With at least 25,000 Nova Scotians suddenly out of work, some employers are faced with an odd problem — a labour shortage caused by the federal program geared to helping laid-off workers.

It's been a particular hardship for restaurant owners.

"Everything is different now," says Chris Cuddihy, owner of Salvatore's Pizza in north-end Halifax. "Everything has changed."

Cuddihy laid off 32 workers in mid-March and put the business on hold. Since then he's been keeping himself busy in the restaurant with cleaning and maintenance.

His wife and partner has been volunteering with Feed Nova Scotia.

Cuddihy said delivery has never been Salvatore's strength, but he knows his patrons would like to see the business up and running. So would he.

There's just one problem.

Chris Cuddihy is the owner of Salvatore's Pizza in north-end Halifax. (CBC)

"Most of our staff is receiving the [Canadian Emergency Response Benefit] and the way it's set up right now is, if they were to work at all — even for a day — they would lose their benefits for a full four-week period," he said. "That's a bit of a challenge."

The benefit is temporary income support for people who've stopped working due to COVID-19. It provides a taxable benefit of $2,000 a month for up to four months to eligible workers who have lost their income.

According to the federal rules, those who are eligible for CERB have been "without employment or self-employment income for at least 14 consecutive days in the initial four-week period." For the later benefit periods, they should expect to have no employment income.

"If they came back to work, they would be choosing between [working at the restaurant] and receiving the CERB benefit," Cuddihy said. "So if they work for a day or two within a four-week period, they lose the entire four weeks of benefit. And I don't want to put them in that position."

Cuddihy isn't alone.

Gordon Stewart, executive director of the Restaurant Association of Nova Scotia, said he's heard from more than 20 restaurants provincewide and all are facing the same problem.

"We've certainly heard from a number of restaurants that it's difficult to get employees to come back because the program is a generous program," Stewart said. "And that's good because we need a generous program right now for a lot of those workers."

Unlike the traditional employment insurance program that claws back some of benefits based on the hours worked, workers cannot draw benefits from CERB if they've worked any amount during a four-week period.

Gordon Stewart is the executive director of the Restaurant Association of Nova Scotia. He says many restaurants in the province are facing the same problem as Salvatore's. (CBC)

Stewart said he's been in conversations with Mélanie Joly, the federal economic development minister, to see if there are any exemptions.

He said he's hearing that workers drawing CERB benefits may be allowed to work up to 10 hours per week, although no details have been announced.

Wayne Easter, chair of the federal finance committee, said the matter is being studied. Easter said the issue appeared on his radar when much of the construction industry went back to work.

"That's a challenge for us at the moment because we want to see people, that can, be working," Easter said.

'New wrinkle' to address

He said it's also part of the reason Ottawa is urging employers to take advantage of another emergency aid program — the Canada Emergency Wage Subsidy. Under this program Ottawa pays 75 per cent of an employee's salary and the employer tops it up, if possible.

Easter calls the sudden labour concern a "new wrinkle that we're going to have to try to address."

Cuddihy said he's equally concerned about bringing even a skeleton crew back to his restaurant too early.

"I also want to make sure that everyone's safety is also fine," he said. "We have to make sure that we're doing our part to keep [COVID-19] down — not ramp it up."

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