it's corporate welfare this is not acceptable and yes this type of political discourse i think is a very interesting counter discourse politically academically i leave it to kevin he's doing an amazing job well i guess the narratives that we tend to use haven't been framed so much in terms of corporate welfare up until now we've um because we've been really advocating uh in a context in which the government and industry has been pushing corporate social responsibility um one of the counter narratives have been to talk a lot about corporate accountability um that's been sort of one of the key framings i think one of the other key framings that we end up getting into a lot is is talking more about collective and indigenous rights and sort of identifying those independently from um individual rights although those of course come into to play as well and i think one of the other sort of key framings that's coming out of latin america and and um when when you raise the the piece around what sort of capitalism is is this kind of corporate welfare actually fostering i do think in the extractive system we're talking about predatory capitalism we're talking about very we're talking about casino style um high rents um high costs uh business that is offloading the cost especially on to directly effective communities and workers and that's having very narrow capture of benefits for narrow group of people i actually think one of the things that we could do better is getting better about talking about some of the narrow ways in which that those rents are being captured um and and that's something that we've talked at mining watch about trying to do in the coming year especially especially now that some of the discourse has been shifting um into trying to equate mining with development which is precisely what communities have been saying this is not development or this is not the development that we're looking for in many cases and so um in that that frame we have been looking to sort of more more strengthen the tax justice uh frame and and look at who benefits and and and who loses in a little bit more concrete terms yeah okay uh well my question's mostly directed to kevin uh it's actually the the question that you pose yourself about how corporate welfare can be used to reduce corporate harm and increase social justice uh my question is can it uh and does this sort of like reproduce the idea that corporations are more efficient uh there would be more efficient of using the the money as opposed to giving it directly to to people uh and also in terms of uh like when labor sort of like rallies for companies to be bailed out because they're sort of threatened as well that sort of also uh like narrows the the the beneficiaries of the of welfare because it's only targeting a certain population that are employed not only in that company but only in the wage sector and it also tends to sort of like uh reproduce this whole like male wage earner model uh as well uh so anyway so my question is can it be used because my answer probably be no but what's your sort of take on that my questions for Jennifer um you talked a little bit at the end of your talk about the discursive change toward economic interests as national interest I was hoping if you could elaborate a bit more on this around the question of when did this change occur um how else is it manifesting and why hasn't there been more pushback a really great question and can corporate welfare be used in order to increase corporate responsible behavior I guess is the is the number of that question and um and I I think it can but um that but it um but obviously what we need to do if it's if corporate welfare is really to change corporate behavior um is that we have to for one we have to think about corporate welfare much more generally we have to think about corporate welfare being about something other than subsidies this is about the way in which capitalism is run within countries and the way in which capitalism is run within different countries um has a huge impact on how corporations behave within that country um and the um and so how responsible they are at the moment what seems to be happening is that corporate welfare is being used to reward bad corporate behavior um and um and because there isn't that there isn't that there isn't this kind of debate the issue of procurement for example companies are giving procurement contracts um unconditionally in the UK a number of companies are being giving more and more given more and more contracts to run services when they've been investigated for fraud uh and when they're not actually delivering services in anything that looks like an efficient way um and something the public accounts committee has raised is can't we do something about that can't we actually be much more much more selective about how we um award procurement contracts for example uh in relation to uh in relation to um the the broader question um the as I said I actually I actually think that corporations are always getting assistance from the state they just get there's different types of assistance from the state uh and sometimes governments like governments uh aid corporations by relaxing regulations allowing them to employ people at um at um on on poverty wages for example um or um or or reducing their corporate tax rate or or reducing regulations more generally what I would argue is that we could like we could look at this a different way um and actually and actually think about ways in which um the the the dominant model isn't towards lowest common denominator but actually is about um lifting wage rates uh and actually that reduced that that reduces the cost of the state because at the moment actually what states are doing is is they're topping up wages uh for low paid workers so it's it's it's a really complex issue um I would I would say because corporate welfare is actually um you know includes a whole range of things but in a nutshell what corporate wealth what corporate welfare is about is about to me is the way in which capitalism is is run and managed and then the way in which corporations make a profit within that's within uh within that um system and then um how we can give other inducements and other incentives to corporations um other than encourage the kind of predatory behavior that we've talked about so it's about how we use um the corporate welfare in order to um uh change behavior and I think that I think that overall I think that we that that's that's possible because some countries are already doing that some countries actually are much more demanding in terms of how they um in terms of expectations from companies and how they run capitalism um in relation to does this um are there problems with that in terms of reproducing a male breadwinner model it is if we think about corporate welfare just in terms of subsidizing um the big heavy industries uh but as I said corporate corporate welfare for me actually goes far beyond that um there are other problems in terms of maintaining uh corporations that uh that will that will then push up prices and and ultimately consumers will pay I mean that's a that's that that is a um is a risk um but but I think you know as I you're right to raise the issue but as I said the more I've thought about this the more I I just think that actually the the idea that corporations don't have assistance from the state most corporations don't have assistance from the state in some way is a myth um because they do and we just have to then think what then we just then we have to change the nature of the debate because then if we accept that corporations need the state we have to ask them what we can then expect from them um not just in terms of the sort of general behavior but the tax behavior apart from anything else and if I could just maybe add on that that question a little bit because I think there's some interesting examples too where um there have been some public policies that have been implemented in in certain countries that we could point to that have been very helpful I think to better protecting the interests of mining affected communities in particular um both both a couple of good examples from here and a couple of good examples from broad I think right now in in Latin America you're seeing um we're seeing different efforts to try to push back and and limit or restrict some of the most voracious and devastating types of of mining Costa Rica right now is an all-out ban on open pit gold mining six states provinces within Argentina do as well what's interesting about and and now there's also legislation or or efforts to protect and and further implement legislation in in Argentina and Colombia to protect uh fragile ecosystems that are important to vital water supplies for communities but I think what's important in terms of the lessons that are coming from those states in terms of how to implement those and make sure that they stay in place um in a system in which you know that those companies have tremendous economic and political influence has been to combine them with strong social movements and where the the legal and technical responses to the mining industry have had some uh advance they've been supported by really strong uh mobilizations usually cross sectoral mobilizations both at the local and national level um and I think here at home there's a couple of important struggles that have been fought by indigenous communities to really start to question um the free entry model of mining where uh prospectors have can go on to private property and collectively own property without any need for a permit um and or like with very very basic and and lax regime to do so and we've just there was a really important court um decision in Yukon recently that found that uh the Ross River Dene First Nation has the right to prior consultation and consent prior to any concessions being granted on its land and I think increasingly we're going to see more and more cases of that sort being fought at that level not at the stage of exploration not at the stage of of exploitation but rather even before there's a concession so before there's a project before there's a company on your land more defense strategies at that level and I think those are valuable and important aspects of of the struggles that we're seeing fought um on the question with regards to economic and national interest I think it's particularly been in the last two I mean we've started to look a bit at this question with um the international civil liberties monitoring group and and post 9 11 within the anti-terrorist strategy in Canada there has been more inclusion and um seeing uh indigenous and environmental groups that are questioning uh economic interest as being a threat to the state um I think it's been from 2005 or 2006 on that there's been um some of that quite explicitly laid out and and certainly evidence that that the RCMP and CSIS have been carrying out more spy activities but in terms of discursively and really meet in more media spaces I think the last two years in particular um with the conservative government's desperate attempt to protect the interests of corporations and the tar sands and with quite significant and and substantial protests both in the US and in western Canada against the construction of the pipelines that are necessary to ship that oil out of the out of the tar sands um that we've been seeing more of that that shift from Joe Oliver and others that have been in in those positions to do so um that have gotten notable attention and um so I actually think that there has been pushback and I think that the pushback has been more in those spaces maybe not as much here in Ottawa um I think in terms of uh some of the efforts to divide and crack down on on the civil society sector that we're seeing a much reduced civil society sector that's actually super constrained in terms of where it's going and and unfortunately I think people have been organizations have been backing into their own spaces as opposed to um and backing into their own spaces and trying to protect what's there's as opposed to trying to find more uh assertive strategies to push back against the the broader economic agenda right now but um but I do think in terms of the tar sands and some of those those demonstrations that there's there are significant protests um going on and it's precisely for those reasons that that the government's been been speaking the way it has and and trying to criminalize the way it has. I heard a joke on the on the hill in Ottawa. Peter Kahn being the lowest paid lobbyist for for the oil industry. I thought that she was a very good too um on the first question about the starting by mentioning the question of efficiency of corporations I think one literature I think is amazing it's about the birth the origins of corporations late 19th century in the United States for example William Roy on socializing capital and in this literature what you see is the rise of corporations has nothing to do with increasing productivity or increasing efficiency it's really the capacity it's increasing the sabotage capacity of specific organizations over the community and and for example Torshain Veblen when he discusses the issue it's always about the sabotage capacity so basically the your capacity to capture strategic assets of the community and create maximum damage or well this is when you're blackmailing somebody so you're asking for a ransom not to use your sabotage capacity and Veblen defines the intangible assets of the corporations first and foremost well by its efficiency but by its predatory efficiency over the community instead of its productive efficiency I think it's something interesting on the question should we provide corporate welfare in exchange of if they respect social corporate corporate social responsibility or if we receive spin-off I think yes absolutely I think it's one good way to think about the issue is just if we provide privileges to any organization well we as a citizen we should expect something in return and so for example on negotiation of CETA one of the suggestion we're making at the time is that okay if we extend the pattern term by two years this is what we should be asking in exchange in order to make sure that we get out of this system of huge massive public direct and indirect subsidies this is South Korea Japan the way the state interacts with corporation can be way more productive but we need to keep in mind one thing about the nature of the corporation itself if we define it first and foremost by its intangible assets in terms of sabotage capacity let's keep in mind that corporation exists because the states accept these forms of organization to exist as well so we should have also a more radical questioning about is it the most efficient forms of productive organizations we want in our community this is so and we need to also ask this question thanks we're almost out of time and it is Friday afternoon and it is dark out so I will pass the mic to Kevin who wants to say one more thing I do promise because actually I mean I know it's Friday afternoon and it's going to but actually I in terms of this discussion what's really interesting to me and actually Mrs maybe what combines the some of the issues here is that actually not talking about corporate welfare to go back to the issue of corporate welfare I think helps to reinforce the myth and this goes back to both your points that that corporations are incredibly efficient and actually what that what that what that has meant is that most of the programs being put in place by governments now and the name of neoliberalism and the idea of efficient corporations actually is not reinforcing market behavior at all it's actually it's actually just it's actually undermining markets so markets actually so the corporations involved in these kinds of markets have the state on board to lobby for them this is not about this is about not about the market this is about powerful state interests or the case of the pharmaceutical interest interest or the health care more health sector more generally this is about corporations actually being given a license to trade within these areas with guaranteed levels of income or virtually guaranteed levels of income it's not the market the market actually is being undermined it's not being strengthened but we think it's being strengthened because of the dominance of neoliberalism and the discourse that exists which again you know goes back to which which is why I think we need to actually address the discourse that's what I wanted to add okay so I'd really like to thank our presenters today for their really fascinating discussions and particularly want to thank Kevin for being here in Canada with us in the cold and and being such a great addition to our institute while he's been here I also want to thank Donna for her hard work for organizing this event thanks so much Donna and also to the student journalists from Carleton who've taped this event so these presentations will be available to others across the worldwide web and thanks to our audience so thanks everybody we'll see you soon