Hands in our pockets
(Stock Photo Yahoo)
A bail-out for Bombardier and the Beaudoin family appears to be in the cards, as Trudeau and the Liberals continue to blur the lines between Capitalism and Socialism.
Bombardier a failing Canadian aerospace and transportation manufacturer has once again requested billions of dollars in hand-outs from the federal government in addition to the billions it recently received from the Quebec government, and the Caisse de depots et placement du Quebec. The Caisse de depots et placement du Quebec are the administrators of the Quebec public and para-public pension plans.
The Quebec government recently gave Bombardier 1 billion dollars for a 49.5 per cent stake in the C Series jet Program, while the Caisse de depots has put up an additional 1.5 billion, U.S., for a 30 per cent stake in the companies train division. The additional funding provided by the Quebec government and Caisse de depots, further entwines the fates of Bombardier, the province Quebec and the rest of Canada.
Bombardier is a publicly traded company on the Toronto Stock Exchange under the symbols BBD.A and BBD.B. These two symbols represent two different classes of shares with different stakeholder voting rights. The different shareholder voting rights have drawn criticism from the investing public as well as those in government who are opposed to the Bombardier bail-out. The BBD.A shares come with 10 votes per share while the BBD.B shares only have one vote.
The Beaudion’s, the founding family of Bombardier hold 53.4 per cent of the voting rights. As such, these dual class shares provide the Beaudion family with complete control of the company regardless of what its stakeholders may think
These issues of governance as it relates to a publicly traded company funded with private investor capital is one thing, but when a company continually receives Canadian tax-payer dollars to remain solvent, corporate governance becomes a Canadian issue.
All tax dollars transferred to Bombardier, can be deployed at the discretion of the Beaudion family and its hand-picked board of directors. Bailing-out Bombardier literally means handing over billions of tax-payer dollars to a company that hasn’t made a profit since 2013 with no strings attached.
The obvious governance issues aside, when you tie the fate of Quebec and its public pension plans to this deal, you’re essentially saying that Bombardier should be permitted to gorge itself on tax-payer dollars for the rest of its existence, as the fate of Quebec's public pension plan is resting on the shoulders of Bombardier and the Beaudions.
Of course, the justification for this bailout is quite simply jobs. Bombardier has recently announced 7,000 layoffs worldwide with 2,800 in Canada. This comes as a proverbial shot across the bow of the Liberal Feds. It’s a warning that more layoffs are likely to come unless additional tax-payer money is handed over.
This is exactly what happens when governments get themselves into bed with business, especially businesses with bad governance.
Jobs, what about Alberta and the oil patch?
According to the financial post, Alberta lost 63,500 jobs in the first eight months of 2015, which is more than the entire fulltime Bombardier workforce worldwide.
In 2014-15, the Canadian Finance Department reported Quebec as being the recipient of 19.6 billion dollars in federal transfer payments with a large chuck of that coming from Alberta’s oil patch. It would be reasonable to assume that some of the 19.6 billion dollars in transfer payments made its way into Bombardier coffers.
While politicians politic, and Bombardier awaits a Trudeau handout, the Quebec government casually begins interweaving the fates of Canadians with those of Bombardier and Beaudion family while stifling Alberta’s hopes of an energy east pipeline.
Is this really where you want your tax dollars going?
