Evidence of meeting #26 for Government Operations and Estimates in the 43rd Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pandemic.
A recording is available from Parliament.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I recognize that, but you mentioned they did an analysis regarding.... I think Mr. Green was referring to payouts for dividends, etc., companies receiving subsidies but still paying out dividends. You mentioned that finance did an analysis to come up with the wage subsidy or recommendations for it.
Are you aware if ESDC followed such recommendations, or did they just create it out of the blue without the feedback from finance?
Auditor General of Canada, Office of the Auditor General
The Department of Finance provided advice on the design of the program and advice that informed the policy—
Auditor General of Canada, Office of the Auditor General
The advice that informed the policy decision.... Once the policy was in place, then Canada Revenue Agency rolled out the program in accordance with the policy.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Okay.
I want to follow up. Regarding the CEWS, you mentioned the government followed best practices from around the world on the wage subsidy. I'm wondering: What best practices?
What I'm getting at is that I was looking at the top 50 companies by market cap in Canada. About 10 of them where the market cap is a third of a trillion dollars received wage subsidies. These companies representing a third of a trillion dollars in market cap had $32 billion in profit, so again, I'm trying to get to what analysis from finance or what best practices led to the development of a program that would pay wage subsidies to a group.... Actually, I think seven of them were worth a third of a trillion dollars, but also I'm getting to Mr. Green's point about a subsidy that would go to companies that ended up paying dividends.
Auditor General of Canada, Office of the Auditor General
The best practices I was referencing are best practices that are recognized internationally in an emergency situation, and those best practices are the ones that take all of those prepayment controls and focus on post-payments. The decision to do personal attestations and move to post-payment work, that's the best practice.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Okay, so the best practice was about the delivery of the wage subsidy, not the makeup.
Under your CERB report, in paragraph 6.36, you state that you found the benefit was being delivered. Finance performed an analysis to inform the Minister of Finance on proposed changes to the benefits in light of the evolving crisis. Do you know if those proposed changes were made?
Auditor General of Canada, Office of the Auditor General
Is your question referencing the Canada emergency response benefit?
Auditor General of Canada, Office of the Auditor General
The changes that we saw happening throughout the program were the ones that allowed individuals to earn a level of income, $1,000, as I referenced earlier.
Conservative
Kelly McCauley Conservative Edmonton West, AB
That's the one that came out of the finance analysis? Great.
On to—
Auditor General of Canada, Office of the Auditor General
It came out of finance and CRA and ESDC's analyses. There were a whole bunch of departments that were doing analysis as the program evolved.
Conservative
Kelly McCauley Conservative Edmonton West, AB
In paragraph 6.38 you comment that “We found that the [CRA] identified and suggested changes to [ESDC] on the design of the non–Employment Insurance Emergency Response Benefit.” Did they make those changes the CRA suggested that you noted in 6.38? What did CRA recommend that you noted in 6.38?
Auditor General of Canada, Office of the Auditor General
I think I'm going to turn to Jo Ann Schwartz to perhaps provide a little more detail about that paragraph.
Jo Ann Schwartz Principal, Office of the Auditor General
Sure. Thank you for the question.
In terms of paragraph 6.38, we did see that the CRA identified and suggested changes to ESDC on the design of the CERB, for example, additional mechanisms to recover funds.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Did they act upon them, though? Your commentary is not very clear on whether they actually made those changes as suggested by CRA.
Principal, Office of the Auditor General
We don't report explicitly on whether those recommendations were, in fact, accepted.
In terms of additional mechanisms to recover funds, those—
Conservative
Kelly McCauley Conservative Edmonton West, AB
Can I ask why not? What's the point of putting it in here? We're studying the CERB and whether it was rolled out effectively and was the best for taxpayers. I'm sorry for sounding cynical, but's what the point of saying, “Well, CRA recommended stuff” and then not commenting on whether the government took advantage of those recommendations from the experts or made such changes?
Principal, Office of the Auditor General
Our point of including it was to show that the CRA was playing an active role and was involved in looking at how the design was happening for the CERB.
In the situation of additional mechanisms that they were recommending be included to recover funds, those were mechanisms they saw that ESDC had. They wanted to recommend that they would also have them. To my understanding, not all of these recommendations were accepted.
Conservative
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you, Mr. Chair.
When COVID-19 started to appear in Canada, we saw, and we've discussed today, how the federal government worked very quickly to protect Canadians and roll out a number of the programs we've been talking about here. The reports you've put together, of course, focus specifically on the first wave of COVID-19 in Canada. I understand that there's a lot of significant work that's been done to scale since then, particularly with PHAC's capacity. We can see that some of the responses from the government to the recommendations you've mentioned here speak directly to that.
My question to you, through the chair, Ms. Hogan, is this: Do you agree that PHAC's response has evolved since the first wave?
Auditor General of Canada, Office of the Auditor General
Unfortunately, I'm not sure that I can absolutely comment on that. I see what you see in the media, but I haven't done any audit work to tell you whether or not PHAC's response has evolved.
What we saw during the audit period, and we demonstrated it through the pandemic preparedness audit, was that they were adapting and evolving at those early stages. I assume they would continue to adapt and evolve as the virus does.
We saw them not have an agreement with provincial-territorial partners, but even though that agreement wasn't there, it didn't stop them from discussing it with them and making sure they received the information they received. When they saw it was too much for provinces and territories to respond, they adjusted again to try to make it more manageable.
We definitely saw them reacting throughout the early stages. I just assume that they would continue to do so during [Technical difficulty—Editor].
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you for that.
I understand that you're doing audits on the next periods of the government's response to the pandemic. Assuming that's the case, when do you anticipate being able to release some of those findings?
