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.

Income Tax Act

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, my next question relates to the emergency wage subsidy. The initial iteration of the program was complex enough that there were small businesses that struggled with the application process.

The new iteration, this latest iteration that we are debating tonight, is infinitely more complex. How are very small businesses, owner-operator businesses, going to apply for this program when they do not have teams of lawyers and consultants helping them? They are trying to run their businesses. Service Canada offices are still closed in the region I represent.

What is the minister's message to them?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, that is an excellent question and something I have wrestled with, too. In putting together both the wage subsidy and the rent subsidy programs, we have tried to balance two things. One is to make it as easy as possible for businesses to get access to this support, but the other is to have a smooth curve of support, so that businesses that need the most get the most. If a business has a 70% revenue decline or more, it gets 65% support, but it does not just drop off. We do not want to create a perverse disincentive. In order to have that smooth curve, which we have achieved, there is a little complexity. I am hopeful that when people actually start applying for the—

[The Chair, Conservative, Bruce Stanton]

We will go back to the hon. member for Skeena—Bulkley Valley.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, I think, especially with the Service Canada offices still closed in northwest B.C. in some communities, the complexity of the program is of particular concern.

My next question is around the emergency wage subsidy. It has been successful at helping businesses retain their remaining employees who are working for them, but it has not been so successful at allowing them to rehire the ones that they laid off.

Does your government have a plan to increase the number of employees who have been laid off being rehired under these programs and re-employed?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, I do think, and it is not just my thought, the data shows that Canadians have been going back to work, and we have now recovered 76% of the jobs lost in the depths of the pandemic. I will also say that I think we are going to be operating under some restrictions to our economic activity until we can really vanquish the virus, so we need to have support measures in place until then. That will be the moment for the economy to come roaring back, which I know we are all going to work hard to facilitate.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, we all acknowledge the first iteration of the commercial rent assistance program was flawed. There were businesses that qualified for the flawed program and received those benefits, and there were businesses whose landlords did not want to play ball and did not get them. What do you say to those businesses that are not able to get retroactive support back to April and that are faced with this profoundly unfair situation?

[The Chair, Conservative, Bruce Stanton]

Before we go to the response, I will give a reminder to hon. members that we are keeping the debate rules, as we do in the House and in committees of the whole, to direct questions through the chair, kind of in the third person.

It is not a big issue, it is just a reminder.

The hon. minister.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, it was very kindly meant.

I think that is a very legitimate concern, and what I would say to those businesses is two things. One, we are focused on the future, and two, we have a lot of support for them in the future. They can get up to 90% of their rent paid. That is a lot. They can also get up to 65% of their wages paid. That is also a lot, and they can get another tranche of CEBA, another $20,000, $10,000 of which is forgivable. That is a lot of support.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Chair, I would like to ask the Minister of Finance about specifics this evening.

I would like to know whether she plans to use her regulatory power to address the gaps. I have one specific example from my riding, about an outfitting operation that experienced serious flooding in 2019 and therefore did not have any revenue. The owner managed to keep the business going. Then came 2020. Since this company did not have any revenue in 2019, it was not eligible for the wage subsidy.

Is there something in Bill C-9 that would address these terrible gaps?

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

Madam Chair, I thank the member for his excellent question, to which I have two answers.

First, yes, there will inevitably be gaps. A country-wide program cannot account for every possible situation. I would be very happy to discuss this very specific example with the member.

Second, Canada's regional development agencies are there to help businesses that fall into these gaps.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Chair, I will be pleased to speak with the minister about it.

However, this case was brought to her attention via email on September 23, and all I received was an acknowledgement of receipt. I resubmitted it on October 20 and still have not received anything.

At the same time, I submitted the case to the Minister of Economic Development, who got back to me rather quickly. However, her officials merely explained to the owner of the outfitting business that the programs could not be adapted to every individual because that would be impossible. He was offered a loan, when what the business needed was breathing room in the form of money. I could resend the email, but I hope we will find solutions.

Here is another case, this time involving an inn in the woods. It used the wage subsidy program in the spring, but it did not need the program in the summer because its campground gave it some breathing room. Now it really needs that program. However, according to the calculations and the new criteria, the inn would receive just one wage subsidy of 18%. Is that possible? The bill talks about 65%, and I would like the minister to elaborate on that.

The inn operators wanted me to know that the inn was closed in April. Next April, they will not be able to declare income for the previous year, so they will end up in the same boat as the outfitters. I hope we will be able to fill these gaps.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Madam Chair, I thank my colleague for his question.

I want to begin by saying that, in some ways, this example illustrates just how well the Canada emergency wage subsidy works and how it is targeted properly. It is there for businesses that need it. When the economy is doing better for these companies, as was the case for that inn this summer, they do not need the wage subsidy. Then they can apply for it again later. That was a very good example.

It is hard for me to comment on that specific case without knowing the exact details of the situation. Once again, I would be pleased to discuss it with the member or to have my team speak with his.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Okay, we will talk, Madam Chair.

Basically, what these businesses are telling me is that they are currently struggling and that they are unable to maintain a connection with their employees. Is not the purpose of the wage subsidy to maintain that connection?

I would like to know whether the minister has anything planned for the tourism industry, particularly sugar shacks and other such businesses that are not covered by any program. They are facing uncertainty and are worried about having to close their doors.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Madam Chair, we have already spoken about the tourism industry several times this evening. I agree.

As with the restaurant industry, which is subject to new lockdown measures and whose employees cannot work, the quarantine and border restrictions are limiting what the tourism industry—

[The Deputy Chair, NDP, Carol Hughes]

The member for Berthier—Maskinongé.