Human Resources Committee on May 25th, 2020

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you very much, Mr. Chair.

Thank you to all the witnesses for coming to our committee today.

Mr. Kassam, you made a comment about the importance of CERB and you also touched on your preference, which is a universal direct payment. Like you, I support that system. I think that would have been the simplest way to provide support quickly to Canadians who need help.

That being said, the government came in with the CERB program. It is a much more complex program, one in which we continue to find people falling through the gaps. One example I highlighted at this committee and elsewhere is single parents, many of whom are women, who don't qualify to receive the CERB because their income is spousal maintenance and child maintenance. That is not deemed to be income under the definition of CERB. To this day nothing has been done, in spite of the government's acknowledgement of the issue. The minister for ESDC,Minister Qualtrough, came before us and voiced her concerns about this gap. We're still struggling with that for many of the single parents out there.

Likewise, we have a situation whereby people with disabilities and seniors also were not eligible for CERB. The government did come in with a one-time support for seniors. We're waiting for quick progress and hoping for an announcement with respect to support for people with disabilities.

With that as the backdrop, Mr. Kassam, as we're now also talking about re-entry into the workforce, one of the key issues that is emerging is the lack of sick leave for individuals. I know that constituents of mine had to quit their job prior to the height of the COVID-19 situation because they were expected to show up at work even though they were exhibiting flu-like symptoms. They were in such a conundrum, they didn't know what to do, and in the end they felt they had to resign their position.

Mr. Kassam, I wonder whether you can comment on the importance of sick leave for every worker across the country as we transition, hopefully, into the return to work.

[Shamez Kassam]

I personally believe that sick leave is important, especially as we transition into reopening the economy.

I'm just talking from my own experience here, but as a business owner—I co-own our financial planning practice with two other individuals—we were just speaking of transitioning our staff and ourselves back to work. Before, people would come to work if they were mildly ill. I've done that myself when I had a cold or a sore throat or something, and I should have been at home, but I pumped a bunch of Tylenol flu capsules and I did go to work.

In this new situation, if people are having any symptoms whatsoever, even mild, they should be cautious and stay at home. Therefore, I do believe, from a practical perspective, that sick leave is important for every worker. Of course, this has to be balanced with the financial responsibilities put on employers.

I can tell you that in Calgary, business owners have been squeezed in every possible direction, even before this COVID-19 pandemic.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you very much for that. The commitment was made today from the Prime Minister about the 10-day sick leave. It was something that I know our leader Jagmeet Singh had pushed very hard for. I hope that will come into play, because I think it is absolutely essential for all workers across the country.

With that being said, there is another piece I'm wondering about, Mr. Kassam. As a business owner, one issue that I know people have raised with me is the commercial rent subsidy. Many people are not able to access the commercial rent subsidy because it's the landlord who has to make the application as opposed to the small business owner.

The other criteria related to that is the landlord has to have a mortgage in order to apply. I have so many small businesses in my community that cannot access the commercial rent subsidy, and they are in a dire, dire situation. It is in nobody's interest, I think, for the government to not step in to help these small businesses survive the pandemic, and of course, not only for those businesses but also for the road to recovery for the country.

I'm wondering whether or not, as a small business owner, you have any comments with respect to the commercial rent subsidy. Should the government change the program so that small businesses themselves can apply? Do you agree that it should not be tied to a mortgage?

[The Chair, Liberal, Sean Casey]

Ms. Kwan, I am very sorry, but you are well past your time.

Mr. Kassam, you are more than welcome to provide the committee with a written answer. I am sorry about that.

Next we're going to Mr. Albas for five minutes, please.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you very much, Mr. Chair.

Thank you to all of our witnesses here today.

Mr. Epp, could you quickly go over the Canadian emergency wage subsidy in regard to your own business? Are you utilizing this?

[James Epp]

We do not qualify for the first month, though we are qualifying for month two. That subsidy is challenging in some ways because it's such a broad base. Concerns are where, for instance [Technical difficulty—Editor]

[The Chair, Liberal, Sean Casey]

Mr. Epp, I'm going to get you to stop for a minute. If everyone's sound quality is as bad as what's coming through mine, we clearly have a technical issue.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, if I can make a suggestion, maybe Mr. Epp can write to the committee on his experience with the Canada emergency wage subsidy. I don't want to waste time as we're getting near the end of the session.

[The Chair, Liberal, Sean Casey]

Fair enough, Mr. Albas. Thank you.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you.

I'll go to Professor Milligan.

Professor Milligan, thank you very much for being here today. I certainly appreciate seeing you, Ken Boessenkool and other economists discussing various proposals, so I appreciate your putting yourself out there.

Professor, why do you think the Canada emergency wage subsidy is being so underutilized?

[Prof. Kevin Milligan]

I think the contention is right. The uptake of the wage subsidy has been lower than most people expected to see. I think the main reason is that it was slower to get into place, and many businesses had to make a decision of how to lay off their workers. Instead of laying them off through a furlough, through the wage subsidy, they laid them off onto the CERB. It's great that we had both things there, that the CERB was able to act as a life preserver for so many Canadian families.

That's the way things went in March, April and May. As to where we are now, I think that, looking forward, the wage subsidy is a really important tool as we restart the economy.

Whatever the mix was between the CERB and the wage subsidy in the past few months, I think that, looking forward, we should be putting our focus on getting people back to work and on the CEWS.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Respecting that we want to look at the future, will the uptick, though, in the CERB usage and lack of use of the Canadian emergency wage subsidy mean a slower recovery and much more money spent on the CERB?

[Prof. Kevin Milligan]

It's hard to predict the future, especially in this crisis. What I do hope to see over the summer is that businesses here in B.C. and in other places start to hire back their workers, that we will see that case load on the emergency benefit going down and there be more workers on the wage subsidy.

I am seeing businesses open up around me here in Burnaby, and I'm happy to see that. I do hope that we will start to see people maintain their income by doing it through the wage subsidy rather than the emergency response benefit because the wage subsidy is a way to rebuild the economy.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

What percentage of the economy do you think it is possible to allow to return while still ensuring health protections? As we know, some sectors and businesses will be closed for a while still.

[Prof. Kevin Milligan]

I can't hazard a guess as to what percentage. However, I do know that with regard to the kind of freeze that we have seen the economy experience in March, April and May, there are clear signs that we are coming out of it in the labour market, in other kinds of indicators of economic activity, so I am hopeful that we will start to make that recovery in the data that comes out in the next few weeks.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, how much time do I have?

[The Chair, Liberal, Sean Casey]

You have one minute.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay, I'll try to get this through.

Professor Milligan, you've said that for a program like the CERB to be made permanent, that would require making the GST 27%. Clearly that's just not realistic. Do you agree that the CERB must be scaled down as soon as possible without hurting Canadians who need the support?

[Prof. Kevin Milligan]

I think that we need to start planning for a transition out of the emergency response benefit. Mr. Albas is right. If you were to make a program like the CERB permanent, that costs us about $15 billion a month. That would be $180 billion a year, so the idea of making this a permanent feature of our economy is simply not something we can sustain.

That's one of the reasons we want to start planning a transition out of the CERB, and I think that we ought to start that planning now. As we know, the administration of these benefits is a very difficult thing. To get the details right and to make sure that all Canadians are supported, we want to start that planning now.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Milligan.

Thank you, Mr. Albas

Mr. Vaughan, please, you have five minutes.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

I'll pick up on that, Professor Milligan.

Guy Caron, a former member of Parliament and a candidate who talked a lot about basic income, estimated that to provide $2,000 to every single Canadian for a year would cost well over $500 billion. Do you support that calculation?

[Prof. Kevin Milligan]

The numbers can get very large like that. It depends on the particular amounts, but $2,000 a month times 30 million adults is $60 billion a month. If you multiply that by 12, you get numbers that are very big. Those numbers get very challenging.

There are other ways one can think about delivering these kinds of benefits, by phasing them out with income or by targeting them in different ways, but for the universal idea where you give the same cheque to everyone, it would be very expensive.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

If we were to claw that back through the tax system, what percentage would be currently clawed back under the existing tax rates?

[Prof. Kevin Milligan]

Tax rates for many Canadian families are more in the range of, at the federal level, 25% or 30%. You would get back some of that if you were to pay out these kinds of very large cheques to everyone. You would get some of that back through the tax system; that is clear. You could imagine extra surtaxes in order to pull back those extra benefits at tax time.

I just think, for me, a very important consideration in going the way the government did with the CERB was the speed of delivery. The fact that there was that CRA website made it so fast.