Citing oil struggles, Woodward lays off ship workers to sail internationally

A Labrador-based shipping company says in order to stay afloat after a rocky year,ithas little choice but to lay off some of its Canadian workers and operate in international markets for the next few months, a move raising the ire of the sailors' union.

Woodward's Coastal Shipping Limited will be switching flags on its fleet of tankers from Canadian ones to those of theMarshall Islands at the end of the month, amove known in the industry as "reflagging."

"We hear once in a while that a company will do this, and we absolutely disagree with this behaviour," said Patrice Caron, the executive vice-president of the Seafarers International Union of Canada, which represents workers aboard Woodward's ships.

Caron said the move allows the company to swap outits Canadianworkers for international ones, who are paid less.

While Woodwardhas changed flagsin previous years, including in 2019,Caron said "it's shocking and insulting,"to union members who will now be without work for months, despite their qualifications.

The union and the company don't agree on how many workers will be affected. Caron said about 60 people will be laid off, while Woodwardpegged that number at closer to 30, with half the crew staying onto provide "continuity with the management of the ships," said Woodwardpresident and CEO Peter Woodward.

The CEO said some people who have been offered international work may choose a layoff instead, leaving the total number up in the air. But what isn't up for dispute is the reason for the switch: a money-saverin the midst of what he calleda "terrible" year.

"We're basically managing our business to try and keep it going," Woodward told CBC Radio's Labrador Morning.

Oil and gas pains

The Coastal Shipping fleet delivers fuel to areas including Labrador's northern coast and Nunavut. But the struggles in the oil and gas sector have rippled down to delivery, and Woodward said he's seeing work dry up, with competitors tyingup their fleets at rates he hasn't seen in more than a decade.

"It's been a tough year for the oil business. Demand is down and major oilcompanies are going through tough times, and it's reflecting on the people that service the oil industry as well," he said.

The union agreed 2020 has been challenging.

"We do have shipping companies throughout Canada that are feeling theseshortages, especially in the oil and gas trade. Up until we regain normal life, tanker trade is weaker," said Caron.

If the company wanted to keep Canadians, they could do it.- Patrice Caron

But Woodward said tying up the fleet for the winter is akin to leaving a car in a snowbank and expecting it to run again in the spring.

"We're really anxious just to keep our ships goingfor the winter months," he said.

The flag swapping gambit might not even work out, he added.

"We still haven't secured any work, so there's still a possibility that we may have to tie the ships up if we don't find work. And that'll be terrible becausethat will end up with significantly more layoffs than we hoped," Woodward said.

The switch is expected toward the end of December and last until May, he said.

Less money, for everyone

Going international means competing at international rates, said Woodward, which pay abouthalf as much as similar Canadian work. That means reducing costs, he said, such as payroll.

While foreign crews make less than their Canadian counterparts, Caron said organizations such as the International Labour Organization and the International Transport Federation are addressingworkers' living conditions and wages. On the latter, Caron said the gap is closing.

"We're not there yet, but it's getting closer. So if the company wanted to keep Canadians, they could do it, and I don't think it would be that much more expensive for them," he said.

• Foreign crews replace 104 Canadians at Woodward Coastal Shipping, union says

To Woodward, the bottom line matters.

"Ihave a lot of empathy for our crew.We have a lot of great crew members.We're just trying to run the business so that it's sustainable and that we'll be around for next year," he said.

But as Canadian owned-ships continue to reflag, Caron said, the issue is a perennial one.

"We're complaining each time, but it's very difficult to make them understand when there's dollar signs at the end. It's very difficult to get a company, a corporation that size to change their mind."

To keep it from reoccurring, he would like to see the federal government provide incentives for keeping Canadian crews employed, suchas lowering fees for working internationally.

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