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 .

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

All right, that's clear. Thank you, Mr. Chair.

I will ask Ms. Hogan the same question that my colleague Mr. Poilievre asked her. First, let me explain why. What does this have to do with Bill C‑2? We, the legislators, are being asked to vote for a multi-billion-dollar bill. As in the case of the aid programs during the pandemic, we are talking about huge sums. In order to move forward, people need to have absolute confidence in the government and our various institutions, whose role includes auditing the work of the government.

Ms. Hogan, I will take Mr. Poilievre's question as my own: did your office present the audits to a lobbyist before they were presented to the House?

[Bea Bruske, President, Canadian Labour Congress]

Thank you, Chair, and good afternoon, committee members.

My name is Bea Bruske, and I am the president of the Canadian Labour Congress.

The CLC is Canada's largest central labour body speaking on issues of national importance to all working people in Canada.

Since the early days of the COVID-19 outbreak, the Government of Canada committed to doing whatever it took, for as long as it took, to get Canadians through the pandemic. The government has consistently said that no matter how much longer the crisis lasts, and no matter where you live, they've got your back. Despite this, back in October, the government announced it would be terminating the Canada recovery benefit. It did so in the midst of the pandemic. It did so before the labour market had fully recovered, and it did so with no system of unemployment benefits in place for vulnerable workers who cannot access EI.

The pandemic is far from over. Today, the number of daily COVID-19 cases is 135,000 higher than when government announced that it was ending the CRB. Many Canadians continue to struggle with joblessness and underemployment. In November, there were 1.2 million Canadians who were officially out of work, and another 630,000 working people who wanted full-time work but couldn't find it.

Statistics Canada's labour underutilization rate captures the full range of people who are available and who want to work. In November, the labour underutilization rate was 12.4%. In other words, 12.4% of the potential labour force was either unemployed, not participating in the labour force but wanting work, or employed but receiving far fewer than their usual hours of work. When the government decided to end the CRB, the official jobless rate was still a full percentage point higher than in February 2020. Total hours worked were below prepandemic levels.

One labour market indicator had recovered to the prepandemic levels, and of course that was the labour force participation. In other words, in our mind, there is little evidence of people staying at home on CRB benefits rather than taking part in working or looking for employment. Many CRB recipients were in fact working while they were receiving those benefits, as the CRB permitted them to do. They relied on those benefits to cope with insufficient hours of work and with reduced earnings. In the period just before the government's decision to terminate the CRB, 970,000 Canadians received it, and in the final eligibility period, there were still over 600,000 CRB recipients. The number continues to climb as workers retroactively claim those CRB benefits.

Let's be clear. The Canada recovery lockdown benefit is not a substitute for the Canada recovery benefit, which workers continue to need.

The restrictive benefit may never be used, or used very sparingly. Last Tuesday we heard this committee, and this committee heard from government officials who were unable to identify a single instance, between the announcement of the benefit on October 21 and now, where the lockdown benefit would apply. We still haven't heard how much the lockdown benefit is expected to cost, possibly because the actual cost will be negligible, or perhaps even zero.

It's doubtful the lockdown benefit would help families in places like Alberta, where the government has dragged its feet on putting lockdowns in place, despite the widespread risk of COVID. As a regional benefit, the lockdown benefit is not designed to respond to workplace outbreaks like the ones we've seen at Cargill, at Amazon and at Canada Post.

Honourable members, the decision to terminate the CRB, pulling the rug out from under struggling workers, self-employed workers in the hard-hit hospitality and tourism.... They've relied very heavily on the CRB. In contrast, the measures in part 1 of Bill C-2, extending the emergency wage subsidy and emergency rent subsidy to the tourism and hospitality sectors, will do very little for those workers.

We recommend urgently restoring the CRB benefits for workers who cannot access employment insurance. We also recommend several amendments to improve the lockdown benefit, which I'd be pleased to detail for you if there's an opportunity.

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

What is the relevance to Bill C-2, Mr. Poilievre?

[Julie Dzerowicz, Liberal, Davenport, ON]

How is it relevant, Mr. Chair?

I have a point of order. What's the relevance to Bill C-2?

[The Chair, Liberal, Peter Fonseca]

Is it relevant to Bill C-2?

[Julie Dzerowicz, Liberal, Davenport, ON]

No. What's the relevance of the question to Bill C-2?

[Julie Dzerowicz, Liberal, Davenport, ON]

Again, I have a point of order.

What's the relevance of this to Bill C-2?

[Julie Dzerowicz, Liberal, Davenport, ON]

I have a point of order, Mr. Chair.

What's the relevance of this to Bill C-2?

[Rachel Blaney, NDP, North Island—Powell River, BC]

That's very interesting.

Let's step back to the Canada emergency wage subsidy. You've been talking about that.

You did release a series of findings and implications, one of which was that:

...without effective controls for validating payments, the integrity of the program is at risk and ineligible employers might receive the subsidy.

This is an important factor to consider, and I appreciate what you just said about the social insurance numbers. Given the amount of public attention on the cost of the pandemic recovery and how the government is going to pay for it, I'm wondering again if your office was consulted at all about the executive compensation components within Bill C-2 and if you feel those provisions address the concerns that you mentioned in your report.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you very much, Mr. Chair.

It's been quite interesting listening to my colleagues and their views on this specific motion. In the past 20 months, I think our government—in fact, just team Canada—has done all that we can to ensure that Canadians are protected and had the ability to stay at home while COVID raged in public settings, whether it was through providing CERB or supporting small business through the business account or wage subsidies. I think it's a little surprising that there seems to be an automatic assumption of guilt declared by a couple of our members here on how we were able to support hundreds of thousands of Canadians to get through what has been the most challenging part of their lifetimes and of our generation.

We worked really hard—not just members on the governing side but also members from all parties—to ensure that our constituents were well supported throughout this whole process. I think we need to continue doing that—indeed, we realize that COVID is not yet over—whether through Bill C-2 or other ways. We want to continue to support Canadians and I think we should. I think we need to find that collaborative approach. We need to find that balance in the work that we do here in this committee to make sure that Canadians are feeling supported and are being supported.

The last thing I think that our committee should be doing is using this committee for political posturing or to distract from the work we've all been doing among all parties over the past 20 months. We need to ensure that, as we continue to finish the fight against COVID, we all lend our hands and work together and really try to move things forward.

I think there are other more pertinent issues that we should be looking. As members have said, this one was really hashed out in the 43rd Parliament. I think artificial intelligence, facial recognition and equity are huge topics that Canadians are very much concerned about, and we would be doing an injustice if we played into what I think may be political posturing. I think it would be an injustice if we stepped way from continuing to protect Canadians from this changing world, from the changing digital space and from the changing normal of what COVID has brought for us.

I would respectfully ask my colleagues to think about this, guys. We have an opportunity to move forward. We have an opportunity to do the right thing. We have an opportunity to really work on issues that impact each and every one of us every single day, and we can do that here in this committee. I would really encourage you to work on those issues as opposed to rehashing things that have already been settled, and not participate in what is going to be a political posturing session. I think Canadians deserve better than that.

Thank you.

[Karen Hogan, Auditor General of Canada, Office of the Auditor General]

Thank you, Mr. Chair.

Mr. Chair, I wish to acknowledge that the lands on which we are gathered are part of the traditional unceded territory of the Anishinaabeg People.

Thank you for this opportunity to contribute to the committee's study of Bill C‑2, An Act to provide further support in response to COVID‑19..

I'm happy to discuss our audit reports, including the Canada Emergency Wage Subsidy and the Canada Emergency Response Benefit, which were tabled in the House of Commons on March 25. Joining me today is Philippe Le Goff, who was the principal responsible for the CEWS audit.

Our audit of the CEWS, or Canada Emergency Wage Subsidy program, focused on whether the Department of Finance Canada provided analysis on the program and whether the Canada Revenue Agency limited abuse by establishing appropriate controls in its administration of the program.

Overall, we found the department and the Canada Revenue Agency worked together within short timeframes to support the development and implementation of the Canada Emergency Wage Subsidy, CEWS.

The design and rollout of the subsidy highlighted pre-existing weaknesses in the Canada Revenue Agency's systems, approaches, and data. One of the weaknesses is related to the lack of up‑to‑date tax data, which meant that the agency did not have all the relevant information for assessing the applications before issuing payments. This revenue information would have allowed the agency to validate the reasonableness of the revenue drop that was declared by applicants.

To prioritize issuing payments quickly, the Canada Revenue Agency decided to not implement certain controls that it could have used to validate the reasonableness of subsidy applications. For example, the agency decided that it would not ask for employee social insurance numbers, although this information could have helped prevent the doubling up of applications for financial support.

The limitations of the agency's information technology systems affected its ability to perform some pre-payment validations, as did the absence of complete and up‑to‑date tax information. As a result, the agency will have to perform more post-payment verification work.

Let's now turn to our report on the Canada emergency response benefit. This audit focused on the analysis carried out by Employment and Social Development Canada and the Department of Finance in the design of the benefit. It also examined whether Employment and Social Development Canada and the Canada Revenue Agency designed mechanisms so that the benefit would support eligible workers who had suffered a loss of income for reasons related to the COVID-19 pandemic.

Working within a short time frame, Employment and Social Development Canada and the Department of Finance supported the design of the benefit to quickly deliver support to workers who had lost income because of COVID-19. The department and the agency made an early decision to focus on post-payment controls to simplify the process and expedite issuing benefit payments. The department and the agency introduced additional controls once the benefit was rolled out.

Based on our audit work on the original design of the two programs, both will need to rely heavily on post-payment verification, which will be time-consuming and costly. The post-payment work on these two programs was expected to be the subject of an audit by my office to begin in early 2022. However, we have been informed by the Canada Revenue Agency that it has deferred or delayed its work and that it is highly unlikely that a significant amount of post-payment work will be completed by 2023. Given that there will be little for us to audit, we have postponed our work.

This concludes my opening remarks. We would be pleased to answer any questions the committee may have.

Thank you.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Ms. Chatel, thank you for the question.

To recap some of what I said earlier, the Liberal government has been there from the beginning. Since 2015, it has invested a lot of money in organizations like the CBC, the Canada Media Fund, Telefilm Canada, the Canada Council for the Arts and so on.

What did we do when the pandemic hit? As early as April, the government invested $500 million in emergency funds to maintain jobs and support business continuity. We realized that this sector needed an extra boost. Then on November 30, as part of the 2020 fall economic statement, the government announced an investment of $281 million. One of the purposes of this investment was to respond to the film and television industry's request for assurances, to ensure that they would be covered if something happened during filming. Subsequently, there was a record investment of $1.93 billion in the 2021 budget. These are huge sums.

We are now continuing to provide assistance through Bill C-2. As you said, this bill affects cultural organizations, agencies and businesses. However, it lacks direct assistance to self-employed workers. We provide this assistance through Canadian Heritage and existing programs. So we don't need a bill because, as we promised in our platform, we will make an investment of about $50 million. In addition, we will continue to fulfil our election commitments, such as holding a summit in a month and a half, among other things. There is a continuity in all of this, which is to never forget our workers in the cultural sector.

[Sophie Chatel, Liberal, Pontiac, QC]

Good morning, Minister, and welcome to the committee. It's a pleasure to see you this morning.

I would also like to thank your colleagues from the Department of Canadian Heritage, who have indeed done an extraordinary job during this pandemic.

I wanted to quickly come back to what some of my colleagues from the Conservatives have mentioned. Minister, I don't want you to leave with the wrong impression here. We called FINTRAC as a witness. In their testimony, they concluded that in the standard that this government has developed over the years to ensure accountability when there is something suspicious about any of our programs, there are checks and balances in the system to red flag it and immediately move toward an investigation.

We heard that banks, very early on, identified some suspicious transactions that were, by and large, very small numbers of payments. Immediately, it went to FINTRAC, which launched an investigation. The collaboration between FINTRAC and the Canada Revenue Agency went very well.

Minister, I want you to understand that the witnesses said the system and standards in place for all of our programs are very good. This is supported by the Auditor General report that investigated those systems and concluded that, through the program we had in place, the money went to the right person and abuses were taken care of.

I will ask my questions in French, because, as you know, the arts and culture sector is very important in Canada from coast to coast, and particularly so in Quebec. This is also the case in my riding.

I am very pleased to hear that our programs really helped the sector during the pandemic.

Also, I am very interested in the summit you are going to organize. I'm also hearing concerns that the arts and culture sector needs to receive financial support quickly.

As you mentioned, Minister, Bill C‑2 will go a long way to help organizations, businesses and employees in the sector, who will benefit from maintaining the employer-employee relationship. There is still a need to help the self-employed in the sector and I am very pleased to hear you say that help will be available to them.

I believe I understood that no new legislation will be required to provide assistance to these workers, as these programs are already in place.

Can you give us more details about this aid? Will it get to them more quickly as there is no need for a bill?

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

As far as the cultural sector is concerned, this is definitely going to help the organizations, cultural businesses and others. The part that is also necessary, which is not through Bill C-2 but what we're doing now, is to help the gig workers, the independent workers. It's absolutely necessary, and we're doing it right now.

[Adam Chambers, Conservative, Simcoe North, ON]

We also had some information last week about the hiring recovery benefit. It has a very low take-up, with about 10,000 approved applications.

If we're trying to convince people to re-enter the workforce, should we be concerned? In Bill C-2, we're asking to extend the Canada hiring recovery benefit program, but we're extending a program that seems to not really be that effective.