Finance Committee on March 17th, 2021

[The Chair, Liberal, Wayne Easter]

We will call the meeting to order.

Welcome to meeting number 27 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of March 8, 2021, the committee is meeting to study Bill C-14, an act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021. Therefore, members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. Just so you are aware, the website will always show the person speaking rather than the totality of the committee. I'd like to take this opportunity to remind all participants, witnesses and members, that screen shots or taking photos of your screen is not permitted under parliamentary rules.

Before we go to the witnesses, as the committee knows, the subcommittee on agenda and procedure met on Monday. There was a report sent out to committee members. I would like to make a couple of changes to that report, if I could.

I will read the report and make the changes as I go, as follows:

1. That, with respect to Bill C-14, An Act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures:

a. The Committee invite witnesses to appear on the Bill on Wednesday, March 17, 2021, from 2:30 p.m. to 5:30 p.m., on Thursday, March 18, 2021, from 10:00 a.m. to 1:00 p.m., and if required during other meetings before Tuesday, March 23, 2021;

b. The Committee proceed with clause-by-clause consideration of the Bill no later than Tuesday, March 23, 2021, at 4:00 p.m.;

It did say “3:30 p.m.” That is amended to read “4:00 p.m.”

c. Amendments be submitted to the Clerk of the Committee in both official languages no later than 12:00 p.m. on Monday, March 22, 2021;

d. The Clerk of the Committee write immediately to each Member who is not a Member of a caucus represented on the Committee and any independent members to inform them of the study of the Bill by the Committee and to invite them to prepare and submit any proposed amendments to the Bill which they would suggest that the Committee consider during the clause by clause study of the Bill. The Clerk should also outline all of the parameters and deadlines mentioned in paragraphs a) to c) of this motion;

2. That the committee hold a 90 minute panel of witnesses on the Covid-19—

It did say “Covid-10” and is amended to read “Covid-19”.

—expenses study on March 25, 2021 followed by a 30 minute discussion on committee business to study various motions on notice (3 motions from Gabriel Ste-Marie (Routine motions), 1 motion from Peter Julian (Tax evasion) and 1 motion from Julie Dzerowicz (interprovincial trade barriers));

It did say interprovincial “tax” barriers. That is slightly amended to read interprovincial “trade” barriers. It's probably due to me being on P.E.I., and people don't understand my island accent anymore.

3. That the committee hold a meeting to study the Main Estimates and invite the Minister of Finance and senior officials;

4. That the subcommittee hold its next meeting on Monday, March 29, 2021 or Wednesday, March 31, 2021 to discuss committee business.

With those slight amendments, does somebody want to move the motion?

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

Yes, I so move.

[The Chair, Liberal, Wayne Easter]

It is moved by Mr. Ste-Marie.

Is there any discussion on the motion?

Yes, Peter.

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

Thanks, Mr. Chair.

On the last part, about the steering committee, I thought we were meeting after the discussion of the motions next Thursday—so a week this Thursday—and so it was the following Monday. I think that's the 31st, but you mentioned a number of dates. I'm not sure if I misunderstood you or whether you clarified.

[The Chair, Liberal, Wayne Easter]

What we were going to discuss at the meeting on March 25 in the last half-hour were those motions—the ones from Gabriel Ste-Marie, yours, and the one from Julie Dzerowicz—to see what we'd do with those motions. Then we would have a subcommittee meeting on Monday, March 29 or Wednesday, March 31.

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

Good. Yes. Thank you.

[The Chair, Liberal, Wayne Easter]

Okay.

All those in favour?

(Motion agreed to)

Thank you, all.

We shall now turn to witnesses, but before we get to the witnesses, I'll give you the speaking order for questions. First will be Mr. Kelly, followed by Ms. Koutrakis, Mr. Ste-Marie and Mr. Julian.

Witnesses, welcome, all. I'm sorry for taking a little time with that procedure, but it gets us to where we want to go.

We will turn first to the Quebec Chamber of Commerce. We have Charles Milliard, president and CEO; and Mr. Lavigne, senior consultant.

Mr. Milliard, the floor is yours. If you could hold it to about five minutes, that would be great.

[Charles Milliard, President and Chief Executive Officer, Fédération des chambres de commerce du Québec]

I'll do my best.

Happy St. Patrick's Day to everyone.

My name is Charles Milliard.

I am the CEO of the Fédération des chambres de commerce du Québec. The FCCQ is an organization that includes both 130 chambers of commerce from across Quebec and 1,100 member companies. We are the largest group of business people in Quebec and we represent all sectors of activity in Quebec.

Thank you for inviting us to testify before you today on Bill C-14, which is a follow-up to the economic statement that was introduced on November 30.

The FCCQ welcomed many of the measures that were presented in this budget update. These include the increase in the wage subsidy rate and its extension to March 13, and June 5 thereafter, as well as significant investments in infrastructure, particularly at major airports. This is noteworthy. However, today we want to focus our comments on the Canada emergency rent subsidy and add some editorial comments on the tourism and pharmaceutical industries.

The Government of Canada has a number of excellent programs in place that are having a major impact on the ability of individuals and businesses to weather the current crisis. These include the Canada emergency commercial rent assistance, CECRA, a program that was put in place quickly and addressed a real and very concrete problem, the difficulty for commercial tenants to pay their rent due to health-related restrictions.

However, problems arose very quickly, and we heard a lot about this at the federation, because it was the building owners who had to apply directly. This proved to be ill-suited to the crisis environment, which complicated the relationship between many tenants and landlords and therefore limited the appeal of the program.

For example, according to a survey conducted by Restaurants Canada, 20% of restaurant owners, or one in five, were not allowed by their landlords to defer rent during the first wave of COVID-19, a criterion that was required to qualify for the CECRA. This made it imperative to change the program. Fortunately, the new Canada emergency rent subsidy, or CERS, addresses this challenge by now providing financial assistance directly to the tenant company, up to and including a 90% subsidy rate. This is major and it was very much appreciated.

On the other hand, it seems unacceptable to us, at this time, to penalize businesses that have not been able to benefit from the CECRA because of its particular mechanics, even though they would have been entitled to it since March 2020. The federation therefore recommends that commercial tenants be allowed to receive the CERS for all months in which they would have been eligible for it since the beginning of the crisis and for which they did not receive the CECRA.

As we all know, government programs are rarely retroactive, and that's fine. However, we are in a more than exceptional situation. Let's be clear: thousands of entrepreneurs were eligible for the CECRA, but they were not able to benefit from the program for reasons that were totally beyond their control. In this case, for us, making the program retroactive would correct an injustice that has been experienced by far too many medium-sized business owners in Quebec and the rest of Canada.

On another note, the FCCQ also looks favourably on the assistance that was announced in the economic statement for the events and arts sector. I know that my colleagues the other witnesses will talk about this at length, so I won't go into detail. However, it should be remembered that the major Quebec and Canadian hotels have seen their clientele of international travellers and conventioneers virtually disappear since last March.

For us, this tourist accommodation sector is important and is still too often left out of the current crisis. For now, unfortunately, the assistance promised by Ottawa is limited to loans, when it is clear to us that hoteliers and tourism businesses still need direct and most concrete assistance, as does the cultural sector, for that matter.

I'll close by quickly talking to you about the pharmaceutical industry, because Bill C-14 is preventing and alleviating shortages of therapeutic products, including drugs and medical equipment, in Canada. This is a great opportunity to remind ourselves of the importance of the health and life sciences sector in Canada. Prior to the pandemic, the FCCQ had recommended a massive investment in this sector, and I believe that the federal government has a role to play, among other things, in the local production of manufacturers and, above all, in the rapid review of the proposed reform of the Patented Medicine Prices Review Board, the PMPRB. The crisis has revealed the importance of having a strong pharmaceutical industry in Canada, and I think you have an opportunity as parliamentarians to improve the situation at this time.

In conclusion, the federation recommends the passage of Bill C-14, while reiterating the importance of making the Canada emergency rent subsidy retroactive for contractors who were unable to obtain emergency assistance.

Thank you. I would be happy to answer any questions you may have.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Milliard.

I will turn to the Pia Bouman School for Ballet and Creative Movement and to Ms. Bouman, artistic director and founder.

[Pia Bouman, Artistic Director and Founder, Pia Bouman School for Ballet and Creative Movement]

Thank you for this opportunity.

My name is Pia Bouman. I would really like to begin by expressing my admiration and thanks to the Government of Canada during this time of COVID. It has often been the saving grace for this school.

I would like to point out a few facts about the school.

It was founded by me in 1979. It was granted charitable not-for-profit status in 1987 on a compelling mandate, which is that any child who wishes to learn dance, any child who wishes to create dance and any child who wishes to perform dance should be given the chance to do so in a safe and professional environment.

This mandate enabled us to have a very sizable bursary program, which enabled children from socio-economically challenged situations to express their wish to dance. It gave them any chance to do so, taking part in a full program or in just a small part of the program that we gave.

Pia Bouman School gives a full classical dance education—we follow the Royal Academy of Dance—to children and youth six to 17 years old. Since its inception, hundreds of children and youth aged six to 17 have enjoyed dancing, learning and goal-setting, and have been successful in their pursuits.

Pia Bouman School is also a hub where professional dancers hone their art, visual artists show their work, musicians practise, and independent theatre develops works, rehearses and performs in our studio theatre. We had a presence of 40 years in Toronto's west end, Parkdale, a socio-economically challenged area. In 2019 Pia Bouman School had to move.

We renovated 225 Sterling Road. We built four studios inside a large space, again, with the possibility of a theatre. Theatres are much-needed facilities in the city of Toronto. From September 2020 until now, the school, like all schools, was closed for extended periods. Dreams were lost. A safe home away from home was lost. There is no financial compensation for the loss of a love for dance in a young person's life. At the moment, I am dealing with at least three students who are in situations of serious mental and emotional depression.

PBS was not able to finish its studio theatre because the school had to close; we lost income and we were not able to pursue further building. The revenue PBS receives through rentals of its studios and theatre for productions accounts for a large part of our income and is an essential part of our revenue to help cover our substantial rent.

During the COVID-19 period of March 15, 2020 to August 31, 2020 the school closed its doors. Most office staff were laid off. This means contract teachers and accompanists were temporarily laid off—a harsh situation for people I feel deeply responsible for, people who amaze in dance, in music and in art.

In April 2020, the Zoom classes entered our lives. It was a new way of teaching. In order to keep teachers' income below the maximum allowed if they received CEWS, the number of teaching hours was greatly reduced so as not to exceed $1,000. PBS, the school, lost income. In the period 2019-20, we were obliged to refund class fees to students who could not commit to Zoom classes in their already very stressed and complicated lives. In the current school year, from September 2020 to now, we have less than half of our normal student population.

PBS has lost income that we would have received from rentals by performance companies that rent our spaces and from individual artists who find our studio space a place for incubation and development of their works.

The point I'm trying to make here is that it is not just a school, but an entire population, intertwined with the arts in all different forms, that is greatly and seriously affected by this pandemic.

Pia Bouman School received $60,000 through CEBA, which was a saving grace. Our landlord has not given us any reprieve, and our rent in the centre of Toronto, a bit on the west end, is sky-high. CEBA was incredible. It helped us through this period to some extent; we received $40,000 in April and just this past March we received another $20,000.

The catch for the school is that we need to pay this amount back by December 2022. Not only do we have to pay this back, but we will have, if we make this, a debt of $50,000. We have a rental theatre space that could possibly bring in support for our presence in the city, but we cannot use it because it is not finished. It requires money to finish it.

We have to rebuild our student population. Currently, the student population is less than half. The parents have serious fears for their children, and the fears are transplanted onto their children, specifically the teenagers aged 12 to 17. Not only have these children, these youths, lost the possibility to express themselves through dance, to learn and to enrich themselves with music and personal expression, but they've lost a dream. I have to point out that this dream is the existence of the arts, and in general that has disappeared from our lives.

It only takes all of you a glance at the papers to see that arts are not represented. How can any student who studies art and who loves art continue to believe that art will be an important part of their lives if there is not a voice around them to listen to or to see as pictures? This is a very serious concern of mine.

When we reach the end of the pandemic and Pia Bouman School looks at its debt, I know how much support we will need to be able to keep this school, which is unique—it is the only school that is a charitable not-for-profit organization and enables children to dance. If this school is lost, there is a lot lost for all of us and for our children. It frightens me. It worries me. Obviously, I am more than involved in all these issues as an artist, as a choreographer and as a teacher.

I have given you just a little picture. In a normal year, from September 2019 to March 2020, the income of the school—that's not a full school year—was over $600,000. The income we have now for the same period is a third of that. In rental fees from artists, theatre companies and professional artists, we received in the previous period over $30,000, and to date it is $7,000.

The bursary support that we received from foundations, institutions and very generous individuals over the past so many years has always been between $25,000 and $30,000, which gives as full a dance education as any child could wish or just as little bit as any child could wish.

To date, it is nothing, because the foundation that supported us says it does not know how this will go. There is no revenue for our dancers, and for many that means another dream lost.

I'd like to end with one last observation. For our children and youth, dance, theatre and live music have disappeared from their lives since the onset of the pandemic. In order to learn to appreciate the voices of art and music, one must hear and see the voices to be able to learn it as an expression, and history has told us that.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Pia.

We turn now to Festivals and Major Events Canada. We have Martin Roy, executive director.

Martin, welcome back. The floor is yours.

[Martin Roy, Executive Director, Festivals and Major Events Canada]

Thank you, Mr. Chair.

Festivals and Major Events Canada, or FAME, and the Regroupement des événements majeurs internationaux, REMI, represent more than 500 festivals and events in Canada, through direct and affiliated memberships, in a sector of the tourism and cultural industry that alone generates more than $1 billion of the country's GDP each year.

Today, I will be addressing you on the topic of Bill C-14 regarding the implementation of the fall 2020 economic statement, as well as on the heels of FAME's submission of a new three-step roadmap for the recovery of the festival and events sector.

I want to take this opportunity to acknowledge the work you have done here in the pre-budget consultations. We are pleased with recommendation 55 in your report, and we very much hope that the government will take it up in full.

The first phase of our roadmap is a survival phase, which we are still in, where festivals and events are deprived of the opportunity to bring people together and generate self-sustaining revenues, which typically make up more than 80% or 85% of the financial packages, with the rest being grants from cities, provinces and the Canadian government.

It is primarily through the emergency wage subsidy that you can really help us achieve the first step of the plan, keeping teams together and expertise alive. We understand that this program is very expensive for taxpayers. That said, we caution elected officials who would want to end it too soon or opt for declining support. If choices must be made, we believe that fewer businesses should continue to be supported, but at a high rate, keeping eligible only those that continue to be most affected, such as those in the tourism and cultural sectors, where revenue losses can be as high as 100%. We believe the wage subsidy will be vital, until we fully recover our business models, likely in the first or second quarter of 2022.

I also emphasize the importance of thinking about the hyper-seasonality of festival operations and revenues to keep them eligible, especially when it comes to reference periods.

Also related to this stage of the plan, we emphasize the importance of maintaining regular grants as the lifeline for festivals and events, which now account for almost all revenues. As for the Canada emergency rent subsidy, it is an interesting complement for festivals and events, but not in the same way for everyone. On the one hand, there are small festivals run out of a single office, and on the other, there are large institutions, such as the Toronto International Film Festival or the National Bank Open, formerly the Rogers Cup, that have large facilities that are very expensive to maintain and will likely exceed the maximum threshold of the program.

The second phase of our roadmap is about public health and the gradual recovery of our operations. We need to instil confidence in Canadians. We are asking the government to facilitate a discussion between festivals and public health authorities across Canada to see what can be done this summer. We need to do this soon and know within the next month or so what framework we can operate under in June, July, August and beyond.

Events may be held soon. They will not necessarily be cost effective, nor will they be able to take place with the same capacity, but they will be organized in a safe manner from a health perspective. For example, outdoor amphitheatres with facilities that force distance are possible. We have solutions for just about every problem you can think of. So we need to discuss them.

The federal government can play a role by supporting test concerts, for example. This summer, cancelling events altogether or instituting gauges without regard to the capacity of the organizers, for example, limits of 250 people, would be a form of intellectual laziness on the part of the authorities.

The third phase of our plan is to stimulate tourism and economic recovery by reviving festivals and events. Like you, we recommend creating a new program based on the model of the marquee tourism events program, which was established after the 2008 crisis, and funding it with $225 million over three years.

We know that festival-goers spend one-third of their money on food and one-quarter on hotels. So there would be a trickle-down effect to other sectors that are very much affected, not to mention, of course, the artists, musicians and the entire ecosystem, including stage and technical equipment suppliers.

We believe that this program should be managed by the regional economic development agencies, in collaboration with Canadian Heritage. Not all festivals are recognized as cultural, but they all have an economic and tourism impact. Think of sporting events, fireworks festivals, culinary or wine festivals, for example. Tourism and the economy are a common denominator.

In closing, there is also an important social dimension to our project. Canadians will want to come together after the crisis. They will need social healing. In fact, that is why we propose to call the program “Celebrating Together Again.”

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

Beth Potter is next. Ms. Potter is president and chief executive officer for the Tourism Industry Association of Canada.

Welcome, Beth. The floor is yours.

[Beth Potter, President and Chief Executive Director, Tourism Industry Association of Canada]

Mr. Chairman and esteemed members of the committee, I would like to thank you for inviting us here today to share with you the tourism industry's priorities for the upcoming budget.

[The Chair, Liberal, Wayne Easter]

Beth, I have to interrupt for a second. I think we're all having trouble hearing the translation. Can you perhaps lower your mike a little? It's coming through as garbled, and I expect the translators are having trouble.

Try it there again.

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

Is it possible that she's also not toggled to the correct English or French?

[The Chair, Liberal, Wayne Easter]

Yes, that would be possible.

Look at the bottom of your screen, Ms. Potter, and you will see interpretation there. If you're speaking in French, click it on French, and it will probably come through better.

Can you find it?

[Beth Potter]

Is this better?

[The Chair, Liberal, Wayne Easter]

Yes, that's great.

[Beth Potter]

Okay. That's awesome.

I'll just continue from there.

Prior to COVID-19, tourism was one of the fastest-growing industries in the world. We are here today, over a year into the pandemic, and the visitor economy is still in crisis. The tourism economy has lost over half a million jobs. The rate of unemployment in the sector has surpassed the national level, and the impact on tourism has been greater than that experienced after 9/11, SARS and the 2008 economic crisis combined.

Canada's tourism sector was the first hit and the hardest hit, and it will be the last to recover. Before COVID-19, tourism was the fifth-largest sector in Canada, responsible for 10% of Canadian jobs, $105 billion in revenues, and 2.3% of GDP.

Since the onset of the pandemic, TIAC has been advocating for targeted support for the sector, and many of our recommendations require Bill C-14. We applaud the government for the implementation of the HASCAP program. We continue to work closely with government to facilitate open dialogue on feedback from the industry, and we also thank the government for the recent extension and revenue comparison changes for the CERS program.

However, we are still waiting for a sector-specific support package. A large portion of our recovery plan is based on business solvency. Over the past year, tourism businesses have lost revenue and cash flow, but regardless of that, fixed expenses like rent, mortgages and taxes have continued. Without liquidity to stay on top of these costs, these businesses will not be able to survive and reopen.

We have a number of recommendations with respect to improving current support programs, which we have provided to you in writing through our recovery plan, and we will continue to work with the government to provide industry feedback on these programs. We have seen the commitment from the government in the Speech from the Throne, the fall economic statement, and revised mandate letters on supporting the hardest-hit businesses, but now is the time for us to see action and investment in measures to support the rebuilding of our sector.

We are calling on the government for immediate action in this budget. We are specifically asking for the following: a tax incentive for Canadians for the 2021 and 2022 tax years to travel locally or within Canada; the development of a business events and urban recovery funding program; top-up funding for Destination Canada to keep Canadian destinations top of mind; support for destination-marketing organizations to entice the return of high-value travellers; reinstatement of the visitor GST rebate program for international visitors; reintroduction of the federally funded marquee tourism events program; and support to save our airline sector, the backbone of tourism and the economy.

One of our key recommendations is for a tax incentive to help Canadians explore Canada, to stimulate the visitor economy, and to support small businesses. This is an opportunity to encourage domestic travel and unlock the spending power of Canadians. If we can shift just two-thirds of the planned spend on international leisure travel towards domestic travel, it will make up for the forecasted $19-billion shortfall currently facing our visitor economy in 2021.

Recovery of international travel will also depend on border reopening. We need to use current science-based data and effective testing and contact tracing, and commit to adopting proof of vaccination as an additional travel document going forward. We need federal guidance on a policy road map so that tourism businesses can understand what conditions are required before border restrictions are relaxed. We need the government to set out the criteria for reopening.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Potter, and also thank you for sending us information from time to time.

Thank you, all, for your presentations.

As I indicated earlier, we'll go to a six-minute round first, starting with Mr. Kelly, followed by Ms. Koutrakis.

Pat, go ahead.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Chair.

I'll start with the last point that Ms. Potter made about the necessity of criteria around reopening so that businesses can actually plan to recover. Does Bill C-14 contain such a road map or set of criteria under which the economy can reopen?

[Beth Potter]

Not that we've seen. We know that the ongoing work around the rollout of the vaccine program, as well as the monitoring and tracking of variants, are things that the government is working on. To our knowledge, at this time there is no reopening plan in place.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Right, so again, for your members to be able to plan to recover and to move beyond absolutely critical survival, bare survival emergency measures—which are mostly based on debt and will actually eventually becomes a problem and a barrier to recovery—there's really no substitute for having your customers back.

[Beth Potter]

No, and we're going to need time for businesses to be able to restock, prepare, market, communicate with their customers and rehire.