Finance Committee on April 13th, 2021

[Alla Drigola, Director, Parliamentary Affairs and Small and Medium Enterprises Policy, Canadian Chamber of Commerce]

Thank you, Trevin.

Good afternoon.

If the Canadian Chamber can leave committee members with just one message today to help businesses that are still struggling, it’s this: COVID-19 business support programs must remain in place for as long as businesses, particularly those in the hardest-hit sectors, are not allowed to operate without restrictions.

The wage subsidy, the rent subsidy, the liquidity programs, BCAP and HASCAP, and the partially forgivable small business loan, CEBA, are all excellent programs that are necessary for the survival of business and that are working well for the most part.

The government’s initial focus was rightfully on creating business support programs that would be as widely accessible as possible; however, it is time to start taking a more focused approach to COVID-19 support programs and spending, and that requires a plan.

For all of the subsidy and spending that Canada has seen and will continue to see, the only path to real, sustainable growth is job creation and business investment. In the upcoming budget, which will be released just six days from now, the Canadian Chamber expects to see a clear plan from the government. This plan will need to be twofold.

On the one hand, we need to see continued support for the hardest-hit sectors. Sectors that depend on face-to-face interactions such as tourism, travel, hospitality and events are experiencing immense difficulties and are widely expected to be among the last to recover. They will need targeted policies to assist their longer recovery period.

CEWS and CERS need to continue to be available beyond their current June expiry date, with a few improvements, such as increasing the CERS multi-entity cap to ensure that struggling medium-sized businesses are treated fairly.

Relying on the growth of only a few sectors will not get us to recovery. We need a plan that lifts everyone up and that grows all businesses, large and small, from coast to coast to coast.

Thank you for the opportunity to meet with you this afternoon. We look forward to our discussion.

[The Chair, Liberal, Wayne Easter]

Thank you both very much.

We'll turn to the Canadian Women's Chamber of Commerce. Ms. Wilson, founder and CEO, and Ms. P. Kassün-Mutch, board member, the floor is yours.

[Nancy Wilson, Founder and Chief Executive Officer, Canadian Women's Chamber of Commerce]

Thank you, Mr. Chair and members of the committee.

My name is Nancy Wilson. I'm the founder and CEO of the Canadian Women's Chamber of Commerce. I'm here today with one of our board members, Petra Kassün-Mutch, who will help me address questions from the committee.

I'm going to stray from the notes that I emailed just a bit, so I apologize in advance to the interpreters. Very briefly, I want to define the scope of the women's entrepreneurship population and say that the group I'm talking about today is comprised of approximately 1.1 million business entities. That's 16% of SMEs in Canada. These are pre-pandemic figures. That 16% represents about 114,000 SMEs. Approximately 37% of self-employed Canadians are woman-identified. That's over a million self-employed Canadians who identify as women. These are not small numbers that we're talking about.

Going back to my notes, there's no doubt that women in general—employed, self-employed and business owners—have been disproportionately hit by the COVID pandemic. There's a wealth of research to support that. At the same time, women-owned businesses are essential and critical to Canada's economic recovery. Women-owned businesses are highly represented in sectors that were hardest hit by the pandemic. These are also the sectors that employ high numbers of women wage-earners. Therefore, a side effect of investing in business recovery in those sectors is going to be alleviating some of those labour force and unemployment issues that we're seeing for women re-entering the labour force. These issues are very much intertwined with supporting women business owners to get back on their feet and recover.

One of the major issues during the pandemic—and one of the factors that led to the pandemic being so devastating for women entrepreneurs and business owners—was the fact that a lot of the financial support measures coming from the government in 2020 that were focused on business support were designed for traditional, large business structures. As such, a lot of women business owners were simply not eligible for those support programs. CEBA, the wage subsidy and a lot of the loan and debt programs that were put in place were quite effective for larger, traditional business structures. However, they were very ineffective for the population I represent at the Canadian Women's Chamber of Commerce.

When we're talking about designing policy for recovery, we need to think very differently. I'm going to talk about two specific recommendations.

First, we would like to see a recovery fund put together, specifically with funds going directly to women entrepreneurs and business owners, and we would like that fund to be administered and managed by community-based organizations within the women's entrepreneurship ecosystem. The reasons are simply that the expertise and infrastructure exist in the ecosystem, as do the delivery method, the knowledge about women's business structure and the relationships with the people who need that money the most.

Second, we want to see the government double down on the women's entrepreneurship strategy. The women's entrepreneurship strategy, initially introduced in budget 2018, was groundbreaking. It received a lot of attention globally, and rightly so. It was starting to gain some traction when the pandemic hit.

In order to really see that strategy reach its goals, the government needs to reinvest in it. We want to see at least $5 billion reinvested into that women entrepreneurship strategy to regain that traction, to regain ground that has been lost, to support the ecosystem of organizations that support women's entrepreneurship, to provide emergency funding during the recovery and to start implementing a longer-term, sustainable women entrepreneurship strategy going forward so that Canada can remain globally recognized as a women's entrepreneurship champion.

Finally, I echo my colleagues at the Canadian Chamber of Commerce. I think there is a lot to be applauded in terms of the government's response last year—its fast and nimble response to the pandemic. With the recovery, I think we need to look at lessons learned and make sure our recovery response and policies are truly inclusive going forward, and that we're able to make sure that the hardest hit during COVID, during the pandemic, are the ones who are truly taken care of the most during this recovery period, not to the exclusion of other groups necessarily, but given due consideration.

Thank you so much.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Just to give members the question lineup, the first questioner will be Mr. Falk, followed by Ms. Koutrakis.

We'll turn to the last witness, Brad Sorenson, CEO of Providence Therapeutics.

Brad.

[Brad Sorenson, Chief Executive Officer, Providence Therapeutics]

Thank you very much.

Thank you for the opportunity to join you today. Messenger RNA is the most effective vaccine technology on the planet. In the worldwide race for a COVID vaccine, messenger RNA was the fastest by months. It is the most effective at 95% efficacy. It will be the fastest vaccine platform to respond to variants. It is the most scalable vaccine technology, having gone from novel technology to rolling out hundreds of millions of doses within a single year.

The committee will recall that prior to November 2020, no messenger RNA drug—vaccine or otherwise—had ever been approved for use in humans. In fact, prior to 2020, Moderna and BioNTech, the inventor of the Pfizer vaccine, had never even run a phase three trial. However, these previously untested and unproven companies are now providing Canada a lifeline to safety and economic stability.

Providence Therapeutics looks forward to joining these companies and adding to the worldwide supply of mRNA vaccines in early 2022. I would be remiss if I did not add that Providence has always been committed to prioritizing Canada's needs. Certainly, it is clear that Canada will need additional vaccines in 2022, as the current vaccines are not up to the task of suppressing the variants.

Let me recap the progress that Providence has made over the past year. Providence designed a vaccine in under four weeks. We negotiated and paid for the licence to the necessary intellectual property with Genevant of Vancouver. We established productive collaborations with the University of Toronto, Sunnybrook Research Institute and the Ontario Institute for Cancer Research. We completed over five preclinical animal trials to establish the safety and efficacy of our vaccine. After we qualified our good manufacturing practices, or GMP, we manufactured enough vaccine to complete all of our early clinical trials. Our phase one trial has been fully enrolled. Our last patient visit for follow-up is scheduled for April 20 of this month. The final results will be unblinded and available to the public in approximately six weeks.

In the meantime, we have provided limited access to the Government of Canada via the strategic innovation fund and the National Research Council, plus the provinces of Alberta and Manitoba, as these groups evaluate opportunities to support phase two and three trials and manufacturing scale-up for commercialization. I am pleased to advise the committee that Providence has a vaccine that is on track to being best in class when compared with Pfizer and Moderna, specifically in the areas of tolerability, stability and immune response.

Providence met with Health Canada on March 18 for a preclinical trial application, or pre-CTA meeting, to lay the groundwork for phase two and three trials in Canada. These trials will be non-inferiority or comparator trials wherein the Providence vaccine will be tested directly, head to head, against an approved vaccine. The primary readout will be a surrogate marker of immunity. This will allow Providence to run these trials in Canada. All participants will receive a vaccine, either Providence or competitor, and no participant will be given a placebo.

One critical item required for these trials that has not been resolved yet is that Providence must have access to the competitor vaccine to run the trial. We approached the Canadian government and were instructed to ask the company in question. We did. We have been informed that they are not willing to provide doses. We have circled back with the Canadian government and are currently waiting for a further reply. It has been suggested that we should speak to the provinces. We have. However, because this is a multi-provincial trial, it would be difficult to guarantee that all doses came from the same production lot.

It is Providence's opinion that if the Canadian government is committed to supporting R and D and trials in Canada, then providing access to doses should reasonably fall within its responsibilities. We respectfully ask specifically for that practical support, keeping in mind that all doses received will in fact be administered to Canadians in the end.

This committee and other witnesses are certainly aware that COVID variants are currently threatening the success of Canada's vaccine rollout.

I would like to state for the record that Providence has been warning of this outcome for months and in fact brought up the need for a broader-based vaccine to the Government of Canada back in March 2020.

Providence has a funding application currently under review with the NRC to advance a variant vaccine forward to approval by Q1 of 2022. This variant add-on trial is set to start in October 2021. This is relevant, as right now variants are successfully evading the currently approved vaccines and Canadians will need these variant vaccines as early as possible in 2022.

If Canada desires to avoid future loss of life and lockdowns with all the attendant economic and mental suffering, absent a broad-based universal COVID vaccine, updated variant vaccines will be required yearly for the foreseeable future.

As I am speaking to the finance committee, I will note that Canada's financial contribution received in 2020 from the NRC and NGen totalled $1.6 million. In 2021, Providence has received $1.8 million to date from Canada. The total authorized refund amounts awarded to Providence to date are $4.9 million from the NRC phase one grant, and $3.5 million from NGen.

I look forward to your questions. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Sorenson. It's nice to hear some good news, with a bit of questionable news in there too that I guess we'll have to get to.

We'll have to go first to five-minute rounds. Sorry about that.

Mr. Falk will be followed by Ms. Koutrakis.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair, and thank you to all the witnesses for testifying today at committee.

Mr. Sorenson, as a quick bit of advice, Mark Scheifele and the Winnipeg Jets are where you want to place your bet, if that's helpful at all to you. I'm sure it is.

[Brad Sorenson]

I have to confess that Brian Pallister has made me a bit partial to Winnipeg right now.

[Ted Falk, Conservative, Provencher, MB]

All right, there you go. My understanding is he has made a deal with you. We'll talk about that a bit yet.

The federal government's vaccine procurement and rollout has been a disaster, often because Canada has had to source vaccines from outside the country. Meanwhile, your company is making good headway on a made-in-Canada vaccine, yet you were quoted in a CTV News article at the end of January as suggesting that if engaging with the federal government is supposed to be part of that solution, it's not working.

Why isn't the federal government working with you on this?

[Brad Sorenson]

Again, you're referring to a quote from back in January. I have to acknowledge that in the last 30 days the level of communication between Providence and the federal government, particularly the strategic innovation fund, has seen a significant uptick. We have been formally invited to submit an application to them for support for our phase three trial, which we completed last Friday. We are hopeful that the request will be evaluated on its merits and that we will be able to see some support forthcoming.

[Ted Falk, Conservative, Provencher, MB]

Okay. That's good. Canada has an opportunity to shore up COVID-19 vaccine production in my province of Manitoba, near the University of Manitoba. Emergent BioSolutions signed a contract last year to produce the vaccine that your company developed, and you have the backing of Premier Pallister. The federal industry minister says that he wants to support you, but then his spokesperson walked that back and...those remarks, as reported in the Winnipeg Free Press.

Have you been able to get any basic commitments from the federal government? I think you've just answered that question. They are talking with you collaboratively. How's that going?

[Brad Sorenson]

I'm not somebody who likes to watch life in the rear-view mirror. I like to think of what's coming forward. I believe the federal government is learning from the past, is going to seek and take advantage of the opportunity presented to it to have a world-class mRNA vaccine manufactured here in Canada, and will support that.

To date, all the support that we have received or is being contemplated by the federal government is strictly related to the clinical trial aspect. We have had no engagement with the federal government as it relates to manufacturing or scale-up for commercialization. They seemed reluctant to begin those discussions until we are farther along in the clinical trial process.

[Ted Falk, Conservative, Provencher, MB]

Okay.

I know I'm going back to some quotes you made in February, but you indicated back then you had the capacity to produce about 120 million vaccines right here in Canada, yet the federal government wasn't offering you any help or taking your calls at that time.

You thought 50 million doses could be ready this year. How could the government better support you in achieving that objective? Making the vaccine available was one of the ways you suggested, but is there anything else?

[Brad Sorenson]

Candidly, the chance of us producing 50 million doses has passed. That was proposed and the federal government and the provincial governments were made aware of it in January. The Manitoba government took advantage of that opportunity.

In order for us to produce the vaccines in the volumes we're discussing, we have certain key raw materials we have to secure and acquire, and there are lead times associated with that.

[Ted Falk, Conservative, Provencher, MB]

Okay.

[Brad Sorenson]

The soonest we can start production in Canada at scale now is no longer in July; it would be in September. We still could produce tens of millions of vaccines this year.

[Ted Falk, Conservative, Provencher, MB]

Okay.

The other vaccine doses that are currently being used and prescribed here in Canada range in price, the cheapest being $3 to $5 a dose and the most expensive being around $37 a dose. Where do you see your company's vaccine landing?

[Brad Sorenson]

Our term sheet we have with the Manitoba government, and what was proposed across the board in Canada, was $18 Canadian a dose. I'm not ashamed to say that Providence is making a fairly reasonable profit at that price. If there was an opportunity to do something and improve on that pricing, we certainly would look at it.

Once we have the full supply chain integrated into Canada, which we are in the process of doing, we will be able to reduce those prices further. Right now we still currently rely for 2021 on an international supply chain, and we're looking to reduce that reliance by 2022—

[The Chair, Liberal, Wayne Easter]

We will have to move on. I'm sorry, Ted.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Sorenson. I think my time is up.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We turn then to Ms. Koutrakis, and I believe Ms. Dzerowicz wants the last question in this round.

Annie, the floors is yours.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you to all the witnesses for appearing here this afternoon and for your testimony.

My question is for Ms. Wilson.

The Canadian Women's Chamber of Commerce has commented on the need for universal child are as an important part of our economic recovery. Can you elaborate on this?

[Nancy Wilson]

Absolutely. Child care is essential to support women entrepreneurs. Without a national child care program, it is my belief that while any other strategy or policy interventions may certainly have an impact, we will always be struggling against the issue of unpaid care work and a disparity in the amount of time women entrepreneurs are able to spend on building their businesses, as well as other inequalities.

When you look regionally and within urban centres at the accessibility of child care, it's a complicated issue. There are certainly individuals and organizations that know much more specifically about child care than I do. What I'd say is national child care is incredibly important for women entrepreneurs. It is not a panacea, however. It is not the be-all and end-all solution for women business owners. It is one piece of the puzzle.

I would also add that a national child care program is of benefit to parents of all genders. Right now it's very much positioned, and we position it, as a benefit to women entrepreneurs. Simply because of gender roles, because of the amount of unpaid care work that falls on predominantly women-identified parents, it is going to be primarily of benefit for mothers and for women. Going forward, envisioning a more equal division of labour, a national child care program really is going to benefit all Canadians. It's going to benefit our children; it's going to benefit our early childhood educators; it's going to benefit employers and it's going to benefit parents of all genders.

[The Chair, Liberal, Wayne Easter]

We are going to have to move to Ms. Dzerowicz for the end of this round, and then to Mr. Ste-Marie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thanks to everyone for their excellent presentations.

My question is directed to the Canadian Chamber of Commerce.

Mr. Stratton, last week in The Globe and Mail business section, there was an article that started as follows:

Canada’s beleaguered economy has an $80-billion-a-year stimulus injection sitting right in front of it, and it won’t cost its governments a penny to pick it up. They won’t have to raise taxes...for it. They’ll actually make money from it—lots of it.

What would it take?

“One weekend,” former Bank of Canada governor Stephen Poloz told an online forum last week.

It would have to be a heck of a weekend. Removing Canada’s largely indefensible barriers to interprovincial trade would require a rare collective political goodwill among provincial premiers, and serious leadership from Ottawa.

My question to you, Mr. Stratton, is, should eliminating interprovincial trade barriers be an urgent and immediate priority for our federal government and a key part of Canada's economic recovery plan?