I read something buried in the business section of the Toronto Star yesterday that absolutely boggles my mind.
Almost everyone in Canada is negatively affected by the COVID-19 pandemic. Some of course more than others and often in different ways, but few have escaped completely the consequences of dealing with this virulent global virus. Many thousands of people have been afflicted with the disease and too many families have endured the loss of loved ones. On top of that, almost everyone else has been faced with some of the residual affects of the virus, whether it be loss of income or employment, households turned upside down, friends and extended families not seen, restricted activities, loneliness, depression or just plain COVID fatigue. Everyone, or almost everyone, is paying some sort of price.
But we are a tough lot, we Canadians. Perhaps it is our northern heritage but most of us roll up our sleeves, suck it up, and do what needs to be done to get through this. Sure, there is grumbling here and there. That is natural and to be expected. These are not particularly happy times. But in general, unlike our neighbours to the south, we have avoided civil disobedience and tried hard to show tolerance and empathy to others and make the best of a very difficult and dangerous situation.
That tolerance has been extended to government at all levels in Canada. We know that the pandemic meant that they had to do things differently. We have, especially at the federal level, accepted less accountability, granted more power, and recognized the need for extraordinary public spending.
We tolerate this because we believe it is necessary in order to keep us as safe as possible, and to help those Canadians who are financially or otherwise affected by the COVID-19 pandemic and who need this assistance to survive, recover, and move forward positively. That is who we are.
But what happens to that tolerance when we find we were misled; that not all of the massive public spending went to help those who need it, but rather to line the pockets of those who do not? And that my friends, brings me to the story that was almost hidden in Saturday’s Toronto Star.
The article is written by Amir Barnea, a freelance columnist who contributes to the Star. The headline is innocent enough: “How Leon’s profited off government handouts”. Leon’s is a well-known national chain of furniture and appliance stores. They have two locations in Muskoka ably run by local franchise holders. But wait till you hear what their parent company has been able to pull off with the help of the federal government and with taxpayers’ money as a result of the pandemic.
According to the Toronto Star article, Leon’s net income “suddenly shot up by 88.8 per cent in the second quarter of 2020 (which ended on June 30) to $47.2 million compared to $25 million the year before.” It was the second-largest quarterly profit it had recorded in over a century of operation. It allowed Leon’s to hike their regular dividend to shareholders twice, and also declare a one-time special dividend payment.
How did this happen?
Well, according to Amir Barnea, “Leon’s didn’t discover a gold mine under its North York head office, but it did identify another treasure, courtesy of the federal government: The Canada Emergency Wage Subsidy (CEWS) which generated a $29.8 million windfall for the company.”
He goes on to explain, “The CEWS program provides eligible companies with a 75 per cent subsidy for salaries for both active employees and those laid off and rehired. While firms were encouraged by the government to immediately re-hire employees let go when the pandemic hit, this was not a binding condition for receiving funds. This allowed companies like Leon’s to book record profits by receiving large subsidies for active employees while keeping the company lean for a few months” [by not bringing back laid off employees who were therefore additionally subsidized by $2,000 a month CERB payments].
My understanding is that the CEWS program was intended (or at least was said to be intended) for businesses, especially smaller, privately owned companies, to survive during the pandemic by assisting them with funds to pay employees during that time. It was not (or should not have been) designed to help companies of any size to make more money and profit from the pandemic at taxpayers’ considerable expense.
There are a few points that need to be made here. First, while they appear to have taken advantage of a situation, Leon’s did nothing illegal and they did nothing that the Trudeau Government did not give them the ability to do. They met all eligibility requirements set by the government.
Second, Leon’s is simply an example we are now aware of. Quite likely, we will never know how many other companies in Canada have made a profit from government handouts on the back of the pandemic or how much that has affected our insurmountable national debt, now approaching a trillion dollars.
And finally, we will also probably never know how much this particular structure of the CEWS program was designed to assist friends of the current government. What we do know is that it is all on the backs of current and future generations.
I am angry about all this. I am not prepared to call it corruption but I do believe there is a pattern here of the Trudeau Government not being clear to Canadians where the money is going in relation to the pandemic and who is actually benefitting from it.
Because Parliament was effectively shut down for much of the pandemic by the government, much of the legislation related to COVID-19 did not get the scrutiny required to catch loopholes that allowed companies such as Leon’s to profit from the pandemic. It did not allow oversight of COVID-19 contracts awarded without tender and it was unable to determine how many of these went to friends of the government such as the WE Charity.
In my article last week, I wrote that no government will endure this pandemic without making mistakes and that all we can ask is that they do their best. I stand by that.
However, I see all of this less as a mistake and more as a breach of trust affecting Canadians and letting down all those who have sacrificed during this pandemic and tolerated government actions for what they believed to be the good of the country, when in fact it may not all have been.
That is where Canadians, however patient and tolerant as we are wont to be, should firmly draw the line.
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