THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, May 18, 2021
The Standing Senate Committee on National Finance met by videoconference this day at 9:30 a.m. [ET] to study the subject matter of all of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators, before we begin, I would like to remind senators and witnesses to please keep your microphones muted at all times unless recognized by name by the chair. Should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk and we will work to resolve the issue. If you experience other technical challenges, please contact the ISD service desk with the technical assistance number that was provided.
[Translation]
Honourable senators, the use of online platforms does not guarantee the confidentiality of speeches or the absence of eavesdropping. Therefore, when the committee meets, all participants must be aware of this and limit the possible disclosure of sensitive, privileged and even private Senate information.
[English]
Participants should know to do so in a private area and should be mindful of the surroundings in order to keep the conversations and also to respect the rules and regulations.
We will now begin with the official portion of our meeting, as per our order of reference received by the Senate of Canada. My name is Percy Mockler, senator from New Brunswick and Chair of the Standing Senate Committee on National Finance. I would like to introduce the members of the Standing Senate Committee on National Finance who are participating in this meeting: Senator Dagenais, Senator M. Deacon, Senator Duncan, Senator Forest, Senator Galvez, Senator Klyne, Senator Loffreda, Senator Marshall, Senator Moncion, Senator Richards and Senator Smith. We also welcome senators who will join us later.
I wish to welcome all of you and those across the country who may be watching on sencanada.ca. This morning we continue our study of the subject matter of all of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures, which was referred to this committee on May 4, 2021, by the Senate of Canada.
[Translation]
To begin, we welcome Dan Kelly, president and chief executive officer of the Canadian Federation of Independent Business; Shannin Metatawabin, chief executive officer of the National Aboriginal Capital Corporation Association; and Alla Drigola, director of Parliamentary Affairs and SME Policy of the Canadian Chamber of Commerce. She is accompanied by Patrick Gill, senior director of Tax and Financial Policy. We also have with us Tabatha Bull, president and chief executive officer of the Canadian Council for Aboriginal Business.
[English]
Welcome to all of you and thank you for accepting our invitation to appear before the Standing Senate Committee on National Finance. We will hear opening remarks with the time frame of five minutes for comments. First, I recognize Mr. Kelly to make his presentation, please.
Dan Kelly, President and Chief Executive Officer, Canadian Federation of Independent Business: Thank you, senator. Thank you to all of you, senators, for inviting CFIB back to this committee. It feels just moments ago that I was with you and, in fact, many of my fellow panellists, to share our thoughts on the previous budget implementation bill. Here we are once again.
Today CFIB is marking the one-year anniversary of the Prime Minister’s unkept promise to extend COVID support programs to new businesses. Thousands and thousands of businesses that came online in 2020 — often that were started in 2019 but actually physically began operations in 2020 — have been unable for the entire pandemic to receive a nickel of support from the federal government, unlike their other business counterparts.
On May 19, 2020, the Prime Minister promised he would fix this problem and not a stitch of work has been done. It’s deeply shameful that this has happened. I urge you, senators, to continue to push for access by these businesses, some of which are the most vulnerable businesses. They are often led by new Canadians, Indigenous people and women. It is something we need to fix and quickly.
I sent the clerk a deck of slides and I believe it has been shared with you. Things have gotten worse in the last couple of weeks since we first met for small- and medium-sized firms. Right now, the number of small- and medium-sized businesses that are fully open, has actually dropped to 54% across Canada, with the majority of small businesses in Ontario and Nova Scotia right now fully or partially closed. That obviously is deeply concerning as more provinces have enacted fresh lockdowns or extended lockdowns across the country.
Only 40% of small businesses on slide 3 are at full staffing levels. Most worrisome, less than a third, 31% of small businesses, are at normal levels of revenue. Obviously that makes it very difficult for them to successfully operate.
There are many pandemic-related concerns, most notably around the economic repercussions of the pandemic on small businesses and the economy more broadly. The stress, though, that business owners are under is incredible. While many of us are starting to be a little bit more optimistic as we look at what’s happening in the U.S. and the U.K. as the economy starts to get back on its feet in those countries, Canada, sadly, is moving in a very negative direction right now with the fresh lockdowns.
Just to refresh your memories, one in six businesses we believe are at risk of permanent closure. That’s 180,000 businesses across Canada who we believe will shut their doors forever before the end of the pandemic. That would take with them 2.4 million private sector jobs.
The average small firm prior to the third wave took on $170,000 in additional debt. That’s debt they will carry with them through the recovery phase that we hope to get to. While there have been many, many useful government support programs, I just want to share with you some fresh data.
On slide 8, we asked our members, small business owners, whether or not the support programs, the wage subsidy, the rent subsidy, the CEBA loan program, provincial grants, for example, whether or not they are helping small firms make up for their lost revenue. If you can believe it, almost two thirds of businesses said that the government support programs [Technical difficulties] — the shortfalls that they have experienced.
[Technical difficulties] — worry about this. There are a lot of positives in the budget. I do want to speak to that in just a second. My Internet connection it’s telling me is a little bit unstable. However, the 2021 budget did have some good news for small business. It extended the wage and the rent subsidies into the fall. I do note that in the summer the wage and rent subsidies are supposed to drop in their generosity way too soon given how long the pandemic restrictions are in place.
There is a new hiring incentive, the Canada Recovery Hiring Program. We quite like this program. We called on Minister Freeland to implement it. The immediate expensing of eligible property acquired by a small business, up to $1.5 million, that’s really good news. We like that. Also, the directional commitment to reduce credit card processing fees for small business is a really good plan.
In conclusion, I want to note that there are some massive gaps. This is my last slide, slide 11, for those that have the deck. There have been no fixes, sadly, in the budget to many of the emergency relief programs. There is still no access for those new businesses that opened their doors after March 1, 2020. The rent subsidy program still has major challenges. It excludes those that have a holding company and an operating company in most circumstances, and it has a requirement that you have to pay your full rent in 60 days, putting it out of reach and making it less usable for many businesses. There are no fixes to the gaps in the CEBA loan program for those that don’t qualify under the non-deferrable expense scheme, nor is there another third round of funding that we believe is necessary.
The Chair: Mr. Kelly, I’ll have to stop you, please, and thank you for providing us with your document. It’s part of what is being presented. I want to make sure we have time for senators to ask questions.
I will now move immediately to Mr. Shannin Metatawabin to make his presentation. Mr. Metatawabin, the floor is yours, please.
Shannin Metatawabin, Chief Executive Officer, National Aboriginal Capital Corporations Association: Thank you, senators, for the opportunity to speak to you today. This is an important time to discuss the budget. My name is Shannin Metatawabin. I am from Fort Albany First Nations of the Mushkegowuk nation. Before I start, I want to acknowledge that I am making this call from the traditional territory of the Mi’kmaq. I am a CEO of the National Aboriginal Capital Corporations Association, or NACCA. This is a network of Indigenous business development lenders that has amassed 50,000 loans to First Nations, Inuit, and Métis businesses, totalling $3 billion plus for more than 35 years. All the while, they’ve been managing a declining government investment and scarcity of loan capital.
Last year we delivered the Indigenous business support program to support COVID businesses and were assured that there would be a recovery strategy. This year, there is no recovery strategy announced in the budget. So those businesses that were supported last year have no supports this year. Forty per cent of them said they couldn’t take on any more loans, and about 44% of them said they couldn’t survive more than six months. So we’re looking for the government to continue looking at that as an option.
Thank you for the invitation to speak on this budget. I think it’s a turning point for the future. Let’s consider the investment: $18 billion for Indigenous people overall, with $64 million for Indigenous businesses. Budget 2021’s investment in Indigenous people is both significant and unprecedented. There is an additional $42 million over three years for NACCA’s Aboriginal Entrepreneurship Program, ensuring the AFI network will be prepared to issue new loans under the Indigenous Growth Fund. There will be $22 million over three years to continue developing the Indigenous Women’s Entrepreneurship initiatives. The investment will allow our network to tailor its lending to Indigenous women seeking to expand or start their businesses. Renewal of the Investment Readiness Program will enable development of the Indigenous Growth Fund, or IGF and promise to promote the network’s capacity.
Last but not least, there is a commitment to ensure Canada will meet its procurement target of 5% of federal contracts. These commitments, once met, will be crucial to making Indigenous prosperity a reality.
The 2021 federal budget shows that Canada has begun to receive the message about the need to include Indigenous people in this country’s prosperity. NACCA has also created an Indigenous Growth Fund, Canada’s newest and largest Indigenous social impact fund. Launched in April 2021, the fund is not a government program. Rather, it was designed by NACCA, working with government, and it provides capital tailored to the lending practices of the AFIs. The IGF raised $150 million from government partners in its first round, yet it also provides an investment vehicle for social impact investors seeking to make their own contribution to reconciliation. Once fully used, the IGF will increase AFI lending by $75 million annually, allowing loans to roughly 500 Indigenous businesses. This fund will help set the stage for concrete action, meaningful Indigenous engagement.
It’s important for everyone to recognize the impact Indigenous people have on Canada’s future prosperity. Government expenditures on Indigenous services has grown from $7 billion in 1996 to $17 billion in 2019, an increase of 143%, which is unsustainable over the long term. True sustainability lies in recognizing that investing in the Indigenous economy now will slow this trajectory and lead to $100 billion GDP impact on Canada’s economy.
How is this an investment? From every loan, health indicators increased by 20%. Mental health indicators increased by 52% and life satisfaction by 72%. There are 3.32 jobs created per loan, and income doubles. For every dollar provided to an Indigenous business, $3.6 hits the GDP and $1.4 is returned to the Treasury department in social spend savings. That’s quite significant and goes a long way to providing the economic boost the Indigenous community needs to provide future prosperity for itself and the Canadian economy.
We, at NACCA, will respond in kind with government whether federal departments, Crown corporations or regional development agencies. We will work to ensure these new investments pay dividends for Indigenous businesses people, communities and economies for decades to come.
With private partners, we will offer a safe investment vehicle allowing them to show their commitment to economic reconciliation. With our Indigenous clients, large and small, our network continues to work as it always has, loan by loan, business by business. AFIs will support their visions and invest in their strengths. At the end of the day, Indigenous business owners are the ones who will build prosperity in our communities. They will help this country to realize a new vision of shared prosperity. Meegwetch.
The Chair: Thank you very much, Mr. Metatawabin.
The third person is Ms. Drigola. The floor is yours.
Alla Drigola, Director, Parliamentary Affairs and SME Policy, Canadian Chamber of Commerce: Thank you. Good morning. It’s good to be back before the committee. My name is Alla Drigola. I am the Canadian Chamber of Commerce’s director of parliamentary affairs and SME policy. I am joined today by Patrick Gill, the senior director of tax and financial policy.
During the pandemic, the federal government rolled out a number of excellent programs that have helped keep thousands of businesses afloat and millions of jobs intact. The update to these programs in the budget, including the extension CEWS and CERS, the enhancement of the Canada Small Business Financing Program and the introduction of the new recovery hiring program, are critical to helping businesses stay afloat during this ongoing third wave.
But businesses are frustrated by the absence of a concrete and clear reopening plan from the government, particularly for the hardest-hit sectors. Instead of planning and preparing for reopening, businesses are stuck in a holding pattern with little to no information. The wage subsidy, the rent subsidy, the liquidity programs, BCAP and HASCAP and the partially forgivable small business loan CEBA are all excellent programs that are necessary for the survival and recovery of business, but they are not a reopening plan. They do not tell businesses what indicators to look for, what restrictions will be lifted and when, what a border reopening might look like or how vaccine passports might work for travel or potentially even consumer activities.
The Canadian Chamber’s business-led recovery initiative has done a lot of work in this space. We have put out guidance and resources for businesses on how to safely reopen their workplaces, how Canada could successfully and safely restart travel, what to think about when it comes to digital health credentials and more.
Most recently, we partnered with the Government of Canada to help provide rapid tests to small- and medium-sized businesses across the country in tandem with our provincial, territorial, and local chamber networks.
But just as Canada cannot keep growing the deficit unconditionally, businesses cannot operate on debt forever. A successful reopening plan that permits businesses to return to operations in a safe and sustainable way is the best way forward for all. A reopening plan must include clear metrics we must reach for various federal government restrictions to lift and what new tools will be introduced and when. A successful reopening plan should include targeted support for the hardest-hit sectors, including maintaining current rates for CEWS and CERS into the fall and likely even beyond, among other measures. We should avoid replicating the inconsistent patchwork of lockdown restrictions that businesses in different parts of the country faced during the pandemic when looking at our reopening plan.
The federal government has a clear leadership role to play on this front, and we encourage them to continue working with provinces to get this plan announced and rolled out as quickly as possible.
Beyond the transition from pandemic survival to recovery, a number of structural challenges remain that prevent Canada from reaching its full recovery potential.
I will now turn it over to Mr. Gill to speak to some of the Canadian Chamber of Commerce’s recommendations for Canada’s economic recovery.
Patrick Gill, Senior Director, Tax and Financial Policy, Canadian Chamber of Commerce: Good morning, senators. The budget’s focus on growth and jobs was an important step toward economic recovery, yet our country’s drivers of growth need to shift from public spending to private investment to get Canada’s finances under control. While the government’s plan reduces deficits over the coming years, it depends on meeting growth targets that will be difficult to achieve and exceed, unless Canada improves its competitiveness and level of economic activity.
Our businesses, from Main Street to C Street, are seeking a clear and predictable plan to help them lead Canada’s economic revival. Businesses are ready to kick-start our shared recovery, but they need the government to do its part in creating and encouraging the business environment. In this regard, there are several aspects of the budget that could be improved to spur Canada’s economic revival.
First, unlocking business investment for recovery in job creation — for instance, while the budget moves forward with accelerating capital cost allowances and deductions for Canadian-controlled private corporations on a temporary basis — that measure could and should be extended to publicly traded firms, as is typical under the Capital Cost Allowance, or CCA system. This, for instance, would help marshal the broadest scope of business investment.
Second, the government should be more ambitious in its approach to fixing Canada’s costly and burdensome regulatory environment. Moreover, it should be cautious in how and when it adds new complexity to its regulatory frameworks. The proposed new regime for interest deductibility is one example of adding new complexity onto existing complexity, which generally has served Canadians’ interest well.
Finally, moving toward a fiscal anchor rather than fiscal guardrails is needed to guide and control future expenditure choices. With significant spending committed in the medium term, a fiscal anchor is needed to impose discipline over fiscal policy decisions over the long term. Public debt can never be permitted to put public services at risk. Left unmoored and unchecked, public debt risks are caught up by inflationary and credit pressures. Thank you, and we look forward to our discussion.
The Chair: Thank you. To conclude the presentations, Ms. Bull, the floor is yours.
Tabatha Bull, President and Chief Executive Officer, Canadian Council for Aboriginal Business: Thank you very much. [Indigenous language spoken]
Good morning. It is a pleasure to be back here again. As president and CEO of the Canadian Council for Aboriginal Business, I want to thank you, Mr. Chair, and all the distinguished members of the committee for the opportunity to provide you with my comments and answer any questions.
It provides a true point of optimism to see the voices of Indigenous businesses be included here alongside our business association colleagues. I am speaking to you from my home office, and I acknowledge the land of the traditional territory of many nations, including Mississaugas of the Credit, Anishinaabe, Chippewa, Haudenosaunee and the Wendat peoples.
As a proud Indigenous woman leader whose first career was in a non-traditional environment, I would like to acknowledge the historical significance of Bill C-30 being the first budget presented by Canada’s first woman Minister of Finance. In her address, Minister Freeland acknowledged that Indigenous people have led the way battling COVID-19, and that success is a credit to Indigenous leadership and self-governance. The budget document reiterated that no relationship is more important to the federal government than the relationship with Indigenous people.
There were several measures announced in the budget that, if adopted, would support Indigenous health and well-being, including investments in health care, education and the National Inquiry into Missing and Murdered Indigenous Women and Girls. I want to note that these investments are imperative and required to begin to close the vast social and economic gaps that exist, but I want to speak more today on the supports for Indigenous prosperity.
We need to look beyond closing the gaps and look forward to supporting the growth of Indigenous economy. This is an economy that will close gaps on its own, through employment, environment and social responsibility and through the creation of intergenerational wealth and hope.
The budget proposed several initiatives to build infrastructure and support Indigenous economic growth. In addition to the programs that NACCA will be able to administer, it also included more than $6 billion to help close infrastructure gaps in Indigenous communities and $36 million over three years to build capacity and create jobs in Indigenous communities through clean energy projects.
CCAB would like the Government of Canada to make every effort to ensure that this infrastructure work for Indigenous communities is delivered by Indigenous businesses.
This budget also proposed substantial commitments to support economic recovery more broadly. Although these commitments are significant, the inclusive implementation of the proposed measures will be key to building Indigenous capacity and supporting Indigenous self-determination, especially pertaining to infrastructure. I share this with you, as CCAB regularly hears from our members that they continue to face challenges accessing existing government programs. This includes accessing the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy, as well as accessing federal procurement opportunities.
Additionally, CCAB’s latest COVID-19 Indigenous Business Survey conducted this past winter showed that less than half of the businesses surveyed applied to business recovery programs.
We need to ensure that Indigenous businesses are a first thought and not an afterthought, not only when designing business recovery programs but when designing every program that supports economic development and entrepreneurship in Canada, including programs that actively support their access to these initiatives.
We would have liked to see a commitment to a government-wide Indigenous entrepreneurship and economic development strategy, one that is supported and mandated across all federal departments and agencies to ensure all programs consider the unique legal and race-based circumstances of Indigenous businesses. The strategy would include mandated procurement targets and ensure that Indigenous communities obtain ownership share in large infrastructure projects to generate their own-source revenues that support self-determination.
CCAB would also like to see Indigenous set-asides in all areas of federal programming. This measure is necessary, as CCAB’s research and policy work has shown that Indigenous businesses have not been able to access general federal business programs in line with their proportion of the population.
For example, Indigenous businesses are under-represented in the government’s innovation programming. Of the 85 projects that received $3.4 billion in federal funds from the Strategic Innovation Fund, none were awarded to an Indigenous business. The federal government needs to make a concerted effort to ensure that Indigenous businesses have access to innovation funds among all business programs to support Indigenous economic recovery.
As always, CCAB is committed to working in collaboration with the government, our members and partners to help rebuild and strengthen the path toward a healthy and prosperous Canada. Thank you all for your time. I look forward to your questions. Meegwetch.
The Chair: Thank you very much.
Senator Marshall: Thank you. I wanted to hear the witnesses’ views on the Canada Emergency Wage Subsidy and the Canada Recovery Hiring Program because the objective is to move from the wage subsidy program to the Canada Recovery Hiring Program.
The wage subsidy program ends on September 25. There’s $10 billion budgeted for it, but the benefits decline quite significantly between June 6 and September 25. I know that the government can extend it to November 30, but I couldn’t find any money in the budget for that extension.
The Canada recovery hiring benefit, on the other hand, is going to be available between June 6 and November 20, and the budget for that is $595 million. So when you compare it to the $10 billion for the wage subsidy program, you can see that the extent of the benefits and the support is declining.
Could the witnesses please speak to the transition? The objective is to move from one program to the other, whether you think that will be successful. I would like to hear any views or comments that you might have, positive or concerns, with regard to the two programs, the transition and the decline in the benefits.
The Chair: Thank you. Can we have comments from the witnesses as per your presentations, please? I will recognize Mr. Kelly.
Mr. Kelly: Thank you, senator, for the question. As usual, the question is one that’s also on the minds of a lot of small business owners.
We do like the new hiring incentive that has been put in place. I do think it is a good idea to have programs like it, that will help transition businesses from the wage subsidy back to paying wages on their own. Taking away supports too quickly, I think, would be a giant mistake at this stage.
Small firms are looking forward to getting rid of subsidies and replacing that with sales, but until governments can tell all Canadians it’s time to head back to work, it’s time to head to the theatres, it’s time to travel, it would be a giant mistake to end or even substantially reduce the subsidy programs that are in place right now.
So I’m urging you, senators, to recommend that subsidies be kept at their current level. It’s already sized to fit. I mean, you get a smaller subsidy if your losses are less significant. It’s not like you’re getting 75% wage subsidies like you did in the spring. The program has been targeted to those that are hardest hit.
The hiring incentive was a good idea. I do worry that it is going to be too short a period of time. The difference, I think, in the cost is that the hiring incentive is targeted at small- and medium-sized firms, and the wage subsidy is targeted at businesses of all sizes. That would be one of the big differences there.
Mr. Metatawabin: Thank you for the question. What we need to recognize — and I remember presenting to the Senate Finance Committee last year at this time — is the uncertainty has not changed much since last year. The programs were just introduced last year to support the surviving businesses. We can’t put the rocks on the shoulders of the businesses to get through this. We have to support them fully. That includes extending these programs to ensure that we support them up until we provide some certainty as to when this economy gets back on its feet and everybody will be opening their doors. Right now we don’t have that certainty.
We do have the vaccine roll-out that is continuing, but there still is no certainty when the economy is going to get back.
We were assured that last year’s emergency response was to support the emergency and just get them through that part, but that would be a recovery program put into place. That does not exist right now.
If we’re going to be supporting Indigenous businesses and businesses in general, let’s extend those programs.
Ms. Drigola: Thank you for the question, senator. It is a really important point to raise. The wage subsidy is critical in helping businesses to survive. The new recovery hiring program will be essential for businesses to recover. But the challenge here is that businesses don’t know what the summer will look like, what the fall will look like. We’re told maybe we’ll have an outdoor summer. If you’re a restaurant, that might mean patios, but that doesn’t mean any indoor dining. You will see your wage subsidy start to be scaled down and diminished to only 20% if you have 75% or more revenues by September; then you’re only going to get 20% for both rent and wages with the majority of your business still unable to operate due to public health restrictions. That’s a concern.
The recovery hiring program incentivizes businesses to hire new workers, to increase their hours or to increase their wages, which is great. It’s a great incentive for businesses to scale up as they recover.
The trouble here is, as we’ve heard before, there is a K-shaped recovery, where a lot of sectors are recovering and doing well. Other sectors will need a much longer runway. That’s where we need that targeted support from the wage and rent subsidies to continue at current rates. As mentioned, already there is a sliding scale that is built in both programs. As you see your revenues come back, the amount of support you’re getting decreases. That’s when you can start to look at that recovery hiring program and say, my revenues are coming back; I can still get a little bit more support to bridge me through by adding employees, et cetera. But if you’re in a travel or hospitality business, you don’t have that kind of foresight right now to know, do I need to hire and train employees today for opening in July or August if I’m not being told that I will be allowed to do that? You can’t make those decisions today and take advantage of those programs.
Absolutely, a great program. It needs to be longer, and the wage and rent subsidies need to be maintained at the current rate.
Ms. Bull: I agree with my fellow witnesses. The only point I would raise is that the recovery program has the same requirement that you must have a CRA number prior to May 15, 2020. For that reason, there will be a number of businesses who will not be able to access that program, particularly small businesses but also businesses that are on reserve.
There is the Indigenous Community Business Fund which was extended. However, we will need to see more investment into that fund in order to support those businesses.
The Chair: Senator Marshall, you have 30 seconds left. You can ask a question, and probably we could request an answer in writing.
Senator Marshall: My next question would be on the big businesses, publicly traded. Maybe Mr. Gill might be interested in sending a response. Is there any concern that they seem to be left out quite often? Some of the large businesses are getting the impression that they’re the enemy at times. If somebody could respond to that, that would be appreciated. Thank you.
The Chair: Mr. Gill, do you agree that you could send the answer in writing to the clerk, please?
Mr. Gill: Yes. The Chamber will endeavour to do so.
The Chair: Hopefully. We have a due date. Could you provide it in writing before or on Thursday, May 27, please? Thank you.
[Translation]
Senator Forest: I’d like to thank the witnesses for appearing before us again because we had many questions for them in the context of the study of our bills.
My question is for the representatives of the Canadian Chamber of Commerce. I am particularly sensitive to the entire tourism sector, especially the hotel and restaurant sectors, which had high expectations for the budget.
Do you feel that the measures in the budget and Bill C-30, such as the $1 billion for tourism and the extension of assistance programs, will be sufficient to avoid the worst for those industries particularly affected by the crisis and lockdown measures?
[English]
Ms. Drigola: Thank you so much for the question. It’s a really great question. The budget had about $1 billion for the tourism sector over the next three years that they could tap into for some segments.
What I will say is the foundation that the government has for support for the tourism-travel-hospitality sector is there — the rent subsidy, the wage subsidy, the new HASCAP liquidity program, CEBA, et cetera. The only challenge is the end dates of those programs are a little bit too early for when these sectors are projecting to be in recovery. They will have longer runways. All of the restrictions that are currently in place that affects these sectors will be the last ones to lift. We need these programs to continue.
They don’t need to continue for all businesses. We need to have that balance to make sure that we are letting other sectors that can recover start to transition off and have a balance of how we’re using our taxpayer dollars. But, at the same time, we need to continue supporting these sectors that need it most.
The government is there. They’ve got the right tools in place. We just need to make sure that the tools are there for the required amount of time.
[Translation]
Senator Forest: You want the programs to be available and better targeted, if I understand correctly.
My second question, if I have enough time, Mr. Chair, concerns the budget. In addition to expanding the GST, the government announced that it would go ahead with a digital services tax. That tax is not in Bill C-30.
I know that you favour a more multilateral approach, where all states and countries can agree so that your members can compete with foreign companies that are taxed little or not at all. Don’t you think it’s time to restore some tax fairness between Amazon, for example, and our Canadian retailers who are increasingly involved in e-commerce, which has increased quite dramatically in the context of the pandemic?
The Chair: Senator Forest, who was your question for?
Senator Forest: Ms. Drigola or Mr. Gill, whoever wants to answer the question.
[English]
Ms. Drigola: Sure. I can touch on the digital taxation piece initially, and perhaps Mr. Gill can expand on that. I know he’s having some interpretation issues, so I’ll take a first crack at it.
Digital sales tax is something that the Canadian Chamber of Commerce has long advocated for. That needs to be rolled out in Canada. We need to make sure that these services are being taxed on sales in a fair and equitable way. I believe that the budget is putting forward some pieces on this.
I don’t know if Mr. Gill has anything else to include on that front.
Mr. Gill: This measure is intended to bridge Canada’s digital tax divide and to ensure a fair and equitable tax system. This matter has long been part of the OECD BEPS project’s base erosion and profit shifting measures. While participating in this process and seeking a multilateral framework, Canada and other European jurisdictions announced their intention to take unilateral action in the near term. This issue is part of a larger international discussion that will unfold this year. This is about positioning Canada for negotiations as much as it is about collecting new revenues.
The Canadian Chamber believes it is preferable that Canada avoid taking unilateral action in these areas, but it is understandable that Canada is considering such action after years of discussion and to better position itself for negotiations and to create a fairer and more equitable tax system.
[Translation]
Senator Forest: Do I still have some time, Mr. Chair?
The Chair: Yes, you still have time to ask a question. If no one can answer it right away, a response could be provided in writing.
Senator Forest: Division 18 of Bill C-30 amends the Canada Small Business Financing Act to increase the loan limit and better cover innovative companies with patent-related loans.
In the minds of the members of the Canadian Chamber of Commerce, are these amendments promising or satisfactory, and will they promote research, development and innovation in our Canadian companies?
[English]
Ms. Drigola: Absolutely. The Canada Small Business Financing Program, the increase of that from $350,000 to $500,000 is something our members have been very happy about, the introduction of a line of credit there. It is an additional tool for small businesses to be able to start, grow, scale up, expand, et cetera. There are also some funds in there for digitization, for e-commerce, et cetera. So I think there’s a lot in there for small businesses.
The one thing that we have started to hear, is that there are a lot of debt and financing options, and small businesses have been the ones who have taken out a monumental amount of debt over the last 14, 15 months. So there comes a point where what they have to start thinking about is do I take on more debt or do I try to focus on servicing the debt that I already have, maintaining my employees and just trying to keep going.
So these options are great. They’re very important to have on the table, but at the same time, we need to make sure there is also that debt relief piece that starts to be part of the conversation as we move into recovery.
The Chair: Mr. Gill, do you have any comments on that question?
Mr. Gill: I would just add and emphasize, according to StatCan, approximately 40% of businesses this past quarter have told us they are unable to take on further debt. That is highly correlated to their — there’s a number of different factors for that — confidence, cash flow — but certainly it correlates heavily to the confidence that the economy will be open and they’ll be able to pay for that new economic investment or burden that they take on.
The Chair: Mr. Gill, if you want to add in writing on that question, please do, as long as you can provide it to the clerk before Wednesday, May 26, we would appreciate that.
Senator Klyne: Welcome to our panel of witnesses. My first questions are going to be for the Canadian Council for Aboriginal Business, followed by some questions for the National Aboriginal Capital Corporations Association. I may have to ask for second round, Mr. Chair, as I want to get to the other witnesses as well.
For the Canadian Council for Aboriginal Business, the government has committed $22 million to support Indigenous women entrepreneurs in Budget 2021. In your study from September 2020 titled Indigenous Women Entrepreneurs, a number of observations were cited identifying the diverse, unique and complex challenges that Indigenous women face in pursuing entrepreneurship. Can you please tell the committee what are some of the unique challenges Indigenous women entrepreneurs face, and how do you envision this $22 million could be used to support the Indigenous women entrepreneurs starting and running a business?
Ms. Bull: Thank you for the question. Yes, definitely in that study that we did in collaboration with Diversity Institute we did see incredible growth in Indigenous women entrepreneurship both in the size of the business, in the propensity to export and also in the revenue. However, we’ve definitely seen over the course of the last year that those businesses have been impacted harder due to the areas of service that they are in.
The biggest barrier for sure is access to capital: access to financing and debt relief, as we’ve been speaking about. Of course, it is Mr. Metatawabin’s program to run, but if I were in Mr. Metatawabin’s seat, I would definitely be looking at microloans and grants for those businesses.
Actually at CCAB we just ran an Indigenous Women Entrepreneurship Fund program where we provided $2,000 grants, and we had 140 women apply for that. We only had 20 grants so there’s definitely a need there for businesses owned by women.
The other is access to networks, from a perspective of the ability for Indigenous women, Indigenous business owners to be able to access the networks on Bay Street and in major cities and to have that information and mentoring available. That is an area where we also think there is a need for programming.
Senator Klyne: Thank you. In Budget 2021 the government proposed $2.5 billion over five years for distinctions-based approach to early learning and child care. A number of studies cite early learning as being critical to the level of knowledge, skills and abilities that a person will be able to achieve in adult life and continued learning. Can you share with the committee your perspective about the beneficial differences of distinctions-based approach to early learning and child care, and do you see this approach providing the necessary foundation for Indigenous youth to achieve higher levels of educational achievement and close the gap between Indigenous and non-Indigenous education attainment?
Ms. Bull: Thank you. We all agree that part of truth and reconciliation and moving forward in this country is first about education and learning. Additionally, distinctions-based learning provides a safe space for Indigenous youth to feel confident in who they are and in their culture, and we know that confidence is one of the key points and the most needed point of any entrepreneur. We talk so often with Indigenous women entrepreneurs about their ability to feel confident in their business and their ability to provide a proposal for a business plan, when accessing financing. That confidence comes from their youth. It comes from understanding and feeling confident in who they are, and that includes their culture. And definitely important that we look at distinctions-based and recognize the unique characteristics of every culture.
The Chair: Mr. Metatawabin, do you want to add any comments on the two questions?
Mr. Metatawabin: Sure would. Just on the $22 million provided for women entrepreneurs, there will be a microlending program put into place because that’s something that came out from the consultation that we held with our women entrepreneurs. Over 35 years, 41% of all loans provided through NACCA network were to women, but we have a target of 50% loans to Indigenous women. A lot of the grants and lending will be targeted to Indigenous women as the program was target based in the past. We are going to be doing that again because the youth and the women need specific programs and business support, capacity programs to ensure that they’re targeted and we see more results from that. Thank you.
Senator Klyne: Thank you. My next question is for Mr. Metatawabin and the National Aboriginal Capital Corporations Association, which provides advisory support and advocacy for the 50 plus Aboriginal financial institutions across Canada. The most significant challenge for those AFIs is access to capital to lend to Indigenous entrepreneurs and businesses for start-ups, acquisitions and mergers. In Budget 2021, the government indicated its support for the NACCA-operated Indigenous Growth Fund you referenced in your opening remarks, relating that it is $150 million in initial funding from various sources.
Can you share with the committee how this fund will be used to finance Indigenous businesses which would otherwise have great difficulty accessing mainstream financing investors, and are there any early or recent projects or partnerships that demonstrate NACCA and the network of AFIs are making progress toward leveraging participation from mainstream funding sources and impact investors?
Mr. Metatawabin: Thank you for that. We’ve been talking about the Indigenous Growth Fund for a couple of years now, and we’ve had social impact investment and family offices seeking information about when they can invest.
We start with $150 million now. That will increase the number of businesses by 500 businesses in our network, but this will ensure we are increasing the loan lending levels, so we’re able to participate more significantly for those businesses that are becoming more complex and larger. This is the growth trend we’re seeing in our businesses: 85% of our network provides loans to five people and fewer. It could be called micro and small. We’re seeing a gap between the mainstream lenders and our networks, so we’re filling that gap with larger loans for Indigenous businesses that are going to be providing more impact for our communities.
This is an important step for Canada, but we also have to recognize that there has been a 70% decline in government support — business support services. As you mentioned, the AFIs provide this face-to face support to Indigenous businesses. We’ve seen a decline over the last decade. We need a return to historical levels to ensure that our AFIs can make that impact and start lining up the projects so that we can finance them all. Thank you.
Senator Richards: Thank you to all the witnesses. My question is probably for Ms. Drigola or Mr. Kelly.
If sales and profits do not increase, the recovery hiring benefit won’t really matter because there will be so many businesses that will already have defaulted. Sooner or later, debt relief becomes government debt and I wonder if this will increase taxes and higher prices. Right now a 2-inch by 6-inch by 10-foot board of lumber costs $26. Last year it cost $5. That’s astronomical and I know it’s because of the pandemic, but will this ever go down? Once prices go up, they tend to stay up.
There’s also a social aspect to this. There are far more kids on meth and have meth addiction in our province than ever before and they’re dropping out of society. I’m wondering where the hiring will come from if these kids don’t get help and if they become part of the lost generation, which I’m worried about.
Can Mr. Kelly answer any of my concerns?
Mr. Kelly: Thank you, senator. There is much to unpack there. Your concerns about levels of debt, both private debt for the businesses involved and government debt, are well-founded. As my presentation pointed out, the average small firm has inherited $170,000 in new COVID-related debt. This is debt that they didn’t have before the pandemic, but due to shutdowns and higher costs of several things, as you cited. PPE is another example. A small gym, for example, when it was allowed to open spent $2,000 a month in personal protective equipment and sanitation procedures. The costs have gone up and sales have gone down, creating just an untenable situation for so many small firms.
Where I think the government has got it right is when they created the CIBA loan program; they put in place a loan program that had a forgivable element if the balance was repaid. Originally it started off with a $40,000 loan and 25%, or $10,000, was forgivable when the business repays the rest of it. They’ve now expanded that to $60,000, of which $20,000 is forgivable. That’s another positive step.
We’ve urged government to consider raising CEBA loans to $80,000 and have a full 50% of it forgivable. We’re also recommending that the eligibility rules change to make it easier for small firms to get smaller loans through the CEBA program. We think the HASCAP program also needs to have a forgivable element.
If we relieve businesses from some of the debt they’ve inherited during COVID, there is a much better chance that they will be able to successfully transition from a shutdown to recovery, and we believe that would be beneficial for all Canadians.
With respect to the youth employment, that is a concern. Small firms are often the place where young people get their first jobs and, unfortunately, many of them have been shut down.
I will say that as we move forward into the summer, God willing, businesses will be able to reopen across the country. We believe many of those jobs will start to come back. In some instances we do anticipate a shortage of labour, particularly for part-time workers as the government support programs targeted to individuals are quite generous and we struggle to get back some of the staff. That is where the hiring incentive can be helpful, which is included in the budget implementation.
Ms. Drigola: I agree with much of what Mr. Kelly said. There is a lot in there that we can be doing today to make sure we’re avoiding some of these bankruptcies tomorrow. Having a reopening plan is definitely at the top of that list.
When it comes to the job loss piece, I believe it’s about 71% or 350,000 of the jobs that are still lost today compared to pre-pandemic are in the food services and hospitality sector. We know where these jobs are still missing. We know what sectors still need that ongoing support and this is why we talk about having a transition plan, from all businesses being on the support programs to really targeting those businesses that need a longer runway of support.
Mr. Gill: Touching on the inflationary piece, higher inflation is naturally a by-product of the quantitative easing initiated at the beginning of the pandemic, as well as the shifting consumer habits that began across North America during the pandemic. However, I will quickly touch on the debt and deficit piece.
The pandemic caused governments everywhere to shoulder more debt, so people and businesses didn’t have to. Before the pandemic, Canadians and Canadian businesses actually had some of the largest private debt loads among our G20, and even though the budget sets out a plan to reduce federal deficits over the medium term and wind down the pandemic-related measures, the federal plan depends on meeting growth targets.
In this regard, we must continue to avoid further lockdowns by leveraging public health infrastructure such as vaccines and rapid tests. Simply put, opening leads to growth. Additionally, we must avoid weighing down business investment early in the recovery with new costs or regulatory burdens.
On the debt piece, the growing federal debt is a concern and should be taken seriously. Public growth can never be permitted to put public services at risk. That’s why it’s troubling to see a near doubling in debt service charges over the next five years. While still below the service charges of the 1990s, these charges risk being caught up in inflationary and credit pressures. The federal debt is the reason Canada must avoid the 2% growth trap when the pandemic ends. While 2% reduces our federal deficits over the next five years, it allows Canada’s net debt to grow indefinitely.
Mr. Metatawabin: I concur with Mr. Kelly. I also agree that we can’t put all the rocks on the entrepreneur and have them repay a large debt that they didn’t have before this pandemic started. It’s also up to the government to protect the investment in the economy to ensure that there is a sharing of the debt. I agree with Mr. Kelly that 50% of the Canada business loan should be forgivable and that will allow businesses — Indigenous and regular Canadians — to be able to respond and jump back to earning revenue and get this economy going again. Thank you.
The Chair: Thank you.
Senator Richards: Thank you all very much.
[Translation]
Senator Dagenais: My question is for Mr. Kelly.
Mr. Kelly, I listened to your presentation and share your outrage at the Prime Minister’s broken promises. I also understand your frustrations with what I call “foot dragging” that we’ve seen on some issues since the pandemic began.
I often begin my questions by echoing the words of the Prime Minister and his ministers, who often say that they are listening. My question is very simple: Were you consulted by the government before the budget was presented, and if so, were you listened to?
[English]
Mr. Kelly: Yes, I will say that the government has been paying close attention to the suggestions that we had at CFIB and I expect many other business associations have been making. We’ve been in regular contact with the Deputy Prime Minister and several other ministers sharing our views and opinions. I do believe that some of the measures in Budget 2021 were helped by some of the advocacy work that CFIB and other business groups did, such as extending out some of the government support programs for more months, the creation of the new hiring incentive.
While they’ve been listening to parts of what we had recommended, there are some huge gaps. One of the big misses is that government hasn’t focused on fixing the gaps that exist in many of the support programs. The energy that was there in the fall to get some of these gaps fixed to support businesses just doesn’t seem to be there. I know the government needs to keep an eye on the recovery and protecting taxpayers’ dollars. I get and respect that work, totally. Unfortunately, though, we have been struggling to get the government’s attention to fix some of the major gaps. The rent support program is just not working for thousands and thousands of businesses, the CEBA loan program needs to be enhanced to the point we were raising just a second ago, and new businesses remain entirely cut out from any of the support programs.
The government repeatedly said it intends to do something, but no progress has been made. I don’t quite know what the logjam is. I know the federal government needs to attend itself to the health-related concerns associated with COVID quite obviously, but the economic ramifications are very real. I think, as many of the panellists said in the last presentation, these are going to be long-lasting. Events-related businesses, for example, will be shut down for months on end even as other businesses begin to reopen. The government has not been focusing on these. These businesses were not shut down because they were bad businesses and they made mistakes. Those things happen in good times and in bad. We’re not here forever asking for subsidies. What we are saying is the businesses were closed down in order to protect society. They were limited in their ability to earn an income. We do believe it is incumbent upon the tax base more broadly, federal and provincial, to support these businesses until we’re on the other side of the pandemic.
[Translation]
Senator Dagenais: I’ll ask Ms. Drigola the same question. The Canadian Chamber of Commerce is a very important body for the country’s economy. Were you consulted by the government before the budget was presented?
[English]
Ms. Drigola: Absolutely. We’ve had ongoing dialogue with the Deputy Prime Minister, with Minister Ng and several other ministers and their staff throughout the pandemic, especially in the lead-up to the budget. There are many good-news items in that budget that we and others before this committee have advocated for. There’s always more that can be done and things that can be done better. Some of these programs have ongoing gaps and challenges.
The rent subsidy program is a vast improvement over the old, original program. There are still some gaps there for accessibility for medium-sized businesses, for example, businesses who have several locations or businesses in high cost-of-living areas, like downtown cores and the Torontos and the Vancouvers of the world. So there are still improvements that need to be made.
The programs were extended, but unfortunately they are declining. The level of dialogue and consultation has been strong. Was it everything that we could have hoped for? No, there were some things that could have been done better.
[Translation]
Senator Dagenais: I would like to hear briefly from you, Mr. Kelly and Ms. Drigola, about the consequences of keeping our borders closed overall for our economy.
[English]
Ms. Drigola: I can start with that one. I think that it’s not the time to open the border today. However, we do need to have a plan of when we need to open the border, what sort of metrics do we need to reach to do so and how much of the population needs to be vaccinated. Is it going to be a free-for-all or is it going to be a more targeted approach similar to what the United Kingdom has done with their red, amber and green system, where if you’re a traveller coming from a lower-risk region you may be able to enter with just proof of vaccination or a negative COVID test? If you’re coming from some higher-risk areas, do you need to be quarantined? Maybe there are testing points within that quarantine that if you test negative you can leave your quarantine earlier.
When it comes to the Canada-U.S. border, we have such a tight and interconnected relationship that businesses really need to know in advance what that plan will look like so they can start to prepare and be ready for that.
Mr. Kelly: I won’t repeat the wise words that Ms. Drigola just shared. I will say that Ms. Drigola’s organization, the Canadian Chamber of Commerce, Ms. Bull’s, the Canadian Council for Aboriginal Business, and my organization put out a letter today calling on the Prime Minister and provincial premiers to lay out roadmaps to economic recovery of which border measures are a part of. While we are not there to cite a precise date, just laying out the roadmap that is necessary with tentative dates attached so that businesses have something against which to plan to reopen businesses and to be able to operate cross-border is incredibly important.
There are more and more examples mounting where the long-term closure of the border is causing economic harm to Canadian businesses, small- and medium-sized businesses included. We do need to get that taken care of. I’m hoping that will happen soon, especially as we look at Europe and elsewhere with more freedoms being allowed, given higher vaccination rates in, say, the U.K.
Senator Galvez: I would like to thank our witnesses. This is a very interesting conversation that this committee is having about post-pandemic recovery. I’m happy we have initiated this conversation.
I have three questions. My first question is to Mr. Gill. COVID is the elephant in the room, and I know everybody is willing and in a hurry to restart the economy. We have seen some of it, as Ms. Drigola explained. Some followed a K-curve, others followed an L-curve and V-curve. Different sectors are recovering. Some sectors are growing like crazy, for example, the selling of TVs and videos, but there are others that will take time because we have a pandemic and people are consuming, up until now, just the basic products and services.
Mr. Gill, you mentioned that businesses want to meet their growth targets. Can you please elaborate on what is the expectation of the business community in terms of growth?
Mr. Gill: Thank you, senator. Recovery has begun, but it does look different from where you stand. In the K-shaped divergence that we have seen not only in the labour market, that is also expressed on a sectoral basis as well and aligns with what you’re seeing from the labour perspective. It has been quite the plus year for businesses. When the pandemic first hit, businesses were asked to basically put their operations and employees into a state of hibernation. Any sort of cash buffers they had at that time have long been depleted and used up.
Businesses are waiting for the go-ahead to get back to some level of normal. As my colleagues have pointed out, the more clarity there is for businesses to plan for expenditures and hiring decisions is tremendously valuable for them to get going.
We’ve also seen an incredible amount of innovation and adaptation by businesses of all sizes during the pandemic. The growth may surprise us if this level of adaptation and innovation continue. The longer we drag this on and the less certainty there is around how and when things can begin makes it that much more difficult for vulnerable businesses, the small- and medium-sized businesses in hard-hit sectors.
From a public spending perspective, we have to make difficult fiscal decisions on how and when to spend money. Many of us have been making the case that funding continues to be needed, but not everywhere. We can be more targeted with that support.
Senator Galvez: My second question is for Mr. Metatawabin.
You said that you wish the government would increase the assistance and the funds to past historical levels. You mentioned that you have measured the great impact this has had, and the indicators used to measure this.
Is it possible for you to send us the reports where you have measured this? Because this is what you are using to argue for increased support.
Mr. Metatawabin: Thank you for that. Yes, we’ll send a written report to you.
The OECD recently conducted an international study for the 80 million Indigenous people throughout the world. OECD noted that the network Canada has for developmental lending directly to Indigenous people and its social impact should be replicated in the rest of the world and expanded into other countries.
All the social indicators I provided, we’ll be expanding in terms of a social impact report that we will conduct with The Conference Board of Canada. It will demonstrate the increases of 20% in health indicators, 52% in mental health and 72% in life satisfaction. This is the tip of the iceberg. It ripples throughout the economy and throughout the Indigenous community. We’ve never had an economy before, and we’re starting to see benefits for us and for Canada.
Senator Galvez: Mr. Kelly, you said that the government is collecting information on the new businesses that are appearing. Could you mention what these new businesses are and some statistics about them: the size, the sector, and what type of skills these businesses need?
The Chair: Mr. Kelly is not present, so we can come back on the second round.
Senator M. Deacon: Thank you for being here today. Some of these conversations should definitely continue over time.
I have a few questions, and there may be similarities to some of my colleagues. Hopefully there’s not too much duplication, but a couple of issues have come up that I would like to dig in on a little deeper.
First of all, from the Canadian Council for Aboriginal Business, thank you so much for being here, Ms. Bull. A few weeks ago you appeared before us to discuss Bill C-14. You mentioned that a number of Indigenous-owned businesses were having issues applying for the rent subsidy due to the requirement to have a CRA number.
I asked Minister Freeland about this a while ago and she said, the requirement for the CRA number was meant to ensure that finite government resources went to where they were needed most. She went on to say she understood it was a hurdle for some businesses and that the spring budget contained measures specifically to address the gaps for deserving businesses that do not qualify for the rent subsidy for one reason or another.
Does this budget contain measures that address your concerns around the rent subsidy?
Ms. Bull: Thank you for your question. No, and I believe the program that Minister Freeland was speaking about is the Indigenous Community Business Fund, a specific fund of $117 million to support community-owned and micro-businesses within a community. But access to that fund is a very different application process than going through a wage subsidy or rent subsidy program. This is a separate fund that needs to be accessed directly through communities or Indigenous Services Canada.
We saw in Ontario that they were able to change the application process to ensure that Indigenous businesses without a CRA number could access the Canada Emergency Business Account here in the province. My question would be that if the Province of Ontario can do that, why not the federal government?
Senator M. Deacon: Thank you.
I’ll ask my next question to the Canadian Chamber of Commerce, and I welcome anyone else who would like to respond.
In your media release following budget day, you called on the government to ensure that support for businesses is not removed too early and that it does not decrease too quickly. There’s been some mention of that this morning.
I was hoping you could share with the committee what you think the markers should be for decreasing pandemic business support. Is it a level revenue on a case-by-case basis, for example, or would you tie it to public health markers, like the number of fully vaccinated individuals or overall case counts? I haven’t seen the letter that was sent to the premiers and the Prime Minister. There may be some commonality on that roadmap letter, but if there’s anything else you could share with us this morning, that would be greatly appreciated.
Ms. Drigola: Thank you for the question. The letter went out about 10 minutes ago, so it’s okay if you haven’t seen it yet. We can circulate it to the committee after this meeting.
In terms of the markers, there are different ways of looking at it. Many of these questions are for public health experts. I’m not a public health expert. I’m not in a position to say when it is safe to start lifting restrictions for different sectors.
What I will say is that these programs — the wage subsidy, rent subsidy, HASCAP, CEBA, et cetera — are in place to help support businesses while these restrictions are in place. If most restrictions are lifted and most businesses can get back to normal operations, it makes sense to start transitioning them off these programs and allowing them to grow, recover and help meet the pent-up consumer demand that we know exists today.
For other businesses — the events and travel sectors, tourism — these are the businesses that will presumably have restrictions lifted last, with borders opening, encouraging international travel, et cetera. We know that these businesses are the ones that need these supports to continue. What the time frame is, I’m not an expert. It depends on whether you are a restaurant versus a hotel versus a convention centre, for example. There are different markers.
While restrictions are in place, where a business is not allowed to operate normally, there should be a level of government support to help bridge them into recovery. This doesn’t have to be just CEWS and CERS. We’ve talked about CEBA, and there have been suggestions at this table to expand that amount.
Another thing that hasn’t been talked about is extending the repayment deadline. Right now, December 31, 2022, is the date by which you have to repay the amount of the loan to qualify for the forgivable portion. In April and March 2020, that seemed like a sufficient runway when we thought this pandemic might last a few weeks or months. Fourteen or fifteen months later, that is a fast-upcoming timeline that many businesses that are still in lockdown today may not be able to meet and therefore will miss out on that forgivable portion.
There’s a multitude of things we can do to help support businesses, whether you’re in a recovering sector or a hardest-hit sector that will need a longer runway. Again, this requires public health experts at the table as well for that conversation.
The Chair: Senator Deacon, Mr. Kelly wanted to comment on your question.
Mr. Kelly: Senator, it’s an excellent question. One of the things that I think gets forgotten in this mix is that there is already built into the programs — the wage subsidy and the rent subsidy — an automatic adjustment. It wasn’t there at the very beginning of the program. The wage subsidy was 75% if you had a 30% or greater loss. But the wage subsidy today is basically 80% of whatever your loss is. So if you have a 10% loss, you get an 8% wage subsidy. The dollar amounts really are targeted to the sectors that are hardest hit. If you’re a restaurant down 75%, you get a fairly substantial wage subsidy, as you should.
Our advice to government is that they have already built in an automatic adjuster to the programs to make them less expensive. Let’s hope every business is close to 100% of regular sales in the fall. If that’s the case, the subsidies will cost the taxpayer almost nothing because they’re already suited to those means.
The Chair: Thank you. Senator Deacon, that completes the first round. Senator Moncion is the sponsor of Bill C-30.
[Translation]
Senator Moncion: One of the biggest problems with managing the pandemic is lockdown measures, which are different from province to province. They are applied sporadically, and they are also poorly targeted and very punitive for many regions.
The federal government has introduced measures to help small- and medium-sized enterprises and has adopted more targeted measures to help larger enterprises. Provincial governments also have programs in place to help some small businesses, including the Ontario small business support grant, which provides $10,000 to $20,000 in assistance to small businesses.
I would like to hear from you about the various equity elements associated with lockdown measures and the provincial assistance provided to your small- and medium-sized businesses. This has a major impact when a government decides to shut down the province for six weeks, regardless of region or anything else. I would like to hear your comments about the survival of your small- and medium-sized businesses.
[English]
Mr. Kelly: Thank you, senator. The provincial lockdown measures have really hurt businesses quite fundamentally. Ontario has been the jurisdiction most likely to use lockdowns than any other jurisdiction in North America and has one of the longest sets of lockdowns in the world. If you can believe it, I have tons of members in the Toronto area that have been locked down for 350 days since the lockdowns started.
Ontario seems to be the only province that uses lockdowns as a semipermanent policy. Other provinces have used lockdowns, but they apply them and remove them according to the COVID case rates at the time and they use them in much more reasonable ways with a goal of trying to keep some sustenance level of economic activity happening.
Ontario has been the worst province in the entire country in its application of lockdowns. They’ve been “lockdown happy” in Ontario and using it as a one-trick pony and not using rapid testing or other means until very recently as ways of trying to find pathways for businesses to have some sort of business income. As a result, the economic supports have been absolutely necessary.
I will compliment the federal government that they have done more to help small firms get through the pandemic than most provincial governments. Most of the money that subsidized businesses to get through the pandemic has come from the federal government. Provinces have provided far less. I understand they’re a more limited fiscal capacity, but it is the provincial governments that have implemented the lockdown measures and not the federal government.
Ontario, again, has had really poor programs throughout the pandemic, but many provinces need to do more. We have a research summary on the CFIB website that shows which programs are working better and worse by province across Canada.
Senator Moncion: That would be valuable information to provide. I am going to look it up. Thank you.
Ms. Drigola: The patchwork of restrictions across Canada that varies region by region with different metrics used to scale up or scale down these restrictions have been extremely challenging for small and particularly for medium-sized businesses, the ones that have locations in several jurisdictions across Canada. It makes it very difficult to ensure you’re abiding by some rules here and different rules over there. There is a whole section of Canada that has been essentially closed off. I’m speaking about the Canadian Atlantic bubble. That’s something that the Canadian chamber and others have been advocating for, that we try and avoid moving forward, particularly when it comes to a reopening plan. We want to avoid adding these additional barriers and challenges for small- and medium-sized businesses having to try and juggle while keeping their businesses afloat.
The provinces have rolled out different measures for small businesses. The province of British Columbia is announcing some tourism support either today or late yesterday. There are things that have been done. But to echo what Mr. Kelly said, the federal government has really stepped up in this regard and rolled out these programs — the wage, the rent, the liquidity programs — that have been able to help the vast majority of businesses.
Are these programs perfect? No. Are there still some gaps in the programs and improvements that need to be made? Absolutely. At the end of the day, the best thing we could do is have a reopening plan to get these businesses back on track, to be able to open and operate and do what they do best and keep Canadians employed in a safe way. Again, the critical piece here is to have a consistent plan for the whole country and not a patchwork of restrictions where you might be able to do something in Ontario but not do it in Nova Scotia, or you are able to do it in British Columbia, but you come to Ottawa and the same health indicators are yielding different business operation realities. That is absolutely something that we’re keeping track of.
Senator Moncion: Thank you. Could I get some comments from Indigenous group representatives on this, please?
Ms. Bull: Thank you for the question. Yes, I would agree with Ms. Drigola and Mr. Kelly. We’re seeing a real impact on tourism here in Ontario, in northern regions where there are a number of Indigenous businesses who were really growing tourism opportunities there. We’re definitely seeing that the cases are much lower there in northern Ontario, but those businesses are still closed down. It has an impact across the country that doesn’t seem to align with what’s happening with the health indicators, as Ms. Drigola said.
We have seen provinces roll out special additional supports on top of the federal government supports, reflecting that those businesses have been closed for a much longer time, particularly here in Ontario. We’ve had some good response from those provinces on ensuring that those programs meet the needs of Indigenous business.
At the beginning of the programs rolled out so quickly by the federal government — and commendable for that — there was a real effort in ensuring that we were closing those gaps, and the government was quite responsive to that. But of late, there are still some gaps that we think need to be closed as well.
Mr. Metatawabin: First, I’d like to commend the Atlantic provinces for the bubble that they created early on. I think it’s made a huge impact in the Atlantic provinces where business feels like you’re able to move around. Some consistency across the country for best practices would be a good thing.
I want to highlight that the Indigenous Tourism Association of Canada highlighted that their tourism industry is near collapse. They got $16 million last year just to survive. This year, they didn’t receive any support and NACCA didn’t receive any support directly for Indigenous tourism businesses in the recovery, but they’re the ones that are going to be taking the longest to recover. It’s going to be six months to a year before people feel free to travel and engage those businesses.
I think everybody has talked about it. There needs to be targeted support for certain industries, and I reiterate that’s what needs to happen into the future, recovery for certain industries.
Senator Duncan: Good morning. Thank you. I’d like to, first of all, respectfully acknowledge that I’m grateful to live and work in the traditional territory of the Kwanlin Dün First Nation and the Ta’an Kwäch’än Council. I’d like to thank our witnesses this morning as well for your presentations and for this very interesting discussion.
I’d like to build on the discussion of the roadmap and the border issues. As Ms. Drigola mentioned, we haven’t seen the roadmap yet. I understand it calls upon provincial premiers and the federal government to work toward dealing with the border restrictions and interprovincial travel. Not only interprovincial travel but travel with the United States is critical to the recovery of the tourism sector and for the economic recovery.
You’ve mentioned you’re not supportive of the patchwork approach. I would argue that perhaps a patchwork approach is needed because we have unique situations everywhere in the country. For example, the Alaskan senators have lobbied to have the cruise ship industry restart. British Columbia is saying you can’t stop here this year, but they are talking about cruise ships going into Alaska. That has a huge impact on the Yukon tourism industry. New Brunswick is so close to the State of Maine, and there is cross travel there that is critical to the tourism industry. There is also northern Ontario and the wilderness experience.
Will the business organizations support a unique approach to the border restrictions, lifting the border restrictions with the United States?
The Chair: Your question is directed to the Chamber of Commerce and also to the CFIB?
Senator Duncan: Yes, and also to Indigenous businesses representatives because the tourism industry is critical to many Indigenous businesses.
The Chair: Let’s start with Mr. Kelly, to be followed by Ms. Drigola and Ms. Bull.
Mr. Kelly: Yes, I do think we need to customize approaches. I think the difference here is we need to lay out a framework for this to happen. That’s the consistent push. The framework doesn’t mean that there is one day where the entire country has the switch flipped or that only aspects of it are open, but it lays out the roadmap. Ontario had a colour-coded approach. Other provinces have opened up some regions and not others with certain powers. Certain businesses were allowed to open.
On border-related measures, there is obviously the big debate as to whether Canada will allow fully vaccinated, partially vaccinated or no people whatsoever from the United States or overseas. There are a host of issues. What the business community is looking for is to be included in some of these discussions — we are certainly lobbying for it — but also to have governments lay out what the plan is so that businesses know.
The Prime Minister has spoken a couple of times on some work happening bilaterally with the Biden administration on this front. That’s good news, but let us know what the federal government’s thoughts are about the timing. Should tourism businesses across Canada, essentially, just assume there are going to be no foreign tourists allowed into Canada for the rest of the year? Or is there a possibility of that happening, at least in some regions, as you’ve rightly cited in the cruise ship industry up North?
Mr. Metatawabin: I think providing certainty in an uncertain time is very difficult, but there are many lessons that we can take from all across Canada from the good things that certain regions are doing.
The tourism industry is going to be the slowest to rebound after the economy gets going, but we should have a plan in place, and I’m glad a letter is being sent to ask for a roadmap. A roadmap would be something that you can put together when you know that certainty is coming. Then it can be put in place and everybody will know how to plan, so I totally support that. Thank you.
Ms. Drigola: Yes, and I think that you raise a really important piece of the conversation here. I’m not aware of any jurisdiction in the world today that allows an all-or-nothing approach. It’s not going to be either we open the border and everyone is allowed to come in or we keep it closed entirely for no one to come in. By definition, there needs to be a gradual approach.
What we’re asking for is to know what metrics we need to reach, whether they’re public health or vaccination rates or case numbers, and what do we need to look for from incoming travellers from other jurisdictions for similar metrics and indicators? What does that look like so businesses can start to see, okay, here is where Canada is. Here is where analysts are saying we’ll be in two or three weeks from now. How do I start preparing my business today to be able to welcome that moving forward?
When we talk about wanting to avoid a patchwork of restrictions, we have to think about things like vaccination credentials. If you get vaccinated in British Columbia, it’s going to give you proof of vaccination in a different capacity than if you get vaccinated in Ontario.
How do we make sure there is a uniform way for Canadians to have those digital health credentials and to be able to upload those into other foreign vaccine passports if they want to travel internationally? If we do have a vaccination passport requirement to enter Canada and have people coming from other countries with their own health credentials, how do we make sure they can upload those into our system?
That’s what we talk about when we need to have a consistent framework across the country, but absolutely in terms of the border reopening, there needs to be a gradual and phased-in approach. We’re just asking for timelines and metrics to be able to plan for that.
Senator Duncan: Ms. Drigola, if I could, what I was looking for, would the business group support the frameworks in place? If a province and the neighbouring state meet those metrics, could there be a limited border reopening at that point? Not so much the overall national and international. I appreciate that discussion, but could we see a gradual easing province by territory of the border restrictions if the metrics were in place?
Ms. Drigola: Sure, and I think that’s an important piece of the conversation. I don’t think we’re in a place today to be able to say, absolutely yes or no. I think we need to see what that looks like in each region and internationally.
What I will say is that we need to make sure that Canadians can travel domestically first before we start looking at international and coming and going from different countries. I will just make that point as well.
Senator Loffreda: Thank you to all of our panellists for being here this morning. My question is for all of our witnesses, and maybe Mr. Kelly can start us off. I ask this question because you have all shared some major concerns about gaps and what could be done.
Some centres of influence have shared with us and there is much discussion around the excess liquidity held in many corporate bank accounts. Do you see some of that in the SME sector, or is it strictly a fact for large corporations?
Some COIs have shared their thoughts on the issue. We have also seen a lot of media reports. Some feel that 85% of our businesses are doing fine. Many are thriving. We are concerned about the 15%, but maybe you can share your thoughts and elaborate on this issue in your sectors.
Mr. Kelly: Let me wade in. I do think that there are some legitimate criticisms of some of the government’s support programs as they were fashioned at the very beginning of the pandemic.
The government was slow to announce a substantive wage subsidy. They were under intense pressure to do something more substantive than the first tiny one that maxed out at $25,000. My group, many others and many in the media pushed them to do something bigger, as was happening in Europe.
The government did, and it created a 75% wage subsidy if you had a 30% revenue drop or more. That was in place largely on that framework until the summer. It was not our recommendation. Seventy-five per cent as a maximum was our recommendation, but at CFIB we have always suggested that it be done on a sliding scale.
The government made it available to businesses of all sizes and essentially, if you had a 30% loss, you got 75%. If you had a 75% loss, you got a 75% wage subsidy, and if you had a 25% loss, you got zero.
The program didn’t make a lot of sense. As a result, for the first number of months there were large numbers of businesses that saw their revenues decline fast, that did get those subsidies if they were right around the 30% mark, and in some cases, those subsidies were greater than the amount of loss that the business would have incurred.
That was fixed, though, in the summer of 2020 when the government did put the programs on a sliding scale, and that sliding scale meant that if you had big losses, you got big subsidies, if you had small losses, small subsidies.
I believe that in most cases, the gaps and problems were solved in the summer of 2020, and the money that has been spent since then has been targeted better to the companies. I could fault government for creating that gap that allowed businesses to benefit far more. At the same time, they were fashioning programs together quickly, and I’m sure we will at the end of this discover that, yes, some money was used in ways that probably didn’t make sense. I can tell you for sure had the government not acted — it didn’t act quickly — but had it not acted reasonably quickly, the number of business failures would have been much greater.
Mr. Metatawabin: Throughout the pandemic, a survey we held said 57% remained open, trying to do what they could through this time. Thirty-seven per cent closed down temporarily, and 2% closed down permanently. Forty-four per cent say that they can’t last six more months, and almost 50% say they can’t take on any more loans. So they’re in a tough space. I know you said that 85% say some businesses are doing fine. Those are probably the largest ones. The small- and medium-sized enterprises are hurting, and they require continued support and they require certainty.
Ms. Drigola: I will touch on this just very quickly before I pass it to Mr. Gill. When it comes to the wage subsidy, they were having to fly the plane while building it at the same time, and they rolled out these programs with the aim to help as many businesses as possible.
In the early days of the pandemic, revenues were tanking, and businesses needed to apply and requalify every single month for these programs before they were able to figure out how to pivot and make sure they were able to continue to operate in a pandemic.
The CEWS did its job. They helped those companies keep their employees on the payroll, keep their benefits and keep that employer-employee relationship alive while businesses figured out how to pivot. In terms of what that looks like now and liquidity, I can pass that over to Mr. Gill to answer.
Mr. Gill: Senator, thank you for your question.
There are two pools of private capital that can potentially be unlocked, so both domestic business investment and consumer spending are potentially sleeper issues that could influence whether we emerge from the pandemic with purpose or merely muddle along as we did following the great recession.
Canada’s rate of domestic business investment has consistently been among the lowest in the OECD for various reasons. The persistent weakness in investment in Canada is aggravated by uncompetitive tax rates on capital and other regulatory factors. The three components of domestic business investment are non-residential structures, machinery and equipment and intellectual property.
The capital within businesses today is similar and almost equivalent to the capital available at the beginning of the great recession. We didn’t necessarily find the right carrots or incentives to encourage that business investment following the great recession, but we can find different ways and are encouraging different ways to do that this time through.
Beyond business investment, as you probably heard, Canadians have amassed close to $200 billion in savings during the pandemic. Finding ways to encourage Canadians to spend these savings in a targeted way, such as tourism-related activities or for tourism and other consumer-facing activities would certainly help ailing Canadian domestic industries.
We’re all hoping that when we reopen, people will start spending, and we have seen this in a couple of jurisdictions like Australia, but we do need to be ready if Canadians aren’t opening their wallets. This is why the Canadian chamber and others have floated the idea of whether it is appropriate for a temporary targeted consumption tax holiday to get people spending at the appropriate time when they can do so.
Ms. Bull: Indigenous businesses, 99.8% of which are small and medium enterprises, definitely have been impacted. Although we have seen some small businesses doing well, it is a very small percentage. Specifically, the sectors of construction and secondary industries are saying they are going to need more financial support than others. I think it’s very specific to sectors, as we’ve been saying.
Senator Loffreda: I’m trying to be optimistic this morning. They say optimists live longer, happier and healthier lives. I do support the measures, and thank you for your comments.
Senator Smith: Thank you to our witnesses. I have a question for Mr. Metatawabin and Ms. Bull: Has the Aboriginal community been properly consulted through this pandemic in terms of government actions and trying to implement the various recovery wage programs, et cetera? Have you felt that you’ve had the proper interaction with the government in terms of support?
Mr. Metatawabin: Well, early on with the pandemic, I think we had a delay of about three months before our emergency response was introduced after the Canada business account was introduced to the general population. It took three months before a specific measure for Indigenous was put into place. This pandemic was new, so we can understand that. But we have to recognize that Indigenous people are always an afterthought. We have to include Indigenous peoples in the prosperity of Canada, so we have to be engaged often and early.
I commend the government for engaging us on this budget. Many of the measures that we highlighted as being necessary were put in place, and the only one that’s missing is a recovery plan for the Indigenous businesses that were supported last year but not this year. They’ve extended it until June 30, but I think a real recovery strategy includes a little bit less repayables because they’re over-leveraged right now, and these small businesses are not seeing the light after the economy comes back. They’re looking at that debt load, so we need to help them.
Senator Smith: Ms. Bull, do you have any comments?
Ms. Bull: Yes. I agree, as I said earlier, that when the programs were rolled out there was an interest in closing the gaps. The disappointing point is that programs are rolled out without thought of whether the program will work for Indigenous businesses or if there is a reason why Indigenous businesses would be ineligible. That does cause a delay.
When we’re first developing a program, we need to look at how we are ensuring that Indigenous businesses that have unique circumstances can be included and not creating programs to put a Band-Aid on that would cause extra hurdles.
As an example, the Indigenous Community Business Fund requires a proposal that Indigenous businesses develop and demonstrate their recovery plan. That’s an additional hurdle that Indigenous businesses face to be able to access funding, which other businesses in Canada don’t face. We need to ensure that all programs are built inclusively.
Senator Smith: Mr. Metatawabin, you mentioned the $6 billion infrastructure fund and making sure that the Indigenous business population is in charge.
What type of communications have you had with the federal government on the infrastructure fund? What type of follow-up did you receive? Has the government done its job in implementing infrastructure? We recognize the problem with drinking water is still a major issue within the communities across the country. You made a point about this infrastructure program and the opportunities.
You also mentioned that there should be ownership by First Nations people of the infrastructure programs. Could you elaborate on that?
Mr. Metatawabin: In a general sense, ownership of programs and services for Indigenous should be facilitated by Indigenous institutions in Canada. This infrastructure is one piece of the First Nation Finance Authority being provided with some support programs to ensure that infrastructure in Canada is starting to roll out to the communities. They’re raising private sector capital through bond issuing and providing it to communities in a loan so that communities can start closing the gaps within their regions. This leads to economic development and to better health indicators.
UNDRIP, the United Nations Declaration on the Rights of Indigenous Peoples, highlights that Indigenous people need to be given the autonomy and the ability to run their own programs. This is going toward that goal. Thank you.
Senator Smith: Maybe to all panellists, I’m trying to get an understanding of this recovery program and the complexity of the recovery program. As we look at the hiring element of it, do you see that this can be successful as we move forward in time? Are the mom-and-pop shops, the small businesses, going to be able to access it? Maybe Mr. Kelly or the rest of the panel could chip in and try to get an answer to the complexity of that rehiring program.
Mr. Kelly: Senator, I appreciate the question. We do think that the broad strokes of the program that were in the budget are positive, but, unfortunately, we have very few details at the moment of how the program will be operationalized. This remains unclear. It wouldn’t be a surprise, I am sure, to you and it certainly wouldn’t be a surprise to the business community to know that governments can take a terrific idea and concept and make an absolute mess.
That has happened, sadly, with several programs. The programs that have been administered by the CRA — you’ll hear me use a rare compliment for the Canada Revenue Agency, but the programs run by the CRA have been administered quite well. Those administered by other government agencies have actually been really poor. Any program that has been touched by BDC has just been a waste of time. They really haven’t gone anywhere.
I’m hopeful that the government will implement a good, solid program. They seem to be using some of the infrastructure of the wage subsidy, which has worked reasonably well. I’m optimistic that the program will be a good one, but it’s too soon to say, to answer your question fully, I’m afraid.
Senator Smith: Any other comments from any of the other panellists before we close it?
Ms. Drigola: I think the devil is always in the details. It’s clear that the intention of the program is right. It’s in line with what we and other business organizations have called for. It will help encourage businesses to hire new employees, increase hours or increase wages.
The one thing that we want to avoid is making it burdensome for small businesses to apply. Often small-business owners have very thin resources; they wear several hats. We saw some of the complexity early on in some of the wage subsidy and the rent subsidy programs. The way they have set it up now where they’ve tied the rent subsidy application system to the wage subsidy has worked really well. It’s user-friendly. There is a calculator there so they can see exactly how much they will qualify for and get each month. A similar approach for this program would be very welcome by businesses.
Senator Smith: Thank you very much. Thank you, chair, for giving us a good hook.
The Chair: Thank you, honourable senators. As you know, Bill C-30 and the BIA are very important to all Canadians and parliamentarians. We have a common denominator with the witnesses. It is about transparency, accountability, predictability and reliability. However, I’m looking at the clock ticking. There are eight minutes left. On the second round, we will permit one question. Senators, one direct question and a short answer from the witnesses, please.
Senator Klyne: I do wish I had time for CFIB and Canadian Chamber of Commerce, but I do have a question to throw over to Ms. Bull and Mr. Metatawabin. You can provide your answers in writing. With regard to procurement and the 5% target, if you will — and there seems to be a struggle in getting to that — I have been led to understand that it’s not a matter of capacity. We could probably provide procurement opportunities further than that. Suppliers are available to do that.
Could you provide an assessment about this whole procurement process and why we’re struggling to get to 5% and also confirm that we could in fact do 20 or 30%, if we had the opportunity?
The Chair: Directed to whom?
Senator Klyne: To both Ms. Bull and Mr. Metatawabin.
The Chair: You have 30 seconds, Ms. Bull.
Ms. Bull: Sure. Thank you. We did do a study, supported by Indigenous Services Canada, that looked at the federal spend over one year and the Indigenous businesses in every sector matching through NAICS codes, and we found that Indigenous businesses could provide 24% of the federal spend in one year. Definitely, the 5% is a floor. I can follow up with that information.
Mr. Metatawabin: For the past 30 years, procurement has been less than 1% for Indigenous. The saying, “If there’s a will, there’s a way” is definitely true in this case. It is a real culture of systemic barriers. If we can change the system and allow front-line managers to select an Indigenous business based on a case, targets and needs — and have consequences in place — then we’ll hit that.
[Translation]
Senator Dagenais: I have a very quick question for Mr. Kelly and Ms. Drigola.
Do you find that this budget puts forward measures that will address the labour shortage, which I think is crucial, or could some people choose to prolong their absence from the labour market by continuing to take advantage of assistance programs?
[English]
Mr. Kelly: There is one step that I don’t think has received a great deal of attention. Of course, the CERB program was then morphed into the EI system through the CRB stream. That was $500 a week in benefits. When the economy reopened a bit over the summer of last year, CERB and CRB did serve as a bit of an impediment to pulling people back into the workforce. Part-time workers who were making maybe $100 or $200 a week would make $500 if they were still on government benefits. It is my understanding that the government has undertaken in the budget to reduce that as the economy begins to reopen from $500 to $300. I do believe that is a positive measure that will motivate some Canadians to return to the workforce.
I’m fine with generous support for Canadians and for Canadian businesses until the pandemic is over, but it shouldn’t replace more than 100% of your pre-pandemic income.
The Chair: Thank you.
Senator Galvez: Mr. Kelly, you mentioned that there are new businesses that have not been taken into consideration by the government. Can you please submit to the committee who these businesses are, how many there are, in which sectors they are and the skills they are looking for?
Mr. Kelly: Thank you.
The Chair: If you can, Mr. Kelly, provide the information in both official languages.
Mr. Kelly: In fact, I think we sent that letter for the last round, senator, so I believe the committee has it, but I’m happy to resend it.
Senator Moncion: My question is for Ms. Drigola. The government has been monitoring the COVID situation and has been adjusting its program to the extent that it can, and it has been doing that for the last 13 months. You said at the beginning of your comments that because of the end dates for the programs that are in the present budget that I believe you weren’t very optimistic about the follow-through. My question is: What makes you believe that other measures won’t be put into place if they are needed, because that’s what the government has been doing? I would like to hear you on this one.
Ms. Drigola: Sure. I think it’s not about not believing that other measures will be put in. I think it’s about we don’t need to recreate the wheel. The programs that exist today are working very well and are supporting businesses. What we don’t want to see is them phased out too quickly for businesses that will not be able to recover by the fall. For us, it’s critical that they continue.
The Deputy Prime Minister has indicated to the Canadian Chamber that the government is willing to be flexible and to continue to adapt these programs, and we’re thankful for that. It’s just about making sure that the rate maintaining continues to be part of that flexibility.
Senator Moncion: Thank you.
Senator Duncan: I heard in response to my last question that the Canadian Chamber and this roadmap is more focused on interprovincial travel. I just want to remind the witnesses that the small border communities are incredibly important to Canada’s economy.
My question — and I’m looking for a written answer — is that Budget 2021 proposes to allocate $21 million starting in 2021-22 to deal with and accelerate the reduction of interprovincial trade barriers within Canada. The budget measure mentions, “willing partners.” Are the witnesses present willing partners, and what work have you been doing? If you could submit in writing what your efforts are to reduce interprovincial trade barriers in Canada. Thank you.
The Chair: Honourable senators and to the witnesses, this concludes our meeting. Thank you very much for your availability. To the witnesses, you have been very informative and forthright.
To the senators, thank you for the lines of questions. There’s no doubt this brings into perspective our motto about transparency, accountability, reliability and also predictability.
On this, honourable senators, our next meeting will be on Thursday, May 20, at 1 p.m. EST.
(The committee adjourned.)