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.