Bombardier Boondoggle Bailout

Last month, the Canadian government agreed to provide Bombardier Inc. $372.5 million to help them get through some financial challenges. That amount was in addition to the U.S. $1 billion that the Quebec government has invested. As major international companies can provide substantial employment opportunities, a cost-benefit analysis on the economic outcome will usually dictate what the government is prepared to do. While taxpayers cough up the money to keep the corporations afloat, the executives that manage them continue to receive extravagant pay bonuses. If corporations are struggling financially, why are its executives getting a 50% increase in compensation? Easy answer. It's in their employment contract and you, the taxpayer, is on the hook to pay it. Bombardier's six highest-paid executives earned U.S. $32.7 million as they decided to cut 14,000 jobs.

You may recall the 2008 housing bust in the United States. While the overall economic output took a dive, governments in both the U.S. and Canada stepped in with loans to keep the automotive industry going. On Wall Street, as some major investment companies headed to bankruptcy, their executives left with very lucrative compensation packages. Again, the payouts were part of their employment contract.

Corporations will argue that in order to attract top-level executives they need to be competitive with other corporations and that requires that type of financial incentive. Perhaps it is time to incorporate a clause into those executive contracts that stipulates when corporations are required to seek public financial assistance there will also be an impact on the terms of their employment.

We need to stop being 'shocked' each time we hear about this reality and demand the government initiate some type of process that is fair not only to the corporation, its executives and employees but also to the taxpayers that are footing the bill. Simply saying the bailout protects jobs is no longer sufficient.