Government Operations Committee on April 26th, 2021

[Karen Hogan]

No—

[Kelly McCauley, Conservative, Edmonton West, AB]

It was still based on attestation, though.

[Karen Hogan]

Absolutely. There was a policy decision made that they would favour post-audit or post-payment verification.

[Kelly McCauley, Conservative, Edmonton West, AB]

I understand that. The question, though, is about introducing controls at the beginning or perhaps, after a month or two, not basing it on self-attestation. Would it not be more efficient to do that sooner rather than wait for an after-the-fact launching of audits of the benefits paid out?

I recognize that at the very beginning we had to do stuff immediately, but it has been an entire year now. Should we not have perhaps taken it away from self-attestation faster or linked it to social insurance numbers or other more verifiable things faster?

[Karen Hogan]

I think that, when it came to the Canada emergency response benefit, it was intended to be rather a short time frame. It was extended a few times, but that program is done now.

[Kelly McCauley, Conservative, Edmonton West, AB]

Could we have not—

[Karen Hogan]

If you're looking at the wage subsidy, I would argue—and we found in our report—that there were some instances where controls could have been introduced, but a decision was made that a focus would be put on post-payment.

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me ask you this. You use the word “could” a lot. We “could” have done better dealing with the pandemic and we “could” have done this. Would the better word not be “should” from your point of view? We “should” have introduced this. We “should” have done this. The government “should” have done this as opposed to “could”...? “Could” is very open to interpretation, I guess.

[Karen Hogan]

I guess many of my statements are encouraging the federal government to collaborate better amongst departments and to collaborate better with provincial, territorial and municipal governments, because we should do better the next time a pandemic or a health crisis happens.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay.

Have you looked at what the cost would be of potential abuse or—I don't want to say the word “undeserved”—of perhaps an ineligible receiving of benefits because we're doing things after the fact?

You commented in your report about a very large amount of money being sent for wage subsidies to companies that are deep in arrears for owing GST and other issues. They're going to be bankrupt. Therefore, those are not going to be paid back. What do you think is the total exposure for the Canadian taxpayer for the fact that we're doing things so far after the fact instead of perhaps adjusting as we go?

[Karen Hogan]

We have not looked at the cost or the potential cost of this. That is why, in both of our audits on the Canada emergency response benefit and the Canada emergency wage subsidy, we indicated that we will be doing another audit. Our next audit will look at those post-payment controls, at whether or not they are designed properly and effective. At that opportunity, we'll have a chance to look at some of the potential costs that might impact the government.

[Kelly McCauley, Conservative, Edmonton West, AB]

Paragraph 6.27 of your report on page 7 says that “the department considered social, economic, and health and safety” info to design the program, referring to CERB. I'm wondering how you came up with that—“the department considered social, economic and health and safety”—because one of the items that came out of the CERB was two-thirds of a billion dollars being paid to 15-year-olds and 16-year-olds living at home.

I'm trying to figure out what social and economic design went into a program to pay 15-year-olds and 16-year-olds two-thirds of a billion dollars, when perhaps that money could have been used for long-term care centres or procuring more vaccines or probably for other areas needing resources.

[Karen Hogan]

I might see if Jo Ann Schwartz, who was the principal on the audit, would like to add something. Here, really, the eligibility criteria to earn CERB was that you had to have had income of at least $5,000—

[Kelly McCauley, Conservative, Edmonton West, AB]

No, I recognize that, but you made a statement that the department considered social and economic info to design the program. What made you come up with the determination that they considered these issues?

[Karen Hogan]

Maybe I will turn to Jo Ann, then, and have her answer that more detailed question.

[Kelly McCauley, Conservative, Edmonton West, AB]

I guess we're out of time. Maybe you could provide it in writing.

[The Chair, Conservative, Robert Gordon Kitchen]

Ms. Schwartz, if you provide an answer to the committee, that would be greatly appreciated.

Thank you.

We'll go now to Mr. Kusmierczyk for five minutes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you very much, Mr. Chair.

Thank you very much, Ms. Hogan, for your excellent work and your excellent response today. I think all of us are committed to strengthening our responses and are always looking to do better and to support Canadians better during these challenging times.

The central goal of the CERB was to get funding into the hands of Canadians as quickly as possible to help them through COVID and to allow them to be able to isolate at home, hence protecting their health and the health of their families, and also to reduce the stress on the health care system.

About eight million Canadians received the CERB, and most people received their payment within three to five days of applying. Was the federal government successful in its intended and central goal of getting funding into the hands of Canadians as quickly as possible?

[Karen Hogan]

What we found in the audit on the Canada emergency response benefit was exactly that, that the government prioritized the speed of getting payments to individuals in order for them to either stay home or to help replace income they may have lost because of the pandemic. It was also meant to address individuals who might not normally have been eligible for EI but whose hours or jobs may have been cut or reduced; hence, it would help to keep them in a stable economic situation.

What we found in the audit was that the program was rolled out rather quickly. It now will be up to the post-payment work to see whether or not all of the individuals who received the funds were eligible to do so.

Did the government do it quickly? Yes. What we saw was that it was designed and launched in record time compared with other policies when they're newly rolled out and implemented.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

The CERB was, as we heard today, administered by two organizations, ESDC and the Canada Revenue Agency. We also heard today, of course, that the IT system underpinning EI is 50 years old and that it's extremely difficult to operate and to introduce changes.

What does the fact that eight million applications were able to be processed so quickly tell you about the strategy or the system that was deployed, this bifurcated system where you had the CRA and ESDC delivering CERB to Canadians? Was that the right decision?

[Karen Hogan]

I guess I would quote myself and repeat a statement I made in my opening statement. It demonstrates that, when the public service must, the public service can.

There was really a focus on providing service to Canadians. Employment and Social Development Canada recognized that its IT system wasn't going to be able to handle the volume of applications that was coming in, and they reached out to the Canada Revenue Agency for support. Together they were able to meet the needs.

I think it just shows that, when we have that service mindset and we don't tend to focus too much on process, something important can be achieved. I think that's what we saw throughout the pandemic in many departments across the federal public service.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Would you agree that it demonstrated just how quickly the public service can respond and how flexible and creative it can be in those solutions?

[Karen Hogan]

Absolutely. I think I would say that it wasn't always perfect, but it definitely was the best everyone could do in the situation we were in.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

We know that about five millions Canadians utilized the wage subsidy during this time. One of the stated goals was to keep Canadian workers connected to the workforce during the pandemic.

Canada has recovered about 75% of the jobs lost during the peak of the pandemic, and the economy rebounded better than that of many of our peer countries. This is what economists are saying. In fact, the Conference Board of Canada is forecasting 5.8% growth in 2021.

How important to Canada's recovery was the wage subsidy in keeping workers connected to the workforce?

[Karen Hogan]

In our audit on the wage subsidy, we looked at the design and the rollout of the program and really didn't look at whether or not it was meeting those end of pandemic type goals. Perhaps that's something we can consider looping into our next audit, but we were really looking at whether or not it was designed in a way to help encourage and maintain that employer-employee relationship, and also to help businesses be prepared when the economy reopens and moves forward.

What we saw was that some businesses—and I think everyone across the world can say this—fared rather well during the pandemic, some not so well and some failed. That analysis will have to be done later on by another organization, or perhaps by us.