Evidence of meeting #20 for Finance in the 43rd Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was question.
A video is available from Parliament.
Conservative
Ed Fast Conservative Abbotsford, BC
Do we know the rate at which businesses that received the CEBA benefit went insolvent or bankrupt after that? How many of those businesses actually went under?
Associate Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
We do not have that specific information. What I can tell you more generally is that the insolvency rates in Canada are extremely low, and our understanding of debt service, ordinary debt service in financial institutions, is that arrears on loans are as low as they have been for a very long time.
With regard to the CEBA program and the service of the loans, the applicants to that program do not have an obligation to repay for some time. In order to secure forgivability, they would need to repay by December 31, 2022, so there will come a point then where there's a test in terms of repayment.
Conservative
Ed Fast Conservative Abbotsford, BC
My time is short. I did want to pursue that a little more.
The CFIB has suggested that up to 240,000 small businesses are likely to close up shop by the end of the pandemic. That's a tragedy in the making, and my big concern is that there will be a very significant non-performing loan portfolio outstanding for the government to collect on in the future.
Do you understand that?
Associate Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
I can't comment on the CFIB's estimate of exit. What I can say is that, when this program was stood up, provisions against loan losses were anticipated. There of course is a significant forgiveness element, and as we stand today, the economy looks as though people in general are very much servicing the debt they have.
Liberal
Conservative
Ed Fast Conservative Abbotsford, BC
Yes. Do we know how many people received CERB benefits who are ineligible? What's the number?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
As my colleague alluded to, until we get their tax returns for 2019 and for 2020, we can't say that with precision, because some of that eligibility relates to their income for returns that are not yet due.
Liberal
The Chair Liberal Wayne Easter
Thank you all.
I have a point of clarification to Mr. Ram, if he's still there.
You indicated that, on the legislation coming in, sick benefits wouldn't be allowed for those folks who travel. I wasn't sure whether you meant that would also include retroactive back to January, and I want to be clear on that.
Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development
As I said, the government made an announcement and, again, I'll get back to the committee with a specific date. Yes, once that legislation is introduced and passed, we will be able to deny claims retroactively to that date.
Liberal
The Chair Liberal Wayne Easter
Thank you very much. I just wanted to be clear on that.
Ms. Koutrakis, you have a five-minute round.
Liberal
Annie Koutrakis Liberal Vimy, QC
Thank you, Mr. Chair.
I, too, would like to lend my voice to thank all our officials from the various departments who are here today for the excellent work that they and their teams have done on behalf of all Canadians.
I hope that all of you and your families are healthy and safe.
According to Statistics Canada, household savings have hit all-time highs during the pandemic. Not only has the pandemic curbed Canadians' spending, but direct support programs have provided additional savings.
During our recovery and beyond, how important is it that Canadians have more money saved for the future, and how will these savings boost economic activity and growth as we enter the recovery phase?
Associate Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Maybe I can just answer that.
At a very high level, I think it's quite intuitive. You're right that there are accumulated savings there. A lot of that would be due to the inability to spend on certain things that we would be able to spend more on normally. We would expect that it would give us a bit of a boost when the economy opens up, when it's safe to go out and consume, and that you would see a little more consumption than you otherwise would.
It also helps support consolidation of debt and households deleveraging and being in more solid situations from an overall debt standpoint.
Liberal
Annie Koutrakis Liberal Vimy, QC
Have you seen any reports that indicate to us that personal household debt is on the rise, or has risen?
Associate Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Personal household debt rising has been a concern for a number of years. There has been a reversal over this period, for the reasons you've outlined. Reducing that and deleveraging is obviously a good thing for the economy and for the stability of individual households.
Liberal
Annie Koutrakis Liberal Vimy, QC
Does Canada have the capacity to continue to provide assistance until economic metrics, like the unemployment rate and GDP per capita, return to their pre-pandemic levels?
Associate Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Certainly with interest rates being at an all-time low and starting out entering this period with a very strong fiscal position, the feeling is that, yes, we're in a position to do that.
Obviously we want to promote economic growth and get back to a situation where we're not spending at these high levels on an ongoing basis.
Liberal
Annie Koutrakis Liberal Vimy, QC
What impact would you say the CEWS program had on Canada's unemployment rate? How has this program supported a quick return to work for many Canadians, taking into consideration the additional measures like rent support and loans programs and help for the charities? What would have been the consequences of not offering CEWS and this direct support to businesses? How would it have affected unemployment?
Associate Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Earlier there was a question on the overall impact of all of the measures. The answer I gave looked at them all as an aggregate.
Others on the line would maybe have more to say about the specifics of the CEWS program vis-à-vis the others, but those are the kinds of things we're looking at. I just don't have an answer off the top of my head, but very much, the direction would be the same. This is support that is obviously helpful for jobs and for retaining workers and avoiding scarring impacts on firms.
Liberal
Annie Koutrakis Liberal Vimy, QC
To what extent were debt and tax deferral programs effective in providing Canadian families with flexibility and financial support, especially early on in the pandemic?
How many Canadians have made use of these programs?
Associate Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Thank you. I can take that one.
We had an early estimate when we introduced these deferrals. Overall, we estimated that there would be about $85 billion in debt deferred.
It is not really possible now to assess the implications and how many Canadians and businesses actually took that opportunity. For businesses, for instance, it's going to be difficult until we have returns, so I cannot really answer directly, but as I said, the potential was estimated as about $85 billion.
Liberal
The Chair Liberal Wayne Easter
Thank you, all.
We will go for another 12 minutes or thereabouts. Then we'll let the witnesses go and then deal with the motion.
Mr. Ste-Marie, Mr. Julian, Mr. Kelly and Mr. Fragiskatos, you have one question each.
Go ahead, Mr. Ste-Marie.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
My question is about sugar shacks. Obviously, they have a seasonal activity and this is the second season that will fail. When the wage subsidy program was introduced, it was not introduced in time for sugar shacks to take advantage of it last year. Now we learn that they would like to take advantage of it this year. But they had no income last year because their season fell apart.
Could they apply now for the wage subsidy?
They want to be able to prepare take-out food. They could use a helping hand. They would like to qualify for the wage subsidy.
Can they do this even if they had no income last year? If not, is the Department of Finance currently working on a solution for sugar shacks?
Earlier this week, I questioned the minister about this.