Canadian company used COVID wage supports to hire scabs


For the past eighteen months, the manufacturing company CESSCO, based in Edmonton, Alberta, has been locking out unionized employees. Meanwhile, the company used Canada’s federal government COVID-19 wage subsidy funds to hire strikebreakers.

Unionized workers at CESSCO Fabrication and Engineering Ltd have stood up against a series of attacks on their pay and working conditions. These include cutting wages by 10%, pensions by up to 50% and removing seniority from their collective agreement. In union agreements, seniority stipulates that wage and security benefits go to workers according to their seniority, so that those who have been there the longest are paid the best and are the last to be fired in the event of a dismissal.

The workers, many of whom are boiler fitters and welders who make containers with gases and liquids for the oil and gas industry, have been locked out of their workplaces since June 28, 2020.

Hugh MacDonald, the business manager of Boilermakers Lodge 146, which represents locked-out CESSCO workers, said Jacobin that the union was initially willing to accept wage cuts until the price of oil rose. As of January 14, the price of Canadian crude has more than doubled from US$27.84 on June 29, 2020 to US$69.51.

“A lot of guys on the picket line have worked their entire adult lives at this facility. Some of them have been there for over 40 years. They would definitely prefer to work,” MacDonald says. “But we get support from the working community in northern Alberta and we get support from our international in Kansas City. It helps members on the lockdown line to realize that there are a lot of people standing up and supporting them.

At first, thirty workers were locked out. Eight have since crossed the picket line, according to MacDonald.

CESSCO is listed in the database of companies that have received the Canada Emergency Wage Subsidy (CEWS). The wage subsidy was introduced at the start of the pandemic to subsidize 75% of the wages of employees of companies that experienced a significant drop in income.

The CEWS grantee database does not detail disbursement dates or the amount raised by recipient companies. Whatever the amount of CESSCO’s revenue, the fact remains that the company benefited from the wage subsidy when many of its employees did not receive a salary. MacDonald says the Boilermakers were surprised to find that CESSCO received funds from CEWS while they were locked out.

The Canadian government introduced two major COVID-19 benefits at the start of the pandemic – the aforementioned CEWS and the Canadian Emergency Response Benefit (CERB). The latter provided $2,000 a month to those who had lost their jobs as a result of COVID restrictions.

As of December 19, 2020, the total cost of CEWS was $99.13 billion, compared to $81.64 billion for CERB, which ended in October 2020. As right-wing media ruminated that CERB was transforming unemployed Canadians into “welfare slackers” or encouraged gang violence, some major material flaws of the CEWS became apparent.

In December 2020, the Financial position reported that at least sixty-eight companies that received federal wage subsidies continued to pay dividends to their shareholders, including some of Canada’s largest companies, such as oil companies Imperial Oil, Suncor and Canadian Natural Resources Ltd. . The sixty-eight companies received $1.03 billion in CEWS support while paying out $5 billion in dividends.

“Think about what happens: taxpayers indirectly subsidize payouts to shareholders,” said Richard Leblanc, York University professor and corporate governance adviser. To post. “This is completely unacceptable. Even if the government did not drop the ball, which it did, these remarkable companies should lead by example.

An early 2022 report from the Canadian Center for Progressive Policy Alternatives (CCPA) finds that CEO compensation has increased from 2019 to 2020. The CCPA notes that more than a third of Canada’s 100 highest-paid CEOs run companies that received funds from the CEWS.

“A lot of these companies probably didn’t need [CEWS], but if there was federal money available, they were going to ask for it and they were going to take it,” David Macdonald, senior economist at the CCPA, told the CBC. “That was not what this program was intended for.”

Effective October 28, 2021, the federal government divided the CEWS into two more targeted programs: the Tourism and Hospitality Recovery Program and the Hardest-Hit Business Recovery Program.

On January 11, 2021, Heather McPherson, a left-leaning New Democratic Party (NDP) legislator who represents a riding in the city of Edmonton, where CESSCO is located, wrote a letter to Finance Minister Chrystia Freeland. In the letter, McPherson expressed concern that CEWS funds were being used to hire scabs. Freeland has yet to respond.

McPherson wrote:

I think all Canadians would be appalled to learn that their tax money is being used in this way. But I don’t believe your government has planned COVID-19 economic relief programs for this purpose. In fact, I hope you find this situation as appalling as I do.

McPherson sees the CESSCO situation as an extension of Alberta Conservative Premier Jason Kenney’s scorched-earth assault on the province’s labor movement. The Kenney government passed a law that prohibits strikers from peacefully blocking entrances to workplaces.

McPherson has raised the issue of the scab subsidy in Parliament several times throughout 2021. On February 17, Prime Minister Justin Trudeau provided a boilerplate response to his line of questioning, saying:

We continue to know that many Canadians across the country still need help. We will be there for them. As I said from the start, we will be there for Canadians for as long as it takes, no matter what.

All five parties represented in Parliament supported the introduction of the CEWS, with the NDP successfully pushing the governing Liberals to increase the subsidy from 10% to 75%.

McPherson, explaining the situation to Jacobin, said that when “COVID arrived. . . we were trying to get the money out very, very quickly. She added:

I understand that there may be loopholes, but it is possible to fix those loopholes when the program has been in place for months and months. Not fixing them has to be either because you don’t care or because you don’t really see it as a problem. Maybe they don’t think it’s a problem to use taxpayers’ money to pay scabs and lock out workers. I can’t see it any other way.

McPherson argues that CEWS was an important program to keep local businesses afloat, but its flaws should have been ironed out as criticisms arose.

On July 5, while walking the CESSCO picket line, worker Raymond Mudryk, a welder who had been a member of Boilermaker Lodge 146 since 1976, died suddenly at the age of seventy.

“Brother Mudryk was a proud member of Lodge 146 who put the needs of others before his own. He always did his part to get better wages, benefits and working conditions,” reads his memorial page on the Boilermakers website. On August 25, 2021, which would have been his seventy-first birthday, the lodge held a celebration of his life on the picket line.

Mudryk was not the first CESSCO worker to die on the job in recent years.

In May 2019, CESSCO pleaded guilty to a single charge of failing to ensure the use of fall protection, which resulted in the death of Barry Maitland on January 19, 2016. According to the edmonton newspaper, Maitland fell from the top of a liquefied natural gas storage tank he was welding on.

The Boilermakers aren’t surrendering anytime soon. Despite picket line struggles in sub-zero temperatures of northern Alberta and CESSCO not returning calls from local, MacDonald says workers will continue to picket out of a sense of justice :

We know that is wrong. We know this is an example of corporate greed. What CESSCO has done here is harsh and unfair, especially during a global pandemic. . . . We simply demand fair wages for an honest day’s work. . . . We’re not going to give up, we’re going to stay strong and see what happens.

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