As of April 19, the Canada Revenue Agency (CRA) has received 1,200 complaints of companies misusing funds from the Canada Emergency Wage Subsidy (CEWS) program. Big corporations have taken billions of dollars from the CEWS while paying out massive dividends to shareholders and bonuses to executives. Many companies have achieved even higher profits than they had in previous years! What is even more astounding is that this has gone completely unpunished. 

Pandemic profiteers protected

Not only is the government not going after these pandemic profiteers, it is protecting them from the embarrassment of public scrutiny. The CRA has refused to disclose the names of the companies that were subject to complaint. Only a handful of these criminals are known to us.  The CRA’s treatment of pandemic profiteers stands in sharp contrast to its attitude toward “fraudsters” in relation to the Canada Emergency Response Benefit (CERB). Last summer, the CRA planned to hunt down and punish “CERB fraudsters”: in other words, ordinary people, often in desperate situations, who received the measly $2,000 a month benefit without fitting the exact requirements. If the CRA had had its way, punishment for fraudsters would range from fines to six months of jail time. The agency only abandoned this plan after receiving public backlash. In the last few months, the CRA has resumed its crusade against “fraudsters”. Agency bureaucrats are tirelessly working to get every penny back that was “wrongfully” given to ordinary people, and benefit recipients are assumed guilty until proven innocent. Meanwhile, the agency has no intention to punish the millionaires and billionaires who helped themselves to taxpayer money. 

Despite the CRA protecting the pandemic profiteers, some information is available to the public. The CBC conducted an investigation on this issue back in December. They analyzed the financial statements of 53 companies that disclosed receiving $10 million or more from the CEWS. Of these 53 companies, analysts found that 30 had issued quarterly payments to their shareholders while receiving the CEWS. In other words, more than half of the companies that took over $10 million did not actually need the program to avoid laying off workers. Thirteen of the 53 companies investigated actually increased their profits during the same period they received millions in subsidies! 

With no help from the government, a few companies have been exposed to the public for abusing the CEWS. Among those that are known, TFI International has displayed the worst abuses. TFI International took a whopping $52.3 million in government handouts during the pandemic. Meanwhile, the company hiked its dividends twice during the pandemic and paid $67 million to its shareholders. The company also spent $9 million on buying back shares to drive up share prices. Clearly, TFI International had more than enough money to pay their workers if they wanted to keep them on. Nevertheless, TFI International went ahead and laid off 1,600 workers

CEWS fraudsters?

There are certainly many other companies that have abused this program to the same extent as TFI International, but we have very little information on them because the government is protecting their identities. There is no plan in place to punish any of them, because technically they did not break the law! This is very interesting, because the program is called the Canada Emergency Wage Subsidy, and the public was told the purpose of the program is to protect jobs. But this clearly is not what has happened.

The CEWS comes with a huge price tag. It is currently the most expensive COVID-19 relief program in Canada, costing taxpayers $100 billion. The CEWS is more expensive than the CERB and Canada Recovery Benefit (CRB) combined, which cost approximately $80 billion total. While CERB and CRB leave a lot to be desired, they kept millions of unemployed workers from sinking into total destitution. How well has the CEWS protected jobs? According to one economist’s estimates, CEWS is currently costing the government $14,500 per month for every job saved. This is much more than each of those workers makes in a month in wages! Here we see that this program was essentially flushing billions of dollars down the drain into corporate coffers.

This “flaw” in the program is not by accident, but by design. As we explained when the CEWS was first announced last April, this program is not actually intended to benefit workers. This sort of “wage subsidy” is just a corporate subsidy by another name. We do not know how much of the funding went to actual wages and struggling small businesses, and how much went directly into the pockets of the millionaires and billionaires. The government is keeping information from the public which probably means that people will be angry if they know the truth.

Rich get richer

Why did the government put so much money toward corporate handouts? According to corporate apologists, when corporations do well, the wealth trickles down to the workers! Is this true? Many companies such as Loblaws and Canadian Tire saw a boost in demand for their products during the pandemic and blew through their revenue targets. Out of their profits, they paid millions of dollars to their executives in salary, share and option rewards, and bonuses. To give one example, now-deceased Loblaw executive chairman Galen G. Weston made $3.55-million this year. How much of this wealth “trickled down” to the workers? According to the company, there is no money for paid sick days for the workers. The company also discontinued its “hero pay” program back in November. Despite making record sales, the company can’t afford to give its workers a paltry $2 raise for working during the pandemic and risking their lives every single day. When the rich get richer, the only people who benefit are the rich themselves. Regardless, according to the 2021 budget, the plan is to spend another 24 billion on the CEWS. This is double the amount that will be slotted for the CRB.

At the end of the day, the Canadian government provided billions of dollars in corporate handouts to the rich because it is a capitalist government. Whether you have the Liberals in office or the Conservatives, both of Canada’s main political parties serve the ruling class. As Marx famously said in The Communist Manifesto, “The executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie.” In times of great crisis, such as we are living in today, the veil is lifted and the ugly face of the Canadian state is revealed. While millions sank into poverty and thousands died, the government has prioritized the profits of the wealthy over the well-being of workers and the poor. While the pandemic continues to rage across the country, our government continues to prioritize profits over lives. 

The fact of the matter is that we cannot control what we do not own. The big private companies have held a gun to the head of the government, claiming that they need hundreds of billions of dollars and that if they do not receive them, they will throw millions on the streets. Well, we have seen the result of these corporate bailouts. These greedy bastards have pocketed the money, making record profits while paying dividends to their shareholders!

These capitalists have shown that they care more about money than our very lives. Any company found guilty of this should be nationalized and run under workers’ control. The workers who have kept working for low wages all through this pandemic—these “heroes” are the real force which makes our society and economy run. The workers know how the companies run because that is what they do every day and they would therefore do a much better job managing the economy. The working class gains nothing from giving billions of dollars in charity to millionaires and billionaires so they can continue to become even more insanely rich as we die. It is high time we stopped the gravy train.

No bailouts! 

Nationalize the pandemic profiteers and run them under workers’ control!