Opposition Motion from the Conservative Party - Consequences of the Pandemic on Canadian Workers and Businesses
That, given that the pandemic has had devastating consequences on Canadian workers and businesses, especially in the restaurant, hospitality and tourism sectors, the House call on the government to: (a) immediately pause the audits of small businesses that received the Canada Emergency Wage Subsidy until at least June 2021; and (b) provide additional flexibility in the Canada Emergency Rent Subsidy, the Canada Emergency Wage Subsidy, and other support program.
Mr. Peter Julian (New Westminster-Burnaby, NDP):
Madam Speaker, I certainly agree with my colleague about the scale of the devastation in small businesses. This is the worst economic impact we have seen since the Great Depression. I think the saddest moments for MPs across the country have been in many cases small business people, who put their lives into their business, closing the door for the very last time because they are simply unable to continue.
The commercial rent relief program put in place by the government was handed to a commercial mortgage company. As the member knows, initially it only applied to landlords with commercial mortgages. This was completely unacceptable. Over a billion dollars that should have gone to small businesses was not able to get there because of the complexity of the program given to a company led in part by the spouse of the chief of staff to the Prime Minister. The government has said it will fix that massive error by putting in place a new program, but it is not retroactive.
Why is the government not putting in place retroactive measures for the hundreds of thousands of small businesses that were unable to access the first botched program for commercial rent relief so that those businesses could actually weather this storm and come out of the pandemic and the second wave intact.
Madam Speaker, I would like to give a shout-out to my colleague, the hon. member for Courtenay-Alberni. He has been the strongest advocate for small business in this Parliament. He does extraordinary work and I would like to underscore his amazing defence of small businesses.
I would also like to give a shout-out to the New Westminster Chamber of Commerce, of which I am a long-time member, and the Burnaby Board of Trade of which I am also a member. Coming out of the small and medium-sized business sector, which I will talk more about in a moment, it is fair to say that we are at a crucial period in this pandemic when we need to pay attention to small businesses.
I will flag the issues around small businesses and the government's slow response. However, with respect to the pandemic response, the NDP has been very proud to force the government to do a whole range of things that it was not willing to do initially. Two areas where the government has failed the most is certainly people with disabilities, who have had to wait seven months and are only now getting a one-time emergency payment that does not, by any means, reach all people with disabilities, and also the small business sector.
The small business sector, as my colleague from Courtenay-Alberni pointed out, saw a program put into place that was simply inadequate. I will come back to that in a moment. It is important to note that the government was very quick to respond when the big banks asked for a handout. Within a span of a few days, according to the Office of the Superintendent of Financial Institutions, $750 billion, three-quarters of $1 trillion, was available through various federal government institutions in liquidity support.
That contrasts vividly with how slow the government has been in responding to the challenges faced by small businesses. Nothing is sadder than to see people in the small business sector, who have given their lives to their small businesses, which build communities and create jobs in their communities, turn the key in the door for the very last time and slip it through the mail slot because they simply cannot continue the hemorrhaging of their personal financial resources for their businesses.
The government's initial response was, to say the least, inadequate. We will recall that the government initially put forward a 10% wage subsidy. The member for Burnaby South, the national leader of the NDP, said that was absolutely insufficient, given the size and scope of the pandemic. Those in the NDP caucus worked together and forced the government to put in place a 75% wage subsidy. That has managed to save a whole range of small businesses.
As the member for Courtenay-Alberni outlined so eloquently, we also said that, like many other countries that have put in place commercial rent assistance, we needed to have a robust response from Canada. Instead of a robust response on commercial rent relief, we saw a program that was set up for commercial lenders. The Parliamentary Secretary to the Minister of Finance, member for Central Nova, who is normally a very measured person, reacted very badly when we asked the questions that were on the minds of so many owners of small business across the country.
*The facts are the following.
Fact one is that the commercial rent assistance program that was initially put in place was a failure. There is no doubt that two-thirds of the businesses that desperately needed that support were not able to access it because it went through landlords.
Fact two is that this was an untendered contract that was basically handed over to a company that employed as its vice-president the spouse of the chief of staff to the Prime Minister. There are very obvious questions, when a program is a failure, as to why that happened. The government still has not answered those questions in any sort of fulsome way.
Fact three is that program was set up by a commercial lender to benefit landlords that had commercial mortgages. There is a clear contradiction in that. Not only did the program not worked but a commercial lender was able to set something up that, in a very real sense, was perplexing. A commercial lender was saying that those who had commercial mortgages could access this program.
These are legitimate questions. That is why we have been saying from the beginning that the program the government is announcing to replace it needs to be retroactive for all small businesses that were unable to access any sort of commercial rent relief from April right through until the end of September.
The NDP will continue to be determined on this fact and the member for Burnaby South, the member for Courtenayâ€”Alberni and the entire NDP caucus believe strongly that those supports, which were denied to so many small businesses over the course of the last few months, have to be available retroactively for those businesses that need it the most.
I mentioned earlier that I was going to talk a little about my situation and my experience as the head of an SME. It was a social enterprise with about 50 employees. I am proud to say that it won two Consumer Choice Awards, in 2003 and 2004.
I understand why people might be concerned. Founders and owners of SMEs want their employees to be able to keep their jobs and their businesses to continue to operate.
Having said that, the current situation, which was created by the Conservatives and continues under the leadership of the Liberals, puts SMEs at a huge disadvantage. Web giants do not have to pay taxes in Canada and do not have the same obligations as SME owners. This needs to be corrected to make it fair for everyone.
In addition, the largest Canadian companies that use tax havens often take their money offshore and are not subject to tax laws. This needs to change. The NDP is pushing for these changes to be made during the pandemic, but also after the pandemic.
I want to briefly outline why the NDP feels so strongly, unlike the previous Conservative regimes and the current Liberal government, that we need to put in place a level playing field for small and medium-sized businesses in the country.
That starts with a fair tax system. We can no longer afford the $25 billion that go to overseas tax havens. We support the motion today because the audits the CRA does so frequently on small businesses are not applied to corporations that are named in the Panama papers, Bahamas papers or Paradise papers. CRA has admitted that it simply has not been able to do any of the audits, follow-ups or bringing to account any of these big businesses involved with overseas tax havens. We also believe web giants need to pay their income tax and we need to have a level playing field.
The NDP is proposing other things to be put in place for small businesses. We want to put in place a fair tax system. We also believe that the small business tax rate should go down by 1%. This helps to stimulate jobs in the local economy.
We believe in a significant investment in housing. The newly re-elected John Horgan in British Columbia, the B.C. NDP government, has invested more in housing in the past three years than the federal government and all other provincial governments put together. It has physically built more housing units than all other governments. The Liberals promise, throw out vast figures and eventually they will fund it, but they are far behind the B.C. NDP government in having turnkey housing units that people can access.
We also believe in putting in place pharmacare and ensuring our health care system is enhanced. The medicare system is a $3,000 per employee, cost competitive advantage for Canadian businesses. Pharmacare would be a $600 advantage on top of that. Not only does it mean that employees are treated fairly, but it takes the burden off small businesses and allows employees to have a full range of social benefits.
These are the kinds of things we propose for small businesses to help them get through this pandemic and in the period afterward, to prosper and contribute to Canada's prosperity and jobs across the country.
Mr. Speaker, I think it is pretty clear that we need to provide the supports for small businesses. We honestly believe the CRA is targeting small businesses rather than targeting the massive amount of money going to overseas tax havens. It is $25 billion a year, as evaluated by the Parliamentary Budget Officer. The CRA has done absolutely nothing to curb the massive tax evasion that takes place through the use of overseas tax havens.
Given the pandemic and the sheer size and scope of what we are seeing with overseas tax havens, we believe the audit function needs to be there.
Mr. Speaker, the reality is that when we look at where the government has been putting complications in place, often people who need to get the response as quickly as possible are affected. People with disabilities have had to go through incredible hoops over six months for a $600 payment. Small businesses are having to jump through all kinds of hoops to access programs, and the commercial rent relief program was not even available to two-thirds of the small businesses that desperately needed the support.
Contrast that with the big banks and the massive liquidity supports: $750 billion, with no conditions. The banks were not required to lower their interest rates to zero like many credit unions did. They were not required to eliminate interests or penalties. Their profit so far in the pandemic, and we will hear new figures shortly, is $15 billion, with no conditions at all. That contrast is evident to everybody.
Mr. Peter Julian:
Mr. Speaker, that is a very good question.
People with disabilities waited for six months. SMEs have a bogus program that does not work and that has created a great deal of controversy. In fact, one of the executives of the company that was chosen without a call for tenders is the spouse of the Prime Minister's chief of staff. When we ask these questions, the government refuses to answer and often reacts very emotionally.
However, the government granted $750 billion in aid to the banking sector in a matter of days with no strings attached. I think it is obvious that this government's priority is not people or SMEs, but the banking sector.