Evidence of meeting #47 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was going.
A video is available from Parliament.
4:25 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Ste-Marie.
Now we'll go to the NDP and MP Blaikie for two and a half minutes.
4:25 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Ms. Pohlmann, I know that you've already mentioned the Canada emergency business account loans and the need for a bit of an extension on the payment period, and then, I think, you talked also about extending or expanding the forgivable portion of those loans. I wonder if you might share with the committee why you think that's important and what difference it would make, and to whom.
4:25 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
The Canada emergency business account loans were probably most used by small companies. Essentially, they were only targeting smaller companies. They could access them, and more than 900,000 did so. As a result, as we've learned, the debt that's been accumulated by small businesses has been quite dramatic. In sectors such as hospitality and tourism and arts and recreation, it's well over $225,000.
We're trying to figure out ways in which we can help them deal with some of that debt. Especially in hospitality, some of our members have told us that it's going to take them over a decade to be able to pay back that type of debt, if they ever can. Anything we can do to help with that would be good.
Of course, the Canada emergency business account loan was up to $60,000. Right now, $20,000 of that will be forgivable if you repay it before the end of 2023. Perhaps we could move that up to at least $30,000, or half of that, so they don't have to worry about paying back $40,000, maybe only paying back $30,000. Any little thing will help in terms of dealing with the debt they have. Extending it by one more year to pay will be good as well, because obviously by the end of next year some of them are still going to struggle to pay it back, especially in those hard-hit sectors.
We would encourage government to think about that as we get closer to the end of this year. Maybe we could have it extended to the end of 2024 for repayment, giving them just a bit more time to get their feet under them and get their businesses to recover. Hopefully, later this year or early next year we'll be closer to where we were prepandemic.
4:30 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Do you have a sense at all of what extending the repayment deadline or increasing the amount of the loan that is forgivable is likely to mean for government in terms of how much of that money it actually gets back? Do you have a sense of how many businesses that took a CEBA loan are potentially facing bankruptcy if they don't see some wiggle room on that financial obligation?
4:30 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
Yes. As I mentioned, about two-thirds have pandemic debt. That will vary, obviously. We also know that one in five or one in six are looking to close their doors. Close to 16% to 18% of businesses are in that sort of category. It's probably somewhere in the middle. It's definitely not going to be all two-thirds. I think many of them think that if things can return and they can get closer to what they were doing prior to the pandemic, they can probably pay it back within a year or two. They're probably going to be okay. It's really that group who were closed for....
If you were a restaurant in Toronto, you were closed for up to 350 days throughout the pandemic. That's a lot of time you were dormant. You still had to pay rent. You still had to try to figure out what to do with your utilities and all of that. The subsidies were great, but they didn't cover everything. Those debts still have to get paid off.
4:30 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Blaikie.
We will now hear from the Conservatives. MP Fast, you have five minutes.
4:30 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Thank you.
My first question is for you, Mr. Laliberté. I just want clarification. You're looking to effectively sever division 32 from the BIA and have it considered separately, after further consultation with the government. Is that correct?
4:30 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
All right. Thank you.
Ms. Pohlmann, it's nice to see you again. By the way, I was pleased to hear someone speaking about debt and deficits and the need for a plan to return to balanced budgets. Is it your view that this budget fails to set out a firm plan to do just that?
4:30 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
I'm going to turn it over to my colleague Jasmin.
Would you like to answer that question, Jasmin?
4:30 p.m.
Vice-President, National Affairs, Canadian Federation of Independent Business
Sure.
Thank you for your question. Indeed, we would like to see the federal government setting a clear timeline and a clear plan on what they are planning to do with regard to returning to a balanced budget.
Everyone understands the investment that was necessary to be made during the pandemic to support small businesses. Having said that, throughout the pandemic we regularly surveyed our members. Their top concern related to the pandemic was on the economic impact of the pandemic. Many of our members have said that one way to mitigate the impact of the pandemic is for the federal government to lay out a plan on how they are looking ahead to try to get back to a balanced budget in the near future.
As my colleague Corinne mentioned earlier, the timeline is on the longer side. It's not going to happen next year.
May 17th, 2022 / 4:30 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
I'm hearing a “no” there: No, this budget does not contain a firm date on which our finances will return to balance.
I want to go to Ms. Pohlmann again.
I want to ask you about the new tax on planes, trains and automobiles. Did the government ever reach out to your organization to ask you about the impact that this new tax would have on the affected industries?
4:30 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
Not directly, though we did provide input into the consultations that took place on the luxury tax over the course of the last couple of years.
4:30 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Has your organization done any impact assessment on what this will mean for, say, the boat manufacturing industry, the manufacturers that build planes? Do you have any idea of what the impact will be on them?
4:30 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
We don't have that assessment, no.
4:30 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Did the government do any assessment like that, that you know of?
4:30 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
Not that I know of, but I defer to our colleagues at the Conseil du patronat to see if they maybe know more than I do. We don't represent the aerospace sector, so I couldn't speak to that group.
4:35 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
You mentioned that the budget implementation act doesn't in fact do what was promised in the budget, which is to raise the taxable capital limit. Does this mean the higher limit won't be available in 2022 to those businesses that might have qualified?
4:35 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
That's the question that I have. I'm assuming no, because CRA does not tend to administer those taxes that are not yet passed in legislation. I'm assuming that it will not be at this point.
I suppose if there's another act coming and it's in there before the end of the year, it will probably still apply to the 2022 tax year. We are certainly encouraging them to do that.
4:35 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
How many small businesses would benefit from this promised tax change?
4:35 p.m.
Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business
It wouldn't be a massive number, but there's definitely a significant proportion. I can't give you an exact number. Good examples are farm implement dealers, and sometimes car dealerships that are smaller in scale but have lots of inventory worth a lot of money, although they themselves, in their revenues, only make $300,000 to $400,000 a year.
There is a significant proportion that we hear from every year. The agriculture sector is another one that this tends to have a crucial impact on. I can tell you that there are certain sectors out there, and businesses, that are waiting for this benefit, because it will be a significant help for them.
4:35 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, and thank you, MP Fast.
Now, moving to the Liberals, we have MP Baker for five minutes.
4:35 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thank you, Mr. Chair.
I'm going to start by asking the representatives of the Quebec Employers Council my questions.
What will the repercussions be for your council and companies in Quebec of expanding eligibility for tax relief for small businesses?