Politicians pressed on whether government can should step in on Bombardier pay

by Stephanie Levitz, The Canadian Press Posted Apr 5, 2017 6:49 am MDT Last Updated Apr 5, 2017 at 8:40 am MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Politicians pressed on whether government can, should step in on Bombardier pay OTTAWA – Federal and Quebec politicians were pressed Tuesday on whether government can — or should — allow Bombardier executives to grant themselves generous raises while taxpayers are helping keep the company afloat.Planned pay hikes for six executives were announced last week, with most of the money set to start flowing in 2019, but that’s now been delayed a year amid a sustained public outcry that included a protest at the company’s Montreal office.The company’s move has seemed action enough for both the federal and Quebec governments, who together have given the company more than $1 billion in funding since 2015 to help develop new aircraft.The point of the $372.5-million federal loan for Bombardier’s CSeries and Global 7000 aircraft programs was the jobs and research that will flow, said federal Innovation Minister Navdeep Bains.What the government might have to say on executive salaries doesn’t matter, he said.“It’s not a matter about what I say,” he said. “I think it’s their actions, and the fact that they took this action and recognized there was issues with that, and they’re now trying to correct it and change it, speaks volumes.”What politicians say could be dangerous, Quebec Premier Philippe Couillard argued as his government blocked opposition motions calling for the government to take further steps to corral Bombardier’s pay raise plans.“If the government gives a signal to the world that when you come to Quebec with a company, the government will put its big paws in your business and run your company for you, we won’t go far in Quebec.”That doesn’t mean there’s never a case to be made for governments to act to manage CEO salaries, said Sean Speer, a fellow at the Macdonald-Laurier Institute.“People aren’t standing up in the House to condemn the compensation of Bell’s CEO or Rogers’ CEO or RBC’s CEO,” Speer said.“The reason Bombardier is in the news, of course, is because they’ve drawn on public resources and I think criticism is fair.”Speer worked for former Conservative finance minister Jim Flaherty when that government was faced with a decision in 2013 on whether or not to grant Air Canada more time to deal with deficits in its pension plan.The risk of the airline being grounded was urgent, but Flaherty attached conditions, including a freeze on executive compensation at the rate of inflation, a prohibition on special bonuses and limits on executive incentive plans.In 2015, the company reported a pension surplus.“There were a number of factors at play, but I think it’s fair to say the conditions around executive pay changed the incentives for members of the executive team to fix the problem rather than keep kicking the ball down the road,” Speer said.To ensure executive compensation is not a problem for taxpayers, there should have been no taxpayer money going into Bombardier in the first place, said longtime Quebec Conservative MP — and leadership candidate — Maxime Bernier.Bernier has made no secret of his disdain for government support to corporations, but to the extent the salaries of the CEOs are a problem, it’s only because the Bombardier ones are being supported by taxpayers, he said.“If CEOs want to have big salaries, the capital markets will decide,” he said. “I don’t want to interfere.”Others say the government must engage. Frustration over high CEO paycheques is what fuels populist discontent, Bernier’s leadership rival Michael Chong noted Monday.The Liberals have taken note of the issue too. Some of the money the executives receive isn’t cash but stock options, and they pay less tax on those, making it a more lucrative salary approach if the company is performing well.The Liberals had promised to close the loophole, one they themselves noted was primarily a benefit for just 8,000 very high-income Canadians in 2014.They haven’t done it, in part because of concerns raised by budding start-ups who often use stock options to lure young talent.They represent the minority who benefit, and any change to the tax rate could be capped, said David Macdonald of the Canadian Centre of Policy Alternatives.“Just because you close a loophole doesn’t mean you can’t pay people with stock options,” he said.“It just means they don’t get 50 per cent off compared to the janitor sweeping their floors.” read more

SMMTs eleventh sustainability report shows positives for economy and environment

The Society of Motor Manufacturers and Trader’s (SMMT) eleventh annual sustainability report today reveals that UK manufacturing has made significant progress in cutting CO2 emissions, waste and energy use despite the challenges of the recent economic crisis. While the 30% drop in vehicle production halted the per vehicle reduction, total energy use and CO2 emissions continued to fall in 2009 down 20% with average new car emissions falling to their lowest ever level of 149.5g/km, down 21.2% over the past 10 years.The report, which highlights progress in social, environmental and economic sectors of the motor industry through 2009, will demonstrate that despite challenging economic conditions, last year, automotive accounted for £23.8 billion of the UK’s total export values and still employs over 700,000 people. “The motor industry demonstrated its strength and resilience through the economic crisis and now has a major role to play in a rebalanced economy. The recent string of global investments in the UK-based development and production of low carbon technologies are indicative of the longer-term strength of the sector,” said SMMT chief executive, Paul Everitt. “Tomorrow’s Comprehensive Spending Review must support and incentivise private sector investment in R&D, skills and capital equipment to allow industry to fully exploit the global opportunities emerging from the new focus on manufacturing in the UK.”In particular, the report shows vehicle manufacturers continue to make significant reductions in the environmental impact of their products throughout the whole lifecycle of the vehicle, with 12 times more waste recycled than ending up in landfill and significant development in ELV (End of Life Vehicle) infrastructure to enable 95% recovery in 2015. Speaking at the parliamentary launch later today, keynote speaker, head of climate change strategy, Geoff Richards, will also outline how the work of the Automotive Council, a strategic partnership between industry and government is delivering progress in the transition towards ultra-low carbon vehicles, creating opportunities for the UK supply base. The eleventh annual report collected data from signatories representing 94% of vehicle production in the UK. The full report can be downloaded from the SMMT web site – 10th Sustainability Report   Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window) read more