FINA Committee Meeting
Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.
For an advanced search, use Publication Search tool.
If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.
Standing Committee on Finance
|
l |
|
l |
|
EVIDENCE
Thursday, May 14, 2020
[Recorded by Electronic Apparatus]
[English]
I officially call this meeting to order. Welcome to meeting number 28 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of Tuesday, March 24, the committee is meeting on the government's response to the COVID-19 pandemic.
Today's meeting is taking place by video conference and the proceedings will be made available via the House of Commons website.
I just want to point out, on a technicality, that if you're speaking in English, you should select English at the bottom of the screen. If you're speaking in French, select French. It's easier for the interpreters that way.
With that, then, I will welcome the minister and the witnesses. I'll not go through the list of witnesses, but with the minister, we have witnesses from the Canada Revenue Agency, the Department of Finance and the Department of Employment and Social Development.
Mr. Minister, we certainly welcome you. We know you have an opening statement, but I do want to say in beginning, thank you for the fourth report, the bi-weekly reports of parts 3, 8, and 18 of Bill C-13, related to the COVID-19 emergency response. We appreciate that.
Also, a special thank you to the people who prepare that report, the people who work in the backrooms who we never see, who do a lot of work for Canadians. You can give them our thanks and let them know that we appreciate what they're doing for Canadians and what they're doing in preparing the reports for us at the finance committee.
Certainly, Sean and I thank you for today's announcement as well, a welcome announcement on the fisheries side.
Minister, we welcome you. The floor is yours.
Thank you, Mr. Chair.
I'll begin by thanking the members of the committee for their continuing work during these extremely challenging times, and thank you for the invitation to have me speak today at the committee.
As we all know, COVID-19 continues to pose significant risks to people's health, their way of life, and the economy as a whole.
[Translation]
Since the beginning of March, the measures implemented as part of Canada's COVID-19 economic response plan have been supporting Canadian workers grappling with this unprecedented crisis.
This whole-of-economy plan promotes economic stability and protects jobs. Our government's rapid, comprehensive response is providing over $150 billion in direct support to Canadians, to soften the economic impact of this crisis. This support will also help our economy recover once the crisis ends.
[English]
Ours is one of the most comprehensive plans in the G7. We've rolled out measures for workers and businesses across all economic sectors, for employers of all sizes. We're helping students who are trying to build careers, and parents trying to juggle the demands of the COVID crisis on their professional and family lives.
We've worked with provinces, territories and indigenous leaders. We're continuing to make sure that no one is left behind. The Canada emergency response benefit, which provides temporary income support to workers who've stopped working, is important. More than 7.8 million Canadians have applied for the CERB as of May 10.
We know that the pandemic has brought extra costs into the lives of seniors too and that they need some support as well. As one of our first measures, we announced a GST credit top-up that was delivered in April, which provided financial support to low- and modest-income Canadians, including over four million seniors. Eligible seniors received an average of $375 for single seniors and $510 for senior couples.
[Translation]
This week, the Prime Minister announced additional financial support to help our seniors. Canadians who receive the old age security pension will automatically get a tax-free payment of $300.
Those who receive the guaranteed income supplement will get an additional $200, tax free. These payments will go to support seniors. There are currently 6.7 million seniors who are eligible for the OAS pension and 2.2 million who are eligible for the GIS.
We've also invested in community support initiatives that help seniors. We've given $9 million to United Way Canada to provide practical services, such as delivering groceries and medications.
[English]
We also announced an investment of $20 million in the new horizons for seniors program, which helps reduce isolation and provides social support for seniors. This support is now more critical than ever before. We've also announced virtual care in mental health tools for all Canadians through a new online portal called “Wellness Together Canada”.
In addition to supporting individual Canadians, we've provided significant support to Canadian businesses since the beginning of the crisis. We've implemented support for businesses across Canada that aren't eligible for other support measures, through the new regional relief and recovery fund. This new fund devotes nearly $962 million to help more businesses and organizations that are key to local economies, including rural economies.
Last week, we announced an investment of more than $252 million to support farmers, food businesses and food processors who make sure our grocery stores are stocked and are keeping Canadians fed. This complements our action in March to enable Farm Credit Canada to provide an additional $5 billion in lending to producers, agribusinesses and food processors. The government also intends to propose an additional $200 million in borrowing capacity for the dairy sector in particular.
This past Monday, we announced the expansion of the business credit availability program to mid-sized companies from across the economy with larger financing needs. In addition, we announced the large employer emergency financing facility to provide bridge financing to Canada's largest employers to help them get through this pandemic. These businesses employ millions of Canadians and we need them to stay strong. We'll protect workers by ensuring that companies that receive support through LEEFF respect any and all collective bargaining agreements, including pensions. We'll protect taxpayers by putting in place strict limits on executive pay, share buybacks and dividends.
[Translation]
We want to make sure this support is truly going to companies that contribute to Canada's economic well-being by making significant investments in this country. In considering a company's eligibility, we assess its international organizational structure and financing arrangements, as well as its employment, tax and economic activity in Canada. Recipient companies will be required to commit to certain objectives with regard to the disclosure of risks related to climate change and environmental sustainability.
[English]
Companies will not be able to get this financing if they've been convicted of tax evasion.
[Translation]
The government also announced a temporary top-up to the salaries of low-income essential workers that the provinces and territories have deemed essential in the fight against COVID-19. All provinces and territories have confirmed, or are in the process of confirming, plans to cost-share wage top-ups for their essential workers. The Government of Canada will provide up to $3 billion to support this wage increase.
[English]
Since the beginning of this crisis, we've been focused on providing Canadians and Canadian businesses with the support they need to get through this crisis. We'll do whatever it takes. We'll get through these challenging times together.
Thank you very much.
Minister, thank you very much for those remarks and that overview of where we're at.
We'll start with the six-minute round. I'll give you the speaking order of that round.
We'll start with Mr. Poilievre, Mr. Fragiskatos, Mr. Ste-Marie and Mr. Julian. In the second round, we'll be back to Mr. Poilievre, and then Ms. Dzerowicz.
Pierre, the floor is yours.
The economic challenge we're facing obviously is significant and the investments we are making are significant. We believe those are in the best interests of the economy and will keep our economy strong.
Well, as I said, we're making significant investments to support the strength of our economy. The rating agency looks at the strength of the economy. We believe making those investments will support a strong economy as we come out of this.
For the last time, it is possible we will lose our AAA debt rating, yes or no? Just a yes or no will do.
As you may know, I'm not the debt-rating agency. What I can tell you is we are making investments to make sure our economy is strong. That is the fundamental determinant of how successful we are as a country.
All right, so no answer to that question.
Do you have an estimate for what the deficit will be this year?
We have been providing, as you know, reports through to this committee. The report you received most recently is giving you a comprehensive understanding of the investments we are making.
As we have the information we—
My question is whether you will enforce an approach where there's a question and then there's a response.
Yes, they will have to be relatively the same time, as the Speaker does in the House.
You can answer as you so decide, and the member can question as he or she so decides. It has to be relatively the same time for the question and the answer, according to the rules that the Speaker has been applying in the House.
All right, so the minister doesn't have an answer to that question either.
Mr. Chair, yesterday the minister wrongly suggested that the Harper government had cut the Auditor General's budget. In fact, the previous Auditor General voluntarily reduced his budget as part of his efforts to help reduce the deficit in that time. He said he could meet all of his auditing requirements with the budget he had.
By contrast, today's Auditor General has said the opposite, that he doesn't have enough money to do the work before him.
Will the minister—yes or no, yes or no—provide the Auditor General with the funds he has asked for so that his office, and the office of his soon-to-be successor, can properly audit all the spending of the Government of Canada?
Again, a simple yes or no will do.
I think, Mr. Chair, the response will be roughly the same amount of time as the question.
In fact, what I identified yesterday was the actual spending on the Auditor General in the last full fiscal year in which the previous Harper government was in office, which was—
—which was $85.8 million versus the latest full year that we have reported out from the 2018-19 year, which was $92.4 million. Really, I'm just trying to identify the fact that the spending that has been put forth for the Auditor General has increased.
We certainly support the Auditor General and the important work he is doing and will do for our country, and we'll continue to provide the appropriate level of support for that function.
Yes or no: Will you give the Auditor General's Office the funding it has requested, specifically requested before this committee, in order to carry out his, and soon to be her, audits? Is it yes or no?
Well again, Mr. Chair, the way the process works, as it does for all things that we go through financially, is we look at the requests and we look at the appropriate expenditures for each different function.
We'll continue to take that prudent approach and, as you can see, we have increased—
Thank you.
I asked a very simple question. This is the government that is spending another $150 billion on top of its normal budget. We're probably going to have a half-trillion-dollar federal government this year.
The Auditor General has asked for $6 million or $7 million extra in order to properly scrutinize all this spending.
This should be the easiest question you answer all day, Minister. Will you give our auditor the resources that he has said his office needs to do his job? Is it yes or no?
Thank you, Mr. Chair.
As I've said, we will continue to fund Parliament appropriately. We will continue to respect the requests of all agents of Parliament and come forth with funding that we believe is appropriate based on the needs and their representation.
How many cases of fraud have been detected by your government officials that have been paid out in the form of emergency response cheques? Just the number, please.
Well, I think, as you know, Mr. Poilievre, we've provided you with information on all of the programs we've put out—
Clearly, what we've been trying to achieve is a program that can help the broadest number of Canadians possible—
Just hold on, Pierre. This will be your final question, but I'll let the minister finish first. He was just not quite to your time.
Go ahead, Minister, finish up.
Yes, as I said, we are trying to get to the broadest number of Canadians, and we'll have an approach to audit and people who are fraudulent will be dealt with in the strictest of fashions.
Right. Okay. Thank you.
Your government has told bureaucrats to send out cheques even when they detect fraud. The CBC is reporting that prisoners are receiving the cheques at their jailhouses. How many prisoners does your government believe it has sent $2,000 cheques to so far?
—to our objective here, which is to make sure that we are getting the support to the broadest number of Canadians impacted by COVID-19, and obviously we're very encouraged that the programs are having such—
Thank you, Mr. Chair, and thank you, Minister.
Minister, I want to ask you about municipalities. A few weeks ago, this committee heard from the Federation of Canadian Municipalities, which, as you know, has put forward a request to the federal government to receive in the neighbourhood of “at least”—that's what their letter said—$10 billion. What do you make of this ask? I wanted to get your thoughts on that.
From my perspective, it's interesting that their advocacy has failed to mention at all, really, the provinces, which is interesting, because obviously jurisdictionally the provinces have a key role in this. Municipalities exist as creatures of the provinces, as we all know.
Again, I just wanted to get your thoughts on the ask and the possible provincial role and need for that.
Thank you.
I think what we're seeing across the country in many, many different sectors, whether it be in business sectors or in levels of government, is really significant stress. So many people are impacted and so many things that we take as normal activities are impacted by the coronavirus challenge, so it is not a surprise that we're seeing some stresses at the municipal level. Obviously, our support of people has been critically important, because that's important for the municipal level. Our support of businesses is important, in terms of those businesses and municipalities.
I do think it's appropriate what you said in your remarks—that municipalities do work with provinces. I think it's important for us to say that we expect for that continuing relationship to stay strong and for provinces to be the funders for municipalities.
That said, we do know that we all need to work together in facing up to this challenge, and we are endeavouring to do that. When we get requests, we consider them carefully, because that's appropriate at this challenging time. This request, like all others, we'll be considering carefully, knowing, of course, that it's also critically important for the provinces to be stepping forward in that regard.
What do you make, Minister, of the argument that is sometimes raised that suggests that the federal government ought to act and lead the way when it comes to providing emergency assistance relief to municipalities, because, at least as the argument goes, the federal government has greater fiscal capacity than provinces? What are your thoughts on that sort of reasoning?
Well, I would start by saying it's pretty clear that the federal government has led the way. The federal investments on behalf of people and businesses have been extremely significant. You've seen the direct support now—as I mentioned in my opening remarks—that's in excess of $150 billion.
There's very significant support from the federal government. It is true that the federal government had a strong fiscal position going into this, and we remain capable of dealing with this challenge on behalf of Canadians.
That said, I know that provinces also have the capacity to be an important part of this effort. We are seeing provinces recognize that. They're putting forward programs, in some cases, and that is also important.
The kinds of things we've done, which have been supporting provinces with things like the essential worker top-up or the support for commercial rent—both areas that are really provincial—have been important. The Bank of Canada supporting the issuance of debt from the provinces has been critically important for them in having access to capital.
We've provided significant support. We'll need to continue to work together on the challenges we face, and we need to consider different jurisdictions and levels of government as we move forward appropriately.
Thank you very much.
With my last question, I want to ask you about the nature of this downturn. It is quite unique, in the sense that it has primarily impacted, at least at this point, the service sector. Previous downturns have mostly impacted the manufacturing and construction sector, and men, who disproportionately work in larger numbers in those sectors. This time it's the service sector, and hence—not exclusively—women seem to be impacted. At least that's what the data is showing us.
What does that imply, in your mind, as far as a recovery is concerned? What sorts of approaches are the federal government looking to introduce? Do you have any thoughts on what the current data means, from a recovery standpoint?
I think it is an important question. We are seeing that this challenge is hitting different segments of the population differently. It's hitting low-income workers, in many cases, in a more difficult way than higher-income workers, because many of those workers are losing hours, or the jobs they were occupying are not going on during the course of the COVID-19 crisis.
That was why the emergency response benefit was so important. We knew there were 5.7 million Canadians not attached to an employer who were initially going to be hit, and many of those workers have gone on the CERB.
As part of the recovery, fundamentally what we needed to do was protect those people, and then protect the companies through wage subsidies and credits so that those companies will be around to rehire and to expand afterwards.
Really, it's emergency support for people, and providing a bridge for companies so we can come out of this with a capacity for people to go back to their old jobs—I hope—or, in some cases, move to new jobs that will be there because we've supported businesses.
Thank you both.
We'll turn to Mr. Ste-Marie, and then on to Mr. Julian.
Gabriel, the floor is yours.
[Translation]
Hello, Minister. Thank you for appearing before the committee.
I also want to express my thanks and appreciation to all the officials who have joined the committee's virtual meeting.
Yesterday, the government announced the COVID-19 regional relief and recovery fund. With the other programs it's announced so far, the government started by presenting the terms. In this case, however, it announced the total amount. For Quebec, it's $211 million.
Should I take this to mean that the program will be first-come, first-served, so SMEs need to hurry up and apply?
[English]
[Translation]
I'm referring to the Economic Development Canada program that was announced yesterday by Minister Joly. It's called the COVID-19 regional relief and recovery fund, or RRRF for short.
Thank you.
Our approach focused on coming up with programs for small businesses, like the Canada emergency business account, which offers $40,000 loans.
We know that some companies won't qualify for the program due to their size and status. You mentioned another program that will help businesses that are still struggling. It's a unique program that was designed for small businesses forced to tackle a new challenge, a challenge that didn't exist before. We're going to continue with the credit approach for small businesses.
I hope we'll be able to give more details in the coming days.
All right, thank you.
I'd still like some clarification on the program that was announced yesterday, which totals about $900 million, including $211 million for Quebec. Do companies need to hurry up and apply to this program in case the approach that's used is first-come, first-served?
Our approach for this program is to go through the regional development agencies, and that's why each one has a certain amount to administer. Also, the application process is clear, which is important.
But there will be other programs too, and this is just one of the measures we're taking to help small businesses.
Thank you, and I'll change the subject.
Regarding the aid package for Air Canada, did the government make it a condition that the airline refund customers whose flights were cancelled?
We don't have packages specific to any particular company or sector. Rather, we've proposed a financing opportunity for large companies. Any company in any sector will be able to apply if it needs to. Our approach will require the company to explain its situation and how it will meet our conditions, which will be identical for every company, regardless of sector. We don't have an approach for any specific airline. Our approach is the same for all companies.
Thank you.
As demonstrated by your speech at the beginning of this committee meeting, for two months, the government has been piling on more and more announcements and new programs, not to mention changes to existing programs.
I think it would be appropriate to table an economic update by summertime. I'm envisioning a document that would provide a broad overview of the various programs that have been rolled out, outline the economic situation, and explain your department's working assumptions and the scenarios it's juggling. When the Parliamentary Budget Officer testified before the committee last Tuesday and was asked about this, he said this kind of update was urgently needed.
Are you planning to table an update in the next few weeks?
We believe transparency is very important. That's why you received a 30-page report today outlining our measures. We're making an effort to stay transparent. This crisis is obviously still in flux, and it's hard to make projections right now. We'll be able to do more once things stabilize.
[English]
Thank you very much, Gabriel.
We turn now to Mr. Julian. We will have time in the next round for two more, before the minister has to leave. We will start that with Mr. Poilievre and then Ms. Dzerowicz.
Mr. Julian.
Thank you very much, Mr. Chair.
Thanks, Mr. Morneau, for being here yet again. You've been very accessible throughout this crisis. To you as well as to the families of the public servants who were here today, we hope that everyone in your households continues to be safe and healthy.
I'm going to ask some questions. I hope to have concise answers.
I'm going to start with the fact that we all know, which is that families are struggling and that small businesses are struggling, and yet the programs that the government has rolled out haven't provided the universal supports that many people were hoping for, and therefore many people can't access the CERB and many small business owners can't access the wage subsidy or access the commercial rent relief. There are conditions that limit those programs.
That's why there is some concern with the LEEFF, which is the new program that you've announced. There's that contradiction because, despite the fact that other countries, like the United Kingdom, have banned executive bonuses, stock buybacks and dividend payments because of their use of public funds, in Canada, the approach that you're suggesting taking is simply to cap those. What are you capping in terms of executive bonuses? Are they capped at $1 million or $2 million? How much are you budgeting for this new program?
There were a number of statements there, so maybe I can start with the first premise.
We've taken the view that what we need to do during the COVID-19 crisis is to make sure we're helping the people and the businesses impacted by this crisis. That's why our programs have been specifically directed towards those people.
I think what can be seen in application is that our approach is having exactly the desired impact. The emergency response benefit is a good example. There are now more than 7.5 million Canadians who have come onto this program, so we're seeing a very significant application. Through the emergency business account 600,000 businesses are now getting this $40,000 small business loan. The broad support is there. It's specifically targeted to the businesses or individuals needing it.
With respect to the direct question at the end, on the large employer emergency financing facility, we see that's quite important to help businesses that employ many Canadians to bridge through this time. We've done that, but we've put conditions. I think what you'll see is that our conditions are as strict as or stricter than those in other countries. We are, in fact, not allowing share buybacks or dividends for companies that come forward on this. We are going to have limitations on executive compensation, which I will be able to roll out as we work through those, that will be as strict as or stricter than those in other countries. Similarly, we've said that businesses need to protect workers through collective bargaining responsibilities and pensions.
We see these conditions as critically important. We see preserving our economy as critically important. We think this will help.
I would disagree with your answer regarding how what we are doing compared to what other countries are doing and best practices, but I'll move on to another issue.
Other countries have actually limited the use of public funds to companies that use overseas tax havens. With the rollout of the LEEFF we have seen this week, you said specifically it is only those companies convicted of tax evasion. I'm tempted to ask very cheekily how many companies involved in the Panama Papers, in the Paradise Papers, or in the Isle of Man scam have actually been convicted of tax evasion. But we know the answer. It's absolutely zero. Over 90% of Canada's largest companies use overseas tax havens, companies like Cargill, that have been involved in the worst COVID-19 outbreak in the country. Cargill uses an overseas tax haven.
Many of the companies in the Paradise Papers and the Panama Papers use overseas tax havens. Can you confirm that if those companies, like Cargill, meet the other criteria, despite this open practice of using overseas tax havens, they will qualify for use of the LEEFF?
Well, I think it's important to consider the aspects of this program that will guard against these challenges. You just pointed out one. Of course, companies that are convicted of tax evasion will not be eligible. But we've also been working together internationally to make sure the ability of companies to move money around, what's called base erosion and profit shifting, is more limited. That's actually reducing the scope for people to do the things without actually causing themselves to run afoul of the laws. That has been an important part of what we're doing.
Also, the condition in this new large enterprise facility will be that the money that goes is actually required to be used for Canadian operations, Canadian investments and protecting Canadian workers. That's an explicit condition of what we're doing here.
We've guarded against this, Peter, in multiple ways. Obviously, the work we've been doing for years has been reducing the ability of firms to do this. We're limiting it to those firms that have not run afoul of the law, and we're also focusing the investments, so they must be in Canada, for Canadian investments and for Canadian employees. Fundamentally we're trying to make sure that Canadian employment at these large organizations stays vibrant as we go through this challenging time.
Sorry, Peter, we are over time.
We turn now to the five-minute round with Mr. Poilievre and Ms. Dzerowicz, and then we'll have to let the minister get on to other things.
Mr. Poilievre, the floor is yours.
As I mentioned in French to Gabriel, we are providing significant information to this committee, and as the situation—
Okay, is there an answer? Yes or no.
Hon. Bill Morneau —gets more stable we will be providing more.
Hon. Pierre Poilievre: Okay, so no answer to that, no answer to how many prisoners and fraudsters the government has knowingly given cheques to, no answer to the size of the deficit, no answer to the size of the debt, no answer as to whether it will reach a trillion dollars, no answer as to whether we will lose our AAA rating, and no answer when I asked for the dollar value of our assets, liabilities or equity.
Mr. Minister, do you have answers to these questions or do you just believe that Canadians don't deserve to hear them?
I think that what we recognize is important is that we make the kinds of investments to get us through this time period, and we do it while presenting to Canadians every step along the way exactly what we're doing so they can understand it. So—
Pierre, just hold on, and Mr. Minister.... Hold on, both of you.
Mr. Poilievre, I'm not going to take time away from either one of you, but the minister was about halfway through his response time. He has the floor. Give him the opportunity to answer, and things will be much smoother.
Mr. Minister, you have about 20 seconds to finish that answer.
Well, as I was saying, we believe that it's really important for us to support Canadians during this time and to give a clear understanding of that support, including the costs of it. As that situation is more stable, there will be more information that will be provided.
He won't answer my questions. Maybe he'll answer Michael Cooper's questions. I'll cede my time to him now.
Thank you, Mr. Chair.
Minister, if in fact you clearly want Canadians to understand the costs of the programs that your government is putting in place, then why not provide a fiscal update?
In fact, what we're doing is making sure that as we provide these supports we are providing an understanding of the programs' costs and, as you know, updating this committee—
Can we give the minister time to respond?
Michael, can you just slow down a little? You're coming through a little crackly for some reason.
Minister, you have about 10 seconds, and then we'll go back to Mr. Cooper.
—and we're providing on a regular basis updates on how these programs are moving forward. It's a very fluid situation. We will provide more information as—
—to another area, and that is, Minister, that we have criminals who are receiving CERB cheques, and officials have turned a blind eye to fraudulent CERB applications, but meanwhile, small businesses are falling through the cracks.
This morning, I spoke with a small business owner. He owns a salon, the Care beauty spa and salon in Edmonton. He has invested $200,000 in his business. Just before COVID, he was set to open. Now, he's out of luck. He doesn't qualify for any of the programs. He doesn't qualify for the wage subsidy because he hasn't seen revenue decline. He doesn't qualify for CEBA because he has no payroll, and he doesn't qualify for any of the BDC or EDC programs because he has no revenue.
What specifically is your government doing to address this situation and others like it, where small business owners, who have done absolutely nothing wrong and have invested considerable amounts of money, are now stuck and shut out and desperately need support and help? What are you doing to address this situation, which is not a new one?
Let me first of all say that we are very worried about people like the gentleman you're talking about. That's why we've been so focused on providing supports to businesses, not only for their employees but for their business going forward.
We are working to make sure that these programs are available as broadly as possible. Our emergency business account, which is providing loans of $40,000 to businesses, has now been taken up by an enormous number of small businesses—about 600,000, representing about $23 billion.
We recognize that there are still situations that are difficult. We are looking at how we can consider expanding that criteria to potentially capture businesses like the one that you're talking about, but we will not be able to capture every single challenge. That's the nature of this crisis. We're working hard to make sure, though, that the programs that we do have are having the broadest possible impact.
I will continue to focus on that, making adjustments as we go along so that we can support people like the one that you're identifying through measures that work, and thinking about, for those who fall through the cracks, whether there are other ways that we can be supportive.
Thank you. We will have to end that round there.
The last questioner before the minister has to leave is Ms. Dzerowicz.
The floor is yours, for five minutes.
Thank you so much.
Minister, I want to start by saying thank you for being here today. Thank you for your extraordinary leadership and your hard work. It has been a lot; we're into the end of our ninth week of our lockdown. I know there has been a tremendous amount of work by you, by the team, and I just want to say a heartfelt thanks. We know you're all working hard.
For me, I'm really glad that we have an upcoming three-day weekend. I think we all deserve a bit of a break.
My first question is about the large employer emergency financing facility that was announced earlier this week. There were a number of conditions that were attached to it. Specifically you included environmental and climate commitment conditions.
Can you explain why you felt it was important to add those conditions and why you felt it was important to specifically add the environmental and climate condition?
Our impact on climate change as a country is something that we take seriously. I've been working on this issue with my colleagues. We had a committee that did some work on sustainable finance a little more than a year ago. That gave some recommendations on how large businesses in particular could represent their climate impact in their financial disclosures and talk about how climate change could impact their businesses.
We see this as an important thing for businesses to consider. Many firms have moved forward in this regard, which is quite encouraging, including firms in all different sectors of the economy.
We saw that as something that was important for us to recognize. We needed it to be a condition for this program. We additionally know that our goals around the decarbonization of our environment by 2050 are important to Canadians. They are important to the world. We thought we needed to put that as an overall Canadian goal.
As we think about the large enterprise financing, which is protecting jobs and protecting businesses, we want to make sure that those businesses and those jobs are sustainable. That's how we got to the conclusion that this was going to be an important part of that consideration.
Thank you so much.
My next question is about small businesses and the commercial rental assistance program that you announced. I know that small businesses in my riding are waiting with eager anticipation for the application process to open for that. I think they are both excited and have a bit of trepidation, in terms of whether their landlord will sign on to it and whether they will be able to qualify for it.
What would be your message to small businesses around the commercial rental assistance program, to maybe put them at rest in terms of our purpose and how it is meant to be helpful?
First of all my message would be to landlords. I think this is a really important program that will be supportive of landlords, and I think they should take advantage of this.
What we have seen, for landlords, is that many tenants cannot pay their rent. If they have a commercial tenant who can't pay rent, then they are much better off to get 75% of that rent—so 25% from the tenant and 50% guaranteed by the government—than to get potentially zero. That is a huge advantage for landlords. For tenants, obviously it's a huge advantage, because they can decrease their rent payment because of the support from government. That is my message.
This is a program that is just being rolled out. Of course, there are always concerns. It won't work for every single situation. The landlord-commercial tenant relationship is a provincial jurisdiction. We are trying to help to make this work by stepping in through the mortgage system. We think this can have a really big and important impact on small business in our country, and I would encourage landlords to be a part of it. I would encourage commercial tenants and landlords to work together to get through this.
Obviously, it will be helpful for all of us if those stores, which are making our lives so vibrant, remain along our streets when we get through this COVID-19 situation.
I have one quick question, Minister. We're learning a lot through this pandemic. You mentioned that 7.5 million Canadians have applied for CERB. We also know that many people have lost their jobs. We've also learned, through these committee meetings, that there are actually a lot of jobs available, whether they're in agriculture or health care or even in construction. How might this information, the fact that there are actually jobs available and we know a lot of people are out of jobs, impact our thinking and our approach to supports moving forward?
I think, Julie, you're pointing out an important question that we need to answer, which is how do we move into the next phase? The Prime Minister has talked about extending the wage subsidy. We think that is a step, but we're going to need to think about how that system, our emergency response benefit and our employment insurance system work together, creating the right incentives for people to get back to work, creating the right support so that businesses will bring people back on. We're working through that now.
I think we all know what the goal is. The goal is to get people back to work, to get people into those jobs that are available and to create new jobs as we move forward. That's what we're working towards.
Okay. Thank you both.
Minister, we will let you go.
I just want to make one point. It relates to the question on fraud. I think you gave a fairly clear answer. The answer, to be honest, hasn't been clear from the minister or the Prime Minister on that issue. I think it needs to be stated clearly that the government is not going to accept what is clearly fraud, but there are going to be a lot of errors out there.
I have constituents who were on EI, went back to work, but because they automatically got enrolled in CERB, had no way of saying they were going back to work. They ended up, when they came home, having a $2,000 cheque to deposit. They called, worried about what would happen. I actually had to write a letter to them, saying that, “Look, this was an error on the government's part. Continue to work. Don't spend the $2,000. Set it aside, and when things settle out here that money can be paid back.” Those kinds of errors are going to happen in a fast-moving system like this, but the government has to make it clear that we are not going to accept what is outright fraud. That money will be hauled back in. I think somebody needs to be clear.
Let me just be clear on behalf of the government. We designed these programs with an attestation that allows people to get into the program based on some pretty clear facts. That was in order to facilitate getting money out to a very large number of Canadians in a rapid way. The fact that there are some people who are committing fraud or that there are accidents is a problem. We're going to have to come back to those problems.
For those people who are committing fraud, that's not acceptable. We are going to come back. We are going to have to deal with that, and that will be dealt with. I would encourage people to be fair and honest in their attestations. Not being so will have ramifications for them afterwards.
Thank you very much for clearing that up. Thank you again, Minister, for appearing. You're here lots these days. We do thank you for all the hard work that we know you and your staff right throughout the system have been doing.
We'll go to officials. The speaking order to start with is Mr. Morantz and then Mr. McLeod. In the notice of meeting, all the officials' names are laid out, from the Canada Revenue Agency, the Department of Finance, and the Department of Employment and Social Development. If you want to ask a question to a specific individual, that would be helpful. If you don't do that, whoever wants to answer can. I can't see everybody on my screen. If you're putting up your hand, you may have to push your button and yell at me.
Marty, the floor is yours for a five-minute round.
Thank you, Mr. Chair. My questions will be addressed to the CRA officials, anyone who wants to take them.
This morning in the National Post there was yet another report of a leak of what you may call guidance or a memo, directing the public service to approve CERB claims, even if someone had attested to the fact that they had either quit their job or had been fired for misconduct. I just want to ask if you're aware of this guidance.
That article actually referenced guidance within Service Canada, so I'll gladly answer that question.
That guidance is accurate, but there are a few things that I'd like to highlight.
First, when people are applying for the CERB, whether it be on the CRA site or on the Service Canada site, they do need to complete an attestation, and there is a very clear attestation element there that confirms the person has not quit their employment. Then, as part of the Service Canada application process, they go through the EI system. There are a number of different questions in the EI system, and a number of them do tie into the question of whether someone has quit. Under the EI program, and as well under CERB, people generally do not quit their employment. However, there are some situations in which people can legitimately quit their employment. An example would be if someone had because they needed to take care of their child because of that situation. Other times, there are other situations in which people can quit.
We are recording those answers. As part of the after-payment integrity measures, we will be reviewing those types of responses and ensuring that only the people who were qualified for the benefit are actually able to retain it.
Perhaps, Mr. Groen, you could send it to the clerk, and then we'll distribute it to committee members.
We'll not take time away. We're a little looser on time now that it's not the minister.
Marty, go ahead.
Thank you, Mr. Chair.
As an aside, my understanding is that people who applied for CERB actually made disclosure that they had been fired or lost their job, at least according to the article. I take it you're saying that is not the case. The article basically makes the case that there's no way you could collect money back from somebody who actually disclosed this, that they were fired for cause or quit and then got paid. I'm not sure how you would have a case to collect those monies back. I'm just mentioning that as a comment.
It's the same question, though, with respect to the National Post report earlier this week about the no “stop pay”. Have you seen that guidance?
It is very much connected guidance. It is connected to how we treat and process applications. We certainly do have that guidance.
Again, as part of the response to the committee, I would be able to provide that guidance.
Certainly.
What I would like to highlight, however, is that again, as the minister indicated, priority in delivering the CERB has been about being able to pay people very quickly. If we had all the—
Thank you.
I have limited time, so I want to go on to my next question.
Was the guidance given by a cabinet minister?
No, it is internal guidance developed by departmental officials to facilitate the administration of the program, and it is very much in line with the federal guidance we have to deliver our programs.
Would you have the authority, then, within the public service to provide a guidance document that said if somebody earned more than $1,000 on the CERB, they would be eligible to receive the CERB?
The program parameters of the CERB are that someone who.... They need to attest again that they have not received more than $1,000.
The parameters of the program are that people can earn up to $1,000, and they need to attest, once again, that they are not earning more than $1,000. Again, as part of our program integrity measures, we rely on people's attestations. We have to process the applications.
However, working together with the CRA, we do have and will continue to have, even after the CERB program is over, a number of different program integrity measures to be able to recoup any money that was paid to people who were, in fact, not eligible.
Again, people actually disclosed to you the fact that they got fired. I don't know how you're ever going to.... You paid them. I don't know how you're ever going to collect that money back.
With respect to this issue, if you have the guidance to say you're going to pay people who have been red-flagged for fraud, certainly you must have a guidance authority within the public service to pay people who are falling through all the cracks in these programs. Again, I think that would be self-evident.
Why would you pay people who don't deserve the money and not pay people who really do need it?
The delivery of the program, the overall design of the program, is not the purview of the public service. It is driven by the decisions that the government has made related to the design of the program. However, for the administration, we are responsible.
Regarding your question about people who have indicated that they quit their jobs, again, we will be looking at those, because there will be circumstances in which somebody may have legitimately quit their job and would be entitled. However, we also are requiring them to complete an attestation. Therefore, if they do not meet the program criteria.... Like we do for all the programs we deliver, if people do not meet the program criteria, we do have the authority to recover those funds.
The question just came from one of my colleagues. It says that our Conservative members are receiving reports from our communities about confusion around import tariffs on PPE and the exact requirements they need to follow on bringing in this equipment. Can CRA officials please clarify the existence of import duties on PPE and could they provide the committee with a written answer on the exact process for importing PPE?
Who want to take that? We are substantially over on that round, but I think there's a lot of information to come out there. Can anybody take the question on the tariffs on PPE?
Thank you very much.
All right. We'll now go to Mr. McLeod, who will be followed by Mr. Ste-Marie and Mr. Julian for shorter rounds.
Thank you, Mr. Chair. I was hoping to get a question in to the minister, but it looks like we've lost that opportunity again.
I did want to ask a couple of questions.
First of all, I wanted to know from anybody who is presenting today how we can get information as to the update that is happening for the different programs by region, It would be interesting for me, as an MP, to know what the uptake is for different programs for businesses that are applying for the north.
I know that everybody is working a hundred miles an hour and 24 hours a day, but is there anybody who can provide me with that information? I'm concerned that there may be pockets or areas that may not be utilizing the programs. I'm hearing that in the north a lot of businesses in our communities are not applying for the programs. What I'm hearing is that because there are no banks in our communities, a lot of times they can't go through any kind of financial institution, so there's a small uptake. Can anybody speak to that?
Certainly, there is information that is being made available in a transparent way on a number of these programs in terms of the distribution by province, so we at the CRA would have information on the programs that we're administering. I can probably say the same for each of the departments that is administering the program. I don't know whether there is one comprehensive report on all of these programs, but certainly we would be willing to provide information on it, on a province and territory basis, if the committee would like that.
Would that same kind of information be available for the indigenous business support? A lot of our indigenous companies are large development corporations, and there start to be challenges when you're dealing with companies that have over 20 people. Up to now, it has been difficult for them to prove that there has been a reduction in revenue, because they have so many branches and subsidiaries. A lot of them were not able to access some of this program funding that was designated for indigenous businesses, but I don't know if that's information that I could get my hands on in a quick fashion.
Certainly we can provide you with the distribution with respect to the wage subsidy, which is a program we administer, and the same thing with the CERB. We're certainly aware of that issue and trying to work with indigenous businesses to ensure that if they are eligible they can apply.
Okay. I'm not sure if you can answer this, but I want to talk about how the different regions are impacted by COVID. I think the federal government's economic recovery approach has to reflect existing regional distinctions.
In the north we've been very fortunate, especially in health impacts; right now we have no cases, but we do have existing costs of living, a large service area and infrastructure gaps.
I'm very keen to know whether the government is prepared to assist us in addressing some of these unique recovery challenges faced by all our northern territories. We've talked lots about greater flexibility and doing things differently, especially with cost-sharing projects or allocating recovery programs. We focused on a base plus per capita formula. That's not something we do across the board with all departments.
Should that be considered, in your opinion?
I don't know who that could go to, maybe Suzy McDonald, somebody from finance, or Mr. Leswick. Somebody want to take a stab at that?
It relates to business and individuals in the north, which I've learned, Michael, is quite a different set-up from what we understand down here in what you call the south.
Suzy, do you want to give that a go? I see you're—
Perhaps I could start, and then perhaps my colleague Evelyn who deals with infrastructure might want to add something.
I think we're certainly very aware of the concerns and the particular needs of the north and northern communities, working closely with the territories to understand those needs. We're very aware that funding has been provided to Yukon, Northwest Territories and Nunavut to support the COVID-19 health and social services preparations and response. Those funds are being delivered through CIRNAC and are expected to flow to the territories in the coming days. We're continuing to discuss their needs with the territories; continuing to provide funding on a regular basis through the territorial funding formula and making sure those funds continue to flow through these difficult times.
Sure, simply to add appreciation for those thoughtful comments.
I share the view that an awful lot of learning and collaboration has come to the fore in the past few months and will endure through our stabilization and recovery. I think we will have a great interest in thinking about infrastructure, whether it's current programming done better or stimulus related, and thinking about how those funds can be best applied toward our next normal, the way you've highlighted.
Thank you.
We are over time. Some good thoughts there, Michael.
We'll turn to Mr. Ste-Marie and Mr. Julian. We have time to go to a five-minute round, fellows.
Gabriel, you're on.
[Translation]
Thank you, Mr. Chair.
My questions are for the representatives of Employment and Social Development Canada.
First, people whose EI benefits are running out are noticing that the criteria for the Canada emergency response benefit are a little vague.
Here's a quote from the information available online: “The date for which you would potentially become eligible for the Canada Emergency Response Benefit would be the week following your last Employment Insurance benefit payment...You may not receive EI benefits and the Canada Emergency Response Benefit for the same period.”
Can these people apply for the Canada emergency response benefit after a week? How does that square with the 14-day no-income requirement?
Does it mean that a person can't receive both EI and the CERB at the same time, or that they can't collect them both during an official CERB period, like the period from March 15 to April 11 or the period from April 12 to May 9?
[English]
Who wants to take that on, Department of Employment and Social Development or CRA?
Go ahead, Mr. Ram.
To be clear, one cannot receive the Canada emergency response benefit and EI benefit for the same week. The government has adjusted the eligibility rules for the emergency response benefit to allow it for people whose EI regular benefit claim has run out following the beginning of the COVID crisis, recognizing that in many cases people are not able to get back to work.
[Translation]
[English]
[Translation]
The interpreter is telling us that the sound quality isn't good enough for interpretation. I don't know if a colleague could answer for the witness or if there's a way to improve the sound quality.
[English]
Mr. Ram, is your Zoom channel on the same language that you're speaking?
Speak slowly and we'll give it another attempt.
Okay, my apologies. I will begin again.
I wanted to confirm for the honourable member that there is no ability to receive the emergency response benefit and the employment—
[Translation]
Mr. Chair, point of order.
The interpreter is saying that the sound quality still isn't good enough for interpretation.
[English]
Okay. Is there anybody else who can take that question?
Maybe the technical people could look at Mr. Ram's set-up to see if we can get a question a little later.
Go to another question and maybe we can come back to that one, Mr. Ste-Marie.
[Translation]
If it's not possible during this meeting, I'd like to get a written answer to this question as soon as possible. I wrote to the Department of Finance over a week ago, and it referred my question to the Department of Employment and Social Development. I got an acknowledgment of receipt saying they would get back to me, but I'm still waiting for an answer.
My other questions are also for the Department of Employment and Social Development.
First, what's happening with the Bloc Québécois' proposal to incentivize work for workers and students who are getting emergency benefits, along the lines of the EI system, so that people can earn more than $1,000 a month without losing the whole benefit?
For instance, it was suggested that $0.50 be clawed back for every dollar earned over the $1,000 limit, like for EI.
[English]
Does somebody want to take that?
Mr. Ste-Marie, Mr. Ram has indicated by the shaking of his head that he will get a written answer to you on your first question. I don't know if he can give you a written answer on the second or not.
Okay, he'll give us a written answer on both, Gabriel. Do you have another quick question?
[Translation]
All right.
Could a student who's receiving the Canada emergency response benefit apply for the Canada emergency student benefit when their benefits run out?
I think Mr. Ram is better placed to answer that question. But he'll have to answer in writing, unfortunately.
[English]
[Translation]
Okay.
Can a student who's receiving the Canada emergency student benefit get a job funded by Canada summer jobs if they earn less than $1,000 a month?
Since you've warned me that this was my last question, Mr. Chair, I'll wait for the written answers. I'm also going to email my questions to the department.
[English]
Okay. I don't see anyone up to answer that one.
There are about four questions there to be answered. Please send them to the clerk. That would likely be faster. He'll make sure they're in both languages and get them out as quickly as possible.
We'll turn to Mr. Julian for five minutes.
I'll give you the lineup for the next set of rounds: Mr. Cumming, Mr. Fraser, Mr. Cooper, Ms. Koutrakis.
Did you have a question, Elizabeth May? Put your hand up if you do.
Thank you very much, Mr. Chair.
I'll have some brief questions. I just want to make a comment to start. The idea of the CERB is to provide support for people who don't have other means. Somebody who quits their job because they don't have access to protective equipment, for example, should qualify for the CERB.
I find it a bit rich to be talking about widespread fraud when what we have in many cases are people who are just not meeting the strict criteria. That is why the universal benefit that Jagmeet Singh proposed makes such good sense. I hope the government continues to think about that because it would eliminate a lot of the problems that we are seeing.
My question, to the Department of Finance, is the question I asked the minister. I did not get a reply.
What is the budget for the LEEFF? What are the funds that are projected to be spent, the loans that are projected to be outlined for the LEEFF?
The LEEFF is targeted to transactions of about $60 million or higher per firm. At this time, the government has not provided an estimated ceiling or size of the program. The reason is that it is very uncertain in terms of the economic landscape and the financing requirements of the companies that will have to assess whether this program meets their needs and whether they have indeed exhausted their other conventional lending sources.
That is something for which we would anticipate being able to provide updates. At this point, we don't have that estimate due to the current economic uncertainty.
Thank you. So you can't tell us whether there are 100 businesses that would be targeted or 1,000? You just can't say?
Okay. Then I'll go into my next question.
The supplemental unemployment benefit is a program that we've raised numerous times. We have understood, and the finance minister has confirmed, that there was a workaround being put in place that would allow SUB, the supplemental unemployment benefit, to be paid in addition to CERB benefits.
Is there any update that the Department of Finance can provide us on that?
I'll start. Then my colleagues at ESDC may like to add.
Part of putting in place the CERB is that the EI system is not functioning in the way that it was previously. The CERB is put in place, and it suspends some of the EI particularities. The supplementary programs or SUB programs are not part of that at the moment. Employers can continue to deposit or to put in place those SUB plans with ESDC so that their employees can benefit from them when EI comes back into play.
At the moment, that's the state of play.
Thank you for that.
My final question then is around the wage subsidy and the commercial rent relief program for small businesses. In both cases the thresholds have been difficult for people to reach.
Are there further changes planned to either the wage subsidy or the commercial rent relief program that will allow more small business to access these programs?
Perhaps, Mr. Chair, I can begin on the wage subsidy.
While I can't comment on any future changes the government might make, the wage subsidy was designed with flexibility in mind. I think the committee is probably familiar with some elements of that flexibility, which were intended to recognize the particular challenges of all businesses, particularly small business, in accessing the program, for example, through the use of cash or accrual accounting, different reference periods and so on.
I think the minister did indicate that we will continue to look at these programs and make adjustments as necessary.
On the commercial rent program for small business, that program is not yet launched. It is targeting the small businesses most significantly hit by the crisis, and I believe it will be very impactful for those small businesses and their landlords to bridge them through this period.
That wouldn't be a supplementary; that would be a new question.
We'll go to Mr. Cumming and then on to Mr. Fraser.
Go ahead, James.
Great. Thank you so much.
Can you tell me how many applications you've had under the EDC assistance program and the value of the loan guarantees that have been granted so far?
That would be to Finance, I suspect.
Do I see anybody there for the question on the money backed up for EDC?
Go ahead, Ms. Giles.
There are several business credit availability programs, BCAP, that EDC is involved with. Could I ask which program in particular your question is about?
It's the original program that was announced—the first program that was brought on—along with the other series of programs with BDC that are providing guarantees on lines of credit.
Okay, you can look that up and we'll come back to you.
Go to your second question, James, and we'll come back to that one.
Yes, thank you.
I have the statistics as of yesterday at 11:59, so that's end of day yesterday. We've received just under 179,000 applications.
I don't have the exact number in front of me. I can tell you that it's quite small. Our primary focus is looking to make sure that there are no fraudulent applications and that the application is in line with what we have in terms of file on the taxpayer.
So far, the rejection rate with respect to turning down applications is very low.
Have you had many applicants who have brought questions to you on the seasonal nature of their businesses and who may not be eligible for the CEWS program?
Certainly we've had lots of questions on all kinds of issues.
With respect to the policy and the treatment of seasonal businesses, I'd turn to the Department of Finance.
As Mr. Vermaeten said, we have had a lot of interaction with stakeholders on this.
What I'd say with respect to seasonal businesses is that of course there are many variations, but the program is designed to look back to the average in the months prior to the crisis, or the period in the preceding year. That would hopefully capture many seasonal businesses, by reference to the same period in the preceding year.
However, we're happy to look at circumstances. If there are others, we are happy to engage with the company.
On the rent subsidy program that's not out of the gate yet, I have heard both from landlords and from tenants about the difficulties with the program and the inflexibility of the program. We've now determined that between two levels of government, they'll provide a 50% rent subsidy. To allow the landlord and the tenant to negotiate whatever terms they need to make sure that the business can remain open, and to attest that they've come to some kind of a conclusion, strikes me as a simple way to achieve the result we want of tenants and landlords being able to enter into that arrangement.
Thank you for that. As you mentioned, it hasn't yet been fully launched. We expect that to occur in the next week or two.
As I was mentioning, it is very much a program available for those small businesses most impacted by the crisis. Under the conditions of the program, the landlord or the property owner must provide at least a 75% rent reduction to the tenant. That's not to say that the landlord could not provide more, so it indeed does provide flexibility as appropriate, given the circumstances of the small business tenant.
Thank you.
There's just one other thing I'd like to add on Mr. Cumming's question. It relates to the CEWS, the wage subsidy. I know that the Prime Minister and others have mentioned that they're going to extend that program, but I can tell you that if they're allowed to take their three-month period, it would make an unbelievable difference in the seasonal tourism industry throughout the country, because a lot of the seasonal tourism industry is in June, July and August.
If they could apply the wage subsidy to those months, it would make the difference between survival or not, I think. I know that it's not your policy decision to make, but that's for information for any of you when you may have a discussion on the matter.
Mr. Fraser, are you there?
I am, Mr. Chair, but I'm having trouble.
I am going to pass the time over to Ms. Koutrakis, but very quickly, just from Finance, just for the sake of clarity, on the protections against abuse in the CERB, I don't know why this has become a controversial issue whatsoever.
Am I correct in my understanding that we made a decision to administer the program quickly, to approve applications based on the attestation and to conduct enforcement on the back end to the extent that fraud is detected? This does not seem like rocket science to me. Is that an accurate description of the enforcement mechanism?
Thank you, Mr. Chair.
I wanted to thank Minister Morneau for appearing before our committee today, as I know his time is very precious, and to thank him and his team for all their hard work during this time.
I also want to welcome and say hello again to our witnesses who have appeared before the finance committee. It's nice to see everyone again. Thank you for all your hard work and your dedicated work with your teams.
My first question is for the Department of Finance. My colleague Mr. Fragiskatos touched on this a bit in his exchange with the minister earlier. This is with regard to the gendered economic consequences.
An economic downturn can have gendered economic consequences that reflect in part the gender division of labour in the workforce. Women in Canada carry out a higher proportion of unpaid care work than men do, and during a public health emergency such as this, care work may have unintended negative consequences on the mental and physical well-being of our caregivers, including an increased risk of falling ill.
If an analysis has been conducted, what were your findings from this analysis? What action can we expect from the Department of Finance based on these findings?
I'll begin, and others may want to contribute.
At the Department of Finance, we deal in analyzing old proposals and doing a gender-based analysis. I'm sure the committee is aware in each of the budgets we provide a gender-based analysis, and indeed, we do that for any proposal. We have done that for every proposal the department has worked on in the context of the current crisis. I think the question raises a very good point about the overall effect, and I think the department will want to look at each of those analyses, and as we continue to look at the overall picture, ensure we apply that gender-based analysis not only to the constituent parts, but to the whole economic response plan.
Are there any other factors that you look at as well, such as age, ethnicity and income, when you're doing the analysis?
Our gender-based analysis plus covers many aspects beyond gender; it's a comprehensive analysis. Of course, we also look at the environment; we do an environmental assessment on every measure. We try to do a comprehensive analysis on all aspects to look at the implications of particular measures across the spectrum.
Thank you.
I have a question for the CRA or employment.
An immediate measure was taken to allow businesses and individuals to defer income tax payments until August 31. In the event that the pandemic is not fully over after August 31, will this measure be extended?
CRA or somebody, I don't know if you can answer that question; it's more of a policy question to the government.
Mr. Vermaeten.
I certainly cannot answer that question, but of course as the economic situation evolves, I know the government is looking at all these things, and I'm sure they'll make a call if they need to.
I hope somebody can answer this. Is the CRA predicting any challenges for individuals accessing their accountants or tax preparers during this time? How will this impact the filing of income taxes this year for individuals experiencing these challenges, to avoid penalization?
We've been working closely with CPA Canada almost daily by email and phone and having teleconferences with members. Also, with the CFIB, the Canadian Tax Foundation, l'APFF in Quebec, so we're in pretty close consultation with the practitioner community. They're giving us feedback on what they're seeing, and that allows us to react before Canadians are adversely affected. We're pretty much in daily contact with those stakeholders, and they're being pretty clear about what they and their clients need.
Thank you, Mr. Chair.
I want to follow up on the issue of fraud and abuse with respect to CERB and EI. Could the officials clarify just how many applications have been red-flagged?
We have an active program in which we proactively identify potential issues. I can confirm that, as many members would know, back at the beginning of April we had identified situations in which clients had mistakenly applied for both benefits, once on the CRA side, once on the Service Canada side. At that time, we identified just over 200,000 clients who had made that mistake. Those individuals will be contacted by CRA in the coming months, at which point the money will be recovered from those Canadians.
We also have active measures in which we are constantly reviewing and identifying potential issues, which we pursue.
I don't have a specific number. Aside from the 200,000-and-some that have been identified as duplicate payments, I don't have any other specific number on specific applications that have been.... When it comes to language, we don't use the term “red-flagged”. I don't have any specific number there.
Let me just say that I find it very disturbing that applications are being processed...not because the application was fraudulent and yet got through because efforts were being made to get monies out; that's one thing. But it appears that applications are being processed even where there is evidence of fraud and abuse. There may be tens of thousands of applications being processed where there is fraud and abuse.
For the minister or a spokesperson of the minister to say that there are back-end safeguards.... Well, okay, that's fine; but why get rid of all front-end safeguards when there is evidence of fraud and abuse? Would you care to comment?
Certainly.
When we were rolling out the program, we knew it was fundamental to be able to process applications very quickly. We could not deliver the program under the regular EI program, which has a number of different controls, both up front and on the back end. If we had done that, it would have meant that Canadians would have been waiting months and months before they could have been paid. We made a conscious and deliberate decision, in order to get money to the millions of Canadians who needed the benefit, to streamline the process and leverage an attestation model.
That said, I absolutely want to assure this committee that the integrity measures are strong and robust. We do have means and mechanisms whereby we will be able to address any potential fraud and abuse of the program. We and the CRA have lots of measures in place that we will continue to use going forward.
Michael, I'll give you your time back—I've stopped the clock—but I can give an example of what can happen. I mentioned it earlier with the minister.
I had a construction company with 28 employees call me. Their workers were laid off while they put in proper washrooms on their construction sites to meet COVID-19 standards. They applied for EI and they were on EI. Because they went back to work just as the system was starting up, they automatically went to CERB without asking for it. It was an honest mistake by everyone. So 28 people got CERB, they called me, and I basically said to set the money aside. It was an innocent mistake in a fast-moving system.
That was 28 people right there. It wasn't fraud. As the system was changing, EI rolled them over when they had no way of reporting that they were going back to work. Those things happen. That's an innocent example. There are probably others that are not.
The floor is yours, Michael. Go ahead.
Thank you, Mr. Chair.
I will turn to another topic, one that I raised with the minister. It is with respect to new businesses. I spoke with a business owner who invested $200,000 to open a salon. Just at the moment he was about to hire four people and start the business, COVID-19 happened. He doesn't qualify for the wage subsidy, because he has no revenue decline. He doesn't qualify for EDC or BDC loans, because he has no revenue. He doesn't qualify for CEBA, because he doesn't have a payroll.
The minister, in answer to that question, indicated that this was very much something that the government was attuned to and was ready to address. I'd be very interested in hearing what details the officials might be able to provide to reassure small business owners like the one I'm talking about that help is finally on the way.
I would just reiterate what the minister said. We are working hard on all these issues affecting small businesses and larger businesses. We've taken a number of measures and continue to look at the impact they've been having. If there are any outstanding areas that need to be addressed, and this is very much on our minds, we'll continue to evaluate and recalibrate as we go.
Thank you. We'll end it there.
We'll go to Ms. May.
I think Mr. Ram's system is working now. I'm not sure whether Gabriel is still on or not. We may have to go with a written response. Gabriel, if you're on, click on and we'll go to you so Mr. Ram can answer your question.
Ms. May.
Thanks.
I hope I won't use it all and then more members can ask questions.
I'm not sure which officials I need to ask this, but it's following up on this general conversation we've been having about getting things out quickly versus full controls and rigour. What I wanted to suggest, because it's been missing in this conversation, is that part of the reason for speed is flattening the curve. People won't stay home and stay away from work if they're not financially secure and don't see some aid coming. There's the connection between getting CERB out quickly, getting it to everyone who needs it quickly, and not necessarily being concerned at the front end with making sure that everybody is “eligible”. I wouldn't call it all fraud. I certainly agree with the chair that there are lots of circumstances here where there could be confusion.
What I wanted to ask officials was, to get a sense of if the instructions had been other than what they were, if the instructions had been, “Don't approve anyone until you've checked, you've gone back into their background, and you know that this is someone who deserves the benefit.” What would that have cost the Government of Canada? Did we have the capacity to do that?
We've heard from witnesses that it would have significantly delayed when people got their money, for which I think there would have been a public health impact. This is a public policy issue at a very high level. I just wonder, is there any estimate of what it would have cost the Government of Canada to have staff checking all the applications?
I'm happy to respond from our perspective.
I want to clarify that there are certainly upfront checks that are done. For example, we check that the social insurance number is valid, that the person is of legitimate age to be able to receive this and that there's no double-dipping with respect to the various programs. Certainly there is upfront verification. I just wanted to assure you that it's not without that.
With respect to creating a system where individuals would have to prove that, in fact, they have no income, I can't tell you what the cost would be, but I can tell you it would be an extremely lengthy process to provide us the information. That they don't have income is very difficult to prove in real time. I think not only would it have been very costly, but I think most importantly it would also have delayed the ability to get the money out to individuals by weeks, if not months.
Thank you.
We'll go to Mr. Ram and Mr. Ste-Marie. Did you note the questions, Mr. Ram?
The floor is yours, Mr. Ram.
[Translation]
[English]
Great, glad to hear it.
Thank you, Mr. Chair, for the opportunity to respond. If Mr. Ste-Marie would not mind repeating his question, that would be very helpful to me.
[Translation]
Great, thank you.
The first question is about the vagueness of the criteria for people whose EI benefits are running out and who want to apply for the CERB.
Can those people apply for the Canada emergency response benefit after a week? How does that square with the 14-day no-income requirement? Does that mean a person can't receive both EI and the CERB at the same time, or that they can't collect them both during an official CERB period, like the period from March 15 to April 11 or the period from April 12 to May 9, and so forth?
[English]
To be fully clear, you cannot receive the Canada emergency response benefit and EI benefits in respect of the same period. In the example that the honourable member mentioned, for a person who is on an employment insurance claim, when that claim comes to an end and they're unable to work, they can apply for the CERB and they will receive the CERB for a period following that for which they received the EI benefit.
[Translation]
I'm still on the same question about the vague details on the website.
From what I understand from your answer, when you talk about periods, you're referring to official CERB periods. Let's take the period from March 15 to April 11 as an example. If someone's EI benefits run out on March 16, can they apply for the CERB before April 11, or do they have to wait until April 12?
[English]
Unfortunately I'm not sure I fully understand the question. However, we will definitely study the transcript and get you a written response as soon as possible. I apologize.
That's not a problem.
Do you want to ask your other question, Gabriel? We'll get a written response to that one.
Just so it's clear, as I understand Gabriel's question, Mr. Ram, if a person runs out of regular EI on March 16, would they have to wait until April 12 before they could kick into the CERB?
Go ahead, Gabriel.
[Translation]
Mr. Chair, I'll move on to my next question.
The Bloc Québécois has asked the department to incentivize work for workers receiving the CERB or the CESB, along the lines of the EI system. Workers receiving the CERB or the CESB can earn up to $1,000. The idea is to claw back $0.50 for every additional dollar earned.
How far has the department gotten with that proposal?
[English]
As my colleague previously said, the CERB is a very simple program and does not feature many of the elements that we are regularly used to seeing in employment insurance. This was a conscious policy choice that the government made due to the very large number of applications that were coming in. We would not have been able to efficiently process all of those claims using the existing EI rules and regulations. This includes what I think the member referred to as working-while-on-claim provisions. These are provisions that exist in the EI system to allow people who are on a claim to earn income and not have the full benefit clawed back. These provisions do not exist under the Canada emergency response benefit. We could not efficiently introduce them and still be able to process those claims.
Under the Canada emergency response benefit, if you earn—
[Translation]
Point of order, Mr. Chair.
The interpreter is saying that the sound quality still isn't good enough for interpretation.
[English]
It's not your fault, Mr. Ram. It's really tough in the interpretation booth. If you could look at the transcript and provide the clerk with some answers, we should be all right. The system works imperfectly, if I can put it that way. I have difficulty seeing all the people on my screen, for instance. Maybe I should go work on a bigger screen.
Okay, I think that's the end of the questions.
Sorry, Ms. Giles, I nearly forgot about you. Go ahead.
Thank you, Mr. Chair.
I just want to circle back to confirm that we are still awaiting the information that would be available following some of the program adjustments that have been made to the EDC new loan guarantee for SMEs. As well, we are still awaiting information to flow in from the financial institutions that EDC and BDC are partnering with to deliver these programs. As soon as that information is available, we'll make sure that it is shared with the committee.
Mr. Chairman, to be clear, the program was announced regionally in March and I'm looking for information up until this date, because it's been expanded now. It's the EDC loan, the BCAP loan guarantee program. What was provided for loan guarantees both in number and size in the pre-expansion, so up until now? What I'm really looking for is what the uptake is on that program, because it was supposed to be a loan guarantee program that would provide that liquidity to small and medium-sized businesses.
Ms. Giles can try to find that information and provide it to the clerk as well when it is available, and we'll see that the committee gets it.
With that, I do want to sincerely thank the witnesses. I know that these are fast-moving times and fast-moving programs and everybody is doing the best they can. On behalf of the committee, I sincerely thank you for appearing and answering our questions as best you could today. We look forward to the information that will come to the clerk and will get that out to the members of the committee.
Committee members, we will see you for two panels on Tuesday coming. For those who manage to get some time off, have a good Victoria Day weekend. That won't be a lot of people.
The meeting is adjourned.
Publication Explorer
Publication Explorer