No, we’re not all in this together. The lovely idea of common sacrifice in the face of a common threat had a brief moment in the early days of the pandemic, but by now we are (or at least should be) a lot wiser.
Some people have sacrificed a lot. Take, for example, nurses who have been at the sharp end of the fight against COVID-19. They’ve paid a high price in overwork, stress, illness and in some cases death. But in Ontario any increase in their pay has been capped at a measly 1 per cent.
Happy National Nursing Week!
At the same time, as the Star’s Jacob Lorinc reported over the weekend, many top Canadian CEOs saw their compensation soar in pandemic year 2020.
Some of these same CEOs made quite a show of announcing they would take salary cuts when COVID hit. They said they’d share in the hardships of their employees, and some redirected their pay cuts to charity or, in the case of Telus CEO Darren Entwistle, to “the Canadian health care workers on the front lines battling COVID-19.”
Sounded rather noble, but as Lorinc reports, Entwistle was one of the CEOs who did quite well out of the pandemic. His salary, like that of many top executives, is just a fraction of his overall compensation, which includes bonuses and stock options. Overall, his compensation for 2020 actually rose last year by $3.1 million to just over $16 million.
He’s not alone. At SNC-Lavalin, where employees were asked to take a three-month pay cut to help the company through the worst of the crisis, CEO Ian Edwards volunteered to cut his salary by 20 per cent. But with the help of a $5.61 million bonus, he ended up a million dollars ahead for 2020.
Those executives, however, are just individuals, albeit extravagantly compensated ones. For a more disturbing example of how the benefits and burdens of the pandemic have been unequally distributed, consider how some big companies have used federal subsidies to fatten their bottom lines.
This involves not just millions to some CEOs but billions to corporations — including some of the hedge funds and money managers that had a great year in 2020. According to an analysis of data by the Globe and Mail, investment firms Franklin Templeton, CI Financial and Gluskin Sheff & Associates are among the companies that tapped into the federal Canada Emergency Wage Subsidy (CEWS) program for support.
The CEWS was clearly meant to do one thing: help hard-hit companies keep employees on the payroll. The federal government set it up quickly and shovelled money out the door to prevent mass layoffs in the crucial early weeks of the pandemic. It ballooned to an enormous program — $100.6 billion last year and this.
The program did save many jobs, and helped to head off a crisis of unemployment. But it’s become quite apparent that the rules were too lax. They allowed many companies that weren’t badly hit by COVID receive millions, sometimes tens of millions, of dollars that didn’t go to saving threatened jobs. Instead, the money allowed companies that would have had a pretty good 2020 anyway have an even better year.
We already knew about companies that took CEWS money while paying millions in dividends to their shareholders. The new analysis suggests that nearly a quarter of those that got the wage subsidy actually increased their revenue last year. In those cases there’s not much evidence that jobs were saved, but it’s clear taxpayers are on the hook for tens of billions.
Some of this is understandable, given the urgency of acting quickly last year. Companies that got CEWS money when they didn’t really need it may well have followed the rules as they were written.
But the government shouldn’t simply ignore abuse. It should call out companies, especially big ones, that violated the spirit of the program. It should see if any of those millions that went to companies that didn’t need them can be recovered. And it should tighten the rules for the remainder of the life of the program.
Common sacrifice is indeed a fine idea. Those who abuse it should face consequences.
https://www.thestar.com/opinion/editorials/2021/05/10/all-in-this-together-greedy-ceos-and-corporations-abuse-our-trust.html?source=newsletter&utm_content=a02&utm_source=ts_nl&utm_medium=email&utm_email=0C810E7AE4E7C3CEB3816076F6F9881B&utm_campaign=top_54349
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