Premier Brian Pallister says he’s opposed to corporate bail-outs and argues governments should never prop up failing companies like Tolko Industries in The Pas.

I agree.

However, the Tory premier apparently isn’t opposed to all forms of corporate welfare. Just last month, his government handed Maple Leaf Foods a grant to purchase processing and packaging equipment. Together with the federal government, Maple Leaf got a handsome $500,000 taxpayer hand-out. It was part of a larger $35-million plant expansion.

And this wasn’t funding for some industry-wide benefit, like job training or research. This was a direct grant to a for-profit, private company to buy equipment. And the average taxpayer, who now forks over 42% of their earnings to government, had to pay for it.

Granted, that’s not a bail-out, the kind Tolko Industries — which announced Monday that it was closing its Manitoba operations — would have required to stay afloat in the short term.

Pallister rightly says it’s not up to governments to prop up unprofitable companies like Tolko.

“Companies that come looking for direct bail-outs generally bail out as soon as the bail-out is done,” Pallister said Wednesday. “So I don’t think that’s the answer.”

If a company can’t find a way to make a profit in its industry, throwing tax dollars at it won’t help anyone in the long run, said Pallister. Tolko decided it could no longer operate in northern Manitoba because running a pulp-and-paper mill there simply wasn’t profitable.

“If it’s not an intelligent thing for them to do, it’s very likely not an intelligent thing for me to do with the money I take from Manitobans in taxes,” said Pallister.

Sometimes private sector companies fail and people lose their jobs, the premier said. That’s reality. It’s tragic, it’s unfortunate and it’s very tough on the families affected. But it is reality.

However, it’s not government’s role to dump tax dollars into losing operations, the premier said. Government’s role is to create the most attractive economic environment possible to attract and retain business — including competitive taxes and fair regulations — and to provide the best infrastructure, education and health care possible for all industries, said Pallister.

I couldn’t agree more.

But giving direct grants to companies to fund equipment purchases, to expand their plants or for any other capital investment goes well beyond those stated goals. If government gives grants to Maple Leaf to buy new equipment, then in fairness it’s obliged to give grants to every other company in every other industry. But they don’t. And that’s one of the many problems with corporate welfare. Governments decide, usually for political reasons, which companies to give tax dollars to and which companies to ignore. Some companies get government hand-outs while their competitors don’t. Governments get into the business of picking winners and losers and they’re not usually very good at it.

Not only is the practice unfair, it interferes with the competitive balance of a marketplace. Besides, government has no business spending tax dollars to subsidize private business. Tax dollars should be used solely to fund public goods and public services, including helping people who are in genuine need of support.

Does anyone really think Maple Leaf needed a $500,000 taxpayer grant to help purchase equipment? If it makes good business sense for them to invest in a plant expansion to become more profitable, then they should do it without tax dollars. The $500,000 just helps them pad their bottom line.

I agree with everything Pallister said about government’s role in attracting and retaining industry in order to create good paying jobs and to expand the tax base.

And he’s right that bailing out failing companies like Tolko is wrong.

But giving out grants to companies like Maple Leaf runs counter to the message he gave Wednesday.

Maybe it’s time for him and his government to better align their stated objectives with their policy actions.