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TRANSCRIPTION WITH SPEAKERS
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[00:00] SPEAKER_00: It's the Canada's podcast network.
[00:03] SPEAKER_01: Hi, this is Andrea Sassan Toronto's host for Canada's podcast, your
[00:07] SPEAKER_01: nation's number one entrepreneur network. Today I'm joined by Brian Kingston,
[00:13] SPEAKER_01: he's a vice president of Business Council of Canada. Welcome Brian.
[00:18] SPEAKER_01: Hi, thanks for having me. You're most welcome. Thank you so much for taking the time to speak to us today.
[00:23] SPEAKER_01: And no problem. So for those of us or those who may not know what is the role of the Business
[00:31] SPEAKER_01: Council of Canada and how many members do you currently have or represent? Yeah, so the Business
[00:38] SPEAKER_00: Council is an on-for-profit, non-partisan organization that represents business leaders of Canada's
[00:44] SPEAKER_00: largest companies. So we have around 160 members right now. They employ about 1.7 million Canadians
[00:52] SPEAKER_00: and represent about half the value of the TSX. And our members are very diverse in
[01:00] SPEAKER_00: both their region that they operate in as well as their sectors. So everything from finance,
[01:07] SPEAKER_00: oil and gas manufacturing, agriculture, seafood, you name it. All of those sectors are represented
[01:12] SPEAKER_01: by the Business Council. That's great. And BCC has been very vocal about raising some of the issues
[01:21] SPEAKER_01: on behalf of the businesses it represents. Can you maybe let us know about some of the issues that
[01:30] SPEAKER_00: you have been vocal on? Sure, yeah. So we've been following the coronavirus COVID-19 issue for some time.
[01:40] SPEAKER_00: You know, at first it was really about supply chain impacts that were emerging out of China and
[01:46] SPEAKER_00: Wuhan, where we saw Canadian companies were having difficulty obtaining products because of the shutdowns
[01:53] SPEAKER_00: that we had witnessed there. Of course, at that time, we never imagined that COVID would spread
[01:59] SPEAKER_00: at the pace that it did. And we never imagined that it would come to Canada in the way it has.
[02:06] SPEAKER_00: So it's become much more, of course, than simply a supply chain issue now. Our focus has been
[02:12] SPEAKER_00: on a few things. Number one, the first message that we got out as an association was to urge
[02:21] SPEAKER_00: other employers to take strong action to protect employing health. Our members moved
[02:28] SPEAKER_00: quite quickly. I mean, these are large companies that have pretty active, you know,
[02:35] SPEAKER_00: policies and able to respond to this quickly. And you know, in terms of encouraging work from home
[02:42] SPEAKER_00: and other other measures. But we wanted our members to urge others to do the same and to take
[02:48] SPEAKER_00: this seriously and take aggressive action. So that was our very first statement when this
[02:54] SPEAKER_00: began. And since then, we've been really focused on both pushing government to take the decisive
[03:00] SPEAKER_00: action needed to contain the virus. You know, we recognize that this is going to be very painful
[03:05] SPEAKER_00: for the Canadian economy. But other countries have shown us that if you don't contain the virus
[03:11] SPEAKER_00: through aggressive action, it will get out of control. And the impact on both the health of Canadians
[03:18] SPEAKER_00: and the economy more broadly will be far worse. So we've been supportive of taking really aggressive
[03:24] SPEAKER_00: measures right now, shutting down as much as possible, get a handle on this, and then move on
[03:31] SPEAKER_00: to helping the economy recover. So, you know, through three areas that we've been really focused on
[03:39] SPEAKER_00: more recently have been trying to encourage government to support employers to keep
[03:44] SPEAKER_00: employees on the payroll. We think that's really important. None of our members want to lay people
[03:50] SPEAKER_00: off. That is absolutely their last choice. So we've been asking government to try and, you know,
[03:56] SPEAKER_00: rather than putting people into the EI system, support employers and help them pay their employees.
[04:03] SPEAKER_00: We've also been pushing for greater support, capital support, liquidity support for companies
[04:09] SPEAKER_00: that are in dire need. We want to make sure that when we come out of this, we actually have a
[04:14] SPEAKER_00: business sector that's relatively intact. So that's been a big focus. And then the last piece
[04:20] SPEAKER_00: has really been on essential services and making sure that as provinces move to shut down different
[04:26] SPEAKER_00: sectors of the economy, they're doing so in a coordinated fashion so that we don't find out that,
[04:32] SPEAKER_00: you know, a supplier in Quebec can no longer produce a product for Ontario, which turns out
[04:37] SPEAKER_00: is actually pretty important right now. So that's been kind of the main focus, but frankly,
[04:41] SPEAKER_00: things are changing on an almost hourly basis these days. So who knows where we'll be next week.
[04:48] SPEAKER_01: And let's talk about a little bit about the EI and EI benefits. In your latest statement,
[04:55] SPEAKER_01: which was issued yesterday, it talks about EI system being overburdened. We know that the
[05:03] SPEAKER_01: usual number of applications per week is around 45,000. In the last week, we've seen
[05:09] SPEAKER_01: 1 million applications. And with the Royal Assent yesterday off the bill, the Canada's
[05:18] SPEAKER_01: emergency support bill, there was an additional 82 billion dollars that is being used now to
[05:30] SPEAKER_01: give benefits through CRA. Do you think that that will assist in terms of alleviating the burden
[05:36] SPEAKER_00: of EI and how helpful will that be? I think it's definitely a step in the right direction.
[05:44] SPEAKER_00: As you noted, the EI system was overburdened. I think government only processed about 15% of
[05:49] SPEAKER_00: applications, despite the fact that they had thousands of public servants working away on it.
[05:55] SPEAKER_00: So it was obviously not working. This program is meant to divert people from EI,
[06:00] SPEAKER_00: get them onto this benefit, which they say will be quicker. And because it's paid out through
[06:05] SPEAKER_00: the CRA, you'll actually see the benefits immediately. So I think it's a step in the right
[06:12] SPEAKER_00: direction. We still think that a direct wage subsidy to employers would have been the best
[06:17] SPEAKER_00: way to do this, because you simply, the employer would pay the employee, they would have paid
[06:22] SPEAKER_00: them the equivalent to the EI, and then they would file for reimbursement at a later date.
[06:29] SPEAKER_00: Government believes the CERB program is the best approach. So we're willing to see how it works,
[06:37] SPEAKER_00: see how the employers respond to it, and hope that it is effective. I mean, the three kind of key
[06:43] SPEAKER_00: factors that we look at here are speed. Can you actually get the money out the door to people that
[06:49] SPEAKER_00: need it quickly? Scale? Can you scale this thing? Can you actually process four million applications,
[06:57] SPEAKER_00: five million applications quickly? And then finally, its efficiency. Is it easy for people to
[07:03] SPEAKER_00: apply? And is it easy for government to get money in their hands? So if it needs those criteria,
[07:09] SPEAKER_00: then I think it's a success, but it's a bit too early to tell.
[07:14] SPEAKER_01: And the situation right now is that people are waiting for a few weeks to be able to access EI funds.
[07:23] SPEAKER_01: They're left without a job or being laid off, which makes it really difficult to
[07:28] SPEAKER_01: basically purchase the necessities such as putting food on the table, being for rent. So hopefully
[07:35] SPEAKER_01: the CRA route will be more expedient, and where people will be able to access benefits quickly.
[07:43] SPEAKER_01: Quick clear. So let's talk about the actual budget itself. In your statement, it mentions that
[07:51] SPEAKER_01: US has put in or is contributing $850 billion. Canada is contributing $82 billion. So why
[08:02] SPEAKER_01: the big discrepancy, and do you think that the federal government should be doing more than they are?
[08:07] SPEAKER_00: Yeah, absolutely. I think they're going to have to do a lot more. They did move pretty quickly
[08:13] SPEAKER_00: to announce that first $82 billion or $85 billion a month. But the important thing here to know
[08:20] SPEAKER_00: is that $55 billion of that is in tax deferral. So that's not direct support to the Canadian economy.
[08:27] SPEAKER_00: It's helpful. Don't get me wrong. Companies knowing that they can push off paying their taxes
[08:32] SPEAKER_00: until the later date. But when you compare to what the US has done, $350 billion in loans for
[08:39] SPEAKER_00: small business, another $500 billion to be pumped into the economy in the terms of both direct
[08:46] SPEAKER_00: support to companies that are facing potential bankruptcy, as well as capital liquidity measures.
[08:51] SPEAKER_00: I just don't think that we've done enough. I mean, when you look at what other countries are
[08:56] SPEAKER_00: spending to help support their economies, Canada is total spent right now. It's about 3.4% of our GDP.
[09:04] SPEAKER_00: France is sitting at 15.6% in Germany over 15%. So some countries are moving more aggressively
[09:14] SPEAKER_00: to introduce a much greater fiscal firepower. Now to the government's credit, they have been clear
[09:20] SPEAKER_00: and minister Morneau has said, we'll do whatever it takes. And he's said that this is a phase
[09:26] SPEAKER_00: of profit. It's not as though one announcement will be all that's required. So I fully expect that
[09:31] SPEAKER_00: as this evolves, you'll see them announce more supports and basically try and help companies
[09:39] SPEAKER_00: that really need it throughout this process. So it's phase one of what I hope isn't, you know,
[09:44] SPEAKER_00: five phases, but maybe a couple more phases become. I think a lot of small businesses right now
[09:50] SPEAKER_01: are thinking it's great that these loans are available, but I'm struggling as it is, do I really
[09:57] SPEAKER_01: want more loans or do I want government help in terms of, you know, greater wage subsidies, which
[10:03] SPEAKER_01: is something that UK and Denmark are doing and they have up to 80% of wage subsidy.
[10:10] SPEAKER_01: So a lot of things I think to follow and to come and to see how our federal government will
[10:17] SPEAKER_01: react in terms of assisting businesses, which are really important in terms of the life and
[10:25] SPEAKER_01: health of Canada's economy as a whole. So any from what you are seeing so far, if the government
[10:33] SPEAKER_01: doesn't take the action that they're supposed to, where do you see this going? And I know in the
[10:39] SPEAKER_01: last statement, it also mentions recession, depression, where are we heading if this is not
[10:47] SPEAKER_00: acted upon? Yeah, I mean, the current forecast for the Canadian economy are very worrying. We're now
[10:55] SPEAKER_00: expecting in the second quarter for the Canadian economy to contract by as much as 20%. These are just
[11:02] SPEAKER_00: unbelievable numbers that would have never expected. And employment, you know, is definitely
[11:09] SPEAKER_00: likely to, or sorry, unemployment despite well about 10%, you could go far, far higher.
[11:16] SPEAKER_00: So this is not a good situation, clearly. And the reason we're asking government to act quickly
[11:22] SPEAKER_00: with really significant support for businesses is because we do know that we will get through this.
[11:29] SPEAKER_00: The virus will be contained and has been contained in other countries. And what will happen
[11:34] SPEAKER_00: afterwards is we're hoping for a bit of a V-shaped recovery where you actually, when Canadians get
[11:39] SPEAKER_00: all clear that you can leave your home, you can go out and spend and do the things that you like to do,
[11:45] SPEAKER_00: that they will go out and do that and will return to a certain level of normalcy.
[11:51] SPEAKER_00: The fear is, if so much damage has been done, that small businesses on your local main street are just
[12:00] SPEAKER_00: they've simply had to stop operations, you've got vacancies, even companies, media and
[12:06] SPEAKER_00: large companies in some sectors that potentially have become bankrupt or had to restructure.
[12:11] SPEAKER_00: It makes it difficult for that more aggressive recovery to take place after the virus is contained.
[12:18] SPEAKER_00: So, you know, we really need to make sure that the economies like a car were hoping we can kind of
[12:26] SPEAKER_00: just put it into idle for the next few weeks and then restart it. The last thing we want to do
[12:31] SPEAKER_00: is turn the thing off completely, which makes things a lot more difficult to get moving again.
[12:37] SPEAKER_01: Brian, thank you so much for your time today. And the viewers and the listeners can also
[12:44] SPEAKER_01: visit the Business Council of Canada website for the latest update or updates on your advocacy work.
[12:53] SPEAKER_01: And again, any last words of wisdom for the business owners out there?
[13:01] SPEAKER_00: Just, you know, this is going to be changing constantly. Unfortunately, there is no
[13:08] SPEAKER_00: clear source of information on these programs. I mean, the CERB, when it was announced yesterday,
[13:15] SPEAKER_00: it took me quite some time to figure out exactly where the details are and how to figure this all out.
[13:20] SPEAKER_00: So, I would just urge business owners if you're part of an association, if you're part of CFIB or
[13:26] SPEAKER_00: Canadian Chamber, you know, reach out to them. That's what associations are there for.
[13:33] SPEAKER_00: So, it's a really important time to make sure that you have information to all the programs
[13:37] SPEAKER_00: that are being announced, because there is a lot of support being unrolled and sometimes it's
[13:42] SPEAKER_00: really difficult to determine if it actually applies to you. So, you know, urge people to make
[13:48] SPEAKER_00: sure they make those contacts and figure it out. Great advice. Thank you, Brian. Thanks a lot.
