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

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, we have been talking all along about the need for Canada's economy to get on track and the government to fine-tune the programs it implemented with basically no oversight, because in large part it hampered the role of Parliament. With respect to these jobs, we in the opposition had come back with a number of solutions to the programs that were not working in the past. My friend from Carleton wrote to the government a number of times as the finance critic with possible solutions and I see many of those are in Bill C-9. We could have dealt with this months ago. We could have fine-tuned these programs months ago so we could get on a better trajectory to get back to normal or get to the new normal, yet we were not given the opportunity because the Prime Minister was trying to hide his WE Charity scandal problems.

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

Mr. Speaker, I want to thank my good friend from Haliburton—Kawartha Lakes—Brock. I appreciate him talking about the tourism and hospitality sectors and how deeply they have been impacted by the pandemic.

He also talked about spending. What I am concerned about when I hear the Conservatives say we are spending too much is what programs they want to get rid of. They keep voting for the programs we are passing through Parliament and have not voted against any of the spending.

Most importantly, with respect to the commercial rent assistance program, we the NDP have been calling for the government to backdate it to April 1 for those who were not able to apply for the funding because their landlords would not apply on their behalf. I am disappointed that the Conservatives have not joined us in calling on the government to backdate it. Can the member explain why the Conservatives are not calling on the government to backdate that program so that those who were not able to apply for the design-flawed program could get access to that funding? Many of them are steeped in debt or facing bankruptcy.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I appreciate the question from my friend from the NDP. He has been very busy today. It is always good to see his face and hear his contributions to this debate and other debates going on today.

To the surprise of the NDP, when my friend asks what programs we would cut, we are talking about what programs would have done better. A lot of the solutions the Liberals put in Bill C-9 are things we have been talking about for months. I am sure my friend from the NDP is hearing these very concerns that have finally been addressed in Bill C-9 from his own community, his own chamber of commerce. I know I have.

The rent subsidy was a horrible disaster as 90% of businesses did not bother applying. That was a complete travesty, but something that could have been fixed had the House of Commons been in session. Therefore, I would ask my friend this. Why did the NDP support the Liberals in shutting down this place?

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Mr. Speaker, based on the member opposite's feedback, I assume he and the Conservative Party will be supporting Bill C-9. As he mentioned in his speech, when the pandemic hit we were building the plane and at the same time we were flying it. Was it perfect? No. Through collaboration, through debate and through this process we can make things better.

Will the member opposite be supporting this legislation?

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I believe I mentioned a number of the issues and concerns we had with the original pieces of legislation for the rent subsidy and others that are, for the most part, being addressed in here. We appreciate that there was collaboration finally on this subject, especially now that we are able to get back to Parliament. I know we are doing it in cohorts, but this is some of the work that we can do together. The fact is that we can have a point-counterpoint discussion and fine-tune some of these programs.

At the end of the day, we may disagree on some options and some programs, but I think we all want the same thing. That is a strong Canada and the fact that our main streets are not decimated and people are able to go work and earn a living, so I think we are on—

[The Deputy Speaker, Bruce Stanton]

Resuming debate, the hon. member for Surrey Centre.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Speaker, it is a pleasure to be here today. I am joining members virtually from my home in Surrey Centre, B.C., to speak to Bill C-9, an act to amend the Income Tax Act, Canada emergency rent subsidy and Canada emergency wage subsidy. This bill has been very anticipated.

The topic of these subsidies came up earlier this week when I had the pleasure of welcoming the Prime Minister to my round-table meeting with the Downtown Surrey Business Improvement Association. The new rent subsidy is especially on the minds of the members of the downtown BIA. My office has been responding to many questions over the last few weeks from Surrey business owners who were wondering when these subsidies would be available.

These subsidies in their previous forms have been vital to the survival of many businesses. Small businesses are the heart of Surrey Centre, and we know that they are the backbone of the Canadian economy. It is why I am so pleased to support Bill C-9 today.

Bill C-9 would address some of the key areas where businesses are still feeling a real pinch from the pandemic. It would create access to the new Canada emergency rent subsidy, which would give businesses, charities and non-profits rent and mortgage support until 2021. It would create the new lockdown support, which is an extension of the rent subsidy, in the event of a closure ordered by public health. Lastly, it would extend the Canada emergency wage subsidy until next summer.

For small businesses in Surrey and across Canada, this support will be essential. For employers and employees, certainty and surety are vital. To know one has a job, that the rent will be paid and that business will survive and be carried until next summer allows SMEs to plan, pivot and retool for the new post-COVID economy without laying off employees or being kicked out of their leases.

More than $2 billion has already been distributed to 138,000 small businesses, through the Canada emergency commercial rent assistance program, to support their rent payments. This has, in turn, supported 1.2 million jobs in our country.

The new rent subsidy would address some of the challenges that business owners continue to face and would close the gaps in the previous rent subsidy program. We know that some landlords were not keen to sign on to the Canada emergency commercial rent assistance program, and that left some renters without access to this important support. In contrast, the new Canada emergency rent subsidy would go directly to small business owners and tenants. That way, if they qualify for the subsidy, they will receive it. There is no middleman to approve or block the much-needed support for small businesses.

The new rent subsidy would work much like the wage subsidy in that it would go directly to the tenant through the CRA, making it easier and simpler to access. This new subsidy would help businesses that were left out of the program previously or that had difficulty accessing the support because their landlords would not sign on to the program. The new rent subsidy would work on a sliding scale of up to a maximum of 65% of eligible expenses until December 19, 2020. Organizations would also be able to make claims retroactively for the period that began on September 27 and ends on October 24, 2020.

The next important aspect of this bill is the newly created lockdown support. An additional 25% allocated through the Canada emergency rent subsidy would go to eligible organizations in the event of a closure issued by public health. It would support businesses as public health officials work to keep communities safe from the spread of the virus. The lockdown support would have an important role to play as our businesses and non-profits manage getting through the second wave and any future waves of this virus.

We have already seen the impact of the second wave on businesses. Targeted restrictions on certain industries that operate in areas with high case numbers have meant that many businesses, such as restaurants, gyms, banquet halls and event centres, have needed to reduce their capacities again or close altogether. It has been a very challenging time for businesses, like the banquet halls in Surrey, which have been particularly hard hit because of public health closures. When businesses are not able to generate any income to pay rent, the mortgage or hard-working employees, support from our government will be their only way through the pandemic.

In May 2020, and then again in September, local businesses that were severely affected by the public health restrictions met with elected officials and asked for assistance. They appreciated, in particular, the federal government's assistance for rent and wage subsidy but were worried that it was coming to an end. Their ask was that we support them if things continued the way they were, and be there for their employees if health restrictions during the pandemic continued.

I am proud to say that, as a government, we have and will be there for them. This new bill would extend and simplify the support we have given to Canadian small and medium-sized businesses, and would continue to keep our main streets alive.

Businesses like Bozzini's Restaurant and Nahm Thai Bistro, which were hit hard with provincial health restrictions, would be able to continue to stay open and pay their hard-working employees. They would continue to serve the best pasta and Thai cuisine Surrey has to offer. It would help banquet halls and conventions centres like Aria, Crown Palace, Mirage, Grand Taj and Taj Park pay their rent or mortgages and keep their chefs and server staff, despite having to close down because of provincial health restrictions.

As it is Veterans' Week, I want to offer my appreciation for the courage, bravery and sacrifice of our veterans, who have put their lives in harm's way so that we can live free and safe. We are forever indebted to them.

The bill would help Tony Moore and Jim Holland of the Whalley Legion. They have had to temporarily rent a building for their Legion hall while their new state-of-the-art Legion village is built. This would help with their rent and wages for staff to keep their facility open and help it thrive once again when the pandemic is over.

The bill would help Nazia Bajwa from Beautyland Salon pay the rent and keep her employees. It would help Andy Dhaliwal from Top Quality Lumber and Surinder from Mill & Timber Products continue to pay their employees so they can put food on the table and pay their rent and mortgages.

This support helps. It helps people continue to have meaningful work and helps SMEs keep their businesses open, pay their rent and mortgages, and avoid bankruptcy. It helps real Canadians, the Canadians who have built this country and now count on the government to support them in their time of need.

The sliding scale of up to 65% support in the Canadian emergency rent support, combined with lockdown support, would mean that hard-hit businesses subject to a lockdown could receive rent support for up to 90%.

Finally, the bill would extend the Canada emergency wage subsidy to June 2021. So far the wage subsidy has protected the jobs of more than 3.8 million Canadians by helping employers keep employees on the payroll and rehire their workers. Continuing to support employers in this way will mean that Canadians can keep their jobs despite decreases in business or in the event of future closures ordered by public health.

In my riding of Surrey Centre, this has helped local restaurants, trucking companies, hair salons and retail stores stay open; has given a sense of certainty; has alleviated the anxiety of employees by letting them know they will get through the pandemic; and has protected business owners from collapsing.

We had to move quickly at the beginning of the pandemic to get support to individuals and businesses as quickly as possible, and we knew there was a chance that gaps would need to be filled as a result of that speed. I know my constituents have been reassured to see the evolution of these programs over the course of the pandemic, as they have addressed the gaps. This bill would do just that. It would ensure that our small businesses have the support they need to keep their businesses up and running and keep their employees on the payroll.

I am grateful to the Minister of Small Business, the Deputy Prime Minister and their teams, who have taken the time to listen to the needs of Canadians to make the necessary changes to the rent subsidy, create the new lockdown support and extend programs like the Canada emergency wage subsidy. As we continue to navigate new waves of the pandemic, these business subsidies will help businesses stay afloat and help Canadians keep their jobs while we continue to recover.

I hope we can work together to quickly pass this legislation and get help to our struggling small businesses, charities and non-profits as soon as possible.

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

Mr. Speaker, I thank the hon. member for Surrey Centre for articulating the benefits of the changes before us. As I have heard in the communities I represent, they are much needed.

What we have not heard in the debate yet is a clear explanation from the government as to why it refuses to make the changes to the commercial rent assistance program retroactive to April 1.

Could the member explain to the House why there has been so much reluctance to make those changes retroactive and to correct what was really an unfair disparity between tenants whose landlords were up for participating in the program and those whose landlords were not?

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Speaker, that is a very good question. It was a question we asked as well in the beginning. We wanted to know why this was the way it was. We have to remind ourselves that the previous incarnation of this bill was done by 10 provincial premiers and three territories, so 13 bodies plus the federal government. It had to be supported by all of them. I think the question goes back to some of the premiers who were reluctant at the time to endorse a program that was more liberal and more accommodating to others.

However, this is a program that goes above and beyond. We know that rent and housing are in the purview of the province, but in times like this the provinces need support. The federal government is there for them.

This program is the federal government's program in its entirety. Federal taxpayers are paying for it. The other one was a joint program that had to have consensus from and support of all 10 premiers and three territories. That is why this program was different. We are hoping the new one is going to alleviate some of the gaps that were caused by the previous—

[The Deputy Speaker, Bruce Stanton]

Questions and comments, the hon. member for Guelph.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, I feel as though we are on one of those nightly conference calls we had every night of the week, seven days a week, in the first two and a half months of the pandemic, given what was happening in our communities.

The member mentioned by name the businesses he has been advocating for. We all had a list in our communities. I was also working with the downtown business association in Guelph to try to get direct support.

Going through the province was difficult. As the member said, the coordination with the province would be eliminated by this new program, and it would introduce a scaled approach. That was another thing we were advocating for internally: How can we do this for businesses that do not quite meet the thresholds?

Could the member comment on how this is going to improve as business volumes go down or up during the pandemic? Will this be able to match the needs of businesses?

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Speaker, absolutely. I sincerely appreciated the federal cabinet ministers, who listened not only to the governing side, but also to members of the opposition when they gave suggestions and provided the input of their BIAs and small businesses.

The bill would help those with the most need, such as a business that is in complete lockdown. In Surrey, it is the banquet halls that have been completely shut down. They have a large square footage, huge rents and huge tax bills. They did not get much support from the provincial government and were left out, in fact, but now all will be supported. They will get up to 90% until they are able to get back to business. Changes will also help restaurants that have had to shut down a large capacity of their seating. They have still been able to do some business, so they might not need 100% of their full rent. They might need 50% or 40%.

The scaling will help them, as opposed to a one-size-fits-all program, which was for businesses that had a reduction of, say, 30%. They would get 75% or 50% from the federal and provincial governments. The new program will actually incentivize them to do better in their businesses, get back to 100% and, in fact, increase business. It is a very good model that incentivizes business growth and helps businesses in this most difficult time.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, it is a pleasure to rise here this afternoon as one of the final speakers on Bill C-9. It is a key piece of economic legislation with much-needed support programs for businesses, not only in eastern Ontario where I reside but in every part of the country.

I have said this before during debates, particularly ones where we are dealing with economic measures for small businesses. I am not a fan of pushing bills through at some of the pace and time that we have done during COVID-19. I was not a fan last time when we only had about four hours of debate back in September to put some of these things through. I am happier with the process this time around. Albeit not perfect, it is a step in the right direction in terms of the committee of the whole and more debate. I appreciate the chance to rise here today.

A lot of times people see us in the chamber and see their local member of Parliament put their speeches up and wonder why we go through what we do with the legislation. They think that once we see the bill, we should vote on it and get it over with, whichever way we fall. We have to keep reminding not only us here in the chamber but all Canadians that this process is so fundamental to getting the best piece of legislation we possibly can. We need proper scrutiny of legislation to make sure that we get it right and get the best bill possible, and now, more than ever.

We are spending billions and billions of dollars of new money in the new programs in a very quick period of time. This scrutiny, the back-and-forth debate and discussion that we have, is so key.

When things are rushed through too fast, mistakes sometimes happen. We learned this morning that, for the Minister of Finance and the House leader's team, one of the amendments that was proposed or suggested by the Canadian Federation of Independent Business, a reasonable proposal, was actually struck down by the Speaker earlier this morning because it was not organized and prepared properly. I think the term used was that it was a procedural error. The reality is that it was a mistake on the government's part because we are rushing things through at the last minute, and it was not able to be votable in that circumstance.

We were told with the prorogation of Parliament for six weeks that the government was going to be doing a reset. That was the real reason we had, apparently, for prorogation for six weeks. It was in the name of getting organized, having a cabinet retreat and getting all these bills lined up and ready to go.

As much as I talk about the concerns and sometimes about the lack of debate, my understanding is that this amendment is now going to have to be brought forward likely in a separate piece of legislation with debate and scrutiny, so we are going to have more time in this chamber and hopefully in committee to look at some of these issues and their responses in the coming weeks.

On Bill C-9, the vote was unanimous at second reading. I think the way the direction is going today we will find the same thing again, in favour of these programs and sending the message to small businesses wherever they are in this country that their Parliament and their MPs understand the seriousness and severity of the situation they are in.

We said that where things are good we will support the government and where scrutiny is needed, we will certainly give it. Because of that scrutiny and feedback, I am going to say that, in this legislation, the government has taken up some of the good ideas and good fixes.

There is one thing this pandemic has created. There never was a shortage of acronyms in the parliamentary world, and there certainly have been a few more in the last seven months. We have the CEWS, the Canada emergency wage subsidy. We have the CERS, the Canada emergency rent subsidy, which replaces the CECRA.

Before I get into some of my comments about the details, I want to first thank the businesses in my riding of Stormont—Dundas—South Glengarry. I am very fortunate as I am one of the few members of Parliament who can drive back to my riding in about an hour or an hour and a half.

One of the things I enjoy every weekend, lately by Zoom, is having a lot of meetings with chambers of commerce and local business owners, and dropping by with what I call a bit of a wellness tour, asking for their feedback and if they were able to get the CEBA emergency business loan or able to get the wage subsidy. It is from those tours that I am able to share on social media some of my visits and encourage constituents to learn about the businesses in our community. More importantly, it is a good way to get feedback that I can bring back here to Ottawa to say, “Look, this program is not running effectively. There are gaps and there are holes in there”.

The wage subsidy was a perfect example. In the opening days of the pandemic, the government proposed a 10% wage subsidy. That was not helpful in the minds of many businesses. Many did not find it would be enough to keep their employees on the payroll. Many transitioned to CERB.

We advocated for a much higher number, and at 75% it was certainly an improvement. We appreciated the government taking up the calls we heard from businesses and the calls we made. In created a bit of chaos in terms of businesses laying some people off onto CERB and then coming back, but nevertheless, we will take that step in the right direction.

One of the other things I know our shadow finance minister, the member for Carleton, raised several times as well was that the cut-offs are an issue in a lot of these programs. It was actually pitting businesses when it came to the rent subsidy and the wage subsidy and their drop in revenues, where if they were able to recover 70% of their pre-COVID revenues, they were totally cut off the program. By finally taking the idea of indexing these programs, it was not an “all or nothing” situation.

We actually had businesses saying they did not want to bring on more staff or that they wanted to be careful about the number of hours of their stores because they did not want to lose the benefits keeping them afloat. It is really more of a cliff's edge. I feel this legislation had some challenges, and I am glad to see our idea of indexing it and having a sliding scale being used, as it is certainly going to help businesses in the country.

CERB was the same way. If someone made more than $1,000 they were cut off. There were people who wanted to go back to work but could not get full-time hours. They had to decide whether to take the $2,000 in CERB or go back. There was no hybrid model on that. We are seeing that advocacy from our side of the aisle, which will be continuing as these programs continue and we go through the second wave and back to more normal times.

On the rent program, the original program was rushed, and frankly, I do not think it was very effective. My understanding is that 10% of businesses were eligible for that program. It was a messy situation with landlords and tenants, and there was sometimes the sharing of financial information by tenants with their landlords, who had to apply. It was just not the best program. Thankfully, months later, the government has now listened to opposition members and made some changes to it.

The big thing I want to mention on the rent subsidy program is why opposition parties matter when it comes to this kind of matter, and why parliamentary scrutiny and asking the tough questions and digging a little are so important. When I saw the rent subsidy program being announced, I thought, yes, we do need this support program, and I thought CRA, the Canada Revenue Agency, would be the natural body to administer it. We then received information that it would be the CMHC, another acronym for the Canada Mortgage and Housing Corporation. I thought that was kind of weird because it handles residential mortgages, not commercial ones. I thought it was kind of a strange organization to run the program.

We were told by the government that there was nothing to see, that we should stop complaining, stop delaying, stop attacking, and that we were team Canada and all in this together. That is the case, but we also need to make sure we are scrutinizing each other in the decisions we are making, so we started to dig and ask questions. All of a sudden, we found out that the Canada Mortgage and Housing Corporation was in fact not administering it. It was the organization that had it from the top but it was now subcontracting it to MCAP.

Who is at MCAP? It would be the Prime Minister's chief of staff's husband. We were told there was nothing to see, that we should stop suggesting a conflict of interest and that it was a ridiculous line of questioning. Now we realize there were inappropriate meetings at the Prime Minister's Office, and the lobbying commissioner is now investigating this potential scandal. Actually it is not “potential”; it is a scandal now. I am just waiting for the report to come out from the lobbying commissioner.

The bill would correct a lot of the things that were rushed through earlier, and now have the CRA involved in the process. I will wrap up my comments by making two key points on dealing with this economic legislation. The reasons for rushing things through, and the lack of ability to scrutinize and hear committee testimony from stakeholders like the Canadian Federation of Independent Business, are a challenge. With proper scrutiny, we get better bills. We get better legislation that does not need corrections to be brought in, and we are able to expose corruption, conflict of interest and wasteful spending when it happens.

Second, to my colleagues on the government side, the take-it-or-leave-it approach we saw earlier needs to end. We see that when we have reasonable ideas, work better in collaboration and do not bring these bills up at the last minute and say to take it or leave it in a rushed manner, we can actually get better scrutiny, better bills and better confidence from Canadians on the things we are presenting.

I appreciate the opportunity to speak here today and I look forward to hearing questions and comments from my colleagues, as always.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I listened with great fascination to my hon. colleague's discussion. The issue before us is a very serious issue. There are small businesses across this country that have been hammered by the first wave of the pandemic, and now the second wave, with winter coming.

I feel that in the first stages, with the rent subsidy plan and the government moving fast, there was a need for urgency. We had to get stuff out the door because we knew businesses could go under, but we learned very quickly that there were problems with the program. That was the issue, and I think we were all shocked at the attitude of many landlords who would let their businesses go under, rather than respond.

When we knew there was a problem, that was when we needed to start fixing it. We have been, for a number of months, waiting and waiting, and businesses are hanging by a thread. To my hon. colleague who talked about moving too quickly, there was a need to move fast, but given the crisis of the pandemic, there is a need now to be able to fix things as we are moving so that we are not leaving businesses hanging and waiting for a good piece of legislation that might come too late for them.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I agree. We needed to have a quick response to get assurances to businesses as quickly as possible. Having said that, the one thing I have always said is to spend the extra hours here debating, scrutinizing and going back and forth and to spend some time at committee hearing from stakeholders. As an example for this piece of legislation, I am a big supporter of the Canadian Federation of Independent Business and the advocacy it does.

If it had the opportunity to bring these things forward at committee, when we have all these things going back and forth, for example the rent subsidy program, we would have had a better bill months ago. We would not be having tenants having to wait months and months on end for a fix that has finally come. We could have had a better bill and a better solution, by taking a bit more time when it originally happened. The lesson is learned. Let us not do that again.