Canada Emergency Wage Subsidy.


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Flair Airlines rehires all laid-off employees and restores wages following federal subsidy

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BY ALLISON BENCH GLOBAL NEWS
Posted April 8, 2020 1:01 pm
Updated April 8, 2020 1:04 pm

Flair Airlines has made the move to rehire all the employees it previously laid off, restoring it to a “pre-pandemic” level, after the company was assisted by the Canada Emergency Wage Subsidy.

All 130 employees that were previously laid off due to the COVID-19 crisis by the airline have been rehired, and all salaries of employees who had faced reductions have been restored to their previous levels.

The Canada Emergency Wage Subsidy was announced last week and subsidizes up to 75 per cent of employee wages. Flair has bumped that up to 100 per cent for all employees.

 

“We resolved at the outset of the outbreak to uphold our civic responsibility to our passengers, employees and the communities we serve,” said Richard Williams, Flair’s vice president of human resources.

“We are proud that, with the help of the Canadian government, we can continue to meet the moment.”

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I see the WestJet unions are calling for Federal aid for what they are calling a "Devastated Company".   https://canadianaviationnews.wordpress.com/2020/04/08/it-is-urgent-unions-call-on-ottawa-to-deliver-immediate-aid-to-devastated-westjet/

This was a very profitable public company over the years that also spent a fair amount of their profits in buying back shares.  Now of course we will never know how they are doing as a Private company.  Their last public report was for the 3rd qtr of 2019 and showed a net earnings of over 209 million for the 9 months.

https://www.westjet.com/assets/wj-web/documents/en/investorMedia/WestJet-2019-Q3-Financial-Report.pdf

 

You do however have to wonder how things might have been without the takeover.

 

 

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1 hour ago, Marshall said:

I see the WestJet unions are calling for Federal aid for what they are calling a "Devastated Company".   https://canadianaviationnews.wordpress.com/2020/04/08/it-is-urgent-unions-call-on-ottawa-to-deliver-immediate-aid-to-devastated-westjet/

This was a very profitable public company over the years that also spent a fair amount of their profits in buying back shares.  Now of course we will never know how they are doing as a Private company.  Their last public report was for the 3rd qtr of 2019 and showed a net earnings of over 209 million for the 9 months.

https://www.westjet.com/assets/wj-web/documents/en/investorMedia/WestJet-2019-Q3-Financial-Report.pdf

 

You do however have to wonder how things might have been without the takeover.

 

 

The problem with Westjet is that it is not publicly traded, and hence there is no transparency. No one knows its current situation unless ONEX chooses to break out the numbers (which it might be doing for the government.)

I don't know why the unions or other staff believe Westjet's situation is any worse than the other airlines. It's bad everywhere. And using language like devastated company makes one wonder whether ONEX is putting someone up to this. I mean, is ONEX going bankrupt? No. It's stock is actually trading in the middle of its 52 week range, which is a lot better than pure airline stocks have done. ONEX has $38 billion of assets under management. But I bet ONEX doesn't want its corporate child forcing it to sell off or mortgage other assets to raise cash. (I'd also bet certain folks in the industry have told the government ONEX shareholders shouldn't get off unscathed here; shareholders in other companies have to shoulder some negative impact.)

Westjet should be treated like the other carriers, and that means it should get similar support, unless its status as a part of a conglomerate makes it ineligible, in which case the government should consider if the rules should be adjusted. 

Edited by dagger
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18 minutes ago, dagger said:

 

I don't know why the unions or other staff believe Westjet's situation is any worse than the other airlines. It's bad everywhere. And using language like devastated company makes one wonder whether ONEX is putting someone up to this.

I believe one of the big reasons for this, is that WJ has never been through anything like this.  They were all but immune to SARS. 9/11 had an impact, but that was a lifetime ago and a much much smaller company.

It should also be mentioned that there is an incredible amount of irony here.  WJ unions crying out for government help ???

Had that sentence been typed here say 3 or 4 years ago, oh my the outrage that would have ensued.

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1 hour ago, Marshall said:

WestJet unions are calling for Federal aid for what they are calling a "Devastated Company".

There are two sectors that indulge in hyperbole.  Unions and Journalists.

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40 minutes ago, dagger said:

The problem with Westjet is that it is not publicly traded, and hence there is no transparency. No one knows its current situation unless ONEX chooses to break out the numbers (which it might be doing for the government.)

I don't know why the unions or other staff believe Westjet's situation is any worse than the other airlines. It's bad everywhere. And using language like devastated company makes one wonder whether ONEX is putting someone up to this. I mean, is ONEX going bankrupt? No. It's stock is actually trading in the middle of its 52 week range, which is a lot better than pure airline stocks have done. ONEX has $38 billion of assets under management. But I bet ONEX doesn't want its corporate child forcing it to sell off or mortgage other assets to raise cash. (I'd also bet certain folks in the industry have told the government ONEX shareholders shouldn't get off unscathed here; shareholders in other companies have to shoulder some negative impact.)

Westjet should be treated like the other carriers, and that means it should get similar support, unless its status as a part of a conglomerate makes it ineligible, in which case the government should consider if the rules should be adjusted. 

Could one not make the same argument about Porter?

100% private equity ownership.

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18 minutes ago, rudder said:

How well is Gerry Schwartz connected to the Libs?

At one point he and Reisman were deeply connected with the Liberal Party. But the Liberal entourage of the 90's doesn't have much to do with Trudeau.

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WestJet plans to put nearly 6,400 employees who were laid off due to the novel coronavirus pandemic back on the payroll, the airline’s president and CEO announced Wednesday.

In a video message posted to social media, Ed Sims credited the federal government’s emergency wage subsidy program, which he said WestJet will apply for after the airline had “substantial” conversations with Ottawa.

Sims said the move would not necessarily mean those employees will be going back to work, “as there may simply not be enough work there for them.”

“It will help them make ends meet, and I’m grateful for the hard work of the government of Canada and of all governments across Canada to provide businesses like ours with the tools to continue operating through these most challenging of times,” he said.

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Air Canada plans to use wage subsidy ‘for the benefit’ of all 36,000 employees

Airline to ‘retain or return’ laid-off staff to payroll for emergency program’s term

  • Calgary Herald
  • 9 Apr 2020
  • EMILY JACKSON Financial Post
img?regionKey=fTENizczj1w7hv0%2b3rDApg%3d%3dNATHAN DENETTE/ THE CANADIAN PRESS A man uses hand sanitizer at Pearson International Airport in the Toronto area on Wednesday. Air Canada CEO Calin Rovinescu says the federal government’s wage subsidy will help the airline “keep as many of our employees as possible during the crisis.”

Air Canada plans to use the federal government’s emergency wage subsidy to help its 36,000 Canadian-based employees, making the airline one of the largest employers to pursue the relief plan after its revenue crashed due to COVID-19 travel restrictions.

Canada’s largest airline announced Wednesday that it intends to adopt the 75-per-cent wage subsidy program after discussions with Department of Finance officials. The government unveiled the program one day after Air Canada temporarily laid off 16,500 employees — about half of its workforce — because its seat capacity and operations dropped by 90 per cent due to closed borders and stay-at-home orders.

Air Canada did not say exactly how many employees it expects the wage subsidy to cover, only that it intends to adopt it “for the benefit of” all 36,000 employees.

The airline will apply for the program retroactively to March 15 and “retain or return” affected employees to its payroll for the program’s term. The 16,500 furloughed employees would return to payroll but not to active status, as there is no work for them given schedule reductions. The program, which provides subsidies of up to $847 per week for 12 weeks, ends June 6.

“The Canada Emergency Wage Subsidy is an extremely important program to help employees and employers during this time of crisis, and as one of Canada’s largest employers most affected by COVID-19, we want to acknowledge the leadership of the Government of Canada in introducing it,” chief executive Calin Rovinescu said in a statement.

Exact details of the emergency wage subsidy are still unclear and legislation supporting it has yet to be passed, but Air Canada believes it qualifies and has the support of the five unions representing its employees in Canada.

“While our seat capacity and operations have decreased by more than 90 per cent overnight, we are trying to keep as many of our employees as possible during the crisis and this measure will certainly help,” he said.

“Once the crisis passes and passenger demand increases, we look forward to returning as many employees as possible to active status as we resume normal operations.”

Canada’s airline industry, including its largest players Air Canada and Westjet Airlines Ltd., has been pressing the government for assistance during a devastating time for the air travel sector.

The federal government has acknowledged the airline sector has been hard hit and said it plans to help it out, but it’s not clear how the wage subsidy plan fits into those discussions.

Westjet is “continuing to evaluate the wage subsidy program as the government finalizes the details,” according to an emailed statement on Wednesday.

Regardless of any larger bailout package in the future, which will likely take wage subsidies into account, Air Canada appears to be using the wage subsidy exactly how the government intended, Deloitte chief economist Craig Alexander said Wednesday.

At first the government only intended to provide the wage subsidy to small businesses, but it expanded the program to large businesses after a dramatic spike in employment insurance applications.

“The government recognized this was going to be such a bad downturn that every industry and business in Canada was going to be hurt, and as a consequence, everybody would need support,” Alexander said.

“Rather than picking out winners and losers, they said let’s just give the wage subsidy to everybody.”

The federal government realized it would be better to keep thousands of people on payrolls where possible to reduce the burden on EI systems and to help companies resume work faster once the economy starts up again, Alexander said.

The wage subsidy also helps companies with cash flow issues, enabling them to keep paying workers, typically one of the largest expenses, at a time when limited money is flowing in, he added.

In Air Canada’s case, some employees will receive more money under this program than through employment insurance. They will also maintain their health insurance and other benefits.

The government has asked employers to do everything possible to pay the remaining 25 per cent of an employee’s wage and has threatened penalties to companies that try to game the system.

Air Canada’s top executives Rovinescu and chief financial officer Michael Rousseau will forgo their salaries during the crisis. Senior executives, board members and management will take respective pay cuts of 25 to 50 per cent, 25 per cent and 10 per cent.

Air Canada also plans to cut $750 million in costs and capital spending in 2020, up from a previously announced $500 million. It suspended its share repurchase plan in early March.

Airlines around the world are expected to lose more than US$250 billion in revenue as air travel demand evaporates during the pandemic.

Domestic airlines have faced criticism for refusing to offer customers refunds for cancelled travel, instead giving them credit for future flights.

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So far the airlines that are participating in this program are still operating, even if at a much reduced capacity.  It will be interesting to see if Air Transat, Sunwing or Porter participate, or if they don't whether being completely shut down hinders them from doing so.  

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5 hours ago, ng78 said:

So far the airlines that are participating in this program are still operating, even if at a much reduced capacity.  It will be interesting to see if Air Transat, Sunwing or Porter participate, or if they don't whether being completely shut down hinders them from doing so.  

Porter got some kind of financial relief, didn't they? Also, the feds have forgiven airports their federal rent payments, so it stands to reason the airlines have been given some help there as well

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15 minutes ago, dagger said:

Porter got some kind of financial relief, didn't they? Also, the feds have forgiven airports their federal rent payments, so it stands to reason the airlines have been given some help there as well

Yeah Porter was able to secure a loan using their owned airplanes as collateral.  As far as I know though, their employees remain laid off and they are not participating in the wage subsidy.  

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16 minutes ago, dagger said:

Porter got some kind of financial relief, didn't they? Also, the feds have forgiven airports their federal rent payments, so it stands to reason the airlines have been given some help there as well

Airports giving money back to the Airlines?  Might just be a dream. Of course the airlines are saving wads of money by eliminating  landing fees etc.  

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58 minutes ago, Fido said:

When all of these workers get back What are they going to do?

 

We'll be back on the payroll temporarily, but most of us won't be back to work yet.

Edited by FA@AC
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HALIFAX, April 9, 2020 /CNW/ – Chorus Aviation Inc. (“Chorus”) is announcing the intention of its subsidiary, Jazz Aviation LP (“Jazz”), to adopt the Canadian Emergency Wage Subsidy (‘CEWS’). Due to the COVID-19 pandemic, the Air Canada Express flying operations undertaken by Jazz have been reduced by approximately 90% until at least the end of May, and Jazz expects to incur significant revenue losses for the last half of March and the second fiscal quarter. Any near-term recovery in Jazz’s flight operations depends exclusively on the lifting of domestic and trans-border travel restrictions and protocols.

jazz-logo.png?w=400

As of March 15, 2020, Jazz’s active workforce in Canada consisted of approximately 5,000 employees. On April 6, 2020, Chorus announced significant measures to reduce costs and bolster its liquidity. This included the difficult decision to reduce Jazz’s workforce by approximately 60%, or 3,000 employees. Subject to the adoption of the CEWS into law, Jazz intends to adopt the CEWS to assist its employees.

“Our employees are amongst the best in the business and play an integral role in supporting Air Canada’s domestic and trans-border operations. I’m particularly pleased that our unionized labour groups support this initiative as we are hopeful the CEWS will provide much needed support to our employees through this difficult period,” stated Randolph deGooyer, President of Jazz.  

“I applaud the members of our federal government for tabling this important subsidy to help employers and their employees manage through this very uncertain time,” stated Joe Randell, President and CEO, Chorus. “Every measure must be taken to preserve our strength and resources in order to successfully emerge from this crisis when it abates.” 

All areas of the organization are under review with the objective of reducing costs to ensure a strong company that is ready to resume normal operations as soon as possible.

For further information regarding the Capacity Purchase Agreement (‘CPA’) under which Jazz performs flight operations for Air Canada, please refer to Chorus’ Annual Information Form dated February 12, 2020.

Chorus AviationChorus Aviation, Jazz
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3 hours ago, Fido said:

When all of these workers get back What are they going to do?

 

They aren't going back to work. They're going back on the payroll so they can collect more than they would otherwise collect on EI (max $575 weekly vs. max $875 weekly @ 75% subsidy). They'll get laid off again when the subsidy ends which is currently early June. 

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6 hours ago, Fido said:

Thank you CanadaEH

This is unreal.

Crazy times.  We're putting you back on the company payroll but don't bother coming back to your job 'cause there no work to do.  Oh, BTW, the government is paying your wage.

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4 hours ago, seeker said:

Crazy times.  We're putting you back on the company payroll but don't bother coming back to your job 'cause there no work to do.  Oh, BTW, the government is paying your wage.

I really hope this isn't the government's way of "helping" airlines. It seems ridiculous. But as someone who has a spouse that's been laid off I'm happy to have her collect a bigger paycheck than what she was otherwise going to be getting on EI.

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The program is not for airlines but for all businesses affected by the crisis and it certainly appears to be one means of keeping people solvent and money moving. It ends in June so is an immediate, short term program.

Air Canada may not have 'stuff to do' for those workers but other companies will find opportunities.

At Flair the staff are being trained in other areas of the operation, being placed into teams to push projects forward, completing more advanced training etc. There are numerous opportunities for a creative company to use the program to pay staff and provide meaningful work for the staff and real results for the company.

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30 minutes ago, Trader said:

The program is not for airlines but for all businesses affected by the crisis and it certainly appears to be one means of keeping people solvent and money moving. It ends in June so is an immediate, short term program.

Air Canada may not have 'stuff to do' for those workers but other companies will find opportunities.

At Flair the staff are being trained in other areas of the operation, being placed into teams to push projects forward, completing more advanced training etc. There are numerous opportunities for a creative company to use the program to pay staff and provide meaningful work for the staff and real results for the company.

This is a good idea. Lots of work to be found across organizations that wish to exploit "downtime". 

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