• Michael Laxer

CEWS remains the real pandemic scandal



The mainstream media is finally figuring out what many of us did months ago: the federal Canada Emergency Wage Subsidy (CEWS) is a scandalous boondoggle.


On April 19 the CBC reported that:


The Canada Revenue Agency has received nearly 1,200 complaints about companies allegedly misusing federal support money designed to protect jobs during the pandemic, CBC News has learned.
Despite repeated threats from the federal finance minister's office to come down hard on companies with large fines and even imprisonment of executives for misusing the Canada emergency wage subsidy (CEWS), the CRA hasn't penalized a single company.
Critics say that's in part because the CEWS program doesn't expressly restrict how companies manage the profits that might result from receiving federal support for wages, so long as the government money was used for that purpose.
There's nothing that says a company receiving CEWS money can't also pay or increase dividends to shareholders or hike executive pay.

As I noted before on The Left Chapter companies receiving the CEWS have been allowed to increase dividends often to the financial benefit of their CEOs and management, they were allowed to receive the subsidy despite having workers on strike or having locked out workers, they were allowed to receive it and then lay off workers and the subsidy was made available for various extremist groups.


The CBC found:


...six examples of large, publicly listed corporations that qualified for and received CEWS and either initiated or increased payments to investors in the form of dividends.
They include TFI International, a Montreal-based shipping and logistics company with more than 16,000 employees across North America.
TFI hiked its dividend twice in 2020, paying out more than $67 million to shareholders while also receiving $52.3 million in CEWS.
In an email to CBC News, TFI declined to comment on the subject.
High Liner Foods received $3.4 million in CEWS and increased its dividend by 40 per cent citing "improving free cash flow." High Liner Foods paid out a total of $5,518,000 in dividends in 2020. The company did not respond to repeated requests for comment
Tourmaline Oil, an oil and natural gas producer based in Calgary, and Alamos Gold, a multinational gold producer based in Toronto, also raised their dividends and received CEWS, although neither company published the amount of money it received from the government wage subsidy program.
Tourmaline increased its dividend by 17 per cent, and Alamos by 33 per cent, noting that "the increase is supported by the record free cash flow in the quarter and strong outlook."
Neither company responded to requests for comment.

This is almost certainly the tip of the iceberg.


Remember, this was supposed to be a subsidy that would allow companies to continue to pay wages and keep employees employed, not a way to pay out increased dividends because the company no longer needs to worry about the cost of wages. But there were very few restrictions placed on the program once a company qualified and obviously there has been a lack of oversight.,


As I noted before everything that has happened with the CEWS was 100% predictable. It has been a program to allow the rich to get richer at least partly on the public dime.


All wage compensation to workers should have been paid directly to workers and never to Canada's grifter corporate class. Compensation should not have been dependent on corporations or on workers working during a pandemic. This should have been the left's and labour's position.


The NDP-Liberal CEWS sham is a disgraceful fiasco that represents one of the biggest transfers of wealth from the public to wealthy corporations and CEOs in Canadian history. Steps should be taken immediately to change the program and stop this extreme version of corporate welfare.

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