On Sunday April 5, 2020, Local 793 Business Manager Mike Gallagher addressed the union with a video update from his hometown of Oakville, ON.

In the report, he spoke of concerns with potential tax implications in respect to the newly introduced Local 793 Temporary COVID-19 Top-Up and announced the need to put a hold on the COVID-19 Emergency Relief Grant while awaiting clarification from the government.

He talked about the hurdles the union is facing to ensure that the temporary top-up funds were not going to be clawed back by the federal government, and pointed out that if the money was a dollar-for-dollar claw back, members would not see a financial benefit and it would come at an immense cost to the union’s fund.

“As the Business Manager and a Trustee, I cannot release the funds to go to you only to have the HRDC (Human Resources Development Canada), Minister of Finance, or the Minister of Employment and Social Development claw it back,” Gallagher said. “I would not want to have our trust funds going, basically, to pay a tax to the federal government through you.”

Business Manager Gallagher assured members that the Benefit Plan Trustees are working with the government and remain committed to getting the benefits to the members now when they need it the most.

On Monday, a letter was sent to Prime Minister Justin Trudeau, Treasury Board President Jean-Yves Duclos and many relevant Ministers requesting changes to the employee benefit related legislation and policy due to the COVID-19 crisis. The letter is requesting immediate interim relief measures under the Canada Emergency Response Benefit Act (“CERBA”) to confirm that any income replacement relief provided to Local 793 members and their families to deal with the devastating impact of income interruption due to the pandemic is treated as a “relief grant” under Section 35 of the Employee Insurance Act Regulations.

Click link below to read the letter to the Government of Canada requesting changes to employee benefit related legislation and policy due to COVID-19:

Letter to Prime Minister Justin Trudeau

A letter was also sent to Finance Minister Bill Morneau last week. The letter, written in conjunction with MEBCO, a non-profit corporation representing the interests of Canadian multi-employer pension and benefit plans, proposes immediate changes or interim amendments that need to be implemented to the Income Tax Act.

Business Manager Gallagher stressed that it is necessary for an interim order from the government that the COVID-19 related top-up qualifies as an emergency relief grant, as written in Relief Grants, Section 35(7), of the Income Tax Act and Canada Revenue Agency Policy:

“Section 35(7) of the EI Regulations exempts certain income from the definition of “earnings” that would otherwise be captured under s. 35(2), including “relief grants in cash or kind” at 35(7)(c)… the type of financial assistance being contemplated by HWTs and ELHTs in the context of a pandemic, fall within the scope and intent of the relief grant provision and should therefore be viewed as not constituting “earnings” for the purpose of s. 35.”
* Health and Welfare Trusts (HWTs) and Employee Life and Health Trusts (ELHTs)

Click link below to read the letter sent to Finance Minister Bill Morneau requesting changes to employee benefit related legislation and policy due to COVID-19:

Letter to Finance Minister Bill Morneau

Business Manager Gallagher said that the union is prepared to challenge the government if their decision is not favourable and stated that he has spoken to union lawyers at Koskie Minsky LLP in preparation for going to court, if necessary.

However, Gallagher believes the government will do their best to give the interim order needed to allow the union to provide these relief grants to members and is hopeful they will address the issue by week’s end.

“I’ve always believed that if you have a number of people of goodwill and working together, you can move mountains. I believe we will be able to move this mountain and be able to get this benefit to you.

“I am optimistic that we’ll resolve this issue.”