Finance Committee on March 11th, 2021

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

We'll never know how this turned out now.

[The Chair, Liberal, Wayne Easter]

We'll suspend. I am told that you can be in two Zooms at once. I didn't know that.

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

I didn't know that either, Wayne. I'm a little scared. My technical capacity might be stretched by that kind of effort.

[The Chair, Liberal, Wayne Easter]

We'll try that. It might work and it might not, so each of you are on your own.

We'll suspend until after the vote, and the minister will have about 29 minutes with us.

The meeting is suspended.

[The Chair, Liberal, Wayne Easter]

I will call the meeting back to order.

I don't see Mr. Ste-Marie.

We'll start with you, Peter, for six minutes.

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

Thanks, Mr. Chair.

Thanks, Minister Freeland, for being here today. We hope that you and your family continue to be safe and healthy during this pandemic.

I want to say at the outset that I think it is absolutely inappropriate that we have gone two years without a budget. In Canadian history, we have had massive crises and we've never had a two-year period without a budget. It's a question of accountability.

Despite the fact that we're talking about the fall economic update and Bill C-14 today, the reality is that C-14 has areas where it doesn't respond at all to the needs of Canadians at this critical time during the pandemic.

I'll start with an issue that I have raised with you, which is the issue of subsidies that have been given that permit abuses. We raised this with your predecessor last spring. If we're going to give wage subsidies and supports for businesses, we need to put in place...as other countries did, to avoid abuses—like dividend payments, executive bonuses and stock buybacks—of government funds.

We have seen a whole range of abuses taking place with government funds. There's Bell Canada, which received $122 million and laid off hundreds of workers and are still paying dividends. Suncor laid off a couple of thousand people.

Here is a critical issue. You referenced it in your opening remarks when you talked about $505 million for long-term care. Extendicare, Chartwell and Sienna Living paid out, collectively, over $172 million in shareholder dividends, despite the fact that they were receiving massive and significant government subsidies. During this time and up until now, over 760 residents and workers have died in their facilities.

I think it is obvious to anyone that instead of being paid out in dividends, that money should have gone to resident care and to support the safety of their workers.

My question is very simple. Do you agree that there was a major mistake made in not ensuring that abuses like this couldn't take place? Why wasn't this loophole closed in Bill C-14?

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

Thank you, Mr. Julian, for raising all of those important issues.

I'll start with the wage subsidy. If I have time, I'll say a couple of things about long-term care.

On the wage subsidy, I hear your concerns. It is important for companies to understand that, legally, the wage subsidy can only be used to pay employees. It can't be used for any other purposes. Any allegations of misuse should be reported to the CRA. There are penalties for misuse of the wage subsidy. It is an additional 25% penalty and potentially imprisonment, in cases of fraud.

It was and is important for us to have that support out there, but we do take abuses seriously.

The other thing I would say about the wage subsidy is that my priority, at the end of the day, is to keep as many Canadians working as possible. Our supports—and I would say the ingenuity and resilience of Canadians—mean that we are getting through this unprecedented global pandemic.

However, at the end of the day, there are still 636,000 Canadians who don't have a job today who had one before the virus hit. For that reason, our objective has been and continues to be to have in place the most comprehensive set of supports we can to keep people working. The wage subsidy is a really important program in that regard because it keeps people connected to their jobs.

As you know very well, Mr. Julian, that is so important for a person's sense of self-worth and dignity. Also, if one becomes long-term unemployed, it is much harder to get back into the workforce. That's the rationale there.

I could say more about long-term care, but I see you wanting to talk and maybe I've run out of time.

[The Chair, Liberal, Wayne Easter]

We will have to go to Mr. Julian.

Go ahead.

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

Thank you.

You talked about comprehensive supports. Here's another example: part 2—student loan payments. Despite the fact that the NDP steered through a motion, which passed unanimously, for a moratorium on all student loan payments, what we have is just a moratorium on interest.

Students are struggling. People with disabilities are struggling. These are situations that are well known to Canadians right across this country. The NDP has also proposed supports going immediately to people with disabilities, far beyond the partial payment that was made this fall and that took nine months to occur.

Why didn't the fall economic statement ensure that there was a moratorium on all student loan payments and that there were adequate supports in place for people with disabilities?

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

Mr. Julian, I'm really glad you raised students. In my opening remarks, I singled out the importance of Bill C-14 in allowing us to provide more support for students. It is really important to me, and you're right to raise the issue.

What I would say, collectively, is that we need to understand that the three groups that have been hardest hit by losing their jobs are youth, women and low-wage workers—particularly racialized and new Canadians. We need to be sure that our support is targeted there.

[The Chair, Liberal, Wayne Easter]

Thank you both. We'll go to a five-minute round, first with Mr. Fast and then on to Mr. McLeod.

Ed, you have five minutes.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you.

Minister, earlier in this meeting you referred to chart A2.3. You suggested that it explained everything. It explained spending, it explained borrowing and it explained how much money was going to be allocated to a certain area.

In fact, Canadians can't see this chart. You and I can see the chart, and if you look at it, I think you'll agree with me that all this chart does is explain that the government is going to borrow another $663 billion.

Would you agree with that assessment?

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

No, Mr. Fast, I'm afraid I would not.

Let me just say a couple of things. Canadians can see this chart because it was published in the fall economic statement. It's available to anyone who would like to go online and look at the fall economic statement. For wonkish people who are watching our deliberations, let me point you to page 141 and chart A2.3.

What this chart shows is how we got to the number of $1.831 trillion for the borrowing authority we are seeking. It shows the composition of it, and I think that was important to show and people should refer to it. I can go through the chart, if people would like.

[The Chair, Liberal, Wayne Easter]

We'll have to go back to Mr. Fast.

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Minister, you have confirmed what I just said. This is all about how much the government is going to borrow. It says nothing about where it's going to spend that money, and that's why we need a budget.

For two years you've neglected to deliver a budget and an economic plan for the country that would outline what you expect in terms of tax revenues, what you expect in terms of debt servicing costs, what you expect in terms of spending, what programs you're going to spend on, what fiscal anchors you're going to put in place to make sure that this doesn't get out of control, economic growth projections.... None of that is in this fall statement, yet you're asking us to increase the borrowing limit by $663 billion without any idea of where you're actually going to spend that money.

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

Mr. Fast, there's a lot in there. Let me parse it and respond to the various points you've raised in the time allotted.

To your first point, that the borrowing authority is quite different from a budget, you are 100% right, Mr. Fast. That's a really important distinction. In seeking an increase of the borrowing authority, we are being extremely transparent. We are saying that this is the upper limit up to which the government may borrow.

We are not saying that the government will undertake those borrowings, nor are we saying anything about government spending. That's entirely separate. That happens through the fall economic statement. It happens through Bill C-14, which we're debating today, and it will happen through the budget. That's entirely right.

[Ed Fast, Conservative, Abbotsford, BC]

Minister, your government blew through its previous debt ceiling within a couple of years—way beyond it. In fact, you exempted certain spending for COVID relief and that was appropriate, but you blew through it. Now you're suggesting to Canadians, “Yes, but if you give me $663 billion, don't worry. I won't blow through that line of credit.” Why should Canadians trust you with that?

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

Mr. Fast, you've answered your own question with your previous question. It's very important to make a clear distinction, as you did in your first question, between the borrowing authority and actual spending authorities. We are very clear on that distinction. Canadians should be clear on it too.

The only other thing I would say is that, when it comes to spending authorities, our government has been clear that we believe, during COVID, it is important to do whatever it takes to support Canadians and Canadian businesses. We're open and transparent about that. I hope that all members of this committee will agree with that. Canadians need us to be there for them. That's why they made Bill C-14.

[The Chair, Liberal, Wayne Easter]

We'll need a quick, snappy question and a quick, snappy answer.

[Ed Fast, Conservative, Abbotsford, BC]

I'll just make a comment.

We fully support the support measures that are contained in C-14. What we do not support is part 7, which dramatically increases Canada's debt ceiling without any oversight or accountability.

You're simply saying, “Give me a blank cheque and then trust me.” We just cannot do that, Minister. In fact, Minister, we are very disappointed that you wouldn't sever part 7 from C-14. That would allow us to support Bill C-14 and all the good measures that you've contained in there.

[The Chair, Liberal, Wayne Easter]

We're going to have to end it there, Ed.

Does the minister have a quick response, or are we on to the next questioner?

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

I have a very quick response, Mr. Chair, which is simply to say, with really great respect for Mr. Fast, that the characterization of the borrowing authority limit as a blank cheque is simply false. This is a transparent and open authorization of a level up to which the government may borrow. Spending authorizations are separate.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We have Mr. McLeod, followed in a two-minute round by Mr. Ste-Marie.

Mr. McLeod, you have five minutes.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair, and thank you to the minister for appearing in front of us and having an open discussion on so many things over the last while.

I represent the Northwest Territories. A year ago we were very nervous. We didn't know what the outlook was. The pandemic was declared, and we spent a very difficult year trying to make sure everybody was looked after. We're now starting to see light at the end of the tunnel. Vaccines are being rolled out, and here in the north it looks like we'll have everybody vaccinated by at least April.

The combined work of the Government of the Northwest Territories and the Government of Canada can only be described as a success in keeping the cases down and the death numbers low. The low numbers in the north have allowed us to do more than what our southern neighbours were able to do. For us in the north, we were able to keep all our schools open. We allowed businesses to stay open. I think for that we should all give ourselves a collective pat on the back.

The Government of the Northwest Territories just announced fairly recently that of the $156 million that was spent in the Northwest Territories to address COVID, $123 million of that was covered by the Government of Canada. That's the reason we were successful. The assistance that the territories received from the federal government is the major reason we were able to operate the way we have.

Our economy varies by degree. We have some people who did well all through the pandemic and others who have struggled, and then there are some who are really in trouble.

Back in June, the Government of Canada increased the borrowing limit for all three territorial governments to ensure that they could continue to have the fiscal flexibility to manage the economic pressures caused by COVID. I'd like to ask if the minister could explain how Bill C-14 similarly seeks to make sure the Government of Canada has the fiscal flexibility it will require.

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

Thank you, Mr. Chair.

Thank you, Mr. McLeod—Michael, as I call you in less formal settings. It's great to see you.

You prefaced your remarks by explaining to us a little bit about how things are going in the Northwest Territories and how people have handled COVID. You suggested a collective pat on the back, and let me just say, speaking from the south, to you, Mr. McLeod, and to all the people of the Northwest Territories, I think all of us in the south should be patting all of you on the back.

The way that the Northwest Territories has handled this global pandemic is really admirable and a real example for the rest of the country. The approach you took required a lot of sacrifice from individual people in the Northwest Territories. It required an acceptance of some real restrictions on travel outside of the territories, and you guys are quite rightly reaping the benefits of that disciplined approach. I collectively pat you all on the back. Bravo.

You're also quite right—