Bill C-2

An Act to provide further support in response to COVID-19

Part 1 amends the Income Tax Act and the Income Tax Regulations to extend subsidies under the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS), and the Canada Recovery Hiring Program until May 7, 2022, as part of the response to the COVID-19 pandemic. Support under the CEWS and the CERS would be available to the tourism and hospitality sector and to the hardest-hit organizations that face significant revenue declines. Eligible entities under these rules would need to demonstrate a revenue decline over the course of 12 months of the pandemic, as well as a current-month revenue decline. In addition, organizations subject to a qualifying public health restriction would be eligible for support, if they have one or more locations subject to a public health restriction lasting for at least seven days that requires them to cease some or all of their activities. Part 1 also allows the government to extend the subsidies by regulation but no later than July 2, 2022.
Part 2 enacts the Canada Worker Lockdown Benefit Act to authorize the payment of the Canada worker lockdown benefit in regions where a lockdown is imposed for reasons related to COVID-19. It also makes consequential amendments to the Income Tax Act and the Income Tax Regulations .
Part 3 amends the Canada Recovery Benefits Act to, among other things,
(a) extend the period within which a person may be eligible for a Canada recovery sickness benefit or a Canada recovery caregiving benefit;
(b) increase the maximum number of weeks in respect of which a Canada recovery sickness benefit is payable to a person from four to six; and
(c) increase the maximum number of weeks in respect of which a Canada recovery caregiving benefit is payable to a person from 42 to 44.
It also makes a related amendment to the Canada Recovery Benefits Regulations .
Part 3.1 provides for the completion of a performance audit and tabling of a report by the Auditor General of Canada in respect of certain benefits.
Part 4 amends the Canada Labour Code to, among other things, create a regime that provides for a leave of absence related to COVID-19 under which an employee may take
(a) up to six weeks if they are unable to work because, among other things, they have contracted COVID-19, have underlying conditions that in the opinion of certain persons or entities would make them more susceptible to COVID-19 or have isolated themselves on the advice of certain persons or entities for reasons related to COVID-19; and
(b) up to 44 weeks if they are unable to work because, for certain reasons related to COVID-19, they must care for a child who is under the age of 12 or a family member who requires supervised care.
It also makes a related amendment to the Budget Implementation Act, 2021, No. 1 .

Finance

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Finance regarding Bill C-2, An Act to provide further support in response to COVID-19.

I want to say a big thanks to the extraordinary and tireless clerks and staff who made this all happen: Alexandre Roger, Philippe Méla, Isabelle D'Souza and Émilie Thiverge. I thank them so much on behalf of the committee.

[Sophie Chatel, Liberal, Pontiac, QC]

At least this version is more in line with the existing language in Bill C-2 and the Income Tax Act that Bill C-2 amends.

[The Chair, Liberal, Peter Fonseca]

Mr. Blaikie, I will now give you my ruling that this amendment is inadmissible, and here is my reason for this.

Bill C-2 provides for further support in response to COVID-19. The amendment attempts to create a mechanism allowing people who have received certain benefits they are not entitled to to reimburse 50% of the amount instead of the full amount, as provided in the respective acts. If adopted, the amendment would force the government to reimburse people who have already paid back any amount above the 50% threshold from the consolidated revenue fund.

House of Commons Procedure and Practice, third edition, states the following on page 772:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, the amendment proposes a new scheme for the reimbursement of payments of benefits unduly received, which would impose an increased charge on the public treasury not envisioned in the bill. Therefore, I rule the amendment inadmissible.

[Greg McLean, Conservative, Calgary Centre, AB]

There was one thing you said in the beginning about legislation. Is it this revised legislation we're looking at today, Bill C-2, that allows three more years?

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Blaikie.

I will give you my ruling that this amendment is inadmissible. Again, here's my reason for it. Bill C-2 provides for further support in response to COVID-19 with the lockdown benefit available to people meeting the criteria established in the bill. The amendment attempts to allow the lockdown benefit to be accessed under specific circumstances even if a lockdown has not been called.

House of Commons Procedure and Practice, third edition, states the following on page 772:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, the amendment proposes a new scheme for the lockdown benefit that would make it available to people not presently eligible under the bill, which would impose a higher charge on the public treasury than the one contemplated in the bill. Therefore, I rule the amendment inadmissible.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

All right. I just wanted to make sure I wasn't jumping the gun.

We've had this conversation around the table. The government has said that one of the purposes of this bill is to narrow the scope of existing pandemic supports, at least as they were until October, and to focus on particularly hard-hit industries. Of course, one of the big conversations around this table has been about the fact that within those hard-hit industries.... I'm speaking particularly of tourism and hospitality and arts and culture. We know the industries I'm talking about, because they're very clearly laid out in part 1 of the bill. These are the industries for which the government has said the wage subsidy should continue to apply. But workers who don't work for a company that's eligible for the wage subsidy or that sees fit to apply for the wage subsidy, or who work for themselves, don't have access to any kind of financial benefit.

This amendment would simply say that the Canada worker lockdown benefit.... Incidentally, I didn't propose an amendment with a better name than that, one that rolls off the tongue. If anyone has any suggestions, I would be open to such an amendment.

This simply says that people who work in any of those industries that the government already identifies in this bill as requiring exceptional support should be able to qualify for the Canada worker lockdown benefit whether there is a lockdown order in their region or not. It would mean that self-employed workers like independent travel agents, for instance, or some of the folks we've been talking about in the arts and cultural sector, or those who don't work for an employer that would get the wage subsidy under the terms of Bill C-2 would be able to apply directly for $300 a week of support under the Canada worker lockdown benefit program.

That's what this amendment would accomplish.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Blaikie.

Is there any discussion on this?

I will give you my ruling. This amendment is inadmissible, and here is my reason for it.

Bill C-2 provides for further support in response to COVID-19 in the amount of $300 weekly as part of the lockdown benefit. The amendment attempts to increase this amount to $500 weekly.

House of Commons Procedure and Practice, third edition, states the following on page 772:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, the amendment proposes a new, superior amount for the lockdown benefit, which imposes a charge on the public treasury higher than the one contemplated in the bill. Therefore, I rule the amendment inadmissible.

[The Chair, Liberal, Peter Fonseca]

There is no further discussion.

Mr. Blaikie, I will now give my ruling. This amendment is inadmissible, and here's my reason for it.

Bill C-2 provides for further support in response to COVID-19. The amendment seeks to remove several amounts or benefits from the calculation of taxpayers' income for the purpose of determining their eligibility for a benefit that is based on their income when these amounts or benefits are presently taken into account. House of Commons Procedure and Practice, third edition, states, on page 770, “An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.”

In the opinion of the chair, the amendment is a new concept that is beyond the scope of the bill and that would also require royal recommendation. Therefore, I rule the amendment inadmissible.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks, Chair.

I very much respect the intention of my colleagues who are trying to solve a major problem. I don't think there's much disagreement about the problem we are trying to solve. The disagreement is more about the solution to the problem.

While Mr. McLean's intentions are good, I am concerned about the potential implications of this subamendment. We don't know what those implications are, and we won't be able to figure them out this evening before we vote on this subamendment. By trying to solve a big problem, we could create a much bigger problem for the companies we want to help.

I remind my colleagues that we are talking here about companies whose revenues have dropped by 40% or 50%. Companies that qualify for these programs are already suffering and are already doing everything they can to retain their employees. Despite our good intentions, this change could create additional problems for those companies. If we unwittingly create a problem tonight, companies may no longer be eligible for these programs under Bill C‑2. Unfortunately, if we make such a mistake, we will only realize it in the coming months.

I am not saying there is a problem, but rather that we do not know whether there is a problem. Despite the intelligence and experience of everyone around this table, no one here can say with certainty that we won't cause a problem for the companies we are trying to help. While the underlying intent is good, it is very risky to pass amendments that would change the wording of the bill.

That is all I wanted to say.

[Trevor McGowan]

Maybe I'll start with your second question first. As noted, there's a concern that because the rules apply to all dividends and not just dividends paid on the publicly listed shares, they could require repayment of the wage subsidy where one entity in a corporate group is moving funds to another entity in the corporate group for the group's purposes and not actually returning any amounts to shareholders. That's a very common way for public companies and large corporate groups to move money around and ensure that funds are in the correct legal entity. Likewise, it could adversely affect corporations that have issued preferred shares as part of their corporate financing programs. I think those are probably the two largest.

In terms of what impact the amendment would have on the administration and enforcement of the rules, of course the Canada Revenue Agency has been working tirelessly to put these structures and programs in place in order to implement the new measures contained in Bill C-2. Any change to them could require the Canada Revenue Agency to tweak its systems. While I don't know—I'm not involved in the development of the Canada Revenue Agency's IT systems—that does seem to be a risk.

Conversely, public corporations could be required to proceed with the rules without necessarily having full certainty as to how they are intended to apply—for example, whether it applies to the qualifying period that ends after the date of royal assent, or before, or whatnot.

So there would be those concerns. Unfortunately, I don't know enough about the Canada Revenue Agency's technical systems to advise or to opine on whether they would need to be redesigned, but that is something that I think we'd want to check.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

Thank you, Mr. Chambers.

I propose that we strike out the last part, the second part of the amendment here to Bill C-2, NDP-3, paragraph (b). We could strike that out because there is a problem with retroactivity. If we took out the retroactive clause there, “Subsection (18.1) is deemed to have come into force on March 15, 2020”, I would propose that to my colleague from the New Democratic Party. I think the intent of that would be clear, that companies cannot access the benefits if they are paying dividends or increasing the payouts to their executives.

We would like to have language in there that includes share buybacks as well, because it's all about income distribution one way or another and access to these programs should not be benefiting shareholders at the expense of taxpayers. I think we all agree on that. I think it's a flaw in the initial bill that went through that we have this. Nevertheless, there are companies that followed the rules and applied those rules to make sure they survived that period. Retroactively.... The programs were not loans at that point in time. The programs were, “Here's a program to make sure you hang on to your employees and that your employees have the sustenance required.” Some of those companies have since emerged as dividend-paying companies.

I want to make sure that the timing on this is very clear, that we're talking about the go-forward plan, with no retroactive element involved in this that would require all kinds of financial restatements and all kinds of public market shenanigans that would happen at that point in time. I do appreciate very much the intent of the bill as far as matching revenues with expenses goes.

Thank you, Mr. Chair. I would propose that as a friendly amendment.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Blaikie.

Is there any further discussion?

I'll now give my ruling on this amendment. It is inadmissible, and here's my reason for that.

Bill C-2 provides for further support in response to COVID-19. The amendment seeks to amend subparagraph 56(1)(r)(iv.1) of the Income Tax Act to remove any COVID-related financial assistance amount from the calculation of the taxpayer's income in order to receive an old age security benefit.

As House of Commons Procedure and Practice, third edition, states on page 770, “An amendment to a bill that was referred to a committee after second reading is out of order. It is beyond the scope and principle of the bill.” In the opinion of the chair, the amendment is a new concept that is beyond the scope of the bill, and it would also require royal recommendation.

Therefore, I rule the amendment inadmissible. This ruling also applies to NDP-2, since the two amendments are consequential.

[The Chair, Liberal, Peter Fonseca]

It's 6:30. I call this meeting to order.

Welcome, everyone, to meeting number nine of the House of Commons Standing Committee on Finance.

Pursuant to the House of Commons order of reference adopted on December 2, 2021, the committee is meeting on Bill C-2, an act to provide further support in response to COVID-19.

I know I've gone over a number of the health and safety measures with all of the members, as well as with the witnesses who are with us today. They are ministry officials who understand the different protocols we have to abide by—the two-metre physical distancing, the wearing of masks and the hygiene.

Also, when it comes to using our technical system here for the hybrid—

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

I have two motions that are more in the spirit of the actual work of the Standing Committee on Canadian Heritage, work we are all eager to tackle in a meaningful way.

The first concerns the situation facing artists, something the Standing Committee on Finance has talked a lot about in the past few days, further to its examination of Bill C‑2. We, as the heritage committee, can do something, and that is studying a piece of federal legislation, the Status of the Artist Act. Quebec has a statute with some very helpful provisions.

The motion reads as follows:

That, pursuant to Standing Order 108(2), the Committee undertake a study on the Status of the Artist Act and its impact on improving basic working conditions for artists; that the Committee invite officials from the heritage department, tax experts and other stakeholders and groups from the culture sector to follow up on this issue and that the Committee hold a minimum of four (4) meetings to that end; and that the Committee report its findings and recommendations to the House.

Tourism

[Randy Boissonnault, Liberal, Minister of Tourism and Associate Minister of Finance]

Mr. Speaker, let me outline just a few of the supports that the government has put in place for entrepreneurs and people in the tourism sector: $100 million to help Destination Canada market us around the world and in our own country, $200 million to support festivals and events, $200 million to support small festivals and large festivals, $500 million for the tourism relief fund and $1 billion in 2021.

If the other side of the House would like to deliver a Christmas present to the tourism sector, they could vote for Bill C-2 and see $7.4 billion put into our economy.