Finance Committee on Feb. 2nd, 2023

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thank you, Chair.

Thank you to the witnesses.

Ms. Grynol, we know how hard the tourism industry was hit in 2021. From speaking with many people from the hotel industry, and especially the travel industry, we know that women and single moms were hit the worst.

A lot of the complaints back then were that the vaccine mandates for travel were a big issue. People who were vaccinated, and even those who were unvaccinated, were going to countries that had looser restrictions at the time. That was one of the biggest complaints, especially from the single moms who got hit the worst during the pandemic.

In 2021, we saw that vaccines were available in Canada. We saw countries with lower vaccination rates than Canada lifting their restrictions at the time. We also saw an unnecessary election called by the Prime Minister. At the time, it was okay to be around big gatherings and all of that. Those people from the tourism industry were asking how come it was okay for those big gatherings to happen, while they were getting hit with restrictions that limited how much money they could make, because people didn't want to come to Canada because of the restrictions?

All of that, along with a report from the court that said Canada’s top health expert did not recommend a vaccine requirement before boarding a bus, train or plane, point to this being more political science than actual science.

How hard was the industry hit?

That's the first question, because we see that the requirement for vaccinated passengers on planes and trains was lifted only on October 2022, after a summer that could have been very successful for the industry.

How bad an impact did those mandates have? Let's start with that.

[Susie Grynol]

They were central to our industry being closed for that period of time. I think all Canadians believe that many of those restrictions were required at the time with COVID, and we certainly supported them. We did what we needed to do to keep Canadians safe.

You are correct that Canada did open later than some other countries did. In our sector, that's why we were last to market to hire people back. That's why many of our employees shifted to other sectors that were open over that time period. Other countries did open before Canada, so that has also put us at a competitive disadvantage, because they are way ahead of us in terms of investing in their tourism growth strategies, to the tune of $2 billion over three years in France, $1.2 billion in Australia and 1.6 billion euros in Spain. There is a wonderful moment here for Canada to rebuild our tourism sector, which was deeply devastated, at a time when demand for Canada is at an all-time high.

Those investments would also be worthwhile when we think about the looming recession. Historic data would show that the tourism and hospitality sector is effectively recession-proof, in the sense that it's not one of the things that get cut. As we are looking at a recession and we are an industry that is poised for growth, we are truly hoping the government will make the kinds of investments we need to see to build the next Fogo Island Inn and to invest in those attractions so we can welcome the world to Canada and meet our growth potential.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Do you have numbers on how much loss there was, especially last summer, because people did not want to come to Canada or because they couldn't get into Canada because of those restrictions?

[Susie Grynol]

Last summer the sort of recovery in travel was driven by domestic travel. We really just had Canadians circling around Canada. Our international visitation measured by spend was down by 45% over the summer period. We did have some traffic come back, particularly our U.S. visitors, who would get in the car and come over—what we call “rubber tire traffic”—but we did miss out on the international visitors last summer for sure.

There were also impacts on those big global events that would come to Canada. They looked at Canada and just saw that we were not open for business over that time period. That's why we have included a bid fund in our recommendations. It's so that we can attract back some of those major events that have overlooked Canada in recent years.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Now we go over to the Liberals with MP Chatel for five minutes. Go ahead, please.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

I'm pleased to see all my colleagues on the Standing Committee on Finance again.

Ms. Grynol, it may sometimes be difficult to hear what you have to say because it reminds us of the hard times we experienced over the past two or three years. In addition, members of your association who work in the tourism sector here in Ottawa went through the trucker convoy and occupation. That made things much worse still. I've spoken to some members of your association, and they told me how difficult it was for the hotel and conference industry to get people coming back to Ottawa. We're working on that, obviously.

Thank you for being here with us, for your energy and for your confidence in our ability to get through this together and build the economy going forward. We talked a lot about innovation. I hope you can inspire my Conservative colleagues who have stopped believing in our great country and the resilience of Canadians. I hope you will inspire my colleague who said earlier that he had lost faith in Canadians.

I have not. I believe Canada is well placed and has everything it needs to prosper in the economy of tomorrow: we have the people, the natural resources and a democracy.

I'd like to talk about what Mr. Lansbergen said earlier. We even have a sector that is one of the pillars of the 21st century economy: I'm talking about feeding the planet and ensuring food security.

Mr. Lansbergen, thank you for your comments and proposals about fishing and the fact that fish are a key protein.

Having said that, my question is for Ms. Verwey.

You said earlier that the agricultural clean technology fund was an excellent way to position our farmers in the 21st century economy.

Can you share your recommendations with us? You seemed to have some, but you did not submit them in writing. You could explain them to us, and perhaps even submit them in writing.

[Jill Verwey]

Yes. Thank you.

Thank you again for the expansion of that fund for clean tech. It's quite limited in the amount of money that is available, in that smaller operations were not able to access the funds due to, I guess, the stopgap of looking at larger operations, larger applications.

I certainly could provide additional information as to the number who wouldn't be able to access that program. Even for the large-scale operations or at the modest scale that we have, certainly a large number of operations that would incorporate maybe a larger grain handling or grain drying operation would fall below the 10,000 acres.

I think there is definitely a gap there. A number of smaller operations would not have been able to access it and take advantage of making some of those technical advances in their operations to make them more technical going forward.

[Sophie Chatel, Liberal, Pontiac, QC]

If you could submit that information to us by this weekend, it would be useful to us. It's a great program and I'd like to see it work for all farmers.

Ms. Grynol, the brief you submitted to the committee is about the temporary foreign workers program, which is very complex, especially for small employers. That's what I'm hearing too. I really hope this program will address the labour shortage, and I have high hopes for the trusted employer system as well.

I read your recommendations, but do you have any more specific recommendations?

In your brief, you say that automatic admission should be anticipated for your sector. Why do you think so?

If you don't have enough time to complete your response, please send it to the committee in writing.

[The Chair, Liberal, Peter Fonseca]

You have a few seconds for your answer.

[Susie Grynol]

Did you say that I have a few seconds?

[The Chair, Liberal, Peter Fonseca]

Yes.

[Susie Grynol]

We have very technical recommendations that we would be happy to provide to the committee on this front.

I do want to acknowledge the government's shift on that program to prioritize our sector in having now allowed 30% for our workforce. I will say that we have never, ever gotten there, because of processing, but we have very technical recommendations on how we could do that. They do include the trusted employer program, because at the end of the day, we know that protecting international workers coming into this country is a priority. Our hope is that they come in and build a life in Canada. We are a large employer of new Canadians and we take great pride in supporting new Canadians. Whether they have language skills or they don't, they can find a home in the hotel industry.

[The Chair, Liberal, Peter Fonseca]

Thank you. You were quick with those seconds.

Thank you, MP Chatel.

Now we will move to the Bloc and MP Ste-Marie, please.

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

Thank you, Mr. Chair.

Mr. Mueller, we've taken note of all your pre-budget requests. Of course, it all revolves around the need to have a comprehensive Canada-wide strategy for your industry, just as other countries have a strategy like that.

I would like to talk about a more specific need with you. We know that throughout the aerospace ecosystem, the ability to certify aerospace products is a critical issue.

Can Transport Canada currently provide certification, and if not, what needs to be done?

[Mike Mueller]

Thank you for the question. It's a great question, and this is a great concern that we do have.

Transport Canada certification is an absolute crown jewel in Canada, and it really contributes to our competitive advantage internationally. If we can build a plane here, which we can—we're one of the few nations that can build a plane from scratch, which is something we should be celebrating—a big part of that is Transport Canada being able to certify those planes and the parts that go into planes and things like this.

As the industry is committed to net-zero goals—we were signatories to the net-zero action plan from Transport Canada—we see new and emerging autonomous technologies out there. We see the funding that is coming through on the ISED side also, through innovation, but as we innovate and as we look towards the sustainable future of aerospace, we really need Transport Canada to keep pace to maintain that competitive advantage that we have here nationally, and also the international global competitiveness.

If you'll indulge me, I just want to mention, going back to the luxury tax, that on that particular piece, I forgot to note that the U.S. introduced a similar luxury tax in 1991, and they repealed it in 1993. I'm hoping that in 2023, 30 years later, we could see aircraft being removed from that luxury tax here in Canada also. Hopefully, we've learned something in 30 years.

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

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we go to MP Green for two and a half minutes. Go ahead, please.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you.

There are certainly lots of interesting interventions in the pre-budget discussions. I'm going to continue on with my exchange with Campaign 2000.

Ms. Sarangi, thank you for taking the time to present to the committee. The work you do is so important for vulnerable Canadians across the country.

You mentioned a CERB low-income repayment amnesty as one of your budget asks, but you have more suggestions for the government, and you mentioned some of those in your opening statements. I'm hoping you can use the remainder of my time to highlight what those are and why those matter for vulnerable people across the country, or, I should say, for people made vulnerable by bad fiscal policy across the country.

[Leila Sarangi]

Thank you.

I agree that vulnerable people are valuable and they are made vulnerable by the systems we have in place. A policy system is a choice, so we can choose different and better.

One of the recommendations in our submission, which is described in detail and which I do want to highlight, is with respect to a supplement to the Canada child benefit. We know that the Canada child benefit worked to reach families and children in poverty when it was first implemented, but there has not been an increase in the base amounts for that benefit. Our annual research shows that it is stagnating. It's losing its power to reach children, especially those who are in deep poverty. Even with it being indexed to inflation, the child benefit is not reaching those families who are on social and disability assistance programs. It's just flatlined now. A supplement targeted towards those families would drastically and immediately reduce rates of child poverty.

The other recommendation I will quickly highlight is that anybody who does not file a personal income tax form does not get any benefits, and oftentimes those people are very marginalized. A report last year from the Auditor General found that CRA struggles to reach hard-to-reach people. We are asking the federal government to research and pilot a parallel cash transfers program that would work through community-based organizations such as Campaign 2000 members that have relationships in communities with these folks to get cash benefits to people who are left outside of the personal income tax system.

In our submission, we also have recommendations around affordable housing, full pharmacare that includes medicare and vision care, and access to child care, and we're building out a national system to make sure that child care is affordable for people who really can't pay $10 a day so that there's a zero-to-$10-a-day sliding scale fee. It's all written out in our budget submission to you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Green.

Now we go to the Conservatives and MP Morantz for five minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair.

To our fine representatives here from KAP, Ms. Verwey and Mr. Hornby, as I said earlier, we have kind of a perfect storm of bad news. We have made-in-Canada inflation. We have made-in-Canada high interest rates. We have a punishing carbon tax that the government wants to triple, triple, triple, and excessive regulations around fertilizer. There's so much ground to cover, and I have only a couple of minutes.

My first question is this: Don't your members just wish that the government would get out of the way and let farmers do what they do best—grow food and feed the world?

[Jill Verwey]

Thank you for that comment.

Yes, I think the sentiment of the majority or of all producers is that what we're doing is something we have a lot of passion for. We do it well; we do it efficiently, and we certainly do it sustainably because we want to ensure that the next generation will be here to farm in the future. The majority of these regulations that have been imposed do hinder our ability to do that, since we are price-takers in the market. Without a strong bottom line, we don't have money to invest and to innovate and to ensure that we have a future for our children and the next generation.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you.

I wonder if you could comment on the carbon tax in particular. I know it's been particularly punishing to small family farm corporations, and now the Trudeau Liberals are planning on tripling it on April 1. Can you give some examples of the real-life impacts on family farm families of having to deal with this inequitable and unfair tax for which their corporations receive no climate action incentive?

[Jill Verwey]

I think the one thing to emphasize is that the tax was put in place to change behaviour and to discourage the consumption of carbon-based products. The two things that have been highlighted in Bill C-234 with regard to natural gas and propane use are two things that are needed on our farming operations that we can't change.

The care of our animals and drying of grain are two things that have to be done in our operation. Unfortunately, with the carbon pricing in place, they pose inhibitive additional costs on a farming operation. It is just one more thing adding an expense to our bottom line. It also reduces the amount of money we have available to make any further changes or innovation in our farming operations and while continuing to do our daily operations.