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this post was submitted on 30 Sep 2023
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There's no significant difference between the two.
Tax breaks remove potential future tax revenue, but aren't spending tax revenue acquired from another source.
Yea, there's no significant difference - tax breaks spend revenue from a future source.
But with a tax break in an emerging business, that revenue wouldn't otherwise exist because the company wouldn't have opened operations here when it could take advantage of egregious US subsidies instead.
You're falling into something akin to the broken window fallacy. Economic resources aren't created or destroyed by incentives, they are shifted. If that tax break didn't exist those loans, employees, potential capital etc.. would be doing something else. Tax breaks need to be extremely precisely honed to avoid lowering future income.
Economic growth doesn't happen on its own. The Canadian economy isn't some entity that magically sees growth without investment.
So demand isn't somehow linked with supply?
Did you accidentally read "does" instead of "doesn't"? Supply and demand being intrinsically linked is why economic growth does not happen on its own. If there was some way to separate them, then economic growth could theoretically happen on its own, but as that notion lives with fairytales and unicorns...
It can make a big difference in who can use them. An income tax break, for example, is only useful to those who have income to tax. While a subsidy can fund a venture that does not yet have income.
I meant in this context where it's established companies that have the means to build the factories they're planning to build.