February 2, 2015 | In: Opinion
Back in 2008, the term “Too Big to Fail” was coined in the US – affirming that the US government will never let large organizations fail because of the potentially huge negative implications on the economy. Indeed – the US government helped many large companies regain their balance and stand on their feet. Granted, the US government’s response could have been better and more broad, but one has to admit, there was a response (and it worked)!
Fast forward to 2015, and here’s what the Canadian government did when Target announced that it was exiting the Canadian market leaving nearly 17,600 families out of steady income: nothing. Canada did nothing to prevent a company from making a decision that will have a disastrous effect on the lives of nearly 50,000 people (that’s about 0.15% of the total Canadian population). The only thing that the Canadian government did was to “accept” Target’s incentive for creating a $60 million fund to pay generous severance packages for all of its employees (Target’s employees, that is!) Other than that, the Canadian government was just a spectator in this tragedy, and did absolutely nothing – no effort whatsoever to keep about 17,000 families from falling into poverty and potentially becoming a burden on the country’s social care program!
So, what could have the Canadian government done?
They could have done many things – such as extraordinary tax incentives for a specific period (such as 5 years) – they could have offered to become a temporary partner in the business by putting money there – they could have worked with Target to find another solution that will help keep the company on Canadian soil.
So, why didn’t they do any of that?
Usually, the Canadian government doesn’t interfere with the private sector – especially when the parent company is a US company. Additionally, doing any tax incentives may result in other similar companies (such as Walmart Canada) asking for the same treatment – something that the Canadian government can’t afford and something that shouldn’t be done.
But the Canadian government should have done something. It shouldn’t have let this to happen without a fight – an honest fight! Yet it did nothing. Yes – we know that major companies are going to be jealous and are not going to accept any “special” treatment for Target Canada, but up until 2015, and as far as I know, it’s still the Canadian government that runs this country, and they can decide whatever they want to protect the country’s interests as well as the interests of its citizens.
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