Finance Committee on May 18th, 2021

[Kim G.C. Moody]

How much time do I have?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Take a minute or a minute and a half and tell us what you think about it.

[Kim G.C. Moody]

I've written extensively about this and have been quoted a lot in the media about it. The short answer is that there's a much better way to support media than through the tax system. I think we have a media credibility problem in Canada as it is. To have our tax system, already compounded with huge amounts contributed to the CBC, used to fund otherwise private businesses—notwithstanding that this is an important part of a democracy—is foundationally wrong. I'll just leave it at that.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

I'll ask you one more question before I move to other witnesses.

Explain why, as simply as you can.... I completely share your concern over how deficits threaten the long-term viability of government programs, government expenditures and programs that Canadians need. Tell us why it's so important that we get a handle on the deficit and reduce it much more quickly than.... Well, there really is no schedule in this budget for a proper reduction of the deficit. There are only references to an eventual debt-to-GDP ratio several years down the road.

[Kim G.C. Moody]

Frankly, it's a lot of common sense. Talking to my economist friends, like the esteemed Jack Mintz and others.... Some economists don't like it when I use a simple example, because apparently households are different from governments. Clearly they are, but I think the basics are the same: revenues and expenses. If revenues are less than expenses, there is a deficit, whether it's in a household or government. If you accumulate debt, you're going to have to pay somebody interest costs. When those interest costs rise to the point that they achieve a significant amount of the spending budget, whether it's in a household or a government, something has to give. In the household, if it's my household, that means my grocery bill goes down or my kids' discretionary spending goes down. In government, service programs go down.

I've heard some witnesses today say—and have listened to others—they want the government to spend lots of money. Of course everybody wants to receive money, but there's only so much money to go around. The short answer to your question is that I'd like to see the government continue to provide essential services that aren't compromised.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Ms. Wilson, you talked about the challenges of independent contractors, and I'm really glad you mentioned them. I've been one and have been in a business that engaged independent contractors. They were failed initially by many of the government support programs. It took quite a while, amid criticism from the opposition, for the government to make some changes. In some cases they helped independent contractors, but many are still falling through the cracks of government support measures for businesses that have been adversely affected by COVID-related business closures and lockdowns.

Could you comment further about independent contractors and support for them?

[Nancy Wilson]

Sure. Thank you for the question.

The bulk of the financial support is through a couple of different programs. I'm sure this committee knows this well. I'm not telling anybody what they don't know. We have CEBA loans and the wage subsidy. Those are the two big ones for business supports. Then, of course, we had CERB, which is now the recovery benefit, focused more on individuals, although that does address self-employed individuals as well.

Originally the eligibility was very much focused on employers, so traditional-style businesses that employ employees. It is a great design because it is quick to apply, with a very straightforward document showing what your payroll costs were as an employer in the past year. The problem is that if you are not an employer or if you employ a few people and your main source of labour is through independent contractors or you are an independent contractor yourself, CEBA is off the table and the wage subsidy doesn't apply.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

You're right.

[Nancy Wilson]

The wage subsidy is still not applicable to freelancers. They work for themselves and contract with other folks. In terms of CEBA, if they have a certain amount of fixed costs, they can access that, but it is a long, hard road to get access to that CEBA, in terms of this preliminary questionnaire showing this fixed cost and that fixed cost. It's tough.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

It looks as though I'm out of time. I would have liked to hear from—

[The Chair, Liberal, Wayne Easter]

You have time for one more, a quick one, Pat.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Okay. That's great.

Ms. Potter, you mentioned the HASCAP. The government has pointed to that program and others for businesses that have fallen through the cracks in terms of measures, yet what your members have told you I've also heard from many other small businesses. It may be that they're allowed to apply but they still don't get approved.

Could you talk about challenges your members have with that or with other programs?

[Beth Potter]

Thank you very much for the question. One real challenge with the HASCAP goes back to where businesses are getting their funding from.

The tourism industry is an unusual industry in that we buy strange things that traditional banks don't really appreciate—things like float planes and boats. We are a seasonal business, and that often scares away traditional financial institutions as well, so using third-party lenders is quite common in the tourism industry. Unfortunately, the debt service ratio and the third party lenders immediately create a black X on applications for HASCAP. There's a challenge in getting that sorted out. We have taken it to the folks at ISED and to the folks at the Department of Finance. We're trying to work through it, but it is certainly one of the challenges.

The other challenge we're having is that we're asking businesses to take on more debt to cover fixed costs that aren't going away. Some flexibility around repayment is going to be, I think, something we're going to have to get into down the road. As far as how we do that goes, similar to the case with the CEBA program, there is a forgivable portion if you pay back within a certain time frame. The challenge for many businesses is that they're taking on a disproportional amount of debt and they're going to need longer than the 10 years to pay it back. I think we're going to need to see, perhaps, a little bit of leeway in that realm.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thanks. This chair is more generous than the last one was with time. I'll tell you that.

[The Chair, Liberal, Wayne Easter]

Thank you very much to you both.

We'll go to Ms. Dzerowicz and then Mr. Ste-Marie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair. I agree with Mr. Kelly's comment. You were very generous, but I think it was good.

To all the presenters, I really thank you for being here today. I really appreciate your presentations.

Ms. Wilson, I'll start with you. Your disappointment comes across very clearly. I really appreciate your honesty. I want to dig a little bit more into some of your comments around support for women entrepreneurs, because I'm hoping we can get that right, moving forward.

I want to talk for one minute about national child care. I agree with you that it's not a panacea. I do believe, though, it's a huge announcement. I know that for people in my riding of Davenport, they see this as a game-changer for them. For many of them, they want to start businesses. For many of them, they really just want to focus on some of their life's work and for their career.

Would you agree that, while this is not a panacea, if implemented as stated it would be of huge benefit to your members?

[Nancy Wilson]

Absolutely. I want to state unequivocally that the child care announcement in this budget is historic. The investment is historic. It is absolutely what our community has been asking for and looking for. Although I have complaints, and I don't hesitate to air those complaints when I have the floor, I commend this government on moving forward on a national child care program. Of course, I have a couple of bones to pick with how it's being implemented. I think that can come out as we move forward.

But absolutely this is a fantastic move forward, yes. The answer is yes.

[Julie Dzerowicz, Liberal, Davenport, ON]

I really appreciate that, Ms. Wilson. Thank you.

I want to get to women's entrepreneurship. I know that our government's been seized with this. Since 2018 the government's support to the women's entrepreneurship program has been close to $5 billion. It includes $1.4 billion through the Business Development Bank and $2 billion through Export Development Canada. You're right. In this budget we have $146.9 million over four years. You're saying, “Julie, that's just not enough. It's just not enough. It's not going to be helpful to us.”

I know that you made some recommendations around the Canada recovery hiring program. I really appreciate your comments around the contractors. I'm wondering if there are one or two key recommendations where you would say, look, if government only does these one or two key things for women entrepreneurs, it would be a game-changer for us. What would those be?

[Nancy Wilson]

What do women entrepreneurs need? They need grant funding. They need financial support directly in their pockets to help them with rebuilding and recovering their businesses. As things go back to normal, as their children go back to school and back into child care, however that is organized, they can turn their attention back to their business. They can try to go out and generate sales.

They need cash. That's what they need. They need cash. It can't be debt, because that's what they've been accruing over the course of the pandemic. They haven't been able to access financial supports in the same way that other groups have been able to—period. We need money.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you. I really appreciate that. I thank you for being here again today.

Ms. Potter, thank you for being with us here again. Thank you as always for your very thoughtful and very measured presentation. It was very thorough as well.

Toward the end of your presentation—it might be just because sometimes when people are saying things, I'm kind of thinking about what they said before, so I don't hear clearly what they say after—you made some very thoughtful comments around some of the things that need to be done to encourage interprovincial tourism and also to build confidence within the population to travel. I wonder if you could repeat those. I just think it's really important for us to hear them.

[Beth Potter]

We want to make sure that we have a seamless traveller experience for everyone, domestically and internationally. We're asking the federal government, when it's at the FPT tables, to really take on a leadership role and encourage the provinces and territories to come together and unite on a domestic travel policy so that there's one travel policy for Canada, which is the way it has been in the past, and not different requirements among the provinces.

It's the same with going international. We also want to make sure that we are lining up with what is happening and the requirements that are needed, around the globe. If the consensus at the G7 and G20 tables is that proof of vaccination for international travellers is required to enter a country, we'd like Canada to participate in that regime.

[Julie Dzerowicz, Liberal, Davenport, ON]

Okay. For interprovincial—

[The Chair, Liberal, Wayne Easter]

Please ask a very quick supplementary.

[Julie Dzerowicz, Liberal, Davenport, ON]

It's not even supplementary. It's just a clarification. I just want to make sure of something.

Ms. Potter, you're saying that for the interprovincial side there should be just one rule, with no vaccine passport. We should all have rules of engagement for travel, but they should be very clear and consistent among all the provinces and territories. That's what you're asking for.

[Beth Potter]

Exactly. We're asking for no travel passport within Canada.