Finance Committee on April 11th, 2024

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair, and thank you to all the witnesses for your excellent testimony.

Mr. Hetherington, you gave a raw number for food bank usage by people with disabilities. Can you give us a rough idea of what percentage of food bank users are people living with disabilities?

[Neil Hetherington]

Approximately one-fifth to one-quarter of food bank users identify as having a disability.

[Don Davies, NDP, Vancouver Kingsway, BC]

What percentage are children?

[Neil Hetherington]

Of that percentage, you would be looking at one-third.

[Don Davies, NDP, Vancouver Kingsway, BC]

I don't mean children with disabilities; I mean children generally. What is the percentage?

[Neil Hetherington]

It's one-third.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay.

You mentioned the incredibly high public support for a federal disability benefit. That measure also received unanimous support in the House.

Do you have any advice on how the rate should be set? How much money should the federal government set the rate at?

[Neil Hetherington]

Disability advocates have long said it should be the poverty line plus 15% to 30%. It costs more to get by when you are disabled, even at that very minimal level of the poverty line.

There's an easy way to look at it. Across the country, folks are generally receiving about $1,300 or so on disability. The poverty line is $2,300, so there's a $1,000 difference to get up to the poverty line. Here is a rule of thumb for the million individuals who would qualify for this: Every billion dollars invested equals about $100 for a person on disability. Therefore, you're looking at a program of $10 billion to $12 billion to get somebody from $1,300 to $2,300 as a minimum floor for a fully funded Canada disability benefit.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

This may beyond your field of expertise, but it would strike me that when we give more money to people in lower income brackets, they spend that money in our communities. They don't put it in an offshore savings account. They don't save it. They probably spend it and recirculate it into the economy.

Are you aware of any economic knock-on effects of the federal government providing that money to people in this cohort and whether a certain percentage of that money is actually returned back to the economy in a productive way?

[Neil Hetherington]

You're entirely right that when those who are a thousand dollars under water below the poverty line receive any benefit associated with that, they are going to put every dollar—every penny—back into the local economy. I think that needs to happen. At the same time, we want to ensure that each of the monetary policies are tamed to ensure that they are not a significant driver—and they wouldn't be—of inflation.

[Don Davies, NDP, Vancouver Kingsway, BC]

You commented that a surprising number of food bank users are the working poor. I think you specifically said that these are people who often have no benefits.

In this Parliament, the New Democrats have been proposing to work with the government to develop dental care and pharmacare to provide benefits for those who don't have them. I'm just wondering what you think the impact would be on the cohort you work with on a daily basis of taking away expenses they have for dental care and pharmaceuticals and freeing up that money to be spent on other necessities of life.

[Neil Hetherington]

I see that every day. I see it when somebody doing their best working 40 or 50 hours with two or three part-time jobs has to come to the food bank because they have to make a choice among rent, food, medications and hydro.

Those are important benefits, particularly when they're deep and targeted benefits for both dental and pharma.

[Don Davies, NDP, Vancouver Kingsway, BC]

I had the privilege of serving in Parliament when the COVID pandemic crisis began in early 2020. I was in the House when all parties supported a $107-billion COVID aid package. Of course, part of that package was to provide $2,000 a month for CERB to people who were unable to work because of the pandemic, often through no fault of their own.

What did you notice about food bank use during 2020 and 2021 as a result of federal support for people who otherwise would have been pressed out of work?

[Neil Hetherington]

Food bank usage did increase during that time, but CERB was an absolutely needed stopgap.

Just to back up for one second, you mentioned the figure $2,000. I think everybody on this panel can ask the “elephant in the room” kind of question: Why did we feel that $2,000 was the right number, yet every year, everywhere across the country, pandemic or not, those with disabilities are told they'll be fine on $1,300? That's obscene.

Again, I just implore this group, those at the Ministry of Finance and each of you voting on Tuesday to fully fund the Canada disability benefit. It's targeted and it's needed.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

To the Council of Canadian Innovators, what are CCI's recommendations for a smart industrial strategy that would help ensure that intellectual property resulting from Canadian innovation is owned by Canadians?

[Laurent Carbonneau]

There are a lot of places we can start. We talked about tax credits and procurement. To my mind, these are supply-and-demand sides of the same equation about how we make sure we're getting more innovation in the economy.

On the supply side—and traditionally we've been better at this in Canada—there has been a lot of emphasis on tax credits and research funding. We provided a bunch of recommendations on how we can make SR and ED more effective at targeting the outcomes we want rather than continuing to be focused on just the input. We think that's a promising way forward.

On the demand side, we mentioned earlier our report on procurement. I think this is a really underused lever in Canada compared to a lot of other advanced economies. Of course, the U.S. has had the small business innovation research program in place for several decades now, which produced a lot of really interesting spinoffs, both technological and economic. This is a thing the EU is experimenting with a lot more. I mentioned Finland earlier. It has a very progressive structure of programs that all interlock and build up a lot of competence, while making sure that its municipal and regional governments are included, which is something that historically has not been much of a feature in Canadian innovation policy. Between those two things, there would be an interesting set of levers.

On the IP side, we talked a little about the education piece, and I think it's really critical. We talked about the IAC, which contributes to that. I also want to highlight the work done by the industrial research assistance program, IRAP, out of the National Research Council, one of Canada's most successful industrial policy programs, really, for the last 75 years. The combination of business, public sector and technical expertise makes it unparalleled as a place to develop genuine expertise and to help companies navigate technological and business trends.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Davies.

To our witnesses, thank you for your excellent testimony. We appreciate it a great deal.

That concludes this panel, and we'll now transition to our next panel. You may leave.

Members, as I understand it, we have votes a little after 5:30. I think it would be a shame to not have those who are in our 5:30 to 6:30 grouping, so we have contacted them. We're going to bring in everybody together so that at least they can give us their opening remarks. I don't know how much time we'll have for questions, but you'll get questions. All the witnesses from the 4:30 to 5:30 panel and the 5:30 to 6:30 panel will be here joining us.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Can we get UC to go right up the votes?

[The Chair, Liberal, Peter Fonseca]

Yes, we can go right up until the votes, but only once the bells start can we ask for UC.

We're suspended right now for the transition.

[The Chair, Liberal, Peter Fonseca]

We're going to get started. Time is running quickly, and we want to make sure that all of our witnesses get their opening remarks on the record. Then we can get as much time as we possibly can with questions before the votes start.

Members, with us today we have, from the Canadian Association of University Teachers, David Robinson, executive director; from the Canadian Fabricare Association, Konstadin Kantzavelos, president; and from the Otonabee-South Monaghan Food Cupboard, Joan DiFruscia, chair.

I don't know whether they're here yet, but also joining us we have, from the Canadian Cancer Society, Rob Cunningham, senior policy analyst, and Kelly Masotti, vice-president of advocacy. From the Vancouver Anti-Corruption Institute, we have Dr. Peter German. From the Front d’action populaire en réaménagement urbain, we have Madame Laflamme, who's a spokesperson for the organization. We are waiting on Jeff Pearson, president of carbon at Wolf Midstream. Hopefully, he will arrive.

We are going to get started with the Canadian Association of University Teachers for five minutes.

[David Robinson, Executive Director, Canadian Association of University Teachers]

Great. Thank you, Chair.

I'm very grateful for the invitation to be here today on behalf of the Canadian Association of University Teachers. We represent 72,000 faculty, librarians and professional staff at more than 120 post-secondary institutions in all provinces across the country.

I want to focus my remarks today on Bill C-59's proposed exclusion of public post-secondary institutions from the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act.

The CAUT fully supports these important changes. Corporate insolvency and bankruptcy processes are inappropriate and unnecessary for publicly funded universities and colleges and are counter to the fundamental values and principles of those institutions, including collegial decision-making and academic freedom.

We learned this lesson the hard way. As we heard earlier, in February 2021, Laurentian University in Sudbury was the first-ever publicly funded university to apply for and receive CCAA protection. As the Auditor General eventually concluded in her report on the matter, invoking the CCAA was unnecessary, inappropriate, costly and a destructive decision by the university's administration. It was unnecessary because mechanisms to deal with the institution's financial challenges already existed.

First, the university did not follow the normal, broader public-sector precedent and refused financial assistance that was offered by the provincial government.

Second, it deliberately ignored contractual obligations with the Laurentian University Faculty Association that provides for a process to deal with instances of bona fide financial shortfalls. Virtually every faculty association in Canada has negotiated so-called financial exigency provisions in their collective agreements that specify how the academic community as a whole can manage financial crises, while protecting core educational values. Instead, the administration of Laurentian used the CCAA to ignore the collective agreement and withhold financial information, and turned to an expensive, combative and unnecessary process.

In pursuing protection under the CCAA, the administration also betrayed the fundamental values of the university. Historically, financial exigency clauses arose in collective agreements to protect the principles of collegial academic decision-making and academic freedom. Financial exigency processes ensure that decisions about academic restructuring and program closures are made not by administrative diktat, but with the active participation of the academic community, those who have the expertise on educational matters.

Financial exigency language also protects the foundational value of all universities. That's academic freedom. It grants academic staff the right to teach, research and express views without institutional censorship or reprisal. Academic freedom, as the Supreme Court of Canada has noted, is necessary to “allow free and fearless search for knowledge and the propagation of ideas” and is “essential to our continuance as a lively democracy”. Financial exigency language ensures that administrations do not use a financial crisis as a cover to violate academic freedom by targeting academics they find controversial, difficult or unpopular.

Finally, the CCAA process was also extremely and needlessly costly. Laurentian University spent tens of millions of dollars on lawyers and consultants while nearly 200 faculty and staff positions were lost and 69 programs were cancelled, many of which were unique French-language and indigenous programming, including the only indigenous bilingual midwifery program serving northern Ontario.

In the wake of what happened at Laurentian, CAUT commissioned a report by lawyer Simon Archer and Virginia Torrie, a former professor of law at the University of Manitoba. They concluded:

The policy objectives of public institutions, such as universities, are inconsistent with the core rationale of insolvency law to promote commercial risk-taking. Applying the CCAA to such institutions changes the ground rules on which they operate. This...undermines university governance, internal decision-making, and transparency.

The report concludes by emphasizing the pressing need to amend the CCAA and Bankruptcy and Insolvency Act to preclude its use by public universities and colleges.

I therefore urge the committee to support those amendments.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Robinson.

Now we're going to hear from the president of the Canadian Fabricare Association, Mr. Kantzavelos.

[Konstadin Kantzavelos, President, Canadian Fabricare Association]

Honourable Chair and respected members of the Standing Committee on Finance, good afternoon. My name is Konstadin Kantzavelos. I have been operating my business, TSC Wetclean, in the city of Mississauga since 1988.

I am a proud member and president of the Canadian Fabricare Association, where I have sat on the board since 2013. It's an honour to represent and lead an organization rooted in our industry since 1949 that currently represents over 10,000 jobs across Canada.

The CFA is the governing body of professional dry cleaners, wet cleaners, launderers and allied trades dedicated to providing fabric and textile care services and solutions from coast to coast by establishing good management, ethical conduct and proper operating procedures. Today is our association's most important opportunity to represent our interests. Please allow me to shed light on our industry's contribution to the Canadian economy and the challenges we have faced. More importantly, please allow me to illustrate how the Canadian government and the CFA can work together to revitalize and reinvigorate business across Canada.

No industry suffered more than the fabric care industry during COVID-19. We saw up to a 90% drop in revenue across the country for over two years. Over 50% of our fabric care locations closed nationwide. Working from home was the key element in these declining numbers. For many Canadians, suits, shirts, ties, skirts and dresses are the uniforms worn for work, similar to everyone in this room today.

I am here today to celebrate the major contribution of the small business owners of the Canadian Fabricare Association across Canada. We are members of a small business community that constitutes 98% of all businesses in Canada—small companies. Small businesses employ over 10 million Canadians and are responsible for 50% of Canada’s GDP.

According to Statistics Canada, the average person spends approximately 10 hours weekly on unpaid work. The primary work we're talking about here is laundry. An Ipsos Reid poll conducted on behalf of GE Appliances revealed that 30% of Canadians find they only get around to it when they've run out of clean underwear, 25% of Canadians confessed that they've left their clothes in the washer or dryer for days before tending to them and 41% said they simply guess at methods of stain removal.

Most recently, as read in the Financial Post this past March, the Bank of Canada's senior deputy governor, Carolyn Rogers, spoke on the declining state of Canadian productivity. According to Rogers, Canada must tackle weak productivity to inoculate the economy against factors driving future inflation.

The Organisation for Economic Co-operation and Development revealed that Canada ranks 29th among 38 OECD countries for labour productivity. To put this in layman’s terms, in the time a Canadian worker produces one dollar's worth of goods and services, an American worker produces $1.30. That's a 30% advantage.

These statistics are important because despite most industries having raised their prices on consumers, the members of the CFA have kept their prices relatively unchanged because of our investment in the proper technology and advanced productivity.

In February 2021, during the height of the pandemic, Swedish consumers who turned their laundry, dry cleaning and clothing alterations over to professional cleaners received a tax deduction of 25% of the cost. The Swedish association put forward a plan to educate its government on how that incentive could work.

The CFA is no different. It looks at our diversity as a strength and at our employees as our greatest asset. We are a green circular industry. We focus on proper textile care, which extends the life of fabrics and removes uncertainty from the consumer. Our members are certified through the CFA, which means they meet the required environmental, economic and social standards. Committee members may be interested to know that all our industry members continually deliver towards the preservation of our environment and our ecosystem by adhering to all federal government guidelines on waste management.

By implementing a tax incentive, the Canadian government will demonstrate its commitment to a greener economy. Considering that we live in times of viruses and harmful diseases, what better way to promote cleanliness to every Canadian household than with a tax incentive to have their fabrics and garments cleaned professionally?

As the president of the CFA, it is my job to inform you of the importance of what our industry stands for in our communities—the preservation of our environment and our economy. What we are proposing is a tax credit of 25% to incentivize using the services of professional fabric care in every Canadian household. This is where Bill C-59 can assist. Just as in Sweden, the CFA can be a resource for the Government of Canada in paving the way for maintaining the stability and economic growth of the Canadian fabric and textile care industry.

We request that this committee make a focused choice to work with the Canadian Fabricare Association and ensure that our proposal for a tax incentive can become a reality and prevent our small businesses from disappearing.

Here are some suggestions for requirements for this tax incentive. You must be at least 18 years old, live in Canada and pay taxes on at least 90% of your total income. The maximum amount of annual cleaning expense to use the tax incentive would be $5,000 per household. The professional garment care provider must be registered with the Canadian Fabricare Association, and you do not need to own your property to receive the incentive.

Which services are covered for this deduction? They include dry cleaning, wet cleaning, laundry wash and fold, clothing repairs and alterations, area rug cleaning and upholstery cleaning.

Thank you very much for the time today.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Kantzavelos.

We will now hear from the Otonabee-South Monaghan Food Cupboard and its chair, Ms. Joan DiFruscia, please.

[Joan DiFruscia, Chair, Otonabee-South Monaghan Food Cupboard]

Good afternoon, Mr. Chairman and members of the Standing Committee on Finance.

I am honoured to be here to speak to you on the issue of affordability from the perspective of people who are living in poverty, such as the families served by the Otonabee-South Monaghan Food Cupboard, also known as the OSM Food Cupboard.

The OSM Food Cupboard is a rural food bank located in Keene, Ontario, in the riding of Northumberland—Peterborough South. The OSM Food Cupboard opened over 10 years ago as an outreach project of Keene United Church, and it supports residents of the township and Hiawatha First Nation.

Please consider this: When you leave this meeting today, I assume that you have a safe place to go, where you will be sleeping tonight, the next night and so on. Tomorrow you will make choices for breakfast, lunch and dinner. But what if you are food-insecure? For example, with Ontario Works, the basic social assistance program in Ontario, you receive just over $700 a month, the same as in 2018. After you pay rent, if you can find a place for, say, $700—please don’t laugh at that comment—and pay for utilities, for gas, as your friend drives you to a training program, for a cellphone, for receiving calls for potential jobs.... Whoa. You ran out of money long ago. And then what about food?

The reality is that there just isn’t enough money to cover the costs of even the essential items. With all the stress, what is a person’s health like, physically and mentally?

At the OSM Food Cupboard, between November 2023 and February of this year, the number of families with children doubled. Children now make up one-third of the individuals supported by our food bank. Keep in mind that whether it's one member or six members, families come to our food bank only when they need to, and select the foods they need.

The volunteer staff and committee members are dedicated and compassionate in working to support the families. The Food Cupboard is a reliable and consistent source of food, and also offers a listening ear. A family can pay their electricity bill knowing that there is help with food needs. Over time, special relationships have developed between the staff and the families, along with respect for each other. Please know that people do want to improve their lives. The fact is that when one lives in deep poverty, it is, like a deep hole, extremely difficult to climb out of.

In this amazing country of Canada, what solutions are there for dealing with the root cause of poverty, which is low income? One solution is a guaranteed livable income.

A second solution is governments of all levels and stripes collaborating with the shared goal of lifting people out of poverty. Mechanisms need to be in place to prevent clawbacks, such as during the rollout of the Canada disability benefit, thus improving the lives of people living on disability.

A third is that supports to cover benefits during a transition period from social assistance to even a part-time minimum-wage precarious job would encourage people to leave the social safety net.

Four, affordable housing, such as Otonabee Court in Keene, allows long-time residents of the area to continue to live in the community, paying either market rent or geared-to-income rates, depending on their income.

Financially, there are costs to all of society when people live in poverty. The already stressed health care system responds as best it can, as adults living in poverty are more likely to need treatment for such chronic conditions as heart disease and diabetes, plus mental health conditions. There are also costs to the justice and education systems. There is a tremendous cost to not making changes, which also prevents people from living up to their full potential.

I have been involved with food banks for over 40 years. The system is broken. Food banks are not helping people get ahead. Recently, food insecurity has grown substantially, partly due to inflation, but it's a global phenomenon and not something unique to Canada. For our food cupboard, which distributes food once a month, I have heard this comment: “I live for two weeks and then I exist for two weeks—until the next food distribution day.” That is not acceptable in this country.

Members of the Standing Committee on Finance, you have a responsibility to ensure that government investment responds to the needs of Canadians.

Bill C-59 aims to implement elements of the 2023 fall economic statement, but shortly you will also likely have a role to play in implementing elements of budget 2024.

I am here today to tell you that we are facing a food insecurity crisis that needs to be urgently addressed. As you consider Bill C-59 and eventually budget 2024, I urge you to consider prioritizing the needs of low-income Canadians.

I just want to thank MP Lawrence for the opportunity to speak today.

Thank you.