One quarter of Canada’s small businesses report staff refusing to return to work: survey

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A national association representing small business owners says about a quarter of recently-surveyed employers have had staff refuse to return to work when asked — and the group claims a desire to remain on the Canada Emergency Response Benefit is playing a big part.

Of the 868 businesses who explained why employees turned them down, the top reasons cited included a preference to remain on the CERB (62 per cent), health concerns (47 per cent) and child-care challenges (27 per cent), according to the results of a weekly survey the Canadian Federation of Independent Business conducted of its membership between July 3 and July 6.

“Staff have said, ‘I’m a little bit worried about coming back to work, I’ve got some child-care challenges, my bills are being paid by the CERB, so I’m just going to stick out on the CERB for the rest of the summer and give me a call in September,” Dan Kelly, president and CEO of the CFIB, said in an interview.

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“That’s a very typical response that we’ve had from members.”

There are just under 1.2 million small- and medium-sized businesses in Canada, according to government figures from late 2019, of which the CFIB represents about 110,000.

According to the group’s recent survey results, 3,389 respondents answered the question about whether any of their laid-off staff refused to come back to work when recalled. The CFIB says 27 per cent of those said “yes.”

According to the CFIB, the results suggest 14 per cent of all businesses have had staff refuse to return to work because they prefer to stay on the CERB, a $2,000-per-month emergency benefit the federal government rolled out as the COVID-19 pandemic hit the country.

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While Kelly acknowledged the CERB isn’t the only reason given by employees for being hesitant to return to work, he said the fact it was the most commonly cited reason “surprised” him.

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What it says to me is that CERB … certainly is, for some, tipping the balance in favour of remaining off and for others, is the reason that they’re remaining off,” Kelly said.

Parisa Mahboubi, senior policy analyst at the C.D. Howe Institute, said the type of labour being sought might be part of the challenge. She noted that in many industries, only part-time work is up for grabs.

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“This was something that I anticipated … even a few months ago, when we started talking about the opening up the economy,” she said.

“The reason is that the individuals receiving CERB, they don’t have that incentive to look for employment, given (the) current features of this CERB program.”

However, the survey’s finding that 14 per cent of businesses have had employees refuse to return because they prefer to remain on CERB shows the problem is not “widespread,” economist Armine Yalnizyan argued.

This isn’t a widespread phenomenon and CERB isn’t a huge disincentive to work. It does support people from having to return to unsafe work conditions,” said Yalnizyan, who is the Atkinson Fellow on the Future Of Workers at the Toronto-based Atkinson Foundation.

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According to CFIB’s survey results, the top industries that reported having a difficult time finding enough staff to operate include hospitality, construction and agriculture.

“This makes perfect sense,” Yalnizyan said. “These are issues that we have been reading about in the papers as unsafe places to work, places where contagion (is) happening again.

“So is it reasonable that people are kind of iffy about going back and even in those cases, only a quarter of them? Yeah, I think that’s kind of reasonable.”

Colin Busby, research director at the Institute for Research on Public Policy, said there’s still not enough available data to “really suss out the full effect of the emergency response benefit as a potential disincentive to work.”

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“But I think it’s probably, at the same time, fair to conclude that we need to be looking at how it was designed in a way that considers it a likely possibility for a number of workers, and think about how we go about the next iteration of it or whatever the future of the CERB looks like,” Busby said in an interview from Montreal.

The Liberal government is trying to amend CERB rules so that a person would not be eligible for the benefit if they don’t go back to work “when it is reasonable to do so” and their employer has asked them to, or if they turn down “a reasonable job offer” when they’re able to work.

The government bill, however, did not pass in June as planned and remains stalled in the legislative process.

As the expected end of the CERB looms nearer, politicians, economists and stakeholders have been offering different suggestions for how Ottawa could redesign the benefit in order to get more people back to work or moved onto the Canada Emergency Wage Subsidy (CEWS) for businesses — which covers up to 75 per cent of wages (up to a maximum of $847 a week) for workers at eligible companies.

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For now, the government has extended the CERB program, as is, until the end of September.

Businesses awaiting details on wage subsidy eligibility: CFIB

In the meantime, the CFIB is hoping the government will soon announce how it may tweak the federal wage subsidy program.

Ahead of the release of the government’s “fiscal snapshot” on July 8, Finance Minister Bill Morneau spent weeks collecting feedback from businesses, labour groups and other stakeholders about how the wage subsidy could be reshaped to improve uptake.

The CEWS was first extended through the summer and then Prime Minister Justin Trudeau announced earlier this week that Ottawa would keep it running until December. But Trudeau didn’t touch on the program’s eligibility rules.

While that extension came as good news, Kelly noted the government still hasn’t released the eligibility requirements for the wage subsidy program beyond June, even though it’s now mid-July.

“So employers don’t know for the subsidy period right now whether they qualify for the wage subsidy or they don’t,” Kelly said.

“That is also one of the reasons why only a third of employers across Canada — 34 per cent — have brought back all of their workers.”

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Global News asked Morneau’s office when criteria for the wage subsidy for July and August would be announced and how the government plans to reshape the eligibility rules for the remainder of the program. A response was not received by deadline, but Global News will update this story if a response is received.

In hindsight, Kelly said some of the challenges facing businesses and workers now might have been avoided if the government had moved more quickly to roll out the wage subsidy program.

Unfortunately … because the CERB (happened) faster than the wage subsidy, employers were left with really no option but to lay off their workers at that time,” he said.

“And as a result, once we broke that employment relationship, it now takes a huge amount to try to tape up the egg here and get employees back to work.”

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— With files from the Canadian Press

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