Ottawa issued a $ 372.5-million loan last month while Quebec poured $1 billion US into Montreal-based aerospace giant.
Innovation Minister Navdeep Bains, Bombardier president and CEO Alain Bellemare and Transport Minister Marc Garneau were on hand last month to announce $372.5 million in federal aid. The federal government issued a $372.5-million loan last month for the C-Series and Global 7000 programs, while Quebec recently poured $1 billion US into the C-Series program in exchange for a 49.5 per cent stake.
The province’s pension fund manager, the Caisse de Dépôt, also bought a 30 per cent stake in the company’s railway division for $1.5 billion US.
Bombardier has announced job cuts totaling 14,500 positions worldwide over the last two years as it tries to regain its financial footing. The company cut its losses to $981 million US last year, down from $5.34 billion US in 2015.
Despite of the layoffs, low revenues and clutching on hundreds of millions of dollars in taxpayer subsidies, Bombardier awarded $32.6 million US to their top five senior executives.
Critics have called the salary increases unacceptable and said that they should be reversed.
In 2016, CEO Alain Bellemare got paid $9.5 million US, up from $6.4 million US in 2015. His annual bonus almost doubled to $2.36 million US. In 2016, Bombardier’s executive chairman Pierre Beaudoin’s compensation increased to $5.25 million US. That was up from $3.85 million US in 2015. The chief financial officer and heads of business and commercial aircraft, meanwhile, each received more than $4 million US, while the head of the railway division’s compensation increased 93 per cent to $4.7 million US.
Earlier Friday, senior Quebec cabinet ministers had called on Bombardier to respond to criticism about executive compensation. Bombardier executive chairman Pierre Beaudoin responded by asking for a pay cut just one day after the company was under fire for giving big raises to its top five executives.
“After listening to the recent public debate about the compensation of senior executives at Bombardier, I have asked the board of directors to reset my 2016 compensation, reducing it to the 2015 level,” he said in a news release.
It’s not the first-time Bombardier received complaints in regards to their interest-free loans. Brazil, for one, has lodged a formal complaint against Canada at the World Trade Organization arguing this gives the Quebec-based aerospace company an unfair competitive advantage.
The question remains: Should public dollars go to private companies?