0:00
So before I introduce Francis, we are hosting this weekly call because we know that your companies and organizations are under severe pressure. And while our government has responded rapidly, with programs being expanded incrementally to address gaps, there's a lot of information to process and many entrepreneurs have expressed uncertainty around their eligibility for emergency relief programs. With this in mind, we're privileged to have Francis McCray, Assistant Deputy Minister of small business and marketplace services at innovation, science and economic development Canada with us today. Francis has meaningful insight into many of these programs and the recent developments, her sector, Foster's business and consumer confidence in the marketplace in small business competitiveness by championing and administering responsive legislation, policies, programs and services. The sector collaborates with and has oversight responsibilities for the Business Development Bank of Canada, and administers important marketplace frameworks and regulation. Since the crisis emerged from has hosted daily calls at 11 o'clock every day, on top of all the other responsibilities, she's managing and demonstrated exceptional leadership. And so we really are fortunate to have people like Francis helping to get information related to the emergency relief out in a very efficient manner. And she is always keen to listen and to take that feedback back to government. So, Francis, many thanks for joining us, I know that you've put in long hours of working from home, including all the work that you're doing with these calls. So we really do appreciate you being here. If it's all right. I was hoping perhaps you could walk us through some of the key programs available to entrepreneurs, and then maybe we can have a bit of a dialogue after that.

1:41
Sure. So thanks very

1:42
much, Claudio. Michael, Laura. Great to be on the call with you today. I know that these are really important forums. I've participated in a lot of different webinars in the last while in addition to the calls that that were mentioned, I think the thing that kind of has struck me, you know, it's an interesting time for me to be in the role of Assistant Deputy Minister of small business. And, you know, there there, there is no department in the government that doesn't deal with small business in some shape or in some way. And, you know, in fact, as we all know, and you know, the statistics, I'm sure better than I do, you know, really, you know, 98% of our economy is small business, and in some sectors, it's actually, you know, higher than that. And, and so, you know, the the challenge we have had, I think, certainly I have had is making sure I'm well connected with my colleagues across government who are designing and implementing and running these programs. And that I think, is kind of the key thing for us. Being able to provide a perspective from small businesses directly on what they're selling. Experiencing on the ground, and then how the various measures which, you know, as Claudia was mentioning earlier, that the measures are being rolled out. And I think you've heard the government say very quickly, the idea is not to have them perfect as they're launched, but to try to get money out there as quickly as possible and then adjust. And I think that's what you've seen, the government do, over the last number of weeks is not be afraid of adjusting and saying that, you know, they need to they need to tweak, you know, add more programs, and expand eligibility, you know, and, you know, change certain of the of the program parameters. And even on the legislative side, you've seen them not be afraid to take some of those things back into legislative proposals. So I think, you know, from my perspective, there's a couple of things. One is, I think, for me are really important messages. You know, We are listening, the government is listening, I can tell you and I say this to the people on who join my call every day. And, you know, there is no monopoly on good ideas. And if I didn't think that the input is make was making a difference, you know, I would say so. And I actually think and I know, from talking to my colleagues across government from speaking to, you know, ministers in their offices, that it is making a difference what people have to say, and I think you have seen that, as I said, in where the government has been going. And, you know, the reality is all of these various programs that are being announced, I mean, some of the challenges we have are the fact that you know, the interaction among them, and the complimentary nature of them is not always totally fine tuned when they're when they're put out the door. So we're kind of, you know, reacting to that. And then you know, you have a sequencing issue. So as an example, and the candidate emergency response benefit, which at first was designed in such a way that, you know, if you made any kind of income, you would not be able to apply and get the benefit. And then, of course, that turned out to be a perverse incentive, so that people were, you know, turning down work. We, you know, we were seeing the impact in some of the key sectors that needed to keep operating as essential services. So, you know, that adjustment that happened to allow for $1,000. And then the other issue is

5:44
the question of,

5:48
you know,

5:50
how then that interacts with the wage subsidy program. That's a 75% wage subsidy for remuneration. So So So that's kind of the the reality that that we're dealing with is these things are kind of always being adjusted as we're going along. I won't get into the detail on the program. I know that, you know, you probably all know the programs very well. There are a lot of, you know, program finders on our innovation canada.ca website, there's, you know, we've repurposed that innovation website, which I'm sure you may be familiar with to be able to, you know, find the right kinds of tools and resources around around the programs that may or may not be suited, but those are connected as well to the federal government, PR

6:38
firms, but not just federal to provincial

6:42
as well. So I think you know, the particular concerns that you have around startups around the the venture capital ecosystem, we can, you know, get into some of that on some of the questions. You know, that that this is something that we've been paying a lot of attention To the BDC, which I can't speak for, but I do know that they are very, very attentive to what's going on the VC ecosystem, and you see some movement there, and they'll continue to look at what's going on

7:10
there. Just maybe close with this is that, you know,

7:15
the proposals that are being made by various numbers of stakeholders, by business groups, by provinces, by by

7:25
businesses themselves,

7:27
and all of those by academics,

7:29
all of those are really important to hear. I think the challenge the government is going to have is, you know, continually responding in an evolving environment. And, and so there's so many factors that are shifting at the same time that any given proposal or idea has to be looked at, in the light of, you know, the uncertainty of the future, that that we're all kind of living with. So, I would just say that, you know,

7:58
there is no shortage of good idea. ideas. We get them every day

8:01
I get a lot of them. I know many, many, many people are all across government, do ministers get them? And that's really important. We need all those ideas. I think that the challenge we will have collectively is how do we, you know, you know, action, some of the, you know, the best idea is based on what kind of environment we're going to be facing, as it evolves. And I think that is probably our central challenge at the moment. And I think maybe I'll just leave it at that, Claudio, if that's okay. And we can come back on some questions. I did say to Claudio, I just found out this morning,

8:39
well, late last night, but mostly

8:40
this morning. And then I need to support minister eating it and a parliamentary appearance she has before three

8:47
o'clock so I am going to have

8:49
to leave a little bit early. But as I said, we're happy to take any questions back if I don't have time to answer them, depending on how the conversation goes.

8:58
Great. So Francis, Maybe we could drill down on on the areas that are most relevant to, to the tech sector. So, you know, one of the one of the key areas of concern was the requirement for a 30% drop in revenue in order to be eligible for let's say, the Canada emergency wage subsidy. Can you speak to some of those programs and how the government is evolving? Its thinking around the revenue drop requirement?

9:22
Yeah, so thanks for that. I, you know, I would just say on this one, you know, it's, it's, it's very difficult when you're moving these programs through and you'll all be familiar with the way government programs are designed. Normally, we spend quite a lot of time on program design, because you really want to target your programs to the right need. The challenge of doing that in this environment is one is fluid, to there's such a diversity of need. And so no sectors are the same back no one businesses the same probably. And, and in addition to that, there are other evolving kind of programs. Like the provincial programs and others that are that are unfolding, and then just that that, you know, the time crunch, right, people are developing this literally kind of in some cases overnight.

10:11
And so,

10:12
so the question of the of the threshold, I mean, you'll remember when the wage subsidy was first announced, first, it was a temporary wage subsidy of 10%. That got shifted quite quickly, within a week to 75% wage subsidy with, you know, a very specific type of benchmark in terms of, you know, the the revenue loss timeframe, that got changed again, and, you know, probably about a week later. And, you know, one of the things that we know, as of last week was the Prime Minister, extended that program into August 29. And the Department of Finance at the same time said that they knew and I think it's very, you know, it's public knowledge that the anticipated demand for that program was Higher than it has been. And therefore, you know, there is a real need to kind of go out and figure out what some of the barriers might be one of them definitely is around, you know, people are being heard on the threshold issue, the newness of organization, so the timeframe over which people have to demonstrate, you know, loss, and then just the benchmarks that are not necessarily, you know, the type of timeframes that work for all industries take seasonal and industries or others or like I said, new industries. So, there, you know, there is a definite I hear out that that the Department of Finance has that's not being led by my department, but I do know that this is a big part of what they're going to be doing is they need to understand what some of the key barriers are. They've addressed some of them. In the announcement last week, they widened the eligibility to make it more permissive. And I would suspect that you're going to see you know, A lot of discussion and very short period of time to,

12:03
to look at

12:04
what other barriers there are. And I know certainly that 30% threshold is is one of them.

12:15
Two programs come to mind that seem to have a point of intersection. So when is the Canada emergency business account? And then there was a recognition, it seems of certain gaps as it pertains to Angel backed or we'll say high growth companies, and then the regional relief and recovery funding was made available. And now there seems to be a bit of an intersection between the two. So can you provide some clarity one in the sense that, you know, what do what do startups and entrepreneurs need to qualify for the Seba funding? And then if they're not, if they don't meet those requirements, how can the regional development agencies provide relief?

12:58
Okay, so thanks for that question. So on that See, but this is another one where we're now on version 3.0, of Seba. And so the government first announced it had a certain payroll threshold that companies needed to meet, they changed that payroll threshold, after some initial reactions, and then they now as of Tuesday this week have announced further opening up of that program to address and some of the barriers around payroll in particular, because a lot of companies are not structured with payroll, per se, they have labor costs, but those are not primarily related to payroll. And I know a lot of startups are in that category, whether it's payments or dividends or, or, or, you know, contracts, you know, more, you know, gig labor as an example. So, you know, but there are many industries like that. It's not just, it's not just, you know, many, many types of companies, even very, you know, mature companies who have different types of labor models for very good reasons. So we're on Cb 3.0. There was an announcement on Tuesday about some of the general kind of parameters of that and we'll see more details coming from the Department of Finance over the next little while. And I think the, the issue here is, you know, staying true to the purpose of the Seba program, which is to support companies in in dealing with non deferrable business costs and so, it's not an income support program, the income support program is is served program primarily the Canada emergency response benefit, which is intended for you know, self employed and and employed people who, who need income support. So that's immediate income support and then the, the seabed itself is going to you know, continue to be about non verbal business costs. And so the idea is that companies would be able to demonstrate their non deferrable business costs in 2020. So it doesn't have to be cost incurred, but it does have to be, you know, real costs that they will be facing that they are not able to defer. So as an example, if you take rent, well, you know, we would probably want people to see if their landlords will try to apply for the rent commercial rent assistance, before they would be, you know, applying to Seba and if that was their major non verbal cost as an example, but, you know, rent is included in the non verbal costs that are eligible for seven and we'll have more detail around what those non verbal costs are kind of, you know, entail The idea is that people could, you know, you know, show what costs they have and put that forward and, and then, you know, have some points in there. Information points in the tax system. And that then kind of, you know, they can that banks can help validate against. I mean, I think the other thing we want to be careful about on these things is the wider they get opened it, whether it's, you know, a program for, you know, individuals or for businesses, the wider it opens, the more you know, risk there is challenges around, you know, accounting for public funds that that we all will have to worry about

16:28
as time goes on, so, so, the Seba enhancement is designed now to help help those companies that have you know, that that don't have payroll meeting 20,000 but that do have no undeliverable costs and that, that they need some help with so that's where Seba 3.0 comes in. On the question of the regional funds, so the regional fund was when it was announced it was it was dissolved. To help those who are not eligible for Seba, at the time, I would tell you that, you know, was not clear that we were going to have a C, but 3.0. And so now we have a situation where, you know, we have a C, but 3.0 businesses, you know, who are eligible for that should be applying for that, which will then likely reduce the draw on, or the demand rather for the regional relief and recovery fund. And so, you know, we're constantly This is one of those things that I was telling you about as one program opens, and another isn't yet available. You know, there is a challenge that businesses have of what to apply for. My advice always is whatever you're eligible for, you can apply for. And, you know, there's, there's no you know, we're we're in a shifting environment right now. So if you say someone applied for the regional fund and then found that they were eligible for Seba, well, they will just have to get in touch With their regional development agency, and, and, you know, pull back the application, and it doesn't necessarily need to be, you know, I know people get worried about, you know, being accused of double dipping, I think we're all aware in this environment, there's just so much moving at the same time, it's pretty difficult for people

18:19
to

18:20
kind of, you know, wait and hope that something else opens when, in fact, there is a program for which they can apply and get some support. So, and I would just last thing I would say on the regional on the RS, which is important.

18:35
And people have pointed this out to us that you

18:37
know, not, not all the regional development agencies are managing that program exactly the same way and the terms and conditions and eligibility requirements are different. And that is true. And a big part of that is that as usual, the otas are fill a complimentary role in their ecosystem, and where there are other programs so certain provinces, for example, have different programs that they do Announcing, you know, the RBA has to take that into consideration when they look at complementarity. So, you know, I think it isn't a widened one size fits all, in terms of what's available across the country. And that's where the particularities of the RDS come in. And, you know, there's cohesion in the sense that it's generally, you know, similar types of support, but there may be differences in terms of eligibility because of, you know, the assessment of what's in the environment and what the need is,

19:34
is there and I'm cognizant of your time is there. What I've heard from from entrepreneurs is some of them have a familiarity with the regional development agencies, others it's, it's a new concept. So you know, because we have people calling in from from all across Canada, is there a common thread between the regional development agencies, and then is there variation in the different regions that that might help situate people around how To think about when to reach out to the Regional Development Agency.

20:03
Well, I mean, you know, the regional development agencies are very close to the ground, and they do operate a little bit differently. And, you know, they, they, you'll be familiar with the fact that they used to be all under separate ministers, they were all created at different times to fill various needs. And so that's one of the way they're, they continue to operate is that, you know, you know, they all have regional development strategies that, again, are based on what the need is in their region and not on kind of a national vision of what a Rdh should or shouldn't be. And that's kind of by design. They are now of course, all under ministers really as the Regional Development Minister and she's, you know, well aware of the different situations that we we are in across the country, a CCO is structured completely differently and how has a different has has historically had a very different role, say then, you know, Western economic diversification which which you know came along later and has has a different history in terms of of Western provinces and of course that ebbs and flows with the way that the economy in various regions has tended to, to change. You know, I look I talked to my RBA colleagues all the time, they are constantly trying to adjust to see what's needed. And they are they know their ecosystems very, very well there. They have very strong partnerships on the ground. You know, you tend to have a lot of longevity in the in the senior levels and in the staff levels at the rd is I've just not hesitate to reach out to them for conversations.

21:51
Great and on the on the rental relief issue. My understanding is that there are some jurisdictional issues that the federal government is is having to manage it, but this is an area of of high priority that they're trying to resolve. Can you provide some background there?

22:08
Yeah. So, um, you know, just on the on the rent relief, you know, this this is a this is a it's very much a discussion with the provinces and territories. And you know, that that, you know, the reality is that the federal government has very few Weaver's at back practically none around commercial leasing in, in this country. And so, I think, you know, we're working with the provinces and territories to to implement this agreement that we have on on the rent the commercial rent Assistance Program. And some provinces are, you know, taking certain action in terms of legislation and in terms of, you know, even just some of the, some of the language that the Premier's are using around you know, design That landlords look at this program, and others are not being quite as quite as loud on it. I mean, one of the things I keep saying to people is you have to remember and not all landlords are created equal, you have everything from a small landlord who's relying on rent to, to be an important part of their pension income to you know, very large players who you know, may have, you know, a little bit more flexibility but even then, you know, bills have to be paid. So, again, even in the in the landlord side of things, there are there's so much diversity that designing to what is needed and what will be palatable, I think is is a real challenge and we are working very, very hard on rolling it out. I'm very happy to say that you know, or you know, CMHC is evolving this program as they're designing it, you know, originally, there was going to be a separate solution for non mortgage properties. Well, now the answer to that is all properties if no mortgage and non mortgage will have access to the same solution. So, you know, I think those are, those are things that that we're working on, and pretty hard to be able to roll out. And as I understand, I believe CMHC has made it clear that their, their rollout date is May 25. So that's Monday. What staggered by by kind of application, kind of trusses. But there's a lot of detail on the CMHC website now, which, which we hope will will lead to more take up and we'll have to see I very I feel very comfortable that the government will continue to listen to feedback. It has been listening to feedback. I see no sign of that. letting up.

25:00
Thank you so much, Francis, we really do appreciate your time and being here, I know you have a number of important priorities that you're balancing. So thank you for for taking the time to join us. We do appreciate your insights. We have some questions that came in. So if it's all right, we will send them through to your office and great,

25:20
ya know, happy to answer them. And you know, and I answer a lot of emails every day myself, at everybody that writes does get an answer. So, and it's usually for me, so you know, I do encourage you to keep asking, keep sending the feedback. It's all very important. And I do want to just, you know, maintain that open door. You know, as we move through all these phases together, we've got to keep that communication going. So, and again, I apologize, I have to leave early. It literally kind of just came up today so and I will have to sign off and support the minister at committee.

25:59
Wonderful. Thanks so much, Francis luck with that and thank you for being here. Take care. Bye bye