TERRAZZANO: Flunking the test pays well in government

About 90% of government executives take a bonus every year, whether they deserve to or not

Published Jul 31, 2026  •  3 minute read

A Canada Post community mailbox in Calgary. Photo by Gavin Young /Postmedia Network

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In the real world, bonuses happen when you do a good job or your organization has a great year. In Ottawa, bonuses reward D- performances, bailouts and billion-dollar losses with taxpayers’ money.

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Let’s start with Canada Post. The federal Crown corporation showered its managers and executives with $30.8 million in bonuses in 2025. That same year it lost nearly $1.6 billion and took a $1-billion bailout from taxpayers.

This wasn’t a one-off rough patch. Canada Post has lost money for eight years running, totalling $5.4 billion.

VIA Rail is another Crown corporation rewarding failure with taxpayers’ money.

The government dumped $376 million into VIA Rail last year to cover the train company’s operating losses. Despite hemorrhaging money, VIA Rail rubber-stamped $10.3 million in bonuses. Every executive took a bonus and the average bonus payout was $115,293.

Then there’s Alto, the Crown corporation dreaming up Canada’s high-speed rail boondoggle. It hasn’t put a single shovel in the ground. It hasn’t laid a single metre of track. It doesn’t even know the exact route for its train. Despite having completed almost nothing, it handed out $2.8 million in bonuses. Every Alto staffer took a bonus.

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The Canada Mortgage and Housing Corporation is also familiar with the taxpayer cookie jar. It’s the government’s housing agency and it has repeatedly claimed its goal is “housing affordability for all.”

Spoiler alert: The CMHC is failing its own goal.

The CMHC handed out $31.7 million in bonuses last year even as its own CEO admitted housing supply and affordability “remained one of Canada’s greatest challenges.”

If only bureaucrat bonuses made homes affordable, then every Canadian would own a home with an inground pool and a cottage at the lake.

This isn’t a few bad apples. It’s the whole orchard. About 90% of government executives take a bonus every year. Those executive bonuses cost taxpayers about $200 million last year.

Meanwhile, federal departments consistently miss their own performance targets. In two of the last five years, departments failed to meet even half of them, according to the government’s data. Their best year was 2024-25 when they hit 54% of their own targets.

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Picture a report card full of D’s and F’s that still comes with a gold star. That’s what happens in the federal government’s executive suites.

Former parliamentary budget officer Yves Giroux explained what’s going on: Bureaucrats set their own targets and they’re careful to set the bar “not too high” but not “too low” and yet “by their own assessment they fail to deliver on many of these.”

Translation: Bureaucrats discovered they can fail and still get rewarded for a passing grade because they’re the ones grading their own homework.

How does the government justify these bonuses? A Canada Post spokesperson said it needs to “retain the talented and experienced people” leading the corporation.

Retain them for what talent? Losing $5.4 billion over the last eight years? These bonuses aren’t rewarding talent or excellent performance. They’re a perverse incentive, telling government executives that failure is safe and success is optional because the bonus cheque comes either way.

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Taxpayers continue to foot the bill for failure even as the government sinks further into debt. Paying interest on the federal government’s debt costs taxpayers more than $1 billion every week.

Prime Minister Mark Carney told departments and Crown corporations to find up to 15% in savings. Carney doesn’t need to look far to find the fat. Bonuses for failure should be the first thing on the chopping block.

Franco Terrazzano is the federal director of the Canadian Taxpayers Federation

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