Finance Committee on April 20th, 2021

[The Chair, Liberal, Wayne Easter]

We will call this meeting to order.

Welcome to meeting number 35 of the House of Commons Standing Committee on Finance.

Pursuant to the committee's motion adopted on Friday, February 5 of this year, the committee is meeting to study all aspects of COVID-19 spending, programs and related monetary policy.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25. 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 people should realize that the entirety of the committee is not visible at all times, just the person speaking.

I ask participants to refrain from taking screenshots of their screens. That's against parliamentary rules as well.

Just before I go to the witnesses.... Committee members, I had hoped that on Thursday we'd be able to do committee business as well as the panels, but we're going to get disrupted by votes now, so those meetings will have to be fairly tight. What I'm suggesting is that we do a steering committee meeting on Monday evening. I believe that time is still available.

On the 27th—just to remind folks—we'll have the Governor of the Bank of Canada for one hour and the Parliamentary Budget Officer for one hour. Usually we have them for an hour and a half, but due to Zoom time restrictions, we can't get our regular three hours. We're going to have to go back to two.

That's the situation at the moment. Are there any complaints about that suggestion?

Okay, we will turn to the witnesses.

Witnesses, please hold your remarks to about five minutes.

We'll start with the Nicole Brayiannis, national deputy chair, Canadian Federation of Students.

Welcome, Nicole. The floor is yours.

[Nicole Brayiannis, National Deputy Chairperson, Canadian Federation of Students]

Thank you, Chairperson.

Thank you to the committee for inviting the Canadian Federation of Students to speak on this issue.

I want to start out by acknowledging the privilege that comes with addressing you today, as I ask you to join in paying respects to the original caretakers of the land where I reside, in so-called Pickering, Ontario, who are the Anishinabe, the Haudenosaunee and the Mississauga of the Credit peoples.

To share a bit of context, the Canadian Federation of Students is the oldest and largest student organization in Canada. We represent more than 530,000 students across the country, and our membership includes both domestic and international students at the college, undergraduate and graduate levels, including full- and part-time students.

I want to emphasize how proud I am of the student leaders who, for over a year, have been tirelessly lobbying for improved support. From parliamentary petitions signed by nearly 10,000 Canadians, to a federal lobby week dedicated to a “Just Recovery for Students”, we have been calling on our elected officials for adequate financial support.

This pandemic has proven to be a struggle across sectors. As classes shifted online and work became even more precarious, we continued to see students experiencing new and enhanced challenges to accessing post-secondary education.

While we appreciate the more than $9-billion student investment made last April, we want to address the ongoing shortfalls experienced by students and the PSE sector as a whole. To date, as reported yesterday within budget 2021, more than $2 billion remains unspent.

Instead, students have received a failed $912-million Canada student service grant, inaccessible exclusion criteria for centralized financial relief supports and a six-month moratorium on federal student loans that ended in October 2020. In fact, students spent weeks fighting for the Canada emergency student benefit, only to receive less funding support and to have it endure for less than half of the pandemic.

Therefore, our first recommendation is to uphold commitments to students and graduates by allocating the remainder of unused funds to expand the current and any future financial relief programs to include every domestic and international student and recent graduate. Alongside this, students need an investment in accessible mental health supports that are adequately funded and staffed to address the very real threat of a youth mental health crisis.

As youth unemployment hovers around 20%, following a record-breaking 29% in May 2020, students need a commitment from their elected officials to lay the foundation for a stable future. While the Canada summer jobs program holds value in providing youth opportunities for employment, it excludes international students and those over the age of 30.

Amidst ever-changing familial and personal situations, relief for every person living in this country needs to be readily available, without the stipulation and added barrier of productivity demanded only of young people in this challenging time.

Budget 2021 also promises to continue the doubling of the Canada student grants program for an additional two years, which will assist many students with continuing their studies into the next academic year. Alongside this, we need to see a focus on more permanent measures for low-income students and sustainable investments into the post-secondary education sector.

Our PSE system has been increasingly underfunded since the late 1970s and now faces extreme precarity, as we've seen in recent events with the collapse of Laurentian University in Ontario. Therefore, our second recommendation is to invest in the targeted funding of federal grants, with the intention to move to a universal framework that matches 50% of student tuition costs in each province and territory.

Canada is one of the only G7 countries without a federal post-secondary education act. To stay competitive on a global scale and continue to attract and retain talent within this country, our government needs to be investing in the education sector to see large-scale advancement.

In order to ensure that money is being effectively spent, we need a holistic approach to understanding the impacts of this pandemic. As part of this process, the PBO has been tasked, on the federation's behalf, with producing estimates and cost frameworks for this short- and long-term grant-matching program, federal student debt elimination strategies and annual program values to ensure investment adjustments with inflation, enrolment growth and institutional costs.

Yesterday's budget also waives the accrual of interest on student loans for the next two years and increased the income repayment threshold for borrowers living alone to $40,000.

This is a step in the right direction, but our third recommendation is to listen to student calls for the reintroduction of moratoriums until at least December 2021, implement a stopgap urgent loan forgiveness program and permanently eliminate interest on student loans.

Debt creates economic drag and causes students to delay making large purchases and life choices, and actually reverses the positive, upward mobility associated with pursuing a post-secondary degree. Now more than ever, the PSE sector is going to be critical in advancing our country forward. Re-skilling will be key to upkeep with the technological and virtual shift we've seen this past year, as well as prepare us for the parallel need for a greener economy.

In a just social and economic recovery from COVID-19, student and post-secondary issue prioritization will be critical in rebuilding Canada.

The Canadian Federation of Students appreciates being a part of this consultation to address these needs, and I look forward to your questions. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Nicole.

We turn now to the Canadian Labour Congress—no stranger to the committee—Hassan Yussuff and Chris Roberts.

Go ahead.

[Hassan Yussuff, President, Canadian Labour Congress]

Good afternoon and thank you, Chair and committee members, for the opportunity to present to you today.

The Canadian Labour Congress, as most of you know, is the largest central labour body in the country. It brings together some 50 national and international unions in Canada as well as some 12 provincial and territorial federations of labour, along with 100 labour councils across the country.

The CLC advocates on national issues on behalf of some three million workers, men and women from coast to coast.

The coronavirus pandemic and the economic shutdown continue to devastate hundreds of thousands of working people's lives. Yesterday's budget, I think, brings important relief for working people hard hit by the pandemic. It does so in several ways.

First, the extension of the Canada emergency wage subsidy will continue to support employment into the fall of 2021. Second, the Canada recovery hiring program will promote job creation and support underemployed workers seeking additional hours of work in the second half of the year.

We hope the hiring program is further refined to provide targeted support for workers who are often overlooked in a job recovery. These include displaced workers, workers with disabilities and the long-term unemployed. Additional job training incentives would be combined with the hiring subsidy to increase the take-up rate.

Third, the extension of the recovery benefits and the temporary employment insurance measure recognize the reality of the third wave of COVID-19 infections in Canada. The emergency income support benefit continues to be essential for working people during the ongoing public health crisis.

From the beginning, the employment insurance program was not equipped, of course, to handle the extraordinary spike in unemployment. The unprecedented scale of job losses simply overwhelmed the EI system. A simplified unemployment benefit that allowed an automated claims process was needed. The government and federal public service workers quickly designed and implemented the Canada emergency response benefit, or CERB, to cope with the wave of layoffs.

The EI system was unable to cope with the scale of the crisis, but not just because of the outdated technology and a rigid administrative system. The EI program has also been severely eroded over decades. Eligibility restrictions shut out workers in part-time and non-standard work arrangements. This was especially the case for women, youth and racialized workers. These workers were the hardest hit by the economic shock of the pandemic. Going forward, we must address the long-standing weaknesses in the EI program.

We are pleased that yesterday's budget announced a forthcoming consultation on long-term EI reforms. In our view, the most important task is to expand access and increase the benefit levels. This is essential in reducing inequality and job market precarity. Improving access to EI and increasing benefit levels will also encourage employers to improve job quality. Extending the maximum duration of benefits will also improve the quality of job matches.

In our view, a comprehensive, open and participatory review of the EI program is long overdue. This review should include a careful examination of the management of the EI account and the program of long-term financing challenges.

Even more importantly, it is time to restore direct federal government funding to EI. For most of the program's history, the federal government contributed a significant portion of the program's cost. In the 1990s, the government withdrew entirely from paying into the EI program. It is time to return to truly tripartite funding for employment insurance.

This could be done by ensuring that federal government funding is tied to the incentive of achieving and maintaining full employment. Below a certain level of unemployment threshold, say 4%, employer and employee premiums could bear the full cost of benefits. Beyond 4%, the federal government should be obliged to defray the cost of benefits stemming from the unusually high unemployment. This would acknowledge the government's primary responsibility in stabilizing the economy and eliminating unemployment.

With that, I will end my remarks and welcome any questions, both to me and my colleague, Chris Roberts. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Yussuff.

We'll turn now to the Canadian Teachers' Federation, Shelley Morse, president, all the way from Nova Scotia.

Shelley, the floor is yours.

[Shelley L. Morse, President, Canadian Teachers' Federation]

Thank you for inviting me here today.

Good afternoon, Mr. Chair and committee members. I'm grateful for the opportunity to speak with you. I'm also pleased to be appearing alongside Hassan Yussuff. Many thousands of our teachers and education workers are also members of the CLC.

I would like to begin by acknowledging that the land from which I am speaking to you today is Mi'kma'ki, the ancestral and unceded territory of the Mi'kmaq people of Nova Scotia.

I would like to preface my remarks with a brief overview of the impact of COVID-19 on our students, teachers and education workers.

Canada's education system is one of the world's best. However, that standing is under severe threat due to the low prioritization it has received since the beginning of the pandemic. Education outcomes for students in this country are in jeopardy and the federal government must continue to take action before more damage is done to our K-to-12 cohort and the economy.

Last September, the OECD estimated that Canada's present value of GDP lost over the remainder of the century due to coronavirus-induced learning loss could be as high as $2.5 billion. Of more immediate concern is the direct impact of school closures on the economy as Canada tries to recover. According to the C.D. Howe Institute's comprehensive measure, K to 12 schooling accounts for 11.5% of the GDP in Canada. Therefore, the disruption of the Canadian education system impacts the Canadian economy almost more than any other sector.

These figures paint a stark picture around the importance of creating and maintaining safe schools. Still, in Ontario and in many areas of Alberta and Quebec, school buildings are again closed and students and teachers are forced to adopt online learning, with its numerous shortcomings in terms of equity and quality.

Before going forward, I also want to acknowledge the tremendous stress on all levels of government. On behalf of the Canadian Teachers' Federation, thank you to your staff and the dedicated members of the public service. Your work is so important.

While we recognize that education falls under provincial and territorial jurisdiction, the CTF/FCE applauded the $2-billion safe return to class fund. We appreciate the efforts made through this fund and other federal initiatives to try to keep students and educators safe. Unfortunately, I cannot stress enough that funding has not flowed down to the classroom level. Our teachers and education workers are still paying out of pocket for their PPE, hand sanitizers, additional cleaning products for their classrooms and makeshift dividers between desks.

Likewise, the CTF/FCE was pleased to see the government think outside the box by announcing Infrastructure Canada's $3-billion COVID-19 resilience funding stream, which aims to support projects such as retrofits and repairs for schools. We are also happy to see Infrastructure Canada's recent announcement of $120 million to support ventilation improvement projects in public buildings, including schools. This is something the CTF/FCE has long called for.

We also have concerns. What are the reporting and accountability measures in place to ensure that projects being funded are not, for example, roof repairs that have been neglected for years? Similarly, how can the federal government work to ensure provinces spend the funds in a timely manner?

In Ontario, just last week, funding was announced under the resilience stream for space reconfiguration, such as new walls or doors, to enhance physical distancing. Don't get me wrong. This is a much-needed investment, but it's the end of the school year. This federal fund was announced last August. That is why the CTF/FCE has been advocating—and will continue to advocate directly with federal officials and policy-makers—for better tracking of school-related federal funds, either through a federal-provincial-territorial task force or other mechanisms to ensure the funds are used in a timely manner, reaching their intended destinations and making a tangible difference.

Additionally, the CTF/FCE urges consideration of other supports for people on the front line. The lack of mental health funding for frontline workers remains a deep concern. A recent poll of Canadian teachers tells a worrying tale, with over 70% of respondents concerned about the impact of the pandemic on their own mental health and well-being. Of course, a major reason for this is the almost constant worry for their students in this challenging context.

We were happy to see additional funding in the fall economic statement for the Wellness Together program, but more resources are needed, and they must be allocated specifically for services tailored to the unique workplace stressors of teachers and other frontline workers.

As governments plan for the coming months, we must also ensure that teachers and all education workers have priority access to the COVID-19 vaccines so that our children can learn in class, parents can work and our economy can begin to recover.

The CTF/FCE is grateful for the federal government's support throughout the pandemic, but as this third and most vicious wave makes clear, the pandemic is still very much with us. The challenges our country faces, including those experienced by teachers and education workers, will continue to require the government's full attention.

On behalf of the over 300,000 teachers and their students across this country, I appreciate the opportunity to contribute to the important work of the committee and welcome the opportunity to answer any questions.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Morse.

Turning, then, to the Conseil québécois du commerce de détail, we have Jean-Guy Côté, CEO.

Welcome.

[Jean-Guy Côté, Chief Executive Officer, Conseil québécois du commerce de détail]

Thank you, Mr. Chair.

I want to start by thanking the committee members for the invitation to come here today to talk about the positions and issues of the retail industry, the day after an important day in the parliamentary calendar. The tabling of a budget is usually one of the most significant events of the year in Parliament. We're very grateful for this invitation. It will also give us the opportunity to respond to the various parts of the budget in real time.

I've been the chief executive officer of the Conseil québécois du commerce de détail for four weeks. This is all new. I used to keep a close eye on the Canadian economy as a researcher and associate director at the Institut du Québec, which came into being as a result of a partnership between HEC Montréal and the Conference Board of Canada. Over the past few months, I've been able to keep track of the measures announced by the government and adopted by Parliament to resolve the economic issues surrounding the pandemic. As a result, I have fairly specific knowledge of the issues and the items tabled.

The Conseil québécois du commerce de détail represents thousands of retailers in Quebec. A number of these retailers are based in Quebec and have their head office in Quebec. However, some retailers are based in other parts of Canada and carry out many activities in Quebec. We share a significant number of challenges with other retailers across Canada. The Conseil also represents many small retailers, meaning people who have one or two stores, or one or two doors, as they say in the retail business. We're aware of the various challenges that retailers face, depending on their size, to ensure a proper return to business.

We're still in a crisis. The pandemic is ongoing and the lockdown is relatively challenging in other parts of Canada. In Quebec, some areas are more locked down than others. In some areas, certain retailers can't conduct business as usual because of the number of cases. The third wave is still very severe. The issues identified as of March 2020 are still ongoing. In the end, the programs in place are still just as relevant.

We can also see that the pandemic has affected industries in different ways. Health care and education have spearheaded the response to the pandemic. Tourism, hospitality, arts and culture, and retail suffered far more losses than other industries that were able to remain open and continue their economic activities. As a result, each industry's response to the pandemic and experiences during the crisis differed.

However, all our members are telling us something important: the pandemic comes on the heels of the completion of a major transformation in the retail industry. I'm talking about the digital shift that started nearly 20 years ago and that has dramatically transformed the retail landscape and the jobs within it. The pandemic is a powerful catalyst for this transformation.

Here are some key statistics. Over 11% of sales are done online, which wasn't the case before. In addition, 62% of people now use their credit card to make retail purchases, a much higher percentage than before. Lastly, 86% of people who shop online do business with companies outside Canada. They purchase from foreign retailers, mainly American. As you can see, the retail landscape has changed dramatically in recent months.

The federal government's response and the subsequent measures adopted by Parliament were still significant. In the early months of the pandemic, the response was very aggressive. In our view, this was necessary to meet needs. The Canada emergency response benefit, given its universal nature, was able to maintain the income of Canadians and increase the savings rate. This will make it possible for the economy to recover much more strongly than if nothing had been done. In addition, the Canada emergency wage subsidy has helped our retailers maintain the employment relationship with their employees. This was necessary in a situation where certain positions were severely understaffed. There was also the Canada emergency rent subsidy. This subsidy kept commercial establishments open when the pandemic subsided enough to allow some businesses to reopen.

Other measures could be put in place. I'll elaborate on that, if I may.

During yesterday's budget presentation, we were very surprised to hear that the issue of interchange fees, the fees charged to retailers for credit card payments, would be revisited. The government has the opportunity to regulate this issue. This would cost the government nothing and would give retailers and consumers some relief. It would give them the chance to participate in the economic recovery, which we hope will be as strong as possible in the coming months. I'm optimistic about the coming months.

I hope to be able to provide appropriate answers to your questions in the next few hours.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Côté.

Turning to a fellow Islander, I have, with the Tourism Industry Association of Prince Edward Island, Ms. Clemence, CEO.

Go ahead, Corryn.

[Corryn Clemence, Chief Executive Officer, Tourism Industry Association of Prince Edward Island]

Thank you.

Good afternoon and hello to all of the finance committee members.

I represent the Tourism Industry Association of Prince Edward Island, the hardest-hit industry on the island since the onset of this pandemic. Prior to the pandemic, tourism was one of the top three industries on Prince Edward Island, generating an estimated $504.8 million in direct revenues and approximately $145 million in total tax revenues. Leading up to 2020, we enjoyed five consecutive record-breaking seasons, resulting in businesses in our industry reinvesting and expanding their operations.

In 2019, Prince Edward Island welcomed an estimated 1.6 million visitors to our island, which has a humble population just shy of 160,000. The cruise industry set a record, with 128,000 passengers, near equal to our total population, helping to lengthen our traditionally seasonal industry in the spring and fall. In the 2020 season, and again in 2021, cruises ground to a complete halt, going from 128,000 passengers to zero.

The impact this industry has not only on the ports affected but on the supply chain, from transportation providers to small businesses, including retail, restaurants, experiential product and tour companies, is staggering. We have individual family-owned retail businesses sitting on over $1 million in inventory, purchased in advance of the 2020 season and carrying that cost for multiple years. Our main transportation provider, normally employing approximately 500 people, now has 155 individuals working at a much reduced capacity.

In other sectors, we have seen an 80% decline in our accommodations, and some operators, such as the island's only family-run amusement parks, went from 350 staff in 2019 to 198 in 2020 across their four companies. Sales dropped from 60% to 80%, with the two largest amusement parks being down 80%. For one single attraction, this meant going from a profit of $300,000 to a loss of $300,000, even with the subsidies in place.

To put this in further perspective, that $300,000 in revenue would afford this business the ability to pay down approximately $250,000 in debt and to continue to expand their operations. Instead, the pandemic has forced them to now take on an additional $300,000 in loans just to keep the lights on, as opposed to investing in new capital projects.

In addition to the financial impact, amid the uncertainty, companies are losing the workforces that they have spent many years developing. Continued investment by the federal government will be required to support skills development.

While some of our larger businesses have taken on additional loans as a means of survival, many of our smaller operators don't have the capacity to do so. While carrying existing debt from investments in previous years, these businesses can't comfortably take on additional debt without any indication of when they may be able to pay it off. HASCAP, for example, has benefited a small number of businesses on Prince Edward Island, but no matter how low the interest rates or payback terms are, many will not entertain this as a viable option for them.

We recognize how fortunate our island has been in the face of the pandemic, and we were grateful to be open to the Atlantic bubble for the summer of 2020. This, paired with the Canada emergency wage subsidy and other supports, allowed many of our operators to open for the season, albeit at a much reduced capacity and at great financial cost.

As we move towards the 2021 season, our optimism has shifted to the realities of another bleak tourism year. At best, we are preparing for another Atlantic bubble, but many of our operators will not survive without the continued extension of the Canada emergency wage subsidy and the Canada emergency rent subsidy supports. These programs provide a backstop for our businesses to keep staff employed and keep the doors open in a time of much uncertainty. With border closures and continued COVID-19 restrictions, these operators are in an impossible position of trying to budget, plan, staff and forecast with no real understanding of what the coming months will bring.

The Government of Canada has acknowledged the hardest-hit sector with these supports. We thank you for recognizing the importance of our industry, and we ask that you continue to consider and evaluate these programs.

As we move to reopening to the rest of Canada, our industry is faced with the reality of no meaningful tourism on Prince Edward Island until the 2022 season. Even if our operators survive the 2021 season, without the ability to generate meaningful cash flow, they are looking at a long winter to prepare for what is, hopefully, an improved 2022. The industry will not see 2019 visitation or expenditure levels that we enjoyed only a couple of years ago, but this signifies the start of a struggle back to the thriving industry we once were.

With that, our focus is on ensuring the survival of our operators and recognizing the importance of not only surviving but finding a way to see capital infrastructure investments and upkeep so that our businesses are well positioned to welcome back visitors to our island in the way we once did, with world-class hospitality, authentic island experiences and product that is refreshed, renewed and revitalized.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Clemence.

Before I go to our last witness, the order for questions will be, first, Ms. Jansen, followed by Mr. Fragiskatos, Mr. Blanchette-Joncas and Mr. Julian.

We're turning to our last witness, from the Fitness Industry Council of Canada, Sara Hodson, national representative.

[Sara Hodson, National Representative, Fitness Industry Council of Canada]

Thank you, Mr. Chair and honourable members of the committee. It's a pleasure to be here today.

The Fitness Industry Council of Canada represents over 6,000 fitness facilities across this great country. They range from single boutiques to national chains and non-profit and municipal facilities. Pre-COVID, the fitness industry employed 150,000 people and served six million Canadians. Our industry has been severely decimated by COVID-19 due to closures and restrictions across the country. Today we have laid off half of our employees and lost half of our membership.

The majority of fitness facilities have been closed over the last year despite worldwide data showing that fitness facilities are not transmission sites of COVID-19. Facilities are operating at somewhere between 10% and 50% of their revenue. The wage and rent subsidies have been very much appreciated by our industry. We still experience severe financial hardships. We continue to have small business loans, equipment leases, property taxes and debts from PPE. As well, our industry had to very quickly invest in and create online platforms in order to continue to keep Canadians active at home. Facilities are losing currently $15,000 to $30,000 per month per facility.

We have a lot of fitness brands and facilities that were opened the year before the pandemic hit. Those facilities are not able to benefit from some of the subsidies we have. I want to bring that to your attention today.

Fitness facilities in their current state across this country have anywhere from two to six weeks of remaining capital and have taken on significant debt. They have defaulted on their leases and their loans. Currently, looking across this country, we see that about a third of fitness facilities have already closed. Some have gone in silence. Some have gone publicly. We know that a third of facilities have closed. We will see that number double as our industry bears the weight of reopening.

We foresee that once Canadians are fully vaccinated, it will take about six to nine months for our industry to just gain the three million members we lost. To offset the debts and the other costs that we have now taken on, we need to increase our membership base by 20%, meaning that we have to serve 7.2 million Canadians. We project that this will take an additional six to nine months. Overall, the fitness industry is 18 months away from any type of return to the February 2020 state of the industry. That will take us to February of 2023. This is a three-year critical financial impact on our industry.

As we all know, the federal budget was released yesterday. As much as there are great initiatives included for mental health, we as the fitness industry are disappointed that our proposal was not considered in the 2021 budget. I do believe that as much as we did include mental health in the budget, we really missed an opportunity to help Canadians' mental, physical and social health. This is where fitness and fitness facilities come in.

On January 28 I had the great pleasure to present to Deputy Prime Minister Chrystia Freeland an economic recovery plan for the fitness industry. Our proposal was to have fitness memberships and services considered as a medical expense on our personal taxes. That's line 33099. Our proposal included financial modelling that actually showed projected health care savings ranging from $500 million to $2 billion a year by combatting physical inactivity in Canada. Our proposal supported the employment of young people, the recovery of our industry and the health of Canadians. We were endorsed and backed by Heart and Stroke, Diabetes Canada and the Canadian Cardiovascular Society.

Why does fitness even matter for Canadians right now? Well, the reality is that exercise is medicine. There's so much I wish I had time to share with you. Exercise is known to reduce hypertension and cancer and diabetes by up to 60%, stroke by 50%, and Alzheimer's by 40%. Exercise is just as effective as antidepressants.

We know that we are in a physical inactivity pandemic, and this was echoed by the World Health Organization in 2018. We are fighting COVID as a country, and the access to physical activity right now is at risk. We are on the verge of losing two-thirds of fitness facilities, eliminating Canadians' access.

What is the solution? We need to make this tax deductible. As a country that funds the research that teaches and supports exercise as medicine, we now have to give Canadians the opportunity to benefit from exercise as medicine. This is Canada's opportunity to gain global attention and recognition for incenting the people of Canada to get active, to make a bold statement that physical activity is fundamental to our health care system.

The time is now. We are losing our fitness industry, but together we can create change and empower Canadians' physical, mental and social health.

Thank you. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Sara.

I certainly thank all the witnesses. We're covering all the bases: students, teachers, labourers—and in industry—retail, tourism and fitness. Those were very interesting witness presentations.

We're turning, then, to Ms. Jansen for the six-minute round, followed by Mr. Fragiskatos.

Tamara.

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

Thank you very much.

I'd like to give a special thanks to Sara Hodson for coming and giving us that wonderful presentation. I was able to see the whole presentation beforehand, which was great. I thought.... I mean, for myself.... Sitting on Zoom for hour upon hour for the last year, I know I've become very inactive and have gained weight. Definitely, you feel it mentally. There's no doubt about it. You and I discussed how much better we feel when we get up and get active.

What I really loved about your presentation that you gave to Ms. Freeland is the fact that, actually, it's a win-win.

Maybe you can fill us in a little bit more. You did mention that you have a lot more to say but that you didn't have enough time, so please fill us in.

[Sara Hodson]

Yes, absolutely. Thank you.

This really is a win for the federal government. This is a win for Canadians. This is a win to recover the fitness industry.

When we actually look at the data that has been published by Canada on inactivity, we know that it costs us annually $2,000 per person who is inactive and has underlying health concerns. We have 30 million Canadians who are inactive.

Really, the upside on this is that we can actually create health care savings. We can promote the health care of Canadians. We can employ young people. We can invigorate and re-energize an industry that I cannot stress enough is an industry that has been severely decimated. There really is no downside to this proposal. I believe that it is something that we absolutely have to take seriously right now.

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

Over the weekend, I got an email from a local constituent who also has a gym. I don't want to say too much about him because we haven't had a chance to talk, so I don't know that he wants to go public. He ended up buying a gym just before COVID happened. It's a long-standing gym that's been around for 30 years. Because of all the little wonky things with all the different programs, it looks like he's going to lose the gym.

I've dealt with so many people in my riding who have lost—whether it's a gym or a dance studio—things that have huge impacts on our communities and on our communities' health and mental health as well. I wonder if you could speak a little bit more about how much impact things like gyms, dance studios and so forth actually have on our local communities.

[Sara Hodson]

That's where I really think that this is an emphasis on mental and social health. We see people who come together and really create a community. Not only is exercise medicine—so truly, from a physiological perspective, we know that when we move our bodies we are combatting depression, stress and anxiety—but also we are feeding social health, feeding community.

We have a nation that has been isolated due to this pandemic. When we look at places like Australia and New Zealand, people are wanting to participate in fitness coming out of this. People are wanting to connect in places that are recreation-based, in places that are movement-based. This is all about, again, supporting the mental health of Canadians.

With regard to the operator that you mentioned, that is not a unique story. Those are the stories that I'm hearing on a daily basis. For me, my business came into this pandemic a healthy, thriving business. I've built it over a decade. My business now has $300,000 of debt. I have to somehow bring back my business, grow my business even more just to bring myself back to where I was. Again, that's going to be a three-year plan.

We have not even begun to see the fallout of our industry. Because our industry has been closed for the majority of this year, we don't even know what our industry can bear, financially, in the sense of reopening.

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

I wonder what your thoughts are on the lack of information coming from Health Canada in regard to physical activities being good for your health. I know that I was kind of shocked. I've heard very little about building your immunity with vitamins and with activities and stuff like that. I wonder if you could speak to that as well.

[Sara Hodson]

Yes, I think the closure of gyms sends a message that maybe they are not a safe place, yet as I shared earlier, when we look at worldwide data, gyms and fitness centres are not transmission sites for COVID-19. They actually have a 0.06% rate globally, so we are safe.

We can share the message of “get outside and be active”, but that doesn't work for everybody. That doesn't meet all Canadians where they're at. As we've spoken about, we're all sitting here on Zoom, as we're doing all day long, and that's not an easy feat, never mind weather and so forth.

Actually, the British Medical Journal just this past week revealed that a sedentary lifestyle is directly correlated to severe COVID outcomes—death, hospitalization and recovery—that are draining our health care dollars, and we as a nation have shut down the providers of physical, mental and social health. As we reopen, we need a way to be here for Canadians, and that's at risk.

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

I thought—

[The Chair, Liberal, Wayne Easter]

You can have a quick one, Tamara, very quick.

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

You were hoping that the government would incentivize people to take charge of their own health. It's a great idea. What were the savings that you said we could have had?

[Sara Hodson]

If we get 1.2 million Canadians active out of the 30 million who are currently sedentary, we can actually have an upside of anywhere from $500 million to up to $2 billion, with the $2 billion representing those people who have underlying health concerns. If we get someone with high blood pressure active, that is the return that we can bring back into health care.

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

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thanks to both of you.

We are turning to Mr. Fragiskatos, who will be followed by Mr. Blanchette-Joncas.

Go ahead, Peter.