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Top CEOs in Canada were paid at second-highest level ever during the pandemic – CP24 Toronto's Breaking News

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OTTAWA – Canada’s 100 highest-paid CEOs had their second-best year ever in 2020, even as the COVID-19 pandemic left this country in the worst economic downturn since the Great Depression.

“Despite the pandemic being a pretty bad year for most Canadians, particularly on the unemployment front, it wasn’t really that bad for Canada’s richest CEOs,” said David Macdonald, a senior economist at the Canadian Centre for Policy Alternatives.

Macdonald authored a report released Tuesday examining how much the top 100 best-paid CEOs of publicly traded companies earned in 2020. The report said that by noon on Tuesday, the average CEO of these companies would have already earned what the average Canadian worker will make all year.

In 2020, as many Canadians had hours cut or lost their jobs completely during repeated lockdowns and forced closures, those highest-paid CEOs earned an average of $10.9 million.

That was down from the record high of $11.8 million in 2018, but an increase of $95,000 compared with 2019.

Macdonald said that CEOs receiving the second-highest pay on record is “quite an achievement” given the pandemic was damaging to many of the companies they were running.

More than 82 per cent of the average pay came through bonuses including cash or stock options, which Macdonald said companies creatively calculated to ensure poor performance during the pandemic didn’t affect CEO pay.

“This only happens in bad times,” said Macdonald. “When things go badly for the company, CEOs are protected in many cases. When things go well for the company, the sky’s the limit.”

Macdonald said CEOs often justify their bonuses with claims they are compensation for being exceptional at their jobs, but he said half the CEOs who got bonuses in 2020 worked at companies which received government aid like the Canada Emergency Wage Subsidy or only received the bonus because of an adjustment to the bonus formula.

“I think it really illustrates the bankruptcy of the idea that this is somehow based on merit,” he said.

The top-paid CEOs made 191 times more than the average worker in 2020, which was down from 202 times as much in 2019, and the lowest gap between CEOs and average workers in six years.

But that’s not, Macdonald said, because average workers got a raise. Instead, so many of the lowest paid workers were laid off for part of the year that their wages were missing entirely as the average numbers were calculated.

The report makes several recommendations for tackling excessive executive pay through a review of tax systems, including how capital gains and stock options are treated.

Macdonald also recommends the federal government create a wealth tax for the richest Canadians, as the wide gap between the average income of Canadians and the highest-paid CEOs is set to broaden further over time.

“When we’re thinking about how should we structure taxation, so that it’s based on what people can pay, a wealth tax then makes a lot more sense,” he said.

NDP Leader Jagmeet Singh campaigned last fall on a promise to create a wealth tax of one per cent on anyone with a net worth of more than $10 million, and impose a 35 per cent tax on income over $210,000.

In their first year in office, the Liberals raised the tax rate from 29 per cent to 33 per cent for people earning more than $200,000. Because of inflation, the top tax bracket now starts at $216,511.

Finance Minister Chrystia Freeland has now been tasked with establishing a minimum 15 per cent tax rule for top-bracket earners, which would include an attempt to prevent the wealthiest Canadians from reducing their tax burden through various tax planning loopholes.

She was also told in her mandate letter to fund the Canada Revenue Agency to combat tax avoidance, and raise corporate income tax for banks and insurance companies that make more than $1 billion.

Adrienne Vaupshas, a spokesperson for Freeland, said in a statement Tuesday that the government has been “consistently focused” on addressing income inequality in Canada by putting in place higher personal income taxes for the wealthiest Canadians, a tax on multinational digital giants, and limiting stock option deductions in the largest companies.

NDP finance critic Daniel Blaikie said in a statement that the Liberals have let everyday Canadians down because they have not made the ultrarich pay their fair share, such as by closing tax loopholes and tax havens.

The Tories did not immediately respond to a request for comment.

This report by The Canadian Press was first published Jan. 4, 2022.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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