Secretary Treasurer Report – August 2021

Please see the update below regarding the financial affairs of the Component:

2021 Fiscal Year End
As the fiscal year ends, I am happy to report that the Component was successful in overcoming the many financial challenges that this past year put in place.  ACCEX initially budgeted to run a $200,000 deficit during the year, but with strong cost control measures and continued government assistance through the CEWS program we were able to significantly reduce the size of our deficit.  Some of the adjustments made to the Component’s operation will have long-term cost savings for the Union. I also want to thank the Local Presidents for their assistance and flexibility over the past year.

The pie chart below shows a visual representation of where your dues dollars were spent over the last year.

Statement of Operation – 2021 Fiscal Year (July 2020 – June 2021)
Please see below the Unaudited Statement of Operation for the past fiscal year which ended on June 30, 2021. Our annual accounting audit will take place in January 2021 as per the Component Bylaws.

2022 Component Budget
ACCEX met in late July to review a draft budget for our 2022 fiscal year. We remained conservative in our anticipated dues revenue but did budget for increased funds for our committees compared to last year and set aside funds for the resumptions of the bargaining reopener.   The budget was unanimously approved by ACCEX.

Trustee Audits
Our three Component Trustees are scheduled to resume audit work in September. They will start with finishing off the 2015 year end audit. As part of the 2022 budget, I have allocated a significant amount of funds so that the trustees may continue to work through the backlog of trustee audits. It’s worth noting that our books are audited annually by an external auditor, to ensure the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and that the Statements are presented in compliance with Canadian Accounting Standards for Not-for-Profit Organizations.

Belfield Update
The Component moved into our offices at 25 Belfield Road in 2006. The Office was heavily renovated at that time and a new roof was installed in May 2006 with a 15-year warranty. There were multiple days of heavy rain in late May and our roof began had a major leak … exactly one week after that 15-year warranty expired. Great timing, eh?  As such we had two different roofing companies provide quotes for repair and replacement. Based on the reports from the different roofing companies, ACCEX decided it was best to go for a forward with a replacement and work began this week.

 

In Solidarity,

Alex Habib
Secretary-Treasurer, Air Canada Component of CUPE

Secretary Treasurer Report – May 2021

Please see the update below regarding the financial affairs of the Component:

Banking and Investments
As of May 1st, we currently have $3.2 million saved in three different GICs. I have started to diversify the term lengths on the GICs in order to get higher interest rates on longer term GICs with interest still paid out annually. We also have a balance of approximately $950,000 in our savings account.

Budget Follow-Up
As follow-up to the budget, ACCEX passed in December, I have continued to try and find further cost-savings as we did anticipate stable staffing numbers through the winter but instead saw layoffs again in February and March. Please see the below updates:

  • We made further staffing reductions to our office staff with one member converting to part-time. For comparison, in March 2020 we had 7 full-time staff. We now have 3.5 full-time staff, and we will continue to subsidize this cost using the CEWS program which currently runs until September 2021.
  • As previously reported, we were able to end our lease early for the YVR WCB Office last fall and cancel the associated phone and internet cost. We have also made the decision to pause the Component Worker’s Compensation Committee and rely on our Locals and CUPE National to support worker’s compensation appeals.
  • ACCEX unanimously passed a motion earlier this year to suspended Local Budgets for February 2021 and March 2021. This was a significant cost savings as given the low active local membership numbers the base amounts plus the per member $8.00 would have left the Component with almost no leftover funds after the CUPE National per capita is paid.
  • We had hoped to continue to reduce Local Budgets by a small percentage for the rest of the fiscal year, however the motion failed to garner unanimous support.

Audits
Our external auditors completed their audit of the 2020 Year-End Finances in January 2021 and the statements were unanimously approved by ACCEX at our last meeting. We remain completely up-to-date with our accounting audits. I wish I could say the same with our trustee audits however we currently find ourselves with all three elected trustees on layoff status. I hope to re-engage with our trustees in the near future once it is again permitted to conduct in-person meetings.

Highest Earner Top-Up
In my last update I advised that ACCEX had taken the decision to have legal counsel review the matter of two of the three former Component Officers not repaying the amount in disputed top-up.  Upon review with counsel, the Union will not be pursuing the repayment any further and passed a motion as such. The bylaws now provide for a clear definition on highest earner going forward and the Union now considers this matter closed.

In Solidarity,

Alex Habib
Secretary-Treasurer, Air Canada Component of CUPE

Component Financial Position Explanation

It has come to my attention that some members may not fully understand some of the financial terms used in my Secretary-Treasurer reports and are confusing a current year deficit with the overall state of the Union’s finances.

In accounting there are two main statements that are reviewed to determine the financial position of an organization. Those are the Income Statement, also called a Statement of Operations, and the Balance Sheet. The Income Statement shows the Revenues and Expenses of the current year, with the net result being a Surplus if it is positive and a Deficit if it is negative.

In our current fiscal year, which runs from July 2020 to June 2021, we are currently running a small deficit of approximately $150,000. This is not unlike many businesses who have been impacted by the pandemic. Currently our expenses each month are greater than our revenues. I have spent the better part of the last 6 months trying to reduce the Component’s expenses which I have chronicled in my previous reports.  We have been relatively successful and for the month of November actually had a small surplus.

The second and more long-term statement is the Balance Sheet. It shows the Assets, Liabilities and Retained Earnings of an Organization over the year. It is generally a snapshot of the organization on the given day it is produced. The Component has well over $4 million in cash and investments currently available to us.  On our most recent audited statements for the year ended 2019, our Retained Earnings were over $5.3 million. We are currently in the midst of having our 2020 year-end audited and expect this number to increase.

I hope this clarifies the positive financial health of the Component and explains what allowed us to approve the two-month dues reduction in April and May of 2020. I have prided myself on my financial management of the Component over the past two years and if you ever have any questions or concerns of a financial nature, please reach out to me anytime.

In Solidarity,

Alex Habib
Secretary-Treasurer, Air Canada Component of CUPE

Secretary Treasurer Report – December 2020

Please see below the quarterly updates regarding the financial affairs of the Component:

Budget Follow-Up
As a follow-up to the 6-month Budget passed by ACCEX in June 2020, I have continued to try and find further cost-savings:

  • We were able to end the lease and associated expenses for a small office that we had in YVR last month. This office was used by a member of our Worker’s Compensation Committee and they will now work out of the Local 4094 Office.
  • We have cancelled our Bell telephone lines at the Component Office. Our local number, toll-free number, and extensions all remain the same, but instead of having a traditional phone in the office the phone will now “ring” on our laptops and cell phones.  This represents a savings of approximately 66% and allows us to make and receive calls using our Component numbers from anywhere we have an internet connection. Most of our staff and committee members are working from home due to COVID-19 therefore it makes logical sense to initiate this changeover.
  • There will be no 2021 CUPE pocket calendars printed this year. Not only is this a large cost savings but it also aligns with our goals of reducing our Union’s environmental footprint. The same information that was normally found in the front pages of the calendar can be accessed on the Component Mobile App or Website.  We have also noted over the years that members are moving over to online resources, so with the elimination of the paper calendar, we have also increased the information on our App and Website.
  • We will continue to take advantage of the CEWS program for our office staff. Unfortunately, the new formula is less advantageous with weekly payments decreasing and as such had to make the difficult decision to layoff one staff member.

ACCEX will be meeting in the coming weeks to review and approve a further 6-month budget for the second half of the 2020-21 Fiscal Year.

Audits
Our external auditors are scheduled to begin their audit of the 2020 Year-End Finances in January 2021. This will ensure we remain completely up-to-date with our accounting audits.  I also hope to have the Component Trustee’s resume their audits in the new year, now that all three have received the required training. The COVID-19 pandemic caused a delay in getting training scheduled for our newest trustee as CUPE National was not offering any education courses throughout most of the year until they recently launched virtual offerings.

Highest Earner Top-Up
In my last update I advised that ACCEX sent letters to the former Component President and Component Vice-President regarding repayment of disputed amounts in top-up payments last term. Neither of the two former officers responded to the letter. ACCEX has taken the decision to have legal counsel review this matter and provide guidance to us. In addition the current Component President has not been part of these discussions or decisions and has excused himself during meetings where it is discussed.

Please see the table below with amounts for  the Highest Earner for September and October 2020:

Block Month Highest Earner
Sep 2020 $9,564.67
Oct 2020 $9,307.33

Statement of Operation – Q1 2021 Fiscal Year (July 2020-Sep 2020)
For Comparison, our Income during the first quarter is the equivalent of a single month’s income in 2019. We are currently in a deficit position, which was expected through the budgeting process in June as we have many fixed costs.  In addition, many annual expenses such as our property tax, commercial insurance, and grievance database fees were all recorded in the first quarter which does make the deficit larger. So far from reviewing the second quarter it does appear we will be in a break-even position.

Wishing everyone a wonderful holiday season and hopefully a brighter and better 2021!

In Solidarity,

Alex Habib
Secretary-Treasurer, Air Canada Component of CUPE

Component Secretary-Treasurer’s Report – September 2020

I hope you are staying healthy and got to enjoy your summer, even if it did not involve your usual peak summer flying. Similarly to many of our members, the COVID-19 pandemic continues to affect the Union’s financial position and we continue to take steps to address it by reducing our cash burn as much as possible. Please see the following updates since my last report.

Investments
We currently have the majority of our cash invested in three GICs with maturing dates over the next year. Fortunately, all of our GIC’s were purchased prior to the drop in interest rates as result of COVID-19, so we are earning considerable returns.

Belfield Office Update
The Component office reopened in August as the Toronto region entered “Phase 3” of the Ontario Government’s reopening plan. As part of our reopening our Staff and Committee Members continue to have the option of working from home as they have done so effectively while the office was closed. This is also inline with our budget passed in June which had all Component Committees reduce their in-office time by 50% to save on expenses.

As a follow-up to the Budget we passed at our June ACCEX meeting, I have continued to try and find further cost-savings. We continue to take advantage of the CEWS for our office staff which was recently extended until December 2020. Unfortunately, the new formula is less advantageous with weekly payments decreasing over the next few months and we have therefore adjusted our staffing levels accordingly.

Audits
The 2019 year-end audit was completed by our external auditors in early August and approved by ACCEX at our August meeting. Thankfully, this was a much simpler process as it was the first full year with new bookkeepers. This term we have been able to bring the Component up to date by completing 4 years of audits. We will also begin the 2020 year-end audit on schedule in January 2021.

Highest Earner Top-Up
As you may recall, last term there was a disputed amount of top-up paid to the Component Officers during their term. When I took office last year, I was first tasked by ACCEX to reconcile the disputed amount and attempt to recover the funds. At that time, the former Component Secretary-Treasurer was the only officer who responded and paid the disputed amount in full.

At our ACCEX meeting last month we discussed ways to recover payment from the former Component President and Component Vice-President. A decision was made to send a final letter requesting payment by September 30, 2020. This letter was signed by all the voting members of ACCEX and advised if we did not hear back by September 30th that we would review our options to take legal action against the former officers.

Please see the table below for the highest earner in the bargaining unit for the past six months.

Block Month Highest Earner
Jun 2020 $9,491.33
Jul 2020 $9,570.67
Aug 2020 $9,603.33

Statement of Operation – 2020 Fiscal Year (July 2019- June 2020)
As noted below we do end the year with a small deficit, however this is solely a result of the 2-month dues reduction that put $505,910 back into the membership’s pocket. If we had not provided this reduction, we would have ended the year with a significant surplus.

Income
Dues Income                                                                $5,006,812
Rental Income                                                             $52,008
Other Income (interest on investments)               $89,169
Total Revenue                                                                       $5,147,989

Expenses
Dues Paid to CUPE National                                         $1,742,547
Airline Division Affiliation                                             $9,627
Funding to Locals (YVR, YYC, YUL, YYZ and RG)   $1,039,659
Administration (Staff and Building)                            $832,998
Committees                                                                       $1,059,825
Grievance Legal/Arbitration                                         $637,027
Total Expenses                                                                           $5,321,683

Surplus (Deficit)                                                               ($173,694)

Wishing everyone a happy and healthy fall!

In Solidarity,

Alex Habib
Secretary-Treasurer, Air Canada Component of CUPE