Finance Committee on April 8th, 2020

[The Chair, Liberal, Wayne Easter]

Chief Picard or Ms. Sioui.

[Chief Ghislain Picard]

I guess it goes back to what we stated earlier, which was supported by my colleague. Definitely, in terms of resources, we're very limited and it really touches on the needs of families, children and women. In a situation like the one we all face, our foundations are very vulnerable, as we said, and more specifically, women. In normal times, we already face a shortage in women's shelters, so it's even more important that we be afforded the resources to respond to those situations that many of our communities face. Not enough can be said on the limitations our leadership faces in these times.

I will ask Marjolaine to add to this.

[Marjolaine Sioui]

I would like to add that right now Quebec Native Women is working with the shelters. At the same time, there is an increase and we know the funding is certainly going to enhance what is being done right now. You also need to put into perspective that it is also taking care of the children. There is the whole issue with placement of children and all of that.

Of course, there are great things being done, but more needs to be done. We need to make sure that all of those women and children have a safe place to be right now.

[The Chair, Liberal, Wayne Easter]

With that, we are at the end of our time for our first panel.

I want to thank all the witnesses for coming forward. As you can see, it's certainly not the same process as when you're a witness in Ottawa, with all the technology we have there, but I want to thank you for your endurance and for the remarks that you put forward.

We will have a written record of what was said, and we can draw from that for our recommendations.

Mr. Chartrand, I've already sent a note up the line on the personal protective equipment. If you have anything more on that point, send it directly to me or the clerk. We'll put it up the line. That's an issue that needs to be addressed immediately.

With that, we'll adjourn this panel and go to the next one. Thank you one and all.

The meeting is suspended for a moment.

[The Chair, Liberal, Wayne Easter]

I will call this meeting officially to order.

As you know, the committee is operating pursuant to an order of reference of Tuesday, March 24. The committee is meeting to discuss the response to the COVID-19 pandemic, and we're very much interested in your presentations today and the effect on the tourism industry.

I will ask our seven witnesses to be quite tight in keeping their introductory presentations to five minutes so that we'll have time for members to raise questions.

Again, I remind people to mute their phones unless they're speaking. It really helps with the lines.

We will be starting with Mr.—

[Charlotte Bell, President and Chief Executive Officer, Tourism Industry Association of Canada]

Mr. Chair, I'm sorry, but I think you forgot me. It's Charlotte Bell with TIAC.

[The Chair, Liberal, Wayne Easter]

Okay. I don't have you on my list here, and you're supposed to be on it. Sorry.

Charlotte, go ahead. My apologies.

[Charlotte Bell]

No, that's okay. I just wanted to make sure you knew I was here. Can you hear me okay?

[The Chair, Liberal, Wayne Easter]

Okay, it's good. Thank you.

All right, we'll start with Mr. Hamel with the Alliance de l'industrie touristique du Québec. The floor is yours. Try to keep it to five minutes.

[Yan Hamel, Member of the Board of Directors, Alliance de l'industrie touristique du Québec]

Good afternoon. I'm the president and CEO of Croisières AML, Canada's largest cruise company. Since 65% of our 600,000 passengers come from outside Quebec, you can see that we're extremely affected by the current crisis. I'm also representing the Alliance de l'industrie touristique du Québec, a group of 14 regional and sectoral tourism associations. We represent 10,000 businesses and over 400,000 workers in the industry.

Mr. Chair, thank you for the opportunity to discuss our situation with you. I also want to acknowledge all the committee members and my other colleagues from Canadian tourism associations. Of course, I would have liked to speak with you under different circumstances. That said, I want to thank the Canadian government for actively listening to us. We're in constant contact with Ms. Joly and some other ministers, and we greatly appreciate it.

Tourism in Quebec is extremely important. It's the fifth largest export sector in Quebec. It generates nearly $16 billion in revenue, or 2.5% of our GDP. It involves 30,000 businesses and 402,000 workers. This amounts to one in ten workers in our province.

As you know very well, the tourism industry was the first industry affected by the pandemic. Unfortunately, it will be the last to recover. As a result, we'll need substantial government support for longer than Canada's other economic sectors. We acknowledge the government's efforts so far. These efforts have been made in a timely fashion and in response to our recommendations.

I want to draw your attention to two areas identified by the tourism industry as a whole. The first area is support for our workforce. We felt that this area was the most important. The social fabric of our society and our industry is primarily tied to our workforce. The workforce performs all the duties involved in welcoming tourists and ensuring that our industry runs properly. The Canada Emergency Wage Subsidy of 75% constitutes extremely well-targeted assistance that will really help our industry in these difficult times. However, the six weeks required to access this funding may be very long for some small businesses. We would have wanted this time frame reduced to help those businesses meet their cash flow needs.

It should also be noted that Quebec's tourism model is closely linked to the seasons. In Quebec, the peak tourist season is the summer. We would have preferred some flexibility in the definition of lost revenue for the period in question, from March to May. We would have wanted the definition to include revenue lost as a result of deposits for passes and the decrease in bookings. This would give most of our tourism businesses a much better chance of qualifying for financial assistance.

I now want to address our most important request concerning the workforce. It will take our businesses several months, even several years, to get back up to cruising speed, or in other words, to restore their client base and economic performance. Therefore, we want this 75% wage subsidy formula for our tourism industry implemented for at least 12 months, or when the loss of revenue is between 0% and 14% per month.

This aspect is critical to ensuring that we can hold on to our good workforce and keep our workers on the labour market. Businesses can then maintain their key human resource base so that they're able to handle the recovery.

I won't go into all the details, but we're asking for another very important measure. We want the government to better adapt the work-sharing program to the current seasonal nature of our tourism industry. The program should be extended to our seasonal employees and should provide the flexibility to create versatile work units with complementary skills. As a result, an employee could perform different duties in the business. We have different options to propose. We want the age requirement for businesses lowered from two years to one year so that, during this recovery process, younger and innovative businesses can access the program.

Once the situation of our employees has been resolved, another important point remains: support for tourism businesses' cash flow. Businesses depend heavily on cash flow to operate.

Since the impact of the pandemic will last a few years rather than a few months, we need fees waived, not deferred. We really need support from the federal government with respect to rental rates, fees for the use of government infrastructure, regulatory relief, the extension of certain permits, and so on. This measure will be very important.

We understand the principle of flattening the curve. However, like Austria, the Canadian government must be able to provide a projected recovery scenario and a timetable in reverse for lifting the measures implemented.

In particular, as you know, our industry depends largely on bringing people together. The number of people who gather together and social distancing will significantly affect the future of our industry. For example, the occupancy rate following the measures imposed—

[The Chair, Liberal, Wayne Easter]

We'll have to try to finish up—

[Yan Hamel]

—requires us to have some—

[The Chair, Liberal, Wayne Easter]

Thank you very much.

We'll turn to the Hotel Association of Canada and Ms. Grynol.

[Susie Grynol, President and Chief Executive Officer, Hotel Association of Canada]

Thank you, Mr. Chair.

The hotel industry in Canada has been decimated by the COVID-19 crisis. We were hit early, and we have been hit hard. In a 48-hour period, our occupancy dropped by 80%. In the weeks that followed, we laid off 80% of our workforce, representing more than 250,000 workers.

Most hotels in Canada today are closed. The ones that remain open are doing so for humanitarian purposes, serving as shelters, as safe places to self-isolate, as quarantine facilities for public health, and as a refuge for front-line and essential service workers. Some hotels in specific regions are preparing to serve as overflow for hospitals as the pandemic worsens.

The majority of our hotels in Canada are owned by small businesses in the community, despite the fact that their property might carry a recognizable brand name. In fact, 60% of the industry does not carry a brand at all. They are small, independent mom-and-pop operators whose businesses are severely at risk.

We commend the Government of Canada for its determination, speed, innovation and boldness in the implementation of the economic measures announced to date. We are here to help the government expedite and maximize the impacts of these programs, and I would like to provide feedback on the gaps and challenges we have experienced.

Our immediate need is liquidity. The government's small and medium-sized business loan and guarantee program is critical, but there are three main problems with its design.

Problem number one is that the systems are being overloaded, and it is very difficult to get access. Our solution is to create a priority structure so that the most vulnerable businesses get access first. This could be achieved by giving priority to those businesses that have experienced the same 30% revenue drop—the approach that's being used in the wage subsidy program—or it could even be as high as a 50% drop.

Problem number two is that when we do get through to the banks, our members are being denied because of the risk, yet we are the sector that needs the loans the most. As our solution, we recommend a full government guarantee for loans to those businesses that were hardest hit and were otherwise solvent before COVID-19.

Problem number three is that the definition of a medium-sized business fails to account for varied ownership structures, which are commonplace in our industry. For example, if a community owner of a hotel has multiple franchises, the loan has to be split among these properties, but if the owner had set up a different corporation for each hotel, each property would qualify for the loan. Our solution is to treat each hotel as a separate business, as has been done in the U.S. for the hospitality and food service sectors to address this very issue.

The wage subsidy program was welcomed with open arms. It will be a lifeline for many hoteliers, and we're delighted to learn that Minister Morneau, just an hour ago, announced that the government will be covering the additional costs of CPP and EI, etc. Our recommendation is to extend the duration of the wage subsidy for businesses that will take longer to recover. The extension could be, for example, until revenue losses are below 30%. This will expedite the rehiring of staff.

Let me leave you with one new idea that would be easy to administer, not add a nickel of government debt and carry negligible risk.

Last year, our members were profitable, and we paid corporate income tax. When our members file their corporate tax returns this year, they will be claiming heavy losses and will carry these losses back to generate a refund of previous taxes paid. The Government of Canada could expedite this process by letting us file a loss carryback today, rather than waiting until corporate year-end and the time to prepare financial statements and file tax returns. An attestation could be provided on a single sheet of paper and be implemented in a matter of weeks, if not days. This would get much-needed liquidity into the hands of those who need it most.

In looking ahead, to stand this industry back up, we will need stimulus measures, as we did with SARS, to encourage business and other travel. We look forward to those discussions when we can see light at the end of this tunnel.

I want to thank you for your time today.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Grynol. Thank you for the suggestions.

We'll turn to Mr. Keith Henry with the Indigenous Tourism Association of Canada. Go ahead, Mr. Henry.

[Keith Henry, President and Chief Executive Officer, Indigenous Tourism Association of Canada]

Thank you for the opportunity. I'm just going to launch into this.

We've been analyzing the impacts of COVID-19 and, like my predecessors, we're also seeing significant devastation of our industry as it stands today. Indigenous tourism in 2019 had roughly 1,900 businesses spread through every province and territory. We provided employment for roughly 40,000 people, some of whom were non-indigenous people working in our businesses, and they came in a variety of shapes and sizes.

What we're seeing right now I would like to categorize into three key themes.

First, the current economic stimulus is to flow through the traditional networks of Export Development Canada, the Business Development Bank of Canada, organizations like the regional development agencies and major banks. However, there continue to remain challenges to support for our indigenous tourism small businesses through any of these networks, and we believe that right now, while the best of intentions have been made and we think the ideas are correct, the delivery model needs to be adjusted to ensure that indigenous tourism businesses, which are some of the most vulnerable and at risk within the tourism sector, are somehow protected so that we can rebuild after COVID-19.

There are six major themes we're seeing across Canada with our indigenous business network, and I want to stress that it's important that the committee appreciate that there's been a lot of mix-up between what's community and what's industry. We have a robust industry that's been evolving. Canada has become one of the world leaders in indigenous tourism, and has done so especially over the last five years. Indigenous tourism has grown by almost half a billion dollars in direct sales and GDP during that time.

The first of the six themes that we're seeing right now is that there's a detrimental impact on indigenous tourism operators. We've literally gone from a very promising 2020 season to almost zero. We know that going into April, May, June, July, August, September, October—which is the height of the business season for most of our tourism businesses—we have gone from many bookings to complete zero, so the 1,900 businesses are seeing significant challenges. A lot are small operators doing outdoor adventure and other sorts of cultural experiences. That's going to mean absolute devastation to those small businesses.

The second theme we're seeing across the country is that the loan programming structures are not effective. Most of our indigenous businesses do not access capital through traditional banks. Some of the larger members of our industry will do that, and some of the hotels and casinos and so forth might have more access, but a lot of our small mom-and-pop businesses don't work with major banks, EDC or BDC. They work with the aboriginal financial institutions, and there's been no commitment publicly of stimulus funding into that network yet.

The third theme that we're hearing from across our sector is that there is a lot of confusion with the information that's out there. As we see every day, the programs are being adjusted on the fly, which I think everyone appreciates, but it becomes very confusing for our indigenous tourism businesses, and they don't identify those networks, as I said in speaking about the second theme.

The fourth key theme is that indigenous tourism is still in development. While we have 1,900 businesses, it's fair to say that 800 to 1,000 of them have been developed over the last five to seven years, and many of them are not showing profit-and-loss statements in a way that would get traditional bank financing. No matter what the accommodations are in the economic measures that have been provided through the various programs, ultimately you have to be a viable business, and that's a major concern. Most of our businesses are still in development. They are bringing in more and more paying customers, but they're still very vulnerable to market conditions, and we feel this will completely bankrupt at least 500 to 600 businesses if nothing is done in a very short period.

The fifth theme is that there are challenges with eligibility and the potential for accessing these funds. It just kind of speaks to that same theme. We're seeing significant efforts already by businesses trying to be in contact with Export Development Canada, with the Business Development Bank of Canada and with banks, and they have already been declined. Despite the fact that there have been $40,000 emergency investments, these things certainly are not being translated into approvals, because the system is overloaded with many other sectors, and the banks are typically looking to support the businesses that they can see very clearly are economically viable, when, as I said previously, many of our businesses are still in development.

The sixth theme I would like to touch on is that we've built indigenous tourism with a lot of trust among our indigenous networks. We have a national organization that I represent. Many provincial and territorial partners have been established in every province and territory. One of the reasons was to make sure we had a coordinated effort to build indigenous tourism in this country, and I think it's really important that the solutions that are moving forward build on these existing indigenous networks with an indigenous solution.

Finally, what we are saying as an industry is that we are first of all pushing to invest at least $25,000 in 640 businesses in the short term, in what we're calling a stimulus development grant. We've launched an intake of that. We've already had several million dollars in applications. We have some existing program resources that we are investing to help these businesses with short-term cash needs. This has certainly been a huge initial perceived benefit or relief to our sector. There's been no stimulus identified to support this directly yet.

Second, we're recommending that a stimulus resource like BCAP, an indigenous BCAP of $557 million, be created, and that it flow through essentially the indigenous network. We see three conditions critical to this.

One is for indigenous tourism businesses to be incentivized with a forgiveness amount if the loans are repaid over the proper amortization. We need to defer initial payments until September 1, 2021, because we know 2020 will be a loss leader. It's especially difficult for our businesses, so we need to help them rebuild and keep their businesses moving forward so we can recover appropriately after COVID-19.

As well, if there are stimulus resources redirected through the aboriginal financial institutions network, we must make sure that they're provided at a competitive and equitable commercial rate. There are roughly 60 aboriginal financial institutions in the National Aboriginal Capital Corporations Association, and they often give high-interest loans because they're high-risk. Although our businesses may be high-risk, as many tourism businesses may be for some time to come after COVID-19, we need to make sure that those rates are competitive to save our businesses.

Third, because of the significant apprehension by indigenous businesses about securing loans through the major banks, EDC or BDC, given the lack of equitable access over the past years, we must stress our strong belief that we have to move forward with the aboriginal financial institutions as the longer-term recovery efforts for indigenous tourism in this country.

I just want to finish with—

[The Chair, Liberal, Wayne Easter]

Okay—

[Keith Henry]

Okay. Thanks a lot.

[The Chair, Liberal, Wayne Easter]

I hate to cut you off, Keith.

We will turn now to Northwest Territories Tourism and Ms. Bolstad, the CEO. Please go ahead.

[Cathie Bolstad, Chief Executive Officer, Northwest Territories Tourism]

Good afternoon. Thank you, Mr. Chair and the committee, for inviting Northwest Territories Tourism to be part of this really important conversation, and also for the rapid response that's been taken to help Canadians weather what is an unprecedented health and economic storm.

I just want to start by giving you a little of the Northwest Territories context, because I think that will help serve my comments and feedback on some of the federal programs.

In 2019, the Northwest Territories welcomed 120,000 visitors, and we had $210 million directly injected into our economy. While those numbers sound small relative to some of the larger centres in Canada as a whole, we've seen a 42% growth in our tourism industry over the past five years. In 2015, Stats Canada said there was about one in 14 jobs—there are 3,000 jobs in the Northwest Territories—with a 42% growth, so there are a lot more people in the Northwest Territories working in this industry and relying on it for their livelihoods.

We have a very unique visitor profile, because the bulk of our visitation actually comes in two very distinct periods: summer, like many Canadian destinations, for a variety of outdoor adventure and experiences; and more importantly, fall and winter for aurora tourism. Summer visitation for the Northwest Territories actually comes primarily from North America, and summer is when those travels go into the regions where we have small communities that are road-accessible. It's really those small indigenous communities that are going to feel the pinch when our summer tourism is immobilized by COVID-19. The summer season for us is actually much shorter than the summer season when you think about other jurisdictions in Canada, because many of our small operators have an eight- to 10-week window in which to capture the revenue that sustains their businesses.

The aurora season actually relies on international visitation from Japan, South Korea and China. China is 17% of total visitors to our territory annually as of last year.

As you can imagine, with our winter visitation profile as I've just outlined, it means the impact of COVID-19 hit us hard and hit us fast, similar to what you heard from Susie. It hit our territory early in the process, because it came in our peak aurora season. It started late in January, escalated into February and hit full form in March, when the territory was shut down to visitation. Tour operators, hotels, restaurants, airlines and retailers saw business grind to an absolute halt in March, when it's normally their peak winter season. For two of our largest hotels in the capital city, which underpin our industry’s success across the territory, their combined private sector investments of close to $60 million over the last few years, which rely on visitation revenues for capital repayment, are now at risk and they are struggling.

The Government of the Northwest Territories recently conducted an industry survey to determine the impacts of COVID-19. The survey closed at the end of March. I want to share with the committee that 77% of those surveyed had already closed temporarily, 36% had laid off or terminated employees, 30% had reduced their services to cut costs, 27% had reduced staff hours and 3% already said they had closed permanently. More than 300 people—again a small number in a big field, but big for here—had already lost their jobs. This impact has primarily been felt in the capital city, but those effects are now being felt in the smaller regional communities and we're hearing loud and clear from them.

Hunting, fishing, paddling and outdoor adventure companies are experiencing cancellations and demands for returns on their deposits from their customers. Many of these small companies operate only in summer, and they've used their customer deposits already to bring their supplies to remote camps or to make investments in capital upgrades so that they are ready to host these visitors, and these visitors are no longer coming in this short season.

What we’re hearing from our members is that many are struggling to find federal help that fits the size or the nature of their business, which is seasonal.

For many of the small seasonal tourism businesses, the Canada emergency wage subsidy is not going to apply. For summer operators, employers will not see at least 30% of their revenue drop until the season is over. Their immediate challenge is ensuring they actually have enough cash to keep their operations afloat. Without better support to really ensure liquidity, we're worried that these businesses aren't going to survive to see the end of this pandemic.

Other options for liquidity, such as the Canada emergency business account, require organizations to demonstrate they've paid between $50,000 and $1 million in payroll by 2019. What we're hearing from our tourism operations is that they're all small companies and many of the owners are not actually on the payroll, so they're not going to be able to meet these thresholds.

The government's move to support income via the Canada emergency response benefit is a positive step, and we're hearing that, but the industry needs employment benefits for sole proprietors. We're hearing from business owners here that they're confused about their eligibility and they're not sure how to apply. They need to know who to talk to in the Northwest Territories to get the clarification they need, and they can't find their way.

Measures like work sharing are incredibly important for some businesses to maintain employees when there isn't enough work, but most of our members say there's no business at all now and that's making this option not one for them.

The business credit availability program has also created confusion regarding access for our industry members. Financial institutions aren't available in many of our communities, and even when they are, they often don't have the information on the program to help our businesses figure out if they qualify. Some industry members who own their own properties have said that they have secured the mortgage deferral and it's a help, but those who are renters have to negotiate with property managers with no financial supports available at this time at the federal level. These businesses are asking for some sort of aid for the overhead costs they must incur to keep their business afloat until they see revenue streams begin to flow again.

I hope I've painted a picture that the Northwest Territories is really reliant on a number of things in tourism. Underneath all of that is a network of small airlines that move people and cargo into and throughout the Northwest Territories. We've seen the ground lease rents for airport authorities waived, and this is positive, but currently airlines and airline schedules have been reduced or cancelled altogether, and the situation for these little businesses is quite extreme. Just yesterday I had a small airline member call and advise me that, although it's short, the summer tourism season sustains their winter operations, which serve the residents. Small airlines are flying essential cargo, they're flying food to our communities and they are also the connection to the health care services offered in larger centres. We don't see right now, in any of the financial options available, programs that will bring relief to these small airlines that are the lifelines of our communities.

These are some examples of what we've heard from our members of the Northwest Territories tourism industry and their views on the federal programs announced to date. While I know I have focused mainly on gaps and what needs to be addressed to help the Northwest Territories' situation, I do want to say and I feel it's important to say, that Canada's response has been rapid in the face of an unprecedented situation. Your invitation made to me today underscores Canada's commitment to ensuring that the NWT and the north doesn't fall through the cracks. It gives me great confidence that the federal government is looking to ensure that all Canadians come out of this crisis strong, together.

Thank you for your time today and for your work on behalf of all Canadians.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Cathie. You certainly outlined the complexity of tourism across the country and the different circumstances we all face. Thank you for that.

Turning to Tourism HR Canada, we have Mr. Mondor.

[Philip Mondor, President and Chief Executive Officer, Tourism HR Canada]

Thank you so much, Mr. Chair, and good afternoon to the committee.

Tourism HR Canada's mandate is focused on building an inclusive and resilient workforce, so I will focus strictly on the workforce matters. There are 750,000 jobs directly attributed to revenues derived from tourists and this accounts for 2% of GDP. These jobs would not exist if it were not for the visitor economy. Many tourism businesses receive significant revenues from local residents, which support additional employment. When we measure everyone working in tourism, we employ 1.8 million Canadians. That's roughly 10% of the labour market. When we consider all economic activity and tourism industries, we contribute 5.1% to Canada's GDP.

Three weeks ago we did the first forecasting on job losses due to COVID. In the short term, we estimated losses as high as 770,000 jobs, based on a metric of 70% revenue loss. If you look at the moratorium on hiring students or casual labour for the sector during the peak season, it's another 215,000 to 230,000 who will not get tourism jobs. Normally there's an increase in hours for permanent staff and these, too, will not be realized.

Current evidence suggests that job losses are at the higher end of our projections. Restaurants Canada estimated that 1.2 million will lose jobs in the food services sector. Only two weeks ago they reported that, and already 800,000 have lost their work. We heard from Susie earlier about the Hotel Association of Canada's estimated 250,000 job losses, 153,000 of which are in Ontario and Quebec alone.

The measurement metrics are different on these different projections—different time frames, different scenarios—but the story is the same. It's on a very large scale. It's across Canada. It's in every corner of Canada and it's affecting more than 10% of the labour market. New data from the Conference Board this week is suggesting that 2.8 million jobs will be lost in the economy in March and April alone. If you look at what's attributed to tourism, the losses account for 840,000 jobs in the same window of time, which is slightly higher than what our original projections were. The longer the disruption, the greater the job loss will be.

The job losses were immediate and companies faced liquidity issues, especially since the shock was immediate. Most of these job losses were hourly wage earners and it impacted all five industries that make up the sector, with the food and beverage and accommodation sectors being most impacted. With the recent announcement on wage subsidies and the ongoing adjustments to CERB, we can expect that there will be some job recovery, but employers tell us that lag and uncertainty about recovery time means that employers are also encouraging workers to seek the benefit while they try to stabilize.

Now we need to get businesses focused on workforce recovery initiatives, which is hard to do while they're still grappling with liquidity, but this will be a growing concern. Recovery is dependent on the ability of companies to quickly gear up and adjust to the new reality. It's about skills, first and foremost ones that help employers retool and train to focus on the Canadian domestic market, on how to rebuild financial reserves, on how to develop new business models and low overhead and increased margins, on staff that are more versatile and so on.

The bottom line...? Investment and training in retention programs is essential. When you look at research done on other recovery models, bar none, investment in training at this stage of these pandemic-type issues resulted in the highest return on investment when it came to recovery. It's a new business environment and one that requires improved resilience to fare future disruptions. People need to be retrained or upskilled to be prepared.

The wage subsidy program that was announced and the changes that were made to it over time, the flexibility, has made a huge difference. There's no question. People are much appreciative of what the government has done. Speaking strictly from a workforce or labour perspective, I just want to encourage the Government of Canada to act soon on funding to support training and to help businesses retool so that they can successfully recover.

The pre-election budget last year mentioned $1.7 billion over five years to create a tax credit and pay for dedicated time off for workers to take skills training. Perhaps this is worth revisiting.

As a final note, due to the economic impact on people's discretionary spending, the Conference Board, in a project with us, indicates that it does not expect spending on recreation or culture to return to normal until 2021, and that consumer spending on accommodation, food and services will not return until December 2021 or early 2022. All of this suggests that there will be a volatile and unstable labour market for well over a year, and it's time for us to also think about the employee side of this equation.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Philip.

The lost, on my part, has been found.

Charlotte Bell with the Tourism Industry Association of Canada, you're up next.

[Charlotte Bell]

Thanks so much.

First and foremost, thank you for the extraordinary speed with which government has put measures in place to address this crisis. Our thanks extend to the many women and men within government at all levels working towards solutions.

Parliament was never designed to deal with an all-encompassing crisis of this magnitude, but only Parliament can take the bold steps needed to address the situation.

TIAC represents the entire sector of the travel economy. We support our industry in its entirety, those who are on this panel and those who are not.

The travel economy is the proverbial canary in the coal mine. We were the first to experience extreme, severe and immediate impacts. The situation is dire. Many businesses are closed. Many will never reopen. SMEs and seasonal businesses, including indigenous tourism and outfitters, have not yet opened for the high season and will likely lose their entire year's revenues. Festivals, sporting events, conferences and other venues where people gather are cancelled. Countless attractions people flock to year after year are closed. Second-language international students won't be coming.

We're calling on government to take bold measures to provide sector-specific relief to those hit hardest. Other countries have stepped up to support their travel economies. This industry is an economic driver for communities across the country that depend on it for jobs and economic growth. Without it, the impact on local economies will be disastrous.

The timing of this pandemic is all the more catastrophic for our sector. Unlike other businesses, tourism garners the bulk of its revenues during the high season between May and September. We need the right relief measures immediately accessible so that businesses can stay afloat.

We appreciate the programs announced so far—we asked for most of them—but there are significant gaps in the eligibility criteria and design. It's a work in progress, so I'm going to focus on three.

The wage subsidy is a great idea but it is not designed, necessarily, to address our industry's needs. Most businesses cannot access it. They've laid off a lot of their staff. You cannot show 30% or even 15% revenue loss in March and April when you open only in May. Some likely won't open until much later, if at all. If businesses are already closed, this measure won't help. Many businesses are owner-operated. If they can't get support, they won't be able to hire staff in the first place because they'll be out of business. Right now owners don't qualify for that particular initiative.

The Canada emergency business account, the $40,000 loan program, is also not accessible to many tourism operators, as many small rural and seasonal businesses don't meet the minimum $50,000 payroll criterion. The business credit availability program is designed to provide an operating line of credit as a one-year term loan of up to $5 million. Again, for many tourism businesses that depend on the summer for their entire annual revenues, this is just one more debt they can't possibly repay within a year's time.

One thing the industry needs is liquidity to meet expenses so businesses can reopen when this crisis is over. For many operators, that may mean next year, after losing their entire year's revenue. This is why we ask that you consider some fine-tuning under the small and medium-sized enterprise loan and guarantee program that would address the industry's top concern, which is liquidity.

We believe these changes would help solve the current problems tourism businesses face when trying to access the BCAP. With full government backing for loans of up to $6.25 million processed through chartered banks and credit unions rather than BDC, you could establish a forgivable portion of these loans for amounts paid for fixed costs—like wages, rent, mortgage, insurance, utilities—for a period until revenue reaches normal monthly activity.

A number of other countries have put specific tourism packages in place, recognizing the contributions the sector makes to overall economies and jobs, as well as understanding that many businesses garner most, if not all, of their revenues over a short period of time. Other countries have turned their attention to recovery, also, specifically designed to support tourism. We urge the federal government to find solutions that will address the particular needs of this sector. We must develop a robust recovery plan very soon so we can bounce back when the crisis is over.

Tourism has been an economic driver and job creator for this country, with one in 10 jobs from this sector and contributions to the Canadian economy of $102 billion. When this is over, we'll be competing with countries that are ahead of us in terms of relief programs and recovery planning.

We need to be ready to go, because tourism can and will contribute significantly to the recovery of the Canadian economy when this is over.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Charlotte.

Before I turn to Unite Here Canada, I just want to give you a heads-up that when we start the round of questioning, Blake Richards will be first.

I hope you're on the line, Blake. You're on my question list here. Then we have Sean Fraser, Mr. Ste-Marie and Mr. Julian.

We now turn to Ms. Travis with Unite Here Canada. The floor is yours.