Dear Sisters, Brothers and Friends:
Over the past nine months our union, our social movements and our communities have been profoundly shaken and had to confront unprecedented challenges as a result of the COVID-19 pandemic that swept the world. As is the case for unions elsewhere in Canada and across the world, CUPE faces new challenges: large scale lay-offs, seismic transformation of workplaces and work itself, the rise of remote and virtual work, increased surveillance, fundamental shifts in the operation of our organizations, and the most severe of all, COVID-19 related deaths and illnesses.
As we face these challenges together, I have never been prouder of CUPE because I see that our collective resilience is incredible. I am inspired by CUPE’s dedicated leaders, members, and staff as we find creative and innovative solutions to deal with the new challenges.
At the peak in June 2020, more than 10 per cent of CUPE membership across Canada had been laid off or had no hours of work. By August about one-third of these workers had returned to work. We expect the majority of CUPE membership to return to work over the course of 2021.
We anticipate that CUPE’s revenues will slowly start coming back throughout 2021 but they will not reach the 2020 budgeted revenue level by the end of the year even though we will see some growth primarily due to slight wage increases.
Throughout the pandemic we have taken the position that we will do everything in our power to maintain the servicing and supports to our locals and members. We committed that we will do whatever we can to find savings in our operations before we consider cutting programs or staff. Our goal for 2021 is to make sure that our front-line services are not affected.
I am extremely proud of the way each part of CUPE has come together to find solutions to our challenges. This fall I began the extensive budget consultation process earlier than normal. Due to the unpredicted challenges we face, I did two rounds of consultations with each region and with National Office.
Many meetings took place with National Executive Board members, senior staff from each region, Managing Directors and Directors of each National Branch. In addition, considerable preparation was conducted by researchers, our economist, and staff from the Finance and Administration Department to establish revenue projections for the new year.
Our Strategic Directions document endorsed by delegates at the last convention also sets out some of the priorities for the year ahead and was considered in setting priorities. Most especially, we must maintain resources dedicated to fighting oppression and right-wing extremism in all its forms. Regardless of our challenges, CUPE National resources will continue to be dedicated to our ongoing fights for justice and most especially our work confronting anti-black racism and the fighting against the oppression of indigenous peoples across Canada.
Our membership projections this year are made against 2020 actuals that changed dramatically in the second quarter, and partially rebounded in the third quarter for most provinces and sectors. We have assumed that the recovery in members returning to work will continue through 2021, and we will have a full return to pre-pandemic membership levels at the beginning of the fourth quarter in 2021 for all regions other than our Airline sector where the recovery will take longer. We have phased this in on a quarter by quarter basis for the first three quarters of 2021.
Wage and membership estimates for 2021 produce a drop in per capita revenue of $3.1 million compared to the prior year’s budget.
Investment, arrears interest and miscellaneous income are budgeted to decrease by a total of just over $2.3 million, largely due to a drop in expected investment income. This is mainly due to a reduction in the opening balance in our investment accounts at the start of the new year caused by market losses due to COVID-19 as well as the $22.4 million special contribution to our pension plan made in June 2020. Therefore, the total projected decrease in revenue for 2020 is $5.4 million over the prior year’s budget.
This year we have had to take an unprecedented hard look at all spending categories in order to balance the budget. Given the drop in budgeted revenue we have no choice but to look for spending savings to make this up.
Some budget categories that reflect core activities of the organization have not been significantly impacted but overall, virtually every budget spending line was examined to find the savings needed.
When all the input is combined, CUPE’s budget consultation process provides a clear vision for our work in 2021.
Simplified Administration of the 1991 and 1997 Quebec Accords
In previous reports I have explained CUPE’s will to simplify the administration of the 1991 and 1997 Accords with the Quebec Division. The National Executive Board gave me the mandate to look at how we could facilitate the administrative aspect of the Accords without any change in the overall costs for CUPE.
It is important to note that at the December 1997 meeting, the National Executive Board ratified an agreement updating the 1991 Accord put in place to fund specialized services provided in French by the Quebec region, including setting up and operating a fully autonomous Education service. This Accord also addressed the full participation of SCFP-Quebec and its locals in the Quebec Federation of Labour.
The administration of this section of the 1997 Accord provides for CUPE to transfer back to Quebec 11.5% of the Quebec per capita revenue in a given year. From this 11.5%, 10 staff representatives were hired by the Division to provide those services on behalf of CUPE. This transfer of money is counterproductive. We are proposing, starting with fiscal year 2021, that CUPE keeps the per capita revenue portion equivalent to the cost of the 10 staff representatives and that in return we transfer the 10 staff representatives to CUPE’s payroll. Of the 11.5%, the total cost to transfer those staff representatives is 4.2%. Therefore, beginning in 2021 CUPE’s transfer back to SCFP-Quebec will be reduced to 7.3% instead of 11.5%.
In addition to the updating of the 1991 Accord, the 1997 agreement also covers the costs of office space used by our national representatives. It also introduces a cash redistribution equivalent to five staff representative positions that the region preferred not to fill at that time. Of those five staff positions, four have been filled since 1997.
We are proposing to transfer the four staff representatives to CUPE’s payroll. In addition, we are proposing that the costs for the office space, clerical support and the transfer amount equivalent to one staff position be paid directly by CUPE National
In 1997, it made sense to send the money to the Provincial Division as the Regional Director was also the division’s Secretary-Treasurer. The Regional Director was then in a position to hire specialized staff representatives through the Division. This hasn’t been the case since 2011. I think it is important that we separate the administration of CUPE from the work of the Division.
I believe that by transferring the 14 staff and keeping the money to fund this transfer while paying the locals directly, without having the money transiting through the Division, accomplishes this.
These changes also permit more transparency in the 2021 budget. Instead of having the money allocated in different budget lines, you will see that I propose we create one budget line, in the Quebec region Schedule, entitled “Quebec Accord – 7.3%”. Aside from reallocating budget lines, this proposal doesn’t change the total numbers themselves nor the number of staff assigned to the Quebec Region.
Taking such measures will ensure that future National Executive Board members and staff will have easy access to the Accord in the budget.
CUPE National Sector Conference
Our 4th bi-annual CUPE National Sector Council Conference was held virtually October 20-22. Over 850 leaders and activists attended 11 sector meetings held over three days.
It was more important than ever this fall that our leaders and activists had the opportunity to come together to discuss the issues facing their sectors. This was an opportunity to go beyond the issues facing an individual local or region to share strategies and resources for the difficult rounds of bargaining ahead.
CUPE National Committee Meetings
Although I much prefer attending the Committee meetings in person, I was able to attend the virtual meetings of the following National Committees over the fall:
- National Contracting Out & Privatization Committee
- National Persons with Disabilities Committee
- National Global Justice Committee
- National Rainbow Committee
- National Pink Triangle Committee
- National Library Workers Committee
- National Child Care Working Group
- National Health & Safety Committee
- National Women’s Committee
- National Health Care Issues Committee
- National Environment Committee
It was invaluable to hear the challenges and recommendations from the representatives of each Committee. The Committee members are from most regions of the country and were able to share a wide range of perspectives on the conditions and issues CUPE faces.
CUPE Newfoundland and Labrador Division Convention
On September 25, I was pleased to virtually attend the annual Division Convention of CUPE Newfoundland and Labrador. My message to the delegates was loud and clear: CUPE will not stand by while governments attempt to use the pandemic crisis to launch attacks on the public sector by implementing austerity measures. Instead, we must support CUPE Newfoundland and Labrador’s position that an economic recovery plan that responds to worker’s needs including childcare and a fifteen-dollar minimum wage, a prohibition on P3 projects and strengthening of public services.
Alberta Division Convention
On October 8, I was honoured to virtually attend and address the Alberta Division Convention. I congratulated the delegates for their unending commitment to standing up for the rights of all workers as they face one of the most regressive right-wing governments in the country. It is hard to fathom how this was possible, but in the middle of the pandemic, the Kenny government cut funding for health, education and municipalities. CUPE leaders must contend with this governments plan attacking union rights, cutting pensions and destroying public services.
I made the commitment that on behalf of the National Executive Board and all 700,000 CUPE members across the country, CUPE Alberta has our unending support to fight the attacks on all levels including providing significant resources for the historic legal battles ahead.
CUPE Nova Scotia Executive Board
In mid-October I was invited to open the CUPE Nova Scotia virtual executive meeting. I was very happy to be able to be there virtually and to have the opportunity to address the Executive Board on the challenges CUPE has faced across the country with COVID-19 and how we are adapting to this new situation. I also had the opportunity to talk about some of the challenges in preparing the 2021 budget.
Update on the Federal Public Sector Accounting Board
CUPE is deeply concerned about a series of proposed changes to accounting standards for pension plans that are under consideration by the Public Sector Accounting Board. These accounting changes could result in Defined Benefit pension plans requiring significant increases to reported debt and deficit on the books of governments at all levels. We are concerned that while these changes have no sound basis in accounting, they would have negative political effects, both for our members’ pension plans and for the public services we all depend on. CUPE is working with labour movement allies and other stakeholders to make a strong case against these changes.
CUPE Ontario Webisode on Long-Term Care
On September 29, I joined hundreds of CUPE members and community allies at one of the series of webisodes hosted by CUPE Ontario Executive Board members. This episode was called: Code Red: At Risk and Vulnerable, Long-Term Care in Ontario. Panelists discussed the crisis in the Ontario long-term care sector, the issues facing long-term care workers and the people they support.
Soon after, and following a prolonged campaign called Time to Care, CUPE Ontario celebrated the passage of legislation ensuring a minimum daily average of four hours of hands on care per resident in every long-term care home in the province. I acknowledge the many years of dedication to this campaign lead by Sister Candace Rennick along with the other leaders and staff in the region.
Ontario Council of Hospital Unions Bargaining Convention
In my greetings to the OCHU delegates, I thanked Ontario hospital and healthcare workers for the incredible work they do, day in and day out, in extremely tough circumstances. Although the challenges are significant, OHCU’s determination to protect the health and safety of members and the services they provide continues during the preparation for the upcoming bargaining sessions.
I pledged CUPE National’s support each and every step of the way throughout the upcoming bargaining process.
CUPE National Anti-Black Racism and Inclusion Workshops
During October, I attended a series of workshops facilitated by Elevate Inclusion Strategies on identifying and challenging anti-black racism. I joined our National President Mark Hancock and our CUPE National senior staff leadership from across the country who also participated. I learned a lot and believe that we will all benefit greatly from these sessions designed to focus on systemic discrimination and racism faced by black people, how to be strong allies and how this intersects with the work of CUPE and the communities in which CUPE members and staff live.
The next step is rolling out the training for all staff across the country starting in December.
FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 2020
The total assets in the General Fund at September 30, 2020 were $278 million compared to $271 million at June 30, 2020 and $300.2 million at December 31, 2019. The items of significance are discussed below.
The bank balance at September 30, 2020 of $19.4 million is a $5.3 million decrease from the bank balance at June 30, 2020 and an increase of $320,000 from the balance at December 31, 2019. The bank balance includes various internal cash reserves which are set aside for the 2021 convention, retirement payouts, employee future benefits funding, property maintenance and the Regional Building Fund.
The total liabilities in the General Fund were $241.8 at September 30, 2020 compared to $237.9 million at June 30, 2020 and $244.1 million at December 31, 2019.
Due to the good governance CUPE established by creating the Roadmap on the Employee Future Benefit Liability in 2005, we are continuing to make progress toward the goal of recording the full liability on the Statement of Financial Position.
The true liability as calculated by our Actuary at December 31, 2019 stood at $222.8 million, in comparison to $205.0 million at the end of 2018. The December 31, 2019 Balance Sheet has recorded a liability of $175.3 million leaving an unrecorded gap of $47.5 million at that time.
By the end of the third quarter of 2020, the booked Employee Future Benefit Liability remains at the same level when compared to the balance at the beginning of 2020.
This is due to the fact that the new money being put toward the liability this year has largely been offset by temporary unrealized investment losses for the first nine months of 2020. The recorded liability at September 30, 2020 is $175.3 million.
The Fund Balance at September 30, 2020 is $36.5 million of which a total of $2.9 million is restricted as follows: Convention and National Events Assistance Fund $659,000 and Regional Building Fund, $2.25 million.
The preliminary operating deficit (before the provision for the Regional Building Fund) for the year is $19.6 million which is $17.3 million larger than the budgeted deficit of $2.3 million.
Total revenue is under budget by $17.7 million due to two main factors, both resulting from the COVID-19 pandemic. Per Capita revenue is under budget by $5.7 million due to membership losses occurring as a result of the COVID-19 pandemic. We also experienced temporary unrealized loss of $9.6 million in our investment accounts caused by a significant drop in the financial markets due to the COVID-19 pandemic. At the time of writing this report, the investment markets are showing signs of recovery.
Salaries are under budget by $1.9 million, current benefits are over budget by $1 million and future benefits, excluding the provision to add the investment gains and losses to the liability, are over budget by $1.3 million. Directors and Representatives salaries are $333,000 under budget, Administrative and Technical Salaries are $267,000 under budget and Clerical salaries are 398,000 under budget. Vacation Relief is under budget by 876,000 or 53%.
Due to the actuarial evaluation as at January 1, 2020, which required a 1.29% increase (13.63% to 14.92%) to CUPE’s contribution to the pension plan, there is an increase in the pension contribution expense. This increase has pushed the pension contribution expense $1 million over budget.
In addition, by a special motion of the National Executive Board, in May 2020, CUPE made a special pension payment of $24.3 million, of which $1.8 million will be recovered from other Employers who participate in the plan, into the CEPP in order to shore up the solvency deficit as at January 1, 2020 in order to avoid the risk of having to potentially pay substantial solvency payments in future years. This payment is shown as a separate line in the General Expense Schedule (Schedule A).
Due to significantly curtailed economic activity due to COVID-19, many of our regular operating expenses are well under budget. Below are some of the more significant items:
- Operational Travel is $4.0 million under budget.
- Fixed Staffing costs are $1.3 million under budget.
- Human Resources programs are $1.1 million under budget largely due to staff training being postponed or held virtually.
- Office Expenses $776,000 under budget.
- Rent is $725,000 under budget due to postponement of many capital projects since the start of the pandemic.
- Organizing and Regional Services programs are $538,000 under budget largely due to not being able to carry out much of the work planned in the areas of recruitment and skill development due to COVID-19.
- National Committees is $629,000 under budget due to the cancellation of our All Committees meeting in March 2020 and the fact that the second meetings of the committees scheduled in 2020 are held virtually.
- NEB/NEC related costs are $498,000 under budget.
COVID-19 has also created more spending in two areas in particular:
- EAP Care Costs are $672,000 over budget as we are providing enhanced EAP program for our staff to help them cope during this difficult time.
- We have incurred unbudgeted costs directly related to COVID-19 as PPE supplies are needed as well as additional cleaning services at CUPE facilities. This cost to the end of September 2020 is $400,000 and is expected to increase as the year goes on.
National Defence Fund
As at September 30, 2020 we have $18.6 million in Total Assets compared to $13.8 million at December 31, 2019 and $14.2 million at September 30, 2019. The cash balance at September 30, 2020 is up $4.5 million from December 31, 2019 and up $4.2 million from September 30, 2019. In addition, we have investments totalling $11.1 million on the books at September 30, 2020, up $475,000 from December 31, 2019.
Under Liabilities we have accounts payable and accrued liabilities of $1.0 million at September 30, 2020 compared to $2.1 million at December 31, 2019. There is also $8.6 million in cost-shared campaigns’ liabilities at September 30, 2020 compared to $8.7 million at December 31, 2019. Finally, $1.9 million is owed to the General Fund at September 30, 2020.
Cost-shared campaigns approved by the National Executive Board in the first three quarters of the year totalled $2,218,649 with an annual budget of $4.0 million. There was a recovery of $1 million in unused funds from prior years cost-shared campaigns that have been closed out during the first half of the year. Major Organizing expenses were $1.9 million against an annual budget of $4.0 million. National Strategic Initiatives expenses were $1 million against an annual budget of $2.85 million. Regional Strategic Initiatives expenses were $1.2 million with a budget for the year of $2.325 million.
National Strike Fund
The Statement of Financial Position is set out as Statement 1. All receivables and payables relate to the varied activities and ongoing programs of the National Strike Fund and represent a picture of our assets and liabilities on September 30, 2020.
Total Assets in the National Strike Fund as of September 30, 2020 were $124.5 million compared to $114.7 million December 31, 2019. These assets consisted of $14.8 million in cash, $2.0 million in per capita receivable and $107.7 million in investments.
Under Liabilities we have accounts payable and accrued liabilities totalling $213,500 down $20,000 from December 31, 2019.
Revenue into the Strike Fund, including investment income, was $11.4 million and expenditures of $2.3 million, resulting in a surplus before unrealized gains of $9.1 million. There was an unrealized gain of $749,000 recorded on our Strike Fund investments at the end of September 2020 as markets show signs of recovery from the market losses in the first quarter due to COVID-19.
STRIKES, LOCKOUTS AND SETTLEMENTS
Local 5257 (ON) – Blaisdale Montessori School, approximately 130 members on strike since November 16, 2020.
PER CAPITA ARREARS
For the quarter ended September 2020 the total arrears were $13,906,916 which was an increase of $1,561,528 or 12.65% from the previous quarter ended June 2020.
Total arrears have increased 46.80% as compared to September 2019.
INFORMATION TECHNOLOGY (IT) REPORT
In the fourth quarter of 2020, the IT Branch continued to focus on conducting its own business as usual while working remotely to enable and support the rest of CUPE staff to do the same. For IT, that included executing on plans for approved new releases of the MRMS, executing on the approved plan for the replacement of CUPE’s Per Capita Tax system (PCS), making progress on CUPE’s Business Continuity and Disaster Recovery planning project, implementing a CUPE-wide Intranet project as well as planning for the implementation of TEAMS to replace Skype For Business across CUPE.
The CUPE intranet project is on schedule to go live in December. Staff across the country are excited about this bilingual solution that will help connect CUPE employees to the work-relevant information they need. As a result of the intranet requirements gathering sessions that took place over the month of September with staff from all CUPE areas, a list of approved publishable content types was created to guide the content and communication themes of CUPE’s intranet. The project team organized a contest where all CUPE staff were invited to submit ideas for the intranet name and the suggestions were great.
- Over 330 CUPE employees voted to name CUPE’s Intranet and the winner was CUPE Connect / Connexion SCFP.
- 56 Intranet content publishers across the country were nominated by their managers and are scheduled for training in November.
Member Relationship Management System (MRMS)
The interface between the MRMS and the new Per Capita System (PCS) and additions needed to the Local Union Information (LUI) has now moved into the testing phase. This includes the capturing of the Trustees’ Audit Reports process that is currently performed in the old Per Capita Tax system. The expected release date for the PCS is Q1 2021.
The IT Development team is continuing to work with the Organizing and Regional Services Department in a data validation/purification exercise with a focus on improving the accuracy of the existing data in MRMS and the processes needed to ensure the data is regularly and easily maintained going forward.
A minor MRM release is scheduled for late November consisting of rolling out a new National Representative assignment report in LUI and other enhancements to the MRM Education (ED) module including ability to notify facilitators of changes to an events date or location, and to send facilitators a reminder email to accept or decline facilitating an event.
In an urgent matter to address Alberta’s new Bill 32, the IT Development team has started the work for allowing locals in Alberta the ability to access MRM LUI in order to manage all of their members’ information. This will allow the locals who may not have a tool or system today, to keep track of their members and be able to increase member engagement. More importantly, MRM LUI will give locals the ability to capture and track the anti-union requirements of Bill 32 allowing the members preference to opt in or out for the payment of dues related to political and charitable activities. The expected release date for this functionality is early December.
Per Capita System Development
Development of the new system is ongoing with a target completion date of early 2021. Much work has been done with the Finance users to confirm the proposed system design and features. The design and development work have been split into seven segments, which are now complete. User testing and training has started and will continue into January 2021.
IT Infrastructure & Operations
CUPE IT continues executing its plans to improve network resiliency to minimize downtime at CUPE offices across the country, including developing a Business Continuity and Disaster Recovery Plan in the event of disruptions at the CUPE National office, improving CUPE’s overall IT Security posture (e.g. stronger account/password and threat identification and reaction procedures) and lastly, planning the migration from Skype For Business to Microsoft Teams.
PROPERTIES AND LEASEHOLDS
Due to the current COVID-19 pandemic, we have refocused our efforts in terms of the activities of the Property Management Group. We have been making plans to focus on the work needed to ensure buildings remain safe while they are unoccupied. We have had to curtail much of our capital project work but do continue to focus on project work that cannot wait.
The property team has done a tremendous amount of work in the implementation of our protocols regarding the return to office by our staff to ensure their safety in this new environment and provide adequate COVID-19 Preventive measures. Over the past number of months, we have drafted new cleaning standards and have implemented them in every office where we hire the cleaners directly. This included ensuring all cleaning contractors were trained on these new standards. We continue to work diligently at ensuring our protocols are met in all our facilities.
We have recently concluded renewal agreements for Hamilton, Corner Brook, Windsor and Dauphin.
We are analyzing our options regarding some leases coming to term in 2021, such as Kitchener, Sault Ste. Marie, London, Oshawa, Windsor, Fort McMurray, Medicine Hat and Terrace. Given the financial challenges we expect to see going into 2021, our focus will be on securing lease renewals over relocations where possible.
CONFERENCES AND EVENTS
CUPE held its first ever virtual Sector Council Conference this past October. The health care, library, transportation and childcare sectors met on October 20. The communications, municipal, post-secondary education and social services sectors met on October 21. Finally, emergency and security services, education and energy sectors met on October 22. There was a total of 852 members registered for this conference, along with co-chairs and staff. The sectors with the highest number of attendees were the education sector with 189 members joining the virtual meeting followed by the health care sector with 164 members.
As with every national conference, our members were provided with English and French interpretation and real-time captioning in both English and French for all sector meetings. We also provided our members with ASL-English interpretation upon request.
The Sector Council Conference brought together members from all over the country and provided them with a platform to discuss issues they are facing in their sectors and workplaces. While there were aspects of this virtual conference that were successful, we have much to take away, learn from and improve upon for our virtual Human Rights Conference scheduled for March 2021.
CUPE continued to hold virtual national committee meetings and strategy sessions throughout the fall and winter, including several anti-racism strategy sessions booked in November and December.
With limitations around group gatherings still in place as a result of the pandemic, CUPE continues to provide our members and staff with much needed opportunities to meet and discuss pertinent issues affecting their lives and the lives of their colleagues and communities. CUPE is proud of the work we do, for the meetings we hold and for always ensuring that our members’ voices are given an opportunity to be heard.
The Joint Board of Trustees (JBT) will hold its fourth meeting of the year in December to discuss ongoing activities of the Plan.
Earlier in the fall, as part of its asset allocation review, the JBT requested an Asset Liability Study (ALS). The ALS is a projection over the next 15 years of the financial results of the last performed actuarial valuations (effective January 1, 2020). The goal is to evaluate potential changes to the asset allocation of the Fund using multiple economic scenarios.
Following the review of the ALS, the JBT terminated Letko Brosseau’s Balanced Investment Mandate and transferred the assets to Fiera Capital, Baillie Gifford, TD Asset Management and Guardian Capital.
The JBT also hired AlphaFixe and allocated 5% of the CEPP fund to their Green Bonds Mandate.
The fall 2020 CEPP newsletter Pension Connection was sent to all participants in December and is available on the CEPP website at: www.cepp.ca.
- Sister Leanne W. MacMillan, Ontario Regional Office – December 1, 2020
- Sister Doreen Beath, Ottawa Area Office – February 1, 2021
- Brother Louis F. Bergeron, Quebec Regional Office – February 1, 2021
- Brother Walter J. Skomoroh, Manitoba Regional Office – March 1, 2021
- Brother Christopher Watson, Ontario Regional Office – March 1, 2021
- Brother Allen Bleich, Manitoba Regional Office – April 1, 2021
- Brother Stéphan Meloche, Quebec Regional Office – April 1, 2021
- Sister Daria Ivanochko, Organizing and Regional Services Department – May 1, 2021
- Brother Blain K. Morin, Ontario Regional Office – June 1, 2021
- Sister Irene Jansen, Human Rights Branch – July 1, 2021
This holiday season begins, we are acutely aware of the 50,000 CUPE members who remain on lay off and those who have seen their hours reduced. Our hearts go out to the families and loved ones of the members we have lost this year – most particularity as a result of this devastating pandemic.
As 2020 draws to a close and we begin the new year, we know that CUPE leaders, members and staff have many reasons to be proud of their work on behalf of our 700,000 members across the country.
I wish you, your family and loved ones a very safe, happy and heathy holiday and new year.
I look forward to the days ahead when we can celebrate together in person.
Stay safe. Stay strong. And stay united.