Employees, small businesses brace for losses as HBC cites US-Canada tensions and mounting debt
Canada’s oldest department store, Hudson’s Bay Co. ULC, began liquidating 90 of its 96 stores this week, triggering widespread distress among its workforce and affiliated small businesses, as reported by Financial Post.
The liquidation followed a court ruling on Friday that allowed the company to proceed after prolonged financial challenges.
The move affected roughly 9,000 employees across the country.
Jody Nesbit, president of Union Local 240, which represents about 60 Bay workers, said there were “a lot of tears,” and explained that although the company’s financial instability meant “the writing was on the wall,” workers had still held out hope for a turnaround.
“They didn’t ever think that the Hudson Bay Company would be gone from Canada,” she said. “It really took people by surprise.”
Hudson’s Bay filed for court protection on March 7 to shield itself from creditors while seeking financing.
The move came after a landlord locked it out of a store in Sydney, Nova Scotia, and bailiffs tried to seize merchandise from another location at Toronto’s Sherway Gardens mall.
The company, which has struggled to adapt to online retail, said the protection order was meant to provide “breathing room” to secure financial backing.
However, according to HBC, trade tensions between the United States and Canada discouraged potential financiers, undermining its restructuring efforts.
Nesbit said reality is “slowly setting in” for long-serving employees, including one member who worked at the Bay for 38 years.
Some workers now regret not accepting a $25,000 severance offer made during HBC’s earlier restructuring 18 months ago, as they may now be entitled to a maximum of $8,800 under the federal Wage Earner Protection Program Act.
With the company owing over $950m to creditors, including banks, major clothing brands, and vendors, Nesbit said she does not expect employees to receive additional compensation.
Concerns have also emerged over the status of disability payments.
Andrew Hatney, a lawyer representing multiple HBC employees, said he contacted the company to ask whether those payments would continue.
“We hope this is not going to be a repeat of Eaton’s situation, where the disabled employees had their benefits cut off and they were suffering as a result,” he said.
A 50-year-old employee who has been on disability leave since 2021 and worked at the Bay for 25 years said the decision to shut down most stores was a “big shock.”
She said she depends on her benefits to pay for thousands of dollars in medication and expressed concern about her future employment prospects, adding, “I don’t have any other experience… even if I go off the disability, who the heck is going to even hire me in the future?”
In addition to employees, small businesses that operated inside Bay stores also face losses.
Hair Republic HR4 Inc. co-founder John Nguyen said HBC owes his company more than $35,000 and expressed concern about his place in the creditor queue.
“Honestly, that’s a lot of money,” Nguyen said. “That’s not pocket change for us. If they owe a billion dollars … then there are creditors that are a higher priority for them.”
Nguyen recounted how he initially thought the partnership offer from HBC in 2021 was a scam.
After confirming it was real, he saw it as an opportunity to connect with younger customers through his salon.
The collaboration thrived for two years, but by 2024, delays in payments became more frequent, extending from the usual 40 days to 60 or more.
He said the last payment he received, covering November and December, came only in February 2025 after he escalated the matter to HBC executives.
Despite the setbacks, Nguyen expressed gratitude for the exposure the partnership provided.
He noted that six months ago, he was in talks with HBC to expand his salon’s presence, but growing uncertainty around the company led him to hold off.
“Dragging his feet,” he said, helped him avoid a “major loss.”
