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Monique Gomel
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Monique Gomel
2021-06-22 12:06
Hello, and thank you for inviting me to speak to the committee today.
My name is Monique Gomel, and I am the interim chair of Destination Canada’s board of directors. I am joined by Marsha Walden, president and CEO of Destination Canada.
I would like to acknowledge that I am joining you from Vancouver, the traditional territories of the Coast Salish peoples: the Squamish, Tsleil-Waututh and Musqueam nations.
I was appointed interim chair in March of this year. However, I've been vice‑chair of the board of directors since 2017. I'm also a senior vice president at Rocky Mountaineer, where I oversee global marketing, communications, data and insights, and sales operations.
Today I would like to give you a brief overview of my role as interim chair, the state of the tourism sector in Canada and Destination Canada's near- and longer-term plans.
First, as interim chair of the board, I work collaboratively with a team of eight directors with tourism experience from small business owners to renowned entrepreneurs to former executives from multinational corporations.
The government has appointed some of Canada's best and brightest tourism business leaders to help provide strategic advice to the executive team and the president and CEO of Destination Canada. Directors are actively involved in long-term strategic planning, prioritization of objectives, financial oversight and risk management. The board assures itself that appropriate systems of governance, leadership and stewardship are in place while empowering the executive team to manage the organization.
Before I provide an overview of the state of the sector as a whole, I would like to share my perspective as an operator. In my role as senior vice president of Rocky Mountaineer, a Canadian luxury rail company, I'm seeing firsthand the devastation of the COVID‑19 pandemic on our business. We weren't able to operate in 2020, and we've delayed the start of our 2021 season.
The impact of the pandemic on tourism is greater than that experienced after 9/11, SARS and the 2008 crisis combined. Women, youth, immigrants and indigenous workers, who make up the engine of the visitor economy, have been the hardest hit by the impact of COVID-19 due to reduced operations, business closures and job losses.
We are forecasting that the sector [Technical difficulty—Editor] until 2024.
At this point in my presentation, I would like to acknowledge that the speed and scale of the government's response to the pandemic has never before been seen in times of peace.
The government has provided over $15 billion in federal government investments to support tourism in the past year. This includes important programs like the Canada emergency wage subsidy program and the highly affected sectors credit availability program. There was also robust support for Canada's tourism sector in budget 2021, which, I will note, still needs to pass the House and Senate, including an additional $100 million to Destination Canada for marketing.
While government subsidy programs are helpful for survival, recovery can only happen when revenues return.
The good news is that, although the sector is struggling now, we're seeing strong signals of future demand. Our latest research shows upward trends in feelings of safety about travel and a greater willingness of communities to welcome visitors.
With these signs of hope, Destination Canada is focusing its strategy to help revive market revenue in the near term and support a thriving and resilient industry that delivers net benefits to communities in the long term.
A key part of our plan to revive revenue is a multiphased domestic campaign that reflects the evolution of health restrictions. Recent research from Destination Canada finds that, if Canadians shift two-thirds of their typical spending on international travel towards domestic tourism this year, it will make up for the estimated $19-billion shortfall in international visitation. It will also support 150,000 jobs and help accelerate recovery by a full year. Simply put, we need Canadians to keep their holiday dollars in Canada this year to speed up our sector's recovery.
In its early stages, our campaign aims to increase Canadians' understanding of the importance of travel to their communities, inspire confidence and a desire to travel domestically, and finally to reignite the welcoming spirit of Canadians from coast to coast.
While our industry is first and foremost concerned with protecting the health of our employees and guests, we are eager to welcome travellers again. When the time is right, we will start introducing more aggressive calls to action and encourage Canadians to book their travel. We are also key in our international markets, ensuring that Canada stays top of mind for business and leisure travel alike when it is safe to do so. The efforts are now intensifying.
In order to help our industry ready itself to reopen and compete in a ferocious marketplace, we are hearing three main areas of concern.
They are seeking clarity around reopening milestones—
Suzanne Benoît
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Suzanne Benoît
2021-03-09 11:11
Good morning, Madam Chair, ladies and gentlemen.
I am very pleased to be appearing before you today on behalf of the members of the Quebec aerospace cluster. We are very grateful for this invitation and for the interest you have taken in our industry.
As you know, the global aerospace industry was hit hard by the current crisis. The recent report of Canada's Industry Strategy Council also cites aerospace as one of the sectors most affected by the pandemic across the country and most in need of targeted emergency measures by the federal government.
For a year now, the vast majority of the global air fleet has been grounded as a result of the sharp decline in air traffic caused by the closing of international borders. As a result, thousands of aerospace workers are now unemployed, and hundreds of Canadian businesses are struggling to survive.
However, our industry is developing measures that would allow operations to resume, as many other countries have done and are still doing. Leading executives in our sector have also mobilized as never before and, last May, established the alliance for aerospace recovery to accelerate the industry's emergence from the crisis. The alliance is a strategic committee of Aéro Montréal's board of directors that, in the past few months, has helped to develop a specific action plan that is readily applicable and suited to the industry's needs.
However, the government needs to take a position on it quickly because every day counts. We have already observed a nearly 60% reduction in airlines' new aircraft requirements and do not anticipate a return to previous production levels until 2024-2025.
The global aerospace industry had hit unprecedented heights before the crisis. To meet demand, many airlines took on debt so they could continue expanding at pre-crisis growth rates, acquiring new equipment, investing in automation to increase their productivity and expanding their plants. However, their operations have since declined by as much as 50%.
Many SMEs now have cash flow problems as a result of those capital investments and of the changes made to repayment terms by nearly all decision-makers in recent months because they too are struggling to survive the crisis.
Extending the Canada emergency wage subsidy for our sector until the end of the crisis, which is anticipated in 2024, would help us retain our qualified employees and thus ease pressure on corporate cash flows.
We must block the exodus of sectoral workers to other places around the world where governments are engaged or to other industries less affected by the crisis.
Since the pre-crisis labour shortage will still be intact when the sector recovers, it is therefore vital that we retain workers within our businesses.
The few nations that have an aerospace industry support their strategic sector because they know that exports of high-tech products will create jobs and wealth. That is why they advance strong industrial policies to ensure its growth.
To address the crisis, France has invested $26 billion in its aerospace sector, the United States $80 billion and Germany nearly $10 billion. Here in Canada, we are still waiting for the targeted assistance that is so slow in coming. What will Canada do to support this pillar of our economy?
Aerospace is a strategic and key industry for the economy. On its own, it generates total revenue of $34 billion and contributes $28 billion to Canada's GDP. It represents 235,000 direct, indirect and induced jobs, including more than 43,400 in Quebec, and consists of hundreds of SMEs and large businesses. It invests more than $1.4 billion in research and development every year. The sector exports more than 80% of its production, which contributes to Canada's collective wealth. It is therefore essential that we invest now in order to preserve our industry and halt its decline.
In the 1980s, Canada's aerospace sector was ranked fifth largest in the world. Today, we have fallen to ninth position, and, if nothing is done, we should simply consider taking ourselves out of the running.
Canada has set very clear greenhouse gas emissions targets, and the transformation of the aerospace industry will play a crucial role in meeting those targets.
A large number of initiatives conducted by our businesses across Canada are already in development and include the design of new low-emissions engines based on hybrid, electric and hydrogen propulsion.
All these disruptive technological projects are part of a long-term strategy and require a profound transformation. Here in Canada, we are fortunate to have all the operational and technological assets and skilled talent we need to contribute to a greener recovery.
To support the aerospace industry and ensure its long-term viability, the federal government must become our strategic partner and quickly establish an integrated national aerospace strategy. That strategy, together with competitive funding, would enable Canadian businesses to compete with other countries on an equal footing.
By contributing to efforts to develop the industry, the Canadian government will help our country continue to distinguish itself and to shine on the global stage. The facts are clear: support for our industry is a profitable investment for Canada.
Madam Chair, ladies and gentlemen, thank you in advance for your support and attention.
View Bernard Généreux Profile
CPC (QC)
As Mr. Chartrand just said, we tend to invest a lot of money, and that's what the government has done over the past year to support industries in general. What you're asking is that we continue to provide that support in the same way. I'm sincerely somewhat surprised at your idea of covering wages for three or four years.
Please explain that proposal to me.
Suzanne Benoît
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Suzanne Benoît
2021-03-09 12:43
We simply need to consider the fact that it will take the aerospace manufacturing industry two more years to emerge from the crisis. It's either the wage subsidy or other types of assistance. We have to consider this. That support helps.
View Helena Jaczek Profile
Lib. (ON)
Thank you very much, Madam Chair.
First of all, I'd like to thank all the witnesses for their testimony. Obviously, we hear your frustration and your anxiety about your industry. I'm on the transport committee as well, so we have been studying the whole aspect of the impacts of COVID-19 on your industry. You've alluded to the fact that you had some issues even prior to the pandemic.
Monsieur Chartrand, when you came to the transport committee back in January—your association did—there was a question about how the Canada emergency wage subsidy had been used to maintain employment. I believe there was some question as to whether all employers were taking full advantage of that program. Could you elaborate?
David Chartrand
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David Chartrand
2021-03-09 12:44
They are not. I have to be honest. A lot of the small and medium-sized businesses are using it. Some of the major ones, like Air Canada, are not, or they're partially using it. There haven't been obligations put on the employers to use it to keep people employed and at work. I believe that was what the CEWS was for, initially. It was to make sure that we kept people employed and at work.
Why? Knowing that it will take a long time to recover in that industry, as Madame Benoît has said, many of these employers, such as Air Canada, have decided that since there were people who were going to be on furlough for a year to two years, they simply didn't want to pay the difference. They were getting a wage subsidy for 75%. They didn't want to pay the additional 25% or the benefits, which are attached to collective bargaining agreements.
It is extremely important that we continue the program and not lose our talent and that we make sure people stay and work in the small and medium-sized enterprises, and maybe that there is a merging of two different programs, but the wage subsidy is important, and it has helped. I can't say that it hasn't. I think it should be maintained, but there needs to be more sector-specific aid to the employers to make sure they can support their people at work and have new projects for people to work on, like Suzanne was saying for green energy. If we don't support the employers, we're going to lose that talent, and then employers won't be interested in investing here in Canada.
View Helena Jaczek Profile
Lib. (ON)
Did Bell take advantage of our government's wage subsidy program? If it did, what type of subsidy did Bell receive?
Robert Malcolmson
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Robert Malcolmson
2021-01-26 11:24
Yes. We did take advantage of the wage subsidy program. We used it for its intended purpose, which was obviously to keep employees working and to avoid layoffs in the midst of the pandemic.
I am happy to elaborate on that further, but I'm getting a stop sign from the chair.
View John Nater Profile
CPC (ON)
Wonderful. Thank you, Madam Chair; and thank you, Mr. Malcolmson and Mr. Daniels, for joining us this morning at our committee.
I guess I would just make the observation that according to your recent shareholder report, your profit was $5.5 billion over the last two years, yet Ma Bell was still able to take advantage of the wage subsidy, so I do find that interesting.
You mentioned a fair bit about wireless home Internet. I think in many rural communities there's a feeling that Bell is the incumbent and that Bell has let go much of the infrastructure in favour of perhaps a push to wireless. I want to get your opinion on that and why, in so many rural communities, there isn't a push to put fibre in the ground where there might be a business case. I think of a lot of places in rural southern Ontario where smaller telecoms have invested in fibre, yet Bell, where it's the incumbent, has failed to do so.
Robert Malcolmson
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Robert Malcolmson
2021-01-26 11:39
I'll address your comment on the wage subsidy first, and then I'll answer your question about wireless home Internet.
In terms of the wage subsidy, yes, we did receive it, and we received it in large part because the businesses we own—and I'm thinking here of Bell Media, the largest media company in the country, and our retail footprint of retail stores—were some of the hardest hit by the pandemic. It was a choice between laying off thousands of employees in an era where advertising revenue disappeared and retail stores were shut down or keeping Canadians working, and we chose the latter. We think the program itself worked, and it served industry well in order to keep people working.
In terms of your wireless home Internet question, our preference when we build networks is always to build fibre where there's a business case to do so. In smaller rural areas, there are challenges with building fibre connectivity, so we've come up with an innovative product, which we call “wireless home Internet”. It reduces the cost of the build, reduces costs for consumers and extends the network footprint in an innovative and seamless fashion. As more spectrum becomes available, we'll be able to do even more of that for rural Canadians.
View Nathaniel Erskine-Smith Profile
Lib. (ON)
Thanks very much.
Mr. Malcolmson, you've heard frustration from all parties now, I think, about B.C accessing the wage subsidy. I have the information in front of me but I really must be reading it incorrectly. I just want to confirm.
B.C. received $122.8 million in the federal wage subsidy. Is that right?
Robert Malcolmson
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Robert Malcolmson
2021-01-26 11:44
Yes, that's correct. If you look at the breakdown of where those funds went, $71 million—give or take—went to Bell Media.
As I mentioned, Bell Media was one of the operations that was hardest hit by the pandemic. I'll give you an example. Advertising revenues—which Bell Media is dependent upon in that media business—plummeted by over 30% just in Q2, 2020.
View Nathaniel Erskine-Smith Profile
Lib. (ON)
I have limited time but I do appreciate that and I took the point that jobs would have been lost but for the federal wage subsidy of almost $123 million. This is where I'm a little confused. I'm reading a B.C. news release from Q3, 2020, saying B.C. has a strong financial position with $5.2 billion in available liquidity at the end of Q3; 10% Internet revenue growth; 4% growth in year-to-date cash flows from operating activities; and a 13.7% higher free cash flow, which actually translates, from my reading of the news release, to a 5% increase in the Q4 dividend.
Instead of accessing that available liquidity, instead of perhaps not increasing that dividend, did you think it best to access public funds?
Robert Malcolmson
View Robert Malcolmson Profile
Robert Malcolmson
2021-01-26 11:45
No, we participated in a government program that was very well designed and intended to keep Canadians working at a critical time. We participated in that program commensurate with the impact that the pandemic was having upon our workforce.
I have to say that when you quote our financial results—and I don't do math as quickly as you do—you do have to remember that to build Canada's networks, to invest in 5G, to have fibre rolled out to 5.6 million households and to target wireless home Internet to reach a million households, you need investment capital. The only way you get investment capital is from shareholders willing to invest their money with your company in order to fund your network expansion.
If we don't have investment capital and if we're not delivering shareholder returns, Canada will not have the level of investment required to build the networks that we need in order to—
View Nathaniel Erskine-Smith Profile
Lib. (ON)
Mr. Ghiz, I don't want to put you entirely on the spot, but I did read recently in the Financial Post that Rogers and Telus received, I think it was $63 million, from the wage subsidy but then Telus paid out dividends. That makes me uncomfortable.
Does it make you uncomfortable?
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