Public Accounts Committee on Feb. 2nd, 2023

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

It's odd that you should have said that, and you're wrong to say that it was not addressed in the Auditor General's report. As we all know, we only needed the CERB because of the faulty employment insurance system. The system is inflexible and doesn't allow Canadians and Quebeckers who need money quickly to obtain it. That's why the CERB was introduced. Its implementation was completely improvised. The billions of dollars that were diverted will never be recovered. The good news is that we are discussing it here today.

The reform will be presented by the government, but you worked on it. I'd be interested to know whether you are aware of when the reform will be tabled. Is it ready for tabling or is it still being worked on?

[Jean-François Tremblay]

It's not up to me to answer that question, but rather the minister and the government.

I'd like to add something about the CERB.

In the first month following the introduction of the CERB, we received 15 times more CERB applications than the number of employment insurance claims we would normally have received.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Of course it was an economic crisis.

[Jean-François Tremblay]

No system could have handled the demand. The crisis was unprecedented in Canada's history. When there is an unprecedented situation, special measures are only to be expected.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Special measures are a natural response, but if the system had been working and was better attuned to people's needs, there wouldn't have been as many instances of fraud.

You're not telling us anything new when you say that the crisis was unprecedented. But other countries managed to deal with it through their regular employment insurance system.

Canada's employment insurance system is rather archaic, to say the least.

Can some aspects of the reform be revealed now, or is that impossible?

[Jean-François Tremblay]

I'm truly sorry, but it's up to the government to decide where and when to reveal the details.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Desjarlais, you have the floor now for two and a half minutes.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I'd like to now move to what I think is probably top of mind for most Canadians who took CERB, the fact that the recommendation by government members was to apply. Even if, in some cases, the eligibility criteria might not have been clear and maybe even arbitrary at times, they were told to apply.

It is a fact that we see messaging right across the board to regular Canadians who were suffering and who needed help.... Part of a government's responsibility, as the Auditor General puts it, is to be very clear. In this process of recouping or clawing back some of this, I think it's also fair to talk about the reality that they were encouraged to do this. They were encouraged to apply, even at times when asking their own MPs whether they were eligible or not. At times when they weren't, they were told to continue to apply, that this was an emergency, that we were all in this together and that we were going to get through it together.

To be frank, it seems as though we're prepared to abandon many Canadians, even at a time when the affordability crisis right now is pinching harder than in many years past. It's true that the major effects of the pandemic on our economy are certainly passing, but not for everyone. For many regular working-class Canadians, it's only making things worse.

My question is for the Auditor General.

How do you square that circle and the fact that the advice to the public at that time was to apply and to make sure they had the support they needed rather than going into poverty? I know your report makes some mention of that, but it's not explicit to the fact that government incentivized people's applications to this program.

How do we actually balance that with the reality that we need to be fair with our tax laws, and also the reality that Canadians were told to apply even at times when the eligibility criteria may have been confusing? Your audit didn't go into detail on the encouragement or process of the communication of this program. Why not?

[The Chair, Conservative, John Williamson]

You have 30 seconds, please.

[Karen Hogan]

I would acknowledge that the pandemic was very difficult and continues to be very difficult for so many Canadians.

The questions you're asking me are policy questions. It's entirely up to the government to make a decision on whether or not they want to investigate further or look to recover payment. Under the current tax system, any individual or business that receives something they were not entitled should pay it back.

My audit was carried without—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I don't think it's a policy decision, though, to be able to understand that the government incentivized this, even against—at times—the eligibility. That portion should have been in the report.

[The Chair, Conservative, John Williamson]

Mr. Desjarlais, that is the time. We are now over the time.

I'm going to Mr. Chambers, please.

You have the floor for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Ms. Hogan, you said in a couple of different forums that you would hope that CRA would be more transparent.

What do you mean by that?

[Karen Hogan]

We've identified some instances in our audit report. I would point you to paragraph 97, where their business intelligence identified a little over two million recipients that are potentially ineligible. Only a fraction of those are communicated with or followed up on. That's what I mean about being transparent. If you believe that two million individuals did not meet the criteria, then reaching out to all of them is the fair way to treat a taxpayer.

There are two steps to the process. First is identifying who is ineligible or not, and then it's making a decision about recovery. All of those need to be decisions that are clear and transparent.

I can point to an issue at the beginning of the pandemic when there was concern over net versus gross for self-employed individuals for the $5,000. There was a lot of confusion. There was no clarity. The government clearly came out and said that gross is fine.

It's that kind of clarity that I think every Canadian—whether they be an individual or a business—is looking to find. Will you be asking them to repay it or not, and were they eligible or not?

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

Based on the level of postpayment verification activity that you've seen, do you think that the attestation-based approach is reasonable now that we know that a lot of postpayment verification activity may not occur?

Do you think that, on balance, the attestation-based approach would have made sense at the time, had we known the level of postpayment verification activity that has taken place so far and may not occur?

[Karen Hogan]

Again, hindsight's a wonderful thing.

Putting ourselves back in 2020, there was a lot of uncertainty. There was a need to have people stay home to help support our health system and to help protect Canadians.

The decision that was made to rely on attestation was a very reasonable one in unprecedented circumstances, but it has to come with rigorous postpayment work. That's why I continue to repeat that I am concerned about the little amount of postpayment work that's being carried out.

[Adam Chambers, Conservative, Simcoe North, ON]

You wouldn't call the postpayment work “rigorous” at this point.

[Karen Hogan]

I don't believe enough is being done. No.

[Adam Chambers, Conservative, Simcoe North, ON]

It's been mentioned—I believe by Mr. Tremblay—that the attestation-based approach is a public sector best practice in times of emergency. I have not been able to find that same organization say that, in times of no emergencies, an attestation-based approach is appropriate.

Would you agree?

[Karen Hogan]

The international best practice that we quoted in both of my audits around the individual payments say that, in the time of an emergency, relying on attestation is very acceptable, with rigorous postpayment verification.

[Adam Chambers, Conservative, Simcoe North, ON]

It's relevant because the new dental and rental benefits that the government's distributing are relying on an attestation-based approach, but we are no longer in an emergency situation. Would you agree with that?

[Karen Hogan]

I think that as a country, we—many sectors, individuals and businesses—are still feeling the enduring effects of the pandemic. However, questions about designing other policies that I haven't studied, I can't really comment on that.

[Adam Chambers, Conservative, Simcoe North, ON]

Do you think it's reasonable to use an attestation-based approach in a time of non-emergency?

[Karen Hogan]

I pointed to an international best practice that calls for it in times of emergencies.

[Adam Chambers, Conservative, Simcoe North, ON]

For the CRA, how do you respond to this time of emergency? Are we in a time of emergency?

Why do we have to continue to rely on the attestation-based approach, which we are now seeing is resulting in a significant amount of cost associated with postpayment verification work?