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Canada Emergency Wage Subsidy

June 4, 2020 

Canada Emergency Wage Subsidy
Department of Finance Canada Via
email: fin.cews-succ.fin@canada.ca 

Under the current Canada Emergency Wage Subsidy ("CEWS") rules, a Registered Pension Plan (“RPP”) is eligible for the CEWS in respect of its eligible employees if it has experienced the prescribed decline in qualifying revenue. However, RPPs, such as multi-employer pension plans (MEPPs), would be excluded under the proposed amendments, as they are tax-exempt trusts that are not described under subsections 149(1)(e), (j), (k), or (l). 

Access to the CEWS has been critical for many self-administered MEPPs during the COVID-19 pandemic— which have been deemed to provide essential services during the crisis by Ontario, British Columbia, Alberta and Manitoba. Unlike single-employer pension plans, self-administered MEPPs do not rely on an employer's human resources, but rather maintain their own independent staff to administer the plan. 

MEPPs have two primary sources of revenue: pension contributions and investment income. Pension contributions are generally tied directly to employees’ hours worked, and have therefore declined due to terminations, layoffs, and reductions in working hours. Investment income has also declined, given the pandemic 's impact on domestic and global markets. 

Despite the pandemic’s impact on MEPPs’ revenue streams, MEPPs cannot reduce or scale down their services. Self-administered MEPPs employ staff to assist in the administration of their plans, whose tasks include processing contributions, providing pension payments to retired members and spouses, commencing pension payments for new retirees, and enrolling new members. 

MEPPs are obliged to continue administering their plans by provincial and federal legislation and by their fiduciary duties to members and beneficiaries. As such, MEPPs will generally be unable to respond to decreased revenue during the pandemic by cutting their staffing costs. We note that due to these constraints, MEPPs will be forced to address any shortfall by drawing on plan assets, which only puts future retirement benefits at risk. 

For these reasons, we strongly urge against changing the CEWS rules so as to exclude MEPPs. We would greatly appreciate the opportunity to discuss the above in more detail. Thank you for your consideration of these issues. 

Yours truly,

Robert Blakely

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