Yet another major crisis is looming in BC – one that could put tens of thousands of people out of work and thousands of businesses into bankruptcy – and the NDP government seems bent on making it even worse.
The unprecedented speed and depth of the economic crash has disproportionately affected workers in the private sector, which suffered nearly 90 per cent of all job losses. Government workers were relatively unscathed.
Desperate, BC employers laid off thousands of workers in the early days of the COVID-19 closures. Back when businesses were sticking up signs on windows saying they’d be closed for two weeks and reopen March 27, the BC Government said they would allow these layoffs to stay in place for 16 weeks, before triggering automatic terminations and severance payments.
Well, March 27 turned into April, and then May and June. To flatten the curve, businesses shut down. Even now, many employers haven’t been allowed to reopen at all.
The termination date is coming up, with severance payments due. Employers don’t want to terminate their staff, and they can’t afford the severance. They need help.
But when 12 major employer associations broached the subject with Labour Minister Harry Bains, they were shot down. A follow-up letter to the Premier drew John Horgan’s casual dismissal.
And now it’s termination time in British Columbia.
Here are six things to consider:
1. Many businesses are teetering on the brink of bankruptcy and need more time.
I’ll let the letter from the employers make the case: “The extension is needed to save hard-hit employers from bankruptcy and/or insolvency when they are obligated by law to pay severance due to the expiry of the 16-week period which, for many employers, begins in early July. An extension would also help to facilitate laid-off workers’ return to work as businesses reopen, increase revenue and cash flow and, hopefully, eventually return to pre-COVID-19 operating levels.”
But Horgan said no, meaning thousands of employees will likely be terminated in the next several days. The resulting severance payments will bankrupt business owners hanging by a thread. Pick your poison, job creator: hire back staff you can’t afford to pay, or release them with a severance you can’t afford to pay.
The federal government, meanwhile, went the opposite route of Horgan: they extended the layoff period for federally-regulated employees (think airlines, airports, rail, etc.) to six months, even longer than the timeline requested by BC’s business community.
“We know that many employers who have had to temporarily lay off employees intend to bring them back to work. However, there is still a great deal of uncertainty regarding exactly when that will be possible,” said Justin Trudeau’s Labour Minister Filomena Tassi.
The business community’s request is also in line with what other provinces have done. If Trudeau and other premiers can see this is important, and understand the challenges facing employers, why can’t Horgan?
2. Severance isn’t great.
Most workers don’t want severance; they want their jobs back. They want to work and support their families; they want their workplaces to be financially healthy again. Severance payouts, which the NDP seem to think are some sort of golden parachute into a better life, are a one-time, heavily-taxed payout.
A friend of mine was laid off by her company during COVID-19, and then terminated as it became clear that her employer’s financial crunch would last years. Her final paycheque included her vacation payout, some cash-in-lieu of benefits, a week’s salary, and her severance. Total: $39,762.
Wow, you can hear the NDP say, what a lot of money! But then the taxes kicked in: nearly $18,955 in federal and provincial income tax and other deductions. Her final cheque was cut in half by taxes. Sure, she walked out the door with $20,000. But she was forced to walk away from a job she loved into a pandemic where hundreds of thousands of people are competing for scant work.
Very few, if any, employers want to terminate their teams. But COVID-19 has trashed even the best business plans; through absolutely no fault of their own, thousands of small businesses are on the brink. They may have had the best product, a great price, a wonderful location, an incredible menu, a talented team, or whatever “special sauce” made them different, but they are at the end of the line. As the letter from the business groups says,
“Many firms are facing stark financial challenges, including low or exhausted operating lines of credit and/or working capital... In many cases, employers are understandably not permitted to reopen at pre-COVID-19 operating levels because of public health guidance, further straining their financial position and ability to immediately rehire workers temporarily laid off.”
These job creators need a life ring – not the anchor of severance payments for workers they don’t even want to let go.
3. Harry Bains’ solution is bureaucratic and flawed.
The NDP’s suggestion is to have individual businesses file individual requests to extend layoffs past 16 weeks, and then get approval from a badly backed-up Employment Standards Branch. The BC Liberal opposition note that more than 3,000 applications are already delayed waiting for this – tens of thousands more applications from individual businesses would force employers and employees to be stuck in bureaucratic limbo for months. As BC Liberal Jas Johal correctly diagnosed:
“This is a bureaucratic nightmare, in regards to paperwork, for stressed out small business owners who are on the brink of bankruptcy.”
Yes, he's in the Official Opposition. But the employer associations’ letter was even tougher:
“[It] is a hollow offering and, frankly Minister, insulting to the many businesses struggling to recover or simply keep their doors open as a result of COVID-19… it will be several weeks or months before extensions to statutory layoff provisions that are urgently required NOW are granted. The result will be widespread bankruptcies and insolvencies that you, as Minister of Labour, caused through your inaction. Your approach is perplexing and is unacceptable.”
4. The NDP have been in charge three full years.
It’s a real stretch for the Labour Minister to blame the 2001-2017 BC Liberal government for things flowing from a virus that’s only been here six months, but there Harry Bains was in QP Tuesday:
“You know where we got the backlog, Mr. Speaker? It's because that side, when they were in government, cut employment standards in half. They laid off half the workers in employment standards. That's how we are trying to clean up the mess that they have created in employment standards.”
Bains has been the Labour Minister for three full years and could have remedied these supposedly draconian cuts by now. That’s on him, not the government of yesteryear. And it’s Bains and Horgan who refuse to follow the lead of other provinces and the federal government on this.
5. The Premier says he will speak with the letter’s signatories - that's an exaggeration.
Under heavy questioning Monday, Horgan said he would be “happy to revisit this question and will do so as early as Thursday when I have all of these people on a telephone call.” He didn’t sound very happy during his answer, though, and both he and his Labour Minister have dug in for two days, rejecting the concerns of businesses.
Further, only four of the letter’s 12 associations – representing the largest employer associations in BC – were deemed important enough to make the Premier’s economic recovery task force - and that's whom Horgan is meeting on that phone call. Those four business association leaders are outnumbered by Horgan’s top ministers, deputy ministers, aides, bureaucrats, the BC Federation of Labour president, and NDP allies on that same task force/phone call. Half the committee reports professionally to Horgan – hardly a fair and open dialogue with “all of these people” who signed the letter.
6. I don’t think the Premier knows what “salacious” means.
In Question Period Tuesday, Horgan waved away the letter from 12 employer associations, whose members combine to employ the majority of British Columbians, as “salacious.”
Yeah, it’s not. Salacious means “having or conveying undue or inappropriate interest in sexual matters.”
The book Fifty Shades of Grey: salacious (or so some would say). A letter from 12 employer associations: definitely not salacious, although I guess one could argue that small businesses – and their employees – are being screwed by Horgan’s decision.
Jordan Bateman has a long history of public policy work, championing small business and fiscal responsibility. Currently the Vice President, Communications & Marketing for the Independent Contractors and Business Association (ICBA), Jordan also served six years as the B.C. Director of the Canadian Taxpayers Federation, and was a two-term Langley Township Councillor.
SWIM ON:
- Jordan Bateman's last piece - on minor hockey under COVID-19 - blew up like nothing else in the short but rich history of this very site.
- If you're more audio- or video-minded, Jordan expressed many of these thoughts in this week's BCPOLI Hotstove.
- Last May, the NDP government was pretty clear: they wanted to ditch the secret ballot for union certification, despite the majority advice of their own expert panel. The reason that didn't happen? Andrew Weaver. Here's how that happened.
