Deputy Prime Minister and Minister of Finance Chrystia Freeland participates in a virtual discussion from Ottawa on Monday, May 3, 2021, with seniors from Residence Memphremagog in Magog, Quebec. THE CANADIAN PRESS/Sean Kilpatrick

Deputy Prime Minister and Minister of Finance Chrystia Freeland participates in a virtual discussion from Ottawa on Monday, May 3, 2021, with seniors from Residence Memphremagog in Magog, Quebec. THE CANADIAN PRESS/Sean Kilpatrick

Freeland says feds will voice concerns to Air Canada over executive bonuses

Federal finance minister calls airline’s $10 million payouts ‘inappropriate’

Air Canada is heading for a bout of political turbulence as Finance Minister Chrystia Freeland signalled her displeasure over millions in bonuses to the airline’s executives as the company negotiated a federal bailout.

The airline on Monday disclosed in its annual proxy circular to shareholders that it gave $10 million in bonuses to people the investor document called instrumental to the airline’s survival over the past year as air travel plunged during the pandemic.

In a lengthy comment Wednesday, Freeland, calmly and slowly, said she was disappointed in how some businesses seem not to be behaving as responsible corporate citizens while receiving taxpayer-funded federal aid to survive the pandemic.

On the bonuses themselves, she called them inappropriate.

In April, the airline and government agreed to a $5.9 billion loan package that includes money to help refund passenger tickets, but also capped executive compensation at $1 million until 12 months after the loan is fully repaid.

The government also paid $500 million for a six per cent stake in the country’s biggest airline, which Freeland says was done to ensure taxpayers could benefit once Air Canada’s revenue rose once regular travel resumed.

It also makes the government one of the key shareholders in the airline.

“That gives us a voice in decisions taken by the company, and we will not shy away from using that voice to express our very reasonable view of what constitutes responsible corporate behaviour,” Freeland said.

“Canadian companies receiving money from the government have a duty to behave responsibly when it comes to regular Canadians who are now their shareholders as well as their customers.”

In the House of Commons later, Prime Minister Justin Trudeau said the airline’s executives needed to provide an explanation as he was pressed by the Bloc Québécois to make Air Canada claw back the compensation.

Freeland made the comments during a call with reporters where she outlined the details of a new federal program to help eligible companies rehire laid-off staff, or boosting hours for existing workers, by underwriting up to half of the payroll increase.

The government sees the program as an avenue to flow aid to recovering businesses as it winds down the wage subsidy, which has provided over $80 billion in aid to date. The official launch can’t happen until Parliament approves the Liberals’ budget bill, but the government is promising payments to be retroactive to June 6.

The value of the wage subsidy and suite of “recovery” benefits are set to decline starting next month. Freeland said the government will be looking at a suite of indicators before changing plans, including vaccination rates and case counts, how much of the economy has reopened, employment levels and hours worked.

The Air Canada investor document noted the airline benefited from $554 million through the wage-subsidy program in 2020, which the company said helped retain workers even as it laid off 20,000 staff because of the downturn.

The document said the airline plans to continue applying for the aid.

Freeland herself was scheduled to get on a plane later Wednesday to fly to the U.K. for a gathering of G7 finance ministers, which she noted was an in-person-only event.

As part of her travel plans, Freeland said she consulted the country’s chief public health officer, got tested for COVID-19 earlier this week, and plans to take precautions while at the meetings and then finally staying in a government-quarantine hotel before isolating in her home.

She said travel should be undertaken with extreme care and only where absolutely necessary.

“I undertake this trip with great reluctance because I think it is important for all of us to stay as close to home as possible,” Freeland said. “But my judgment was that it was important for Canada to have a seat at this table were some important decisions that will have a real effect on the lives of Canadians.”

Among the decisions expected are consensus on a global corporate tax rate that the United States has pushed. Freeland said Canada backs the concept, but wants to hammer out what the rate should be and the rules about how taxes are levied, which vary by jurisdiction.

Similarly, Freeland said she’s also looking for agreement on taxing digital services. Absent consensus, Freeland said the government would move ahead unilaterally with its own digital services tax starting Jan. 1, 2022.

—Jordan Press, The Canadian Press

RELATED: Airlines prepared for unruly passengers ahead of return to air travel

RELATED: Air Canada calls on Ottawa to lift hotel quarantine as it prepares for recovery

Air CanadaAir TravelFederal Politics

Just Posted

Cody Bandsma practises kiting with his new paraglider wing at Blackburn Park on Wednesday, June 9, 2021. (Lachlan Labere-Salmon Arm Observer)
VIDEO: Cody Bandsma reaching new heights over Salmon Arm

Former 100 Mile resident discovers Shuswap by air with powered paraglider

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

A promotional image for The Wharf Sessions album. (Salmon Arm Arts Centre image)
The Wharf Sessions album pays tribute to Salmon Arm’s long-running concert series

Salmon Arm Arts Centre wanted to give recording opportunity to artists in a tough year

(Heather Lueck image)
Crash north of Enderby knocks out power, slows Highway 97A traffic

A witness captured footage of a medical helicopter landing at the scene

An overhead view of the proposed location of 5 new units at Sicamous Creek Mobile Home Park. (District of Sicamous image)
5 new rental units proposed at Sicamous Creek Mobile Home Park

Coun. Gord Bushell said he thinks it will be great to have five new rentals in the community

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Cruise ship passengers arrive at Juneau, Alaska in 2018. Cruise lines have begun booking passengers for trips from Seattle to Alaska as early as this July, bypassing B.C. ports that are not allowed to have visitors until March 2022 under a Canadian COVID-19 restrictions. (Michael Penn/Juneau Empire)
B.C. doesn’t depend on U.S. law to attract cruise ships, Horgan says

Provinces to get update next week on Canada’s border closure

This undated photo provided by Girl Scouts of New Mexico Trails shows a scout donating cookies to firefighters in Rio Rancho, New Mexico, as part of the Hometown Heroes program. As the coronavirus pandemic wore into the spring selling season, many Girl Scout troops nixed their traditional cookie booths for safety reasons. That resulted in millions of boxes of unsold cookies. (Girl Scouts of New Mexico Trails via AP)
Thinner Mints: Girl Scouts have millions of unsold cookies

Since majority of cookies are sold in-person, pandemic made the shortfall expected

In this artist’s sketch, Nathaniel Veltman makes a video court appearance in London, Ont., on June 10, 2021 as Justice of the Peace Robert Seneshen (top left) and lawyer Alayna Jay look on. THE CANADIAN PRESS/Alexandra Newbould
Terror charges laid against London attack suspect

Crown says Nathaniel Veltman’s four counts of first-degree murder constitute an act of terrorism

Premier John Horgan speaks as provincial health officer Dr. Bonnie Henry, right, and health minister Adrian Dix look on during a press conference to update on the province's fall pandemic preparedness plan during a press conference from the press theatre at Legislature in Victoria, Wednesday, Sept. 9, 2020. THE CANADIAN PRESS/Chad Hipolito
B.C. officials to provide details on Step 2 of COVID reopening plan Monday

Step 2 could allow for larger gatherings and a resumption of recreational travel

Longtime SOWINS volunteer Diane Fru (far left) walks with members of her family as they Walk To End Abuse Sunday, June 13, 2021. South Okanagan Women In Needs Society (SOWINS) raised a record amount this year. (Monique Tamminga Western News)
Walk to End Abuse in South Okanagan breaks fundraising record

More than $53,000 raised so far while the pandemic has increased need for SOWINS’ services

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

Most Read