Finance Committee on April 2nd, 2020

[Frank Vermaeten]

Thank you very much.

Just to confirm, people will be able to apply by phone through the IVR. It's an automated phone system. It's very simple. You call the toll-free number. It gives you a greeting. You put in your social insurance number. It tells you whether you're on direct deposit or whether you're on mail. If you're on mail, it asks you whether the postal code is correct. We don't reveal the full address. We say, “This is the postal code we're sending it to.” If it's correct, or if it's direct deposit, you're just confirming that it's okay.

Then the only thing left to do is the attestation. The automated message reads the attestation that, for example, you have met the $5,000 threshold and you are currently not working. You press “Agree”, and that is it.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

[The Chair, Liberal, Wayne Easter]

On your statement there, Mr. Vermaeten, I think most MPs had better frame that statement in their office, because I guarantee we're going to get lots of questions on that point.

Okay, here's where we're at. I think we can finish up with this line of questioning. Next will be Mr. Morantz and then Mr. Fraser. Then for two and a half minutes apiece, we have Mr. Ste-Marie, Mr. Julian, Mr. Poilievre and Ms. Dzerowicz, who will wrap it up.

It will be four o'clock by then, but I'll have a statement from the administration folks on video conferencing.

Mr. Morantz, we'll go to you.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair. I want to thank you all for being here on this call. It's been very, very interesting.

I have a couple of fairly concise questions and then a broader one.

Just to clarify, with regard to the Canada emergency response benefit, are the proceeds that individuals will receive from it taxable?

[Andrew Marsland]

Yes, they are taxable, in line with other income support measures, such as employment insurance.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Okay. Thank you.

With respect to the eligibility for the CERB, is dividend income eligible income when it comes to complying with the $5,000 eligibility requirement?

[The Chair, Liberal, Wayne Easter]

Who wants to take that question? Is dividend income considered earned income?

[Elisha Ram, Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development]

Good afternoon. I'm Elisha Ram from ESDC. Thank you for the question.

The legislation that governs the use of the Canada emergency response benefit speaks to a number of sources of income that can make up the minimum $5,000 requirement. They include employment and self-employment income. The question of whether dividend income qualifies under one of those sources is one we're currently looking at. We hope to have a simple answer to that question very soon.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'd really appreciate knowing that, because I'm getting a lot of questions from small business people about that aspect.

I want to circle back to the call centres. It's a bit of a broader question. Before this all happened, there were a number of reports from CFIB and Stantec Consulting that showed a lot of challenges with the call centres. This was actually internal, in that CRA requested the reporting internally. Small business owners were getting incomplete or inaccurate information: 41% of them reported that this was the case. The Stantec report found that 83% of Canadians had an experience that did not meet their needs.

Given the massive increase in calls that will happen because of this terrible situation we're now in, what is CRA going to do to make sure they can handle all of these new calls? I was briefed this morning by some departmental officials about a new call centre or something like that, and the process that was being set up, but could you comment on how you're going to handle the influx of new calls and make sure Canadians get timely and accurate information?

[Frank Vermaeten]

Let me just make a couple of comments.

In terms of the accuracy, one thing the Auditor General said was that the measuring of accuracy was not very good. This was as a result of the old technology we had. We now have new technology that allows call recording and centralized listening by experts. They use this to ensure that accuracy has improved. In fact, we're getting accuracy that is simply 90% or over. We think our accuracy [Technical difficulty—Editor] and handle call volume.

It certainly is a challenge, no doubt. I think you're seeing that all across the country in terms of the strain that's being put on infrastructure right now.

We're going to do our best to deal with that, both on the technology side, beefing it up as fast as we can, and by working with the providers to provide the pure capacity on that front.

We're also putting on additional call agents to deal specifically with the launch of the CERB. We'll be putting on an additional 2,000 agents to be able to answer questions. We'll be providing that at all hours so that people will be able to get through. We're confident that we can provide good service.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you.

Do you have a very short one, Marty?

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Yes, I have a quick one on the CERB vis-à-vis the EI program. My understanding is that people who are applying for EI now will be basically moved over to CRA to be handled in the CERB program. What happens in the case of someone who would have received a higher EI benefit than the $500 a week?

[Cliff C. Groen]

Regarding that question, to be clear, people who have already applied to EI do not need to reapply. On application, they will not be processed and moved over to the Canada Revenue Agency for the payment of the benefit. It is Service Canada that will be paying all of the EI applicants and those who are eligible for EI. Those individuals will receive a flat $500 payment. We are in fact issuing those payments. We have started issuing those payments already.

For individuals who are qualified under the regular EI program for greater than $500, the period that they would be receiving the CERB benefit would not count against them in relation to their EI entitlements. If they were to receive the benefit for a period of 16 weeks, and if afterward they remain unemployed, they would be able to go onto the EI program and receive their full entitlement and not have those 16 weeks of payment count against them.

[The Chair, Liberal, Wayne Easter]

If I could ask, as well, Cliff, what about the ones who are, say, receiving $368 a week now? Would they be bumped up to the $500 during this period?

[Cliff C. Groen]

Yes. Since we have been receiving these record numbers of applications since March 15, we have already processed some of them. All of the individuals who would have received less than $500, we are bumping up to that $500 amount. They may have received $350 last week and may this week. A good number of them, over 100,000 last night, we bumped up to their actual payment amount of the $500. Those who have not yet been done will certainly be done in the coming days.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you, and thank you, Marty.

We now go to Sean Fraser.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much, not only to my colleagues but to the officials who've joined us. I know how hard you've been working over the past few weeks. On behalf of Canadians, I want to pass on my gratitude.

My first question builds on a line of questioning from Mr. Julian earlier during this meeting about the timing of the rollout. There have been some calls for, essentially, a universal payment that reaches everyone equally. I wrestled with this personally for some time. One concern I had is that we may not have the ability to simply send a cheque to everyone. The time you could take to set up a new system may result in a delay that would leave people without a much-needed income, which they need ASAP.

I'm wondering if you can comment on the need to use existing structures to expedite payment, whether it's the GST rebate, the Canada child benefit, ceasing payments on student loans or lifting the burden of remittances for payments that may become due. Can you talk about how those processes would have essentially allowed us to get cash out the door more quickly, to ensure that individuals would be able to put food on the table?

[The Chair, Liberal, Wayne Easter]

Who wants to take it?

Andrew, go ahead.

[Andrew Marsland]

Perhaps I'd make a number of observations. Obviously, I can't comment on policy decisions, but there are number of considerations. As was identified, a key issue is the extent to which you can piggyback on existing systems such as the GST credit, which has the advantage of having already baked into it the targeting of those most in need, or the child benefit for that matter.

The original 10% wage subsidy also had the ability to get cash to firms very quickly because it allowed them to offset their eligibility, those small companies that were eligible, against withholdings of income tax from their employees.

That's a very important design consideration in a situation like this: To what extent can you use those existing systems? In looking at the Canada emergency recovery benefit, CRA was able to build on a system very quickly to deliver those.

Those are very important considerations. To the extent to which you build in many criteria, you have to build a system that has many criteria that targets particularly, and that inevitably slows down the capacity of the government to deliver relief to Canadians.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you.

Changing tack for a moment, one concern I'm hearing from people at home, who are supportive of certain measures such as the new emergency wage subsidy, is that they want to ensure there are checks and balances in place to protect against the risk that taxpayers' money is flowed through to businesses, particularly larger businesses. They want to ensure that money is not used or repurposed to essentially provide bonuses for executives or stock buy-back options that may predominantly benefit wealthier Canadians instead of actually reaching the workers.

What protections are we looking at or could you comment on that we could advance in order to ensure that the money actually gets to the workers and preserves that connection between employer and employee rather than, essentially, padding the bottom line of a business that may not need a subsidy in the first place?

[Andrew Marsland]

I'd make a couple of comments on that. The first one is that the measure itself, as announced yesterday, is targeted at those businesses that are suffering significant challenges, whose revenues have severely dropped because of the current crisis.

The second one is that the measure as proposed is designed to support only circumstances in which the remuneration has actually been paid to the employees. It's intended that the employer's claim, through the portal, is based on remuneration actually paid. It tracks the remuneration. It should correspond to that.

The final consideration, as the government announced yesterday, is that there will be follow-up afterwards. There will be penalties imposed where it appears that the subsidy has been claimed inappropriately.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you.

[The Chair, Liberal, Wayne Easter]

Be very quick, Sean, if you could.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you, Chair.

Obviously on the east coast, where I find myself today, the importance of seasonal industries cannot be overstated. A number of people have expressed concern, for example in the fishery or other seasonal businesses like the tourism sector, about the potential for their workers who essentially had a job locked up but had not yet started working. They cannot work because of the COVID-19 pandemic, which has caused their employer to close up shop.

I'm curious as to whether you have any insights on the eligibility of individuals who were anticipating seasonal employment that was, in fact, locked up but now is disappearing after they had arranged their affairs. Would someone in those circumstances be eligible for the Canada emergency response benefit even though they have not yet officially started working?