Finance Committee on May 19th, 2020

[Janet Wardle, Chair of COVID-19 Committee, Aerospace Industries Association of Canada]

Thank you. Good evening.

As chair of the Aerospace Industries Association of Canada special COVID-19 economic impact committee and president and CEO of MHI Canada Aerospace, I thank you for the invitation to be here today as you study the government's response to COVID-19.

AIAC is an industry association representing more than 95% of aerospace activity in Canada. Our members are located in all regions of the country and range from very small to very large businesses operating in all three segments: space, aerospace and defence.

MHI Canada Aerospace is a North American tier one heavy aerostructures operation, whose work statement represents the largest on-load of related high-skilled aerospace manufacturing jobs to Canada in the past 40 years. We currently employ 850 employees at our Mississauga facility, along with an estimated 3,000 people indirectly throughout our supply chain, of which 65% is within Canada. We pride ourselves on our team Canada approach, our accomplishments and how we have successfully positioned ourselves for future growth opportunities within the commercial and defence aerospace industry.

More than 80 years ago, decision-makers just like you committed to making Canada a global leader in aerospace. They had the foresight to recognize an industry that, if supported, would add to the overall economic health of the country. We are now one of the five leading aerospace hubs in the world. That is the kind of commitment and leadership required today. Nearly 215,000 Canadian jobs and $25.5 billion annually are contributed to the Canadian economy.

We have faced challenges before, but the impact of the COVID-19 crisis is truly unprecedented. With little demand for flights and most airline fleets grounded for the foreseeable future, the effect on the aftermarket demand has been significant and is expected to remain low. In some cases, new orders have been stalled and airlines have requested delivery delays, leading to reduced aircraft deliveries. Canadian aerospace companies are grappling with cash availability, operational constraints, supply chain impacts and revenue sensitivity.

In fact, EDC's own reporting identifies aerospace manufacturing as one of the hardest hit industries. While some sectoral support has been announced for other industries, that hasn't been the case for aerospace. Now is the time. In addition to your overall economic support, we are once again calling on the government to please work with us on a sectoral strategy for aerospace.

There are many global examples of industry and government working together to enable the aerospace, defence and space industries in their countries to achieve a top position in the global market, and that is what we need to do in Canada. For example, the Australian government is investing significantly to build defence capabilities. In the U.K., programs across the space sector are supported to deliver innovation and growth. Likewise, the U.K. has also developed a strategy for defence.

This isn't about bailouts. It's about leveraging a transformational opportunity to catapult to a solid position of strength as a world leader. Canada has been a leader in the past, and we need to get there again. This crisis has reinforced what AIAC has been saying for some time now. Vision, investment and partnership are needed if we are to be the leaders on the world stage.

AIAC issued our “Vision 2025” report last year because Canada was starting to lose ground and we needed to partner with the government. Of course, no one could have foreseen the COVID-19 crisis, but we knew that as an industry we couldn't continue on a downward trend. Too much is at stake. The report's recommendations are more applicable now than ever, and our industry, through AIAC, has also identified some additional priorities to ensure we mitigate these severe challenges and position Canada's aerospace sector moving out of COVID.

One, we need to partner with the government on a plan to allow people to begin flying again in a way that considers safety and respects new social norms.

Two, we need to further reform our existing programs that take into account different timelines faced by our industry compared to others.

Three, building on the work already done through vision 2025, we need the development of a long-term strategy for the sector to ensure our global competitiveness and to ensure we contribute to the economic growth that is required post COVID-19.

Four, we need the rapid implementation of green technologies and supply chain support for SMEs so the sector can establish itself as a world leader in environmental sustainability and ensure that our supply chain can adapt.

Five, we need to expedite public procurement, in particular, defence and space projects, to help stimulate and sustain high-tech jobs and supply chains.

We have a road map for moving forward, but government support is needed to not only allow the sector to recover from the crisis but also recover to a position of strength on the global market. We look forward to partnering with the government to make this a reality.

Thank you for your time and consideration.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Wardle.

We turn now to the Canadian Energy Pipeline Association, with Chris Bloomer, president and CEO.

Welcome. The floor is yours.

[Chris Bloomer, President and Chief Executive Officer, Canadian Energy Pipeline Association]

Good afternoon and thank you for inviting me here today.

CEPA represents Canada's transmission pipeline companies that operate most transmission pipelines in Canada and many of the large pipelines in the United States. We are pleased to report that our systems continue to deliver this essential service in the face of today's unprecedented challenges. In addition to delivering the energy that enables our essential services to continue operations, CEPA members continue to deliver economic benefits for Canada. In 2018, CEPA spent nearly $14 billion on taxes, goods, services and capital projects in nearly every province and territory and directly employed over 13,500 people.

CEPA members have felt the impacts of COVID-19 too. Transmission pipeline operations, maintenance and construction projects along with their supply chains were designated critical infrastructure quite early, and personnel were designated as essential service workers. Special protocols have been set up to protect vital control room personnel and systems and to ensure that personnel are safe. We transitioned to this new reality swiftly and safely, but we are looking forward to getting fully back to work and contributing to Canada's economy and recovery.

It is important for us to recognize the front-line workers who have kept society going. I would also like to thank the federal and provincial governments, which ensure that our members receive the advice and equipment they need to remain safe and the financial aid and liquidity support that are essential to preserve our capacity to recover quickly. Our industry stands ready to do so.

The new decade began with cautious optimism for the pipeline sector. We remain optimistic, and we have many opportunities to grow. We are seeing progress on major pipeline projects, including Trans Mountain, Coastal GasLink, Keystone XL, Enbridge Line 3 and expansion of TC Energy's NGTL system. Other major projects in the midstream and petrochemical sectors, such as Inter Pipeline's Heartland Petrochemical Complex and Pembina Pipeline's Prince Rupert LNG terminal, will create new infrastructure and value-added processing of natural gas liquids into essential petrochemical products.

Recently, CEPA undertook a survey of members to determine what shovel-ready and shovel-worthy projects could be deployed quickly under the right economic, policy and regulatory conditions. I'm pleased to report that CEPA members identified almost 7.5 billion dollars' worth of new projects, many of which offer significant growth and employment opportunities for Canada.

There will be large and small changes to the lives of Canadians and lessons learned as a result of the pandemic. However, our commitment to be the best in the world in terms of environmental performance will remain. Our operations and the products we transport across the continent and the world are essential and have the best environmental practices.

For CEPA, another reason to be optimistic is Canada's status as a world leader in environmental, social and governance standards, or ESG. We know that capital markets are looking at enhanced ESG reporting and, as Canadians, we know that we produce energy to the highest ESG standards. This is a competitive advantage for Canada that should be leveraged.

Another reason for optimism is the engagement and support we see from indigenous communities that are seeing benefit agreements, community investment, jobs and local supply opportunities from energy projects that will provide economic security and build strong communities for the long term. In 2018, CEPA members spent $240 million on personnel, services, supplies and equipment from indigenous suppliers.

Canada is a leader in responsible energy development, and we have the resource base that can grow to meet energy demand globally. Canada can leverage these advantages as the world recovers.

I'd like to speak a bit about liquefied natural gas, or LNG. Canada has immense natural resources, particularly natural gas which, if converted to LNG to supply global customers, would be a powerful engine for the Canadian economy. LNG can bring thousands of jobs and billions of dollars of revenue to Canada for decades and will help reduce the use of coal around the world.

Beyond LNG, our liquids-rich natural gas offers the potential to expand a major value-adding industry—the petrochemical sector. Again, these are tens of billions of dollars of potential investment that could provide employment, technology development, revenue and products for the whole economy.

As Canadians, we enjoy the security that our resources provide, the security that has ensured the supply chains that feed Canadians, helps to create the fertilizers that grow our food, provides heat and power for our essential services like hospitals and nursing homes, and provides the raw materials for plastics necessary for the personal protective equipment that keeps our front-line workers safe and able to continue to operate.

Global demand for reliable and affordable energy continues to rise, and despite major growth in renewables, oil and natural gas will remain essential parts of the energy mix for decades to come. Natural gas will be foundational as the core to future energy plans and electricity growth. Petrochemical products will also continue to be essential ingredients in new renewable energy production facilities and the systems that connect them.

The ongoing global demand for oil and gas will be met one way or another. Canada should be the first supplier of that energy, as a global ESG leader whose oil and gas resources are developed and transported under some of the strictest environmental standards in the world. Canada should be the first molecule of natural gas or barrel of oil produced and consumed in any market, because no other country produces it more responsibly. The fact is, Canada has the energy that the world will need long into the future. By providing responsibly produced Canadian energy to the world, we will create the jobs and economic and social benefits that our country will need to recover and prosper.

In closing, I would ask you to consider the following.

The crisis has taught us that Canada needs the ability to look after itself in a pandemic. We need shorter supply chains, and we need to enable those supply chains. Fortunately, we have the raw materials we need, the human resources and the ingenuity we need, and the energy we need to be self-sufficient and to help others. What we need is the will to set aside minor differences and work together to leverage all of our natural advantages for the future of all Canadians.

Our industry must be part of that future. We will build it together: safer, smarter.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Bloomer.

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

I'd like to raise a point of order, Mr. Chair.

The interpreters informed us that they were able to interpret the previous witness's presentation because they had the text, but that the sound quality wasn't sufficient for the rest.

[The Chair, Liberal, Wayne Easter]

Thank you, Gabriel.

We will have the clerk notify me if translation services have future problems, and we'll take a break to sort it out.

We'll turn to the Canadian Parks and Recreation Association, Mike Roma, incoming president, and Cathy Jo Noble, executive director.

The floor is yours.

[Cathy Jo Noble, Executive Director, Canadian Parks and Recreation Association]

Thanks for the opportunity to speak to the role of municipal parks and recreation and what we can do to help in the societal and economic recovery of communities from COVID-19.

The Canadian Parks and Recreation Association is the national voice for municipal parks and recreation. We are the arenas, pools, sports fields and playgrounds in your community, and we are the summer camps, yoga classes, sport leagues and swimming lessons in which you and your family participate.

The municipal parks and recreation sector provides facilities, services and programs for both a social and financial return. During the pandemic, as facilities and programs are shuttered, we are losing both revenues and the value we bring to communities and individuals. Returning these services fully, safely and quickly in a post-pandemic context must be a priority for all levels of government. Jurisdictional roles must not be a barrier during this time of crisis for municipalities and non-profits.

The financial impact of COVID-19 on the municipal parks and recreation sector is $221 million monthly, due to the incurred fixed costs of operating facilities against zero financial and social return. When facilities and programs do resume, new public health requirements such as hygiene, cleaning and social distancing could raise facility operating costs by as much as $226 million annually. Lower revenues are expected due to capacity restrictions on facilities and programs under social distancing. The true impact of this is yet to be determined.

Since municipalities do not qualify for the Canada emergency wage subsidy program, thousands of parks and recreation employees have been laid off, and thousands more, including summer students, will not be hired for summer programs.

I will now turn it over to Mike Roma.

[Mike Roma, Incoming President, Canadian Parks and Recreation Association]

Thank you, C.J.

When restrictions are lifted, Canadians will want and need recreation and parks services. There will be challenges. C.J. has mentioned some of them.

There will be higher operating and infrastructure costs. There will be limitations on the ability to deliver programs in terms of participant levels and facility and space capacity limitations, while costs will remain the same.

Hiring, training and ramping up staff will be expensive, and municipalities aren't eligible for current wage subsidy programs. As well, participants will need to get over the stigma of being in busy facilities and spaces. That will require enhanced cleaning procedures as well as enhanced promotions and marketing efforts. There will also be capital investment requirements related to those public health restrictions. They will be added to the pre-COVID capital issues the sector had in terms of aging infrastructure.

These challenges will lead to increased costs and user fees and the need for specialty staff, supplies and equipment. In some cases, we fear that these increases will be too much for municipalities and non-profits, leading to reduced service levels and, in some cases, facility and space closures.

We know that recreation, parks and sport will be key to our recovery. We also know that we have a lot to contribute to other federal agendas, such as increasing physical activity levels, addressing climate change and furthering reconciliation.

For these reasons, we call on the federal government for two avenues of support, with the first being a community sport and recreation recovery fund, and the second being investment in sport and recreation community infrastructure. We call upon the federal and provincial and territorial governments to create a joint single-transfer funding program that municipalities can immediately access to help support the costs of returning parks, recreation and sport services to communities.

We applaud the recent commitment by the federal government of $72 million to amateur sports sectors; however, we are representing the places where those activities will occur, and obviously we need to be providing those spaces for sport and play to come back.

We also call for an investment in community sport and recreation infrastructure, not only to address the pre-existing multi-billion dollar recreation infrastructure deficit, but also to address new infrastructure needs in a post-COVID-19 setting. When compared to any other infrastructure system provided by municipalities, it's been proven that recreation most needs investment. Again, we do applaud the federal government for re-profiling existing infrastructure funds to create a COVID-19 fund, but that is only a first step. New money is also needed.

We're hoping that these infrastructure funds, when announced, could be directed to municipalities directly to allow for timely and direct funding to communities, and they should be earmarked for sport, culture and recreation infrastructure, preferably to reinvest in aging facilities, similar to the envelope created in the 2017 federal budget.

With that, I would like to thank you for your dedication and public service in these trying times and also to thank the finance committee for inviting CPRA to appear.

We will welcome any questions during the question period. Thank you.

[The Chair, Liberal, Wayne Easter]

Thanks, both of you, for your presentation.

We'll turn to the Food Processors of Canada and Denise Allen, president and CEO.

[Denise Allen, President and Chief Executive Officer, Food Processors of Canada]

Thank you, Chairman and distinguished members of the committee, for the opportunity to present as you examine concerning matters related to COVID-19. My name is Denise Allen, and I am the president and CEO of Food Processors of Canada.

For more than 35 years, Food Processors of Canada has been the trusted, leading national voice of the Canadian food and beverage processing sector. Today, we find ourselves in uncharted territory. We have accepted that our future is irreversibly changed by the prolonged effects of this crisis, and this has forced us all, both in business and in our daily lives, to consider the interconnectedness of our societal, food and economic systems. The following submission is intended to respectfully inform you of the impending risks we observe in our food value chain and to offer a suggestion on how to offset the possibility that, if the issue of liquidity is left unaddressed, food shortages and food price inflation will be more severe than necessary.

Since early March, the COVID-19 pandemic has placed extraordinary strain on our entire supply chain. During this time, food processors have continued to manufacture safe, high-quality products under a difficult set of circumstances, which includes reduced operating capacity and sales, higher operating costs and wages, employee absenteeism, sourcing of personal protective equipment and other measures to ensure factories remain open while simultaneously safeguarding our employees' health. These changes to operating procedures are taking place under a backdrop of daily changing public health announcements and a nationwide state of emergency.

The disruption to the food sector in Canada has left certain sectors of our economy devastated. This prolonged disruption is marked like no other in history and bears a combination of unique characteristics that will require remediation to ensure that food products continue to flow uninterrupted to consumers. Our sector's commitment to produce essential products for Canadians during our crisis remains strong. As we look forward, we recognize that social distancing rules will remain in effect for the foreseeable future. This enormous change to how we plan and run our businesses day to day will have an ongoing effect on productivity and profitability, and has, therefore, forced us to broaden our analysis and risk mitigation plans to include the interconnected parts of our food system.

A return to a steadier economic state will require the recognition and support for the incremental expenses beyond PPE incurred to date, as well as a recognition of future financial risk in the form of liquidity in one important selling channel: the food service sector. Our government's recent announcement that it will provide targeted support to food processors by creating the emergency processing fund is welcomed support. However, this pool of funds is inadequate to cover the added operational burden of not only PPE but other incremental costs to ensure the safety of front-line workers and to meet increased demand from retailers.

Through the collection of source data from businesses, we have extrapolated an estimate of approximately $1 billion in added operational expenses assumed by food processors alone. FPC welcomes the assistance and support offered by the emergency processors fund. However, we respectfully ask that consideration be given to expanding this fund to offset the financial burden beyond that of PPE being shouldered by the food and beverage processing sector.

The credit risk posed by the devastation in the food service sector, primarily of independent restaurants, presents significant risk to the efficient workings of the entire Canadian food supply. Recently, government announced a rent subsidy program for independent businesses, which responds to one of the greatest challenges for independent restaurants. However, the sector is reporting low uptake of the benefits of the program. Even more worrisome is the working capital requirement to restock inventories, which will exceed that of rent default risk.

By contrast, the retail sector remains buoyant with little to no liquidity issues reported. Retailers currently have sufficient cash flow to pay food processors within established payment terms. The food service sector has had a significant erosion of sales, which presents liquidity risk in this second major selling channel for food processors and primary producers. This liquidity risk is severe and compounded by rent and other debt, low operating margins and shortened cash cycles. Their liquidity problem is not simply timing but an inability to generate cash from operations or to borrow sufficient funds to replenish inventories required to reopen.

When we examine the total food supply chain, it is apparent that many independent operators in this sector will not be able to honour past food orders and settle rent debt through further borrowing or sales. Unless independent restaurant operators can secure a source of funding in the form of long-term financing or grants, their rent debt alone will be a significant detriment to their ability to reopen profitably.

This gap translates into significant accounts receivable risk for both food distributors and food processors. Without immediate remedy, food distributors will not extend further credit to their restaurant customers, based on this restriction to working capital.

The backbone of the Canadian food supply chain is our farmers. The agricultural sector is the base producer of food for both selling channels. The liquidity issue presented by the food service sector will impact the agricultural sector's ability to see their product effectively reach the consumer market.

Our ability to focus on the total food system and supply chain in Canada will determine if there are food shortages and severe price inflation, which will disproportionately affect those most economically vulnerable. We are asking for an injection of working capital to backstop the credit risk posed by the food service sector and ensure that product continues to flow unfettered while protecting the Canadian small business owner.

In conclusion, Chairman, two immediate opportunities exist to protect and secure food supply for all Canadians.

First, expanding the scope and magnitude of the emergency processing fund to include other incremental operating expenses is needed to offset the increases and support public safety protocols expected to continue far into the future.

Second, an immediate injection of working capital is required to backstop a minimum of three to six months' worth of food orders to offset the receivables risk to distributors and discourage changes to payment terms.

With relative stability restored to our food system, our collective focus must then shift to an exit strategy for COVID-19.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Denise.

We'll turn now to the National Association of Friendship Centres, with Mr. Sheppard-Buote and Jocelyn Formsma.

[Christopher Sheppard-Buote, President, National Association of Friendship Centres]

[Witness spoke in Inuktitut and provided the following text:]

Atelihai, Christopher Sheppard-Buote Uvanga.

[English]

Good morning, committee. My name is Christopher Sheppard-Buote. I'm the president of the National Association of Friendship Centres.

I want to recognize that today I'm on Treaty No. 6 territory and I am thankful for the welcome that they have shown me since being here. I am joined today by Jocelyn Formsma, who is the executive director of the national association.

We thank you for the invitation today—

[The Clerk of the Committee, Mr. David Gagnon]

I'm sorry, Mr. Sheppard-Buote and Mr. Chair. I think there's a problem with the sound.

The sound quality is not good enough to interpret Mr. Sheppard-Buote.

We can try it one more time.

[The Chair, Liberal, Wayne Easter]

Just go fairly slowly and talk as close to your mike as you can, Mr. Sheppard-Buote.

[Christopher Sheppard-Buote]

Good morning, committee. My name is Christopher Sheppard-Buote. I'm the president of the National Association of Friendship Centres.

I want to recognize that I'm on Treaty 6. I'm joined by Jocelyn Formsma, the executive director of the National Association of Friendship Centres. We represent over 100 local friendship centres and provincial and territorial associations in every province from coast to coast to coast, except Prince Edward Island.

Friendship centres are urban indigenous community hubs that provide a wide range of programs and services for every demographic of indigenous people, including prenatal, healthy baby, family, children's, youth, adult and seniors programming. We offer services in health, economic development, entrepreneurship and employment and training, housing and homelessness, head start and child care, violence prevention, education, languages, culture, justice, and sports and recreation.

Collectively, we are the largest and most comprehensive urban indigenous service delivery network in Canada. Last year, 93 centres served approximately 1.4 million first nations, Inuit, Métis and non-indigenous people across over 1,200 programs and services in 238 buildings, and employing over 2,700 people. We are proud to be a largely indigenous, women-led network.

What I need you to hear today is this: The federal government needs us to help navigate through the remainder of the COVID-19 response in urban indigenous communities. They will need us to help re-establish Canada's economy after COVID-19, and they need to effectively resource us to do so. The first friendship centres have been on the front lines of support for first nations, Inuit and Métis people for 70 years. COVID-19 is but one emergency that we are helping the communities we serve to navigate. The matters and conditions that we help our community members with every day will still be here, even after this pandemic ends.

Among the systemic barriers to doing this essential work are the distinctions-based approach to COVID-19 funding, which left many of the urban indigenous community members we serve unseen; the ongoing jurisdictional wrangling between federal and provincial governments; the chronic lack of resources, training and personal protective equipment; and not being engaged nationally on urban-specific approaches.

While we are appreciative of the funds we have been able to secure through the indigenous community support fund, we need you to know that this money was spent even before it hit the ground. The $15 million that was set aside for urban indigenous needs was never going to meet those needs. We must see a second wave of funding soon. Urban indigenous people cannot continue to be left behind.

Now is the time to leverage the friendship centre movement's expertise, networks and programs to support urban indigenous people and provide them with the support they need during this crisis and afterward. The NAFC continues to seek funds to ensure that urban indigenous communities are served in this time. Friendship centres should not be decimated because they answered the call when others could not or would not, because they spent and served without proper equipment, and because they put aside their regular fundraising activities or shut down their social enterprises. Our network is highly effective, agile and competent at sharing information and caring for each other.

Instead of looking at us as another handout asking for more, we encourage the federal government to look to us as an answer to the question of how to reach this priority population. Properly equipping and resourcing friendship centres now and including friendship centres in response and recovery strategies is but one way to care for and invest in the viability of urban indigenous communities and economies.

The NAFC has offered and continues to offer its perspective, expertise and knowledge of urban indigenous communities and community members to inform the federal government and guide effective remedies both now and post COVID-19. We look forward to being a part of the ongoing conversation and the continued investment in our work.

Thank you so much.

[The Chair, Liberal, Wayne Easter]

Thank you very much. We could hear you considerably better when you went slower. Thank you very much for that.

We turn now to the Public Policy Forum with Edward Greenspon.

Go ahead, Mr. Greenspon.

[Edward Greenspon, President and Chief Executive Officer, Public Policy Forum]

Thank you.

On behalf of the Public Policy Forum, I thank the finance committee for the opportunity to address the critical issue of how COVID-19 has impacted the economy, and what can be done.

I'll be speaking about the general public interest and not the state of the think tank sector.

PPF is embarking on a post-COVID research and convening project that we call “Rebuild Canada”. Our work starts from the premise that the crisis has thrown up new issues with which we must deal, as well as changing the trajectories of long-standing issues that we have not yet adequately addressed. There are many of them.

I was struck in the recent jobs numbers that young people make up 14% of the population and have lost 30% of the jobs. Nearly half as many again are still employed but have lost all or a majority of the hours they usually work. Research from previous recessions shows that unlucky timing in entering the labour market reduces earnings for at least a decade.

As with public debt, digital infrastructure, gig work or the decoupling of China and the United States, policy-makers are going to be left with a host of issues with major consequences. Rebuild Canada will gather some of the best established and up-and-coming policy minds and generate fresh ideas for decision-makers such as you.

Our first choice is whether we seek a return to the pre-pandemic status quo or strive to turn this cataclysm into a catalyst for a more productive, resilient and fair economy and society. With that in mind, I'm going to briefly touch on two issues that we will look at.

The first is climate and energy. Nowhere is the crisis more acute than in Canada's oil and gas producing provinces. As policy is considered, three realities stand out. One, climate change is getting worse. Two, an energy transition is already under way, driven by both public opinion and international investors. Three, a move away from fossil fuels will occur over decades, not years.

Just 3.8% of new vehicles sold in Canada today are electric or hydrogen. Internal combustion autos still comprise 99% of the passenger fleet, and the average life span of a modern car is about 13 years. It is clear that we will be running on gasoline for a while yet. If fossil fuels are going to be with us and climate change is getting worse, there's only one possible solution. We need to pursue all four pathways of the government's 2018 Generation Energy Council report, including a cleaner oil and gas sector.

Norway provides a model of climate cleanliness at home and the export of low-carbon oil abroad. The alternative to a cleaner oil and gas pathway, given continued demand, is to become a net importer and forgo the $76 billion that Canada earns toward our balance of payments from oil exports.

One place to start being cleaner and continuing to make this money for our government and for other revenue is by matching U.S. incentives for carbon capture, including the so-called 45Q tax credit. Canada at one time was a world leader in carbon capture, one of many steps in reducing emissions. Today, our homegrown technologies are being tried out south of the border. I see in the PPF's energy future forum project a strong desire to re-establish leadership at home and to sell abroad.

The second thing I want to talk about is quality of information in a democracy. As some of you know, I spent most of my career at The Globe and Mail, including as Ottawa bureau chief, founding editor of globeandmail.com and editor-in-chief. The COVID crisis is having two major effects on the news industry.

First, it is decimating revenues at journalism-based organizations at the very time that demand for reliable and local information is greater than ever. In releasing its first quarter results two weeks ago, Torstar Corporation reported print ad revenues at its dailies and weeklies down 58%. Digital was also down. This is typical of the industry and comes on top of a decade of declines that have taken ad revenues for dailies from $2.5 billion in 2008 to potentially as low as $600 million to $700 million this year. The news media is bleeding out.

A broke press is not a press at its best. Community newspapers are the most vulnerable, because they generally lack any subscription revenue. Weekly publishers are worried that their critical flyer business may never come back as retailers announce plans to go online. Everyone knows the only growth area is digital advertising and that it is thoroughly dominated by Facebook and Google, neither of which employs journalists who can go out and establish whether 5G cell towers cause COVID-19 or whether a conspiracy theory is at work.

There are different ways to rebalance the finances of reporter-based news media and the algorithm-led global platforms. An obvious and overdue point is to finally make foreign digital services subject to the same sales tax obligations as Canadian news media. Some people also think we should finally extend section 19 of the Income Tax Act to the Internet.

As you know, France and Australia have turned to competition law to pressure platform companies to negotiate content payments with news publishers. PPF’s “The Shattered Mirror” report recommended an alternative of imposing some form of levy, as with cable TV, on digital operations that do not invest in Canadian journalism.

We also need to activate the three useful vehicles to support journalism contained in the federal government’s 2019 budget. I’m proud to have played a role in designing the labour tax credit and the extension of charitable status to journalistic organizations. Now, with news media facing a Waterloo moment over COVID, it is time to get the money out the door.

Historically, when Canada’s ability to provide news about the country to its citizens was threatened, we used policy to create a CBC and a section 19 and a split-run magazine policy. We need to be resolute again.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Greenspon.

Before I turn to the YMCA, I'll give members the first round of questioning. We will have to go to five-minute rounds this time. First up will be Mr. Cooper, then Mr. McLeod, Mr. Ste-Marie and Mr. Julian.

We're turning now to Peter Dinsdale with YMCA Canada.

Mr. Dinsdale, the floor is yours.

[Peter Dinsdale, President and Chief Executive Officer, YMCA Canada]

Thank you very much, Mr. Chair and committee members, for the opportunity to testify during this unprecedented and trying time of crisis.

The YMCA has been a part of communities for decades. We've been a place of connection and belonging in times of fortune and celebration, and we've been there in times of recessions, depressions and disasters, helping communities recover. COVID-19 has been no different.

From coast to coast, YMCAs have steadfastly continued to provide services to ensure communities have access to the supports they need during the crisis, either by moving them online or opening our doors wherever possible. We are transforming our facilities to protect the homeless and providing child care for essential workers. Our employment and training, as well as our immigrant and settlement services, are being delivered by phone and online. We have launched virtual workshops to promote physical health and mental wellness. We are leveraging technology and other avenues to reach seniors and young people in isolation.

Through these efforts we are supporting the fight against COVID-19 by providing Canadians with what they need to be on the front lines and remain healthy and physically distant.

YMCAs are responding to the urgent needs of communities, but not in the absence of significant challenges as a result of closures and declining revenues. This comes at a time when the demand for our services has increased as communities look for supports to cope and connect during the pandemic.

We thank the Government of Canada for recognizing the needs of the charitable sector during this pandemic. The Canada emergency wage subsidy has meant that YMCAs can retain and recall staff previously laid off and ensure they remain connected to their employer. The $350-million emergency community support fund will help charities continue to provide emergency services to vulnerable populations today.

While these announcements are a positive step forward, a large financial gap continues to exist in the absence of core stabilization support for the charitable sector. Our cash flow projections have informed that YMCAs in Canada are going to be missing $42 million in the next three months and $84 million in the next six months. This funding is required to keep them all open.

Considering we are now in week 11 of this pandemic, we are extremely concerned with this financial position. That's why YMCA Canada supports Imagine Canada's urgent call for broader sector stabilization to address this financial shortfall. An immediate funding program that will provide us with stability during this precarious time will ensure we can continue to provide programs that communities rely on and that our facilities, spaces that Canadians helped us to build in these communities, remain open once again when we all come together.

As a federation, we're made up of 44 YMCA member associations with reach into communities all across Canada. We have the means to deliver these funds quickly with accountability measures in place to maximize the impact of this investment on Canadians.

In addition to sector stabilization, this pandemic will require us to evolve to return to the next normal. We'll need to retrofit our spaces and purchase PPE to adhere to the health and safety limitations, continue to innovate and deliver programs remotely, introduce new programs and expand existing services to meet demands. This also means updating our operating model to ensure we can be agile in a changing environment and continue to be responsive to the needs of communities moving forward. Financial support to enable this transformation will be critical for the social and economic recovery of our country.

Young people will need greater access to employment services and training to obtain meaningful employment. Demand for immigrant and settlement services will increase once the border restrictions have been lifted and people are able to arrive in Canada. Individuals will be seeking mental health supports to manage stress and anxiety caused by the pandemic. Parents, particularly mothers, will need to know their children are safe and have access to high-quality child care to return to work or to school, or to find a new job.

We recognize these are significant investments. However, the cost to replace the social and community infrastructure built over generations is much greater. Immediate sector stabilization and transformation funding programs will enable our sustainability through this pandemic and our ability to support community recovery, just as we have in trying times before this.

For the YMCA, this means continuing to reach over 2.28 million people and employing over 30,000 staff through 1,700 locations.

Thank you for the opportunity. The Prime Minister has indicated he'll be there for all Canadians, and the charitable sector is telling you we need your support today more than ever.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Dinsdale.

Thank you to all the witnesses for appearing and for your presentations.

We'll go to five-minute rounds now, starting with Mr. Cooper, followed by Mr. McLeod.

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

Thank you, Mr. Chair.

Thank you to the witnesses. My questions will be directed to Mr. Bloomer.

Mr. Bloomer, in your testimony you referenced $7.5 billion of new shovel-worthy projects. I presume that the $7.5 billion of shovel-ready projects would include the $1.5-billion 344-kilometre Nova Gas Transmission line. Would that be among the projects you would identify as shovel-ready?

[Chris Bloomer]

There are a number of projects. We polled our members, and they came back with a list of projects—

[The Chair, Liberal, Wayne Easter]

Mr. Bloomer, I don't want to interrupt you, but I would ask you to slow down considerably. We have word from the translators that they need you to slow down and speak clearly.

[Chris Bloomer]

Okay. I will slow down.

We surveyed our members, and they came back with a list of projects that were considered shovel-ready. There are a number of projects like NGTL, and there are infrastructure projects for maintenance and expansion of operations. There are also new projects and some petrochemical projects.

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

I mention NGTL because it has been approved by the Canada Energy Regulator. Is that right?