Finance Committee on Dec. 8th, 2020

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you very much for the questions. I'll start with the second then move on to the first.

I do want to thank the deputy—I'm looking at you on the screen right now—for his hard work representing the north. I think we are all aware that the north faces particular challenges always, but especially now in fighting the coronavirus.

In terms of cost-sharing programs and government programs to support the north in the fight against the coronavirus, I'm really glad to be able to say that the Northwest Territories received $30.7 million to support a range of measures that the territories have put in place to protect northerners. This includes, critically, the isolation centres, which are expensive but have—and I will be interested in the member's point of view—been, I believe, a critical element in the defence of the Northwest Territories against the coronavirus. Overall, in the fall economic statement we were able to say that the government has provided $272 million to northern communities and businesses.

Let me just say quickly on housing that it is a key area and it's something that we very much support. We realize there is an acute need in the north. The coronavirus, which of course requires us to be able to have space, has drawn particular attention to the housing need and the housing gap in the north, and as the member knows, our government has also committed to a very strong program to support rental housing construction across the country.

[The Chair, Liberal, Wayne Easter]

We will have to end it there.

Thank you, all.

We're turning, then, to Mr. Ste-Marie. He'll be followed by Mr. Julian and in a second round by Mr. Poilievre and Mr. Fragiskatos.

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

Thank you, Mr. Chair.

I want to begin by welcoming the minister and thanking her for appearing before the committee. I also want to welcome the members of her team joining us by video conference.

Minister, is your department, or the government more broadly, working on a program to support the aerospace industry specifically?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

The short answer is yes, absolutely. I can share the details if—

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

Take the time you need.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

We are working on a program like that right now. We understand the crucial role of the aerospace sector in Canada. It drives job creation and Canada's export market. Our government is convinced that we need a plan to support growth, and the aerospace sector will most certainly be a part of the economic recovery plan.

We all agree that Canada needs to transition to a green economy, and helping the aerospace sector make that transition will be absolutely necessary. We are working on that with Minister Navdeep Bains.

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

Thank you. That's very encouraging to hear. We eagerly await the details.

I imagine, from your answer, that you are taking a page out of France's book; the country put a condition on the financial assistance provided to Air France as part of its bailout for the aviation industry. The seven billion euros is conditional on the preparation of a plan by the airline to green in its fleet.

That works out well, because if the Canadian government had a similar program, it would secure sales for the Mirabel-built Airbus A220, developed as the C series. It is by far the most fuel-efficient and least polluting aircraft in its class. In Quebec, going green pays off.

I suggest the minister consider establishing a loan program for buyers. In the aerospace industry, airlines that own Airbus A220s put them in the air first because they use less fuel and are the only aircraft with the capacity to turn over all their air in flight instead of recycling it.

This is an invaluable asset for air carriers, something they have recognized, especially given the pandemic. Air carriers currently have no liquidity. They are not accepting delivery of aircraft they ordered so they don't have to pay the balance.

The area next to Mirabel is full of parked aircraft because the buyers aren't able to take possession of them now. Chances are they could take possession if they were able to get loans.

The last thing I will say is that the A220 aircraft is about more than just Airbus. It's about Pratt & Whitney engines, CAE flight simulators, Bombardier cockpits, landing gear, fuselages, Héroux-Devtek wheels and hundreds of other parts from small and medium-size businesses that are facing bankruptcy right now.

Minister, what do you have to say about that?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you, not only for your question, but also for all the information and advice you shared.

These are unprecedented times, so it's extremely important and useful to talk to our counterparts in other parts of the world regularly. Yesterday, I spoke with France's finance minister during a G7 finance ministers' meeting.

You're right, Mr. Ste-Marie. We are looking at France's and Germany's growth plans, and we are studying them closely. There are always things we can learn, and there may be a few things they can learn from us as well.

During yesterday's discussion between Canada and France, we talked about the green shift and shared ideas. We have a lot in common, so we should work together closely.

I will just add that I wholeheartedly agree that we need to think about clean growth as we develop the growth plan. That approach is very appropriate for the aerospace industry. I also agree that Canada's aerospace sector is very well-positioned, as the member mentioned.

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

Thank you.

Do I have any time left, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

No, I'm sorry. Thank you very much for that discussion.

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

Thank you very much, Minister.

[The Chair, Liberal, Wayne Easter]

We're going to Mr. Julian, who will be followed by Mr. Poilievre.

Mr. Julian, you have six minutes.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair, and thank you, Minister Freeland, for being here today. We you hope you and your loved ones are safe and healthy during this pandemic.

Canadians are really struggling. A lot of them are struggling to keep a roof over their heads and a lot of them are trying just to keep their small businesses going.

It's very disturbing, then, to find out from journalists who have been investigating some of the distribution of COVID relief that dozens of large Canadian companies have been using COVID funds to issue dividends, engage in stock buybacks and even give executive bonuses [Technical difficulty—Editor]

[The Chair, Liberal, Wayne Easter]

We lost you there, Peter, right where you said “executive bonuses”. Could you back up to that point?

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much, Mr. Chair.

My question is very simple. How many companies have engaged in these practices? What is the total amount of what they have received?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you very much for the question.

I do want to thank the member opposite for his advocacy for Canadian working families and for Canadian workers. I know that it is a very sincere concern.

Let me say a couple of things about the wage subsidy. The wage subsidy can, by very clear and specific design, only be used to pay employees. That money cannot be used for any other purpose. That is very important for Canadians to know, and that's something that the government needs to be very careful about and is very careful about.

The design of the wage subsidy was to encourage as many companies as possible to keep as many Canadians on the payroll as possible. So far, the wage subsidy has kept almost four million Canadians on the job. It has kept them employed. I think that is very important.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Minister, other countries have understood that you can't have companies taking COVID funds and then engaging in issuing dividends, stock buybacks or executive bonuses. In fact, other countries are taking action against these practices.

A number of journalists have been attempting to get information from this government about where the COVID funds have gone. Over $80 billion as yet has not been transparently accounted for. The journalists who are asking questions, like CBC and like newspapers, are not getting the answers.

What are you going to do about these practices that clearly contravene what Canadians would see as an appropriate use of COVID funds? Why is the government stonewalling on getting this information to the Canadian public?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you again very much for the question.

As the member opposite knows, in designing these COVID programs, we had to balance, and we continue to have to balance, the need to get the money and the support out there to keep as many people as possible in their jobs—which is our first and clear priority—with the need for compliance, audits and rules. We're always trying to strike that balance, and I believe that with the wage subsidy, we've done that.

I do want to emphasize for the member opposite, but also for any companies who are listening, that the wage subsidy must be used to pay workers. That is very clear, and we expect companies to comply with that policy.

[The Chair, Liberal, Wayne Easter]

We'll go back to you, Mr. Julian.

We lost Mr. Julian. There are two minutes left of his time, so we will come back to him later.

Mr. Poilievre, you're on for five minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

When will interest rates rise?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

As the member knows, I neither have a crystal ball nor am I the Governor of the Bank of Canada.

[Pierre Poilievre, Conservative, Carleton, ON]

Exactly. The minister has no control over when they rise and can't guarantee they'll be low for long. That's why she's claimed that she's locking in our debt for the long run. It's kind of like a homeowner who takes on a long-term mortgage rather than a variable rate.

She can tell us then, what share of the new debt that the government has added since March is locked in for more than four years.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

We were clear in the fall economic statement and in our printed documents that 10-year and longer bonds make up 50% of the issuance in 2019-20. They're planned to make up 29% of the issuance in 2020-21.

[Pierre Poilievre, Conservative, Carleton, ON]

That clearly contradicts the data on page 139 of the fall economic update, which shows that the combination of short-term treasury bills and short-term bonds of four years or less equals 75% of all of the debt that the government has issued since March, and that issues of 10 years and up represent a combined 25%. In other words, three-quarters of the new debt is short term and susceptible to sudden increases in interest rates.

Why are you contradicting the data that's in your own report?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, I am in no way contradicting the data. In fact, the numbers I am citing come from table A2.2 from the fall economic statement. As I said, what that table shows is the reality, which is that 10-year and longer bonds make up 15% of the 2019-20 issuance. Our intention, our target, is that they should make up 29% of the 2020-21 issuance.