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Canadians working from home permanently should expect salary changes, experts say – The Globe and Mail



When Mark Zuckerberg hosted a town hall in late May with Facebook Inc.’s 48,000 employees, some were tuning in from new cities they had scrambled to move to as the pandemic hit.

Mr. Zuckerberg had a clear message for them: If you plan to stay, expect a change to your pay.

“That means if you live in a location where the cost of living is dramatically lower, or the cost of labour is lower, then salaries do tend to be somewhat lower in those places,” he said on the video conference, where he announced more employees would be allowed to work remotely permanently.

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Mr. Zuckerberg gave Canadian and American workers until Jan. 1, 2021 to inform the company about their location, so it can properly complete taxes and accounting and use virtual private network checks to confirm staff are where they claim.

The demand is part of a new reality Canadian workers are being confronted with as employers try to quell the spread of COVID-19 and increasingly consider making remote work permanent.

The shift means many companies are having to rethink salaries and compensation, while grappling with the logistics of a new work model.

Only one-third of Canadians working remotely expect to resume working from the office as consistently as they did prepandemic, while one in five say they will remain primarily at home, according to a June study from the Angus Reid Institute.

Like Facebook, Canadian technology companies Shopify Inc. and Open Text Corp. have already announced more employees will soon have the option to permanently work remotely.

Both declined interviews with The Canadian Press, but Richard Leblanc, a professor of governance, law and ethics at York University, said he wouldn’t be surprised if their staff that relocate will see their pay change.

“It’s inevitable because the cost and expense structure of work has changed,” he said.

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“If you, for example decide, that you could do the majority of your work from well outside the Greater Toronto Area … and you want to buy a home in Guelph or in Hamilton, should we expect the base salary for those individuals might change? Yes, because your cost of living has changed and your expenses have changed.”

If companies calculate salaries properly, neither the business nor workers should feel their salary adjustments are unfair, Prof. Leblanc said.

However, figuring out what to pay staff transitioning to permanent remote work is tough, especially with a pandemic raging on and forcing some businesses to lay off workers or keep companies closed.

Owners have to consider what salaries will help them retain talent, but also how their costs will change if workers are at home.

Companies, for example, may be able to slash real estate costs because they don’t need as much – or any – office space, but may now have to cover higher taxes, pay for their workers to buy desks or supplies for their homes or offer a budget for them to use on renting spaces to meet clients.

“[Businesses] are looking at every line item on their on their income statement … because they want to make sure they can survive and thrive over the long-term,” said Jean McClellan, a partner at PricewaterhouseCoopers LLP’s Canadian consulting practice.

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Companies such as GitLab, an all-remote company in San Francisco focused on tools for software developers, may offer some clues about how Canadian companies opting for permanent remote work can tackle salaries.

When GitLab started offering permanent remote work years ago it built a compensation calculator combining a worker’s role and seniority with a rent index that correlates local market salaries with rent prices in the area.

Anyone can visit GitLab’s site and plug in a role, experience level and location to find a salary.

GitLab’s junior data engineers, for example, make between $50,936 and $68,913 if they live in Whitehorse, Yellowknife or Iqaluit, where the Canada Mortgage and Housing Corporation said the average rents for a two-bedroom home last October were $1,695, $1,100 and $2,678 respectively.

That salary shoots up to anywhere from $74,359 to $100,603 for those living in Toronto, Vancouver or Victoria, where CMHC reported the average rents for a two-bedroom home last October were $1,562, $1,748 and $1,448 respectively.

Prof. Leblanc warned that varying remote work salaries can create “a global competition for talent in an online world.”

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People who apply for permanent remote jobs, he said, may find their fighting for the role against far more people than ever before because companies will be able to source talent living anywhere in the world.

The companies that don’t offer remote work at all could also find themselves at a disadvantage, if their industry starts to value flexibility and look less favourably at companies that don’t offer it.

GitLab settled on its model and calculator because the company said they offer transparency and eliminate biases around race, gender or disabilities.

Its co-founder Sid Sijbrandij wrote in a blog that the calculator was dreamed up because every time he hired someone, there was a conversation around reasonable compensation.

The negotiation would usually revolve around what the person made beforehand, which was dependent on what city they were in. Gitlab scrapped that model in favour of the calculator and also started letting workers know if they move their salary could change.

However, GitLab acknowledges that many people see paying someone less for the same work in the same role regardless of where they live as “harsh.” The company disagrees.

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“We can’t remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do),” it says.

“We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable.”

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Monteregie virus infections top 60; hundreds of people overwhelm testing centre – CTV News Montreal



A new testing clinic in the town of Mercier reached full capacity within two hours of opening on Thursday—a sign of how seriously Montérégie is taking its new COVID-19 outbreak, including its younger residents.

Many of the hundreds who lined up were young and were connected with people who attended the two teenage house parties that started the outbreak.

They admitted that having parties right now may be a bad idea.

“The young people [saw] each other too fast,” one told CTV. “We didn’t wait.”

People around Mercier have good reason for their anxieties. The outbreak has now infected more than 60 people, leading to the closure of many businesses.

“It was a little bit everywhere in Mercier, so I decided to be tested just to be sure,” said one person who arrived to be tested Thursday morning.

The region’s outbreak first started at two house parties held by teens, but it had some time to spread—in workplaces, bars and homes—before health authorities realized what was happening.

Now people are second-guessing their health and trying to figure out if their symptoms match up.

“The first day I was constantly tired,” said one young man, who said he’s been feeling sick for two days.

While they were overwhelmed by the lineup, health authorities said they’re happy to see the demand and will set up another clinic for Saturday.

“People are concerned about their health, and the health of their family, so it’s a good thing they come and get tested,” said Jade St-Jean, the spokesperson for the health district of Montérégie West.

Officials say the testing will help give them an idea of the scope of the outbreak.

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Torstar surges over first offer price amid rival bid – BNN



Torstar Corp. rallied to an eight-month high after receiving an unsolicited offer to purchase the company by a private investor group, less than two weeks before shareholders were set to vote on an initial buyout deal by two prominent Canadian business families.

Shares of the Toronto Star parent skyrocketed 16 per cent to 72 cents on Thursday as it resumed trading after saying a competing proposal may result in a “superior offer” to an earlier bid from NordStar Capital LP. While no final decision has been made, Torstar said it’s now in discussions with the new group.

Brothers Matthew Proud, chief executive officer of Dye & Durham Corp., and Tyler Proud, head of Avesdo Inc., are leading the $58 million competing bid, around 72 cents per share, according to several media reports.

NordStar, owned by the Rivett and Bitove families, had offered to buy Torstar for 63 cents a share in cash in May, making for a price tag of $51 million.

The original deal is still “in the best interest of the company,” Torstar’s board said in a press release Thursday. “The board continues to recommend that Torstar shareholders vote in favor of the NordStar transaction.”

The break fee in the NordStar contract is $3.5 million. Currently, the arrangement has the support of Torstar’s board and its largest independent shareholder Fairfax Financial Holdings Ltd., ahead of a special meeting on July 21.

Nordstar has no plans to increase its offer. Its bid fully values Torstar based on expenses it will have to incur to grow the company and its newspapers, a spokesperson for the company said in a statement provided to BNN Bloomberg.

NordStar is controlled by Jordan Bitove and Paul Rivett. Rivett was a senior executive at Fairfax, a Toronto-based insurance and investment holding company, when it built its 40 per cent stake in Torstar’s Class B shares. He announced his retirement from the firm in February.

Bitove is a private equity executive whose family was part of the ownership group that brought the Toronto Raptors basketball franchise to the city in the 1990s.

Torstar, which also publishes more than 70 other newspapers, has been unable to turn around years of losses in advertising revenue. Before Nordstar’s offer, Torstar’s shares had slumped almost 80% since the end of 2017.

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Torstar shares halted on TSX after getting rival takeover offer for newspaper company –



A second bid to buy newspaper publishing empire Torstar Corp. has emerged, one that reportedly values the company 14 per cent higher than the previous offer.

Torstar Corp. confirmed on Thursday that a second offer to buy the company has come forward, and the company’s board is currently considering the unsolicited offer by an unnamed private investor group.

Torstar “is engaging in discussions and negotiations with the New Offeror regarding its non-binding proposal,” the company said in a press release.

The company did not say who was making the offer, but the Globe and Mail newspaper first reported that the bid came from the Proud Brothers, Matthew and Tyler, who made their money in the technology sector.

The new  bid reportedly offers 72 cents a share to buy the company. That would value the company at $58 million, better than the 63-cent offer in May from the Bitove and Rivett families’ company Nordstar, which valued the company at $52 million.

Like many newspapers, the owner of the Toronto Star, Hamilton Spectator and 70 other publications across Canada has seen a precipitous drop in its paid circulation and advertising revenue, and a corresponding increase on the digital side is not making up for it.

The company took in $479 million worth of revenue in 2019, down $64.4 million or 12 per cent from 2018’s level, and spent $51 million more than it earned, according to its latest earnings.

But the company has $42 million in cash on its books, and no debt, which is what makes it an attractive acquisition even beyond the core business.

Shares in the company were halted in premarket trading on the Toronto Stock Exchange on Thursday morning, with regulators citing “pending news” as the reason for the halt.

Torstar shareholders are scheduled to vote on whether or not to accept the original NordStar offer on July 21. 

Torstar’s board says it still recommends shareholders vote for the NordStar deal, pending the discussions they are having with those who’ve made the new offer.

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