Finance Committee on April 16th, 2020

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you.

I have three questions for the officials. I also want to thank them for their work.

My first question concerns the Canada emergency response benefit. Take the case of a student who works each summer. The end of the school year is coming up, and the student was supposed to start working again starting on April 20. Is this student eligible for the Canada emergency response benefit?

My second question concerns the Canada emergency wage subsidy and not-for-profit and charitable organizations. Will the regulatory framework be more flexible for them? In my constituency, I'm being told in no uncertain terms that these people will face a loss of revenue over the next few months, but not necessarily right away.

Will the regulatory framework have some flexibility?

My third and final question is about the wage subsidy for first nations-owned corporations on reserve. This comes from a colleague of mine. Do first nations-owned corporations on reserve have the right to access the wage subsidy?

Thank you for your responses.

[Andrew Brown]

Perhaps I can take the first question, which related to the eligibility for the Canada emergency response benefit with respect to students. You gave the example of a student who has been regularly working for their summers and who would have been starting to work on April 20, I believe you said. In that case, we're talking about a student or a worker who has not yet started to work.

The rule for the Canada emergency response benefit is that it's available to those who stop working due to the COVID-19 situation, so unfortunately in this case that student would not be able to benefit, because they were not working and then did not cease working as a result of COVID-19.

[The Chair, Liberal, Wayne Easter]

Andrew, I'll just come in there, if I could, and I know Peter will, as well. With seasonal workers, it is a little different. They're not working either, but they've lost their opportunity for a job as a result of COVID-19, and they are going to be allowed in.

You probably can't answer this, but the Prime Minister has said that we would be looking at students. We're all very happy that seasonal workers who have actually run out of EI and who are going back to a seasonal job will be allowed in CERB now, but something similar has to be done for students. I think that's where Peter is coming from. Do you have any response on that?

[Andrew Brown]

I can't say that where we'll be going for students.... I can certainly say that the government has been working on other sorts of supports for students and for young people. In terms of the extension that was announced yesterday for seasonal workers who have recently exhausted their EI claims, it's a different group of workers, who have established claims in the past and whom we would have been expecting to be returning to their usual seasonal employment. In this case, that group that's been identified would be able to benefit, because they're not able to return to their work due to COVID-19.

The difference would be.... It depends on each person's situation, in one sense. For example, students who have been working throughout the year—they've been doing a part-time job and they had to stop that part-time job because of COVID-19—would be able to benefit. We expect that there are many students who would be able to benefit. However, those who may have been more focused on their academics, who were not working at the time and therefore haven't stopped, are not eligible for the benefit.

[The Chair, Liberal, Wayne Easter]

Thank you, Andrew.

What about the wage subsidy? There are two questions there. Who can take them?

[Andrew Marsland]

Perhaps I can.

[The Chair, Liberal, Wayne Easter]

Andrew Marsland, go ahead.

[Andrew Marsland]

The first question related to non-profit organizations and charities. In designing the wage subsidy over a short period of time, we did engage with the charitable sector to understand the particular challenges they face. I'll briefly point out two areas of flexibility there. One is with respect to government funding. There is election in the legislation that allows a charity or a non-profit organization to either include or exclude that, and depending on how it's funded, that might be to its advantage, or not. For example, if it has funding that is permanent, it would probably want to exclude it. If it has funding that is based on a service fee from government, then it would probably want to include it in the calculation. The second area of flexibility relates to the reference period in terms of either comparing, for example, March 2020 to March 2019, or, alternatively, looking at February and March of this year and seeing how revenues have been affected. There is some flexibility in there to accommodate the particular needs of non-profits and charities.

The third question related to first nations corporations. A first nation corporation that is owned by a first nation individual would qualify for the wage subsidy. The legislation excludes corporations owned by governments, corporations that are exempt on that basis. That issue has been brought to our attention, that there may be circumstances that are somewhat different with respect to first nations corporations, and we're looking at those submissions.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

Just to understand, at this point they are excluded, but you are looking for ways in which a first nations-owned, a first nations community-owned corporation could receive the wage subsidy.

[Andrew Marsland]

Yes. I could explain the general principle of excluding government-owned corporations that are exempt. In many contexts, they have other means of support, for example provincially owned corporations, federally owned corporations, and so on. That would cover corporations owned by first nations, so they are excluded presently.

[The Chair, Liberal, Wayne Easter]

Does that give you clarity, Peter?

We'll move on to Mr. Morantz, and then Mr. Fraser.

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

Thank you, Mr. Chair.

My question is directed to CRA officials. I want to go back over some recent history. Before this crisis happened, there were two recent reports highlighting significant difficulties with CRA, particularly around the accuracy of service and call centres. There was a CFIB report showing that only 51% of callers received an answer to their inquiry regardless of wait times. Only 60% of callers received complete or above and beyond guidance information, with 41% receiving incomplete or incorrect information. The CFIB gave the agency a grade of D minus. Of completed calls, only 51% were rated as good, 28% as acceptable, and 21% as poor.

That was the CFIB report, but what I find even more interesting is that there was another report, called “Serving Canadians Better”, which was actually retained by CRA. They hired Stantec Consulting to do a report on their call centre service. That report said that 83% of respondents felt that they had service that did not meet their needs, and 71% of respondents felt that they haven't yet reached their service improvement goal. Only 28% were confident in CRA's future direction, and some of the words they associated with CRA were “slow”, “incompetent”, “bureaucratic”, “difficult”, “complicated”, "inefficient” and “frustrating”. That was from a report that CRA actually requisitioned for its own information.

My question is this. Given this massive amount of resources and new programs required because of the crisis and dedicated to the COVID-19 response, and given these historical difficulties with the agency that I've talked about, how are Canadians to have confidence in CRA that they will receive timely and accurate information in this time of need and, more importantly, that they will receive their refunds and benefits, including the late-coming wage subsidy, on a timely basis?

[The Chair, Liberal, Wayne Easter]

Are we going to Mr. Vermaeten or somebody else from CRA?

[Frank Vermaeten]

I'm happy to answer that question.

I think you're right, in that there have been a number of programs, a number of reports, and they've been quite critical of our call centres. I think we've done a lot to try to respond to that.

One of the challenges we had in the past was the technology. We didn't have the technology to do some of the basic things that are needed to ensure high quality. That issue has been resolved. We now have call recording and a centralized listening team. That allows our centralized listening team to listen to these recordings, find out where the information is inaccurate and address those problems, so we've been able to provide better answers. As a result, now we're consistently hitting a target of 88% to 90% in terms of accuracy, which is a significant improvement, so we feel very confident about that.

Certainly, call centres remain a challenge, particularly now. We have extremely high volumes. We're dealing with the high volumes of the regular tax season that's going on, and on top of that the challenges of the financial pressures that people are facing—they're calling us on that—and then on top of that, of course, the new programs that have been launched.

I'd say that with respect to our ability to provide funding and refunds and do that accurately, I think we are doing a very good job.

I think it has been mentioned that the GST credits are additional significant amounts that were announced by the government. We delivered that roughly a month ahead of schedule. Those payments went out on April 9. It was the single biggest payment in history in terms of the Canadian government providing those payments.

We're providing the Canada child benefit enhancement. That will be delivered on schedule, probably slightly ahead of time, and everything is on track with that.

With CERB, I think we were able to deliver exactly on schedule. We said that it would take us approximately three weeks after the parameters were locked down. As a matter of fact, the parameters weren't locked down completely until shortly before the release, and we managed to do that. In addition to that, we've managed to adjust the program to reflect the latest changes to the program—for example, the $1,000 exemption of earnings. I think we've responded quite well.

Are we on track for the wage subsidy? I believe we are very much on track. Again, the legislation passed only a very short time ago, which did lock down the parameters. Even then, throughout that process—a very short process, which Parliament responded to very quickly—there were some changes made, and that required changes from our side, but I think we are certainly on track. We said three to six weeks after the parameters were locked down, so we're certainly on track for that. As I said previously, our plan is to launch—

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

I have—

[The Chair, Liberal, Wayne Easter]

I'll give you time for another question, Marty. Go ahead.

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

I appreciate that.

I did receive a response to my OP question, which did confirm that your internal estimate is that 12% of Canadians were getting incomplete and incorrect information still. I want to point out that this is not the past; this is recent for these two reports, particularly the CFIB report that came out in January and the “Serving Canadians Better” report, which you retained Stantec Consulting for, in November.

Do I have time for one other quick question, Mr. Chair? I wanted to turn to Ms. McDonald if she's still on the call.

[The Chair, Liberal, Wayne Easter]

She is.

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

Thank you.

There's a question that I asked of the governor of the Bank of Canada a few minutes ago, and he said I should be asking the Minister of Finance. He's not here, so I'll ask you.

In my home province of Manitoba, my premier, Premier Pallister, proposed the idea of having a central hub for lending. Provinces as well are borrowing a lot now in order to deal with this crisis. I think every premier liked this idea, but for some reason it didn't get past the Department of Finance. I wonder if the Department of Finance is open to Mr. Pallister's proposition of having the federal government coordinate lending so that the provinces can have the benefit of the lower interest rates.

[The Chair, Liberal, Wayne Easter]

Ms. McDonald, you're on.

[Suzy McDonald, Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance]

While I'm responsible for FP relations in the area of provincial lending, my colleagues in FSP also have something to do with that. I don't know if Soren has anything he wants to add, but I will say that we can bring that back and take a look at it within the department. I don't have an answer I can provide to you today on whether or not that's something we'll move forward with.

Soren, I don't know if you have anything else on this file.

[Soren Halverson]

Thanks, Suzy.

I would maybe just point out that the Bank of Canada now has facilities in place that serve the purpose of supporting funding markets for provinces. It would appear that those facilities are in fact doing a very good job in that regard. What I believe we're seeing is that the spreads that provinces are looking at in funding markets are actually pretty reasonable at the moment, and they've come down quite considerably. Those funding markets are open for provinces to access as a general feature, so it seems—

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

The spreads that the provinces are paying would be larger than what the federal government is paying, still, so I'm not sure what the reticence would be in doing this at this point in time.

Maybe we can have another conversation about that sometime.

[The Chair, Liberal, Wayne Easter]

Yes. I think the point's been made, Marty.

We'll turn to Mr. Fraser and then Mr. Cumming.

Sean.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much, Mr. Chair.

To all of our witnesses, I appreciate your taking the time to be with us. More importantly, I appreciate the work you've been sinking in over the last number of weeks. It's monumental, the effort that you've put together.

I would like to dig in a little bit on the notion that my colleague Mr. Julian has raised at the last number of meetings around the proposed universal income of $2,000 per month. It's an intriguing idea. I agree with the principle that we don't want to see anyone left behind. But when I started thinking about it, I realized that were quite a few big holes. I have a few questions that will hopefully let us examine this a little more closely.

Does anyone here have the median household income in Canada? I don't mean to put you on the spot. We can get into it later, perhaps. I'll follow up. What I'm trying to figure out is how much this program would actually cost if you expended that. There are about 30 million adults in Canada. My back-of-the-napkin math pegs the cost of this annually as being somewhere in the ballpark of $750 billion.

I don't know, Mr. Marsland, if you have this on hand, or if there's someone else better positioned, but I'm curious to know whether anyone has handy the total spending of the federal government from last year.