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Bell received $122M in wage subsidies, bringing big 3 telecom total to nearly quarter billion

/Wikipedia

Last updated on January 25, 2021

Bell filed its first provincial lobby registrations in months and, as the downUP previously reported, it would inevitably reveal how much the company received in wage subsidy money.

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Digestible version (full story below):

  • Bell received $122.8 million in wage subsidy money from the Canada Revenue Agency, the company confirmed to the downUP, bringing the total amount of federal wage subsidies given to Rogers, Telus and Bell to nearly a quarter of a billion dollars
  • The Canada Emergency Wage Subsidy program is intended to keep employees of Covid-impacted companies on the payroll, instead of laying them off
  • The figure was revealed when Canada’s largest telephone company first filed a new lobby registration in Alberta, which requires registrants to note how much money they received from any government entity within the past 12 months
  • Bell originally didn’t file the CEWS amount when it registered that semi-annual lobby renewal on Jan. 13, but following a downUP inquiry about the missing information to Alberta’s ethics commissioner, the company filed a “notice of change” on Friday including the figures
  • Bell recently went through a restructuring of its media division, which included layoffs of some of its more well-known figures
  • Bell and Rogers have reported difficulty in their respective media businesses, which were the primary drivers of the amounts they received

Key figure:

Bell received $122,853,243 from the Canada Revenue Agency.

What this story contributes:

While it has been known that Bell has been receiving wage subsidy money, it has refused to reveal how much — until now.

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Deep version:

It is widely known that Bell has been receiving money from the Canada Emergency Wage Subsidy (CEWS) program, which is intended to help businesses keep employees on the payroll during the pandemic, but the company has refused to reveal how much. This publication previously reported that the amount would inevitably become unmasked when the company went to file its latest lobby files.

That day was Friday, when Bell came to file its lobby registration in the Alberta, Ontario and New Brunswick registrars and reported $122.8 million it received from the Canada Revenue Agency (CRA), solidifying it as one of the bigger beneficiaries of the CEWS program even as it goes through a number of high-level layoffs.

Bell, which confirmed the CEWS figure for the downUP, filed semi-annual paper work on January 13 and initially reported receiving no money from the government. Because registrants in Alberta must report money they received from any government entity within the past 12 months, this publication reached out to the Office of the Ethics Commissioner and asked about that specific discrepancy — where is Bell’s CEWS data?

While the office said last Thursday it cannot discuss the particulars of any lobbyist registrants’ case, it said the following in an email: “Upon being made aware that a lobbyist may have provided inaccurate or incomplete information in a filed registration, the Registrar would contact the lobbyist to notify the lobbyist of the issue and to give the lobbyist an opportunity to respond. Additional information may be requested from the lobbyist.”

A day later, Bell filed a “notice of change” in the Alberta record revealing how much it received from the CRA. On that day, it also filed a registration in the Ontario lobbyist registrar with the numbers, and this week, it filed the figures in the New Brunswick lobby ledger.

The ethics office of Alberta said that in cases where it finds the rules breach was unintentional, there is no history of non-compliance, the lobbyist rectifies the situation promptly and demonstrates it takes the obligations under the law seriously, the lobbyist “may be given a warning and instructed to bring the registration into compliance within a particular time frame.” In more severe cases, such as intentional non-compliance or repeated breaches, a monetary penalty of up to $25,000 would be handed down.

There is no evidence Bell deliberately left out the data in its original filing. Before the figures were registered in the lobby files, the downUP reached out a couple of months ago to Bell, which only said that the CEWS program helped it reduce its labour costs.

The amount Bell has received means the big three telecoms — which includes Rogers and Telus — have a combined $242 million in subsidy money, a large haul even as some of them go through restructurings and layoffs.

Earlier this month, Bell shook-up the executive roster of its media division, shuffling some in and letting others out. Then, telecom and media publication Cartt.ca reported this week that Bell Media made a further 17 cuts at the director and general manager levels.

Since the downUP first reported on the CEWS figures of Rogers and Telus, the big dogs have received increased subsidy amounts, as claim periods are over four-week intervals. Rogers increased its total to $82 million so far (the program will run at least until June this year) and the data we have on Telus shows they have received $38.5 million. Both those figures also came from provincial lobby registrations.

While it’s known that Rogers and Bell can largely attribute government assistance to hurting media properties, it’s unclear where Telus is putting those subsidies.

In December, the Financial Post reported that a number of companies were receiving CEWS money while increasing the payout of dividends. Telus has increased its dividends during the year, Rogers had no change to its payouts, and Bell declared a higher dividend in February — before the pandemic — and has maintained it since.

According to the FP, when Bell was asked how much it has received, the company said the amount was immaterial and didn’t reveal the figure.

Bell owns a number of media properties, some of which have struggled during the pandemic, according to its financial reports. Rogers also has a media arm that has limped. Corus, which received at least $34 million in CEWS, is a pure-play media company. Cogeco, which owns a slate of radio properties, received nearly $6 million.

The large telecoms likely benefitted from a rule change for the CEWS program. In the program’s earlier days, companies needed to meet a revenue decline threshold of 30 per cent in a single month to qualify. But when the federal government came this summer to extend the program until the end of the year, it eliminated that threshold and implemented a sliding scale that will see money decline until the end of the pandemic.

Bell CEO Mirko Bibic noted that, despite the hit to its media properties, “we maintain Bell media’s margin stable year-over-year at approximately 30% due” partly to “amounts received under the federal government’s employment wage subsidy program as we met eligible criteria for parts of our media operation during the initial April/ May measurement period.” It’s unclear how much it received in subsidies in each quarter.

In an opinion column in the Globe and Mail this summer, Allan Lanthier, a former advisor to the CRA and the finance minister, said the fact that Rogers would theoretically be entitled to at least $25 million from the program showed the government’s faulty planning when it removed the 30 per cent revenue decline threshold to qualify.

“There is no mischief on the part of these companies: Management has a fiduciary responsibility to the company’s stakeholders – shareholders, employees and customers – to claim any amounts that are legally due,” he wrote.

“It is government policy that is out of whack,” that allowed such a “windfall” for large corporations, he said.

The CEWS program has approved roughly $57 billion in subsidies from about 2.1 million applicants, but only 420 applicants have received more than $5 million.

Receipts” is a series of stories based on financials, documents from sources or public records requests

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