Finance Committee on April 16th, 2020

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I think Mr. Cooper has triggered me to ask another question first, before the real question I was going to ask, and that is about speed.

I want to follow up where Minister Morneau ended. I want to say a huge thank you to every single one of you at the Department of Finance, at the Department of Employment and Social Development, and at the Canada Revenue Agency. It has been unbelievable what you have been able to help produce and what we have been able to launch since this whole pandemic got under way just over a month to five weeks ago.

We know that there are many people out there who are still waiting for a number of programs, but I can tell you that I am so enormously proud of our Canadian bureaucracy. I talk about all of you all the time, to say that it was nothing short of a miracle for us to introduce the Canada emergency response benefit in such a short period of time; to bring out the GST credit a month in advance, before we even thought about it, before we had originally planned to; and to have the Canada business emergency plan that the banks are putting into effect and that over 220,000 businesses have already applied for, according to the minister today.

So I want to start by saying thank you. Thanks to all of you. Thanks for stepping up. Thanks for your creativity. Thank you for your hard work. We are so blessed to have such an unbelievable civil service here in Canada.

What I want to ask you is this. There must have been a lot of discussions going on in terms of how we actually deliver these programs and what the best way is to do that. Can someone talk about what your key objective was? What was the key thing you were thinking about that led you to introduce these programs? What was it that helped you make a decision about how to introduce these? If someone could talk a bit about that, that would be great.

I hope to have another minute left to ask one more question.

[Andrew Marsland]

Perhaps I will begin, Mr. Chair—unless you want to go first, Cliff.

[Cliff C. Groen, Assistant Deputy Minister, Service Canada - Benefit Delivery Services Branch , Department of Employment and Social Development]

Go ahead, Andrew.

[The Chair, Liberal, Wayne Easter]

Go ahead, Andrew.

[Andrew Marsland]

I was going to begin by saying that, of course, speed and effectiveness are the key criteria.

When you look at these things, we're lucky in that we have a system in the Canada Revenue Agency and Service Canada that is equipped to deal with these programs and that has the nimbleness to adapt: for example, to stand up the Canada emergency response benefit and, shortly, to put in place the wage subsidy.

I think it's also important to leverage the private sector through the loan system and to work with them. I think it's important to look at the tool kit and its adaptability, and also to understand that while we're in a crisis, it's in a broader context that we need to think about having a system that has the checks and balances in place and is equipped to look at these things beyond the immediate challenge.

[The Chair, Liberal, Wayne Easter]

Does somebody else want in on that one as well?

Cliff?

[Cliff C. Groen]

I'll just add to Andrew's comments that when we were designing the CERB, there were three main criteria that we had. It needed to be speedy. We knew it was absolutely critical that we deliver it on a very quick basis. It needed to be simple, because if it weren't simple, there was no way we'd be able to deliver it. And it needed to be delivered safely, as well. We knew that if we were to make a commitment to deliver the program, it would have to be done—and we didn't fail on that. That's why it was important that both we and the CRA joined together to be able to deliver it in that time frame.

[The Chair, Liberal, Wayne Easter]

Thank you.

Go ahead, Julie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

I have just one other quick question, about one of the things that Governor Poloz, in the last session, said in answer to a question by my colleague Ms. Koutrakis. She asked whether we could make up the 4% to 6% GDP loss that we're anticipating happening over the course of this next year. He said, absolutely. He said that there will probably be some structural things that will have to change, but he said there are also going to be some positive structural changes and some innovation happening.

My question is really about the data that we're gathering. I think we're probably starting to learn a lot about our workforce right now. I would love to know, from anyone from the Department of Employment and Social Development, what data we are collecting in terms of the jobs that were lost or the age of the people who are applying for the Canada emergency relief benefit. What data are we collecting so that maybe we can pivot to create a better platform for our social welfare system moving forward?

I'm particularly interested in the universal basic income, but I would love to know what data we might be collecting right now that might actually inform some of our decisions moving forward.

[The Chair, Liberal, Wayne Easter]

Who wants to take that? Does anybody have an answer?

[Julie Dzerowicz, Liberal, Davenport, ON]

Is there no one from the Department of Employment and Social Development...?

[The Chair, Liberal, Wayne Easter]

Go ahead, Andrew.

[Andrew Brown, Director General, Employment Insurance Policy, Skills and Employment, Department of Employment and Social Development]

I'd just say that, at this stage, we are very much in the early days. We're collecting a lot of volume metrics right now, in terms of the number of claims we're seeing for the CERB, and CRA is collecting similar data. It will take us a little bit of time to start the analysis of that data so that we can understand better the people it is helping. We are very keen to understand more about those who are qualifying among the employed, but also among the self-employed, which is something that is new with this approach. It's very much on our list, but it's too soon to report results at this stage.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll go to Mr. Ste-Marie, then Mr. Julian and then Mr. Morantz. I may have put Mr. Morantz and Mr. Cumming in opposite order, but Mr. Morantz will be after Mr. Julian.

Go ahead, Gabriel.

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

Thank you, Mr. Chair.

I'd like to join Ms. Dzerowicz in thanking you, the officials, for all your work. In times of crisis, the needs are great. I'd like to tip my hat to you and thank you.

I want to share two specific cases to hear your interpretation of the programs in place.

The first concerns a salaried worker who applied for the Canada emergency response benefit. The worker's employer chose to apply for the Canada emergency wage subsidy. However, 75% of the worker's salary amounts to less than $1,000 per month. Would the worker be entitled to receive both the emergency benefit and the wage subsidy? I also want to point out that this person can't afford to repay the emergency benefit that they've received to date.

[The Chair, Liberal, Wayne Easter]

I would expect, Andrew, that it probably goes to you, or is somebody else coming in?

I guess I would put it this way: Is it seen as double-dipping?

[Andrew Marsland]

If I understood the question, Mr. Chair, it's whether an employee....

I wasn't sure about the assumptions behind the question. Is this the situation where an employee is rehired by an employer who is accessing the wage subsidy?

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

Yes, that's it.

[Andrew Marsland]

Of course, if an employee was in a situation where accepting a job with the wage subsidy would provide them less, then I guess they wouldn't necessarily have to accept that job if they were in a worse position. If they did accept that job—say they were better off with the wage subsidy so they got up to $847 a week—and there was a period where they had received both the Canada emergency response benefit and a salary, then I think the government said, when it released the backgrounder on the wage subsidy, that it would consider an approach to avoid duplication and to allow that employee to pay back the CERB if there was indeed duplication. That's something we're looking at.

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

Thank you. It's clear.

The second case that I want to share concerns a start-up that seems to be falling through the cracks. The person invested $1.6 million to launch their restaurant, which was scheduled to open in mid-March. To date, the business has incurred major expenses, including the lease, the cost of hiring a number of employees, and the perishable food supply, which constitutes a total loss. I believe that the full $1.6 million was spent. However, there don't seem to be any measures in place to help that business. It can't obtain the $40,000 loan because there were no wages to compare for the months in question, or even in January and February of this year. This also prevents the business from receiving the Canada emergency wage subsidy.

Does a program exist for this person, who is launching their business? Again, they invested $1.6 million in their business. The person doesn't seem entitled to any type of support measure.

Thank you.

[The Chair, Liberal, Wayne Easter]

Go ahead, Soren.

[Soren Halverson, Associate Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance]

The programs I would point to would be the loan guarantee from Export Development Canada and the BCAP co-lend facility from the Business Development Bank of Canada. Each of those facilities provides pretty much 80% coverage on credit that a financial institution would extend to an operation such as that one.

In the case of the EDC program, that takes the form of a guarantee on 80% of incremental credit that a financial institution would extend. In the case of the BDC program, it is 80¢ that BDC will lend for every 20¢ that the financial institution lends.

The way to get those programs is to go through the existing financial institution with which the business has a business banking relationship. Those facilities make it easier for the financial institutions to continue to extend credit to businesses in situations such as the one you describe.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Thanks, all of you.

We'll turn to Mr. Julian, and then Mr. Morantz and Mr. Fraser.

Peter.