I call this meeting to order.
Welcome to meeting number five of the House of Commons Standing Committee on Finance. Pursuant to the House of Commons order of reference adopted on December 2, 2021, the committee is meeting on Bill , an act to provide further support in response to COVID-19.
Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be available via the House of Commons website. The webcast will always show the person speaking rather than the entirety of the committee.
Today's meeting is also taking place in webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants and can therefore only view the meeting in gallery view.
I'd like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen are not permitted.
Given the ongoing pandemic situation and in light of the recommendations from the health authorities, as well as the directive of the Board of Internal Economy of October 19, 2021, to remain healthy and safe, all those attending the meeting in person must maintain two-metre physical distancing, wear non-medical masks when circulating in the room—and it is highly recommended that the mask be worn at all times, including when seated—and maintain proper hand hygiene by using the provided hand sanitizer at the room entrance. As the chair, I will be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.
To ensure an orderly meeting, I'd like to outline a few rules to follow.
Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of floor, English or French. If interpretation is lost, please inform me immediately, and we will ensure interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair.
For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the Board of Internal Economy's guidelines for mask use and health protocols.
Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you're not speaking, your microphone should be on mute. I remind you that all comments by members and witnesses should be addressed through the chair. With regard to a speaking list, the committee clerk and I will do our best to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.
It's now my pleasure to welcome our , Chrystia Freeland.
Minister, we know how busy you and your department are, and we appreciate your being here with us today for these proceedings. I know that you're joined today by your assistant, associate deputy minister Nicholas Leswick.
Welcome, Minister and Nicholas.
We also have some of your staff here virtually from the Department of Employment and Social Development and the Department of Finance. I won't go through the list of names, but they are available if information is needed from them.
With that, Minister, we now are going to hear from you in your opening statement. After your opening statement, we will move to questions from members for a two-hour period.
Minister, the floor is yours.
Thank you very much, Mr. Chair.
Thank you, all members of the committee and committee staff. I know how hard you work. It is great to be here.
I wouldn't call Nick “my assistant”, or anyone else's. He's a very senior Department of Finance official. In fact, he's the second most senior. Greg McLean will be interested to know he's also originally from Alberta, from outside Calgary, so we have a strong Alberta presence in the department. My chief of staff is from Edmonton. She went to the same high school that I did, but many years later.
Mr. Chair, congratulations on assuming the chair, and thank you for your invitation.
I'd like to say to all the members here that I imagine we may have some robust exchanges, but congratulations to everyone on being elected and thank you for your hard work.
Since the House has returned, the emergence of a new COVID variant has forced new travel restrictions in a number of countries, including Canada, and created renewed uncertainty in global markets. The emergence of the omicron variant is a reminder that the best economic policy remains finishing the fight against COVID. That fight isn't over yet, and that really underscores the need for us to continue to protect Canadians and Canadian businesses and, in fact, the need for this bill.
When the COVID‑19 crisis hit, our government rapidly rolled out a historic set of broad‑based programs so that we could save lives, ensure our economy could withstand public health restrictions, and have the backs of Canadian workers and Canadian businesses so they could get through the pandemic.
Our income, wage, and rent support programs have helped keep food on the table, protect millions of jobs, and keep hundreds of thousands of Canadian businesses going through the darkest days of the pandemic.
Having said that, our support measures were always designed to be temporary emergency support measures. As many members of this committee have noted, the emergency nature of this support meant that there have been bumps along the way.
Unfortunately, some seniors who received COVID supports have seen their GIS benefits affected. Our government—very much including me, personally—is very aware of this issue and is actively seeking a solution. Our most vulnerable seniors should not be penalized, particularly those who lost income due to the pandemic.
We know that many seniors rely on GIS payments to help make ends meet, and I am confident that the government will have more to say on this issue in the next few days. Today, with high vaccination rates, over a million jobs created, children back in school and businesses across the country reopening, the time has come to adapt the business and income support measures to these new and improved circumstances.
Across the country, businesses are reopening. As of last month, more than 106% of the jobs lost in Canada in the depths of the recession have been recovered. This is compared to just 83% of jobs recovered in the U.S.
Thanks, in part, to our government's support measures, we have avoided the sort of deep economic scarring that followed the 2008 recession and that would have done permanent damage to our economy. Just last Friday, Statistics Canada reported that strong job growth continued in November, with 154,000 new jobs created. This outpaced market expectations. These new jobs lowered the unemployment rate to 6%, the lowest since the pandemic began, and only 0.3% above pre-pandemic levels of February 2020.
However, some areas of the country and some sectors of the economy are slower to reopen and continue to need targeted support. That's why, in October, our government announced a pivot from the broad-based support that was appropriate at the height of lockdowns to more targeted support that will provide help where it is still needed, while also prudently and carefully managing government spending.
On November 24, I introduced legislation in Parliament to deliver this more targeted support and that's what we're going to discuss today.
Bill allows us to move forward while keeping in mind that the recovery is still uneven and that public health measures that save lives continue to restrict certain economic activities.
Given the fears caused by the new Omicron variant, Bill is more important than ever. That is why I am here today to ask you to act in the best interests of Canadians and Canadian businesses by helping them through the pandemic and these uncertain times.
Bill will provide critical support for the economic recovery and protect workers in the hardest hit sectors, including tourism. As outlined in the list of eligible tourism and hospitality entities released with Bill C‑2, we have ensured that businesses in the arts and culture sectors, including those offering live performances and art exhibitions, as well as museums, will be eligible. In practical terms, this means that the bill includes significant measures to support the jobs of artists and cultural workers.
That being said, our government recognizes that the arts and culture sector remains disproportionately and negatively affected by the pandemic. That is why, during the election campaign, we made a commitment to provide targeted support to cultural workers and technicians, including the self‑employed. While we want to quickly deliver the support measures included in this bill, we are working hard to keep our promise to artists so that they can continue to shine here and around the world. We will be able to give you more details soon.
For artists in Quebec and across Canada, we must move quickly to pass Bill while working together to introduce new measures that will directly support artists and the cultural sector. Among the measures included in Bill C‑2 is the Canada worker lockdown benefit, a new income support benefit that will take into account the decisions of the public health authority, which remain uncertain and unpredictable.
The Canada worker lockdown benefit will provide $300 a week to workers who are directly affected by a COVID‑related local lockdown and will be available to eligible workers retroactively from October 24, 2021, to May 7, 2022.
We're taking this step because we want to make sure that no one is left behind, including workers who are unable to do their jobs due to future public health restrictions, should they be required.
Bill is also designed with an understanding that some workers may require income support if they need to take time off because they're sick, under quarantine or have caregiving responsibilities. That's why the bill proposes to extend eligibility for both the Canada sickness benefit and the Canada caregiving benefit.
We want to make sure that businesses can continue to grow and recover and drive up Canada's labour force participation rates and our level of employment. That's why we're proposing to extend the Canada recovery hiring program until May 7 and increase the rate of support to 50%.
We also know that there are some businesses that have been most deeply affected by the pandemic and that continue to face significant pandemic‑related challenges. The new tourism and hospitality recovery program will deliver wage and rent subsidies to employers such as hotels, restaurants, travel agencies, and tour operators. The bill includes details of the types of businesses that would be eligible. The subsidy rate for this highly targeted group of tourism and hospitality businesses will start at 40% for applicants with a 40% loss of income and increase based on their loss of income, up to a maximum of 75%.
For businesses in all sectors, the hardest-hit business recovery program will provide support through wage and rent subsidies to employers who have experienced deep and enduring losses throughout the pandemic. The eligibility for these programs will be a two-key system. One key will consider whether the employer has faced a significant revenue loss over the course of the first 12 months of the pandemic. The second key is revenue loss in the current month.
The local lockdown program will be there to provide employers facing temporary new local lockdowns with a subsidy rate of up to 75% through the wage and rent subsidy programs. This is important because it will ensure that local authorities and public health officials can continue to make the right public health choices, knowing that support will be there for workers and businesses if needed.
While we are all hoping that lockdowns will not be necessary in the future, recent developments related to the omicron variant serve as a reminder that the fight against COVID is not yet over, and to underscore a key aspect of Bill , it would enable the government to take immediate action to support workers and businesses directly affected by local lockdowns should the public health situation require it.
I will note that we will continue to have measures in place such that any publicly listed corporation that chooses to increase executive pay while receiving government support will have the wage subsidy support clawed back.
The broad-based set of business and income support measures, which we introduced at the height of the pandemic and which came to an end, as we committed, on October 23, had an estimated cost of $289 billion.
Mr. Chair, I can today report that the Department of Finance has estimated, on October 21, that the total cost of the measures in Bill would be $7.4 billion, and it would come from the consolidated revenue fund. The government will account for the potential economic impact of the omicron variant, including the increased possibility of the need to use the insurance policy, which is the lockdown support measures in Bill C-2, in our economic and fiscal update on Tuesday.
Fighting COVID-19 and the subsequent lockdowns we put in place to save lives required unprecedented government spending in Canada and around the world. Canadians supported that extraordinary spending because they understood that it was not only the compassionate thing to do, but the right thing to do economically.
With Bill , we will continue to have Canadians' backs while delivering support that is more targeted—and prudently manages public finances.
I hope all parliamentarians will vote to pass this legislation so that Canadians who need support can access it without undue delay.
Finally, Mr. Chair and fellow members of Parliament, I'd like to reiterate as clearly as I can that the single most important economic policy for Canada continues to be making sure that everyone who can get vaccinated does get vaccinated. We have one of the highest vaccination rates in the world, with 89% of Canadians 12 and older having received at least one dose of the vaccine. We have the second-lowest mortality rate in the G7. Children between five and 11 started getting vaccinated last month. Many of our parents and grandparents are now getting their booster shots, and the rest of us will start getting them soon too.
I have to say, speaking as a daughter, what a relief it is that our parents and grandparents are getting their boosters. I think that feeling is one common to many Canadians.
We can be proud of how we have come together to fight COVID‑19. Our battle is not quite finished yet but we are getting there. The measures in this legislation are an important part of what we need to do to get the job done.
On that note, I am pleased to answer any questions you may have.
Thank you very much, Ms. Dzerowicz, for your question and your hard work. It's nice to have here today a member of Parliament whose riding borders my own.
I think that is a really important question. I'm going to start by saying something that perhaps politicians and indeed even economists don't say often enough, which is that we are still today—we have been since COVID hit—travelling in uncharted waters. This is an unprecedented crisis, and I do think it's important for everyone to acknowledge the high degree of uncertainty that we continue to face.
What I think that requires of us as policy-makers, as people who have the privilege and the responsibility of steering the Canadian ship through these uncharted waters, is that we have to have a lot of humility. We have to acknowledge that there is great uncertainty about economic forecasts and great uncertainty about what's going to happen with the virus. Acknowledging that actually is a strength.
What we need to do, having acknowledged that, is to really have tremendous agility, have a lot of our tools in our tool box and be able to respond quickly as the circumstances change. The emergence of the omicron variant is an example, so I want to start with that.
Having said that, I think it is also really important for us as Canadians to set the record straight and to really take some quiet Canadian pride in the reality that we have done a really good job in handling this, the worst crisis since the Second World War and the deepest economic blow to the country since the Great Depression. The Canadian economy is recovering strongly. That is due to the hard work of all Canadians, and it is due to the work that we've done in the House of Commons.
Let me give you some numbers to back that up. Our GDP in the third quarter grew by a robust 5.4%. That beat market expectations. It was stronger than in the U.S., the U.K., Japan and Australia. Our jobs recovery has been very, very strong, with 154,000 jobs in November and 106% of jobs compared to pre-COVID. I really want to emphasize that, for our government, focusing on the jobs recovery has been at the core of everything we've done, because we understand that for every Canadian, or the vast majority of Canadians, the way to make life affordable, the way to have a good life, is to have a job. It starts there. I am really pleased to share with this committee and with all Canadians how strong our jobs recovery has been.
Canadian households have weathered the storm remarkably well. Savings in the third quarter were 11% and that compares to an average of 3.4% between 2010 and 2019. Deposits are at $105 billion—4.3% of GDP—and that is above pre-pandemic levels. Canadian households have been wise and prudent, and they have handled this crisis very, very well. Our exports surged to $56.1 billion in October, the highest level ever.
Yes, there are challenges ahead. Yes, there is a great deal of uncertainty and unpredictability. We need to be prudent and keep the insurance policy of lockdown support and keep this targeted support for the hardest-hit sectors, but I also think that Canadians should take some quiet Canadian pride in how well we have handled this historic challenge.
Madam Minister, thank you for being here and for your opening remarks. I also appreciate your willingness to answer our questions.
The Bloc Québécois believes that it is important to follow up on the support measures for the sectors, for the workers and for the businesses that are still experiencing difficulties because of the pandemic. Bill will address that, which is important to us.
As we have said time and time again, we could have started work on Bill C‑2 earlier if the House had been called back sooner after the election, instead of waiting two months. Nevertheless, we supported the principle of the bill. We are here to study it, and we are very pleased to do so.
As you know, the leader of the Bloc Québécois, my colleague Ms. Sinclair‑Desgagné and I sent you a letter expressing our concerns about Bill C‑2. You addressed the issues in your remarks, and I thank you for that effort. I appreciate that very much. I would like us to go back to it together, to determine your position and the government's position on it.
As you mentioned, our biggest concern is for self‑employed cultural workers. We are very pleased to see that Bill targets the cultural sector with more generous measures. This is what we have been asking for.
We are very disappointed that the bill does not provide income support for self‑employed workers in the cultural sector. In Quebec, a few years ago, these people, particularly artisans in the sector, were asked to become self‑employed, freelance workers. At the outset, we wondered why they were not offered the Canadian recovery benefit (CRB). We were told that the department and the federal government would not be able to properly target people working in those sectors. What are you offering those people?
We don't want them to find a job in another sector, to retrain. In recent decades, in Quebec, we have managed to consolidate the cultural sector, and we want to maintain the expertise. That is why I am asking you this question.
Thank you, Madam Minister.
Thank you very much for your hard work, Yvan, and for your constituents in Etobicoke.
The reason we are describing Bill as the final pivot is that we have come a long way in our fight against COVID. We have come a long way in our fight against the COVID recession, and that is a really good thing.
Notwithstanding some irresponsible partisan posturing, which we hear sometimes in the House and sometimes in committee, it is really important for the economy for Canadians to understand that we have made real progress and that we're going into the end of the year and the beginning of next year with a strong economy and strong economic growth underpinning that with a real tailwind. Keynes talked about animal spirits and their importance in the economy, and that continues to be true today.
I do really want people to come away from today with an understanding that we have done a really good job as a country dealing with what was a devastating economic crisis and what could have been much worse, particularly on jobs but also on a strongly recovering GDP. Canadian households, on average, are in a strong financial position right now. They're in a stronger position than they were before COVID hit on a number of measures. That is good news.
Why, then, is Bill necessary? It's necessary for two reasons.
First, we know that there are some sectors which, through no fault of their own, are particularly hard hit and just cannot fully reopen. There's tourism and hospitality. We spoke earlier today about the culture sector as well. Our philosophical approach in putting together our COVID support programs has been that we did not want to permit economic scarring. We didn't want Canada's economic muscle to atrophy during the COVID recession, because we knew that if it did, coming back from that recession would be even harder. Bill is designed to provide that targeted support to the sectors that need it.
The second part of it, which omicron has made even more important, is an insurance policy. We still don't know what's ahead. We're all going to hope—I'm going to knock on wood here—that the smart public health measures that have served us well, and the border measures, will keep omicron under control. Please get vaccinated. Please get your boosters. That's so important as well. However, I think it is really prudent to have lockdown support in our tool box, in case that is needed.
That's the thinking behind Bill , and that's why it is a pivot. It's different from the support needed at the height of the crisis. It does cost less money and that is very important to me, to Nick and to the whole Department of Finance, but it is still necessary to have that little bit of extra support.
I really hope and believe this is the final push.
First of all, welcome to this committee and welcome to the House, Mr. MacDonald. It's great to have you here. I think colleagues would probably agree with me that this is one of the livelier and more consequential committees, so it's really good to see you here.
As I said earlier in my testimony, one of the principles on which our government based everything that we did in this crisis was the idea that a job is the most important thing for working Canadians, that a job is the basis of a person's and a family's economic well-being. Having a job is actually also really socially and psychologically important.
Probably the moment that got me the most worried when COVID hit was in the immediate aftermath of the lockdown when we saw that we had lost three million jobs. That was devastating to the lives of three million people and probably a lot more than three million people, because it also meant the lives of the families and friends of all of those people who lost their jobs. That was the deepest hit the Canadian economy had taken since the Great Depression, so we knew we had we had to act and we had to act quickly.
We acted with the CERB because we wanted to be sure that vulnerable people could pay their rent or pay their mortgage and could buy groceries. We also acted with the wage subsidy. I want to emphasize how important, in my view, that was, because it allowed people to stay connected to their jobs and it prevented economic scarring.
We see what that has meant in the numbers today. Canada's jobs recovery has been outpacing market expectations. We're at 106%. That is strongly outpacing what we're seeing in the U.S., which has had only a 83% recovery of jobs.
I don't want to give Canadians the impression that I think our work is finished or that I think there are no concerns left with omicron or that I am blind to the very real challenges of opening up the Canadian and global economies. These are real challenges, but for me the single most important economic number, which gives me a lot of comfort, is our very strong jobs recovery. That's down to Canadians. It is down to the small businesses that have hung in there and kept their workers on.
I am sure you have talked to a lot of small businesses in your constituency. I certainly have. Some people decided to take home less money for themselves so they could keep their workers on. There are so many people across the country who did that, who have shown remarkable resilience, as have the workers who kept on going into work even maybe when they had to take a pay cut during the worst of the crisis.
This is really important. The Canada recovery hiring benefit is going to put some further wind in the sails of that jobs recovery.