Taxpayers in the Dark: CEWS
We’ve talked about this before – the Canadian Emergency Wage Subsidy (CEWS) – and if you’ve watched our videos or seen our tweets you know how critical we’ve been on the rollout of this benefit.
The CEWS was first introduced on March 27th, 2020 by the federal government. With the intention to help Canadian employers who had seen a drop in revenue during the pandemic, the benefit would cover a portion of employee wages. If you look at the CEWS webpage, it stresses that the benefit would enable employers “to re-hire workers, help prevent further job losses, and ease your business back into normal operations.” The importance of this quote will come into play a little later.
Our primary critique of the program has centered around the widespread abuse of the benefit by large, profitable Canadian companies as well as many foreign corporations. Below you will find a small list of companies and organizations which applied and received CEWS:
· Lululemon
· Bell Media
· Volkswagen Group
· Qatar Airways
· Adidas
· INDITEX
· Kering Group
· Bank of China
It is worth noting that this is only a small list of examples. If you are curious about other companies, we would encourage you to explore the CEWS Registry or watch our video.
Of the examples provided, how many went bankrupt or closed like the many local mom-and-pop shops and businesses you live around or use to frequent? How many of these CEOs or owners had no idea whether they would be employed from one week to the next? How many of these dipped into saving to keep their businesses afloat?
The answer is none. Below you’ll find the same list of companies as noted above, however this time we show the 2020 compensations, dividends paid out and the net worth these companies have stated they have:
· Lululemon | 2020 Compensation to CEO = $11.3M
· Bell Media |2020 Compensation to CEO = $9.25M
· Volkswagen Group |€2.4B Paid in Dividends
· Qatar Airways | State Controlled |Hold $56.2B in International Reserves
· Adidas |€3.9B Paid in Dividends
· INDITEX | Net Income of €3.6B
· Kering Group |Net Income of €4.8B
· Bank of Canada |State Controlled | Combined Assets of $8.8T
Remember when we stressed the importance of the quote highlighted at the start? It’s important because in February 2021 Bell Media, one of the companies we purposely listed, announced massive layoffs in the Toronto area despite being recipients of the CEWS. Let that sink in, Bell Media received an undisclosed amount of taxpayer money and still laid off hundreds of Canadians.
Our first question to the Canadian government is simple, should these companies have taken CEWS? We don’t think so. It is worth nothing, that after a year of introducing the benefit, the federal government took some accountability for the flaws in the program. During the most recent federal budget, the government added the following clause regarding the latest CEWS terms and conditions:
“Any publicly listed corporation that decided to increase executive pay during this difficult time, while receiving taxpayer support, may have their wage subsidy funds clawed back.”
This clause is nowhere near enough as the use of the word “may” is problematic as there is no guarantee that these public companies will have repercussions. Additionally, why is the clause not extended to non-publicly listed companies?
Our second question to the Canadian government, apparently, is much more difficult to answer. You see, after exploring the CEWS registry and finding these high-profile businesses, we wanted to know how much the government really gave to both profitable Canadian and foreign companies.
Between December 2020 and present day, we’ve submitted several inquiries through the Access to Information and Privacy Department of the federal government, also known as FOI requests. Bear with us as we provide a timeline:
December 23, 2020 – “I would like to see any documentation associated with the Bank of China’s application for the Canada Emergency Wage Subsidy, including: the application itself, any communications between the Bank of China and representatives of the Government of Canada regarding the Canada Emergency Wage Subsidy, and the amount received by the Bank of China.”
January 19th, 2021 – “I’d like to know the total amounts received under Canada Emergency Wage Subsidy (CEWS) by the following corporations: The Walt Disney Company (Canada) Ltd. Starbucks Coffee Canada, Inc.”
April 8, 2021 - “I would like to see all documentation associated with the Canadian Emergency Wage Subside (CEWS) received by subsidiaries of foreign corporations…”
May 18, 2021 – “Total dollar amount received by subsidiaries of foreign organizations for the CEWS broken down by industry (ie. Airlines VS. Retail VS. Food & Beverage, etc.) if you cannot provide the breakdown, we would like the total dollar amount received by all subsidiaries of foreign corporations for CEWS.”
In all our attempts to extract this information, the response has been the same:
“… we are confirming that the information you are seeking is taxpayer specific and cannot be retrieved or provided. Section 241 of the Income Tax Act prohibits the CRA from releasing any information that can identify a taxpayer without their consent.”
Our attempts have not been limited to FOI’s. In early March 2021 we reached out to several MPs in British Columbia. We avoided the Liberal ones for obvious reasons but reached out to several Conservatives and NPD members. From the Conservatives, Shadow Minister of Finance, Ed Fast was far too busy to provide a comment, according to staff. We sure hope his constituents have an easier time getting ahold of him
However, a positive reception was found in NDP Finance Critic Peter Julian, who has been outspoken on CEWS on his own platform. We had the opportunity to chat with him on March 15th and encourage you to take a listen to what he had to say:
Since our interview, Mr. Julian and his colleagues have sent a letter to Finance Minister, Chrystia Freeland regarding the benefit. They demand that the federal government make good on the CEWS claw backs, but also questioning why the government took an aggressive approach to those improperly accessing the Canada Emergency Response Benefit (CERB), yet the same determination lacked when it came to big companies.
We’ve talked about the CEWS and our efforts to keep the government accountable and for transparency where Canadian taxpayer dollars are concerned at great length. Until our questions are answered, we’ll continue to press on this issue because we firmly believe that if you follow the money, you’ll find the truth.