Human Resources Committee on April 30th, 2020

[The Chair, Liberal, Sean Casey]

I call this meeting to order. Welcome to meeting number six of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

I believe at this time it would be appropriate for us to observe a moment of silence for the victims of the military helicopter crash yesterday.

[A moment of silence observed]

Thank you.

Pursuant to the orders of reference of March 24, April 11 and April 20, 2020, the committee is meeting for the purpose of receiving evidence concerning matters related to the government's response to the COVID-19 pandemic.

Today's meeting is taking place by video conference. The proceedings will be made available via the House of Commons website. The webcast will always show the person speaking rather than the entirety of the committee.

In order to facilitate the work of our interpreters and ensure an orderly meeting, I would like to outline a few rules to follow.

First, interpretation in this video conference will work very much as it does in a regular committee meeting. You have the choice, at the bottom of your screen, of either “Floor”, “English” or “French”. In order to resolve the sound issues from our previous meeting, please ensure you are on the English channel when speaking in English and on the French channel when speaking in French. If you plan to alternate from one language to the other, please also switch the interpretation channel so it aligns with the language you are speaking.

Before speaking, please wait until I recognize you by name. When you're ready to speak, please click on the microphone icon to activate your mike. I will just remind everyone that all comments by members and witnesses should be addressed through the chair.

Should members need to request the floor outside of their designated time for questions, they should activate their mike and state that they have a point of order. If a member wishes to intervene on a point of order that has been raised by another member, they should use the “Raise Hand” function. This will signal to the chair your interest in speaking. In order to do so, you should click on “Participants” at the bottom of the screen. When the list pops up, you will see next to your name that you can click “Raise Hand”.

When speaking, please speak slowly and clearly. When you are not speaking, your mike should be on mute.

The use of headsets is strongly encouraged. If you have a microphone on your headset that hangs down, please make sure it's not rubbing on your shirt during your questioning time.

Should any technical challenges arise, for example, in relation to interpretation or if you are accidentally disconnected, please advise the clerk or chair immediately, and the technical team will work to resolve them. Please note that we may need to suspend during these times, as we need to ensure that all members are able to participate fully.

Before we get started, can everyone click on their screen on the top right-hand corner to ensure that they are on gallery view. With this view you should be able to see all the participants in a grid view. It will ensure that all video participants can see one another. That's it for the preliminaries.

I would now like to thank the witnesses for joining us today.

From the Department of Employment and Social Development, we have Graham Flack, deputy minister; Lori MacDonald, senior associate deputy minister and chief operating officer for Service Canada; and Benoît Robidoux, associate deputy minister.

From Canada Mortgage and Housing Corporation, we have Evan Siddall, president and chief executive officer; and Romy Bowers, senior vice-president, client solutions.

It's my understanding that only Mr. Siddall has opening remarks.

I see that we have a point of order from Ms. Kusie, so I recognize Ms. Kusie, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

I have two brief points.

First, we previously discussed the possibility of having the ministers prior to officials, so the official opposition would ask that we continue to pursue this. I recognize that we have three ministers here in quick succession, but we would appreciate it if we could continue to pursue the format of having the ministers before the officials.

Second, it is the hope of the official opposition, and I feel confident that all parties would benefit from this, that if a point of order is made during someone's speaking time, the time taken for the point of order be added back to the interaction time between the questioner and whoever the respondent is at the time. If we could get confirmation on whether this is possible, it would be helpful.

Thank you.

[The Chair, Liberal, Sean Casey]

Ms. Kusie, I can tell you that at the last meeting all of the points of order pretty well came at the end. A couple were made during, and pretty much everyone went over their time anyway.

We have asked the various departments to have the ministers come first. We will continue to do so.

Thank you, Ms. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

[The Chair, Liberal, Sean Casey]

I now recognize Mr. Siddall for his opening remarks, please.

[Evan Siddall, President and Chief Executive Officer, Canada Mortgage and Housing Corporation]

Thank you for this opportunity to update the committee on how CMHC is supporting Canada’s response to the COVID-19 pandemic.

My 2,000 colleagues and I have been devoted to doing all we can to help stabilize our financial system and ensure that Canadians continue to have the security of a home. We have mobilized our crisis response plan in order to perform an essential role, and that is to act as a shock absorber to Canadians during unforeseen events.

In the early days of the crisis, our financial system came under pressure as bank funding markets seized. In coordinated action with the Bank of Canada, along with the Department of Finance and the Office of the Superintendent of Financial Institutions, we relaunched the insured mortgage purchase program, or IMPP, a tool developed by CMHC to support market liquidity during the global financial crisis of 2008 and 2009.

Under the current revised program, we stand ready to purchase up to $150 billion of insured mortgages to ensure that banks have access to reliable funding. In short, the IMPP provides a safety net to ensure that banks can continue their lending activities so that housing markets remain functional.

We are also ready to expand the issuance of conventional Canada mortgage bonds, depending on market conditions and investor demand.

As Canadians do their part to contain the spread of the coronavirus, more than ever, our homes have become a sanctuary—a sacred place of safety and refuge in challenging times. We therefore acted quickly to offer help to Canadians who are having difficulty paying their mortgages or rent.

As the committee knows—

[The Chair, Liberal, Sean Casey]

My apologies for interrupting, Mr. Siddall. Ms. Kwan has a point of order.

[Jenny Kwan, NDP, Vancouver East, BC]

Mr. Chair, I'm really sorry. I don't know if others are having this problem, but I can barely hear the interpretation for Mr. Siddall. I pretty well missed all of what he said, except for the very beginning.

[The Clerk of the Committee, Ms. Marie-France Lafleur]

I believe the issue is that Mr. Siddall is on the English channel.

When you're speaking in French, could you please switch it to French, and when you're speaking in English, could you switch it to the English channel?

[Evan Siddall]

I was told to do that. Okay.

[The Clerk]

Thank you.

[The Chair, Liberal, Sean Casey]

I believe it's important that everyone get Mr. Siddall's statement, and I'm sorry to do this, sir, but it's probably appropriate for you to start from the top.

You were probably close to the end. Were you?

[Evan Siddall]

Goodness, no. I will rewind a bit and continue.

[The Chair, Liberal, Sean Casey]

Okay.

[Evan Siddall]

I'm going to switch languages now.

[The Chair, Liberal, Sean Casey]

Okay.

[Evan Siddall]

Under the current revised program, we stand ready to purchase up to $150 billion of insured mortgages to ensure that banks have access to reliable funding.

In short, the insured mortgage purchase program provides a safety net to ensure that banks can continue their lending activities so that housing markets remain functional.

We are also ready to expand the issuance of conventional Canada mortgage bonds, depending on market conditions and investor demand.

As Canadians do their part to contain the spread of the coronavirus, more than ever, our homes have become a sanctuary—a sacred place of safety and refuge in challenging times. We therefore acted quickly to offer help to Canadians who are having difficulty paying their mortgages or rent.

As the committee knows, the mortgages of millions of Canadian homeowners are insured by CMHC, Genworth Canada, or Canada Guaranty. This insurance protects the lender against default should the homeowner not be able to meet their mortgage obligations.

In the face of significant job and income loss due to COVID-19, we provided lenders with the ability to help homeowners who have been financially impacted by the pandemic. In coordination with private insurers, we're offering, first, temporary deferral of mortgage payments for up to six months; second, mortgage reamoritization so that homeowners can make lower payments over a longer period; and third, adding missed payments to the mortgage balance and spreading them over the repayment period.

We're urging Canadians who can pay their mortgages to do so, to keep our economy going and reserve financial relief for those who need it most.

The same mortgage deferral relief has been made available to our multi-unit clients. These are people who own apartment buildings, for example. In return, we've insisted on patience from landlords, specifically that they refrain from evictions during this crisis.

Meanwhile, we've accelerated support for non-profit and co-op housing providers to ensure that they continue to receive federal rent subsidies so that low-income tenants are not themselves forced from their homes. Again, we made it clear that evictions will not be tolerated.

For renters affected by COVID-19, the first defence is of course the income support measures announced by the Government of Canada, such as the CERB, the temporary salary top-up for low-income essential workers and the increased Canada child benefit. As is the case with mortgage holders, people who can afford to pay their rent must continue to do so.

Direct affordability support to households in housing need is also available in a number of provinces via the Canada housing benefit, which took effect on April 1. We're continuing discussions right now with other provinces and territories to accelerate the flow of this benefit to Canadians in need of assistance.

Finally, CMHC will administer the Canada emergency commercial rent assistance for small business. This program will lower rent by 75% for small businesses that have been affected by the crisis. While the program is not housing related, we were pleased to be called upon to deploy our real estate expertise to help struggling entrepreneurs.

I want to assure the committee that we stand ready to deliver other pandemic-related initiatives should the need arise. A rapid response in the past few weeks reaffirms CMHC's capacity to develop and launch new financial support programs quickly and effectively.

Looking to the future and our recovery, the pandemic has only underscored the importance of housing and our aspiration that by 2030 everyone in Canada has a home that they can afford and that meets their needs. We must continue our work investing in the supply of new housing and promoting urban densification as an answer to the shortage of affordable housing.

In closing, I will add one further thought for committee members. Please take note that almost everything we've done to respond to the crisis involves more borrowing. Governments need to borrow to finance new programs, just as mortgage deferrals add to already historic levels of household indebtedness. However, as Hyman Minsky, the economist, said, debt causes fragility. We leave this crisis less well prepared for the next one, and we must think ahead.

CMHC will share housing market forecasts shortly. I expect it to project a decline in prices. Combined with increasing unemployment, this prospect should give us pause. My colleagues and I are preparing ourselves to help Canadian households without offering bailouts, the tempting short fixes that have perverse long-term economic consequences. In my view, we must also confront the powerful incentives for excessive household borrowing that have contributed to the run-up in house prices.

CMHC was founded to help rebuild our post-war economy. We're at our best when we're responding to crises and helping our country get out the other side. We look forward to continuing our work in housing Canada, post crisis.

Thank you, Chair and committee members. I look forward to answering your questions.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Siddall.

Now we'll begin with the Conservatives and Ms. Falk for six minutes.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Thank you, Chair.

In March, we know the government encouraged those who lost their jobs due to COVID-19 to apply for EI. Then CERB was announced and it was understood that those who applied for EI were going to be rolled over into CERB.

We are hearing many instances of expectant mothers not receiving the benefits that they are entitled to. We've heard instances of expectant mothers being told that they are required to start their EI maternity leave immediately, despite qualifying for the CERB benefit, and instances where expectant mothers applied for EI benefits before CERB was available, but unlike non-pregnant applicants, have not been switched over to the CERB program.

As many of us know, myself included, who just had a baby nine months ago, there are financial costs and changes in life, but a baby also brings great joy. I can only imagine the stress of having a baby during a pandemic, and on top of that, fighting for benefits when one is entitled to them.

What actions have been taken within the department to ensure that expectant mothers are receiving the benefits they are entitled to and to ensure that expectant mothers are receiving accurate information?

[Graham Flack, Deputy Minister, Employment and Social Development, Department of Employment and Social Development]

Mr. Chair, I am happy to take that question.

Let me give you three categories of expectant mothers to give you the cases and how we are dealing with them.

The first category would be expectant mothers who have not been let go from their jobs but are going onto the EI special benefit, maternity benefit, during either the pre-March 16 period or after, during the CERB period. That is the part of the EI system that we have continued to have function after March 16, so whether they went on maternity benefits prior to March 16 or after, they will be receiving the benefits through EI maternity. That's 55% of their income, based on their qualifications.

For women who were laid off prior to their going on maternity leave, as a normal function of our EI system, they go on regular benefits first under the EI system and they then are switched over to maternity leave. In both of those cases, they are on EI benefits, so it's 55% of their salary. Any woman you described who is in a situation where she would have been laid off prior to March 15 would be on EI regular benefits, and then she would proceed to EI maternity benefits.

For women who were laid off after March 16, indeed our intention is to put them on the CERB for that period and then transition them to EI. Our system was not built to be able to do this, so the teams have been working very hard to allow that to happen in an automatic way. They have found a solution to be able to do that, but in the interim period, in order to avoid women being without benefits, we put them on EI, even the women who applied after March 16, so that they would be put in pay and getting benefits. For some of those women, that would mean they would be earning more than the CERB, because in EI you can earn up to $573. For some, it would mean less than the CERB.

As soon as we are able to implement this solution to the system, the 46-year-old EI system that we have, we will be doing two things. Everyone who will be enrolled in EI, who is in the situation you described, will automatically go into the CERB and then automatically be transitioned to the EI benefit. For anyone who has been in the EI system from March 16 until now, we will go back and retroactively top up their pay if they were below $500.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

I just need some clarification, then.

I've been contacted by some constituents who are early on in their pregnancy, who might not have had the full hours, and they're concerned about not being able to get those full hours.

So that these families and these new children don't fall through the cracks, what is the government or the department planning on doing for the men or women who wanted to access maternity or parental leave but missed the hours because they've been laid off for CERB, but would have had the hours if they hadn't been laid off because of COVID?

[Graham Flack]

As Minister Qualtrough indicated at her appearance with you last week, that is an issue we are looking at from both the policy perspective and a solutions perspective in terms of how to address it.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Is there a timeline with that? I know it's very stressful, especially for new parents who are having babies and trying to plan. This could ultimately affect child care options as well. Is there a timeline expected for when we can let our constituents know we can have an answer for them?

[Graham Flack]

I can tell you that we've been working very aggressively on it. As you've seen with the other case you raise, there are also system issues in terms of, for example, if one were to lower the number of hours from the current 600 hours to a different level. We don't want to put forward a solution to you if our system will not accommodate that. We're finding ways to be able to do that.

There's both a policy issue that needs to be determined, and Minister Qualtrough committed to be able to do that, and also a systems issue. This is a 46-year-old COBOL-based system that was not designed to accommodate these sorts of changes quickly. What we don't want to do is put changes into that system that could risk other EI beneficiaries in terms of problems that emerge in the system, but I can assure you that we're working aggressively day and night to work through all of these issues, as we have through the other issues we've dealt with today.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Falk.

We will go to Ms. Young, please, for six minutes.