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Rogers, Bank of China, Anti-Abortion Groups Take CEWS

Rogers, Bank of China, Anti-Abortion Groups Take CEWS

Earlier this week, the names of organizations that applied for and received the Canadian Emergency Wage Subsidy (CEWS) were made available to the public by the Canadian Revenue Agency. One can search the names of businesses and other entities by querying the database, or by checking the full list of recipients here. The only firms that were not made publicly available for privacy purposes were sole proprietorships.

Dependent on the degree of revenue loss, the Canadian Emergency Wage Subsidy covers up to 75% of payroll costs for a business, non-profit, or charity. According to a report from the Parliamentary Budget Office released on December 16th, it is estimated that the cost of CEWS for 2020 is approximately $85.5 billion, with an additional $13.9 billion price tag for 2021. A portion of this money will be recouped through taxes, bringing the current estimated cost for the program to come out to a total of $86 billion.

In Canada, the wage subsidy goes to the institution, not the worker. Over 365,000 organizations have taken advantage of this program so far. Ineligible groups may have to repay the subsidy plus a penalty, with the possibility of imprisonment for those found defrauding the system. Of all COVID-19 support programs rolled about by the government, CEWS has been the most costly.

Since the database was made public, it has been found that CEWS-recipients include political parties, controversial non-profits and charities, foreign state-owned enterprises, and profitable dividend-paying corporations. AMI-owned Postmedia, the recently-purchased Torstar Group, and New Tang Dynasty’s The Epoch Times were all given financial assistance from the government as well.

The federal Conservative, Liberal, New Democrat, and Green parties took in a minimum of $2.9 million from CEWS, according to iPolitics. Four provincial parties also collected funds from this program. This includes the United Conservative Party in Alberta, the Alberta Liberal Party, the Prince Edward Island Liberal Party, and the British Columbia Green Party. Leader of the Conservative Party of Canada, Erin O’Toole, promised that the party would pay back the money they took. iPolitics reports that, as of November, only the Green Party and NDP were still receiving the wage subsidy.

Controversial groups, such as those advocating against abortion using graphic materials, also obtained the CEWS. This includes the Centre for Bio-Ethical Reform and the Campaign Life Coalition. The Centre for Bio-Ethical Reform has a display called the Genocide Awareness Project, comparing abortions to the Holocaust, that is shown at universities. The Campaign Life Coalition is known for its outspoken opposition to the Conversion Therapy Ban and abortion.

State-owned companies and organizations linked to entities such as the Chinese Communist Party also had their employees’ wages subsidized. Entities named include the Bank of China, the Industrial and Commercial Bank of China, China Mobile, and the Canada China Business Council. Since this information became public, Canada’s Deputy Prime Minister Chrystia Freeland said the government will be reviewing the program criteria. No details have been provided on whether or not the government will be asking for restitution. On a related note, many Canadians have recently come by letters from the CRA asking for repayment of the Canadian Emergency Response Benefit. While it was admitted that the CRA miscommunicated eligibility criteria during the program’s roll-out, it has been made clear that many affected Canadians will be expected to return these funds.

Corporations that secured the Canadian Emergency Wage Subsidy faced no restrictions on executive compensation or returning profits to shareholders. As a result, some have distributed dividends and performed share buy-backs as a way to direct earnings to their shareholders. Corus Entertainment, BCE (Bell Canada Enterprises), and Rogers Communications were among those that did this while collecting CEWS. According to an analysis performed by CBC News, 213 corporations trading on the Toronto Stock Exchange indicated that they took part in the wage subsidy program. 53 of these public companies disclosed receiving more than $10 million, and 30 of them collectively gave out nearly $2 billion in total to shareholders. This does not include share buy-backs. CBC News also found that thirteen firms had a higher net income this year than they did in 2019. Data published by the Canadian Government showed that 35% of wage-subsidy payouts went to organizations with more than 250 employees. The data shows that, for many months, the average amount these larger corporations accepted from the tax-payer funded program was over $2200 per employee.

Questions have been raised about the efficacy of the Canadian Emergency Wage Subsidy program, particularly the number of jobs it may actually be saving. Economists and accounting experts that CBC spoke to were not able to draw definitive conclusions. That being said, with the wage subsidy being applied to all workers in an affected business and not just those at risk of being laid off, there are indications that the program isn’t helping the employees who need it most. Michael Smart, economist at the University of Toronto, told CBC News that he estimates that this inefficiency is costing the government $14,500 per month for every job saved.

This money goes towards the business’s profits, not the employee.

“The danger with this program is that we’re spending a lot to save a relatively small number of jobs,” Smart said to CBC News.

References – Rogers, Bank of China, Anti-Abortion Groups Take CEWS

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1 comment

  1. An eye-opener and so well researched! Much to think about and important to have this presented for the public. Appreciate the balanced delivery and lack of hyperbole which lets and expects readers to get involved in thinking about the complex situation.

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