Finance Committee on April 3rd, 2020

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

My questions will be addressed first to Mr. Thibault.

Mr. Thibault, the picture you presented of the situation in your industry is alarming. You talked about the drop in sales between March 10 and 23 and the projections of less than 90% of what was expected in April. The industry has completely collapsed because of the crisis. You also said that 40% of the operators had suspended operations.

You expressed concern about the duration of the measures. Of course, we would like the government to extend them if necessary.

Do you think the duration of these measures should be adapted according to the sectors?

Even if the situation were to improve over the summer, your industry will not get back on its feet immediately. An extension of the measures could allow small regional hotel operators to get help during the summer and allow seasonal workers who depend on them to work the hours necessary to qualify for employment insurance.

What do you think?

[Dany Thibault]

It will indeed be necessary to paint a portrait of the different sectors. Ours will be among the slowest to recover, as will air traffic, which will take longer to recover. We will live in step with people's sense of security. We will have to wait for people to go into hotels and hold meetings. We also have to consider that people will have less money to spend.

Our industry will experience a longer exit from the crisis, even though our sector was among those most rapidly affected. We came to a very abrupt stop. Our industry has shut down operations dramatically. It will take time before people regain the confidence to travel, have the financial capacity to do so, and before companies resume their business meetings. Indeed, the complete shutdown of these meetings has destroyed us.

A sectoral approach will certainly be necessary since not all industries will recover in the same way and at the same speed.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

My colleague Mr. Fragiskatos has opened the door to the idea of using your residences as hospitals.

My colleague Andréanne Larouche, the Bloc Québécois critic for the status of women, has taken similar steps. We know that the number of cases of spousal violence is increasing, particularly because people are confined and in distress. My colleague has taken steps to ensure that the rooms currently available in hotels serve as shelters for women and families who are victims of violence. Because of health measures, residences for abused women are currently taking in fewer women. My colleague mentioned this option.

What do you think of this?

[Dany Thibault]

In terms of the safety of our employees, taking in people in need, such as women who are experiencing violence or who need to protect themselves, is certainly less risky than taking in someone with COVID-19. So it is a possibility. In our case, regardless of where the clientele comes from, if we can find a way to contribute, I don't see a problem with that.

However, aside from offering that, we must be able to provide support. In Montreal, there was talk about housing some of the homeless in hotels. We're not always against this idea, but we have to be able to support these people. Each clientele has its own needs.

We are hospitality specialists, meaning that we make people happy and keep them safe, but at the same time we know nothing, we hear nothing, we recognize no one and we have never seen anyone. Discretion is also part of our job. For us, it would be a good thing, but, again, we need guidance to meet the specific needs of these people.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

A few weeks ago, hotel owners said they were having trouble getting credit. In particular, some said they were being turned down for the Business Development Bank of Canada's first-ever loan program.

Has the situation changed? Do your members currently have access to government loan guarantee programs?

[Dany Thibault]

In terms of the small business loan program, yes, at the beginning everybody was caught off guard and reacted very strongly. Again today the Hotel Association of Canada has asked that we approach members of Parliament to find a way to facilitate access to the program, particularly with regard to the criteria.

The problem is, everything takes time because everyone's knocking on the door. Even today, a lot of people still need cash. Our industry entered a crisis at the end of the off-season, when liquidity ratios are lowest for the majority of operators. So this crisis could not have hit us at a worse time. We didn't choose it, and there's no telling when it's going to end. Even though criteria have been established, the lack of program speed and flexibility is making life a little difficult for us. It's not about accessibility, but about flexibility.

We can't set the standards today like we did yesterday. I think that's where there's work to be done.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both.

I'm turning to Mr. Julian, who will be followed by Mr. Cumming.

Peter.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks, Mr. Chair.

Thanks, to all the witnesses. We certainly hope that you and your families are safe and healthy.

My first questions are for Mr. Falconer.

Thank you so much for being on the line with us. We salute machinists across the country, your members. I am very sorry to hear that you have front-line members who are now impacted by the virus, who caught the virus in their workplace. We certainly hope that they get better soon. Please pass on what I know would be unanimous support from the committee that we are thinking of them.

I am shocked, Mr. Falconer, about your comment that there are employers not supplying protective equipment. You were referencing, I believe, the airline industry. My concern is whether there are measures and protocols for social distancing. Is there access to personal protective equipment? What measures need to be taken to protect your members? What do you need from the federal government?

You also flagged in your important testimony that you have members who will be unemployed but cannot access the emergency benefit. We've heard from other witnesses already today that there are many people who are excluded from this benefit. Would it not be more effective, as others have said, to provide a universal benefit, tax it back for those who don't need it, and speed up the benefits going to Canadians?

Those are my questions, to start.

[A voice]

It's less than what they would get on EI.

[Gord Falconer]

I will answer the first part.

I just want to emphasize that we have sat down with multiple employers to ask them to come up with a protocol for the front-line people. In some cases, for example for the screeners under CATSA, the employers are using what they call Health Canada's guideline. The problem is that Health Canada's guideline says that they do not need the specific masks, so the employer says, “Well, okay, we don't need to supply those masks”, which becomes a problem because there is conflicting information as to whether the person is at the front line or not.

The second piece, obviously, is that getting access to that equipment is also a major concern. The protocol we have put out for workers who are at the front line, if you think about someone in the screening.... Everybody in the room at some point or another has gone through the airport. When do you reach the screeners? They're the first person you'll run into when you're doing that. They do the pat-down. They do the screening component. Then you go to the gate.

The transportation minister said that the airlines are going to be responsible for doing that check. In fact, the screening officers are the first line before someone even gets to the gate, and they are the ones who do not have protective equipment. Protocol is obviously a concern for multiple levels.

On the issue of the benefits, I'll let Ivana—sorry?

[Peter Julian, NDP, New Westminster—Burnaby, BC]

No, go ahead.

[The Chair, Liberal, Wayne Easter]

Go ahead.

[Ivana Saula, Research Director for Canada, International Association of Machinists and Aerospace Workers in Canada]

The issue with the CERB.... I do understand that there are some workers out there who might not qualify for it, but the issue that we are raising and that we are hearing about from our members across Canada is that once they switch over to the CERB as of April 6, the benefit they will receive under CERB is less than what they would have been entitled to under EI regular benefits.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

My next two questions are for the machinists. There is what many people are calling the “courage bonus” for front-line workers, the bonuses that the federal government would endeavour to give to those workers who are on the front lines.

The other issue is the wage subsidy. What are other countries doing on the wage subsidy, in order to put in place what you specified public money should be used for, which means public money going to the workers, not for executive bonuses, dividend payments, share buy-backs and the like? What are other countries doing?

[Gord Falconer]

As I say, we are an international union. I got an email today indicating that defence companies are giving front-line people a $200 bonus each week because their jobs are essential services.

We have others in health care who are being compensated with a wage subsidy since, because they are at the front lines, they are actually having more expenses. Some of those individuals have to get hotel rooms because they cannot go home to their loved ones.

Some of what we are calling bonuses are needed for people who actually have more expenses. As Ivana indicated earlier, we do have a problem with some of the locations, in terms of a flat fee for people living in rural versus urban areas. People cannot afford to live in some of these areas. Some of our workers at the airports, who are making minimum wage, are still essential. In that context, we do talk about that.

On the wage subsidy issue, I will let Ivana speak.

[The Chair, Liberal, Wayne Easter]

Okay, Ivana, go ahead, fairly quickly.

[Ivana Saula]

Yes, sure. As Gord already mentioned, in terms of the wage subsidy we are very clear. The guidance we've given is clear, but it's not too restrictive in terms of giving room to the federal government to define what is beneficial for businesses as well.

For us it's very important that the subsidies that are paid out are really used to subsidize the wages of workers, but also that they allow employers who are not able to rehire their staff to put them back on the payroll, even if they are not back at work, working.

The tightening of the emergency wage subsidy could alleviate a lot of the pressure that is on the EI system now, both through regular benefits and through the CERB. Because the resources are finite, targeting help through the wage subsidy could help us spend our resources wisely at a time when they're significantly constrained.

Other than that, I think it's important to have fairly detailed reporting requirements for employers so that the money is used in the way it's intended. Far too often we have seen subsidies given to employers and being misused, and they hardly benefit communities.

We can perhaps target it for the aerospace industry, the shipbuilding industry, and air transportation as well—industries that we are now realizing are at the heart of the economy—and provide some flexibility, as Gord mentioned, for workers as well, and for employers to give the opportunity for workers to stay closer to the workplace so they are not going back home and possibly transmitting the virus.

Also, there's giving hazard pay to the front-line workers. That definition has been broadened during this pandemic. Our concept of what it means to be at the front line is significantly different. We do need to develop better protections, through wage subsidies as well, for workers.

I just want to add that, on the issue of PPE, because the definition of front-line workers has changed, it is incredibly important that for employers.... We refer to screening officers, because I think that's where we've seen possibly the worst abuses of health and safety legislation, and it is incredibly important for those people to be considered front-line, and for both employers and public health officials to understand that general health guidelines don’t work in specific cases —

[The Chair, Liberal, Wayne Easter]

We're going to have to end it there, Ivana. We are way, way over time.

We'll start the second round with Mr. Cumming, and then over to Ms. Koutrakis.

James.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you to all our witnesses.

I'll start my first line of questioning with Ms. Bamford.

I was very interested in your testimony as it relates to the policy initiatives. I think you characterized them as an attack on the resource industry and the competitiveness of manufacturing by driving up electricity costs and making those industries less competitive. It strikes me that one thing this country is blessed with is a lot of natural resources, and particularly now an abundance of energy resources at a low price. Would not now be the time, particularly when we get through this, to encourage investment in those sectors? I believe Canada should be able to have a strategic advantage.

[Jocelyn Bamford]

Absolutely. I'll just share with you that my November hydro bill was $55,000, and $35,500 of that was global adjustment. As you will recall, the global adjustment is what was paid to subsidize inefficient wind and solar. Some $10,000 was for delivery, and only $2,000 was the actual electricity cost.

I started to look around in North America and compare what my inputs would be if I moved my business to the United States. We do military parts, so they are always encouraging us to move down to the States. I am paying 28.2¢ a kilowatt hour all in. I would be paying between a low end of four cents and a high end of seven cents a kilowatt hour.

In addition, many, many manufacturers in Ontario produce parts and pieces for the resource sector. The manufacturing sector and the resource sector are so interconnected. We need competitive energy to be able to compete and run our plants efficiently. We are also a supplier to the resource industry. If you go down my street, Nugget Avenue in Scarborough, there are four of us that do parts and pieces for the resource sector. When you take out the resource sector, you also take out manufacturing.

We are so blessed in this country to have innovation and technology to make our resource sector, through innovation, the cleanest in the world. We could also export the resources, such as our liquefied natural gas, and help countries like China come off coal and thus reduce emissions and have a cleaner world. Why are we not exploring those opportunities?

There are are many, many companies that have innovative technology that allows the resource sector to work cleaner. Our company is one of those companies. Why are we not celebrating that and having that be the way to get through this terrible crisis? We need more tax dollars. We need more companies working, and we need more employees working. The way to do that is to tap into the resource sector projects that we have, or that we could have if we weren't tied up and prevented from doing so.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you so much for that. I couldn't agree more.

Mr. Cross, I'm thinking more of when we come out the other side of this. I know you're a big proponent of a private sector-driven economy and private sector investment. It strikes me that we have quite a list of projects that are sitting in regulatory approval. Would it not make sense to try to advance those projects and that private sector investment so that we can get the economy going after we get through this crisis?

[Philip Cross]

I think that, after this crisis ends, we should be using every and any tool we can to get economic growth going. I'm quite concerned, as the representative from the hotel industry said, that some sectors are going to recover very slowly. This has obviously been a big hit to the energy sector, to the restaurant industry, to hotels. It's going to take a long time to restore confidence. I would expect this is going to dampen growth for quite some time. We should be doing everything possible to encourage investment and growth wherever we can.

We don't have the luxury of picking and choosing if this sector is politically correct and that one isn't. In the short term, we've solved the problem of greenhouse gas emissions. Air travel and oil and gas production in this country are going to decline and are not going to recover for quite some time. We should stop worrying about that and start worrying about growth in whatever industries we can get to grow, because there's going to be an awful lot of income loss and debt dislocation to deal with, coming out of this crisis.

[The Chair, Liberal, Wayne Easter]

Thank you, all, on that round.

We'll go to Ms. Koutrakis, and then way out to you, Mr. Cooper, following Annie.

Go ahead, Annie.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

I have a question for Mr. Thibault, and then if I have enough time, one for Mr. Falconer.

Mr. Thibault, thank you very much for your contribution and your comments today.

In my riding there's a small hotel with 130 rooms that has already agreed to convert into a small hospital. I am very proud of that. I am also pleased that Mr. Legault, from the Quebec government, is still looking for another 3,000 to 4,000 rooms. I think this is a good opportunity to help COVID-19 patients, but also the other patients who are currently in the hospital.

I understand the importance of the hotel and tourism industry to my riding and to the rest of Canada and Quebec as a whole. I also recognize that this industry is one of the sectors most affected by COVID-19. Over the past few days, the federal government has announced a number of measures, including loans, wage subsidies and tax deferrals to help struggling businesses stay afloat during this crisis.

Can you tell us how your members have been able or plan to benefit from these measures to maintain their activities and their staff? Is there any way the government could provide more support to the hospitality and tourism sector?