Wage Earner Protection Program

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Name of Transfer Payment Program: Wage Earner Protection Program (Statutory)
Start Date: July 2008
End Date: Ongoing

Description: The Wage Earner Protection Program Act was part of Bill C-55, which set out a comprehensive reform of Canada's insolvency laws, including the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.  Passage of Bill C-55 was expedited with unanimous, all party consent in both Houses of Parliament.  The Bill received Royal Assent on November 25, 2005, and became Chapter 47 of the Statutes of Canada, 2005.  The Act was subject to technical amendments, which were contained in Bill C-12 and received Royal Assent on December 13, 2007.  The Act and its Regulations came into force on July 7, 2008.  Further amendments to the Program to include coverage for termination and severance pay were included in the Budget Implementation Act, 2009.
The Wage Earner Protection Program (WEPP) is a targeted federal Program providing financial support to workers who lose their job and are owed money when their employer goes bankrupt or becomes subject to receivership under the Bankruptcy and Insolvency Act.  Specifically, the Program reimburses eligible workers for unpaid wages, vacation, severance, and termination pay, up to a current maximum of $3,646 (the equivalent of four weeks' maximum insurable earnings under the Employment Insurance Act).  The Wage Earner Protection Program is administered by the Labour Program and is delivered by Service Canada.
There is no repayment of Statutory Transfer Payments, unless a WEPP recipient receives an overpayment.

Strategic Outcome (s): Safe, fair, and productive workplaces and cooperative workplace relations.

Expected Results: The expected result for this Program is a reduction in economic insecurity of Canadian workers with unpaid wages in insolvent workplaces.

Results Achieved:  Overall, in 2012–13, approximately $26.4 million was paid to over 11,000 Canadian workers for lost wages, vacation, termination and severance pay, as a result of their employer declaring bankruptcy or becoming subject to a receivership.

Program: Labour

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($ millions)	2010–11      Actual      Spending	2011–12      Actual      Spending	2012–13      Planned      Spending	2012–13      Total      Authorities	2012–13      Actual      Spending	2012–13      Variance Between      Planned and Actual
Total Grants	31.9	32.6	54.2	26.3	26.3	27.9
Total Contributions	-	-	-	-	-	-
Total Other Types of         Transfer Payments	-	-	-	-	-	-
Total Transfer Payments	31.9	32.6	54.2	26.3	26.3	27.9

Comment(s) on Variance(s): During 2012–13, 11,072 displaced workers applied to the WEPP, representing a decrease of 35.4 percent from volumes seen during the previous fiscal year (17,132).  The decrease in application volumes resulted in a corresponding 20 percent drop in the number of applicants paid during 2012–13 (11,064). The disparity between the number of applications received and the number of payments issued was due to applicants not meeting all of the conditions for payment that are set out in the Wage Earner Protection Program Act.
In some instances trustees and receivers are able to request compensation for fees and expenses they incur when performing their WEPP duties. Fiscal year 2012–13 was the second full year of operation for the trustee and receiver payment program. While $2.5 million has been set aside for trustee payments, only seven payments were issued for a total of $14,420.

Audit Completed or Planned: No audits were planned for the 2012–13 reporting period.

Evaluation Completed or Planned: A summative evaluation is scheduled to be completed in 2013–14.

Engagement of Applicants and Recipients:  The Wage Earner Protection Program engages stakeholders, including the Canadian Association of Insolvency and Restructuring Professionals and Trustees through its Joint Liaison Council.
The WEPP utilizes Service Canada to convey information about WEPP to Canadians.  Service Canada - WEPP website

Source: Employment and Social Development Canada (ESDC)