Finance Committee on April 13th, 2021

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Welcome to meeting number 33 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—

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

I have a point of order. My humble apologies for interrupting you.

Apparently Mr. Kelly's been trying to get in for 10 minutes, and somehow or other he's just not able to connect.

[The Chair, Liberal, Wayne Easter]

We'll get the meeting started in any event, as we have quorum. Thanks for that, Tamara.

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, and it will cover only the person who is speaking rather than the entirety of the committee.

I'd remind all participants that, per House of Commons rules, people are not allowed to take screenshots. They're just not permitted. Also, I'd ask folks to abide by all health protocols and stay safe.

With that, we will turn to the witness list. As I said, we are a little tighter in this panel as we have only an hour and 15 minutes. Please hold your comments to about five minutes, and then we'll go to questions.

We'll start with BGC Canada. We have Josh Berman, director of research and public policy, and Chad Polito, executive director, BGC Dawson, Montreal.

Go ahead. The floor is yours.

[Josh Berman, Director, Research and Public Policy, BGC Canada]

Thank you.

Let me start by recognizing and thanking the federal government, MPs, and Canada's federal civil servants, for the critical and important work you are doing to support people living in Canada through this pandemic. Thank you.

I'm proud to represent today, along with Chad, from whom you'll hear in just a moment, our 84 clubs, which together serve more than 200,000 children and youth at over 775 locations across Canada. As one of Canada's largest child- and youth-serving organizations, our early learning and child care and our before- and after-school programs help young people develop into healthy, active and engaged adults.

Over the past 100 years and during these last 13 difficult months, our clubs have been there for vulnerable children, youth and families. Today clubs are providing food for families, partnering with their local food banks. We provide safe child care and programs for children and youth, and help to share trusted information on COVID safety and vaccines with our members. We have rolled out safe and high-quality digital programs when kids can't be in clubs.

Chad and I want to focus our remarks today on four key takeaways.

First, while the emergency community support fund allowed clubs to further step forward in the early months of the pandemic to support our communities, the needs in our communities continue to outstrip our ability to fully respond. Importantly, as the demand for our programs and services rises, it means more dollars out the door, not in.

Second, while the demand for our programs and services has risen, revenue has fallen. Our revenues across the country are down some $20 million after taking into account federal and other emergency supports due to large reductions in earned incomes and philanthropy. Programs like the Canadian employment wage subsidy have been extremely important in helping charities like BGC protect staff positions in the face of declining revenues. The extension of this program to June is positive and we support broad calls for further extension as the pandemic drags on.

Lastly, frontline human service charities are still facing serious fiscal challenges that have not been addressed by government programs to date, and are severely limiting our shared capacity to deliver services to communities that have borne the brunt of COVID-19's impact. A continued response to this crisis demands more. This is why we have joined others and continue our call for a community services COVID relief fund in next week's budget. This fund would provide a temporary, 18-month operating funding program to bridge our frontline agencies to the other side of this pandemic and support a transformation fund to help community services invest in their capacity, technology, operating models and mergers in order to come out of this pandemic stronger and more resilient.

We thank you, members of this committee, for your pre-budget recommendation for bridge operating grants for essential community human services organizations. These are organizations like ours that are run by and for those who serve Black, indigenous and people of colour, and are proud members of our shared economy, one that employs, I should say, 315,000 people across Canada. BGC has supported vulnerable community members for over 100 years and done so while balancing our books. This proposed fund wouldn't make us whole but would allow us to continue to provide child care and after-school programs, run safe transitional housing programs and offer newcomer support, virtual counselling and shelters for people experiencing homelessness and women fleeing domestic violence.

With that, let me pass it to Chad.

[Chad Polito, Executive Director, BGC Dawson, Montréal, BGC Canada]

Thanks, Josh.

BGC Dawson is a community organization that has recently celebrated its 60th anniversary and serves over 800 families in the Montreal area.

The COVID-19 pandemic brought on some unique challenges for our community. Food security is one of our core programs. Pre-pandemic, we were serving 40 to 50 individuals per week through our food bank. At the height of the pandemic, this number skyrocketed to 941 people per month. While we are extremely grateful and thankful for the emergency community support fund, which enabled us to meet this need temporarily, we have more requests for food than we have resources. We had to make the difficult decision to scale back our food bank and are now serving just over 400 individuals each month, but the demand remains.

Summer camp, one of our key revenue-generating programs, was moved to a virtual format last summer and was offered free of charge. This significantly impacted our ability to meet our 2020 budget.

On top of that, our building is in desperate need of repair. This year, we invested over $100,000 in building maintenance and still have to plan to replace a leaking roof and an original furnace in order to be able to keep our doors open.

Our club, like others across Canada, had to make the difficult decision to lay off some staff and reduce program offerings. Approximately 70% of our staff nationwide are women, and we know that the services we provide allow mothers who so choose to enter and stay in the workforce.

Looking forward, we are committed to being there for our community and want to be in a strong position to adapt our programs to meet new realities. An article in the Financial Post on April 8 found that “the number of Canadians close to insolvency reached a five-year high”, with 53% of those polled saying that “they are $200 or less away from not being able to meet their bills and debt payments each month”.

We know that a lot of the families we serve are struggling financially and are just barely hanging on. As we move through this pandemic, organizations like ours need to be able to offer vital programs and services to all who need them, as part of our commitment to long-term community care.

Thank you for the opportunity to be here today.

[The Chair, Liberal, Wayne Easter]

Thank you very much, both of you.

I'm turning to Big Brothers Big Sisters of Canada, with Matthew Chater, national president and CEO, and Margie Grant-Walsh, executive director, from Pictou County, I believe.

Go ahead.

[W. Matthew Chater, National President and Chief Executive Officer, Big Brothers Big Sisters of Canada]

Thank you for the opportunity to be here. To echo my colleague, I would like to express significant thanks to all members for all you do daily on behalf of Canadians, during this pandemic as well as beyond.

Big Brothers Big Sisters has operated in Canada for over 100 years. We facilitate intentional mentoring relationships with over 41,000 youth in 1,100 communities with the support of over 21,000 volunteers.

Children and youth in our programs face toxic stress due to living with adversities caused by systemic challenges like poverty, mental illness, neglect, addiction and a range of other sources. According to our research, 63% of young people in Big Brothers Big Sisters programs experience three or more of these adversities while at the same time having only one, or often zero, developmental relationships. The pandemic has only amplified these stressors, making them more complex and deeply rooted.

Big Brothers Big Sisters mentoring is needed now more than ever. For example, calls to Kids Help Phone were up by 55% and through text by 61%, and 76% of the youth reaching out to them said they had no one else they felt it was safe to turn to.

Many of these callers are referred to Big Brothers Big Sisters, as we are ideally suited to help. We just completed research with York University and the University of Victoria that found that mental health issues like depression and anxiety during the pandemic are significantly lower among youth enrolled in Big Brothers Big Sisters programs, and that rates of depression and anxiety drop the more youth are engaged with their mentor. The challenge is that we already had 15,000 youth on our wait list before the pandemic, and now that list is growing daily.

This increased demand comes at the same time that revenue has plummeted, dropping by $13 million in 2020, and we are projecting a further 30% drop in 2021, for a total shortfall of $25 million across the federation.

While the government has provided additional funding to the Kids Help Phone, which we fully support, funding a crisis line without also assisting community services organizations to which those youth are referred is like funding the 911 emergency call service without providing the medical systems in order to respond.

We are extremely grateful for the programs the federal government has introduced, like the wage subsidy and the emergency community support fund. Without those our losses would be even greater, but there is now nowhere else to turn and much more that needs to be done.

We are not alone in this dilemma of increased demand for our services coinciding with the most severe financial crisis in our history. That is why Big Brothers Big Sisters, alongside the YMCA of Canada, the YWCA of Canada, BGC Canada, United Way-Centraide Canada, the National Association of Friendship Centres and many others providing frontline support have come together to appeal for a community services COVID-19 relief fund.

You have heard from my colleagues at previous meetings, and Josh has spoken to it today, but I will also lend my voice to plead with this committee to ask the finance minister to establish that funding in the April 19 budget. This is about whether your communities continue to have organizations like ours that provide the services governments do not. Youth mentoring through Big Brothers Big Sisters will be critical to Canada's economic, social and public health recovery.

To provide a local context, I'll turn it over to my colleague, Margie Grant-Walsh, executive director of Big Brothers Big Sisters of Pictou County, Nova Scotia.

[Margie Grant-Walsh, Executive Director, Big Brothers Big Sisters of Pictou County, Big Brothers Big Sisters of Canada]

Thank you, Matthew.

Think back to when you were nine. Who was important in your life? What would it be like without that person?

Our children and youth have been facing isolation, mental health challenges, food insecurity, affordable housing concerns and struggles with educational learning.

I can speak from my experience in northern Nova Scotia. Rural communities have been most affected. We have no public transportation, challenges switching to virtual mentoring, connectivity issues, and in the recent report card on child and family poverty in Nova Scotia, we have the third-highest child poverty rate in Canada. One in four children live in poverty.

Demand for service has increased. We have seen an increase in requests for essentials like food and heat. What social service organizations can say they are in contact weekly with their families? We can.

We're not only mentoring children facing adversities, but families as well, and they trust us. Staff have been overloaded, stressed, and working extremely hard to support our families, pivoting on a moment's notice on a tight budget. Top this off with the largest mass shooting in Canadian history.

Revenues have dropped substantially. Unlike many organizations, we fundraise a substantial part of our budget. At our agency, 69% is raised by special events alone. The drop in revenue in 2020 was 29%, over $270,000. In my 34 years with Big Brothers Big Sisters, I have never seen a year like it.

We are blessed to live in Nova Scotia for our low COVID numbers, but that brings the challenges of people isolating themselves to prevent spread. The biggest challenge is the lack of contact from caring adults who are invested in their well-being. Think again to when you were nine, and how you would deal with a pandemic without your mentor.

Thank you for this opportunity.

[The Chair, Liberal, Wayne Easter]

Thank you both, and thanks for what you do.

Turning to the Coalition Canada Basic Income and Barbara Boraks, please go ahead.

[Barbara Boraks, Member, Coalition Canada Basic Income]

Thank you, Mr. Chair.

I am pleased to present today on the topic of a basic income guarantee.

I would like to acknowledge MP Dzerowicz’s private member's bill, Bill C-273 and MP Gazan's motion 46.

Mr. Chair, if a basic income support system had already been in place, a more effective mechanism would have been available for responding to the financial needs of people affected by COVID-19.

I will begin with a summary of the benefits of a guaranteed basic income. It will help people meet their basic needs. It will improve physical and mental health outcomes. It will provide a more effective way of supporting seasonal and gig workers. It can help transition jobs from, for example, fossil fuels to renewables.

Basic income is an effective income support partner to a streamlined employment insurance program. For people living in poverty, this program gives them back their dignity and personal empowerment.

In recent decades, basic income has been supported by representatives from all parties in Canada. For example, all provincial political parties in P.E.I. unanimously support a basic income implementation project and are asking the federal government to work with them.

I have been working with basic income advocates for more than six years and have heard various concerns about a basic income. These fall into three groups: misconceptions about the details of basic income, attachment to the status quo and skepticism about changing our current systems of income support.

There are several misconceptions about basic income. Most Canadian advocates are seeking an income-targeted, not means-tested, basic income delivered to people living on low incomes. This replaces certain transfers and works in tandem with employment insurance and social support programs.

The latest PBO report estimates that basic income will lead to a substantial reduction to the poverty rate at a gross cost of $85 billion in the first year and a net cost of near zero after accounting for specific tax credits. The PBO report does not include the downstream savings a basic income could create in sectors such as health care and criminal justice.

On the second concern, attachment to the status quo, we can only hope that arises from a belief in the efficacy of the current system and not from personal or professional vested interests.

To the third concern, skepticism, I say that I respect this stance. In the face of major changes, this belief contributes to good governance when accompanied by openness to evidence-based new practices.

Mr. Chair, issues of cost are primary to your work and, for the question of a basic income guarantee, the evidence indicates that the benefits to Canada are worth the cost. Our current mechanisms of income supports are outdated, overly complicated and expensive.

The current income support system prevents low-income Canadians from developing financial independence, reduces financial incentives to work, contributes to poor educational outcomes and also adds to health care costs. As well, the evidence indicates that the existing system contributes to people remaining in abusive situations, weakens our arts and cultural industry and hinders capacity building in our farming communities.

I can make these statements because evidence supports them. Mental health problems, physical health problems and food and security are all tied to low income. The overrepresentation at all stages of the criminal justice system of indigenous peoples and those of African ancestry reflects their overrepresentation among impoverished people.

The evidence of these effects of low income and poverty come from institutions such as the National Farmers Union, the Canadian Public Health Association, the Canadian Association of Social Workers, Ontario Dietitians in Public Health, CUPE PEI and the Service Employees International Union, together with other labour unions, the Elizabeth Fry Society, social planning and research councils, municipalities and many more. These institutions support a basic income.

Mr. Chair, I am asking that FINA study the evidence about basic income in order to understand its financial and social implications with the goal of implementation.

I believe the evidence will lead this committee to recognize that a guaranteed basic income will give Canadians better value for their tax dollars and a more resilient society going forward.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Barbara.

Before I go to our next witness, the first questions will be placed by Ms. Jansen and then Ms. Dzerowicz, Mr. Ste-Marie, and Mr. Johns. I don't believe we have Kelly here yet; hopefully we can get him.

I'll turn to Festivals and Major Events Canada and Mr. Martin Roy, executive director.

Welcome back, Martin, The floor is yours.

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

Thank you, Mr. Chair.

Good morning, members of the Standing Committee on Finance.

It's a pleasure to be here again.

Festivals and Major Events Canada, or FAME, and the Major International Events Network, or RÉMI, represent more than 500 festivals and events in Canada that are direct and affiliate members in the tourism and cultural industry sector. This sector alone contributes more than $1 billion to the country's GDP, year after year.

In September, FAME was at the Chateau Laurier alongside the Tourism Industry Association of Canada, the Hotel Association of Canada and the Indigenous Tourism Association of Canada to launch the Coalition of Hardest Hit Businesses.

On the coalition's website, which I invite you to check out at hardesthit.ca, there are now more than 100 business and association logos of all kinds, primarily from the two sectors where FAME acts as a bridge, tourism and culture.

In the fall, following the press conference, we were heard by the Canadian government. We were pleased to see our reality recognized in the Speech from the Throne and the fall economic statement. The Canada emergency wage subsidy, or CEWS, rate was subsequently increased.

For all of this, we are very grateful to the government.

On the other hand, faced with the prospect of a possible end to the wage subsidy in June, the coalition had to formally appeal to the government three weeks ago at a press conference.

We asked the Minister of Finance to use the budget to extend and improve the CEWS and the Canada emergency rent subsidy beyond the June 5 deadline, to the end of 2021.

We understand that these programs are costly to taxpayers, but we caution elected officials who would want to end them too soon or opt for declining assistance.

If choices must be made, we believe that instead we should continue to support fewer businesses by making only those that continue to be most affected eligible for programs, in the tourism and cultural sectors, for example, where revenue losses can be as high as 100%.

If the CEWS is to end in June, it should only be to make way for the wage subsidy for the hardest hit businesses.

At a festival, although it varies from province to territory, self-generated revenue accounts for 85% of budgets, and government revenue accounts for about 15%. Right now, that 15% is often the only revenue our organizations have, both to organize activities for communities between now and the end of this pandemic, and to pay fixed costs and salaries. Without the CEWS, we are not there. Organizations will close down or have to let go of key staff who will be out of work. Then we will be no further ahead.

While they are still hopeful of hosting festivals and events this summer, organizations will not return to their often high-traffic business models until 2022, after the third wave of the COVID-19 pandemic and the expected effect of vaccines, even if it is done in compliance with health regulations that will hopefully be eased. That means that festivals and events have only crossed half the desert at this point.

We are told every day that the pandemic is not over. Canadians are being told not to give up until we get to the finish line and our businesses are still being asked to make huge sacrifices. We are saying to the government: “Fine, but don't give up on us until we get to the end of this, either.” It's a pact or a deal that has to go both ways.

If governments maintain restrictions, they must also maintain support for the businesses that suffer the most, like ours.

It would be a shame to lose festivals and cultural and tourism institutions in general because we will not have been willing to pay six more months of wage subsidies, when we will have done so for over a year. We will need it more than ever after the pandemic to boost the economy and tourism and to provide social healing. We'll also need it to finally get together and party like we did before the pandemic.

We will, of course, be listening carefully to the budget announcement next week, hoping that your recommendation, recommendation 55 in your pre-budget consultation report, will be taken up in full, particularly because it incorporates our idea of a festivals and events recovery program. We will also be mindful of this because your report recommended that the government support the cultural, tourism and hospitality sectors by “providing additional financial support to these sectors until the COVID-19-related restrictions can be safely lifted.”

We won't go so far as to say that the budget announcement will be the moment when we can gather 90,000 people on the Plains of Abraham in Quebec City or at the Calgary Stampede. You will agree with me that this moment could happen in July 2022, but certainly not on June 5, 2021.

Thank you for your attention.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Martin.

We'll go to the first round. I'm going to hold the first round to five minutes per questioner. That way, we can get 10 rounds in during the panel.

We'll start with Ms. Jansen.

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

Thank you very much.

My question is for Mr. Roy.

I come from Cloverdale—Langley City, and we have the Cloverdale Rodeo here in our downtown. I was chatting with the organizers there, and they mentioned that just missing last year cost them $2 million in revenue. The spinoff amount for Surrey was $30 million. I think of the Best Western Hotel that's on the corner right there. I think of all the fairs and markets, the small food trucks and so on, that have lost their ability to make money.

There are other things that the Cloverdale Rodeo does. They have Gone Country from Twins Cancer Fundraising. Up to now they've raised $3.9 million. They can't do their event. Ride to Conquer Cancer can't do their event. The 10K and the 5K runs can't do their events. Conventions can't be held there. Concerts, trade shows, the famous Longhorn Saloon.... All of these incredible local initiatives that make our community what it is are completely off the table.

As you mentioned, I mentioned to the Cloverdale Rodeo that we don't see things opening until 2022 at the rate the vaccinations are rolling out right now, and the line went silent. He said that will be the end of many of these things that I just mentioned.

Could you possibly talk a bit more about that?

[Martin Roy]

Thank you for the question.

You've given a good description of this drama which affects us and the communities in which we are present. We have also experienced in Calgary what you experienced in your riding. In 2020, the business community was dismayed that the Stampede would not be held. We will see what happens in 2021.

It was the same with the Toronto International Film Festival, or TIFF, which normally has a huge economic impact. This was the case for Bluesfest in Ottawa, for the Montreal International Jazz Festival as well as for the Quebec City Summer Festival, which normally benefits merchants on Grande Allée in Quebec City. They have all been deprived of this revenue.

It's not just our festivals and events that are impacted economically; the communities as well as the tourism industry, which is part of this ecosystem, are also impacted. That is why we have recommended the creation of a tourism industry stimulus program that builds on festivals and events. It's a program based on a 2009 and 2010 initiative, the marquee tourism events program. We made this proposal, and the committee recently included it in this recommendation 55. We very much hope that in next week's budget, the government will have good news for us.

With respect to revenues in the coming year, own-source revenues are not likely to be there, or certainly not to the same extent as usual. A question mark remains over the Canada emergency wage subsidy. We hope it will be extended.

This program would supplement our revenues and get us through the second half of the desert, as I call it.

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

Can I ask you, have you been looking at what sorts of criteria you think could possibly help us reopen? Could we get some certainty about what we would need to see in order to begin to open again? I was chatting with someone from a big marketing company, and they were saying, if you would combine the vaccination level with the immunity as well as masking and all that sort of thing, and if we could get some criteria by which we could decide whether we could open, that would give us the ability to start planning.

Have you talked about anything like that? It seems like right now we have absolutely no plan whatsoever.

[The Chair, Liberal, Wayne Easter]

Mr. Roy.

[Martin Roy]

There is indeed no plan, which I deplore.

We are confident that we will be able to host safe events across Canada this summer. Obviously, they won't be events with the same amount of traffic, but we think we can do some things. There are a variety of options, whether it's rapid testing, vaccine passports or physically distancing festival-goers. There are ways to provide distancing between festival-goers, for example, with barriers, fences, platforms or chairs.

The problem we have in the provinces—I'm experiencing this particularly in Quebec as I've had discussions about this with public health officials—is that they are currently managing the third wave. They are following the order of the schedule, which is a problem.

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

Can I ask one more question?

[The Chair, Liberal, Wayne Easter]

You are out of time, but we'll give you it. Go ahead. Be very quick.

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

Has anyone thought of suing the government for damages for being so late, for screwing up this vaccination rollout?

[The Chair, Liberal, Wayne Easter]

Maybe we shouldn't have given you it.

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

Oh, oh!

[The Chair, Liberal, Wayne Easter]

Is anybody going to answer that question?

I don't hear any answers.

We'll turn to Ms. Dzerowicz, followed by Mr. Ste-Marie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank everyone for their excellent and very thoughtful presentations. Thank you for being here today.

I will direct my questions to Ms. Boraks from Coalition Canada Basic Income.

I have three questions, so I hope you can be as succinct as you can. First, whenever someone talks about some sort of guaranteed basic income, many people believe it would serve as a disincentive for people to work. How would you respond to this?