The Canadian Trucking Alliance wrote Prime Minister Trudeau and several high-ranking cabinet ministers urging them to consider amending the Canada Emergency Wage Subsidy (CEWS) to be more inclusive of certain struggling businesses as well as other targeted relief measures to support trucking industry.
“The trucking industry has received unprecedented support during the COVID-19 crisis, but it also faces unique and rapidly escalating challenges which require tailored solutions to protect the stability of the supply chain as we eventually move towards an economic recovery period,” wrote CTA president Stephen Laskowski in a letter to the PM, as well as ministers Morneau, Garneau, Freeland, and Tassi.
CTA applauded a recent government announcement that participation criteria for the CEWS would be reviewed and asked that the program be scalable to make it easier for fleets to get approved. A recent survey of CTA members showed that nearly 50 percent of trucking companies do not qualify for the CEWS either fully, or in part. In fact, many fleets are falling just below the threshold of ‘30-percent’ decrease in revenue required to receive up to 75 percent in wage subsidies for eligible employees.
CTA suggested that rather than drawing a hardline threshold, perhaps the subsidy can be scaled to the level of the actual revenue decrease experienced.
“While there will always be a natural level of fluctuation in revenues for most companies, healthy companies should be able to manage these ups and downs. Nonetheless, these are truly exceptional times and there are companies that fall just below current thresholds for full participation in the CEWS but are still experiencing great decreases in revenue and profitability than what could be considered normal fluctuations,” CTA’s letter states.
Overall, the trucking sector is being hit hard by the economic impact of COVID-19. While it is being relied on to operate and deliver the essential products and food Canadians need to overcome the pandemic, many have been severely strained by a collapsed freight market; a precipitous drop in cash-flow; deferred or non-payment by customers; and rising empty miles (when trucks are travelling, but not generating any payload – usually on the backhaul – to cover the costs of operation).
CTA’s recent Business Conditions Report highlights many of these challenges and finds that more than one in three carriers have significant concerns about whether they can continue operations under the current state of the industry.
“CTA has conducted extensive economic modelling in our sector and there is virtually no scenario in which most trucking companies will not be forced to operate on a negative cashflow basis through this pandemic and for months to come. This is true even for companies that are able to access the CEWS at the full benefit,” Laskowski wrote.
To complement a potentially improved CEWS, CTA has been advocating since the beginning of the crisis for a three-month payroll deferral program, which would be similar to the current GST remittance deferral already announced by the federal government. In essence, the program would serve as a zero-interest load for companies and would let them keep a greater share of their cash on hand.
The Alliance also stresses that the hard-working women and men who are driving the trucks that are keeping the country’s shelves stocked need to be looked after. CTA is joined by other industry groups in callingfor an increase to the meal allowance for truck drivers who are seeing their meal costs soar and dining options limited while on the road.
“While CTA understands that government has difficult decisions to make and likely cannot satisfy all employers in every sector, we do believe there are simple ways the government can ensure the right companies get the help they need,” the letter concludes. “Stabilizing the Canadian transportation industry and supply chain needs to continue to be a priority, and we ask that you work with CTA to find ways to assist our nation’s most important freight mode.”
Meanwhile, CTA also continues to work through channels to ensure the government puts conditions to block Driver Inc. companies – whose operations are designed around tax avoidance and non-compliance – from receiving public money through government relief programs.