Evidence of meeting #107 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was province.
11:50 a.m.
Conservative
Clifford Small Conservative Coast of Bays—Central—Notre Dame, NL
Do you think your members in the hospitality industry have much of an alternative to using fossil fuels right now? Do you think there are other readily-available sources of fuel that could replace fossil fuels right now, or do you think the carbon tax is just a tax?
11:50 a.m.
Chief Executive Officer, Hospitality Newfoundland and Labrador
To steal from Mr. Bonnell, I think there's constant innovation trying to be made, but for right now, it would be very difficult to implement an alternative.
11:50 a.m.
Conservative
Clifford Small Conservative Coast of Bays—Central—Notre Dame, NL
Thank you.
On immigration, Mr. Foley, your industry relies heavily on new Canadians. How are you finding the impacts of the housing crisis on your industry?
11:50 a.m.
Chief Executive Officer, Hospitality Newfoundland and Labrador
Housing is definitely a big challenge when it comes to labour. Even between communities, we're seeing people paying incentives with gas cards and trying to get people to move to the next community, and we're only stealing from one community to the next in doing that.
We put in a tremendous amount of effort last year with refugees and new Canadians. It worked somewhat in the bigger areas, but when we got into the rural areas, there was nowhere for people to live. It was put back onto the employers to try to provide that housing. Of course, the available housing now in many of the areas is just not there, because that is gobbled up for short-term rentals. A number of different factors are adding to the lack of housing, but the lack of housing is certainly preventing some of these immigration policies from working.
11:50 a.m.
Liberal
11:50 a.m.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Thank you, Mr. Chair.
I'm Churence Rogers, member of Parliament for Bonavista—Burin—Trinity.
First of all, Alex and Sean, I'd like to thank you for your endorsement of the tax incentives that were included in budget 2023 and, of course, the way they are going to be impacting our province with some great projects. I'm excited about the fact that rural energy projects are moving forward, but also that we have identified others like EverWind in Marystown and the one at Come By Chance, for example, or another one for Argentia. These are going to be major projects moving forward, and they're going to be tremendously beneficial to the province as a whole.
Alex and Sean, from your endorsement, I guess you would agree that the federal government is on the right track in terms of clean energy projects, trying to reduce fossil fuel emissions and investing in a new clean economy. Would that be fair to say?
11:55 a.m.
Managing Director and Chief Executive Officer, World Energy GH2
Absolutely.
The ITC was a huge step forward. The support we're receiving from the federal government as well as the provincial government to advance the industry is monumental.
We do need clarification on the breadth of the ITC coverage and to understand what the CFD will look like—that's also very important—but we understand that this stuff takes time. We're doing our part and just carrying forward the message as much as we can that there is some urgency to getting clarifications on the announcements that have already been made in the 2023 budget.
11:55 a.m.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Without these kinds of incentives in budget 2023, we probably would have missed the boat on some of these major projects that are about to be developed, considering what you talked about in terms of U.S. subsidies and how aggressive they've been.
11:55 a.m.
Managing Director and Chief Executive Officer, World Energy GH2
Absolutely.
If we had not had a response to the U.S. IRA subsidies, we would have missed the boat. We're at a point now where, if we don't get clarification on the full range of our subsidies and how we're going to level set with the IRA, then we could miss it. That's not just with respect to securing the offtake agreements. These manufacturing slots that I referred to before are critical, because once there's clarity around the U.S. IRA rules—which are coming any day now—there will be a massive rush to secure those wind turbine manufacturing spots and the electrolyzer spots.
Although we've done a great job positioning ourselves with these OEMs, that could change quite quickly if we don't have some clarification in short order.
11:55 a.m.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Thank you.
Craig, on the tourism industry, it's pretty big in Bonavista—Burin—Trinity, for instance in the Bonavista Peninsula. I know the challenges—I've talked to some of the operators—around the industry from the impact of the pandemic.
Last year they seemed to bounce back. The year 2022 seemed to be a good summer, a good year. This year wasn't quite as positive as last year.
What do you think led to some decrease in the tourism industry this year, around my riding and right around the province? What are some of the contributing factors, to your mind?
11:55 a.m.
Chief Executive Officer, Hospitality Newfoundland and Labrador
Thanks very much for the question.
I think there was a pent-up demand for everybody to come home last year. I think that really drove some visiting.
We're still waiting for some analysis of the research for that answer. Marine Atlantic is at capacity right now, so even if we wanted more people to come, they couldn't come by car. We know we have challenges in the airline industry, and we do not get accidental tourists in Newfoundland and Labrador.
11:55 a.m.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
The new ferry that will be going on the Argentia run in 2024 should be a good boost for your industry. What do you think?
11:55 a.m.
Chief Executive Officer, Hospitality Newfoundland and Labrador
I think it's all going to help, but we're seeing changing consumer choices as well. People travelling on ferries now want their own cabin. This is all part of what came from the pandemic.
Marine Atlantic is challenged with trying to build that capacity, and I think they are trying to build that capacity.
11:55 a.m.
Liberal
11:55 a.m.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
The EI regulation changes.... I know that Carey's told me about his.
What about your membership in terms of the impact?
11:55 a.m.
Chief Executive Officer, Hospitality Newfoundland and Labrador
Yes, the impact for our membership.... Of course, we're concerned about the employees. We have a very challenged labour pool right now. Some industries are the beneficiaries of some of our challenges. What we're concerned with, I guess, as an overall industry, is that we're going to lose more. If we don't have the people to work, we're not able to open and we're not able offer the experiences. There is a requirement, I think, to be able to keep those people who are seasonal workers at least in their communities. It's because of the....
If I could offer one quick thing, with regard to the regions that are broken down for EI, it is very hard to compare Trinity to Grand Falls-Windsor. The opportunities are not the same. That's going to take some longer-term planning or changes, but there need to be immediate responses as well.
Noon
Liberal
Noon
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
My question is for Mr. Foley. It's about a concern he raised in his presentation, the repayment deadline for loans provided through the Canada emergency business account, or CEBA.
You were clear that things still hadn't returned to normal for the industry and members of your association. Tourism declined because of the pandemic, and the impact is still being felt. Now, on top of inflation, interest rates are higher. As is the case throughout the economy, members of your association are dealing with not just higher costs, but also lower revenue given that things haven't returned to prepandemic levels. The government is saying now is the time to repay the loans. It pushed the deadline by a few weeks, but that was more symbolic than anything else.
On behalf of the members you represent, could you tell us how this repayment deadline is affecting businesses? Will some businesses that would have otherwise been able to stay afloat have to close their doors?
Noon
Chief Executive Officer, Hospitality Newfoundland and Labrador
Yes, I think the research we cited, indeed, says that—that some of these businesses are not going to survive. Many indicated that they couldn't repay it within that period of time. That's if we take an individual operator perspective. These people were fighting for breath immediately. As soon as the pandemic came in, they were the first ones shut down, and they were shut down immediately. When you have no oxygen, you're trying to take every available breath that you can get. To be fair, these programs were needed and appreciated when they came in. They were lifelines that kept many people whole.
What that has done, though, is that it has compounded. We called it a bit of a snowplow effect. It just piled up, piled up and piled up. Now it's all become due. It's not structured in a way where it can help their cash flow. It's not that the businesses can't pay back that amount of money. It's just that it's very difficult to pay it back when it's not structured in a proper way.
Therefore, getting some relief on the timeline would be important. For some, if that debt could be stretched out over a longer period of time, it would help the individual operator. My concern with that is that, if operators are only just able to make their minimum commitments, we're going to see a decrease in quality because they're not reinvesting in their businesses. They're not able to hire more people. They're not able to make those [Technical difficulty—Editor] changes. They're not able to stay open those extra few weeks to stretch the season because the money is just not there.
Noon
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I'm going to continue on that line with Mr. Foley.
I come from a riding that depends heavily on tourism. I'm the NDP tourism and small business critic. As you say, it was the first and hardest-hit sector in the pandemic, and for various reasons it has not fully recovered. Some of those reasons run on from the pandemic and others are totally separate.
In my area, for instance, I had a whole bunch of businesses that were going to be able to pay back their CEBA loans, and then we were burning all summer in the Okanagan Valley. We had travel shutdowns, where the government basically shut down the tourism industry to keep people out. That affected the whole business of labour, which has been a big issue, and housing is a huge part of that. I have hotels that are buying motels to house their employees. It's just a whole pile of run-on things.
I've been working with the Canadian Federation of Independent Business and TIAC to try to get the government to extend that because, like you say, it's not that they can't pay them back. It's that they were forced to pay them back over a relatively short period of time. I'll give you a few extra seconds to expand on that and why the government.... This would keep businesses alive so that they could pay back the loans. This would keep businesses alive so that they could keep the people who work there and provide an opportunity for visitors across the country to enjoy this place.
12:05 p.m.
Chief Executive Officer, Hospitality Newfoundland and Labrador
Thank you for the opportunity.
In our industry, I think every single system was broken when COVID came. I remember people calling me—hotel owners—and saying, “I have to find the keys to the front door—we've never locked it.” They had to figure out how to shut down. What do you do with your cable and those types of things?
The impact of the pandemic, although most of us are trying to think beyond that, is still having a real impact on our industry. When every single system in that ecosystem is broken—air travel and access—and then you throw in some other things, as you say, a natural disaster, all of this has a direct impact on these operators who are trying to get ahead. It's one step forward and two steps back most of the time.
It's about being able to get the time to get ahead, to restructure and to make a plan with a bit of a longer horizon, because these are all unintended consequences, I guess, that are affecting the businesses' ability to operate and to respond in the way they want to. I talk to operators who feel a sense of shame because they had to even ask about that. That's not the position they want to be in. They think, “I'm going to get ahead”, and then something new comes in.
It's a very unfortunate situation. Based on our research and the conversations I have, many businesses are in peril.
