Canada demands corporations protect workers’ rights, limit dividends, share buy-backs, exec pay in exchange for COVID-19 support

Canada is demanding the nation’s largest corporations hit hard by the COVID-19 pandemic protect workers’ rights while imposing strict limits on dividends, share buy-backs, and executive pay in exchange for government support to ride out the crisis.

The corporations seeking bridge financing under the Large Employer Emergency Financing Facility (LEEFF) will also be required to demonstrate environmental sustainability and aim to meet national climate change goals.

Tax evaders and banks will not be eligible for the facility which provides funding for companies with annual revenues of more than $300 million to navigate the economic turbulence caused by the coronavirus pandemic that’s sweeping the globe.

“These are bridge loans, not bailouts,” Prime Minister Justin Trudeau emphasized during his daily briefing.

The official government announcement explained the conditions attached to support^[1]https://pm.gc.ca/en/news/news-releases/2020/05/11/prime-minister-announces-additional-support-businesses-help-save:

Companies seeking support must demonstrate how they intend to preserve employment and maintain investment activities. Recipients will need to commit to respect collective bargaining agreements and protect workers’ pensions. The LEEFF program will require strict limits to dividends, share buy-backs, and executive pay. In considering a company’s eligibility to assistance under the LEEFF program, an assessment may be made of its employment, tax, and economic activity in Canada, as well as its international organizational structure and financing arrangements. The program will not be available to companies that have been convicted of tax evasion. In addition, recipient companies would be required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, including how their future operations will support environmental sustainability and national climate goals.

Labour and civil society groups welcomed the government’s announcement.

“Good to hear about conditions on employment & restrictions on stock buybacks, dividends and exec pay, as we’ve argued for and for companies to disclose finances to the government.,” Toby Sanger, the head of the tax evasion watchdog Canadian for Tax Fairness, said.

“We’re glad to see the government announce support for hard-hit sectors, and companies that employ millions of Canadians,” said Canadian Labour Congress (CLC) President Hassan Yussuff. “Most importantly, the government has included explicit directives to respect collective agreements, bargaining and pension protections.”