Finance Committee on May 17th, 2022

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

We will move to the Liberals. MP Chatel has up to six minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much, Mr. Chair.

My questions are mainly for the representatives of the Fédération québécoise des municipalités.

Mr. Boulet and Mr. Demers, thank you very much for being with us this morning.

You mentioned the housing problem, which is a very important issue. I represent a rural riding. Some colleagues and I have tried to determine the major housing challenges facing the rural communities. Access to land is one of the points that was raised. Rising land prices make matters difficult.

Are you aware of any situations of that kind?

[Jacques Demers]

I'll give you my answer, and my colleague may then add to it.

Yes, there's a land access issue, but unemployment also causes problems. We're discussing housing, but many businesses are looking for employees, especially in the regions. They're looking for them everywhere so they can operate. However, those people have to be housed, but we don't have housing to offer them at affordable prices. In fact, there's simply no available housing right now, in any category.

We need to find ways to solve this problem because the major risk the regions face is that they may lose those businesses. They may leave, in some instances, for the larger centres. This is a huge problem.

Once we manage to attract a business to a rural area, the next challenge is to retain it. Housing is definitely part of the problem. Consequently, we have to find solutions to it and ways to adapt. In both Quebec and Canada, we've decided to occupy our land, but we may be losing significant pieces of it. We have to consider what that means economically. When we consider business retention, a distinction has to be made between what goes on in the major centres and what happens in the regions.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much.

The labour shortage and lack of major housing developers are definitely problems.

However, the 2022 budget outlines three measures that I believe are very positive for our rural communities.

First, funding is budgeted to expedite housing construction, which will help support the municipal processes involved in planning and executing housing programs.

Second, the rapid housing initiative will be extended.

Lastly, funding is being granted to housing cooperatives.

These three programs represent $7 billion.

How can Quebec get its share in a way that helps it efficiently manage its programs.

What do you think the challenges are here?

[Jacques Demers]

I'll let my colleague Mr. Boulet answer that question.

[David Boulet]

We discussed housing in our presentation. This issue has been a concern for all Quebec regions, even rural regions, for some years now. However, the programs offered for social housing, affordable housing or housing in general are often designed to suit the needs of urbanized areas. The important thing for both levels of government will be to take account of the new challenges involved in the current situation.

What's happening now in some regions is that the cost to build a housing project is higher than its market value as a result of rising materials and construction contract costs. Consequently, it's important that the two levels of government, together with the municipalities, find solutions so these projects can be carried out. Without necessarily being strictly financed out of public funding, they will have to be feasible and profitable for their developers and especially to provide housing in short order for workers and families wishing to settle.

With regard to the housing construction component, the municipalities are in a very good position to detect existing problems in the area, to find solutions suited to each of the RCMs and municipalities and, lastly, to promote, as partners, projects that meet the needs of the various municipalities.

[Sophie Chatel, Liberal, Pontiac, QC]

We have a lot of housing cooperatives in Quebec, in particular.

Do you think the new cooperative housing development program will help provide affordable housing units in short order?

[David Boulet]

The cooperative model has always been around. You can see it virtually everywhere, but much more so in urban areas. It would definitely be helpful to deploy it more in all types of communities. However, expediting the development of cooperatives will definitely help meet part of the demand, which is hard to quantify. Once again, we have to ensure that community needs are clearly taken into account.

[Sophie Chatel, Liberal, Pontiac, QC]

In closing, I'd like to ask you to send us a written description of the specific problems you wish to draw to our attention.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Chatel.

Moving now to the Bloc, we have Mr. Ste-Marie for six minutes, please.

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

Thank you, Mr. Chair.

Greetings to all the witnesses.

Thank you for being with us today. Thanks as well for your presentations, which are very interesting.

My questions are for Mr. Demers and Mr. Boulet, from the Fédération québécoise des municipalités.

Mr. Demers, you are the mayor of a magnificent municipality. My friend Jean-Claude Germain lives there, and it's always a pleasure for me to visit him.

You mentioned challenges regarding roads and dams, of which there are many in my region as well. Even if Internet access materializes, cellular telephone access is still a challenge. It's very important to have access to that type of service for safety reasons.

Mr. Boulet, I don't think you had time to discuss infrastructure, in particular, during your statement. I'll allow you some time to round out your presentation and then ask you my questions.

[David Boulet]

Thank you very much.

FQM's members adopted a resolution on infrastructure at their annual general meeting in late 2021 calling for more investment in municipal infrastructure by the two levels of government. A recurring theme in our demands is that funding be predictable and flexible. Mr. Demers discussed this a few years ago before the House of Commons Standing Committee on Transport, Infrastructure and Communities.

FQM's members also demand that the planning initiatives of the municipalities be used as investment decision-making criteria rather than fixed and at times restricted categories that prevent investment in crucial infrastructure such as municipal buildings, fire stations, municipal garages and dams. These demands on FQM's part are recurring, and we've made them under the Taxe sur l’essence et de la contribution du Québec, or TECQ, program, which is funded under the Canada community-building fund.

Since the program will expire in 2023, this is an excellent opportunity to design a new program that applies to more types of assets, including those previously cited, and that will provide longer-term funding. The TECQ program is a good example of a program tailored to the circumstances of the municipalities. All we need is to improve it by extending it and making it more flexible.

In closing, I would like to add a word on adapting to climate change, which is also related to infrastructure. The municipalities have a front row seat from which to observe climate change, and they will also be the first to have to adapt to it. The Canadian government should therefore partner with the municipalities to help them adapt to climate change and should make significant investments to that end.

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

That's great. Thank you.

Mr. Demers, did you want to add a comment?

[Jacques Demers]

I'd obviously like to go back to the cellular coverage issue because I think it will be our next major battle. People think the cellular network is accessible throughout Quebec, but that's false. There are holes in cellular coverage in many places, even near major centres. They don't always affect very remote regions.

The regions have to be mapped more accurately. This is a mistake that we made in the early going with regard to Internet access. Many parties have promised to resolve the issue, but the mapping wasn't done or wasn't accurate. Consequently, this first step has to be taken. The federal government will have to invest in it because this is a federal responsibility. All of us, working together, have managed to resolve the Internet access issue, but cellular coverage is still a major challenge.

As regards the safety aspect, tragedies have occurred in various regions. There are many holes in cellular coverage along the major roads, places that don't seem to be a problem at first. This puts lives at risk. It makes no sense that users should still be deprived of access to the cellular network on the roads today. I believe we can move on to the next step. For that to happen, we need the regions to be mapped much more accurately and for the cellular network then to be deployed. We must choose the places where we want to solve these problems and move forward.

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

I entirely agree with you. Another tragedy occurred on the Côte-Nord a few weeks ago, reminding us how important this issue is. When we raise the subject with the government, we get a lot of talk about high-speed Internet access from Mr. Lauzon, the parliamentary secretary to the Minister of Rural Economic Development. We'll keep on trying to make the government aware of this because it's a very important safety issue.

Mr. Boulet, you mentioned the model associated with the Taxe sur l'essence et de la contribution du Québec program. What I understand from your remarks is that infrastructure funding must be granted soon and that there should be flexibility because, when you don't rely on that kind of model and approve projects on a piecemeal basis, only the major projects that help the major cities expand are approved, and there are a lot of delays.

My colleague Ms. Chatel discussed the rapid housing initiative, which is outlined in the budget and in the budget implementation bill.

Mr. Demers or Mr. Boulet, have you found that program useful?

Have you had a lot of projects approved under that program?

[David Boulet]

It's a bit early to gauge the impact of that program in particular. What will be important to assess is the willingness to get things done and the speed with which action is taken. This is a pressing issue for Quebec municipalities. People have wanted to settle in the regions for a year or a year and a half. This has become a priority issue in recent months. The speed at which action is being taken is a very welcome aspect, but there have been no results so far, and I therefore can't express an opinion on the subject.

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

Thank you.

I'll have more questions for you in the next round.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

We are now moving to the NDP and MP Blaikie for six minutes, please.

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

Thank you very much.

I want to come back to the question of the CERB amnesty that Ms. Sarangi raised in her opening comments.

There are some provisions in the bill to make it easier for the government to pursue people for CERB debt that the government is claiming. Earlier at committee, I asked the government how much they expected, both what they thought they were owed and what they thought they would be able to reclaim. I want to share just a bit of their answer with you. Maybe as somebody who is an expert in the field, you can help decipher what some of these things mean.

I was surprised that the government said, in response to the question of how much government thinks it's owed for CERB repayments, that “Since post-verification was delayed to January 2022, there are limited results to report on at this time with respect to the volume and amount of CERB overpayments and recoveries.”

I find that curious, because we know—and I believe you said in your testimony, Ms. Sarangi—that the government has sent out a number of letters. I don't know if you have a sense of the quantity of letters they have sent out, but I know that at one time they had sent out over 400,000 letters to various Canadians asking for money back. Presumably they know how many letters they sent out; I think it would be distressing if they didn't. Also, presumably they have a sense of how much they told people they owe in those letters. I found it curious that there was no attempt to quantify that.

They say their work is going to continue over the next four years and that results will be reported as the work unfolds. Nevertheless, they also report that they announced $260 million over four years in the 2020 fall economic statement “to increase their capacity to detect, investigate and address cases of fraud or misrepresentation related to the Canada emergency response benefit”.

They don't know how much is out there and they don't know how much they want back, but they do know that it's worth spending at least $260 million to get it, whatever it happens to be.

I just wonder if you had a reaction to these answers similar to what I had and if, as somebody who is working with people who are directly affected by the government's vigorous attempts to recover this money, you might be able to help fill in some of the blanks around how worthwhile it is to pursue this money.

[Leila Sarangi]

Through the chair, thank you for that question.

I am concerned that they don't have an amount. They don't know how much they're owed or expect that they'll recoup, and at the same time, they're but money in pursuing people.

For that initial round of letters that were sent out in December of 2021—441,000 letters—we know they mostly went to low-income, racialized and indigenous people and people with disabilities, folks who lost their work. We know that about 75% of the CERB benefits went to those communities and to those individuals. Because CERB was broader than employment insurance, we know that racialized women working in precarious jobs were able to access CERB payments when they wouldn't have been able to access EI. When we talk about getting payments back, we're actually talking about communities who are already facing these multiple marginalizations.

I am a bit frightened as well that they're pursuing without the required amount of information. We asked people, “How is it going to impact you and how do you feel about receiving these letters or having to repay?” People used words like “devastation”, “traumatic”, “bankruptcy” and “going into homelessness”. There were real worries about not being able to care for their kids and having child welfare come in and intervene if people will not be able to appropriately care for their kids.

This is going to continue to be detrimental. I mentioned that in July there will be more clawbacks, but the fact that this will go on for several years, the fallout, this ongoing retraumatizing of folks, is very concerning.

At our end, we have been trying to get a copy of the letters to find out those similar questions and what they are saying about how much people owe. We're finding it so hard to find that information. Even when people are being dealt with on an individual level, it just makes it harder to get that broader assessment.

Like you, I feel very concerned and very worried. I don't believe there will be much to recoup from families who are already in debt and who already have accessed their lines of credit and their credit cards. They've collected rent arrears. There are student loans that people are still repaying. There's just nothing for people to be able to give back, so I really don't see this as a worthwhile pursuit, but we know that it's going to cost hundreds of millions of dollars for the federal government to pursue this action.

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

Another component of the answer that I found curious talked about how they're willing to work with families one-on-one on repayment plans. Of course, we know that in some cases we're talking about families who don't have any flex in their budgets. If you were talking about something they could afford, you might be talking about five dollars a month or something like that.

They say, “This approach allows ESDC and the CRA to be responsive to each individual's unique financial situation, as opposed to an amnesty, which may not capture everyone's financial hardship situation.” I mean, I am finding it....

You know, when it comes to deliberate fraud, there are rules about that. There's a whole infrastructure that prohibits fraud. Fraud was always illegal. There were additional provisions passed during the pandemic making fraud—I don't know—more illegal, I guess, but certainly addressing it directly. For people who were deliberately fraudulent, there's a way to pursue those folks. What we're talking about is a larger category, which could include people who applied in good faith, really thinking they were eligible, and who were experiencing real financial hardship as a result of the pandemic, and in some cases were told either by government MPs or by government officials at the CRA to apply now and figure it out later.

Of course, they're not able to figure it out later. They'd been given the impression that they were eligible for the money and they weren't in a position to be able to hold it in an account. They were applying because they were desperate at the time, given the circumstances of the pandemic.

I'm just wondering, how does an amnesty not respond to that concern?

[The Chair, Liberal, Peter Fonseca]

MP Blaikie, you're way, way, way over time. I'm sure in the next round, Ms. Sarangi, you will be able to answer that.

We are moving to the next round. The Conservatives are up first.

MP Lawrence, you have five minutes.

[Philip Lawrence, Northumberland—Peterborough South, CPC]

I'm actually really curious to hear the answer to that question. Maybe I can give 30 seconds of my time to Ms. Sarangi to respond.

[Leila Sarangi]

Through the chair, thank you very much for that.

We firmly believe that a full CERB amnesty will capture all of those folks that the government wants to work with on an individual basis. We are asking for an amnesty for anybody whose income falls below or around that low-income measure. Those are the families who really cannot pay that five or ten dollars a month.

[Philip Lawrence]

Thank you. The analogy “blood from a stone” seems to come to mind.

Mr. Goddard, I would like to focus my questions on the craft brewery industry and go over a couple of the numbers you mentioned at the beginning.

You said that about 96% of brewery employment is from craft brewers. There are 17,000 jobs at stake. Microbreweries only start getting profitable at about 10,000 hectolitres or more.

Are those numbers all correct?