04/10/2020 15:03 EDT | Updated 04/10/2020 16:22 EDT

Workers May Face Pay Cuts With Coronavirus Federal Wage Subsidy

One business told its employees they'll only get 75 per cent of their usual wage.

Minister of Finance Bill Morneau responds to a question during a news conference in Ottawa on March 27, 2020.

OTTAWA — An Edmonton man says he and his colleagues were told this week that they will have to take a 25 per cent cut on their next paycheques because the federal government won’t subsidize the rest of their wages.

“It just blindsided us,” the man told HuffPost Canada by phone. “I thought that didn’t sound right.”

The worker, who asked for anonymity for fear of career repercussions, said no one at the plumbing company he works for has been laid off. No one, as far as he knows, was in line to be cut from the company payroll because of the COVID-19 crisis, but sales have declined by what he estimates to be at least 15 per cent, as few people want plumbers and other technicians entering their homes unless there is an emergency.

“[We] were just flabbergasted yesterday,” the man said. “It was a bit of a shocker driving home. Right off your plate — gone. And the reasoning was, the federal government is only going to pay 75 per cent, so we’ll keep you employed, but that’s going to be your salary from now on. Which I think is wrong, I think they misinterpreted that. The interpretation should be, yeah the federal government is going to give you 75 and you top it off to make it whole...”

“I thought that was wrong. And I still believe it’s wrong,” he said.

Parliament is expected to pass legislation on Saturday establishing a $73-billion program called the Canada Emergency Wage Subsidy. For employers who have seen at least a 15 per cent drop in revenue, the subsidy will provide payments worth 75 per cent of an employee’s pre-crisis weekly pay up to a maximum of $847 a week for up to 12 weeks.

The program was designed, according to the federal government, to prevent further job losses, encourage companies to rehire workers previously laid off as a result of COVID-19, and help Canadian companies resume normal operations when the crisis is over. 

WATCH: Have this info handy when applying for the Canada Emergency Response Benefit. Story continues below. 


It wasn’t designed, however, for companies to use it as an excuse to cut their workers’ salaries and pay nothing towards their employees’ incomes.

Finance Minister Bill Morneau on Thursday encouraged employers to “do all they can to top up their employees’ pay to 100 per cent of pre-crisis pay levels.  

“We all need to do our part to help each other through this challenge,” he said.

The Edmonton man, whose wife has already been laid off because of the coronavirus pandemic and government shutdowns, said he worries what the decrease in salary will mean for his insurance benefits if he is injured on the job, or, if he gets laid off, how it might affect his employment insurance. 

Alberta isn’t the land of economic opportunity it once was, and he took a pay cut to take this job. Now, he’s scared.

“I can’t go out to someplace and apply for a job.”

He’s also concerned for his colleagues, many of whom were already just scraping by.

“I watched the wind taken right out of them. They can’t say anything. They have no place to go. If something happened to them today, they would be absolutely zero.” 

The most generous interpretation, he said, is that his employer doesn’t understand the program. In the back of his mind, however, he wonders if his employer is using the federal program as a way of skipping out on their responsibilities. 

I watched the wind taken right out of them. They can’t say anything. They have no place to go.Edmonton worker

Instead of helping him, the program is hurting, he said, because it gives his employer an excuse to pay him less.  

Asked Friday about this practice, Treasury Board President Jean-Yves Duclos said businesses are expected to meet their own obligations.

“We do hope and would expect that employers would add another 25 per cent so that full wages will be paid, but we are understanding that not all businesses will be able to fill the gap between the 75 per cent and the 100 per cent,” the minister said. 

The Edmonton man hopes that when the crisis is over he and his colleagues will see their salaries return to what they once were. 

“But that’s probably not going to happen,” he said.

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