‘It’s Very Disheartening’: COVID Benefit Contributing to Labour Shortages

By Lee Harding
Lee Harding
Lee Harding
Lee Harding is a journalist and think tank researcher based in Saskatchewan, and a contributor to The Epoch Times.
June 17, 2021 Updated: June 17, 2021

Employers and a small-business advocacy group say the Canada Response Benefit and its predecessor have provided a lingering disincentive for people to work, causing an unprecedented worker shortage.

Herbert Hildebrandt, VP of business development at Precision Fab Inc. in Aylmer, Ont., says his company had a difficult time getting workers for the past year. The plant, which employs 120 people, builds containers that allow automotive parts to be shipped from 40 small suppliers in southern Ontario to automotive assembly lines elsewhere.

“We certainly had to lay off some people in the beginning, March–April 2020, and then when we tried to get some people back, there was a number of people that just never returned,” Hildebrandt told The Epoch Times.

“We’ve never had a worse labour shortage in our area than right now.”

Hildebrandt says many employees who did not return were receiving the Canada Response Benefit (CRB) or its predecessor, the Canada Emergency Recovery Benefit (CERB). Although recipients are supposed to attest to the government every two weeks that they have applied for jobs, he says his talks with former workers have similar patterns.

“Really, it’s a short conversation,” he said. “You call him and say, ‘We would like you back for your job.’ And they’re, ‘No, not right now, I’m not prepared.’ Or it usually involves, ‘I don’t feel comfortable,’ or ‘Due to COVID, I don’t want to right now. It might not be safe.’ I don’t know that those most of the time are legitimate excuses. I would say that they’re just kind of convenient.”

Hildebrandt said he’s advertised for workers by posting a notice at a local restaurant, only to come back days later to find another business to outbid his posted starting wage, and then another business outbid both of them. In response, he is outsourcing more to the company’s plant in Mexico.

“Most of our investment over the next two to four years is slated for Mexico because we have tried to grow here more but we feel like we’ve reached almost a limit. We’re not sure that we can sustain the growth here because of the acute [worker] shortage,” he said.

According to Statistics Canada, fewer people are looking for work, as the unemployment rate went down from 13.7 percent in May 2020 to 8.2 percent in May 2021. Meanwhile many employers are saying the jobs they’re offering are turned down because government programs encourage people not to work.

The CRB, which succeeded the CERB when that program ended last fall, pays $1,000 every two weeks and is scheduled to end on Sept. 25.

‘Just Nobodys Applied’

It’s a different business, but the same story, some 2,900 kilometres away in Prince Albert, Saskatchewan. At Lammle’s Western Wear and Tack, manager Ryan Sawatsky wants to hire.

“We’ve been trying online ads. I’ve got ads posted up. I’ve tried Facebook, everything we can think of. I’ve got signs on the door and just nobody’s applied,” Sawatsky said in an interview.

“I’ve been doing this for 21 years and I’ve never had as much trouble trying to find staff. My biggest thing is you can’t get anybody to work during the day. I can get kids that want to work evenings and weekends, but I can’t get anybody who wants to work full-time Monday to Friday. That’s what bugs me.”

Sawatsky said sister stores in other cities face similar problems, and the CRB is to blame.

“We figured it out. [We pay] $500 a week. That’s for a 30-hour work week. So why would you come work for 30 hours when you can sit at home and make the same amount?”

Jonathan Alward, Prairies director for the Canadian Federation of Independent Business, says his members have complained about the government incentives for a year now.

“If you look at the restaurant sector, that’s one where I’d heard last summer, where this was starting to become an issue. And people were unwilling—some people only wanted to come back part-time, because there was a top-up provision before they would lose the … benefits,” Alward said in an interview.

The Winnipeg resident said the only thing keeping the CRB from being a bigger issue is that lockdowns have directly hindered business operations and dampened the economy. For many, the result is less business growth and therefore less of a need to hire.

Last month’s CFIB member survey found the top three limitations on sales or production growth were a shortage of skilled labour (38 percent), insufficient domestic demand (34 percent), and a shortage of un/semi-skilled labour (23 percent).

Hildebrandt fears that the situation will only get worse given that “there’s real serious talk of universal basic income.” Meanwhile, provincial governments have lockdowns while the federal government has incurred massive debt to pay for programs that have kept people from working.

“It’s very disheartening. And I feel that it is really a slap in the face of the Canadian entrepreneurs and middle-class workers primarily, and those that are trying to get ahead and live what would have been the Canadian dream—the success of hard work and prosperity and an economic climate conducive to business success,” Hildebrandt said.

“The [government is] just going to tax us more and in their words ‘equalize it’ to pay for all of this because we’ve spent ourselves into a really, really dangerous spot in this country.”

Lee Harding
Lee Harding
Lee Harding is a journalist and think tank researcher based in Saskatchewan, and a contributor to The Epoch Times.