Third reading of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy)

By: The Hon. Marty Klyne

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Whale tail breaching water, Newfoundland

Hon. Marty Klyne: Honourable senators, I rise today to speak to Bill C-9, An Act to amend the Income Tax Act which introduces the Canada Emergency Rent Subsidy, or CERS, and it modifies the Canada Emergency Wage Subsidy, or CEWS. I will be brief.

Senators, the COVID-19 pandemic has provided us with an unprecedented challenge and no manual or handbook of best practices to deal with it. I’m grateful for our front-line health care workers and how they did not hesitate to rise to the challenge right from the get-go and the great work they continue to demonstrate around the clock to ensure Canadians continue to get the best possible care.

Hats off to all our staff, families and friends for their support during this pandemic. I would be remiss if I did not thank those Canadians who continue to practise the health guidelines, protecting themselves and, in doing so, protecting those they care for, including the aged and youngsters alike.

We have lost over 11,000 Canadians to this virus, which continues to batter our way of life and kneecap our economy. My sincere condolences to the families who are left to mourn a loved one lost to COVID and those who were struck by the virus and who have since recovered — but not fully, due to the lingering effects.

My best wishes go out to the hundreds of thousands of owners and employees of small and medium-sized businesses, who are doing the best they can to serve customers in a safe environment, keeping the shop above water and, all the while, keeping themselves safe from COVID.

Honourable colleagues, small and medium enterprises, or SMEs, are the backbone of Canada’s economy. These businesses are the ones that put it all on the line to create jobs, create wealth and create a future for the next generation to aspire to. SMEs are the reason Canada had a vibrant economy that offered the high standard of living we all enjoy and is still the envy of many around the world. These SMEs continue to invest in their businesses, ensuring their place of business is a safe environment for employees, customers and suppliers.

Canada’s SMEs make up over a million employers, of which 97% are small businesses. According to the Key Small Business Statistics published in January 2019 by Innovation, Science and Economic Development Canada, the proportion of Canadians employed by SMEs is close to 90%. We often took for granted these businesses and the goods and services they provide for our consumption, enjoyment and satisfaction. But COVID-19 has been a wake-up call for all of us. We don’t take them for granted now, and we understand we cannot not support these businesses and their employees.

Statistics Canada reported that two fifths of small businesses had a 40% drop in revenue in April 2020 compared to April 2019. Businesses of 5 to 19 employees reported a 41% drop while those with 20 to 99 employees reported a 39% drop.

Honourable senators, we can’t leave these SMEs to burn through all their cash reserves and not have the opportunity to build up enough retained earnings to continue to invest in the development of their employees and the repair and maintenance of their equipment and other assets. We certainly must do all we can to prevent those viable and adaptable businesses from having to close their doors and lay off employees due to no fault of their own.

Some businesses have been able to reinvent and transform themselves in order to survive, and some to resurrect a shuttered business. If we give up on SMEs now, the decline will only snowball and fuel an unwanted decrease in spending and reduction in personal savings and retirement funds, which could potentially lead to a rise in the default on mortgages, lines of credit, car loans and leases. Our SMEs are making all the investments they can and must make to provide safe environments for employees and customers, while developing new ways of doing business and invest further to lure customers back with the hope pre-COVID business levels will return.

Canadian business owners put it all on the line to start their business, and they have put it all on the line again to restart the business. They continue to demonstrate resilience and a Canadian work ethic to keep it all going.

Colleagues, the federal government’s response to the impacts from the pandemic has been direct, flexible and a model for many countries to aspire to. Bill C-9 is a clear signal that the federal government will continue to support the backbone of this economy. This legislation offers Canadian businesses the funds they need to continue to operate and keep others employed and serve their customers. Bill C-9 proposes the Canada Emergency Rent Subsidy, or CERS, which will provide assistance to businesses so that, in simple terms, they can pay the rent, keep the lights on and ride it out.

As Senator Smith reminded us yesterday, the Minister of Finance tells us that the bill will be tweaked to allow businesses to apply for rental assistance so they can pay the rent; they won’t have to pay the rent first and then apply.

The Canada Emergency Wage Subsidy, or CEWS, first introduced in March and has since provided businesses with $48 billion in support, will be extended to June 2021 with the approval of this proposed bill, Bill C-9. As we know, colleagues, CEWS has been the lifeblood of our nation’s employers and economy. There have been over 1.5 million applications approved, with 95% of these claims under $100,000.

Bill C-9 will also update the CEWS program to include subsidies for an employer with a 70% or greater revenue loss in a single period to be eligible for a 65% wage subsidy as well as a further top-up of up to 25% for employers facing the greatest impacts due to the pandemic.

Knowing the vast majority of our economy depends on the survival of small- and medium-sized businesses should be the paramount reason to support Bill C-9 and why it is so important to do so expeditiously. Our businesses may be small, but they sure are mighty in many regards.

I support this legislation, colleagues, because it will straightaway provide a much-needed lifeline to our small- and medium-sized businesses, the owners and their employees — those who represent the backbone of our economy. I hope honourable senators will do the same. Thank you.

Some Hon. Senators: Hear, hear!

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