This week the major theme in Ottawa has once again focused on the Quebec based manufacturer Bombardier after it was reported that six company executives were to receive $32 million in bonus payments. Bombardier, as many may recall, received an interest free $372.5 Million loan from taxpayers back in February. This loan was controversial in large part as Bombardier executives had previously stated publicly that the company did not actually need the loan having secured adequate funds elsewhere. Controversy over the announced $32 million in bonus payments did result in Bombardier voluntarily agreeing to defer half the bonus amount to the year 2020 if certain financial targets are met.
As my own critics like to point out in recent letters to the editor – opposing is not the same as proposing an alternative. It is an important point and one that I agree with. In this case could the $32 million in bonus payments to Bombardier executives be avoided until the company repays the $ 372.5 Million loan? The alternative answer is yes.
As an example when the former Conservative Government provided assistance to Air Canada this assistance came with terms and conditions. Some of these conditions included terms that executive compensation would be frozen at the rate of inflation and that any additional bonuses would be prohibited. Over and above these restrictions Air Canada was also banned from issuing dividends or allowing share repurchases.
The debate in this particular case is that the Liberal Government loaned $372.5 Million to Bombardier, interest free, with no similar terms of restrictions whatsoever. In fact at the same time Bombardier receives this loan it has also announced 7,500 jobs will be lost, 2,000 of these jobs in Canada alone. It was further revealed in Question Period this week that the Liberal Government has yet to sign off on the final paperwork for this loan and still has the option to add similar restrictions if it so desires.
My question this week pertains to government bailouts to private industry. In the event the Government does provide a form of assistance to a large scale Canadian employer is it reasonable to also require and enforce that executive bonuses and other shareholder related perks have limits placed on them until such time a loan and/or other relief measure is satisfied?
I welcome your comments, concerns and questions on this topic or any matter before the House of Commons. I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.
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Dan Albas is the Member of Parliament elect for Central Okanagan-Similkameen-Nicola.