Shucking Oysters: When is Enough Enough
By Alex Allen
Trigger warning: The following article contains lots of numbers and dollar signs that could trigger math anxiety.
Are you sitting down? Did you know that during the pandemic Ottawa paid out over $100 billion to Canadian businesses “struggling” to keep their employees on the payroll? But instead of payments going to individual workers, most of the Canada Emergency Wage Subsidy (CEWS)* money went to their bottom line. The almighty profit, which shouldn’t surprise anyone. As we all know, greed is a very powerful stimulant.
The 2020 financial statements of 53 public companies showed that they received more than $10 million in wage subsidies, and in just six months, they collectively dished out $2 billion to their shareholders. At least seven companies bought back shares while receiving the CEWS. In other words, tens of millions of dollars from the government’s pandemic aid package went to corporations whose profits went up, despite the colossal economic downturn in 2020. After all, maximizing profit is a moral imperative, people.
Much like a human psychology experiment, the behaviour of corporations that received CEWS payments varied widely. Many suspended or cut dividend payments and some introduced different forms of discretionary spending. Others, as humans do, spent lavishly on non-payroll expenses, which is perfectly legal under the emergency wage subsidy.
The Montreal-based trucking giant TFI International, for instance, received $63 million in wage subsidies, while also paying out $45 million in dividends amid rising profits and a soaring share price. As it laid off 1,600 workers, the company spent nearly $9 million buying back shares and then announced it was increasing its dividend by 12%.
“We are not ashamed,” about taking the wage subsidies, TFI CEO Alain Bédard told a Montreal newspaper. “Not taking it would be like refusing a tax exemption. It would be like saying ‘We’re more Catholic than the pope.'” During that time, Bédard sold stock options in TFI worth more than $20 million.
Canada’s big three telecom companies collectively received more than $240 million in emergency subsidies. Bell received $122.9 million, Rogers $82.3 million and TELUS $38.6 million. BUT, the three companies continued to pay out regular dividends to shareholders; Bell and TELUS even announced increases to their annual payouts. Meanwhile both Bell and Rogers laid off workers at their “hard-hit” media divisions. Rogers paid out just over $1 billion in dividends while Bell paid shareholders close to $3 billion; and TELUS paid almost $1.5 billion.
Air Canada received the most in emergency funding … $656 million to “pay” its employees. They reported an operating loss of $3.776 billion in 2020 compared to an operating income of $1.650 billion in 2019. Yet the company paid its top executives and managers a combined $10 million in bonuses tied to the pandemic. The airline justified the bonuses and stock awards to shareholders by saying the senior executive team “reacted urgently, decisively and skillfully to mitigate the impact.” Those actions included slashing over 20,000 employees from Air Canada’s workforce, a reduction of more than 50%.
The second-highest sum paid to a publicly traded company, a paltry $120 million next to Air Canada’s wad, went to Imperial Oil. The Calgary-based energy giant’s annual gross profit for 2020 was $2.648 billion, a 46.67% decline from 2019. And yet they still paid out $162 million to their shareholders during the pandemic.
And then we have the brazen private “premier” Royal Ottawa Golf Club, who managed to build up a surplus thanks mostly to federal subsidies for workers’ wages. Faced with lockdown restrictions, the club asked for and received $1.019 million for just one season, and ending its 2020 fiscal year with an extra $825,000 — 19 times more than the $43,883 operating gain the club reported the year before.
When you live in a world of pure money and greed, eventually you lose feeling for the real value of things. It’s called cognitive numbness. The question is, why do people who “have everything” (especially the three amigos, Elon, Jeff, and Mark) always seem to want more? Making money cannot be an end in itself — at least for anyone not suffering from an acute mental health disorder. To say that my purpose in life is to make more and more money is like saying that my aim in eating is to get fatter and fatter.
As someone once said, a good definition of hell is having no choice but to tolerate the intolerable.
* There was also an additional pay out of $82 billion to individuals impacted by the pandemic through the Canadian Emergency Response Benefit. I affectionately called this group, the CERBians, young people aimlessly “nomading” in 1970s Winnebagos, 80s cargo vans, and questionable pick-up trucks. Some of them are still here.