Madam Speaker, I am happy to speak to the motion.
We are living in extraordinarily difficulty times. COVID-19 obviously represents the greatest public health emergency we have seen in our lifetimes. However, it also represents the greatest economic shock we have seen in generations, perhaps only rivalled by the Great Depression regarding its magnitude in the history of our nation. How we respond to this pandemic will dictate what our country looks like a year from now, two years from now or 10 years from now. We must have the courage to take actions, as difficult or as challenging as they may be, to allow households and businesses to survive this pandemic so they are still there to contribute to the economy on the back end.
Over the past eight months or so, I have had too many phone calls with business owners and workers who have been concerned about their well-being, and the well-being of their employees and families. I do not like being on the phone with parents who do not know how they will feed their kids. I do not like being on the phone with neighbours who fear they are going to lose their home. I do not like being on the phone with business owners who are worried the business they have built up over their lifetime is at risk of disappearing forever.
As much as I do not like being on the other end of those phone calls, I am so privileged to have the opportunity to do something to help those in need. I do not know that in my life I have ever done work as meaningful as I have over these recent months to help keep people fed, housed and on the payroll wherever possible.
A big part of our response has been to advance benefits and supports to businesses in a manner and to a degree that Canadians have never seen. Some of those business supports are the subject of the opposition motion on the floor today.
Over the course of my remarks, I am going to discuss the nature of the economic crisis facing Canadians and explain why now is the time to make these kinds of investments. I plan to outline some of the responses we have put forward to help support businesses to date and demonstrate that they are showing signs they are starting to work, keeping people afloat during their time of need. Finally, I will deal with my objections to the motion, which largely deal with the fact that it is calling on the government to do something it has already done.
I kicked off my remarks by drawing attention to the severity of the public health and economic challenge before us. Let me say, before I get into a discussion of business supports, that the most important economic policy we can adopt is to protect the health and well-being of Canadians and our communities. We will not see an economic recovery if we do not address the public health threat before us.
The recession we are facing is not like other economic crises we have seen in the past. In 2008, for example, there was a fundamental problem with the financial system globally, primarily in the United States. That, of course, had a serious spillover effect into Canada. Now we are dealing with an exogenous shock to our economic system. It is temporary, but it is severe. The threat we are facing is caused by a threat to our public health in the form of a virus that we need to stomp out if we are going to see an economic recovery.
Effectively, we have a supply-and-demand side shock going on. Businesses have been shut down because of public health measures. Sometimes it has been mandatory and sometimes businesses have done it in a voluntary way to protect the health of their employees and customers.
Of course, on the other side of the equation we have customers who are not going out to businesses because they are afraid. They are afraid to travel. They are afraid to dine in enclosed spaces. They are afraid to go to entertainment venues. The consequences of the supply-and-demand side shocks that we are seeing are that businesses are producing fewer goods and services and customers are purchasing fewer goods and services. The Canadian economy is suffering as a result.
We made a decision that we were going to step in to ensure that the consequences of this economic slowdown would be mitigated and that the long-term prospects of the Canadian economy would remain positive. We can afford to make the kinds of investments necessary to float businesses and households through this emergency. In fact, I do not know that we can afford not to. If we do not choose to advance substantive supports for businesses and households at this point in our history, the costs will be borne out in the lives of our loved ones. We will see businesses shut their doors. We will see jobs leave and maybe never come back.
If we make the investments to keep households and businesses as close to whole as possible throughout this entire ordeal, we can limit long-term economic scarring. We can protect the long-term interests of the Canadian economy and, more importantly, the Canadians who take part in it.
The reason that now is the time to invest is, first, there is a need, which I think I have established by now. Second, we really can afford to do this at this point in our history.
We are dealing with a historic situation. We entered this pandemic with the strongest fiscal capacity of any developed economy in the G7, and we have used that fiscal capacity to deliver for households and businesses. We do not just have the fiscal capacity to respond. We are dealing with historically low interest rates globally and here in Canada as well. The fact is that we can finance the recovery effort at a rate that most would not have thought possible just a short time ago. We can lock in long-term low interest rates that will help ensure households and businesses can survive during this time of unprecedented uncertainty. In fact, the cost of servicing the much larger debt that we have today is lower by several billion dollars than it was about eight months ago, because our interest rate is at the effective lower bound.
Making these investments is not just something we can do; it is the smart thing to do. I direct members to the comments of the chief economist of the IMF, who is on leave from Harvard University's Department of Economics. She stated, “For the many countries that find themselves at the effective lower bound of interest rates”, which Canada is at, “fiscal stimulus is not just economically sound policy, but also the fiscally responsible thing to do.”
I would like to take some time to outline how some of our fiscal stimulus has been designed in a way to respond to specific needs that Canadian businesses are facing.
When we first realized the impact that this pandemic could have on the Canadian economy, we made a decision that households and small businesses were too big to fail. We wanted to protect their interests because they serve Canada's interests. The programs we have put forward are not based on some rigid economic ideology. They are designed to solve very specific problems that my constituents were calling me about. I know the constituents of every MP in the House were calling their offices as well.
I had the opportunity to speak with my parliamentary colleagues from different partisan backgrounds, from every region in Canada. The feedback I heard largely mirrored the feedback I was hearing at home. The same thing is true of the stakeholder engagements that the government undertook, including many of the calls that I personally took part in, with chambers of commerce, business associations and local small business owners.
At the outset we realized that a lot of people were at risk of losing their income who did not necessarily qualify for EI, including self-employed Canadians. We advanced the Canada emergency response benefit to make sure that people could afford the basics, even when their job was causing them to lose income or their business was shutting down temporarily or perhaps even permanently.
We launched the Canada emergency wage subsidy because businesses were telling us that if they did not have support to keep workers on the payroll, they would have to lay them off. The panic I heard in the voices of local business owners when they realized the impact of this pandemic was going to be felt by their employees is something that will stick with me forever.
We launched the Canada emergency business account to respond to the concerns about paying monthly bills, such as electricity, heat, Internet and phone bills at businesses. This helped them literally keep the lights on.
When we realized there was a crunch coming for rent for commercial properties, we initially launched the Canada emergency commercial rent assistance program. Now, in response to feedback, we have moved forward with the Canada emergency rent subsidy, which will provide direct support to tenants who were suffering from an inability to cover their rent during this pandemic.
There is a series of other measures. We realized that we needed to get cash into the economy to ensure that businesses could meet their needs, whether it was dealing with equipment and materials they had on order or covering larger monthly expenses. We did this by advancing the business credit availability program. We did this by working with banks, including the Bank of Canada, to discuss lowering the domestic stability buffer. We did this by delaying remittances. We thought of every existing mechanism we had to keep cash in the hands of businesses rather than insisting they give cash to the government. This was a strategy that was important to adopt at the time.
I think back to the testimony that was given by Kevin Milligan: a professor of economics at the University of British Columbia who has since been brought in to advise the government. When he attended at the finance committee, he made the point that the pandemic has created significant costs. It was not a decision by the government of whether we should bear those costs, it was a decision by the government of who should bear those costs.
If the government decided not to advance the kinds of programs I have just described, those costs would have been passed on to households and businesses. They would have been demonstrated by households defaulting on their mortgages. They would have been demonstrated by parents not being able to buy groceries for their kids. They would have been demonstrated by businesses laying off workers, perhaps permanently. They would have been demonstrated by businesses potentially being shuttered forever.
We made the decision that the federal government should take advantage of its ability to borrow at historically low interest rates and use the fiscal firepower that it had, because it had been responsible in managing the nation's economic affairs to make sure that the government stepped in and supported Canadians during their time of need. The results of these investments are starting to show themselves, and they are positive.
If I look at the road to recovery, though we may have a long way to go and though we are certainly still living in the midst of a public health and economic emergency, there is no question in my mind that the businesses that have received these supports are better off and potentially still here today because of those supports.
If I compare us to the United States with a geographic proximity that is significant given the way the virus has spread, I can see that our response has been largely successful. To date, 76% of the jobs that went missing during this pandemic have come back. We still have a way to go to reach our 2019 levels of employment, but we are going to get there because we are going to continue to be there for Canadian households and businesses.
The 76% recovery in Canada compares with a 52% return of lost jobs in the United States. I direct everyone's attention to a recent report from TD Bank, which stated, “No matter how you slice the data, the Canadian labour market has been on a steadier road to recovery relative to the U.S.” The report concluded by suggesting that the old adage, “When the U.S. sneezes, Canada catches a cold,” ought to be changed to, “When the U.S. sneezes, Canada builds antibodies.”
The reality is that this approach is not based on ideology. It is in response to specific needs we are hearing directly from stakeholders, and it mirrors the advice we have received from leading economic experts: the IMF, the Bank of Canada, the World Bank, leading Canadians banks, business associations right here in Canada and, in fact, community members in my backyard who run businesses. Their advice has been that we need to be there in the short term to allow businesses to stay here in the long term.
Turning my attention to the motion before the House of Commons today, my objections to it exist on a number of bases. First and foremost, the motion calls on the government largely to do something that it accomplished yesterday: introduce flexibility in the wage subsidy and Canada emergency rent subsidy programs.
I note, in particular, the wage subsidy has now been extended through to next June. It is going to continue to allow employers to maintain a connection with their employees not only so they continue to have a source of income, but also so that the connection is there on the back end of this pandemic. It is going to benefit employees, who will maintain jobs, and it is going to benefit employers who will not have to look for new labour, will not have to deal with retraining and will have ready access to workers when it is safe to return to work and when orders have returned to full volume.
Some of the changes that have been made to this wage subsidy show the flexibility that we have been willing to implement, whether it was the initial shift from 10% to 75%, the expansion of certain eligibility criteria so more organizations would qualify, or the introduction of a sliding scale so all businesses that had suffered a revenue loss had something to gain from this program rather than experiencing a cliff that would have maintained an incentive for businesses not to recover to the fullest of their ability.
As well, the new Canada emergency rent subsidy is a significant program that responds directly to the feedback we have heard from Canadian businesses. This is going to provide a new, simple, easy-to-access support. It is going to allow tenants to apply directly to the program to get the support they need literally to keep the doors open. It is going to provide support of up to 65% of their monthly rent expenses. For businesses that have been mandated to shut down as a result of a public health order, it is going to provide further lockdown support of up to 25% of their rent to ensure that they can weather the storm of this pandemic.
The motion suffers from an additional defect in that it asks for the suspension of audits altogether. The reality is these are perhaps the most significant economic supports that have been directly provided by a federal government in a very long time: generations, in fact. The idea that the CRA, which operates at arm's length from the government, should be told not to conduct the audits that it determines are necessary to ensure the integrity of the program is not in accordance with best practices and does not protect the public interest in making sure that the benefits accrue to those who are eligible rather than extending them to those who do not qualify, which could in fact put business owners in quite a bind if they are given benefits and not told very shortly thereafter that they were not eligible in the first place.
The other problem I have with the motion is that there is a tacit implication that the government has not been flexible in its approach to date, when it comes to specific emergency programs or perhaps emergency programs more broadly. From my conversations at home, as much as people appreciated CERB in the early days of the pandemic, or businesses appreciated the wage subsidy, the emergency business account or the slew of other government programs we put forward to help Canadians during their time of need, perhaps the most cited positive feedback was the government's willingness to listen and to adapt its programs to the needs of those who did not fit in, in the first instance.
I mentioned initially the fact that the wage subsidy shifted from 10% to 75%, and that we expanded the eligibility criteria to different classes of organizations and different kinds of businesses because of the transactions they had in the year before so we could properly adjust their supports to mirror the financial situations they found themselves in.
When I look across all the other programs, I look at the Canada emergency business account and remember that we shifted the payroll threshold. I remember we expanded it to businesses that used credit unions as opposed to traditional banks. I remember we made changes around payroll processing by third parties. I remember that we made changes to allow access for businesses that used personal accounts. Now we are expanding the program to make a greater loan with an additional forgivable portion, and we even created a new fund through the regional relief and recovery fund in Atlantic Canada, administered by ACOA, to ensure that businesses that did not qualify for those existing supports would have another path to choose should they need additional financial support to get through this emergency. The reality is we have been as flexible as possible because we continue to have conversations with those who have been impacted most by this pandemic.
I know that I am going to continue to have those kinds of phone calls that are difficult to make throughout this pandemic. I know that I am going to be dealing with businesses whose customers have not come back. The motion cites the restaurant industry, the hospitality sector and tourism operators. I have talked to campground operators. I have talked to travel agencies. I have talked to restaurants. I have talked to airlines. They have a presence in my community and they keep people working. They are telling me that they continue to need support whether with their rent, keeping their staff on the payroll or keeping the doors open, but most importantly they say we need to continue to fight this pandemic so we can put an end to the public health emergency that is causing their customers to be afraid.
We are going to continue to do whatever it takes to ensure that we protect the health and well-being of Canadians, that we eradicate COVID-19 from our communities to the best of our ability and that we continue to extend the kind of emergency supports that will help keep Canadian households and businesses afloat throughout this pandemic until it is finally over.
I would be pleased to take whatever questions my colleagues may have.