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Corryn Clemence
View Corryn Clemence Profile
Corryn Clemence
2021-05-18 11:32
Good afternoon to my fellow Islanders, and good morning to those from across the country.
Thank you for the opportunity to present to your committee again, a mere month after my last presentation. As the CEO for the Tourism Industry Association of Prince Edward Island, I have spent this past year reaching out to operators and identifying the ongoing challenges that our industry has faced since the onset of the COVID-19 pandemic.
With the initial shutdown of our industry back in the spring of 2020, tourism on Prince Edward Island faced that challenge with cautious optimism, opening to Atlantic Canada in July. While the season itself was difficult, many operators would not have survived without the full support of the Canada emergency wage subsidy. This program provided the assurance that operators needed to keep staff working and keep the doors open to the limited visitors we did have.
Decisions made last year were done with the optimism and hope that the 2021 season would bring us back to a more normal tourism year with increased capacities, further border restrictions lifted, and the vaccination programs being rolled out across the country. As we are on the brink of kicking off another summer season, operators are now faced with a third wave of the COVID-19 pandemic, enhanced border restrictions, and a beleaguered mindset.
In the recent announcement of the 2021 federal budget, the proposed wage subsidy decline would set many operators further behind than last year, and the uncertainties of both subsidy programs and restrictions leave many facing the impossible decision of remaining closed again and the harsh reality of not surviving the year. Some of our small owner-operators are balancing financial struggles, staffing issues and COVID protocols all at once, while navigating through the federal and provincial programs, looking for any type of assistance to help them through. The mental health strain is clearly visible, and we will continue to be concerned for these struggling Canadians. In what is a traditionally seasonal destination, these operators have a six-month window of opportunity to drive sales, pay staff, cover debt load, and plan to retain enough revenue to cover 12 months of expenses from the six months of business.
The Canada emergency wage subsidy and the Canada emergency rent subsidy programs provide a backstop for our businesses to keep those staff employed and keep the doors open during these difficult times of reduced capacity and border restrictions. While numbers for visitation and sales remain low, programs such as these have been a lifeline for tourism and hospitality businesses across the country. It is important to note that as visitation and sales increase, these subsidy programs in their current capacity naturally decline and become obsolete.
Should operators make the decision to shutter their business for the year, I want to highlight the domino effect that these decisions have on communities, other operators and our tourism product overall. For example, as Matthew mentioned earlier, if a main attraction in one of our smaller communities makes the decision to stay closed, this has detrimental implications to local accommodation providers, restaurants and retail businesses. We need to find ways to ensure that these businesses are equipped and able to open to protect the industry in both a rural and urban capacity. Demand-drivers like these are the reason for many to make travel plans, and without them, everyone suffers.
As we move to reopening to the rest of Canada, our industry is faced with the reality of no meaningful tourism on Prince Edward Island until the 2022 year. Even if they survive the 2021 season, without the ability to generate meaningful cash flow, they are looking at a long winter to prepare for what is hopefully an improved 2022. The industry will not see the 2019 levels of visitation and expenditure that we enjoyed only a couple of years ago, but is at the start of a struggle back to the thriving industry we once were. With that, our focus is on ensuring the survival of our operators and recognizing the importance of not only surviving but finding a way to see capital infrastructure investments and upkeep so that these businesses are well-positioned to welcome back visitors to our island.
We are not out of this pandemic yet, and our tourism and hospitality industry faces its biggest challenge to date: surviving a second year of pandemic lockdowns and limited ability to operate. We are asking the Government of Canada to maintain the Canada emergency wage subsidy program and the Canada emergency rent subsidy program at their current rates until the time comes for people to travel and restrictions are eased. Our industry is focused on people interacting, travelling and coming together.
View James Cumming Profile
CPC (AB)
It's good to see you again, Mr. Chair. Thank you to all of the witnesses today.
I want to start off with Mr. Jelley.
Mr. Jelley, I have enormous empathy and respect for you as an entrepreneur and the crisis you're working through with those losses through what has been a very active business.
I want to talk to you about a couple of things. Is it not time that we looked at these supports with more of a risk analysis and a targeting...? Obviously, the government can't carry on these levels of support across the board. It's just not sustainable.
Would you not agree that we should now do a better risk analysis and have actual targeted supports?
Matthew Jelley
View Matthew Jelley Profile
Matthew Jelley
2021-05-18 11:38
Thank you, Mr. Chair.
Thank you, Mr. Cumming, for your question.
I participated in a chamber of commerce video here five years ago promoting entrepreneurship, where I said that it's not realistic for us all to work for the government. I didn't realize that five years later that might come back to hit me.
I do agree. I highlighted in my comments that I think it is an opportunity to retarget and refocus, but what I am saying is that in tourism and hospitality, if we're looking to retarget, we are there. If we're talking about businesses down by more than 50% or more than 70%, those are the places where I feel we should be.
As far as public companies, private equity funds and very large companies are concerned, I think there are lots of policy considerations for you and your committee members. It is not my place to do that. For us, for small businesses and for those most highly affected by the pandemic through no fault of their own from the double whammy of travel restrictions and capacity limits, our businesses have been so devastatingly hit. Certainly, and all biases declared, I think we're in that category that is well deserving.
For a business that's down 11%...is it time to start weaning those off...? Certainly I think that's a very fair consideration.
I'm more than happy to share my financial situation, how it's impacted us and what that means. It's a water park designed to and does hold 3,000 to 4,000 people a day and is limited to less than 500. Expenses don't change. We still need to have lifeguards. We still need to have the water flowing on the waterslides. We still need to pay the insurance company.
View Tamara Jansen Profile
CPC (BC)
Absolutely.
Now I'm going to shift over to Ms. Clemence.
When I heard the Prime Minister talk about a one-dose summer, my heart broke because I recognized the tourism industry was absolutely hooped by that sort of talking point. I wonder if you could talk a little more about the challenges. I know the Tourism Industry Association of Canada has been saying over and over again that these supports they've been getting shouldn't stop until the government stops telling people to stay home.
I wonder if you could talk about that.
Corryn Clemence
View Corryn Clemence Profile
Corryn Clemence
2021-05-18 12:27
Certainly. Thank you for the opportunity.
I think it's a unique challenge in each of our provinces. Obviously, Atlantic Canada has handled the COVID restrictions differently than other jurisdictions with our Atlantic bubble last summer. We're looking again at an Atlantic bubble. We were really optimistic that the vaccine rollout would provide some benchmarks and a roadmap to return to travel and visitation.
With the vaccine rollouts as they are now, the one dose versus two and the varying restrictions in different jurisdictions, it's very challenging. One of the things we've had conversations on with the Tourism Industry Association of Canada and governments is trying to find ways to clarify those restrictions. Even as we start to see some jurisdictions open up, ease those border restrictions and increase capacities, to be able to move freely, have consumer and visitor confidence, and have people understand what the restrictions are in each jurisdiction is really important.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-05-18 12:38
Yes. I'll direct it to Ms. Clemence because Mr. Jelley has been doing a lot of the answering.
There have been persistent calls for the government to now pivot to targeted, sector-specific support for the most heavily impacted sectors of tourism and hospitality, and Mr. Jelley signalled that in his testimony earlier.
Could you tell this committee what targeted, sector-specific support for your sector should look like? Obviously, the enhanced CEWS program is part of that, but are there other elements that you would welcome?
Corryn Clemence
View Corryn Clemence Profile
Corryn Clemence
2021-05-18 12:39
I think Matthew has articulated, certainly, the hardest-hit sectors as being attractions. We see it with our experience providers and accommodation providers. I'm not an expert on what those formulas might look like, but when you start to look at the percentages of the hardest hit, I think that's a true indicator of where we see those deficiencies in the support.
View Peter Julian Profile
NDP (BC)
Thanks, Mr. Chair.
I have a question for Ms. Kennedy. The government is scaling back substantially on COVID support starting in a few weeks, and we're in the midst of a deadly third wave. Do you think the government is acting prematurely in cutting back all of those supports that people desperately need at a time when we are very much in danger?
Colleen Kennedy
View Colleen Kennedy Profile
Colleen Kennedy
2021-05-18 13:54
Yes, I do. I think the government responded very well to the needs of Canadians when the pandemic started. Yes, we might have the vaccine and we might be getting closer to the end, but we are far from financially independent or wealthy enough in some of these cases for these companies to move on without assistance. We're still probably months out before we're back to even 50% of our business capacity. A lot of that's not going to happen for about six months out.
Like I said, it's not just a matter of getting the vaccine for us. We've lost 19 flights in Atlantic Canada. We almost have to rebuild our traffic routes and our access routes to fill our businesses and our accommodators again, so I don't think pulling out in the next three or four months is a wise idea for us.
View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Mr. Chair. I will leave it to you to introduce the officials later on, but let me say thank you very much to the officials for being with us.
Mr. Chair and members of the committee, thank you for inviting me to speak to you today about Bill C-30, Budget Implementation Act, 2021, No. 1.
After more than 14 months of uncertainty and challenges, Canadians are continuing to fight COVID-19, but we know there is light at the end of the tunnel. As we fight the third wave, more and more Canadians are getting vaccinated.
Bill C-30 is an essential piece of legislation that, once enacted, will allow us to implement our plan to finish the fight against COVID, create jobs and a swift recovery from the COVID recession and lay a foundation for robust, inclusive, green, long-term economic growth.
This budget is about helping middle-class Canadians, helping workers and helping more Canadians to join the middle class. It is about embracing this moment of global transformation to a greener, cleaner economy. It is a plan that will help Canadians and Canadian businesses heal the wounds of COVID and come roaring back.
First, we need to finish the fight against this virus. This bill includes a one-time payment of $4 billion to the provinces and territories to support their health care systems, support that is so essential as we fight the third wave. This is in addition to the $1 billion to support the provinces and territories as they ramp up their vaccine campaigns.
We are making progress in our vaccination efforts, and I know that team Canada can vaccinate even more Canadians even more quickly, and we will. I was vaccinated with the AstraZeneca vaccine at a Toronto pharmacy 15 days ago, and I encourage all Canadians to get vaccinated as soon as it is their turn.
The pandemic has caused a recession, so we need to start by rolling out a comprehensive plan for jobs and growth, to address the disproportionate impact the recession has had on women, young people, racialized Canadians, low-wage workers and small business.
A cornerstone of our plan is a historic investment of $30 billion over five years, reaching $9.2 billion annually, in permanent investments to provide high-quality, affordable and accessible early learning and child care across Canada. Our goal is that within five years, families everywhere in Canada should have access to high-quality child care for an average of $10 a day. Dear colleagues from all political parties, let's make a commitment together today to all Canadians. Let's get this done.
I want to take a moment to recognize Quebec's leadership, especially that of feminist Quebeckers, who have led the way for the rest of Canada.
While we know better days are ahead, many families are still struggling. Around a million Canadians either remain out of work or are working significantly fewer hours than they were pre-pandemic. We must support hard-hit Canadians and businesses across the country so they can recover as soon as possible.
Bill C-30 includes emergency supports for Canadian workers, businesses and families.
The legislation extends the Canada emergency wage subsidy, the Canada emergency rent subsidy, and lockdown support through to September 25, 2021 which will help protect millions of jobs.
With this legislation, we are providing a bridge for people who are unable to work because of COVID by extending income supports, maintaining flexible access to EI benefits, and extending the EI sickness benefit from 15 to 26 weeks.
Bill C-30 also introduces a $15 an hour federal minimum wage. It expands the Canada workers benefit, extending income top-ups to about a million more low wage workers, and lifting nearly 100,000 Canadians out of poverty. These are measurable concrete steps to help Canadians who need help.
We must also help small business, the backbone of our economy and every main street in the country. To do that, we need to improve access to capital and help businesses hire more workers, in particular, through the new Canada recovery hiring program.
Young Canadians have made tremendous sacrifices this past year to protect their elders, and now, they need our collective support.
Through Bill C-30, we will make college and university more accessible and affordable by extending the waiver of interest accrual on federal student loans until March 2023. This will mean savings for more than 1.5 million Canadians repaying student loans. We will not let young Canadians become a lost generation.
Mr. Chair, I have spoken today about just a few of the measures included in Bill C-30, measures which will make a tangible positive difference in the lives of millions of Canadians.
This is a plan for jobs, growth and the middle class. It is a plan built around helping Canadians recover, succeed and thrive.
I recognize the critical role parliamentary committees play in scrutinizing government legislation, and I'm grateful to all of you for your hard work.
Bill C-30 is a historic first step towards recovery and new economic growth for future generations of Canadians.
I would be pleased to answer any questions you have as you study this critically important piece of legislation.
Thank you.
Thank you very much.
View Tamara Jansen Profile
CPC (BC)
Thank you.
I didn't get an answer to that one, so regarding the business support loans, Dave would like to know why your programs make no differentiation between those who were seriously impacted and those who were not. He wants to know why small business owners like him who were shut completely down were treated the same as ones that were open.
Why didn't you better target compensation for those who were much more impacted?
View Chrystia Freeland Profile
Lib. (ON)
In fact, compensation has been very focused on where the need is the greatest. That is why programs like the wage subsidy and rent support are actually based on level of income loss.
As well, I do want to go back on the CERB and to say that my government's view is that the millions of Canadians who lost their job in COVID through no fault of their own needed to be supported. We're glad to have been able to do that.
View Pat Kelly Profile
CPC (AB)
Thank you.
When the minister appeared at committee to discuss the fall economic statement, she admitted there was nothing in the fall economic statement, or the Speech from the Throne, or any of the previous measures to assist small businesses that opened their doors in, say, late 2019 or the early months of 2020 and do not meet the criteria of the existing support measures.
Is there anything in this budget that would address this problem? This was something that has been widely acknowledged now by the government as a shortcoming in the support measures.
Evelyn Dancey
View Evelyn Dancey Profile
Evelyn Dancey
2021-05-11 17:41
I was pausing to see if my colleague, Mr. Marsland, wanted to reply as well, but perhaps we can share in our response if we have different things to say.
There are actually new or enhanced program announcements for Budget 2021 that will be available to new businesses or those that have been launched since the beginning of the pandemic.
With respect to my area at Finance of economic development, there is the Canada digital adoption program to support the acquisition of technology to help the digitization of business. There is the expansion of the Canada small business financing program, which includes a number of elements that are included in Bill C-30 for further detail, but both expands the range of assets that can be financed as well as the different types of financing available.
There also has been an expansion of the government's suite of entrepreneurship measures for women entrepreneurs, Black entrepreneurs, and other equity-deserving entrepreneurs.
View Pat Kelly Profile
CPC (AB)
For the entrepreneur who has spent all of their life savings in 2019 to build a new restaurant with an opening date of March 15, 2020, there's really....
With all due respect, I think many of the programs you've described, or some of them, will decline those businesses, and for the same reasons they don't qualify for all of the existing programs. Is there really anything for a business such as I've described?
View Bernard Généreux Profile
CPC (QC)
You know that the Conservatives agree with this proposal. In fact, we are the ones who put it forward so that we only have one tax return, while maintaining jobs and minimizing the effects of this change, obviously.
As I told you, I am an entrepreneur. Like everyone else, we were affected by the pandemic when it started 14 months ago. One of the things that the government had to do was to put aside all of the EI administration to provide the CERB much more quickly, because the EI administrative system was not responding to the demands. In any case, it was impossible to be able to manage the CERB quickly using an absolutely archaic system.
On the other hand, I observed that the financial institutions that supported businesses with $40,000 loans—now $60,000—offered in collaboration with their government relations turned around quite quickly. They have certainly demonstrated that it was possible to do things much faster than normal, that is, when there was no crisis.
Have you seen the same thing with your businesses, not only with the $40,000 to $60,000 loans, but also with the whole Emergency Wage Subsidy and other programs?
Philippe Noël
View Philippe Noël Profile
Philippe Noël
2021-04-22 12:04
I have to tell you that, in general, we've received a lot of positive feedback about the wage subsidy. That is one of the reasons why we asked that it be extended until 2022.
Philip Hemmings
View Philip Hemmings Profile
Philip Hemmings
2021-04-15 17:22
Good afternoon. Thank you for this opportunity to appear before the Standing Committee on Finance.
This presentation draws largely on the OECD economic survey of Canada that was published on March 11. Our report is generally positive about the suite of economic policy measures that was introduced in 2020 and the subsequent evolution of those measures. The initial policy response was viewed as being appropriately rapid. The steps taken were also seen as having performed a reasonably good job in ensuring income support to those households and businesses most severely affected.
Canada was ranked as having one of the largest packages of fiscal support in an international comparison the OECD made in autumn of last year. Canada's package at that time, when we added it up, was worth around 13 percentage points of GDP. Other countries with large fiscal packages in this comparison were Italy, Germany, Australia and Japan. We'd also underscore that prudent fiscal policy in Canada over past years has helped provide scope for this sizable fiscal support.
Canada's menu of support has become more targeted, which is welcome. Notably, there has been the transition from the Canada emergency response benefit to the more focused benefits, including the Canada recovery benefit, the CRB. To be sure, there will be scope for technical improvements to some of these schemes that are still operating. For instance, our report flags that the 50% clawback rate of the CRB could perhaps be dissuasive to individuals in returning to employment.
Our report emphasizes that for the time being, a focus on keeping these supplementary channels of support open is appropriate to help economic recovery. Financial assistance for households should ensure gaps and support are covered. For businesses, continued focus is needed on nurturing their recovery.
It is worth emphasizing, I think, that, even with the retention of supplementary support, the very large deficit generated in 2020 will partially unwind. The shift back from blanket support suggests smaller outlays. Also the recovery process itself, unless reversed by another shock, will bring deficit reduction through revenue increases and diminished spending demands.
The crisis has raised a question as to whether the safety net provisions available in normal times are adequate. The recent commitment to introduce automatic tax filing for simple returns, partly so that more low-income households receive the tax credits as well, is welcome. In addition, permanent change to income support may be required to make social safety nets more reliable, timely and effective. This is challenging to implement. Our report suggests that one route would be for provinces and territories to upgrade their safety net welfare provisions, possibly with financial assistance from the federal government.
In principle, a guaranteed income scheme offers another solution; however, our report concludes that such a scheme is likely to be overly expensive and may reduce incentives to work. While support programs should remain on offer while the economy is fragile, a clear and transparent road map for preventing a spiralling public debt burden is needed. Canada's past record in federal deficit and debt suggests that, to date, broadly defined fiscal rules have worked adequately; however, a more precise rule may provide a useful anchor for reining in the debt burden. Our survey and previous ones have specifically suggested the introduction of a numerical debt-to-GDP target.
Finally, I think it's worth underscoring—and this is something emphasized in our report—that a successful post-COVID economy also requires structural reforms that do not necessarily involve direct fiscal costs. To help the business sector, our report urges faster progress in particular on the removal of non-tariff barriers between provinces. It also supports continued attention to the competitiveness and quality of telecommunication services. In addition, it identifies scope for improving business insolvency processes. For households, the report advocates the creation of more affordable housing through measures that encourage the building of more homes, for instance, through lighter planning regulation.
This brings my introductory comments to an end.
Thank you.
View Peter Fragiskatos Profile
Lib. (ON)
Thank you very much. It's an interesting point.
Economically, this downturn has taken a different form. It's fair to say that it is not quite like economic downturns of the past and therefore requires some creative thinking and pointing towards anything that will boost productivity and competitiveness. We've just given some examples here. I'm sure we could list many more. Your point is well taken.
Mr. Hemmings, I remember about a year or a year and a half ago, when the emergency programs were being put in place and being refined, some of my friends in the opposition and some in the media were saying that the government was doing too much and that the government should hold back. They were more or less making an argument for austerity, in many ways, although they did not use the word.
I wonder what your thoughts would be if we just imagined for a moment that the federal government did not introduce emergency programs or if they had been much more restrained in nature. The programs that have been introduced have been generous and have held up the Canadian economy, in my view. We've heard that same view articulated here from experts who have testified in recent weeks and months.
What is your view? If the Canadian government had not put in place the various emergency programs, where would the country be right now?
Philip Hemmings
View Philip Hemmings Profile
Philip Hemmings
2021-04-15 17:38
You'd have a lot of households struggling, compared to the way you are now.
In the situation that governments faced in March and April last year, there was a high degree of uncertainty. Many governments, including the Canadian government, were trying to think of ways of supporting households and businesses in a very rapidly evolving situation. Canada was on the right side of the equation in the sense that it moved quickly. It moved quite boldly with support programs. It's quite possible that with hindsight, you can look at the programs. This is not only true for Canada; elsewhere, some of these emergency programs didn't hit the targets as accurately as good programs would. The point was expediency at the time.
You have the fiscal room to do this. You're on the—
View Sean Fraser Profile
Lib. (NS)
View Sean Fraser Profile
2021-04-13 18:16
My question is for Ms. Drigola.
I love it when witnesses start by saying “the one thing you can do” and then tell us what the one thing we can do is, which is to keep emergency programs in place.
Mr. Stratton referred to the phenomenon of economic scarring, which has been front of mind for us from the very beginning. I'm curious as to whether you can offer perspective into what kind of economic landscape we might have been dealing with, had the government not intervened to put forward measures such as the wage subsidy, such as CEBA and such as CERB in some instances, at the outset of this pandemic.
What would the world we're living in look like in the absence of those benefits?
Alla Drigola
View Alla Drigola Profile
Alla Drigola
2021-04-13 18:17
That's a great question.
We would have seen many more businesses struggling or closing and many more jobs lost. As Trevin said, from the beginning we commend the government for introducing these programs quickly and making them widely available to businesses. We've seen that more than 50% of small businesses have accessed CEBA and CEWS. The numbers are very significant. Without these programs and those supports, we would have seen unemployment numbers that were much larger, with businesses closing.
That being said, this is why today we're calling for these programs to be extended and for businesses to have the certainty that those programs will still be in place past June. We're in the third lockdown now. Many businesses in Ontario have been shut—especially restaurants, for example—since the fall. We really need to make sure that these programs remain in place and that they are still there for businesses that need them, because without them I think we're going to see a lot more devastating consequences.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you so much, Mr. Chair.
I want to thank all the presenters for their very thoughtful presentations.
Mr. Macdonald, I'm going to start with you. I love it when people start off with numbers. It's always helpful to have the latest, so thank you for that. You are a true economist.
You mentioned 92% of every dollar to combat COVID-19 comes from the federal government. We have heard quite a bit of commentary from some of our opposition colleagues that we spent too much money on our emergency programs and that the supports we have implemented have caused us to go into massive debt.
We all know we have very few options to actually fund these types of programs, so we're going to have to increase our debt, raise taxes or cut crucial programs. In your opinion, how should the federal government have financed this emergency and extra spending?
David Macdonald
View David Macdonald Profile
David Macdonald
2021-03-18 10:27
Thanks so much for the question.
Certainly, when it comes to debt and deficits, the federal government does not exist alone. It exists within the Canadian economy, across from other large sectors in the economy, and deficits and debt are fungible. In essence, they can move between sectors. In this case, the federal government took on a massive deficit in this year and what that did was create smaller deficits and in fact some surpluses in other sectors of the economy. For every deficit there's a surplus of equal value in another sector of the economy.
The federal government could have decided to spend none of this money. It could have decided to have no CERB, no support for business, no support for provinces and no support for health care and individuals. What would have occurred in that case is that those deficits would not have occurred on the federal books. They would have occurred on provincial government books as they covered health care costs. They would have occurred on household books that incurred deficits because they lost work but still had expenses, or on business books.
Despite the federal and provincial governments' efforts, we've nonetheless seen increases not only in federal debt but also in household and corporate debt at the same time. In fact, the household and corporate sectors are far more leveraged than the federal government is. If we were to see interest rate increases, they would certainly hit the federal government, but they'd hit the household and business sectors much harder. Not only do they pay higher interest rates, but they have a lot more debt.
I think it's worth understanding the federal government and its deficits not on their own, but by how it and those deficits relate to other sectors in the economy.
View Julie Dzerowicz Profile
Lib. (ON)
Maybe the other question...and I didn't mean to ask this, but I think it was just a comment Mr. Cross made at the end of one of his answers. I think there was a real attempt on the part of our government to make sure that our emergency programs really supported right across the income spectrum. I know a recent Stats Canada report indicated that households in the lowest income quintile increased their share of disposable income from 6.1% in the first quarter to as high as 7.2% in the second quarter of 2020, while those in the highest income quintile decreased their share of disposable income from 40.1% to 37.7% over the same period of time.
Would that give an indication that our emergency programs have been helpful and have worked particularly for those on the lower end of the income scale?
David Macdonald
View David Macdonald Profile
David Macdonald
2021-03-18 10:31
I think some of the programs could have been better targeted. We think of top-ups to old age security, for instance, which goes across a large spectrum of seniors. It might have been better to devote that money purely to the guaranteed income supplement. There were broad top-ups across the entirety of people receiving the Canada child benefit, which goes quite a ways up into the income spectrum. Those might have been better targeted particularly to the lower-income recipients of the CCB.
Certainly if we look at some of the big programs to support individuals, like the CERB and its knock-on benefit, the CRB, as well as improvements to EI, the floor for what one can receive in benefits, at $500 a week, would have been a substantial benefit, particularly for lower-income households, which not only benefit from improvements in access in most cases but wouldn't even have gotten into the EI system period. Now even when they get in, they're sustained at a much higher level.
I certainly think that those changes in the CERB, EI and the CRB have been some of the more important ones in supporting low-income households, particularly those attached to the labour force. I certainly hope that going forward those are the types of changes that will be made permanent in upcoming EI reforms, when the CRB program is wound down this summer.
View Peter Fragiskatos Profile
Lib. (ON)
Point taken, but by invoking him, I think you raise someone who's quite relevant and whose thoughts and ideas are quite relevant, specifically with regard to some of the matters that we're discussing at the committee today.
I know you have issues with government spending, and that's fair to raise, but in the context of COVID-19, I wonder what else government could have done.
For example, have you had a chance to read the recent report of the International Monetary Fund, the IMF, that focused specifically on Canada? It was released this month, so it's very recent. If you haven't had a chance to look at it, that's quite understandable.
It did say that if emergency programs such as the wage subsidy and the Canada emergency business account—which is, of course, the loan that now goes up to $60,000 for small businesses—the rent subsidy support, and many other examples that have been introduced, which admittedly are expensive, but have helped to sustain the country.... That's not just political spin here; that is the reflection of the IMF as well. It found, in this report, that unemployment would have risen by 3.2% beyond what we saw last April, which was 13% unemployment in Canada. It could have been even worse. As far as economic output goes, we would have seen, according to the IMF, a decline of 8% beyond what we saw in terms of the GDP decline.
What do you make of this? Absent the introduction of emergency programs, we would have had an enormously difficult time in Canada. We just heard from the Parliamentary Budget Officer, for example, who made clear to this committee that if emergency programs had not been introduced, Canada would have seen a situation of—he didn't use the term, but I think he might as well have—a depression.
What do you make of these things?
Ian Lee
View Ian Lee Profile
Ian Lee
2021-03-18 12:40
To your first question, whether I read the IMF report, yes, I did. Yes, they commended us on our response. I've never suggested—I think you're dichotomizing this or turning it into a Manichaean argument of the light being on or the light being off. I have never said, and I don't think any Canadian has said, that we shouldn't have helped anybody. The issue has never been whether we should help anybody versus not help anybody. The question is targeting, I think, a more precise, surgical targeting. We're the only country—and I've looked at the OECD report on this and at the StatsCan report—that paid out 150% of the total job loss income. That violates, I believe, the principle of the unemployment insurance system that all Canadians have supported all the way back to Mackenzie King. That is that you don't get 150% of your loss. If you're making $1,000 a month, and you go into the unemployment insurance office, they don't give you $1,500. They give you a portion of your job-loss income.
We've paid out more, in percentage terms—so we're comparing normalized data and not absolute data—than has anybody else, and those resources are scarce. Those resources that were squandered with our paying more than we needed to could have been used to pay other people who needed more help.
The issue is not whether we should help people; the issue is can we not ensure that we provide the greatest amount of help to the people who suffer the most.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you so much, Mr. Chair.
My question will be directed to Mr. Robson, but first I want to make sure that something else is on the record around the budget. I don't want Canadians who might be listening to think that there's been a deliberate attempt by our government to not be transparent or accountable. Last year we actually announced a budget date. That was Monday, March 30. We didn't follow through with it, because there was a massive pandemic, and that had to be sidelined.
I also want to remind everyone that we did have reports every two weeks, once we started up with the finance committee, to make sure we were transparent and accountable with our spending. It took part right up until the end of August, when we prorogued. When we came back into session, then we were accountable through our Parliament. There also is an intention to be presenting a budget. I don't want people to think that's not coming—it is—or that we haven't been accountable and transparent.
Mr. Robson, in your opinion, how should the federal government have spent or financed emergency and economic restart programs? We have heard time and time again from many economists that if we hadn't spent what we did, our economy would have been much worse. We also have really good data to show that we're actually doing fairly well, considering. When we look at our labour participation rates, we are doing better than Germany, the U.S. and Japan. When we look at the fourth quarter of Canada's GDP growth, we grew more than the U.K., the U.S., Germany, France and Italy.
If you are worried about our debt levels, how would you have done things differently?
William Robson
View William Robson Profile
William Robson
2021-03-18 13:01
The C.D. Howe Institute and I myself were at the forefront, early on, of urging some of the relief measures that we have seen. I am not critical of the CERB in principle. I am not critical of the CEWS in principle. I am not critical of many of the credit supports the government put in place. I admire them. I think they were timely. I was impressed with the speed of execution.
The concerns I have are more forward-looking. As was alluded to earlier, we are in a situation where many of the challenges we face economically are not related to propping up demand. The demand is there and the savings are there. What they are related to is the reopening of the economy...both the safety from the coronavirus and many of the infrastructure challenges. I'll just elaborate by saying that much of the investment that we now need to undertake in airports and at the border, for example, is related to the need to make travel and the movement of goods and services safer and easier now that we are in this new situation.
The main point of my remark about the tax cost of program spending was about what comes next. There is a lot prefigured, in the fall economic statement, the Speech from the Throne and other promises that we have heard, about new ongoing programs. I would say that's out of place, at this point. We really ought to be thinking about things that will make the economy function better as we reopen and as we need continuing protection from the coronavirus. That's the main focus and the appropriate focus for future economic growth.
View Philip Lawrence Profile
CPC (ON)
I apologize. I have a limited amount of time and, as I said, I do appreciate all your efforts.
I realize there will be idiosyncrasies in how we all measure things a little bit differently, but overall there's a pretty clear picture that emerges that we have higher unemployment than the G7 average, than most of the countries in the G7, than a lot of the countries in the G20, and higher unemployment than the average across the European Union. I think addressing those to specific idiosyncrasies probably isn't fair. I also think that our expenditures, it's pretty clear, are amongst the highest in the developed world as well.
What has happened is that, while other countries are getting paycheques, we are putting it on the credit card. I think that's pretty fair to say.
If you have any dispute with that, please share.
Alison McDermott
View Alison McDermott Profile
Alison McDermott
2021-02-18 16:41
I would just say that you do have to be careful about that. We would say overall that our response has been quite generous, but not wildly more generous than a lot of other countries. There has been somewhat more direct support than liquidity support, which makes it a little bit more costly, in some cases.
Overall I think it would be disputed to say that our response has been less effective than that in other countries, because you have to look at changes. You can't just look at levels of unemployment—
Alison McDermott
View Alison McDermott Profile
Alison McDermott
2021-02-18 16:42
That's fine. I would say that you really have to be quite careful. I wouldn't compare levels of unemployment at a given time against fiscal costs and draw conclusions from that.
View Patrick Weiler Profile
Lib. (BC)
Thank you for that.
Let's get back to the discussion of vaccines, given what we know about the immunization timelines for Canada: that all Canadians who want a vaccine will be immunized by the end of September. With these likely timelines, similar to when we know we'll be able to return to normal with the pre-pandemic ability to have social gatherings, to travel and otherwise, what would your advice be for the government with respect to whether it should or should not extend some of the pandemic relief programs, like the emergency rent subsidy, the emergency wage subsidy and the emergency business account?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-01-27 17:25
That's a very tricky area for me to venture into because, in my capacity, I provide information and analysis, but my mandate does not include providing advice to the government or to parliamentarians. Extending or not extending some of these measures is a decision that you collectively have to make as parliamentarians.
One thing that I can say, however, is that in our fiscal and economic outlook, we have assumed that the support for COVID-related measures will be allowed to expire as planned. If these measures were to be extended, then the deficit that we indicated in our documents would obviously be higher. As to whether the government should or should not extend these, I'll leave that to policy-makers.
View Patrick Weiler Profile
Lib. (BC)
From the financial analysis point of view, what would be the monthly cost of extending these programs, say, by another three months or by another six months?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-01-27 17:26
It depends on the programs themselves. CERB, for example, ran at about—if I'm not mistaken—$6 billion to $8 billion per month. The wage subsidy is probably running at close to a few billion dollars a month, so it depends on which programs you're talking about and on exactly when you're thinking about extending them. Extending a program when the economy is in a recovery phase is much less expensive than extending it, for example, right now when lockdowns are still in place in many areas of the country.
So, it depends on when these would get extended, but you're talking about easily $10 billion a month if you were to extend all of these programs beyond their scheduled expiry dates. Again, that's with huge caveats.
View Patrick Weiler Profile
Lib. (BC)
I've spoken to a lot of businesses in my riding that have been very, very hard hit by the pandemic, perhaps none more so than those in the hospitality or F and B sectors. El Segundo is a restaurant in Sechelt that opened up after the pandemic hit. It made commitments to open up far before the pandemic hit. It's not eligible for things like the pandemic relief programs. I'm wondering if you've analyzed the cost of extending these programs to businesses that were established after the onset of the pandemic or after mid-March?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-01-27 17:28
We haven't done that because the data we have would probably not allow us to do that, certainly not right now. It takes a little bit of time, with some delay and lag, to get information on businesses that have been recently established. So, we haven't done that—unless my colleagues want to chime in and contradict me by saying that it would be easy to do, but I don't think it would be easy to do at this point in time.
View Kelly McCauley Profile
CPC (AB)
We heard earlier today Mr. Green talking about some of the wage subsidies support. The government has listed the names of the companies but not the amounts. Now, we've also heard that the communist-controlled Bank of China, or whatever their bank was here, received subsidies. Foreign-controlled airlines received subsidies. Should CRA be releasing the information for transparency for parliamentarians and taxpayers to see how much has been received by the companies for these subsidies?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-01-27 18:03
That's very close in its design or its nature to a subsidy. In the case of subsidies, my understanding is that the amounts of subsidies that corporations and businesses receive tend to be public, generally speaking. In the case of the wage subsidy, there could be competitiveness issues in some instances, but generally speaking, I think the amounts that corporations have received should indeed be public.
Now that the government is disclosing who receives them, the competitive disadvantage, if there was one, has probably been eroded already. Disclosing the amounts would be more transparent.
View Matthew Green Profile
NDP (ON)
Thank you, Mr. Chair.
I'm going to go back to the small businesses. We heard about the programs that were rolled out, and we were talking about how we might be able to list who got what in some of these subsidies. I'd like to go further.
Were you able to disaggregate who received these by way of the size of their business, whether they were small or medium businesses versus larger corporations?
Xiaoyi Yan
View Xiaoyi Yan Profile
Xiaoyi Yan
2021-01-27 18:25
I know the data by industry exists, so it's detailed enough down to the size of the business within the particular industry.
View Carla Qualtrough Profile
Lib. (BC)
Thank you, Mr. Chair. I am happy to be here. Thank you for inviting me to join you today.
I am accompanied, as you said, by Graham Flack, my deputy minister; Benoît Robidoux, my associate deputy minister; and Mark Perlman, my chief financial officer for ESDC.
Today I will be speaking to supplementary estimates (B) for 2020–21. As you know, these supplementary estimates were tabled in the House of Commons on October 22 and passed through the House just three nights ago.
These supplementary estimates represent an additional $31.4 billion in planned budgetary expenditures. The bulk of this investment, $28.5 billion, can be attributed to the Canada emergency response benefit payments under statutory authorities, delivered by Service Canada and the CRA. From March to September, the CERB helped almost nine million Canadian workers get through a very difficult period. I also note that these supplementary estimates include funding for the safe restart agreement, training for workers, early learning and child care, youth programming, and training for personal support worker interns, just to name a few things.
Since March 2020, our world has completely changed, but our government’s priorities of supporting Canadian workers, investing in youth, and helping people overcome barriers to training and working remain the same.
When the pandemic first hit, we put a moratorium on Canada student loan and Canada apprentice loan repayments and introduced the Canada emergency response benefit. We then quickly put in place the Canada emergency student benefit to support students and recent graduates who were faced with fewer job opportunities in the summer. We also created thousands of jobs and training opportunities for youth and provided a one-time payment for persons with disabilities.
As the CERB was coming to an end, we made changes to the EI program so more people could access benefits, including regular and special benefits. For Canadians who don’t qualify for EI, we introduced a complementary new suite of recovery benefits: the Canada recovery benefit, the Canada recovery sickness benefit, and the Canada recovery caregiving benefit. Together, these measures are helping millions of Canadians through this challenging time.
I would now like to share a few words about the fall economic statement. There are a lot of important investments being made as a result of the FES to help ensure that Canadian workers, young Canadians, students and vulnerable populations, such as Canadians with disabilities, are part of Canada’s recovery, through things like easing the burden of student debt by eliminating the interest on repayment of the federal portion of the Canada student loans and Canada apprentice loans for 2021-22, expanding the Canada summer jobs program to fund 120,000 jobs, and enhancing the youth employment and skills strategy to create 45,000 job placements to help youth facing barriers.
We will also maintain our commitment to implement the changes to the registered disability savings plans announced in budget 2019 for beneficiaries who cease to be eligible for the disability tax credit. We'll make targeted investments in training to support the most vulnerable and those hardest hit by the pandemic, including women, racialized Canadians, indigenous people, persons with disabilities and skilled newcomers to Canada. This will be the largest investment in training in Canadian history.
We will invest in the opportunities fund for persons with disabilities, the indigenous skills and employment training program and the foreign credential recognition program. Lastly, we are investing in a new pilot program designed to support marginalized women by providing and testing pre-employment and skill development supports. I am confident it will be a game-changer for women by providing better ways to support them to join the workforce or get better jobs in communities across the country.
The fall economic statement is a plan to build back better. Together, we have the opportunity to provide Canadians with the certainty they need, along with the resources that will help them achieve success. I hope we can work together to pass Bill C-14 and see these important measures come to fruition sooner rather than later.
The appropriations requested in the supplementary estimates (B) passed this week have allowed us to continue to support Canadians during the pandemic and beyond. My officials and I are happy to answer your questions.
Thank you.
View Kate Young Profile
Lib. (ON)
View Kate Young Profile
2020-12-10 17:07
Thank you very much, Mr. Chair.
Thank you, Minister, for appearing before our committee once again. It's a pleasure to get a chance to talk to you before the holidays. It's been quite a year, to say the least, and these main supplementary estimates are a real testament to how busy this year has been. You mentioned the programs: CERB, Canada emergency student benefit, the one-time payment for persons with disabilities, and the Canada recovery benefits. There are massive programs that were put together in record time. How do the size and scope of these undertakings reflect on the public service as a whole?
View Carla Qualtrough Profile
Lib. (BC)
Thanks for the question. It's nice to hear your voice as well.
I think the effort and the work by the public service during these past months has really shown, and it's certainly lived up to its reputation of being world class during this pandemic. We've asked a lot of the public service during this crisis, and it's really delivered for us. We asked it to do new programs, as you said, and it has done them. We asked public servants to do this from their kitchen tables and they have done it. We asked them to do this while their kids were at home and they were juggling the extra demands of child care and worries around COVID, and they did it. Really, it's been incredible. These were massive public policy programs, new programs. Early on at ESDC, for example, we took stock of all of our resources, what we had at our disposal, and we went into the pandemic response very well aware of our limitations and very committed not to fail, and we didn't.
I'm just super grateful for their hard work and I really believe that Canadians have benefited. The unsung heroes of this entire effort are our public servants.
Padminee Chundunsing
View Padminee Chundunsing Profile
Padminee Chundunsing
2020-12-10 16:59
Mr. Chair, members of the official languages committee, good afternoon.
Former committee members who came to meet with us in Vancouver already know me, so hello again to those members. To introduce myself to the new members of the committee, my name is Padminee Chundunsing, and I am the chairperson of the board of the Fédération des francophones de la Colombie-Britannique.
Thank you for the invitation to share some lived experiences in terms of what's happening on the ground in our province.
Let's begin with the Department of Canadian Heritage. Last March, as soon as the lockdown measures were introduced and the consequences of those measures became apparent, especially within our cultural and social organizations, Minister Joly and Canadian Heritage officials stepped up very quickly to explain that funding would not be interrupted and that events could be postponed to later dates without the risk of penalties. This gave our member organizations some temporary breathing room. That said, the closure of child care centres and other services that allowed our associations to free up funds to complement the grants left our members in a fragile state in the long term.
I'd like to discuss federal government communications. The health care situation in British Columbia was quickly turned upside down. The government that has neither legislative nor linguistic obligations, in other words the British Columbia government, communicated more information in French than the federal government, which is bound by the Official Languages Act.
However, we are under no illusions about that advantage, since it's more a reflection of the fact that our Minister of Health is also our Minister of Francophone Affairs. We would like to commend Adrian Dix's work and determination in both roles. There has been no indication that the rest of the provincial government and the administrative apparatus are at all inclined to significantly and permanently improve the use of French in their communications.
The lack of information from the federal government had considerable repercussions for francophone organizations and citizens, particularly those in precarious situations, as it was difficult to access information and services that were not directly related to health.
As for information on federal government assistance programs, it was available in French, but very inconsistently. Some people got everything they needed, while others were told that those services were not available in French. On that point, some Service Canada users told us that services in French in central Vancouver, a designated bilingual area, were no longer available.
After investigating and contacting the Office of the Commissioner of Official Languages, which supported us in our efforts, we learned that officials did not think it was important to reopen services in French. We therefore wrote to Minister Qualtrough, along with Ms. Joly and Mr. Duclos, informing them of the situation and requesting that French services be restored. We know how important Service Canada is in applying for the Canada emergency response benefit and EI. Our complaint has gone unanswered to this day, and we continue to receive conflicting information on the availability of services in French.
For example, we heard from one of our members that roughly 40% of francophone women in lockdown with an abusive partner who took part in a survey had not used the support services, not knowing that they were available.
Francophone immigrants appear to have been more affected than the rest of the population. We've heard of people going to the Centre of Integration for African Immigrants for assistance in completing their EI applications, because they could not get help in French from Service Canada.
Many French-speaking African families with low incomes in normal times found themselves unemployed when COVID-19 struck. As schools closed and classes moved online, kids from those families couldn't attend classes properly because they didn't have computers or an adequate Internet connection to keep up with all online classes. Francophone schools couldn't afford to provide a computer to every student or a high-speed Internet connection to the families.
Francophone immigrant families often use interpretation services for medical consultations. With the lockdown, consultations were held online and interpretation became difficult. Many francophones couldn't consult their doctors because of this.
At the community level, there was confusion about who does what. This translated into absurd situations where provincial civil servants and agency staff on the ground refused to engage with francophones, explaining that the federal government subsidized all our needs.
The shortcomings related specifically to the pandemic and its aftermath combine with other more common shortcomings in British Columbia: the lack of bilingual communication at airports. The lack of bilingual security and border services officers and the minimum number of bilingual employees mean that service is interrupted any time those employees are not on duty.
We must also add the general misunderstanding at best, and hostility at worst, of local federal public servants regarding language obligations.
The pandemic has created a particularly difficult situation for francophone immigrants in transition between two immigration statuses. Just at our federation for example, we had to lay off two employees who had reached the end of their work permits and were waiting for their francophone mobility status or permanent residence. Our coordinator was supposed to receive permanent residence on June 15, 2020, and finally got it at the end of September. During those long months, it was very difficult to get up-to-date and relevant information in French. It was even harder to reach an agent. On top of those two specific cases, we heard many stories of people losing their jobs as a result of losing their status. Given the cost of living in the Vancouver urban area, they were forced to leave the country.
The pool of francophone candidates in our province is pretty small, so it is crucial that our organizations be able count on the skills of people already in those positions and not risk losing them because of delays in processing their immigration files.
To wrap up, although the Department of Canadian Heritage moved very quickly to support the community and ease its concerns, communication and assistance from other federal departments were chaotic and sporadic. Our federation shares the FCFA's view that linguistic management during the pandemic proves once again that in order to ensure that francophones are treated as second-class citizens, the Official Languages Act must be modernized and given more teeth, otherwise we will be faced with inconsistent, potentially humiliating and certainly dangerous situations regarding public health and safety.
View Gabriel Ste-Marie Profile
BQ (QC)
I will start with a comment for the finance officials.
Over the spring and summer, the Minister of Finance provided 10 biweekly updates, the last of which was dated August 6. They were extremely useful and informative because they made it possible to track each of the policies and provided an overview. I want to thank you for that.
I have another comment, this one for Mr. Fraser, a government member on the committee. When Parliament was prorogued, those updates stopped. It would help us assess the policies if the government were to bring back a similar reporting mechanism. I have a question for the witnesses about that.
According to your latest data, where do things stand with the Canada Recovery Benefit, the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy?
Are the programs effective? We are hearing about some of the failings, especially in relation to the Canada Recovery Benefit and artists, people in the entertainment and cultural industries, and self-employed workers.
Andrew Marsland
View Andrew Marsland Profile
Andrew Marsland
2020-12-08 17:57
Perhaps I'll start with the second question and ask colleagues to respond to the rest.
The CRA publishes data on the wage subsidy on, I think, a weekly basis, and clearly many firms and, as I think the minister mentioned, up to four million employees have been supported, or jobs have been supported, through that. In that sense, the support is going out, and I think the committee is very much aware of both the original program and the adjustments that took place in the summer.
On the rent subsidy, it's early days. I think the latest data I saw was that applications are coming in and being paid out, but we'd expect a little bit of a lag.
I think it's successful in the sense that it's been successfully launched and many businesses are applying for it. I think it's probably too early to tell just how many, but I would expect that the pattern would follow that of the wage subsidy.
View Han Dong Profile
Lib. (ON)
Thank you very much, Chair.
Good morning, colleagues.
Monsieur Tassé, thank you very much for being here with us today.
I am sure you have had a chance to review a number of the government's emergency assistance programs, as you mentioned in your opening remarks. The government has been clear about the need to balance speed of deployment while building back-end safeguards.
On par, would you agree that the government has done well?
Marc Y. Tassé
View Marc Y. Tassé Profile
Marc Y. Tassé
2020-11-30 12:18
It's really hard for me to say so, first of all because I don't have access to all the information and the facts that would support it. Unfortunately, the only things I see right now are from the media, so I don't think it would be fair for me to speculate.
View Greg Fergus Profile
Lib. (QC)
Mr. Tassé, thank you very much for your opening statement. It was extremely interesting. Given your considerable reputation and expertise in these matters, your contribution is very useful indeed.
The Clerk of the Privy Council appeared before the committee in the early days of the pandemic. The Government of Canada anticipated that errors would be made in relation to the emergency measures that were rolled out in response to the COVID‑19 pandemic. That is why the government was proactive and took the initiative to reach out to the Auditor General of Canada. She informed the government that she certainly expected that audits would be performed and errors would be identified.
Let's be frank here. In a situation as unprecedented as a global pandemic, isn't that the most prudent thing the government could have done, in your expert opinion?
Marc Y. Tassé
View Marc Y. Tassé Profile
Marc Y. Tassé
2020-11-30 13:08
It was a very good move, but it's hard to say whether it was the most prudent move.
The important thing was to ask whether you were abiding by the processes already in place and, if not, which processes you thought that you couldn't abide by. The issue was whether there was any appearance of potential conflicts of interest. The other important thing was to seek the opinion of Mr. Dion or his team members. This was indeed a precautionary approach, but it was based on a risk assessment.
You said earlier that some issues were expected to arise. It always depends on our risk sensitivity. We generally determine what risks are tolerable, what risks we think are a little high, and what risks we don't want to take at all. When the government contacted the Auditor General, was it based on risks considered too high or on normal risks? That would be the question to ask. To answer your question properly, we would need to know the level of risk considered.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you.
You have spent quite a bit of time today talking about how this pandemic has widened the divide in our country and saying that it could worsen further if we don't have the right response. You also indicated, a little earlier in your testimony, that our income supports have been very helpful.
We are known, I believe, to be very generous with our emergency supports. We've created a very flexible EI system, we have the Canada recovery benefit, we've put in a tremendous amount into training and retraining, and I believe that it's anticipated that we will be providing—I don't know when this will be happening—sector supports to those sectors that have been disproportionately impacted.
What more could we be doing? I think this government, from the very beginning when we were elected in 2015—when we increased taxes on the top 1% or reduced them on the middle class and then introduced the Canada child benefit—has been extraordinarily concerned about income inequality. All of our measures are very much concerned about this as well. Is there something we're not doing that we should be doing?
Tiff Macklem
View Tiff Macklem Profile
Tiff Macklem
2020-11-26 17:00
I'm going to leave these questions for parliamentarians to debate and come to conclusions on. Let me just highlight a few things, though, that I think you want to make sure are top of mind.
One thing that is important to keep in mind is that what we really have to avoid is longer-term unemployment, because that is really where you will have ongoing costs to society. Just to give you a simple statistic, somebody who is permanently laid off takes twice as long to get their job back as somebody who is temporarily laid off.
View Andréanne Larouche Profile
BQ (QC)
Thank you very much, Madam Minister.
I didn't understand what you said earlier. Who would have thought Canada was the only country with a feminist lens on economic measures during the pandemic?
I'd like to bring to your attention that some economic measures were not necessarily suited to women. I am thinking of the emergency account in particular. Some women had trouble gaining access, for they had more personal accounts because they run very small businesses. Women in my constituency have contacted me to tell me about the difficulties they encountered gaining access to certain economic measures.
I'd like to hear from you about this.
View Maryam Monsef Profile
Lib. (ON)
It was CARE International. They are of course a very well-respected organization nationally and domestically. Your point about supports for women entrepreneurs is an important one. First, the partnership with the regional development agencies that provided funding through, for example, Community Futures Development Corporation has been able to provide targeted supports to entrepreneurs.
My colleague Minister Ng was able to secure an additional $15 million for women entrepreneurs across the country. Most recently our finance minister was able to put forward additional measures that provided small businesses with additional supports for their fixed costs. It was great to see it move forward earlier this week; I think it was yesterday. I'm very much looking forward to ensuring that those businesses that can remain viable stay so, and those businesses that are so critical to the character and the vitality of our communities have the supports they need to make it through a difficult winter.
As we approach Christmas, as we approach the holiday season, I know all of us are going to do our part as MPs to encourage buy local measures, particularly in smaller and rural communities where those entrepreneurs are doing everything they can to keep their doors open. They need to know that we'll be there for them just as we've been since the beginning of the pandemic.
View Lindsay Mathyssen Profile
NDP (ON)
Thank you, Madam Chair, and thank you, Minister, for appearing today.
I just want to continue on with the line of questioning from my colleague from the Bloc. With all due respect to CARE—they are a wonderful organization, absolutely—but considering that we heard from a majority of witnesses throughout our study about how COVID has impacted women, I find it difficult to hear that so many women have fallen through the cracks, especially when the government was pushed on the fact that when CERB was provided, there wasn't an actual GBA+ lens applied to it. If in fact that is the case, in terms of the new programs for EI, the caregiving benefit, the paid sick leave and so on, do we have your assurance that, moving forward, a GBA+ lens will be absolutely applied?
View Maryam Monsef Profile
Lib. (ON)
Thank you for that very important question.
COVID has highlighted challenges that existed before the pandemic. Structural, systemic challenges that were hurting communities pre-COVID are in sharp focus now. It may be difficult to consider that CARE has recognized Canada as having the best intersectional gendered response, but it's true, and it doesn't mean that we don't have more work to do. On those three measures that you referred to as well as the new CERB—EI, the caregiving benefit, sick leave—an intersectional gendered lens was applied.
I think we can all agree that those particular measures are going to disproportionately benefit women, disproportionately benefit racialized women, disproportionately benefit those who perhaps did not have these care benefits before COVID, but now don't have to make the difficult choice between staying home when they or a loved one is sick or going to work and risking the spread of this very cruel disease.
View Jag Sahota Profile
CPC (AB)
Thank you, Madam Chair.
Minister, I asked you about gender-based analysis and if the programs had that lens applied. Women were being left out of some programs where they couldn't get financial support. You said that Minister Qualtrough was fixing the programs, or had fixed the problems so women could get support.
How and why did we get to the stage where the program needed to be fixed? Your mandate letter requires you to apply the gender-based analysis lens before the programs are rolled out, not two, four, six or eight months later when women have already lost their jobs and feel the financial impact.
View Maryam Monsef Profile
Lib. (ON)
I think every Canadian appreciates that we are in the middle of an unprecedented crisis and that the pandemic is something that we have been working on since the beginning of the year. I think Canadians also appreciate that their government listens. When they say something needs to be improved, when they say something is better, I think Canadians expect the government to listen, and we've done just that.
In addition to the supports we've put forward around parental leave and mat leave, we were able to put forward a credit—
View Jag Sahota Profile
CPC (AB)
Minister, my question is this: Why wasn't the gender analysis lens applied before the programs were rolled out, such that we needed to fix those programs afterwards?
View Maryam Monsef Profile
Lib. (ON)
We were able to put forward a historic number of programs and deliver them in record time. Canadians told us to focus on speed and to perfect the programs after they had been rolled out. We did just that.
Canadians can rest assured that we'll continue to be there for them throughout COVID and post-COVID. We will take what they have to say seriously and respond to their needs. Members of Parliament have played a really big role in providing those eyes and ears on the ground to ensure that the decisions we make in such tight timelines, in a matter of months compared with years, take into account lived realities, as well.
View Jag Sahota Profile
CPC (AB)
Thank you, Madam Chair.
My question is for Ms. Smylie, or anybody else who wants to answer.
Ms. Smylie, on the GBA+ analysis, you talked about the process and how you apply the GBA+ lens at the beginning, in the middle, towards the end. Basically you continue to apply the lens.
Considering the problems we saw with the initial programs at the beginning of the pandemic, which are now being fixed, was a GBA+ analysis done at the beginning? If so, were the issues, such as women going on maternity leave or small business owners who are women and not having chequing accounts, flagged and addressed prior to the rollout of these programs?
Lisa Smylie
View Lisa Smylie Profile
Lisa Smylie
2020-11-24 13:14
Our work at WAGE doesn't involve us being intimately familiar with all of the discussions that go on as part of the GBA+ process, so I'm not able to speak to any specific initiative that is the purview of another department.
In terms of whether GBA+ was applied at the beginning, the middle or the end, my answer is that it depends. For new programs that were developed, you can see in the economic and fiscal update that in many of those, the GBA+ was done at the beginning. For initiatives that leveraged existing programs, the GBA+, in the context of COVID, would have been done in the midst of implementing that program. It existed pre-COVID.
The answer is that it depends on what initiative was being leveraged, whether it was a new program or an existing program, in terms of what point in time that GBA+ was done.
Corinne Pohlmann
View Corinne Pohlmann Profile
Corinne Pohlmann
2020-11-17 12:02
Thank you for the opportunity to be here today. I'll be focusing my remarks on the impacts of COVID-19 on female entrepreneurs. I'll be walking you through a slide deck that I hope you all have in front of you.
Right away, I want to talk a bit about CFIB. It's a not-for-profit member-based organization that represents the interests of independently owned Canadian companies. Our 110,000 members come from every sector of the economy and are found in every region of the country.
During COVID-19, CFIB has been very active. Our help line call volumes tripled, with small business owners looking for information to help them get through the crisis. We've also undertaken regular surveys since the beginning of the pandemic to determine how small businesses are doing and how well government programs are working, and I want to share some of that with you today.
If we move to slide three, I want to start with how small businesses are doing right now.
As of early November, 66% of small businesses were fully open, 42% were fully staffed, and only 28% were at normal sales, all of which has actually decreased since October as more jurisdictions impose further restrictions. The bottom line is that this pandemic remains a significant challenge for many small businesses.
As you can see on slide four, small businesses are not homogeneous. About 30% have been in business for 10 years or less, and 96% have fewer than 50 employees. Just under one in two small businesses are owned by men, almost one in four are owned by women, and 28% have multiple owners, which might have a combination of genders.
Slide five looks at the share of ownership by gender, with 23% of firms being either entirely or majority owned by women and another 28% owned equally by women and men. This means that around 50% of businesses have women playing some type of role in the ownership.
Female business owners are also more highly represented in certain sectors, such as social services, enterprise and administration management, retail, professional services and personal services. In addition, as you can see on slide six, women-owned businesses also tend to be newer and smaller than their male counterparts, which might also explain some of the additional challenges they have faced.
As you can see on slide seven, those challenges are substantial. Only 63% of female-owned businesses are fully open, which is 10% less than male-owned businesses. Just 35% are fully staffed, which is 13% less than their male counterparts, and only 24% are back to normal sales, which is 8% less than men-owned businesses.
As you can see on slide eight, most small businesses are worried about the uncertainty around a second wave, and about two-thirds worry about the economic repercussions. About half are worried that consumer spending will be reduced even after COVID, and a similar number are worried about their business cash flow, the physical health impacts and their growing debt.
When we dissect the data further, you will see on slide nine that female-owned businesses are much more likely to be worried about consumer spending being reduced even after COVID, about their mounting debt, about their business cash flow, and about dealing with overwhelming stress than their male counterparts. Clearly, female entrepreneurs could use some financial and emotional support.
When it comes to financial support, as you can see on slide 10, female-owned businesses are more likely to need rent relief, and getting that relief significantly increases their odds of staying open. This is why the new Canada emergency rent subsidy needs to be implemented as soon as possible.
As you can see on slide 11, the Canada emergency wage subsidy tends to be more heavily used by more established firms. As female-owned businesses are more likely to be newer and smaller, we can assume they are probably not using the wage subsidy quite as much, and they are more likely to have used the Canada emergency response benefit to help themselves get through the tougher periods of the pandemic. It was also sometimes the only financial support many very small and newer business owners could get.
Quickly, in summary, before I get to some recommendations, female-owned businesses are more likely to be smaller and newer businesses, which also tend to be the businesses that are more likely to fall through the cracks of the various emergency relief programs, so it really should be no surprise that they also tend to be more worried about their businesses, and with good reason. The data tells us that they are less likely to be fully open, have normal or better revenues, be fully staffed or be able to pay their rent.
To help these entrepreneurs weather the storm, we need to make adjustments to the various emergency relief programs. First, we need to expand all emergency support programs to include microsized and newer firms, as this will likely help more female-owned businesses and also those that are owned by visible minorities.
For example, the Canada emergency business account loan requires a smaller company with less than $20,000 in payroll to submit documents showing they have more than $40,000 in non-deferrable expenses. The problem is that the application process is complex and some of the rules make it very difficult to comply. It needs to be simplified and made more flexible.
Second, as rent tends to be a more important expense to female-owned businesses, government needs to introduce the Canada emergency rent subsidy immediately, as December 1 is not that far away.
It would also be important for government to look at providing 50% of rent retroactively to those who qualified under the old rent program but did not get relief, as their landlord did not apply. Those businesses have likely accumulated a lot of debt and deserve to be provided with some assistance to help them through.
Third, even though women entrepreneurs are less likely to use the wage subsidy, it is still the most generous program being offered to small businesses. We want to make sure it is accessible to those who really need it. For example, many small business owners pay themselves in dividends, so they're not able to include their own income in the wage subsidy, nor can they use their dividend income to get CEBA. These programs should allow at least some dividend income to be included.
We would also suggest that the new lockdown support, which allows businesses to get up to 90% of their rent covered if they are forced to shut down due to a public health order, be expanded to the wage subsidy. Businesses want to hold on to their staff, and if they must close, they may have no choice but to let them go. Increasing the wage subsidy to 90% during these periods may help many more hang on to their staff until they can open.
Finally, I just want to mention something that is starting to emerge with seasonal businesses. They're now in their low season and may no longer have the revenue losses they did during the summer, but their needs have not changed. Without having made their usual higher revenues during the high season, it will be difficult for many of them to get through to next year. Finding some alternative ways for them to illustrate their circumstances in order to get a higher wage subsidy would be welcome.
There are many more ideas, but I will leave it at that for today. Thank you for your attention. I look forward to answering any questions you may have.
Sévrine Labelle
View Sévrine Labelle Profile
Sévrine Labelle
2020-11-17 12:09
Good morning, everyone.
Thank you for inviting me.
Allow me briefly to introduce Femmessor. We are a Quebec organization that has been devoted to the development of women's entrepreneurship in Quebec for the past 25 years. We offer financing and coaching particularly to women entrepreneurs from all regions of Quebec.
To maximize the potential of the Canadian economy, we need to promote diversified and inclusive economic growth. Unfortunately, female-owned businesses are still a small minority of Canadian SMEs: only 15.5% of SMEs are majority female-owned, compared to 66.4% that are majority male-owned. According to statistics, this gap is even wider in the manufacturing, technology and all innovative sectors, where women are largely absent.
Female entrepreneurship has experienced remarkable growth in recent years. Entrepreneurship intentions among women in Quebec more than tripled between 2007 and 2017. And this rate is twice as high among immigrant women. However, the COVID-19 crisis has hit women entrepreneurs harder, which threatens to widen the gender gap.
That is one of the findings of a survey conducted by Femmessor in collaboration with the BMO Chair in Diversity and Governance at the University of Montréal and the Women Entrepreneurship Knowledge Hub. The findings in this report are worrisome and shed light on the need for additional steps to ensure that women entrepreneurs can participate fully in the economic recovery.
Highlights of the study include the fact that women entrepreneurs were hard hit by the COVID-19 pandemic. Two-thirds of the companies surveyed were operating at less than 50% capacity during the crisis in the spring, and one in five entrepreneurs did not think they could survive the crisis. In addition, women-owned businesses have distinctive characteristics. They are in the sectors most affected by the pandemic. We are thinking, obviously, of the retail industry, personal services, the arts, culture, housing and the restaurant industry.
In many instances, women-owned businesses are also small businesses. Consequently, the financial resources that they can use to address such a crisis are limited. They also experience financing issues, as my colleague said. According to our study, 42% of the women entrepreneurs surveyed indicated that they were actively seeking funding to ensure their survival or to adapt their service or product offerings in response to the pandemic.
After exhausting the government assistance available, their funding requirements averaged $54,000. However, only 20% of respondents said that they intended to take advantage of the measures put in place by the Government of Quebec and the Government of Canada. When asked why, many said they did not qualify for the programs. The high level of debt among women entrepreneurs is also a major concern according to the study. In the spring, the most-used government measures among women entrepreneurs were definitely the Canada emergency business account and the emergency wage subsidy. New measures have since been implemented.
The crisis has also affected the women themselves. They have more family responsibilities and are experiencing more stress, which has, in some instances, made it more difficult to achieve work-life balance and to manage their businesses. We also learned from the survey that women need training and coaching to help them go digital and to support them in innovation, business development and networking.
What needs to be done? First of all, we need to step up our efforts to ensure that women are fully engaged in the economic recovery and that they do not lose the hard-won gains of the past 10 years. A gendered crisis requires a gendered response. Consequently, the economic recovery plan must include specific actions to revitalize the sectors that employ the most women. Women entrepreneurs can play a leading role in creating a resilient economy, not only because of the role they play in providing essential services to our population, but also because of their role in creating strong and diverse local economies.
Lastly, women entrepreneurs can be a driving force in creating a sustainable and green economy. According to a major Canada-wide study, Canadian women are more committed to taking action on climate change than Canadian men.
We need to increase support to women entrepreneurs, build on expertise from entrepreneurial ecosystem partners, including Femmessor, and work together to ensure that no businesses lag behind in generating the expected level of prosperity.
The various special assistance measures for women entrepreneurs naturally include financing and customized ongoing coaching to address the many needs identified. For example, at Femmessor, we place an emphasis on financing plus coaching, which has yielded a survival rate of approximately 80% for our companies after five years. There are also advisory services, codevelopment, customized training, and an emphasis on a diversity of female role models. Femmessor does all of these things.
I would like to congratulate the Canadian government for its leadership in the development of women's entrepreneurship, and for its sensitivity to the problems faced by women entrepreneurs during the crisis. Femmessor is grateful to the government for its trust in us, and for awarding us the largest grant under the federal Women Entrepreneurship Strategy to an organization that specializes in women's entrepreneurship. This support was also increased during the COVID-19 pandemic to help hundreds of women entrepreneurs transform their business model and adapt their products and services in order to become financially viable again.
Quite simply, what we are requesting is that financing for the many programs established by the government of Canada for entrepreneurs should also be extended to organizations like Femmessor, to ensure that women have full access to these forms of financial assistance and can benefit from the coaching we can give them.
From the standpoint of the Canadian economy, if women and men participated equally in entrepreneurship, it would mean a potential injection of $150 billion in gross domestic product, or GDP—a 6% rise in the current forecast GDP over the next decade. That would be equivalent to adding a new financial services sector to the economy, making it a significant step forward.
To conclude, more than ever, diversity and inclusion should be seen as ways to leverage economic growth, innovation, sustainable development and social development. All the evidence shows that Canada's sustainable development and economic development will require greater participation by entrepreneurial women and underrepresented communities, together with a contribution to help them achieve their full potential.
View Patrick Weiler Profile
Lib. (BC)
Thank you, Mr. Chair, and thank you, Minister, for joining our committee today.
I'd like to turn back to the matter at hand today, which is, of course, the supplementary estimates (B).
Minister, this spring we debated and passed in the House several bills that contained vital measures to help Canadians get through the COVID-19 pandemic, and in particular, the estimates and the Public Health Events of National Concern Payments Act provided authority for a variety of COVID-19 spending, such as the CERB and the safe restart agreement, and others.
You mentioned in your opening remarks that these supplementary estimates (B) present information on the $58 billion in statutory expenditures. How much of this statutory funding is related to the COVID-19 response measures, and how are these items presented in these supplementary estimates?
View Jean-Yves Duclos Profile
Lib. (QC)
Thank you, Mr. Weiler. That's an interesting segue from the earlier question by member of Parliament Lloyd.
Ninety-six per cent of the statutory expenditures in the supplementary estimates (B) are focused on the COVID-19 crisis, expenditures such as the safe restart for children at school, to provide PPE—personal protective equipment—to front-line workers, strong investments in vaccines, in treatments, in testing equipment and resources for provinces and territories. Those are all part of that very significant 96% of the budgetary dollars in the supplementary estimates (B).
David Chartrand
View David Chartrand Profile
David Chartrand
2020-11-03 11:20
Thank you, Mr. Chairman, for allowing me to speak.
Natan—of course a very close friend of mine—it's great to see you again.
Marlene, it's been a while since I saw you. It's great to hear your opinion and views.
Natan, you'll see me now reading something, which I'm not typically used to doing. They're structuring me here.
Let me start off again by thanking you for inviting us to speak as the Métis National Council again on the COVID-19 that is gripping our country—we all know that—and, in particular, its impact on the Métis nation.
Since my last appearance, the Métis nation governments have worked hard to provide support for our citizens, family, workers and businesses as they try to cope with the hard impact of COVID-19. The Government of Canada heard our concerns, which I expressed to you in my last appearance, that some of the key support programs, such as the Canada emergency business account, were not reaching many of our people. However, after many calls and some push forward, it responded quickly and meaningfully and in partnership with us to adjust the program to allow our Métis nation governments and capital corporations to deliver a financial lifeline to our entrepreneurs, which we called a Métis nation CEBA.
It has also provided additional support to our governing members to ensure food security, income and other supports for many of our more vulnerable citizens, including our seniors, students, early learners and homeless. To give you an example, in the spring the Métis government in Manitoba delivered over 6,000 hampers to our seniors and vulnerable across the province. We're already now moving on our second phase.
There is no doubt that the government’s indigenous support programs, in addition to its broader COVID-19 economic response plan, have helped to stave off what truly could have been a devastating and disastrous impact on our communities.
At the same time, COVID had a significant impact on our people even before the onset of the second wave. Métis constitute the largest indigenous labour force in Canada, and the data coming out of Canada’s labour market survey shows we have lost jobs at a faster rate than other groups.
In case you have forgotten my last brief, there are an estimated 400,000 Métis in the Métis nation homeland in western Canada. We are the largest indigenous nation in this country. Many of our citizens are employed in the services and construction sectors. Their type of employment does not enable them to work from home.
We are also concerned for the future of many of our businesses. Yesterday, the Métis government announced $5.5 million, because we're in a red zone in Manitoba, to help any of our businesses that would potentially find themselves near bankruptcy or complete closure. We announced $5.5 million to be eligible to all Métis businesses in Manitoba. We know that we are a stopgap measure that cannot be relied upon for too long.
The COVID crisis has also exposed the particular vulnerability of our citizens and communities, owing to our long-standing exclusion from the federal health supports available to other indigenous peoples. While the First Nations and Inuit Health Branch of ISC worked with the first nations and Inuit to provide PPE and other forms of medical assistance, the Métis were left to fend for ourselves. As you heard from me last time, we ordered a lot of our stuff from China.
While we are all now focused on the need to contain this second wave, we hope that Canada tries to build resiliency with an equitable and sustainable economic recovery plan. We'll figure out in this plan the impact that COVID is having on our people.
We believe an equitable and sustainable economic recovery plan should incorporate the commitments made to us during the 2019 election campaign. Acting on these commitments will serve to stimulate economic activity and resolve long-standing inequities. These include commitments by Canada to close the infrastructure gap in Métis communities by 2030 through investments in critical health infrastructure such as the Métis nation health hubs; co-develop distinctions-based indigenous health legislation—with which we're in dialogue with Canada right now—to ensure indigenous control over the development and delivery of services; attain a 5% indigenous procurement target in federal spending and establish a major projects benefit framework to ensure Métis communities benefit from major projects.
I should add that passing federal legislation to implement UNDRIP will greatly assist in helping shape this major project framework. The MNC is engaging with the mining, oil and gas, and pipelines industries on UNDRIP, and we are all of like mind in working together to support legislation that can ensure our rights are respected and that certainty is provided for major projects to continue in this country. We will be meeting with many of the executives of the mining sector and the pipeline sector. We're making it very clear from our sector, the Métis nation, that we work hand in hand together and that UNDRIP is not a veto.
I should also add that the federal government’s budgets in 2018 and 2019 contained significant allocations for Métis nation-specific programs and services such as housing, early learning, child care and post-secondary education over a 10-year period. That was an essential, very wise investment because, as you know, all universities and most post-secondary institutions are shut down, so they're learning from home, and so are our kids. We've been able to provide supports to them at home.
Accelerating the release of the balance of this funding in a shorter time frame may also help in addressing the long-standing needs and provide economic stimulus in our communities. We hope the money would be released in a much broader context and we can get all of it into our banks so we can make sure we can put our long-term plans into action.
I hope this committee will lend its support to our important work ahead with the government.
Again, thank you for the invitation. Thank you for allowing us to be here and speak. I commend each and every one of you, from all parties, and I hope you're all safe. At the same time, I hope that all parties that are listening today take the time to reflect on where the Métis nation sits on your party's platform; and where you sit on ensuring the Métis government and Métis citizens—who, as I say, are the largest indigenous nation in this country—are well protected and part of your platform, your policy and your think plan.
To end, take care, and again, be safe, everybody. It was a pleasure speaking to you.
View Brian Masse Profile
NDP (ON)
View Brian Masse Profile
2020-07-10 15:48
Thank you, Madam Chair.
Have any of your companies applied or expect to apply for or receive any financial aid from any of the COVID-19 federal government programs?
I'll start with you first, Mr. La Flèche.
Eric La Flèche
View Eric La Flèche Profile
Eric La Flèche
2020-07-10 15:48
No, we did not apply and did not receive. Although some of our subsidiaries could have applied for them, we chose not to.
Michael Medline
View Michael Medline Profile
Michael Medline
2020-07-10 15:49
I do not believe we did. I'd have to check if there's a franchisee somewhere who was impacted who did, because we have franchised stores, as well—they're not our employees—but I don't think so.
Sarah Davis
View Sarah Davis Profile
Sarah Davis
2020-07-10 15:49
I have the same answer. As an enterprise, it's no. There might be some independent businesses that are affiliated with us that could have if they had the right circumstance.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you so much, Mr. Chair.
Thank you, Ms. Lang, for your excellent presentation. You covered a lot of territory very quickly, and thank you so much for your service to our nation.
We've mentioned a few times in different ways the impact of the COVID-19 programs on consumer and business insolvencies. Do you actually have numbers? Are you able to say that CERB actually stopped x number of insolvencies, and the wage subsidy actually...? Do you actually delve down, or do you just say that in general this is what we understand has happened?
Elisabeth Lang
View Elisabeth Lang Profile
Elisabeth Lang
2020-07-07 17:28
Based on our statistics that we report monthly on our website, we know that the numbers are down by about 50% this May versus last May. That would be one number you could look at. However, what you don't know is what they would have been, of course.
View Julie Dzerowicz Profile
Lib. (ON)
We're not able to to say that this program had more of an impact than another program. You're just able to give the overall bucket.
View Annie Koutrakis Profile
Lib. (QC)
View Annie Koutrakis Profile
2020-07-07 18:11
How are CERB and other COVID-19-related government support payments treated in insolvency proceedings?
Elisabeth Lang
View Elisabeth Lang Profile
Elisabeth Lang
2020-07-07 18:11
The CERB and the CESB for students both had specific wording added in their legislation that they would not be subject to the Bankruptcy and Insolvency Act. This means they will not be treated as income.
If you go bankrupt, there's a surplus income provision that looks at your income and at all of your expenses. If you cross a certain threshold, based on your family's size, you are required to pay additional amounts to your bankruptcy estate, which will be distributed to your creditors. You're also required to stay in bankruptcy for a longer period, for 12 months longer. CERB and CESB would not be part of that calculation in those cases.
I think I can say that consistently, across the board, with the other benefits, the legislation is silent on their treatment in insolvency.
View Pierre Poilievre Profile
CPC (ON)
Excellent. Thank you very much.
The final point I would make is that right now.... You know, 10 years ago, we had the Auditor General doing 28 audits per year. Now we have the Auditor General doing approximately 14 audits per year. Ten years ago, the budget for the Government of Canada was about $250 billion. Today, it's over $500 billion. In other words, spending has doubled and the number of audits has gone down by half, so mathematically that means that we're getting a quarter of the accountability we were 10 years ago.
The previous auditor general—Mr. Ferguson, I mean—never accused the then government of having shortchanged his budget, so this is really unprecedented. I'm hoping that the government will correct the shortfall that it has created, and you will have the finance committee as an ally in pushing the government to do that.
Let's move on to the COVID response audit. What is your sense of the areas that you would focus on? You've said that you can't audit all of the COVID programs—it's just too vast—but is there a specific area on which you would like to focus your office's attention?
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 12:19
We're almost at a point where I believe we could publish a list of topics that we're considering looking at. The way we've tackled the broad spectrum of what's going on in COVID is that we've looked at it in a short-term, a medium-term and a long-term aspect. In the short term, in addition to looking at overall preparedness, we are planning and have started to look at personal protective equipment, at Canada's food supply and.... I'm just trying to find the third one that I listed.
I'm sure, Mr. Hayes, you'll remember the third one. We were just talking about it this morning.
Andrew Hayes
View Andrew Hayes Profile
Andrew Hayes
2020-06-22 12:20
Yes, indeed. The spending and design of the CERB was the other main area that I think we were going to mention.
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 12:20
Thank you, Andrew. It came to mind just as you mentioned it.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you so much, Mr. Chair.
I want to add my sincere and warm congratulations to you, Ms. Hogan, on your appointment to be our new Auditor General. It's an important role. Thank you for your service to our nation.
I want to start by correcting something on the record. My colleague Mr. Julian indicated that the only time there's ever an increase in the Auditor General's budget is when there is a minority government. I think as you just stated, and as the interim Auditor General indicated the last time you met with us, in 2017 there was actually an increase of just over $7 million. In budget 2018 our government committed to investing more than $41 million in additional dollars. I know there's more to come, but I wanted to make sure it was on the record that dollars did flow, and in a majority government, in our last Parliament.
My first question for you is with regard to your point 11. You mentioned that our committee's motion calls on the Auditor General to “audit all federal programs associated with Canada's COVID-19 response”. Is that the intention? While there is a motion, would it be typical that the Auditor General would audit 100% of the programs or is it the intention that you will do 50%, 70%, 75%?
If you could clarify that, it would be appreciated.
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 12:53
I did raise it, I guess, in order to provide a little bit of clarity to that. To go back to the motion, it did say all programs within COVID and all the audits that we were intending on doing. As an independent audit office, it's very important to be able to have the choice to audit what you want, when you want and to the extent that you want.
I simply wanted to highlight that auditing all of the COVID programs would be astronomical. There are just so many. We would likely be doing just that for many years to come, which we don't believe is the best thing for Parliament and the best for Canadians.
There are many important programs out there that we need to look at. There's military spending. We would love to go back and look at cybersecurity, something that we have delayed. We think the reliance on technology across the entire country has made it very clear that this is an important audit to look at. We'd love to do a follow-up on connectivity in the north. There are so many—
View Julie Dzerowicz Profile
Lib. (ON)
Ms. Hogan, I'm sorry to interrupt. You're just saying that you're not intending on all programs, but it would be a subsection.
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 12:54
We're going to look at risk and at where we'll have the best impact and value, so yes, that is our intention. We just wanted to highlight that we can't look at what the motion said, which was all programs.
View Julie Dzerowicz Profile
Lib. (ON)
Perfect. At this point, you don't have any idea of whether it's 25% or 50%, but you'll just kind of take it as it comes along.
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 12:55
Absolutely. I think we need to be able to have the flexibility to plan right now in the short term. We do have a medium- and long-term plan. It's a little bit in flux, because the pandemic might evolve as we move forward, so I don't have a number or a target. Our intention is to look at what we think will add the most value and is the most important.
View Julie Dzerowicz Profile
Lib. (ON)
Next, you indicated that the work is progressing and is under way.
How is the audit of the spending that's been undertaken and the money that's been borrowed due to COVID-19 different from the audits regularly conducted by your office?
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 12:55
When you say “regularly”, do you mean with respect to performance audits? I guess I don't really see it much differently other than it came from an order in the House. It might be somewhat different in that some programs that we focus on are really within one department. This has a much more horizontal impact across many departments which might have a role in either establishing a program or rolling it out. That just adds some complexity.
Some of the programs might be structured in a very different way. We might see lots of controls before money flows. Because of the response in an emergency time, that's usually where you try to get funds out quicker. Your controls then show up a little bit later on in the process—what we, as auditors, would call preventative controls or detective controls. It just changes the approach you might take or the way you might look at a program if there are preventative versus detective controls.
Other than that, it doesn't really change what we're looking at. We still have to gain a great understanding of the program. We'll look at the outcomes and how it might have been established.
View Annie Koutrakis Profile
Lib. (QC)
View Annie Koutrakis Profile
2020-06-22 13:26
Thank you, Mr. Chair.
I would also like to offer you my congratulations, Ms. Hogan, as the new Auditor General. Your role is essential to our democracy, and I am certain I speak for all when I say you will have our full support and collaboration, and we are eager to work with you.
We know that generally Canadians are unlikely to submit fraudulent claims for government subsidies and support programs. That being said, we must also be prepared for the reality that some people will try to take advantage of federal COVID-19 support programs through fraud. Will the Office of the Auditor General play a role in evaluating fraudulent CERB claims? How can the office evaluate the federal government's COVID-19 response plan and similar programs in the future? What can you put in place to make sure these programs are audited as they should be and I'm sure they will be.
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2020-06-22 13:27
When it comes to any program that is set up in response to these times, obviously decisions are made quickly. Maybe processes didn't follow the traditional processes that normally would have occurred when a new program is rolled out. Unfortunately, there are individuals who will take advantage of that, as you mentioned, and fraudulent claims could be made.
As an auditor, when you know there is an increased likelihood or an inherent likelihood that there would be fraud in a program or something you are auditing, you will design your audit to look for that.
In the case of CERB, we'll be able to focus on the design and controls in a first short-term quick audit so we can provide some best practices for future programs. To be able to look at whether or not there was fraud that we have intentions of targeting, that will likely be a little later on. You need to allow the system to self-identify those problems and be able to try to implement corrective measures to recover monies, if needed. While you might not see it in the short term, we intend to look at it.
Any audit is always approached by making that assessment about inherent risk that might alter or amend the kinds of procedures we plan.
Catrina Tapley
View Catrina Tapley Profile
Catrina Tapley
2020-06-17 13:20
We're happy to get back again on this, but that is how we treat government response benefits.
Marian Campbell Jarvis, did you want to add anything to that?
Marian Campbell Jarvis
View Marian Campbell Jarvis Profile
Marian Campbell Jarvis
2020-06-17 13:20
Yes. I think it would be helpful to know if there were particular benefits that Ms. Kwan was concerned about. The CERB has obviously been the focal point, and a few other benefits that Minister Qualtrough has—
Catrina Tapley
View Catrina Tapley Profile
Catrina Tapley
2020-06-17 13:20
Perhaps I can.
If there are particular benefits that the honourable member is worried about, we're happy to track down those particular benefits. However, the benefits that we have looked at that are being provided under the current situation by the government would not affect our immigration programs.
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