Finance Committee on May 18th, 2021

[The Vice-Chair, Conservative, Pat Kelly]

I will call this meeting to order.

Welcome to meeting number 46 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2) and the committee's motion adopted on Tuesday, April 27, 2021, the committee is meeting to study the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021. Therefore, members are attending in person and remotely by using the Zoom application.

The proceedings will be made available via the House of Commons website. The webcast will always show the person speaking, rather than the entirety of the committee. I'd like to take this opportunity to remind all participants of this meeting that taking screenshots or taking photos of your screen is not permitted. Interpretation services are available to all members. Just remember to ensure that your interpretation setting is set to the correct language when you are speaking.

I see that we have at least one guest member today. I want to welcome Mr. Fisher, who is substituting for Mr. Fraser.

With that, I will welcome our witnesses. Today we have Simon Telles, lawyer for Force Jeunesse. We have Susie Grynol, president and chief executive officer of the Hotel Association of Canada. We are expecting Alanna Hnatiw, mayor of Sturgeon County. Hopefully we will be able to connect with her and get her onto the call.

In the meantime, let's get under way and have opening statements from our witnesses. After that, we'll go to questions.

With that, go ahead, Mr. Telles.

[Simon Telles, Lawyer, Force Jeunesse]

Thank you very much.

I would like to thank all the members of the committee for inviting our organization to appear today. It is truly a pleasure for me to be with you. This is the first opportunity for our organization to be heard before you. I look forward to the opportunity to interact with you.

I would like to introduce myself. I am Simon Telles, president of Force Jeunesse. I have been involved with the organization for over four years. Coming out of a crisis like the one we've been experiencing for a little over a year, it's especially important to get involved.

Force Jeunesse is a nonprofit organization that was founded in the early 2000s to improve working conditions for young people, but the organization's mission has expanded greatly over time. It is made up of young volunteers, mainly between 18 and 35 years old, who come from different backgrounds. Some are young professionals in the health and education fields and others are students. In short, Force Jeunesse is a coalition of young volunteers who want to get involved and present concrete proposals to improve public policy.

Our mission hinges on three main axes: defending the rights and interests of youth, ensuring a certain intergenerational equity in public policy, and promoting youth engagement and the place of youth in decision-making spheres.

On a daily basis, we hear a lot of prejudice expressed about young people. In my experience, however, our youth are quite supportive, determined, and engaged.

It is true that, coming out of the COVID-19 crisis, our youth are weakened. Therefore, it is important to show special concern for them in all policy and program decisions put forward. One need only think of the very significant job losses experienced by young people, who often work in more precarious fields. In addition, compared to the rest of the population, youth have much more worrisome mental health indicators and higher rates of psychological distress. In short, young people already face many barriers in their daily lives, and these are even higher for minority youth. The crisis we just went through only accentuates these inequalities.

We are not experts on all the areas addressed in the federal budget, but we looked at it through the lens of intergenerational equity. There were four items that particularly resonated with us, and those are what I'm going to talk about today. They are mental health, federal health transfers, the environment and climate change, and finally housing.

Let's start with mental health.

As I mentioned in the introduction, young people have been particularly affected. So we are pleased to see that the budget has provided $100 million over three years for those most affected by COVID-19, including youth. The challenge now will be to get that money on the ground quickly and to increase access to psychological health care for young people, because that's what we're finding to be most lacking right now.

What we are concerned about is that youth group insurance, whether for students or workers, determines whether or not a young person has access to mental health care. For us, this situation is not acceptable. We must find solutions that will guarantee all young Canadians access to mental health care.

Many proposals are possible, but the one we favour is universal access to psychotherapy. In Quebec, we already have access to universal drug coverage. In Canada, we have access to universal health care almost everywhere. For us, it would be completely consistent and logical for mental health care to also be covered for all Quebeckers and all Canadians.

The second topic that is of great concern to us is the issue of federal health transfers.

This topic has been the subject of much discussion in the news over the past few months. We note that across the country, the population is aging and health care costs are rising faster than other government spending and the economy. In addition, the COVID-19 crisis has exacerbated the situation and exposed the vulnerabilities of our health care system. Additional investments in health transfers are therefore urgently needed.

We note that health care spending is placing increasing pressure on provincial public finances. The federal government's share of funding for the system is declining, because the growth in federal transfers is not keeping pace with the growth in provincial health spending. We are therefore disappointed that the budget did not provide for an increase in health transfers, even though this is a unanimous demand from all provinces. There are few issues that bring us together to this extent, but this is one of them.

This is a real issue of intergenerational equity. You might think that young people are less concerned about health because, statistically, they have fewer health problems, but it's quite the opposite. If we don't take steps now to ensure that the health care system is adequately funded, it is our generation that will be faced with agonizing choices later on. Access to health care is one of the foundations of our social model.

The other topic I'm happy to talk about is the environment and fighting climate change.

When young people are asked what issues matter most to them, the environment and fighting climate change often come out on top. That really resonates with me. So we're very pleased to see that in the federal budget, a significant amount of funding has been dedicated to reducing greenhouse gas emissions. There is a $5 billion investment over seven years. This is a step in the right direction.

That said, we believe even more needs to be done, particularly to reduce greenhouse gases, but more importantly to put in place eco-tax measures that will truly change consumer behaviour. In our view, we need to subject pollution to consequences, largely financial, and ensure greater accountability of stakeholders and polluters, whether consumers, citizens or businesses.

Finally, the last topic I would like to address with you in a general way is the issue of housing.

We are facing a real shortage of affordable housing just about everywhere in Quebec, and this phenomenon is not limited to the big cities as one might think. It affects young people in the job market particularly, because they generally have a slightly lower income at the beginning of their career. We find that the portion of their budget that goes to housing is continually increasing, which impacts other aspects of their lives and other equally basic needs.

We believe that the overheated housing market is jeopardizing the ability to afford home ownership. Young people can no longer afford home ownership, or they have to wait much longer than their parents to do so. So it's also an issue of intergenerational equity.

We find it interesting that the government, in its budget, has proposed a 1% tax to reduce foreign speculation in the market. On the other hand, for us, this is not the crux of the issue. It is a measure, but it is not the most important one. What the government should be doing is building more affordable housing, helping young people get into home ownership through tax credits and subsidies, directly assisting young people who are most in need and don't have enough income to adequately house themselves, and most importantly, rethinking programs to make sure they meet the objectives.

One example I can give you is the famous HBP, the Home Buyers' Plan, which allows young people to withdraw a certain amount from their RRSPs as a down payment for their first home. Intuitively, we tend to think that this is an interesting measure, but most young people have not yet accumulated enough money in their RRSPs. So it is a measure that is available, but it only helps a small portion of the population. We thus need to find direct ways to make housing more accessible for all young people.

Of course, in its strategy, the government really needs to ask whether every person who needs housing assistance is actually receiving assistance. What we see in the budget right now is that there are several blind spots, and we think there should be more help.

There also needs to be more federal collaboration, in our view, with provincial and municipal governments to ensure that efforts are coordinated, to avoid duplication, and to ensure that no one is left behind.

In conclusion, we find it very interesting that the government is assessing the intergenerational impact of each of the measures in the budget. For us, this is a very inspiring exercise, because it makes us aware of the impact of our decisions on future generations. Provinces and municipalities should even take a similar approach.

That said, to make the exercise even more interesting, rather than simply identifying the target population, i.e., whether the measure is aimed at youth or seniors, we should ask what the real impact of the measures put in place is on intergenerational equity. We believe that this would allow us to go even further and implement more structuring and sustainable measures.

I'll close by saying that we young people want to contribute to the work of commissions, committees, and decision-making entities in general. Please feel free to consult with us in advance of the various programs. It will always be our pleasure to contribute to the work of the committee.

Thank you for listening. I remain available, should you have more specific questions.

[The Vice-Chair, Conservative, Pat Kelly]

Thank you.

I had meant to ask our panellists to keep their remarks to about five minutes. We have a smaller group today, so if the next two witnesses want to go over five minutes, that's okay. However, we had just about 10 minutes there.

Thank you very much for the opening statement.

We'll move on to Ms. Grynol, from the Hotel Association of Canada.

[Susie Grynol, President and Chief Executive Officer, Hotel Association of Canada]

Thank you, Mr. Chair.

My remarks are only five minutes, so we'll buy some extra time for questions.

Thank you for the invitation to speak with you today.

My name is Susie Grynol, and I am the president and CEO of the Hotel Association of Canada.

Today I am here on behalf of the Coalition of Hardest Hit Businesses, representing more than 100 organizations in the tourism, travel, arts and culture, events and festivals, accommodation and hospitality sectors. A copy of coalition members was sent through to the committee in advance.

Because of necessary public health policies, we have seen thousands of festivals, concerts, conventions, indigenous tourism experiences, fairs, exhibitions, business and sporting events cancelled. Unfortunately, no major events are scheduled for this summer or fall.

When we are past the third wave, most industries impacted by COVID will revive quickly when the light-switch is turned on, ramping up operations the day after restrictions are lifted. For Canada's tourism, travel and events sector, our recovery will be more complicated, more like a dimmer switch that will build over the next year.

Opening up the international border is complicated. Planning large concerts and conventions in a new COVID world will take time, and today we have no information on what metrics would lead to a domestic travel restart, to the reopening of the U.S. border or to the welcoming back of international vacationers. We don't know how Canada plans to allow vaccinated Canadians to resume travel and what a phased reopening plan would entail.

The only thing we do know is that travel is not being recommended by public health officials this summer. Most Canadians will spend their summer in their backyards or at cottages and campsites. Our downtown cores will sit empty because no major events are planned, business travel will be non-existent and Canadians will likely spend their pent-up travel dollars down south this fall and winter, rather than in Canada. Simply put, our recovery is not imminent.

Where does this leave us? The federal budget did make some helpful investments into tourism. We saw marketing dollars and specific funds to bring back our events businesses and other business support programs, which may benefit the industry when the pandemic is over, but these investments cannot bring back the summer of 2021 and will not change the reality that the fall will be our toughest quarter of the pandemic.

How could it be worse than 2020 was? It's because the critical lifelines of our industry—CEWS and CERS—are being aggressively wound down for all sectors equally, starting in June.

How big a problem is this? According to our survey of coalition members from March, 60% of businesses represented will go out of business without an extension of CEWS and CERS to the end of 2021. This means that we could lose the critical infrastructure that supports our event businesses in Canada, the unique local attractions that enhance our visitor experience and the hotels that anchor our travel sector. It means that our post-pandemic nation will look a lot less vibrant and less Canadian. It puts the livelihoods of more than two million people at risk, mostly women, young people and immigrants.

The real tragedy is that this is a problem of timing and not a shift in human behaviour. Once it's allowed, travel will come back with a vengeance. We've seen it in other countries. Canadians will want to attend sporting events and concerts. They will want to go back to the theatre and attend in-person conventions. They can't wait to get married in a big, crowded room full of the people they love. Travel and face-to-face events will come back, but we need a plan for how the government intends to keep our sector intact until we can get to the other side of the pandemic.

Today we're asking the government for two things. First, the federal government must produce a clear reopening plan based on metrics and milestones that we can rely on to start planning large events and the return of travel. Other countries have tabled reopening plans, and we believe Canada should follow suit.

Second, we need a sector-specific support program in place for the fall to assist with wages and fixed costs so that we can survive to the spring and summer of 2021, when our true recovery will start. It is only the federal government that can disarm the ticking time bomb that faces our industry. If a sector-specific approach is not designed, it is not a question of whether that bomb explodes, only a question of when.

Thank you.

[The Vice-Chair, Conservative, Pat Kelly]

Thank you for that statement.

Now we go to our last witness, Ms. Hnatiw, mayor of Sturgeon County.

Before I have her start, I have Sean Fraser as our first speaker, but I see he's not here.

The first questioner will be Mr. Falk, followed by Ms. Dzerowicz, Monsieur Ste-Marie and Peter Julian for the first round of questions.

With that, Ms. Hnatiw, go ahead with your opening statement.

[Alanna Hnatiw, Mayor, Sturgeon County]

Thank you so much.

In 2019 the Government of Canada released “High-Speed Access for All: Canada's Connectivity Strategy”. Notably, the strategy commits to deliver the 50/10 service to the hardest reaches of Canada by 2030, which implies that rural and remote areas will be the last to be served.

Also, the recently announced $1 billion for the universal broadband fund is insufficient to meet the current needs. Minister of Service Alberta, Minister Glubish, is on record as stating that Alberta alone would need $1 billion to service all of Alberta with high-speed Internet.

The competitive grant model prioritizes higher population areas to the detriment of rural areas. The federal government's broadband strategy implies that the hardest-to-reach areas will be serviced last. Efforts should prioritize rural areas. Otherwise, the digital divide will only grow.

The eligibility maps used by the Government of Canada do not accurately reflect service levels and the criteria for challenging eligibility is next to impossible. This means that it will be up to municipal governments alone to service these areas as they continue to be ineligible for federal funding and the business case is not there for the private sector to invest.

The private sector has failed to meet the need for high-speed Internet service to rural areas because the economic business case does not exist. There is a higher return on investment to densely populated areas, where there are more subscribers, obviously, so when the Internet service providers do invest in rural broadband infrastructure, they usually suck the jelly out of the doughnut by serving only the most densely populated areas first.

Any government intervention must address this economic challenge while ensuring that Internet service is affordable to guarantee high adoption rates and equity among urban Albertans and, I might say, urban Canadians.

Albertans are experiencing greater access to more affordable Internet. However, the Internet is more expensive in rural areas. In addition to an increased financial commitment, the federal government must also reconsider the current eligibility requirements for federal grants.

The eligibility mapping tool relied on by Innovation, Science and Economic Development Canada significantly overstates the level of Internet service actually provided in rural Alberta. This is supported by speed tests conducted in Sturgeon County as well as by the rural municipalities of Alberta and many other municipalities through the open-source Canadian Internet Registration Authority, otherwise known as CIRA.

Further grant programs must also provide more lead time for municipalities and Internet service providers to prepare applications. This will ensure that the right partnerships are formed and that public dollars are used as efficiently as possible.

Given the current supply chain issues, more time should be provided to execute broadband projects. Some grant programs require funds to be spent within a particular fiscal year, which rushes procurement processes, raises questions of supply availability and risks service quality at the expense of expediency.

Alberta has the highest availability of high-speed Internet service at 94.7%. However, while over 95% of urban residents have high-speed Internet service with unlimited data, only 33% of rural households enjoy this level of service. Rural Canadians continue to identify unreliable and slow Internet connectivity as the most significant challenge, resulting in rural children often doing homework at local coffee shops or libraries to access the Wi-Fi and, of course, we all know those facilities have been closed for the majority of the past year.

The sudden need for Albertans to learn, work and access health care services and communicate with friends and family from home has brought the digital divide to the political forefront. This creates a unique opportunity and a policy window for governments to consider significant generational investments to improve the quality of life for rural Albertans and rural Canadians. Overwhelmingly, rural communities have identified the inability to access affordable high-speed Internet as the top issue impeding their economic growth.

Not only does the lack of Internet service drive workers and employers to cities, thereby reducing productivity in rural areas, but improved rural Internet service can play an integral role in Alberta's economic recovery. A recent situational analysis completed for the Edmonton Metropolitan Region Board in 2020 identified that improved broadband and connectivity across the region could enable economic recovery and increase GDP by up to $1 billion per year, with approximately a 1% increase in the region's GDP.

There is also research demonstrating positive economic benefits when women are connected globally, including increased income opportunities, greater independence and individual empowerment.

Time is of the essence. The digital divide continues to grow at the rate of technology, and rural communities cannot afford to be left behind. Investment in rural broadband is an investment in Alberta's economic recovery. All parties need to be at the table.

I would say, with the digital commute faced by all of us, not having Internet to rural homes is tantamount to not having roads to homes or elevators in high-rises. This is a basic service that needs to be provided to all Canadians, much like natural gas and electricity have been over the previous decades.

Thank you for your time.

[The Vice-Chair, Conservative, Pat Kelly]

Thank you.

Now for six minutes, we have Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

I think I'll start off with Ms. Hnatiw.

You're still probably in gear from your opening comments. I'd like to expand a little more on what you're hearing back from some of your rural business owners and how much they depend on the Internet. I know, from speaking to folks in my area, Zoom requires an awful lot of bandwidth. A lot of people are conducting meetings by Zoom. Too many people on Zoom slows the speeds down.

Do you have any feedback from any of your rural businesses?

[Alanna Hnatiw]

We have. In fact, when we did our CIRA study.... We did one in 2018 and then another one in 2020, just to see if there had been any improvement, and there hasn't been. We are debenturing up to $7.3 million for our first-phase rollout, because there are a number of industrial parks and country residential subdivisions that are in desperate need of increased connectivity to be able to operate their businesses.

For the last year the council has been meeting virtually. Because of spotty cell service on top of spotty Internet service, when we conduct our council meetings we can't have our cameras on. A number of councillors are dropped off of the call throughout the course of conducting business. We know that those are the very same struggles that our businesses are experiencing.

[Ted Falk, Conservative, Provencher, MB]

Just like anything else, the rollout of rural broadband to acceptable levels will require a plan. Part of that plan will make sure that there are suppliers or providers in place that can actually provide the service infrastructure and also the bandwidth that you need.

Has that part of the plan been addressed? Even if the federal government has announced additional money for rural broadband, are the people in place? Have they been given adequate notice to actually provide the service?

[Alanna Hnatiw]

We have a number of service providers here. Currently, we've put out requests for proposals from those service providers to come up with a partnership so that we can perhaps supply the infrastructure and they can supply the service. Of course we would prefer to be able to do business with more than one, because we are not interested in inviting a monopoly into the county or into the Edmonton metro region for that matter. It's a regional issue there as well.

I think the business case is not necessarily there, as we've mentioned, for more sparsely populated areas. For those companies that have provided service in the densely populated areas—as I said, sucking the jelly out of the centre of the doughnut—it would be nice if there were some spreading out of the business risk and the business case. It could be by having those Internet service providers that are providing service to the sweet spots in the city also having to provide a portion of service out to the smaller providers in rural areas to try to spread the risk.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Ms. Grynol, you've testified here at committee before, most recently during pre-budget consultations. You gave very compelling testimony about the stress and the losses that the hotel industry in Canada is experiencing and in all likelihood will continue to experience for some time.

Do you have any communication with associations south of the border? How are they doing?

[Susie Grynol]

Yes, I do have communications with other hotel associations around the world. In particular, I'll reference the American Hotel and Lodging Association. They're faring a lot better than we are. I don't think that will be a surprise to anyone around the table.

Referencing occupancy levels in Canada last week, we were 28% versus the U.S. at 54%. In fact, their travel has come back so quickly that they are having to cap operations because they can't find enough staff. There has been so much pent-up demand. They are in a much different situation than we are. They will not miss the summer season, as we will in Canada.

[Ted Falk, Conservative, Provencher, MB]

Okay. What would you attribute that to?

[Susie Grynol]

I suppose they have had different levels of restrictions in place.

[Ted Falk, Conservative, Provencher, MB]

Yes. Both of our countries have experienced COVID for about the same length of time. The responses have been significantly different, by this Liberal government as compared with the American government, but they've also had a plan there to reopen the economy. They've had, as you indicated during your opening comments, specific benchmarks or thresholds where at that point certain things will happen and will open up.

How much of a missed opportunity do you think this government has had in doing that, as far as your association is concerned?

[Susie Grynol]

First let me say that the reason we still have an industry standing is because of the investments this government has made. We've had a very open working relationship with the government. They have certainly listened to our plight and have been responsive. We're grateful for that, but I will say that it is time for a plan. We need to get back to business.

In our sector, as I indicated in my opening remarks, it's not a flick of a switch. It is going to take a longer period of time to build back. Opening up a border is not an easy thing. We just need to know what we're dealing with so that we can start to organize these business events. We're not suggesting that we do this in a willy-nilly unsafe way. We're simply saying to pick some metrics and allow us to plan against those. We're not even saying it has to be this date versus that date. We're just saying to please pick a date and communicate it so that our businesses can start to plan these business events again. As you all know, they take a lot of lead time—several months, indeed—so the longer we wait.... Our recovery is not forecast until early spring for some of these larger events, at this stage.

[Ted Falk, Conservative, Provencher, MB]

I would—

[The Vice-Chair, Conservative, Pat Kelly]

I'm sorry, Mr. Falk. You're out of time.

We'll now go to Ms. Dzerowicz for six minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair. You're doing a great job.

I'd like to start with Ms. Grynol and then continue with Mr. Telles, if that's okay.

I just want to start by correcting the record a little bit. I know that my opposition colleagues often say this, and I always want to correct it. In a world population of over seven billion people, everybody in the world is fighting to get those vaccines. I really feel very blessed, in our country of Canada, that we continue to rank among the top three in the world in terms of vaccinating, with a first dose, our whole population. I just feel that we should feel blessed as a nation, and privileged, that we get the chance to have so many vaccines come into this country. I'm just going to put that on the record.

Ms. Grynol, you've been wonderful. You've come here so many times. You're always professional. You always are right to the point and give your excellent recommendations. I have two quick questions for you.

Your first ask was to produce a plan with metrics, with milestones. Can you tell me what would be a model country for that? Is there a country or a couple of countries that have done a fairly good job right now? I'm wondering if you see countries where you would say, “Why don't you try this? If you follow this model, that would be helpful to us.”

[Susie Grynol]

Yes. At this stage, I would point to the U.K. They probably have the best model in place. They're using a traffic light system. Green is for 12 low-risk countries. They'll open first to low-risk countries, where you have to test negative and then you have no quarantine. Amber is for countries that are moderate risk, so you must self-isolate for 10 days. Red is for countries that are high risk, where you would still need to have a hotel quarantine, as an example.

They have a system where they're going to open up to nations who have comparably low levels of risk. I think that would be the model we would recommend, but there are others too. I would be happy to follow up with the committee on a few others as well, including Israel and others.

[Julie Dzerowicz, Liberal, Davenport, ON]

That's very helpful. It's good for us to get a sense of what models you think are good models for us to look at.

Your second ask was for sector-specific support that would allow you to survive through 2021. Very specifically, are you asking for the wage subsidy and the rent subsidy to be extended until the end of this year? Is that what your direct ask is?

[Susie Grynol]

Yes and no. We don't want it extended for everybody. What we're saying is that it's time to tailor it to the sectors that really need it. I am not recommending that it be extended in its current form, because it's just way too expensive. Half of the businesses that are getting it right now don't need it.

We're saying to cut it off at maybe 40% or 50%—something that would demonstrate the business is still under duress—and do it strategically for the sectors that the government is choosing to support, understanding that our recovery is not within reach, not because of anything we've done and not because travel will not come back but simply because we will have missed the timing of the summer and because business events have a longer lead time.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you very much.

Thanks so much for being here with us again. I hope you don't have to come back, because then we will have been doing things to satisfy the industry.

I'm going to go to Mr. Telles.

Thank you for your presentation.

I don't speak French very well, so I'll speak to you in English.

I want to say thank you for being here. I have a nephew in university right now, and I follow his progress all the time. I want to say a huge thanks to you and, through you, to all youth for everything you do. I know it's the youth who step up in our coffee shops and who step up to help us in a lot of the short-term and more contractual jobs that are in our society, and I just want to say a huge thanks to you.

In our budget, we've put an additional $5.7 billion. There's a very deliberate desire to make sure our youth are not going to be the lost generation. Mr. Telles, it's really important if you could let us know if the measures we've put in here are actually helpful or a complete miss.

For us, we have increased the threshold of when you actually have to start repaying the federal student loans to $40,000. I've been told this is a game-changer. Can you let me know whether this is actually helpful to youth?

We've also doubled the Canada student grants, so that's an average addition of around $2,600. Is that helpful? Also, we've continued to suspend the interest on the federal student loans until March 2023. Is that helpful? Last, we've put a lot of money into making sure we have a lot of job opportunities available for youth. Is that helpful? In my own riding, I have only 12 square kilometres, but I have 400 jobs available for youth right now. Is that helpful?

Perhaps you could address those, and then I'd like to talk to you about climate change.

[The Vice-Chair, Conservative, Pat Kelly]

You have about a minute.