NDP's Catherine Fife criticizes unspent Liberal grant to OpenText
None of the promised $120 million has been spent because OpenText hasn't created any new jobs
NDP finance critic Catherine Fife is calling for the Ontario Liberal government to end their current method of awarding funding to private businesses in the province and move instead towards what she calls a more transparent targeted tax credit system that would only benefit companies who prove they have created jobs.
The Waterloo MPP's remarks come after a CBC News story revealed none of a promised $120 million grant to business software maker OpenText to create 1,200 jobs in the province hasn't been paid out because the company so far hasn't been able to create any jobs.
The grant was announced at the end of April 2014, just before a provincial election was called.
"When you have a targeted tax credit approach, it's a more accountable method of supporting businesses, because the business understands the rules of engagement." said Fife. "If a company creates a job, a new job, then the company receives a tax credit for creating that. There's a responsibility on behalf of the business to prove to the government that real jobs were created."
"Private companies actually appreciate the openness and transparency on that, because it's a level playing field," she said.
"Right now, the public as a whole has no idea what the obligation is on the part of OpenText or what the government has promised OpenText."
Auditor general critical of process
OpenText announced it would be cutting 425 jobs from its worldwide workforce a year after it received the provincial jobs grant, but didn't specify whether any of the lost jobs would be in Ontario.
In response, the province said that OpenText would not only have to replace any Ontario jobs lost in the cuts, but it would also have to create new jobs in order to receive any part of the promised $120 million grant.
"The ultimate question really... is around transparency and accountability," Fife said.
"We just don't know the conditions of that contract," she said. "This government continues to hand out hundreds of millions of dollars without accountability and without transparency."
Ontario Auditor General Bonnie Lysyk released a report in December 2015 into the $1.45 billion worth of grants doled out by the Ministry of Economic Development to businesses over the last 10 years to provincial businesses.
Lysyk's report said that while the money was given to a range of companies from high tech firms to autoparts makers, she noted the government doesn't know if the money creates long-term jobs or helps the province's economy.
The auditor general also said the funding process lacked "fairness and transparency."