Finance Committee on May 1st, 2020

[Natalie Drolet]

Yes. In order to renew a work permit, a worker has to have all of their ducks in a row. They have to have a new job offer, a new employment contract and a new labour market impact assessment from the employer. There are some workers who are on implied status waiting to change jobs. There are also workers who were on implied status waiting to change jobs, and their employers, who were hoping to hire them, have told them the jobs are no longer available. We're seeing that, of course, in the restaurant sector and the tourism sector.

These workers who were not able to submit the applications to renew their work permits or who have done so but lost the offer of employment are also stuck.

[Julie Dzerowicz, Liberal, Davenport, ON]

I'm going to stay on this topic, but I'm going to pivot over to Mr. Gilroy of the Canadian Horticultural Council.

Mr. Gilroy, you mentioned that many farmers will get only a portion of the labour they need. My understanding is there were planeloads of migrants who were brought in to help support farmers. Is it that we didn't bring in enough? That's one. Two, was this a labour issue we had before the pandemic that's exacerbated now? Then, three, I'm assuming there haven't been layoffs on farms—to Ms. Drolet's comment about migrant workers—just because I'm assuming they're much needed. Could you respond to that? It seems like, on the one hand, we have some labour, but, in other areas, we don't.

[Brian Gilroy]

You're absolutely right. Some sectors of agriculture, floriculture for example, have been hit dramatically hard, and some of those workers have transferred to other farming operations. To the best of my knowledge, anybody who has come into the country to work in agriculture, if that position needed to be closed, another job has been found for them.

As for the percentage, just recently I saw some information that 85% of the workers who would normally arrive at this time have arrived, but some growers haven't received any of their workers. There are processing challenges that have made it extremely difficult. I know that in Quebec they use a lot of Guatemalan workers. I believe flights are just starting now, and workers had hoped to be in the fields a few weeks ago. The challenge is great.

[The Chair, Liberal, Wayne Easter]

Thank you all on that point. For Julie's information, we had a lot of workers from Jamaica turned back by a decision of the New Brunswick premier this week, which puts New Brunswick in a bad position.

We'll turn to Mr. Morantz and on to Mr. Fragiskatos, and then to Ms. May.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair.

My questions will be for Councillor Gillingham, chair of finance with the City of Winnipeg, a position I once held. For disclosure, I know Councillor Gillingham very well, and he's doing excellent work at the City of Winnipeg.

Councillor Gillingham, you mentioned in your presentation that you took the responsible path by asking corporate finance to implement a crisis cash flow management plan. You started off by talking about the first year, but I'm wondering if you can elaborate on the rest of the plan in terms of dealing with the cash flow crisis.

[Scott Gillingham]

Yes. There are three tiers in the cash flow management plan. In the first tier, we have already pulled a series of levers, including reducing discretionary spending. I mentioned the temporary layoff, unfortunately, of 675 community services staff and 250 transit staff. We've also implemented a freeze on the acquisition of fleet. We're looking at a hiring freeze for the remainder of the year as well.

We're about to pull other levers soon, if necessary, and that's replacing our cash-to-capital funding with other financing, perhaps transferring unallocated equity from our land operating reserve. One of the other things we're looking at is the possibility of advancing our planned debenture issuance timing, which we're looking at probably doing in the fall. We may move that up if necessary, but if we wanted to do it right now, the markets are not open.

Then there are levels two and three, those other tiers, and that gets into extending our line of credit and some other measures, which would possibly look at more reductions of service across the board.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you very much.

I know that just before the crisis hit you had been working on getting the first-ever multi-year balanced budget plan passed, and it just passed before the crisis hit. I'm wondering if you can talk about how that has positioned the city to weather the storm better than most.

[Scott Gillingham]

Yes, Winnipeg did adopt our first-ever multi-year balanced budget this year, when we balanced four operating years. Up to that point, we had only balanced our budgets on an annual basis. Of course, municipalities are required by legislation to balance their budgets; we cannot run deficits, so we followed what several other Canadian cities have done in balancing multiple years.

To your point, Mr. Morantz, I believe that this has really positioned the city to weather the financial storm of the pandemic much better. Had we not done the difficult work of balancing several operating years, not only would the city of Winnipeg be facing the crisis in our cash right now in the impact of the pandemic, but we'd also be staring down a $120-million deficit for 2021 that we would have to balance.

I think the timing has been somewhere between fortuitous and prescient to have this multi-year balanced budget, and it puts us in a much better position to effectively manage the crisis we're facing.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you for that.

I want to touch on one additional point. Contrary to what my colleague Mr. Sorbara said on the $180-billion ICIP, that program is riddled with problems. In fact, Parliament voted a couple of months ago to have the Auditor General audit the whole program, because the Parliamentary Budget Officer asked for information on it, and no information was available to him.

My recollection is that the last major.... Remember, major capital projects are going to be fundamental to helping cities and Canadians come out of this crisis. The last major capital projects funded in Winnipeg, there were two of them, both funded before the Liberal government took power in 2015. I'm wondering where the missing $180 billion actually is, because there hasn't been a single major intergenerational capital project announced in Winnipeg since 2015. That's five years, so I'm wondering if you can comment on your frustrations in accessing federal infrastructure dollars.

[Scott Gillingham]

I did mention that one of the things the federal government could do is to assist in expediting the money and, speaking very plainly, getting it out the door and into the ground at the municipal level. You mentioned two major projects that did come on stream: bus rapid transit in Winnipeg and the Waverley underpass, both under the previous government.

Under the current federal government, an accelerated regional roads program has been announced, which we are much appreciative of, with federal, provincial and city governments all participating in that funding. That's been very important, and that's running right now as well.

Right now we have two.... We have an application in on the ICIP program for four projects within the city of Winnipeg. The bulk of them are related to a north end sewage treatment plant that has been upgraded to meet provincial licensing requirements, so we obviously hope for assistance and funding partnerships from both the federal and provincial government. I repeat that we need to see those monies flow from those programs much more quickly.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

[Inaudible—Editor]

[The Chair, Liberal, Wayne Easter]

We'll have to end there. Sorry, Marty.

You have five minutes, Peter.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Mr. Chair, if Mr. Morantz is worried about infrastructure spending in Canada, I would just direct him to the testimony given by former Conservative MP Ed Holder, now the Mayor of London, Ontario. As you know, he spoke quite eloquently to our committee about infrastructure spending and how it's benefited London, Ontario...certainly want to see infrastructure utilized by the government, going forward, as we engage in the economic rebuilds. At some point, I would like to compare this government's record since 2015 on infrastructure and programs actually completed with the Harper government's record on infrastructure projects completed. Those numbers exist. The gap is enormous. Mr. Morantz and all the Conservative members on the committee can consult the record on that.

However, I digress. I do want to focus on COVID-19 and direct some questions to Mr. MacDonald and the not-for-profit and charities sector.

Thank you very much for the work that Imagine Canada is doing, Mr. MacDonald. We have Pillar Nonprofit Network in London, Ontario, as you know, with its executive director, Michelle Baldwin, and not to mention countless charities and not-for-profits in the city of London. You said something that was quite poignant, I think, when you asked all of us to imagine what our communities would look like without not-for-profits and without charity organizations. I certainly do not want to imagine my city without charities and not-for-profits. They do fill important services. They carry out vital services that government simply isn't capable of carrying out.

With that said, I do want to ask you about the figures you presented. My understanding is that you're asking for around $10 billion. You gave us a projection of between $9.5 billion and $16 billion as the projected loss over six months. Is that correct?

[Bruce MacDonald]

That's for 2020 revenues.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Okay. So you're asking for in and around $10 billion. I'm just seeking clarification on how that figure was arrived at. More to the point, how exactly would those funds be distributed? What exactly would those funds go toward? How would they be spent?

[Bruce MacDonald]

In terms of how the figures were calculated, together with a private sector volunteer, our chief economist sat down and took a look at total revenues for the sector in previous years and then started to assign some assumptions based on the revenue lines that this sector sees. Then we tested those assumptions with charity leaders. We know right now that special events revenue is almost gone by 100%. Those with events in March, April, May and even into June have had to cancel them. Those revenues are gone, and in many cases the organizations also had to pay for the costs.

This was done methodologically. We're happy to send the calculations for that. They provided a pretty good snapshot. It was done early. As I said, we think they maybe were a little bit optimistic at the time.

[Peter Fragiskatos, Liberal, London North Centre, ON]

If you could provide that methodology, that would be quite helpful, I think.

[Bruce MacDonald]

Yes.

[Peter Fragiskatos, Liberal, London North Centre, ON]

The second question was around how the money would be spent.

[Bruce MacDonald]

I think it's important to acknowledge that with regard to the initial $10-billion stabilization fund ask, we subsequently removed $2.5 billion, which is the estimate we have for the contribution of the emergency wage subsidy program and some of the other targeted investments. The ask is now sitting at around $6 billion.

This would be in the form of a grant. We're proposing three delivery systems. One is that the organizations that have existing relationships with the federal government would access those conduits. Two, look at organizations that have a core capacity in granting, those like the United Way or Community Foundations, that can deliver with speed. The third are the national federated bodies. These are the ones that already know the local communities the best and already have a core competency in doing flow-through dollars. That way, those monies can get to the local communities as quickly as possible so that charities can keep the doors open.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I have a last question for you, Mr. MacDonald. How do we avoid federal dollars going towards charity and/or not-for-profit organizations that prior to the crisis simply were not operating efficiently and probably would not have had much of a future?

I've put on record what I think of not-for-profits and charities, but there are organizations out there that have not been well managed. How do we avoid throwing good money after bad, so to speak? What safeguards has Imagine Canada proposed to the federal government to avoid this? Could you elaborate on those safeguards?

[Bruce MacDonald]

First of all, I think it's important to note that the accountability in the charitable sector is actually quite high. First of all, we—

[Peter Fragiskatos, Liberal, London North Centre, ON]

I understand that. I appreciate that.

[Bruce MacDonald]

I think it's an important point to make, because I don't want there to be an inference that the charitable sector is not professionally or well managed. Whether it's reporting to government on an annual basis or having community volunteers on boards of directors, our standards of accountability are high. In fact, Imagine Canada operates a standards program whereby we accredit charities.

I think one of the benefits, though, of having the kind of delivery system we are proposing is that those organizations and funders know the community organizations best. It's basically impossible to have one metric to determine the worth of any organization—quite frankly, it has been frustrating for society to use costs of administration as the sole determinant of worth—but if you are empowering a community foundation to grant to organizations it already knows, it has a pretty good sense on these things. It's built into the mechanism.

[The Chair, Liberal, Wayne Easter]

I am sorry, but we'll have to end it there.

We'll go to three single questions and then we'll probably close.

Elizabeth May, you had one. Then we'll go to Gabriel and then to Peter.