Finance Committee on June 4th, 2020

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

Right.

As you noted, the finance minister talked about support for the energy sector within hours, days, months. More than a month went by before there was the $1.7-billion package for orphaned wells, which with regard to all of the federal spending, I would submit, is a drop in the bucket and limited in terms of the scope and effect of that program.

We saw some very limited liquidity for smaller oil and gas companies through EDC and the BDC. Then we finally had the LEEFF, which was intended for larger and mid-size loans for mid-size and larger companies. Now we heard testimony from a number of industry stakeholders a couple of meetings ago about some of the significant problems with that program, including credit standards being too high, interest being punitive and access to the program being cost-prohibitive.

Would you share those concerns? Would you be able to comment on the LEEFF and its effectiveness?

[Jim Rakievich]

Just to be clear, we've not looked to participate in the LEEFF program. I can just say that even with EDC and the BDC, they're not like chartered banks. You're going to pay higher.... Your cost of capital is going to be higher, but not like mezzanine debt. It's kind of in between. Yes, the thresholds are high. With the BDC, one of the criteria, as it turned out, was that we needed four straight quarters of profitability. I remember telling them that if I had four straight quarters of profitability, I wouldn't be in a hurry to talk to them. In any event, I would say that criteria and speed are critical.

You know, it's a critical industry to the Albertan and Canadian economies. There are companies like ours that are making a real difference in technology, which will have an impact on the environment and climate change. We're working towards those things. This industry recognizes that, longer term, going to a non-hydrocarbon energy world is the future. However, until then, how do we do the safer, less environmentally impactful...and all kinds of things? We as a company are investing a ton into that technology.

[The Chair, Liberal, Wayne Easter]

We will have to end it there.

Sorry, Michael.

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

Okay.

[The Chair, Liberal, Wayne Easter]

I'd like to go back to the same question that you raised.

I was going to ask it later, Mr. Rakievich.

It's five business days in the United States, and it's 143 calendar days or 102 business days in Canada. What's the reason for that? I do hear this quite often: how quickly they can make decisions on loans in the United States and here we can't. The Americans are greater risk-takers than Canadians are.

What do you see as the difference? Is it process, or what is it?

[Jim Rakievich]

I think that what they chose to do was, rather than segment all of this funding into all these different buckets with different criteria, I think their immediate response had a completely different philosophy: the PPP. They said, “Look. Some companies are out of business right now and shut down, like restaurants or retail. Some companies are still going and will have trouble later. What we're going to do is make sure that people keep working and that companies are supported across the board. We'll have a simple application form that's across the industries and not segregated into this group, that group and another. If you qualify under a base set of rules, then you can apply and receive the loan funding.”

I think that they took a more holistic approach to a big fund to distribute quickly versus trying to piece off funding for all these different groups and industries, etc.

[The Chair, Liberal, Wayne Easter]

Thank you. That gives me a little to go on.

Next is Mr. Fragiskatos, followed by Mr. Brunelle-Duceppe.

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

Thank you very much, Mr. Chair.

Thank you to all our witnesses. I want to ask a question of Mr. Devlin of Fanshawe College.

Thank you very much, Peter, for being here, and for taking the time to update us about what Fanshawe College has been doing and to offer your perspective.

One of the things that stood out, at least for me, in your presentation were your remarks on infrastructure. Clearly, infrastructure has been of paramount importance any time governments approach an economic restart, but I wouldn't want to see infrastructure spending on projects in terms of a strategy limited to municipalities. I think municipal governments certainly will be asking for that kind of support, and I hope that they will get it. The same will be true of provinces.

College campuses and university campuses ought to be a focus. I know you mentioned the strategic infrastructure fund and some of the success that Fanshawe has seen in that regard. Could you build on the thoughts you offered already about the importance of infrastructure on post-secondary campuses?

[Peter Devlin]

That's a great point, and I welcome the opportunity to expand on the importance of infrastructure funding.

Colleges exist across our nation, as do universities. Colleges are connected to industry, business and community. Everything that we do touches our partners, and our learning is all part of how we touch those businesses and industries. With our faculty and our curriculum, it's all about building economic growth through research, through client projects and through entrepreneurship.

I would emphasize that Fanshawe College every single year provides 1.6 billion dollars' worth of economic business and economic goodness to our region. Infrastructure projects provide jobs, but more important than that, they provide the fuel for colleges to interact with business, community and industry. They provide the skilled labour to be able to propel our economy forward, particularly in a post-COVID environment.

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

It's the slogan of the times, it would seem.

I think you put your finger right on it. Not only are colleges focused on career-based education, but when we turn to them in terms of thinking about an economic restart and rebuild, a lot is there to be offered. An infrastructure focus would certainly be warranted as the government begins to think in the weeks and months ahead about how to best approach things.

I have a couple of minutes remaining, and I want to ask a question of Ms. Amyot.

Ms. Amyot, I was just trying to make sense of some of the recommendations that you had. Were you calling for the federal government to take a much more active role when it comes to helping to fund colleges? Is that the point that you were making? Please give just a yes or no on that, if you could, because I have a follow-up question in that regard.

[Denise Amyot]

Absolutely. In fact, the federal government already is providing funding for colleges and institutes, whether it's in research, in infrastructure or in indigenous education, just to name a few.

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

Certainly, we have supported colleges, and Mr. Devlin was kind enough to highlight some of the work that has happened at Fanshawe College because of federal support.

I would hope at the same time that you're also active with the provincial governments and calling on them to invest and to continue to invest. I see that the Bank of Canada in early May—I guess we all saw—began engaging with buying provincial bonds. There's an entire program that's now been set up, a program meant to increase the fiscal capacity of the provincial governments so that they can spend, and I hope that they come to the table.

I know that provincial governments in this country have been focused on the health response and have been doing, generally speaking, a very good job in that regard. The federal government has been there to assist, and I think it should continue to assist.

When it comes to the provincial focus, the capacity is there to help institutions, organizations and businesses. Unfortunately, I'm not sure many.... At least in Ontario, I haven't seen the Ford government step up as much as it should in that regard, and when the Bank of Canada is there for them, I think there's an opportunity for them to do that.

I just wanted to put that on the record, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Okay. We'll take that more as a comment.

We'll go to Mr. Brunelle-Duceppe, followed by Mr. Julian.

Go ahead, Alexis.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Thank you, Mr. Chair.

First, I'd like to thank the witnesses for appearing before the committee. We appreciate it.

My questions are for Ms. Amyot.

First, has COVID-19 had an impact on registrations in your colleges and institutes?

[Denise Amyot]

Unfortunately, yes.

Statistics for the winter session haven't changed, but those for the spring-summer session have. In some cases, there has been almost a 40% drop in registrations, which is huge. This term is still between 22% and 25% of the student population.

We think the number will be about the same for the fall session. Naturally, some decisions by the federal government will help us with regard to the possibility for students to study online without affecting work permits. Unfortunately, we still don't know if international students will be able to come this fall. We still haven't had an answer on that.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

I was just going to bring it up because it's a huge loss of students. In your speech, you talked about the financial implications and administrative problems associated with immigration for international students. It is important for the committee to understand this major issue.

Can you tell us a little more about this issue and how it affects the institutions you represent?

[Denise Amyot]

Absolutely.

The contribution of international students to all colleges and universities is $22 billion. That's huge. It's more than many sectors can hope for, be it the softwood lumber sector or other sectors. I think we're even on par with the aerospace sector.

If no measures are put in place to facilitate the entry of students or the obtaining of study permits and student visas, it will be very difficult. That's why we're making a special request this year to compensate for this loss. Our post-secondary institutions aren't eligible for the emergency wage subsidy at this time. The losses would be less if we could at least qualify for it.

If I may, I'll give you an example that shows the importance of decisions. A decision was made to allow international students to study online. That decision had to be made by mid-May, and we got it on May 15. However, we got an answer for the spring-summer session, but it was much too late. That delay resulted in a huge loss of money. What's important to us isn't just asking for money, but making sure that decisions are made in a timely fashion, which will make a difference for us financially but also for the students.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

I'm curious to know why this has a greater impact on colleges and CEGEPs than on other institutions, such as universities, for instance.

[Denise Amyot]

That's because, right now and for the last two years, there have been more applications from students in colleges, among other things. One of the extremely popular programs is the post-graduate specialization program. Students who come from overseas to study and work here for a year easily find work afterwards.

I'm going to tell you about another decision for which we're still awaiting an answer and which is starting to become urgent. We have asked that for students who are doing two programs in a row, these successive studies not be treated by program, but that they be considered as a 50% portion of their education. We've been waiting four weeks for an answer. The more days go by, the more money gets lost.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

We'll push the government to continue thinking about it.

Do I have any time left, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

Please make it quick.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

In terms of research, can you remind us how much you're requesting and the benefits of this project for your CEGEPs and institutes?

[Denise Amyot]

For the next two years, we are asking for $165 million. We know that right now, for every dollar the federal government invests in applied research, the private sector is giving almost a dollar. There aren't many people who can say that in research.

To help businesses prepare, we need that money immediately, by August at the latest. If that money doesn't arrive until November, it will be too late. Now is the time to help businesses reorient and adapt to the new reality of the COVID-19 pandemic.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Thank you very much, Ms. Amyot.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

I will turn to Mr. Julian, who will be followed by Mr. Cumming.

Peter, you have five minutes.