Finance Committee on Feb. 25th, 2021

[Mike Cassidy]

Yes, it would be a start.

I don't mean to just use the 10% example. With the total operating costs and the revenues that we need have for sustainability, I do not feel.... Within our industry, that 10% would be welcomed, but in the intercity component, it would not be sufficient to carry us. It would not be enough assistance.

[Ted Falk, Conservative, Provencher, MB]

Thank you for your comments.

Thank you, Mr. Chair, for your flexibility.

[The Chair, Liberal, Wayne Easter]

It's not a problem.

We'll now turn to Ms. Dzerowicz and Elizabeth May, who I know is here somewhere. Gabriel is going to give you his two and a half minutes, so you'll be next after Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank everybody for their presentations and for their contributions to our deliberations today.

My first questions are for Mr. Kelly.

Mr. Kelly, I believe that Bill C-14, which is trying to find its way through our House right now, is going to at least partially address the issue you raised about rent having to be paid up front. Whether my recollection is correct or not, could you just tell us, what is the impact on small business of Bill C-14 being held up in the House?

[Daniel Kelly]

I don't think Bill C-14 helps us at all on the rent subsidy program, but it is important legislation nonetheless. We ask all parties to work quickly to get it across the finish line. My understanding is that this legislation also helps us significantly with refunding some of the RRRF measures—the regional relief and recovery fund. The dollars are running out in some of those programs, and some businesses that were unable to access other government programs like CEBA have depended on these regional funds to get some support. Time is of the essence, and we're urging parliamentarians to pass that quickly.

Some changes to the rent support program were just announced yesterday, I believe, but I think that is separate.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thanks so much. I'm a little tired today, so I might not be recalling correctly.

My next question is about your first chart, entitled “Businesses fully open”. There's a difference between Nova Scotia at the top and Ontario at the bottom. My colleague, Mr. Fraser, suggested that perhaps public health measures have a bit of an impact on the number of businesses that are open. I think it was verified by Mr. Mutch earlier.

First, do you agree with that? Second, what other factors might be impacting this wide difference across our country?

[Daniel Kelly]

The biggest difference is how far and for how long governments have needed to lock down the business community. Of course, Atlantic Canada took a different approach by basically sealing off the borders quickly and then preventing much of the lockdown that might otherwise have been necessary. It's not that they haven't used them at all, but most Atlantic provinces have had to use lockdowns of short duration for some sectors of the economy, which has lessened—not eliminated, of course—the impact on some of those factors.

The biggest effect on those provinces that have had to use wide-scale and long-term lockdowns.... Just to give a bit of colour here, Toronto and Peel now have likely—and I stand to be corrected on this—the longest lockdowns in North America. Businesses have been locked down, depending on the sector, for 220 days since the pandemic began. Ontario has been the worst-responding province in the country by about a mile in terms of addressing the impact of COVID-19 and protecting small and medium-sized businesses from the problems. It's been one of the only provinces that has also allowed big box stores to remain open while shutting down small firms, which is a policy I can't understand.

The Ford government should be deeply ashamed of itself for the way it's treated the small business community.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much. I appreciate that, Mr. Kelly. I might come back to you if I have time, but I'm going to pivot over to Ms. van den Berg.

I will make a comment and ask a question, and I would like you to respond to both, Ms. van den Berg.

You've indicated that restaurants right across the country have been the fastest to lose jobs. Would they also be the fastest to regain jobs if we are going to restart the economy? In looking at it on your charts, we can see that it went up and then went back down again. That's the comment. I wanted to know whether you agreed with that.

Second, the question I have is this. I mentioned this a bit in my earlier question. We've seen in different regions in Canada, such as Atlantic Canada and British Columbia, that with reduced public health measures, they have lower case numbers. Can you talk about whether restaurants in regions that allow in-person dining are seeing enough income to run their businesses without supports?

[Lauren van den Berg]

Yes, we were hit first. We were hit hardest. As I mentioned, we lost more employees in the first six weeks than the entire Canadian economy lost in the 2008 recession. That also means we stand ready to rebuild those jobs exceptionally quickly. The caveat to that, of course, is the fact that we need to survive long enough to have a place to create those jobs, so for us it really comes down to the key pillars of the wage and rent subsidies.

I don't want to keep beating a dead horse, but taking out debt to pay down more debt is not sustainable for any cohort or pillar of our economy. Restaurants in particular stand ready, having made significant investments—even over the course of this apocalypse while we were shut down—in the health and safety of not just our staff and employees but of Canadians and all guests who come into our establishments.

In the regions where we have been fortunate enough to reopen, with limited capacity, for indoor dining, it has been a challenge. For many of our smaller independent operators, limiting their capacity to, say, 50%—as that percentage seems to be what most governments rely on—means you have two people at a table. That's for your entire restaurant. The staff required to turn over the table, the cooks required and the additional labour we have to bring in to make sure we can sanitize everything on a regular basis in shifts means our labour expenses are even higher when we're able to serve only 50% capacity.

For many people, and many small business owners and restaurants in particular, it's extremely difficult to make the case to stay open, which is why it again comes back down to those subsidies. They are crucial for our survival.

Thank you so much.

[The Chair, Liberal, Wayne Easter]

We will have to move on.

We'll now go to a round of two and a half minutes, first for Ms. May and then for Mr. Julian, followed by Ms. Jansen for a five-minute round.

Ms. May, you have two and a half minutes.

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

Thank you.

I will begin in French to thank my colleague Mr. Ste-Marie.

You are so nice.

My question is for Mike Cassidy.

It is an honour to speak with you, sir. I've watched your valiant work on behalf of Maritime Bus Lines from the other coast, where I'm working with Wilson Bus Lines. I want to give you the time to explain the coast-to-coast bus coalition vision.

Parenthetically, before the transport committee last week, I put to the deputy minister of transport the question of what we were going to do to save our ground transportation outside of the inner city buses, between cities. He said, “We're working on it, but we think it's mostly provincial jurisdiction.”

I think your vision solves that problem. I want to give you the time to explain it.

[Mike Cassidy]

Thank you very much, Ms. May.

It dates back to the summer of 2012, when we had one of the largest transportation companies in the world, Keolis, which owns Orléans in Quebec and used to own Acadian Lines in Nova Scotia, Prince Edward Island and New Brunswick. They stated in the summer of 2012 that they were going to surrender their motor carrier rights and leave the maritime provinces, because they were losing $2 million a year. They provided evidence to the Nova Scotia and New Brunswick boards of public utilities.

At the time, I did not understand intercity. I had a very good understanding of municipal transit, which is completely different from my motorcoach operation. Transit is one of need. Normally, in the motorcoach business of groups, it's a want. The need is different.

We stepped up to the plate and said our region was going to have intercity transportation. We need it.

In 2018, when Greyhound made the financial decision to surrender its motor carrier rights from Sudbury, Ontario to the west, that was the same feeling I had in 2012.

I spent 2019 providing data to Transport Canada, waiting for their study to be issued, talking about intercity across this country. I was in the media constantly in those early times, when Greyhound pulled out of the area and the region, talking about what I call my trans-Canada bus corridor network. It is so important to have a bus corridor across this country, and feeder routes into the actual corridor.

Now we have a chance where there are four companies. It's ironic that it's Wilson's on the west coast and Maritime Bus on the east coast. We have Pacific Western's Ebus in Alberta, and then we have Kasper Transportation in northern Ontario—four companies coming together with the same dream.

Intercity regionally is important, but we know we have to cross provincial borders. Once we start to cross provincial borders, we need all stakeholders. I do not want to be able to say that the province says it's federal, and the federal government says it's provincial jurisdiction. We're in this together, and when you look at the airlines or you look at Via Rail in the pandemic, most of us in this country would agree that buses have remained. We have been reliable and we have got the work done.

I will cherish the day we can have a cost-effective—and it has to be cost-effective—bus corridor, with a feeder system for our country. We do not have to have large international corporations telling us we cannot successfully run bus companies in Canada. We have proven the opposite, Ms. May, and I still think we can prove we can make this happen.

[The Chair, Liberal, Wayne Easter]

We are going to have to cut it there. We're a little over time.

Next is Mr. Julian, followed by Mrs. Jansen.

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

Thank you very much.

Ms. van den Berg and Mr. Kelly, you both indicated very passionately and eloquently the importance of providing supports for the small business sector.

I see first-hand here in New Westminster—Burnaby what the impacts have been on small businesses and restaurants in our area. They are really struggling to get through this pandemic, and they are very apprehensive about a third wave.

In its summary statement, the fiscal update that was presented in November has massive cutbacks in government supports over the course of this year, from April 1 to March 31. Basically, program expenses are slashed in half.

I want to ask the two of you, because you have spoken about providing those supports for a pandemic that will certainly be lasting for another year. How important is it that we put supports in place for the restaurant industry and for small businesses, so as many of those businesses as possible make it through the pandemic?

[Lauren van den Berg]

I don't think I could possibly overstate how desperate the picture is for restaurants, local communities and small businesses across the country. These supports are absolutely crucial. We can't even begin talking about recovery until we start talking about survival first.

While we are sensitive to the fact that money doesn't grow on trees and the government probably can't keep printing it, the reality is—as one of the other witnesses said here today—that a government budget is not the same as a household budget. It is to our detriment to keep making that analogy, because restaurants are a critical pillar of our culture, our communities and our local economy.

We contributed four per cent to the country's total GDP. Without the support of a government in return, the heart and soul of so many communities will be bereft.

I want to make sure Dan has some time to speak to this as well, as I know he has some thoughts and feelings to share.

[Daniel Kelly]

I will take a slightly different tack, with the same end point as Lauren. I am really worried about the amount of money the government has been racking up in federal debt over the last little while, and I know we're passing the bill to future generations, including my 12-year-old son. I can also say, though, that businesses have been shut down in order to protect society. While subsidies do not work in ordinary times, they are absolutely necessary right now. These businesses need to be there to help us get out of this. If we want a chance of growing the Canadian economy once again and getting back to robust GDP growth in the future, we're going to need every single entrepreneur to keep working and to keep moving.

Businesses will fail, for sure. Many will be taken out by this, but we can minimize that amount if we get the program supports right and if we extend them until such time as governments can tell Canadians to return to work. The signal to the governments that they can start pulling back from subsidies is when we can say, “Canadians, go back to the office. Canadians, go back to the restaurants. Start dining again. Start going to the theatres. Start taking trips, including international trips.” When that happens, we can slowly start to reduce some of the supports that are there, but if we do that too quickly, these businesses will die and thousands of Canadian jobs will be taken out with them.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll divide the rest of the time among the four last questioners, with about four minutes apiece.

We will start with Ms. Jansen and then Ms. Koutrakis.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you, Mr. Chair.

It has broken my heart to hear about the many small businesses that have been completed decimated by the continued COVID restrictions and lockdowns. It's terribly frustrating to see our hard-working job creators and service workers who have been so hard hit and who continue to suffer due to the slow procurement and use of rapid tests and vaccines that could have provided a road to recovery much earlier.

Mr. Kelly, I'm hearing from business owners in my riding that if we have to wait until September for the government to finally stop telling Canadians to stay home, they will not be able to hang on. What's the expected loss of businesses and jobs if vaccinations are slow and we do not fully open up until September?

[Daniel Kelly]

I'm super worried about the slow rollout of vaccines—especially as Canadian entrepreneurs look at what's happening in some of our major trading partners, as in the U.S.—and getting tourism back. The U.S. is allowing those who are vaccinated to return to the U.S. without having to go through quarantine requirements. We're going in the opposite direction, with further restrictions.

Rapid testing, I completely agree, has been a giant missed opportunity for us. Provincial governments have relied almost exclusively on lockdowns as a way of solving this. Most of the Conservative governments have been awful through the whole pandemic on that front.

I will say that if we can get rapid testing sped up even now—Ontario is finally starting to come around to that, while unfortunately the B.C. government seems out to lunch on that front—and can get some of the provinces to pick this up, we think we may be able to have a chance of using that as a tool to guide us through COVID without locking down.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you. Here in B.C. we have an NDP government, which is still not letting us get out and go.

You mentioned in your presentation that your calls with your members have begun to be suicide prevention interventions. How will we even be able to quantify the impact on the mental health of your members?

[Daniel Kelly]

We've tried to do some of that. I think it was in my deck today that about half of business owners are saying that this is having a mental health impact on them as business owners.

It's pretty bad. My little not-for-profit association took 78,000 calls from business owners last year to try to provide them with guidance and support. That's 78,000 calls, and these calls are dark. Business owners are really at their breaking point. Every day and every hour that the program gaps and supports don't get fixed, more business owners are making the decision to hang it up forever. That's a shame. We're all going to suffer for that.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Absolutely.

I'd like to ask Ms. van den Berg a question. You mentioned that there is really no evidence to show that COVID protocols that small business owners had put in place were failing. That is incredibly shocking, considering how many small businesses are shutting permanently across the country every day. Would you agree that if Canadians continue to be told to stay home until September due to slow vaccine rollouts and lack of rapid tests, restaurants across the country will continue to go broke?

[Lauren van den Berg]

Absolutely. One hundred per cent. It is a terrible and depressing likelihood. We are staring down the barrel of a gun here.

A slow vaccine rollout is frustrating and disappointing from a Canadian perspective, but I also think pinning all our hopes on a vaccine rollout isn't a strategy for reopening. With the rapid testing—again, a missed opportunity—and waiting for vaccines, how do we live in the meantime? What do we tell the countless restaurant operators across the country who are struggling to make ends meet, even when they can open indoor dining, after they have made these unbelievable investments in protecting the health and safety of their teams, their people and their guests? It's a growing concern, and my fear is that we don't have any good answers yet.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll turn to Ms. Koutrakis, followed by Mr. Fast, and then Mr. Fragiskatos will wrap it up.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you to all the participants in today's meeting.

It's heartbreaking to hear this testimony. In my riding in Vimy, Laval, there are many small and mid-sized businesses, predominantly restaurants. I am the daughter of a former restaurant owner, so I've lived it. I know exactly what the challenges are and what it takes, and it breaks my heart to see how many small businesses, particularly in the hospitality industry, are suffering.

I have a question for Ms. Abou-Dib.

In the riding of Vimy is the headquarters of Teamsters Canada. I saw the building being built not too far from my office, and I was proud to see your building go up in my riding.

Ms. Abou-Dib, your president, Mr. Laporte, in response to the fall economic statement, said that the federal government is “dead serious about supporting working-class and middle-class Canadians” and that “continued government spending will be the only thing keeping millions...from total ruin”.

How would you respond to criticism from the opposition suggesting that the federal government should ease its emergency spending, and what specific elements of the FES demonstrate a commitment to ensuring continued support for Canadian workers and families?