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MEC says 75 per cent wage subsidy could save co-op

FILE - A Mountain Equipment Coop, MEC, store is seen in Montreal on Tuesday, June 18, 2019. Two large Canadian retailers plan to shutter operations Friday in an effort to give their staff time to join mass climate strikes and raise awareness about the impending crisis, while others will continue business as usual. THE CANADIAN PRESS/Paul Chiasson
Summary

MEC has laid off hundreds of staff quietly over the last four weeks

Hundreds of MEC staff to be rehired under federal wage subsidy

MEC says it was already in financial stress before COVID-19

VANCOUVER (NEWS 1130) – Hundreds of laid off staff at one of Canada’s largest outdoor retailers learned Friday morning they have options.

Mountain Equipment Co-op, which is Canada’s biggest cooperative, with more than 3.5 million members, now says the federal wage subsidy could be the key to keeping the struggling company afloat as its financial situation continues to deteriorate.

“We believe (the Canada Emergency Wage Subsidy) will provide important aid to employers like MEC that have suffered immense business losses due to the COVD-19 crisis. We also believe that the CEWS program will allow MEC to weather the current challenges and return to full business operations quickly and effectively when we have overcome the current pandemic,” an offer letter, which was sent to staff, reads.

After waiting for weeks to find out if their employer would take advantage of the federal wage subsidy for COVID-19-impacted businesses, staff have learned they have two options.

Either they can take a pay cut and work for 75 per cent of their regular pay (up to $847 per week, subject to deductions) or they can remain on the Canada Emergency Response Benefit.

Those who choose to return “to work” will actually be placed on a temporary leave of absence.

“We do not yet know how long it will be necessary to maintain the pay deduction and keep you on leave, but we are committed to providing you with updated information when we are able to do so. You are not required to report to work during the leave period, unless otherwise notified.”

NEWS 1130 has heard from a number of staff who were laid off between late March and early April who say the federal wage subsidy was announced at about the same time. As companies like Air Canada and WestJet took advantage, they wondered if MEC would too.

However the co-op also published an “April Update” on its website Friday, explaining how previous financial misadventures have left MEC desperate for revenue, having lost $11.5 million last year alone.

Multiple staff members say they are aware of more cuts coming to head office, and on Friday, some senior store staff and team leaders received their layoff notices. They had remained employed to ship products from stores for online sales, say our sources, who prefer not to be named for fear it could cost them their jobs.