BUSINESS

Back to work—at last

Canadians grapple with a slow recovery

BRENDA DALGLISH June 29 1992
BUSINESS

Back to work—at last

Canadians grapple with a slow recovery

BRENDA DALGLISH June 29 1992

Back to work—at last

BUSINESS

Canadians grapple with a slow recovery

One year ago, when Canada’s unemployment rate stood at 10.2 per cent, Maclean’s reported on the experiences of four people who had recently lost their jobs—and on the reasons why their former employers had been forced to lay them off. Recently, with the nation ’s unemployment rate now at 11.2 per cent, Maclean’s revisited the subjects of that earlier survey to find out how they are surviving their personal recessions.

It took a draining eight months for Ellen Soyka of St. Catharines, Ont., to find a new job. And when she did, her new position was not as rewarding as her old one as a buyer and store manager for Coy Bros. Ltd. The small, family-owned department store chain went out of business in February, 1991. Now, Soyka, 37, manages the costume jewelry department at a local Birks outlet. She earns less than the $23,000 she earned at Coy, and her new hours leave her less time to spend with her two young children. But she is not complaining. “I’ve had to make concessions,” said Soyka, “But I knew I couldn’t have what I’d had before.” And despite her time without work, she says that with the help of her auto mechanic husband, Thomas, and unemployment insurance, her family has kept their home and still has enough money to enjoy life. “It was hard at times—money comes into everything,” she acknowledged. “But it probably has given all of us a better understanding of getting along together.” Still, Soyka says that this recession has left a lasting impression, unlike the previous one in 1981-1982. “After what I went through in the past year-and-a-half,” declared Soyka, “nothing is going to be safe for me anymore.”

Many other Canadians have also had their faith in prosperity shaken since the country slipped into recession in April, 1990. More than 1.6 million people remain without work, 200,000 more than were unemployed at the end of the last economic downturn. Of the four Canadians Maclean ’s examined last year, three have found new jobs. But two of those earn less than they did before. Their experience is common among people who lost their jobs in the latest downturn. “Canadians have been disappointed,” said Michael McCracken, president of the Ottawa-based economic forecasting firm Informetrica Ltd. “A year ago, there was some hope that the economy was bouncing back. But here we are, a year later, with no real progress.” In fact, some signs suggest that the economy is slowly beginning to recover: last week, Statistics Canada reported that its composite leading economic indicator rose by one-tenth of a per cent in March, the third consecutive monthly increase. But, for the first three months of the year, Canada’s gross domestic product grew by just 0.1 per cent. McCracken says that sluggish pace remains far below the three-per-cent annual growth required simply to employ the number of new workers entering the labor force each year. It falls far short of what is needed to provide new work for all those who have lost their jobs in the past two years. As a result, for many laid-off Canadians, the search for work has proven to be both long and frustrating.

Haligonian Wayne Decker, 45, knows that firsthand. As Maclean ’s reported last year, he was laid off in March, 1990, from his job of five years as executive assistant to Robert McDonald, a personal friend and the owner of a General Motors car dealership in the Nova Scotia capital. Sixteen months later, in October, 1991, he finally found full-time work as comptroller for a small silk-screening shop in Halifax owned by another friend. Decker, who has a bachelor degree in business, says that he filled out “darned close to 100 job applications” before taking the parttime job at the printing shop that led to his fulltime position. Said Decker: “A few times, jobs that I figured I had because of personal connections didn’t materialize. I was disappointed in some people and in the system.”

While Decker was out of work, he collected unemployment insurance and his wife, Diane, continued with her job as a clerk in a medical office. As a result, they and their two children never faced a serious financial crisis. Meanwhile, Decker said, he worked around the family’s house and yard—and played hockey “to blow off steam.” But Decker now earns significantly less than he did in his $32,000-ayear job at the car dealership. “With the way the economy has been, a person is fortunate to have a job he can count on,” he said. “Hopefully, down the road the money will take care of itself.” And like Soyka, Decker says that he worries about being unemployed again. “Once in a while, the thought does pop into your mind,” said Decker. “But our business is growing in leaps and bounds.”

That is something that Decker’s former boss cannot say. McDonald’s dealership, one of Atlantic Canada’s most successful in the 1980s, continues to suffer from the nationwide downturn in auto purchases that forced him to reduce his staff to 95 people from 300 three years ago. Sales at his Halifax Chevrolet-Oldsmobile outlet fell by 22 per cent to $72 million in 1990, and then dropped by another 12 per cent to $63 million last year. And although McDonald said that he does not expect any more layoffs, he added that he is not optimistic for the immediate future. Declared McDonald: “I’ll be satisfied if we can break even until the economy turns around.”

Across the country, in the Vancouver suburb of Coquitlam, Michele (Mike) Ruggiero’s garden was immaculate a year ago. Neatly spaced rows of beans and lettuce were weed-free, and firmly planted wooden stakes anchored 40 bushy tomato plants. Ruggiero had time for gardening because he had lost the job he had held for 25 years when Fletcher Challenge Canada Ltd. permanently closed its nearby Delta Plywood Plant in February, 1991. For three months, the 48-year-old mill worker collected unemployment insurance; then he received $17,000 in severance pay from his former employer. Ruggiero, who supports his wife, Sabina, and two daughters, said that he feared he would not find another job that paid as well as the $35,000 he earned at the mill. But six months after being laid off, through a friend he landed a job at a steel mill. Ruggiero left that job in March because, he said, he could not adjust to the rotating shift work. The following month, he took a job with a City of Vancouver work crew—but that lasted only three weeks. On June 1, he accepted a job offer from the nearby Flavelle Cedar Sawmill. Said Ruggiero: “I applied at the sawmill over a year ago, and when they called I couldn’t believe they had kept my résumé for so long.” Ruggiero is more fortunate than many formerly unemployed Canadians in other respects, as well: not only is he earning roughly what he made at his Delta job, but his new position allows him to return, without penalty, to his union’s pension plan, which he had paid into for 29 years at the Delta mill. Said Ruggiero:

“Hopefully, this job will last until I can collect my pension and younger guys can take over.”

The future remains uncertain for Ruggiero’s original employer, Fletcher Challenge. Since 1988, the company has closed three and sold two of the eight mills it owned on the B.C. coast, has put its four mills in the southern Interior of the province up for sale and continues to operate only three mills in the province’s north and one in the central Interior. The closures have trimmed Fletcher’s wood-products workforce by 2,000 people, to 4,700. According to Desmond Getz, vice-president of the company’s coast wood-products group, high wood costs and a shrinking supply of harvestable timber forced Fletcher to down-

size. But even with the reductions, Getz says, he is not sure that the company’s problems are over. “We believe we faced up to the [timber] harvest realities and the economic issues maybe a little quicker than others, and have been subjected to a fair amount of criticism for doing so,” said Getz. “We think we’re out ahead of it, and I would like to think we have the majority of the toughest and worst behind us.”

Like forestry, manufacturing also suffered serious losses during the recession. Those losses cost René Bolduc his job as foreman of a furniture-maker’s paint shop in Lac-Megantic, Que. Bolduc had held the job for 15 years before being laid off in November, 1990. The 37-year-old Quebecer could not be reached for comment this year, but his former live-in companion, Josée Lemieux, told Maclean’s that Bolduc has suffered a series of setbacks in the past 12 months. After his weekly $250 unemployment insurance payments ended last fall, she said, Bolduc borrowed money to buy a franchise business specializing in the custom painting of enamel bathroom fixtures. But an allergic reaction to the special paint used in the process forced him to abandon the business. At the same time, his personal life began to unravel as his relationship with Lemieux ended and he went to live with his mother.

Whatever hope Bolduc may have of returning to his old job at Bestar Inc., which manufactures ready-to-assemble furniture at Lac-Megantic, must be fading. According to Bestar executive vice-president Luc Quirion, “the situation is still very difficult.” Sales for 1991 tumbled by 10 per cent from the previous year, when the company lost $3.2 million, defaulted on $3.5 million in outstanding loans and came close to going under. Its workforce remains at last year’s level of 275, down from 487 at its peak. Several cost-cutting measures instituted a year ago to stave off bankruptcy also remain firmly in place, including a 20-per-cent across-the-board reduction in management salaries and a hiring and salary freeze for other employees. “The restructuring was painful,” Quirion told Maclean’s, “but it has allowed us to stabilize things. We have improved our productivity by around 25 per cent and cut our losses significantly.” He added: “Hopefully, we will be in a position to take advantage of better times in the future.”

Ellen Soyka’s former boss, Frank Coy, is looking to the future, too. Coy, 54, lost a business that had been in his family for 141 years when Coy Bros.’ two department stores closed in February, 1991. Since then, he has earned his licence as a real estate agent, and now works for a fellow Rotary Club member in St. Catharines.

His wife, Gail, is Soyka’s boss at Birks. Coy says that working alone as a real estate agent is a big change after managing a company with 35 employees. “The last few years at the store were very difficult for me,” said Coy. “I can’t say I miss the agony and the trauma of that, but I do miss the times, five or 10 years ago, when it really was a pleasure to go to work.” As house prices and interest rates come down, he says that real estate sales are slowly beginning to pick up.

That, Coy adds, gives him hope that the economy has finally tinned around. “I really feel that the recession is probably over,” he said. “It’s taken a long time—it’s only in the last month or two that I’ve come to believe we are pulling out of it.” But for Coy, as for Soyka and the many thousands of other Canadians whose lives have been uprooted by recession, it will be a long time yet before the scars of unemployment are entirely healed.

BRENDA DALGLISH with JOHN DeMONT in Halifax, BARRY CAME in Montreal and HAL QUINN in Vancouver

BRENDA DALGLISH

JOHN DeMONT

BARRY CAME

HAL QUINN