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MNP presents insights and recommendations regarding Bill C-9 to Senate Committee on National Finance

2020-11-12


MNP is honoured to have received an invitation to share our experience and insights on COVID-19 emergency response measures to the Senate Committee on National Finance regarding Bill C-9 on November 12, 2020.

Senate Committee

Thank you, Mr. Chair and honourable members of the Senate.

My name is Am Lidder and I am the Senior Vice President, Tax Services at MNP and I am joined today by Kim Drever, Regional Tax Leader. 

Just over 240 days ago our lives changed forever as Canadians from coast to coast to coast have experienced a level of stress and uncertainty that has been unknown in our country for generations.

We thank the Government of Canada, and all governments across Canada for their tireless work to keep Canadians safe and healthy throughout the pandemic.

Our presentation today is focused on ensuring that the changes to Bill C-9 deliver simpler, more accessible programs to help businesses get through the pandemic. This is important for immediate emergency relief and the long-term health of our economy.

As the largest Accounting, Consulting, and Tax Advisory Firm headquartered in Canada, MNP has had a unique vantage point through which we have experienced this pandemic and the related economic fallout. As a trusted advisor to over 180,000 clients, we have stood alongside them as they face the challenges of COVID 19.  With over 80 offices across Canada, we have been deeply engaged in the communities we call home and know, firsthand, the complexities of operating a business in a world with more questions than answers.

Broadly, the legislative changes put forward in Bill C-9 are to be commended as they provide businesses with much needed emergency financial support in a time of sustained crisis.  At the same time, these amendments demonstrate how complex our tax system and government programs are. Easing the administrative and financial burden put on businesses to access and comply with the programs may allow more businesses to access these supports.

We are tabling with the committee some specific technical amendments to Bill C-9 that we feel could improve the legislation, and ultimately the outcomes for the small and medium sized businesses that represent such an integral part of the Canadian Economy, the Canadians employed by these businesses, and the communities they support.

Simplicity and accessibility are key to delivering successful emergency relief programs. Our hope is that through the Bill C-9 process and in any future deliberations on support measures that businesses are not unduly burdened by excess administration.

We believe that making the Canada Emergency Rent Subsidy a tenant program is the right focus and we believe that this will improve accessibility for those that need it.

To address specific concerns related the Canada Emergency Rent Subsidy, there are a number of businesses that will be excluded from the program by virtue of how the legislation is drafted. For example:

  1. Businesses that change the terms of their lease, for whatever reason, would be excluded;
  2. Businesses that are moving into different premises, could also impede the tenant’s ability to access the subsidy;
  3. For those businesses that own their own building but are receiving income through leasing excess space, like a local bookstore sharing space with a coffee shop. If the bookstore revenue declines to below the rental income, would the bookstore still qualify?
  4. Lastly, the eligibility criteria requires cash-strapped tenants to find the cash to pay the rent to access the program.

Regarding the Canada Emergency Wage Subsidy, the program is working, and the extension of the program is welcomed by Canadians. This is a lifeline for Canadian businesses.

Bill C-9 contains amendments related to asset sales that could have a negative impact on succession planning of small and medium sized businesses. Given the significance of the CEWS program, vital business decisions may be delayed.

For example, a family-owned flower shop with two locations is unable to transition one of the locations to their daughter. She would be disqualified from CEWS whereas if the family opted to sell that location to a competitor, the new owner would qualify. This leads to the long-term sustainability of the business being compromised.

While program tweaks and changes compound, it is critical that policy makers be mindful that the CEWS program is administratively challenging for businesses. We caution that any further changes do not add further complexity.

Ultimately, we believe that the core objectives of any recovery measures ought to result in a more robust and competitive economy so that all Canadians and Canadian businesses can prosper in our evolving economic reality. An ideal recovery is one where our country is well positioned to respond to any future challenges.

Canadians and the businesses with which they work or invest are continuing to face a crisis of confidence. The need for the protections and stability afforded to them by amended programs like CEWS and CERS are not to be understated.

Rebuilding the confidence of Canadians will not be done by maximizing the number of businesses receiving government support, but rather by creating the conditions whereby businesses are able stand on their own.

Thank you, Merci.

MNP can customize our online course to suit your organization’s requirements. Contact us for more information.

MNP is proud to represent the interests of our clients from coast to coast to coast as we advocate for simple, accessible programs to ensure Canadian businesses have a long and prosperous future.

View Presentation

For more information contact:

A​m Lidder, Senior Vice President, Tax Services, at [email protected]

Kim Drever, Regional Tax Leader, at [email protected]