(Ottawa) The NDP wants the federal government to take back the wage subsidies given to companies that have benefited from them to increase the salaries of their executives.
In a letter to Finance Minister Christiaan Freeland, MP Peter Julian argued that all publicly traded companies that receive wage subsidies should be reimbursed to the government for pay rises or bonuses paid to senior management.
Mr Julian criticized the government for not including in the program conditions to limit share repurchases and dividend growth.
The Canada Emergency Wage Subsidy (CUSS) accounts for up to 75% of the company’s employees’ salaries. The program is estimated to be over 100 billion.
Minister Freeland spokeswoman Catherine Kaplinskas said the program would allow 5.3 million workers to continue or re-employ their jobs.
According to economist David McDonald, the general tax rule will solve the problem cited by the New Democrats.
Michael Smart, an economist at the University of Toronto, prefers future program reforms to retroactive reimbursements. Instead, he recommends that the federal government return the subsidy to small businesses and struggling sectors or allocate it only to jobs at risk.
The government has set up a system in its latest budget to recover money paid to listed companies accused of increasing executive compensation. The NDP also wants the move to be implemented in advance.