The Canada Emergency Wage Subsidy program saved trucking jobs. But it can achieve so much more.
Economics professors for years to come will be assessing and pontificating over the various approaches governments took to managing the economic fallout caused by the Covid-19 pandemic. Books will be written on the subject. But truthfully, it’s likely too soon to come to any certain conclusions.
While the U.S. largely doled out checks to individuals – much-needed lifelines – that did little to curtail the massive unemployment that ensued. Canada, too, issued checks to affected individuals but like many European governments, focused on subsidizing wages in an effort to maintain jobs.
As in the U.S., unemployment here is high – 8.5% as of November – but there’s no question the Canada Emergency Wage Subsidy (CEWS) saved jobs. Perhaps even yours. And you may not even know it.
The transportation industry fared better, and recovered more quickly, than most – and in many cases trucking companies that received CEWS payouts really didn’t need them. Murray Mullen, chairman and CEO of Mullen Group is honest about it.
“You have many companies, like Mullen Group, that were well-funded and positioned to manage through the crisis,” Mullen told me in an email exchange regarding CEWS. “In other words, we really did not need the government funding. In saying this, the funding was offered to all businesses based on the government rules and as such, many of our business units qualified.”
While Mullen acknowledges his company did not need the funding, it allowed it to maintain jobs that otherwise would’ve been eliminated, at least temporarily. And that in itself is what the program set out to do – allowing more people to maintain their livelihoods uninterrupted while minimizing the strain on unemployment programs.
As it turns out, Mullen Group really didn’t need a government handout to survive the Covid crisis. Its LTL and logistics and warehousing segments thrived as consumer spending on truck-delivered goods drove the economy to a quick resurgence.
Like many other trucking companies, Mullen has been faring pretty well. So, the optics of accepting CEWS checks, at first glance, could be a little stomach-churning. But a recent line in Mullen’s press release outlining its 2021 business plan caught my eye.
It was almost a footnote: “In addition, we will allocate $10 million to fund growth and create jobs in Canada. In 2020 the federal government implemented the CEWS program. We will be directing the vast majority of the funds we received to create opportunities and employment for Canadians.”
Mullen’s CEWS funds were already put to good use saving jobs, as disclosed in previous financial disclosures. Was this a clever way to restate the aforementioned? Or was it something extra? A way to pay it forward? I sought clarification from Mullen himself.
“I acknowledge the funds we have received are higher than the employee costs we incurred,” he told me. “With this in mind, I made a commitment that no shareholder or senior executive would receive any direct benefit from the CEWS program. First off, this was not the intention of the program and secondly, we believed we had an obligation to use the funds as originally set out. So, we continued employing more employees than we would have otherwise. Along with this, we are investing at least $10 million to buy local, and we will support Canadian businesses and Canadian jobs with the CEWS funding.”
I asked for specific examples and senior vice-president Richard Maloney rhymed them off. Its Grimshaw Trucking unit is the first company to order refrigerated containers for shipping palletized loads of high-value, temperature-sensitive food and pharma products from B.C.-based CryoLogistics Refrigeration Technologies.
Cascade Energy Services will call upon Nisku, Alta.-based Precise Tank Cleaning Tools for zero-entry tank cleaning systems. And a fleet of Ford Transits needed to support Mullen’s burgeoning LTL and logistics/warehousing operations will be sourced from locally owned Ford dealers, employing local Canadians.
“We could have bought these assets from outside of Canada but I felt it is our collective duty to reinvest in Canada. And we have just started,” Mullen told me.
CEWS wasn’t without its problems, but overall, it was a good thing. It saved Canadian jobs in a wide range of industries – not just trucking. But if Corporate Canada follows Mullen’s lead and reinvests some of this funding to promote Canadian industry and jobs outside its own walls, it could be a great thing.
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