Russell Wangersky: Government funding should have strings attached
You can, from the right side of the boardroom table, make the argument that Bombardier executives wholly deserved their 50 per cent salary increase.
In this file photo, WestJet Encore’s Bombardier Q400 NextGen turboprop aircraft arrives at J.A. Douglas McCurdy Sydney Airport.
©Cape Breton Post file photo
It could have been worse. Ottawa might have handed Bombardier the $1.3 billion it had begged for since 2015. Instead, the federal government provided a measly $372.5 million in February. That comes on top of the $1-billion bailout provided by the Quebec government last fall.
OK. Taxpayers in Quebec and across the nation were willing to hold their noses once again, amid hopes their money would help the company back towards profitability, and the loans would be repaid.
Our aerospace and commuter train giant said it needed the cash to protect thousands of jobs in Canada. There was no talk of rewarding top executives with financial windfalls.
Then came the news that Bombardier was indeed paying millions in salary increases, bonuses and incentives to top executives.
The reaction was immediate. We are outraged. Politicians rushed for higher ground while Bombardier tried to make the best of a public relations disaster by agreeing to defer some of those increases.
But the damage is done. Bombardier is well advised not to come calling on taxpayers with its hands out again. The company, once considered too big to fail, is on its own and can only blame itself.
Here is the Bombardier storyline now. Taxpayers’ hard-earned dollars are being spent to reward incompetent executives who cried hard times to suck $1.3 billion from the public purse.
It certainly can’t be a reward for filling contracts on time, avoiding massive cost overruns, keeping plants open and not laying off thousands of workers in Canada and abroad. All those failures did occur.
Government and company executive may argue that to attract and retain qualified executives, you have to pay top dollar. But this is the kind of expertise we don’t need.
The Canadian Taxpayers Federation was right after all. It lobbied Ottawa since 2015 to reject the pleas of this corporate welfare bum. The CTF is taking well-deserved credit for saving us $900 million since the company had originally sought $1.3 million.
The Bombardier ripoff brings back memories of the situation in the U.S. when the 2008 recession brought Wall Street bankers and major automakers to the brink of collapse. The U.S. government paid hundreds of billions to bail them out and what thanks did it or the American taxpayer get? Automakers moved jobs and plants to Mexico and laid off thousands of American and Canadian autoworkers. And big banks paid their executives gigantic bonuses as a reward for massive failures.
Is it any wonder that era resulted in a populist movement giving rise to Donald Trump? Will there be a Canadian equivalent? What will be the fallout in Canada? We do have Kevin O’Leary and Kellie Leitch waiting in the wings.
Giving Bombardier a blank cheque with no strings attached was bad business. Bailouts should not reward corporate failures or their top executives.
Times are tough, but obviously they are not that tough in some corporate boardrooms.