Staff at Manitoba Hydro's Taylor Avenue office will begin packing up their belongings soon and moving to the Crown corporation's downtown tower.

And when they arrive at their new office, they're going to get a small bump in their paycheque for being downtown.

The public utility announced Friday that approximately 500 to 600 employees from its Taylor Avenue office will be moved to its downtown office tower by next June. Once they move into their new digs, they'll get an additional $840 per year on their paycheques via a downtown allowance the utility gives all staff at its Portage Avenue headquarters.

"The people who are moving from Taylor will also get that allowance," said Hydro spokesman Bruce Owen.

"At the same time, we are going to have some people — not a lot — but some people will be moving potentially from 360 Portage Ave. to Taylor, and they won't get a downtown allowance [anymore]."

Owen said the move means the cost of the downtown allowance, which has been in place since Hydro's downtown tower opened in 2008, will increase by up to $400,000 to roughly $1.7 million per year. In total, about 2,100 of Hydro's 5,300 employees will work downtown once the consolidation with Taylor Avenue staff is complete next June.

Owen confirmed there has been talk of doing away with the allowance, but actually implementing a change will be difficult.

"It's under discussion, but part of it is there are collective agreements in place and whatnot, so this is something that will require a lot of discussion at different levels," Owen said. "We can't change these rules for some and not for all. And we can't change it midstream. It will all have to be done for everybody equally at the same time."

Downtown costs

Hydro officials have previously said the additional pay is in recognition of the additional costs that come with working downtown, such as parking fees.

We strongly recommend they go back to the drawing board to eliminate these kind of luxury allowances. - Jonathan Alward, CFIB Manitoba

Jonathan Alward, the Manitoba director of the Canadian Federation of Independent Business, said the downtown benefit is a luxury that Hydro cannot afford.

"We strongly recommend they go back to the drawing board to eliminate these kind of luxury allowances," he said, noting Hydro's struggles to get its mounting debt under control.

The process of moving Hydro employees is expected to cost the utility about $900,000 this year, in addition to the annual allowance hike for the utility. However, Hydro expects to save about $2.1 million per year overall from the move due to a reduction in maintenance and other costs.

The move also makes sense, Owen said, in light of Hydro's efforts to trim about 900 positions from its workforce. Approximately 820 employees have elected to take buyouts.

"Obviously the benefit [to the move] is more of us are going to be working under one roof and there will be an additional 600 people working downtown, which is a good thing for all the amenities that are here, like restaurants and the Jets," Owen said.

Debt rising

The downsizing is a result of Hydro's attempts to bring its debt under control. The Crown corporation's debt rose $1.9 billion in the last fiscal year, its annual report said, bringing its long-term debt to $16.1 billion.

Despite the impending mass exodus of staff from the building, there are no plans to sell the Taylor Avenue location, Hydro officials said. Approximately 100 employees, mostly operations staff, will remain in the building, which houses technology systems and a backup control centre that officials said would be costly and difficult to relocate.

"We will keep a presence on that site," said Owen.