Finance Committee on May 1st, 2020

[Annie Koutrakis, Liberal, Vimy, QC]

I was asked to use the microphone on my laptop.

I want to say thank you very much to all of our witnesses for their presentations this afternoon. It has been a great exchange of comments and insight. I'm sure that all of us are going to walk away today feeling a little smarter. I know that I will.

I'm hoping to get two questions in.

My first question is for Mr. Armstrong. I want to begin by recognizing the concerns raised by dentists, including dentists in my own riding in Vimy, in Laval, primarily around the need for appropriate PP equipment. They note that without that, nothing happens. Of course, our government, as you know, is doing everything it can to procure everything we need, but I do note your concerns.

The CDA has noted that while professional dental corporations and self-employed dentists will likely have no issue accessing the Canadian emergency wage subsidy, questions were raised around whether cost-sharing arrangements or partnerships would be eligible to receive this support. To your knowledge, have dentists employed in cost-sharing arrangements and partnerships experienced any challenges when applying for the CEWS?

[Dr. Jim Armstrong]

Thank you very much for the question.

The short answer is yes. About 26% of dentists function in some sort of cost-sharing partnership. Sometimes for both partners, their wage bill is too high or they're having other issues. Being able to take a look at some of those things would be excellent.

You mentioned the PPE. You know, I think what we heard today is that everybody has had this massive collapse in demand and we're all facing liquidity and solvency issues. One of the things I have to really compliment my Premier Horgan in B.C. and the federal government for is that they both have identified companies that can manufacture PPE but they don't have the high-tech equipment. They've been able to get them capital to buy this high-tech equipment, and then they've been the purchaser of primary supply. I think that's one thing all Canadian companies are going to have to do, with the pivoting of the oil and gas industry going into geothermal.

I think if we can continue to have programs that support all of us in these new ventures in bringing some of the supply chain back to Canada, that would be great.

[Annie Koutrakis, Liberal, Vimy, QC]

Absolutely. I think that would be a really great way to stimulate our economy as well and work towards self-sufficiency.

Based on feedback also from your members, will the CECRA program sufficiently cover the cost of rent for dental practices, or will additional rent supports be required?

[Dr. Jim Armstrong]

Thank you again for that question.

If the retail council is on here, I'm sure we would have the same issues. That program...and again, it's anecdotal. I don't have data from across Canada, which bothers me, but what we've heard out in B.C. is that very few landlords are going to take advantage of it. They don't want to take a 25% haircut. I find that disappointing. At this point that doesn't seem to be that beneficial to us.

[Annie Koutrakis, Liberal, Vimy, QC]

Any suggestions...?

[Dr. Jim Armstrong]

Yes, you know I've been thinking about this one.

We've all talked about extending the wage support for employees. If that was extended, some of that money could also be used towards rent support. The program as it is I think looks on the government to pay 50%, the renter to pay 25% and the landlord to pay 25%.

If that 50% could be delivered in a program similar to the wage subsidies, directly to the renters, then we'd be able to do something like that.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you for that.

Mr. Chair, do I have time for a quick question?

[The Chair, Liberal, Wayne Easter]

No, I'm sorry, Annie. You're out of time.

[Annie Koutrakis, Liberal, Vimy, QC]

Okay. I tried.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We will go to Mr. Poilievre, and then on to Mr. Fragiskatos.

[Pierre Poilievre, Conservative, Carleton, ON]

Thanks very much, Chairman.

My question is for the agricultural and farming representatives on the panel today.

I have some great farms in my riding. I represent the beautiful Carleton countryside, south and west of Ottawa. I have some great dairy, cash crop and horticultural operations. One of them is Carleton Mushrooms, which is one of the biggest mushroom producers in Ontario, if not in Canada. It employs about 50 people and produces an incredible product.

The farm groups have come up with a request for $2.6 billion of rescue assistance to get through the COVID lockdown. Obviously our food supply is essential to our survival. Without agriculture, there is no human life.

I'd like to ask any of the farm representatives on the panel today: How did you come up with $2.6 billion? Why will that number allow our farmers to get through the COVID lockdown and come out the other side strong enough to continue supplying our population with nutritious and delicious food?

[Janet Krayden]

I'll just speak very quickly then hand off to Ryan.

First of all, on a point of clarification for the other member of Parliament, currently I would say the majority of mushroom farmers in Canada do not qualify for any of the emergency COVID measures, and the other agriculture programs are not working, either. We qualify for nothing right now.

Now I'm going to hand it off to Ryan. Thank you.

[Pierre Poilievre, Conservative, Carleton, ON]

Wow.

[The Chair, Liberal, Wayne Easter]

I will interject there before you come in, Ryan. To Pierre, the mushroom industry seems to be outside of being able to qualify for the regular farm programming. I don't know why that is, but that is basically the bottom line here. I'll not take the time from you. They're in a different situation from the general farm community with so many of the farm programs.

Maybe Ryan can give us a good answer. Go ahead.

[Ryan Koeslag]

Partly it's because we grow 365 days a year, but we also have a large workforce, including temporary foreign workers. That puts us in a position that's unique to temporary foreign worker programs. Traditionally, they're under the seasonal ag worker program.

To answer the question about the $2.6 billion, that was a number gathered by the Canadian Federation of Agriculture from all its membership. We included our numbers there, which included not only production losses but the costs of just having to supply the equipment that provided double the amount of transportation, to install the barriers in the lunchrooms in the packing facilities. There are a number of different things that have taken place that have increased the costs significantly in order to provide the foods in grocery stores.

Again, I can't help but think that, with all these issues being brought forward about costs of living and other industries struggling, we all eat three times a day, if not more. I just want to express the importance of how we need to make sure this food supply is domestic. We need to make sure we have these industries sustaining themselves and not running into these situations where they have liquidity issues and are having to lay off. We don't want to be importing our food, just like we don't want to be importing our oil. We want to be supplying ourselves and getting these foods to the grocery stores, and making sure places like Carleton Mushrooms are doing well, staying open and providing our food.

[Pierre Poilievre, Conservative, Carleton, ON]

Janet, if I could follow up, I have two questions for you. One, explain why farms don't qualify for the COVID rescue packages that have come out so far from the government. Two, what will be the impact of the carbon tax on non-exempt fuel costs for producers across the country?

[Janet Krayden]

Thank you, Pierre.

Basically the COVID measures do not work for the farmers, and I would say this would be for all farmers in Canada. That is because we do not qualify as small businesses. Farms have a lot of capital investments and machinery. We're not small businesses that way. Also, we have a lot of workers. Because of those two criteria that are within the small business programs, we are not qualifying for anything.

I have to explain to the committee that we are also not qualifying for any of the agriculture programs. It's not just mushrooms. There are some serious problems with the agriculture suite of programs that exist currently. Unless the parameters are fixed—and the Canadian Federation of Agriculture explained how they need to be fixed—then we cannot access any funding, either, through the agriculture programs.

Those are our two issues. We have no access to any funding right now. That's why we're asking for this committee's help to get this fixed.

Now I'm going to hand it back to Ryan to talk about the carbon tax.

[Ryan Koeslag]

The carbon tax is becoming a big issue for our farms. Like I mentioned, we go 365 days a year. That means our buildings have climate-controlled facilities. They use a lot of gas. They use a lot of electricity—very efficiently, however. The costs from the carbon tax are weighing on them. The number one cost is labour. Following that is energy input. If we increase those costs significantly, we're going to be seeing increased costs in food.

There are other industries that we know of, like the greenhouses, that received an exemption or rebate for the carbon tax. We're looking for that alleviation from the carbon tax too, just like other fellow ag commodities.

[The Chair, Liberal, Wayne Easter]

Thank you, everyone, for that round. We will now be going to Mr. Fragiskatos and then on to Ms. Larouche, unless Gabriel wants in. There will be one question to Ms. Larouche and then one to Mr. Julian.

Go ahead, Peter.

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

As I understand it, Mr. Chair, Ms. Carter is actually a constituent of Mr. Fraser's. I'm not one to stand in the way of democracy, so I'm going to just pass along my time to Mr. Fraser.

[The Chair, Liberal, Wayne Easter]

Sean, you're on deck.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you so much, Mr. Chair.

Thank you to my colleague for being so generous with his time.

Welcome to all of our witnesses, and in particular Ms. Carter, who is joining us not only in her national capacity but as the CEO of the Halifax International Airport Authority.

Ms. Carter, thank you for being with us. I have two areas that I'd like to explore if the time allows.

First, we heard through your testimony about some of the importance of the direct economic impact that your airport provides to our region, and airports more generally. In addition to whatever direct impact there may be, obviously airports can be remarkable economic enablers for communities and for regions as well, as is the case with the Halifax Stanfield International Airport.

I want to get your thoughts in particular on one of the industries that's of strategic importance to the Atlantic region: the tourism sector. It is going to be particularly hard hit this year. In the testimony previously, and in my conversations with tourism operators, we've heard that this season in a lot of ways feels like a lost one. So many of our operators are just hoping they can hang on and preserve the tourism networks that exist for the next season.

I'm curious if you can shed some insight on how the airports could play a role in the recovery for the tourism sector, and how the federal government might be able to facilitate a contribution from airports to the tourism sector's recovery.

[Joyce Carter]

Thank you for your question, Sean. It's nice to see you.

For sure, as you know, historically Halifax Stanfield has played a significant role in the tourism industry in Nova Scotia. Two out of every three tourists who come to Nova Scotia come by way of the Halifax Stanfield airport, and those stats are similar across the country.

We have been working closely with all of the industries because it is so important that the airport be here and ready when the industry rebounds, and certainly this summer will be very difficult for the tourists. We talked earlier on the call about transportation and travel being mostly within Canada in 2020. What we have to do is we have to be financially sound and we have to be ready when that business is ready to come back.

When you think about the tourism industry itself and you think about the airports.... Some of the comments I made earlier about the financial position we're in, perhaps one of the ways we may get out of that is through fees and charges. We're a non-share capital corporation. It will only be able to be absorbed by the system if it is passed on through to the travellers.

The last thing we want to do as an association, as an airport or as an industry is increase our fees into the future to allow us to come out of this. Some of the items that I talked about in my presentation will be helpful in helping us maintain those fees at a low level, because they will be passed on to the consumer.

[Sean Fraser, Liberal, Central Nova, NS]

What kinds of fees would consumers potentially be looking at, and how would their travel experience be impacted in the event that you do need to pass these costs on? Give me a practical example of what travellers might be looking at, from the booking process right through to the time they board their flights.

[Joyce Carter]

The airport improvement fee is a key one that may get passed on. As we know, that's paid directly today by travellers. That is paid for the capital improvements at airports. When you look at the airports across Canada and they model out their financial stability over the next five years, they don't have enough revenue. We get revenues only from passengers, generated to sustain the costs that are here. That airport improvement fee, in some cases, has to go up 40% and 50% to be able to sustain our operations through the most critical period, and that's a direct pass on to the passengers.

We do not want that to happen. We do not want to borrow, as our models show us we would need to do, so much that we're not in a strong financial position to be able to support the tourism industry, coming out of this.