As Canadian trucking companies face an anticipated plunge in freight volumes, Prime Minister Justin Trudeau announced on Monday a 75% wage subsidy would extend to any business facing a revenue plunge of at least 30% because of the COVID-19 pandemic.
Speaking during his daily news conference, Trudeau made clear that trucking companies — along with any other business in Canada — could qualify for up to C$847 per employee per week. He highlighted Quebec trucking and logistics company Energy Transportation Group as a potential beneficiary, saying the subsidy would help ensure it “can keep moving essential goods like food and toilet paper.”
While carriers like Energy continue to enjoy robust demand for vital consumer goods, others already are hurting. Carriers specializing in auto parts and oil services have it the worst, with fleets completely idled and layoffs hitting drivers and other employees.
Auto parts carrier: ‘We’re down until they come back up’
Verspeeten Cartage in Ingersoll, Ontario, temporarily laid off its roughly 110 employee drivers. The company hauls parts for General Motors, Ford, and Fiat Chrysler, all of which halted their plants’ operations in North America.
“We’re down until they come back up,” Verspeeten President Scott Verspeeten told FreightWaves.
He said the company is looking into the wage subsidy and whether it could rehire any of its employees even if they won’t be working. Meanwhile, he said, Verspeeten has financial reserves to last several months.
“We’re OK for now, and I’m sure we’re better off than some,” Verspeeten said.
In St. John, British Columbia, D.R.S. Energy Services is contemplating what to do with its 45 employees and 27 trucks.
D.R.S. serves the energy sector in British Columbia and Alberta, where the historic plunge in oil prices is having a catastrophic impact on the industry.
“We were surviving until two weeks ago. Now I’m thinking we’ll be down for three months,” President and owner Sandy Beech told FreightWaves.
Beech and his business partner are also looking into the subsidy and other government assistance as its trucks sit idle. He has yet to lay off the drivers but did cut back the maintenance shop to three days per week.
Barring a return to demand for hauling for rigging equipment and other oil services, Beech hopes the provincial government will grant him permission to begin mining a gravel pit. The project, delayed by more than a year, would allow the company to extract and haul gravel.
In Quebec, Energy Transportation Group CEO Shawn Girard said his company has no need to apply for the wage subsidy as demand for essential goods remains strong. But he found Trudeau’s message reassuring.
“It’s comforting,” Girard told FreightWaves. “We don’t need it right now. But will we need it a month from now?”