Finance Committee on May 18th, 2021

[Simon Telles]

I thank you for the question. I will respond to it briefly.

With respect to the massive investments that have been made in post-secondary education, these are welcome and impactful dollars. You may know that in Quebec we have a student financial assistance program. The money is transferred to Quebec and then they distribute it. These are important amounts for us. The federal government must continue, in our opinion, to invest in students.

On the other hand, these investments only affect students. We're concerned about what's happening with young workers between the ages of 18 and 35, who aren't necessarily in school anymore. The budget kind of forgot about that segment of young people, or at least devoted fewer measures to them.

You talked about job creation, which is one of the main concerns of these young people. There is a new generation coming out of universities, trained and ready to contribute to society. However, these young people are not necessarily able to find a job in line with their skills or their fields of interest. So, this is a particular concern to monitor.

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Chair, I just—

[The Vice-Chair, Conservative, Pat Kelly]

I'm sorry—

[Julie Dzerowicz, Liberal, Davenport, ON]

Do you have to cut me off?

[The Vice-Chair, Conservative, Pat Kelly]

Yes, we're at six and a half minutes already.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Vice-Chair, Conservative, Pat Kelly]

We're going to move on now to Monsieur Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair. I want to begin by congratulating you on your masterful chairmanship of the committee.

Ms. Hnatiw, Ms. Grynol, and Mr. Telles, I welcome you and thank you for your presence and your presentations. You have addressed extremely important topics and critical issues.

My questions are for Mr. Telles.

What is the situation among young people? Since we've been in a pandemic for over a year, how is their morale and what are their economic challenges? You were talking about mental health, for example. How are things on the ground, for young people?

[Simon Telles]

Thank you, Mr. Ste-Marie.

That is an important question. I can tell you that things are better than they used to be. The Canada Emergency Response Benefit and the Canada Student Emergency Benefit are among the things that greatly improved the situation for youth, of course, and provided direct financial assistance to young people and students in need. As I mentioned in my opening remarks, young people are often employed in particularly precarious fields, such as the service, restaurant and tourism industries. Young people have lost their jobs at a higher rate than the rest of the population, and needed this emergency federal assistance. This mattered a great deal in the lives of young people.

Vaccination prospects also make a big difference. For perfectly normal reasons, established by public health departments, young people are often among the last groups to get vaccinated. They are beginning to regain some hope for a return to normal life. On the other hand, the crisis has done significant damage.

There are two specific topics that I talked about in my speech where there is still work to be done: housing and mental health.

Already, under the mental health aspect, there was a sense on the ground that there was a lack of investment, long waiting lists, and a complicated process to access psychotherapy; only a small portion of the population had access. Now the demand is even greater. The pandemic has brought out problems, has brought out new, quite significant stress related to personal life, work, prospects, employment, the projects of young people, which have had to be put aside. So they need some extra help.

Housing is not just a one-time issue; it is a very pressing concern. Young people sometimes have to move from one area to another in order to get housing. Often, housing is going to make up more than half of a young person's total budget. It's too much. It prevents them from meeting their other basic needs.

There is still a lot of work to do. There are some positive things in the new budget, but we shouldn't stop to analyze the programs and measures that are being proposed and wonder how they will affect young people. They will certainly still need to be supported as they emerge from this crisis, to make sure they have all the tools they need.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Indeed, the housing situation is appalling, given the explosion in prices. For a young person who needs to find housing or wants to buy a condo or a house, it's appalling. Many economists will say that what is needed is to build more housing, but in your presentation you named measures that could be targeted to help young people. Can you repeat those for us, with more explanations, please?

I think I have two minutes left, so you can take them to respond.

[Simon Telles]

Thank you very much. I will be happy to respond.

As you mentioned, new affordable housing needs to be built. In practical terms, the federal government could subsidize construction projects, along with the provinces and municipalities. Initiatives at all levels of government are being put forward to build housing. This is the case in Quebec and I am sure it is also the case elsewhere in the country. The federal government can play an important role in subsidizing these projects and coordinating with all the players to ensure that the projects are carried out properly, while ensuring that the housing remains affordable. The goal is not to build housing that will be subject to speculation, but to have rents remain affordable for young people and others in need.

With respect to home ownership, there is another idea, which I didn't have time to present. I think we need to start thinking about taxing or putting a tax on the sale of buildings, even those that are used as primary residences. There is still a lot of construction, purchase and renovation going on, and prices are rising so fast that young people are no longer able to buy a first property. So, we think that an interesting solution would be to tax the profit generated when selling a residence, even a principal residence. The money raised could then be reinvested to help young people buy a first property.

I was also talking about grants to people in need. We need to continue to directly target younger people with lower incomes to allow them to adequately house themselves. This can be done through the various programs already in place, but we really need to rethink our programs, like the Home Buyers' Plan. We really need to re-evaluate whether it is an effective tool, how many young people have used it and how it has contributed to home ownership. We need to try to re-evaluate the programs that are in place and ask if we could create new programs that would have a more direct effect.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Indeed, these are good proposals.

Mr. Chair, I imagine my time is up?

[The Vice-Chair, Conservative, Pat Kelly]

You have half a minute.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

I'll stop here.

Thank you very much.

[Simon Telles]

Thank you.

[The Vice-Chair, Conservative, Pat Kelly]

With that, we have Mr. Julian for six minutes.

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

Thank you, Mr. Chair.

My goodness, you're putting fear into all of us with your rigorous adherence to six minutes, so I'm going to get right to it.

I thank our witnesses for stepping forward today. We certainly hope that you and your families stay safe and healthy during this dangerous third wave that is now sweeping across our country. Thank you for your testimony as well.

I'd like to start with Ms. Grynol.

The figures you gave, as I understood them, are absolutely shocking. Are you saying that if we don't have the supports in place for the hotel industry, 60% of those businesses will be out of business by this time next year—if we don't put in place that foundation of support?

[Susie Grynol]

That statistic is actually for the coalition. The number for hotels is even worse. It's 70%.

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

That's unbelievable. It's just earth-shattering, yet we have a budget implementation act, as you well know, that basically does a victory lap, as if the government thinks that COVID has been soundly beaten, with a massive slashing of supports such as CERB and CEWS starting in just in a few weeks' time, the month after next.

When we're talking about 70% of the hotel business, what does that mean in terms of lost jobs and the economic impact that all of the communities will feel, not only with those hotels closing and the immediate loss but in the longer term, in the rebuilding afterwards and what it would mean for those communities?

[Susie Grynol]

It's absolute devastation. The hotel industry would be considered the anchor business of the tourism industry. It supports commerce and the movement of people, and it's critical for communities that rely on tourism. That's the first thing you do when you plan a trip—you book the hotel.

It impacts Canada's ability to bid on international events and bring them back to Canada, because we would not have the capacity. The downtown cores are hurting so deeply. They're sitting at 90% revenue loss, on average, over the course of the last 15 months. It's devastating.

Just for the hotel sector alone, we're talking about more than 300,000 jobs that would be at risk. Also, 70% of the industry going down means that for the northern and rural or remote regions of the country that have one or two hotels, which are required in order to get essential services up there, we now start getting into significant questions of access if we allow this infrastructure to break down.

I want to remind the committee who owns these hotels. Often people think it is the Marriotts and the Hiltons that own these properties. It's not. It's people in your communities. I'm sure you know them, because they've all been banging down your doors for the last number of months.

Most of this industry is owned by a small business, someone who has invested in the local hotel. They may have a chain that is referenced on the hotel. That's a marketing agreement. There's a true franchise structure in the hotel industry. These people have invested their livelihoods into the local hotel, and they're going to lose everything if we don't have a system in place or if we pull the system prematurely, before these businesses can get back on their feet.

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

If the government does its victory lap and starts slashing all of these benefits within weeks and then eliminates them in just the next few months, and we see that 70% devastation across the country, I can just imagine what the impacts would be in my community.

How devastating is it and for how long? What I'm trying to get at is, to rebuild the infrastructure that we have now that would be lost by poor government policy and cutting off supports prematurely—for reasons that don't jibe with me, certainly, because the government is refusing to ask the companies and the individuals who earn the most during this pandemic to actually pay their fair share.... The resources are there.

If the government decides that they're just going to basically close the books on COVID-19 and not provide those supports, how long would it take to rebuild the infrastructure that we have in place now? What would it cost for our country and for regions to have to rebuild the infrastructure that the government has allowed basically to be crushed?

[Susie Grynol]

Speaking on behalf of the coalition, because it's a much bigger number, we're talking about two million jobs here if we lose the critical infrastructure that supports these businesses. Think about all of the IT systems, the HR, the training, all of the employees. Think about closing all these businesses, transferring ownership, then rehiring all of these people, retraining them all and putting all the new systems back in place. As it is, the forecast that came out yesterday from CBRE suggested that our true recovery starts in the summer of 2022, and we don't get back to pre-pandemic levels until 2025.

That's assuming that these investments come through. If they don't come through.... We haven't actually measured that number because I'm scared to measure that number, quite honestly. To put a dollar figure on it, speaking now just for the hotel industry, which is a $22-billion industry, if we lose 70% of that—you can do the math—it's more than $12 billion that would be lost.

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

That would be more than $15 billion in infrastructure, yes. That is absolutely appalling.

Government members really need to heed the message that you've been giving, and that so many others have been giving this committee, that this victory lap that would slash all of these programs is simply irresponsible and inappropriate when this third wave is at its maximum and still very dangerous.

[Susie Grynol]

I will say that it made sense. The programs to date have made sense and the slashing, as you refer to it, the wind-down, makes sense probably for 90% of the economy, assuming that we don't have a fourth wave. It just doesn't make sense for this one sector. It's been clearly documented that we are the 5%, and it is just going to take us longer, so we are asking for there to be a plan of support tailored to the hardest-hit sectors, those I've just described, who will just take a few more months to get back on their feet so that we can avoid the business dislocation costs that we just discussed.

[The Vice-Chair, Conservative, Pat Kelly]

Thank you very much.

In our next round it will be Ms. Jansen and Mr. Fragiskatos for five minutes each, followed by Mr. Ste-Marie and Mr. Julian for two and a half minutes each.