Finance Committee on Feb. 7th, 2022

[Alison Coke]

It's a pleasure.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Coke and Mr. Baker.

We're moving now to MP Ste-Marie from the Bloc, for six minutes.

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

Thank you, Mr. Chair.

Good morning, everyone.

I thank all the witnesses for their presentation. This is certainly a most interesting group of witnesses.

My questions will be directed to Mr. Roy.

Your presentation contained a lot of material. I hope that we can address in more detail all the points that you have raised. I would first like to know how the festival and events industry is doing on the ground after two years of the pandemic.

[Martin Roy]

Thank you, Mr. Ste-Marie.

I'll give you some figures. In the first year of the pandemic, the turnover of REMI members, the Regroupement des événements majeurs internationaux, in Quebec, fell by 68%. Our self-generated revenues come from tickets, food and beverage sales and private sponsorships, among others. These revenues have declined by 89%.

As a result, we consider grants, whether from Quebec, the provinces, territories or the federal government, to be our lifeline. Without the specific and, I would say, fairly horizontal support that we have received, particularly through the wage subsidy, many festivals and events would be dead and buried today.

We live in hope of resuming our traditional business models as early as this summer. We are waiting for a clear signal in this direction from the various public health branches. We know, for example, that Ontario has presented a fairly precise schedule for the lifting of restrictions, which is not the case in Quebec. This is what we are asking the Quebec government to do also.

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

You have not generated any independent income for almost two years. Without support measures, the industry would appear to be in mortal danger.

You talked about the very long delays associated with the Major Festivals and Events Support Initiative. You are asking us to recommend that the end of the program be deferred to March 2024 so that it runs for two years, not one. Is this correct?

[Martin Roy]

Absolutely.

Originally the program was supposed to last two years, but actually it took almost a year to set up and six or eight months for responses to be provided. So for events and festivals, there is only one edition left. What we are asking you to do is to extend the program by one year, which can be done at zero cost. Of course, if you can add resources and extend it financially, we suggest that you do so. You could also make the program more accessible and thereby significantly increase its impact.

Generally speaking, I hear people calling for an end to income support measures. I've heard that here too. I want to stress the importance of supporting the cultural and tourism sectors and the people who work in them. This support is essential. There is no magic wand that turns directors and actors into nurses or personal support workers. It doesn't happen overnight.

I therefore stress the importance of these measures and the importance, by the same token, of retaining expertise in the performing arts sectors, because once the pandemic is over, we're going to want to have resources and trained people so that we can finally return to a normal cultural life in Canada.

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

In fact, the whole cultural sector is a key industry. It is absolutely necessary to preserve this expertise.

We are well aware that you were the first victims of the pandemic. You were the first to close your doors and you will probably be the last to reopen them. I look forward to your full return to your events.

You point out that one of the support programs is too restrictive, as it only targets festivals with annual revenues of $10 million or more. As for the other component for smaller events, the assistance it provides is too diluted, since it targets all cultural events, not just festivals.

Can you remind us what you are suggesting to the committee?

[Martin Roy]

Of course.

The budget contained assistance for the large festivals, on the one hand, and there was other assistance for the smaller events from Canadian Heritage. At that time, the budget did not provide a definition of a large festival or a small festival. It took a few months before the government decided that large festivals were festivals with annual revenues of over $10 million. We recommended that the threshold be much lower, because in reality there are only about 25 events in Canada that have that kind of annual revenue. You know who they are; they're the big festivals. For the smaller festivals, the assistance is extremely diluted. At Canadian Heritage, there is a large envelope of $200 million, but it is used for just about everything, and there is a much smaller amount allocated to festivals.

In reality, COVID‑19 amplifies the funding problem on the festival side, because before the crisis, things were already not going well. Programs were frozen for over 10 years and there was no new investment. In 2019, there was a new two-year investment, which was then extended for one year in the 2020 Fall Economic Statement, and then extended again for two years in the budget.

What we'd like to do is get it over with and make these investments permanent. There's no reason to do it one year at a time. So that's another one of our recommendations, to make these investments in the programs permanent, that is, the Canada Arts Presentation Fund and the Building Communities Through Arts and Heritage program.

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

That's very clear, thank you.

[Martin Roy]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

We will now move to the NDP, and Mr. Blaikie, for six minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Ms. Sarangi, you were speaking earlier about the seniors who have been affected by a clawback on their guaranteed income supplement of CERB benefits. I know we're here to talk about pre-budget submissions. The government talked about spending money in May or June of this year. However, in your opening comments you talked about how inadequate that was, and the need for something to happen much sooner. You mentioned a one-time payment to those seniors, and perhaps also some assistance, some kind of housing fund, to try to get those who have been evicted back in their homes.

We have a number of Liberal members on the committee. Could you take a bit of time to impress upon people why it's such a matter of urgency that the government act now as opposed to in May and June?

[Leila Sarangi]

We've actually been writing to all elected members since the summertime, when seniors first opened the GIS cheque or got a letter that surprised them to say, you don't have GIS this year, or your GIS has been drastically reduced. Seniors have been going since June of last year without that supplemental income and these are—as you all are well aware—the lowest-income seniors. They're the most vulnerable in our communities. They are people who are over 65, who've worked hard their whole lives, who are still forced to work even though they should be retiring. They're in precarious, low-wage jobs where they're serving our coffee or giving us advice in the grocery stores or the home gardening stores.

They didn't have income supports to fall back on. They didn't have something in their bank accounts that they could fall back on. They have been trying to make ends meet since last summer. Over time it is getting worse and worse, and for months now I have been receiving calls and emails in desperation from people who have been evicted in the middle of this winter, living in their cars in the Northwest Territories. There's somebody in Nova Scotia who sold her small business to try to get extra money, and then was taxed and didn't end up with anything extra. There are people who have been sending me their doctors' prescriptions for their medication. They have $1,300 a month to live on right now, and they've got these prescriptions and they can't afford their medications. There are others who are emailing me about their neighbours, one of whom has committed suicide and another lost their life because they couldn't access medication. Our partners who work in food banks are seeing people they've never seen before. Seniors are moving in with their adult children and putting pressure on those families, who are raising their own children.

Other legal clinic partners are accompanying seniors in online rent tribunals where seniors are being evicted over Zoom calls. This is devastating. What is happening in our communities is devastating, and it's happening in your ridings across the country. It's such a deep issue and a small amount of the budget. If there was an immediate emergency payment of $2,500, in the same way that CERB was released quickly.... These people are in the system. The money is earmarked. When they're calling me and asking me when the money is coming and why it hasn't come yet, I don't have an answer, because I really don't know.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much for putting a human face on what, on Parliament Hill, too often devolves into a conversation about figures and about bureaucratic processes. What gets lost in there is the fact that there are people right now who are losing their lives or having their lives damaged irreparably because we're not providing assistance quickly enough.

It adds insult to injury to know that the government was aware of this problem at least as early as May of last year, which would have been enough time to do something about it, but its position initially was that there was no reason to do anything. It wasn't until well after the fall election that the government got wise to the fact that this would have serious implications for people, and I'm certainly hopeful that we'll see action before the budget.

Thank you for that.

With the one minute I have remaining, I'd like for you just to speak a little to.... The NDP has talked a lot with Campaign 2000 about the need for a low-income CERB repayment amnesty, and it's something we don't hear a lot about on Parliament Hill except when the NDP's raising it. When we talk about the economic side of that, I just wonder if you could speak to how much government can really expect to get back from folks who can't afford the debt burden that the government is putting on them? How much money do you think government could reasonably expect to recover from folks who already live below the poverty line and took the government at their word and applied for help when they needed it?

[Leila Sarangi]

Nothing, pennies maybe, in comparison to the amount that the federal budget is. We're talking about people who live on $700 a month if they're single or $1,300 a month if there's a couple. There is no extra $10 a month to make these kinds of repayments.

The kind of hardship and stress that puts on individuals and families, to be saddled with $14,000 of federal debt, is very scary and puts a lot of unnecessary stress on families that are already struggling to make it through their days, to make sure their kids have something in their stomach before they go to school, to make sure that they can afford some new clothes or keep the lights on and keep a roof over their heads.

No, they're not going to make any money back.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Sarangi and Mr. Blaikie.

Members, we're now moving into round two. In this round we have the Conservatives up first.

Mr. McLean, you have five minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, witnesses, for all the time and input you're giving us today on these important deliberations.

My first questions will be for Dan McTeague from Canadians for Affordable Energy.

Mr. McTeague, you talked about proposing a rebate for Canadians, or a remit from their taxes, on the increase in energy. I'm a little confused with that. I'd like you to explain it a bit, please. The way the government has actually sold its carbon tax to Canadians is that there already is a rebate to those Canadians who need it—a wealth redistribution mechanism, if you will.

Can you comment on why we might need more of the same, if that's actually the proper way to do it, as opposed to just reduce the carbon tax?

[Dan McTeague]

That's a very good point.

The carbon tax, of course, in many provinces, mine included here in Ontario, increased 10¢ a litre with HST in a period of 22 months, well beyond what would otherwise be an inflationary factor. We also know that the increase in the price itself, more than the carbon taxes but the actual increase in prices of gasoline, diesel, natural gas and heating oil, is affecting many parts of the country. Fully about three-quarters of Canadians who'd be caught by this, including those on fixed incomes, have seen prices go, from an average of about 65¢ or 70¢ a litre for diesel gasoline in 2020, at this time of year, so back to the beginning of the pandemic, to $1.13 a litre last year, and now $1.55 or $1.60.

In that period of time, beyond carbon taxes having that direct higher-than-inflation impact, you have a much higher price on which the federal and provincial governments take 5% at the federal level and anywhere from 7% to 9%, depending on the province and the further east you go into the Atlantic provinces. That's a windfall of money that I suspect will contribute to the hardship of Canadians as they try to struggle to get back on their feet. You don't have to take my word for it. MNP debt solutions says that over 40% of Canadians are less than $200 away from calling it a day financially.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. McTeague. Let's move on. I hear what you're saying there.

I agree. The whole issue of the carbon tax, when we applied it to a $60 barrel of oil, was more or less the equivalent of pushing it up to a $95 barrel of oil, thus trying to equate the transition to other forms of energy in making those economic. However, now we have a $90-plus barrel of oil. We're obviously going to be paying more for oil and the products that come from oil. In addition to the carbon tax, we have an escalating tax on top of just our energy tax.

I'm glad you talked about the impact on the price of food, because that is fundamental here. For failing in our food production and our food provision to Canadians, we are failing very much as a nation. This tax, particularly the clean fuel standard tax, which is in addition to the carbon tax, will provide more of an inflationary effect upon the production of food. Can you comment on that, somewhat?

[Dan McTeague]

Well, look, it's already a serious situation. We're just emerging on the food side, with fertilizers now being double the price. That may not just be a question of scarcity. Urea and nitrogen are both products that are derived from hydrocarbon. It looks like our farmers are scrambling for product and hoarding or keeping whatever they have. ”Hoarding” would not be the right word in this case; they're trying to protect what they have for this year's planting season. That would mean, of course, inevitably higher prices for anything.

As the carbon tax makes its way throughout the economy, much of it is not shielded. Much of it is widely compounding the cost of living, well beyond the simple rebates that people receive. When it comes to food, though, the totality of the increase in the price of that which we cannot take for granted is something that most of us have no argument with. As you increase the cost of transportation, input costs for processors, input costs, whether it's over output-based prices...it's creating a problem.

[Greg McLean, Conservative, Calgary Centre, AB]

Thanks, Mr. McTeague.

I have one more question here. The oil and gas companies across Canada have provided excise taxes, sales taxes, income taxes, municipal taxes and royalties totalling over $500 billion to Canadian treasuries over the past 20 years. In your mind, does this constitute a subsidy to the oil and gas industry?

[Dan McTeague]

The question is often asked. It's not a subsidy—they pay far more than they could ever possibly receive—unless you're talking about a subsidy that every single business in this country gets.

I'm not a big fan of the oil companies. I took them on when I was an MP, but I never stood to try to kill that industry, because I know how important it is for every social program in this country.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. McTeague and Mr. McLean.

We're moving to the Liberals and Madame Chatel for five minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

I have a question for Mr. Lee. I'm very glad that he supports the independence and skill of the OECD. I was there for four years before the election.

The OECD agreed that it was important to take unprecedented action to preserve the workforce, but now we're moving towards building resilience in the workforce, and that's very key. The OECD has three proposals.

The first is to help those in need while encouraging firms to move off subsidies and workers to shift to viable jobs. The second is to ensure that firms use public support effectively to keep or create jobs, for training and for retaining staff. The third is to make the labour market resilient by investing in people, health and environment.

Mr. Lee, would you say the OECD is right in those three recommendations, moving forward?

[Dr. Ian Lee]

I've been using the OECD in my courses since I started teaching 34 years ago.

I want to be very clear. I've never advocated saying that we shouldn't be spending on income support.

I just looked up a number very quickly, because I anticipated this question. This is from StatsCan 2019, pre-COVID, when three-fifths of total federal, provincial and municipal spending went to social protection, health care and education. Three-fifths is a huge amount of money. It was over $500 billion. That's pre-COVID. I'm not suggesting that we stop spending on income support or health care. We have a long history, as we all know, going back to the sixties, when we developed medicare, CPP and so forth. That's not the issue when you say, “Oh, you're against income support.” We've been doing it. The employment insurance program was passed in 1935. We all know that.

What I am arguing is that we have to tie the support, which has been in the Employment Insurance Act from the very beginning of our country, and with strong support across Canadian society.... It's that you have to be looking for a job, and you cannot turn down a job in your wheelhouse of experience or where you live.

That's all I'm really saying, because we have a million vacancies in Canada and we can't build a strong economy if businesses don't have enough workers to function, so I'm in agreement with the abstract principles of the OECD.