Question Period Note: PUBLIC ACCOUNTS OF CANADA 2025 FOR EMPLOYMENT AND SOCIAL DEVELOPMENT CANADA

Can
you explain why do Wage Earner Protection Program (WEPP) expenditures exceed the
2024-2025 annual allocation by $14.1 million?

The Government of Canada is committed to protecting workers in Canada
and supporting them during the difficult time of employment loss.
 Through the Wage Earner Protection Program (WEPP), individuals who are
owed eligible wages after their employer is bankrupt, subject to a
receivership or another WEPP qualifying insolvency proceeding may
receive a one-time payment for owed wages, vacation pay, and termination
and severance pay.
 Workers can receive a payment of up to an amount equivalent to seven
weeks of insurable earnings under the Employment Insurance Act
($8,844.22 for 2025).
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 In 2024-25, WEPP spending (expenditures) continued to increase with a
total reaching $63.4 million compared to $60.4 million in 2023-24.
 The WEPP spendings are reflective of a sustained rise in insolvencies and
an increase in the number of affected workers across Canada, with
business insolvencies reaching their highest level since the 2009 recession. Since 2018-2019, the WEPP has continually exceeded its annual allotment
of $49.3 million, which is reflective of a sustained rise in insolvencies and
number of affected workers across Canada.
 In 2024-2025, the program received 14,512 applications compared to 12,759
applications in 2023-2024. This represents a 14% increase.
 In 2024-2025, the program paid 12,505 applicants compared to 11,298
applicants in 2023-2024. This represents a 11% increase. The average
payment for 2024-2025 was $5,607, which is consistent with 2023-2024
average amount ($5,608).On March 7, 2025, Hudson’s Bay Company (HBC) was granted protection
under the Companies’ Creditors Arrangement Act (CCAA).
 Employment of over 9,300 employees was terminated in June 2025.
 As of September 2025, close to 2,700 WEPP applications have been
received and will be processed. Should all former HBC employees be
entitled to the maximum WEPP amount for 2025 ($8,844.22), a total of $82.3
million could be paid in connection with the insolvency proceedings of this
estate.

The WEPP provides one-time payments to Canadian workers, in workplaces under federal,
provincial and territorial jurisdictions, who are owed wages when their employer files for
bankruptcy, becomes subject to a receivership or another WEPP qualifying insolvency
proceeding.

Workers can receive a payment of up to an amount equivalent to seven weeks of insurable
earnings under the Employment Insurance Act ($8,844.22 for 2025). The WEPP maximum is
indexed annually to ensure that the amounts protected by the WEPP increase with inflation.

WEPP payments are made from the Consolidated Revenue Fund of $49.3 million.

To be eligible for a WEPP payment, an applicant must meet three conditions, as outlined in s.
5(1) of the WEPP Act:
 they must have been employed in Canada and their employment has been terminated.
 their former employer must be bankrupt, subject to a receivership, or another qualifying
insolvency proceeding; and
 the applicant must be owed eligible wages by their former employer

Eligible wages, which include salaries, commissions, vacation pay, expenses of a traveling
salesperson, termination and severance pay, must have been earned in the six-month period
prior to the insolvency proceeding. If an employer attempted to restructure prior to the
insolvency proceeding, the eligibility is extended to begin six months prior to the start of those
proceedings.

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Once an applicant receives the WEPP payment, the Labour Program assumes their rights in the
insolvency proceeding in respect of unpaid wages, to the extent of the WEPP payment amount.
Collection activities are administered by the Canada Revenue Agency, both for subrogated
debts owed to the Government and for overpayments to recipients.

WEPP is delivered by Service Canada, on behalf of the Labour Program.

Once the initial decision is rendered by Service Canada, WEPP applicants have the right to
request a ministerial review. If the applicant is not satisfied with the review decision, they may
file an appeal with the Canada Industrial Relations Board.

Since its inception in July 2008, WEPP has paid almost $640 million in eligible wages to over
192,000 Canadians (as of March 31, 2025). In a typical year, about 12,000 individuals benefit
from WEPP.

The Wage Earner Protection Program is a statutory program, with
payments drawn from the Consolidated Revenue Fund through an
annual allotment of $49.3 million. However, an increase in the volume
of applications and eligible recipients in recent years have resulted in
expenditures that exceed the annual allotment.
EXPENDITURES:
 2023-2024: $60,4M
 2024-2025: $63.4M
 2025-2026 as of September 2025: $14.6M