I call the meeting to order.
Welcome to meeting number eight of the House of Commons Standing Committee on Finance.
Pursuant to the order of reference of November 19, 2020, the committee is meeting on its study of the pre-budget consultations in advance of the 2021 budget.
Today's meeting is taking place in a hybrid format, pursuant to the House order of September 23, 2020. The proceedings will be made available via the House of Commons website. So you are aware, the webcast will always show the person speaking, rather than the entirety of the committee.
I think almost everyone is familiar with the rules, so I'll bypass them to save time. We're tight for time, with four witnesses in an hour.
I would like to welcome our witnesses. We have four with us today.
I want to first thank most of you in today's appearance who provided submissions prior to August 15. We appreciate that very much.
We will start with the Canadian Nurses Association. We have Mr. Villeneuve, chief executive officer.
Mr. Villeneuve, the floor is yours. Could you try to hold your remarks to about five minutes so we can have as much discussion as possible? Thank you very much.
I'd first like to acknowledge the Algonquin Anishnaabeg peoples, from whose traditional lands I am speaking to you today.
My name is Mike Villeneuve and I am the CEO at the Canadian Nurses Association. I've worked in and around health systems for over 40 years, 37 of those as a registered nurse.
I would very much like to thank the committee for the opportunity to present recommendations from CNA, which is the national and global professional voice of Canadian nursing.
In this extraordinary global crisis, nurses, who in our country are the largest group of health care professionals, are playing an enormous role across the country. We're alarmed by the growing number of cases now being reported and we are especially concerned with the spread to indigenous and isolated communities and to vulnerable people. They are disproportionately affected.
Throughout the pandemic, we have learned important lessons. We've seen challenges with pandemic preparedness across the country and have witnessed the devastating effects of the disease in long-term care homes. We've also seen our health care system quickly adapting to the expansion of virtual care.
While our August submission recommends a suite of actions, I'd like to focus on three of them.
First, we strongly recommend that the federal government take a leadership role in redesigning what it means to age in our country. Despite the devastating impact in long-term care homes during the first months of the pandemic, the second wave is rehashing vulnerabilities in the sector. Even with lessons learned, staffing, supplies and physical plant issues remain critical.
To address these challenges CNA has called on the federal government to lead the development of national standards for institutional long-term care. We were encouraged to see new investments in the fall economic statement and national standards reflected in the Speech from the Throne, as well as helping people to age in place. We strongly encourage the committee to support the development of these standards.
Furthermore, it's critical that federal health transfers meet the needs of Canada's aging population. It was estimated that aging would drive about 20% of increases in health care spending over the next decade. We urge the committee to support a demographic top-up to the Canada health transfer, as the pandemic has only exacerbated the challenges older adults face. This would enhance the ability of provinces and territories to deliver care in the longer term, investing in that whole trajectory of home and community care, long-term care, and palliative and end-of-life care.
Our second recommendation relates to further enhancing pandemic preparedness. We must all remain focused in fighting the pandemic. It's nowhere near over. Despite the promises of a vaccine on the horizon, we will be in a chronic emergency for months to come. In a recent survey, nurses identified the supply of personal protective equipment as one of their top three concerns during the second wave of the pandemic. Investments in 2021 must ensure availability of PPE, capacity to conduct viral testing and contact tracing, and an equitable distribution of vaccines, especially to vulnerable groups.
Finally, CNA encourages the committee to support expanding virtual care. The sudden acceleration in virtual care has been a long-awaited shift for our health system. This is good. While barriers still exist, the role of virtual care should be scaled up. Virtual care can lower costs and improve access to health care, particularly for indigenous people and others in rural and remote areas, and people who struggle in any way to access primary care. However, to expand virtual care, fast and affordable Internet access needs to be made available to all, and here we know the government can exert a strong and helpful influence.
In closing, the COVID-19 pandemic has caused unparalleled disruptions to social, health and economic systems around the globe, as I don't need to tell any of you. We now have an opportunity, though, to bring about some essential transformations to our health care system and create a safer, healthier and more equitable society for all.
Thank you, Mr. Chair. I will do my best to answer any questions.
Thank you, Chair. Good afternoon, and thank you for the opportunity to speak with you today. I hope you're all doing okay in these unsettled and unsettling times.
I am joined by my colleague Sasha McNicoll, who's our senior specialist on policy. We'll both be answering questions.
Community Food Centres Canada is a national organization that creates vibrant community food centres and programs in low-income neighbourhoods across the country. Through our more than 200 organizational partners, we support people living in poverty and food insecurity to eat well, find community and work towards social justice.
It will come as no surprise to this committee that COVID has exacerbated some of the deep social inequities that the communities we work in have grappled with for a long time. Food insecurity is up a shocking 39%, meaning that one in seven Canadians now struggles to put food on the table. This corroborates what we are hearing from our partners who have seen the needs in their communities skyrocket. For example, The Depot Community Food Centre in Montreal had to move into a hockey arena in order to meet the needs of people seeking support.
The federal government has responded to this emergency with a $200-million emergency food security fund, which, along with other private funds, has helped us provide good food for half a million Canadians. In the long term, however, we know that providing food through charity will not solve this problem. Reducing poverty by boosting incomes is the key to reducing food insecurity in Canada. For example, the Canada child benefit has reduced severe food insecurity among families with children by 30%. Upon reaching the age of 65 and becoming eligible for seniors benefits like old age security, the guaranteed income supplement and CPP, people's risks of food insecurity decrease by a full 50%.
It is now time to build on these achievements in order to create a just recovery from COVID and to continue the work toward a 50% reduction in poverty, as laid out in Canada's poverty reduction strategy.
Our pre-budget submission proposes two ways to help us get there. The first is to make the disability tax credit refundable. To this end, Community Food Centres Canada was pleased to see a Canada disability benefit included in the Speech from the Throne. There are 2.7 million Canadians living with severe or very severe disability. These Canadians are more likely to be unemployed, and 30% live below the low-income measure. Because the disability tax credit is non-refundable, however, it only serves to decrease tax owing and is therefore of little use to people with disabilities living on low incomes who pay no or little income tax. Making the disability tax credit refundable would provide low-income Canadians with severe and prolonged disabilities with up to $1,300 per year. This may not seem like a lot, but for a single person on disability support living in Ontario, it will represent a 9% increase in their income. The federal government should also look into increasing the disability tax credit.
Our second recommendation is to explore the creation of a tax credit for working-age adults. As I mentioned, the Canada child benefit and seniors benefits have decreased food insecurity among families with children and seniors, but for single adults, poverty has increased. They also make up 43% of all food-insecure Canadians. Working-age adults are increasingly being trapped in poverty by low-wage jobs and insufficient social assistance rates. Two-thirds of food-insecure people get most of their income from employment, but the kinds of jobs available do not pay enough to provide a comfortable and dignified life. Indeed, many of the top growing sectors over the last decade—including retail, accommodation and food services—provide the lowest-quality jobs in terms of wages and benefits.
Many low-income adults rely on provincial and territorial social assistance, which in no jurisdiction in Canada comes anywhere near the poverty line. In Ontario, for example, a single person on welfare receives $733 a month, which is about one-third of the poverty line. In order to be successful in reducing poverty by 50% by 2030, Canada's poverty reduction strategy will need to provide more significant support for single adults aged 18 to 64. A working-age tax credit that would bolster incomes for low-wage workers and people living on social assistance would also create a higher income floor beneath which no Canadian could fall.
For moral and economic reasons, we want to build a society focused on thriving, but we also want to do this because greater equity will help inoculate us against future shocks. Creating an income floor that no one in this country can fall below is the right thing to do. Making the disability tax credit refundable and developing a refundable working-age tax credit will have a significant material impact on this goal.
Again, thank you for the opportunity to be here today to discuss how to reduce food insecurity and poverty in Canada. Sasha and I look forward to answering any of your questions.
Before I begin, I first want to acknowledge that I'm speaking from the unceded Algonquin Anishinaabe Territory.
I want to thank the committee for the opportunity to speak to you today.
Skills/Compétences Canada's mission is to encourage and support a pan-Canadian approach to promoting careers in the skilled trades and technologies to youth and their communities.
With Skills Canada member organizations in each of the provinces and territories, we're able to connect to more than 100,000 Canadian youth on an annual basis. With the help of our many public and private sector partners, including union training centres, technical institutes, polytechnics and community colleges, SCC is helping to address the skills gap issue that is touching many sectors across the country.
The activity that we are probably best known for is skills competitions. Through this activity, we put tools and materials in the hands of students in an effort to familiarize them with the many career options available. If you've not been to a skills competition, we demystify many of these occupations by hosting events in publicly accessible facilities where visitors can watch competitors prepare a four-course meal; build structures, including electrical and water services; repair vehicles; and create information technology networks, websites and much more. In addition, students from surrounding schools are able to participate in Try-a-Trade and technology activities.
As the country continues to deal with the impacts of COVID-19, we believe that a skills-based economy and skills-led recovery will contribute to the strengthening of our communities.
According to a national survey that we conducted in July, close to eight in 10 Canadians agreed that the COVID-19 pandemic brought to their attention the importance of the many essential workers in the skilled trades and technology sectors.
This increased awareness among Canadians of the many essential occupations in the skilled trades and technologies presents an opportunity to attract and create a diverse and inclusive workforce, which will strengthen the country.
Possible increases in domestic manufacturing, new infrastructure projects and the impact of technology all bring with them opportunities to return to pre-COVID-19 levels and see economic growth. To do this, Canada will require the right mix of skills to respond to these demands.
For these reasons, not only youth but—maybe even more importantly—career influencers such as parents, teachers and employers should be targeted with outreach. Building a diversified workforce for Canada requires parents to encourage their children to investigate many career options. It requires teachers and instructors to understand the apprenticeship system and Red Seal certification so they can provide relevant training, guidance and endorsement of these careers.
It also requires employers to hire apprentices and support the on-the-job training model that has been in existence since the Middle Ages.
Our survey in July also revealed that 46% of Canadians are mostly unfamiliar with the apprenticeship training system. This lack of knowledge undoubtedly contributes to our nation's challenge in recruiting people to these occupations.
Most Canadians understand how more traditional systems of education function, making it easier to endorse those learning models. Contrastingly, the apprenticeship model that encompasses 80% on-the-job and 20% in-school training is very different from the training education that is often based out of a single training institution.
In general, we are witnessing how the required skills in these industries are quickly changing, forcing us to contemplate the impact on our skills development strategy and how we can quickly adjust our training programs. In the context of the current pandemic and also due to our increasingly digitized world, skilled trades and technology occupations have never been so relevant and interesting.
As a result, it only makes sense for the federal government, through a variety of tailored approaches, to invest further in the awareness and promotion of such career paths. Along with its provincial and territorial partners, the federal government must look at supporting skills development and modern training opportunities that will realistically meet our future economic needs.
In closing, we recommend the following measures.
First, the federal government should fund the promotion and orientation of skilled trade and technology-based occupations, targeting under-represented youth and people in career transition, including women, indigenous peoples, persons with a disability, those from under-served communities and those who are part of the LGBTQS+ community.
Second, the federal government should fund national awareness initiatives aimed at engaging parents on how the apprenticeship training system in Canada works, on the importance of the essential skills and on recognizing the Red Seal endorsement acronym, RSE, as a standard of Red Seal completion in the skilled trades.
Third, the federal government should support the work required to identify current and emerging technologies and how those technologies are and will be applied in apprenticeship and technology-based occupation training models.
Last, the federal government should support the creation of a multisectoral skills strategy that links recommendations 1, 2 and 3 into an overall skills promotion and skills development approach linked to the skills that Canada needs now and will need in the future.
I will answer any questions the committee may have.
Mr. Chair, I would like to begin by thanking you, the clerk and the committee members for the opportunity to appear today on behalf of WaterPower Canada as part of the committee's pre-budget consultations.
Thanks also to the members of the committee and to all those contributing to this consultation for supporting and serving our communities during these challenging times.
I am coming to you today from the traditional unceded territory of the Algonquin people, and I'm very grateful to also have the pleasure to work and live here.
WaterPower Canada is the national trade association that represents the producers of hydroelectricity and their suppliers of goods and services. Electricity is an essential service, and water power represents 60% of our total electricity production in Canada.
Our sector's track record for more than a century has been playing a major role in keeping Canada's lights on. Thanks to the preparedness and response of our members and our workforce, we've overseen the reliable operations of more than 500 water power generation stations throughout the pandemic. These continue to power critical services such as hospitals, communication networks and food supply chains across the nation.
In early March, as the reality of the pandemic set in, our sector was deep in preparations for the freshet, the spring thaw that places increased demands and pressure on our infrastructure. By mid-March, pandemic response plans and protocols were rapidly implemented. Only works critical for the safe, reliable and optimal operation of the generation fleet proceeded. All others were deferred.
Workplace practices in the office and in the field were dramatically overhauled to assure the health and safety of our employees and contractors. We're proud of our role in supporting Canada's pandemic response.
The government is currently directing emergency support where it is most urgently needed. We're still in the thick of the pandemic. Once the greatest danger of this crisis has passed, the economy will need a serious boost, and that must accomplish two things: getting Canadians back to work and addressing the climate crisis.
Canada is one of the few countries in the world uniquely positioned to move toward and beyond a 90% non-emitting electricity supply. We have a competitive advantage through our abundant, diverse, clean and renewable electricity resources, including water power. Building on these strengths, leveraging these existing competitive advantages, and creating the right conditions for investment will support recovery efforts and reinforce clean growth priorities.
Investments made by our sector in refurbishment and redevelopment of existing assets provides additional generation and storage capacity at a very low unit cost and with a minimal incremental environmental footprint. New transmission capacity can connect regions with abundant clean and renewable energy supply to those that are phasing out coal. The water stored in our reservoirs can be leveraged as the battery that balances supply and demand.
Projects such as Pumped Storage Hydro, which uses water and gravity to store and generate electricity, and Green Hydrogen, for example, can ensure the reliable integration of variable renewable energy resources, such as wind and solar.
These potential investments represent tens of thousands of new jobs and the avoidance of hundreds of millions of tonnes of greenhouse gas emissions annually. As our brief submitted to the committee in August outlined, there are ways to create the conditions necessary to move clean and renewable energy projects forward.
One is designing and implementing strong measures for decarbonization of Canada's electricity supply. We welcome the introduction of Bill and references in the fall economic statement on the importance of strategic transmission interties.
A second way is to design and implement strong measures for fuel-switching, switching from fossil fuels to clean and renewable electricity in transport, industry and buildings. We welcome the measures in the fall economic statement related to electrification and we anticipate the clean fuel standard.
A third is to ensure that the implementation of federal legislation does not introduce any undue or overly burdensome constraints on water power producers so that the regulatory environment does not impede investments in existing or new projects.
Despite our abundance of clean electricity, only 20% of the energy we use is electric. Growth in demand for electrification, combined with stringent and stable long-term climate policy, is critical for our sector to maximize our investments in the coming years and to help power Canada's recovery, a recovery that will be durable, national and renewable.
Thank you again for the opportunity to appear. I look forward to addressing any questions the committee may have.
Thank you, Chair, and thank you to the witnesses.
My questions are for the CNA.
Mr. Villeneuve, thank you for your work, the work of the organization and the work of all nurses across Canada. I especially have in mind all the local nurses in London, Ontario, especially those at LHSC and St. Joseph's, but all nurses beyond that too.
I wanted to ask you about this, sir. I read the statement that the CNA put out yesterday in response to the fall economic statement that Minister read in Parliament. I did see that the organization spoke positively about long-term care and what the government said about that, about all the work the government has done to procure PPE, and on public health when it comes to indigenous communities. That work is ongoing and positive.
I did see a couple of points that stood out to me in the press release and that the government can further act upon. One is the mental health of nurses. Could you speak to that issue and your concerns there?
I wonder if you would elaborate upon something else that you mentioned today: virtual health care. What would you want to see the federal government do to address that possibility?
Thank you very much for the question.
The mental health state of nurses has been a concern from early on, first because of the fatigue, which we projected. Then, because of the moral decisions that were being made in other countries, they were pretty concerned about the challenges they were facing at points of care—physicians and others, too, but since we're speaking about nurses....
We did a survey at CNA of a group of nurses who reported before COVID that their mental health was rated as good or excellent. Eighty per cent of them rated that. It's down to about 45% at this point in the pandemic, so that's a serious change.
We're hearing every day about unbelievable fatigue. Also, there's the burden of watching people die with their families on the other side of a window. It's just compounded levels of grief and fatigue. There's no buffer in the system. There's no other group to come in and help take over, so I think they're pretty pressed.
One of the challenges we all face in this country is that you have to wait a long time for a lot of mental health treatment and you have to pay. We certainly hope that governments will do all they can to support access to mental health treatment for all health care providers—we can talk about society later—at rates they can afford or, if not that, then free.
On your second question about virtual care, as you know, there has been this giant barrier since time immemorial, and suddenly it was freed up, which is a very good outcome of the pandemic. Now we need to understand.... It seems to be working pretty well. In some places, 76% of primary care is delivered virtually.
Who is it working well for? Who has broadband and who doesn't? That's a serious problem. In my beautiful home in farmland here in eastern Ontario, I sometimes might as well be in Iqaluit. It's hit-and-miss. Even on these sorts of appearances, I worry if I will have broadband. If we want people to work at home and send pictures and videos of their problems to their doctors and so on, we really need a strong hand in expanding the access to broadband—
I would like to thank all the witnesses for their sensitivity to vulnerable members of society. It's an issue that came up in many of the opening statements.
My first question is for Mr. Villeneuve, of the Canadian Nurses Association.
The House of Commons is currently debating a motion put forward by the Bloc Québécois. The motion reads as follows:
(a) acknowledge the extraordinary work of health care workers (including doctors, nurses and orderlies) during the COVID-19 pandemic, particularly with seniors but also with the general public;
(b) recognize the courage and sacrifices required from them and their families in order to be on the front lines;
(c) highlight the work of Quebec and the provinces in responding to the health crisis and note the direct impact on their respective budgets; and
(d) call on the government to significantly and sustainably increase Canada health transfers before the end of 2020 in order to support the efforts of the governments of Quebec and the provinces, health care workers and the public.
On September 18, the provinces jointly called on the federal government to significantly increase funding to help cover the escalating costs of delivering health care, particularly as a result of the pandemic. They are requesting an increase of $28 billion, which would raise Ottawa's share of health care funding from 22% to 35%.
Mr. Villeneuve, if health care ceased to be underfunded, would that address the bulk of your recommendations?
Thank you very much, Mr. Chair.
Thanks to all our witnesses for being here. We hope that you and your loved ones are safe and healthy during this pandemic. It's very good of you to give testimony today that will hopefully form some of what we should see in a spring budget.
I'd like to start with you, Mr. Villeneuve. First, our thanks go to all the front-line workers and nurses across the country who have shown such courage during this pandemic.
I have three questions.
What you're calling for is an investment, the demographic top-up transfer, that is slightly less than the cutbacks we've seen over the last five years. I'm wondering whether that demographic top-up is in addition to restoring the full health care funding that was slashed by the former Harper government and continued by the current government. We've seen the impacts of that.
My second question is around long-term care. What do you think is needed? Should long-term care really come under the Canada Health Act as part of ensuring that there is publicly administered long-term care and long-term-care standards across the country to avoid the nightmare that we have seen repeated numerous times, often in private long-term care homes, over the course of the last few months?
The third is on the issue of pharmacare. We have Bill before the House of Commons, the Canada pharmacare act. MPs will be voting on it in February. It would provide the legal framework for universal, publicly administered access to medication. To what extent do you think, and do Canada's nurses think, it would be a good idea to have universal pharmacare to add to and strengthen our health care system?
Those are my three questions to start. Thank you.
Thanks, Chair, and I'll do my best to answer the questions quite quickly.
CNA has a long-standing position in strong support of universal pharmacare and would be very pleased to see that go forward as a key piece of medicare.
I'll work backwards. You're asking a lot of me to remember three things.
With regard to long-term care, that whole sector has been not well treated at best, and at worst has been neglected. We have watched over several decades as the amount of acuity inside those places climbs at a level that, if you've not been in one, I think would shock you.
When I graduated, many of those patients would have been in a hospital with a registered nurse. As we've moved care out to homes and communities and long-term care, we have not shifted budgets, interests, professional supports, funding, leadership, training and all those pieces. Now we have a very well-intended workforce that is largely made up of unregulated providers doing their very best. We need a really big multi-billion-dollar investment in that sector to cast it anew. That would start with staffing, wages, physical plants. What happens in some of those places would never be allowed in a hospital.
The whole sector needs a discussion. We need to frame what we expect as Canadians to get as we age, starting at home so that we don't have to go to those places, and right through to end-of-life care.
On your first question, I'll try to be as quick as I can. If I understand you correctly, we took the figures calculated by the Conference Board of Canada, which was the $93 billion over 10 years, and took a 22% cut of that, so it's somewhere around $13 billion in the first five years, up to a total of $21.1 billion over 10 years. We approached it that way, if that helps answer your question.
Thank you very much. I will start with Mr. Saul.
For what it's worth, to me it is unconscionable that in a nation as wealthy as Canada we still have questions about our neighbours being able to afford food.
You have quite articulately pointed out that food won't solve hunger, but that income will. You cited the Canada child benefit as one example of a visible and meaningful reduction in food insecurity when we simply got money to people who didn't have it before.
For what it's worth, to pick up where Mr. Falk left off, I'm hearing from food banks in my community that when CERB landed on people's kitchen tables, they didn't go to food banks as often as they did before the pandemic. This indicates the magnitude of the problem to me.
You made a couple of specific suggestions, but I'm thinking more broadly. Can you comment on the importance of finding people who don't have money and who might be going through the demonizing process of applying for social assistance where their life choices are judged.... When people are given money, in your experience, do they spend it on things like food and housing and basic needs, or do they fall into the tired old trope of people who spend it on vices, whether it's drugs or alcohol?
The answer is clear as day in my community: People spend money on what they need.
I'm going to echo what you're saying. Poverty is not about a lifestyle choice or a character flaw or poor budgeting; it's about low wages. It's about inadequate social supports. People want to work. People want to contribute. People have things they want to get done in their lives. They want to make sure their kids are safe and healthy and move well.
It's very clear that if you support people, they contribute. They keep those dollars in the economy and they keep the economy going.
We probably put out about $10 million in grocery gift cards so that people had that income to keep the economy going. When those grocery cards disappear, but they have income, it keeps the economy going.
We are signatories to an International Covenant on Economic, Social and Cultural Rights around the right to food. It is our duty to respect, protect and fulfill the right to food. It is unconscionable to me that four and a half million of our fellow citizens, about 12% to 14%—
Look, if you look at that number, you see that if you're white, it's about 11%; if you're a new immigrant, it's about 17%; if you're black, it's 30%; if you're indigenous, it's about 30%. If you go north to Nunavut, it's over 50% of people who are food insecure.
We have a lot of work to do on this issue. I want to be really clear and underline this: It is not about charity. It's ensuring that people have good jobs that aren't precarious, so that they have good incomes and they can go home to a full fridge, not an empty fridge. The kinds of recommendations we're making here are about putting income in people's pockets, and then they spend it in their communities.
We will have to end it there. I hope within a couple of weeks we can get back to our hour-and-a-half schedule. This is pretty fast and rapid.
To the witnesses, thank you very much for your presentations and submissions, and thank you for appearing as a witness today. I know it was on fairly short notice for some. If there is something you think you have missed, drop the clerk a note. Mr. Bateman, I believe you are going to provide a little further information as well.
Thank you for your presentations again, and we wish you well. Stay healthy.
With that, I will suspend for the next panel.
The meeting is suspended.
I'd like to welcome the second panel to the finance committee for our continuing hearings on pre-budget consultations in advance of the 2020-21 budget.
I'll not go through all the preliminaries, because we're going to be very tight on time. I would say to the Conservatives that you wanted the second panel to be the same as the first in terms of questioners. Because we're only going to get two people on or you can split your time, you can think about if you want to change that and just let me or the clerk know.
First up on questions will be Mr. Kelly, followed by Ms. Koutrakis.
We'll start with our witnesses. From the Canadian Produce Marketing Association, we have Mr. Lemaire, president. You have five minutes.
Thank you, Mr. Chair and honourable members of the committee.
On behalf of the Canadian fresh fruit and vegetable supply chain, I welcome the opportunity to share our recommendations for budget 2020-21.
Since the start of the pandemic, the fresh fruit and vegetable supply chain has seen massive shifts in our markets, changing retail sales patterns, the rise of e-commerce and major disturbances in food service. We recognize there will be winners and losers as we emerge from 2020.
Today my comments will focus on the need for a financial protection mechanism for produce sellers in Canada, which is a tool that has long been a priority for our sector and has only been intensified by the COVID-19 environment. Other programs and tools that also require consideration include the swift deployment of the universal broadband fund and other critical infrastructure; targeted tax credits for essential services to support required changes in COVID business practices, including the purchase of new equipment and PPE; and more effective programs to support our domestic food supply as an essential sector and to bolster food security in Canada.
Our recommendations can be found in our submitted brief. More information is in our comprehensive report, which outlines 24 recommendations for government action to support our sector in COVID recovery.
We have an immediate need for a Canadian limited statutory deemed trust to effectively protect produce sellers during buyer bankruptcy in Canada. This is at no cost to the government and would provide an avenue to reinstatement of protection in the U.S. for our exporters.
Growing, harvesting, packing and selling fruit and vegetables comes with a number of risks. COVID has only created greater challenges, as overhead and capital costs continue to rise, while returns are delayed until the product is sold and payment is collected down the supply chain, usually long after the farmer or produce seller has shipped their product.
We know bankruptcies are coming. Federal support, loans and credit have created a false sense of security. Economists have already coined the term "zombie companies". These companies are leveraging federal programs or tapping banks for more credit. Over the next two years, the pandemic will drive Canadian produce companies into bankruptcy. We anticipate company failures, especially among hard-hit food service businesses. These closures will be felt by urban Canadians, who will miss their favourite restaurant, but they will be felt the hardest in rural Canada, where farmers will be forced off the family farm.
In the case of an insolvent buyer, the current super-priority provision for farmers fails to effectively protect our sector, as the terms of payment for fresh produce sales regularly extend beyond the 15 days between delivery and buyer bankruptcy as prescribed in the act. Sellers of fresh produce are rarely able to recover their product, as other commodities are most often able to do under the BIA.
Canadian fruit and vegetable farmers have already begun to identify a growing concern related to their accounts receivable and delays in payment due to COVID. Compared to the same period in 2019, the industry is seeing 25% or more of their accounts overdue. For some, this equals over half of their estimated annual income. These delays put an increased burden and strain on the sector and are clear indicators of financial turbulence and potential bankruptcies down the line. Our lack of financial protection for produce sellers also means we can no longer access protection tools in the U.S. without incurring significant cost. For Canadians to file complaints in the U.S., we now must post a bond twice the value of the claim.
The effects of the COVID-19 pandemic are already being felt south of the border. Over the first three quarters of this year, the value of complaints filed under the U.S. Perishable Agricultural Commodities Act for non-payment has risen by 52% in 2020 compared to 2019, and this is expected to rise even further in Q4.
We urge the government to implement a Canadian limited statutory deemed trust to effectively protect produce sellers during bankruptcy in Canada. It would be fitting for a financial protection mechanism to be included in the budget implementation act, as it would support one of our critical sectors and strengthen our own food sovereignty and security. This no-cost tool has been supported by this committee and the AGRI committee twice, most recently in recommendation 15 from its report of November 2020 on enhancing business risk management. More importantly, the tool would protect sellers domestically, remove complications in cross-border trade in the U.S. and reduce potential costs imposed on Canadian consumers.
In closing, thank you to the members for the opportunity to share our comments today. I will be happy to answer questions.
Festivals and Major Events Canada, also known as FAME, and the Regroupement des événements majeurs internationaux, or RÉMI, represent over 500 festivals and events across the country. Together, the coalition has a direct and affiliated membership active in the tourism and culture sector, which is responsible for generating over $1 billion in revenue a year. That attests to our members' significant contribution to the country's GDP.
These associations have joined the coalition of the hardest-hit businesses and are calling for an increase of the Canada emergency wage subsidy for the category of businesses most affected by the pandemic, as well as greater support for fixed costs and better access to liquidity.
FAME and RÉMI welcomed a number of the measures announced yesterday, particularly the enhanced wage subsidy. I want to take this opportunity to thank the many members from all parties who supported us, as well as the government. I will, of course, share a few of our reservations and talk about what still needs to be done, but overall, we find the measures encouraging. The measures announced yesterday are a step in the right direction, and I want to make that clear.
It is important to understand that the emergency wage subsidy needs to provide considerable flexibility while taking into account the hyperseasonal nature of our business. Asking an event operator to compare their summer revenue to their January revenue would be pointless. When it comes to liquidity, we still believe the government needs to intervene financially through a fund to reduce the deficits of cultural organizations, including festivals and events. That financial support cannot be limited to loans; it must also be subsidy-based.
The majority of festivals and events are non-profit organizations, with no loss provisions or capitalization. According to a survey, FAME estimates that festivals and events currently have a combined deficit of at least $150 million. Why? Because, in the six months before the pandemic, event organizers made the usual expenditures in anticipation of the 2020 installments of their events, but were prevented from generating any revenue during the three to 10 days of the event or festival, as they normally would have.
We had called on the government to immediately renew investments in the two main programs that support festivals and events. The investments were made in 2019, but only for a period of two years. Thankfully, the government renewed that funding yesterday. My only concern is that the funding is yet again limited to one year. At some point, we will need predictable funding to operate. It's incredibly challenging for event and festival operators to cope when the government reduces funding to later cancel it outright. Ideally, agreements would cover multiple years.
Until 2018, approximately $31.5 million of the $50 million in funding delivered through the two main programs for presenters was divvied up among more than 1,050 festivals. That figure jumped to around $42.5 million in 2019-20. The government provided an additional $10 million or so in 2020, in response to the pandemic, bringing the government's spending on festivals and events to more than $50 million. In 2021, the investment will once again total at least $42.5 million, but the fear that it will drop back down to $31.5 million in 2022 looms. That worries us.
Furthermore, we recommended that the government establish a transition fund for green digital events, and in yesterday's economic statement, the government set out funding to support the planning and presentation of COVID-19-safe shows and events delivered both live and digitally. Once the details are released, we will know whether that funding aligns with our recommendation.
As far as the recovery goes—which, I know, is what the committee is keen to hear about as part of its pre-budget consultations—we urge the government to set up a program modelled on the former marquee tourism events program, which the Conservatives introduced after the 2008 crisis. The program would require a $225-million investment over three years. No doubt that is what the was referring to when he appeared on the television show Tout le monde en parle and said that he was having discussions with the . The marquee tourism events program was administered by Industry Canada.
We are proposing that the new iteration of the program be managed by Canada's regional development agencies. In yesterday's economic statement, the government recognized the importance of providing events and festivals with unique support. In our view, such a program would go a long way towards providing the support the sector needs. The new program would deliver stimulus while attracting more tourists through festivals and events. Initially, the program would support domestic tourism, but would help draw international tourists when the situation allows.
A quarter of festival goer dollars are spent on hotels and accommodations, and one-third on restaurants. By helping festivals and events as part of the economic recovery, the government would be providing indirect support to restaurants and hotels, which have been hard-hit by the crisis, as well as transportation operators, artists and performers.
The government needs to act swiftly so the sector can keep its teams in place. The sector must prepare now for festivals and events in 2022.
We recommend moving quickly to keep the teams we have in place. To put on festivals and events in 2022, we have to start getting ready now. Thank you.
Thank you and good afternoon. My name is Kathleen Sullivan, and I'm CEO of Food and Beverage Canada, an association representing Canada's food and beverage manufacturers.
Food and beverage is the largest manufacturing sector in this country. It includes 7,000 companies. They employ 290,000 Canadians and generate close to $120 billion in annual revenue.
Unfortunately, it is also a sector that is often overlooked. Most of our food does not go straight from the farm to the grocery store. Instead, agriculture products are shipped to Canadian food plants, plants that turn wheat into flour and then bread, turn cow's milk into yogourt and cheese, and turn potatoes into perogies.
Food manufacturing is a critical component of Canada's domestic food supply. Our 7,000 companies buy over half of Canada's agriculture output, add value to crops and livestock production and, most importantly, ensure that Canada maintains its food sovereignty.
We should all be very concerned that with COVID-19, Canada's food system has experienced a series of shocks: the collapse of food service, the disruption of supply chains, the impact of border closures, the additional costs to protect our workers and, most recently, the fees imposed by some of Canada's largest grocery retailers. These shocks have destabilized not just my sector but the entire food system.
In 2018, Dominic Barton and the agri-food economic strategy table tapped agri-food to drive economic growth in this country. To achieve this, we will need to address some fundamental issues. Today I'll focus on three—resolving agri-food's labour problems, rebalancing relationships across the supply chain, and ensuring that our front-line food workers are recognized as a priority and continue to be protected throughout COVID-19.
With respect to labour, even before COVID-19, labour was the biggest issue and the most limiting factor facing our entire agri-food sector. We simply do not have enough people for the jobs we have, and we do not have the right people with the right skills. On any given day, this, Canada's largest manufacturing sector, is short 10% of its workforce. By 2025, we expect to be short 65,000 workers.
This is a missed opportunity for our economy. There is demand for Canadian products here at home and abroad, but until we address the industry's labour problems, our ability to invest and grow will remain constrained.
We are therefore encouraging the federal government to work with industry to develop a labour action plan for Canada's food and beverage manufacturing sector, and I would say for the entire agri-food sector.
The second issue is to rebalance the supply chain. Canada's grocery sector is over-concentrated. We have just five retail companies controlling 80% of Canada's grocery market. This circumstance has allowed retailers to regularly impose arbitrary transaction costs, fees, and penalties on their suppliers. Most recently, in the past few months and despite the pandemic, major retailers have announced even more new fees. This simply can't continue. Other countries have faced this challenge and have addressed it by implementing a grocery code of conduct. We, along with 33 other industry associations and producer groups, are encouraging Canada to do the same.
We are pleased that at their meeting last week, the federal, provincial and territorial agriculture ministers committed to striking a working group to look at this issue. We encourage the federal government to continue to prioritize this and to commit to having a code in place by the end of 2021.
Finally, I would like to talk about our front-line food workers. Even in a pandemic, Canadians need to eat. It is thanks to the efforts of our front-line food workers that Canada's food plants have continued to operate through COVID-19. This has been no easy feat. As companies, we have invested an estimated $800 million to keep our workers safe. We have also spent countless hours reinforcing with them the importance of their contribution. It is critical that governments also reinforce with our front-line food workers the essential nature of their work. As we move forward, in particular we are asking that governments consider the importance of front-line food workers in any rapid testing and vaccination programs.
Despite the measures we have put in place to mitigate risk, food plants remain congregate settings, and it is on all of us to do what we can to ensure our food workers remain healthy while they produce the food that allows us to eat.
I thank you for the opportunity to present to you today, and I look forward to your questions.
Thank you, Mr. Chair and members of the committee. It's an honour to be speaking with you this afternoon.
As you may know, the Canadian Arts Coalition is a body of arts organizations across the country. It is non-partisan and collaborative and is made up of major arts organizations that are either service organizations or presenting organizations, and so on.
We had a number of concerns that we presented to you because we were really concerned about the way that COVID-19 has effectively upended the day-to-day life of Canadians and those around the world. We're particularly concerned about that in the arts, which obviously have been put on hold, as we heard just a little while ago from FAME.
We are concerned about how the arts and the broader Canadian society will rebound and how we need to work together to build a truly inclusive society, one in which the arts play a prominent role, as they have during these past few months, with many Canadians turning to the arts as a way to get through their days and to enjoy the moments they have while being in isolation or whatever it may be.
We're aware at the same time of the economic benefits of the arts, culture and sports. For example, we understand that in 2016 they contributed about $1.7 billion in our economy. You've heard already from FAME about issues with hotels and restaurants, and we would underscore that, but we also think it's really important in terms of our demography—in terms of indigenous peoples, persons who are deaf or disabled and the racialized populations—and how we build our sense of Canadians in this way.
To give you a sense of the recommendations that we've brought forward, we did a survey of our members and found a number of startling things that we put into the recommendations. In the recommendations you have in front of you, which were submitted back in June, there have been some changes.
Number one is that funds need to be dedicated to enable a safe, green reopening of arts venues and to encourage the public to return to the live arts. This is a challenge that we're going to face as people feel confident about going into rooms that are sizable and have more than, let's say, five, 10, 15 or 100 people.
Second, it's really important at this point in time to address some of the systemic issues, particularly issues around systemic racism in arts funding, by providing funds to ensure enhanced interim ongoing operational and project funding for indigenous, racialized, deaf and disabled, and community-based arts organizations.
Third, we feel it's really important to extend income support programs, including EI and CEWS and to begin to consider quite seriously a universal basic income.
Also, there really is an important aspect—FAME mentioned this earlier—about investment in digital technology, as that is the way many of the arts programs that are out there right now online are being presented to the public.
We were very happy when we saw that the economic statement yesterday addressed some of the issues that we put forward in our paper. We want to congratulate the government on these steps.
It's important that increasing the maximum wage subsidy rate to 75% be extended from the end of December on to March 13 of 2021.
Also important, as we see it—and we support it—is the providing of a top-up of $500 million to regional development agencies, as FAME mentioned, and community futures networks. Those bring in tourists, as we know, and the arts are rather critical to that. We have a great advantage, given the diversity of our arts programs that bring people in from around the world to see art by indigenous people, by people of colour and so on, and also in our regions across the country. Arts are very important here.
We are very pleased to see the addition of $181.5 million in the 2021-22 budget for the Department of Canadian Heritage and the Canada Council for the Arts. The safeguard that we would wish to make clear is that those funds should also be used to ensure that there is an inclusive arts ecology, and that, for us, means paying particular attention to indigenous artists, artists of colour, the deaf and disabled, and small and regional arts organizations, as well as community-based arts organizations.
We think it's very important to work across the sectors and also to work across governments as they are beginning to look at how best they can marshal their energies to support the arts to come through this and into the future. Those are the concerns we bring forward to you. We want to see how our community can be included in terms of involvement and implementation, particularly our organization in the arts and other organizations, so that we can tailor this response.
We've been pleased to see that the recommendations we made to you back in early July, I think it was, are now becoming a reality. That's because of the attention the government is paying to people who are in the field, who have their finger on the pulse and who are able to channel that information to you so you can consider it. I think the expression is you're building it as you're flying. We're on that plane with you and we want to be able to construct as you move along as well.
I think that's what I really want to say this afternoon, other than that we look forward to remaining involved with the government as it moves forward on this timely matter to ensure that the arts are essential in Canadian lives and that the arts ecology is inclusive, as I have mentioned, and that it builds the social cohesion and identity of who we are as Canadians.
As I said, we are encouraged by a few measures, but the discouragement felt by FAME and RÉMI members is fairly widespread and profound. A few months ago, people were telling me that they had lost a year and it was hard but that 2021 would be even harder. A normal festival and event season won't be possible in 2021. We aren't expecting things to return to normal until 2022. That means we have to rethink our business models. We have practically no self-generated revenues. The only thing keeping us somewhat afloat right now are the subsidies. Otherwise, we would be completely lifeless. That's the reality on the ground.
We made recommendations regarding the emergency wage subsidy, which has come a long way. It is essential that the subsidy remain tailored to the culture and tourism sectors, to account for the hyperseasonal nature of our business, as I mentioned earlier. The funding for Canadian Heritage has increased. We feared a decrease, but it has been postponed. The problem has not been fixed; it still exists, and if nothing is done, come 2022, we will be negatively impacted again when funding levels drop back down.
We believe the sector's economic recovery hinges on the marquee tourism events program, version 2.0. It was introduced in response to the 2008 crisis by the Conservative government at the time. The Conservatives invested $100 million over two years to stimulate the economy through events-based tourism. That would be the ideal solution for us right now. It would, however, require more than the 2009-10 investment, which is why we are recommending $225 million in funding over three years—so $75 million times three. There would be an indirect spinoff for hotels.
I would also draw the committee's attention to the recommendations that were made further to the evaluation of the program in 2011, when it ended. There were three lessons learned. First, applicants needed time to develop project proposals, second, it was necessary to take the time to develop a data collection system, and third, time was of the essence.
For some people, summer 2022 is a long way off. For us, now is when we have to start planning for festivals and events that will take place 12, 15 or 18 months down the road. That is why we are calling on the government to include the program in its next budget. The recovery of the event and tourism sector would then truly be possible.
We're all very aware of the pandemic's impact, not only on health, but also on the economy. In this meeting, we've already discussed the somewhat harder hit sectors. We've talked about the restaurant and hotel sectors. I'd add the tourism, air transportation and aerospace industries.
I'll talk about the cultural sector. My first questions will be for Mr. Smith.
Mr. Roy, don't worry. I'll turn to you later.
Mr. Smith, what's the situation for the members of your organization, the Canadian Arts Coalition?
Do you think that yesterday's announcement in the economic update will breathe new life into your sector?
The situation for our members is rather precarious—like fame, in a way, but perhaps at a different level.
Artists are basically unable to perform. In many cases they cannot rehearse. Their income predominantly comes from performing, creating, rehearsing, etc. Without that, they have a rather bleak time at the moment and are very concerned about what the future will hold.
While the wage subsidy is in place and CERB continues, there are questions about what will come after that, and whether that's a sufficient supplement during the current crisis.
We've seen small, medium and large venues that are closed right now. As a result, it's not just the loss of revenue but also the sense of what opportunities there are for the public to see live performing arts.
One question that was asked earlier, which I think needs to be underlined, is that even with a vaccine, we still don't know the level of confidence the public will have in going into venues for live performances. How comfortable will people actually feel? Will they wait to see how effective the vaccine has been, and so on?
Those are really big concerns. We are very concerned about the more marginalized artists—that is, indigenous artists, artists of colour, and the deaf and disabled. They are already hanging on by their fingernails, and now they're finding it incredibly difficult, because they were last in to the funding system, so to speak. As a result, they have hit more difficult times than others.
Yesterday, additional assistance was announced. Mr. Roy spoke about this earlier. Several months ago, I wrote to the to ask for funding for performance and cultural activities. I'm pleased to see a step in the right direction. We pushed for this as well.
Mr. Smith, you brought up a good idea for everyone from artists to craftspeople to technicians. It's the concept of a guaranteed minimum income, or basic income, which would provide some form of social safety net. We in the NDP are interested in this idea and we're looking into it. My colleague from tabled a motion on the issue.
I want to know how this could apply to your members. How could this provide more security for the cultural community as a whole, meaning for artists and craftspeople?
It's incredible frustration. It's not so much that malls and stores might be open, because obviously people are passing through those. However, there's a similarity with those museums and galleries. It's the concern about the venues for performing arts in particular, where people would be sitting next to each other. In our research, for example, we noticed that in Germany a symphony orchestra, I think, tore up half the seats in their theatre in order to get live performances. Of course, that was very heavily subsidized by the German government as well.
There are real questions about when performing arts spaces will be able to open safely. Will that vary based upon the size of the performing arts centre—small versus medium versus large, such as a 3,000-seat proscenium, for example, versus something that holds 100 people?
I want to underline that one thing we brought forward is that there needs to be a marketing strategy to convince Canadians that things are safe, or to encourage Canadians to try. We think government and arts organizations should collaborate to say, “Yes, we are working together to make sure that the environment is safe, and we encourage you to take the chance, because the PPE is in place, the sanitizers are in place, foyers have been taken care of, the front of the house is taken care of, etc.”
My next comment, and maybe slight question, is for Mr. Smith.
I just want to say that because I'm blessed to be in a riding where there are tons of artists and people in the cultural sector, I very much appreciate your presentation and your recommendations. You were very clear. You spoke to us about your recommendation one, about reopening. I think two, three and four are quite clear in terms of what you talked about.
Maybe you could spend 15 seconds just on your last one, engaging the private sector and increasing the charitable tax credit. Maybe you could give us a couple of seconds about that, and then I have one last question.