Bill C-9 (Historical)

An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy)

This enactment amends the Income Tax Act to revise the eligibility criteria, as well as the level of subsidization, under the Canada Emergency Wage Subsidy (CEWS) as part of the response to the coronavirus disease 2019. It also extends the CEWS to June 30, 2021. The enactment further amends the Income Tax Act to introduce the Canada Emergency Rent Subsidy (CERS) in order to support those hardest hit by the coronavirus disease 2019. This subsidy provides relief in respect of rent and interest on debt obligations incurred to acquire real property used by businesses, charities and not-for-profit organizations in the course of their businesses or other activities. The rent subsidy is effective as of September 27, 2020.

The House proceeded to the consideration of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy), as reported (without amendment) from the committee.

Speaker's Ruling

[The Deputy Speaker, Bruce Stanton]

There are three motions in amendment standing on the Notice Paper for the report stage of Bill C-9.

The Chair will not select Motions Nos. 2 and 3, since they require royal recommendation.

The remaining motion has been examined and the Chair is satisfied that it meets the guidelines expressed in the note to the Standing Order 76.1(5), regarding the selection of motions in amendment at report stage.

Motion 1 will be debated and voted upon.

I will now put Motion No. 1 to the House.

Motion in Amendment

[Gabriel Ste-Marie, Bloc, Joliette, QC]

moved:

That Bill C-9, in Clause 2, be amended

(a) by adding after line 34 on page 3 the following:

“(5.1) The definition eligible entity in subsection 125.7(1) of the Act is amended by striking out “(entité déterminée)” at the end of paragraph (f) and by adding the following after that paragraph:

It does not include a political party within the meaning of subsection 2(1) of the Canada Elections Act or of any Act of the legislature of a province relating to provincial, municipal or school board elections. (entité déterminée)”

(b) by replacing line 20 on page 14 with the following:

“(23) Subsections (1) to (10), except subsection (5.1), and subsections (14) to (17) are”

(c) by replacing line 35 on page 14 with the following:

“(24) Subsections (5.1), (11) to (13) and (18) to (22) are”

Mr. Speaker, I would like to remind the House that the Bloc Québécois supports Bill C-9 and is in favour of passing it quickly.

We had several opportunities this week to share our reasons for this. The bill extends the Canada emergency wage subsidy in order to give businesses more security, which is something that we have been calling for for a long time. We have also been calling for the creation of a program that provides businesses with real assistance with their fixed costs, and the Canada emergency rent subsidy meets that need.

However, there is a still a problem with this bill that dates back to the initial bill to create the wage subsidy that was introduced in the spring, and that is the fact that the political parties can apply for the program.

The wage subsidy is an emergency program designed to respond to an emergency. We are in the midst of a pandemic and some businesses were or still are being forced to scale back their operations or even close. In order to stabilize the economy, we are asking taxpayers, through their taxes and future debt load, to collectively support these businesses and help them survive the pandemic.

If we have learned one thing from the field of economics over the past century, it is that it is better to go into debt and pay more to support the economic fabric in times of crisis, since that is the lesser of the evils.

Why are millionaire political parties availing themselves of the wage subsidy when, even in 2020, they are still able to raise millions and millions of dollars through their funding mechanisms?

An article by Catherine Lévesque in The Canadian Press reports that the Liberal Party has received more than $1.25 million through the wage subsidy program. However, in 2020 alone, the Liberal Party has managed to raise nearly $9 million in political contributions. The year is not even over yet, and we know that November and December are generally important months for filling the coffers.

Was the program intended for political parties? In my opinion, no. Is this a serious ethical breach? In my opinion, yes. Why? Because if we look at the legislation that created the wage subsidy, political parties are not listed and even seem to be excluded.

Even so, the Liberal Party opted to apply, and the Canada Revenue Agency chose to say yes and give it the funding. That is unacceptable. It is deeply unethical.

I therefore call on the Liberal Party and all parties in the House to vote in favour of the amendment to close that loophole, clarify the scope of the bill and send a message that those actions were contrary to the spirit of the act. I am also asking the Liberal Party and all parties that received money from the wage subsidy to pay it all back. It is a matter of principle. It is not up to taxpayers in Quebec and Canada to fund political parties through the wage subsidy.

According to the act that created the wage subsidy, an “eligible entity” can be a corporation or trust. Is the Liberal Party a business whose activities are intended to enrich it? Maybe that is how it qualified for the wage subsidy.

Item (b) of the definition of “eligible entity” indicates “an individual”. Clearly, the Liberal Party is not a person or an individual.

Is it then “a registered charity”? I say no. However, if we expand this definition to include crony judges or Liberal cronies winning contracts, like the directors of WE Charity or the former member for Pierrefonds—Dollard, who was awarded an untendered contract to produce medical ventilators at twice the price when he has never made them before, then we could say that the Liberal Party is charitable with its friends. However, serving the public does not seem to be its objective.

The definition then indicates at item (d), “a person that is exempt from tax under”. Here it is referring to unions such as farmers' unions, which the Liberal Party is not, obviously.

Item (e) reads as follows: “a partnership, all of the members of which are described in this paragraph”. This is known as a limited partnership.

Is the Liberal Party a limited partnership? Their experience is in sponsorship, not partnership. In any case, once again, it does not apply. That is what the amendment specifies. It clarifies that political parties, within the meaning of the Canada Elections Act or similar provincial legislation, are not eligible entities. That closes the loophole.

To access the wage subsidy, there must be a 30% drop in the average revenue for January, February and March. A political party can easily meet that requirement by delaying fundraising by one month in order to qualify. Just because we are in a pandemic does not mean that the cupboard is bare. There is approximately $9 million in the Liberal Party's coffers. They have the money. It is a millionaire party that is continuing to raise funds.

The other criterion for the wage subsidy is to compare a given month in 2020 with the same month in 2019. The year 2019 was an election year. All political scientists know very well that during an election year, every party tries to raise more money. Therefore, it was only natural that revenues in 2020 would be lower than in 2019, and not because of the pandemic.

Why should taxpayers, people who are struggling right now, working-class people who pay their taxes, who are in debt and who are having a hard time making ends meet, be asked to make an extra effort to support millionaire parties? This should not even be a question. This is another dirty trick to warp the spirit of the bill in order to make a buck at the expense of taxpayers. That is not why we were elected to the House. We must vote in favour of this amendment.

I believe that the state should provide public financing to political parties, as it did before. When Jean Chrétien was looking for a way out of the sponsorship scandal, he decided that each political party would receive a small amount of money for each vote received. This was intended to cut down on shenanigans and shell games. It was an attempt to put less emphasis on money and to avoid putting parties that defend the interests of the wealthy at an advantage. The point was to improve democracy.

This worthy measure was unfortunately eliminated, and the Bloc Québécois has since been calling for it to be reinstated. That is how it is done in Quebec and in the majority of western democracies. It is obviously less common among Anglo-Saxons, and that culture surely had an influence on this Parliament's decision. The idea of public financing is to level the playing field and support each party based on the number of votes it received.

Letting political parties receive the wage subsidy does not level the playing field. It actually increases disparities because the parties that get the most money will hire the most people and will therefore receive more wage subsidies. This creates an imbalance that is unacceptable.

The Bloc Québécois is not against the principle of public financing, but we are absolutely against the notion of warping the spirit of the wage subsidy bill by claiming that they gave it a shot and got it. This is unacceptable and needs to be fixed. That is the purpose of this amendment. I urge all political parties in the House that accessed the wage subsidy to pledge to immediately pay back the money they received. It is a matter of honour.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Mr. Speaker, I agree with the member that there is a principle here. The principle is that there are thousands of businesses across our country that have issues related to the pandemic. The government developed a wage subsidy program and, through that program, hundreds of thousands of jobs have been saved in all regions of our country.

The Bloc wants to try to create a scandal of sorts. In the election, members of the Bloc party beefed up their expenses in order to get larger rebates. That is something that I would suggest is scandalous. With hindsight, I wonder if the member would agree that it was wrong of the Bloc party to do that.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I am outraged by what the Parliamentary Secretary to the Leader of the Government in the House of Commons said.

Quite frankly, we are not the ones who tried to create a scandal with the wage subsidy. It is the Liberal Party that is not playing by the rules and not acting in an ethical manner above all suspicion. It put its hands in the cookie jar, betraying the spirit of the law. Why is the member accusing the Bloc Québécois of beefing up election expenses to get a larger rebate?

During the last election, the Bloc Québécois was not sure whether it would be entitled to have its election expenses reimbursed, unlike the Liberal Party. If members look at the expenses per riding, they can see that the Bloc's expenses are actually far below those of the Liberal Party and Conservative Party candidates. The Bloc Québécois follows the election rules and the ethics rules. That is why, from the start, we said that we would not apply for the wage subsidy, even if the other parties were doing so. In our opinion, that is unacceptable. We did not want to play that little game.

Quite frankly, I am outraged by what the Parliamentary Secretary to the Leader of the Government in the House of Commons said.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, speaking of election campaigns, I would like to know what my colleague thinks of duplication, which means being paid twice for the same thing. The money they got from the wage subsidy goes in the kitty for the campaign. Then they spend it on the campaign and get reimbursed.

What are my colleague's thoughts on that? Is that not scandalous?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague from Abitibi—Témiscamingue for his comment.

It is a big problem, actually. According to the Bloc Québécois's House leader, the member for La Prairie, what is happening now is double dipping. They collected $1.25 million from the wage subsidy. That helps the party because they can use the money to fund their next election campaign. Once the money is spent, Elections Canada reimburses half of it. In this case, that adds up to about $2 million.

I am calling on the government, the Liberal Party, to pledge to pay back the wage subsidy. It was not entitled to that money and it needs to do the right thing.

[Marilène Gill, Bloc, Manicouagan, QC]

Mr. Speaker, I thank my colleague for his work.

Yesterday in the House I had the chance to ask the President of the Treasury Board questions about Bill C-9. He admitted that the wage subsidy was meant for people with urgent, pressing needs, as my colleague said earlier. He also admitted that recipients cannot double dip. For example, a restaurant cannot receive the same subsidy twice for the same location.

Then I mentioned that the Liberal Party was not in that situation, but it received the same amount twice, as my colleague from Abitibi—Témiscamingue just said.

Is this a double standard that applies to the Liberal government? In this case, the government is both judge and jury.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague from Manicouagan for her intervention.

To begin with, I commend my colleague because successfully getting an answer from the President of the Treasury Board in the House is no small feat. He is good at congratulating the member on his or her question, but he never answers with anything concrete. I congratulate and pay tribute to the hon. member.

Now I will get to the subject at hand.

Under this program, the public will pay taxes and go into debt. The public knows that a crisis is gripping the economy and that we must all pull together to get through it. However, what are we seeing here? We see the government acting in its own interest. The governing party drafts the legislation then puts its hands in the cookie jar behind closed doors. As my colleagues have noted, it will then get paid a second time through election rebates. It is unethical. The government has lost the public trust. According to a poll from June, the government has even lost the confidence of Liberal voters.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Mr. Speaker, I am pleased to have the opportunity to discuss the government's plan to support businesses and the economic recovery in response to COVID-19.

Since the beginning of this pandemic, the government has had two main goals: to protect the lives of Canadians, and to protect and preserve Canada's businesses, jobs and economy. In the face of an uncertain economic situation, our government took decisive action to support businesses affected by COVID-19 and to help protect the jobs that Canadians depend on.

While some sectors of the economy are recovering, others are still struggling with declining revenues, increased costs and uncertainty because of the pandemic. Many entrepreneurs and businesses in Canada still need help with cash flow and operating costs. That is why our government introduced an act to amend the Income Tax Act with respect to the Canada emergency rent subsidy and Canada emergency wage subsidy.

Bill C-9 would implement new targeted supports to help hard-hit businesses. These measures are designed to help businesses get through the second wave of the virus so that they can protect jobs, continue to serve their communities and be positioned for a strong recovery.

From very early on in the first wave of the pandemic, it was overwhelmingly clear that one of the most important ways to help businesses survive these trying times was through rental supports. Many Canadian businesses either had to shut down for months on end or lost a significant percentage of their revenues, yet still had to pay their landlords.

That is why our government quickly responded and developed a program: the Canada emergency commercial rent assistance program, or CECRA, to help businesses with rent so that they could stay afloat during the pandemic. One of the problems with this program was that it required landlords to apply for assistance, rather than the businesses themselves.

Businesses reached out to me when this program was announced to let me know that, while they needed the rental support in order to make it through, their landlords refused to apply for the program. They were being forced to pay full rent amounts with almost no revenues. As much as I tried my absolute best to help my constituents and the businesses in my riding asking for help or trying to access programs, I had no idea what to tell these people. They were at the mercy of their landlords.

I raised the issue at caucus, as did many of my colleagues, and we were very happy to see that the government listened. Our comments were listened to, and the new and improved version is being discussed today: the Canada emergency rent subsidy. We are proposing to provide an easy to access commercial rent and mortgage program until June 2021 to organizations and businesses affected by COVID-19, with a subsidy of up to 65%.

The new rent subsidy follows the Canada emergency commercial rent assistance program, which targets small businesses and has already helped more than 133,000 such businesses and supported 1.2 million jobs in Canada. Since the beginning of the pandemic, we have been working closely with small businesses. The new rent subsidy will be better targeted and easier to access. On top of that, it will be paid directly to small business tenants.

What would this look like in real terms for Canadian businesses? Let us consider a hair salon owner, for example, who followed public health safety precautions and closed to the public in March or April. They then opened during the summer as they were allowed to serve the public at a much lower capacity, and limited the number of customers in order to follow social distancing rules.

In Quebec, they had been given permission to remain open until further notice and were open during the months of September and October. Let us say that in October the revenues were down 25% compared with last year. On top of this, they incurred $2,500 in eligible rent costs for the first period of their rent subsidy. For this period, thanks to the new Canada emergency rent subsidy, they would be eligible for a rent subsidy of 20%. However, we know that not all businesses have been able to remain open.

The Speech from the Throne underscored our commitment to providing direct financial support to businesses that had to temporarily close their doors by order of local public health authorities. We are following up on this commitment by also proposing lockdown support, which would provide an additional subsidy of 25% for organizations required to temporarily close their doors as a result of an order issued by an eligible public health authority.

This support would be on top of the Canada emergency rent subsidy, which could cover up to 65% of rent, resulting in a total subsidy of up to 90%.

Take, for example, a chain of restaurants that saw its revenues down by 70% in September, and then 80% when six of its 10 locations were shut down under a regional public health order effective October 1. If this chain of restaurants incurred rent costs of $400,000 for the eligible period, $120,000 of which related to the six locations closed by the public health order, then under the rent subsidy the chain would be eligible for a base subsidy rate of up to 65%, plus the new lockdown support of up to 25% with respect to the six locations closed by the public health order, for the days that they were affected. The base subsidy would apply a benefit of $195,000 and the lockdown support would be $16,071, for a total rent subsidy of $211,071 for the month of October. This would go a long way in helping the chain of restaurants cover its total of $400,000 for 10 locations, of which more than half were significantly impacted by closures due to public health orders.

In addition to this assistance for fixed costs such as rent, employers can also apply for the Canada emergency wage subsidy to keep their employees on the payroll. The subsidy will also encourage them to rehire workers they have laid off, which will put them in a better position to prepare for a strong economic recovery.

The Canada emergency wage subsidy has supported more than 3.8 million Canadian employees. More than $45 billion has been disbursed under this program.

Throughout the summer, my colleagues and I heard from witnesses at the industry, science and technology committee. One of the very clear messages was that the wage subsidy had to be extended in order for businesses to keep their employees on the payroll.

The extension of the Canada emergency wage subsidy until June 2021 proposed by the government in this bill will continue to protect jobs by helping businesses keep their employees on the payroll and by encouraging employers to rehire their workers. What is more, the wage subsidy will remain at the current rate of up to 65% of eligible wages until at least December 19, 2020.

This extension is part of the government's commitment to create more than one million jobs and restore employment to pre-pandemic levels.

Our government continues to assess the impacts of COVID—19. These programs are built to be flexible in order to help the businesses that have been hardest hit. As circumstances improve, the level of help will decrease, and as circumstances get worse, more support will be given to businesses and organizations.

As we have said since the start of this crisis, we are ready to take additional actions when needed. That is why I would encourage all members in the House to put the immediate needs of Canadians and businesses first, and support Bill C-9.

Canadian businesses need this new rent subsidy and the extension of the wage subsidy to get through the crisis. This bill will enable us to help them.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I would be curious to know how my colleague defines fixed costs.

When will the federal government create a real program to respond to needs related to fixed costs?

Quebec has taken action on fixed costs, namely by including commercial rent, municipal and school taxes, interest on mortgage loans, hydro and gas fees, insurance, telecommunication costs, licences and association fees in those costs. Why is Canada not providing assistance as effective as that provided by Quebec?

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Mr. Speaker, I thank my colleague from Abitibi—Témiscamingue for his question.

I would say this bill is a great start. Fixed costs include rent, and we are helping businesses pay their rent. We are also helping them pay their employees' salaries. I think supporting this legislation is a step in the right direction.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, the member mentioned the number of phone calls she received at the beginning of the pandemic, when so many businesses were hurting because of the way the CECRA came out and because of some of its restrictions. She indicated that she had spoken to the government, just like I believe everybody on these opposition benches did as well, but it still took six months for it to respond. This was brought out on April 24, 2020. We are talking about the beginning of December before this unfolds, and we see businesses closing now.

What does she have to say regarding the delay by the government in bringing these changes?

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Mr. Speaker, the government did act and responded accordingly. When it comes to rent, this is the jurisdiction of the provinces in most cases. There was a lot of red tape around this program in the beginning.

I am really glad to see that we have come a long way and that we will be offering assistance directly to businesses as of now.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, my hon. colleague identified so many reasons why the commercial rent assistance program needed to be fixed.

I appreciate her advocacy within her caucus, but what I do not understand is that the Liberals rejected our amendment today to backdate the program to April 1 for those who could not get rent support because their landlord would not apply. We appreciate the Liberals making this a tenant-driven program, but why would they not backdate it for the six months to allow those who were excluded from the design-flawed program to apply to get the support?

I hope the member can actually answer the question. The Liberals talk about moving forward, but she knows very well that the debt moves forward for those small businesses that did not get the help they needed. They closed their doors for public health. They need government support.

Will the member go back to her caucus and advocate for it to backdate the program?