Mr. Chair, first I would like to congratulate my colleague from Pierre-Boucher—Les Patriotes—Verchères for his excellent speech on the importance of protecting consumer rights.
We're talking about airline tickets here. When you look at what's being done in Europe, the United States and around the world, air carriers are required to reimburse consumers for tickets they've paid for where trips have been cancelled. Assistance programs are bound by this condition. Canada is the lone exception. I therefore strongly encourage my esteemed colleague to continue the fight with Option consommateurs. This has to change; consumers must be reimbursed.
I'm going to talk about emergency economic support measures. Many measures have been introduced to support workers' incomes. My colleague from Thérèse-De Blainville, who will be speaking immediately after me, will tell you in greater detail about the new changes being made to urge people to go back to work.
The employment insurance system was initially intended to support incomes in an economic crisis. We're currently in the midst of a health crisis and the system has failed. Consequently, the government has introduced the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy.
The wage subsidy was initially 10%. It was a half-baked system. The government told businesses to withhold amounts from the payments they were required to make to it. The Bloc québécois looked at what was being done elsewhere in the world, in Denmark, for example. We made some demands, and we're pleased with what has been put forward.
Fixed costs are a serious problem for SMEs. That's an important point. The organizations representing SMEs have been telling the government that and telling us too since the crisis began. Wages are an issue, but fixed costs are too, and they have to be addressed. That's why we managed to add a measure to the motion passed in the House on April 11 requiring the government to introduce measures to support and assist businesses with fixed costs.
We waited, but we got virtually nothing. You could say the mountain laboured and more or less brought forth a mouse. There was rent assistance, but it's awkward, very limited and poorly put together. The Canadian Federation of Independent Business, the CFIB, has demanded that the program be completely overhauled.
The Conseil québécois du commerce de détail, CQCD, reports that 40% of its members who are entitled to assistance say the owners of the premises they lease for their businesses refuse to join it. It's not working for nearly half of SMEs that are entitled to assistance because landlords don't want to cooperate. They ultimately feel it's preferable to write off their losses because then they'll have fewer hassles and, ultimately, less tax payable. It's not working.
We discussed this in the Standing Committee on Finance meeting yesterday afternoon with the management of CMHC, which will manage the program. They said they were surprised it wasn't working. Logically speaking, it's true that landlords would have every reason to enter into this kind of agreement, but, in actual fact, nearly half of them prefer to write off the losses. They can't be bothered. So the program is poorly put together, poorly suited. That has to change.
There's assistance for rent, which represents a significant portion of fixed costs. The Prime Minister noted this earlier. However, all other fixed costs have to be considered as well. Every SME has its own structure and fixed costs, such as wages. It's not just about rent. In the case of businesses, yes, but that's not always the case for other SMEs. We need flexibility and a program in order to help them.
Our humble proposal is that a refundable tax credit be introduced for fixed costs.
The business would first have to prove it's been affected by the current crisis and has experienced a decline in revenue. For example, that might mean a 30% drop in recent months. Then it would be questioned about its fixed costs and asked to provide proof, just as it usually does when filing its year-end tax return. It would receive a refundable tax credit equivalent to half of its expenses. Why half? Simply because the government's rent assistance program for SMEs covers 50% of its rent expenses.
Getting back to the emergency rent assistance program, since building and commercial property owners don't necessarily want to participate in it, we're asking the government to provide assistance equal to half the cost directly to the SME renting the premises. It could make do with that and it would be more effective. Why not do that since a large number of commercial landlords don't want to join this program?
Furthermore, as regards our fixed costs tax credit proposal, SMEs that want it could include their rent expenses. This method would be further to the motion adopted in the House ordering the government to introduce a measure to assist SMEs with fixed costs. A simple refundable tax credit for fixed costs would work well.
The rent assistance program also has to be changed as a result of a serious problem. SMEs are required to prove they have suffered a decline in revenue as a result of COVID-19, which is normal. However, it has to be a 70% decline. That's neither the 15% that was the case for the first period covered by the wage subsidy nor 30%, as was the case for the others. It's more than double. This specifically targets small businesses whose turnover has collapsed. I think we need fixed costs assistance that covers a larger percentage of SMEs. The criterion could be set at 30%, as is the case for the wage subsidy, and the same figure could be used for the fixed costs tax credit.
To recap, on April 11, the House adopted a motion directing the government to introduce measures respecting fixed costs, but, apart from the introduction of a modest rent assistance program that doesn't work and must be completely overhauled, as the Canadian Federation of Independent Business stated, nothing has been done. We therefore request a tax credit.
We also have another request. SMEs are currently in considerable difficulty. Under the emergency loan program, they may apply for a $40,000 loan, and, if they repay it on time, the government will allow them to retain $10,000 in the form of a grant. We ask that the government make a more sustained effort by increasing the $10,000 amount to $20,000. That would really help businesses, especially with their fixed costs. Economic activity has stopped, and none of the lost income can be recovered. We therefore ask the government to provide more assistance to SMEs by doubling the portion of the loan that may be retained as a grant. This is important for us.
Today, the Minister of Finance announced the details of his loan program for large businesses. Those businesses will have five years to repay their loans. We believe the same condition should apply to SMEs. Rather than require them to repay their loans before the end of 2022, they should be granted a five-year period as well.
I've discussed fixed costs, but now we're going to talk about amendments that should be made to the Canada Emergency Response Benefit. This will be very interesting. I now turn the floor over to my colleague from Thérèse-De Blainville.