How to Foster Loyalty in US Consumer Markets

Instead of a salary, many private sector CEOs are compensated with bonuses and stock options. According to the CCPA report, pay accounted for around 8% of total compensation for the top 100 Canadian CEOs in 2021. If we only look at salaries, eleven CEOs had lower base remuneration than Via's CEO. That includes four CEOs who receive no pay but are compensated in excess of $10 million. In other words, even if one of Canada's top 100 best-paid CEOs left millions of dollars in annual variable compensation on the table to work for a public business, their basic income would typically be lower.That is more than a haircut. That may mean the difference between having a penthouse in New York and a great home in Oakville; between taking a cruise every now and then and owning a yacht; or between never worrying about money again and caring a little bit about money. I am not advocating we cry for the only modestly wealthy CEO in Oakville. However, I doubt many readers would give up the yacht and penthouse for a merely prosperous retirement to do the same job at a company they prefer.Money is not everything. Highly sought-after employees may choose to take a job for reasons other than money. But compensation is still important. Consider John Tavares, the Maple Leafs pajama-wearing boy who wanted to raise the Stanley Cup in Toronto. He only accepted a 12- to 15% discount to play for the Leafs. It's difficult to see a CEO at the top of their game accepting a fifty, eighty, or even ninety percent pay cut to operate Via Rail—no matter how much you romanticize trains.

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$5, $10, or $15 to support a completely Canadian perspective on the major problem of the day and receive a charitable tax receipt.Of course, one could have moral objections to CEOs receiving large pay. Okay, fair enough. I happen to believe that weakly controlled capitalism works rather effectively. Perhaps certain things could or should be done on the margins to limit potential compensation excesses. That's not my opinion, but reasonable people can differ.I don't believe that paying the CEO of a crown corporation one-tenth of what the hundredth best-paid private sector CEO receives will attract a large pool of applicants to lead crown corporations. As someone who wants companies to succeed, I'd recommend allocating a smaller portion of their overall budgets to executive salaries. Incentives do matter, after all.That is not to argue that Via Rail is doing a poor job given the circumstances. Maybe the CEO is doing a good job; maybe not. If he is doing a good job, that is excellent. If he isn't, they should compensate someone else more. A national passenger rail operator should not worry about a rounding error in its budget. And neither should taxpayers.The reaction to Ontario Premier Doug Ford's declaration this week that his administration will expand the role of private delivery in the province's publicly financed health-care system was fast and predictable. We heard assertions that it represents a "purely ideological path" and a "fatal threat" to public health care, endangering lives.

The true story here, however, is not the Ford 

administration's ideological zeal. It is actually the growing ideological convergence—from the NDP government in British Columbia to the United Conservatives in Alberta to the Legault government in Quebec and now the Progressive Conservatives in Ontario—around the need to leverage private diagnostic and surgical capacities to address pandemic-induced backlogs in the short term while also preparing for demographic pressures on health-care services in the long term.These administrations have each reached the pragmatic conclusion that rationing through backlogs and waitlists will no longer suffice to address the supply-demand problem at the heart of Canada's health-care issues. We require surge capacity.Ontario's diagnostic and surgical backlog is not a recent trend. Even before the pandemic, the government estimated that there were approximately 200,000 persons. However, it climbed significantly during the pandemic as the province's healthcare system redirected capacity and resources to deal with the crisis. The province's Financial Accountability Office anticipated in a 2021 report that clearing the pandemic-induced backlog would take three years.There is reason to suspect that these figures may underestimate the situation. Delays in diagnostic testing obscure the severity of impending health-care demand. There were also issues with self-reporting during the pandemic. The Quebec government, for example, reported a 24-percent decrease in requests to be placed on a surgical queue during the pandemic compared to pre-pandemic years. The end consequence is a "invisible waitlist" and the "crisis behind the crisis" in the context of the epidemic.

As early as spring 2020, provincial governments 

began implementing initiatives to address the mounting backlogs. The plans typically included a combination of increased public funding, increased number of surgeries and tests within the public system (including running MRI machines and operating rooms on evenings and weekends), and leveraging private diagnostic and surgical capacity in specific areas such as cataracts, hips, and knees.The Ford government's initial effort to reduce backlogs was unique among provinces in its minimal reliance of private provision. As I stated in a policy brief with former BC Premier Gordon Campbell in February 2022, "The provincial government's plan essentially aims to clear these backlogs without drawing any surge capacity into the system.This contrasted sharply with other jurisdictions, particularly British Columbia's NDP government, which announced its plan to leverage commercial delivery in May 2020. The province's Surgical Renewal Plan specifically pledged to "increase capacity at contracted private surgical clinics that agree to follow the Canada Health Act and not overbill patients."