Arguing over optics of collecting subsidies while paying dividends obscures deeper issues
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The main parties in Ottawa aren’t interested in having that discussion. Pierre Poilievre, the Conservative finance critic who has complained at great length about the size of the debt and a $12-million federal grant that Loblaws Cos. Ltd. used to buy energy-efficient fridges, didn’t ask any questions about the possibility that companies might be abusing the wage subsidy when Finance Minister Chrystia Freeland appeared at the House finance committee last week, though he did raise it two days later in the House of Commons.
Freeland, who did get a question about the results of our investigation from NDP finance critic Peter Julian, only reiterated that CEWS can’t be used to compensate owners and managers.
That’s not the point, of course. The Post’s findings suggest that dozens of companies opted to let taxpayers subsidize their payrolls, rather than ask their shareholders to make a temporary sacrifice.
The issue is less about the money and more about the signal it sends at a time when systemic unfairness has become undeniable. By making all those CEWS claims that they didn’t necessarily need, executives will have emboldened those who claim that Corporate Canada can’t be trusted to steward the economy on its own.
“You want to have a credible, and even a costly, signal to the population that we are in it together,” said Nicola Lacetera, a professor of strategic management at the University of Toronto’s Rotman School of Management. “When we come out of this, hopefully, we won’t come out of it with even less cooperation, which was already quite low.”
Capitalism is held together by trust, but when that trust is gone, it exposes another blind spot in all those neat theories about the way the world should work.
“In every instance, there should have been a pressing of the pause button on dividends,” de Gannes said. “Why not have taken the opportunity to at least demonstrate deeper thinking?”
Financial Post
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