Finance Committee on Dec. 7th, 2021

[The Chair, Liberal, Peter Fonseca]

That's all the time we have, Mr. McLean.

We'll move over to the Liberals.

Ms. Dzerowicz, you have five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

It's me already. Okay. Thank you so much.

Mr. Chair, perhaps I could make a request. Mr. Blaikie had asked.... He didn't exactly ask this specifically, but I do think it's important for us to have a breakdown of the $7.4 billion in terms of the different programs we have. Could I please request, through you to our officials, that we get that in writing from our officials as soon as possible, ideally tomorrow? I think we should have that information. That should be readily available to all of us.

[The Chair, Liberal, Peter Fonseca]

Ms. Dzerowicz, I did understand that the officials were going to do that homework and look to, I believe, the CRA to be able to get some of those numbers, but yes, we'll request that.

[Julie Dzerowicz, Liberal, Davenport, ON]

I don't think it's something the CRA would have. I think our officials in Finance would have that, but for some reason we don't have that available today.

Any rate, thank you so much for the opportunity to ask a few more questions. I want to ask about category one, around the supports for businesses—the tourism and hospitality recovery program and the hardest-hit businesses. Actually, it's more around the hardest-hit business recovery program. If we read through the backgrounder, there's a very specific list of who's included. I wouldn't mind hearing from officials about how they came up with the list. Was it through recommendations that Finance might have made through some of the meetings we had earlier this year? Was it through an understanding or consultations with the different industry groups that we came up with this comprehensive list?

I wouldn't mind getting an understanding about how we came up with the list that we have. I think it's a good list, by the way, but I wouldn't mind understanding how we compiled and settled on it.

[Maximilian Baylor]

You mentioned the hardest-hit program, but I believe you're referring to the tourism and hospitality recovery program. That's the one that has the list.

Effectively, that program is intended to support the tourism and hospitality organizations that have been deeply affected by the pandemic and continue to struggle. It's also those that are generally affected by public health restrictions. It's very much through those two lenses that the definition was developed. As you suggested, there was indeed engagement with stakeholders to try to understand where those needs were. Their input was solicited on how to best define those types of businesses, to arrive at that definition.

As we noted earlier, maybe there are some businesses that have been hard hit that don't fall within the parameters of that definition. That's why the hard-hit businesses program is there, for those that have still been hard hit but that do fall outside the scope of the tourism and hospitality recovery program.

I hope that answers the question.

[Julie Dzerowicz, Liberal, Davenport, ON]

It does, Mr. Baylor. I appreciate that. I also stand corrected. You're absolutely right—I'm just looking at the backgrounder now—that it is the eligibility for the tourism and hospitality and recovery program.

I'm glad we did extensive consultation. Did we also discuss with them the level of support that we were contemplating providing them? The reason for my question is just getting an understanding of...making sure that we tested with them what they felt was the support that they needed in order to continue to survive and thrive as we try to come out of COVID.

This is to you again.

[Maximilian Baylor]

Yes, my understanding is that this was part of the discussion.

As I mentioned earlier, my colleague Yves Poirier was more involved with the consultation. He can perhaps add to that.

[Yves Poirier]

As Max was saying, it was partly through engagement with stakeholders, including other departments that might be managing other tourism-related programs, that we came up with the definition. Then in terms of level, we also received input and we took that into consideration when developing the sliding scale for the subsidy rate and what kind of threshold would need to be met to qualify for the measure, recognizing that the intention was to move away from the broad-based support programs we had before to a more targeted approach that would provide more support but to a specific subset of industries.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Dzerowicz.

Now we go over to the Bloc and Madame Sinclair-Desgagné.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Mr. Chair, you're getting better and better at pronouncing my name. Thank you.

[The Chair, Liberal, Peter Fonseca]

I'm doing my best. Thank you so much. Thanks for that encouragement.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

When I asked questions about the businesses hit hard by the pandemic, I must say that I was a little surprised to hear officials say that the two criteria listed were very clear. Based on the feedback that we've received from businesses, these two criteria may be restrictive.

Consider businesses that are hard hit, but that haven't experienced at least a 50% revenue decline over 12 months, and therefore don't meet the eligibility criteria. Is it possible to show flexibility for either of the two criteria? For example, could the 12‑month period be staggered? Could a large enough revenue decline be demonstrated over another period during the pandemic? The second criterion, as I said earlier, is very restrictive. As we know, businesses' revenues fluctuate, especially based on when they receive their supplies, and even more so when there are delays. Could there be some flexibility with respect to at least one of the two eligibility criteria?

[Trevor McGowan]

I can speak briefly to the criteria from the legislative side and then let my colleagues join in on the policy side.

For the month-over-month revenue-decline calculation, that has some flexibility in that you can elect to have the current month tested against either the same month in the prior year, or in the January and February period before the pandemic. There's also a deeming rule that lets you have the larger revenue decline for the current period or the prior period, which provides some flexibility in smoothing out different revenue months, and it provides certainty. There are also elections that allow, for example, the cash basis of accounting to be used or the normal accrual basis if you're ordinarily a cash-basis taxpayer, as well as different rules that let you determine revenues if you're part of a group.

So there is some flexibility although it is fundamentally a month-over-month or period-over-period test. One bit of flexibility in terms of the 12-month test—it's not a big thing to highlight but it may be worth mentioning—is that you look at the revenues for the first 13 periods and in order to avoid double counting December over December, there's the flexibility to exclude one of those two months as well, although that's a much smaller thing than the flexibilities I mentioned earlier.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. McGowan.

We'll be moving to the NDP, Mr. Blaikie, for two and a half minutes.

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

Thank you, Mr. Chair.

I'm a supporter of the notion of public service. I believe that there is a positive role for the government to play in the economic life of the country. These are all things that I believe in and that I defend.

I have to say that I've been very disheartened by today's interaction with some of our lead civil servants on a really important file. Presumably, this is the table of advisers that the ministers have around them when they're planning important programs.

I've asked for a breakdown of the budget. I don't know if they really don't have that answer or if they're on a mission of obfuscation. If that's true, it certainly doesn't manifest the kind of respect that there ought to be for the legislative branch of government.

If they don't have the answer, then what are we to draw from that? Does this mean that the minister, sitting around the table with her advisers, didn't bother to ask this question, so nobody has created the answer? When we ask about the Canada worker lockdown benefit and if it would apply in any region of the country between October 23 and now, and they don't have the answer, does that mean the minister didn't ask? Does that mean that Minister Qualtrough didn't ask it of this table, didn't say, “Hey guys, we're putting together a piece of legislation and it's retroactive...”? They've emphasized the importance of the retroactivity of the legislation. Did the minister never ask where in the country it would apply retroactively?

Either you have to conclude that our civil servants, who ought to be treating the legislature with respect, aren't being up front about some of these questions, or you have to conclude that the people who are running the country never bothered to ask them. Neither one is a very good outcome for Canadians.

I have to say.... I know that we've been in a rush because the Prime Minister took his sweet time bringing Parliament back, but the departments have been developing this legislation for a while. The ministers have had ample opportunity to ask the questions that have been posed here today. I don't think I've been asking particularly political questions. They're just questions of fact about the bill: How it works, why certain decisions were made to leave certain things out and what the budget breakdown is. But we can't get a straight answer: We've been here for almost four hours and I haven't gotten one thing that I would classify as an answer to a question I've asked, Mr. Chair.

I'm really quite beside myself with displeasure at the way that this has unfolded, and I certainly hope that we're going to get some answers in the rest of our testimony or this really doesn't do much for anyone. I'm hoping that people are going to get their act together and we're actually going to be able to get some answers to questions, because so far this has been a waste of time.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Blaikie.

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

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

We have heard a number of the members bring up timing and the need for speed. I have a few questions on timing, if I may.

We knew that the CRB and some of these programs were expiring in the fall. At what point in time—what time of year or what month—did the government start designing these new packages?

[Catherine Demers]

Maybe I can start, Mr. Chair.

This is work that the department was.... If we recall, there was a possibility under the CRB to extend the benefits, should they be needed, until October, and November 20 was the end date under the legislation. Tracking was undertaken by the department throughout the delivery of the Canada recovery benefit to examine labour market indicators and the evolution and patterns of applications of each benefit in the functions of the state of the labour market, the economy and the pandemic. That has been kind of an ongoing work to do this tracking, knowing that the benefits were ending by October, which led the government to examine the needs, given the state of the labour market and the pandemic, for future targeted support.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

Would it be safe to say that the design of these programs occurred in the summer—in June and July—and that the government was thinking about these in June and July?

[Catherine Demers]

The work, as I was saying, has been linked to the existing Canada recovery benefit, whether there were signs that required, as provided in the legislation, the extension of those benefits until November 20. Those are the benefits I'm referring to.

[Adam Chambers, Conservative, Simcoe North, ON]

When did the government start drafting the Bill C-2 legislation? What was the approximate date? Was it on or about...? “A week” or “a month” would be fine. Was it last week, two weeks ago, three weeks ago, two months ago?

[Catherine Demers]

The announcement was made.... I don't know if my colleagues from Finance would like to respond. The announcement was made on October 21 for these additional measures.

[Adam Chambers, Conservative, Simcoe North, ON]

We're to understand that drafting this really important bill had to wait until an announcement was made on October 21, at which point the government started drafting the legislation. That was post-announcement. Is that correct?

[Catherine Demers]

I would have to defer to colleagues at the Department of Finance.

[Trevor McGowan]

I can only speak to part 1 of the bill, as I was involved in the drafting of that. It's been an iterative process, from tabling the first bill, hearing stakeholder responses and then iteratively improving on the programs over the last almost two years.

In terms of the work on Bill C-2, that was going on in concert with the announcements. It's not been days or weeks, I'm sure.