Finance Committee on June 11th, 2020

[Bill Morneau, Liberal, Toronto Centre, ON]

There were a number of things wrapped up in that comment/question.

I think that first it's important to acknowledge that the Auditor General's resources were reduced under the previous Conservative government and we have subsequently increased them. The point that I think you're making is that we should continue to work with the Auditor General to make sure the office is appropriately resourced. I want to confirm, again, that we will do that.

With respect to the Canada Infrastructure Bank, we think it is a very important institution that will enable us to bring more resources into the building of infrastructure across the country. That is critical. We obviously have been very pleased that we got that institution up and running. Some of its projects are already supported, and there are other projects on the way. There has recently been a new chair appointed who has a particular expertise in this area.

This is an institution that I think will have a long-term and positive impact on our infrastructure and on our economy. I'm looking forward to more work that it's going to be able to do in the coming days, months and years.

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

And the answer to my question—

[The Chair, Liberal, Wayne Easter]

Ms. Dzerowicz, you will wrap it up.

[Julie Dzerowicz, Liberal, Davenport, ON]

Great. Thank you so much, Mr. Chair.

Thank you, Minister, for being here today.

I was running through the sixth report of the Department of Finance. It's 36 pages long. It's remarkable, very thorough. It reminds us about how much work has been done over the last three months. It truly is a testament to the hard work, the extraordinary work, by you, your team and the Department of Finance. I want to say a huge thanks to you.

My first question is regarding child care. We had an economist come before the committee last week. She told us that there is going to be no economic recovery if we don't figure out how we're going to support child care. Women will not be going back to work if we do not find a way to support child care. She talked to us about household spending accounting for over 56% of the GDP and how women's incomes are critical to maintaining household purchasing power.

My question is, what approach are we looking at to support child care to ensure maximum participation by women in the workforce moving forward?

[Bill Morneau, Liberal, Toronto Centre, ON]

As you know, we've embarked on these discussions with the provinces. We've put $14 billion on the table, which we believe will be important for a safe restart. For us, I think a safe restart means what it means to Canadians, that we need to be able to get back to work in a safe way, one that gives us confidence. Clearly, we will have a challenge over the course of the summertime in particular, because so many of the things that children often do—camps, day cares, child care facilities—might not be fully up. The issue that economist was bringing to the table is real, and we need to work on that. It is, however, different in different parts of the country. Child care is one of those areas in which different provinces have different regimes and different capacity based on what they've built.

We've put money on the table for many things, one of which is to support child care. We are looking forward to working with the provinces to provide that support, which along with the other programs we have, programs like the emergency response benefit, do have a positive impact as well, but we're going to need to find a way to provide that support so our economy can get up and running. Obviously, we recognize that the COVID-19 crisis has had a differential impact on different groups. It has had a more significant impact on young people and on people who are lower earning, and it has had a differential impact on women. That is all important and it's all part of how we're trying to respond to this issue.

[Julie Dzerowicz, Liberal, Davenport, ON]

Perfect.

I know that our government has announced $14 billion for the provinces and territories for sick leave, child care, and PPE, as well as for transit, so monies that will go be going to the cities. I know we're still in negotiations on that, but how are we going to ensure that the dollars allocated will go directly to each of those buckets? What kind of transparency are we going to be asking for as we're moving forward and delivering the $14 billion?

[Bill Morneau, Liberal, Toronto Centre, ON]

I think one of the things we have seen during the course of this pandemic, notwithstanding the regular differences in jurisdiction between provinces and the federal government, is a high level of co-operation and understanding that we need to support Canadians. We will need to negotiate outcomes and agree on what we're trying to achieve. We're putting $14 billion on the table, and that's important.

Those negotiations are going on. We should expect there will be different points of view, as there always are. But I think we share the goal and I'm confident we'll get to a conclusion that will make sense for Canadians in those areas, in the testing, tracing and sick leave and child care, and in helping municipalities, places where we know.... With regard to municipalities, if we don't have transit, people can't get back to work. So there's a whole host of areas we need to work together on that are largely provincial jurisdictions, but in which the federal government can provide support.

[The Chair, Liberal, Wayne Easter]

You can have about a 30-second question, Julie, and the same for the answer.

[Julie Dzerowicz, Liberal, Davenport, ON]

Sure.

Minister, how has the take-up of CECRA been so far? If the take-up hasn't been very big, would we consider other options to support small businesses and their need to pay rent?

[Bill Morneau, Liberal, Toronto Centre, ON]

First, I would say that we always have to look at all of these programs together. There are many different programs we're helping people with: the CERB, the wage subsidy, the CEBA loans to small business, etc. The emergency commercial rent approach, I'm very encouraged by right now. After many weeks of discussion, we've seen provinces move forward with bans on evictions. That is starting to change the activity between tenants and landlords. We've seen a very significant uptick in applications in the last few days. We're now in a phase where I think there are very encouraging signs that this program can have a big impact on commercial tenants. I'm looking forward to seeing landlords and tenants continuing to work together in making sure people can get through this time, and that's what we're trying to achieve.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thanks, both of you.

I just have a couple of points, Minister. On the economist that Ms. Dzerowicz mentioned, her key line was—I think it has a nice ring to it— that “child care is the secret sauce to recovery”. She explained in her evidence that “the secret sauce to recovery” means that if women got child care, they could get back into the workforce, etc. That has a nice ring to it.

There was a witness on June 4, and if there's one thing I can really congratulate you, the Prime Minister and the cabinet on, it's a willingness to basically change the programs to make them work as new information comes in. I know you're trying to do that with the wage subsidy, but one company that was before us on June 4 was Brandt Tractor—I know that Finance has this information—which employs 3,200 people. Their problem is that they actually bought out another company last year. If both companies were operating on their own, they would both qualify for the wage subsidy, but because they purchased this other company, that affects their revenue, so they don't have required drop in revenues to access the subsidy. They are an example that I know you're trying to fix. They're not the only company in that situation, but I just draw that example to your attention because they were a witness before the committee. They're a strong Canadian company, and they were very worried about their 3,200 jobs. This is in the evidence. I know that it's gone to Finance, but it's in the evidence for June 4.

With that, I again sincerely want to thank you for today, and also for the reports you give us. There is a lot of information. As Julie said, it is really unbelievable the amount of programs that have been rolled out and the changes that have been made to them as we roll along. There are still people falling through the cracks—I know that—but we thank you for your efforts. We know that you're working long hours and working hard.

With that, thank you for appearing before us again.

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you, Mr. Chair, and thanks for all the participation. We'll see you soon.

[The Chair, Liberal, Wayne Easter]

Now we're turning to the officials. I know that we have a new individual among the mix: Mr. Michael Carter, executive vice-president of the Canada Development Investment Corporation.

I know that members had asked that you appear before the committee on behalf of the corporation. A lot of the other departments are normal. I don't know if you have a two- or three-minute opening, Mr. Carter, that you want to start with, to basically explain what the Canada Development Investment Corporation does. If you do, we'll give you the time. If you don't, that's fine. We'll go to questions.

[Michael Carter, Executive Vice-President, Canada Development Investment Corporation]

Thank you, Mr. Chairman. I'm happy to give a short introduction.

The Canada Development Investment Corporation consists of a small group of people who are responsible to the Minister of Finance for looking after assets that the government gets and probably wants to resell. There are examples in the backgrounder.

When the governments bailed out Chrysler and General Motors, the shares in General Motors and Chrysler were given to us to look after and to sell. More recently, when the government purchased the Trans Mountain Corporation, the was given to us because the government does not intend to keep the Trans Mountain pipeline forever and will, presumably, sell it in the near future. More recently, we have, at the request of the government, incorporated the Canada Enterprise Emergency Funding Corporation, which is to carry out the LEEFF program, the large employer emergency financing facility program.

Thank you for inviting me to the committee. I'd be happy to field any questions on that.

[The Chair, Liberal, Wayne Easter]

I will go through the list of questioners. We will start the five-minute rounds with Mr. Morantz, then Ms. Koutrakis, Mr. Barsalou-Duval and Mr. Julian.

Before we start, though, committee members, this is something I should have mentioned earlier. When we discussed the steering committee report the other day, I think we established a certain deadline for witnesses for the general panel coming up. We've had to move that deadline up a little tighter, so there will be a second panel on Thursday, June 18 after the bank economists appear. There will be a general panel with general witnesses who have asked to appear, basically. The deadline for parties to have their witness lists to committee will be noon EST on Monday June 15.

Mr. Morantz, you have five minutes.

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

Thank you, Mr. Chair.

I want to speak to the Global Affairs officials who are here today—whoever could possibly shed light on a question I have.

It relates to an arrangement that's been entered into between Global Affairs Canada, UNICEF and the WHO with respect to COVID-related grants that were issued for projects in Gaza and the West Bank. I'm asking because I just want to make sure that these monies, these Canadian taxpayers' dollars, do not indirectly wind up with organizations that are listed on Canada's terrorist entity list.

One of the reasons it's a concern is that this has happened before. In 2018-19, Global Affairs granted $1 million to UNICEF, and it somehow wound up with an organization called the Union of Health Workers Committees, which is known as an NGO that is linked to the Popular Front for the Liberation of Palestine.

Could you comment on these concerns and provide us with some assurances that this is not occurring and that the proper mechanisms are in place to ensure that Canadian tax dollars do not wind up in these implementing partners that may have links to organizations on the Canadian terrorist entity list?

[Troy Lulashnyk, Director General, Maghreb, Egypt, Israel and West Bank and Gaza, Department of Foreign Affairs, Trade and Development]

Thanks very much. I'll field that one. I appreciate the question.

I'd say, first and foremost, that for the two projects you mentioned with the WHO and UNICEF, there are very specific and stringent conditions on that funding and a series of measures that we have put in place to ensure that there is no misuse or diversion of it in the field.

The first point is that these projects are being implemented directly by UNICEF and by WHO, and there are not sub-implementing partners involved. So UNICEF and the WHO are are directly responsible for the COVID implementation.

Second, for our projects, we have what is called “enhanced due diligence”, which includes a series of measures designed to prevent this misuse or diversion. It starts with very specific anti-terrorism provisions in our grant arrangements. It also includes detailed screening of individuals. On the ground there is very extensive monitoring and site visits. An oversight system is put in place, and we follow that up with detailed audit and evaluation measures so that we can be assured, as you have described, that the funds are used for the purposes they have been designed for, so there is very particular care of the programming taking place in West Bank and Gaza.

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

Are these new measures in place because of what happened in the incident I described earlier, or were these measures in place when your department provided a million dollars that wound up with the Union of Health Workers Committees?

[Troy Lulashnyk]

Yes, we run a significant number of projects in West Bank and Gaza each year. We apply this enhanced due diligence regime and framework to these projects. They have been in place for some time. They are very clearly specified, and we monitor every one of these projects.

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

If they've been in place for awhile and this incident happened.... I'm not sure if you're familiar with this incident, but I have the ATIP on it; I have a copy of the agreement. In the schedule it talks about the implementing partner being the Union of Health Workers Committees.

If you've had this regime in place and it's so stringent, how can we have confidence that if it happened then under the same mechanisms you're describing, it isn't happening now?

[Troy Lulashnyk]

These mechanisms are very stringent and cover a host of activities, from the agreement to the implementation to the operationalization on the ground, to working with the partners, then the audit and evaluation function at the end. They are robust. They are stringent. I am aware of the case you refer to. We have been working with UNICEF, with the other programmers. We have applied this system diligently across the board.

[The Chair, Liberal, Wayne Easter]

Thank you.

Ms. Koutrakis.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you to our witnesses this afternoon.

I have two questions, Mr. Chair, and they are both to the Canada Revenue Agency.

Recently there have been debates around the necessity of fines and potential jail time for the small number of people who take advantage of the CERB by submitting fraudulent applications.

Can a representative from the CRA comment on why it is important to include provisions that penalize and prosecute people who abuse the CERB?

[Ted Gallivan, Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency]

I think the first thing to talk about is the word “fraud” and where we would apply these measures and where we wouldn't. People who have made a mistake, people who are confused, will simply be asked to repay the funds. That's not really where we are focused.

We are focused on organized crime organizations, for example, people who have taken advantage of data theft and ID theft. We've heard reports of people who have gone into senior citizens' homes and tried to take advantage of vulnerable Canadians, making claims under those names.

Those kinds of incidents call for tougher measures. We are getting a lot of leads from Canadians. We ourselves have picked up a number of cases where we are concerned. We need our own enforcement mechanisms. Right now we have a number of joint operations with law enforcement, with local police. We would like to have our own powers at the CRA so we can pursue them ourselves.

Again, an important point to make is that these measures are for the people operating at scale or taking advantage of the data of many innocent Canadians.