Finance Committee on April 29th, 2021

[Blaine Cameron]

Thank you very much.

I'm Blaine Cameron, chair of the Ottawa Centre chapter of ACORN Canada. We're a national independent membership-based organization of low- and moderate-income people. We are a community union of 140,000 members in nine cities across Canada. Thank you very much for giving us the opportunity to speak today.

ACORN would like to bring to the committee's attention the following issues.

First, access to affordable high-speed Internet is a lifeline, and with the pandemic the need is greater than ever, but still far too many low-income Canadians don't have access to it. ACORN did a survey of 600 low- and moderate-income community members in 2019. Out of the respondents with household incomes under $30,000, 80% had home Internet, but 65% of the people filling out the survey had to sacrifice things like food, medication and so on to afford their home Internet.

The current federal voluntary opt-in program called the connecting families program needs to be made mandatory and expanded. Currently it targets only families with children, leaving out seniors and many other families. The speed of the Internet is too slow with multiple children in the household, and the uptake of the program is as low as 5%.

Government should immediately create a $50 monthly Canadian broadband benefit retroactive to January 1, 2021, to six months after the pandemic ends. The benefit should be for all low-income Canadians, fixed-income seniors and those Canadians with job or income loss due to COVID-19.

In the long term, affordable high-speed Internet access should be provided through the expansion of the connecting families program and provision to all low-income Canadians and fixed-income seniors of $10-per-month high-speed Internet. The speed of the Internet should be 50/10, which I believe is 50 download and 10 upload.

Second is the need for fair and inclusive banking. We're happy to see that the recent budget mentions addressing predatory lending by doing a consultation focused on lowering the criminal rate of interest noted in the Criminal Code of Canada. ACORN's latest study, released in February 2021, shows a massive growth in the use of instalment loans. When we did a study back in 2016, 11% of people had taken instalment loans. That number has now jumped to 45%. On top of that, payday lenders continue to charge an exorbitant interest rate—around 400% to 500% [Technical difficulty—Editor]

Payday lending should be added back under section 347, and exception 347.1 should be removed. No other exceptions should be allowed, such as for instalment loans or others. A fair credit benefit should be introduced, funded by the government and administered by the banks. Fees for insufficient funds should be lowered from $48 to $10.

Third is the need for affordable housing. The government must bring a rent relief program for tenants who have lost their jobs and who are on the verge of eviction. Predatory lenders, such as real estate investment trusts, otherwise known as REITs, should be stopped from destroying affordable housing. This should be done by having the tax loopholes in the Income Tax Act, which give huge exemptions to REITs, closed. The Canada Mortgage and Housing Corporation aids and abets the process of financialization of housing by offering its insured mortgage products to assist REITs to secure the financing needed to buy new buildings. The bottom line is that REITs business models and acquisition strategies are dependent on CMHC backing, meaning that CMHC has a significant amount of leverage over REITs to ensure that affordable housing in Canada is preserved.

This predatory lending must stop, and any CMHC-backed financing should ensure that it has clear no-displacement conditions. We ask for the creation of a national non-profit acquisition strategy, funded as part of the national housing strategy. This strategy should fund and give the right of first refusal to non-profit, co-op and land trust organizations to purchase rental buildings when they come on the market. Ban REITs from owning certain types of multi-family residential buildings that are best suited for permanent and true affordable housing through non-profits.

Fourth, and finally, is the need to modernize employment income. We welcome some of the changes that the government has made to the EI system. However, most of these changes are temporary. Moreover, the system is still inaccessible, and the benefit inadequate, for low-wage workers.

The government should undertake a quick and comprehensive review of EI. Make EI accessible for all workers by lowering the hours requirement consistently across the country to 300 hours, or 12 weeks of insurable work, whichever is better for the worker. Denmark makes it harder for working people who have paid into the system to use it.

Raise the benefit rates for all workers to 75% of earnings, and raise benefits to 100% of earnings for low-wage workers.

Thank you once again for having ACORN here.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Cameron.

We will turn to Mike Reimer, owner and operator, Churchill Wild.

[Mike Reimer, Owner and Operator, Churchill Wild]

Good afternoon, everybody.

It's Mike here, with Churchill Wild. I'm the owner-operator of a small business based out of Churchill, Manitoba. We're family owned and we're involved in remote, high-end polar bear ecotourism on the western Hudson Bay coast. This year, 2021, marks our 40th year in tourism in Manitoba, and in 2019, our last full season of pre-pandemic operations, we employed 10 full-time and up to 60 full-time seasonal staff.

Our base of operations is in the remote community of Churchill, Manitoba, which, like us, depends entirely on tourism for revenue. We are considered a bucket list destination for a global clientele eager to encounter Canada's spectacular wildlife, and in particular our fabulous polar bears.

Churchill Wild is part of a greater $108-billion tourism industry in Canada employing 1.8 million people. We are representative of a typical multi-generational business in Canada that is being devastated by the current travel lockdowns due to COVID. Most of us have had zero income for the past 15 months and likely will not survive many more months of this. Assistance from both federal and provincial governments has been well intentioned but at best has delayed the inevitable bankruptcies that are facing many of us this year, and our experience with that help has been as follows.

Federally, the CEWS program, the Canada emergency wage subsidy, is a helpful program, but for a business such as ours with zero income, it only limits the losses while trying to keep our staff engaged for, hopefully, a future reopening. A wage subsidy is a subsidy against wages paid to staff, so if we qualify at the highest rate, as an example, for every $100 spent, we get $75 back. We still end up spending more to lose more.

Last summer we attempted to employ our highly specialized seasonal staff, as it's crucial we don't lose them for the future reopening. That means we took on additional losses. We spent thousands of dollars only to get less back so that we could keep good staff involved to some degree. We created make-work projects and had the most experienced bear guides in the world sanding walls in the hope that we would be able to retain them the following year, an experiment we could ill afford and are very hesitant to repeat this year.

Due to the way CEWS works, if we had no revenue in off-season months—which is typical for us—and happen to sell one of our $25 cookbooks, this revenue change percentage disqualifies us from CEWS for that time period, so an $8-million business essentially is disqualified from thousands of dollars of support due to some strange loophole or rule that says that if we sell anything at all, we don't qualify. As a result, we are in fact discouraged from selling the few trinkets we might be able to sell—not that they really affect the big picture.

Regarding the CERS, the rent subsidy, we do have an office just south of Winnipeg and we do use it for that, but all our lodges and facilities are up north and remote and carry horrendous insurance rates with them. Rent subsidies really do nothing for us there.

As for the CEBA, the Canada emergency business account, we use that as well, but again it doesn't help when we don't take in any money. It's as if I told you to go on living your life, but you won't be paid any more; however, if you need help, I'll give you a loan. It's pretty tough to make loan payments without income.

On HASCAP, we would currently need to change over our banking because local credit unions can't access it, but again it's to get a 4% interest rate loan. Without income, how do you make the payments, especially with interest?

Provincially, we had an opportunity for a bridge grant, which we used, but for an $8-million revenue business such as ours, a $15,000 bridge grant is just a nice way to have a barbecue. As an example, the guy we use to run the dog team program for us takes in about $20,000 annually and qualifies for the same $15,000 bridge grant as our company.

Beyond the crippling financial losses our industry is enduring, it is also the great unknown that is tearing the guts out of us. After 15 months of no income, we still have no indication of when and if we will ever open our doors again. Every few weeks the rules and regulations change. We sway in the wind, waiting, wondering, spending and losing money.

We are unable to give our staff any assurances of what their lives will look like more than three weeks from today, if we're lucky. We have no opportunity to give them something to plan towards. When will they be able to work, and can we give them any work this summer? Will we incur even greater losses simply to try to keep them employed so that we can actually hang on to them until we get back to work?

Those of us in tourism have ended up feeling rather abandoned by government. We are facing 100% income losses while other businesses appear to be not only surviving, but, oddly, actually thriving in COVID. The glaring disparity is numbingly depressing for us. We listen to reports and we actually see colleagues in other industries experiencing record-breaking profits in housing, construction, real estate, equipment maintenance and road work. Everything else around us seems to be off-the-charts profitable, while tourism is collapsing.

It further makes no sense that businesses with zero revenue and those that are profiting are still utilizing the same programs. Our first choice would be to be allowed to operate—safely, of course—and showcase this wonderful province to our country and the world. If that is taken from us, then at least allow some specialized help for businesses such as ours.

Canadian tourism destinations such as ours showcase Canada to the world. It is imperative that we reignite that excitement in global travellers once again. Canada cannot afford to fall behind in what is a very competitive marketplace. We're seeing even now that some of our long-time tour operators that have brought us guests over the years from around the globe are starting to shift operations to different destinations. As an example, Alaska is opening up this summer. Some of our tour operators are taking their groups to Alaska because they perceive Canada as unwelcoming and an unsafe destination. That will have long-term side effects for us as well .

There's a growing concern that we'll miss the upcoming reopening surge in travellers eager to be on the move again. There's a real urgency out there, I think. There's a sense that once there's some safe way to travel, they will be coming in droves. We need to be part of that.

I'll ask you guys this: If your employer were to ask you to take a pay cut for the greater good of the country, how much would you be able to afford or be willing to take? Would it be 10%, 20% or 50%? We were not asked; we were told. It was a 100% pay cut.

We gamely struggled through 2020 living on hope for the coming promised vaccines that might put all of our lives back to some semblance of normalcy. We entirely understood the need to protect our loved ones from COVID and did not for one minute begrudge the necessary lockdowns while trying to beat back this common enemy, but we are now facing a very real potential of a second year of no income—not a reduced income, but zero—while Canada struggles to get vaccine programs under way. This is simply unacceptable.

We are an enormously valuable industry. We must be allowed to survive so that Canada's world-class tourism destinations will be around to welcome travellers in the coming reopening.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Reimer.

We do appreciate you calling it as you see it on the ground. We want to hear the facts from your perspective.

We'll turn now to the Frontier Duty Free Association. We have Mr. Bachand, board member and land border duty-free store owner, and Ms. Lee, who is also a board member and store owner.

The floor is yours.

[Tania Lee, Board Member and Land Border Duty Free Store Owner, Frontier Duty Free Association]

Thank you, and good afternoon. My name is Tania Lee. I'm an owner-operator of a small land border duty-free store in Sarnia, Ontario. We service travellers crossing into Port Huron, Michigan. With me today is Philippe Bachand, a store owner-operator in Philipsburg, Quebec. He is a fellow member of the FDFA board of directors.

Our Canadian land border association is made up of 33 stores across the Canadian border. Our businesses were effectively shut down over a year ago when the border closed in March 2020. We are an export business that can no longer export. We are the hardest-hit businesses in this country. Unlike other businesses, our stores cannot pivot to other business models. By regulation, all of our duty-free sales are export sales. We cannot sell online to domestic travellers unless they are physically crossing the border to the U.S.A. We cannot sell our inventory into the Canadian domestic market. Other tourism businesses, such as local B and Bs that have lost their U.S. visitors, can turn to domestic Canadian tourists. Local restaurants can turn to curbside pickup. Duty-free stores have no option but to wait for a fully open border.

We have been very supportive of government actions to protect the health of Canadians, but our industry is now sustaining year-over-year decreases of over 94%. We need help to survive and to recover. We have been able to access some federal programs, such as the wage and rent subsidies. However, due to our unique position on the border, some of these programs do not apply to us.

This is an industry that employs upward of 2,500 people in very small border communities. After a year of very significant losses to our industry, the long-term viability of our industry is at risk. We have two solutions that we ask you to support and to champion.

First, in budget 2021 a $500-million tourism relief fund was announced. We are asking your support to channel some of this fund into a duty-free relief fund to help us stay alive and to recover, and to allow grants of up to $200,000 per store, with a total maximum budget allocation of $6.6 million.

[Philippe Bachand, Board Member and Land Border Duty Free Store Owner, Frontier Duty Free Association]

Thank you, Ms. Lee.

Secondly, members of the committee, we need an export designation to recover long term.

Also important is long-term support. Our internal projections indicate that the industry will need two or three years to fully recover from the current crisis, even if the Canada-United States border reopens in the next few months.

All products sold at duty-free stores are for export only and are immediately exported to the United States. However, due to an unclear federal designation, the products sold at Canadian duty-free stores are erroneously subject to domestic policies that put the stores at a massive competitive disadvantage with U.S duty-free stores and retailers, which ultimately results in significant revenue loss here in Canada.

We are asking this committee and the federal government to create special overarching legislation that will allow our stores to come out of this crisis with an export sector designation with all the rights and privileges to facilitate our recovery post-crisis and level the playing field with American counterparts, our only competitors. This small but powerful legislative initiative should have paramountcy and be instructive over other legislation that encumbers our ability to compete as an export market. We have submitted the full plan for duty-free export designation to each committee member and to the committee.

We would like to thank you for your time. We are ready to welcome any questions afterwards.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Bachand.

We'll turn now to Hebdos Québec. We have Mr. Poisson, general director, and Mr. Chartier, editor and chair of the board.

[Benoit Chartier, Editor, Chair of the Board, Hebdos Québec]

Thank you very much, Mr. Easter. We say Hebdos Québec, like weeklies.

Allow me to introduce myself. My name is Benoit Chartier, and I am the chair of the board of directors of Hebdos Québec. Joining me is Sylvain Poisson, the general director of Hebdos Québec.

He will now take over.

[Sylvain Poisson, General Director, Hebdos Québec]

Thank you for inviting us.

Established in 1932, Hebdos Québec is a not-for-profit organization that brings together the vast majority of independent publishers of local and regional weekly newspapers around the province. Hebdos Québec represents, defends and promotes the interests of the local and regional press, supporting its development and outreach, while coordinating efforts across the sector.

These weeklies have come through changing times and crises. Their owners, true entrepreneurs, have transformed and reinvented their news media services over the decades, in an industry that is nearly 170 years old. These publishers are proud entrepreneurs, Mr. Chartier among them. He owns five weeklies, including the oldest weekly French newspaper in North America, Le Courrier de Saint-Hyacinthe.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Chair, am I the only one not hearing what he's saying?

[Sylvain Poisson]

Committed to the principles of equality, freedom and pluralism, weekly newspapers led society, governments, institutions and organizations to foster a more just society. They helped bring about important social change and significant progress in a number of areas, ranging from education and health to culture and the economy. A true bastion of democracy, the local and regional press has a duty to the public and is committed to providing citizens with high-quality news in accordance with journalistic standards. As a source of news, oversight and careful thought, these weekly newspapers are vital to social cohesion.

Already hard hit by the media crisis, which they are struggling to recover from, weekly newspapers are also facing the challenges of the digital transformation. They are missing out on tremendous digital revenues owing to the virtual stranglehold of the Google-Facebook duopoly. The two companies have cornered nearly 80% of the online advertising market in Canada. That is besides the fact that they use and distribute content created by our journalists, without having to pay for the production of that content.

We are advocating for a regulatory regime that is largely modelled on the law recently passed in Australia, because we believe that may be the only way to restore the current market imbalance and ensure the longevity of our news media. We are putting all of our trust in Canada's parliamentarians from all parties, beginning with the Minister of Canadian Heritage. He has understood the magnitude of the problem, and there are encouraging signs that efforts will lead to similar legislation here.

What's more, we are having to face these numerous challenges in the midst of a global pandemic, which is having a devastating impact on local and regional business, community life, working conditions and human resources, and countless other sectors.

[Benoit Chartier]

Despite all the obstacles, it is our duty to safeguard our democracy, protect the public's right to information and ensure the survival of our weekly newspapers. Through local and regional news coverage, weekly newspapers reflect their communities, conveying a wealth of actions, events and reactions in every field of human endeavour.

Without these local voices, there is no coverage of regional achievements, municipal news, community organizations or public debate around projects or citizen-led initiatives; no platform for provincial and federal representatives or community figures; and no visibility for cultural organizations, sports groups or business associations.

At the same time, we wish to thank the House of Commons Standing Committee on Finance for inviting us to participate in this forum, as part of its study on COVID-19 spending and programs.

The federal budget delivered by the Minister of Finance nearly two weeks ago contains no new funding specifically for our industry. We are, of course, eagerly awaiting measures to reduce the power of the web giants, as previously mentioned, and we believe the federal government can and must play a vital role in levelling the playing field.

We welcome the introduction of a 3% tax on revenue from digital services that rely on data and content contributed by Canadian users. We are, however, anxious for the details of the $300 million over two years in pandemic recovery funding for the Department of Canadian Heritage, and we hope the money will support community newspapers trying to find their way out of the crisis. The same is true of the proposed funding to potentially help more than 160,000 businesses cover the costs of the new technologies they need to compete with Facebook, Google and the other web giants.

Lastly, the extension of the Canada emergency wage subsidy to September 25, 2021 is absolutely vital, in our view, although the subsidy rates would gradually be phased out starting on July 4, 2021, under the budget.

In conclusion, we believe that the $96 million over five years to enhance the competition bureau's enforcement capacity is very much needed. It is important to point out that, in 2018 and 2019, Ottawa spent $52 million to place ads with Google, Facebook, Twitter and other digital giants. During that same period, the federal government spent $11.6 million on online advertising with other, mostly Canadian, platforms. In those years alone, the federal government's online ad buys totalled more than $24 million on Google and nearly $16.5 million on Facebook. Without spending a cent more, the government could have easily allocated some of that money to regional media, directly contributing to their future.

A 2020 survey by the Centre d'études sur les médias revealed that the number of newspaper titles in our industry went from 200 to 113, as a result of mergers, closures and shifts to semi-monthly or monthly publication. In short, the pandemic has hurt revenues, which have dropped by 30% to 40%, and workforces, which have shrunk by at least 20% since 2016. The recent budget offers up a few lifelines, but we are waiting for the real support to materialize.

Thank you. Sylvain and I will be available to reply to your questions, especially about the war that we want to fight against Facebook and Google.

[The Chair, Liberal, Wayne Easter]

Thank you very much to you both.

We'll turn to the National Association of Friendship Centres. We have Mr. Sheppard, who is the president, and Ms. Formsma, who is the executive director.

Go ahead, Mr. Sheppard.

[Christopher Sheppard, President, National Association of Friendship Centres]

Thank you.

Atheihai, Christopher Sheppard, uvanga.

Good afternoon, committee. My name is Christopher Sheppard. I'm the president of the National Association of Friendship Centres. I want to recognize that I am joining you today from Saskatoon, which is Treaty 6 and the homeland of the Métis. I'm joined by Jocelyn Formsma, who is our executive director of the national association. We thank you today for the opportunity to appear before you.

The indigenous population in Canada is young, growing and largely urban-based. Our network is an indigenous self-determined response to the symptoms of urbanization experienced by indigenous people in Canada. Nationally, approximately 61% of all indigenous people are living in urban settings.

Friendship centres are known within urban indigenous communities for creating much-needed support structures that are not available anywhere else. There are extensive culturally relevant supports programs and services, and we create safer and welcoming spaces for indigenous people in urban settings. These services span a range of areas, including health, housing, education, recreation, language, justice, employment, economic development, culture and community wellness. As a result, indigenous people build their socio-economic status and feel a greater connection to the urban indigenous communities that they call home and reside in or visit.

Friendship centres also do outreach and partnership development with the broader public, community organizations, municipalities and governments to foster better understanding of indigenous history and circumstances. This work fosters greater anti-racist understanding and acceptance of indigenous people in urban settings.

How we're presenting our work today is around the budget that was just presented and some of the peripheral COVID-19 pieces that we've seen in the past. We're pleased with some of the commitments made for first nations, Inuit and Métis people; however, the 2021 federal budget falls short with respect to urban indigenous people, communities and organizations.

While we recognize the historic investment in indigenous communities, we believe the federal government missed an opportunity to announce investments specifically for urban indigenous people. The 2021 budget was tabled as the country navigates out of over a year of uncertainty and worry, in which indigenous communities have been disproportionately affected.

The NAFC actively sought a response from the federal government that factors in the unique challenges indigenous people face in urban areas.

This year's budget included the expansion of aboriginal head start, the indigenous community support fund and indigenous early learning, as well as funding for anti-racism initiatives, health navigators and Jordan's principle workers. While we are encouraged to see the investments for indigenous communities and organizations in expanding aboriginal head start, employment and training, and justice, we're disappointed that there were few specific investments for urban indigenous people. As the largest network serving the largest percentage of indigenous people in Canada, we were hoping for some recognition of the importance of this community and their critical work.

The Government of Canada has adopted a distinctions-based approach to its federal policy-making and decision-making. “Distinctions-based” means the three federally recognized indigenous groupings in Canada: first nations, Métis and Inuit. While commendable, and the distinctions-based approach was intended to remedy the previous pan-indigenous, pan-aboriginal or one-size-fits-all approach to indigenous policy-making and decision-making, our experience has been that it also excludes urban-based and two-spirit LGBTQ+ people.

We advocate for urban service delivery. There needs to be an inclusive and balanced approach that also ensures that diversities are recognized and that the diverse needs of urban indigenous community members and 2SLGBTQ+ community members are met.

We welcome the budget's inclusion of the community services recovery fund and the continuation of the indigenous community support fund and the investment readiness program. These funds will be essential to building resilience in our network and among many other indigenous and non-indigenous charitable and non-profit service providers and social enterprises on the front lines of the pandemic and beyond.

The friendship centre movement stands ready to engage and to remain a strong national partner with the federal government to ensure urban indigenous people have access to every benefit for indigenous people announced in the 2021 budget.

While there is no direct mention of friendship centres and little mention of urban indigenous, there are numerous areas outlined in the budget proposals for which funds have been announced.

These include work regarding anti-violence and MMIWG, addressing anti-indigenous racism in health care, indigenous-led health care, children's programming, youth engagement, food security, social finance, access to justice, consultations on the United Nations Declaration on the Rights of Indigenous Peoples, infrastructure, and housing and homelessness. The NAFC will continue its work to ensure that the largest and fastest-growing demographic of indigenous people in Canada, urban indigenous people, will benefit from every opportunity presented in the budget.

We thank you for your time and consideration. As always, we really look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Before I go to the last witness, we have authorization to go to about 5:45 or 5:50 Ottawa time, so we can stick with our regular time frame on questions. The first one to raise questions will be Mr. Falk, followed by Ms. Dzerowicz.

We'll turn now to Ottawa Special Events.

Mr. Wood, welcome again. The floor is yours.

[Michael Wood, Partner, Ottawa Special Events]

Thank you, Chair. It's nice to see you again. It's nice to see MP Dzerowicz and MP Fraser. I'd also like to thank MP Kelly for asking me to join today to address the federal response to the COVID-19 crisis in small businesses across Canada.

I'm very fortunate that I've met over 35 ministers, MPs and MPPs from across all party lines during a global crisis while hosting round tables with other small business owners who are not sure where to turn.

The last 13 months have been incredibly difficult. My business is down 97% in gross revenue, which corresponds to revenue losses of more than $3 million. I'm not alone. Many of these small businesses are in sectors that you and your families have supported over the years: the arts, travel, restaurants, hospitality, tourism and more. We're not expected to return to a normal balance for up to five years, yet support is expected to be reduced starting in July.

In March of 2020, I had to lay off my entire staff, some of whom had been with me for more than eight years. I've yet to be able to rehire one of them part time, let alone full time. Not only did they lose their jobs; they also lost their full benefits paid for by a small business.

Although you can empathize with what I'm saying, I think it would be hard for you to understand what so many Canadians continue to endure until you found yourself in this position.

Today, I'm going to discuss five critical issues facing Canadians who own and work for small businesses.

First, small business owners took out loans before COVID-19. These loans have personal guarantees. Minister Freeland's office directed me to Minister Champagne to discuss my idea of no-fault bankruptcy; he has yet to reply to any of my multiple outreaches. I've done the same with Minister Lametti and his parliamentary secretary. Again, I have not heard back.

This should be of utmost importance. Canadians should not lose their businesses, their homes and all of their assets through something they did not create. Stop and imagine for a second that you and your family lost everything through no fault of your own but because of government decisions. How does that thought even make you feel right now?

Second, the Canadian emergency response benefit has been greatly appreciated, but it's not enough. In Ontario, $450 a week represents almost 20% less than the minimum wage. Small businesses have had to put their lives and livelihoods on hold and are not being fairly compensated for their sacrifice. I live in a simple 1,600-square-foot home. My mortgage, alone with property taxes, is $1,800 a month. I have been on the program for a year. Again, I did not put myself in this position.

Third, the HASCAP program needs to be reassessed. I met with Jeffrey Valois from the PMO and Zachary Nixon from Minister Ng's office, along with half a dozen other small-business owners, about this. There has to be a contingency for extremely affected sectors. There is a huge discrepancy between a decline of 50% in gross revenue and a decline of 90% or more in gross revenue. Small businesses cannot continue to borrow our way out of this.

Fourth, while the government made changes to the rent program to no longer allow landlords to dictate whether or not they would participate, there are still gaps. For many companies, there is not enough revenue to cover the 35% hole left in rent coverage. The sliding scale it is currently on needs to be reassessed, and we must raise that maximum coverage of 65% to something more meaningful for Canadian small business owners.

It is of the utmost importance to note as well that commercial leases also contain personal guarantees. Tenants across Canada have had their assets confiscated by landlords as they have limited revenues coming in through their doors. The Canadian wage subsidy is expected to be reduced in July. Many industries will not even have a chance to recover or resume any form of normal operations before it is reduced. Right now, small businesses are at risk, while more than 340 Shoppers Drug Mart locations have accessed the program in its full capacity and haven't lost a dime. Many industries can't even fill the 25% gap, which continues to keep employees laid off. According to the Canadian Federation of Independent Business, the CFIB, about 20% of Canadian small business owners are contemplating closing their business, which would equate to 2.4 million jobs at risk across Canada.

To survive this, small business owners need CEBA debt forgiveness as well as HST forgiveness, especially for those who are hardest hit.

I've developed relationships at all levels of government, across all party lines, by providing productive, balanced, non-partisan solutions. The uncertainty caused by delays in program development, the risk of people losing everything they've worked for, and insufficient definite direction have led to a parallel pandemic in our country: a mental health pandemic. Let small business and the government finally work together to develop tangible solutions to not only save Canadian jobs but lives as well.

Thank you so much. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Wood, and thank you all for your presentations today.

We'll turn to a six-minute round first. We'll begin with Mr. Falk, followed by Ms. Dzerowicz.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

I want to thank all of the witnesses at committee today. You've had some very interesting and heart-wrenching stories.

Mr. Reimer, I'd like to start with you.

You're a constituent of mine. You live in my riding, but you operate your business in northern Manitoba. For those folks who are not familiar with Churchill Wild, I invite you to Google that sometime, churchillwild.com. It has a phenomenal website. It will certainly whet your appetite to do some northern Manitoba tour excursions.

You failed to mention in your opening comments that you have built this business from the ground, together with your wife and your family members, and that you bought the business early on from your in-laws, who had started a very small lodge business. Your company employs many indigenous folks from the communities around Churchill, and they provide the necessary support that you need to run your four different lodges in northern Manitoba.

You indicated that you've had zero income for 15 months and that you don't expect any this coming season. How do you keep your business afloat?

[The Chair, Liberal, Wayne Easter]

Mike, before you start, can you raise your mike a little? You're on mute too.

[Mike Reimer]

Sorry; how's that?

[The Chair, Liberal, Wayne Easter]

There we go. We're all dandy now.

[Mike Reimer]

Thank you.

We are barely surviving, and what we are surviving on is probably similar to many other tourism entities. We're essentially living on money we have borrowed from our clientele. We were quick to retain our deposits that we had collected at the end of 2019, doubting that this would be a quick recovery. At some risk, we took a lot of hard hits on social media. We actually had some lawsuits coming our way, because people demanded their money back when the borders were closed and it was obvious they would not be coming on our trips in 2020. We essentially are living on that money.

We have a small pool of cash reserves remaining in the bank. It's not our money; it's money that we owe to our clients. We owe them the trip that they have reserved, that they will now hopefully be taking in 2022. I shudder to say that word.

That's what's happened. We are living on those funds. When they run out, and they are running out and will run out shortly, we will be out of money. We will still owe our clients that money. We will owe them that trip. That's what's going on.

Unfortunately, what's going to happen is that if we do run out of money, if we do fold, as many businesses will, Canada and the rest of us will all get a very big black eye in tourism in general, worldwide. It's a huge trust issue that's at stake right now.

If global clients perceive Canada as a place where they left their money to be frittered away, so to speak, or lost, they will be very hesitant to commit funds to new trips to Canada in the future. That's what's going to happen. We're going to get severely hammered on social media if our businesses start to fold and we are unable to provide those trips that people have sunk their earnings into.

That's what we're up against. We need to figure out a way to prevent that from happening, because Canada cannot afford to lose that edge.

[Ted Falk, Conservative, Provencher, MB]

You mentioned in your presentation the various government programs that you've explored, and as fully as you're able to, you've taken advantage of those programs. However, you've also indicated that you actually need revenue, and revenue is what's missing. Your business losses are a direct result of government decisions to curb COVID, which you have indicated you don't begrudge. You recognize the necessity of the decisions made, but they've basically taken away your lifeline. Now you need help.

I was on your website. I notice there's a section on your website about all the philanthropy that your organization has been involved with over the years and how you've given back to community and you've supported the local indigenous people there with good employment. Now it's time for the government to help you. Now it's your turn to get some help.

Are there any particular suggestions you would have that this committee could forward on to government, to the finance minister, that would help businesses such as yours?

[Mike Reimer]

Well, there are two. One is perhaps a smaller one. It's in reference to the CEWS program. If we don't have any income and we're paying out to our staff, obviously we're going backwards. If we could reboot that or reshuffle that for businesses such as ours—and there were others mentioned on the panel—and it could be rejigged, so to speak, to offer a 100% wage subsidy for businesses that have 90%-plus revenue losses year after year here, that would certainly be a help, absolutely. Then we could engage with our employees, who are critical to the reopening.

It's actually almost one of our biggest fears: Where will our employees be when we get a chance to start again? We're totally dependent on good staff, as are all of us in business. I don't know the metrics of it, but I would think there's a way to simply rejig this or realign this so that it works for people like us, businesses like ours that are suffering such huge losses.

The other thing would be if there's a potential to expedite a safe reopening of tourism destinations such as ours right now. Is there a way to do that?

Just backing up a bit, there was much-needed priority given to vaccines for exactly our northern communities and our first nations communities, so most of these people have now been vaccinated and essentially are safe, so to speak. If we could ensure rapid-testing points at departures, airports, gateway cities, key travel points along the way, we should be able to safely move visitors along that pipeline into remote communities that have all been vaccinated and essentially provide that service that they are more than willing to pay for and have paid deposits on.

Just briefly, I would like to pass on to Mr. McLeod, who is from the NWT, that I've just recently heard that the Northwest Territories is allowing for remote tourism activities under certain guidelines. I'm not sure if that's correct, but we are hearing that. That would be one way to do it. Give us an opportunity to create some sort of avenue so that visitors can come once again.

[Ted Falk, Conservative, Provencher, MB]

Thank you. I think I'm out of time.