Insights

Business in Vancouv er is owned by Glacier Media Inc., 303 West 5th Av enue, Vancouv er, B.C. V5Y 1J6 Publisher; Editor-in-chief; vice- resident, editorial, Glacier Media | Kirk LaPointe, 604-608-5183 Mana in editor | Timothy Renshaw, 604-608-5131 D e u ty Mana i n e ditor | Mark Falkenberg, 604-608-5174 online editor | Emm a C r awford H a mpel, 604-608-5138

Canada’s coronavirus unification factor B usiness and political leaders cannot afford to waste COVID-19’s unifying role as a com mon villain. Partisan d ivisiveness has become a major negative force in 21st-century enterprise and politics that has closed free-trade doors and increased the corrosive fallout from widening wealth gaps and inert governments. The pandemic’s threat to every thing from transportation, trade and t ravel to entertainment and community events has for the first time t his century galvanized communities and countries in a war against a single enemy. That singular focus has tem porarily eliminated parochial walls. A nd Canada needs all the singular focus it can get to allow it to tread water in what is shaping up to be a rapid downshift into global recession that will affect all sectors and social strata in the country. Civility and empathy in the House of Commons following word that the prime minister’s wife had tested positive for the coronavirus was a welcome departure from current standard operating procedure in the political arena.

But singular focus needs to be ap plied now to the COVID-19 economy. I t is devolving into ever-darker degrees of bleak, especially for Canada. I n a recent economic assessment, the Organization for Economic Cooperation and Development notes that COVID-19’s severe impact on the global economy has rendered growth prospects highly uncertain. What is certain is that they are not good. The assessment estimates annual GDP growth dropping to 2.4% this year, which is down from an already an emic 2.9% in 2019. It pegs Canada’s G DP growth at a slim 1.3%, down another 0.3% from 2019 and likely optimistic in light of recent events. T he COVID-19 economy has also underscored the world’s overreliance on China as the centre of its manu facturing and supply chain universe. D iversification to domestic and regional sources is long overdue.

The COVID-19 challenge has and will inflict a lot of damage in the short term, but its role in unifying lo cal, regional and international virus w ar efforts could pay long-term social and economic benefits. The COVID-19 eco nomy has also undersco red the world’s ov errelianceon China

last laugh

Tough COVID-19 questions: how long will, how long can this go on?

Podium Kirk LaPointe I hear a lot of people asking: how long will this go on?

What I wonder is: how long can this go on?

First, the “will” question. The first bout of COVID-19 so cial distancing and self-isolation m ight still feel like one part novelty, one part dislocation, but it will wear really thin, really quickly, really. We were born to socialize, and this is, after all, Beautiful British Columbia.

This is spring’s first week and our inclinations will be to hit the park, the beach, the hiking trail, the golf course, the tennis court, the bike path, the seawall, the Grind, the Drive, whatever. Mostly, though, we can’t, which

I’m afraid to say might be dif ferent from saying we won’t. S everal weeks from now, the stir-craziness will be savage among the healthy among us. Naturally we are wise to con fine our outdoorsy moments to o ur front step or our backyard, to a patio at home and not the one we cherish at our favourite (but, sigh, still closed) restau rant. But: singles not dating? C ampers not pitching tents? No picnics in the park? Sure we can not do that?

The best guess – guess with a capital G – is that the corona virus will hit its peak in B.C. in J une, endures in July and August, and keeps us creeped out a bout gatherings. Some authorities fret about a resumption in a utumn. Many predict three or four social distancing stints. Beyond logistics, can any of us claim we will not fall prey to serious psychological problems from the stress of seclusion and solitary work? Isn’t it already happening? Wasn’t the hoarding of supplies a precursor to fear contagion?

But the bigger question is the “can” question. How long can this go on?

The pandemic has already clobbered our economic pros pects. That the federal government earmarked last week $82 bi llion in emergency relief is telltale of symptoms to come. Provinces and cities still have to weigh in with support, but Ottawa’s deeper pockets will be dug and dug and dug into. Spain, after all, disbursed nearly 20% of its gross domestic product to its calamity; Canada is around the 3% level.

So, even with the shovelling of money, at what stage can we afford to stay isolated and in active and not engender a true m eltdown? We live in a society of instant gratification, not enduring de nial of it. We are social animals w ith few lone wolves. Our businesses have cultivated us with a ccess to quick delivery, abundant choice and easy refunds a nd exchanges. In this environment of tempting online commerce and g overnment underwriting, consumers cannot be quelled, but many bricks-and-mortar businesses can be. It will not take long to take large holes out of our communities, to make permanent the staff reductions in our stores and restaurants, unless there is some sort of ac commodation of the seclusion – a nd that doesn’t seem in the cards.

Small business is acutely vul nerable. It bears ridiculous rents a nd taxes, excessive regulations, a shortage of labour due to un affordability and global behemoths as competitors. Take two or t hree months out of their lives and you take out their lives. If governments can’t see, own and act upon their share of the prob lem and its foundations, they h ave a death wish on the sector. Larger businesses, too, are suffering a surfeit of silly im pediments to investment, layers o f taxes and virtue signalling tolls – hardships in normal circumstances. Under this new normal, this can’t continue. As we feed and nurture those in need, action must be taken toward a reset of government’s size and seizure in the postvirus period. This won’t be the last coronavirus.

We are into a period in which the joy of living in a great city is deeply diminished. The head of our province’s restaurant as sociation told me last week he e xpects one-fifth of the sector to vanish. We need businesses to survive for our post-virus iden tity as a community; for them to d o so, governments have to stop seeing them as an ATM.

Think ahead, governments: the geese will not lay the golden eggs for a long time after this ends. Private-sector growth is an oxymoron, but public-sector growth is alive and well. How long can that go on? •

Kirk LaPointe is the publisher and editor-in-chief of Business in Vancouver and the vice-president, editorial, of Glacier Media.

Most Canadians want more say in choosing senators, poll finds

Podium mario canseco B efore the entire country became gripped in the fight against the corona virus, R esearch Co. asked Canadians about their views of the u pper house. Discussions about the Senate of Canada can be extremely toxic, and there has been no shortage of ideas and proposals to make the best of existing statutes.

From 2012 to 2016, the Senate was on the minds of Canadians for the wrong reasons, after the expenses of its members were examined by the auditor gen eral. While the level of attention a nd dismay from Canadians fell short of what was experienced in the United Kingdom dur ing its parliamentary expenses s candal in 2009, the situation served to harden existing nega tive perceptions.

T he New Democratic Party (NDP) and the Bloc Québécois have had no difficulties argu ing for the Senate’s abolition. T he Conservative Party of Canada attempted to make some modifications during the tenure of Stephen Harper. The Liberal Party of Canada, fol lowing its victory in the 2015 f ederal election, chose to switch appointments from the prime minister’s desk to an arm’slength advisory body. Since this modification was enacted, 52 senators have joined the upper house.

Four years have passed since the first arguably non-partisan appointments to the Senate, but Canadians remain unwavering in their wish that, someday, all voters will be able to have a say in the composition of the upper house.

In the survey, only about one in 10 Canadians (9%) says that our country needs a Senate and believes the current guidelines that call for appointed senators should not be modified. Three times as many adults in Canada (27%) think that we do not need a Senate and want all legislation to be reviewed and authorized by the House of Commons. This leaves one in five Can adians (20%) who are undecided wh en asked how they feel about the upper house and the largest proportion (45%) who want Canadians to take an active role in the process to choose senators.

Across both genders and all age groups, more than two in five Canadians yearn for this approach. British Columbians and Albertans, at 52% and 51%, respectively, are more likely to support the notion of a Senate where voters have an opportun ity to make a selection. A s econd question puts forward different options for the Sen ate of Canada, and there is some c onsistency. Across the country, 40% of Canadians want to re form the Senate to allow Canadians to elect the members of t he upper house. Just over three in 10 (31%) prefer establishing a selection committee that would appoint non-partisan senators. Only 10% want to go back to the process we had before Justin Trudeau’s Liberals formed the government – the prime minis ter making all appointments at h is or her discretion. While the Reform party advanced the cause of a Triple-E S enate (equal, elected and effective) in the last decade of the 2 0th century, the highest level of support for electing senators is seen now with Canadians who voted for the NDP in the last fed eral election (52%). Those who c ast ballots for the Conservative party (44%) and the Liberal p arty (35%) in 2019 are less likely to endorse this type of Senate reform.

Since the beginning of his tenure, Prime Minister Trudeau has named only senators who were recommended by an arm’slength advisory body and not directly appointed by himself. More than a third of Canadians (37%) believe these changes have made the upper house “better than before.” As expected, Lib eral voters are more likely to feel t his way (58%) than Canadians who voted for the New Demo crats (30%) and the Conservatives (20%). Ev en after many instances of interrupted efforts to reform the Senate, Canadians are still hopeful for the future, with more than half (54%) expecting that, one day, voters will “definitely” or “probably” get to elect the members of the upper house. Longing for the chance to vote for senators at one point is high est in Ontario (57%), British Columbia (56%) and Saskatchewan a nd Manitoba (also 56%).

The survey shows that, while Canadians are not necessarily enthralled by everything that happens in the upper house, there are still some positive feelings about where things are headed. Just over a third of Can adians think the new process of a dvisory body recommendations has helped, but a larger propor tion wants to vote – and more t han half dream of eventually holding a paper ballot bearing the names of candidates to the upper house. •

Mario Canseco is the president of Research Co.

Results are based on an online study conducted February 22–25, 2020, among 1,000 adults in Canada. The data has been statistically weighted according to Canadian census figures for age, gender and region. The margin of error, which measures sample variability, is plus or minus 3.1 percentage points, 19 times out of 20.

Court clarifies legal principles in wrongful dismissal claims

Podium Sarah Blanco I n the recent Quach vs. Mitrux Services Ltd. decision, the BC Court of Appeal c larified three important legal principles in wrongful dismiss al claims related to: 1 ) how employers can modify employment contracts;

2) whether employees on fixed-term contracts are en titled to damages equivalent t o the balance of the term if wrongfully dismissed; and

3) when aggravated damages for unfair or bad-faith con duct or emotional upset will be a warded.

The facts In this case, Tri Quach and Mitrux Services Ltd. signed a one-year, fixed-term contract. One month later, Mitrux asked Quach to sign a month-tomonth contract in place of the fixed-term contract. At this stage Quach had already left his previous job. Quach initially refused to sign the new contract but ultimately agreed after Mitrux insisted.

The new month-to-month contract was terminable upon four weeks’ written notice or payment of one month’s salary in lieu of notice. On Quach’s insistence, the month-tomonth contract included a term that said that any failure to comply with the terms of the agreement or misrepresenta tion by Mitrux would void the e ntire agreement.

Prior to his start date, Mitrux terminated Quach without cause. Quach sued for dam ages for wrongful dismissal a nd sought damages for the full year of unpaid wages. Mitrux argued that the month-tomonth contract governed, and therefore one month’s pay in lieu of notice was appropri ate. After losing at BC Supreme Co urt, Mitrux appealed the decision to the BC Court of Ap peal, which made the following f indings.

Modification of contracts The trial judge found that the month-to-month contract failed for lack of fresh “con sideration” for the changes t hat Mitrux tried to impose. The Court of Appeal agreed, reaffirming the principle that a modification of a pre‑existing contract will not be enforced unless there is a further benefit to both parties. In this case, Mitrux attempted to replace the first contract with one that was more favourable to Mitrux, and less favourable to Quach. The second contract purported to provide fresh consideration because Mitrux agreed to waive the “probationary require ment” as set out in the Employment Standards Act. However, t he Employment Standards Act establishes a floor of standards, not a requirement that there be a probationary period. There was therefore no consideration at all.

Mitrux also argued that its commitment to pay $1,000 to reimburse the legal fees incurred by Quach in creat ing the fixed‑t erm contract was sufficient consideration. However, the trial judge found that the terms of the second contract had not been settled when Mitrux offered to reim burse Quach $1,000. The Court o f Appeal agreed that the evidence on this point was vague.

A ggravated damages The Court of Appeal began by reiterating the test for aggra vated damages, which required a f inding that Mitrux engaged in conduct during the course of dismissal that was unfair or in bad faith, and a finding that the manner of dismissal caused Quach a serious and prolonged disruption that transcended ordinary emotional upset or distress.

Mitrux argued that contrary to the finding of the trial judge, the second criteria had not been met. The Court of Appeal agreed. There was no indica tion that Quach’s feelings of s trong dismay and anxiety for himself and his family were be yond the “normal distress and hu rt feelings” of job loss that are not compensable. On the contrary, Quach appeared to recover quickly from his loss of the position. He found new em ployment soon after he learned h e would not be starting work with Mitrux.

Are new earnings deductible from damages? The Court of Appeal then con sidered the trial judge’s award o f damages. The judge made no deduction for post‑dismissal earnings. After reviewing the applicable law in B.C., the court concluded that the fixed‑term nature of a con tract did not entitle Quach to d amages in the full amount of unpaid wages for the balance of the term without deduction of monies earned elsewhere during the term, absent a con tractual provision that says o therwise.

Tips for employers Quach vs. Mitrux Services Ltd. is a helpful decision that clari fies the law in several key areas. E mployers now have certainty that mitigation will be taken into account in cases involving wrongfully dismissed employ ees on fixed-term contracts u nless the contract provides otherwise. The case also serves as a helpful reminder to em ployers to: • ensure that a modification to an employee’s contract contains a benefit for the employee; • act fairly and in good faith when dismissing employees and avoid conduct that will cause employees an unneces sary emotional upset; and • note that employees who are dismissed before their start date may still be en titled to wrongful dismissal d amages. •

While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.