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Results: 1 - 15 of 1633
View Brad Vis Profile
CPC (BC)
Thank you, Chair. I will be sharing some of my time with MP Vecchio.
I have just a quick comment regarding Mission, British Columbia, the community I'm in right now. The number of homeless has tripled from about 63 in 2017 to 178 in 2020, which is more than any other municipality in the Fraser Valley regional district. As a community, though, we are too small to qualify as an urban centre and too big under the rural stream for Reaching Home. In essence, we are the missing middle.
I just want to share with committee members that right behind me is actually the shelter where homeless people live. We don't qualify for that funding. I was pleased that Abbotsford got some. Mission really needs support too, but we don't get it.
I'll switch now to the mortgage brokers. I've heard directly from mortgage brokers regarding the Canada emergency business account. They have shared that the CEBA is being pegged against their mortgage debt when applying for a mortgage. In some cases it's impacting their ability to purchase a home.
Has your organization heard anything about this taking place?
Paul Taylor
View Paul Taylor Profile
Paul Taylor
2020-08-17 15:54
I have not, actually, until this moment.
Elaine, is there anything from your side?
Elaine Taylor
View Elaine Taylor Profile
Elaine Taylor
2020-08-17 15:54
No. I have not heard that either.
That is new news, if in fact that is happening.
View Brad Vis Profile
CPC (BC)
As I understand it, the CEBA is not meant to count against someone's overall debt when applying for a home. Maybe we need to have a conversation with some of those local banks or credit unions.
That was really my only big question. I will turn it over to MP Vecchio unless you have another quick comment, Mr. Taylor.
Paul Taylor
View Paul Taylor Profile
Paul Taylor
2020-08-17 15:55
I do, only to say please get in touch with my office directly if you actually have those scenarios with constituents in your riding. We will certainly do our best to assist anybody with whatever expert knowledge is needed. We have members throughout the continuum, so we'll certainly do our best to help.
Yan Hamel
View Yan Hamel Profile
Yan Hamel
2020-08-10 12:28
Out of respect for Mr. Sébastien Lemire, the member who invited me, my presentation will be in French.
Good afternoon, everyone.
I'm the president and chief executive officer of Canada's largest cruise line. We operate 25 ships. In 2019, we carried 600,000 passengers, 65% of whom were from outside Canada. We had 750 employees. However, as of March 15, we were down to 33 employees. As a result of the Canada emergency wage subsidy, or the CEWS, we now have 250 employees.
I'm also a member of the board of directors of the Alliance de l'industrie touristique du Québec, which represents 10,000 businesses in 40 regional and sectoral tourism associations and belongs to the business leaders' group.
I want to thank the Honourable Sherry Romanado, the chair of the committee. I also want to acknowledge the committee members along with my colleagues from the Quebec and Canadian tourism associations.
I want to thank the federal government for the programs that it has developed and implemented to date. I also want to say that we greatly appreciate the fact that the government is actively paying attention to our current situation.
The tourism industry has some unique characteristics. First, labour is key to our tourism product. The customer experience is largely made possible as a result of the human assets of our employees. These employees have been severely affected by the pandemic. In a few moments, I'll outline some measures to help them in this area. Next, we operate throughout Canada. Lastly, we have a strong seasonal component, both summer and winter, and our production cycle is very different from the cycle of other companies. Our inventory is perishable. Every time we lose a working day, we can't get it back later. The tourists won't be there. The current crisis constitutes a major challenge for us. We're living in an unprecedented atmosphere of uncertainty. We need government support, since our industry will take a long time to recover from the crisis. However, our industry has the potential to make a major contribution to Canada's economic recovery.
According to the Destination Canada estimates, in the province of Quebec alone, we can expect a loss of over 120,000 tourism-related jobs and economic losses of $11 billion during the pandemic.
Our recommendations are simple and they boil down to two things. They directly concern two existing programs. We're asking for changes to two existing programs. The first relates to labour, and the second involves the cash flow of tourism businesses.
We recommend that the wage subsidy be extended to August 2021. Tourism businesses will be in survival mode until spring 2021, when the recovery begins. We need major support in this area. The program is currently scheduled to end on November 21. However, we need lasting support.
We'll then need a review of the calculation method. Under the old system, a 30% loss made us eligible for a 75% subsidy. Under the new system, a 30% loss will qualify us for only a 12% subsidy in the new program period starting in November. Our recommendation is that the safe harbour rule of 75% be extended to August 2021 or that the declining multiplier be maintained at 1.2 for the loss of revenue on the base subsidy, while the top-up subsidy remains in place. As you know, the new wage subsidy now consists of a base subsidy and a top-up subsidy. All this would have a major structuring effect on the entire industry.
Another significant component of an existing program is the expansion of eligibility for the regional relief and recovery fund, or the RRRF. The alliance recommends the addition of a third category of financial assistance for large structuring tourism companies with a turnover of at least $5 million that have suffered a minimum loss of 30% between April 1, 2020, and March 31, 2021, compared to the same period in 2019-20.
These companies stand out for their multiplier effect in the tourism ecosystem, the regional economic engine. The companies attract travellers, who spend locally when they visit nearby businesses. The maximum amount of financial assistance would be $5 million in the form of a subordinated loan.
The proportion of financial assistance—
Yan Hamel
View Yan Hamel Profile
Yan Hamel
2020-08-10 12:34
Okay. I was just about to wrap up my presentation.
The RRRF would be very helpful in terms of cash flow, as a result of a moratorium on the capital and interest.
Thank you, Madam Chair.
Martin Vézina
View Martin Vézina Profile
Martin Vézina
2020-08-10 12:34
Thank you, Madam Chair.
I also want to thank the committee members for having me here today so that I can talk about our industry.
The Association Restauration Québec is the oldest restaurant association in Canada and the largest in Quebec. Founded in 1938, it brings together over 5,600 managers of all types of restaurant services.
In Quebec, the industry generated annual sales of $14 billion and consisted of over 21,000 companies that employed approximately 230,000 people. I should specify that this was before the current crisis. We played a key role in the economic, bio-food and tourism development of all regions of Quebec. We hope to continue to do so.
First, we must note that restaurants are being hit very hard by the storm that we're all experiencing. Restaurants will likely continue to be heavily affected for many months to come.
In the first few weeks of the lockdown, 80% of our members had to suspend their activities completely, which means that they had to fully shut down. Our colleagues at Restaurants Canada also made an assessment. In Quebec alone, approximately 175,000 workers in the restaurant industry were laid off at the end of March.
In April, restaurant sales in Quebec, for all categories combined, plummeted by 70%. For restaurants with table service, the drop was obviously sharper, with a decrease in sales of over 83%. Of course, the situation improved in June, as a result of the gradual reopening of dining rooms in Quebec. However, it's utopian to think that we'll return to normal and recover 100% of our usual sales.
The reason is very simple. The dining rooms can't be filled to their maximum capacity because of physical distancing standards, and many customers have disappeared as well. Think about tourists from abroad who can't come to Canada, workers who are staying home and who aren't in the city centres, and people who normally attend all the major sporting and cultural events such as the Formula 1 Grand Prix in Montreal or the Festival d'été de Québec in Quebec City.
When we surveyed 580 food service managers in early July, 61% of respondents expressed concern about their ability to survive. They said that, if nothing changes, they won't be able to survive for more than six months. This means that we must fear the worst for thousands of food service businesses, but also for thousands of families with members who depend on an income or employment in a food service business.
Of course, we welcome the assistance measures implemented by the Government of Canada. We're very pleased to see that the Government of Canada stepped up to the plate with a number of different measures, such as the Canada emergency business account, the Canada emergency wage subsidy and the Canada emergency commercial rent assistance.
Some of these measures continue to serve as critical lifelines for all restaurant owners across the country.
The Canada emergency response benefit or its student equivalent was needed for people who ended up with no income overnight, including many restaurant owners.
However, let's face it. Along the way, the benefits have become a real headache for thousands of employers, who are unable to recruit and employ the workers that they so desperately need to serve customers.
While a great deal has been accomplished to date to assist Canadian businesses, more must be done to help the food service industry get through this crisis.
We made 28 recommendations to various levels of government to help get our businesses back on track.
First, we believe that it's perfectly legitimate to ask for a financial assistance program—we're not talking about a loan, but about financial assistance—specifically for the food service industry to offset operating losses or, at least, to cover the many major costs arising from the new health regulations.
Second, in the coming months, the suspension of the GST and QST collection in Quebec should be considered. This could be a good way to encourage consumers, who have also had economic difficulties, to support restaurants in their community.
We obviously also support better oversight of the fees charged to merchants by payment card network operators. These fees are commonly known as interchange fees.
Lastly, because the impact of the pandemic on the profitability of restaurants will last longer than in many other sectors, the federal programs already in place must be maintained for as long as necessary. The Canada emergency wage subsidy remains critical and must be maintained. However, the Canada emergency commercial rent assistance must be changed, since many tenants can't benefit from it and because the 70% drop in income criterion is too stringent. This must change.
As a result of your assistance and concern, restaurant owners will be able to get back on their feet and continue to welcome you to their establishments across Canada.
Thank you for listening.
Susie Grynol
View Susie Grynol Profile
Susie Grynol
2020-08-10 12:45
Thank you very much.
Madam Chair and members of the committee, thank you for the invitation to testify today.
The hotel industry represents more than 8,000 hotels, motels and resorts. We employ more than 300,000 Canadians. We play an essential role in the Canadian economy, and we contribute taxes to the tune of $10 billion to all three levels of government.
Hotels in Canada are mostly small and medium-sized businesses with owners who are usually located in the community they serve. These are local entrepreneurs of often family-run businesses who have invested their entire livelihoods into a hotel or a local inn.
Our industry has been there for our communities throughout the COVID-19 crisis. We made our rooms available to front-line workers and Canadians to self-isolate. We assisted public health in the mandatory quarantining of returning Canadians. We allowed vulnerable Canadians to take shelter and prepared several hotels to welcome post-surgical patients to assist with hospital overflow. We helped flatten the curve.
Our 300,000 employees are made up of some of Canada's most vulnerable people—women, immigrants, visible minorities and young people—and they have been seriously impacted by the pandemic and the economic slowdown.
The hotel industry has been devastated by this pandemic. We were hit first, hit hardest and will be the last to recover. The limits on international and domestic travel, as well as restrictions on mass gatherings, are appropriate and necessary, but they do put us on the edge of survival. Most hotels in Canada have been operating at a revenue loss of between 70% and 90% since mid-March. If government support is not received, we will have bankruptcies and thousands of permanent job losses in the industry. According to our latest member survey, 40% have only four weeks left before cash runs out to cover fixed costs.
We are at a crossroads. That is why our association has issued a five-point plan to keep the hotel sector alive and transition it to recovery. A copy of this plan was circulated to members in advance of this meeting.
However, for the purposes of our dialogue here today, I'm going to focus on two key critical recommendations: One is liquidity that works, and the second is an increase to wage subsidy support for hard-hit businesses.
Our industry has been cut out of the government's loan program, BCAP. Banks are not willing to loan additional debt to businesses with heavy assets and an unclear line of sight to recovery. Unfortunately, our entire sector falls into that category. Hotels have had only a 6% success rate in accessing BCAP. Most hotels are being told not to apply.
Our recommendation is that the government fix this gap immediately and create a new loan program for hotels. It should include streamlined access with a 100% loan guarantee, a loan value of up to 20% of the annual revenues, a component equivalent to the commercial rent assistance program to cover three months of fixed mortgage payments, low interest, no hefty bank fees, repayment terms that make sense and no personal guarantees.
The CEWS program, on the other hand, is not just working; it has been a critical lifeline for hotels to keep employees on staff during the pandemic. The recent extension, and the addition of the top-up for hard-hit businesses, were most welcome, and they are in line with the recommendations HAC made during the CEWS consultation process. However, the drastic phase-out, which will begin in September, coincides with the exact moment when our occupancy levels from summer travel will drop and then flatline.
In September we will be forced to make the difficult decision to sever ties with the very employees we will need again in a few months' time. However, if the government maintained a 75% wage subsidy coverage, we could keep our employees on payroll and quickly ramp up when travel resumes. If the government is going to support these vulnerable Canadians either way, why not extend the subsidy further to hard-hit sectors and avoid the anxiety, uncertainty and expense of mass layoffs?
We are recommending the government maintain the 75% subsidy coverage until December by applying the safe harbour principle, as designed by finance, to periods seven, eight, nine and 10. This should apply only to businesses with severe and sustained revenue declines of 50% or more.
Our future is in your hands. The government will be making life and death decisions for many hotels. We hope you will recognize that not every sector is alike. It is time to transition into sector-specific support measures in order to bridge hard-hit industries like ours to the other side.
Thank you for your time today.
Charlotte Bell
View Charlotte Bell Profile
Charlotte Bell
2020-08-10 12:55
Thank you, Madam Chair and members of the committee. I’m pleased to be here.
Despite some businesses reopening during the summer season and talk of recovery, Canada’s tourism sector has remained stagnant since the onset of the pandemic. This sector was the first hit, the hardest hit and will be the last to recover. As other sectors and businesses see restrictions ease and revenues return, regulations that have handcuffed the tourism sector remain in place.
To give you a snapshot of the devastating impact on this sector, our latest survey in mid-July—normally our “high season”— revealed that 82% of all respondents experienced revenue declines between 61% and 100% in the last month compared with the previous year. Sixty-eight per cent of all respondents said that, without access to government-supported financing, they’ll be unable to stay in business. This survey includes all sectors of the visitor economy.
Let me be clear: Health and safety is paramount to this sector. It’s a key imperative for our industry to help rebuild consumer confidence and restore businesses, big and small. This industry has complied with all public health regulations, with many going above and beyond by implementing rigorous safety measures to ensure the health and safety of employees and guests. This includes hotels, air services, conference centres, tourism operators and others. This at a time when critical government support programs are nearing an end and our sector continues to be denied access to government-backed liquidity.
The visitor economy is unlike other sectors. We can’t provide curbside products or services, nor can we sell experiences online to keep the lights on.
Today I'm going to focus on a couple of the priorities.
First is sustaining tourism businesses. We know a vaccine will eventually come. Until then, we need dedicated, ongoing government support to bridge us into recovery. We can achieve this in a few ways, first, by extending the Canada emergency wage subsidy to next summer and applying the safe harbour provision to ensure the hardest-hit tourism businesses will continue to receive the 75% subsidy past the summer.
Charlotte Bell
View Charlotte Bell Profile
Charlotte Bell
2020-08-10 12:58
CEWS is one of the few support programs our sector has been able to access and is key to allowing businesses to keep their staff and avoid massive layoffs come September, not to mention bankruptcy.
Second, BCAP doesn’t work for the tourism sector, just like hotels, which are part of our sector. Across the spectrum, this is a problem. Forty-three per cent of our recent survey respondents were flat-out denied. More than 50% waited three months to hear back, and 38% are still waiting. Only 12%, all told, were approved. These businesses are deemed too risky to lend to and have been shut out of the program. Without access to government-backed liquidity, they won’t have the cash flow required to cover fixed costs or employee salaries, and they're just going to go bankrupt. BCAP needs to be amended, and it needs to be 100% government backed with a forgivable portion to cover fixed costs.
Second is reopening Canada and enticing travel. Pre-COVID, Canada was on track for another record year of inbound visitors bringing in more than $23 billion to the economy. Since March, we’ve seen a 98% decrease in inbound visitors each month. With borders closed, tourism businesses will not survive for the eventual return of regular travel, including international travel. Providing incentives to spend on tourism products will be key to making the transition a reality.
The loss of inbound tourism has had a substantial economic impact across the globe, including in Canada. Many countries offer significant inbound travel incentives to pique visitor interest. For now, we need incentives for Canadians to visit their own country through tax credits. When it’s safe to reopen our borders, we’ll also need to attract travellers in an internationally competitive market. Destination Canada and other government agencies will need dedicated funds to ensure we’re in a competitive marketplace.
Finally, the ongoing bans on mass gatherings have taken their toll and will only get worse come September, without business meetings, conventions and festivals this fall. This sector of the travel economy will need dedicated support to ensure events are able to meet expectations once they’re able to operate again.
My conclusion is this: The visitor economy has given much to Canada with 1.8 million jobs, more than $100 billion annually and a sense of cultural and national pride. We cannot afford to lose tourism. While we appreciate the programs in place so far, we continue to need government support to ensure we’re still here to welcome guests tomorrow and in the future.
Thank you.
View Sébastien Lemire Profile
BQ (QC)
Thank you, Madam Chair.
I especially want to thank my colleagues on the Standing Committee on Industry, Science and Technology for addressing the issue of the tourism industry. This issue is particularly significant in my constituency, of course, but also throughout Quebec and Canada.
I met with some of the people here or with representatives of different organizations a few times before and during the COVID-19 crisis. Ms. Bell, I believe that you used the canary example. You said that the tourism industry might be the last one to recover, but that it was the first one hit. We must take this into account.
In my opinion, the major challenge is that the programs seem very poorly adapted to the reality of tourism or cultural businesses. Today, we're also hearing from representatives of the culinary industry. These programs are hurting all these industries. I hope that this is one thing that we'll remember.
In particular, Mr. Vézina spoke of how the Canada emergency response benefit and the Canada emergency student benefit have affected the recruitment of workers. In several regions of Quebec, including my own region, labour shortages are still a major issue. This was the case before the crisis. If there isn't any adapted program to help people return to work, there will be issues. Also, in my opinion, the fixed costs included in the Canada emergency commercial rent assistance are generating a great deal more confusion than results.
In terms of the tourism industry, I believe that it's important to remember that the return to normal will take time. We're talking about 2023 or 2024. At least, that's what I've heard from people in the industry. Quebecers have been especially supportive. I've run into a number of them. I was fortunate, because several friends came to visit me in Abitibi Témiscamingue. International tourism brings in a great deal of money. We may have difficulty obtaining this type of security.
My message is as follows. We must ensure that our programs are geared towards a return over the long term. One challenge for the industry will be to determine how to return to normal. At one of our meetings, you suggested a return to 70% of activity levels, not just based on losses, but until things get back to normal. If we want festivals to come back and if restaurants want to continue their activities, we must take into account the fact that the summer season is short. We know that 65% of the tourism economy, or two-thirds, is generated in the summer. What will happen during the year? The key issue is the workforce. We must keep jobs active to ensure a long-term vision of development and to plan for next year.
My question is for Mr. Hamel, the representative of the Alliance de l'industrie touristique du Québec.
Could you finish your comments on the regional relief and recovery fund, or the RRRF? We know that tourism businesses are in dire need of cash flow to deal with the economic crisis. That's the crux of the matter.
Would changes to the current RRRF, to tailor the program to the tourism industry, provide a way for these businesses to quickly obtain the necessary cash flow and a subsidy at the end of the repayment process that could help get them back on their feet, just like an adapted version of the RRRF program?
Yan Hamel
View Yan Hamel Profile
Yan Hamel
2020-08-10 13:20
Thank you, Mr. Lemire.
To answer some of the questions asked earlier, I'll say that, at this point, the provinces don't have strong and robust measures to help the tourism industry. This is a major issue. The most structuring measure is the Canada emergency wage subsidy.
The other critical issue is cash flow. In Quebec, there was an effort to determine the best existing programs to address the cash flow issue in the tourism industry across the country.
Yan Hamel
View Yan Hamel Profile
Yan Hamel
2020-08-10 13:20
We've spoken with Ms. Bell and the Hotel Association of Canada. The current RRRF doesn't ensure access to funding for businesses that are important and structuring for our economy. Yet these businesses will create wealth and maintain jobs across the country when the time comes for recovery.
We're requesting a review of this program to make it more flexible and better adapted to the real needs of all tourism businesses in Canada and businesses with a turnover of over $5 million. We're asking for access to cash flow quickly and at an affordable cost.
We spoke earlier about issues with banks. Businesses can't carry too much debt. What we're asking for already exists at the federal level. We're asking for a subordinated loan. If the businesses recover faster than others and can repay the loan before December 31, 2022, as set out in the current program, there needs to be a moratorium on the capital and interest and the non-repayable portion must be between 25% and 50%.
Access to cash flow is a critical and important issue.
View Lloyd Longfield Profile
Lib. (ON)
View Lloyd Longfield Profile
2020-08-10 13:46
Go, Bombers, go.
I want to send my questions over to Ms. Grynol. Thank you for spending time from your holidays in this committee meeting and also supporting the hotel sector while you're doing that.
This is the industry committee and not the finance committee. I know that the finance committee is looking at financial models. When we talk about liquidity, I've been working with a local major chain in Guelph, as well as bed and breakfasts in Guelph and a conference centre in Guelph, which are very different business models, and they all rely on visitors, of course. In terms of the hotel and the conference centre, the rental of the space and the food and service that go along with it quite often provide the profit for the organization more than room rentals. Also, there are deposits that have been paid by not-for-profits or by weddings that are not going to happen, and in the next fiscal year, those deposits are still sitting on the books and will affect cash flow.
Could you maybe speak to the liquidity piece? I know we've had loans through BDC and EDC, usually with a credit union. As you pointed out, banks are not usually financing hotels. Could you maybe expand on the liquidity a little bit for us, please, just so we can understand how that industry works?
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