Use pandemic to stop brain drain, MPs told, as payments for CERB top $40 billion

Use pandemic to stop brain drain, MPs told, as payments for CERB top $40 billion

OTTAWA — The federal government should use the COVID-19 pandemic to reverse a brain drain of top tech talent south of the border, a House of Commons committee heard Monday, alongside warnings that companies would leave Canada if taxes go up to pay for massive deficits.

The pandemic-related economic crisis is ”an ironic opportunity for Canada” because it has led to structural changes that would normally take years happening in a few months, said Jim Balsillie, chairman of the Council of Canadian Innovators.

He said the closure of the Canada-U.S. border, for instance, should spur the government to create a program to put Canadian innovation students to work domestically, with many having seen their co-op placements in Silicon Valley evaporate.

“The border may not open for eight or 12 months. So we have an unusual opportunity to reverse the brain drain — I mean, it is reversed temporarily — but we can actually make Canada a preferred destination,” Balsillie told the Commons industry committee.

“They can’t leave now. So the top students are here, let’s have them build our country.”

The message from Balsillie added a wrinkle to how governments are charting an economic path out of the crisis, knowing that traditional stimulus won’t help a crisis that has hit female-dominated professions. The economic crisis has also been likened more to a natural disaster than a traditional recession.

Speaking earlier in the afternoon, Bank of Canada governor Stephen Poloz spoke about the need for policy-makers to reconstruct broken value chains, unwind the hundreds of billions in emergency measures and manage the unpredictable behaviour of consumers and businesses.

“It is clear that the events of this year will be a massive test for everyone’s policy-making ability,” Poloz says. “We are entering unknowable times, and we will have to be nimble and innovative.”

Federal figures released Monday showed that a key federal benefit for Canadians out of work, or seeing large drops in their earnings, in the COVID-19 pandemic has now paid out $40.33 billion in emergency aid to 8.21 million people.

The spending has pushed the Canada Emergency Response Benefit further beyond its $35-billion budget. However, billions could be clawed back next year when the government taxes the earnings and recoups improperly paid benefits.

At the same time, the federal government opened applications for a commercial rent assistance program that will provide forgivable loans to landlords who give tenants a break on payments.

Landlords with up to 10 eligible tenants located in Atlantic Canada, British Columbia, Alberta or Quebec could apply online Monday. Applications for landlords in Manitoba, Saskatchewan, Ontario and the territories open Tuesday. Landlords with more than 10 tenants can apply later this week.

Prime Minister Justin Trudeau repeated his request for landlords to apply for the help, while also telling business owners to apply for other programs to pay their rent on time.

The Bank of Canada has helped by purchasing government bonds, effectively providing hundreds of billions in low-cost financing to federal and provincial governments.

Poloz said in his speech that the bank is prepared for the possibility that near-term cash demands from governments may put renewed strain on financial markets.

Federal spending is now up over $151 billion, and the estimated deficit for the fiscal year on a course to top $250 billion, with warnings from the parliamentary budget office that more may be needed.

A panel of experts convened by the C.D. Howe Institute said Monday that governments will likely need “revenue sources beyond tax rate hikes” to pay for the spending, suggesting taxes on large online companies as one example.

“Any such new revenue sources must be done in conjunction with other jurisdictions so as not to be seen as an outlier, thus harming Canadian competitiveness,” the report said.

The chief executive of Magna International also told MPs on the industry committee that companies will be looking to see what the “new normal” will be once the crisis passes.

“The debt … is that going to put a burden on taxes on companies? Because a company like Magna, we’re a proud Canadian company, but we have to go where we can make a profit,” Donald Walker said.

“It will be similar in other areas around the world, but it’s going to be very interesting to see what happens from a competitive standpoint.”

This report by The Canadian Press was first published May 25, 2020.

Jordan Press, The Canadian Press

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

robbery
UPDATE: Suspect identified in early morning shooting

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

Many rural municipalities were concerned about a proposed reduction to their industrial revenues, but Alberta’s Municipal Affairs minister has come up with an alternative solution. (Photo contributed)
Province and rural municipalities agree on a plan to support Alberta’s energy industry

Creating new wells or pipelines would result in a three year ‘tax holiday’

The influenza vaccine will be available at no cost starting Monday in Alberta. “The more that we can avoid influenza-related tests, emergency visits and hospitalizations, the stronger our system will be to support those with COVID-19 and all other health needs," says Dr. Deena Hinshaw, the province's chief medical officer of health. (AP Photo/Ted S. Warren)
Hinshaw urges Albertans to get flu shot as COVID cases jump by 332

Alberta’s central zone now has 132 active COVID-19 cases

The Bellows family on vacation last year in Mexico. L-R: Angel, Ryan, Darrel, Grace and Michael. (Photo submitted)
Rimbey community rallying behind family after cancer diagnosis

Michael Bellows, 12, a ‘strong, resilient kid’ says father

Across the province, there are 2,738 active cases of COVID-19, with 18,417 recovered cases. There have been 288 deaths from the virus in Alberta since the beginning of the pandemic. (File photo)
Alberta reports 244 additional COVID-19 cases Thursday

2,738 active cases of COVID-19 in the province

In this photo provided by Shannon Kiss, smoke from the CalWood Fire billows, Sunday, Oct. 18, 2020, as seen from Gunbarrel, Colo. (Shannon Kiss via AP)
‘First guys out:’ Western Canadian air tanker fleet busy despite drop in wildfires

CEO believes wildfires have become more dangerous in recent years as people live closer to where they start

A passer-by walks past a COVID-19 testing clinic in Montreal, Friday, Oct. 16, 2020. THE CANADIAN PRESS/Ryan Remiorz
Canada ‘yet to see’ deaths due to recent COVID surge as cases hit 200,000

Much of the increase in case numbers can be attributed to Ontario and Quebec

Executive Director of Agape Kate Halas (left) receives $1000 from Sgt. Eric Christensen (right) on behalf of Agape. Photo/ Shaela Dansereau.
Former Wetaskiwin Peace Officer wins provincial award; gives back to Wetaskiwin community

Eric Christensen has won the Alberta Association of Community Peace Officers Award of Excellence.

Agriculture Minister Devin Dreeshen (Alberta government photo)
Big boost for Alberta college agriculture research

The $2-million agreement to benefit Lethbridge College’s applied research team

Grant and Barbara Howse, in quarantine in Invermere. Mike Turner photo
Denied entry into U.S., Canadian couple still forced to quarantine for 2 weeks

The rules around crossing the U.S. border led to a bizarre situation for an Invermere couple

Employee Sophia Lovink shows off a bag of merchandise in Toronto on Thursday, June 11, 2020. (THE CANADIAN PRESS/Nathan Denette)
Canada gets C-average grade on 2nd year of cannabis legalization

Cannabis Council of Canada releases report card on federal government and legalization

Canadian and American flags fly near the Ambassador Bridge at the Canada-USA border crossing in Windsor, Ont. on Saturday, March 21, 2020. Restrictions on non-essential travel between Canada and the United States are being extended until at least Nov. 21. THE CANADIAN PRESS/Rob Gurdebeke
Non-essential travel restrictions at Canada-U.S. border extended to at least Nov. 21

The restrictions do not apply to those providing essential services in either country

(The Canadian Perss)
Banff wolves have lower survival rate due to hunting, trapping outside park boundary

Researchers looked at 72 radio-collared wolves in the national park from 1987 to August 2019

Democratic presidential candidate and former Vice President Joe Biden speaks at Miramar Regional Park in Miramar, Fla., Tuesday, Oct. 13, 2020. Alberta Premier Jason Kenney is still hopeful about the Keystone pipeline if there’s a change in government in the U.S. next month, saying Alberta has been engaging with American officials from both sides of the aisle. THE CANADIAN PRESS/AP-Carolyn Kaster
Alberta premier says he’s still hopeful about Keystone, even if Biden elected

The Alberta government has agreed to invest about US$1.1 billion as equity in the project

Most Read