Finance Committee on April 3rd, 2020

[Dany Thibault]

Thank you for your question. Indeed, we too must make our contribution as hotel operators. I congratulate the hotelier in your riding for doing that generously by offering his premises so people can be cared for.

To answer your question, the eligibility requirements and the program are still a bit hard to understand. In our industry, we've had to send a lot of people home and tell them we don't need them anymore because we don't have any customers.

According to the program, more than 90% of our people would be eligible, particularly with respect to the percentage of salary funding with a 30% loss of business income. Does that mean that I have to get all these people back to work, when I have nothing to give them because I don't have a client?

The flaw in the program is that I couldn't bring in the employees even if I wanted to. First of all, it will cost the government more money to fund employees for whom we do not have work. I need three, four or five employees at most to keep a big hotel open, because I have two, three, four or five guests a night. The problem with the program is, first, that it is hard to understand. Second, it cannot be applied across the board. I think it will have to take a different form for each industry. I understand that we cannot have a program that suits everyone, nor is it easy to have a program for each industry. We cannot choose as we please.

Indeed, the difficulty with the programs that have been put forward is often the interpretation of certain rules that could easily exclude someone for a technical reason. This is somewhat in the same vein as hoteliers who, as I said at the outset, are going to have booking cancellations when they are not operating because it is the off-season. In July, they will not have any reservations because no one is making reservations right now. Therefore, they will lose their reservations and income. This is where these programs, although proactive, need refinement and data that are easy to interpret and allow us to qualify easily without necessarily overtaxing the system while waiting for the recovery. That's why we're advocating an extension of the program, because when customers come back, we won't have immediate cash flow. We need to be able to take advantage of that kind of subsidy as we call back employees, not pay employees to do nothing, because right now we don't have a customer.

[Annie Koutrakis, Liberal, Vimy, QC]

I understand. Thank you for your comments.

Mr. Falconer, in addition to—

[The Chair, Liberal, Wayne Easter]

Go ahead, Annie, but be fairly quick.

[Annie Koutrakis, Liberal, Vimy, QC]

Okay. In addition to a number of measures supporting businesses of all sizes, such as loans, wage subsidies and tax deferrals, the federal government has taken steps to support the air transport industry specifically.

Can you comment on how the airline industry and its employees have benefited from the supports put in place by the federal response to COVID-19, and what more you think we can do to help support the air transport industry?

[Gord Falconer]

I can only say that we haven't seen the benefits yet in the airline industry. We haven't even seen the finished results of the layoffs yet because, and I say this in complete agreement with most people in the airline industry, it's a day-to-day issue. We are seeing things changing, hourly in some cases, in what happens.

What benefits are we seeing? We are seeing a lot of people getting let go. I can tell you that half of our membership has been let go at the airports, and we're trying to hold the pieces together. One of the things we talked about was the wage subsidy issue. It would be bringing people back to work, because the EI system can't handle it. I honestly believe that it cannot handle the numbers that are coming at us hourly, never mind daily.

[The Chair, Liberal, Wayne Easter]

We'll have to leave it there, folks, and turn to Mr. Cooper and then Ms. Dzerowicz.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you, Mr. Chair. I'll direct my questions to Mr. Cross.

Mr. Cross, in your March 24 column in the Financial Post, you noted the importance of offering direct aid to small businesses. The government has announced a 75% wage subsidy, but a subsidy for which the portal may not be set up for six weeks, meaning it could be almost two months before businesses see one cent of the wage subsidy. It would certainly seem to me that a business that can get by over the next two months isn't necessarily a business that is in desperate need of a wage subsidy, like so many business owners who are literally making the decision right now of whether to retain employees or lay them off—not in two months but today.

In that regard, do you have any comments on the wage subsidy program? Do you think it's the way to go? If so, is there a better way to get the dollars out? Dr. Mintz suggested perhaps going through the banks, or is it better to expand something like the business credit availability program or perhaps some other mechanism to get the dollars out to small businesses that desperately need those supports?

[Philip Cross]

As a general rule, using existing mechanisms always beats setting up a new program. For the six-week rollout for CERB, based on recent experience with the federal government, including the way it has failed to pay its own employees, it would be optimistic to say that it would be up and operational. Remember, too, that the federal government is largely operating from home now or remotely. It's going to be very difficult to set up a new program.

Using existing programs, or using existing channels such as banks, would prove to be a better way of getting much-needed help to businesses as fast as possible—and I'd underline “fast”. A lot of these small firms simply don't have the wherewithal to survive, sometimes not even a month.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you for that.

In the same article, you made reference to the United Kingdom. Are there any lessons that you see that we could learn from measures that have been taken by the Johnson government?

[Philip Cross]

No, I'm not going to extend my analysis to countries that I don't fully understand.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Okay.

I will now turn my questioning to Mr. Sobot or Ms. Bamford.

We've certainly seen businesses that are shutting down. We're also seeing another part of this downturn that will be less visible, namely the tens of thousands of businesses that won't be starting up in the coming months. Many entrepreneurs are obviously shelving start-up projects.

One of your recommendations was to provide for a 24-month capital gains exemption. Would you be able to elaborate on that in terms of encouraging investment and also to help see revival of the economy once we get through this very difficult period? How might that be beneficial?

[Veso Sobot]

Thank you so much for the question.

Essentially, there are a lot of assets that have been locked away in capital. The owners do not want to sell because of the capital gains hit they would take by selling it. Hence, the only time valuable assets that can contribute to the economy are sold is when the owner passes away. How much better it would be to provide an incentive for that churn of assets so that those apartment buildings that have been owned by the same man or woman for 50 years could be sold while the owner is still alive. That money then would churn the economy in a very big way. It would provide way more resources for the multiplier effect to help us get out of this crisis.

Back in the 1980s, if you recall, both the American and Canadian governments did this for a very short period of time. They provided a significant capital gains holiday, and our economies, in conjunction, had 5% GDP growth. It was astronomical.

It would only be a temporary measure, something for a short period of time in order to spur growth, spur activity, spur assets moving. I think it would be probably the best economic stimulus we could possibly do in a short order of time.

[Philip Cross]

This is Philip Cross.

Could I ask the chair's indulgence to make one last point?

[The Chair, Liberal, Wayne Easter]

Go ahead, Philip.

[Philip Cross]

Thank you.

In reply to Mr. Cooper's question about Britain, I must say I misunderstood it. I interpreted it as a follow-up to the nuts and bolts of getting money out, and I don't have any understanding of that in Britain.

I understand now that what he was referring to was how Boris Johnson, very much like the Trump administration and the Ford administration here in Ontario, was very proactive in going to business and not just asking, “What do you need?” It was, “How can you help? We in government are the ones that are having a lot of trouble delivering a good health care result to people. What can you do to help us?” I think that attitude especially is something that would be quite useful.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

Ms. Dzerowicz, you have five minutes. Then it will be Mr. Ste-Marie.

[Jocelyn Bamford]

It's Jocelyn Bamford. Can I just comment to build on what Mr. Cross said?

We had 3,000 initially, now 8,000, businesses put up their hands to say that they would assist with the COVID-19 response. We've only seen four or five POs. I have had, in our coalition, people who have said, yes, they'll make masks and they'll make gowns. As we are churning in the sink, what's happened is that the parts that supply that, the material, are being eaten up by other countries, because they are moving with alacrity and we are slowly moving forward to secure this stuff. It's not, "Can you make a respirator in three months?” It's, “Can you make a respirator in two weeks? Can you make a gown in two weeks?”

We are moving at the speed of government, but we need to be moving at the speed of business of the military, because when they do decide to give those contracts out to people, there are going to be no supplies to fill those contracts, and people are going to perish because of it. We need to move faster on this response with business and get people going, or our front-line workers are going to be in real trouble.

[The Chair, Liberal, Wayne Easter]

That wasn't Julie, was it? No?

[Jocelyn Bamford]

No, it's Jocelyn.

[The Chair, Liberal, Wayne Easter]

Okay, Julie, you're up.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thanks so much, Mr. Chair. No, that indeed was not me.

I just want to start off by saying thanks to all the presenters, everyone who has come today. I'm listening to not only the initial presentations but also the conversations. They've made me, even more than ever, appreciate the leadership of our federal government and what it has had to do over the last three weeks. It's been extraordinary. It's also made me appreciate even more fully the job we have ahead of us.

I will just recap what we've done over the last two and a half to three weeks. We've introduced the Canada emergency response benefit, which is going to be up and running and taking full applications beginning April 6, this upcoming Monday. We've introduced the largest, historically speaking, support program for Canadians ever, the Canada emergency wage subsidy, which our Minister of Finance has let us know he is hoping will be up and running in three weeks. I know that six weeks has been thrown around, but I know that our civil service is working 24-7 to try to get that up and running sooner. We've also introduced the Canada emergency business account, through which our small-businesses will be able to access $40,000 in interest-free loans.

I don't want to throw out an amount just in case I have forgotten the exact amount, but we've put money into our economy, into our banking sector, to ensure that we have stability in our economy and banking sector. Today we announced $100 million in initiatives for our shelters and for food security. We are providing support for our seniors through the United Way, making sure that Meals on Wheels continues, and providing additional support for those seniors in isolation; and we are providing additional dollars for Kids Help Phone.

It's quite extraordinary what we've been able to do, and yet I know that we have to do so much more and that it will take our very best ideas to craft a path moving forward. It's going to take all of us to ensure that we come out in a way that is going to make us stronger at the end.

So my question is a general one. Mr. Cooper started asking this, and I want to continue. Our Prime Minister is constantly saying that he is absolutely always in touch with G7 leaders. He also talks about being in touch with the G20 leaders. Of course he had a telephone meeting with all the premiers and territorial leaders last night. I think we're always looking for the best ideas.

Countries around the world are grappling with finding the best ways to provide additional supports. Is there any idea that the U.K., Singapore, South Korea, Taiwan or any other country in the world right now is adopting that you think maybe we should be looking at but haven't looked at?

I'll start with Mr. Thibault of the Association Hôtellerie Québec and then go through the other presenters. Has there been any idea introduced out there that we haven't thought of but that you think we should be adopting?

[Dany Thibault]

Everyone is looking for ideas. What has been proposed for us is twofold.

First of all, it's about finding ways to support companies so that they can start holding meetings again for clients on business trips. This could be done through an investment fund or something else, to create a bit of movement in business tourism.

In Quebec, for example, eyeglasses are reimbursed up to a maximum of $250. This is done in Quebec, but elsewhere as well. A similar measure could be considered, and this has been raised within our association. It would provide a reimbursement for citizens who take a leisure trip in Canada over the next 12 months, up to a given amount. That would stimulate demand and create jobs. It would be easily refundable through taxes and would have a direct impact in terms of stimulating the economy and creating jobs.

[The Chair, Liberal, Wayne Easter]

Julie, you can have one quick question.

[Julie Dzerowicz, Liberal, Davenport, ON]

I would maybe just ask if there's anyone else who wants to respond, because I thought that was very helpful. Is there anyone else who wants to put forward a particular idea that's being acted on elsewhere that we should be looking at here in Canada?