Federal Bank Awarded Senior Staff $104M in Bonuses, Raises During Pandemic: Taxpayers’ Federation: Taxpayers’ Federation

King Street West, a major commercial and entertainment district in in Toronto, on April 23, 2020. (Emma McIntyre/Getty Images)

A federal bank paid its employees about $104 million in bonuses and raises during the pandemic in 2020 and 2021, according to the Canadian Taxpayers Federation (CTF).

The Business Development Bank of Canada (BDC) issued a total of $93 million in bonuses to its employees over the two-year period, according to documents obtained by CTF through Access to Information requests.

CTF said in a Jan. 30 statement that the documents also showed that BDC gave its employees a total of $11 million in pay raises during the pandemic years without issuing any pay cuts.

BDC issued the pay increases despite reporting a net loss of $218 million in 2020, according to Blacklock’s Reporter.

CTF also said that the bank’s latest annual report shows that BDC senior executives received $8 million in salaries and benefits in 2020 and $8.8 million in 2021.

“That’s a 10 per cent pay bump—despite the fact the number of people on the senior management team fell from 24 to 23 during that time,” said the CTF release.

“This past year, the average salary for senior management at the Crown corporation was about $385,000. Meanwhile, the average Canadian salary in September 2022 was roughly $59,000.”

BDC says it is “a Crown corporation that was established by an Act of Parliament” in 1974 and also that it is “wholly owned by the government of Canada.”

“The objectives of the Business Development Bank of Canada and its subsidiaries (together, BDC) are to promote and assist in the establishment and development of business enterprises in Canada, with a focus on small and medium-sized enterprises, by providing a range of complementary lending, investment and advisory services,” the federal bank wrote in its 2022 annual report.

‘Big Bonuses’

A year earlier, BDC’s then-president Michael Denham said in the bank’s annual report that small businesses across Canada suffered “extreme hardship” because of the COVID-19 pandemic.

“As they struggled with business disruptions and cash flow problems, BDC stepped up to provide financing and advice support to help,” Denham wrote in BDC’s 2021 annual report.

“Our employees worked harder than ever last year,” he added.

Franco Terrazzano, the CTF’s federal director, says BDC “shouldn’t have doled out big bonuses and higher pay while Canadians were losing their jobs and businesses.”

CTF also says that BDC’s current president, Isabelle Hudon, previously awarded a $5 million contract to U.S. consulting firm McKinsey, which included a contract extension of over $2 million.

McKinsey has received a sharp increase in federal contracts since the Trudeau government first took power in 2015.

The consulting firm has received over $100 million worth of federal contracts since then, which are currently being studied by the House of Commons government operations committee.

Noé Chartier contributed to this report.