Over the past eight months of the pandemic the Trudeau government has doled out hundreds of billions of dollars to Canadian corporations. However, they have consistently been vague and evasive when asked where exactly the money is going. We know about the 107 different programs drawn up to funnel money into the hands of corporations, but the names of these corporations and amounts are being kept secret. It is believed that many companies receiving government aid are also gifting executive bonuses and dividends to wealthy shareholders. The real welfare bums are the capitalists.
This fall, the CBC decided to launch The Big Spend, a full-blown investigation into tracing the government’s pandemic spending. But billions still remain unaccounted for as journalists are refused answers. We know for certain that at least $240 billion has been spent on these different programs, but information regarding which businesses have received it and what they are using it for is only available for certain companies, most of which are publicly traded. Private corporations are protected from any obligation to disclose such information by the excuse of safeguarding “business secrets.”
The Canada Revenue Agency (CRA) supposedly planned to make public the names of 355,990 businesses who received aid through the Canada Emergency Wage Subsidy (CEWS) back in October. They have yet to do this. A big question mark also remains around the estimated $700 billion in corporate handouts pointed out by the Toronto Star back in July.
The rich are getting richer, and we’re paying for it
The abhorrent activity of the corporations that have disclosed their financial statements, however, paints a clear-enough picture of what is going on.
Take for example furniture company Leon’s. It received $29.8 million through CEWS after seeing a decline in revenue, laying off 70% of its workforce, and closing 72 stores back in March. But by the end of June, the company’s income had shot up by 88.8 per cent. On Nov. 10, Leon’s announced a special dividend of $0.30 per common share for its shareholders—$0.14 higher than the pre-pandemic rate, amounting to $24 million. On Sept. 30, it started buying back $74 million worth of their shares, and its spokespeople have remained vague when asked if the company has hired back laid-off employees.
Another, more sickening example is that of Extendicare Inc. and Sienna Senior Living Inc., two of the largest long-term care providers in the Toronto area. The two companies received more than $157 million in federal and provincial COVID-19 relief and have paid a combined total of $74 million in dividends to their shareholders this year. Both claim they have put the government aid directly into hiring more staff and making their facilities safe for their residents during the pandemic, but family members of the residents are saying the quality of care has deteriorated. On top of the reported horror stories from family members of poor treatment, more than 480 residents and staff have died of COVID-19 at the companies’ facilities. “Where’s all that money going?” one family member asked. “Because it’s not going for proper care.” In an attempt to deny reality, both companies insist that none of the government aid they received went to their shareholders. However, basic math proves this to be false. No matter what accounting tricks they may pull, they cannot deny receiving taxpayer dollars and they cannot deny the fact that they richly rewarded shareholders while people died due to poor care.
We have similarly seen that, after a set of unnamed banks received $10.7 billion in loans and $260 billion to support “interbank funding” and “functioning of key finding markets,” Canada’s biggest banks have been able to increase bonuses this year to $16.2 billion, up 3.9 per cent from last year. In 2019, Canadian banks announced that significant job cuts were on the way, but that was put on hold once the COVID-19 pandemic hit. Now that they’ve received billions from the government, they have resumed their plans for job cuts. The Bank of Canada has no plans to turn off the money taps for banks.
None of these are isolated cases. A Financial Post analysis published Dec. 7 revealed that at least 68 publicly traded companies continued to pay dividends to their shareholders while receiving CEWS. And while those companies received at least $1.02 billion through CEWS, they paid out more than $5 billion in dividends. This was echoed in a similar analysis published by the CBC on Dec. 10, which found that of the 53 companies whose records they were able to analyze, 30 paid out money to their shareholders while receiving CEWS. Together, those companies paid approximately $2 billion to shareholders.
So not only is the federal government giving away billions of dollars to corporations and keeping the majority of names and amounts secret, but those companies that have disclosed the state of their finances are funneling that money—one way or another—into the pockets of their shareholders or funds for bonuses. At the same time working people are being told to make sacrifices, work in unsafe conditions, and keep their heads down and accept the fact that public money is being hoarded away to let the rich get richer.
‘Transparency’ is not enough
The Liberals are being attacked from all sides for their lack of “transparency.” Conservative finance critic Pierre Poilievre has declared “the free ride is over. We should now expect to receive the data.” NDP finance critic Peter Julian has agreed that the federal government should show where the money is going, adding that this would allow Canadians to see and decide whether it was “appropriate” to give the money to the corporations. That the NDP’s demand in face of this issue is nearly indistinguishable from the Conservative position is scandalous in itself, but their justification makes it worse!
Do we really need to deliberate the appropriateness of public money going to companies who use it for shareholder dividends and bonuses? We agree that these companies should be named, but the NDP should be going much further than calls for “transparency.” This is the bare minimum. As far as we can tell, the NDP isn’t even arguing that businesses receiving money should not be allowed to give out bonuses and dividends, let alone saying that they should not be laying off employees.
Preetika Joshi, an accounting professor from McGill University, proposed this measure be written into the policy for government programs like CEWS, highlighting the regulations in place for similar programs in Spain and the Netherlands. The idea is that companies who receive government money should be forbidden from paying out to shareholders. It is scandalous that this was not done from the start. But again, this is just a measure that illustrates the corrupt nature of these no-strings-attached handouts. These companies shouldn’t have been bailed out at all.
Finance Minister Chrystia Freeland says that now is not the time to be worrying about the spending, and tries to calm our outrage with a metaphor: “There will be a time for post-mortems, but while the plane is flying, one does not try to change the engine.” If this crisis has shown us anything, it’s that the time to change the engine is long overdue.
Name and expropriate!
Throughout the COVID-19 pandemic, the overwhelming majority of resources and money have gone into “saving the economy.” What this really translates into is saving the capitalists’ profits at the expense of the workers. Workers are facing mass layoffs, terrible working conditions and illness, all while public money is given away to the capitalists. It is the workers who end up paying for the crisis.
Some will argue that if we don’t bail these companies out, we will just lose jobs. This is not totally wrong. The capitalists will cut jobs to keep their profits and their shareholders happy. So why should they be allowed to run things at all? If they can’t save jobs without billions of dollars in public money, then they don’t deserve to be in charge—even more so if they choose to take the money, keep it as profit and continue laying people off.
The truth is we can save jobs without bailing out the capitalists. If corporations need bailouts to survive, then they should be nationalized without compensation.
The capitalists have shown that they are nothing more than parasites. So long as they are in charge, the economy will continue to run chaotically according to whatever generates the most profit. And when it all breaks down, as it often does, it’s the working class who pays.
The problem is not mere “transparency,” it’s money. The problem is bigger than policy: it’s capitalism.
We say, name the companies taking the handouts, show us how much they’re getting and what they’re doing with it. No more bailouts! Stop propping up the zombie corporations with public money. Nationalize them under workers’ control. That is what we need to fight for in the labour movement. That’s how we save jobs.
