Status of Women Committee on Nov. 17th, 2020

[The Chair, Conservative, Marilyn Gladu]

Thank you very much.

We're going to start our questioning with Nelly Shin for six minutes.

[Nelly Shin, Conservative, Port Moody—Coquitlam, BC]

Thank you very much. I'd like to thank all the witnesses who are here today. I so appreciate your presenting your statistics and recommendations.

We understand that, based on your statistics and our own personal observations, women are very important to the business sector and are a major influence in our local economies and the job market. It's very important that we're having this discussion right now.

I'm looking at the slide show with the statistics and the recommendations for small businesses most impacted by the pandemic. Regarding CEBA, the rent subsidy and the wage subsidy, is there any statistic or data, or do you have any rough estimates, Corinne, on how many have actually, tragically, had to close shop, and where these kinds of benefits might have saved them?

What's helpful to us, as those who will be going to the table to discuss these benefits and who sense the urgency and the needs, is to know where we could focus our attention. Could you speak to that?

[Corinne Pohlmann]

Well, I don't have data specifically for women entrepreneurs, but I do have data more generally in regard to the impacts of the pandemic. We're starting to update that data right now. This is back from July. We're going to be updating it again in a couple of weeks.

We have estimated that between 150,000 and 220,000 businesses will likely close as a result of the pandemic. Also in regard to that, we have been told through our surveys that about 56% of our members aren't certain that they can survive a second wave, so if they're forced to shut down a second time, there will be a good proportion of them that won't survive.

Where we're hearing the biggest issues is probably among the newer businesses, because there is no real assistance for them, and among those micro, smaller businesses, both of which tend to be more highly represented among female entrepreneurs. Those are the two, as I mentioned, where we see the biggest gaps still, and where I think where they're still struggling the most in trying to get through, especially if there is a second lockdown or if they're in a jurisdiction where that is happening. It's pretty grim, unfortunately.

We also don't have data on how many have already closed. That's the other part of this that is unknown at this point. I think there are a lot of what my colleague would call “zombie businesses” right now that are probably looking like they're still around on paper but are probably pretty much shutting down behind the scenes. Unfortunately, it's difficult at this time, but I would say that the target, really, if we're going to help, is going to be the newer, smaller businesses, which is really where a lot of women find themselves.

[Nelly Shin, Conservative, Port Moody—Coquitlam, BC]

Thank you.

I like what I'm hearing about helping women to sit down, receive consultation and revamp their operations to adapt to this COVID environment. I know that Ms. Labelle has mentioned some things, but beyond consultation, what are some tools or programs that would be helpful for women to retool, to repivot in a short time? We know that time is of the essence in this climate.

That's for both witnesses.

[Corinne Pohlmann]

I would say that first and foremost, it's about getting them through this current issue, the current pandemic. Essentially, making adjustments to some of the COVID relief programs is going to be important in order for them to make it through. First you have to deal with your immediate issues, and then you need to look at what you can do. That's usually financial support of some kind, whether to address business cash flow or to deal with your debt.

In terms of pivoting, certainly some businesses are able to go online. We've seen a huge transition. As an organization, we've also been doing what we can to help them get the training they need in order to adjust their businesses to a more digital space. I think that continues to be an important avenue for a lot of businesses, but not every business is able to do that. Those are the groups we have to think about a little bit more as well.

I do want to say that I'm constantly amazed at the ingenuity and creativity of so many small business owners through this pandemic and what they're doing to try to maintain the survival of their businesses. I think there are some incredibly good stories out there to share, regardless of gender, among many businesses I've spoken to that have been able to adapt in many different ways.

Is there a single silver bullet to this? No, unfortunately, I don't think there is, but I think that providing them with the financial support to get through this tough period is the place to start.

[Nelly Shin, Conservative, Port Moody—Coquitlam, BC]

Ms. Labelle, did you want to comment?

[The Chair, Conservative, Marilyn Gladu]

No, that's pretty much your time.

We'll go now to Gudie Hutchings for six minutes.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you, Madam Chair.

Thanks, people, for being here today. It's wonderful to see you. Thanks for your passion and what you do, especially in these crazy times. I think we all agree that COVID has certainly turned the world upside down.

Ms. Labelle, it's great to see your organization, because you can truly talk about the women entrepreneurship strategy, and I'm sure you know that $15 million was added to that. The basis of the strategy is the entrepreneurship fund itself, the ecosystem fund, the knowledge hub, and of course the expert panel. That was started long before the pandemic, so I hope the increase of $15 million is going to help organizations such as yours and others continue to do some great work.

Ms. Pohlmann, you made some great comments. I'm from a very large rural riding, and my colleague MP Shin was going down the line of questioning that I was by asking about what we have done and the success stories of those small businesses and female entrepreneurs who have turned the corner and are doing some great work. A lot of it is changing their product on the fly.

I liked your comment, your thoughts on how we can encourage more businesses to regroup, refocus and look at the new normal that we're coming to. I think we all agree that there will be a new normal.

I also liked your comment on the impact of rural small businesses operated by women. I too, in my riding, have many seasonal businesses, so I'd love your thoughts on the impact on rural seasonal businesses and how we can help women through all our programs.

The one that, to me, has helped most of the people who have fallen through the cracks is the RRRF, the regional relief and recovery fund. That has helped so many people in my riding.

I'd like your comments on rural businesses and how we help women in business retool and regroup in this new normal.

[Corinne Pohlmann]

First and foremost, when it comes to the more rural businesses, this pandemic has hit everybody very hard. In the rural ridings or rural areas of the country, I think it has been slightly less of an issue only because the small businesses in those communities are more well known. Individuals try to do what they can to help them in a bigger way than you'll find in some very large urban environments, which are completely decimated and ghost towns now.

That said, there's no doubt that it's still equally tough in the more rural areas. The issues are similar, though, in that it's again going back to the need for financial assistance now.

As an example, some of the recent announcements around the change in the CanExport program allow folks to not only get funding for export opportunities but also get funding to help them go more digital, to build a website or to be able to get involved in virtual summits. These are good things that we're trying to push out to our members to make them aware of so that they have options, because I think sometimes what's keeping some businesses from pivoting to another area is the associated cost. When you're already feeling as though you're so much in debt and your business cash flow is basically nil, pivoting to something new sometimes takes an investment that you just don't have. Therefore, making sure that there are programs out there that can help them figure out how to do that and can help them also fund that change will be very important.

I want to make one final comment on the regional relief and recovery fund. It has worked well in some circumstances and not well in others.

For example, it was meant to provide opportunities for those businesses that were falling through the cracks of the general support programs, and some of them don't do that, so I think some retooling there could help.

I know it has helped quite a number of businesses in the rural regions, which is great, especially the development corporation grants. Those have worked super-well. However, they were supposed to provide, for example, help to sole proprietors and those really microsized firms, and we've been hearing that they haven't necessarily been able to do that as effectively as we had hoped.

That's my final comment.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

I think, too, each region might be doing things differently, because I know it has been a huge help here in my region. I was really excited when we announced the universal broadband fund and the rapid release stream. I think that's really going to target the areas where we're going to see high-speed Internet get into these small communities and help people retool and get online.

One thing I keep trying to preach all the time is that as businesses are impacted and affected, shop local, buy local, support local, even if it is online.

Madame Labelle, I have a quick question for you.

What are some of your key recommendations to ensure that women return to work? What are the key things we need to address? We always talk about child care. What other ones do we need to address to ensure we do get women back in the workforce quickly?

[Sévrine Labelle]

In fact, what I am interested in is knowing what needs to be done to give a new boost to women's entrepreneurship. In the field, it is clear that we are headed towards a shortfall in terms of creating new businesses. We know that the pandemic is going to cause some businesses to close. It's impossible to quantify at this point, but there is no doubt that shutdowns will happen. If we combine these with the difficulty of creating new businesses, then the economy is really going to be hit hard. Moreover, women are more likely to be tempted to give up on the idea of going into business because of the problems created by the crisis and their responsibilities at home. This would lead to a decline in Canada's economy and the gap between men and women would grow even wider.

Various approaches could be taken. First of all, it is important to ensure that women entrepreneurs are given proper financial support when they are considering going into business, and that entrepreneurship be given another boost in the field to encourage the creation of new businesses. As for economic recovery plans, we need to ensure that they cover sectors where women entrepreneurs are prevalent. The economic recovery should not be thought of simply in terms of infrastructures, large projects and niches of excellence, but should also address economically essential sectors where women predominate.

We have also noticed in the field that there are business buyout opportunities, with many businesses currently not as healthy as they used to be. For some entrepreneurs the crisis was the straw that broke the camel's back and they have decided to sell. I think that women entrepreneurs might excel in this area. Indeed, we are currently seeing a drastic increase in the number of women entrepreneurs who are buying up businesses. I think that we have an excellent opportunity to relaunch the economy through buyouts by women. However, these women will need the proper financial tools and some coaching.

[The Chair, Conservative, Marilyn Gladu]

Thank you.

Over to Ms. Larouche now.

Ms. Larouche, you have six minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

I would like to thank the two witnesses. It's always interesting and stimulating to hear about women in business and women entrepreneurs. However, it is obvious that there are enormous challenges, which were in fact affecting women in business even before the crisis.

Ms. Labelle, I would like you to comment on a particular statistic. In Quebec, SMEs are considered part of our economic model; they are important and they represent a major share of our businesses. However, only 15.5% of SME's are owned by women while 66% are owned by men. What are the barriers and why do so few women own SMEs, which are a tremendous model for economic development?

[Sévrine Labelle]

That's a big question, and one that's not easy to answer.

It's important to note that although the percentage is low, it is rising. Today three times as many women than there were 10 years ago are interested in going into business, and the number of businesses owned by women has increased by 50% in four years. Not only that, but there is parity in the new generation of entrepreneurs. Why are so few businesses wholly owned by women compared to those wholly owned by men? It can be explained in a number of ways. Is it because the world of business lacks models? Going into business means entrepreneurship. But who comes to mind when we look for entrepreneurial role models? Usually white men. This shortage of women role models no doubt has an impact on young women who do not necessarily fit the male role models. And they often fail to reflect these young women's own values, their own way of doing business. This is a crucial factor.

For a long time, women have also come up against various barriers when they wanted to go into business. The first barrier, the one mentioned everywhere around the world, and which is still applicable today in Canada, is access to financing. Among women who want to start a business, 50% say that they have trouble obtaining financing. And yet, with so much capital circulating in the markets, how can this be possible? First of all, there may be a lot of capital, but it is earmarked for growth companies, those that focus on activity sectors identified as niches of excellence with strong growth potential. As we mentioned earlier, women tend to go into business in sectors that financiers consider risky. For example, financial institutions are reluctant to finance retail business activities, where women have a strong presence.

Secondly, gender bias has been around for a very long time. All kinds of studies and research papers have demonstrated that a project managed by a woman is much less likely to receive financing than an identical project managed by a man.

It is absolutely essential to address these systemic barriers if there is to be any real improvement in this small 15.5% of businesses wholly owned by women in Canada. Imagine what our economy would look like if women and men were to launch into business at the same rate and at the same level. In Quebec alone, it would mean that tens of thousands more businesses could be created if as many women as men went into business. It's the largest pool of entrepreneurial talent in Canada and it is imperative that we make the most of it.

[Andréanne Larouche, Bloc, Shefford, QC]

Figures like these would appear to indicate a bright future.

And yet, some of the programs that were introduced during the pandemic were perhaps not well suited to the circumstances in which women found themselves. I would like to hear your comments about the Canada Emergency Business Account, the CEBC, and the reasons why the measures introduced did not help women as much as we might have expected. What could have been done to improve these programs to help women get through the crisis?

[Sévrine Labelle]

Two statistics are worth noting: 42% of women entrepreneurs are actively seeking financing, and only 20% of women intend to use the government programs, including the Canada Emergency Business Account.

I will not repeat the explanations given by Ms. Pohlman, who based her comments on a very accurate survey that took size, level and lifecycle of the businesses into account.

Both startups and small businesses, had more trouble gaining access to these programs. And yet the government made a sound decision by seeking to reach as many segments as possible. That's why it worked with major financial institutions. While this is all very well, we know that many women entrepreneurs do not necessarily have a business account with financial institutions and that some women were not very successful in their dealings with them. Others became discouraged by the huge amount of paperwork and the administrative burden required by these applications.

What I would recommend is that organizations in Canada like Femmessor, and others like Women's Business Centres, be able to offer financing under the same conditions. We have all the tools needed to do so. It would have been very easy for the government to allocate a portion of this envelope to organizations like ours have a direct impact on women and that are not only able to provide such financing, but also to give them the coaching they need to get their business back on track, which the financial institutions do not.

[The Chair, Conservative, Marilyn Gladu]

Excellent.

Now we're going to go to Ms. Mathyssen for six minutes.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Madam Chair. Thank you to the witnesses.

This was mentioned briefly in the witness testimony, but I would like to go back. We've certainly heard about how the provision of child care and a national system of child care would consistently help women across the board, whether they're working or they are women entrepreneurs. Specifically for entrepreneurs, I know you've also talked about the great deal of stress they've had. We've heard about the stress of running a business, absolutely, but also about juxtaposing that with the stresses of the family and caregiving, both for children and also elderly family members, and how that falls specifically on women.

I'd like to hear from both of you about how the provision of a national affordable universal child care program could help those women who run those businesses so that they have the stability of that program.

[Sévrine Labelle]

Who is your question for?

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

My question is for both of you.

[Sévrine Labelle]

I will reply very briefly.

In Quebec, there is a universal daycare system and I must say that when these daycare services were closed because of the pandemic it was a disaster for women entrepreneurs. If these sorts of program do not exist already in the rest of Canada, I am convinced that they are absolutely essential.

And I would add that this ought not to be the only measure taken to support women entrepreneurs. In Quebec, this universal system does not address all the other needs of women entrepreneurs who want to succeed in business.

[Corinne Pohlmann]

I'll respond quickly to say that child care is always going to be an issue for female entrepreneurs. It's something we also saw in a greater degree during the pandemic, given that kids were out of school at the beginning of it. That really highlighted a bit of that issue.

Whether universal child care—I know you said “affordable”, and that's an important part of this—should be part of a mandate going forward is something on which we would have to check with our own female entrepreneur members and see how they think about it. I think having something that's affordable so that they'd be able to put their kids into those programs would certainly help.

I will also mention, though, that a lot of women entrepreneurs go into this line of business because they want to be able to stay at home with the kids. Sometimes the ability to do that by running their own business is there as well. I think there are two sides to it.

At the same time, it's something that we certainly have to look at. That was really brought home at the beginning of the pandemic, in terms of what the kids not being in school meant for a lot of individuals and women who had to then deal with that and balance not just their jobs or their businesses but their child care as well.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Yes, I know. I spoke with quite a few women on Zoom calls. You could hear the kids in the background. That certainly did impact their ability to manage and cope.

Also, in terms of the idea of those supports that the government can provide, we know that a national pharmacare program could save employers $600 per employee because the government, at a more affordable cost, could provide the coverage that normally is provided if employees are lucky and if employers can also afford to provide those benefits.

In terms of a national pharmacare program and a national dental care program, those savings could certainly have a great deal of impact for your members. Could you speak to that as well?

[Corinne Pohlmann]

Yes. Pharmacare is interesting. A lot of small business owners don't have coverage for themselves because they can't afford it or for whatever reason. They'd love to offer it to their employees, but when you're microsized, it can be very difficult to find health care and pharmacare coverage.

Our members are actually quite mixed on it. I think there's actually more support for having something. The reason it's mixed is understanding how it will be paid for. That's the piece that is the big unknown question. The concept and the principle of it are supported by many small business owners because they themselves would like to have greater access to pharmacare types of drugs or whatever the case might be. The thing that holds them back is understanding how it's going to be paid for. There have been proposals in the past for things like a payroll tax, or there could be....other ways that it gets paid for. That's the one missing piece of the puzzle that we would need to know before figuring out exactly how they feel around a pharmacare program.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madame Labelle, would you comment?