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Re: the crisis facing workers in Canada’s air travel and tourism sector

February 24, 2021

The Honourable Omar Alghabra
Minister of Transport
House of Commons
Ottawa, Ontario, K1A 0A6

The Honourable Carla Qualtrough
Minister of Employment, Workforce Development and Disability Inclusion
House of Commons
Ottawa, Ontario, K1A 0A6

The Honourable Chrystia Freeland
Deputy Prime Minister and Minister of Finance
House of Commons
Ottawa, Ontario, K1A 0A6

 

Dear Honourable Ministers:
Re: the crisis facing workers in Canada’s air travel and tourism sector

We write to you today on behalf of hundreds of thousands of workers supported by Canada’s air sector.

As you are aware, the pandemic and public-health measures have far-reaching and disastrous impacts on Canada’s air sector, on the workers directly and indirectly employed by it, and on Canada’s remote communities who rely on this critical industry. The air transport sector contributes $51.4 billion to Canada’s GDP and supports approximately 633,000 jobs. When accounting for spending by foreign tourists, the industry’s total contribution rises to $68.1 billion, or 3.2% of Canada’s GDP.  It also supports the broader tourism and hospitality sectors which generated $105 billion in 2019.

Due to a 90% drop in passenger travel during the pandemic, 28 domestic stations have closed, airlines have significantly reduced services and cut routes, and tens of thousands of workers have been laid-off. Alongside workers directly employed by airlines and indirectly through their contractors, many of which held stable, well-paid, middle-class jobs, the crisis has also significantly impacted workers in a wide-range of airport jobs, including those in low-wage and precarious work who are racialized or belong to equity-seeking groups. Similarly, workers across the tourism and hospitality sector have experienced record unemployment. This crisis has been further exacerbated by the recently announced restrictions on international travel.

While the health measures taken to limit the spread of Covid-19 and reduce Canada’s exposure to new variants are absolutely necessary and supported by Canada’s unions, the government should also put in place other requirements, such as rapid-testing in airports, which would strengthen protections for essential travellers and workers and boost public confidence when it is safe to begin lifting restrictions.

Alongside public health measures, the government must concurrently take immediate action to support the workers whose livelihoods have been up-ended and who may not see their jobs return for years to come.

We would like to draw your attention to four issues of particular concern: 1) expanding access to Canada’s employment insurance (EI) program and including workers laid-off from hard-hit sectors; 2) creating new, and enhancing existing, training programs and supports; 3) strengthening the Canada Emergency Wage Subsidy (CEWS) for the benefit of workers, and 4) ensuring that any government aid to the sector is tied to worker conditions and supports.

Expanding access to Canada’s EI program and including workers laid-off from hard-hit sector: As we near a full-year of public health measures to combat Covid-19, many workers in Canada’s air sector are concurrently reaching a year on EI. We have yet to hear news from the government regarding options for these workers whose jobs are unlikely to return any time soon. It is essential that the government immediately include those workers laid-off from hard-hit sectors in the EI program until the end of 2021.

Additionally, there are many workers in the air industry who are currently inactive, but still employed and receiving CEWS. Recognizing that their jobs are unlikely to return in the near-term, some wish to leave this sector and access EI training programs to pursue a new career that is in-demand. Yet, the disqualification of EI claimants who voluntarily leave employment prevents them from doing so. The government should immediately remove this condition for workers in hard-hit sectors and allow for those who have voluntarily separated from work to access EI training programs.

In the long-term, Canada’s unions continue to call on the government to set a clear timeline for a broad review of Canada’s EI program, with full public participation.[1]

Creating new, and enhancing existing, training programs and supports: In recognition that Canada’s travel and tourism sectors will likely not return to normalcy for years to come, it is essential that Canada support workers to transition to socially-useful jobs in industries at high risk of labour shortages. While conditions should be put in place that gives employees the right to return to their jobs when the industry rebounds, focus should also be put on supporting workers who wish to transition to in-demand occupations, including jobs in Canada’s care economy or those that will support our transition to a low-carbon, green economy.

In addition to allowing those who have voluntarily separated from employment to access EI, the new EI Training Support Benefit should be expanded from 4 weeks to a minimum of 16 weeks in order to allow the time needed to acquire certifiable and transferable credentials. The replacement rate for the EI training support benefit should be set at 85% of average weekly earnings, rather than the proposed 55%.

While enhancing this new benefit will be important, alone it will not be enough during this unique time of crisis. The federal government should work with provinces to prioritize opportunities for workers in Canada’s travel and tourism sectors to receive broad access to vocational education, training and apprenticeships. These should include in-work apprenticeships and on-the-job experience, while recognizing the vital role of public education and community colleges.

However, a significant risk is that employers may use the pandemic to eliminate older, long-term workers, and replace them with cheaper labour.  As travel and tourism does eventually rebound, incumbent workers should have the right to return to their jobs. Otherwise, workers may be replaced in an effort to lower wages and working conditions. Federal and provincial governments should provide support to ensure workers have a pathway back to their pre-Covid jobs, as well as provide training opportunities for those who need them.

Strengthening the CEWS for the benefit of workers: The CEWS program is broken and is not serving workers to its full potential. Companies who are receiving public funds through the CEWS have found loopholes that allow them to cut their costs at the expense of workers. By giving employers leverage in the application of CERB, some employers, including Sunwing, Air Canada (for a short time), Transat, and Westjet, accepted the support that covered 75% of their employees’ wages, but then simply reduced wages, rather than topping up the remaining 25%.

Some airlines curtailed employee benefits by either cutting benefits completely, reducing benefits, or transferring the full cost of the benefit package to the employees. Other airlines, including Canadian North, First Air, and PAL, have provided an ultimatum to workers and their unions, forcing workers to choose between being laid-off or remaining on the payroll, but with reduced pensions, benefit packages or hours.

In other cases, employers, including Air Canada and Flair, have now refused to access CEWS, and opted to layoff workers, severing employee ties to the employer.

Neither airline catering companies nor airport concessionaires tapped CEWS to keep their full workforce intact. This is typical across the broader tourism and hospitality sector. Employers say they don’t want to pay for workers to stay home, but conveniently forget they are passing along money from the government to keep the workforce intact. Those employers who cannot afford to front the initial costs to put workers on the program should be able to utilize relief programs to do so.

While the government moved quickly to close loopholes to prevent a small number of international travellers from accessing financial assistance from any of the three recovery benefits, for months now the government has dragged its feet to close these loopholes that are harming tens of thousands of workers in Canada’s air travel and tourism sector.

CEWS has been designed to provide maximum flexibility for employers but requires absolutely no employer commitment to retain its pre-Covid workforce. Out of concern that CEWS would disincentive work, the federal government has managed to support only a fraction of the workers it was intended to help. During a public health crisis, this should be corrected to ensure a smooth path to recovery.

We encourage the government to immediately take the necessary steps to close these loopholes and require employers to put their full pre-Covid workforce onto CEWS, retroactively top-up wages and reimburse contributions and benefit costs.

Ensuring that any government aid to the sector is tied to worker conditions and supports: Canada’s travel and tourism sectors have not only been the hardest hit by the pandemic, they are also expected to experience the slowest recovery.  For the air sector in particular, this has been devastating for its workers and disastrous for Canada’s remote communities that are reliant on air transportation for their basic necessities. If the sector is to survive, direct funding is necessary.

Canada’s unions stand alongside industry associations in calling for a direct funding package, but if such loans or subsidies are provided, it is essential that they are tied to conditions that support workers. Fortunately, countries such as France and Australia have already developed targeted support for their air sectors that is conditional on worker supports, giving Canada concrete examples to draw from. Notably, the French government has worked with unions to develop work schedules with the goal of preserving jobs.

Targeted industry funding should not be modelled on the inadequate and broken Highly Affected Sectors Credit Availability Program (HASCAP). Instead, we recommend the government tie any targeted industry funding, such as low interest loans and subsidies, to conditions that require employers to: 1) retain workers on payroll, 2) participate fully in CEWS; 3) prevent employers from opening-up collective agreements and reducing workers’ wages and working conditions; and 4) mandate recall protection, giving laid-off workers the right of first refusal to return to their jobs.

Canada’s unions recommend that the government establish a Sector Council Working Group (SCWG) that includes government, industry and union representatives. In addition to devising an effective form of direct assistance to the industry (eg. low interest loans, cash flow assistance and subsidies), the SCWG should be mandated to ensure government funding is tied to the maintenance and creation of well-paid and safe jobs. As is the case with the government’s recent approval of the purchase of Transat A.T. by Air Canada, employment commitments are essential and should be mandatory conditions in any government programs or approval processes. Additionally, clear boundaries must be set on how public money is used, including by preventing paying out bonuses, share buybacks and other schemes that do not directly benefit the industry and workers.

We welcome any opportunity to discuss these matters in further detail.

Sincerely,

Hassan Yussuff
President, Canadian Labour Congress

Mark Hancock
National President, Canadian Union of Public Employees

Stan Pickthall
General Vice-President, International Association of Machinists and Aerospace Workers Canada

Ian Robb
Canadian Director, UNITE HERE Canada

[1] A comprehensive review should include the following reforms: 1) Replacing EI’s variable entrance requirement with a lowered, single national entrance threshold; 2) Increasing the duration of benefits to 50 weeks for all claimants; 3) Ending the disqualification of claimants who voluntarily leave employment without just cause or lose employment due to misconduct; 4) Preventing severance and vacation payments from reducing claimants’ benefits and entitlements; 5) Ensuring a minimum benefit through a new low-income supplement based on individual income, and increasing the replacement rate; 6) Increasing access to maternity and parental benefits and introducing a higher replacement rate following the Quebec Parental Insurance Program; 7) Permanently extending unemployment benefits to solo self-employed workers, freelancers, and gig workers.

 

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This article was originally posted on the IAM Canada website. View the original post here: Re: the crisis facing workers in Canada’s air travel and tourism sector