Finance Committee on May 1st, 2020

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

It's tough to ask one question, but Jeffrey Booth, your book, The Price of Tomorrow, seems to me to have been arguing, way before the pandemic, that this was a global problem, that we have to embrace deflation. You're the ultimate iconoclast of any finance panel I've heard. In that context, everything is going to cost less. We have to embrace it. It changes society. AI is coming at us. What's the role of social programs and do you favour a guaranteed livable income?

[Jeffrey Booth]

I think you're going to need social programs to make this transition, and I do favour support for social programs, but not pretending.... Again, governments can't stop this with monetary policy. It's coming anyway. By not recognizing it, you make the problem worse. You just tax people. On the top, people think they got a gift, and then you have to tax them more for social programs.

John Maynard Keynes wrote in his 1930s essay that we would be working 13 hours right now, and the reason why we haven't been, why we haven't followed this progression of technology down, is that we're on a hamster wheel, pulling asset prices up. Both sides of government—and this is not their fault—are talking about the same system instead of a systematic change. They're yelling at each other on both sides of the aisle and it's creating more division throughout society out of that yelling, because they're missing the fundamental point. Technology makes everything cheaper.

We're asking the wrong question. How do we support more.... I just heard about the infrastructure projects. That's awesome. Why infrastructure projects? Because you get a longer-term GDP gain, and they have always worked to get people back to work and produce longer-term GDP gain because roads got faster, right? People would shorten their commute time and you'd get a longer-term GDP gain.

Today, the superhighways of the future are all digital. The faster roads are the ones we're on right now—Zoom—and without recognizing that, the money is going to go into the wrong areas and we're going to make the problem worse.

[The Chair, Liberal, Wayne Easter]

Elizabeth is pretty neat. She gets one question, but puts three in the one. It's something that Peter Julian does as well.

Gabriel Ste-Marie, you're on.

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

Thank you, Mr. Chair.

I have just one question, and it's for Mr. VanderHout.

With respect to temporary foreign workers, is it true that there's still a lot of red tape despite the crisis and the urgent need for that labour force?

[Jan VanderHout]

There is a bureaucratic hurdle, and a lot of it has to do with the things that are going on in the source countries.

For example, the workers need to go through biometrics in Mexico, and then they need to get a visa before they can travel. This has been ironed out to a large degree; that is very much the case in Mexico. Unfortunately, Guatemala is still a bit of a challenge, although it is starting to open up.

As I wanted to say earlier, I was expecting 13 workers in the month of April and I've received four, so although many workers have been coming in, there is quite a backlog. There is quite a delay.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you for that.

Mr. Julian.

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

Thanks, Mr. Chair.

My question is to Mr. MacDonald.

I find it a bit rich that the government members are pressing charities and non-profits to make sure that every cent is well spent, and the federal government is shovelling money at the banks saying, “If you're indulging in overseas tax havens, you're still eligible for corporate bailouts with public money.” I think that's a bit rich, and it's an important comment.

Very simply, if the charity and non-profit sector does not receive the $6 billion, what are the impacts; and with that money, what are the actual positive ramifications for the Canadian economy and Canadian society?

[Bruce MacDonald]

It's important to note that we are predicting that there are going to be organizations in the sector that won't reopen. This funding that we're asking for is critical to recognize the unique differences in the revenue model. For many organizations, there's this difference between deferred and destroyed revenues. This isn't just a matter of deferring revenues coming in. A $1-million gala or $500,000 gala that has been cancelled means that....

Many organizations are operating with skyrocketing demand. It's interesting that many of the comments from people here today mean that when their sectors are under stress, they're coming to the charitable sector for support.

We're seeing domestic abuse cases rise because of social distancing, when people are now told to stay home. We're seeing mental health cases rising because of the challenges of these times.

This funding is intended to recognize and help make sure that the sector is positioned for recovery and that those critical services, which are growing in demand, are there for people as the private sector recovers, because we are also thinking that it's going to be bit longer for the charitable sector to recover.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you.

We are going to move on because we have another panel, but I have just a couple of points.

Mr. Brading, you mentioned the impact on franchisees, and actually, I've received some complaints from many of them. They operate as independents to a great extent, but they don't qualify for programming.

Do you want to expand on that a little? Am I right, or am I wrong?

[Jason Brading]

Yes. In CECRA, there are a couple of criteria that would negatively affect the franchisee who works under an umbrella corporation such as ourselves. The biggest and the most obvious is that they're our subtenant. We really are the lessee and they are our subtenant.

If we are considered as the lessee, because of the size of our company and the decline in sales of only—I say “only”—50%, they all would not qualify, and we're talking about thousands of subleases.

If they're considered as their own entity, as they should be, they would then qualify. They're under the $20-million threshold and a vast majority are under the 30% threshold, so they would absolutely qualify, but we're concerned that if they're considered as part of our company they would be excluded unfairly.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you for that.

I do know that the Prince Edward Island Potato Board and the Canadian Horticultural Council have sent letters to the Minister of Agriculture; I've seen them. Could you send a copy of that correspondence to the clerk as well so that it can be distributed to committee members?

It is a little unusual for the finance committee to be meeting with so many different sector groups as we are now, but we are operating under a mandate, under a House motion, that basically tells us to deal with COVID-19 issues. That certainly involves a lot of sectors that we don't normally meet with, so can you do that, please?

With that, I thank the witnesses on behalf of the committee. Thank you for taking the time and giving your presentations. I can clearly tell you that your points will be well considered and taken up the line as we try to deal with the issues that this pandemic is causing us all.

Committee members, we'll suspend for a few minutes to allow the clerk to test the microphones of the new witnesses.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Clerk.

First of all, I want to thank all the witnesses for coming.

For official purposes and to start the audio feed, I'll officially call the meeting to order.

I certainly welcome everyone to meeting number 24, the second panel of today, of the House of Commons Standing Committee on Finance.

We are operating under an order of reference of Tuesday, March 24. The committee is really meeting on the government's response to the COVID-19 pandemic. I'll not go through any more formalities than that, in order to save time.

I want to welcome the witnesses. Thank you for coming. If you can, please try to keep the presentations as close to five minutes as possible so that we have more time for questions.

We will start with the Canadian Airports Council, Joyce Carter, chair; and R.J. Steenstra, VP.

Ms. Carter.

[Joyce Carter, Chair, Canadian Airports Council]

Mr. Chair, members of the committee, thank you for the opportunity to present to you today.

As was mentioned, my name is Joyce Carter. I'm the chair of the Canadian Airports Council, but I'm also president and CEO of Halifax International Airport Authority. I'm joined today by RJ Steenstra. RJ is our vice-chair, as you mentioned, but also president and CEO of the Fort McMurray International Airport.

It's nice to see some familiar faces that have joined us today on the committee. Hello to everybody.

You might recognize behind me what is a very empty departures hall at Halifax Stanfield. We would normally see 11,000 travellers a day, and today, on average, we see just 200. So, certainly Canada's airports have seen a significant drop in their passenger traffic.

We are an essential part of our transportation network. Airports enable economic development in communities large and small, they facilitate trade and immigration and they bring visitors to Canada's $90-billion tourism sector. We connect Canada to the world.

Pre-COVID-19, Canada's airports supported nearly 200,000 jobs, resulting in $13 billion in wages and $7 billion in taxes to all levels of government.

Along with our airline partners, Canada's airports have seen a tremendous drop in traffic and revenue since the crisis began. In fact, in April, passenger traffic is down by more than 90% from normal levels. While we are preparing to restart some of our operations as travel restrictions get lifted, we don't expect recovery in our sector for many years. The passenger flights that are still operating today are quite empty. Some communities like Saint John, New Brunswick, and Prince Rupert, B.C., have lost scheduled passenger service altogether. You can appreciate this situation is not sustainable.

It's important to remember that airports must remain open to safely move goods and essential workers and facilitate medevac and other important services to Canada's economy and recovery. Airports moved quickly to help with the repatriation of Canadians, and then to reduce our operating expenses, including closing sections of our facilities, as you see behind me, and cutting wages and cutting staff. But many of our costs are fixed. Costs related to safety, security and runway maintenance, for example, cannot be cut in proportion to reduced traffic. In fact, while Canada's airports anticipate revenue for the year to be down almost 60% of what we expected to see, costs cannot be cut by nearly as much.

We want to thank the government for ground lease rent relief for the 22 airports that this is applicable for. This initiative is helping preserve some cash flow in 2020, particularly for Canada's eight busiest airports, which pay 95% of the rent. Airports must also continue to meet their capital debt obligations and, with few or no passengers, the airport improvement fee that typically covers these costs has vanished.

Managing airports is more than just about passengers. We must maintain buildings, runways, taxiways, lighting systems and other services that are all part of what makes airport operations safe and efficient. We must also conform to ongoing regulatory changes related to runway safety and accessible air travel, with price tags in excess of $350 million. We do not oppose these requirements, but we do wonder how we'll pay for them based on our current financial situation.

Boosted funding for smaller airports through the airports capital assistance program and new funding for safety and security through the national trade corridors fund would be helpful. But infrastructure funding is really a long-term solution to help airports recover over the coming years.

Airports are struggling now to cover their costs based on severely reduced revenues. Over the past few weeks, we have seen positive discussions with officials from transport and finance about a series of measures to help airports of all sizes sustain operations in the coming months. Permanently eliminating airport ground lease rent would be very helpful, given recovery of our industry is expected to be slow and arduous and there's a good chance we will see a second or third wave. This would allow airports to preserve cash, focus on operations during the recovery and pay off incremental debt acquired during the pandemic. Loan or bond guarantees and preferred payment designation for airport lenders would relieve the cash pressure caused by current debt obligations and allow airports to continue to borrow at favourable rates.

Additional debt and interest would have to be repaid, and airports are concerned about what this will do to future rates and charges to airlines and to our shared passengers. This is why interest-free, longer-term loans would provide much-needed cash without unduly burdening future customers who ultimately have to shoulder any additional costs placed on the industry.

The financial model for Canada's smallest airports is barely sustainable at the best of times, but for many rural and remote communities, these airports provide the primary means for access to people and goods. For smaller airports, a funding stream to cover essential operating expenses would be tremendously helpful so that they can continue to connect their communities to much-needed goods, workers, medical supplies and emergency services.

The health of the entire air transport system is not only essential to serving communities and Canadians through the crisis but also key to our economic recovery once we begin to reopen the economy.

Thank you for your time, and I look forward to the questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Carter.

We will turn now to Mark Scholz of the Canadian Association of Oilwell Drilling Contractors.

[Mark Scholz, President and Chief Executive Officer, Canadian Association of Oilwell Drilling Contractors]

Thank you very much, Mr. Chair and the rest of the committee, for the opportunity to be here today.

I represent Canada's drilling and well-servicing contractors from across the country. These are the hard-working women and men who help produce the energy that Canadians rely on every day.

Since 2014, over 200,000 Canadians in our industry have lost good-paying, long-term jobs, from the seismic crew to the drilling rig floor to the supply warehouse. For the past six years consistently, many Canadians have been losing their careers, their livelihoods and their small businesses.

In the drilling and well-servicing sector alone over that same period, we have lost 22 companies and nearly 600 rigs. These companies are the backbone of rural communities in many Canadian provinces. Every working rig provides direct and indirect employment for approximately 200 Canadians.

Today, Canada has only 515 drilling rigs left. Only 20 of those rigs or 3% of the entire fleet, and only five companies, are working today. However, there are 25 drilling rig companies in Canada. This means that 20 drilling rig companies, or 80%, cannot generate enough revenue to pay the bills. The future outlook for drilling activity is frightening, and the impact will be severe.

We believe that nearly 70% of our annual drilling activity was already completed in the first quarter of this year. It means that in 2020, we may have fewer rigs working in Canada than in any period of reported history.

A few weeks back, you may have seen Dennis Day, one of our members from Carnduff, Saskatchewan, talking about having to lay off nearly 250 people in a rural community of only 1,000 people. Many of these people he has known for his entire life. After walking through his local grocery store and seeing one of his former employees buying a 10-pound ham and three loaves of plain white bread, and knowing that was all this man's family would have to eat for who knows how long, Mr. Day purchased $50,000 of grocery gift cards with his family's savings and handed them out to those in need. Although Dennis's story is not uncommon, it is not shared nearly enough.

Our industry allows many Canadians to work, play and raise their children in small communities across the country, but this way of life is in jeopardy. We appreciate that the federal government is providing much-needed support through the Canada emergency wage subsidy. This means that many layoffs will be avoided, and it will help organizations withstand the sudden and hopefully short-term shock of the pandemic. However, without a quick economic recovery and rebalancing of commodity prices, the program will have to be extended to prevent future layoffs.

The government's $1.7-billion investment to remediate orphan and inactive wells will support Canada's struggling service rig sector and workforce and employ 5,200 people. However, to provide a true picture, the 5,200 jobs saved must be seen against the 200,000 jobs lost. Even amongst our association's own member companies, it's important to understand that most will receive little or no benefit from the well remediation funding, as welcome as that support is.

The damage done to Canada's energy resource services sector puts them in a category of their own. We urgently require additional government support if we are to survive. Our association has written to the Minister of Finance urgently calling on the federal government to implement the following policies to save our beleaguered industry.

Firstly, we recommend that the government introduce additional liquidity measures through unsecured and subordinate financial instruments.

Secondly, we recommend that the federal government purchase income tax losses from drilling and service rig companies, less the government's cost of capital.

Thirdly, we recommend that the federal government purchase accounts receivables from Canadian drilling and service rig companies at a discount.

Finally, we recommend that the federal government defer Canadian drilling and service rig companies' GST and payroll and remittance interest-free for six months instead of the current June 30 program.

Mr. Chair, I ask the committee to carefully understand the value of Canada's oil and gas industry to the entire country. I ask you to help us pick it up from the ashes and turn it into what it can and must be—a pillar of strength and a natural advantage for every Canadian citizen in good times and bad.

Thank you for your time today. I look forward to answering the panel's questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mark. We do remember Dennis's presentation.

Turning to the Canadian Dental Association, we have Mr. Jim Armstrong, president.

[Dr. Jim Armstrong, President, Canadian Dental Association]

Thank you, Mr. Chair, and good afternoon to the members of the committee. It's my pleasure to present to you today on behalf of the Canadian Dental Association.

By way of introduction, I'm the new president of the association, having been on the job for a whole six days. Coincidentally, I have served on the board of the CDA for the past six years, and I am the managing doctor for a dental co-operative with 10 practices and 150 team members throughout Vancouver. As well, I'm an adjunct professor at the Sauder School of Business at UBC and the former chair of the economics committee at the British Columbia Dental Association.

I've been a student of strategy in public policy for over 40 years. My academic interests are econometric models, disruptive innovation and AI. From that perspective, I can tell you that the COVID-19 outbreak and the ensuing shutdown have had a particularly negative impact on dentistry. This pandemic has brought two unwanted hitchhikers, which other speakers have already referenced—first, a liquidity crisis and, second, a solvency crisis.

Dentistry is almost entirely a fixed-cost business, and the debt to finance our dental practices is significant. Thus, when people have no money, all dental practices, like other businesses, have a liquidity crisis. Given the magnitude of the problem, many dental practices, as many of the other speakers have pointed out, now face a solvency crisis.

When the pandemic hit, dentistry was shut down under the orders of the regulatory bodies in the respective provinces. Early in the pandemic, all hospitals were critically short of PPE, and dentists across the country stripped their offices of PPE to donate to their local hospitals. Most critically, in order to keep patients out of hospital emergency rooms, dentists, as essential services, provided emergency procedures to patients in pain, with swelling or with infection. There was minimal billing of patients or no charges for these important services. Importantly, though, these few procedures are not nearly enough to sustain a dental practice.

I am deeply appreciative of the government's support of both liquidity and solvency issues for small business. The challenge has been historic. The programs that have been made available to businesses and to workers affected by the shutdown have helped to mitigate some of the worst possible outcomes.

There are obviously difficulties that arise in trying to create programs that cover many different businesses, as we've heard, and then having individual businesses attempt to understand how they fit their particular situations. There are more than 18,000 dental offices across the country, and they operate in a multitude of business models.

There is no road map back from a pandemic, nor is there a playbook as to what should be the stimulus packages to ensure Canadians have companies and jobs to return to. Given the circumstances, we greatly appreciate the government's willingness to be flexible and to adapt programs based on the feedback it receives.

At this point, I think it is important that we begin to pivot and to look ahead at what comes next. Programs that were rolled out were intended to protect Canadians on the supply side to keep the economy afloat through a critical period. This is a Keynesian moment if there ever was one. Now we must consider what we will need to help us through this next phase as the economy reopens.

In the coming weeks, dental offices across the country will begin to open in accordance with the guidelines set out by the provincial regulators, but it will be anything but business as usual. Dental offices are essentially mini hospitals. Like any hospital, we follow strict infection control procedures and practices. As dental offices begin to provide services again in the coming months, they will need to take on a multitude of new and additional costs. These costs include enhanced PPE for staff, and they may require physical changes to the office as well. We're still grappling with some of these questions.

These new costs cannot be defrayed by adding to the costs of services. Furthermore, in order to maintain safety, we will not be as productive as we were in the past. We will not be capable of seeing as many patients per day as we did previously. Moreover, we are greatly concerned that these new costs will come at a time when some patients may not return to dental offices. Some people will be more reluctant to visit any health care provider, for either health or financial reasons. Consequently, they may postpone treatment until a pain or infection requires that they go to the hospital emergency room.

As we look ahead, dentistry would be most appreciative if the Government of Canada would consider the following.

The first is an extension of the eligibility period for the Canada emergency wage subsidy. Many dental offices will be reopening only in the upcoming weeks and we will need to bring staff back slowly over the coming months. An extension of this program would be a significant help to dental practices.

Second, recognize the challenges of retooling and re-establishing dental offices to ensure that we have the ability, through grants or tax credits, to defray some of these costs to help us better serve the public and keep Canada healthy.

Third, give government support to help more Canadian businesses to provide extended health care benefits. This would be a substantial help to Canadians in accessing needed dental, psychological, vision, chiropractic and physiotherapy services at a time of the most extreme stress I can ever remember. The lockdown has taken a toll on our oral health as well as on our physical and mental well-being.

Fourth, currently during this pandemic, governments cover the costs for PPE for public hospitals. It would be greatly appreciated if provincial dental associations could have access to a guaranteed supply of PPE at no cost for distribution to their members.

Like the previous speakers, I thank you very, very much. I would be happy to take any questions in the future.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Jim.

Turning to the Canadian Mushroom Growers' Association, we have Mr. Koeslag and Ms. Krayden.

The floor is yours.

[Ryan Koeslag, Vice-President and Chief Executive Officer, Canadian Mushrooms Growers' Association]

Thanks for this opportunity to speak on behalf of the great Canadian mushroom industry.

We contribute $1 billion to the Canadian economy and create 4,000 jobs. We employ 900 workers from the temporary foreign worker program agricultural stream for jobs that we advertise on an ongoing basis but Canadians do not apply for.

Canada's mushroom growers have high-tech and state-of-the-art facilities with the most advanced growing techniques in the world. We produce nearly 200,000 tonnes of mushrooms and export 40% of our production to the United States.

Members of the committee, we come before you today with grave concerns. Our farmers, who are the front lines of Canada's food supply, are struggling to produce food and keep our workforce safe. They are heroes, but they're being left out. The programs do not work for them, neither the Agriculture and Agri-Food Canada business risk management programs nor the emergency COVID-19 measures.

The Canadian Federation of Agriculture reports that the cost of COVID-19 is $2.6 billion. The cost to the ornamental horticulture industry alone is $955 million.

Our farmers can't get their truckloads of mushrooms to market because the restaurants have been closed down and, because of this, our farms have lost 30% to 50% of production. Due to the mandated restaurant closures and spiralling COVID-19 expenses, we estimate a cost of $6.5 million for mushrooms. Going forward, this will be $400,000 per week.

Today we need to report that our P.E.I. mushroom farm member is no longer growing and had to lay off Canadian workers. If our sector is not included in emergency aid, more layoffs could be imminent.

How can we say Canada's food supply is secure when our essential farmers are being forced to cut back on production and forced to lay off essential farm workers? Committee members, it is disheartening to see funding announced in the billions of dollars for many groups, while at the same time Canada is failing to prioritize funding for farmers, the front line of our food supply.

We cannot find relief in any of the Agriculture and Agri-Food Canada programs. AgriStability is irrelevant. The farmers have to fall below 70% revenue and be topped back up to 70% of previous farm incomes. If that's the situation, it's too late. Could you live on two-thirds of your income, especially with the expectations that farmers can't lay off anyone and have increased expenditures for COVID-19? AgriInvest only works for those who previously participated.

Farmers are not requesting more debt through the Farm Credit Canada loans. We are already highly leveraged. We cannot access the $50-million Agriculture and Agri-Food housing announcement for incoming seasonal workers during the two-week quarantine because our workers are already here, and they're not in quarantine.

Additionally, mushroom farmers are now subject to the carbon tax, for which we have asked for a rebate or exemption, which some agriculture commodities have already received, even though studies show mushrooms are some of the lowest carbon and water footprint crops.

Members of Parliament, we call on you to step up to the plate and help fix this problem.

I'll invite Janet Krayden to speak for the remainder of our time.

[Janet Krayden, Workforce Expert, Canadian Mushrooms Growers' Association]

Thank you.

Chair, members of this committee, farmers need help right now. They are the front line of our food supply. We have a $2.6-million oversupply of mushrooms due to the closure of the restaurant market. We need $3.8 million for emergency COVID measures to protect our workforce by providing such things as extra housing, extra transportation, protective equipment and more space in the workplace.

We also need a fair program to provide a safety net in case a positive COVID case is found. Farmers need help, the Financial Post said this week, or else Canada could lose up to 15% of its farms this year. Farms closing because of layoffs does not make sense as our grocery shelves are emptying.

In the United States, farmers are dealing with the exact same processing and production issues. Their food supply is breaking, an article this week said. There's not going to be as much food in the stores. What does this mean in the U.S.? Recently, we know the U.S. did not want to sell us face masks from American companies. That was being prohibited. How is it going to be any different when farmers in the U.S. are dealing with the same issues and Canada is trying to get the same imports? Both the public safety and the finance committees need to think through our food security at this time.

We've reviewed all the COVID programs and we find that none of them are working for our farmers. The reason is that the parameters are for small businesses, but the modern Canadian farm has a high capital investment, particularly for mushroom farms, and also a lot of employees, so they're not qualifying for the programs for small businesses.

In contrast, the U.S. has released $19 billion for its farmers, $3 billion of which is for oversupply. That's why we think the Canadian Federation of Agriculture's $2.6 billion is very accurate. It's because we know it's from surveys we all did last week, and we also feel it is proportionate compared to the food produced in the U.S., and it is a real need for the farmers.

We're also calling on Agriculture and Agri-Food Canada to please step up to the plate. Let's roll out that Canada brand campaign. Ag Canada has had $25 million sitting there since January. We need to move that out now. We need to promote Canadian products in the stores, so we're also asking the Retail Council, which we hope is testifying here on this panel with us. We had a meeting with representatives two weeks ago. Let's get a working group together: the farmers, the processors, the grocers. Let's fill the empty grocery shelves with Canadian products and let's put a Canadian flag up there so people know where to buy Canadian products first.

This is what we're asking for, and we're hoping you can help us with this and get this prioritized because we really can't wait anymore.

Thank you very much.

We're looking forward to questions.

[The Chair, Liberal, Wayne Easter]

Thank you, Janet. The Retail Council of Canada representatives are not on today, due to a scheduling problem for them, but they will be on next week. I'm not sure if it's Tuesday or Thursday.

We'll turn now to the Chartered Professional Accountants of Canada. We have Joy Thomas, president and chief executive officer, and Bruce Ball, vice-president for taxation.

Go ahead.

[Joy Thomas, President and Chief Executive Officer, Chartered Professional Accountants of Canada]

Thank you, Mr. Chair and members.

I'm Joy Thomas. I'm the president and CEO of the Chartered Professional Accountants of Canada. With me today is Bruce Ball, our vice-president of taxation. I'd like to thank you for your invitation. It's a pleasure to be virtually with you today.

The federal government has acted swiftly and decisively through its COVID-19 economic response plan to provide direct assistance, tax payment deferrals and liquidity support at a time when support was most urgently needed. The accounting profession appreciates that we need to take these measures now, while at the same time we're very cognizant of the work ahead to manage the nation's finances. We've been asked by the committee today to speak to the theme of support for Canadians who are not eligible for existing measures.

We'll start by saying CPA Canada supports the federal government's plan. Unfortunately, when the response is of such historic magnitude and is under extreme time pressures, certain individuals and businesses will be overlooked among the initial stimulus measures. This has happened, and the government deserves credit for making adjustments to assist some of those who have fallen through the cracks and are not eligible for government supports. We've seen enhancements to the Canada emergency wage subsidy program, the Canada emergency response benefit and the Canada emergency business account. We've also seen additional support provided to vulnerable Canadians, students and graduates, essential workers who are keeping us safe and seniors who helped to build this great country.

Please note that we have attached an appendix to our remarks to highlight gaps in support. It's vital that existing gaps be addressed, and we understand that some of these issues are being actively considered by government now.

CPA Canada welcomes the opportunity to participate in the discussion that's happening today. As always, we are appearing here to support Canadians, our businesses and our society at large. Our organization maintains good working relationships with parliamentarians and senior government officials. In particular, we'd like to acknowledge the commitment and the dedication of the Canada Revenue Agency and Finance Canada. Extending numerous tax deadlines and providing greater clarity around the wage subsidy program are appreciated by tax professionals and their clients, including small to medium-sized businesses and individual taxpayers.

The key issues that we're hearing from members around shortfalls in support relate primarily to the Canada emergency wage subsidy program. Some specific issues include certain partnership arrangements that are not eligible, such as private-public partnerships and partnerships involving pension funds. Some cost-sharing or paymaster arrangements do remain problematic. The monthly revenue test does not work in some situations, such as for seasonal businesses or other businesses whose revenue does not occur on a consistent monthly basis. As well, a number of technical issues that need to be worked through on the wage subsidy.

We're also hearing that extensions to other tax deadlines are needed, as outlined in our appendix. We're currently discussing those issues with CRA.

I'm very proud of the CPAs who are making a positive difference by helping individuals and businesses across our country, and this includes those CPAs who are supporting front-line health care workers by offering to prepare their returns free of charge through the Accounting for Bravery program that is running in Ontario and Manitoba. Elsewhere there are other initiatives, such as virtual tax clinics to help low-income and vulnerable Canadians with tax filings. CPA Canada is also doing its part by developing financial literacy and other resources to support members in helping Canadians and businesses survive through the COVID-19 pandemic and, importantly, to prepare for recovery.

We're all rising to the challenge, and collectively we will get through this crisis. The talks around a gradual reopening of the economy are promising; however, as leaders gradually start to ramp up our economy, there are many considerations at play and much at risk. Any reopening needs to ensure that the health of Canadians is protected, that workers are supported and that decisions are data driven and evidence based. Ultimately, Canada will need a plan for recovery towards a sustainable economy with resilience for the future.

I'd like to thank you. Bruce and I look forward to taking your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Thomas.

Before turning to our last witness, I'll give members a heads-up on the speaking order for questions. Mr. Morantz will be first, followed by Ms. Koutrakis, Ms. Larouche and Mr. Julian.

We'll turn now to the Réseau FADOQ and Ms. Gisèle Tassé-Goodman.

[Gisèle Tassé-Goodman, President, Provincial Secretariat, Réseau FADOQ]

Good afternoon, Mr. Chair.

I would like to thank the members of the Standing Committee on Finance for inviting me to appear.

With over 535,000 members, the Réseau FADOQ is Canada's largest network of seniors. As the president of an organization that advocates for seniors' rights, I have to say that this crisis is tragic and certainly very alarming. The Réseau FADOQ believes that, sadly, many seniors have been left out of the government's measures.

As you know, people whose sole income consists of old age security benefits and the guaranteed income supplement have to live on barely $18,000 per year. Living on that amount was tough even before the pandemic.

The public health crisis is exacerbating people's financial distress because the cost of essential goods has gone up. In addition, isolation means that many older people have temporarily lost their support network, and that means added costs as well. Delivery services, for example, come at a price. In addition, many organizations have suspended their activities, forcing many seniors to use private services, also at an extra cost.

This is also the time of year when leases are renewed. That's another cost of living increase seniors have to absorb.

That's why the Réseau FADOQ is once again calling on the federal government to increase the financial support available to seniors through old age security or the guaranteed income supplement. Seniors should not have to choose between buying food and buying medicine.

When it comes to protecting people's financial assets, I have to say that reducing the minimum RRIF withdrawal by 25% has been given a lukewarm reception by our members. Not a day goes by that seniors don't contact us about this. Many investors feel that mandatory RRIF withdrawals should be abolished altogether for 2020. In addition, many are suggesting raising the age at which people must convert their RRSPs into RRIFs.

People are proposing these measures to minimize the impact of the stock market crash on the financial assets of many Canadian seniors.

Lastly, as president of the Réseau FADOQ, I see myself as the elephant in the room. A lot has been said about seniors' homes. The fact is that provinces are struggling because the federal government has been underfunding health care for a long time.

According to the Conference Board of Canada, in 2018-19, federal health transfers amounted to $38.5 billion while total spending for all Canadian provinces and territories was $174.5 billion. Health care costs eat up 40% of the provinces' and territories' budgets, but the Government of Canada covers just 22% of those expenses.

Also according to Conference Board of Canada data, the current rate of increase means that the federal share of health care costs will dip below 20% by 2026. That's why the Réseau FADOQ is calling on the federal government to reinstate pre-2017 indexation and increase the Canada health transfer by 6% annually.

The current Canada health transfer formula should also include a variable representing population aging by province and territory. Seniors deserve to be treated with dignity, and the provinces and territories must have the means to achieve that.

I'd like to thank the committee members for listening to our requests on behalf of seniors and taking them into consideration.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Gisèle.

We appreciate all of today's presentations from the witnesses, some of them on fairly short notice, and we thank you for appearing.

I think we can go to the six-minute rounds in our usual time frame. I think we have enough time to do it that way. We'll start with Mr. Morantz.