Finance Committee on April 1st, 2021

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

I have a question for Mr. Paquet and Mr. Ryan. We have an 8.2% unemployment rate in Canada and about 600,000 Canadians who are still looking for jobs. How would you explain the disconnect between a lot of people looking for jobs and there being labour shortages within the tourism and hospitality industry? How would you explain that?

[The Chair, Liberal, Wayne Easter]

Mr. Ryan, go ahead.

[Jean-Michel Ryan]

I mentioned two things earlier. In the tourism sector, many employees are in contact with the public, for example in customer service. This is also the case for lift attendants at ski resorts. Many people who work with the public are concerned about contracting COVID-19.

At Mount Sutton, we lost a lot of employees over the winter as a result of the second wave and the second lockdown in Quebec. It has been very difficult for us to recruit new employees. We believe that the Canada Emergency Response Benefit, or CERB, does not encourage people to return to work. We were already facing a labour shortage before the pandemic and it has become more acute. Both of these issues have been aggravating factors for the tourism industry.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you very much.

Do I have time for one more question?

[The Chair, Liberal, Wayne Easter]

No. You're done. I'm sorry.

[Julie Dzerowicz, Liberal, Davenport, ON]

It's okay.

[The Chair, Liberal, Wayne Easter]

Mr. Ste-Marie, we will try to go for just a couple of minutes, if we could, and the same for Mr. Johns, so we can get two more questioners in.

Mr. Ste-Marie, go ahead.

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

Thank you.

My question is for Mr. Paquet, Mr. Ryan and Ms. Demarcke.

I don't know if you were able to catch the presentation by Mr. Ladner and Ms. Benham from Grant Thornton LLP. They said that a lot of businesses wanted to apply for the Canada Emergency Rent Subsidy, but they were getting in too late and the program was closed. They also said that the program was too rigid and would benefit from being more flexible so that businesses could be more adequately supported.

Have you heard from your members about situations like this?

We can start with Mr. Paquet or Mr. Ryan, and then move on to Ms. Demarcke.

[Éric Paquet]

We're told that the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy are fairly simple and easy to access. However, for all programs where you have to borrow money, whether it's the Highly Affected Sectors Credit Availability Program or other programs like that, eligibility is indeed an issue, particularly in terms of the risk criteria imposed by the financial institutions. That's what we hear from people in our businesses.

Mr. Ryan, you may complete my response.

[Jean-Michel Ryan]

Companies that are highly leveraged will try, as much as possible, not to take on more debt. Many businesses are considering staying closed longer rather than risk taking on debt.

Today, in this committee, there was a lot of talk about predictability and uncertainty. Small businesses, in particular, that are not as strong, will be more vulnerable in this situation. They will stay closed longer or simply close down because access to some programs may be more difficult. Many companies have recovered, to some degree, but for the hardest-hit industries, it would be good to make accommodations to open the doors to programs a bit more.

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

Thank you.

Ms. Demarcke, do you have a comment on this matter?

[Donna Lee Demarcke]

I have heard some anecdotal cases about incidents where errors have been made. It's very difficult to rectify those problems.

Again, the certainty of knowing whether or not we have the programs available ahead of time is critical and so important for the industry.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

Just before I go to Mr. Johns, I have a question for Mr. Ladner or Ms. Benham. As you explained to me, if you're filing income taxes or handling other financial issues with the federal government, there is always the ability to do a late filing, sometimes with a penalty, but on this issue with the CEWS, that's it—there's no flexibility whatsoever.

Is this an anomaly that's just with these emergency programs for the pandemic? Could you expand on that a little?

[Kevin Ladner]

Tara, can you take that question?

[Tara Benham]

Yes. Thanks, Kevin.

I would say that for most filings and elections within the Income Tax Act there is always an ability to amend or file late. There usually is a penalty attached to it. There are a few things within the Income Tax Act where there is a hard deadline. One of them, for instance, is the SRED filings, scientific research and experimental development. The difference between that program and the CEWS and the CERS having a hard deadline [Technical difficulty—Editor] is that everybody knows how to deal with it. It's year after year, whereas this is new, complex legislation and the businesses are really looking at surviving, versus focusing on that right now. I would say there is a difference.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

You just have a couple of minutes, Gord.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you, Mr. Chair.

Mr. Paquet, what happens if the wage subsidy and the rent program aren't extended through the summer? Can you talk about the impact that would have on workers and those businesses?

[Éric Paquet]

Unfortunately, my guess is that many businesses will close. These programs have been a big help to get through the pandemic in the last year.

For example, the company that has the most cruises on the St. Lawrence had 750 employees and now they have only 250. They don't know if they're going to have a season; 65% of their revenue comes from international tourists, and the borders are closed. The owner knows that in 2020-21 he won't get even half of what he used to get in revenue. If he doesn't get the wage subsidy,

Canada emergency wage subsidy

—I'm sorry, I don't know the English name by heart—it will be tough. We're talking here about companies that hire hundreds of people. These companies are very structuring, not only for tourism but also for the economy. These big companies in tourism are very much affected.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you so much.

My last question is around start-ups. We know it takes years for people to build a business and get it ready to go to market. They can't collect the wage subsidy. They can't access the loan program or the rent assistance program. They've been completely excluded, abandoned, basically, by the government. Still, there are common-sense ideas that could be brought forward so they could get some supports.

Are you hearing from start-ups? Are you seeing many of them failing right now because of the multiple lockdowns and health measures that have been put in place?

[Éric Paquet]

Are you talking specifically for tourism?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Yes, start-ups in tourism.

[Éric Paquet]

We don't see a lot of start-ups right now in tourism. The ones that we saw before the pandemic are having a hard time, definitely. We're mostly focused on the businesses that are there right now and are struggling.

[Jean-Michel Ryan]

Let me continue.

[Éric Paquet]

Okay.