Recommendations to Premier Kenney Regarding COVID-19
March 23, 2020
Hon. Jason Kenney, Premier of Alberta
Government of Alberta
108000 97th Ave.
Edmonton, AB T5K 2B6
Dear Premier Kenney,
On behalf of the Tourism Industry Association of Alberta (TIAA) and its members, we applaud you and your colleagues for your leadership during this time of unprecedented economic and health crisis in Alberta. Your swift reaction to these circumstances has been reassuring to Albertans.
TIAA wishes to take a moment to articulate a couple areas where we have observed gaps in the stimulus package announced by the federal government. We understand this is a very fluid process and that changes are likely to unfold on both the provincial and federal fronts in the coming days, but we share these comments in the hopes that your government may be able to fill in where the federal government has yet to respond to requests to bolster its financial investments.
The Government of Canada announced a 10% wage subsidy for eligible businesses for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer. It was identified that employers that would benefit from this measure include corporations eligible for the small business deduction, as well as not-for-profit organizations and charities.
The subsidy seeks to assist employers in keeping their employees on payroll and Canadians employed. This is a critical objective in support of future economic recovery efforts. Unfortunately, a subsidy of 10% is not enough and it is erroneous that a business could underwrite 90% of payroll overhead for any length of time when 100% of their income stream has been lost.
From a business perspective, the subsidy is much more than ensuring the short-term financial needs of those that would remain on payroll are met: it is about being able to strike at opportunity the minute the green shoots of an economic recovery present. If employers lack for the core leadership, supervisory and support personnel to welcome their guests back the minute doors to businesses re-open to the public, we will compromise the markets ability to respond to consumer spending interest. Alberta has to be ready to open for business again on the drop of a dime.
TIAA recommends that the Government of Alberta advocate to the Government of Canada that it immediately take steps to increase the wage subsidy to no less than 70% of remuneration.
TIAA further recommends that until such time that the Government of Canada can confirm that it is prepared to close this gap that the Government of Alberta bridge the wage subsidy difference.
TIAA is encouraged by the government’s recognition of the liquidity concerns many businesses have right now. On the federal level, the new Business Credit Availability Program (BCAP) aims to support small, medium, and large Canadian businesses by availing $10B of additional support to businesses experiencing cash flow challenges. The program is intended to reduce rates on new loans, provide working capital loans of up to $2M with potential postponement of payments for up to six months, as well as postponement of payments on existing loans. Provincially, the Alberta Treasury Branch and Alberta credit unions have availed options for clients to defer payments on loans, lines of credit and mortgages.
In practical terms, the speed and efficiency with which these measures might become available to struggling businesses is troublesome. Illustrative of the concern are the floods of 2013 in southern Alberta. It took too long to get financial aid to many of the businesses that needed it most and there were bankruptcies and closures of businesses. As your government is aware, over 90% of Alberta’s businesses are small to medium-size enterprises with little to no financial backstops. A majority don’t have weeks to wait for government to sort-out the program details and online application forms: they have days.
TIAA recommends the Government of Alberta TIAA look at whether it could triage the liquidity concerns of businesses through agencies such as local economic development authorities, chamber of commerce or community foundations who are closest in relationship to the struggling business and who could act as an agent of the crown in both providing advice, acting as their intermediary in dealings with banks and financial institutions, and, assisting with the disbursement of funds for qualifying emergency scenarios, if required.
Nurturing an Economic Recovery – Need for Sustainable Funding for Travel Alberta
TIAA was encouraged to hear you speak about the importance of Alberta’s visitor economy to the future of this province. Tourism will be critically important to reactivating the economic machinery of many communities, whether that is to encourage a visit to a local community coffee shop, restaurant, cultural centre, museum or favorite family attraction or to travel to another community as part of a overnight staycation.
TIAA recognizes that it will take some time for Alberta to get back to normal. But, when it does – some of the first jobs that will be needed to support Alberta’s economy will be in hotels, restaurants, attractions, transportation services, and others.
TIAA recommends that the Government of Alberta immediately dedicate the full value of the Alberta Tourism Levy to Travel Alberta to support provincial promotion and marketing efforts.
TIAA further recommends that the Government of Alberta earmark no less than $50M toward an economic recovery campaign aimed at encouraging Albertans to get outside, recreate, go for dinner, stay overnight somewhere to activate consumer spending throughout Alberta.
We look forward to supporting your efforts as we move through these difficult times and we are here to work collaboratively with you as partners in tourism, and in supporting the broader interests of all Alberta communities.
Alida Visbach Darren Reeder
Chair of the Board Board Advisor
Cc Travis Toews, President of Treasury Board and Minister of Finance
Tanya Fir, Minister, Economic Development, Trade & Tourism
Tyler Shandro, Minister, Health
Jamie Huckabay, Chief of Staff, Premier’s Office
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