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Nancy Bélanger
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Nancy Bélanger
2021-05-14 14:58
I don't always have the order of them perfectly in my mind, but yes.
The problem right now with the registry is that corporations do not have to list employees who lobby less than 20%. In other words, in the registry, an organization has to list everybody who lobbies, but a corporation does not have to list those who lobby less than 20%. What that means, the impact of that, is that those individuals who are not in the registry are not subject to the code of conduct of lobbyists, and that's a problem.
It's not difficult. It's just this: List all of the names of those who lobby on behalf of the corporation and organization. The organizations have to do that. I don't know why corporations don't. That's not a very difficult change to make.
James Cohen
View James Cohen Profile
James Cohen
2021-05-06 15:58
Mr. Chairman and members of the committee, thank you for inviting me back to speak to you today. My name is James Cohen, and I am the executive director of Transparency International Canada. TI Canada is a registered charity and is the Canadian chapter of Transparency International, the world's leading anti-corruption movement.
The release of the Panama papers in 2016 was an explosive look into how the world's secrecy jurisdictions and an army of enablers hide illicit funds from crimes like tax evasion, corruption and fraud. One revelation that came out of the trove of leaked documents is that Canada was being happily marketed as a secrecy jurisdiction by Mossack Fonseca, the firm at the heart of the Panama Papers.
The Toronto Star and CBC journalists found that Mossack Fonseca was marketing Canada to clients as a desirable place to store dirty cash, based on our generally positive reputation but also, importantly, on our weak disclosure laws and enforcement. The correspondences the media published showing this advice were from 2012. TI Canada is currently re-examining this phenomenon of overseas incorporation agencies marketing Canada's opacity, and we are finding that nothing has changed. The term that came out of the Panama papers for money laundering and tax dodging in Canada, “snow washing”, is alive and well.
However, as of April 19, Canada is in a better position. TI Canada and our civil society partners enthusiastically applaud the government's proposal to establish a publicly accessible registry of beneficial ownership in the 2021 budget. Canada has been slammed by international organizations, civil society and peers for years, and now we have taken a large step out of that shadow.
Of course, the federal government cannot establish corporate beneficial ownership transparency on its own and expect the problem to be resolved. The provinces and territories must come on board with this initiative. Thankfully there is already momentum, as we see Quebec on the cusp of making corporate beneficial ownership information public via Bill 78, and the British Columbia Land Ownership Transparency Registry went online last week. We hope this will be followed by a public corporate beneficial ownership registry too.
The world is shrinking as a place for tax dodgers, kleptocrats and fraudsters to hide. In 2016 the United Kingdom was the first country to have a public beneficial ownership registry. The U.K.'s overseas territories and Crown dependencies, which include some of the best-known secrecy jurisdictions, such as the Isle of Man, have also agreed to establish publicly accessible registries of beneficial ownership. In a joint statement, the crown dependencies cited their need to co-operate by 2023 with European Union anti-money laundering directive 5, which requires all EU members to establish a public beneficial ownership registry.
From this trend we see that after years of being regarded as a laggard, Canada has the chance to move up to the head of the class on beneficial ownership transparency. While I would never say that any tool is a silver bullet for solving tax evasion and money laundering, a publicly accessible registry will be a powerful tool. It needs to be set up correctly, though. We can learn a lot from our peers in the U.K. and the EU and make sure that our registry has verified data and harsh consequences for those trying to falsify information. Canada's registrar should also have a staff that can conduct proactive investigations and a tip line for people to provide information on suspected tax evaders so proper investigations can be conducted.
This will be a big year for international forums to address beneficial ownership transparency, corruption, money laundering and tax evasion. There will be the G7 hosted by the U.K., the UN General Assembly special session on corruption, the open government partnership summit in South Korea and eventually the Summit of Democracies hosted by U.S. President Biden. This year the Financial Action Task Force, the global standard-setting body on anti-money laundering, will also review recommendations on beneficial ownership transparency, possibly making public registries a new standard. Canada now has a foot to stand on in these forums for calling for greater transparency from others to continue to close the space for tax evaders, kleptocrats and crooks to hide in.
Thank you, and I am happy to take any questions from the committee.
View Wayne Easter Profile
Lib. (PE)
Thank you very much, Mr. Cohen.
The public registry was one of the key recommendations from this committee in our study on money laundering, which was, I think, one of the best studies we've ever done, so we're glad to see that out there too.
I forgot to mention, Ms. Daviau, that yes, we would like you to please send that information in those reports that you mentioned to the clerk. It will be helpful to the committee.
View Sean Fraser Profile
Lib. (NS)
View Sean Fraser Profile
2021-05-06 16:12
Thank you very much, Mr. Chair.
Before I get to my questions, I want to begin by thanking Ms. Watson for being with us today. Her story is a powerful one. I believe she wanted to remind us that this is not a victimless crime.
Although there are certain individuals who are impacted very directly, I would argue that the classes of victims are almost limitless [Technical difficulty—Editor]. Anybody who doesn't have a family doctor, can't afford to pay for school or suffers from a lack of access to services is a victim of those who choose to evade paying taxes that they properly owe, and the quality of life that we all enjoy is diminished as a result.
My first question is for Mr. Cohen.
You spoke with some enthusiasm about the announcement to establish a registry for beneficial ownership. This is useful in this audience of people who study the budget, but I'm curious as to whether you can put into plain language, for Canadians who may be watching, the importance of having a publicly accessible registry so folks know who's behind some of these shell corporations or organizations that might be used to hide the beneficial owner who might be benefiting from those who evade taxes.
James Cohen
View James Cohen Profile
James Cohen
2021-05-06 16:13
As you say, it's a publicly accessible beneficial ownership registry to identify the true individuals. For anybody not familiar with beneficial ownership registry and shell companies, company ABC might be owned by company 123, which is owned by company Ontario 456, which was opened by...Bob. Who's Bob, at the end of the day, and why the level of secrecy?
Bob could be an entirely legitimate business person, but there is no precedent for anonymity behind all those layers. Bob could also be somebody who is evading taxes, denying Canadians revenue for various services that you discussed, such as health services or the environment. Bob could be a kleptocrat from overseas, stealing money from some of the most vulnerable people around the world and hiding it here in Canada. That individual could also be a criminal perpetuating the fentanyl crisis in Canada and facilitating gang activity. He could be a sanction-buster trying to move money around to allow weapons to go into countries like Syria. There's a whole host of people.
As Ms. Watson alluded to, this is not victimless. When we talk about these grand numbers that are being moved around through the shell companies, we should know that there's a precedent crime underneath them. Whether it's undermining Canadian society through sapping resources that should fund our public services, allowing criminals to continue to operate within Canada for crimes in Canada or overseas, or ruining our good name abroad while we give foreign aid money but have stolen money from those very same countries wind up back in mansions in Montreal, Toronto or Vancouver, this all has an impact, and it all should matter to everyday Canadians.
View Tamara Jansen Profile
CPC (BC)
Thank you.
Mr. Cohen, how could transparency assist in the fight against tax avoidance and money laundering in our country?
I understand there are legal loopholes that allow for some entities to accept large overseas transfers without reporting them to FINTRAC. There are lawyers who talk about lawyer-client privilege. Some say they are the worst offenders. Would the beneficial ownership registry tackle that problem in any way?
James Cohen
View James Cohen Profile
James Cohen
2021-05-06 16:55
Yes, a publicly accessible registry would do a lot to fight tax evasion and money laundering in a number of ways.
Currently, only financial institutions are required to do beneficial ownership due diligence by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Thankfully, we are seeing the amendments come into force in June, when all designated non-financial businesses and professions will need to do the same due diligence. That will include accounting agencies, money service businesses and real estate agents. Legal professionals do have to do that due diligence. Due to the Supreme Court ruling, they do not need to file suspicious transaction reports.
It does put a lot of pressure on all the professions to conduct the due diligence and now have the data. They can't say, “Well, I've tried with a client; I don't know.”
Once we have the registry in place it's very important that this data be verified through various methods so that all the various bodies that need to report, and even people looking to invest, like Ms. Watson, have the ability to do their own due diligence as well.
In a lot of ways, this will deter those bad actors from coming in the first place. Hopefully those who still want to game the system will be caught.
View Peter Julian Profile
NDP (BC)
Thank you very much, Mr. Chair.
I beg to correct you. The beneficial ownership registry was supported by the other two parties. The NDP pushed for a publicly accessible beneficial ownership registry, and as we can see from the report on snow washing, it was declined by the other parties, so I'm very glad to see that the idea of a publicly accessible beneficial ownership registry has now come back.
I want to come back to Ms. Iacovelli.
There are two directors for Parrhesia. Nigel Glazier Scott and Paul Joseph Valentine Dougherty were directors of Parrhesia, which was incorporated by KPMG and, as I mentioned, was summarily dissolved 43 days ago. They are the same directors for the “sword” companies.
Could you tell us if there's a connection between these two individuals, Nigel Glazier Scott and Paul Joseph Valentine Dougherty, and KPMG?
Céline Bak
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Céline Bak
2021-04-29 11:05
I would like to begin by stating that my home is on the unceded territory of the Algonquin Anishinaabe Nation, and that this land has contributed to my privilege.
I want to thank those who are working to protect and care for us during this pandemic.
Distinguished members of the Standing Committee on Industry, Science and Technology, thank you for this opportunity to participate in the committee's work.
As people who believe in the importance of government and public policy, we are compelled to think about how we can build back better after this pandemic.
My name is Céline Bak, and I am president of Analytica Advisors. I work as a global management consultant on ESG projects for large and small companies, and as an expert in sustainable finance policy.
Achieving a 45% reduction in Canada's greenhouse gas, GHG, emissions by 2030 is an important part of building back better. We must also ensure that we take care of the young and the old, and enable everyone to contribute fully to our society.
In regard to innovation, science and technology, the Government of Canada's recent budget signalled its intent to build an equitable society that works within the planet's boundaries, that is to say, an intent to build back better. This committee is undertaking its work at a time when an important consensus is forming and policies are coming together on how to build back better.
I will speak of three threads: one in Canada, one in the European Union and one in the U.S.
The first thread, from Canada, is that clean technology was one of nine economic sectors analyzed as part of innovation, science and technology's Industry Strategy Council . The council's report, “Restart, recover and reimagine prosperity for all Canadians”, was published in December 2020.
One of the council's recommendations called for an industrial strategy that included deployment of made-in-Canada clean technology within each of these four pillars: first, become a digital and data-driven economy; second, be the ESG world leader in resources, clean energy and clean technology; third, build an innovative and high-value manufacturing sector where we can lead globally; and fourth, leverage Canada's agri-food advantage to feed the planet.
These are important conclusions, which I recommend for the committee's consideration.
The second thread, from the European Union, is its industrial strategy, which overlaps with the council's recommendations and signals a strong consensus on the opportunity for zero-carbon and digital industries. In fact, half of Europe's 673-billion euro recovery and resilience fund, to be invested before 2024, is directed at stimulating private sector investment. If adjusted to Canada's GDP, this stimulus would be equal to $13 billion in annual public stimulus over the period 2021 to 2023, about $3 billion a year more than what was recommended in the building back better Canada plan published last summer.
I recommend that the committee consider that to be awarded EU recovery and resilience funds, private sector proponents must propose projects that meet the following criteria: first, ensure a three- or four-to-one leverage of private sector investment to public sector stimulus; second, advance the EU's goal of a 55% reduction in GHG emissions by 2030; and third, for projects led by large firms, engage as partners, at least four SMEs, to ensure that companies that are scaling up have access to large and growing markets and can participate in high-growth digital and zero-carbon industries.
In Canada, we have many firms that are ready to deliver fully commercial, sustainable products. We invested in them many years ago through globally leading technology organizations, such as GreenCentre Canada, Emissions Reduction Alberta and Sustainable Development Technology Canada.
For example, since 2009, ERA has committed $646 million to 204 projects worth over $4.5 billion to support the development and adoption of technologies to reduce emissions.
We can expect the same from our neighbours to the south, which is the third thread in the consensus that I wanted to speak to today.
In the U.S., I suggest that the committee keep a clean eye on the clean future act, the act which directs each federal agency to develop a plan, using existing authorities, to achieve the U.S.'s national climate goals in combination with all other agencies. It creates a process for public review, as well as review by the EPA, before each federal agency submits its plan to Congress and begins implementation. It further requires each agency to review its plan at least every two years and to submit an annual report to Congress.
If Canada took the same approach, the Standing Committee on Industry, Science and Technology would be asking the Minister to present the department's plan to reduce emissions by 45% by 2030 in his areas of jurisdiction. In addition to the Net Zero Accelerator fund announcements, the Minister's plan would include a report on emissions from all industries under his jurisdiction, including the automotive, aerospace, rail, pharmaceutical, defence and telecommunications sectors.
Thank you for your attention.
Patrick Sullivan
View Patrick Sullivan Profile
Patrick Sullivan
2021-04-15 17:09
Thank you very much, Mr. Chair, and thank you very much to the committee.
Good evening. I apologize in advance; I have a cold. It's just a cold. I've been COVID tested a number of times. I apologize if I cough during my presentation.
I've decided to make my presentation rather short tonight, so I don't believe I will take anywhere close to five minutes. I just want to make a very firm point.
My name is Patrick Sullivan. I'm the president and CEO of the Halifax Chamber of Commerce, which is a best-practice business advocacy organization that continuously strives to make Halifax an even more attractive city in which to live, work and play. Together with approximately 1,700 member businesses that represent over 65,000 employees, the chamber acts as a single powerful voice to promote local business interests.
I want to thank the federal government for its prompt and meaningful support for our business communities throughout the pandemic. Programs like the Canadian emergency business account, the Canadian emergency wage subsidy—which we utilized to retain our full-time staff—and the Canadian emergency rent subsidy were all crucial to the survival of many businesses, both large and small.
It's apparent, though, that while vaccines are rolling out throughout the country, many of our hardest-hit sectors, like tourism and hospitality, will once again feel the impacts of COVID-19 throughout the balance of 2021.
Businesses need predictability. They need a view of what that business can look like or will look like in order to plan for the coming months. We ask that the Canadian emergency wage subsidy and the Canadian emergency rent subsidy be extended until December 2021 so that those highly affected sectors can remain viable and return to full capacity in 2022. With over $1 billion lost in revenues in Nova Scotia during the 2020 tourism and hospitality high seasons, we must keep these sectors and businesses afloat, not only for the employment of many Canadians but also for our continued economic growth and recovery from COVID-19.
Thank you very much. I'd be happy to answer any questions you may have.
Trevin Stratton
View Trevin Stratton Profile
Trevin Stratton
2021-04-13 17:29
Thank you, Mr. Chair and members of the committee. It's a pleasure to be here today.
The Government of Canada and, indeed, all members of Parliament must be recognized for the work that they have done in providing support to businesses and Canadians during this unprecedented and very uncertain time.
The emergency supports that have been provided have spared many Canadian businesses from economic disaster and will help many Canadians through another challenging year. These pandemic-related fiscal supports have also come at an enormous price, and their cost will continue to mount for the coming months and beyond. Focusing government spending on the programs and policies that will encourage growth, create jobs and help businesses recover will provide the greatest return on investment for all Canadians. Doing so will allow us to produce the revenue needed to offset the extraordinary amount of public spending we have incurred and will help Canada achieve an economic recovery that is fiscally sound.
All of us understand the need for emergency spending to support people and businesses through the crisis, but we must avoid creating structural deficits that will mortgage the future of the next generation of Canadians. Despite the recent third wave of the pandemic, our strong GDP growth this year gives Canadians a taste of the economic rebound to come once vaccines are widely available.
Robust government stimulus spending to jump-start growth in the short term will likely be unnecessary, since pent-up demand is ready to be released once the pandemic subsides. That doesn’t mean the government needs to turn off the taps or start cutting critical programs, but this is not a typical recession that is a result of problems with economic fundamentals; therefore, it will not require traditional stimulus injections to help spur growth.
Instead, our economic recovery plan, including next week’s federal budget, should focus on addressing Canada’s competitiveness, such as our issues with productivity, business investment, and interprovincial trade and regulatory barriers. Addressing these issues will be the key to transforming our high growth rates from this year’s initial rebound into longer-term prosperity, job creation and an inclusive economic recovery.
At the same time, we cannot lose sight of the fact that more than one year into the pandemic, businesses, especially small businesses and those in the hardest-hit sectors, continue to struggle. These sectors will require continued support to ensure they can help propel job creation going forward.
I am joined today by my colleague, Alla Drigola, director of parliamentary affairs and SME policy, who will speak to the types of targeted support that will help businesses that need it most.
Alla Drigola
View Alla Drigola Profile
Alla Drigola
2021-04-13 17:32
Thank you, Trevin.
Good afternoon.
If the Canadian Chamber can leave committee members with just one message today to help businesses that are still struggling, it’s this: COVID-19 business support programs must remain in place for as long as businesses, particularly those in the hardest-hit sectors, are not allowed to operate without restrictions.
The wage subsidy, the rent subsidy, the liquidity programs, BCAP and HASCAP, and the partially forgivable small business loan, CEBA, are all excellent programs that are necessary for the survival of business and that are working well for the most part.
The government’s initial focus was rightfully on creating business support programs that would be as widely accessible as possible; however, it is time to start taking a more focused approach to COVID-19 support programs and spending, and that requires a plan.
For all of the subsidy and spending that Canada has seen and will continue to see, the only path to real, sustainable growth is job creation and business investment. In the upcoming budget, which will be released just six days from now, the Canadian Chamber expects to see a clear plan from the government. This plan will need to be twofold.
On the one hand, we need to see continued support for the hardest-hit sectors. Sectors that depend on face-to-face interactions such as tourism, travel, hospitality and events are experiencing immense difficulties and are widely expected to be among the last to recover. They will need targeted policies to assist their longer recovery period.
CEWS and CERS need to continue to be available beyond their current June expiry date, with a few improvements, such as increasing the CERS multi-entity cap to ensure that struggling medium-sized businesses are treated fairly.
Relying on the growth of only a few sectors will not get us to recovery. We need a plan that lifts everyone up and that grows all businesses, large and small, from coast to coast to coast.
Thank you for the opportunity to meet with you this afternoon. We look forward to our discussion.
Yelena Larkin
View Yelena Larkin Profile
Yelena Larkin
2021-04-13 11:07
Thank you so much.
Good morning, committee members, fellow witnesses and everyone else. I appreciate the opportunity to present my views at this committee.
All of the statements I am about to make are based on the draft of a research paper that my co-author Ray Bawania and I completed in 2019. In this paper, we asked whether the nature of the Canadian economic environment has changed over the past few decades. Our research question was motivated by the trends revealed in the U.S. markets, as well as academic articles that argue that product markets in the U.S. have become more concentrated over the past two decades.
In the project that underlies this statement, my co-author and I examined the business environment in Canada from the standpoint of financial markets. By analyzing the data that is typically used in corporate finance research, my work provides some descriptive statistical analysis of Canadian financial markets that potentially can serve as a starting point for future and more detailed research.
In the centre of our analysis are Canadian publicly traded firms. We first focus on the number of firms traded on the Toronto Stock Exchange, the TSX. Since publicly traded firms are typically the key players in the economy and tend to be much larger compared with private firms, the falling number of public firms could be the first sign of a structural change.
This is what we found. The number of non-financial firms—that is, firms that are not set up as an investment vehicle, such as investments funds, mutual funds and so on—have indeed dropped, by around 30%, since its peak around 2006 to 2008. To ensure that the trend could not be due to industry composition, we also split the overall number of firms into major sectors, and found that the decline in the number of firms is not limited to a specific sector but rather has affected firms across the entire spectrum of Canadian industries.
Next we turned to examining the size of public firms, measured as the market capitalization in constant Canadian dollars of 2002. Market cap measures what a company is worth in the open market and, therefore, serves as the most updated indicator of its perceived value. In addition, it reflects the market's perception of the firm's future prospects and incorporates both tangible and intangible components.
We found that the mean firm size has been persistently rising over the last 35 years. However, the growth has not been equal. Large firms have essentially grown at a much steeper rate over the past 10 or 15 years. For example, the inflation-adjusted market cap of firms in the top quartile of size distribution has swelled from a quarter-billion dollars in 2008 to almost $1 billion in 2016.
We also explored the combined effects of firm number and firm size by constructing a measure of concentration, the Herfindahl-Hirschman index, which is defined as the sum of squared market shares of all the firms within the same industry. We found that concentration has increased in most industries and this increase has been economically significant. Further, consistent with the increase in concentration, we found that the largest firms in each industry have become more dominant. The share of sales by market leaders compared to the total industry sales has also increased substantially over the same period.
In the second part of the paper, we examined possible implications of the systematic increase in concentration along with the decline in the number of publicly traded firms. It is possible that the increase in dominance of large firms could reflect barriers to entry. In general, barriers can be driven by a number of various factors, which include economies of scale and large capital requirements, regulatory changes that potentially discourage new firms from entering the market, and the increasing role of technology behind all this.
To examine the barriers-to-entry explanation, we performed several tests. First, we looked at the link between concentration and profitability. If markets are becoming more concentrated due to greater barriers to entry, we should find evidence that profit margins are increasing in those industries. Consistent with this argument, our analysis showed a positive and significant link between accounting measures and concentration.
It looks like I am running out of time.
In this case, let me mention that, going forward, I would like to set this result into a large frame and consider the relevance of Canadian public firms becoming more valuable and obtaining better investment opportunities. More research is needed to understand the reasons behind the secular decline in the number of firms, which is accompanied by an increase in size and vibrant M and A activity.
I hope these findings can provide an opportunity for policy-makers to further examine the trends of the increased concentration.
Karen Hogan
View Karen Hogan Profile
Karen Hogan
2021-04-13 12:09
Madam Chair, I am pleased to be here to discuss our audit reports, which were tabled in the House of Commons on March 25. I am accompanied by Carol McCalla, Philippe Le Goff, Chantal Richard, Jo Ann Schwartz and Nicholas Swales, the principals who were responsible for the audits.
The reports presented were the first of many audits that my office will conduct on the government's response to the COVID-19 pandemic. I also provided Parliament with our report on the Investing in Canada plan.
There is no doubt that the COVID-19 pandemic was an all-hands-on-deck emergency the world over. Governments had to mobilize quickly to respond to the public, health, social and economic effects of this pandemic. Canada was no exception.
While we found that the government was not as ready as it could have been for a pandemic of this magnitude, the public service mobilized, prioritized the needs of Canadians, and quickly delivered support and services. We did not observe the same service mindset and interdepartmental coordination in our audit of the investing in Canada plan, which I will turn to first.
The investing in Canada plan is important because the government is investing $188 billion to generate long-term economic growth, improve communities' resiliency, support the transition to a green economy, and improve social inclusion and socio-economic outcomes for all Canadians.
Infrastructure Canada is unable to present a full picture of results achieved and progress made under the investing in Canada plan. We found that the department's reporting excluded almost half of the government's investment because it did not capture more than $92 billion of funding that was committed before the plan's creation in 2016.
In addition, Infrastructure Canada's reporting captured only some programs each year, making it impossible to compare results year over year. The clarity of reporting was also impacted by inconsistent information received from federal partners in the plan. The absence of clear and complete reporting on the Investing in Canada plan makes it difficult for parliamentarians and Canadians to know whether progress is being made against the intended objectives.
The issues affecting the Investing in Canada plan are not new. We have seen similar problems in many past audits in areas that require cross-departmental or cross-jurisdictional collaboration, such as indigenous issues and climate change. This audit is yet another example of the need for the government to act on known issues—in this case, the need for broad collaboration and clear reporting on results for this large initiative.
In contrast, we observed nimbleness during our audits of the government's COVID-19 response.
I am going to turn first to the Canada emergency response benefit.
With this benefit, the government wanted to quickly deliver financial support to eligible individuals.
We found that the Department of Finance Canada, Employment and Social Development Canada, and the Canada Revenue Agency rose to the challenge and quickly analyzed, designed and delivered the Canada emergency response benefit.
To simplify the process and get support to people quickly, Employment and Social Development Canada and the Canada Revenue Agency took the approach of relying on personal attestations and automated prepayment controls to validate applicants' eligibility. Once the benefit was launched, they introduced additional prepayment controls to limit potential abuse.
With the decision to rely on personal attestations, host payment verification becomes very important. Employment and Social Development Canada and the Canada Revenue Agency are working to start their post-payment verification efforts related to the Canada emergency response benefit later this year. Their work in this area will be the subject of a future audit.
I will turn now to the Canada emergency wage subsidy. We observed a similar focus on getting help out quickly, in this case to businesses. Once again, the Department of Finance Canada and the Canada Revenue Agency worked together within short time frames to support the development and implementation of the Canada emergency wage subsidy.
The design and rollout of the subsidy highlighted pre-existing weaknesses in the agency's systems, approaches and data. These weaknesses will need to be addressed to improve the robustness of Canada's tax system.
To prioritize issuing payments, the Canada Revenue Agency made decisions about the information it would ask for and the prepayment controls it would use.
For example, the agency decided that it would not ask for social insurance numbers, though this information could have helped prevent the doubling up of applications for financial support. This decision limited the agency's ability to perform prepayment validations, as did the absence of complete and up-to-date tax information that would have helped it efficiently assess applications.
I am going to now turn to our last audit, which focused on pandemic preparedness, surveillance and border control measures.
In this audit, we found that the Public Health Agency of Canada was not as well-prepared as it could have been to respond to the COVID-19 pandemic. Not all emergency and response plans were up to date or tested, and data-sharing agreements with the provinces and territories were not finalized.
The Public Health Agency relied on a risk assessment tool that was untested and not designed to consider pandemic risk. The agency continued to assess the risk as low, despite growing numbers of COVID-19 cases in Canada and worldwide. In addition, the Global Public Health Intelligence Network did not issue an alert about the virus that would become known as causing COVID-19.
I am discouraged that the Public Health Agency of Canada did not address long-standing issues, some of which had been raised repeatedly for more than two decades. These issues negatively affected the sharing of surveillance data between the agency and the provinces and territories during the pandemic. While the agency took steps to address some of these problems during the pandemic, it has much more work to do on its data-sharing agreements and its information technology infrastructure to better support national disease surveillance in the future.
We also found that the Public Health Agency of Canada and the Canada Border Services Agency implemented restrictions at the border as well as quarantine measures. They provided guidance and tools to inform travellers and essential workers coming into the country of public health requirements.
However, the Public Health Agency of Canada had not contemplated or planned for a quarantine on a nationwide scale, from the collection of travellers' information through to all enforcement activities, including following up on those identified to be at risk of non-compliance. As a result, the agency does not know if the majority of travellers properly quarantined.
These audits looked at programs that were rolled out in record time. Faced with a pandemic, the public service focused on the pressing outcome: helping Canadians.
In its first year, the pandemic has shown that when the public service must, the public service can. This crisis has highlighted the importance of dealing with known issues, whether it's agreeing on which organization has the lead; who will do what, and when; who will report what, and to whom; or replacing outdated systems or processes and addressing issues in data quality.
These are not problems that you want to have to deal with at the same time that you are focusing on helping people, because this is not an efficient way of working, nor is it a productive way to serve Canadians. Government organizations need to do collaboration better.
Madam Chair, this concludes my opening statement. We are now pleased to answer questions that you may have.
Thank you.
View Len Webber Profile
CPC (AB)
Thank you, Madam Chair.
Ms. Hogan, I need further clarification on some comments you made in your opening remarks, particularly with regard to the Canada emergency wage subsidy.
I know it was important for Finance Canada and the Canada Revenue Agency to get the help out quickly to these businesses throughout our country. It was vital, absolutely. However, you indicated some concerns, particularly with the subsidy applications and the way businesses were filling out these application forms to get their funds. You said, “To prioritize issuing payments, the Canada Revenue Agency chose to forego certain controls” that could have been used “to validate the reasonableness of subsidy applications.” Then you gave an example—that they decided not to ask for social insurance numbers—and you say that “this information could have helped prevent the doubling-up of applications for financial support.”
My question is this: Why did they choose to not ask for social insurance numbers? What did they use, then, to prevent the doubling up of applications for financial support?
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