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

Alberta has 3,651 active cases of COVID-19. (File photo)
432 new COVID cases sets another record Friday

Central zone holds steady at 126 active cases

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

100 Women Who Care make a donation to Sylvan Lake Food Bank and Bethany Care Centre. Photo By Megan Roth/Sylvan Lake News
100 Women Who Care donate to four Sylvan Lake groups

The Food Bank, Bethany Sylvan Lake, Community Partners and the Library all received a donation

RCMP. (Black Press File Photo)
Calgary man dies in two-vehicle collision near Sylvan Lake

A semi truck collided with a SUV just east of Hwy. 781 on Hwy 11.

Shaelynn Decock and her dog Taco, who has been missing since Aug. 26. Photo Submitted
Sylvan Lake woman looking for closure for her stolen dog

Shaelynn Decock says it has been two months since she last saw her dog Taco

B.C. Liberal leader Andrew Wilkinson, B.C. NDP leader John Horgan and B.C. Greens leader Sonia Furstenau. (Black Press Media)
VIDEO: One day until B.C. voters go to the polls in snap election defined by pandemic

NDP Leader John Horgan’s decision to call an election comes more than a year ahead of schedule and during a pandemic

This photo provided by Air Force Reserve shows a sky view of Hurricane Epsilon taken by Air Force Reserve hurricane hunter team over the Atlantic Ocean taken Wednesday, Oct. 21, 2020.   Epsilon’s maximum sustained winds have dropped slightly as it prepares to sideswipe Bermuda on a path over the Atlantic Ocean.  The National Hurricane Center says it should come close enough Thursday, Oct. 22, evening to merit a tropical storm warning for the island.  (Air Force Reserve via AP)
Hurricane Epsilon expected to remain offshore but will push waves at Atlantic Canada

Epsilon is not expected to have any real impact on land

A voter places her absentee ballot in the ballot box, Wednesday, Oct. 7, 2020, at Merrill Auditorium in Portland, Maine. THE CANADIAN PRESS/AP/Robert F. Bukaty
American voters living in Canada increasingly being counted in presidential race

The largest number of Canadian-based American voters cast their ballots in New York and California

A composite image of three photographs shows BC NDP Leader John Horgan, left, in Coquitlam, B.C., on Sept. 25, 2020; BC Green Party Leader Sonia Furstenau, centre, in Victoria on Sept. 24, 2020; and BC Liberal Party Leader Andrew Wilkinson Pitt Meadows, B.C., on Sept. 24, 2020. THE CANADIAN PRESS/Darryl Dyck, Chad Hipolito
British Columbia votes in snap election called during COVID-19 pandemic

NDP Leader John Horgan called the snap election one year before the fixed voting date

Nunavut's provincial flag flies on a flag pole in Ottawa, on Tuesday June 30, 2020. The annual report from Nunavut's representative for children and youth says "complacency and a lack of accountability" in the territory's public service means basic information about young people needing services isn’t tracked. THE CANADIAN PRESS/Adrian Wyld
Nunavut’s young people ‘should be expecting more’ from government services: advocate

‘The majority of information we requested is not tracked or was not provided by departments’

Ryen Williams, 11, with a lost miniature horse at JJ Collett Oct. 23. Photo by Don Williams
UPDATE: Owners found

Father and son found him while out for a walk at JJ Collett

A Le Chateau retail store is shown in Montreal on Wednesday July 13, 2016. Le Chateau Inc. says it is seeking court protection from creditors under the Companies’ Creditors Arrangement Act to allow it to liquidate its assets and wind down its operations.THE CANADIAN PRESS/Ryan Remiorz
Clothing retailer Le Chateau plans to close its doors, files for CCAA protection

Le Chateau said it intends to remain fully operational as it liquidates its 123 stores

U.S. border officers at the Peace Arch crossing arrested two men on California warrants this week. (File photo)
Ottawa predicts system delays, backlogs unless court extends life of refugee pact

Canada and the United States recognize each other as safe places to seek protection

Conservative member of Parliament Michelle Rempel Garner, left to right, Conservative Leader Erin O’Toole and Conservative Deputy Leader Candice Bergen arrive to hold a press conference in Ottawa on Thursday, Oct. 22, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No-confidence showdown over sweeping Tory motion on government handling of pandemic

The Conservative motion is to be put to a vote Monday and has the support of both the Bloc Québécois and NDP

Most Read