Finance Committee on May 14th, 2020

[Ted Gallivan]

We've been working closely with CPA Canada almost daily by email and phone and having teleconferences with members. Also, with the CFIB, the Canadian Tax Foundation, l'APFF in Quebec, so we're in pretty close consultation with the practitioner community. They're giving us feedback on what they're seeing, and that allows us to react before Canadians are adversely affected. We're pretty much in daily contact with those stakeholders, and they're being pretty clear about what they and their clients need.

[The Chair, Liberal, Wayne Easter]

Thank you.

We'll have to end that there, Ms. Koutrakis.

Mr. Cooper.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you, Mr. Chair.

I want to follow up on the issue of fraud and abuse with respect to CERB and EI. Could the officials clarify just how many applications have been red-flagged?

[Cliff C. Groen]

We have an active program in which we proactively identify potential issues. I can confirm that, as many members would know, back at the beginning of April we had identified situations in which clients had mistakenly applied for both benefits, once on the CRA side, once on the Service Canada side. At that time, we identified just over 200,000 clients who had made that mistake. Those individuals will be contacted by CRA in the coming months, at which point the money will be recovered from those Canadians.

We also have active measures in which we are constantly reviewing and identifying potential issues, which we pursue.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Again, following up on that, how many applications have been red-flagged for fraud?

[Cliff C. Groen]

I don't have a specific number. Aside from the 200,000-and-some that have been identified as duplicate payments, I don't have any other specific number on specific applications that have been.... When it comes to language, we don't use the term “red-flagged”. I don't have any specific number there.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Let me just say that I find it very disturbing that applications are being processed...not because the application was fraudulent and yet got through because efforts were being made to get monies out; that's one thing. But it appears that applications are being processed even where there is evidence of fraud and abuse. There may be tens of thousands of applications being processed where there is fraud and abuse.

For the minister or a spokesperson of the minister to say that there are back-end safeguards.... Well, okay, that's fine; but why get rid of all front-end safeguards when there is evidence of fraud and abuse? Would you care to comment?

[Cliff C. Groen]

Certainly.

When we were rolling out the program, we knew it was fundamental to be able to process applications very quickly. We could not deliver the program under the regular EI program, which has a number of different controls, both up front and on the back end. If we had done that, it would have meant that Canadians would have been waiting months and months before they could have been paid. We made a conscious and deliberate decision, in order to get money to the millions of Canadians who needed the benefit, to streamline the process and leverage an attestation model.

That said, I absolutely want to assure this committee that the integrity measures are strong and robust. We do have means and mechanisms whereby we will be able to address any potential fraud and abuse of the program. We and the CRA have lots of measures in place that we will continue to use going forward.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Okay, well—

[The Chair, Liberal, Wayne Easter]

Michael, I'll give you your time back—I've stopped the clock—but I can give an example of what can happen. I mentioned it earlier with the minister.

I had a construction company with 28 employees call me. Their workers were laid off while they put in proper washrooms on their construction sites to meet COVID-19 standards. They applied for EI and they were on EI. Because they went back to work just as the system was starting up, they automatically went to CERB without asking for it. It was an honest mistake by everyone. So 28 people got CERB, they called me, and I basically said to set the money aside. It was an innocent mistake in a fast-moving system.

That was 28 people right there. It wasn't fraud. As the system was changing, EI rolled them over when they had no way of reporting that they were going back to work. Those things happen. That's an innocent example. There are probably others that are not.

The floor is yours, Michael. Go ahead.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you, Mr. Chair.

I will turn to another topic, one that I raised with the minister. It is with respect to new businesses. I spoke with a business owner who invested $200,000 to open a salon. Just at the moment he was about to hire four people and start the business, COVID-19 happened. He doesn't qualify for the wage subsidy, because he has no revenue decline. He doesn't qualify for EDC or BDC loans, because he has no revenue. He doesn't qualify for CEBA, because he doesn't have a payroll.

The minister, in answer to that question, indicated that this was very much something that the government was attuned to and was ready to address. I'd be very interested in hearing what details the officials might be able to provide to reassure small business owners like the one I'm talking about that help is finally on the way.

[Leah Anderson]

I would just reiterate what the minister said. We are working hard on all these issues affecting small businesses and larger businesses. We've taken a number of measures and continue to look at the impact they've been having. If there are any outstanding areas that need to be addressed, and this is very much on our minds, we'll continue to evaluate and recalibrate as we go.

[The Chair, Liberal, Wayne Easter]

Thank you. We'll end it there.

We'll go to Ms. May.

I think Mr. Ram's system is working now. I'm not sure whether Gabriel is still on or not. We may have to go with a written response. Gabriel, if you're on, click on and we'll go to you so Mr. Ram can answer your question.

Ms. May.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

How much time, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

We'll give you three minutes.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thanks.

I hope I won't use it all and then more members can ask questions.

I'm not sure which officials I need to ask this, but it's following up on this general conversation we've been having about getting things out quickly versus full controls and rigour. What I wanted to suggest, because it's been missing in this conversation, is that part of the reason for speed is flattening the curve. People won't stay home and stay away from work if they're not financially secure and don't see some aid coming. There's the connection between getting CERB out quickly, getting it to everyone who needs it quickly, and not necessarily being concerned at the front end with making sure that everybody is “eligible”. I wouldn't call it all fraud. I certainly agree with the chair that there are lots of circumstances here where there could be confusion.

What I wanted to ask officials was, to get a sense of if the instructions had been other than what they were, if the instructions had been, “Don't approve anyone until you've checked, you've gone back into their background, and you know that this is someone who deserves the benefit.” What would that have cost the Government of Canada? Did we have the capacity to do that?

We've heard from witnesses that it would have significantly delayed when people got their money, for which I think there would have been a public health impact. This is a public policy issue at a very high level. I just wonder, is there any estimate of what it would have cost the Government of Canada to have staff checking all the applications?

[The Chair, Liberal, Wayne Easter]

Mr. Vermaeten, likely.

[Frank Vermaeten]

I'm happy to respond from our perspective.

I want to clarify that there are certainly upfront checks that are done. For example, we check that the social insurance number is valid, that the person is of legitimate age to be able to receive this and that there's no double-dipping with respect to the various programs. Certainly there is upfront verification. I just wanted to assure you that it's not without that.

With respect to creating a system where individuals would have to prove that, in fact, they have no income, I can't tell you what the cost would be, but I can tell you it would be an extremely lengthy process to provide us the information. That they don't have income is very difficult to prove in real time. I think not only would it have been very costly, but I think most importantly it would also have delayed the ability to get the money out to individuals by weeks, if not months.

[The Chair, Liberal, Wayne Easter]

Ms. May, do you want a supplementary?

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

No, I'm fine. I just want to thank all of you for your hard work.

[The Chair, Liberal, Wayne Easter]

Thank you.

We'll go to Mr. Ram and Mr. Ste-Marie. Did you note the questions, Mr. Ram?

The floor is yours, Mr. Ram.

[Elisha Ram]

Thank you.

Can I confirm that the translators can hear me and everything is fine on the audio side?

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

Seems to be.

[Elisha Ram]

Great, glad to hear it.

Thank you, Mr. Chair, for the opportunity to respond. If Mr. Ste-Marie would not mind repeating his question, that would be very helpful to me.

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

Great, thank you.

The first question is about the vagueness of the criteria for people whose EI benefits are running out and who want to apply for the CERB.

Can those people apply for the Canada emergency response benefit after a week? How does that square with the 14-day no-income requirement? Does that mean a person can't receive both EI and the CERB at the same time, or that they can't collect them both during an official CERB period, like the period from March 15 to April 11 or the period from April 12 to May 9, and so forth?