Public Accounts Committee on April 15th, 2021

[Matthew Green, NDP, Hamilton Centre, ON]

Are those reports verified? Respectfully, I feel like CFIB is a bit dubious in the way that they represent small businesses. How do you verify the validity of their data when these claims are being made?

[Michelle Kovacevic]

In my opinion, you don't just attribute one source as the only piece of information. You pool information from all over the place. There are a bunch of secondary sources, and altogether you get the broad strokes of a meaningful trend. To your point, it's not for me to say whether something is dubious or not. It's just another comment of information.

[Matthew Green, NDP, Hamilton Centre, ON]

No, that's my point. I'm trying to get a clear idea about the calculation that was made in the decisions to use the wage supports, the wage subsidies and the way they interact with the CERB. I'm hopeful that in future months, maybe years, when we look back on this, we recognize that we had an opportunity to provide CERB to everybody, including people who were not employed, to batten down the hatches, to maybe only have one wave, maybe two at the most. The fact that we're in the third wave leads me to think that we're not even close to containing this thing, based on this push-and-pull policy of supply and demand for our labour.

I can see Madam Chair holding her mike, so I'll wrap it up and come back on this on the back end.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Green.

We will now move to our second round of questioning. It's a five-minute round, starting with Ms. Dancho.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you, Madam Chair.

I would be remiss as a Conservative member and as a woman if I didn't mention how the CERB initially left out pregnant women. Perhaps Mr. Green doesn't feel that was an important issue, but Conservative members would disagree with him. It was because of our advocacy that that issue was addressed by the Liberal government, but I will move on.

Really, my issue is that half a billion dollars was paid in error, which I do believe is a significant amount of taxpayer dollars, and I'm working to get to the bottom of who was responsible for it and how we can ensure it doesn't happen again in the event we're in this sort of crisis again. I do get a sense that the half billion dollars is not being treated very seriously, like it's not a big deal. Mr. Green said it was only 1%, so who cares? I'm paraphrasing, of course, but that is the sense I'm getting from witnesses and from other committee members.

I completely reject that view. Quite frankly, I find it disrespectful to taxpayers to say that half a billion dollars is, well, just a cost of doing business with CERB. Millions of Canadian families are going to have to work for years to pay federal taxes to pay back that half-billion-dollar mistake. That was financed by deficits, so it's half a billion dollars of a mistake plus interest.

Mr. Flack, you mentioned in the last round that you were taking responsibility for this, or it sounded like you were, but you expressed that you didn't believe it was an error. Rather, I think you said it was a known issue, that ESDC was aware that this would happen.

Was the minister of ESDC aware that there were individuals who had access to both CERB and EI CERB funds, and when was she made aware of that?

[Graham Flack]

From the very beginning of the design, we made ministers aware, and as soon as we briefed parliamentarians, we made them aware as well.

I just want to contextualize it for you. We built, in a matter of two or three weeks, two new systems, one on the EI side and one on the CRA side.

The only way to prevent duplicate applications would have been to have a real-time connection between those two systems. We knew this was impossible to build without months of delay and we made a conscious decision not to delay launching the CERB by months just to have that real-time connection.

We had a plan. Knowing it was possible for people to apply on both sides, the plan was that we would develop a SIN matching system that would take the applications on each of the two systems on which they came in, match the SINs and then set up a system to block applications in the second week where individuals were on both sides—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Mr. Flack, pardon me. I'm sorry to interrupt you, but my understanding is that individuals weren't advised to only apply for one. Was that not the case?

[Graham Flack]

Yes, they were. They were clearly advised on the website. However, as we saw on social media, we had individuals saying that, to be safe, they were going to apply to both.

Therefore, we designed a system. We thought it was going to take three weeks to put it in place to be able to block people on both sides, but the teams were able to put that together in one week.

I'd point out that the money is not lost. We then immediately went to the individuals who had been paid on both sides. Because almost all of those individuals applied for multiple weeks, we had an ability to then tell them that they were going to need to pay it back.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you, Mr. Flack. My understanding is that you're chalking it up to a communications error.

[Graham Flack]

No, it's not a communications error.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Well, you mentioned that it was on the website, so if people weren't fully understanding that, then it wasn't clearly communicated. I think that's a safe assumption to make.

[Graham Flack]

In the case of EI, we had at that point, at the end of March, about two and a half million people who had already applied. While we tried to communicate with them to indicate that you don't need to apply to the CERB, there were individuals who were saying that to be safe, they would, and then sort it out later.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

If I may—

[Graham Flack]

I just want to be clear. We are able, and were immediately able, to contact those individuals, the 500,000 people—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

You were immediately aware of 500,000 people, so half a billion dollars. Why did it take a year for the public to find out?

There were two fiscal updates from two finance ministers in the last year and that was not mentioned. Why, then, did it take the Auditor General to tell the public about this half-billion-dollar error?

[Graham Flack]

I'm pretty confident that we briefed parliamentarians throughout this about the fact that we were not able to put an automated real-time system in place and that we then put a blocking system in place—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

But you knew about the amount, correct?

[Graham Flack]

—within a week.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

And we didn't find out about it until recently. Is that not correct?

[Graham Flack]

I don't recall if we gave a specific amount. I think we might have said the number of applicants—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

You don't recall if you told the public about a half-billion-dollar.... You don't call it an “error”, but I'm calling it that. You don't recall if you released that information to the public.

[Graham Flack]

I believe we briefed parliamentarians on the number of duplicate payments we had and our strategy for recovering them, which was to immediately go to them and say so.

With all due respect, the error thing would imply that what we should have done was to wait many months to have a real-time system in place before we launched the CERB—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

I think you're creating that dichotomy. I don't know enough about it to say if that is true or not—

[The Chair, Conservative, Kelly Block]

Thank you—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

—but you're creating that analysis.