Bombardier and The Divine Right of Kings
The Quebec and Federal Governments have combined to provide the equivalent of about one third of the entire annual budget for the Scientific Research and Experimental Development (“SR&ED”) program to a single company — Bombardier in the form of ‘repayable’ loans.
Note that under SR&ED rules these kinds of loans are considered “Government Assistance’.
While the usual suspects of advisors: eg. right wing academics, business writers, the well-heeled and the unabashedly entitled continue to call for reductions to the SR&ED program, the optics of this deal are spectacularly bad, and call into question the Government’s ability to protect taxpayers’ money.
Their first foray into the kind of direct funding model promoted by their advisors was disastrous — at least on a political level.
It could be that these loans make economic sense, however Canadians are truly shocked at the abhorrent behaviour of six Bombardier executives who granted themselves massive, multi-million dollar bonuses at a time when the company was losing money and cutting staff.
In an attempt to justify their behaviour, the company pointed to the need to pay the global market rate for skilled senior executives.
It is important to point out that the company was failing AND that at least two of the executives are family members (the son-in-law and grandson of the founder). What is the global market rate for business leaders who fail?
So while the fundamentalists in the US appear poised to attack the notion of the separation of church and state, in Canada we appear ready to embrace the divine right of kings (aka “the one percent”).
It seems like the twenty-first century is becoming more like the 18th century — but with better technology.