Finance Committee on Dec. 1st, 2020

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

We're all very aware of the pandemic's impact, not only on health, but also on the economy. In this meeting, we've already discussed the somewhat harder hit sectors. We've talked about the restaurant and hotel sectors. I'd add the tourism, air transportation and aerospace industries.

I'll talk about the cultural sector. My first questions will be for Mr. Smith.

Mr. Roy, don't worry. I'll turn to you later.

Mr. Smith, what's the situation for the members of your organization, the Canadian Arts Coalition?

Do you think that yesterday's announcement in the economic update will breathe new life into your sector?

[Charles C. Smith]

Yes.

The situation for our members is rather precarious—like fame, in a way, but perhaps at a different level.

Artists are basically unable to perform. In many cases they cannot rehearse. Their income predominantly comes from performing, creating, rehearsing, etc. Without that, they have a rather bleak time at the moment and are very concerned about what the future will hold.

While the wage subsidy is in place and CERB continues, there are questions about what will come after that, and whether that's a sufficient supplement during the current crisis.

We've seen small, medium and large venues that are closed right now. As a result, it's not just the loss of revenue but also the sense of what opportunities there are for the public to see live performing arts.

One question that was asked earlier, which I think needs to be underlined, is that even with a vaccine, we still don't know the level of confidence the public will have in going into venues for live performances. How comfortable will people actually feel? Will they wait to see how effective the vaccine has been, and so on?

Those are really big concerns. We are very concerned about the more marginalized artists—that is, indigenous artists, artists of colour, and the deaf and disabled. They are already hanging on by their fingernails, and now they're finding it incredibly difficult, because they were last in to the funding system, so to speak. As a result, they have hit more difficult times than others.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Smith.

Yesterday, additional assistance was announced. Mr. Roy spoke about this earlier. Several months ago, I wrote to the Minister of Canadian Heritage to ask for funding for performance and cultural activities. I'm pleased to see a step in the right direction. We pushed for this as well.

Mr. Smith, you brought up a good idea for everyone from artists to craftspeople to technicians. It's the concept of a guaranteed minimum income, or basic income, which would provide some form of social safety net. We in the NDP are interested in this idea and we're looking into it. My colleague from Winnipeg Centre tabled a motion on the issue.

I want to know how this could apply to your members. How could this provide more security for the cultural community as a whole, meaning for artists and craftspeople?

[Charles C. Smith]

I haven't seen the particular motion, but I suspect that if it's about a universal basic income, it would be strongly supported by the arts community. There have been a number of surveys, including our own, showing that artists see it as a real requirement to sustain ourselves through not only this time but into the future.

We really don't know how long this pandemic is going to have an impact on our society. We could be losing some great workers and some sectors of the arts ecology. We have to remember that we agreed with saying that art is also about bringing people together. It's about tourism. It is also about restaurants and hotels and the impact it has on the economy. We think that because of the diversity of our population, we have a unique gift that we can offer Canadians and the world. We really should be investing in that as much as possible to ensure that we can offer it into the coming months and into the future years.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I have one last question for you, Mr. Smith.

I don't know whether this is a reality in all the provinces, but the guidelines are sometimes a bit difficult to follow at the moment.

For example, here, the malls are open. However, the theatres, movie theatres and museums are closed.

How does this affect the cultural community? What do people think about this? I imagine that there may be some frustration.

[Charles C. Smith]

It's incredible frustration. It's not so much that malls and stores might be open, because obviously people are passing through those. However, there's a similarity with those museums and galleries. It's the concern about the venues for performing arts in particular, where people would be sitting next to each other. In our research, for example, we noticed that in Germany a symphony orchestra, I think, tore up half the seats in their theatre in order to get live performances. Of course, that was very heavily subsidized by the German government as well.

There are real questions about when performing arts spaces will be able to open safely. Will that vary based upon the size of the performing arts centre—small versus medium versus large, such as a 3,000-seat proscenium, for example, versus something that holds 100 people?

I want to underline that one thing we brought forward is that there needs to be a marketing strategy to convince Canadians that things are safe, or to encourage Canadians to try. We think government and arts organizations should collaborate to say, “Yes, we are working together to make sure that the environment is safe, and we encourage you to take the chance, because the PPE is in place, the sanitizers are in place, foyers have been taken care of, the front of the house is taken care of, etc.”

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll turn to Mr. Falk for five minutes, and we'll close off with Ms. Dzerowicz for the last five.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Easter.

Ms. Sullivan, I'd like to ask you a few questions about your presentation.

You've indicated that one of the ongoing challenges in your industry is the labour shortage. We know that the federal government has been doling out billions of dollars, paying people to stay home. How has this affected your industry?

[Kathleen Sullivan]

It's certainly been a contributing factor in our labour challenges. We went into COVID-19 with a shortage of labour and we're now at about 10% vacancy rate on any given day, so it has been difficult. In some circumstances companies have felt that they have had a challenge in filling positions because of some of the support that has been available. Certainly the problem is more complex than that, though, so I wouldn't chalk it all up to that. However, we are definitely seeing this dichotomy between such a high vacancy rate in an industry when we're also facing such high unemployment in the general economy.

[Ted Falk, Conservative, Provencher, MB]

Correct.

From our previous panel, we heard of the employment levels being up and people looking for work for high-paying jobs, and I know your industry is actually very good at creating high-paying, full-time jobs for people.

[Kathleen Sullivan]

We employ about 300,000 people, and it runs anywhere from executives to food scientists to marketing experts. The vast majority of our workers, in fact, are what we call front-line food workers, meaning the people you think of on the assembly line, the butchers. Those well-paying, stable jobs are quite accessible to people who may have just fundamental skill levels. However, we have vacancies across the board. One of the biggest areas where we have a problem is in fact in the skilled trades, where we see a huge deficit across the entire manufacturing sector. I will say that all of Canada's manufacturing industries are at great risk if we don't start to address that deficit.

[Ted Falk, Conservative, Provencher, MB]

Yes, we need to do some better pairing of the workforce and the demand.

A lot of your manufacturers, your processors, have had to shift focus from providing to a restaurant industry to providing to a retail industry. Can you talk a little bit about the complexities that this shift has caused for your industry? They've obviously had to retool. They have to create and manufacture different packaging. What kind of stress has that put on the industry?

[Kathleen Sullivan]

It's been very stressful. You have to remember that from the day the pandemic was declared back in March, the food companies didn't shut down. Suddenly 7,000 food companies across the country became experts in epidemiology and how to keep workers safe from a pandemic. The cost of all of the measures we've put into place—PPE, plexiglass barriers, additional cleaning, slowing down production lines so you can space people apart—has been about $800 million, so it's had a massive impact on the sector.

[Ted Falk, Conservative, Provencher, MB]

The government has talked about providing financial assistance to businesses that need to retool and all that in exchange for an equity position. How many of your association members want to give up equity in their companies for financing?

[Kathleen Sullivan]

I don't think I would be able to find one that would.

[Ted Falk, Conservative, Provencher, MB]

I think you're right; I don't think one of them wants that proposal.

My constituents have told me that food prices in the grocery stores have increased significantly this past year. Would your processors and manufacturers vouch that their clients, the retail sector, have increased their prices substantially?

[Kathleen Sullivan]

I can only speak to the prices that we are paid by the retailers, and I think what we have found is that there has been a flatlining of prices. In fact, some of our companies have said that retailers say to them not to even try to pass on a price increase, which obviously just puts food manufacturers in the middle. Ultimately, those cost pressures can get pushed down to farmers as well, which I don't think is of any benefit to Canadians or to the security of our food supply.

[Ted Falk, Conservative, Provencher, MB]

That's what I suspected. I thought, too, from the manufacturing perspective, that the pricing was pretty flat. We know from the retail side that the grocery store chains have certainly been opportunistic in raising their prices, yet we still have the government giving them $12 million to upgrade refrigerators. It just seems a little strange.

[Kathleen Sullivan]

A bigger concern for us right now, one that I know most of you have been following, is that retailers have arbitrarily increased fees on food processors and suppliers. We're in a position where our costs have gone up almost a billion dollars. We can't pass any price increases on through retail, and retailers, in the middle of a pandemic, are asking us to pay them in order to make their capital improvements. We're seeing incredible pressures on the food supply chain. It's just not something that's sustainable.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Ms. Sullivan. Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you.

On that last point, I can tell you that what one food chain did in Prince Edward Island cost our small dairy $2 million out of their bottom line. That's how serious this is, and that's not a big dairy co-op.

The last five minutes will go to you, Ms. Dzerowicz. You're on.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank all the presenters for their excellent presentations today. Everything you've talked about is very important.

I'm going to start off where Mr. Falk left off with Ms. Sullivan.

Ms. Sullivan, thank you so much for being here. I spend a lot of time on skills and labour, as well as on immigration, as you may know. I think when people talk about food and beverage, they're either thinking agricultural workers or they're thinking about the front line that is selling the products, but there are a whole bunch of other labourers. Can you give a few more examples of who else we're talking about, particularly the ones we're short of?

[Kathleen Sullivan]

We are talking about entry-level positions in food companies. In any manufacturing facility, if you think about the quintessential assembly line, we're looking at people who might be working along that line—adding the hazelnut in the Ferrero Rocher, for example. You are looking at technicians. More and more our plants are automated, so we need computer technicians to calibrate all of the equipment. We need skilled tradespeople, electricians, millwrights, food scientists, marketers and executives. We are probably one of the most diverse industries in terms of hiring, and we frankly need people right across the board. We're right now short, as I said, about 30,000 people, and the companies are all hiring.

[Julie Dzerowicz, Liberal, Davenport, ON]

I have two more questions for you, and then I have to get to a couple of other people.

Do you think this is a labour issue or a wage issue?

[Kathleen Sullivan]

It's complex; it's a number of different things. Certainly what we find is that most jobs are probably above minimum wage, but these are lower-level, lower-paid positions, for sure. One of the big challenges we have is that when you're in an industry that has all of this pressure on your costs and on what you can pay, it makes it very difficult to increase wages.

Also, a lot of our plants are in areas where the wages would be good, but if you're on the outskirts of Toronto, it makes it very difficult for people. There are complex factors that are at play here that we really need to get into. I think the big challenge is that we have the largest manufacturing sector in the country, and we're not tackling this.