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 employees, many of whom are boilermakers and welders who fabricate containers holding gases and liquids for the oil and gas industry, were locked out of their workplace 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. Since January 14, the canadian crude price more than doubled from $27.84 on June 29, 2020 to $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 on the database 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 salaries of employees of companies that have 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.
Since December 19, 2020, the total cost of CEWS was $99.13 billion, down from $81.64 billion for the CERB, which ended in October 2020. As the right-wing media ruminated that CERB was turning unemployed Canadians into “wellness loafers,” or encouraging gang violencesome major hardware flaws of the CEWS became apparent.
In December 2020, the Financial item reported that at least sixty-eight companies that received federal wage subsidies have continued to pay dividends to their shareholders, including some of Canada’s largest corporations, such as oil companies Imperial Oil, Suncor and Canadian Natural Resources Ltd. The sixty-eight companies together 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.
A beginning of 2022 report from the Canadian Center for Progressive Policy Alternatives (CCPA) reveals 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 have received funding 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,” CACP senior economist David Macdonald 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 on several occasions throughout 2021. 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, the NDP push successfully the ruling Liberals to increase the subsidy from 10 percent to 75 percent.
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 has always done 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.
