Finance Committee on April 20th, 2021

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

Thank you, Chair, and thank you to the witnesses for their time this afternoon.

I want to begin with Mr. Yussuff, if I could.

Mr. Yussuff, thanks for your continued advocacy on behalf of Canadian workers. I'm speaking from London, Ontario, today. We have a thriving workforce here in many areas, with a traditional base in manufacturing, and I know that the workers really appreciate the work of the congress.

I wanted to ask you a question relating to an op-ed that you co-wrote in June of 2020. The fact that you wrote an op-ed is not the point here—you've written before—but you co-wrote the op-ed with Goldy Hyder. It's interesting because, as we know, Goldy Hyder is a key voice of Canadian business. He's the chief executive of the Business Council of Canada.

The title of the op-ed is “There is no economic recovery without adequate child care”. Here, we have the business community coming together with labour in a rare partnership to advocate for child care from many perspectives and making the case that it is an economic imperative for the country to move ahead with.

Yesterday's budget was historic for many reasons, but at the centre of it was child care. I wonder if you could speak to the importance of moving ahead with the government's vision on child care and how critical it is as we think about a post-COVID-19 Canada from an economic lens.

[Hassan Yussuff]

Thank you very much.

Yes, I do remember the article very vividly. More importantly, Goldy actually texted me late last night to say what a great collaboration it was. This morning, I didn't respond to him.

His point was the recognition between both of us that COVID-19 has had devastating impacts on especially working women's lives and women in general. The majority of responsibility for taking care of kids is falling to women. More importantly, we've made great strides in bringing women into the workforce, but there's a real possibility that we're going completely backwards, so I still haven't gotten over the excitement of what yesterday's announcement in the budget represents on behalf of the country.

I do believe this is a historic moment for us to bring the provinces onside as to how we can truly build a national system from the experience that we've seen in Quebec, which has been incredibly important for women's participation, equally important for early learning for children in the schools, and more important for families who are struggling with child care needs.

I think this is going to have an incredible impact on the economy. I do believe this is truly a moment in the country's history where, regardless of one's opinion, we should all come together to support this initiative because it represents such a fundamental commitment on behalf of working families in this country, and more importantly, working women.

In addition to that, I think that over time the program would more than pay for itself with women's participation, their contribution in paying taxes into the economy and their ability to have the independence of earning an income and of being equally able to provide for their families.

I saw many interviews yesterday and watched the expression of individuals. We're struggling with child care. I'm wondering how this is going to help them to recognize it is something that this country badly needs. Yesterday's investment for the next number of years is going to be really important for us to win this effort. It will take all of us rolling up our sleeves and working with the provinces and territories to ensure that they collaborate with the federal government to ensure that we can build a truly national child care program on behalf of all working people in this country.

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

Thank you for that view.

The economist Jim Stanford, whom you will know very well, said the following about yesterday's announcement. I'm quoting him here. He estimates that the gain will be two to four times higher than what many economists are saying as far as the lift to the GDP. What many economists are talking about is a 1.2% increase to the overall GDP. Again, he's estimating that it will be two to four times higher than that. As a result of that growth, the tax revenue coming into federal coffers will cover the $8.3 billion a year in terms of ongoing costs.

I cite this as a way to introduce my final question for you. When you hear—as we certainly will in the coming weeks—from some opposition colleagues about the costs of a national child care program, what's your response to that? What's the CLC's view on that?

The opposition will certainly say that it will be too expensive, that we can't afford it and so on.

[Hassan Yussuff]

Child care does cost money. It does cost money for us to build the infrastructure to make sure it happens, but we've seen from the experiences that have been documented time after time from the Quebec reality that the program more than pays for itself. To have the highest participation of women today in the Quebec economy speaks to it, never mind the comfort and support. Working families recognize how much this program does for them. I think Jim Stanford was absolutely correct. This program will more than pay for itself over time.

There is a national consensus in labour and business that this is something that needs to be done. We've talked about this long enough. I think it's now for us to get on with it. We may differ about the specifics. We are very biased in loving the Quebec program. It's evolved over the years. By the way, as a program, it hasn't stood still since its creation.

We believe this program equally will evolve as it goes on and will get better. Where we are biased, of course, is where we differ a little bit in terms of the implementation of what the program should look like, but we do believe at the end of the day that this program will more than pay for itself over time.

It will also give the fulfillment, which is.... We live in a very unequal society. Let's face the reality. As much as I would like to pretend, as a man, how much I contribute to my household, I know I do far less than my partner because sometimes most of the burden has fallen to her. I take pride in the fact that my country is now going to do something that can make women's equality a cornerstone of its economic expansion going forward.

I think we all should feel good, and equally, we now should figure out how we can work together to ensure this actually happens at a provincial level. We need provincial support and co-operation. I'm hoping I'll do my part in the congress to help build a broad coalition that can push the provincial governments to come onside to support this program.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

We will have to move on.

We're turning to Mr. Blanchette-Joncas followed by Mr. Julian.

Go ahead, Maxime.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

I want to start by acknowledging the witnesses and thanking them for being here today.

My questions are for Mr. Côté from the Conseil québécois du commerce de détail.

I imagine that the pandemic had a major impact on consumer behaviour, particularly because of the public health restrictions. For example, consumers were no longer able to go to some of the retail businesses that they used to shop at.

We've noticed that a number of consumers are turning to online shopping. It must be quite difficult for retail businesses to compete with the online giants, which offer free or low-cost delivery. For example, if you buy a product for $10, but pay $15 for delivery, this can be an issue for the consumer, but also for the business. People who shop online do so mainly because the prices are lower.

Do you think that Canada Post should make an extra effort to lower delivery costs through its solutions for small business program? Do you see any other options for businesses?

[Jean-Guy Côté]

Thank you for the question.

There are several options. However, I want to point out that retailers have adapted their delivery methods. Some have been very resourceful in dealing with the competition. Of course, in contrast with some of the well-known large online retailers, the retailers that don't have an economy of scale that provides ample resources to organize delivery are facing certain challenges. Obviously, if Canada Post decides to lower or adjust delivery fees, retailers will welcome this news with open arms. This could happen. That said, I want to point out that there are other solutions, other ways to deliver. The truth is, price isn't the only factor that drives online shopping these days. Convenience is also a factor. For some people, it's easier to shop online than to go to a store.

Interestingly, we've noticed that, when people go to the store, they stay for a short time and buy many things. Going to the store has become an event in itself. Instead of buying just a few products or nothing at all, people go to the store to buy predetermined products and usually leave with the products that they wanted to buy. We're seeing this change in behaviour now, and it's likely to continue after the pandemic.

Obviously, competitive delivery solutions will always be welcomed by retailers.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

There are other ways to make retail businesses more competitive. We've noticed in the past few years that taxation is the main way to accomplish this. How can a retailer compete with a web giant? We've also noticed that tax collection isn't necessarily fair to our local retailers. The federal government is unable to collect GST from web giants located outside the country. I'd like to hear your thoughts on this.

The announcements made yesterday as part of the budget had already been discussed recently. As of July 1, all digital platforms will be required to collect GST. In your opinion, is this measure timely for well-established businesses in our municipalities? Do you think that the impact is already too severe and that it's too little too late to reverse the trend?

[Jean-Guy Côté]

I'll tell you right off the bat that it's better late than never.

Basically, you must understand that the QST is currently being collected by most online platforms in Quebec. Some aspects are already in place. The Quebec experience shows that, when asked, most major online sales platforms readily comply with government requests to register and collect taxes.

Since 2015, we've been talking about this issue and we've been wanting to see this money come back home. There will always be work to do to ensure fairness between retailers and online businesses located outside the country. One option would be to decide that the buyer's place of residence will now be the primary factor in determining whether to collect the tax, instead of relying solely on the business to collect the tax.

Again, I want to point out that tax collection in Quebec is going well. The fact that this measure will be extended to the rest of Canada is good news. In Canada, 86% of online sales are made to businesses outside the country. In 55% of cases, these businesses are located in the United States. In 31% of cases, the businesses are located in other parts of the world. A huge number of non-Canadian or non-Quebec online businesses aren't subject to Canadian borders. It's good news that elements of fairness are being introduced.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In your opinion, Mr. Côté, what would have been the impact if the GST collection had started before the pandemic, following the example of Quebec, which started collecting the GST in 2015?

[Jean-Guy Côté]

I can't say what the impact would have been.

However, it's important to acknowledge that the major trends in online shopping and retail were already under way. Did they pick up speed during the pandemic? Would some consumers have behaved differently? Would they have shopped at local businesses instead of through the major platforms? Perhaps.

However, it's important to note that the pandemic has made buying local more popular. People connected with their local businesses. They wanted to know about local businesses, so they searched online to find them. Also, the fact that people were working from home had a positive impact on businesses on nearby streets or on the main street in their neighbourhood. This helped the retailers and the small, local businesses. I like to say that we'll go back to the days when the retailers knew our first name. In our opinion, this is a great trend and great news. It's probably one of the silver linings of the pandemic.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Côté, I have a question regarding—

[The Chair, Liberal, Wayne Easter]

We will have to—

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Is my time up already, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

Yes. Thank you, both.

You will have another couple and a half minutes down the line, Maxime.

We're turning, then, to Mr. Julian, who'll be followed by Mr. Falk.

You have six minutes, Peter.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks very much, Mr. Chair.

Thank you very much to our witnesses. We deeply appreciate your coming forward today. You're all very eloquent. We hope that you and your families are staying safe and healthy during this deadly and tragic third wave that is sweeping across our country.

I have a lot of questions. I'll start off with Ms. Brayiannis, Ms. Morse and then Ms. Clemence and Ms. Hodson. We really appreciate your testimony today.

Ms. Morse, when you talked about teachers having to buy their own protective equipment in a country as wealthy as Canada, it just made my heart sink that we're subjecting teachers and students to this kind of situation.

As you're probably aware, the strongest criticism of the budget that was released yesterday is the fact that Canada's billionaires, who have massively profited from this pandemic—nearly $80 billion in increased wealth—aren't subject to any sort of taxation. The wealth tax that other countries are adopting is not being put in place in Canada.

At the same time as we're seeing that billionaires aren't paying anything remotely close to their fair share, we're seeing that the government is looking to curb, starting within a few weeks.... In just over nine weeks, we will start to see, effectively, dramatic cuts in the Canada recovery benefit, in the Canada emergency wage subsidy and CEBA. The government is basically presuming that in nine weeks we'll be out of this and that it can slash all the supports that should be put in place to support small businesses, students and teachers across the country.

Is that a wise course of action? Given the size and scope of this third wave—greater than the other two—the increased death toll and hospitalizations, does it make sense that the government, in a little over nine weeks, will start to slash benefits and end them all in September of this year?

I'll start with—

[The Chair, Liberal, Wayne Easter]

I believe you're starting with Ms. Brayiannis.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Yes, thank you.

[Nicole Brayiannis]

One thing I'll raise is that students currently don't have access to financial benefits at all. When we're talking about financial resources ending, there hasn't been anything specific to students since September 2020. Moratoriums also ended in October 2020, so students are really looking for any form of financial relief right now.

When we look at the Canada recovery benefit that is available, many students aren't eligible for it because of that stipulation, the requirement of $5,000 having been made in the last fiscal year. What we're really looking for is any kind of recovery benefit available currently as well as moving forward.

Students need to be included in this access. Again, if we're looking at wanting to stimulate the economy, that's simply not possible when students are barely able to afford their education and then are facing tens of thousands of dollars of debt load upon graduation and even more significantly now due to the troubles of the job market. We really need to be opening access.

We're calling for our government to include students, have specific student-centric responses, as well as open up the general availability of response benefits to include every person studying in this country, both domestic and international.

[The Chair, Liberal, Wayne Easter]

Go ahead, Ms. Morse.

[Shelley L. Morse]

Thank you very much. It's an important question.

I believe we're being overly optimistic to think that we will be on the other side of the third wave in nine weeks and won't require benefits. I think the federal government needs to take a closer look at that.

We know substitute teachers in Canada have suffered greatly throughout this pandemic. Of course, their jobs depend on being able to teach, and that isn't happening because we aren't in schools. We need students in schools in order for our economy to recover. I think government needs to look more carefully at ways to keep our schools open safely and to ensure that our students are in school, learning in front of a teacher.

We all know that light has been shone on glaring inequities in our education system in terms of students and their access to connectivity and devices. Our best bet is to have our students and our teachers in schools. This means government is going to have to step up with more stringent health and safety protocols in our school buildings and with money to make sure that our schools stay open safely. I think government needs to look a little more carefully at their idea that we will be well on the other side of this in nine weeks.

[The Chair, Liberal, Wayne Easter]

We'll hear from Ms. Clemence, followed by Ms. Hodson.

Ms. Clemence.

[Corryn Clemence]

Thank you, Mr. Julian, for the question.

As I indicated earlier, the wage subsidy has really been a critical lifeline for a lot of our operators. Certainly in Prince Edward Island and other areas across Canada, the tourism industry is very much seasonal. A large portion of our industry is based on a six-month season. For us to be looking at the declining rates of those wage subsidies right now, when we still have those border restrictions—we're not even open to Atlantic Canada—is incredibly difficult.

Our infrastructure is built to be welcoming 1.6 million visitors. Right now, with a population of 160,000 people on Prince Edward Island, it's just not realistic for us to sustain this. We were certainly concerned when we saw those declining amounts. Again, to look at that Atlantic component, in Prince Edward Island and among my Atlantic Canada counterparts, we're all in very similar situations in the sense that our operators just can't sustain their operations. Last year, with the wage subsidy in place and those supports at a higher rate, many of our operators still saw deficits at the end of the year. To get through this season and really be able to prepare for next year—with the optimism of being open to all of Canada and beyond—it's imperative for us to see those supports back in place and as they were.

[The Chair, Liberal, Wayne Easter]

Ms. Hodson, please speak fairly quickly, if you could.