Public Accounts Committee on April 22nd, 2021

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Madam Chair.

Through you to Luc, I've checked with the departments to see the work that would be entailed. They have several hundred pages that would have to be translated.

Normally our committee has passed the motion giving a three-week notice for getting information back to us for standard questions that we've asked during our witness testimony. This is a little bit bigger than a standard question because of the amount of work that's going into the translation as well as the proper redaction of information to protect cabinet confidence. There's a little bit of extra work on this. It's “no later than May 27”, which would give us time to have this included through the analysts in our report consideration. When it comes to the report consideration in June, we would be able to roll this into our report, which we can then consider and debate.

I think we have a very heavy schedule in front of us, with lots of studies coming forward between now and the end of May. This would allow us to continue that work as well as be ready for the report when it comes before us.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Longfield.

Go ahead, Mr. Berthold.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you, Madam Chair.

I'd now like to go to the vote on Mr. Longfield's amendment, please.

[The Chair, Conservative, Kelly Block]

Thank you very much.

I don't see any other hands up from colleagues looking to make an intervention.

If you are ready, I will call the question on the amendment put forward by Mr. Longfield.

(Amendment agreed to: yeas 9; nays 1 [See Minutes of Proceedings])

We will vote on the motion as amended unless there is any further discussion.

Seeing none, we will go to the vote.

(Motion as amended agreed to: yeas 10; nays 0 [See Minutes of Proceedings])

Thank you, colleagues. I am grateful and thankful that we were able to....

Go ahead, Mr. Fergus.

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

Please continue, Madam Chair.

[The Chair, Conservative, Kelly Block]

I just wanted to express my thanks for the work you did in coming to a resolution that I think was agreeable to everybody, obviously, with a unanimous vote in favour of this amended motion.

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

Madam Chair, I'd like to add something too.

I would particularly like to thank Mr. Berthold and Mr. Longfield for having reached agreement following this debate. This Is consistent with the Standing Committee on Public Accounts' reputation for collegiality.

I'd like to congratulate them and indeed all my colleagues. I'm very happy to be a member of this committee.

[The Chair, Conservative, Kelly Block]

Thank you, Mr. Fergus.

Colleagues, let's resume our questioning of the witnesses who were before us last Thursday. I would ask that they be entered into the room, so to speak, and that we continue where we left off that Thursday.

Mr. Berthold, I believe you were in the middle of your six-minute questioning time. The clerk tells me that you have a little over three minutes left to continue with your questioning of our witnesses.

Please go ahead, Mr. Berthold.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

I will hand my three minutes over to my colleague Mr. Lawrence, because I spoke at length the last time.

[The Chair, Conservative, Kelly Block]

Go ahead, Mr. Lawrence.

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

Thank you very much, Madam Chair. My question is for the Auditor General.

Once again I would like to thank you for all your work. I know that you've been hours and hours and hours at committees alone as much as you have been actually accomplishing the work of the Auditor General, so I thank you very much.

An issue that has given rise to concern among my constituents, and I think constituents across the country, is the interplay between the work of the CRA and the ESDC. You say in paragraph 7.53 that the memorandum of understanding with Employment and Social Development Canada on the administration of the emergency benefits during COVID-19 did not allow for a work-sharing agreement for the information described. There have been a number of issues along the pandemic with government agencies working together.

I'm wondering if the Auditor General could comment on that and on whether this is a real concern or issue for her. As well, if she has any solutions for the government, I'd love to hear those.

[Karen Hogan]

Thank you very much for your nice comments. I'm always pleased to attend any committee hearings to discuss our work. I think the worst thing for an auditor general's office would be for us to do all this work and for no one to want to discuss it with us, so I am always pleased to be present at committee.

What we saw in many of our audits was that in departments, and even within a department, there are certain silos. I'll use an example in the Canada Revenue Agency. The side that deals with businesses is very segregated from the side that deals with individuals. That's done to protect the integrity of the information.

It's always good, and a best practice, to have that information-sharing agreement among different departments when they need to share information. In a pandemic it's even more important when there is an interplay between those who lead certain programs, when you don't want to have doubling up or potential overpayments when programs overlap each other or should be deducted from each other. It's important to work through how collaboration is supposed to work in normal times, but how collaboration is supposed to work in an emergency situation is also important.

It just makes it easier for every Canadian to interact with their government when they're talking about relevant information.

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

In the departments, I haven't necessarily received an answer as to why these communications didn't happen, both internally and interdepartmentally.

Did the department say it was because of privacy reasons, or is it an IT issue, or is it both?

[Karen Hogan]

I think the two aspects that you listed would be some of the reasons we heard, the most important being the privacy issue, but at times it is technological. At times I think it's just the speed. I do think that every situation is different and unique and requires the departments to discuss with fellow departments when they need to interact together.

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

I've seen a number of cases of people applying to ESDC and then being denied by CRA because there was an existing claim. Maybe the CRA or ESDC could comment. Are those issues fully resolved yet, or are we still looking for a solution here?

[The Chair, Conservative, Kelly Block]

Would you give a very short answer to that question, please?

[Frank Vermaeten, Assistant Commissioner, Assessment, Benefit and Service Branch, Canada Revenue Agency]

I think for the most part those issues have been resolved, but they're ongoing, as new little exceptions will come up. A good system has been put in place in issues of individuals being blocked from being able to access the CERB, for example, because they have an open EI claim, and a mechanism has been put in place to resolve that.

I would say it's going to be ongoing as we manage through the exceptions, but for the most part it has been resolved.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will now go to Mr. Longfield for six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

Thank you to the witnesses for coming back today.

My first question is for the Auditor General.

The findings that we saw in the audit included one major obstacle, the prepayment validations. The agency couldn't always have the most up-to-date information on file to assess an applicant's revenues. The information would have allowed the agency to validate the reasonableness and magnitude of the applicant's declared revenue drop.

I'm wondering what kind of information should have been available for the application review, in your opinion, and what additional time would have been required for the prepayment verifications to be done.

I know this issue about the balance between speed and accuracy was also discussed in report 6.

[Karen Hogan]

You're correct that there was a decision made to prioritize speed over the prepayment controls that are typically seen.

There are two instances here that I would cite in the wage subsidy program. There would have been information available about revenues for businesses that had applied for the wage subsidy, given that one of the criteria was that there needed to be a decline in revenue. That would come from either the T2 return, which is a corporate tax return, or some GST returns.

The constraints you have here are that not everyone is a GST filer. Sometimes GSTs are filed monthly, quarterly or annually. Corporate tax returns are filed annually, so some of it was timing of when these filings would have normally occurred. We did note in the audit that there were many instances of late filers, and that impedes the ability to look at revenue.

Another item would have been looking at the average payroll information. Again, that is typically an annual interaction with the Canada Revenue Agency when T4 summaries are filed at the end of a calendar year.

Some of it was technology, but at other times it was just late information.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

I know that as members of Parliament we saw almost every permutation and combination of what fitted, what didn't fit, sole proprietors and all the rest. All the different ways businesses are registered and operating in Canada showed up at the beginning of the pandemic, so thank you for that.

I have a further question for the Department of Finance. According to this report, Finance Canada performed only a partial analysis of the initial Canada emergency wage subsidy, due to the demand and the short timeline. This is along the same lines. Could you elaborate generally, to the extent that you can disclose what elements the department did analyze in the initial design of the program?

[Andrew Marsland]

As the report noted, the analysis supporting the implementation of the program was done extraordinarily quickly. As you'd expect, a program of this magnitude and scope would normally take months of analysis and so on.

We analyzed as much as we could in the time we had. We developed an approach that would hopefully be responsive to the challenges. We didn't do the kind of analysis one would normally expect, though, which I said would take many months of work.

We continued to analyze it beyond where the minister brought forward amendments to the program throughout the course of it to effectively fine-tune it to recognize some of those circumstances in which some gaps could be identified, and so on. Where appropriate, we recommended changes to the program to respond to them.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Marsland.

I understand a more detailed report is coming forward, I believe in February 2022. Are these the types of things that will be picked up on in the more detailed analysis?

[Andrew Marsland]

Yes. As we said in our response to the report and in the action plan, our intention is to perform a full evaluation of the Canada emergency wage subsidy and publish it in the report on federal tax expenditures, which is tabled with the main estimates. We will do as much as we can.

There's always a challenge with data, a lag with data, but we will do as thorough an analysis as we can with the data available and publish it in that report.

[Lloyd Longfield, Liberal, Guelph, ON]

Is the intention to capture up to September 25, provided the budget gets passed and we're looking at a late September timeline? Will that give you enough turnaround to include up to September 25 at the end of the CEWS program?