Development and Peace lay off staff for summer to fight deficit

  • May 22, 2020

Staring down the barrel of a $5 million deficit, Development and Peace is laying off its 70 employees for eight weeks over the summer while management takes unpaid leaves of absence or reduces their working hours to two or three days a week.

The agreement between the union that represents the workers and management will save the Catholic development and aid agency nearly $1 million dollars, in addition to about $1.5 million in spending cuts already this year.

The layoffs and other budget cuts are dramatic, but they don’t spell the end of Development and Peace, deputy executive director Romain Duguay told The Catholic Register.

“I don’t think this is going to be the end. It will definitely be a year of transition next year,” Duguay said.

Development and Peace’s money problems are coming at them from all sides. Because of COVID-19 there will be no ShareLent collection this year. The collection brought in $6.7 million last year. However, the non-profit can’t apply for COVID-19 wage subsidies of up to 75 per cent because the money collected in April isn’t forwarded from dioceses to the Development and Peace bank account until August. So, while parishes and other church organizations dependent on the collection basket can show sufficient losses to qualify for the Canada Employment Wage Subsidy, Development and Peace is out in the cold.

“The real loss will happen in August and September. We don’t know what will be the situation at that time. We’re looking carefully to be able to apply,” Duguay said. “We will ask the government for special consideration.”

Aside from COVID-16, 2019 and 2020 have been relatively disaster-free around the world. That has meant less demand on Development and Peace for humanitarian aid, and less money coming in from Ottawa to fund disaster relief.

“We have to be happy there was less catastrophe,” Duguay said. “But at the same time, there was less need for us in terms of humanitarian aid.”

The Development and Peace national council, elected by the movement's 10,000 members, gave management a mandate to eliminate the deficit this year. Before the pandemic, the Caritas agency was on track to slay the $521,000 monster from 2018-2019. They had already brought the shortfall down from $3.9 million in 2017-2018.

Under the pressure of investigations into its partners over the last three years, ShareLent revenues have been on a constant slide — from $8.3 million collected in 2017, to $7.6 million in 2018, to $6.7 million in 2019.

Turning to the Canadian Conference of Catholic Bishops (CCCB) for help, Development and Peace has had verbal reassurance that the bishops will help. There’s a possibility of a make-up collection in the fall. This would certainly be welcome, but it would come after the organization’s fiscal year-end on Aug. 31, Duguay said.

“The CCCB actually, as you know, is in the same shape we are because all of the churches are closed,” he said.

Dioceses will have to ensure the survival of parishes before they lend Development and Peace a helping hand, “which we understand,” Duguay said.

The eight-week layoffs will be staggered among employees over the 15 weeks remaining in the Development and Peace fiscal year to ensure that a skeleton staff remains to respond to member concerns and the organization’s 138 overseas partners managing 149 active projects.

The laid-off employees will receive 80 per cent of their normal pay through a combination of Employment Insurance and a stipend from their employer.

When everybody’s back at work in September, they’ll be dealing with a new reality. Four bishops will be on the next national council, following nearly 10 years with no bishops on the organization’s governing body. They will also begin implementing the recommendations of a Deloitte Canada consultant’s report on reorganizing the governance and operations.

The result may be a smaller staff.

“That’s definitely possible. If we don’t have $6 million in revenues, how can we have $6 million in expenses?” Duguay asked. “That’s why we’re calling it a transitional year. There’s going to be discussion for the whole year in terms of what will be the next Development and Peace.”

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