Honourable Chair and respected members of the Standing Committee on Finance, good afternoon. My name is Konstadin Kantzavelos. I have been operating my business, TSC Wetclean, in the city of Mississauga since 1988.
I am a proud member and president of the Canadian Fabricare Association, where I have sat on the board since 2013. It's an honour to represent and lead an organization rooted in our industry since 1949 that currently represents over 10,000 jobs across Canada.
The CFA is the governing body of professional dry cleaners, wet cleaners, launderers and allied trades dedicated to providing fabric and textile care services and solutions from coast to coast by establishing good management, ethical conduct and proper operating procedures. Today is our association's most important opportunity to represent our interests. Please allow me to shed light on our industry's contribution to the Canadian economy and the challenges we have faced. More importantly, please allow me to illustrate how the Canadian government and the CFA can work together to revitalize and reinvigorate business across Canada.
No industry suffered more than the fabric care industry during COVID-19. We saw up to a 90% drop in revenue across the country for over two years. Over 50% of our fabric care locations closed nationwide. Working from home was the key element in these declining numbers. For many Canadians, suits, shirts, ties, skirts and dresses are the uniforms worn for work, similar to everyone in this room today.
I am here today to celebrate the major contribution of the small business owners of the Canadian Fabricare Association across Canada. We are members of a small business community that constitutes 98% of all businesses in Canada—small companies. Small businesses employ over 10 million Canadians and are responsible for 50% of Canada’s GDP.
According to Statistics Canada, the average person spends approximately 10 hours weekly on unpaid work. The primary work we're talking about here is laundry. An Ipsos Reid poll conducted on behalf of GE Appliances revealed that 30% of Canadians find they only get around to it when they've run out of clean underwear, 25% of Canadians confessed that they've left their clothes in the washer or dryer for days before tending to them and 41% said they simply guess at methods of stain removal.
Most recently, as read in the Financial Post this past March, the Bank of Canada's senior deputy governor, Carolyn Rogers, spoke on the declining state of Canadian productivity. According to Rogers, Canada must tackle weak productivity to inoculate the economy against factors driving future inflation.
The Organisation for Economic Co-operation and Development revealed that Canada ranks 29th among 38 OECD countries for labour productivity. To put this in layman’s terms, in the time a Canadian worker produces one dollar's worth of goods and services, an American worker produces $1.30. That's a 30% advantage.
These statistics are important because despite most industries having raised their prices on consumers, the members of the CFA have kept their prices relatively unchanged because of our investment in the proper technology and advanced productivity.
In February 2021, during the height of the pandemic, Swedish consumers who turned their laundry, dry cleaning and clothing alterations over to professional cleaners received a tax deduction of 25% of the cost. The Swedish association put forward a plan to educate its government on how that incentive could work.
The CFA is no different. It looks at our diversity as a strength and at our employees as our greatest asset. We are a green circular industry. We focus on proper textile care, which extends the life of fabrics and removes uncertainty from the consumer. Our members are certified through the CFA, which means they meet the required environmental, economic and social standards. Committee members may be interested to know that all our industry members continually deliver towards the preservation of our environment and our ecosystem by adhering to all federal government guidelines on waste management.
By implementing a tax incentive, the Canadian government will demonstrate its commitment to a greener economy. Considering that we live in times of viruses and harmful diseases, what better way to promote cleanliness to every Canadian household than with a tax incentive to have their fabrics and garments cleaned professionally?
As the president of the CFA, it is my job to inform you of the importance of what our industry stands for in our communities—the preservation of our environment and our economy. What we are proposing is a tax credit of 25% to incentivize using the services of professional fabric care in every Canadian household. This is where Bill C-59 can assist. Just as in Sweden, the CFA can be a resource for the Government of Canada in paving the way for maintaining the stability and economic growth of the Canadian fabric and textile care industry.
We request that this committee make a focused choice to work with the Canadian Fabricare Association and ensure that our proposal for a tax incentive can become a reality and prevent our small businesses from disappearing.
Here are some suggestions for requirements for this tax incentive. You must be at least 18 years old, live in Canada and pay taxes on at least 90% of your total income. The maximum amount of annual cleaning expense to use the tax incentive would be $5,000 per household. The professional garment care provider must be registered with the Canadian Fabricare Association, and you do not need to own your property to receive the incentive.
Which services are covered for this deduction? They include dry cleaning, wet cleaning, laundry wash and fold, clothing repairs and alterations, area rug cleaning and upholstery cleaning.
Thank you very much for the time today.