Finance Committee on April 24th, 2020

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

I am as well, but I'll just keep going because I'm running out of time. I appreciate those remarks for sure. I was an undergrad not too long ago and having a summer job meant I could pay my bills and have that employment and the skill development I depend on today.

Mr. Brown, I want to go back to you briefly with the last minute and a half I have here.

Are you getting a sense from your membership that they are looking to meaningfully contribute to the pandemic response? Before you answer, I want to put some context to that.

We are seeing considerable labour shortages in the food supply chain. We're unable to get the temporary foreign workers we're used to because of border closures because of COVID-19. The Conservatives, you may have heard, recently proposed a solution to both those problems. Having students go to work locally on farms to fill those labour shortages would be incredibly meaningful, given the fact that we're seeing food shortages and youth don't have employment opportunities.

Do you think that students would be prepared to rise to the challenge and maybe step outside their comfort zone and take a shot at working on a farm?

[Adam Brown]

It's an interesting question. We've been discussing that internally within our organization as well.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

That's good to hear.

[Adam Brown]

I think, first and foremost, students generally want to find jobs that are within their field of study, where they can gain skills that they can add to their CVs and help grow their careers afterwards. That being said, I think as well the Canada student service grant, hopefully, incentivizes students to get out and really take part constructively in helping our society combat the pandemic.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Yes, I think that's a good point.

[Adam Brown]

The other thing I would point out as well is that with having students go to work on farms, there are certain costs potentially associated with things like relocation and whatnot. It would be a change, for sure.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

I think you raised some good concerns.

I'll just conclude, Chair. I'm running out of time.

The Prime Minister has said that this is a wartime effort. The Conservatives believe that it's time for innovative solutions, thinking outside the box. So why not mobilize our healthiest, most fit population and see if they'd be willing to round out their resumés, and challenge themselves and further develop their work ethic? I think it might be a good opportunity.

Mr. Brown, perhaps you could discuss that with your membership. Let us know of any positive or negative feedback you get.

[Adam Brown]

Absolutely, I'll be happy to follow up.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thanks, Mr. Brown.

[The Chair, Liberal, Wayne Easter]

We will have to end that round there.

Next is Mr. Fraser, and then we'll go to Mr. Ste-Marie.

Sean.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you so much.

Let me start by saying thank you to our witnesses. This has been one of the most interesting panels, from my perspective, that we've had on this study to date. Unfortunately, I'll only have time for a few quick questions, so if you could keep your answers short, I'd appreciate it.

I'll start with Professor Milligan.

One issue that has come up previously on this committee has been the issue of a universal basic income. My colleague Mr. Julian has suggested a $2,000 monthly payment would be appropriate. I know you've had the opportunity to consider this type of an approach. What would the cost be compared to an ordinary spending cycle for the Government of Canada?

Maybe we'll start there and follow up where the answers take us.

[Prof. Kevin Milligan]

Sure. Of course, the cost depends on the structure that you put on such a benefit. As a starting place, if you imagined sending out $2,000 a month to every Canadian adult, that would be 30 million adults. If you carry the number of zeroes there, that's $60 billion a month. Our GDP is about $200 billion a month, so that's about 30% of GDP just for that income support, before you help out small business, big business, the cultural sector and other sectors. That seems like a lot of money to put in one pot.

[Sean Fraser, Liberal, Central Nova, NS]

If I go from there—let's forget whether it's an affordable plan—the logistics of the idea are the things I worry about. I think there is sometimes a mistaken assumption that there's a “send money now” button sitting in the Department of Finance offices somewhere.

Can you give your opinion as to whether the measures that we have implemented through the CERB, the GST rebate, Canada child benefit enhancements, etc., are actually more effective to get money to perhaps a better targeted group of Canadians more quickly than it would have been to create a database that would send money directly to every Canadian, whether they have lost income or not?

[Prof. Kevin Milligan]

When you think about models of basic income transfers, if we had time to implement such a thing, of course, we're smart people, we know how to figure out administrative systems, you could perhaps find a way to implement that. That's not really a barrier when you're thinking about a long-run kind of program that you might think about and have a couple of years to put in place.

That wasn't the situation we were in here. Here we were in a situation where Canadians needed income as soon as possible. In looking at the decision that was made to use the application-based system of the emergency relief benefit through the CRA, my understanding is that was as fast as things could be done. There was no “send money now” button sitting on anyone's desk.

If we had used, for example, the 2018 tax filer database, well, first you'd have to reverse engineer that database to send money in the other direction. Second, you'd have to at least clean it up a bit because some people have died, unfortunately, some people have been born, some people have moved, there's banking information. All those things, when you're doing them 30 million times, take time to do.

There was a choice made that the emergency relief benefit was going to be faster than doing it through the existing tax database. I think the proof is in the fact that they did get this money out by early April and a lot of Canadians benefited from it. I think a lot of Canadians are happy with that.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much.

I have a final question for you, Professor Milligan.

You mentioned that at a certain point in time we're going to have to send a clear signal to allow Canadians to plan based on the timing of when these benefits will no longer exist, because they are temporary in nature. When will we know the time has come to pull the band-aid off, so to speak, so that Canadians can adjust back to a market-based economy rather than one that's being propped up by very necessary emergency benefits in the interim?

[Prof. Kevin Milligan]

My easy response is that I listen to the scientists and the medical experts on that question, but we also have to be ready as economists and policy analysts to make moves once we hear there is a transition to be made, listening to the health experts. What I mean is thinking about the hiring decision. A company that might be responding to the wage subsidy wants to know whether it's going to be there in June, July or August if they're making a hiring decision in May. It might be the case that the wage subsidy is smoothed out over time and goes down from 75% towards 0% over a number of months. That's one possibility. That's information we want the companies to have when they're making hiring decisions.

I understand that we cannot put deadlines on things right now without having more information about the course of the virus, because as others have said, the virus sets the timeline. However, we need to be ready when the time is there. We need to think about how we can phase these programs out so that we can get back to an economy that works for all Canadians.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Chair, is there any time remaining?

Very quickly, Mr. Brown, thank you for the work you're doing. I'm a former student leader and CASA alumnus and I appreciate your being back in committee with us today.

For what it's worth, following up on Ms. Dancho's comment, I got off the phone with the Nova Scotia Federation of Agriculture earlier today, who were very curious to see if the new Canada student service grants would potentially allow students to, essentially, volunteer in food production to take advantage of that benefit.

My question for you is based on the unique challenges that students are obviously facing, not only having to provide for their cost of living but also to save for tuition in the fall. Some students will qualify for the CERB, and others for the new Canada emergency student benefit. However, in the absence of programs that expand grants, student loans or this new Canada student service grant, I'm curious whether you think the consequence would be that a significant number of your members would not be able to afford their education and might not return to school this September when the next semester commences.

[Adam Brown]

Absolutely. When you look at how different provincial governments are handling it as well, I think a very sound federal response, as has been done with the doubling of the Canada student grant in particular, will help students, particularly those from low- and middle-income financial backgrounds, head back to school in the fall.

[Sean Fraser, Liberal, Central Nova, NS]

That's my time.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Yes, that's your time.

Thank you all.

Next we'll go to Mr. Ste-Marie, and then to Mr. Julian.

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

Thank you, Mr. Chair.

First, I would like to thank all the witnesses for their very constructive presentations. My first question is for Mr. LeBel.

Mr. LeBel, could you share with us your concerns about the reality of international students?

[Philippe LeBel]

My colleague Adam Brown talked at length about it.

At the moment, many international students do not know whether they will be able to stay in the country or come back in September to start the next session. Many people would like to stay in Canada to avoid the epidemiological risk associated with travel. They would also like to have financial assistance and to work during the summer. Right now, Immigration, Refugees and Citizenship Canada has many questions to answer.

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

Thank you.

My next question is for Mr. Céré, whom I also thank for his presentation.

In the event of bankruptcy, workers' and retirees' pension funds are poorly protected because they are not considered a priority in the legislation. Even the federal government takes precedence over them. The White Birch plant and Sears are sad examples.

With the current crisis, would it not be appropriate to act immediately to protect pension funds before we see a possible wave of bankruptcies?

[Pierre Céré]

Is your question for me?

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

Yes.