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Russell Wangersky: Government funding should have strings attached

Who's got the hand out?
Who's got the hand out?

You can, from the right side of the boardroom table, make the argument that Bombardier executives wholly deserved their 50 per cent salary increase.

Russell Wangersky

After all, under their able stewardship, they’d managed to wrest something like a billion dollars from two levels of government for a company in serious financial trouble, while also handling 7,500 or so layoffs worldwide.

Instead of losing $5.34 billion in 2015, why, they only lost $981 million in 2016.

Why shouldn’t the five top wage earners in the company split $32.6 million between themselves this year?

Well, perhaps because it’s a move that outraged new investors. And those new investors are the taxpayers — more so in Quebec than anywhere else, but in the end, all of us.

The Bombardier executives have backed off on the pay increase for now, at least for a year or so, because of the public outcry. People were rightly outraged that a company could argue that it’s poor enough to need government help, yet rich enough to pile new heaps of cash on the top brass.

It raises an interesting question about governments and companies, and whether companies can or should expect government funding to be a one-way street.

Maybe it’s time partnerships actually had to mean something to both partners.

Governments love to call their spending “investments,” whether they are “investing” in playgrounds or new fire equipment. Strangely, though, for all that “investment,” governments often come up short on return — and maybe, we should be looking for something in exchange.

But the fact is, not everybody’s keen on the idea that, when the taxpayer has financial skin in the game, they also should get a voice at the boardroom table.

Quebec Premier Philippe Couillard had this to say about the idea: “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.”

But how about a different interpretation? How about, if you come to a province and finance your operation, the government won’t get involved — but if you go cap-in-hand looking for federal or provincial bailouts (making, in essence, the taxpayer into your partner) you might have to expect some strings attached.

Think about it: if you borrowed a billion dollars from an equity firm, making them a substantial owner in your firm, the first thing they’d want is a significant block of shares to vote, and, more likely, a seat or two on the board of directors as well.

As a company, you wouldn’t argue that your new investor was “putting its big paws in your business and (running) your company for you,” you’d simply recognize that someone making a major investment would feel, legitimately, that they should have a voice at the table, especially because it’s setting the direction for a substantial chunk of its own money.

You can understand why big companies would rather have taxpayers’ money with no strings attached. Wouldn’t everyone? But that system is a fiction — it merely helps to enrich those at the top of the business pyramid, while they bleat about the need for a free market we help to pay for.

Seriously, how well does that system work for the people who actually cough up the investment? Are pay inequalities getting smaller? Is the one per cent feeling the same fiscal pinch all the rest of us are?

Bombardier president Alain Bellemare was to receive $9.5 million this year, up from $6.4 million last year. But since I’m now a government shareholder, I’d like to vote on whether he should get that raise.

You probably guess where I stand. All in favour?

Russell Wangersky is TC Media’s Atlantic regional columnist. He can be reached at russell.wangersky@tc.tc — Twitter: @Wangersky.

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