Anger over Bombardier executive pay puts leaders in Quebec, Ottawa in tight spot

Federal and provincial leaders have sunk millions into Bombardier. Now they have to both defend those investments and condemn the company's executives.

Pay hikes for senior executives force politicians to both condemn and defend the aerospace giant

Bombardier has accepted close to $1.6 billion in government aid over the past year. Executives announced last week they were giving themselves a 50 per cent pay raise. (Ryan Remiorz/Canadian Press)

As hundreds gathered this weekend outside the Montreal offices of Bombardier, chanting angrily over executive pay, a Quebec cabinet minister emerged from a sleek black minivan with tinted windows.

Government House leader Jean-Marc Fournier said he was there to listen to the protesters.

He was booed and chased away by the crowd.

The reaction underscores the delicate position that Bombardier has created for the federal and provincial politicians who have poured hundreds of millions of dollars into the aerospace company in the past year — funding that spared it the ignominy of filing for bankruptcy. 

In promptly deciding to award themselves a nearly 50 per cent pay raise, Bombardier's senior executives sparked sharp public backlash.

Innovation Minister Navdeep Bains, centre, said he was disappointed by news of the pay raise. (Paul Chiasson/Canadian Press)

So deep was the anger, the executives agreed over the weekend to forgo a portion of the raise until 2020 and make it contingent on meeting performance targets.

Now politicians in both Quebec City and Ottawa, who once boasted of their investments in the company's CSeries business jet program, are struggling to demonstrate to the electorate that they understand the outrage.   

"Like many Canadians, I had concerns," federal Innovation Minister Navdeep Bains said Monday at an aerospace industry event in Montreal. 

"I was disappointed, and the company took steps to address the issue."

Times have changed

It wasn't two months ago that Bains, announcing $372.5 million in federal aid for the company, said he was "proud" of the federal government's long-standing relationship with Bombardier.

In the House of Commons, interim Conservative Leader Rona Ambrose asked the prime minister if he was embarrassed by his government's support for Bombardier, given the generous executive pay hike.

"We're obviously not pleased with the decision that Bombardier made around its remuneration for its executives," Justin Trudeau replied. But he added the aid was necessary to secure jobs in the aerospace industry.

​Quebec Premier Philippe Couillard, whose government invested $1.3 billion in 2016 for a share in the CSeries program, has been unabashed about the merits of that decision. 

"Bombardier still exists, thanks to us," he said in February. 

Prime Minister Justin Trudeau was asked on Monday whether Bombardier's actions made him embarrassed, following February's nearly $400-million investment. (Sean Kilpatrick/Canadian Press)

On Monday, Couillard expressed his "disappointment" about the executive pay raise, saying the company ignored the social and economic context in Quebec.

But the premier also sought to keep the criticism in check, stressing the need to maintain a business-friendly environment.

"I understand that there is some dissatisfaction, a bit of frustration," Couillard said. "But remember the reality of this company and its importance for Quebec."

Bridge over troubled waters

Bombardier is the largest player in the province's aerospace industry, which employs some 40,000 people. The company's future in that industry —  it also has a large mass-transit division — is largely dependent on the success of the CSeries program. 

After 2½ years of delays, and $2 billion of cost overruns, Bombardier finally started to see orders pick up last year for the single-aisle jet.

U.S. carrier Delta Air Lines Inc. bought 75 CS100 aircraft and has an option for an additional 50 planes. In June, Air Canada announced the purchase of 45 jets, which are marketed for their fuel efficiency and ability to make transatlantic flights.

But despite the increase in demand, Bombardier is undertaking a dramatic overhaul of its employee base. It plans to lay off 14,500 workers worldwide as part of an effort to regain financial health.

The success of the CSeries program is seen as vital to the company's fortunes. (Paul Chiasson/Canadian Press)

Those layoffs, combined with the large government investments, have contributed to the growing indignation over the executive compensation package.

In just a few days, Quebec's small left-leaning party, Québec Solidaire, has collected 25,000 signatures on a petition calling for the provincial government to revisit the terms of its deal with Bombardier. 

Couillard rejected that proposal outright on Monday.

​But his party will be called upon to vote on a motion — expected to be tabled by the Parti Québecois on Tuesday — that asks Bombardier's executives to renounce their 2016 bonuses.

The premier declined to answer whether he would vote for or against the motion, but hinted he prefers the laissez-faire approach.

"If companies would be subjected to direct government influence in their daily management, that is something that would be very negative for the Quebec economy," he said.

With files from The Canadian Press


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