Letter to Minister Morneau: COVID-19 supports and Budget 2020

UPDATE: On 16 April 2020, the federal government announced its intent to introduce the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. The program will be implemented jointly with the provinces and will provide loans to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April, May, and June. More details to come.

Dear Minister Morneau:

The COVID-19 outbreak continues to impact all Canadians, and its economic and health challenges are significant to say the least. We have been encouraged by the resiliency and compassion of all Canadians – from lending a hand to those who need it most, to repurposing businesses to provide essential goods and services, to cheering for healthcare workers on the frontlines from their porch, Canadians continue to come together. We have also been encouraged by the government’s initial measures and subsequent updates to the COVID-19 Economic Response Plan.

As we continue to actively support Calgary’s business community, we know that more work remains to support Albertan, and indeed all Canadian businesses. As the COVID-19 outbreak will no doubt shape Budget 2020, we urge the federal government to consider the recommendations below to continue to the work of stabilizing our economy in the short term, and positioning Canada for continued resiliency and putting in place a winning strategy for the future.

Our recommendations

Stability during the COVID-19 outbreak:

• Continue to facilitate discussions, and provide regular, public, and transparent communication regarding how major Canadian financial institutions are ensuring access to capital for Canadian businesses.
  
• Coordinate with provincial counterparts and major Canadian financial institutions to develop the Canada COVID-19 Commercial Rent Strategy which would be adopted by all provinces and territories. This written strategy should commit each province to enact similar legislation across Canada that would uniformly achieve the following outcomes:
  - Provide direct financial assistance from a province to landlords in order to waive rent for small and medium-sized business tenants;
  - Mandate that the first $10,000.00 of all commercial leases be waived for April, May, and June 2020.

Continued resiliency and a winning strategy for the future:

• Increase the funding capacity and scope of the Canada Infrastructure Bank to spur additional public-private partnerships (P3s) that will provide investment and jobs for Canadians in Alberta and coast-to-coast.
  
• Work to establish a Royal Commission on Natural Resource Development and Climate Change to position Canada for the future. Ensure that the mandate of the commission is to develop a vision for our natural resources. In addition, provide recommendations to promote the responsible and sustainable development of Canada’s natural resources across the country while Canada meets its 2030 Paris Agreement targets and net zero carbon emissions by 2050.
  
• Establish a Royal Commission to conduct a comprehensive review of the Canadian tax system in consultation with industry stakeholders and sub-national governments and deliver a report before the next federal election in 2023.
  - The Royal Commission’s terms of reference should be guided by the principles of tax competitiveness, simplicity, fairness and neutrality. The inquiry should have the objective of, within expedient timelines, raising sufficient revenues to fund public spending without imposing excessive costs on the Canadian economy.
  
• Commit to additional funding to further innovation and economic activity through all of Canada’s superclusters, and, announce a new supercluster in Alberta: a Natural Resource Innovation Supercluster to complement Alberta’s critical and important resource sector. The sector already leads the way through innovative initiatives like the Clean Resource Innovation Network, and a Natural Resource Innovation Supercluster would expand on these efforts by furthering a vision for all natural resources that contributes to the low-carbon economy of the future.

Our rationale

Stability:

These recommendations stem from what we have heard from our business community, and what has been echoed across the country. In our over 1,400 calls to companies, key concerns are related to access to capital to cover fixed costs, and a top fixed cost for many businesses is their rent. Adopting both recommendations would utilize the federal government’s power to convene in the spirit of cooperation. Our constitution grants different powers to different jurisdictions, and developing the Canada COVID-19 Commercial Rent Strategy would provide support across the country. Canada has a history of success when our federation works together, and this would be the latest example of it.

Continued resiliency and a winning strategy for the future:

Our top concern today must be to “flatten the curve” and stop the outbreak of COVID-19.

While focusing on the health of Canadians, we can simultaneously prepare for what’s next – what do we want the future to be after we recover from this pandemic?

Critical to that future are policy initiatives that realize a vision for our natural resources AND work to solve climate change. The Calgary Chamber is leading a coalition of eight large city chambers and boards of trade across the country that launched the Canadians for Natural Resources initiative as part of our Canadian Global Cities Council. At its core, this initiative has one simple, clear message: Canada can be a leader in natural resource development AND fight global climate change at the same time.

The establishment of and work by a Royal Commission on this issue would begin to provide direction for how this vision would take shape, and would position Canada for the economy of the future. Similarly, investment in a Natural Resource Innovation Supercluster in Alberta would begin to create the investment climate to make this vision a reality.

Akin to the proposed Royal Commission on Natural Resource Development and Climate Change, a Royal Commission to fully review the tax system would help to de-politicize the process of examining the entire taxation system. The resulting new taxation system should be stable; avoiding future amendments that substantially change the rules and undermine the longterm planning of Canadians. The system should reward entrepreneurs and incentivize Canadians to take risks and invest in new ideas and encourage investment both by Canadians and international companies. Implementing recommendations from a commission that carefully considered these reforms would go a long way in providing the growth environment we need for our COVID-19 recovery.

I have never believed more in the grit and resiliency of Canadians and in our ability to manage this outbreak. We will get through this together, and with consideration of the recommendations we have outlined, we can do so while supporting Canadian businesses today, and in the months and years to come.

Yours Sincerely,

Sandip Lalli

President & CEO

Calgary Chamber of Commerce