IT’S TEXTBOOK DISASTER CAPITALISM. Create a crisis to make things better for yourself. The Co-op Refinery in Regina, Saskatchewan did just that last year. They created a crisis for themselves that others would help pay for.

The Co-op Refinery locked out 750 workers for seven months last year.

The refinery brought in hundreds of scabs—some by helicopter—to keep production going. They housed all the scabs in a massive on-site camp.

The lockout reduced production and so refinery profits. The fall in profits meant the refinery was eligible to apply for money from CEWS, the federal Canada Emergency Wage Subsidy program.

A number of companies that provided scab labour and services to the scab camp behind the locked refinery gates, were confirmed recipients of COVID-19 emergency wage subsidies. However the companies won’t say if they spent that money on scabs.

[ HISTORIC IRONY] The Co-op Refinery in Regina was formed in 1944 as a membership-owned collective—with a similar purpose to a union—to protect farmers and consumers and make sure profits stayed within rural communities.]

‘Scab loophole’

Unifor, the union representing the locked out refinery workers, strongly objected to  the use of CEWS to subsidize scabs. The union called on the federal government to close what it called the “scab loophole.”

The union argued that giving government money to an employer in a jam because of a crisis he created would tip the power balance against the workers and strengthen the employer’s side in the dispute.

“I don’t believe for a split second [the government] said, ‘We’re gonna take sides in this dispute,’ but the bottom line is they did,” said Unifor national president Jerry Dias.

“You can’t subsidize the boss during a lockout, or frankly, during a strike, and call it fair,” Dias added.

Drop in profits caused by employer

Amir Mawani, a York University business professor currently researching CEWS, says Canadian unions are right to be concerned, particularly when all a company needs to do to qualify for CEWS, is show a decline in revenues.

“You would not have to explain why your revenues went down,” Mawani told PressProgress. “It could be COVID, it could be a picket line, it could be oil prices going down.”

“That should be the labour union’s concern: that the very act of a lockout is making [the employer] eligible, which perhaps without the lockout, they would not be.”

Mawani explained that it is also difficult to determine how and where a company spends its CEWS money, including during a labour dispute.

Publicly traded companies can choose not to include CEWS income in quarterly reports if the amount of money is deemed “immaterial,” or insignificant in relation to the overall budget. Private companies don’t have to release public reports at all.

“It’s not really a wage subsidy, it’s a business expense subsidy,” Mawani said.

“There is no question the lockout at the Co-op Refinery in Regina would have been over a lot quicker if it wasn’t for the scabs — and if it wasn’t for the wage subsidy subsidizing the company,” Dias told PressProgress.

Many complaints

Federated Co-operatives Limited and several of the contracting companies it employed during the lockout appear in the CEWS database—along with many other employers who had labour disputes in 2020.

The Canada Revenue Agency has received 1,200 complaints about companies misusing CEWS.

University of Saskatchewan political science professor Charles Smith says this “scab loophole” is one of many methods the wage subsidy allows employers to prioritize profits over their own workers.

As of April 30 the government had still failed to close the “scab loophole".

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