Canada’s 100 top-paid CEOs had a stellar year in 2020, despite the onset of a pandemic which led to layoffs and financial woes for many workers, according to a new report.
The Canadian Centre for Policy Alternatives (CCPA) report examined the 100 highest-paid CEOs at publicly traded Canadian-based companies for 2020. It found that their average annual compensation totalled $10.9 million — $95,000 more than their average pay in prepandemic 2019.
“While  was really a pretty bad year for most Canadians, particularly lower paid working Canadians, many of whom lost their jobs … it wasn’t at all a bad year for CEOs,” said David Macdonald, report author and senior economist with the CCPA, a think-tank that studies economic inequity.
MacDonald combined each CEO’s base salary plus compensation, such as cash bonuses and stock options, to tally up their income totals.
According to his report, more than one third of the companies headed by those CEOs received the COVID-19 Canada Emergency Wage Subsidy (CEWS) either directly or indirectly through their subsidiaries or franchisees.
MacDonald suggests that added subsidy helped some CEOs achieve revenue targets for lucrative bonuses, even though their companies may have suffered financially due to the pandemic.
“Many of these companies probably didn’t need the [CEWS], but if there’s federal money available, they were going to apply and they were going to take it,” he said. “That was not what this program was meant for.”
The federal government introduced CEWS in March 2020 to help companies minimize job losses as COVID-19 restrictions and lockdowns were imposed. To qualify, companies simply had to show a drop in revenue during the pandemic.
According to the federal CEWS website, as of Dec. 19, Ottawa has paid out $99.13 billion under the program.
CBC News reached out for comment to several companies which, according to the CCPA report, received the CEWS and were headed by one of those 100 CEOs.
According to the report, David Klein, CEO of the cannabis company Canopy Growth, scored the top spot, earning just over $45 million in total compensation.
MJBizDaily, a cannabis industry news publication, estimates Canopy Growth may have received $50 million total in CEWS funding.
In an email to CBC News, Canopy Growth — which is based in Smiths Falls, Ont. — confirmed it did receive the CEWS, but did not specify the amount.
Canopy Growth said it met the requirements for the subsidy which “allowed the company to offset the financial impact of the COVID-19 pandemic, including strategically hiring approximately 1,000 team members.”
Canopy Growth added that much of Klein’s compensation for 2020 consisted of stock options which are tied to company performance, and that his pay was finalized in 2019, before the pandemic hit and the company applied for CEWS.
According to the CCPA report, the second-highest paid CEO in 2020 was Jose Cil with Restaurant Brands International (RBI), which owns Tim Hortons. The report states Cil’s total compensation was close to $27 million.
RBI spokesperson Mary Lowe said the company did not apply for or accept the CEWS, but that a number of the 1,500 Tim Hortons franchise owners in Canada did receive the subsidy.
“They were 100% eligible for the wage subsidy as the government intended and many of them relied on it to keep restaurants open and keep tens of thousands of Canadians employed through the pandemic,” Lowe wrote in an email.
Lowe did not say how much the franchisees received from CEWS in 2020. According to government data, 483 Tim Hortons franchises in Canada collected the subsidy.
When it comes to CEO pay, Lowe said that although RBI is headquartered in Toronto, it’s a global company which competes in an international market. She added that a large portion of Cil’s compensation won’t pay out for upwards of five years and is contingent on future performance.
Based on his findings, MacDonald said that Canada’s top-paid 100 CEOs now make 191 times more than the average worker salary in the country.
To help shrink the pay gap, Macdonald recommends the federal government tax top earners at a higher rate and get rid of tax loopholes that allow for some compensation to be taxed at a lower rate compared to regular income.
He also said higher taxes for well-paid CEOs would help refill federal government coffers after Ottawa paid out billions of dollars in COVID-19 benefits such as the CEWS.
“As we start to pay for the pandemic and pay for new programs, the people who’ve done the best should be asked to pay more,” said MacDonald.
However, Ari Pandes, a finance professor at the University of Calgary, argues that there are valid reasons why CEOs make far more than the rest of us — even if the company they run recently collected the CEWS.
“The market for CEOs and talent is ultra-competitive,” he said. “So if the company doesn’t pay them [well], then they can go to another company.”