Industry Committee on Aug. 10th, 2020

[Brian Masse, NDP, Windsor West, ON]

Thank you. That's important. I appreciate the witnesses being quick, so that I could hear from everybody. There are some other significant problems here.

I will go back now to Ms. Bell. With regard to the banking situation and funding, how significant is that, in terms of what you're hearing from your members? I ask specifically about that program as it is a micro example, but the bigger fix I think is what you're after, the banking and the borrowing practices. They have been predators. I've been fighting for credit card relief for Canadians since the beginning of this, and that's a whole other separate story, but maybe you can explain a little bit more about that, Ms. Bell.

[Charlotte Bell]

Liquidity is the biggest issue that we are grappling with right now. If you put 10 things in front of me and said, “but I can fix the BCAP or liquidity”, I would say please fix that, because that is what we're hearing from everybody.

As I mentioned, in the survey we did in July—and I know the Hotel Association has done other surveys also related to that program—people are waiting months to get an answer, any answer at all, and most people in the tourism sector across the board are being told, “You are too risky. We are not going to take the chance.” Some have even told us—

[The Chair, Liberal, Sherry Romanado]

Unfortunately, Madame Bell, you are over time.

[Charlotte Bell]

Oh, I'm sorry.

[The Chair, Liberal, Sherry Romanado]

My apologies.

We are now going to go to our second round of questions, and we will start with MP Richards.

I see you have a different headset, and I will ask if you can put the microphone a little closer to your mouth. You have the floor for five minutes.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Hopefully this will be better.

I ask that this maybe not count for my time, Madam Chair, so we can make sure that we're sorted here before I start.

Is the sound okay?

[The Chair, Liberal, Sherry Romanado]

Unfortunately, no. It is very scratchy again. We're going to see what we can do there.

With that, I will go to MP Rempel Garner for her five-minute round while we see if we can figure something out for your connection.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I just got thrown right into it there. Thanks, Blake.

Thanks, Madam Chair.

I'm going to start with Ms. Franc. My understanding is that the Calgary Stampede is a member of your organization. Is that correct?

[Christina Franc]

Yes, it is.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

My understanding, based on the testimony that Mr. Roy prepared with regard to your proposal to the government, is that the Calgary Stampede would not be part of that ask, should it go through. Is that correct?

[Christina Franc]

Yes, that is correct.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Is your organization doing anything to advocate for groups like the Calgary Stampede? My understanding is that the differentiation between what you're asking for versus what the stampede would qualify for is that it has some fixed assets that it uses on an annual basis. Is that correct?

[Christina Franc]

Yes. The Calgary Stampede has an expanded business model outside of the scope of what we represent, so it has its own efforts that it is taking forth.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

The stampede is a marquee tourism event. Even though it has an expanded business model, virtually all of its events this year have also been cancelled, which has put it in a pretty dire scenario. Have you worked with the stampede or are you aware of any other groups that are working with marquee events like the stampede that are in this type of a business model but bring, let's say...? I know that, in the case of the stampede, it's close to half a billion dollars of revenue to Calgary.

[Christina Franc]

We represent the industry as a whole. We can't speak for the stampede or for individual organizations as they stand. I do know they have their own efforts and they are having lots of conversations with the government, but in terms of marquee tourism events, we do have several that are members and some will be able to take advantage of this. Some do have their own efforts going on.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I just wanted to put on the record that, at a time when there's a lot of language from this government and special interest groups for my province to “diversify its economy”, events like the stampede and certainly tourism—I'm sure Mr. Richards will allude to this in his remarks as well—in areas like Banff have taken such a huge hit, and they are a big part of the Alberta economy.

I think there needs to be recognition that Alberta is suffering in so many different ways, and there really haven't been a lot of voices advocating for marquee tourism events in the province. I know you guys are certainly advocating for the festivals that are in a lot of different rural communities, including those in my province, which is great, but I just wanted to put on the record that the stampede wasn't part of that ask.

The next comment I'll make—I'm going to throw my notes aside—is that I've picked up on a theme among a lot of the presentations today, and that is that there is a lot of uncertainty in the industry and that's precipitating a few problems. First of all, I've heard—and I've heard this just in private conversations with other industry groups—that it's difficult to secure loans for tourism operators right now because of the uncertainty related to the lack of metrics around when border restrictions might be eased. I'm not advocating for that, necessarily, but there's a lack of metrics on what that would look like and under what time period.

The other thing I've heard with regard to loans is that banks just aren't willing to backstop them without government intervention. I'm just opening up the floor for verification that that is what you're presenting, that all the witnesses here today are presenting this to the committee.

[Susie Grynol]

Thank you for the question.

Speaking strictly from the hotel sector, there are two key challenges here. One is that the actual regulator for the banks, which is OSFI, has not rewritten regulations for COVID, so that means they're using an old set of regulations for COVID. You have to get appraisals, and it's this whole process. What they're saying is, “You're just worth 20% or 30% less.” We have heavy assets in the hotel industry, so they're just saying, “You're offside with your loan-to-value ratio and that means we can't authorize you to take on any additional debt”, notwithstanding the fact that the government is backing it by 80%.

Then you rightly pointed out the other issue, which is that there's no line of sight on when the cash flow will come back, so we're just being told, “Don't apply.”

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now go to MP Lambropoulos. You have the floor for five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you, Madam Chair. I'll be splitting my time with MP Longfield.

I apologize for my scratchy voice and for any issues there may be. Is translation working? That's the question I have before I begin. It is, okay.

My question could apply to all of our witnesses. I'd like to thank you all for being here today.

Obviously, there are programs currently in place that, if they were prolonged or if they were made broader, would be able to help a lot of the industries that are here today as witnesses. We also know that this may last longer than we originally expected. We may be expected to live with these conditions for the next two to three years, as was previously mentioned. In case of this, many industries across Canada have been looking for recovery strategies and have been looking forward on new ways to do business that would help them continue to survive amid this crisis.

Are there ways that your industries have thought of, going forward, that the government would be able to help you with and that are outside the box, that are not currently already being spoken about and that are not currently already in the works? If you were to think of a new way of doing business next year, is there any strategy that we'd be able to help you with at the federal level? Is there any kind of program you foresee as being useful in the future, in this new way of doing business?

[Clark Grue]

If I may jump in, on the business events side, as many of you will know, the opportunity is to do virtual conferences, and that's what a lot of planners are leaning towards. Those are not nearly as lucrative. They don't support the industry at nearly the same level, but they are a way to at least put a small band-aid on a challenge, on a big wound. That is a pivot that some of the planners are doing, and it is providing some revenue opportunities to stay alive and stay afloat.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

I think that's the case for many of the businesses. I know Uber Eats is something that's helped a lot of restaurants. There are definitely some online tools that have helped a lot of different industries. I know that a Zoom conference isn't necessarily expensive either. Is there anything that the federal government would be able to help you with in terms of a program that would take care of some of the more costly expenses in such cases?

[Charlotte Bell]

We could certainly use tax credits or grants to help those who need to spend on putting health measures in place. Of course, this is very costly, and hotels, conference centres, attractions, all businesses, airports and airlines have been spending millions of dollars making their companies safe for their employees as well as their guests.

None of what we're talking about here is going to save the industry. Again, these may be stopgaps, but they're not going to save the industry. The industry needs liquidity, and it needs it very urgently. I just wanted to make that point.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much.

I will cede the rest of my time to MP Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

For this part of my questioning, I'm going to continue on the theme of how the virtual format may help some parts of the industry but not others.

Mr. Roy, I'd like to direct my questions to you for starters. Guelph has the Improvisation Festival and the Hillside Festival, which were founded in Guelph but have gone virtual this summer. Really, the compensation for the artists comes from going to a festival and being able to market their hard products at festivals. Even though the event organizers may be able to get through this, the cultural sector and the artists themselves are having trouble getting compensated.

They certainly don't get well compensated for streaming services. The industry committee looked at that last term. Could you maybe comment on the importance of getting compensation to the artists?