Finance Committee on May 25th, 2021

[Liban Abokor]

Member, thank you so much.

I'll take a step back and try as briefly as I can to explain that the Canadian philanthropic sector is about $86 billion, with upwards of nearly 10,000 foundations in existence. Not one of those foundations is dedicated to or sees Black communities as a primary constituent of their work, so that means we are locked out of effectively what is a safety net for the national safety net.

When you consider not only that the dollars aren't allocated there, in terms of the membership, as Senator Omidvar and others have shown, Canadian philanthropy is, in the phrase I'm going to use, “quite white”. They were absent from leadership at every single strata, from board to executive leadership. That impacts the kinds of decisions made in terms of the issues they find of import.

Finally, I would point to the CRA and some tax laws. Nearly 70% of Black-led, Black-serving organizations are not charitable, and therefore, many of these foundations find that because they were searching to find qualified donees, their inability to fund limits their capacity to get to serving Black-led, Black-serving organizations. In part, it's lack of relationships, which means you are not identifying where the needs are, but it's also structural challenges through our tax codes that have impeded their possible delivery of dollars to where the needs are.

My final comment would be that when the pandemic hit, it was Black-led not-for-profits that really stepped up to provide the seniors care, travel to food banks, PPE and so much more. Had a Foundation for Black Communities and others like it existed on March 2020, last year, just think about the lives that could have been saved.

When I say that in the community service sector primarily Black-led, Black-serving not-for-profit charities are indispensable, we literally mean that. They are very much lifelines to our community and a community that's reeling with its needs so heightened. It cannot be stressed enough the urgency with which supporting these organizations is critical to our building back better.

I hope I've answered your question. Thank you.

[Annie Koutrakis, Liberal, Vimy, QC]

Yes, and I am curious to know and to hear from you. Do you think the new Black-led philanthropic endowment fund will address some of those challenges?

[Liban Abokor]

I absolutely do.

[Annie Koutrakis, Liberal, Vimy, QC]

How would you see that making a difference?

[Liban Abokor]

Through the endowment, one of the goals is to create a long-term, sustainable funding ecosystem for Black-led, Black-serving charities.

Again, while that is an incredible start, I want to mention that the disbursement quota currently under CRA is 3.5%. Some really progressive foundations fund at 5%, so at 5% of $200 million, we're really talking about approximately $10 million a year at a national scale.

Just to put that in perspective, Ontario Trillium Foundation funds out $200 million a year, and that's just in the province alone. For Black Canadians, that's 1.2 million Black people across this country without a philanthropic home. From an endowment standpoint, $10 million a year in spending to support their needs, resources and services is simply not enough, but it is an incredibly important start.

Something that is important to note is the creation of a legacy that now determines Black communities have some self-determinative ability and self-reliant ability to fund the projects that are their priorities on their own terms. That's something worth applauding and worth thinking about in terms of how to continue to support and increase further investments in subsequent budgets.

[Annie Koutrakis, Liberal, Vimy, QC]

My next question is to Ms. Morano.

With regard to the small business and entrepreneurship development program, your organization noted that Startup Canada is the only national organization capable of delivering on every objective.

Can you expand on this comment and share your thoughts on how Startup Canada can support the work and objectives of the program?

[Natasha Hope Morano]

Absolutely. Thank you very much for the question.

Before I answer the question, I would like to make a quick correction. I think I missed an important word in my presentation. When I was mentioning the Canadian Federation of Independent Business and the estimated businesses that are at risk of closing, I may have said 239, and it's 239,000. Thank you for letting me correct that. It changes the dynamic quite drastically.

To answer your question, Startup Canada is a national convenor organization. We are not a competitor. We work with accelerators. We work with incubators. We work with other support organizations in the ecosystem. We constantly receive feedback from entrepreneurs from coast to coast to coast regarding where their biggest pain points are.

Something that we hold very dear to our hearts is that we provide entrepreneurs with a solid foundation to ensure they're equipped and ready to start businesses. This, to me, is an important aspect of what the government is trying to communicate in recognizing the importance of entrepreneurs playing a critical role in job creation and job growth. We create the entrepreneurs who are going to be creating the companies for tomorrow, as well as job creation.

Because we work with every single entrepreneur regardless of where they are in their entrepreneurship journey, we have programs that are created in response to their needs.

When I say that we're the only national organization that's capable of supporting.... We are already doing all of this. We're looking to the government. We're coming to the government, saying, “Look we're a trusted voice. Entrepreneurs come to us. They trust us. They know that we're able to support them regardless of where they are in their journey.”

We would love to be able to partner formally with the government to amplify our impact and deliver on being able to provide the end-users, that being entrepreneurs, with the tools, resources and services that the government seems to be very keen on wanting to do to support job creation and job growth.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We will turn then to Mr. Ste-Marie followed by Mr. Julian.

Gabriel, you have six minutes.

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

Thank you, Mr. Chair.

I want to start by welcoming the witnesses and thanking them for their presentations. Their input was very enlightening.

My questions are for Mr. Paquet and Mr. Ryan, of the Alliance de l'industrie touristique du Québec.

Your presentation was quite worrisome, Mr. Paquet. Basically, you said, that until the borders open again, the government absolutely has to maintain the current subsidy rates for businesses in the tourism sector. The measures in Bill C-30 miss the mark because, even though they extend the subsidies until September, the rates are being reduced.

Did I get that right?

[Éric Paquet]

Yes, that is what we are saying. Under the budget, the rates will decrease beginning in July until late September. The programs could be extended until November, but that still would not be enough, given that this summer will be like last summer—meaning that tourism businesses will generate only a fraction of their usual revenue. They are going to have to rely on local tourists, even though Quebec's tourism industry draws more than half of its revenue from tourists who come from outside Quebec. Tourism businesses cannot make it through the winter on a fraction of their usual revenue. The fall and winter months are when they really need the wage subsidy and rent subsidy programs.

The pandemic hit the tourism industry like a bullet in the heart. Now, it's as though the industry is on the operating table undergoing open-heart surgery. Three-quarters of the way through the operation is not the time to pull the plug. The operation must be completed, and the patient must be given help to get better. That's the point we are at now.

We are incredibly worried about the many businesses that have gone into debt to make it this far. Most of the program supports available, through the Quebec and federal governments, have been loan programs. Businesses have gone into debt to keep their heads above water and will probably find themselves in dire financial straits come the fall.

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

Thank you.

Would you care to add anything, Mr. Ryan?

[Jean-Michel Ryan]

Yes. If I may, I would like to add to what Mr. Paquet said.

We are now in the second year of the pandemic, the second year of lockdowns and the second year of border closures. The wage subsidy and rent subsidy supports provided by the government have helped a lot, but the sector still needs predictability in the coming year. That is a word you will hear often. Businesses need to know whether they will be able to keep their staff. They cannot operate without workers and they need to take steps to retain their employees so they have the staff they need for next year.

We are really looking ahead to 2022. At every meeting I have attended since 2020, the discussion has focused on 2022 as the year when a recovery would be possible. That means the government really needs to stay the course as far as these supports go, to help the industry make it through the second year in a row of pandemic-related lockdowns and restrictions.

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

Thank you.

As you both explained so well, most of the businesses in the tourism sector are seasonal, meaning that many of them earn the bulk of their revenue during the summer. Since restrictions are not being fully lifted, businesses are going to have to rely on what they make in the summer months to keep them afloat all year long—hence, the importance of extending the measures.

Mr. Paquet, you said the minister had the power to extend the program period. She also has the authority to raise the subsidy rate through regulations.

Would it be worthwhile if the committee were to adopt an amendment that sought to empower the minister to target sectors like yours?

[Éric Paquet]

That's what we are recommending. We are asking the government to keep the current programs in place, with the same terms and conditions. We are actually asking the government to extend the measures for as long as they are needed.

The tourism industry has never come begging for money. It is a thriving industry. Pre-pandemic, the Canadian tourism industry generated $105 billion in revenue, $16 billion in Quebec alone. What we know is that the pandemic has cost Quebec's tourism industry $10 billion, or 60% of its revenue.

We need time to catch our breath. We need a border reopening plan to give us enough predictability to make the transition and once again welcome international tourists. It's going to take months. In any case, once revenues return to normal, businesses will no longer be eligible for the financial support.

From our standpoint, the risk is quite low. As we pointed out, a number of studies, including a recent Desjardins study, show that more than 95% of the economy is back on track. Only a handful of sectors are struggling, such as tourism, culture and aerospace. We are calling on the government to extend the programs for as long as they are needed. Obviously, we hope that period of time will be as short as possible.

[Jean-Michel Ryan]

What's important to understand is that this is about more than just helping businesses survive; it's also about making sure they have the ability to bounce back going forward. Canada and Quebec are going to face tremendous competition from international markets when it comes to tourism advertising and appeal, not to mention reinvestment in tourism infrastructure, in other words, the product we are selling. Across Canada, the industry has to be able to compete with those big markets. This underscores the importance of assisting businesses so they can survive, but also so the Canadian and Quebec tourism sectors can bounce back.

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

That was very clear. Thank you.

I will have more questions in the next round.

[The Chair, Liberal, Wayne Easter]

Thank you all very much.

We will turn to Mr. Julian. Starting the next round will be Mr. Kelly.

Go ahead, Peter.

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

Thank you very much, Mr. Chair.

Thanks to all our witnesses for being here today. As we navigate through the troubled waters of the third wave, we hope that you and your families continue to stay safe and healthy.

I'd like to start with Dr. Ahmed.

You have raised very important testimony, as have all the witnesses. Your testimony, in terms of critical drugs, is fundamentally important.

There is another element, though, of course and that is access to medication. As you know, there are about 10 million Canadians who have no drug plan, no medication plan, so that access to critical drugs falls short because we don't have public universal pharmacare. The government did make a commitment back in 2019 that they would bring that into place, but unfortunately, tragically in this bill the government has abandoned its commitments.

How important is it to have in place public universal pharmacare so that not only are critical drugs available but Canadians can actually access them regardless of their ability to pay?

[Dr. Saad Ahmed]

I think if I were to take a step back on that, certainly there are challenges with access to medications, and I can empathize with many Canadians. About 15% of our patients cannot afford their medications. There are many of my colleagues, particularly at the University of Toronto, who have advocated on this for a long time. There are many of those colleagues who have said that establishing a national formulary or an essential medicines list would be certainly one plank and one way to move forward on national pharmacare.

I should add that in the letter we have received back from Health Canada, after our public letter to the Prime Minister, there was talk about creating a transition office for the Canadian drug agency, which would in fact do something like that.

I would say that when it comes to the matter of critical drugs, which is really my primary concern and has been because I think it's something that's been overlooked as we funded PPE and vaccines and everything else that's been really vital over the last year and a half, there are many global factors as well that cause these issues.

We've relied on single-source suppliers. For example, there is a shortage of magnesium, which I mentioned in my opening statement. That's one supplier from Europe. They went short for manufacturing production reasons, and now we're scrambling. There are a lot of these global factors because we have these “just in time” supply chains and it causes a lot of unpredictability, so—

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

I'm sorry to cut you off. I have other questions for other witnesses. Thank you very much.

I'd like to go to Mr. Abokor.

I was really struck by your statistic. I hope I heard it correctly. It was that 7¢ out of every $100 in measures actually goes to the Black community. When we look at the proportionality of what funding should be in terms of the overall philanthropic sector, shouldn't we be talking about $3 billion to $4 billion available to organizations that prioritize the needs of Black Canadians?

[Liban Abokor]

I think you've just provided my comment. I would repeat everything you said, and pretend as if I said it.

From an equitable standpoint, what we're talking about is helping a community. We're not talking about getting on base. We're talking about a community that's actually outside of the stadium at this point, and getting them to the start line requires significant investments.

In this case, you heard it correctly. It is 7¢ for every $100. About $7 billion a year in charitable spending occurs in this country, and when you think about that, 17% of that $7 billion goes toward, for instance, health care. When you consider the issues that impact Black communities in the area of health care, none of that funding goes to priorities of Black health care, as an example. This goes across the gamut. There isn't a single foundation in this country that doesn't deal with an issue that intersects Black needs, yet there is a significant underinvestment.

To your point and to the member's earlier question, this $200 million goes a long way. It's a wonderful start, but if we're talking about building back better and helping everyone catch up and build equal footing, we're going to need to look at a significantly larger investment over time to really start adjusting some of the massive disparities that we see. I mentioned some of those to you earlier in my opening statements, like housing, food and so forth.

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

We're really talking about the requirements to achieve the kind of equality that we should have. The equality of opportunity in this country is 15 to 20 times what the initial amount has been, so it's a small step. We have to go much further, particularly when we look at the legacy of systemic racism in our country.

[Liban Abokor]

It's an important step as I think it sends the.... It provides a pool of dollars that can attract further investments from various other sectors beyond government, because it's important to note that the disparities aren't necessarily always as a result of government policy. There are others that can make these contributions.

Frankly, government coming to the table in this instance creates a wonderful concept, a proof of concept for why this is necessary. To your point, it does require significant greater investment. We're hoping that this is simply a catalyst for future dollars in this important area.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll turn now to a five-minute round with Mr. Kelly, followed by Mr. Fragiskatos.

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

My first question is for Mr. Paquet.

In your opening statement, you spoke about the need for a clear data-driven plan to safely and permanently reopen the economy. Actually, I don't recall if you mentioned the permanent part, but what you had spoken about was very similar to a motion that we debated in the House of Commons a while ago.

Can you talk about the necessity for business owners, business managers and workers who depend on the businesses so severely affected by COVID to have a proper plan that will eventually lead to a reopening?