Finance Committee on April 16th, 2020

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

Thank you.

In terms of the commercial rental assistance, can you elaborate on it, provide the date of the announcement, explain how the assistance would be retroactive and tell us how it would work? Are you already able to do this?

[Bill Morneau, Liberal, Toronto Centre, ON]

I don't have those details right now. Sorry about that. We're in the process of seeing how it could work.

As you said, the important thing for businesses and SMEs is fixed costs. That's one of our major objectives. We're looking at possible approaches. Of course, this falls under provincial jurisdiction. This means that we must work with the provinces. Every week, when I speak to the provincial ministers of finance, I discuss the importance of SMEs. In this way, our approach will help SMEs. We must work in partnership with the provinces.

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

Thank you.

Dairy farmers are experiencing difficulties. They're suggesting that the Canadian Dairy Commission be given more leeway. They're suggesting an increase from $300 million to $800 million.

Are you looking at this possibility?

[Bill Morneau, Liberal, Toronto Centre, ON]

If we receive a letter to that effect, we can look into this possibility. However, it hasn't been part of our program so far.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

We'll move to Mr. Julian, and then to Mr. Poilievre and Ms. Koutrakis after that.

Go ahead, Peter.

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

Thanks very much, Mr. Chair.

Thanks, Mr. Morneau, for being available.

I do want to pay tribute both to your hard work—I know you're working 20-hour days—and equally to your accessibility. You have been remarkably accessible over the last few weeks. Normally opposition members don't necessarily pay compliments to government members, but I think it's important to underscore your availability and discussions around these important measures to help Canadians.

The announcements that have been made over the last few days, improving the CERB and putting in place a courage bonus, are all on issues that we raised with you. I raised the courage bonus last time you appeared before the finance committee, and the enlarging of accessibility around the emergency business account. These are all important steps.

I think we would agree that there are still many other measures that need to be taken to avoid having people left behind, and so I want to ask you a couple of questions.

First, I had a round table, a video conference, with the small business community in my riding. They raised rent abatement as an extremely important measure that needs to be taken. Gord Johns, our small business critic for the NDP, and I have written to you about a 66% rent abatement proposal. We certainly hope that is the measure, as we've seen with other countries, you put into effect. France, Denmark and Australia, as you know, have put into place rent abatement measures.

Second, credit card costs and mortgage costs are exceedingly high, and the banks have not made the types of sacrifices that we're seeing many other Canadians make. I have not heard of a single person who has had a mortgage deferral approved without penalties, interest or fees. This has an impact on our small business community and in fact on all communities. We've seen credit unions, such as Vancity, reduce their rates to zero. We have not seen the same kind of shared sacrifice with banks playing their part. Will you use the tools that you have to make sure the banks in Canada play their fair part in fighting back against this crisis so that no one is left behind?

My final question is around the CERB, the emergency response benefit. As you know—and the minister has said this publicly—it's available to everybody who applies. You've referenced both seniors and students being left behind right now. Jagmeet Singh proposed that it be a universal benefit. Right now the structure is already in place. Will you look to put in place that benefit so that everybody can take advantage of it and actually access the emergency response benefit, and of course, as has already been proposed, have it taxed back if they don't need it when they file their income taxes this summer?

Thanks for being here, and thanks for answering my questions.

[Bill Morneau, Liberal, Toronto Centre, ON]

Wayne, do I have time?

[The Chair, Liberal, Wayne Easter]

You have two minutes.

Go ahead.

[Bill Morneau, Liberal, Toronto Centre, ON]

There are a few things there, Peter, that you're asking.

First of all, on rent, as I mentioned, we are working through that issue. It is a provincial jurisdiction. I've been bringing it up with the provincial finance ministers each week over the last month, and they've been making progress. Some provinces have done different things than other provinces have. Saskatchewan has moved forward with the $5,000 benefit for small businesses. We do need to work together with provinces in this regard, and we are doing that right now. That is, from our perspective, important.

From the standpoint of the banks, we'll continue to work with the banks. We've had, as I said, 220,000 loans that now have been administered in very short order with the banks, and $8.8 billion has been moved out. That was an enormous effort. We did work together with them to make sure that could happen. Of course we pushed to make sure they moved forward on helping with credit card fees, and they've all cut those credit card fees in half for people in distress. I'm not saying that we shouldn't continue to hold their feet to the fire—we will—but we've made significant progress, and we're going to continue to encourage them to support their clients who are Canadians.

With respect to the CERB, we think it's important that it go towards people who have lost income as a result of COVID-19, and that's how we've defined it. We're going to continue with that. We're going to continue to make sure, for people who find themselves in a vulnerable spot because of COVID-19, that we're dealing with them. That's the kind of approach we're taking with students. For example, we don't think a universal benefit would be appropriate in this regard. There are many people, like you and me, who have not been impacted from an income standpoint as a result of COVID-19. We're focusing our efforts on those people who have been impacted and on making sure that we deal with them as well as we can.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you. You're both right on time. That's unusual.

We will now go to Mr. Poilievre and then to Ms. Koutrakis.

Pierre.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you very much, Mr. Chair.

Minister, I want to reiterate what I said earlier. We have a shortage of personal protective equipment in Canada because your government threw millions of face masks and 440,000 medical gloves in the dumpster. You also gave 16 tonnes of medical equipment to China when we most needed it. This, of course, has driven up prices here in Canada and driven down our stockpiles.

One thing you could do to mitigate the damage your government has done in this area is to take the HST off of those kinds of protective equipment. I know that much of it has been bought privately for long-term care facilities, seniors homes and other places that are not owned or run by government. I think you'll agree with me that people should not have to pay tax on that equipment. I encourage you to remove the HST. That would be a practical and simple thing to make it more affordable.

With regard to the CERB, I want to congratulate your government for listening to demands by numerous MPs, including me, to allow people on the CERB to work and earn some income. You've allowed them to earn up to $1,000, which is definitely an improvement over the original program. That only works out to about eight or nine days out of a month for a lot of workers. If their employer were to come along and say, “Good news. I have more work for you and I can pay you for it. Can you do some extra work?” a lot of them would have to say, “No, I'm afraid I can't because I'll lose my CERB and I'll be worse off working for more than a thousand dollars' worth of wages than I am right now.” Would you consider another methodology to allow people to earn more than that $1,000 so that they would always be better off taking extra hours and earning more wages?

[Bill Morneau, Liberal, Toronto Centre, ON]

We're working to make sure that these programs work and that they serve their goal, which is to provide income for people who do not have income as a result of COVID-19. We're trying to make sure that the adjudication and delivery of the benefit are things that can be administered in this emergency time period.

One of the things we've talked about in the past is that this, we expect, will be a temporary measure. This is a measure we've put in place for 16 weeks. We're trying to make sure that it's administered as a temporary measure in a way that supports people but that doesn't delay the ability to get the payment out to people. In this regard, there's always going to be a balance. We're trying to balance it so that we make sure it has the right incentives and that it protects people. We've come to this conclusion through looking at an approach that we think works.

There will be other things that we're going to continue to need to look at. We know that in a time of emergency we don't have all the answers up front. We're trying to make sure we get to the answers in a way that makes sense, and to the extent that there are things we need to look at and come to in the next iteration, we have done that. A good example of that is how we have moved to the $1,000. On that issue, we feel we've come to the right conclusion.

There will be other issues, I'm sure, that we'll continue to look at to make sure these programs are working successfully. Of course, we want to make sure they're delivered. We were so pleased to say that we were able to actually move forward with the CERB in the timeline that we had. We're so pleased to see millions of Canadians who are actually on it.

Having been involved in international meetings this week, I will say that I think one of the things that Canadians can be proud of is that not only did we come up with these measures and have we been iterating them, but they're also actually being delivered to people. We're finding that is not necessarily the case in other countries where they do not have the same ability to get those benefits out to people, which of course is the ultimate goal. We want to make sure people actually get access either way.

[Pierre Poilievre, Conservative, Carleton, ON]

That is true, but that said, there are small businesses that are falling through the cracks. Again, they can't pay wages right now because their government has shut them down. It is either that or they don't historically have wage-earning employees, so they're not eligible for any wage subsidy. They themselves don't get a wage, so they've never met the $5,000 threshold to get the CERB. Because they don't have a payroll of over $20,000, they can't get the emergency business account either.

There is a large number of people who meet that definition. One of the easiest ways to help them quickly would be just to give them back the GST they have remitted to your government over the last 12 months. Would you consider doing that, Minister?

[Bill Morneau, Liberal, Toronto Centre, ON]

Actually, you've mentioned this before. We've looked at this, and it just doesn't work. I know you have argued for this. It doesn't work in a number of ways.

First of all, it's not their GST. They hold that GST in trust. It never was their money, so it's not an easy thing to necessarily give back.

[Pierre Poilievre, Conservative, Carleton, ON]

It's not your money either, Minister, with respect.

[The Chair, Liberal, Wayne Easter]

Okay, Pierre. Let the minister answer.

[Bill Morneau, Liberal, Toronto Centre, ON]

There are other reasons, of course, that are appropriate to consider here. One is that this measure would have a very different impact on different business sectors, because the way GST is done, it's based on the value added. Some businesses, like the ones in Wayne Easter's riding, are farmers who wouldn't get anything from this because they wouldn't be eligible. Finally, GST/HST is different in different provinces, so the administration of this is not straightforward and we would not be able to do this in a timely way.

We considered that and concluded it wasn't a measure that was appropriate. We also know that, in most cases, those businesses that you're talking about will be able to get the Canada emergency response benefit, because if they don't pay themselves in salary, they will be able to claim dividends for the Canada emergency response benefit, so that will enable them to be eligible.

We're hoping that works. Of course, we're going to continue to look at these measures to make sure they're working broadly.

[The Chair, Liberal, Wayne Easter]

This will be the last question. We're going to hold you five minutes more than you wanted, Minister.

Ms. Koutrakis, you'll wrap it up with the minister. I know there will be disappointed members who didn't get to question the minister, but next we will have the officials.

Annie, you're on.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

I want to take the time to thank you, Minister, for appearing before the finance committee. I know you're very busy. I also want to extend a huge thank you to your staff and to everybody in the finance department. I know how difficult and challenging it is for everyone, and I know you're working around the clock. I want to say a huge thank you on behalf of all Canadians.

You are acting to close all the gaps, I know, but no matter the amount of fine-tuning you do, there will always be some people who don't quite fit the criteria. Clearly, you are doing your best and listening to all MPs and Canadians and making adjustments. I have received numerous phone calls and emails from my constituents thanking the government for being so open and willing to listen and adjusting as we go along. On behalf of my constituents, thank you as well.

Minister, can you comment on where Canada's COVID-19 economic response plan stands relative to our needs in comparison to similar fiscal stimulus and aid packages announced by other countries around the world? How do we know if we are doing enough? How willing and able is the government to go further in our spending as the situation evolves?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you, Annie. This is an important question.

I think what we will see is different countries doing different things based on their situation. We're lucky that our situation fiscally is strong, so the measures we've put in place now represent about 8.5% of our GDP. That's obviously enormous. It's very significant in terms of the direct measures to people, the $107 billion or so that's going directly to people through the wage subsidy and the CERB. It's also very significant in terms of the deferrals we've put in place on taxes, as well as, finally, the credit that we're putting out for businesses. It's significant in multiple places.

With respect to other countries, we are doing that international comparison now. We are among the leaders in that. We obviously have a fiscal situation that enables us to do that. Many European countries don't have that same positive starting point, but we've been comparing and we see that we've been more aggressive in supporting people and more aggressive in supporting businesses.

As I mentioned on an earlier question, we've also been more effective in actually getting it done, for example, getting the business loans out. In our country, they're actually out and in people's pockets already, in many cases. Of course, our CERB is out and in people's pockets, in millions of cases, so this is very positive. In that way, Canada not only has done the work and made the commitments, but we're also delivering. In some countries, the commitments and the delivery are separated by administrative challenges that we've overcome.

We'll continue to look at other countries, how they're doing it, and compare our efforts. We'll make sure they're appropriate for us, but also make sure they're appropriate for supporting all Canadians, your constituents being a good example.

[The Chair, Liberal, Wayne Easter]

This will be your last question, Annie.

[Annie Koutrakis, Liberal, Vimy, QC]

The announcements for things like supporting small business with rent and implementing a top-up for essential workers will require partnership with provinces and territories. Can you tell us more about the partnership between the federal government and the provincial and territorial governments, what that looks like, and the next steps for these programs?

[Bill Morneau, Liberal, Toronto Centre, ON]

I can't quite yet, Annie. The reason I can't yet is that, on the essential workers file, you'd recognize that many of these essential workers are actually in sectors that the provincial governments are responsible for—health care workers, old age care facilities—so we do need to work with them. We've asked for them to come forward to help us deliver those supports and also to be part of the ability to fund it. That discussion is ongoing.

With respect to rent, we're still at a stage where we're coming up with the final details on how we can make sure that works. We are looking towards working with the provinces on that as well. I'm not quite far enough along to give you more details. As with all of the things we're doing with COVID-19, we're trying to get to good conclusions quickly, but also making sure we can administer them.

That's why we do need that discussion with the provinces. We do need to make sure we have the mechanisms, which I'm hoping we will have in the very near future.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you.