Liberals promise cash for hard-hit businesses, but sector-specific support for agents still needed, advocates say

Deputy Prime Minister and Minister of Finance Chrystia Freeland delivered her first federal budget in the House of Commons on Monday (April 19), promising extended financial aid for Canadians, including billions in cash for child care, transportation, housing, marginalized communities and a greener economy.

“This budget is about finishing the fight against COVID,” said Freeland, speaking in French. “It’s about healing the economic wounds left by the COVID recession and creating more jobs as well as prosperity for Canadians in the days and decades to come.”

The Liberals' 2021 budget addresses “three challenges,” Freeland said – the first being to “conquer COVID” which includes “enforcing quarantine rules at the border and within the country.”

The second challenge, she said, is to “punch our way out of the COVID recession” by ensuring that lost jobs are recovered and hard-hit businesses rebound quickly.

Freeland specifically spoke about providing support where “COVID has struck the hardest,” listing off women, young people, low-wage workers and small to medium-sized businesses – “especially in tourism and hospitality,” she stressed.

The final challenge, she said, is to build a more resilient Canada by investing in digital solutions and “green jobs." 

Extended aid programs

As expected, Minister Freeland announced plans to extend some of Canada’s federal aid programs.

“About 300,000 who had a job before the pandemic are still out of work and more Canadians may lose their jobs in this month’s lockdowns,” Minister Freeland explained.

As such, the Liberals will maintain flexible access to employment insurance benefits for another year until fall of 2022.

The Canada Recovery Benefit – “which we created to support Canadians not covered by employment insurance,” said Freeland – will remain in place through September 25 and extend an additional 12 weeks of benefits.

As the economy "reopens over the summer," the benefit amount will go to $300/week after July 17, she said. 

Additionally, the government plans to expand the Canadian Workers Benefit and invest $8.9 billion over six years in additional support for low-wage workers.

The 2021 budget will also introduce a $15/hour federal minimum wage, Freeland said.

Furthermore, the government will spend $30 billion over five years, reaching $9.2 billion every year, to build an affordable early learning childcare system

Support for hard-hit businesses  

“Small businesses are the vital heart of our economy and they have been hardest hit by the lockdowns,” Freeland said, outlining a “rescue plan” for these types of businesses specifically.

This includes extending the wage and rent subsidy programs, and other lockdown support, until September 25, 2021, which will cost roughly $12.1 billion. 

The government has also introduced the Canada Recovery Hiring Program.

This program will run from June to November and provide $595 million to businesses so they can hire back laid-off workers or bring on new ones.

Minister Freeland also unveiled money that will go towards helping small businesses invest in new technologies – up to $4 billion dollars will go towards helping up to 160,000 small and medium-sized business purchase new technologies for growth. 

The Canada Digital Adaption Program will provide businesses with advice and help to get the most out of these technologies, she said.

"Lack of a plan" for travel trade

While the 2021 budget is shaped around supporting small and medium-sized businesses, it falls short in helping independent travel agents, said Judith Coates, co-founder of the Association of Canadian Independent Travel Advisors (ACITA). 

When Minister Freeland said the CRB benefit would go to $300 a week after July 17, "I nearly fell off my chair," she said. 

"We've barely been able to make the $500 a week stretch to pay our rent, put food on our tables, and pay our business expenses," said Coates. 

"With the strictest lockdowns in place until May 20th, how can we expect the economy to fully reopen in the summer?" 

"And due to the unique revenue model of travel advisors (we don't get paid until the customer travels), we do not realistically see any financial recovery until the end of December at the earliest, or more realistically until May of 2022."

Coates said this "reinforces the need for us to continue to advocate for sector-specific aid for our small businesses that are hanging on by a thread." 

ACITA's Brenda Slater said the CRB ("our lifeline") reduction is "going to push more of us out of the industry." 

"ACITA will continue to advocate for the CRB to stay at the current rate, and for six months past the lifting of the level three advisories and border closures," Slater said.

The extension of the wage subsidy and rent subsidy programs "will be a relief" for brick and mortar agencies, Slater said, "but without sector-specific aid, we wonder how long our storefront colleagues can survive." 

"Certainly, there seemed to be a lack of a plan to financially support the retail and independent travel industry."

ACITA's Nancy Wilson said advisors "are in a bad, if not worse place than we were a year ago." 

"We have been hardest hit - we are small businesses, we are tourism, and a majority of us are women. To reduce the CRB, without offering separate sector specific-aid is negligible," Wilson said. 

"I’m not quite sure how many in the travel and tourism sector can survive." 

In a statement, the Association of Canadian Travel Agencies (ACTA) said it was pleased to see the extension of the federal support programs through to September. 

"This will bring continued relief to travel agencies, travel agents and independent contractors," ACTA President Wendy Paradis said on Monday after Freeland's presentation. 

But ACTA anticipates that the industry will need extended support through to the end of the year "or until restrictions on travel are lifted."

READ MORE: ACTA survey - 75% of the industry will not survive if aid programs are not extended

ACTA’s recent survey of more than 1,000 travel agents revealed that 75 per cent would not survive without continued aid until the end of the year.

"ACTA will be taking time to review the 724-page document to understand changes to the government programs noting initial concerns with the decline in the maximum base and top-up levels beginning in July," Paradis said. 

Grow the economy

On the vaccination front, Freeland said that by the end of September, Canada will have received 100 million doses – “enough to fully vaccinate every adult Canadian."

Freeland added that Canada will rebuild its biomanufacturing capacity, supported by a $2.2 billion-dollar investment, “so we can make these vaccines here in Canada.”

Can the government afford all this?

“We can,” said Minister Freeland. “This is a budget that invests in growth. The best way to pay our debts is to grow our economy.”

“These are investments in our future and they will yield great dividends.”

The deficit for 2020-2021 is $354.2 billion dollars below the government’s original forecast, Freeland said.

“We can afford this ambitious budget because the investments we propose today are responsible and sustainable," she said. 

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