Finance Committee on May 25th, 2021

[The Chair, Liberal, Wayne Easter]

We will call this meeting to order.

Welcome to meeting number 50 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, 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. Most people are using the Zoom application remotely.

The proceedings will be made available by the House of Commons website. Witnesses should be aware that the webcast will always show the person speaking rather than the entirety of the committee.

Before I go to witnesses, I should mention that there will be, if everybody shows up, seven witnesses on this panel, which is a little unusual. One witness called in and saw the need to speak, so we put them on this morning to make the seven. We have a two-hour panel, so we should be okay for time.

With that said, we will start with the tourism industry alliance of Quebec, with Mr. Paquet, senior director, public and governmental affairs; and Mr. Ryan, chairman of the board and owner of Ski Sutton.

Welcome to you both.

The floor is yours.

[Éric Paquet, Senior Director, Public and Governmental Affairs, Alliance de l'industrie touristique du Québec]

Thank you, Mr. Chair.

Good afternoon, honourable members of the Standing Committee on Finance.

Thank you for inviting me. With me today is Jean-Michel Ryan, chair of the board of directors of the Alliance de l'industrie touristique du Québec and owner of Ski Sutton.

We welcome the measures for the tourism sector in the 2021 federal budget, but with some reservations. I would be remiss if I did not mention the significant funding allocated to Destination Canada for tourism projects implemented via regional agencies, as well as the funding for festivals and events, which will continue to play a major economic role in urban centres and regions alike, all across Canada.

We believe, however, that the relief efforts aimed at supporting the industry since the early days of the pandemic will not help keep key businesses alive should the financial support decrease in July and later disappear before the borders are reopened. The Canada emergency wage subsidy, or CEWS, and the Canada emergency rent subsidy, or CERS, have literally been lifelines for Canada's tourism businesses. The third wave of the pandemic has had significant repercussions. What's more, a plan to reopen the border is lacking, and restrictions governing public gatherings and travel are ambiguous. Tourism businesses remain at risk of having to rely exclusively on local clientele during the upcoming summer months, which will reduce their revenues significantly for a second consecutive summer.

Already overburdened with debt in an effort to keep their heads above water and facing a sharp decrease in cash flow, or lack thereof, businesses will not be able to generate enough cash during the summer season—just a few short weeks—to make it through another winter. How will CEWS and CERS support seasonal tourism businesses if the subsidies are reduced in July and eliminated in the fall? Seasonal businesses will need the support more than ever in the fall. Would it not be more appropriate to extend the programs as needed, since they will no longer be available to businesses once revenues return to normal?

The federal government has been there from the early days of the crisis, offering relief to Canadian businesses. The relief was helpful but remains as essential as ever. We are asking the government to maintain the existing programs in response to the unique needs of hard-hit tourism businesses.

First, the government should extend CEWS and CERS for as long as they are needed by the tourism industry. It should keep the same program conditions in place and make lockdown support available to tourism businesses that are most affected. We believe that keeping the current terms and conditions of these programs in place exclusively for tourism businesses represents a low risk for the government. Over 95% of the economy has recovered, and only sectors that are the most hard hit—like tourism—would remain eligible for these programs. To further mitigate the risk for the government, we are also proposing that the eligibility threshold based on lost revenues be increased to 30%, as was the case when the programs were initially implemented.

Second, the government should adopt an exit strategy for these programs based on a border reopening plan. Tourism will gradually pick up as soon as an announcement is made regarding reopening the border. However, a period of preparation will be necessary to bridge the gap between the reopening of the border and the gradual return of tourists in the context of business meetings, cruises, international events and the like. These relief measures will remain indispensable and should be available to cover the transition period, providing the predictability required for a successful recovery.

Thank you.

Mr. Ryan and I would be happy to answer questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Paquet.

We'll turn to the Canadian Business Aviation Association, with Mr. Norejko, president and CEO.

[Anthony Norejko, President and Chief Executive Officer, Canadian Business Aviation Association]

Good afternoon, Mr. Chair.

Thank you for the invitation to appear before you today to discuss the implications of Bill C-30 on Canada's $12.1-billion business aviation sector. While this is our the first appearance before the finance committee, the Canadian Business Aviation Association has been representing this sector for a long time. In fact, this is our 60th anniversary. Today we represent over 400 members across the country, including corporate flight departments, flight management companies and entrepreneurs who use aircraft to conduct and grow their businesses.

I would like to share a few facts about business aviation and how it contributes to Canada's social and economic well-being. Despite the myth that business aviation is used exclusively by the 1%, the reality is that our sector is essential to a wide range of individuals in everything from business suits to construction boots. The reality is that business aviation is a significant driver of economic growth and jobs across Canada and can be an anchor in our economic recovery.

Given Canada's vast size, complex geography and small population, aircraft have been a niche tool to deliver personnel, food and supplies, equipment and other essential services to communities of all sizes, many of which have only the most basic airstrip for landing and taking off.

Business aviation employs a wide variety of aircraft from four-seat, propeller-driven aircraft to long-range, Canadian-made Bombardier Global 7500s as well as Boeing 737s. These time machines are used to serve our communities, get workers to remote job sites and ensure that people can travel by air safely, efficiently and with all health protocols firmly in place. Today, with Canada's major carriers having cancelled flights to dozens of Canadian communities, business aviation has become even more important to delivering cargo, personnel and supplies and ensuring that commerce and trade can continue to support local jobs and businesses.

Our sector, which represents over 50,000 Canadian jobs in highly skilled and well-paying professions, gives Canada's entrepreneurs and corporations a much-needed competitive advantage. Moreover, supporting the use of these aircraft also supports Canadian aviation research, development and manufacturing giants such as Bombardier, CAE, Pratt & Whitney Canada, De Havilland and Diamond Aircraft, to name just a few.

While there are many aspects of Bill C-30 we'd like address, the chief among these is the luxury tax on private aircraft. The first critical point you need to know is that very few aircraft fall into the personal luxury category. They are nothing like yachts or high-end cars. They are not a lifestyle choice, but rather a safe, reliable and efficient mode of transportation. The imposition of such a tax on aircraft used for business purposes will have a number of downstream negative implications for safety, sustainability and for the people, businesses and communities that rely on our aircraft.

With the cost of a new tax to consider, operators will be incented to hold on to aircraft that are older and less sustainable. This would be unfortunate, as business aircraft are the most technologically advanced and sustainable aircraft in production, and this would add to Canada's overall effort to reduce their carbon footprint. Moreover, this tax would have the perverse effect of incentivizing operators to purchase and register aircraft in other countries. Dampening demand for new, made-in-Canada aircraft sales also has an implication for Canada's aviation talent pipeline, as you will hear from my colleague from the Canadian Owners and Pilots Association.

The negative impacts will also be felt by non-aviation Canadian businesses that rely on aircraft as a business tool. All the way from construction and mining to the C-suites of Canadian corporations, it is our view that any benefits in imposing this tax are far outweighed by the costs. Compared with other items the luxury tax would apply to, their revenue brought in by aircraft is projected to be limited. According to the parliamentary budget office, the totality of this tax on vehicles, yachts and aircraft will generate $150 million per year. The bulk of that, 70%, is anticipated to come from vehicle sales, and the remainder from boats and aircraft. Therefore, we're looking at tax revenues from the sale of aircraft of less than $15 million per year.

Moreover, this tax is unfair and unsupportable as Canadian taxes such as GST and applicable PST are already applied to the purchase of aircraft, while the personal use of an aircraft is already recognized as a non-deductible taxable benefit to the individual. As well, the Income Tax Act does not specify or limit the type or size of aircraft. An airplane of any size can be used for business purposes. The fact that the Income Tax Act makes no distinction as to what type of aircraft could be used for business purposes directly contradicts the budget's definition of personal.

Our time today is limited, so we won't have the opportunity to detail the many ways that government and the business aviation community can work together to build back Canada's economy. I hope to share some of these ideas with you when we get into the question and answer period.

Thank you again for the opportunity to appear before you, and I welcome your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much for appearing on fairly short notice.

We'll turn, then, to the Canadian Owners and Pilots Association, with Ms. Gervais, the president and CEO.

Ms. Gervais.

[Christine Gervais, President and Chief Executive Officer, Canadian Owners and Pilots Association]

Thank you, Mr. Chairman and members of Parliament. On behalf of the Canadian Owners and Pilots Association, COPA, I thank you for the opportunity to appear before the committee today.

We are very concerned about the proposed provision of a luxury tax on new aircraft in Bill C-30. The equivalency placed on a $100,000 car to an aircraft of the same value as being a luxury is flawed. While there are hundreds of conventional and hybrid green automotive brands selling below that threshold, there are virtually no available new aircraft or helicopters. There is an abundance of new boats that can be purchased for less than $250,000. A basic single-engine aircraft used for flight training sells today for $500,000. The threshold placed on new personal aircraft is a highly unrealistic one.

Thinking that only the wealthy own private aircraft in Canada is misrepresentative. Among the Canadians who own personal aircraft are medical professionals who travel to remote and northern communities not serviced by commercial charter operators, to service and treat their patients. Small business owners use their personal aircraft in locations that are also not accessible to mainstream operators, ensuring their goods and services are available to all Canadians. Farmers depend on their crop-dusting aircraft as a tool to ensure the successful production of their crops. Personal aircraft are used to transport food, clothing and other essential items to smaller communities hit hard by major storms or events like COVID-19, and also used by flight training schools.

Budget 2021 proposes that the tax apply to all new aircraft suitable for personal use, and that, as a general rule, large aircraft typically used in commercial activities, such as those having a certified maximum carrying capacity of more than 39 passengers, be excluded from the base. These are medium and large aircraft classifications and, therefore, it implies that all small aircraft would be taxed.

Aircraft in Canada are registered with Transport Canada as either private or commercial, regardless of classification. Therefore, the tax would apply to all small private or commercial aircraft.

Who owns these aircraft? In 2021, a little over 100 new aircraft were registered as private and 25 registered as commercial. Of the private, 50% were registered to an individual. The balance are registered to a business, the same small businesses that have been pushed to the brink and beyond, such as farmers for crop-dusting and flight training schools. Of the small commercial aircraft, 63% are crop-dusters, 12% are flight training aircraft used for the training of the next generation of airline pilots, and 25% are air charters used for cargo, bringing medical supplies, food and essential goods to remote and northern regions of Canada.

Who, then, will truly be impacted by this new luxury tax? It will be the air operator who serves Canada's remote and northern regions and contributes to the travel and tourism industry, one of the hardest-hit industries due to COVID; flight training schools; frontline workers accessing remote communities; aircraft manufacturers based in Canada; and farmers.

Operators who purchase new aircraft and pay the tax will pass that cost on to the customer. Flight training schools will charge more for flight training. Farmers will have to charge more for their crops. In the end, it isn't the so-called wealthy Canadian paying, but the middle- to lower-class consumer who will be paying the price for the tax.

This new tax might also have environmental and safety impacts by discouraging the purchase of new aircraft with lower operating costs and greener technology. The more onerous the cost of ownership becomes the less pilots will fly, thus affecting the essential business that our aerodromes and local communities rely on. Our vulnerable airport system has already been experiencing difficulties, especially this past year. The thousands of aerodromes in Canada, many located in remote communities, depend on general aviation.

Based on an economic impact study of general aviation in Canada in 2017, this sector contributes $9.3 billion in economic output nationally and directly accounts for almost 36,000 full-time jobs in communities across the country. The report highlights the benefits that general aviation operations bring to communities and to the Canadian economy. Penalizing this industry with an arbitrary tax will harm the Canadian economy as a whole.

The vast majority who own these new aircraft are not the most affluent Canadians. It will mostly penalize the agriculture industry, educational institutes, remote communities and aircraft manufacturers in Canada. COPA is recommending that the Canadian government re-evaluate the criteria of its proposed new luxury tax and exclude all new aircraft typically suited for personal use from its proposal.

Thank you again for the opportunity to voice our concerns. We remain available to provide additional feedback.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Gervais.

We will turn, then, to the Critical Drugs Coalition, and Dr. Ahmed.

[Dr. Saad Ahmed, Physician, Critical Drugs Coalition]

Thank you for having me, dear honourable members, in the context of the House of Commons Standing Committee on Finance's ongoing deliberations on the budget and the COVID-19 pandemic, and on behalf of the Critical Drugs Coalition, which is a non-partisan grassroots coalition of frontline physicians, pharmacists and academics.

I am speaking to provide recommendations for how the federal government can improve the resilience and security of Canada's drug supply chain.

To start off, I'd like to declare that I, along with the coalition, have no conflicts of interest, financial or otherwise. I'm a lecturer with the University of Toronto's department of family and community medicine. I'm also a rural physician. I work in rural and remote settings all across northern Ontario, from remote indigenous communities such as Moose Factory to small but very busy towns such as Kenora, where I am joining you from today.

My interest in drug shortages stems from the beginning of the pandemic when my colleagues and I were actually asked to start rationing and conserving critical anaesthetics, such as ketamine, propofol and fentanyl. These anaesthetics are not just needed to put critically ill patients on ventilators, but also to keep them on them. They're not just needed for COVID-19 patients, but also for other critically ill patients we see in ERs, ICUs and operating rooms. Their shortages have significant downstream consequences.

We are used to working with scarce resources in rural settings, but I was quite surprised to hear from colleagues working in the busier downtown hospitals, where I trained, that they were also experiencing serious shortages of these critical drugs. In fact, at the peak of the shortages in May 2020, only 3% of Canadian pharmacists had received their full shipment of drug orders.

Over the past year we've sought to understand the causes of these drug shortages. The causes do mirror the causes of the other shortages we saw for PPE and for vaccines in terms of production. The fragile global production system mostly based in India and China buckled under the pandemic, and we've had very little domestic capacity to produce injectable critical drugs such as ketamine and propofol, which I mentioned above. In fact, in Canada we only have one plant in Quebec that makes a very limited selection of injectable drugs.

We issued a public open letter to the Prime Minister's Office on August 13, 2020, which was supported and signed by many national bodies such as the Canadian Medical Association, the Canadian Association of Emergency Physicians and the Ontario Medical Association. Our asks were quite clear and included a pan-Canadian list of critical medications that the government commits to ensuring are always in stock, public support for a generic critical drugs manufacturer, and greater transparency and communication around the critical drugs supply.

On April 6, 2021, we heard from Health Canada, and we were happy to see the Minister of Health's announcement of a critical drug reserve, as well as a mention of financial support for domestic biomanufacturing.

However, our concerns still remain on the manufacture of critical drugs. In fact, in the last month I have personally seen the shortage of magnesium sulfate, as have my colleagues. This is a really critical drug used for people with abnormal heart rhythms and pregnant women with pre-eclampsia. Frankly, all these conditions can lead to death if you don't have magnesium sulfate.

Considering that we are having these ongoing shortages, we have three broad recommendations with specific policies we believe are necessary to solve this long-term problem and to maintain supply chain security.

Number one, the critical drug reserve should be maintained after the COVID-19 pandemic for ongoing critical drug supply disruptions. There is no clear definition of a “critical medication”, and at the University of Toronto I and many others have assembled a cross-disciplinary international working group of experts for this very task: to define a critical medicines list. We're pending grant funding. I'm going to put in a shameless plug that this is the sort of research that should be further funded by the government, but I think that's a very important first step.

Number two, we need local production of critical drugs. We've certainly heard lots about PPE and vaccines. A multi-product facility for injectable critical drugs would cost only $50 million to set up. It would be able to make the ketamine and the propofol that I mentioned earlier. There is actually a proposed facility based out of the University of Alberta that could probably supply about 10% of our domestic needs, with spare capacity for future pandemics and disasters. It could also be expanded to make the drug precursors, of which we know we were quite short of in the last year and a half, and that would be another $50 million. For a total of $100 million, we could guarantee sovereignty over our critical drug supply.

Number three, and the last point I'll make, is that we need to think about an overarching industrial policy to incubate and sustain these one-off public-private partnerships in domestic manufacturing. That could take the form of “buy Canadian” provisions to help companies and governments get their money back for investing in these facilities. It could take the form of regulatory harmonization so that we actually align with trusted peers, such as the European Medicines Agency, the U.S. Food and Drug Administration, and so on and so forth. It could even take the shape of a trade and regulatory alliance, such as CANZUK, as proposed by Conservative leader Erin O'Toole.

Regardless, I think there was a lot of really good work done by Health Canada in expediting the approval of imports of critical drugs from other suppliers when they did go short. I think that is something that needs to be encouraged, and we need to make the kind of investment into manufacturing critical drugs that will ensure supply chain security going forward. These investments must be paired with smart industrial policy and ongoing research.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

I believe Mr. Abokor is with us now. I don't know whether his sound has been tested or not.

Mr. Abokor is with the Foundation for Black Communities.

Go ahead, and we'll hope it works.

[Liban Abokor, Working Group Member, Foundation for Black Communities]

Hi. Good afternoon, everyone.

Thank you so much for your patience. What's the rule that says where technology can go wrong, it typically does, especially when it's important?

I'll try to make my opening comments very brief.

Once again, good afternoon, everyone. Thank you to the chair and the rest of the finance committee for this important opportunity.

My name is Liban Abokor, and I'm a working group member with the Foundation for Black Communities, Canada's first-ever philanthropic foundation dedicated to Black Canadians. The goal of the foundation is to ensure that Black communities have reliable, relevant and sustained access to the supports they need to thrive and to find their own futures.

In December of last year, 2020, the Foundation for Black Communities released a groundbreaking report entitled “Unfunded: Black Communities Overlooked by Canadian Philanthropy”. In this report, the findings revealed systematic underinvestment in Black-led, Black-serving non-profits and charities by Canada's leading philanthropic foundations.

Through this systematic review of publicly available T3010 data, we found that as little as seven cents out of every $100 granted by Canada's leading charities was going to Black communities. This systematic underfunding poses a critical threat to an already embattled community reeling from the disproportionate health and economic impacts of the COVID-19 pandemic.

Black unemployment, as many of you may know, is at nearly 20%, more than double the national average. Black women and youth have been especially hit the hardest by this economic downturn. Food insecurity and housing precarity are also at unprecedented levels and are quickly accelerating.

In nearly every indicator, the pandemic has left Black communities in crisis. Without strong and comprehensive investments, some of which we've seen in this budget, our community won't be able to participate in the ambitious goal of this government and this nation, which is to build back better—and that is simply an intolerable outcome.

That's why we applaud the important steps taken in this budget to deliver on some of the demands from our community, mainly the $100-million investment in the supporting Black Canadian communities initiative and the $200-million investment to establish Canada's first Black-led philanthropic endowment, which is something we strongly advocated for at the Foundation for Black Communities. We want to take a moment to recognize all the MPs and staffers we had a chance to meet with during the discussions around this concept.

While these featured pieces have caught the attention of most folks in our community, we recognize that we can further unlock significant other benefits from the rest of the budget to support priority areas for Black communities—such as housing, business, science and social finance—by applying a Black lens to the budget implementation and rollout.

If I may, I'd like to give you two quick examples or two recommendations as to how we can unlock further benefit and participation for Black communities through this budget.

The federal government is investing $750 million in social finance. The social finance fund must establish, we believe, specific goals and objectives for how it can involve Black communities in developing and growing the social economy. More precisely, we're advocating for the establishment of a Black intermediary to assist the flow of funds to Black social-purpose organizations.

Similarly—and my final example—the federal government proposes a national housing strategy of $70 billion over 10 years. The housing crisis is not a level playing field, necessitating targeted and equitable solutions. The CMHC must create and present a clear Black housing strategy that includes housing for aging seniors who are on fixed incomes, housing for youth who are aging out of care and affordable housing as a pathway for Black home ownership and generational wealth creation.

While we welcome these important investments and look forward to finding further ways to unlock greater impact and benefit from this unprecedented budget, we want to ensure that it does so in a way that ensures Black Canadians equitable participation in our nation's vision to build back better.

With that said, I want to thank the committee once again for the opportunity to provide my opening remarks. I look forward to answering any questions you may have.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thanks very much for your presentation. Before I turn to the last witness, the question lineup for the first round is Mr. Falk, Ms. Koutrakis, Mr. Ste-Marie and Mr. Julian.

We turn now to Startup Canada.

Ms. Morano, go ahead, please.

[Natasha Hope Morano, Director, Corporate and Government Affairs, Startup Canada]

Thank you, Mr. Chair.

My name is Natasha Morano, and I am an entrepreneur. I am honoured to be here today representing Startup Canada as the corporate and government affairs director.

Since 2012, Startup Canada’s programs have been a gateway to every stage of the business cycle, from ideation to inception to growth.

Startup Canada enables connections, education, promotion and advocacy. We are accessible to 3.5 million entrepreneurs across the country with 30 active communities from coast to coast to coast. To tell the story of every entrepreneur in five minutes is of course an impossibility. The differences amongst them are countless. What ties them together is that each takes the reins of their own financial destiny. Many may have started through passion. Many more have been thrust into entrepreneurship through necessity, and many, unfortunately, have been left behind.

Entrepreneurs are the pistons of the engine that creates jobs, growth, and resilience. They are an essential piece of our country’s economic recovery, and they rely on trusted authorities, experts and qualified enablers of simplification.

The infusion of funds that budget 2021 offers will provide equitable access to support. It is an enormous step in reinvigorating an inclusive economy. Startup Canada is looking forward to the road ahead and the role that we can play in paving it. It is our goal to help ensure that there is no redundancy in the rollout of these programs and that the support offered in budget 2021 gets into the hands of the entrepreneurs who so desperately need it in a quick and efficient manner.

Entrepreneurs are the critical pistons in our nation’s economy and in our recovery efforts through this pandemic, and they need a reliable ignition system. They need access to trusted organizations that know their pain points and develop programs in response to their needs. The Government of Canada should look to partner with like-minded organizations that are equally charged by powering up entrepreneurs and that understand their needs.

The government’s investment of over $100 million to support inclusive entrepreneurial growth is designed to provide new funding for national organizations to lift up diverse entrepreneurs and small businesses across the country through financing, mentorship and advisory services. This design is an absolute mirror of Startup Canada's own mandate, so it is welcomed.

The pandemic has displaced many Canadians and numerous industries. The Canadian Federation of Independent Business estimates that 239,000 businesses are at risk of closing because of the pandemic. This situation must be curbed. COVID-19 has claimed a disproportionate number of jobs held by women. Women account for 37% of self-employed Canadians. Budget 2021 proposes to provide up to $146.9 million to strengthen the women entrepreneurship strategy. This is a good first step in supporting women entrepreneurs, but there needs to be more.

There is an urgency among entrepreneurs to digitize quickly, to move from storefront to e-commerce, from neighbourhood-based to cross-country, and from operating locally to exporting products and services abroad. The government's commitment to help entrepreneurs magnify the scope of their markets and increase the supply of well-paying jobs is welcomed.

Startup Canada is pleased to see that the government recognizes the importance of investing in programs that support businesses and entrepreneurs to be globally competitive. However, businesses start at different rates with different ultimate goals. There needs to be more early-stage support for entrepreneurs who are not globally minded but who have become entrepreneurs out of necessity and are not the “unicorns” of tomorrow. They require simple, easy-to-use tools and advisory support as they try to make a living for their family.

Startup Canada looks to simplify the process for the Government of Canada to roll out programs while also ensuring that entrepreneurs have limited barriers to program entry. We need to make the journey of being an entrepreneur much easier. We need to consolidate and shepherd entrepreneurs through all of the available support that exists across the Canadian ecosystem from incubators to accelerators to public and private sector support and beyond.

Entrepreneurs, more than ever, do not have the time to research what is available to them, particularly as these supports are revised or changed daily. Let’s save them the time so that they can work on their businesses and support the Canadian economy as a whole.

Everything budget 2021 sets out to do as pertains to support for entrepreneurs is what we do on a daily basis. There is no better time to invest in Canada’s entrepreneurial ecosystem. While there are numerous opportunities for entrepreneurs in budget 2021, there remains a gap in support for early-stage entrepreneurs who have that entrepreneurial spirit running through their veins. There is no safety net to capture them if they fall. These are the entrepreneurs who remain left behind and who require support. They are asking for the foundational support to ensure they are equipped with sound advice and the advisory assistance they need to start their businesses on solid ground and consequently create jobs.

Mr. Chair, Startup Canada is grateful for the opportunity to work with the government to throttle the economy fuelled by budget 2021.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

You might be quoted on the line about the pistons of the engine. I see some of the farmers on this committee really liking that line, Natasha.

We'll start our six-minute rounds with Mr. Falk.

Go ahead, Ted.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

I want to thank all the witnesses for coming to committee today and for their presentations.

I was particularly interested in the presentations by Mr. Norejko and Ms. Gervais. I want to thank you for that. It made me think back 20 years to when I got my pilot's licence and the time and costs involved in doing that.

I was thinking about this just two weeks ago, when I read an article in The Globe and Mail about the RCAF considering hiring foreign pilots because of the pilot shortage here in Canada. I know that getting a pilot's licence is not cheap. An employee of mine received his pilot's licence about a week and a half ago. It cost him about $10,000, and that was using his father's airplane. Instructor time is not cheap. The cost of entry to become a pilot is high. Once you get your pilot's licence, you spend a lot of time on the ramp at a minimum wage job, hoping to be hired on as a bush pilot—flying into the north—or for some contractor or tourist operator.

If these flight schools suddenly had to start paying an additional 10% to buy their aircraft, how is that going to impact education for people interested in becoming pilots?

[Christine Gervais]

First of all, not many will be able to afford to pay that extra 10%. The cost of maintaining an aircraft alone is incredibly expensive. Most flight schools now operate aircraft that are at least 40 years old because of the cost of purchasing a new one. This will definitely dissuade any flight school from purchasing any new aircraft that has the newer technology. They'll decide to continue to maintain their older fleet. The older the fleet, the higher the cost to maintain it or to purchase a new aircraft, and that cost will be passed on to the student.

I'll give you an example. Right now, flight training with an instructor on said 40-year-old aircraft is $300 an hour. Pilots have to do a minimum, and that's a minimum. You have to be really good to get 40 hours on an aircraft before you can get your private pilot's licence. Increasing the cost of flight training will make it almost unaffordable for students to get new licences. That will definitely contribute to the inevitable pilot shortage in the future. It is partly due to the pandemic, but we were also on the road to a pilot shortage even before the pandemic.

[Ted Falk, Conservative, Provencher, MB]

It is my understanding that our military contracts flight schools to do training for them as well.

[Christine Gervais]

Yes, it does in some areas. I know the air cadets actually do their flight training at other flight schools across the country. They'll probably end up keeping the older aircraft, or if they do purchase the newer aircraft, that cost will go to DND.

[Ted Falk, Conservative, Provencher, MB]

Good. Thank you.

Mr. Norejko, you talked about the downstream impact that this 10% tax will have on the aviation industry. You also talked about how contractors and business folks supply northern and remote indigenous communities solely through the use of smaller aircraft.

Can you elaborate a bit on some of the downstream impacts to the aviation industry of this 10% tax that's being proposed?

[Anthony Norejko]

Absolutely. I appreciate the question.

The thing I would raise here is the idea that, as we've seen throughout the pandemic with the reductions of services, the ability to visit Canadians across the communities where they live, coast to coast to coast, has been impacted. The 10% tax just makes the business decision to acquire these aircraft that much more difficult. What it does is put into question the ability of our businesses, employees and personnel in those communities to interact.

Here is a great example. As part of the pandemic, we were asked—and our industry stood up—to help recover and repatriate Canadians from points all across the globe. We've had business aviation providers flying PPE to communities in the north, whether related to oil and gas or just communities in need. This critical asset.... We jokingly call it a time machine, but it does exactly that. It returns time to those individuals and corporations. In this case, we're seeing that the ability to connect with communities across this country is being impacted. This is where our business aviation operators are able to fill that gap and keep those Canadians connected and our corporations busy with economic activity.

[The Chair, Liberal, Wayne Easter]

Ted, this will be your last question.

[Ted Falk, Conservative, Provencher, MB]

Okay.

Ms. Gervais, just to follow up a little more on that, you indicated that the cost of an entry-level new aircraft that a flight school would use is $500,000. That's just the entry level.

From there, where does the cost go?

[Christine Gervais]

A $500,000 aircraft is a single-engine aircraft with four seats that usually has a pilot and a flight instructor. The reason it has four seats is that you could put four people in there but no luggage, or you could put two people there, with full fuel, and do a lot of flight training.

The cost of general aviation aircraft goes upwards to over $1 million. That could be just for float planes or a smaller training aircraft. Then if you want to go into aircraft that are used more for business purposes, they're upwards of millions of dollars.

It's really anywhere from $500,000 to millions of dollars.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll go to Ms. Koutrakis, followed by Mr. Ste-Marie.

Annie.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Welcome to all our witnesses this afternoon. My first question will go to Mr. Abokor.

You touched upon this briefly in your opening remarks, but I'd like to give you the opportunity to further expand and provide the committee with additional information on the inequalities and barriers that Black-led charities and organizations face when accessing funding.