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Jason Nickerson
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Jason Nickerson
2021-05-28 14:08
Hello. Thank you for having us here today.
We're going to speak about two issues that are part of the committee's study from the perspective of our organization, which provides medical assistance to people affected by crises in more than 70 countries around the world.
First, Canada should support the TRIPS waiver. The waiver is not a complete solution to scaling up and diversifying COVID-19 vaccine manufacturing to address the supply shortages, but supporting the waiver quickly clears space and removes legal barriers to then focus on the many other barriers. We emphasize that any waiver must encompass not only vaccines, but other tools like therapeutic drugs and diagnostics and medical devices such as ventilators, as well as the components and equipment needed to make vaccines.
Canada's position during discussions around the TRIPS waiver has been one of indecision—never formally rejecting it, while repeatedly raising alternatives that have failed in the past.
One such alternative raised is the TRIPS article 31 bis mechanism, which is operationalized by Canada's access to medicines regime, or CAMR. It is our position that Canada should follow through on its own claims of CAMR's effectiveness by taking the necessary first step of adding COVID-19 vaccines and drugs to schedule 1 of the Patent Act. While Doctors Without Borders does not believe that TRIPS article 31 bis or CAMR are effective tools at the best of times, let alone sufficient in this pandemic, Canada's failure to even list these items in schedule 1 means that Canada is the single greatest roadblock to utilizing the very tools it has promoted at the WTO.
The second issue we would like to discuss is domestic production. MSF supports increased domestic production, but it must be done correctly. If Canada's approach to scaling up biomanufacturing in this country is to provide financial support to pharmaceutical companies to build factories here, this funding must come with guarantees of affordable access to the final products, both for Canada and for the rest of the world. This is just common sense. If the public is paying to develop and manufacture medicines, we should all be able to access them at fair prices. To this end, Canada must also be transparent about the terms of all such deals.
Another key question is what to do between pandemics with the public manufacturing capacity that Canada is building. New quality-assured manufacturing capacity that has been initiated for the purposes of producing COVID-19 vaccines should not be shut down or sold off to private interests after the pandemic fades. Rather, Canada should use this capacity to address other important global health issues. Producing a range of products keeps facilities operating and Canada's skills sharp. After all, it's not clear what the next pandemic will be, and the world needs a diversity of manufacturing capacities.
Canada has world-class researchers. Where it falls short is in end-to-end development to get innovations out of labs and to patients. Products that are vital for global health but have limited commercial appeal have no real pathway to approval.
Take the Canadian-invented Ebola vaccine, discovered by scientists at the National Microbiology Laboratory in Winnipeg. After discovering it, Canada signed a deal to license it to an American company. This ultimately led to the vaccine languishing on a shelf for years. This meant that this effective vaccine was not ready in time for the 2014 West African Ebola outbreak. To be blunt, this cost lives.
Canada has other promising experimental vaccines, such as the ones for Lassa fever and Marburg virus, which have faced similar challenges. End-to-end production from lab bench to patient bedside ought to be part of our biomanufacturing strategy.
Our overarching message here is that there are many important diseases that are essentially market failures: They are not profitable enough to attract investment from private pharmaceutical companies, yet they represent significant public health threats. Ebola, Lassa fever, Marburg and, prior to this pandemic, coronaviruses are all examples.
There are also many important drugs and vaccines that already exist and are regularly in shortage or hard to obtain. Diphtheria antitoxin, the product Connaught Labs was founded to produce, is now almost impossible to procure worldwide. We know this first-hand because when we were responding to simultaneous diphtheria outbreaks in Yemen, Bangladesh and Venezuela in 2017, we quickly realized how few options existed. The same is true for many antibiotics and other low-profit medicines.
A robust biomanufacturing strategy that is guided by public health needs—and not the pursuit of profits—is what needs to guide Canada's biomanufacturing strategy, which ought to be linked to a research and development strategy—
Natasha Hope Morano
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Natasha Hope Morano
2021-05-25 16:27
Thank you, Mr. Chair.
My name is Natasha Morano, and I am an entrepreneur. I am honoured to be here today representing Startup Canada as the corporate and government affairs director.
Since 2012, Startup Canada’s programs have been a gateway to every stage of the business cycle, from ideation to inception to growth.
Startup Canada enables connections, education, promotion and advocacy. We are accessible to 3.5 million entrepreneurs across the country with 30 active communities from coast to coast to coast. To tell the story of every entrepreneur in five minutes is of course an impossibility. The differences amongst them are countless. What ties them together is that each takes the reins of their own financial destiny. Many may have started through passion. Many more have been thrust into entrepreneurship through necessity, and many, unfortunately, have been left behind.
Entrepreneurs are the pistons of the engine that creates jobs, growth, and resilience. They are an essential piece of our country’s economic recovery, and they rely on trusted authorities, experts and qualified enablers of simplification.
The infusion of funds that budget 2021 offers will provide equitable access to support. It is an enormous step in reinvigorating an inclusive economy. Startup Canada is looking forward to the road ahead and the role that we can play in paving it. It is our goal to help ensure that there is no redundancy in the rollout of these programs and that the support offered in budget 2021 gets into the hands of the entrepreneurs who so desperately need it in a quick and efficient manner.
Entrepreneurs are the critical pistons in our nation’s economy and in our recovery efforts through this pandemic, and they need a reliable ignition system. They need access to trusted organizations that know their pain points and develop programs in response to their needs. The Government of Canada should look to partner with like-minded organizations that are equally charged by powering up entrepreneurs and that understand their needs.
The government’s investment of over $100 million to support inclusive entrepreneurial growth is designed to provide new funding for national organizations to lift up diverse entrepreneurs and small businesses across the country through financing, mentorship and advisory services. This design is an absolute mirror of Startup Canada's own mandate, so it is welcomed.
The pandemic has displaced many Canadians and numerous industries. The Canadian Federation of Independent Business estimates that 239,000 businesses are at risk of closing because of the pandemic. This situation must be curbed. COVID-19 has claimed a disproportionate number of jobs held by women. Women account for 37% of self-employed Canadians. Budget 2021 proposes to provide up to $146.9 million to strengthen the women entrepreneurship strategy. This is a good first step in supporting women entrepreneurs, but there needs to be more.
There is an urgency among entrepreneurs to digitize quickly, to move from storefront to e-commerce, from neighbourhood-based to cross-country, and from operating locally to exporting products and services abroad. The government's commitment to help entrepreneurs magnify the scope of their markets and increase the supply of well-paying jobs is welcomed.
Startup Canada is pleased to see that the government recognizes the importance of investing in programs that support businesses and entrepreneurs to be globally competitive. However, businesses start at different rates with different ultimate goals. There needs to be more early-stage support for entrepreneurs who are not globally minded but who have become entrepreneurs out of necessity and are not the “unicorns” of tomorrow. They require simple, easy-to-use tools and advisory support as they try to make a living for their family.
Startup Canada looks to simplify the process for the Government of Canada to roll out programs while also ensuring that entrepreneurs have limited barriers to program entry. We need to make the journey of being an entrepreneur much easier. We need to consolidate and shepherd entrepreneurs through all of the available support that exists across the Canadian ecosystem from incubators to accelerators to public and private sector support and beyond.
Entrepreneurs, more than ever, do not have the time to research what is available to them, particularly as these supports are revised or changed daily. Let’s save them the time so that they can work on their businesses and support the Canadian economy as a whole.
Everything budget 2021 sets out to do as pertains to support for entrepreneurs is what we do on a daily basis. There is no better time to invest in Canada’s entrepreneurial ecosystem. While there are numerous opportunities for entrepreneurs in budget 2021, there remains a gap in support for early-stage entrepreneurs who have that entrepreneurial spirit running through their veins. There is no safety net to capture them if they fall. These are the entrepreneurs who remain left behind and who require support. They are asking for the foundational support to ensure they are equipped with sound advice and the advisory assistance they need to start their businesses on solid ground and consequently create jobs.
Mr. Chair, Startup Canada is grateful for the opportunity to work with the government to throttle the economy fuelled by budget 2021.
Thank you.
Éric Paquet
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Éric Paquet
2021-05-25 17:41
The billion dollars set out in the budget to help the tourism sector cannot be overlooked, with $500 million being administered by the regional development agencies. We still don't know how the funding will be allocated; the details are expected to come out a bit later. The money will support tourism initiatives in every region of the country, and that's a good thing. It will be allocated on a by project project basis.
However, as I said earlier, tourism businesses are on their knees. For more than a year now, they have been running on a fraction of their normal revenues. Right now, business owners just want to stay afloat until their revenues return to normal. That is where their heads are at right now, which is why we are asking the government to extend the wage subsidy and the rent subsidy. The rent subsidy, which helps businesses cover fixed costs, has been a real lifeline. Both support programs have kept the tourism sector and tourism businesses alive.
The feedback we are getting from businesses is this: being able to pivot and develop new products and services is great, but right now, all they want is to have access to those programs so they can make it through the crisis. Once they are on the other side, they can work on offering new products and services.
Mr. Ryan, is there anything you would like to add?
Jean-Michel Ryan
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Jean-Michel Ryan
2021-05-25 17:43
At the risk of repeating what's already been said, I would stress that businesses really need to get through the end of the crisis if they are going to bounce back.
The Destination Canada funding and other investments in the budget are certainly important, but the focus is on helping businesses prepare for the recovery. The sector has to be able to rebound, however, and private businesses, in particular, need the resources to do so, as do other organizations.
To reinvest in tourism products, services and infrastructure, businesses need a minimum amount of capital so they can access future programs. If they are not in a position to make that investment, they can't access the support programs or participate in the recovery.
That is what tourism businesses are dealing with right now.
Natasha Hope Morano
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Natasha Hope Morano
2021-05-25 17:56
Absolutely, it is incredibly important, and we need to see that long term. That's the big piece.
Similarly with the procurement diversification, I'm really happy to see that there is additional support for under-represented groups. As we're going to look to our great rebuild, we look to the role that entrepreneurs play in creating and stimulating a very sound, strong Canadian economy. We need to be as inclusive as possible and make sure that all voices, all entrepreneur voices, are included in the high-level policies that are going to be implemented.
Andrew Casey
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Andrew Casey
2021-05-21 12:06
It is definitely a key objective that we have to strive for.
We have to create anchor companies. We've been very good as a country at creating a lot of early-stage companies, and as you indicated in your question, many of them are sold off. They go to the large multinational companies.
Part of that is an absolute business strategy that is a reality. You have a small product, one single drug. You recognize that you want to sell it to the world. You need the infrastructure that the large companies provide. You're never going to become a big pharma company overnight, so you will pursue that path.
For others that have platform-like technologies or manufacturing capacity, like Medicago, AbCellera or Repare, they are more likely to be able to stay here in Canada and grow. If we want to get to that, we have to figure out where the gaps are. Some of that is investment capital. It's the talent piece, but there are also some other tax incentives. There are things like patent boxes, which are being used in other jurisdictions, that allow companies to earn money from their innovation but not be taxed at a high rate until they become a commercially profitable company.
Incentives such as that, tax measures such as that, would be really important to keeping some of those companies here.
Andrew Casey
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Andrew Casey
2021-05-21 12:24
That has to be at least a significant objective, because we put in all those investment dollars and we use tax credits and all, which are basically funded by the taxpayers. You create this fantastic collection of companies, and then if you allow them all to go, we miss out on the real commercial benefits of having those companies grow and become large commercial companies.
My reference to RIM really was more about what it did for the local community in southwestern Ontario, in that once it was up and at its peak, it just created more entrepreneurs, more investment and became a self-fulfilling prophecy.
Just on the patent box, to talk about that at bit, that's an ability to take your IP and earn some dollars off it while you're not yet commercial and to have those dollars taxed at a lower level. This is not something crazy. It has been done in other jurisdictions quite effectively, such as the U.K., which has a life sciences strategy. I think that's probably where I would go with this—to ask how we connect all of this.
We do everything in silos. We do pricing and reimbursement in a silo. We do investment in a silo. We do R and D in a silo. We have universities and talent, but is it all connected? The health and biosciences economic strategy table did a really good job of laying out all the assets we have and has identified a need for a cohesive way to bring it all together so that it is all connected and is truly an ecosystem. Like any ecosystem, such as a coral reef, every piece of it has to be healthy, alive and vibrant if the whole coral reef is going to be healthy. That's what we need right now.
We have all these great investments. We have the infrastructure. We have the talent. We have all the companies. Now we need to connect it all with a coordinated life sciences strategy, not only at the federal level but one that ties into all that's being done at the provincial level as well. There are provinces that are equally pursuing the investment area, the tax area and the talent area, so how do we bring it all together?
That would be my advice. If we're going to do this, if we're going to create companies that are anchor companies in Canada, let's do it through a strategy.
Andrew Casey
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Andrew Casey
2021-05-21 12:28
Again, as I said, the investment is always a big part of it. The dollars that need to flow to the sector are absolutely critical.
There are some roadblocks that some of the companies have also identified most recently. If you look at AbCellera and Repare in Montreal, and other companies, they've identified the access to wet lab space as actually pretty critical right now. There is an absence of wet labs in this country, and I think we have to grow more of that.
I do believe the budget contains some dollars that will be dedicated towards that. It still remains that, ultimately, there's going to be a talent issue at a certain point.
Most companies would like to stay here, and if we can overcome some of those roadblocks, I don't think there's a huge issue of losing them, other than making sure that we're keeping an eye on what other jurisdictions are doing to try to take those companies away.
AnaBela Taborda
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AnaBela Taborda
2021-05-20 14:54
Thank you. That's quite okay.
Good afternoon. My name is AnaBela Taborda. I am branch manager of IC Savings Credit Union and chair of the Little Portugal on Dundas BIA, or business improvement area, in Toronto, in Davenport riding. Thank you for inviting me to take part in this call.
Little Portugal on Dundas BIA represents a collection of approximately 325 small and independent businesses along Dundas Street West in Davenport. We are one of over 80 such organizations in Toronto whose entire focus is on the success and growth of our local economies.
Toronto's BIAs represent a diverse range of organizations with priorities that are defined by local business stakeholders. All funds raised by BIAs are reinvested back into their local communities. Over $1.4 billion have been paid in taxes by BIA members, and together we employ over 551,000 individuals. That’s a massive contribution, and a huge responsibility for individual business owners.
In my role as branch manager of IC Savings, a financial institution in Little Portugal, I witnessed the struggle of many small businesses during this pandemic and how the COVID-19 economic response plan and the initiatives put in place by the federal government provided financial help, without which it would have been virtually impossible for our small and independent businesses to survive. We had very few closures in our BIA, thanks to these programs and the ongoing work of our local MP, Julie Dzerowicz, in tirelessly advocating on our behalf and connecting with our membership to help guide them through the available options. Thank you.
Further, I also want to thank the federal government for increasing Canada’s COVID-19 vaccine supply, which is vital to the recovery of our citizens and small businesses.
We are encouraged by a number of proposed items within budget 2021's support for small business and we look forward to their implementation. We do have some concerns, however, as to the timing, duration and design for some of these initiatives. We are keenly aware that although the future is looking brighter, small business continues to suffer. Indeed, full recovery is still a long way off.
An example would be CEBA. Although it is stated that if a business repays their loans by December 31, 2022, up to a third of the value of their loans—meaning up to $20,000—will be forgiven, we know that even a deadline of December 31, 2022, may still be too soon for our individual business owners to manage.
Another example is the budget 2021 extension of the Canada emergency wage subsidy and the Canada emergency rent subsidy and lockdown support beyond June 2021 to September 25, 2021. We believe this should be extended further, because we must first take our small businesses to a livable state before we even consider setting upon any road to recovery.
Helping small and medium-sized businesses move into the digital age we applaud. The Little Portugal on Dundas BIA has been at the forefront of adoption of Toronto’s Digital Main Street program. We have benefited from having a digital service squad member fluent in Portuguese, since in some cases language was a barrier.
Language challenges aside, however, we cannot force people to adopt a digital program. The design of the Canada digital adoption program must be carefully engineered, understanding that many main street independent businesses are slow and unable to adopt for many legitimate reasons and that some will need support in their native language. The program must be adept at uncovering the barriers up front and addressing them directly before the digital training can take hold and be effective in practice. We know this is the case because of the number of current businesses we have worked with that needed additional hands-on assistance with all government relief programs, subsidies and initiatives, since only online access was available, and for obvious reasons.
But again, we do applaud this initiative.
In regard to new businesses, part of the recovery will be welcoming new businesses into our BIA. We need these new businesses to create new jobs and replace any that may have been lost. We need all levels of government to create ways and means of helping us attract new businesses and helping sustain them in their first years as the country emerges from the pandemic. Proof of revenue loss criteria for government subsidies or relief program applications, for example, must be revisited to be more sensitive to a start-up’s reality.
With regard to accessibility, approximately one in five Canadians, or about 6.2 million people aged 15 and over, report having a disability that limits them in their daily activities. That would include the ability to visit main street businesses.
The Accessible Canada Act was developed following the most inclusive and accessible consultations with the disability community in our country's history. More than 100 accessibility organizations and 6,000 Canadians took part in the consultations. What can be done and how can we prepare, as our population continues to age, to improve the accessibility of Canada’s main street businesses?
In closing, I’d like to say that as the government continues to develop COVID-19 recovery programs, we ask that our local MP representatives continue to actively engage us in the development of those programs. Our BIA boards and staff are highly skilled and adept at identifying potential challenges among our memberships and are only too happy to assist in any way we can.
Thank you.
Liette Lamonde
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Liette Lamonde
2021-05-20 16:08
Thank you, Mr. Chair.
Thank you to the members of the House of Commons Standing Committee on Finance for inviting me.
My name is Liette Lamonde, and I am the president and chief executive officer of Bonjour Startup Montréal, a not-for-profit organization whose mission is to better position Montreal's start-up ecosystem for success. We work to accelerate the creation, growth and influence of Montreal's start-ups by mobilizing a wide variety of partners. The ecosystem is made up of accelerators, incubators, investors, universities, large companies and, of course, governments.
Our organization was created in late 2018 by the OSMO and Montréal inc. foundations, with the financial support of the Quebec government, the City of Montreal and the private sector. In the fall, we received support from the Economic Development Agency of Canada for the Regions of Quebec for the first time.
Since our organization was created, we have launched many projects and initiatives to help fill the gaps in our start-up ecosystem, gaps attributable to its relative newness. Montreal's ecosystem is barely 10 years old. Compare that with Silicon Valley, which has been around for more than 40 years.
In that first decade, Montreal built a critical mass of start-ups, more than 1,300.
Montreal's young ecosystem is now entering the globalization phase, where Quebec start-ups move into the next phase of growth and break into international markets. A crucial step, this is when start-ups finally achieve significant economic and social success.
When an ecosystem is able to produce more companies in the league of Lightspeed and Shopify, it builds prosperity and experience.
The race to create thriving start-up ecosystems is not limited to Canada. It is a global race. Every big city is getting in on the investment, in the knowledge that start-ups are incredible drivers of innovation. If Montreal does not establish itself as a true competitor, not only will it stagnate, but it will also lose ground—literally.
April's federal budget provides continued support for small businesses, in the form of much-needed emergency programs to help them cope with the pandemic. The budget also includes significant investments in innovation. We are delighted to see that the government is leveraging innovation to support the economic recovery.
The budget contains measures to support the financing chain for start-ups such as the renewed venture capital catalyst initiative. Among the measures to support start-up innovation is the National Research Council's industrial research assistance program. The budget includes targeted supports for women entrepreneurs and Black entrepreneurs, which some start-ups will be able to take advantage of. Measures that support flagship sectors of Montreal's economy—clean technology, life sciences, aerospace and artificial intelligence—also appear in the budget.
As the voice of Montreal's start-up ecosystem, we applaud the amendments to the Canada Small Business Financing Act, such as extending the loan repayment period to 15 years and expanding loan class eligibility to other types of assets such as patents and trademarks. We believe these changes will help start-ups remain competitive in the context of a sustainable economic recovery.
Nevertheless, I would be remiss if I did not express one of our concerns: the federal government's underfunding of the start-up ecosystem in Quebec, specifically in Montreal. The start-up ecosystem in Montreal is falling behind other ecosystems in Canada. We placed 36th in Startup Genome's global ecosystem rankings, whereas Toronto-Waterloo placed 18th and Vancouver came in at number 25.
With their ever-growing potential, Quebec start-ups are drawing the attention of accelerator programs in Ontario, which are better funded and have their sights set on the cream of the crop in Canada. That means Montreal start-ups are at risk of being uprooted, threatening the very foundations of the area's ecosystem, particularly in the sectors I mentioned, as well as in disruptive technologies.
However, the real competition is not domestic, but international. That is why forward-looking measures are needed immediately to ensure Montreal's start-up ecosystem can continue to compete with comparable ecosystems around the world, ensuring the whole country benefits when Quebec start-ups grow.
This highlights the need for a scale-up platform in Quebec. Ontario has one, and it received $52 million from FedDev Ontario in 2019. Vancouver is looking for $39 million to build a similar platform, not to mention that a new economic development agency for British Columbia was recently created. Neither Montreal nor anywhere else in Quebec has a scale-up program, despite the clear need for one. With appropriate funding, we could fill that void. Funding should be evenly distributed across Canada's start-up ecosystems.
Montreal's start-up ecosystem is hitting its stride, as confirmed last week, when we learned that tech companies in the area had received a total of $1.15 billion in funding in 2020, almost as much as companies in Toronto.
However, there is still much ground to gain. As an ally of Quebec business and entrepreneurship, the federal government, through the Economic Development Agency of Canada for the Regions of Quebec, should support the ecosystem's efforts so that Quebec start-ups can contribute fully to the economy, both in Quebec and in Canada.
Thank you.
Daniel Kelly
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Daniel Kelly
2021-05-20 16:19
Just moments ago Ontario announced another two weeks of lockdown on top of another two weeks on top of another two weeks, so I was just blasting the Ford government seconds ago.
Let me switch gears to the federal budget. There is a lot in the budget that we commend and endorse and some pretty serious gaps that I want to highlight. I did send, through the clerk in both French and English, a side deck of some data from CFIB, as I have done several times in the past to the finance committee, just to give the latest on where small businesses stand.
Right now, at this late stage, 14 months into the pandemic, only 51% of small and medium-sized firms across Canada are fully open. That's 51%. It's a pretty serious situation. If you look at the normal levels of staffing, fewer than 40% of businesses have attracted back all of their workers at this stage—in most cases because they do not need them as they are locked down. Most worrisome of all, only about a quarter of small firms are actually at normal or better levels of revenue than they were at this point before. I reiterate: Only a quarter of small businesses are at normal levels of revenue.
I want to share with you some of the measures that we did like in the budget. It did do several things. It allowed small business owners the deduction of up to $1.5 million. That's a very positive measure. We're quite pleased to see that the government did include that. It was a surprise, and a positive one for business owners across Canada. There's a reference to further progress on reducing credit card processing fees. That's also something that we're quite pleased with. That is good news.
Beyond that, we were pleased with the extension of the rent and wage subsidies until the fall. I will note though that there is great consternation right now about the planned reductions in the subsidy levels in the summer months. Here I want to remind this committee that the rent and wage subsidies automatically adjust depending on the level of business losses that a business is incurring, so the subsidies aren't there for businesses that are not in serious jeopardy. There are so many businesses, especially given that we've got ongoing lockdowns, renewed lockdowns and fresh lockdowns in Nova Scotia and Manitoba, they are really worried about the intended reduction in both the CEWS and CERS.
We did like the new Canada recovery hiring program. That new hiring incentive, we believe, is a real positive and we compliment the government for listening to the advice of my organization and others that have called for such a measure. We believe that it will be a way to help wean businesses off of the wage subsidy and allow that to be eliminated over time, but our overall advice is that governments really can't start to withdraw these subsidy programs until such time as governments themselves—federal, provincial and local—can tell Canadians that it's time to go back to work, time to return to the office and time to go dining and travelling, including with an open border.
One of the other measures that does worry us.... One thing I just do want to highlight is that for Liberal MPs on this committee, I urge you to get the message to Minister Freeland, the Deputy Prime Minister, and to the Prime Minister that the government needs to make good on the latter's promise to new business owners in May 2020 to deliver support to them. That was something that I know the finance committee has talked about already, but it hasn't happened. It's a year into an emergency program and I believe it's deeply shameful that the government has not moved to allow new business owners to gain access to the wage and rent subsidies. That needs to be fixed.
The rent subsidy, while working well, also sadly excludes thousands of business owners, as it does not include those who have a holding company and an operating company. Even the previous CECRA program had a fix for that, and this one does not.
We've made a series of recommendations.
The other big worry that we have right now is the rising levels of debt on the books of small and medium-sized businesses. They have, on average, $170,000 in COVID-related debt to deal with. We urge the government to consider increasing the amount of the CEBA loan and increasing the percentage that is forgiven to 50%, and adding a forgivable percentage to the HASCAP program. These are some of the ways that we'll be able to lift some of the debt burden that businesses are facing and help them into the recovery.
There's lots more to unpack, but I'm happy to do that in response to the questions.
Thank you very much, Chair.
Daniel Kelly
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Daniel Kelly
2021-05-20 16:44
Yes. I've been telling new business owners who have been contacting me in huge numbers to just stick with it, that the government is serious about this. The Prime Minister himself promised to do something for new business owners back in May of last year.
A full calendar year later, during a worldwide pandemic, the government has not moved on this measure. Meanwhile, most of the provincial support programs, many of them admittedly with tons of problems, from the NDP in British Columbia to the Conservatives in Ontario, have fixed this issue and allowed access to new business owners.
It is more complicated, but it's not impossible. We've laid out several ways that the government can do that: removing the requirements for a business number before March 1, a payroll account number before March 1. If they don't have a comparable month in 2019 because they weren't around in 2019, allow them to at least compare themselves against the industry average, say for a restaurant in Manitoba, and use that as the amount to get the subsidy.
These are businesses not set up with the full understanding of the pandemic behind them. These are business owners that often started in 2019. Some of them have laid out $400,000 or $600,000 to invest in a brand new 100-seat restaurant that was supposed to open in March 2020, but delayed because of pandemic restrictions until June, and opened with a trickle of business income, and have not had a nickel of federal support despite the Prime Minister's personal commitment to do that. That's why I'm so unhappy about this.
Liette Lamonde
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Liette Lamonde
2021-05-20 16:56
Thank you for your question, Mr. Ste-Marie.
My main reason for being here today is to make parliamentarians aware that start-ups face a different reality, one that government programs need to take into account. For example, initially, the Canada emergency wage subsidy did not factor in the reality of start-ups. We spoke up quickly, and that changed.
What I'd like to see the government do is adopt a mindset, and consider how each program it introduces to support business is really going to help start-ups and how the program can be improved to do just that.
One of the missing government measures is support for a scale-up platform. That's what we need to move into the second phase, to grow and to benefit economically. It's simple: start-ups need funding, talent and customers. A range of services are available to help start-ups in the development phase, which can last two or three years. After that, though, they are on their own. That is when they need new skills, new funding and new markets in order to succeed.
That is why building a scale-up platform for Quebec is so essential. Without it, Quebec's ecosystem will remain one of small start-ups, and that's not what we want. We have much bigger plans for the future of our start-ups.
I mentioned customers, and the government has the ability to be a tremendous customer for start-ups. For that to happen, however, the government needs to make changes to its tendering process. It needs to listen to start-ups, taking the time to help them improve their technologies and adapt them to government requirements. Imagine what a boon it would be for a start-up to have the government as a customer. Landing a contract with the Government of Canada would give the start-up a reputation that would help it acquire more customers.
Those are two areas where improvement is needed.
Liette Lamonde
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Liette Lamonde
2021-05-20 16:59
That's a great question. Thank you, Mr. Ste-Marie.
At the very beginning of the pandemic, in March, a survey revealed that 60% of start-ups had less than three months' worth of cash. Of course, we feared the worst. By mid-April, though, nearly two-thirds of start-ups had reprioritized and adjusted their business model. That's the beauty and strength of start-ups: they can pivot, adapt and reinvent themselves quickly. Not having a cumbersome structure means they can turn on a dime, as the saying goes.
That ability is the strength from which their innovation flows and has helped them survive the pandemic. Instead of being decimated, many start-ups have seized the opportunities created by the pandemic and are meeting new needs. For instance, MEDTEQ, in Montreal, is involved in a bunch of new projects aimed at solving problems that have emerged during the pandemic. Solutions are also materializing to help restaurants take orders and become take-out operations overnight.
I think start-ups will come through the crisis, but there's no doubt the wage subsidy has a lot to do with it. We are eager to see what comes next. That's when we will be in a position to get a better read on things.
Liette Lamonde
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Liette Lamonde
2021-05-20 17:01
I'm a bit surprised by the question. It seems to me the government had put additional funding towards IRAP, so I don't think the issue is widespread.
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