Public Accounts Committee on April 7th, 2022

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

One challenge—and I think it's been raised before—was some of the unclear eligibility criteria. The Auditor General's report, on page 3, indicates that the eligibility criteria were often unclear where funding was awarded to recipients who were ineligible. Going more specifically, there were some cases involving, again, the community futures program.

They were unaware of some of the nuances of the eligibility program; specifically, recipients who applied for both the RRRF program and CEBA, for example, could claim $20,000 forgivable for only one program, not both. Many of these businesses were unaware of these details and were not provided them by the department, so, by the time the contracts were already lined up and money was awarded, businesses found out that, although they thought they would be forgiven $40,000, in fact, it was only $20,000, obviously a major financial consideration, strain or challenge for them. This was devastating for many businesses, and they had to repay much more than they initially thought and budgeted for.

Mr. Padfield, can you explain how some of that miscommunication or clarification happened and how many businesses this impacted? Did you hear that as a complaint or a challenge in the process?

[Chris Padfield]

If it was a complaint or a challenge, it would have been very early on. I think things got smoothed out quite a bit.

To Mr. Jones's point, while we talk about the RRRF—and you talk about it running from May 2020 and moving to closing up in June 2021—there were, in effect, four trunks to the program. We adjusted the program—again, we were at the bottom of the rung, along with our CFDC partners—between changes that would happen to CEBA, to their wage subsidy and to the rent subsidy, so our program had to change to adapt to all those changes as they went along.

As you know, CEBA was worth $40,000 at the beginning. As the pandemic lingered and needs increased, it moved to $60,000. We likewise had to move our programming to reflect that when we were copying the CEBA-type loans, and we worked with the CFDCs to do similarly.

Throughout that period, from May 2020 to June 2021, that program evolved at four different periods, so we worked closely with our CFDC colleagues. As the overall package and portfolio of federal supports changed, being the lender of last resort in that regard, being the safety net, we had to adjust to all that. We worked closely with our CFDC partners to make sure we were able to do that and that they were given the information they needed to make sure that what they were providing was in line with where the rest of the federal supports were going.

[The Vice-Chair, Liberal, Jean Yip]

Thank you, Mr. Padfield.

We now move on to Mr. Patzer for five minutes.

[Han Dong, Liberal, Don Valley North, ON]

I have a point of order, Chair.

I just want to get on the record that I will cede the floor to Mr. Patzer.

[Voices]

Oh, oh!

[Han Dong, Liberal, Don Valley North, ON]

I'm sorry, Chair.

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

That is duly noted and appreciated, Mr. Dong.

[Han Dong, Liberal, Don Valley North, ON]

Thank you.

On budget day, this is rare.

[Voices]

Oh, oh!

[The Vice-Chair, Liberal, Jean Yip]

Thank you, Mr. Dong, for your generosity of spirit there.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Yes, thank you very much. It's very much appreciated.

Mr. Jones, I just want to start off by thanking you for recognizing that some ideologically driven decisions prior to the pandemic put western Canada into a precarious position and left a lot of these businesses in a vulnerable position when we entered the pandemic. The financial footing they had before was systemically erased.

I have a question for you regarding access to community futures buildings. How many community futures offices are there under your watch? Given that you were WD before and that now you have the two organizations that you're responsible for, I'm just wondering how many offices you have under you.

[Dylan Jones]

I'm sorry. Is the question how many CFs there are?

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Yes. How many community futures offices are there?

[Dylan Jones]

Hicham, do you know the answer to that? I don't know offhand the number of offices.

[Hicham Aitelmaalem, Director General, Prairies Economic Development Canada]

Yes. There are 90 CF offices in the west.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Throughout the last couple of years, how many of those offices were closed to somebody coming in person to apply for these programs?

[Hicham Aitelmaalem]

Sorry, but can you repeat the question?

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Were any of these offices closed, so that the public was unable to come in person to apply for these programs? I'm curious because we had the issue at Service Canada, where all the offices were shut down and our constituency offices basically did all the work for Service Canada.

I'm just wondering about community futures and all these organizations. Seeing as we have such a large number of applicants in western Canada, on the accessibility side of it, were there any issues with offices being shut down and people being unable to get help applying for programs?

[Dylan Jones]

Hicham can supplement, and it's a really good question, but I'm not aware of any complaints. This certainly wasn't raised with me. On our side of the program, most people want to access the documents electronically and there's a high degree of automation, but in terms of people going into CF offices, I'm not aware there were any issues.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I'm curious, generally speaking, because of the area that I serve and our broadband access. I'm sure that all across the country people would say that broadband access is a problem. It's a barrier at times to applying for specific programs, because sometimes the file size is so large that it takes forever to download and upload, and there are issues generally with trying to apply. That's why I was curious if there were any issues.

Ms. Hogan, did you find any issues, when you were auditing, with access to offices or with resources being unavailable?

[Karen Hogan]

No. We did not reach out to community futures themselves. There are hundreds of them, so I can't comment on whether any of them remained open.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

I want to expand on a point that my colleague Eric Duncan was making with respect to paragraph 14.50. This is for the Auditor General.

What was the total dollar amount of ineligible expenses that were approved?

[Karen Hogan]

This is a bit of a difficult question. I do have a dollar amount that would include paragraphs 14.49 and 14.50. We did sampling, so the dollar amounts that I have relate to the three regional development agencies that we looked at that were included in our audit.

We extrapolated the elements that we thought should not have been paid—the ineligible expenses—and we found 25 cases, for a total dollar value of $2.9 million. That would cover both paragraphs 14.49 and 14.50. When you extrapolate, because our sampling was representative across just the three regional development agencies, it could, if the incidence of occurrence remains the same, be up to approximately $55 million. However, again, there were so many different methods of looking at applications across all the regional development agencies that it was impossible for us to extrapolate across all the regional development agencies. This really does relate to the three that we looked at.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Because those dollars were ineligible expenses, are they being recouped? Will the taxpayer get that money back?

[The Vice-Chair, Liberal, Jean Yip]

I'd like a short answer, please.