In late October 1997, Liberal Industry Minister John Manley told the Financial Post that "The problem with government intervention is not picking winners and losers, the problem is governments can never shake the losers. They sink big money into something and then keep throwing good money after bad."

Manley always seemed - to this voter at least - a politician of good intentions and high integrity and he no doubt meant what he said. Unfortunately, nobody in his department was listening.

Or perhaps he never bothered trying to put his principles into action by shutting down some of Industry Canada's programs that exist for no other purpose than to dole out taxpayers' dollars to big corporations, ostensibly to enhance such things as productivity, innovation or new investments in plant and equipment.

This is evident from a quick reading of a new report from the Canadian Taxpayers' Federation titled On the Dole: Businesses, Lobbyists and Industry Canada's Subsidy Programs.

This federal department was handing out great gobs of money before Manley arrived, and has continued to do so since he left.

The taxpayers' federation report covers 24 fiscal years, from April 1, 1982 through March 31, 2006, and reveals that Industry Canada handed out $18.4 billion. Its accounts run to more than 800 pages and contain 47,690 individual records of financial assistance.

The top 50 recipients, all of them big companies, got almost one-third of the money. The federation has listed them in chronological order and the first two spots are occupied by firms from Quebec. Pratt & Whitney Canada Corp., which is based in Montreal suburb of Longueuil, was the biggest beneficiary at nearly $1.5 billion. Bombardier Canadair, another blue-chip member of corporate Quebec, was No. 2 and got more than $745 million.

To be fair, though, all sorts of companies from across the land are represented. General Motors, Ford Motor Co. and Hyundai Auto are all on the list, as are corporations in the forestry, mining, high-tech and shipbuilding industries.

This isn't surprising since, according to the federation, Industry Canada runs about 150 programs that exist only to hand out money.

Straight grants and subsidies have more or less disappeared since the government fiscal crisis of the mid-1990s, which supposedly brought in a new era of transparency and accountability.

These days, the department hands out money under a variety of guises - contributions, repayable loans, loan guarantees and direct loans, among others. It is supposed to be recovering such funds and earning a return on its investments, but that just isn't happening. Only $7.1 billion of the $18.4 billion, or 30 per cent, was ever classed as repayable and a mere $1.3 billion, or seven per cent, was actually repaid.

The taxpayers' federation, being an advocacy group, is naturally appalled at the whole mess.

"Government meddling in the economy is expensive, unequal, unfair and unnecessary," writes national research director Adam Taylor. "Reform is not the solution. Bringing Canada's industrial policy into the 21st century means eliminating corporate welfare and similar regional development plans."

That isn't likely to happen anytime soon, says Donald Savoie, an economist at the University of Moncton and one of the country's leading experts on how and why governments spend money.

According to Savoie, Ottawa is in the game for no good reason except that everybody else is.

"The Americans do it in spades," he says. "The Brazilians and the Europeans do it. Ireland, the Celtic tiger, has been built on grants."

Savoie agrees with much of the analysis from the taxpayers' federation.

Industry Canada's track record on repayment is embarrassingly bad. Financial contributions to private companies rarely produce discernible benefits.

"Are they effective?" he asks rhetorically. "The short answer is no."

The biggest beneficiaries tend to be those with the best connections in Ottawa, which explains, in part, why Quebec companies have done so well. Corporate executives who can't call the prime minister or one of his lieutenants can always hire a lobbyist.

In short, the whole business reeks of insiderism. It is a windfall for Ottawa lobbyists. It rarely produces measurable benefits and should be scrapped.

The trouble is, that would take leaders of integrity, good intentions and lots of courage. And how often do they come around?

(D'Arcy Jenish can be reached at jenish@businessedge.ca)