Public Accounts Committee on Dec. 4th, 2024

[Mairead Lavery]

I'll ask Mr. Moore to describe the documentation challenges we had with that.

[Scott Moore]

I answered this question earlier. It was a question of documentation as opposed to a billing issue. The individuals in question were covering the call centre. We were continuing to receive calls. They were also working on setting up the collections processes for the future that we are now—

[John Nater, Conservative, Perth—Wellington, ON]

It sounds like GC Strategies was advising on those document orders.

Chair, with the minute I have left, I'd like to move the following motion, that:

Given the Auditor General’s Report 8, 2024, on the Canada emergency business account, CEBA, which revealed significant issues regarding the oversight and administration of public funds and concerns related to governance, procurement and risk management, pursuant to Standing Order 108(3)(g), the committee commence a study on this audit and invite the following witnesses in relation to the study:

the Ministers of National Revenue, Finance and International Trade;

Bob Hamilton, commissioner, Canada Revenue Agency;

Chris Forbes, deputy minister of finance;

representatives from Accenture, the firm involved in CEBA administration;

Vivian Abdelmessih, chair of the board of Export Development Canada, EDC;

Mairead Lavery, president and CEO of the EDC executive team; and

Miguel Simard, EDC’s senior vice-president and chief legal officer, special risks and CEBA.

I will be moving that motion. I believe it will be, or has been, sent to the clerk in both official languages.

I reserve the right to make a few brief comments.

[The Chair, Conservative, John Williamson]

I'll come back to you, Mr. Nater, in just one second.

I will suspend the meeting and make sure this is distributed and everyone has it. Then I'll come back with the speaking list and begin with Mr. Nater.

Just give me just a few minutes. Thank you.

[The Chair, Conservative, John Williamson]

I'll bring this meeting back into session.

The motion as advanced by Mr. Nater, which we will consider, has been sent to all members.

I would ask all the witnesses to just hang tight for a bit. I will take the temperature to see whether this will be done slowly, quickly or with difficulty; you never know. If you could just bear with me, I'll come back to you very, very soon. In the meantime, if you want to get up and stretch your legs, that's no problem. If you could kind of stay in the area, I will try to come back to you in the next 10 to 15 minutes.

The same goes for our team of auditors. If you want to get up and stretch your legs over the next 10 to 15 minutes, that's no problem either.

Mr. Nater, I'll go back to you for remarks on this motion. We'll have a debate and see where it goes.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Chair.

I don't plan on making very lengthy remarks. I think the motion is fairly self-explanatory, requesting that seven witnesses, all pertinent to this matter, appear.

The answers we've had so far from the officials from EDC are unacceptable, quite frankly, and fail to account for the seriousness of the concerns that were raised in this report. I do think it is incumbent upon us to hear from certain witnesses and to undertake this study.

I really have nothing further to add. I think the motion is self-explanatory. It's seven witnesses all pertinent to the study at hand.

I'll leave it there, Chair. I thank you for your time.

[The Chair, Conservative, John Williamson]

Mr. Cannings, I am going to Mr. McCauley first, and I'll come to you right after.

Mr. Drouin, I see you as well.

Mr. McCauley, you have the floor.

Thank you.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Chair.

Shockingly, to everyone, I support this motion.

It's very clear that we have a very large problem before us. We have three executives from EDC who, even though they're just blocks away, couldn't even be bothered to show up to defend themselves in person and have been very obvious in their attempts to not answer simple yes-or-no questions. I asked, I think, five times before they were finally pressured to actually respond. It's clear, I believe, that they are hiding some things.

It's very clear that we have a lot of issues.

We've heard directly from EDC that they were aware of Accenture taking advantage of taxpayers, yet they sat idly by and did nothing.

We've seen the government state to the Auditor General that she didn't properly acknowledge how tough times were. We have $3 billion of taxpayers' money that disappeared into the ether of ineligible grants, yet somehow, the government says we didn't properly acknowledge that COVID was happening. However, we've heard repeatedly from the Auditor General that COVID is not an excuse for ignoring the rules.

We have many people to hear from. We heard repeatedly today that EDC is going to work with Finance, but we have the Department of Finance stating that, “Finance Canada has no legislative requirements to provide oversight of administrative expenditures” on behalf of CEBA. Finance states that “the administration of the CEBA program was delegated to...EDC”, and “the Board of Directors...is responsible for providing oversight”. This motion calls to have the board show up.

We also have within EDC a very large executive committee. I'll find the exact name for you here. They have a senior vice-president and chief legal officer responsible for CEBA, yet they could not bother to provide that person for us today. That's Miguel Simard. The motion also includes the senior vice-president of EDC, who, apparently, is responsible for CEBA—at least that's what's on their website. That's in the motion as well.

We need to hear from Finance as to why the finance department forced this program onto EDC when EDC was very clear it did not have the capacity. We need to hear from Finance as to why it's saying it bears no responsibility because it's the board of directors that's responsible.

We need to hear more from EDC officials about why they did not push back. If they're doing only 300 loans a year, at an average of one a day, and then, all of a sudden, they're being told to do about 25,000 a day, there's obviously an issue. We need to delve more into why EDC did not push back more and why Finance apparently thought it was a good idea to have EDC—which does only, again, a minimal number of loans—administer 90,000 loans and $90 billion of Canadian taxpayers' money, when, clearly, they said they did not have the capacity to do so.

I also think we need to hear a lot more from the Auditor General on the differences between what EDC is saying and what the Auditor General's report is saying, as well as between what the Auditor General is saying and what the government is saying.

I'm sorry. I'm losing my voice. I'm suffering from a cold.

I will let it go. I'll finish up there. I reserve the right to speak a bit more once my voice recovers.

Thank you, Chair.

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Cannings, you have the floor, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I think we all agree, and we agreed at the subcommittee, that this is something we should be studying. As the subcommittee report says here, we were supposed to be looking at other things and trying to wrap things up in December with the ArriveCAN and SDTC studies before we go rushing off to the next shiny thing. I'm hoping we will do that.

I'd like to see in this motion some more of that structure reflected in terms of timing. We wouldn't have the next meeting on CEBA until the end of January, for instance, when we've finished all of this other stuff. Maybe we should add in our agreement to look at seniors, etc., and how that would work. I'm just a bit concerned that if we vote for this as it stands, we'll be off on yet another tangent and leave all of this other stuff hanging.

As I keep saying, I'm new to this committee. It works in wonderful and mysterious ways. I would rather have something in this motion that says not just that we should do a study on CEBA, but that this is how it's going to fit in with the rest of our work. That's all.

[The Chair, Conservative, John Williamson]

Mr. Drouin, you're next. If you permit me, I'll just speak to that. Is that okay, Mr. Drouin?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Yes.

[The Chair, Conservative, John Williamson]

Okay.

Mr. Cannings, yes, there is the report from the subcommittee, which I would still like to see passed during this meeting to reflect those priorities. One doesn't necessarily take away the other, because I too would like to fulfill what we agreed to at the subcommittee.

I'll just put that out on the table for everyone to be aware of, that I don't necessarily see this as pushing the recommendation from the subcommittee aside.

Mr. Drouin, you have the floor, please.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I don't necessarily disagree with the motion at hand, although there are some faulty names in there. I was thinking that Mr. Nater, given his background in agriculture, would have known that Mr. Forbes was the deputy minister of agriculture at the time. It's a shame that he didn't pick this up in the motion that he presented. I understand that we all have a job to do—

[John Nater, Conservative, Perth—Wellington, ON]

On a point of order, Chair, it's the current deputy minister of finance.

[The Chair, Conservative, John Williamson]

Yes. That's all right. That's fair enough.

[John Nater, Conservative, Perth—Wellington, ON]

It doesn't matter who it was at the time. It's the person responsible at the time of—

[The Chair, Conservative, John Williamson]

Yes, I suspected that was the case.

Mr. Drouin, you have the floor.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

It's very hard to get answers as to what happened somewhere when somebody wasn't there, and that's the point. If we are to move and have a serious study about this issue, then let's get the people who were there as opposed to the ones who were not there, because they'll say that they don't know and that they weren't there at the time. That's my point.

I don't mind having witnesses come before our committee, but let's make sure they will be able to answer the questions that are relevant to this particular study. That's just what I'm trying to do. I'm surprised that we are moving this fast after we had a subcommittee meeting.

I'm at the will of the committee. I would move to adjourn debate.

[The Chair, Conservative, John Williamson]

I have a motion to adjourn debate on this motion.

I'll ask the clerk to call the roll, please.

(Motion agreed to: yeas 7; nays 3)

Very good. We now go back to the member list, just finishing up our second round.

Witnesses, I think everyone is ready to go here.

Ms. Yip, you have the floor for five minutes, please.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

Thank you, witnesses, for your patience while we dealt with some, let's say, housekeeping.

This is directed to Ms. Lavery. I see in the statement you issued yesterday that 9% of loans went to ineligible recipients. Can you give us a bit of a timeline of how and when these recipients were deemed ineligible?

[Mairead Lavery]

Thank you.

I will ask Mr. Moore to walk us through the ineligible population.

[Scott Moore]

Thank you. There are two distinct populations, and I'd like to make sure both are very clear to the committee.

The first population are those identified by EDC as part of our post-funding validations in the payroll stream. It's $2.2 billion. The payroll stream, again, was for small businesses with a payroll within the eligible range. At the beginning of the program, the funding was based on attestations from loanholders, similar to other COVID-19 programs. EDC had a post-funding validation process to make sure we identified a population of potential ineligibles. The Auditor General looked at that portion of our validation process and confirmed it was accurate. In terms of this identified population of potential ineligibles, we gave all loanholders an opportunity to correct any anomalies, as we should. The end population was 51,000, or $2 billion. Of that, $900 million has been repaid as of today, and $1.1 billion is subject to active collections. It's important to understand that this population is not eligible for forgiveness. They were notified at the end of 2022 and then received a courtesy reminder at the end of 2023. Again, we continue to collect on the remaining amount from this population.

The second population is potentially ineligible. It's $1.5 billion. This was based on the work of the Auditor General around the non-deferrable expense stream for expenses such as rent, insurance, utilities, etc. It's important to note that EDC's validation process prevented $5.5 billion of ineligible dollars going out the door. Based on the work of the Auditor General, we identified $10 million, or 200 loanholders who were potentially ineligible. That was then extrapolated to the full population for a potential of $1.5 billion in ineligibles. That is where the work needs to happen with Finance to analyze this population, which is 135,000 loanholders. About 1,000,000 documents were submitted. Some of the documents could have technical issues, such as a lease without a signature page. We want to give loanholders an opportunity to correct those anomalies—similar to what was done in the payroll stream—before concluding on a final population of ineligibles in this category.

Those are the two very distinct populations.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

I'd now like to split my time with Ms. Khalid.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thanks very much, Ms. Yip.

Thank you, Chair.

Chair, I take note of the concerns of the opposition, especially with the motion they moved with respect to what programming in this committee looks like.

I think, with respect to what we're discussing today—and what we have been discussing over the past number of weeks, months and perhaps years—I would like to move the following motion:

That, notwithstanding any previous decision of the committee, in relation to the committee’s future business, it be agreed that:

1. Any further meetings on Report 8, Canada Emergency Business Account, take place after January 27, 2025—

That's when we come back to the House.

2. One meeting be dedicated to the study of Report 1, ArriveCAN;

3. At the conclusion of the meeting on Report 1, ArriveCAN, no more meetings be conducted to hear from witnesses in relation to Report 1, ArriveCAN;

4. Two meetings be dedicated to the study of Report 6, Sustainable Development Technology Canada, for the purposes of hearing from Zoe Kolbuc, Andrew Noseworthy and the Minister of Innovation, Science, and Industry;

5. At the conclusion of the second meeting on Report 6, no more meetings be conducted to hear from witnesses in relation to Report 6, Sustainable Development Technology Canada;

6. Two meetings be dedicated to Report 11, Programs to Assist Seniors;

7. Two meetings be dedicated to Report 9, Digital Validation of Identity to Access Services;

8. The chair schedule at least two meetings for the consideration of draft reports [for all of the above]; and,

9. Notwithstanding a meeting called pursuant to Standing Order 106(4), no meetings of the committee or subcommittee be held during Parliament’s adjournment from December 18, 2024 to January 26, 2025.