© 2001 Karen Selick
Is Investing in Bombardier "Ethical"?
An edited version of this article first appeared in the July 12, 2001 issue of The National Post.  If you wish to reproduce this article,click here for copyright info.


Is Investing in Bombardier "Ethical"?

I am not a shareholder of Bombardier Inc.  Heaven knows, itís been hard to resist becoming one lately.  My investment advisor has been urging me to buy the stock for months, as have the investment newsletter I subscribe to and virtually every talking head who appears on every investment show on the tube.

But a stubborn little voice inside my head keeps saying, "You donít really want to own shares of a company thatís subsidized by the government, do you?"

Once, I repeated this objection to my broker.  She pointed out, quite correctly, that the government would continue subsidizing Bombardier whether I owned the stock or not, and that the only person who would lose by not participating in the resulting profits would be me.  "Youíre already paying for the subsidy through your taxes, so why not get the benefit of what youíve paid for?"

An eminently sensible question.  Ordinarily, Iím not one to martyr myself a second time over something that somebody else has already skewered me for once.  For instance, I think the health care system in this country would be a lot better if it were privatized, but I havenít been refusing to see a doctor while I wait for my viewpoint to prevail.  

Yet my secret horror is that one day Iíll find myself covertly cheering for the opposing team.  As a taxpayer and a freedom-lover, Iíll be publicly opposing further subsidies.  But as a Bombardier shareholder, Iíll be whispering an urgent, "Yesódo it!" every time the question of a subsidy arises.

International Trade Minister Pierre Pettigrew has been quick to assert that the government is not offering low-interest loans to Bombardierís customers out of any improper motive.  Itís merely "levelling the playing field" --returning tit-for-tat to impress upon those nasty Brazilians that they shouldnít be subsidizing their countryís airplane manufacturer either.

Letís give Mr. Pettigrew the benefit of the doubt and overlook the fact that Bombardierís political contributions are disproportionately in favour of the governing Liberal Party.  As my dear old mother used to say to me:  If the kid next door jumps off a cliff, does that mean you have to do it too?

Sure, the Brazilian subsidies are unfairónot just to Bombardier, but to the people of Brazil.  Some Brazilian taxpayers are being bilked so that other Brazilians will have higher paying jobs, and still other Brazilians will have bigger dividends.  I see nothing fair about that.  

But if itís unfair in Brazil, itís unfair here too.  Protesting against foreign subsidies would be a perfectly acceptable thing for the Canadian government to do, but retaliating at the expense of innocent Canadian taxpayersómost of whom are neither employees nor shareholders of Bombardier--is an entirely different kettle of fish.  To quote Mom again, "Two wrongs donít make a right."

Maybe Bombardier should canvass its shareholders and employees to see how many of them would be willing to participate in offering low-interest financing to Northwest Airlines.  If those two groups arenít willing to ante up for the good of their company, the rest of Canada certainly shouldnít be forced to.

The term "ethical investing" has been appropriated by people who refuse to buy the shares of cigarette manufacturers.  But at least cigarette consumers are allowed to exercise freedom of choice in deciding whether to hand their money over to tobacco companies.  

No, in my books, ethical investing means steering clear of companies that use the coercive power of the state to force unwilling strangers to help boost their bottom line.

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July 31, 2001