Telecoms take $240M from wage subsidy
Layoffs, dividends draw criticism from outsiders seeing flaws in program
Canada’s big three telecom companies have collectively received more than $240 million from the federal government’s wage subsidy program while continuing to pay out billions of dollars in dividends to shareholders.
According to the most recent filings in provincial lobbyist registries, Bell has received $122.9 million, Rogers $82.3 million and Telus $38.6 million in support payments as part of the Canada Emergency Wage Subsidy (CEWS).
Since the beginning of the pandemic, the three companies have continued to pay out regular dividends to shareholders; Bell and Telus have announced increases to their annual payouts. Both Bell and Rogers have also laid off workers at their hard-hit media divisions.
Other large businesses have also paid out dividends while receiving CEWS support, including numerous companies in the oilpatch, auto-parts maker Linamar and furniture retailer Leon’s. (Torstar, the parent company of the Waterloo Region Record, is among the recipients of the federal wage subsidy.)
Economists say the relief payments to large, profitable companies with ample access to credit illustrate problems in the way CEWS is designed, in these cases leading to benefits for shareholders but not necessarily targeted support for workers whose jobs are at risk. One Liberal MP is calling on the government to claw back payments from companies that have paid dividends.
“CEWS is sold as a wage subsidy, but it’s really a business expense subsidy,” said Amin Mawani, associate professor of taxation at the Schulich School of Business at York University.
Mawani has argued that Canada should consider a model where the government pays subsidies only in respect of employees who miss hours of work because of the pandemic.
Under the current rules of the Canadian program, businesses with any level of revenue decline are eligible for at least some level of subsidy with respect to all their Canadian employees.
He said it is understandable that businesses would continue to pay dividends, which he described as a “cost of doing business” akin to paying interest to the bank on loans, but he questioned the need to hike payouts this year. “I don’t think shareholders
were necessarily expecting an increase during the pandemic.”
Bell cut more than 200 jobs at its media division in recent weeks, a move that followed a restructuring of management jobs in January. Rogers also laid off workers in its sports and media business in November.
Michael Smart, a professor of economics at the University of Toronto and co-director of Finances of the Nation, a virtual think tank on public policy, said those moves “tell me that CEWS is not saving jobs.”
“If businesses can get a subsidy from the government, of course they’re going to apply for it, but the subsidy is not going to be effective in saving jobs. Other business decisions are going to drive hiring and layoff decisions,” he said.
While it makes sense to help small businesses struggling to
get credit, Smart said, Bell, Rogers and Telus “have ample access to borrow in their own right to get through this situation.”
On Friday, Nate Erskinesmith, Liberal MP for Beaches—east York in Toronto, filed a private member’s motion calling on the government to compel companies that received CEWS money to return any equivalent amounts that they paid in dividends or through share buybacks.
Erskine-smith told the Star the companies have “abused the goodwill of the federal government. These companies are not in real need,” he said, adding “If anything, this notion of, ‘We are all in this together’ breaks down when you have taxpayers stepping in to support dividend payments to shareholders.”
The telecoms all said the wage support payments they got helped keep workers employed in the face of unprecedented disruption caused by COVID-19, which included retail store closures that affected all three companies as well as advertising declines and loss of revenue related to sports broadcasts that hit the media operations at Bell and Rogers.
“Bell implemented a range of measures in 2020 to keep team members employed, including job reassignments to customer service and other roles, but job losses in media and retail would have been unavoidable in 2020 without CEWS support,” said Bell spokesperson Marc Choma, adding the company has not “applied for or received CEWS funding since last November.”
Telus spokesperson Erin Dermer said, “The subsidy helped to avoid layoffs as retail stores were closed and home installations and repairs were cancelled.”
“The wage subsidy program, designed to help businesses of all sizes, across all sectors, helped us provide critical support to team members whose work was impacted,” said Rogers spokesperson Andrew Garas.
Rogers and Bell have reported full-year financial numbers for 2020, revealing that Rogers paid out just over $1 billion in dividends last year while Bell paid shareholders close to $3 billion. Rogers maintained its payout at the same level it has been at for several years while Bell said last week it is increasing its annual dividend by 5.1 per cent.
Telus, which has not reported full-year results, had paid shareholders about $1.5 billion by early November of last year, when it also announced a 6.8 per cent increase in its annual payout.
Eight former Niagara Icedogs, including the past three team captains, are among 166 Ontario Hockey League graduates starting the 2020-21 season on American Hockey League rosters.
Ivan Lodnia, who was promoted to captain midway through his overage season after Akil Thomas was traded to the Peterborough Petes, is back in North America and on the Iowa Wild after scoring one goal and collecting six assists in 27 games in the Kontinental Hockey League.
Thomas, a second-round pick of the Los Angeles Kings in the 2018 draft, taken 51st overall, is turning pro with the Californiabased Ontario Reign, while Ben Jones, a Vegas Golden Knights prospect and Niagara’s captain in ’18-19, has been assigned to the Henderson Silver Knights in Nevada.
A third-round pick of the Minnesota Wild in the ’17 National Hockey League draft, with the 85th overall selection, Lodnia is in Des Moines, playing for the Iowa Wild, the top farm team in the Minnesota organization. He started the season in Belarus on loan to Dinamo Minsk.
Jones, a seventh-rounder in ’17 who went to Vegas with the 189th overall pick, split ’19-20 competing in the ECHL and AHL — playing eight games for the Fort Wayne, Ind., Komets and 36 games for the Chicago Wolves — after four seasons with the Icedogs.
Since the Golden Knights moved their top farm club to Henderson, a Las Vegas suburb, during the off-season, the Wolves have become the landing spot in the AHL for prospects in both the Carolina Hurricanes and Nashville Predators organizations.
Among the eight Ohlers on the Chicago roster is one-time Icedog Phil Tomasino, Nashville’s first pick in 2019, 24th overall.
Tomasino was in his third season in Niagara when the team, on the ground floor of a rebuild, traded him to the Oshawa Generals for six second-round picks, a third-rounder and two
fourth-round selections. The picks span ’20 to ’24.
Sam Miletic closed out a three-year OHL career with the Icedogs after going undrafted. He is returning for a third season with the Wilkes/barre Penguins in northeastern Pennsylvania, the top farm team of the Pittsburgh Penguins.
Miletic signed an entry-level NHL contract with Pittsburgh as a free agent before the start of the 2017-18 season. He was midway into his third campaign with the London Knights when he was acquired by Niagara in a deadline deal in January ’18.
Other one-time Icedogs on season-opening AHL rosters are Josh Wesley, selected in the ’14 draft in the fourth round, 96th overall, by the Carolina Hurricanes, with the Utica, N.Y., Comets; Brett Ritchie, picked in the second round of the ’11 draft, 44th overall, by the Dallas Stars, with the Stockton, Calif., Heat; and Tom Kuhnhackl, selected in the ’10 draft in the fourth round, 110th overall, by Pittsburgh, with the Bridgeport, Conn., Sound Tigers.
Utica is a shared affiliate of the St. Louis Blues and Vancouver Canucks, while Stockton and Bridgeport are the top farm teams of the New York Islanders and Calgary Flames, respectively.
Also back on the ice one rung below the NHL is Niagara Falls native Mac Hollowell. The fivefoot-10, 170-pound, right-shooting defenceman is returning for a second season with the Toronto Marlies after being chosen by the Toronto Maple Leafs in the fourth round of the ’18 draft with the 118th pick.
Hollowell spent one season in the Greater Ontario Junior Hockey League with the junior B Niagara Falls Canucks before going on to play parts of five campaigns in the OHL with the Sault St. Marie Greyhounds.
His one-time teammate in the Soo, defenceman Conor Timmins, a Thorold native, so far has played eight games with the Colorado Avalanche, the team that picked him in the second round of the 2017 draft with the 32nd overall selection.
Two NHL prospects who joined the team for a championship run in ’18 started the season on NHL rosters: Jason Robertson, selected in ’17 in the second round, 39th overall, by the Dallas Stars, and Jack Studnicka, picked in ’17 in the second round, 53rd overall, by the Boston Bruins. Coming into the week, Robertson has one goal in four games with Dallas this year. Studnicka has one goal in six games so far with Boston.
Dave Bell, Icedogs head coach in ’16-17 after three seasons as an assistant, is beginning his fourth season in the AHL as an assistant and second with the Belleville, Ont., Senators. The one-time pro defenceman spent two years on the Ontario Reign coaching staff after leaving Niagara.
Much like the OHL’S ’19-20 season, the AHL’S campaign was halted prematurely due to the ongoing COVID-19 pandemic March 11, wrapping up without a Calder Cup champion being crowned.
The AHL’S 85th season started Friday, with realigned divisions and three fewer teams as the reigning first-place Milwaukee Admirals opted out along with the ’19 Calder Cup champion Charlotte, N.C., Checkers and the Springfield, Mass., Thunderbirds.
Season openers in the AHL’S Canadian Division, which includes the Laval, Que., Rocket, Manitoba Moose, Stockton Heat, playing out of Calgary, plus Belleville and Toronto have yet to be scheduled.
The Ontario Reign, top affiliate of the Kings, currently leads the AHL with 10 OHL graduates on their roster, followed by the Binghamton, N.Y., Devils, Syracuse, N.Y., Crunch and Texas Stars, nine apiece.
The Soo Greyhounds lead OHL clubs with 16 past and present players on the list, followed by the London Knights, with 15, the Saginaw Spirit, 14, and the Kitchener Rangers, Ottawa 67’s and Owen Sound Attack, 11 each.