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Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday February 10, 2021

Rogers, Bell and Telus collected more than $240 million from Canada’s wage-subsidy program — and Bell and Telus raised shareholder payouts

Canada’s big three telecom companies have collectively received more than $240 million from the federal government’s wage subsidy program while continuing to pay out billions of dollars in dividends to shareholders.

According to the most recent filings in provincial lobbyist registries, Bell has received $122.9 million, Rogers $82.3 million and Telus $38.6 million in support payments as part of the Canada Emergency Wage Subsidy (CEWS).

Since the beginning of the pandemic, the three companies have continued to pay out regular dividends to shareholders; Bell and Telus have announced increases to their annual payouts. Both Bell and Rogers have also laid off workers at their hard-hit media divisions. 

Other large businesses have also paid out dividends while receiving CEWS support, including numerous companies in the oilpatch, auto-parts maker Linamar and furniture retailer Leon’s. (Torstar, the parent company of the Toronto Star, is among the recipients of the federal wage subsidy.)

Economists say the relief payments to large, profitable companies with ample access to credit illustrate problems in the way CEWS is designed, in these cases leading to benefits for shareholders but not necessarily targeted support for workers whose jobs are at risk. One Liberal MP is calling on the government to claw back payments from companies that have paid dividends.

“CEWS is sold as a wage subsidy, but it’s really a business expense subsidy,” said Amin Mawani, associate professor of taxation at the Schulich School of Business at York University.

Mawani has argued that Canada should consider a model where the government pays subsidies only in respect of employees who miss hours of work because of the pandemic. Under the current rules of the Canadian program, businesses with any level of revenue decline are eligible for at least some level of subsidy with respect to all their Canadian employees. 

He said it is understandable that businesses would continue to pay dividends, which he described as a “cost of doing business” akin to paying interest to the bank on loans, but he questioned the need to hike payouts this year. “I don’t think shareholders were necessarily expecting an increase during the pandemic.” (Niagara Falls Review)