Finance Committee on April 1st, 2021

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

Why do you say you're not able to access any federal funding for small business? My goodness, we have CEBA, we have HASCAP, we have the regional relief and recovery fund. This makes no sense to me. These were all supposed to be worked out on your behalf. That was the point of these, yet you say you can't actually access them.

[Judith Coates]

That's correct. I'll address that.

With the CEBA loan, one of the hurdles or roadblocks for us is that we have to have a minimum of $40,000 in non-deferrable expenses. As sole proprietors, we don't meet that benchmark, so we are precluded from that fund.

Then they introduced the regional relief and recovery fund, which was designed for small businesses that are falling through the cracks. We discovered that if you are in a rural area, you can apply through your CDC office for that fund and you are able to get funding. However, if you are in an urban area, it gets redirected to FedDev and you have to be incorporated for that. Half of our members are not able to access that.

We actually met with some of the assistant deputy ministers of small business and innovation and development earlier this month. They kept saying to us that we should be taking advantage of the HASCAP loan and that it's great, whatever the amount is, at 4%, a wonderful loan. Our response was that we've been one year without revenue. How do you expect us to pay loan payments on a 4% loan? It does not make sense for us to be going into more debt. We're already in debt as it is, up to our eyeballs.

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

Not only that, at 4%, oh my goodness, everybody knows we can't even afford that for the government.

Ms. Freeland announced, I believe it was on International Women's Day, that there is a fantastic task force on women in the economy. Have you heard of this task force?

[Brenda Slater]

I would like to answer that one, if I may.

[The Chair, Liberal, Wayne Easter]

Go ahead.

[Brenda Slater]

I'm sorry, but I'm a little bit thrown. We're not aware of that, and we actually met with her senior policy adviser on Tuesday, and nothing was said about that at that time either. We would be very interested in learning more about this.

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

That's crazy.

You have been such warriors, yet you are not even aware of this task force. I thought it was a bit of lip service, because she announced it on International Women's Day and she hadn't even had a meeting yet. This has been going on for months and months.

[The Chair, Liberal, Wayne Easter]

This is your last question, Tamara.

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

Okay.

Can you give specifics on how travel restrictions are impacting your business?

[Judith Coates]

The government is imposing travel restrictions that are hindering us from operating our business. We believe that the government, because it is imposing the restrictions, needs to step in to provide support to us while it continues to keep our businesses shut down.

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

I agree.

[The Chair, Liberal, Wayne Easter]

We will have to end that round there.

Next is Mr. Fragiskatos, followed by Mr. Ste-Marie.

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

Thank you, Chair.

My first question will go to Mr. Siddall.

Mr. Siddall, I share the sentiment of all my colleagues. Thank you for serving the country in the way that you have over these years, and I wish you nothing but good things in the future.

I want to ask you a question related to interest rates. It seems as though they will remain at very low levels well into the future, with the historic lows we've seen since the onset of the pandemic and the Bank of Canada and its governors hinting that there won't be an increase until the economy is really rebounding, and we don't know exactly when that will be. I was interested yesterday when the Parliamentary Budget Officer offered a projection that is very positive. Again, we just don't know.

Given that, is it safe to assume that housing prices will continue to increase with such low interest rates? What does that mean for the average Canadian?

I can tell you, in my community of London, Ontario, the average home price since 2015 has increased nearly 150%. Week after week, I talk to real estate agents and I talk to constituents. My constituents are being priced out of the market. Real estate agents can't keep up. There's such demand for homes that home inspections are a thing of the past. That's not happening anymore.

I just wonder.... I'm putting a number of things to you, but I guess if you're going to focus on one thing, it's this: How sustainable is this situation, given that interest rates are likely to remain very low well into the foreseeable future?

[Evan Siddall]

Thank you for your kind remarks and for your question.

My sincere answer is that we just don't know. Clearly, my predictions in the past have not proven to be true, so I need to be careful when I make forecasts.

Interest rates clearly are one factor. Indeed, the Bank of Canada's interest rates are interesting but not determinative, because most mortgages are five-year mortgages and those are funded actually in five-year terms by banks. While that's related to the bank's policies, it's not exclusively the result of the bank's policies. Of course, there are other factors: supply of housing, immigration or lack of immigration, behavioural changes in terms of what markets people want to buy and sell in, and then, frankly, psychology.

The thing I'm most worried about—and in this respect I echo Governor MacKlem's comment—is extrapolative expectations, which is people thinking this goes on forever. This is clearly not sustainable and is something we should be worried about.

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

Obviously, there are a number of factors that influence housing prices, but if I was going to focus on one thing, I wanted to ask you about interest rates. Thank you very much for expanding on that in your answer.

I have limited time and I'd love to continue the discussion, but I do want to put a question to Mr. Clement.

Mr. Clement, thank you for the work that United Way has done. We are quite fortunate in the London area to have a wonderful United Way that commits itself in so many different ways and has really achieved a great deal, especially during the pandemic.

Your key message to us as a committee.... You brought a number of things forward, but what do you want to leave us with? What can we recommend to the government as a major gap that exists right now that ought to be filled? What can we share with the government on your behalf?

[Dan Clement]

First, the pandemic demand and need for community services is staying at record highs. We have a gap between the revenues and the capacity of organizations and their ability to deliver. What does that tell us? What that tells us is that we've had some great programs up to this point, but a lot of them are expiring and the need is still there.

My fourth point was really about this need for a community services COVID relief fund, a program that will actually fill that gap. The gap is about people not being able to get access to the services they need because the infrastructure for these services is stretched and the gap between the capacity and the demand has grown.

That community services COVID relief fund would be a combination of operating support to fill that gap, and I think it's really important for us to also invest in the future. Our community services operate on very thin margins. They don't build reserves. They put their dollars and efforts right into the community. They don't have the capacity to invest in technology and change. The pandemic is all about identifying the change in innovation, so how do we actually bring that into the future?

That would be my request, my ask, and I think it would go a long way towards supporting communities.

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

Thank you very much.

I know that Imagine Canada has also put similar ideas to this committee and to the government as well through various policy papers. I look forward to seeing where that engagement goes.

Mr. Chair, if you'll indulge me, are we able to have one more?

[The Chair, Liberal, Wayne Easter]

I'm sorry. You are out of time.

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

Okay. Next time.

Thank you.

[The Chair, Liberal, Wayne Easter]

We will try to get four more people on. We'll go to one question each from Mr. Ste-Marie, Mr. Johns, Mr. Kelly and Ms. Dzerowicz.

Mr. Ste-Marie, go ahead.

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

Thank you, Mr. Chair.

Ms. St-Onge, I remember the last part of your presentation, where you said that the government is still buying its advertising from people on the Web. That needs to change.

What does the government need to do to ensure that people in the cultural sector who are below the low-income cut-off can get out of this situation and out of instability in the longer term?

[Pascale St-Onge]

First, we need to think about an income replacement mechanism, because the entertainment and cultural world operates intermittently, as I explained.

Second, there is already a lot of public money invested in culture. Unfortunately, the situation has stagnated for decades. So we need to at least ensure that programs are indexed. Then, we must ensure that there are criteria and accountability for each of these programs in order to verify, validate and ensure that the money reaches the artists. That's also one of our concerns.

We feel it is extremely important to also ensure that all the funds from support programs during the COVID-19 pandemic trickles down to the artists.

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

If you keep saying it, maybe it will work.

Thank you very much.

[Pascale St-Onge]

We hope so.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both very much.

Mr. Johns, go ahead.