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Why Canadian MPs Aren’t Happy With Air Canada’s Bonuses

Air Canada is facing a good deal of backlash due to the discovery that it handed out millions of dollars in executive bonuses and stock options late last year. The payout is said to have taken place during the same period of time the carrier was slashing thousands of jobs and negotiating with the government for financial support. On Thursday, elected government officials unanimously voted to condemn the airline for its actions.

why canadian mps arent happy with air canadas bonuses Airplane GEEK Why Canadian MPs Aren’t Happy With Air Canada’s Bonuses
Air Canada had been campaigning for sector-specific support from the government for the better part of the past year. Photo: Air Canada

It was on Monday, May 31st, that Air Canada informed shareholders that its top executives and managers had received a combined C$10 million ($8.29 million) in stock options and bonuses. The airline’s board had initially approved C$20 million ($16.58 million) in bonuses, but only half of this had been paid out by late 2020.

CTV News notes that the compensation officially called the “COVID-19 Pandemic Mitigation Bonus” was awarded due to airline management’s “exceptional performance during this unprecedented period.”

Government officials vote to denounce Air Canada bonuses

Negative reaction was swift upon the discovery of the airline’s actions. Indeed elected representatives of the Canadian government officially voted to condemn the airline’s handout of executive bonuses on Thursday.

The government had announced a sizeable bailout package in April, which fueled the outrage towards the airline. The following was the official motion put forward by a Quebec Member of Parliament (MP):

“That the House denounce the decision of the Air Canada‘s executive officers to award themselves bonuses of $20 million while the company received nearly $6 billion dollars in public aid.” -Xavier Barsalou-Duval, Member of Parliament via

With no members opposed to this motion, it was passed with a unanimous vote from all MPs in attendance.

why canadian mps arent happy with air canadas bonuses 1 Airplane GEEK Why Canadian MPs Aren’t Happy With Air Canada’s Bonuses
With the government having recently spent billions in loans and investment to support Air Canada through the pandemic, news of the bonuses has become a fierce political conversation topic. Photo: leafsfan67 via Wikimedia Commons 

Poor political optics

It was nearly two months ago that the government proudly announced a C$6 billion bailout package ($4.7 billion) for the airline. The financial aid was granted upon the condition that Air Canada restore air service to small communities, as well as issue refunds for flights canceled due to the pandemic. Despite the massive price tag, the government could tout the move as one that benefitted Canadian taxpayers. Thus, news of the executive compensation has since drawn fierce criticism from members of political opposition parties.

“Air Canada executives are making out like bandits, bandits who are receiving $6 billion in public funds, bandits who are taking advantage of the wage subsidy for workers, bandits who have shamelessly laid off thousands of employees, bandits who are adding insult to injury by giving themselves obscene bonuses.” -Alexandre Boulerice, Member of Parliament via
why canadian mps arent happy with air canadas bonuses 2 Airplane GEEK Why Canadian MPs Aren’t Happy With Air Canada’s Bonuses
Air Canada has yet to officially address the public backlash to its executive bonuses. Photo: Air Canada

Attempting to defend the government’s decision to support Air Canada, Prime Minister Justin Trudeau notes that an agreement was signed with the airline that limited executive compensation, including stock options. Indeed, federal assistance was given on the condition that Air Canada limit executive compensation to C$1 million ($830,000) while restricting dividends and share buybacks.

“We have since learned that, perhaps even while Air Canada was negotiating its contracts with us, the airline was giving huge bonuses to executives, which is completely unacceptable,” Trudeau stated during the parliamentary debate. Acknowledging the outrage, Trudeau added, “I hope Air Canada plans to explain its decision and its rationale to Canadians, who are rightly shocked by Air Canada‘s decision.”

Air Canada Boeing 787
As a condition for government aid, Air Canada agreed to limit its executive bonuses, but this was only months after it had made the payouts. Photo: Vincenzo Pace | Simple Flying

Air Canada remains silent

For its part, Air Canada has remained silent on the issue and is yet to issue a public statement to address the widespread negative reaction. Simple Flying reached out to the airline for comment but did not receive a response at the time of publication.

We’d love to hear your thoughts on this issue. Should airline executives and managers be given bonuses for exceptional performance during the pandemic? Or is this unacceptable given the high number of job cuts? And if you think bonuses are acceptable, what would be a reasonable amount? Let us know your thoughts by leaving a comment.

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