May 13, 2020

McLennan Ross Update for Wednesday

By McLennan Ross Labour & Employment Team

What we are seeing
  • On May 11, 2020, the Government of Canada announced the creation of the Large Employer Emergency Financing Facility (LEEFF) to provide bridge financing for large- and mid-sized employers to help protect Canadian jobs and avoid bankruptcies of otherwise viable firms. Although in the final stages of establishing the program with further information about the application process to be provided shortly, some of the details provided include:
    • The program will not be available to resolve insolvencies or restructure firms or to provide financing to companies that otherwise have the capacity to manage through the crisis. In that regard, an assessment may be made of its employment, tax, and economic activity in Canada, as well as its international organizational structure and financing arrangements. 
    • Companies seeking support must demonstrate how they intend to preserve employment and maintain investment activities.
    • Recipients will need to commit to respect collective bargaining agreements and protect workers' pensions.
    • There will be strict limits to dividends, share buy-backs, and executive pay.
    • Finally, recipient companies will be required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board's Task Force on Climate-related Financial Disclosures, including how their future operations will support environmental sustainability and national climate goals. 
  • Though not focused on the energy sector, LEEFF is being identified as a partial response to the liquidity crisis facing energy producers in western Canada. A concern is that certain qualifying criteria will effectively exclude significant energy producers due to international operations or climate-related concerns.

What we are hearing

  • The Government of Alberta released an online tool to help businesses prepare for reopening.
  • This tool is a collection of COVID-19 information created for businesses identified as being able to reopen as part of Stage 1 of the Alberta relaunch strategy.
  • In addition to the strategy overview, the Government has dedicated a webpage to providing an update with respect to where the province is at and how the relaunch is proceeding from a healthcare perspective.
  • On Wednesday, May 13, Alberta expects to provide an update on whether the province has met the criteria to implement Stage 1 on May 14, 2020. Dr. Hinshaw met with the Government of Alberta's emergency management committee during the evening of May 12, 2020 to discuss the risks and rewards of a regional approach to reopening sectors of the economy.
  • The Alberta approach contrasts favorably with what is occurring in Ontario, where Premier Ford publicly stated that the province has hit Stage 1 of its three-stage framework and there would be good news announced on May 14, 2020, only to be contradicted by the Chief Medical Officer of Health who subsequently stated that he was not confident that the province has met the threshold to start on its economic recovery plan. Premier Ford's office clarified his statement to suggest he would only be provided details about Stage 1 on May 14, 2020, not that the province was at Stage 1.

What we are saying
  • The Court of Queen's Bench took another step towards opening by announcing that it would now process applications that do not require notice to an opposing party. These orders are to be submitted by email and can include matters such as serving commencing documents, matters where the opposing party is consenting and correcting inadvertent errors in court and other documents. The response to the application will also be returned by email, including either the electronically signed Order, or the Master's reasons for denying the application.
  • Although this direction does not currently allow for matters in dispute between parties to be resolved and therefore will not do much to alleviate the backlog of applications facing the court when it reopens on a broader basis, fine tuning the submission of court applications via email may help streamline the court process in the future. In that context, it is a welcome development.

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