May 1, 2020

McLennan Ross Update for Friday

By McLennan Ross Labour & Employment Team

What we are seeing

  • The Federation of Canadian Municipalities released a report highlighting the need for urgent federal assistance to address the impending financial crisis in cities and municipalities due to COVID-19. To view the report, click here.
  • According to the report, municipalities provide many of the daily essential services relied upon by Canadians, including local police, ambulance, and fire services, maintenance of roads, bridges, and other essential infrastructure, public transit for essential workers, water and wastewater services, garbage collection and recycling, local social services, and housing for vulnerable residents and local public health agencies.
  • With plummeting revenues, rising expenses, and a legal proscription against running operating deficits, municipalities are at imminent risk of having to cut essential services to Canadians to remain solvent.  In order to avoid such cuts, emergency operating funding from the Federal Government will be required to cover the anticipated near-term gap of between $10 and $15 billion for municipalities nationwide, with immediate advance payments being provided to municipalities facing urgent liquidity issues. 
  • To date, municipalities have been specifically exempted from such emergency measures such as the Canada Emergency Wage Subsidy, the 10% Temporary Wage Subsidy or the various credit programs.
  • Canada’s budget watchdog indicated the federal deficit will likely hit $252 Billion this year, which highlights the current and future costs of this crisis and the limitations on Government to do anything more than it already has.

What we are hearing

  • As we anticipated, the Alberta Government introduced its relaunch strategy for reopening the Alberta economy in stages starting in May. To view the strategy, click here.
  • The Alberta strategy calls for the implementation of immediate early actions, some of which start on May 1, 2020, followed by three stages, with movement through the stages dependent on the ability to keep infection rates low and within the capacity of the Alberta healthcare system, as measured by the percentage of positive COVID-19 tests as well as hospitalization and ICU rates. If there is an unacceptable increase in either of these metrics, it appears that movement back a stage would occur.  
  • A summary of the highlights from each milestone include the following:
    • The immediate early actions include the scheduling of non-urgent surgeries, the opening of dental and other regulated healthcare facilities, access to public lands and parks, booking for use of campgrounds from June 1 forward, access to boat launches, and the opening of golf courses other than clubhouses and pro shops.
    • Stage 1 allows for some businesses and facilities to resume operations with 2 metre physical distancing requirements and other public health guidance in place, which could occur as early as May 14. This includes post-secondary institutions, retail businesses such as clothing, furniture, and bookstores, some personal services such as hairstyling and barber shops, museums and art galleries, daycares with limits on occupancy, summer camps with limits on occupancy, caf├ęs, restaurants (minors allowed in liquor-licensed establishments) with no bar service and public seating being limited to 50 per cent capacity.
    • Stage 2 will expand the businesses that can open, again with 2 metre physical distancing requirements and other public health guidance in place, to include potential Kindergarten to Grade 12 schools with restrictions, libraries, personal services such as artificial tanning, aesthetics, cosmetic skin and body treatments, manicures, pedicures, waxing, facial treatments, massage and reflexology and movie theatres and theatres with restrictions. As well, some large gatherings may be allowed, with the maximum number of people to be determined. 
    • Stage 3 will see the full reopening of business and services with limited restrictions on permitted larger gatherings, with the maximum number again to be determined.  Arts and culture festivals, concerts, and major sporting events will be permitted with enhanced protection controls in place. Nightclubs, gyms, pools, recreation centres, and arenas will reopen with enhanced protection controls in place.
  • For all stages, physical distancing of 2 metres remains in place, with the encouragement to wear a mask in public ending after stage 2. Isolation and quarantine continue through stage 2 for any returning travelers or where close contact with someone who is COVID-19 positive has occurred. Non-essential travel remains not recommended until stage 3.

What we are saying

  • As we previously summarized here, in recognition of the impact COVID-19 was having upon employers and employees and the need for some of the normal workplace rules and expectations to be relaxed, the Alberta Minister of Labour granted a Ministerial Order that temporarily altered the provisions of the Employment Standards Code and Employment Standards Regulation.
  • We considered most of the changes would be sensible on a permanent basis, but were stated to only last for as long as the COVID-19 crisis continued. We are now being asked how much longer employers and employees can expect these changes to remain in place.
  • Officially, these changes expire and Alberta returns to its previous Employment Standards legislation on the earliest of the following dates:
    • August 14, 2020;
    • 60 days after the state of public health emergency is terminated (it is set to expire on June 15, 2020, unless renewed or terminated earlier);
    • When the Minister of Labour determines that the relaxation is no longer in the public interest, which is too early to say right now; or
    • When cabinet terminates the Order providing the relaxed rules.
  • We do not believe any of these things will happen too soon and that the Government is taking a wait and see approach. With the reopening strategy continuing to restrict normal business operations until stage 3, employers will continue to need the relaxed rules and regulations to continue. For instance, the temporary layoff period was extended to 120 days, effective March 17. We believe it likely that the Government will allow the initial 120-day period to run its course, which would be mid-July or later.  Further details of the Government’s plans may come with the introduction of its plan to reignite the economy.

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