Finance Committee on March 23rd, 2021

[The Chair, Liberal, Wayne Easter]

We will call the meeting to order.

Welcome to meeting 29 of the Standing Committee on Finance.

Pursuant to the order of reference of March 8, 2021, the committee is meeting to start the clause-by-clause study of Bill C-14, an act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures.

Today's meeting is taking place in hybrid format, pursuant to the House order of January 25, therefore members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. The webcast covers only the person who is speaking, rather than the committee as a whole.

With that, I first of all want to thank all the witnesses for coming to assist us in the clause-by-clause study.

We have witnesses here from the Department of Employment and Social Development, from the Department of Finance, from the Department of Health and from the Department of Western Economic Diversification.

With that, we will go to the clause-by-clause study of Bill C-14. Members, if you have any questions on any of these clauses as we're going through them, please raise them, and the appropriate witness from the various departments will answer.

(Clauses 2 to 5 inclusive agreed to on division)

(On clause 6)

There's an amendment by the NDP. It's NDP-1, on clause 6.

Go ahead, Peter. You will want to move that.

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

Thank you very much, Mr. Chair.

Yes, I move the amendment.

Members of the committee will recall that back on November 24, the House of Commons voted unanimously to call on the government to extend the moratorium on paying student loans. We currently have a moratorium on interest, but not on the actual payment of student loans.

This amendment, with NDP-2 and NDP-3, would amend the legislation so that the loan repayment moratorium is extended. This is what the House called for—all of us did—on November 24.

We know that students are going through a profound financial crisis in terms of continuing to try to maintain their studies, but also that trying to get work to pay for those studies is often difficult. The supports are not in place. That's why, on November 24, all members of the House of Commons voted to extend this moratorium.

It's the missing aspect of Bill C-14. It's something that simply needs to be corrected, I believe. When you look at the House motion and when you look at the situation students are finding themselves in, this is simply a way of correcting that oversight. The interest payment moratorium, of course, is welcome, but when students are having to pay back their loans at a time of great financial crisis in the midst of a pandemic, with the third wave coming, it makes sense for us to improve this legislation, so that's what I'm proposing.

[The Chair, Liberal, Wayne Easter]

Peter, I expect you're expecting this, but I will have to rule the amendment inadmissible because it requires a royal recommendation. I'll explain why.

Part 2 of Bill C-14 seeks to amend the Canada Student Loans Act to temporarily suspend interest and interest payments with respect to guaranteed student loans during the period that begins on April 1, 2021, and ends on March 31, 2022. The amendment attempts to suspend interest and interest payments by a borrower for an indeterminate period of time that begins on April 1, 2021. Therefore, expending the time, the government would assume the payment of interest to the lender, which would result in increasing payments from the consolidated revenue fund.

House of Commons Procedure and Practice, third edition, states on page 772:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In my opinion, the amendment as proposed requires a royal recommendation, since it imposes a new charge on the treasury. Therefore, I rule the amendment inadmissible.

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

Thank you, Mr. Chair. You're absolutely right to say I did expect that, and I'll be challenging your ruling.

I would suggest that it's up to the committee, and opposition members may choose to override the ruling of the chair.

On that basis, I would suggest that the House of Commons motion that was adopted by all members on November 24 provided very clear guidelines as to where the government's legislation should have gone, so this oversight needs to be corrected. The government withholding a royal recommendation is a matter of political choice, and the government can choose to provide a royal recommendation if this committee overrides the chair's decision and includes that as part of the amended legislation that's brought forward to the House of Commons.

Because we're in a minority Parliament, members have the sovereign right to override a chair's decision. I think there is a solid basis on which to do that, given that we have had a House of Commons motion that was adopted by all members of Parliament, and this legislation, of course, should be amended so it reflects the clear will of members of the House of Commons from all parties on November 24.

I will challenge the chair on that basis.

[The Chair, Liberal, Wayne Easter]

All right.

Mr. Clerk, on the challenge to the chair's ruling, could you call the vote?

(Ruling of the chair sustained: yeas 9; nays 2)

(Clause 6 agreed to on division)

(On clause 7)

[The Chair, Liberal, Wayne Easter]

On clause 7, Peter, you have an amendment there as well. It's NDP-2. Do you want to move it?

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

Thank you very much, Mr. Chair.

I have gotten a clear view of the committee's will, so I will add to my initial comments. For clause 6, amendments were to the Canada Student Loans Act. This is regarding amendments to the Canada Student Financial Assistance Act.

I would implore committee members to override the chair's ruling on royal recommendation and also vote in favour of this amendment, since students are now being forced to pay for student loans because the government has ignored the all-party resolution that was adopted unanimously on November 24.

Let's look at this picture. Students who are crippled by debt are trying to pay back their loans at the same time as they're often struggling to get their families through the pandemic and put food on the table. This is something that simply doesn't mesh, I think, with the fairness and equity we want to see in this country. That's why I'm proposing this amendment to the Canada Student Financial Assistance Act, to put in place that moratorium through the pandemic so that students are not paying back a government loan when they should be putting food on the table.

[The Chair, Liberal, Wayne Easter]

Thank you, Peter.

My ruling, as you would suspect, is the same as on NDP-1. I'll not go through the long explanation, other than to say that this amendment basically seeks to achieve the same goal as NDP-1, but in this case for the Canada Student Financial Assistance Act. It has the same issue concerning the requirement for a royal recommendation, because it would mean spending more money. Therefore, I rule the amendment inadmissible.

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

Thank you, Mr. Chair.

By the same measure, I will challenge your ruling. The House of Commons has clearly stated, where Liberals and Conservatives were a part of that motion being adopted unanimously, that students should not be forced to pay back their student loan in the midst of a pandemic, so I challenge your ruling with all the great respect I have for you as chair.

[The Chair, Liberal, Wayne Easter]

That is entirely your right.

We will go to the clerk for a vote on the chair's ruling.

(Ruling of the chair sustained: yeas 9; nays 2)

(Clause 7 agreed to on division)

(On clause 8)

[The Chair, Liberal, Wayne Easter]

We'll go then to clause 8 and NDP-3.

Peter.

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

Thanks very much, Mr. Chair.

This would amend the Apprentice Loans Act so that there is a loan repayment moratorium.

Mr. Chair, you'll recall that at the beginning of this pandemic, the government, with all-party support, put in place a moratorium on student debt payments. That moratorium ended, and now students are struggling and people in apprenticeship training programs are struggling to pay for their student loans at the same time as they're trying to put food on the table and keep a roof over their heads. There is a profound indication of unfairness to that.

In light of the November 24 motion adopted unanimously, which included apprenticeship loans, I would move this amendment, which would ensure that there's a moratorium for all those in apprenticeship programs across the country on having to repay their student loans during this pandemic.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Julian. I will have to rule the same as I ruled on the previous NDP-1 and NDP-2. I know this relates to the Apprentice Loans Act, but it is the same issue concerning a requirement for a royal recommendation that can come only from the government or the ministry. Therefore, I rule the amendment inadmissible as well.

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

With respect, Mr. Chair, I will challenge that ruling. We need apprenticeship training. We need the apprenticeship programs across the country to continue. It's very difficult when people are trying to pay back their loans at the same time as they are trying to get through their programs and trying to put food on the table. Again, this is very much in opposition to what was adopted by all-party agreement on November 24, calling on the government to extend the moratorium on student loan payments.

[The Chair, Liberal, Wayne Easter]

Thank you, Peter.

(Ruling of the chair sustained: yeas 9; nays 2)

(Clauses 8 to 14 inclusive agreed to on division)

(On clause 15)

[The Chair, Liberal, Wayne Easter]

Mr. Fast, you have an amendment. The floor is yours.

[Ed Fast, Conservative, Abbotsford, BC]

I do. Thank you, Mr. Chair.

I would like to read it into the record. I move that Bill C-14, in clause 15, be amended by replacing line 6 on page 8 with the following:

must not at any time exceed $1,611,000,000,000:

I don't believe that requires a royal recommendation. Do you want me to make a few comments about that now, or do you want to rule?

[The Chair, Liberal, Wayne Easter]

It's allowable, because it's talking about reducing money.

Mr. Fast, the floor is yours. Make your arguments.

[Ed Fast, Conservative, Abbotsford, BC]

Thanks, Chair.

Let me be very clear. We support the programs and the benefits that Bill C-14 is delivering for Canadians—let there be no doubt about that—yet I remind members that there are still millions of Canadians who have been left behind, including those in the most heavily impacted industries, like tourism, hospitality, airlines and charities, and a host of small and medium-sized industries that were promised targeted, sector-specific support but haven't received it.

Bill C-14, while helpful, does not in any way address these thousands of SMEs that have fallen through the cracks and either have closed up shop or are struggling to survive, so obviously we encourage the government to provide this support.

The one element of Bill C-14 that we cannot support is the government's attempt to increase our country's debt ceiling by the massive, unprecedented and unwarranted amount of $663 billion. This amount goes far beyond the government's current borrowing needs. Indeed, the government has already built in an undefined contingency fund of $87 billion, and then, on top of that, they've set aside another undefined $100 billion of stimulus funding.

When asked what this money might be spent on, the finance minister really refused to say. On top of that, the government has added another $220 billion, without saying what this money might be used for. When asked about this, the minister effectively said we should not worry, that we should trust them, and that there's no reason to believe they'd actually use that borrowing authority.

[The Chair, Liberal, Wayne Easter]

Do you have a point of order, Mr. Fragiskatos?

[Peter Fragiskatos, Liberal, London North Centre, ON]

Mr. Fast is recalling a conversation that happened a few weeks ago at committee between himself and Minister Freeland, but I don't remember the conversation going that way, and since he's reading it into the record, the record won't be accurate. That's my concern.

[The Chair, Liberal, Wayne Easter]

I think that's a point of debate, not a point of order.

Go ahead, Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

I'll go back.

When asked about the $220 billion, on top of all that, in terms of unallocated spending, the minister effectively said, don't worry, trust them, and there's no reason to believe they would actually use that borrowing authority. Now that's pretty rich, since this government blew through $200 billion and through the current debt ceiling in less than three years.

Therefore, Mr. Chair, the government's request for an increase to its debt ceiling to $1.83 trillion is excessive. Accordingly, our amendment does the reasonable thing and reduces the debt ceiling request by $220 billion to $1.61 trillion. This still leaves the government with a contingency of $87 billion and a $100-billion stimulus fund, which as yet remains undefined, and incorporates the exempted borrowing that was exercised during the pandemic, so I encourage all of my colleagues here at committee to do the reasonable thing and support this amendment.

[The Chair, Liberal, Wayne Easter]

Thank you.

The floor is open for discussion. I remind folks again that there are officials here from four departments. I guess it would be the Department of Finance on this one. If you have any questions for them, we have ample time to put questions and take answers.

I have Mr. Julian first.

Mr. Julian.

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

Thank you, Mr. Chair.

I'm intrigued by this amendment and will be listening very carefully to the discussion through the course of the committee. My concern all along, Mr. Chair, as you well know, has been that there's been no provision for the revenue side when we're talking about expanding the debt ceiling.

We have not put in place any wealth taxes, unlike other countries that have done so. Also, no efforts have been made to stop the hemorrhaging of money going offshore. The Parliamentary Budget Officer has evaluated that at over $25 billion every year, which means that over the last decade a quarter of a trillion dollars has gone to overseas tax havens.

We are not putting in place any measures of the sort that we had in the Second World War on the revenue side. For example, we had an excess profits tax. It was 75% of excess profits through the Second World War. At the end of the war effort, it was at 100%. There were measures taken in our past that actually balanced out revenues and expenditures, even in a situation like the war effort, where very clearly increased expenditures were called for.

I decry the government's lack of effort to take on the revenue side of the equation so that the debt ceiling does not have to be raised. We've seen Canada's billionaires increase their wealth during this pandemic by over $60 billion. That didn't happen in the Second World War. Measures were taken to avoid that kind of intense profiteering.

We have whole sectors, like the web giants, that don't pay any tax at all. As well, we have not seen the kind of action that needs to be taken to tackle overseas tax havens and to put in place a wealth tax that would actually help make sure that resources are available for Canadians through this pandemic and in the rebuilding that must surely follow.

I'm intrigued by the amendment and I look forward to the debate, but I think that is a major weakness in the fall economic statement and a weakness, of course, in Bill C-14. Ultimately it would be a colossal failure in the budget that we're finally going to see now, after two years, on April 19.

If the government says billionaires can have a free ride, that banks, with profits of over $40 billion, don't have to pay their fair share of taxes, and that web giant companies that have profits in the billions of dollars don't have to pay anything at all, there's something fundamentally wrong with that fiscal picture. We have also seen the use of COVID funding by many companies—profitable corporations—for dividends, executive bonuses and stock buybacks.

That's why I'm intrigued by Mr. Fast's motion. Mr. Fast and I don't agree on many things, but I'm intrigued by his amendment and will be listening very carefully to the debate.