Evidence of meeting #42 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was students.
A video is available from Parliament.
Liberal
The Chair Liberal Wayne Easter
Thank you, Mr. Shugart. We'd appreciate receiving that contribution agreement, and we will have the Kielburger brothers—
Liberal
The Chair Liberal Wayne Easter
—before the committee on the 28th.
Mr. Fortin, you have a point of order?
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
I think there's a misunderstanding. Ms. Gaudreau was asking for the report on the due diligence that was carried out, not the contribution agreement. Obviously, we'd like the contribution agreement as well, but it was the report containing the due diligence that was carried out that Ms. Gaudreau was asking for. I'm not sure whether the witness understood that.
Liberal
The Chair Liberal Wayne Easter
Okay. We'll come back to Mr. Shugart, if he can answer along that line, and then we'll go to Mr. Julian.
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
Chair, I understood perfectly, and I undertook to provide both.
Liberal
The Chair Liberal Wayne Easter
Okay. Thank you very much.
Then Mr. Julian, you may have the last question.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you, Mr. Chair.
Mr. Shugart, earlier you made what I thought was quite a surprising comment about how the size of the financial decision meant that you didn't see how the Finance Minister and the Prime Minister could have recused themselves. This is quite a surprising comment. So is it the position of the PCO that there's a limit to where the conflict of interest code would apply? At what level is that? If a billion dollars of taxpayers' money is too much for a minister to recuse himself from considering, at what level is that no longer a consideration? Is it $50 million? Is it $1 million? Could you please clarify your remarks?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
I will repeat them, Mr. Chair.
What I said is that I could not imagine how the Prime Minister and the Minister of Finance could not have been involved as part of this process. I did not refer specifically to recusal at cabinet. I indicated that this was a fundamental policy issue for the government. I do not see how the Prime Minister could have no knowledge of the development of the policy that would meet the needs of students impacted by the pandemic.
For the finance minister, given responsibility for the finances of the country, given the significance of the expenditure here, of up to $900 million, with an initial tranche in the order of $500 million, at some stage, the Minister of Finance would, in my judgment, have to be aware of the scale of the program, or existence and development of a program of that scale.
I make no judgment whatsoever about the Prime Minister's comment on his non-recusal, and I make no judgment about the finance minister's comments in that regard either.
Liberal
The Chair Liberal Wayne Easter
We will have to end it there. I think we had a fruitful hour of discussion with the Clerk of the Privy Council.
Mr. Shugart, thank you very much for your appearance today.
There are a number of documents, I think, that you have agreed to provide to the committee, and I think you're well aware there's also a motion by the committee looking for documents by early August. Some of them will be the same, I'm sure.
Thank you very much for your attendance today and your answers to our questions.
With that, we will suspend for a couple of minutes to bring on the next panel, and then go to a group as individuals and the Public Service Alliance of Canada.
Liberal
The Chair Liberal Wayne Easter
I call the meeting to order.
Welcome, witnesses, to meeting number 42 of the second panel of the House Standing Committee on Finance today.
As you know, we are meeting on government spending, WE Charity and the Canada student service grant.
Today's meeting is taking place by video conference, and the proceedings will be made available via the House of Commons website.
With that, we will start. First, we have two witnesses as individuals, and then the Public Service Alliance of Canada. I believe one doesn't have remarks; it slipped my mind who that is. We'll start with Mr. Lapointe, the president of Focus OSBL Consulting Service.
Mr. Lapointe, do you have opening remarks?
Daniel Lapointe President, Focus OSBL Consulting Service, As an Individual
I'm the person who does not have opening remarks.
President, Focus OSBL Consulting Service, As an Individual
I'm happy to appear here in front of the committee to answer any questions you may have. You just gained five minutes.
Liberal
The Chair Liberal Wayne Easter
Thank you very much for that, Mr. Lapointe.
We'll turn to Joshua Mandryk, labour and class actions lawyer, Goldblatt Partners LLP.
Mr. Mandryk.
Joshua Mandryk Labour and Class Actions Lawyer, Goldblatt Partners LLP, As an Individual
Mr. Chair and members of the committee, thank you for the opportunity to speak with you today.
My remarks are focused on concerns that the Canada student service grant raises regarding potential volunteer misclassification and the exploitation of students and recent graduates. I also want to speak about how this program can be salvaged. These are concerns that strike at the core of the program rather than the question of by whom it is administered.
Before I begin, I want to briefly introduce myself and my experiences with these issues.
My name is Josh Mandryk. I'm a labour and class actions lawyer at Goldblatt Partners. My class actions practice is focused exclusively on employment class actions involving wage theft, unpaid overtime and other issues of non-compliance with employment standards legislation. Many of these cases are national class actions, and a number of these cases involve claims of the misclassification of employees, whether it be as independent contractors, student athletes, interns or volunteers.
Prior to my time as a lawyer at the firm, I was actively involved in the fight for the rights of interns and other student workers, first as the co-chair of an organization called Students Against Unpaid Internship Scams, and then later as the executive director of the Canadian Intern Association.
My engagement with issues regarding volunteer misclassification has continued into my work as a lawyer at Goldblatt Partners, including by launching what I believe to be the first volunteer misclassification class action in Canada.
It's with that background that I come to you to share my concerns with respect to the Canada student service grant. In particular, the program raises concerns with respect to potential employee misclassification for participants, for charities and NGOs, and for the government itself.
First, the program potentially exposes its participants to workplace exploitation and misclassification. The question of whether someone is a true volunteer is a legal determination that rests on more than simply whether the hiring entity says they're a volunteer. This program raises legitimate concerns as to whether these individuals are true volunteers.
Second, this arrangement potentially exposes charities and not-for-profit organizations to potential liability for wage and hour claims, whether it be through employment standards complaints, small claims court actions or even potential class actions brought by the so-called volunteers participating in the program.
Finally, the Government of Canada itself could potentially find itself entangled in these legal disputes either as an alleged common employer or as an alleged labour supply agency, given its role as paymaster and given its role in connecting volunteers with placements through the I Want to Help portal.
Aside from those legal concerns, the Canada student service grant also raises concerns about fairness and about the type of support the government should provide for students and recent graduates. These concerns include the following.
First, the rate of pay provided through the program is significantly less than minimum wage under the applicable employment standards legislation, and setting aside the legality of that arrangement, it raises fairness concerns and it sends a message that the government doesn't value these workers' labour.
Second, mandatory volunteer placements are far inferior to paid employment in terms of the doors they open and in terms of what that work experience means for a young worker on their resumé. To the extent that one of the goals of this program is to support students and recent graduates in their career paths by ensuring they have meaningful summer work experiences, the program as structured fails to deliver.
Jumping to my fourth concern, the program is seemingly at odds with the government's own efforts to crack down on the exploitation of workers through unpaid internships, including the standards for work-integrated learning activities regulations that are set to come into force in September 2020.
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
Mr. Chair, could you ask the witness to slow down a bit? The interpreter can't keep up. It's like listening to a race.
Labour and Class Actions Lawyer, Goldblatt Partners LLP, As an Individual
Will do. I'm sorry about that.
As I was saying, the program itself is seemingly at odds with the government's own efforts to crack down on the exploitation of workers through unpaid internships, including in regard to the standards for work-integrated learning activities regulations, which are set to come into force in September 2020.
Finally, this program places onerous demands on students, who are expected to work 500 hours between June 25 and October 31 in order to obtain the full $5,000 grant. This translates into working more than 50 hours per week between June 25 and the end of August, if someone were to try to hit the 500 hours before the school year starts, or it would translate into working more than 27 hours per week every week from the start of the program on June 25 until the end of October. The latter arrangement potentially interferes with these students' studies during the first two months of school. Also, these concerns about the obligations this places on students are heightened given the unique financial, family and child care obligations Canadians are facing during the COVID-19 crisis.
For all of these reasons, the Canada student services grant has serious design flaws that give rise to the exploitation and the potential misclassification of students and recent graduates, and it is in need of a serious overhaul. At this point in time, the best way to try to salvage the program would be to completely remove the mandatory volunteerism requirement, to convert the existing positions into paid jobs through the Canada summer jobs program, and to expand and build up the Canada emergency student benefit to CERB levels and also extend it to international students.
Those are my remarks. I welcome your questions regarding these matters. Thank you.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Mr. Mandryk.
We'll turn to Mr. Aylward, the national president of the Public Service Alliance of Canada.
I would say before you start, Chris, that we do want to recognize the hard work, long hours and different work situations that the public service has followed to assist the government and Canadians in dealing with the COVID pandemic. I want you to know, on behalf of the committee, that we really appreciate the efforts that have been made there.
The floor is yours.
Chris Aylward National President, Public Service Alliance of Canada
Thank you, Mr. Easter, and thank you, committee, for the invitation to appear today.
The Public Service Alliance of Canada represents over 200,000 workers, and 150,000 of those workers work in the federal public service and in federal agencies.
We also represent 40,000 members in the post-secondary education sector; some of these members would be eligible for the new Canada student service grant. We certainly understand the need for a program to assist students; however, this program and the process to establish it are seriously flawed.
The COVID-19 pandemic shut down most of the economy in March. Reopening the economy has been cautious, as it should be. However, this has had a serious impact on potential earnings for young people who are either on the verge of starting their post-secondary education or have recently graduated. The goal of the Canada student service grant program is to provide them with earning opportunities.
While the program was announced on April 22, the announcement that WE Charity would be given the contract to administer it was not made until June 25. It appears that WE Charity was advised two weeks earlier that it would receive the contract. The Prime Minister has claimed that bureaucrats had determined that WE Charity was the only feasible option to deliver the student grant program.
Subsequent events have raised questions about—
Liberal
The Chair Liberal Wayne Easter
Mr. Aylward, could you lower your mike a little? I understand that you're coming through a little crackly for the translators. Just lower it a little further from your lips. Thank you.
National President, Public Service Alliance of Canada
Thank you.
Subsequent events have raised questions about how the decision was actually made. We ask why the federal public service was not directed to administer the student grant program in the first place. At one point, the Prime Minister claimed that WE Charity was the only organization capable of delivering the program on the scale that was needed, yet a significant portion of the grant program budget, $43.5 million, would have gone directly to WE to ensure that their organization could deliver the program. The size of the program, $912 million, is a very large amount for any organization to administer across all provinces and territories, and in all regions of the country.
The successful rollout of the much larger Canada emergency response benefit program, CERB, was done in very short order, and it proved the public service capable of adapting to meet new demands and moving quickly to do so. While the government has argued that the student grant program needed to be turned around quickly, it took almost two months to even announce who would receive the contract. Today, three months later, the program is still not in place. While the program was scheduled to run until October 31, students will have more difficulty accumulating the necessary hours to actually receive any grant money.
If the program had been turned over to the public service to organize a delivery system, it is likely that students would now be receiving some actual benefit. For example, the student loans program could have been adapted to expand eligibility and include grants equal to the funding allocated to the student service grant program. The infrastructure was in place, and this would have gone a long way to alleviating students' concerns about how to pay for tuition, materials, food and lodging while they study. It would have also supported students who may have to defer their continuing education for financial reasons due to the pandemic. I suspect that if the program is going ahead, it will be turned over to Employment and Social Development Canada, as it should have been from the start.
In addition to questioning why the government decided to contract out this program, we are concerned about the premise of the program, which would pay volunteers. We see this as just another example of young people being forced to accept precarious work at poverty-level wages. The payments are calculated using 100-hour thresholds for each $1,000 grant. That's a wage of $10 an hour, which isn't even minimum wage. Minimum wages are at least $11 an hour and higher across the country. For example, in Ontario, it's $14 an hour.
Students—