Finance Committee on Dec. 7th, 2021

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

I want to take this opportunity to thank all of the witnesses, all our officials, for their hard work on this legislation and other legislation that has been so important in supporting so many Canadians, millions of Canadians, through a global crisis. Thank you for your work.

I also want to follow up on the exchange with my colleague Mr. McLean. Just to provide further clarity, I was reading the bill after hearing Mr. Poilievre's question earlier on. Proposed section 29 states the following:

All money required to do anything in relation to this Act, including all money required by the Minister to administer and enforce this Act or by the Agency, as defined in section 2 of the Canada Revenue Agency Act, to administer and enforce this Act on behalf of the Minister, may, until March 31, 2026, be paid out of the Consolidated Revenue Fund.

That's proposed section 29. I just wanted to point colleagues to that in case there are questions. I think that answers the question that was being asked earlier.

[Greg McLean, Conservative, Calgary Centre, AB]

On a point of order, Mr. Chair, I don't think that answers any question whatsoever. The consolidated revenue fund is something that has to be funded by the government.

[The Chair, Liberal, Peter Fonseca]

That's not a point of order.

Mr. Baker.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair. I'm just trying to help by providing some clarity. It's in the act there, if folks have questions or want to see it themselves.

The other point I want to make is this. There was a point made by a colleague opposite a moment ago that with this legislation, through the measures we put in place, we are paying people to “stay home”. I think that was the terminology used. In my view, I couldn't disagree with that more. I think this legislation and the past programs we put in place are to help people put food on the table and survive during a global pandemic and a global crisis.

That said, Madam Demers, I have a question for you along those lines. Can you speak to how this bill will protect our most vulnerable Canadians and those who take care of them?

[Catherine Demers]

Thank you for the question.

The proposed lockdown benefit would really provide income support for those who are impacted, who are losing their jobs or losing their incomes as a result of public health restrictions in their region. It is for both those who would be, as I mentioned before, EI-eligible and those who would be non-EI-eligible. It really is meant to cover all workers and to be quickly available to those workers in need due to public health restrictions for public health reasons. It would be available for the duration of the lockdown.

Similarly, the amendments for the recovery sickness benefit and caregiving benefit are there to provide that continued income support for those who don't have a choice, who have to stay home, who are sick or who have to care for a family member due to COVID. They are really there to ensure that, with the uncertainty of the pandemic and for public health reasons, there are still income supports that could be available for the broad range of workers in need.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you very much for that, Madam Demers.

My next question is for Mr. Baylor. I would like to expand on an issue raised by my colleague Ms. Dzerowicz a few minutes ago.

Mr. Baylor, how did you determine what percentage of lost revenue was needed before one could apply for the benefit?

[Maximilian Baylor]

Thank you for the question.

As I expressed earlier, it was essentially—and maybe my colleague Yves Poirier can add more after my answer—a balance of figuring out who is in need and then providing an amount sufficient for that need.

As you saw, once you hit the threshold at which you're determined to be in need, there's a relationship between the current-month revenue loss and the amount of the subsidy. For example, in the tourism and hospitality recovery program, if you have a 30% to 40% current-month revenue decline, that corresponds to a 40% subsidy rate, and that increases up to a 75% current-month revenue loss. The idea there is to be able to provide that support, depending on your situation in the month you're getting the support.

I don't know if Yves has something to—

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Baylor. That's Mr. Baker's time.

We are moving to the Bloc and Mr. Ste-Marie for five minutes.

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

Thank you, Mr. Chair.

Actually, it is two and a half minutes. I say that for the sake of transparency and to respect what was voted.

Mr. McGowan, I didn't find the final answer to my last question to be very clear, so I would like confirmation that, directly or indirectly, the Minister of Finance can modify the percentages established in Bill C‑2 with respect to lost revenue and subsidies paid out.

As you said, directly or indirectly, she would have the authority, by regulation, to include struggling sectors? Did I understand correctly?

[Trevor McGowan]

Thank you. I would be happy to clarify. I apologize, but since it's a technical response, I will provide it in English.

The changes could be made by regulation, which would be done by the Governor in Council, generally on the recommendation of cabinet. The changes could be made by regulation. I don't believe that's something the minister could do herself, but it can be done through the normal regulatory process.

To answer your second question, yes, I believe it was paragraph (h) of the base percentage definition that was intended to provide the flexibility to modify the wage subsidy rate that you describe, possibly even based upon criteria like different industries or—

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

Thank you very much for explaining, that was very clear. I can't always get my head around all the technical details quickly.

I would like to ask one more question, and it will be brief.

It is difficult, if not impossible, for companies that started up after the beginning of the pandemic to apply for pandemic assistance programs.

If I understood correctly, with respect to the extension of programs proposed in Bill C‑2, nothing has changed in that regard. Is that right?

[Trevor McGowan]

That's right.

The requirement in the wage subsidy that an employer must have had a payroll number on March 15, 2020, has been maintained. That provides an important safeguard against fraud in the system, ensuring that applicants were in the CRA system as having employees at the start of the pandemic.

[The Chair, Liberal, Peter Fonseca]

Thank you, and thanks to Gabriel for that catch.

We're moving to the NDP for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

In June of this year, the finance committee in the last Parliament recommended that the government undertake measures to prevent publicly traded companies and their subsidiaries from paying dividends or repurchasing their own shares while receiving the Canada emergency wage subsidy. It also recommended that the government recover wage subsidy amounts from publicly traded companies and their subsidiaries that pay dividends or repurchase their own shares. I'm just wondering if there was discussion about this recommendation around the table when the bill was being drafted.

I don't see any measures in the bill that would implement this recommendation for the programs on a go-forward basis or retroactively. Am I right that those are missing? If so, what was the discussion around not taking the committee's advice on this matter?

[Trevor McGowan]

I would note that, in budget 2021, and as enacted in Bill C-30 of the last Parliament, the government introduced rules that would require repayment of the Canada emergency wage subsidy for public companies that have increased their top executive compensation between two reference periods. It started in 2021, versus 2020. Now that the subsidies are being extended into 2022, you will find measures in Bill C-2 that would extend the government's announced requirement to repay the wage subsidy for large companies or public companies based on increases in executive compensation. That feature is continued.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Can I jump in?

I suspect that the committee's recommendation did not include a recommendation on executive compensation, because it was already provided for. They made recommendations about the things that weren't. What I'm asking is why the committee's advice was not taken on these further measures in respect of dividends and share buybacks.

[Trevor McGowan]

I would say, and perhaps Max can provide an update on it, that I believe that the June committee hearing resulted in an amendment to Bill C-30 that would require the tabling of a report in Parliament, rather than simply a recommendation. This is certainly something that we have been thinking about.

I can say that, when the government was looking at the best options to extend the wage subsidy, the decision was taken to extend the increases in executive compensation rules that were announced in budget 2021 and enacted in Bill C-30.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. McGowan.

We're moving to the Conservatives and Mr. Chambers for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

Thank you to all our witnesses.

A number of years ago, I had the benefit of spending some time in the Department of Finance for about four years. I know how hard many of you have been working over the last couple of years.

I have some questions. Perhaps I can start on eligibility criteria and how we're verifying them.

There were a couple of comments made about attestations. I'm curious. Can you shed some light on whether we are relying on the same verification of eligibility criteria for this set of supports as we did for the previous?

[Trevor McGowan]

I can certainly speak to the supports in part 1 of the bill. The answer is, yes, they're based on the same platform as the wage subsidy and the rent subsidy in section 125.7 of the act. They have the same applications, the same attestation requirements and the same requirements for payroll or business numbers, so they're a continuation in that respect.

I don't know if someone can speak to part 2, or if the question was just related to part 1.

[Adam Chambers, Conservative, Simcoe North, ON]

No, it included part 2.

I think perhaps Ms. Demers was—

[Catherine Demers]

Yes. For part 2, what I can add is that it is based on the same platform. In order to be able to deliver the benefits quickly to the workers who need them, there is still an attestation-based application. Other requirements are being added. I spoke to one that was added later on for the Canada recovery benefit, which was the requirement to have filed taxes in the preceding year, but there's also, in this case, for example, the need to provide the postal code, the name of your employer and the location of work. Because this is a geographically driven benefit, you need to demonstrate that the loss of your work is in the region where the lockdown was occurring, for example.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

Perhaps I'll just stick with Ms. Demers for a second. These additional eligibility criteria are requirements we're putting on applicants. Correct me, but we're not actually doing any additional checking on the government side before we send out a cheque. These are just additional questions we are asking applicants to verify. Is that correct?

[Catherine Demers]

We're asking applicants to attest, and there would be, potentially, subsequent verifications.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

We're asking an applicant to tell us whether they filed taxes in 2020.