Air Canada is on the cusp of a region of political turmoil, with Finance Minister Chrystia Freeland making clear her dissatisfaction with multi-million dollar bonuses for executives while the airline negotiates financial aid with Ottawa.
In its annual circular sent to shareholders on Monday, Air Canada revealed that it has paid $10 million in bonuses to executives identified as essential to the company’s survival over the past year.
Minister Freeland spoke in a long, slow and calm comment on Wednesday. She said she has been disappointed by the way companies appear not to be behaving responsibly with the taxpayer money given to her to survive the pandemic.
As for the rewards themselves, I called them inappropriate.
In April, the airline and the government reached an agreement under which Ottawa would grant a $5.9 billion loan to compensate customers whose flights had been canceled due to the pandemic. The agreement also stipulated a maximum of $1 million on bonus payments to executives up to 12 months after the loan was fully repaid.
The government also invested $500 million to acquire a 6% stake in the company, a move to assure taxpayers that they will benefit from a revival of Air Canada when air travel resumes its normal course.
This participation also places the government among the major shareholders of the air carrier. “This gives us a voice in institutional decision-making and we will not hesitate to express our informed opinion about what constitutes responsible institutional behaviour,” the minister warned. “Canadian companies that receive government funding have a duty to act responsibly towards Canadians,” she added.
In the House of Commons, Prime Minister Justin Trudeau later said in response to the Quebecoa bloc’s investigation that carrier executives would have to explain their position. For her part, Ms. Freeland made her comments during a virtual media conference on a new program to support the recall of laid-off employees.