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Results: 1 - 12 of 12
View Andrew Scheer Profile
CPC (SK)
This year, on March 31, Canada Mortgage and Housing Corporation, CMHC, announced a special dividend payment of $3.5 billion to the Government of Canada; that is, a transfer from CMHC directly to the Government of Canada. This means the premiums of those first-time homebuyers, who are low- and middle-income Canadians who can't afford to put more than 20% down on their mortgage, went to pay a $3.5-billion dividend to the government. Is that correct?
Romy Bowers
View Romy Bowers Profile
Romy Bowers
2021-05-11 11:56
It is correct that in March of this year we issued a special dividend. The circumstances for that dividend were quite unique. Typically, we issue dividends on a quarterly basis, as do many commercial entities, based on the revenues we earn from our commercial businesses. With the onset of COVID over a year and a half ago, we suspended our dividend because of the uncertainty of the economic conditions, so that we could preserve capital in the event of unforeseen circumstances. During this period, our revenues accumulated and our capital levels accumulated as well. We chose to issue a dividend as economic conditions became better with the alleviation of some of the COVID pressures, and that's the reason the dividend was a large amount.
View Andrew Scheer Profile
CPC (SK)
It says here on CMHC's website that that quarterly dividend is $250 million, so that's exactly a billion dollars a year if it's $250 million a quarter. That's off the backs of premium payers. That special dividend that goes into the government's coffers is directly on the backs of low- and middle-income Canadians and, as you just mentioned, first-time homebuyers. The federal government has scooped up the profits made on the backs of hard-working first-time homebuyers. Is that correct?
Romy Bowers
View Romy Bowers Profile
Romy Bowers
2021-05-11 11:58
It is correct that we pay about $250 million in dividends on a quarterly basis, and that's a result of the risk-based premiums that we charge for our mortgage insurance and securitization businesses. That's in line with the mandate that we have to support financial stability as part of the National Housing Act. We are also bound by the dividend framework that implicates all financial Crowns, and we make an effort to make sure that any excess capital or revenue that we earn is returned to our stakeholder, the Government of Canada.
View Matthew Green Profile
NDP (ON)
Thank you.
I deeply appreciate the interventions of my friend Maxime from the Bloc, which laid out all the information that was withheld and the secrecy in the way this analysis was made. I'll go back just to reiterate for the people who are tuning in.
You have stated in paragraph 7.8 that the Department of Finance performed a partial analysis of the initial design of the subsidy program, but then you said it later provided a sound and complete analysis to inform the adjustments to the subsidy. We heard Mr. Sabia talk about the rapid way in which they had to respond, yet you've laid out that you were unable to provide Parliament with details of these analyses because they were in secret, and cabinet documents must be kept in strict confidence.
The challenge that we have before us as a committee undertaking this audit is that we have to have, I think, reasonable access to information to know exactly what it is that is before us.
I'm going to frame just a little bit further that in paragraph 7.9 you stated through the Auditor General that there were prepayment controls that were implemented to ensure that payments were appropriate. You used an example that the agency did not have up-to-date earnings or tax data or sub-annual data or any kind of starting points throughout the year and that you did not have all the information you needed to validate the reasonableness of the applications before payments were issued.
I'm going to put this question through you, Madam Chair, to the Department of Finance, to Mr. Sabia, whom I missed in the last session of our audit on the CERB. I brought up some important questions in relation to the push-and-pull economics of what we were providing to people to stay home safely versus what the labour market demanded.
Did your department have discussions about mandating that any businesses receiving the wage subsidy would not be allowed to engage in stock buybacks, pay dividends or pay CEO wage bonuses?
I'm not asking you to reveal any kind of secret cabinet stuff. I just want to know if you had discussions about that in your analysis. You don't even have to give me the results. I just want to know, Mr. Sabia, whether you considered it.
Michael Sabia
View Michael Sabia Profile
Michael Sabia
2021-04-22 11:47
Madam Chair, I'm going to give Mr. Green a two-part answer. I'm going to make a couple of comments and then I'm going to ask my colleague, Andrew Marsland—
Michael Sabia
View Michael Sabia Profile
Michael Sabia
2021-04-22 11:48
I would say that a focus of this whole program has been maximizing the scope and reach of the program. Therefore, there was at the time, I think, very much a focus on keeping this as simple and broad as possible, because the objective was to help as many Canadians as possible, which I think the program is succeeding in doing, and to help as many Canadian businesses, particularly smaller businesses, and particularly in some heavily—
View Matthew Green Profile
NDP (ON)
Through you, Madam Chair, sir, those are talking points. I need to know whether you had discussions about stock buybacks, dividends and CEO bonuses. If so, did you make a recommendation to cabinet? You don't have to tell me what the recommendation was, but I need to give you an example. This program provided $120 million in public money to Imperial Oil and then let them pay out $324 million in dividends to their rich shareholders. I need to know, in terms of your reasonableness for the applications, whether you provided cabinet with recommendations on the dividends and the bonuses.
Michael Sabia
View Michael Sabia Profile
Michael Sabia
2021-04-22 11:49
Mr. Green, you know very well that this kind of work, those kinds of discussions and that advice to ministers and to an elected government.... The way our system works is that to keep that advice robust and open, those are cabinet confidences. I think you understand very well—
View Matthew Green Profile
NDP (ON)
Through you, Madam Chair, how do you use the terms “robust” and “open”? We're in the public accounts committee dealing with an audit and we don't have basic information on the analysis by the government on how this came to be.
I'll give you an example. We're talking about Main Street versus Bay Street here. I have a whole community of businesses on Locke Street in my community whose 2019 revenues were dramatically reduced, and due to all these infrastructure programs they can't adequately show their losses and they didn't qualify for anything. One in five businesses in my city are not renewing their business licence. That is the reality and the of the small businesses that are trying to weather this storm.
I need to know whether the Department of Finance had, in its analysis, any thought around the way in which the major corporations of this country absolutely, in my opinion, bilked taxpayers on this program.
View Matthew Green Profile
NDP (ON)
Once again, was a recommendation made that included an analysis in keeping with.... You don't have to tell me what the recommendation was, but did your department at least consider that corporations like Imperial Oil could take $120 million and pay out $300 million-plus dollars in dividends?
Michael Sabia
View Michael Sabia Profile
Michael Sabia
2021-04-22 11:50
Through you, Madam Chair, Mr. Green, again, you understand the rules under which our system works and the provision of advice. Therefore, to respect those rules and indeed the law with respect to confidences of the Queen's Privy Council, those are not details we can enter into. If you have an issue with that—which you seem to, and which is fair on your part—then I think asking us that question is obviously....
We always operate in a way that respects those rules and respects the law. If that law or those rules need to change, then that's an issue, I think, sir, for you to take up with the government of the day.
Results: 1 - 12 of 12

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