Canadian companies have spent billions in recent years buying back their own shares with little pushback from Parliament Hill, but that could soon change as some of those same firms line up for federal bailouts.
Pre-coronavirus buybacks and any effects on the taxpayer now “should be of serious concern for governments who might be interested in taking equity or debt positions in big corporations,” said David Macdonald, an economist with the Canadian Centre for Policy Alternatives think-tank, in an email. Canadian companies may not have been drawing as much attention as their American counterparts, some of which were using debt to buy back stock, but they had been growing fond of buybacks.
However, a scan of financial results shows a wide range of firms that were buying back stock, and that could now be seeking government largesse. The energy sector will be another industry getting considerable government help, as it struggles to survive the double whammy of the coronavirus and a collapse in crude prices.
They should have saved this money for a rainy day. They didn't. Now these staunch capitalists are lining up for socialist payments.
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