Public Accounts Committee on April 15th, 2021

[The Chair, Conservative, Kelly Block]

Yes. According to me, you have a minute and 45 seconds.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

That's perfect.

I understand the sensitivities, especially for many who, through no fault of their own, just didn't understand it, or when there were miscommunications. I understand that, and I quite frankly agree with you that we want to be sensitive to that issue.

My challenge, though, is with those who are fraudulent. Hopefully there weren't that many of them. We're now a year in, and we have no idea how many fraudulent claims may have been made. I'm not talking about the person who misunderstood or the single mom trying to get by; I'm talking about the fraudster who may be a part of organized crime. Do we have any idea how many of them took CERB or what the leakage is there, a year into this?

As I said, in the case of the average Canadian who got confused, I certainly understand your sensitivity and I would actually encourage that, but for those who actually took it wilfully and took advantage of it, do we know how many people are out there and what steps we are taking to recover that money?

[Bob Hamilton]

I think the one thing we need to keep in mind is that, as you say, a year has gone by, but we actually still don't have all of the information on whether somebody qualified or not.

For example, the rules included that in the previous tax year or in the 12 months preceding 2020, you had to have earned $5,000 or met the requirements. We are just now receiving people's tax declarations for 2020, so it's really that process that will identify for us how many people looked as though they didn't qualify based on 2019 tax data but, as it turned out, did, because something happened in 2020 that made them eligible.

That's what makes it difficult. What we are trying to do in terms of controlling fraud, in cases in which it looks as though there's something suspicious, is to lock accounts and prevent the money from going out, so we are taking actions along the way, but we're really going to get a big swath of information in the coming weeks that will help us determine what happened.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Lawrence.

We will now move to Mr. Fergus for six minutes.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Madam Chair.

I would also like to thank all the witnesses who have appeared today.

Like a number of my colleagues from all political parties, I would like to thank these representatives of the Canadian public service for the exceptional work they have done, in unusual and impossible circumstances, to create two programs from scratch, from home rather than at the office. They quickly adopted a framework that makes it possible to recover money after the fact. On my own behalf, on behalf of my constituents and on behalf of more than 9 million Canadians who have benefited from the CERB, I thank them for their outstanding work.

Ms. Hogan, you talked about international standards that now apply to exceptional circumstances such as a global pandemic.

Can you tell us more about those standards? What are their highlights?

[Karen Hogan]

Yes, of course.

I referred to internationally recognized best practices in emergency situations such as a pandemic. Those are practices that strike a balance between the provision of timely support and risk management. Emphasis is placed on post-payment verifications, and a certain level of risk is accepted to expedite the provision of support.

Usually, verifications are carried out beforehand to properly determine an applicant's eligibility for a specific program. In crises or emergencies—for instance, in a pandemic—certain verifications are carried out beforehand, but the primary focus is on post-payment verifications. That is the situation we find ourselves in right now. Post-payment verifications sometimes require tremendous efforts, but it really depends on the program.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you.

My next question is for you, Mr. Flack. Your department has done an outstanding job.

When talking about those post-payment verifications, you acknowledged that there was an overlap between the two programs. However, given global spending, it was indicated the overlap was limited to 1% of the value of payments made to Canadians.

Can you give us a better context of the work you have done, to assure us that it was only 1%?

Do you think you have met the criteria of those international standards by limiting the overlap to a percentage as low as 1%?

[Graham Flack]

I want to begin by specifying where those international standards come from. Those who are familiar with the national security and intelligence field know about a group called Five Eyes. However, there is also a similar group focused on fraud, and our department is its member along with the United States, the United Kingdom, New Zealand and Australia.

We established those principles to guide us in emergency situations. Basically, we followed Australia's experience during the big fires, when they were in a crisis and traditional methods could not be used to verify people's identity. There are very clear principles to reduce friction in the beginning out of necessity and then to make those verifications afterwards.

Here are a few concrete examples. We needed two different payment trails—one at the Canada Revenue Agency and the other one at Employment and Social Development Canada. We knew from the outset that automatic adjustment was impossible. However, after the first week, we were able to compare lists and block some individuals from one list or the other list. In addition, before making a payment, we would ask people to show their income. That is another good example.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Flack. We are over time.

I will now move on to Mr. Blanchette-Joncas for six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

I'm continuing my previous question, and I would like to address Ms. MacDonald.

Your department provided an essential support measure program, which includes the Canada Emergency Response Benefit. I think that it normally should have applied to essential workers.

So why were Service Canada offices closed while the offices of Quebec government public servants were still open to the public?

[Lori MacDonald]

Madam Chair, I think it's important for context to understand that while the pandemic was unfolding, we were seeing significant lineups outside our Service Canada centres and we were seeing people come in ill. We were having to close our offices. A number of factors had a negative impact on our capacity to deliver services.

We made a decision to close our doors but to keep our staff working because we needed to continue to process applications as the pandemic was unfolding. At the same time, we looked very quickly at how could we give alternative service delivery to Canadians when our doors were closed, so we developed two new service models.

First, people could contact us online and fill out a form, and then we would return a call to them within 48 hours.

Second, we put a toll-free number in place, particularly for rural and northern areas. People could contact us through this toll-free number and we would call them back and provide the service to them online.

We continued to work behind our closed doors. We gave alternative service delivery models. These were available across the country so that we could continue processing and provide services while keeping in mind the public health safety prerogative we had at the time.

At the same time, while our offices were closed we took safety measures, working with our labour partners and our occupational health and safety committees, to put in place Plexiglas, appropriate distancing measures and security requirements to be able to open our doors again and welcome Canadians back into our Service Canada centres. We did this in about 70 days.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. MacDonald, I would like to understand something. Service Canada complies with public health guidelines, including those issued by the Government of Quebec. The Government of Quebec decided to keep its public service offices open, but the federal government decided that this did not follow health measures. I am trying to understand the logic of this reasoning.

[Lori MacDonald]

Thank you for the question.

We were respecting health measures. At the same time, we were trying to manage the fact that we had millions of people coming onto EI to access our services. While we were trying to do that, we were trying to continue to work, but we were also having to close our offices because we had people coming in who were ill. We were required to close our office and do massive cleaning. We were having security incidents. With our capacity to manage a number of different factors while we were trying to still deliver services, we took a decision to close our office doors and continue to do our work. We put a model in place that allowed us to meet the needs of Canadians, and in fact it allowed us to meet the needs of millions of people who were looking to collect EI. We had to manage that in terms of processing applications and providing services through our call centres.

A number of factors came into play. We continued to provide services. We put new safety measures in place in our offices. We were closed for about 70 days. We opened those office doors back up again, and we continue to be open to this day.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. MacDonald, why have Service Canada offices in areas most at risk, in large urban centres, been reopened?

In July, you announced the reopening of offices in Gatineau, Montreal and Quebec City, which had the most COVID-19 cases, while there weren't many in rural regions.

If this is a matter of health and safety, why were employees put at risk by reopening offices in regions with the most COVID-19 cases?

[Lori MacDonald]

In fact, we put the same measures in place across the country, regardless of whether it was an urban centre or a rural area. We have approximately 317 offices. Of those, about 150 are very small offices with four people or less. One of the problems we faced was that many of our employees are young mothers who have children. As a result of schools being closed as a result of the pandemic, we couldn't open our offices because we couldn't meet the safety and security standard in terms of having enough people available to work.

Because we wanted to continue to have people working—and they were working at home—it was more effective and efficient from a processing perspective to continue to have our staff work at home while our offices were closed. At the same time, this allowed us to meet the health and safety needs of our offices.

As an example, we have a requirement to have at least two staff available in the office at any given time—

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. MacDonald, I am trying to understand something. Today, on April 15, 2021, 18 outreach sites are still closed in Quebec. Why?

[Lori MacDonald]

We have not re-established our mobile offices, partially because there are a number of stay-at-home orders, so we can't travel into those areas. It's also partly because we set up an alternative service delivery model so that those services can still be provided to those areas without staff physically going to those offices.

Of course, as the third wave comes to an end and as we're able to get back into those communities, we will re-establish our mobile services. At the same time, I have to reinforce that those services are available today, either online or through a 1-800 toll-free number.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. MacDonald, I would like to describe to you the situation on the ground in my riding.

People have to drive for two hours to reach a Service Canada office. So they must make a four-hour return trip. Is it more logical to move one or two employees from an office or to make some 50 people travel to an office in an urban centre? That is my reasoning.

As I said earlier to your colleague, not everyone has access to the Internet or wants to apply over the telephone. Some expect to receive in-person service. So I don't understand why Service Canada has still not implemented effective measures after one year.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Blanchette-Joncas. We are well over time.

I will now move on to Mr. Green for six minutes. Mr. Green will be our last questioner.

[Matthew Green, NDP, Hamilton Centre, ON]

My friend from Quebec has been on this for quite some time. For the sake of his constituents, I want to allow the opportunity for the answer to be given.

[Lori MacDonald]

At this time, we have 317 Service Canada centres, of which 315 are open. We do have capacity at this time for Canadians to access an open Service Canada centre. In fact, 90% of the Canadian population can access an open Service Canada centre within 50 kilometres today.

In addition to that, we have two alternative service delivery models. Anyone can pick up a phone and phone our 1-800 toll-free number to have us assist them over the phone to fill out their application. We will help them fill out their application regardless of the service that they require, and we will call them back within 48 hours to finish that service with them.

At the same time—

[Matthew Green, NDP, Hamilton Centre, ON]

Okay. I hope that provides at least some insight in terms of how you've been able to pivot across the country, but I know that my friend from the Bloc is very passionate about this and I wanted to make sure he got the answer.

You'll note from my earlier interventions that I am trying to better understand the calculations, the formulas, the labour economics and economic theory that led to some of the outcomes that we've had. I asked about how Finance Canada had analyzed the impact of the proposed changes of the CERB on the labour supply and the incentive to return to work.

I recall my time at Acadia, doing economics there—not very well, but doing them—and trying to get a sense for how this is also used in other places, such as in the way we legislate people into poverty through low minimum wages, inadequate social assistance, inadequate disability supports and a push-and-pull into the economy. It feels like there is some of this calculus being done.

According to the OAG, Finance Canada has analyzed the interactions between the CERB and the wage subsidy. I am wondering how much interaction there was between the benefit and the subsidy—the back and forth, the push and pull of labour economics.

[Michelle Kovacevic]

We certainly did do analysis on the interaction between the CERB and other business supports, including the wage subsidy, as you mentioned. I don't have that at my disposal. It is my tax colleague who does that, but he'd certainly be happy to submit that to you.

[Matthew Green, NDP, Hamilton Centre, ON]

If I may, then, I'll ask what criteria were used to measure the level of support provided by the benefit and the subsidy respectively.

[Michelle Kovacevic]

I can't speak to the subsidy, but I can certainly speak to the CERB.

When we started this, of course the Department of Finance's interest is costing and funding, not surprisingly, but I would say we ran the gamut of analysis right from the get-go with our partners at ESDC and CRA. In terms of the design, the tool, as Graham said earlier, we looked internationally—the U.K., France, New Zealand—at what other people were doing for income supports, for business supports.

Then we looked next at what it made sense to do in an income support for people. Given that we are going to see people being basically ordered to stay home because of the public health crisis, what was a reasonable threshold of income to give? Why not $1,000, why not $200? That was—