Finance Committee on March 25th, 2021

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order.

Welcome to meeting number 30 of the House of Commons Standing Committee on Finance. Pursuant to the committee's motion adopted on Friday, February 5, 2021, the committee is meeting to study all aspects of COVID-19 spending and programs.

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. So that you're aware, the webcast will always show the person speaking rather than the entirety of the committee.

In order to save time, we'll forgo the rest of the formalities.

I want to welcome the witnesses.

Thank you for appearing and going through the procedures of this new way we seem to be having to do things. We have six witnesses, or six associations, during these 90 minutes. If you could hold your remarks to about five minutes, it will mean a fair bit more time for questions.

We'll start, then, with Mr. Juneau, chief executive officer of the association of ski resorts in Quebec, and Jean-Michel Ryan, chairman of the board and chief executive officer of Mount Sutton.

Go ahead, Mr. Juneau.

[Yves Juneau, Chief Executive Director, Association des stations de ski du Québec]

Mr. Chair, members of the Standing Committee on Finance, good afternoon.

My name is Yves Juneau, and I am accompanied by Jean-Michel Ryan. We thank you for having us here today. We understand that the purpose of the meeting is to discuss with you assistance measures put in place by the Government of Canada to help businesses weather the COVID-19 crisis. We will use this opportunity to make recommendations for the future. Of course, we're still in a pandemic.

I would like to point out that we've provided the clerk with a reference document, which can be sent to you once the translation is completed.

Since it's such a nice day today, we're going to cool you down a little by talking about snow. We know there are beautiful ski resorts in Mr. Ste-Marie's riding. I'm pleased to point that out.

Skiing has been in the DNA of Canadians and Quebeckers for 100 years. We represent 75 ski resorts in Quebec. This activity generates $800 million in economic spinoffs annually and over 33,000 jobs. It's the province's primary winter tourism activity.

Fortunately for us, the Government of Quebec authorized ski resorts to operate this winter with very strict restrictions, but we are extremely grateful for the fact that we were able to welcome skiers on our slopes. If not for COVID-19, the downhill ski industry contributes $863 million to Quebec's economy, representing 8.6% of the province's tourism GDP.

As members of Parliament, you will surely be interested to know that there are 236 ski resorts in Canada. They are in every province, in your province, in Prince Edward Island, Mr. Chair, and in the Yukon. Unfortunately, the Northwest Territories doesn't have one yet, but we're working on it.

This year, the financial situation of ski resorts has weakened by the pandemic. As such, the measures put in place by the Government of Canada have been beneficial overall. That said, a closer look at these measures reveals some shortcomings. The most beneficial measure for tourism and skiing during the crisis was undoubtedly the Canada emergency wage subsidy, or CEWS, and we thank the government for that.

As a result of the restrictions imposed by COVID-19, the CEWS helped to offset the industry's financial losses and keep key people employed as early as last spring. However, we regret that ski resorts that are affiliated with a municipality and are required to be profitable from own-source revenues generated by the centre are not eligible for this measure. Of course, when we think of skiing, we think of Whistler, Blue Mountain, Ontario, Lake Louise, Alberta. Here in Quebec, Tremblant comes to mind, but most ski resorts in Canada are small resorts that offer winter activities to local and regional clientele.

In Quebec, for instance, eight major resorts generated revenues of $213 million last year. Furthermore, the 36 resorts in the so-called “small category” shared total revenues of $13 million, or only 4% of the industry's total revenues last season.

Here's the issue with respect to the CEWS. Many regional ski resorts are not-for-profit organizations, such as Mont-Orford or Val d'Irène, that have varying degrees of ties to municipalities or RCMs. Consulting firms informed the resorts that their ties to their municipality, however weak they may be, jeopardized their eligibility for the CEWS.

In this context, we would obviously like to see the measure made available to all ski resorts, and we are counting on the Standing Committee on Finance to ensure that this eligibility is broadened and that the difficulty posed by the restriction on public enterprises is understood. That isn't the case for ski resorts that are affiliated with an RCM or municipality, as I just said.

I'd also like to talk about the federal government's very beneficial subsidy program to help businesses adapt to health security standards. In Quebec, there was a $7 million envelope. Unfortunately, major resorts such as Tremblant and Bromont didn't qualify because of the sales they had generated before the crisis. From our perspective, the program should be available to all tourism businesses.

There are also, of course, all the loan and loan guarantee measures. The only thing we'd like to point out is that companies don't want to take on more debt and therefore prefer direct assistance. For this reason, the Canada emergency wage subsidy is the best measure. So it should be expanded and maintained after June, to ensure fairness and not jeopardize the survival of ski resorts. Those are some of the findings.

I'll continue with the recommendations.

We just talked about the emergency wage subsidy. In terms of promotion efforts, we hope that the economic and tourism recovery won't be achieved solely through the traditional big city establishments.

Hon. members, you know what I'm talking about. You represent regions and rural areas. These areas, especially mountain communities, have large areas that encourage a safe resumption of tourism activity.

The federal government should invest in diverse experiences to build back better and to entice visitors to move outside packed cities into rural areas.

We invite you to consider programs such as PAFIRS, the Programme d'aide financière aux infrastructures récréatives et sportives, which was set up in Quebec.

Unfortunately, the government excluded ski resorts. Cross-country ski areas and snowmobile clubs received government support, but there was no federal government support for downhill skiing in Quebec.

We need this support, among other things, for climate change adaptation. I'm sure Ms. May is receptive to that concern. The ski industry has the opportunity to invest in new technologies and innovative solutions, including snowmaking. Given the costs of these new technologies, we hope to be able to count on assistance to modernize our equipment and therefore contribute to a greener, more sustainable economy.

In closing, we would be pleased to provide you with the data you need for your work. We hope to be able to count on your support to sustain tourism development in rural areas.

Thank you for your attention.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Juneau.

We do appreciate anyone who offers recommendations, because that on-the-ground experience usually tells us where it's at, and that we need to know.

Now we'll turn to the Canadian Manufacturers & Exporters, to Mathew Wilson, senior vice-president, policy and government relations.

Mr. Wilson, go ahead.

[Mathew Wilson, Senior Vice-President, Policy and Government Relations, Canadian Manufacturers & Exporters]

Thank you, Mr. Chair.

Good afternoon. Thank you for inviting me to participate in today's discussion. It's my pleasure to be here on behalf of Canada's 90,000 manufacturers and exporters to discuss federal government support programs on COVID-19 and to outline the need for a strong response to grow the economy moving forward.

Without doubt, COVID-19 has been one of the biggest challenges our country and our sector have ever faced. Within this response, there have been challenges, most notably and most recently with the pace and availability of testing and vaccinations. However, when examining the spending and program response of governments, CME and our members believe the response has been generally excellent throughout. In fact, in a recent survey roughly two-thirds of respondents rated federal and provincial government actions as good to excellent. We believe the reason for this high level of support is simple: It's the federal wage subsidy program.

Fortunately for our sector and the economy as a whole, Canadian manufacturers kept operating throughout the past year. In fact, as an essential industry we were not only relied on to produce goods that Canadians need every day; we also played our part in the effort to equip our doctors and nurses with the tools to fight COVID-19. Thousands of companies responded to the call to produce PPE, medicines and other goods that Canadians needed. Such a mobilization of Canada's industrial capacity had not been seen since the Second World War.

Today, with the efforts of the sector and support from government, manufacturing has seen employment levels and output rebound to pre-COVID levels. These outcomes were possible only because of the various COVID-19 business assistance programs, in particular the Canadian emergency wage subsidy. In fact, based on our survey, 53% of manufacturers used the wage subsidy at some point. Government data itself shows that the sector was the single largest user of the program.

The reason for this is simple. Because we had to keep operating during the pandemic, we needed the money to plug gaps that were being caused by precipitous declines in sales and lowered levels of productivity to operate safely. Other programs were also necessary to help manufacturers tackle cash flow and other problems caused by the pandemic, including the rent subsidy program, tax deferrals and extended work-sharing programs.

At the same time, we fully understand the tremendous cost of these programs and the need for oversight on spending, and we believe these programs must come to an end. But given that economic conditions are likely to remain soft, at best, for the first half of this year, we believe many of these programs must continue well into 2021 to provide ongoing stability where needed. That might be the most important part of this conversation. We need to create the conditions for economic growth and prosperity so that we can emerge stronger from this crisis.

Now is not the time for austerity. Turning off assistance programs while the recovery remains fragile risks inflicting harm on the economy that will undermine growth prospects moving forward. Rather, Canada needs to implement an aggressive economic growth strategy that will kick-start the economy to reduce the country's fiscal challenges. This must start in the upcoming federal budget.

CME has called for the government to introduce a Canadian industrial strategy for the 21st century. The pandemic has shown how critical it is to have a world-class, technologically driven, resilient and innovative manufacturing sector. We cannot lose sight of this. We must work together to build it and overcome the challenges that predate the pandemic.

The 21st century industrial strategy should focus on and support concrete measures that will lead to long-term growth and prosperity for Canada. First, it must aim to reverse decades of underinvestment in technology and productive capacity that has seen Canada fall far behind our international competition. Second, it must address chronic skills and labour shortages. Third, it must focus on the commercialization and scale-up of new products and technologies. CME presented our ideas on specifically how to address these issues previously before this committee, and I would be pleased to answer any specific questions on them going forward.

In conclusion, CME strongly supports Canada's efforts to date on COVID-19. While we should review the effectiveness of these programs and look to make improvements, now is not the time to stop the support, as full economic recovery remains a ways away. The focus must now begin on creating growth plans, especially a modern industrial strategy, that will drive prosperity for all Canadians.

Thank you again, Mr. Chair. I look forward to the discussion.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Wilson.

We will turn now to William Ross, coordination officer for Failure of Tax Havens. That's what I have, but I'm not sure I got the translation right.

We'll let you explain it, Mr. Ross. Go ahead.

[William Ross, Co-ordination Officer, Collectif Échec aux paradis fiscaux]

Good afternoon, my name is William Ross.

Mr. Chair, members of the Standing Committee on Finance, good afternoon. I am the co-ordination officer of the Collectif Échec aux paradis fiscaux, which represents more than 1.7 million members from unions and civil society in Quebec.

As part of the consultations of the Standing Committee on Finance, the collectif has been exploring a way to increase government revenues. Given the current emergency, we believe the government has the legitimacy and public support to deliver on two key promises in its own 2019 election platform: ending the use of tax havens and imposing a tax on web giants. We don't rule out the use of a wealth tax, but that will require creating guarantees that these wealthy individuals won't be able to take advantage of existing tax loopholes.

According to the Office of the Parliamentary Budget Officer, Canada estimates that between $19 billion and $26 billion are lost each year because of unpaid taxes, tax evasion and tax avoidance. The Tax Justice Network also estimates, according to the latest figures released last week, that Canada loses $5.75 billion annually because of illicit international flows, representing 20% to 25% of the Canadian tax gap.

At a time when Canada and the world are facing an unprecedented crisis and the public deficit is at an all-time high, it is more than necessary for Canada to make it a priority to fight tax fraud before considering charging taxpayers or cutting programs and services to our already hard-pressed communities. However, the health crisis has highlighted some clear vulnerabilities in Canada's tax transparency and justice policies.

Members will recall that in May 2020, Canadians asked the government to follow Denmark's example by not injecting public funds into companies that use tax havens in their tax strategies. The government couldn't listen to that recommendation. How could it have, since we don't have the proper tools in Canada to know who is using shell companies and for what purpose? We believe it's imperative that the government establish a registry of actual beneficiaries. Innovation, Science and Economic Development Canada held consultations on this issue last year. Unfortunately, nothing has been done since then. To prevent the government from injecting public funds into companies that do not comply with our own tax laws, it's imperative that we have the means to properly map company structures and establish the identity of individuals who benefit from public assistance programs.

Members will also understand that 2020 was an opportunity for an unprecedented expansion of the digital economy. As such, the government's broken promise to introduce a tax on the digital economy and diverted profits by April 1, 2020, was an incredible missed opportunity to ensure that Amazon and similar companies pay their fair share and contribute adequately to the Canadian economy, particularly in times of crisis.

The repeated failure of the OECD negotiations is really the last straw. So we are asking that Canada implement such a tax without delay, in order to recover the lost money.

With regard to foreign direct investment in tax havens, an already well-known trend continued in 2020. In fact, foreign direct investment increased by 3% last year, for a total of 135% over the past decade. Canadians continued to put money into the 12 most influential tax havens. In total, according to Canadians for Tax Fairness, $380 billion is being taken off the tax rolls and allowed to enter the country with impunity. We believe it is absolutely essential that the government curb double non-taxation practices and review its international tax policies and its participation in certain existing tax treaties.

In conclusion, the Collectif Échec aux paradis fiscaux remains convinced that the best thing to come out of the current crisis would be a Canadian economy driven by a desire for tax justice, which would put an end to the harmful practices that have been put in place over the years. This is an opportunity for the government to have all the levers in place to create that change. We encourage the government to act responsibly. As such, I will provide the clerk with a brief of our 12 recommendations, as we have already submitted them during the pre-budget consultations.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you for that, Mr. Ross.

We'll turn, then, to First West Credit Union, with Mr. Gross, president of Island Savings; and Ms. Besse, chief credit officer.

Ms. Besse, go ahead.

[Shelley Besse, Chief Credit Officer, First West Credit Union]

Thank you, Mr. Chair and committee, for having us here today to speak on behalf of First West Credit Union and our efforts to support our members through COVID-19.

As you've heard, my name is Shelley Besse and I'm the chief credit officer. With me is Kendall Gross. Kendall is the president of our Island Savings division.

I'll share some remarks, and then we'll both be available to answer any questions the committee might have.

First West is British Columbia's third-largest credit union, with more than $14 billion in assets, 250,000 members and approximately 1,250 employees, operating under the trade names Envision Financial, Valley First, Island Savings and Enderby & District. We are provincially regulated but are in the process of becoming a federally regulated credit union.

As part of our federal journey, we already had efforts under way to build up liquidity, increase capital, improve our operational processes and invest in digital technologies. This positioned First West well as we entered into the pandemic. This work, combined with our commitment to provide advice-driven conversations to our members, meant that we could be proactive at a time when our members needed us most.

We knew the impacts of the pandemic would be felt by our members immediately and we wanted to be there to help. To do this, we compiled and analyzed data to assess who might be most in need of support and created what we call internally the “COVID index”. Using this insight and other information, we proactively called thousands of members to offer assistance and ongoing check-ins following the first tranche of support. Through our approach, we provided members with payment deferrals in three-month increments, instead of six at the start, and advice on an individual case-by-case basis.

At the height of the pandemic, approximately 15% of our retail loan portfolio was in deferred status. Today, I am pleased to share that it is 0.02%. We attribute this success to our approach. In fact, recent reports by Canada Guaranty noted that institutions that provided incremental and shorter deferral periods saw members resume payments faster, which ultimately is a good thing for members.

How are our members doing today? In December, we reached out to several of our members whom we identified as most vulnerable, and we were thrilled to hear that 79% said they did not need further assistance.

At First West, we have approximately 20,000 business members. At a high, during the spring and summer of 2020, just over 24% of our business loan portfolio was in deferred status. As of March, we have no business members with a current deferral.

While I can't say it won't happen in the future, at present I am not aware of a single First West business member that has failed due to the pandemic. In fact, 69% of respondents to a survey of our membership in February said they probably or definitely had sufficient cash flow or cash reserves to operate and meet obligations over the next six months, and 85% of respondents said their business would definitely or probably survive COVID.

I'd like to take just a moment now to share our community outreach.

First West knew that British Columbians would be needing assistance more than normal, so we quickly disbursed hundreds of thousands of dollars in support of food banks via our “Feed the Valley” and “The Full Cupboard” programs, and to non-profit organizations facing economic challenges.

We recognized that many donations are made to specific events and programs, but in compliance with health orders, these events were often cancelled. Our community partners needed funding just to keep their doors open, which is why we made our funding unrestricted.

To wrap up, I want to come back to First West's pursuit of being federally regulated. We were asked to present to this committee because we embarked on a different outreach approach that has served our members well. We believe that Canadians should have a choice in their financial institution and that different approaches create better results and drive innovation.

Credit unions and the Canadian Credit Union Association played an important role during the consultations with government and its partners and in administering COVID relief programs. I thank the government and urge this committee to continue the collaboration.

We are happy to answer any questions or provide any more details on our COVID-19 response.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Besse. We appreciate very much your appearance and different ideas at different institutions proposed.

Turning, then, to the PEI Business Continuity Group, we have Kevin Murphy, chief executive officer and president of Murphy Hospitality Group.

Kevin, the floor is yours.

[Kevin Murphy, Chief Executive Officer and Spokesperson, President of Murphy Hospitality Group, PEI Business Continuity Group]

Thank you, Chairman Easter and finance committee members. lt is a pleasure to be here today to discuss COVID-19 and the implications it has had and is having for the tourism and hospitality industry on P.E.I., as well as in the rest of Atlantic Canada.

My name, as you know, is Kevin Murphy. I am the president and CEO of Murphy Hospitality Group, which operates 12 restaurants, three boutique hotels and a craft brewery. We have operations in Nova Scotia, New Brunswick and Prince Edward Island. Murphy Hospitality Group was supposed to celebrate its 40th anniversary in 2020, but—as you can appreciate—this was postponed due to COVID.

We are a family business that started with one restaurant in 1980. My wife Kathy and I, along with my three sons, Ben, Sam and Isaac, created this business on P.E.I. and do enjoy this beautiful quality of life.

The Business Continuity Group, which I am here representing today, was formed in March 2020 by 25 local business people on P.E.I. who were concerned about COVID-19 and what it meant to their businesses and the long-term economic sustainability of our tourism industry on P.E.I.

The group met every week for six months and then biweekly since September. We communicated and met with our provincial government and our local MPs about the situation on the ground and how it was impacting our businesses. We also provided ideas on solutions to ensure that not only would our businesses survive but our tourism industry would be vibrant and healthy when COVID passed. We believed current, accurate information was key to making prudent financial decisions, not only for businesses but for government.

What started out as a 30-day problem turned into a 180-day problem, and then into a year-long problem.

During the summer of 2020, we realized that COVID was going to have a long-lasting impact on our industry and that it would take years to get back to 2019 volumes. The reality of 2020 was that the many programs that both the provincial and federal governments implemented were lifesavers for many businesses in Atlantic Canada. We are thankful for the leadership and support that government provided for our industry.

We have learned a lot over the past 12 months, and there are a number of sectors within our industry that have been more severely impacted than others. They are, namely, transportation, hotels, amusement parks, restaurants, and festivals and events.

For example, I operate two boutique hotels in Charlottetown. The year 2020 is complete. The year-ends are done, and the subsidies have been applied. At the end of the day, each hotel lost approximately $250,000 compared to the year before. It will take years to get back to 2019 profits.

These are relatively small, 45-room properties, but the revenue was down 80%. We were basically closed from March 15 until July 15 last year. We opened with the Atlantic bubble in early July and then shut down again in November. We have not been able to have meaningful visitation to P.E.I. since then, and we are hopeful that it will reopen in April.

Traditionally on Prince Edward Island, most operators make money in the June-to-October period. During the rest of the year, they hope to break even or minimize expenses in the off season. Without full summer seasons and without meaningful activity in the winter, it is impossible to maintain these properties and retain staff. Currently, we are looking at two restricted summer seasons and three very difficult winters until what we hope will be a normal tourism season in 2022.

Our industry is made up of hundreds of operators, and our destination experience is dependent upon the whole industry, not one specific operator or one operation. How do we ensure that we not only survive but thrive as we come out of this pandemic? We have to be ready and able to participate in the recovery, and this takes liquidity and resources.

Many businesses now are concerned with the 2021 season and how it will play out. Today, many tourism operators are contemplating whether they can afford to open or not. The planning starts now for getting these operations ready. This is particularly challenging for those operators that have been closed since September 2019.

We believe that government assistance is still needed for the most severely impacted in the tourism and hospitality industry. We would ask that the federal government extend the Canada wage subsidy and Canada rent subsidy programs until April 2022 for the most severely impacted businesses, particularly those in the tourism-related industries that continue to be down over 30%.

Without continuing assistance, many of them will not survive, and therein starts the negative domino impact on our industry. Our industry has borne the brunt of public health measures such as capacity, travel and operating conditions, and it will be the last to recover as our country comes out of this pandemic.

It is also worth noting that the cost of the extension to government will be much less in 2021 due to many operations performing better as the industry does rebound. There is a plan to open the Atlantic bubble on April 19, which is fantastic news. We've been waiting for this all winter. It will enable a lot of seasonal operators to believe that in 2021 they can open.

We also now need to start talking about the provincial borders for Canadians travelling east to west, as well as the international borders. It is crucial for us that the airlines begin to rebuild their routes, to enable people to travel to our lovely island.

With the vaccinations being distributed to a majority of the population over the coming months, this is the time to plan for this eventuality. When you look at the tourism industry in Atlantic Canada, you'll see that in 2020 and 2021 the motorcoach traveller, the meetings and conventions business, the corporate traveller and even the cruise traveller were non-existent; there were zero. There is a lot of work to do to get back to 2019. We believe and we are resilient and optimistic, but we are also very realistic in what we are facing over the coming months and years.

Now is not the time to end support. This is an investment in our economy, in jobs, in our people and—a lot of the time—in rural Canada. This pandemic is a once-in-a-lifetime event for our country, our businesses and all Canadians. It has been challenging, but together we can get through it, and not only survive but thrive.

In conclusion, certain sectors within our industry will need continued support to survive, and we request the wage and rent subsidy programs to continue. As well, we need the full tourism plant operating, which requires our air access to be open this summer.

Thank you, Chairman Easter and committee members, for your time.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Murphy.

Before I turn to our last panellist, just for committee members, the question lineup is Mr. Fast first, and then Ms. Dzerowicz, Mr. Ste-Marie and Mr. Julian.

We're turning, then, to the Retail Council of Canada, no stranger before the finance committee.

Mr. Littler, the floor is yours.

[Karl Littler, Senior Vice-President, Public Affairs, Retail Council of Canada]

Thank you, Mr. Chairman.

I want to thank the committee for the opportunity to present today.

For those unfamiliar with the Retail Council of Canada, we represent over 70% of core retail sales nationwide. Our members are drawn from grocery, pharmacy, general merchandise and specialty retailers, both in bricks-and-mortar stores and online.

Normally, retail is Canada's largest private sector employer, albeit one that has been battered by three waves of COVID. When it is fully operational, more than two million Canadians work in our sector.

We've noted from these hearings, and prior iterations of these hearings, that several witnesses have treated the meetings as an opportunity to advance their budget recommendations. I hope to be able to address some of that during the Q and A and know that members were presented with a written copy of our submission a few weeks ago.

I want to focus my remarks on the stated topic, which is the federal government's programs to deal with the economic impact of the COVID pandemic.

Briefly stated, these programs have been the main lifeline for our industry. While we've suffered a significant number of closings and job losses—some never to return—those impacts would have been far worse but for the roles played by CEWS, CERS and CEBA, among other initiatives. We want to express our appreciation both to the government for its leadership and to the opposition parties for working collaboratively in a minority Parliament to ensure that support was provided in a timely and generous way.

We also acknowledge that the policy-makers have listened closely to industry and to the Retail Council specifically as to how the programs work in practice, refining them and, at least on CEWS and CERS, fundamentally redesigning them through several iterations.

No one had experience with these types of sweeping measures prior to COVID. Consequently, the early stage versions were rapidly designed and, with that, rather blunt instruments—generous if you qualified, but with an all-or-nothing aspect to them.

The addition of sliding scales and the elimination of some of the arbitrary thresholds were huge improvements to CEWS, as was the addition of measures to deal with businesses that were most heavily affected or in lockdown. The change from CECRA to CERS was a complete rethink of the rent subsidy, and a vastly improved one as to who qualified and the removal of the landlord approval hurdle. RCC also appreciates that the government listened to our suggestion to allow for up to $1,000 a month of earnings for CERB recipients, boosting the incomes of Canadian families and avoiding the problem of outbidding retailers for some of our own part-time employees.

That's not to say that the current generation of these programs is perfect. For example, recent changes to shift reference months to 2019 have been very helpful overall, but they don't work well for new businesses that were nascent or not yet under way in 2019. Presumably, we want to encourage these new businesses, not exclude them from support.

Similarly, we continue to question whether it's fair that a single location with a $100,000 rent bill should be treated differently than another entity with two $50,000 locations even though the two enterprises may be of a similar size. There are also issues with the lockdown provisions requirement to demonstrate revenue loss enterprise-wide.

The list could go on, but it's probably best to say that the programs should be subject to constant reassessment as to how they are working in practice and when and how to ramp them down in a way that is sensitive to the cumulative impact of the pandemic.

On this last point, we believe there is an imperative for Statistics Canada and for government generally to gather better real-time data on our industry and, we presume, on like industries.

Thank you again for the opportunity today and for the hard work that parliamentarians are doing on programs to help citizens and businesses cope with the economic effects of the pandemic.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Littler.

Turning to a round of questions, Mr. Fast will start with a six-minute round.

The floor is yours, Ed.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you to all of our witnesses, especially First West from my neck of the woods in British Columbia and the beautiful Fraser Valley.

My questions are focused primarily on Mr. Wilson. I want to begin by asking you about some of the border measures and how those restrictions have impacted your members, if at all.

[Mathew Wilson]

Thank you for the question, Mr. Fast.

Yes, it's been a huge problem. We've been working with the federal government for a number of months now on a number of the border measures. We have been very supportive of the overall approach the government has taken. However, a lot of the things that were supposed to be deemed essential, like the manufacturing sector and related critical infrastructure parts of the economy, are still falling into a lot of the quarantine measures.

What has ended up happening is that companies are having a hard time getting people into the country to do work on their ongoing operations and they're having a hard time sending people into the United States. There are problems going in both directions across the border, but mostly for Canadians coming back into Canada. It's making it very difficult.

We haven't had any major plant closures or anything to date, but, frankly, it's just a matter of time before they exist.

We believe that, as the government has stated, we're an essential industry. We should not have to go through quarantine and all the rest of those things, but that's not what's actually being applied at the border today.

[Ed Fast, Conservative, Abbotsford, BC]

Can you comment specifically on the hotel quarantine program? Has that impacted your members?

[Mathew Wilson]

I think the issue has been more the uncertainty when they come to the border. We're not really seeing a lot of people. Our sector has been pretty cautious in terms of sending too many people across the border. They're only really sending what they need to, and a lot of people are moving across land borders, so the issue has been more the land border and uncertainty when they arrive at the border and what the requirements might be. They tend to change depending on which part of the country it is and which day they show up at the border, frankly.

[Ed Fast, Conservative, Abbotsford, BC]

You've called for additional funding for the women in manufacturing programs, more specifically for tax incentives to help employers create more child care options. On that point, you appear to have focused on empowering employers themselves, rather than the government, to create these child care options. Why is the emphasis on employer-driven, rather than government-driven, child care?

[Mathew Wilson]

Well, maybe I'd even say it's more individual-driven, because I think everyone's in a different situation, Mr. Fast. What worries us is that if you try to create one type of an approach on anything, you're going to miss out or limit opportunities for other people to participate.

We've had major problems attracting women into the workforce in our sector. Only about 23% of the manufacturing workforce is women. Part of the reason for that struggle has to do with day care and other things, but there are also institutionalized issues that we're trying to work on and address. We need to support day care and child care options for all families, regardless of their makeup, and the more flexibility we can put into that system, the better. That's why we have supported more individual-oriented approaches, as well as corporate ones.

[Ed Fast, Conservative, Abbotsford, BC]

Do you have any idea how many women could be drawn into the labour force if there were a comprehensive child care support in Canada?

[Mathew Wilson]

That would be a big guess. Our goal is to add 100,000 more women to the workforce in manufacturing. There are 1.7 million in the workforce, and roughly 25% are women, so we'd like to add another 100,000 on top of that. We were making great progress before COVID. Unfortunately COVID, as is the case in a lot of places, caused a setback.

[Ed Fast, Conservative, Abbotsford, BC]

Perhaps I could ask a question of Mr. Littler of the Retail Council of Canada.

There's a liquidity issue with your industry as well, is there not?

[Karl Littler]

Yes, but it's variable across the industry, because some entities have done relatively well because they were deemed necessities through this piece. It has been particularly challenging for what you might call discretionary retail, unlike things like food and pharmacy. At its deepest, it has especially hit those in apparel and footwear, and you can imagine what it's like being a luggage vendor at this point in time. Some of them are certainly running on fumes at this point, notwithstanding all of the support, whether that's through liquidity programs or otherwise.

[Ed Fast, Conservative, Abbotsford, BC]

How many more bankruptcies and insolvencies do you expect this year, in 2021?

[Karl Littler]

It's hard to tell. What we did see was that retail had 40% more proposals at the close of last year than it had the prior year. That was atypical, actually, across Canadian industry. With the exception of arts, tourism and activities, basically, the number of bankruptcy proposals was dropping, but it did shoot up in retail.

You have to disaggregate from that those that might have been in perilous shape to begin with. I don't feel that we've felt the full knock-on effects yet. We're going to require a consumer confidence vote, both in the public health environment and in their own financial circumstances, so I'm not sure that, in a sense, the other shoe has dropped for those who may be struggling with their current capital position, because of course they're presuming there will be a rebound. Whether it's behavioural change or otherwise, some of them may not see it.