Evidence of meeting #6 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sector.
A video is available from Parliament.
Liberal
The Chair Liberal Peter Fonseca
I call this meeting to order.
Members, just before we start, we had our fifth meeting earlier this morning and I should have asked you something. If we get to a round of questions where we're not going to be able to do the full round, would you provide me the flexibility to truncate it, so that every party has an opportunity in that last round? I'm just looking to the members. Is everybody in agreement? Terrific.
Conservative
Greg McLean Conservative Calgary Centre, AB
Mr. Chair, if you can warn us ahead of time if our five minutes gets compressed to four and the other parties' time, potentially, to two.... Can you just let us know that before we start?
Liberal
The Chair Liberal Peter Fonseca
Yes. I will do that, Mr. McLean. It's more when we have a hard stop when that would happen.
Welcome to meeting number six of the House of Commons Standing Committee on Finance. Pursuant to the House of Commons order of reference adopted on December 2, 2021, the committee is meeting to study Bill C-2, an Act to provide further support in response to COVID-19.
Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. Just so you are aware, the webcast will always show the person speaking, rather than the entire committee.
Today's meeting is also taking place in the webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for the active participants remain the same. Staff will be non-active participants and can, therefore, only view the meeting in gallery view.
I'd like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen is not permitted.
Given the ongoing pandemic situation and in light of the recommendations from the health authorities, as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe, all those attending the meeting in person are to maintain a two-metre physical distance and must wear a non-medical mask when circulating the room. It's highly recommended that the mask be worn at all times, including when seated. You must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance. As the chair, I'll be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.
To ensure an orderly meeting, I'd like to outline a few rules. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either floor, English or French. If interpretation is lost, please inform me immediately and I will ensure interpretation is properly restored before resuming the proceedings.
The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak to or alert the chair.
For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the Board of Internal Economy's guidelines for mask use and health protocols.
Before speaking, please wait until I recognize you by name. If you're on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you're not speaking, your mike should be on mute. Remember that all comments by members and witnesses should be addressed through the chair. With regard to a speaking list, the committee clerk and I will do our very best to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.
To members and witnesses, when you have 30 seconds left in your questioning time, I'll signal you with this paper.
Now, it's my pleasure to be able to introduce our witnesses. We have with us, as an individual, Stephen Saretsky, a real estate businessman; from the Hotel Association of Canada, Susie Grynol, president and chief executive officer; from Income Security Advocacy Centre, Devorah Kobluk, senior policy analyst; and from the Union des Artistes, Sophie Prégent, présidente.
Witnesses, each entity will have up to five minutes to make opening remarks. Mr. Saretsky is not here yet, so we are going to start with the Hotel Association of Canada.
Ms. Susie Grynol, you have five minutes.
Susie Grynol President and Chief Executive Officer, Hotel Association of Canada
Thank you, Mr. Chair.
Thank you for inviting me to appear before you today.
My name is Susie Grynol. I'm the president and CEO of the Hotel Association of Canada. I am also the founder and co-chair of the Coalition of Hardest Hit Businesses, which represents over 120 different business associations in the tourism, hotel and event sectors.
COVID-19 has had a devastating impact on Canada's travel and hospitality sectors. It has hurt our businesses more than 9/11, SARS and the Great Depression combined.
The accommodation sector itself saw a 71% decline in revenue from April to November of 2020. Hotels located in Canada's major urban cores have been the hardest hit of the hardest hit, with occupancy rates averaging less than 17% over the last nine months of 2020.
Our sector has now lost the better part of two years of business, and we are at a breaking point. Government support to this date has been our lifeline, and I want to thank every member of this committee and your colleagues for working together to keep our sector alive. It's why we have an industry still standing here today, but without Bill C-2's tourism and hospitality recovery program for the coming winter and spring, there will be significant business failures and sizable job losses. As the rest of the economy recovers, the tourism industry continues to deal with variants, changing restrictions and capacity limits. Tourism remains the hardest hit, and it is not expected to recover to 2019 levels until 2025.
Small family-run businesses make up 99% of the tourism sector in Canada. Many people assume that hotels are owned by the recognized international brand on that hotel, but the reverse is true. For the hotels in your riding—and you probably know which ones they are—it's people in your riding who generally own these hotels. These are small business operators who have now spent all of their livelihoods and reserves trying to keep these assets afloat. They have taken on as much debt as they possibly can, and now they are on the brink of survival.
Major festivals, concerts, indigenous tourism experiences and business events have been cancelled. Events planned for 2022 are being reconsidered. Even immediate travel plans to Canada for Christmas or to come and ski over the winter are being called off due to new variants. Put simply, we are at a standstill.
Perhaps the most heartbreaking fact of all is that tourism lost 880,000 workers in the first two months of the pandemic. Today, we employ 350,000 fewer people than we did before the pandemic. With our slow recovery—compared to the rest of the economy—most of these workers have now permanently left our sector.
According to our June survey of the Coalition of Hardest Hit Businesses, 60% said they will go out of business without an extension of government relief programs through the winter of 2022. Simply put, if Bill C-2 doesn't pass, we could lose the infrastructure that supports our events businesses in Canada, the unique local attractions that enhance our visitor experience and the hotels and event spaces that anchor the travel sector.
We are grateful that all parties offered support to our sector during the election campaign. Every party committed support to our sector. Bill C-2 accomplishes the key goal of providing support to only the hardest hit of the hardest-hit businesses in order to keep them alive. This is an investment in a sector that will come back with a vengeance if given the opportunity. It will also help keep people in the workforce who otherwise would be laid off, many of whom are Canada's most vulnerable—women, young people and immigrants.
We are recommending the swift passage of this bill today, without amendments. Tourism and accommodation businesses must have immediate access to liquidity to get through the winter. Passing Bill C-2 in its current form will save thousands of businesses and jobs.
Travel will resume with a vengeance. Of this, we are certain. With the passage of this bill, we will have an industry still standing on the other side of this pandemic, and we cannot wait to welcome the world back to Canada.
I urge all members of this committee to vote in favour of this bill and pass it without delay. Our survival depends on it.
Thank you.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Ms. Grynol. You're right on time.
Now we have Mr. Stephen Saretsky, as an individual.
Liberal
The Chair Liberal Peter Fonseca
Mr. Saretsky, could you could bring your microphone closer to your mouth? Not too close, but at least.... Yes, go ahead.
Liberal
The Chair Liberal Peter Fonseca
It might be your mike input volume. Can you look to increase that? We cannot hear you very well.
Liberal
The Chair Liberal Peter Fonseca
Yes, that is much better.
Okay, can you hold it there and provide your remarks? You'll have five minutes.
If there is any other issue with your mike, we'll let you know. Thank you.
As an Individual
Okay, for sure. I can't speak too specifically on the tourist sector, the tourism segment. Obviously you guys are still facing different variants and lockdowns and whatnot and restrictions. That's certainly impacting the travel sector.
I am very active in the real estate space, so I'm speaking with people in the real estate space on a daily basis—tons of Canadians. That's where I'd probably focus my attention, but I think we're dealing with certainly some of the ramifications of the spending that's coming through. There are always knock-on effects, and I think that we have to be cognizant of those knock-on effects. Certainly we're seeing those showing up in the housing sector. National home prices are running at 22% year over year, back to back. In 2020, we had record home sales. In 2021, we're going to have another year of record home sales, so I think what we're seeing is that some of these excesses are sloshing around.
I think it's important. Obviously the bill is certainly needed in that there are sectors or segments of the economy that need help, like transportation and hospitality. As I said, I think it's dialing in those flows and making sure we're not overcompensating. That would be my only real commentary. Overcompensation, I think, is showing up in asset prices and particularly in the housing market. I think there's a crisis right now in that segment. That's where I'd focus.
I don't know if anyone has any particular questions on that aspect, but I'm certainly happy to comment on that further.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Saretsky.
We're moving now to the Income Security Advocacy Centre and Devorah Kobluk for five minutes.
Devorah Kobluk Senior Policy Analyst, Income Security Advocacy Centre
Thank you. Can I first confirm that you can hear me well?
Liberal
Senior Policy Analyst, Income Security Advocacy Centre
Thank you.
My name is Devorah Kobluk and I'm a senior policy analyst at the Income Security Advocacy Centre. ISAC is a specialty legal clinic funded by Legal Aid Ontario. Our mandate is to advance the rights and interests of low-income Ontarians with respect to income security and employment. We carry out our mandate through test case litigation, policy advocacy, community development and public education.
Thank you for the opportunity to speak to Bill C-2. We are pleased to see an extension of the Canada sickness and caregiver benefits, but we have some concerns. First, the new Canada worker lockdown benefit offers an inadequate rate of $300 per week and is inaccessible since no region in Canada currently meets the lockdown requirement. Workers continue to experience the fallout from COVID-19, and this bill offers next to nothing moving forward. We recommend retroactively extending the Canada recovery benefit at its original $500 rate until the economy fully stabilizes and the impacts of the omicron variant are clear.
ISAC is also very concerned that there are no provisions in Bill C-2 to address the ongoing crisis for low-income seniors. In early August we were flooded with calls in the legal clinic system from seniors who had suddenly seen their GIS reduced or eliminated in 2021 because they accessed the CERB in 2020. The confusion and panic that began over four months ago have not subsided. The situation for these seniors is desperate.
We understand the CERB was developed rapidly when the pandemic hit and the goal was to get money out the door quickly. What we do not understand is why this bill does not seize the opportunity to correct unintended consequences of CERB/GIS interactions.
This government knew of these interactions as early as May 2020 and stated last month that there issues of fairness and equity to consider before addressing concerns. What is fair and equitable about clawing back a poverty-reduction tool, the GIS, during the unusual years of a pandemic?
The seniors impacted are the poorest seniors in Canada. They supplement their below-poverty GIS income with part-time work to make ends meet. At an age when one hopes to not have to work, these seniors work. When the pandemic hit, like everyone else they accessed CERB because of job losses and so, as a high-risk population, they could isolate and stay safe. They were not informed of possible consequences to their GIS.
Further, a loss of GIS disproportionately impacts women and older, indigenous and racialized seniors. At the end of July, these were the seniors who lost up to $600 of their monthly income, or sometimes more, with no warning.
Among those impacted is a 68-year-old senior in Ottawa who worked as a self-employed dog walker prior to the pandemic. The pandemic caused her small business to completely collapse. She used CERB to supplement her lost income and to pay for groceries, personal protective equipment and taxis to medical appointments. The avalanche of unintended consequences has been devastating. She is now trying to survive on approximately $650 per month. Her rent has increased because her rent geared to income was recalculated while she received CERB. She may have to leave her home of over 14 years. She has lost her Trillium drug program benefit that helped her pay for medication, and she is being asked to wait until July 2022 for this situation to be corrected. She will not make it.
As it is for other seniors in her position, with every passing month it is becoming harder to pay for rent, for food when prices are rising, for transportation and for medical supplies. The risk of homelessness increases.
The minimal recourse available to individual seniors is confusing and slow, and it offers no guarantees. A lawyer in our clinic system in Thunder Bay was told by Service Canada that there would be no reassessment for 2021.
In another situation, a Toronto MP's office contacted both the CRA and Service Canada on behalf of a senior constituent only to be told that nothing could be done. That senior was given a list of nearby food banks. We need a systemic solution.
We now know that over 88,000 seniors are impacted. We know that the $438 million needed to fix this problem was already earmarked in the budget. This government can and must fix this problem for the most vulnerable seniors now.
ISAC has reached out to several ministers and to the Prime Minister and has received no response. We wrote an open letter at the end of October, which was signed by 106 anti-poverty community and seniors advocacy organizations from across the country, asking that the government, first, exclude CERB from the calculation of income and recalculate the GIS benefits for 2020-21 and, second, retroactively return the lost benefits and apply the readjusted benefit amount for the duration of the 2021-22 year.
Today I urge the Standing Committee on Finance to amend Bill C-2 to include these provisions and further to also exclude the CRB from calculation of income with regard to the GIS so that this problem does not continue into 2023. Failure to do so will only guarantee ongoing cruelty towards the country's poorest seniors.
Thank you.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Ms. Kobluk.
Now we will move to l'Union des Artistes for five minutes, with Sophie Prégent, the president.
Sophie.
Sophie Prégent President, Union des Artistes
Good afternoon, Mr. Chair.
Thank you so much for inviting me and giving me the opportunity to talk to you about the French-speaking cultural sector.
Who are we at the Union des artistes? First, the Union des artistes was founded in 1937. We are very proud that our union is a very old one. It is recognized by our governments and it represents dancers, singers, animators and actors. In any given year, we have 13,000 members, including affiliated and active members, of course.
Who has been most affected by the pandemic since March 2020? You probably know that the audiovisual sector got back on track relatively quickly in August 2020. So our members had six extremely difficult months. However, the sector most affected, as all unions and associations can tell you, was the performing arts. By that we mean dancers, stage actors, musicians, singer-songwriters, and so on. In a word, these are people who do not do audiovisual work. They are not in film, television or commercials. In normal times, these are the less well paid members, those in the Union des artistes who probably do not make much of a living. Then the pandemic came along and made that situation worse.
To give you an idea of our reality, before the pandemic, the audiovisual sector represented 53% of our members' income. Now it represents 67% of our income. Conversely, the performing arts represented 18% of our members' income in 2019, while the figure now is 7.5%. This is to say that those who used to make their living in the performing arts are now having difficulty doing so. Still today, the sector is not completely operational. When we compare 2021 to 2019, the performing arts sector is operating at 53% of its normal level.
So the audiovisual sector is operating very well, even better than normal, because there is some catch‑up to do. Some shows did not go on the air in 2019 because of the pandemic. Those productions are back on track. However, that is not the case for the stage. Even though theatres have opened their doors again, it is simply not true that they are operating as well as they did before the pandemic. Generally, casts are smaller and fewer people are in the audiences, still today. So those who were the most vulnerable before the pandemic have become even more vulnerable after the pandemic.
I would like to tell you about our members' psychological stress. I may say “our members” but it's broader than that. In January, February and March 2020, we conducted a survey with nine cultural associations of authors, musicians, television directors, dancers, singers, performers, and so on. I don't want to inundate you with numbers, that would not help at all. But I just want to share with you four statistics that affect, not just the members of the Union des artistes, but artists in general.
From the 26,000 artists and cultural workers surveyed, 63% of the respondents are experiencing high levels of psychological stress, 43.3% of them are showing symptoms of major depression, and 41% of them have considered or are still considering giving up their careers. In addition, income levels are so low that the number of artists who have to hold more than one job doubled during the pandemic.
Of course, the Canada recovery benefit, the CRB, was effective in meeting an urgent need. It was urgent because, basically, we do not contribute to employment insurance, so we cannot use its benefits. Now, the CRB is no more.
An emergency benefit must absolutely be introduced on a permanent, long-term basis. At the moment, there must be an emergency benefit that will compensate for the end of the CRB, which was abolished a few weeks ago.
Thank you.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Ms. Prégent.
Witnesses and members, we are moving into our rounds of questions now.
We'll start with the first round, with the Conservatives.
Mr. McLean is up for six minutes.
Conservative
Greg McLean Conservative Calgary Centre, AB
Thank you, Mr. Chair.
I would like to hear more. First of all, thanks to all the witnesses today for your excellent presentations.
Ms. Grynol, you touched on it a bit, but I think it requires some more explanation about how the actual cost structure of hotels is divided between the building owners, the building operators, the franchisees and franchisors. Could you explain that to us, so you can show exactly where the costs are continuing and where the revenues are not flowing in this period?
It would be instructive for this committee.
President and Chief Executive Officer, Hotel Association of Canada
It would be my pleasure.
In the hotel industry—the hotels that would be in all of your ridings—there's a misconception that this is a franchise model. The brands that you might see on those hotels don't actually own those assets. If that asset is generating revenue, they would take a percentage fee. It's a service arrangement, where they would take a percentage fee on top of what the asset would be making.
No one's making money during COVID, so, effectively, those brands—it's really a marketing agreement—that sit above those assets are stagnant. If you go down to the asset level, and you're now looking at the people in your community who own those assets, you probably know a lot of them and who they are. They have invested their livelihood into the local hotel. They purchased that hotel and that hotel is expensive. It's a large asset.
Over the course of COVID they've had to keep the lights on. You can't just shut a hotel down. You need to have insurance, you need to keep the lights on, you need to have maintenance and you need to have a core set of employees. Fixed costs have been the single biggest challenge for these operators, because there has not been enough money coming in the door over this sustained, 19-month period to pay for these assets.
The CERB program, which didn't include hotels originally, but did in the second iteration, has provided a percentage of support. There are still losses every month, but that's critical. The other piece is, obviously, our employees, who are the lifeblood of this industry. The wage subsidy program has been absolutely instrumental.
To be very clear, every single month, most of these properties are running a loss, which is why we are so deeply concerned about this winter period until the spring.
Conservative
Greg McLean Conservative Calgary Centre, AB
When you talk about fixed costs, can you illustrate for us which of those fixed costs would include something like municipal taxes?
President and Chief Executive Officer, Hotel Association of Canada
The tax is included in fixed costs. It's anything that you have to pay on an every-month basis. That's your tax, insurance, maintenance and lights. If you are operating at a very low basis, that's your food that you have to bring in. They're the costs that are non-negotiable. They're your non-variable costs that you have to pay, regardless of what is going on in the external environment.