Debates of Nov. 4th, 2020

Questions on the Order Paper

[The Speaker, Liberal, Anthony Rota]

Is that agreed?

[Some hon. members]

Agreed.

[The Speaker, Liberal, Anthony Rota]

I wish to inform the House that because of the deferred recorded division, Government Orders will be extended by 34 minutes.

Income Tax Act

[Chrystia Freeland, Liberal, Minister of Finance]

moved that Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy), be read the second time and referred to a committee of the whole.

Mr. Speaker, I would like to ask for unanimous consent to split my time with the member for Ottawa—Vanier.

[The Speaker, Liberal, Anthony Rota]

This being a hybrid sitting of the House, for the sake of clarity, I will ask only those who are opposed to the request to express their disagreement.

The House has heard the terms of the motion. All those opposed to the motion will please say nay.

There being no dissenting voices, I declare the motion carried.

The hon. Minister of Finance.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Speaker, I do not think I need to remind anyone in this place that we are battling an aggressive second wave of the coronavirus across Canada and around the world. In order for us to create the conditions for a robust and lasting economic recovery, we must take the right steps now to keep Canadians healthy and safe. We have to do that to flatten the curve, conquer the coronavirus and put it behind us.

While we are doing that, we must mitigate the economic harm of this pandemic in the short term, but also in the long term. That is why I am very happy to speak today in support of Bill C-9, a series of measures that, taken together, will provide Canadians and Canadian businesses with urgently needed support.

We realize that the best economic policy is a sound health policy. Life will not get back to normal in our factories, malls, movie theatres and restaurants until the virus has been eradicated.

We know that the best economic policy is a smart health policy. Normal life, including in our gyms, shopping malls, movie theatres and restaurants, will only resume in full measure once the virus is truly beaten.

The reality is that we must fight against any outbreak of COVID-19 regardless of where that might be. The way we fight this virus is by limiting our social contacts. That also means limiting our economic activities. In return, we must support Canadians and businesses when they face revenue losses. That is the only thing to do that is both fair and practical.

This is precisely what Bill C-9 would achieve.

First, it includes a new Canada emergency rent subsidy to provide direct rent support until June 2021 for businesses and other organizations that are losing revenue because of COVID-19. It allows for coverage of up to 65% of rent or mortgage payments for businesses that suffer a revenue drop of 70% or more. Support will be fixed at this level until December 19, 2020. For businesses suffering a revenue loss of less than 70%, there will still be support in proportion to how much revenue they have lost.

Like the Canada emergency wage subsidy, the new rent subsidy will be delivered through the Canada Revenue Agency, providing easy-to-access support directly to businesses. Critically, it will be directly available to organizations that rent their premises as opposed to requiring participation from their landlords.

In addition to the new rent subsidy, eligible businesses, non-profits and charities will have access to an additional 25% subsidy through our new lockdown support. If businesses have to close their doors because of an emergency COVID-19 lockdown restriction or have to significantly restrict their operations as mandated by a qualifying public health authority, these businesses will have the additional support they need and deserve.

As business circumstances improve, the levels of support we provide will decrease. If, sadly, circumstances worsen, the level of support provided will increase. That is built into these programs, which are designed to be flexible and to provide targeted support where it is needed most.

In addition, Bill C-9 would extend the Canada emergency wage subsidy through to June 2021. This fulfills a commitment in the Speech from the Throne. As we know, the wage subsidy was initially put in place for 12 weeks as an emergency measure to help employers keep workers on the payroll.

Starting last spring, we consulted widely with businesses and their employees. We were told loud and clear that the program was essential. Bill C-9 extends that essential support. It freezes the subsidy rate at 65% until December 19 to ensure that organizations can continue to pay their employees during the second wave.

Together, thanks to the measures in Bill C-9, Canadian businesses and organizations will receive the help they need when they need it. Let's be clear: these measures are based not just on our willingness to help people, but also on the economic realities.

Our economic objective is to stave off long-term economic damage, whether for a major manufacturer or a small family restaurant. Every business we lose creates a void in a community and the repercussions of that loss are felt throughout the country. We must put a stop to that.

Our public health objective is to support local public health officials in the agonizing decisions they must make, and are making, in our fight against the coronavirus. If public health officials anywhere in Canada believe that limited local lockdowns are the best way to stop the spread of the virus, our government will step in with additional economic support for affected businesses. That is what these programs, particularly the lockdown support, will provide.

As the Prime Minister has said, we can and will do everything in our power to help Canadians through this pandemic. In doing so, we will build the foundation for a strong, equitable recovery.

I would like to close by briefly addressing some economic fundamentals.

When COVID-19 hit, Canada had the lowest net debt-to-GDP ratio in the G7. Today, following our country's most ambitious emergency response since World War II, we are still expected to have the lowest net debt-to-GDP ratio in the G7. Our borrowing costs are at historic lows. Today's interest charges on Canada's debt as a share of GDP are the lowest in a century.

Our government is aware that the necessary fiscal measures for fighting the coronavirus are not unlimited. These are temporary but essential measures. These investments are a bridge to a safer and more prosperous future.

The proposed measures in Bill C-9, such as the new rent subsidy, the new lockdown support and the extended wage subsidy, are fundamental pillars of that bridge.

I ask all members of the House to join me in supporting Canadians and Canadian businesses as we confront this pandemic, as we conquer the virus and then, ultimately, as our economy comes roaring back. At a time when we see this global pandemic dividing so many societies around the world and thereby paralyzing their responses, I hope and trust Canadians will remain united.

We unanimously supported the income support measures. I hope we can do the same thing with these business support measures. We can get through this together.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Madam Speaker, I want to talk about the rent assistance program. Clearly, the program the government previously introduced was incredibly flawed, and I think everyone in the House knew it, as they were talking to the business owners who were struggling.

The government prorogued Parliament for six weeks to escape the WE scandal, and we have now been sitting in the House for almost seven weeks debating all sorts of legislation. The government says that supporting businesses through COVID is a priority, so why was Bill C-9 not introduced right after the Speech from the Throne? How many businesses in this country have had to shut down because of a program that was deeply flawed to start with and because of the government's unwillingness to move quickly to fix it?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Madam Speaker, let me start by emphasizing, which is really important for Canadian businesses to know, that these programs will be retroactive to September 27. Businesses can get rent support for the month of October. Of course, the previous CECRA program did cover the month of September, so businesses are getting support all the way through.

I would also like to emphasize that, taken together, the income supports the House has unanimously voted in favour of and the business support measures I am speaking about today, which I hope will be unanimously supported, will create an interlocking set of support measures that will be in place until next summer. These measures are targeted and flexible, and together they will get us through.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Madam Speaker, the question is quite simple. We welcome the bill, which includes several proposals the Bloc Québécois has made in the past. This shows that by working together we can come up with something worthwhile.

Nevertheless, there are some major oversights, such as air transportation, airports like the one in Quebec City, located very close to me, the aerospace industry, inter-regional transport, and so on.

Will there be any measures for these major sectors of our economy that have been very hard hit?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Madam Speaker, I thank my colleague for her question.

Our government's approach is to begin by providing general programs targeting all businesses across the country that have suffered losses. I think that is a good start. We have brought in measures to support Canadians until the fall of 2021.

Today we are talking about measures to support all businesses, depending on the losses they have suffered, until the summer of 2021. I agree that after we pass this bill, we can then think about what else can be done.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Madam Speaker, I thank my colleague for her speech.

I am a bit worried about her statement that these measures will not last forever.

Is she setting the stage for budget cuts and a return to austerity? Is that the Liberal plan?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Madam Speaker, I think our government has been very clear. We understand that now is not the time for austerity. At the same time, the measures we are talking about today are targeted measures to help our economy during the fight against the coronavirus. I am convinced the fight will not go on forever, so these measures will not be needed forever.

[Mona Fortier, Liberal, Minister of Middle Class Prosperity and Associate Minister of Finance]

Madam Speaker, it is a privilege to be here today to support the timely passage of Bill C-9 by Parliament.

Today, I want to speak about some of the measures proposed in this bill that will help Canadians by providing essential support to get through the unprecedented economic crisis caused by the global COVID-19 pandemic.

Since the start of the pandemic, the needs of businesses and workers have been the basis for our actions and our progressive plan for a robust and lasting recovery.

As the Deputy Prime Minister and Minister of Finance stated, to get things right, we have to face the facts. The facts are that to slow the spread of the virus and eradicate it, we must follow public health guidelines, which require us to limit our social contacts and practise social distancing. That is the only way to do it.

This means that we need to ask people who are sick or who have sick children to stay home and not go to work. It means that we need to ask restaurants to serve fewer people or to shut down their dining rooms entirely. It means that we need to limit cross-border travel, even within our own country. It also means that we must ensure that Canadians have the support they need to abide by these restrictions.

It would be unrealistic and certainly unfair to ask workers to stay home or to ask businesses to close their doors without any financial compensation for their lost income. The government has made it clear that we are committed to helping all businesses and workers affected by the pandemic.

In our continued response to COVID-19 and as we look to recovery, we are bringing forward solutions that improve the quality of life of Canadians today and in the months and years to come.

We want to ensure that Canadians do not have to make impossible choices between paying their bills and putting food on the table. By supporting employers to keep their lights on and their employees on the payroll, by supporting workers and by supporting all Canadians through emergency response measures, that is exactly what we are doing.

We are here to bridge Canadians to the other side of this pandemic, and that is precisely what Bill C-9 would do.

The measures contained in Bill C-9 are the result of ongoing consultations with affected businesses. They include a new Canada emergency rent subsidy. This program would provide access to rent support until June 2021 for businesses and other organizations that have lost revenue in this crisis. It would do so by covering up to 65% of rent or mortgage interest payment for the hardest-hit businesses with a revenue decline of 70% or more until December 19. For businesses that have experienced a decline in revenue of less than 70%, there would be a gradually decreasing subsidy in line with the decline in revenues.

In short, all eligible businesses suffering a revenue drop would get rent support that is commensurate with how hard they have been hit. In this regard, the new rent subsidy proposed in Bill C-9 mirrors the successful Canada emergency wage subsidy. It would deliver more targeted accessible rent support to those who would need it most.

Like the wage subsidy, the proposed rent subsidy will be delivered through the CRA to make the application process easier for businesses. It will be available to businesses and other organizations that rent or own their premises. These measures will be directly available to tenants, without the need for intermediation by their landlords. The new rent subsidy represents an important new support to help businesses that are facing significant challenges as a result of COVID-19.

Bill C-9 would provide an additional 25% through the Canada emergency rent subsidy for qualifying organizations significantly affected by a mandatory public health order issued by a qualifying public health authority, as promised in the Speech from the Throne. We are calling this the lockdown support. We know that across the country, as we fight the second wave of COVID-19, public health officials have needed to impose new restrictions. That is their right to do, but it has cost businesses and their employees. By helping to offset up to 90% of rent and mortgage costs for hard-hit employers, the targeted support provided through the Canada emergency rent subsidy and the additional lockdown support would help businesses get through a new lockdown and help us all to do the right thing.

However, the fact is that rental costs are just one category of costs that businesses and employers are dealing with in the wake of COVID.

The need to cover payroll when consumer demand is low is another important part of the big picture. That is why we created the Canada emergency wage subsidy to help businesses, charities and not-for-profit organizations cover labour costs during the pandemic. The wage subsidy protects jobs because it enables those organizations to meet payroll and enables employers to rehire workers so they can continue to serve their communities and position themselves for a strong recovery.

Initially, the program was to last 12 weeks, from March 15 to June 6, 2020, and provided eligible employers with a 75% wage subsidy. We set out to improve the wage subsidy by consulting with businesses and employers. They told us that the subsidy was vital to keeping their employees on the payroll and that it had helped them rehire their workers. They shared ideas about how the wage subsidy could be adjusted to support businesses and workers as they continue to adapt to the challenges of COVID-19.

We listened and then did what was necessary. We made changes to the program so that all eligible employers, whose revenue was affected by the pandemic, now have access to it. We introduced a top-up subsidy for the most adversely affected employers.

In recognition of the vital support provided by the wage subsidy, we committed to extending it until June 2021, as we said we would in the throne speech. Over 3.8 million Canadian workers have already benefited from the wage subsidy.

Bill C-9 will make it possible to extend this vital support and make other changes to the program to ensure that it continues to help employers and that it responds to the changing health and economic situation. We continue to listen to businesses and workers about how we can strengthen the program. As part of this bill, we took measures to make the top-up subsidy more adaptable to unexpected changes in revenue.

Rather than using the existing three-month revenue decline test to calculate the top-up subsidy, the base subsidy and top-up subsidy will be determined on the basis of the year-over-year change in the eligible employer's monthly revenue for the current or previous calendar month.

What is more, to ensure these changes do not lead to a less generous wage subsidy, the wage subsidy program would include a safe harbour rule, applicable until December 19. This rule would entitle an eligible employer to a top-up subsidy rate that is no less than it would have received under the three-month revenue decline test.

Taken together, the measures included in Bill C-9 would mean that employers impacted by the pandemic—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I am sorry, but the time has expired.

I would like to remind the minister that she needs to wear her headset so that her speech can be interpreted properly.

I encourage all members to do the same.

Questions and comments.

The hon. member for Mégantic—L'Érable.

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

Madam Speaker, I listened carefully to the minister's speech. She repeated several times that they listened. The problem is that it took them six months to take action.

Because of rules set out earlier, many businesses had to voluntarily scale back their activities in order to survive.

The Conservative Party proposed changes in May that have just been introduced now, six weeks into the new parliamentary session after the Liberal government prorogued Parliament. That is not exactly the kind of listening we expect from a government that says it is managing a crisis.

On top of that, we just watched all the Liberal members vote against a motion that would give Canadian businesses a little more breathing room and give them a break from CRA audits as they battle for survival.

Why did the minister's colleagues and cabinet, those who claim to be working hard for the prosperity of the middle class, vote against this motion that was all about helping Canadian businesses get through the crisis?

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Madam Speaker, I thank my hon. colleague for his question.

Since the start of the crisis, the government has implemented many programs for businesses, workers and Canadians to help get them through the first wave and then the second. That is why we introduced Bill C-9, whose objective is to present a new program for fixed costs such as rent.

In our discussions with many businesses from across the country and with chambers of commerce, we listened in order to determine how we could support businesses, not-for-profit organizations and, of course, charities. We believe that we have found an approach that will support businesses in the bill we are presenting today.

[Kristina Michaud, Bloc, Avignon—La Mitis—Matane—Matapédia, QC]

Madam Speaker, I thank my hon. colleague for her speech.

Bill C-9 is a good bill, but it does not solve every problem. More specialized sectors such as air transportation and regional airports are going to need more targeted aid. Their losses are in the billions of dollars.

Although there is less air traffic, there is still the financial burden of costs associated with the provision of services such as emergency medical transportation and runway maintenance. In the case of the Mont-Joli airport back home, the losses are substantial. The Gaspé regional airport is running a deficit of $800,000. The government thinks that it is helping air transportation by directly subsidizing the airlines, but that is not going to ensure the survival of airports.

Will the government provide direct financial support to regional airports?

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Madam Speaker, I thank my colleague for her question.

As I mentioned earlier, from the beginning, we implemented many programs to support businesses and various sectors. We wanted to ensure that these programs would apply nationwide.

One such program is the regional relief and recovery fund, and we know that it has supported the efforts of regional development agencies across the country. More than $1.5 billion has been allocated to help affected businesses and communities.

We will obviously continue to monitor changes in the sectors and the economy, and we will continue to support businesses and workers to ensure that we all make it through this crisis.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

A brief question, the hon. member for Courtenay—Alberni.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, we just heard the minister say that she has been listening to small business. For six months we and small businesses have been letting her know that they cannot access the commercial rent assistance program.

The New Democrats support the changes. However, the Liberals have admitted that they have a design flaw in the commercial rent assistance program. The finance minister just said that they could and would do anything to help support small business with an equitable recovery. There is no equity here regarding the fairness of the roll out of the legislation. They need to backdate the program to April 1—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I am sorry. I asked the member for a brief question. We have to allow for the answer.

The hon. minister, a brief answer please because we are going to be running short on time.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Madam Speaker, as the Minister of Finance mentioned, we will retroactively bring this new program to September 27. As we know, the CECRA program provided support until September. We knew we needed to have an approach where tenants had direct access. That is why we are proposing an approach today that will support businesses and their fixed costs.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Order. It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Fredericton, Seniors; the hon. member for Nanaimo—Ladysmith, Health; the hon. member for Saanich—Gulf Islands, Foreign Affairs.

The hon. member for Carleton.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, what is the solution for the mess we are in? The answer is that there are 20 million solutions. They are called workers. That is the size of Canada's workforce. We have 20 million men and women who get out of bed every day and go to work to produce the wealth of the nation. That wealth puts food on their tables, finances the roads upon which they and others drive, pays for our schools, hospitals and everything else we do that makes this country as splendid and as wonderful as it is.

Unfortunately, those workers have been deprived of work, many of them sent home because of health ordinances by local officials during the COVID-19 period. As many as eight million had to take assistance from the government in order to replace their lost jobs or, in the case of furlough, their lost income. Because governments deprived them of their income, those workers had every right to expect governments to replace that income. That, however, is not an excuse for the deliberate policy decisions of the government that have penalized workers who attempted to get back into their jobs as the shutdown began to be lifted.

For example, the early CERB program was pulled out of the hands of any worker who regained more than $1,000 of their monthly income. Rather than being graduated slowly to ensure that each dollar earned was beneficial to the worker, the government penalized people for the crime of trying to rebuild their lives.

Then we had the wage subsidy, for which small businesses were punished if they committed the crime of recuperating more than 30% of their lost revenues. They had to be down by that 30% in order to qualify. If they earned $1 more, they would get nothing at all, forcing many businesses to suppress their revenues, legally and necessarily, in order to continue receiving the support necessary to keep them alive. The same went for the rent program for which businesses had to be down 70% in revenue to qualify. It was another penalty imposed on businesses attempting to recover.

On May 2, I wrote an op-ed in the Ottawa Sun in which I proposed practical solutions that would allow workers or businesses to graduate, slowly and one step at a time, from these assistance programs in a way that ensured that they were always better off earning that extra dollar, taking that extra shift or serving that extra customer.

Finally, today we are debating legislation from the government that does those things. Finally, there is legislation that rewards, rather than punishes, workers for working and businesses for earning. That is what we have asked for all along. This was a painful lesson with great cost, and is one of the reasons why Canada has the highest unemployment rate of all G7 countries, save for Italy. Italy is of course the most socialist country in the G7, and the country from which the Liberal government tries its best to take examples. It is funny that the most socialist country has the highest unemployment, and our government is doing its best to compete for the prize of highest jobless rate in the G7 by replicating those same disastrous policies. However, we have the second highest unemployment rate: higher than the U.S., the U.K., France, Germany and Japan. There we are, barely under Italy in the rate of unemployment, as we enter now the seventh or eighth month of the pandemic crisis.

The government has had to learn, slowly and painfully, the cost to the economy of punishing workers and businesses, but this cost is not unique to COVID times. In fact, we in this country suffer from something I call the war on work. The war on work happens when governments punish wage earners by taking away, through clawbacks and taxes, a large share of each extra dollar a person earns.

Take, for example, someone who might be on disability assistance and who gets a job. They not only pay taxes on their earnings but start to lose their disability benefit at a combined rate that can at times exceed 100%. This war on work effectively makes it unaffordable for many workers to take an extra shift.

Even for people who are not on social assistance, this war on work exists. For example, just last week the reporter Jordan Press obtained a finance committee study showing that a single mother earning $55,000 a year could lose as much as 70¢ on every extra dollar she earns. People in the lower income categories suffer a higher level of marginal effective tax rates.

These are penalties people pay for the crime of getting out of bed in the morning and working hard. This is why our party is proposing there be a full review and reform of our tax and benefit systems to ensure people are always better off working, earning another dollar, taking another shift or serving another customer.

The war on work goes beyond the transfer and tax system. It goes to the regulatory system, which has thus far outright killed two pipeline projects because of the Prime Minister's opposition to them. The pipeline projects would have taken western crude to eastern refineries and to Asian markets, and would have created jobs for steel workers in central Canada, trades workers across the country, refinery workers on the east coast and of course energy workers in Alberta, Saskatchewan and British Columbia. Those jobs are now lost because the government prevented the construction of those very same projects.

It is not just pipelines that were affected. The Prime Minister successfully killed a massive $20-billion mining project in northern Alberta: the Teck Frontier mine, which was supported by all the surrounding indigenous communities. These communities are often the greatest victims of the federal government's war on work. People want to go out and work hard, build their dreams, earn a great living and live a great life, but are prevented from doing so because the government penalizes and blocks projects that create opportunities.

Think of those opportunities and how we could unleash them. I remember being with the member for Kamloops—Thompson—Cariboo about five weeks ago and meeting with local pipeline workers who are part of the Trans Mountain pipeline project, and how proud they were. The local indigenous communities are putting forward remarkable, great Canadian workers, who brought their skills to the front lines and were earning great wages, and rightly so. That is just one example of what we could multiply in this country if the government got out of the way and allowed more of these projects to go forward.

It is not just energy. It is not just resources. It is the construction of anything in this country. It takes three times as long for a warehouse to get governmental approval in Canada as it does in the United States of America. If a group of investors is in the business of building warehouses to produce a particular product and calculates that the wait time to get approval here is three times as long and far more uncertain, then the investors' money leaves our country to go and build somewhere else.

That is exactly the phenomenon we have witnessed in Canada over the last five years. Hundreds of billions of dollars have left the country. Canadian investment in the U.S. doubled while American investment in Canada fell by half. That is because money goes where it can build and earn a return. If governments prevent construction and returns from occurring, the money will go somewhere else. What it means is the jobs and wealth production happen outside of our country. What do we do to make up the difference? We have to import goods from abroad and borrow from foreigners to pay the difference, thus we witness our economy becoming more and more indebted.

It is not just the government that is now on a massive borrowing binge, but also businesses and households. The combined total of this, if we take households, corporations and governments, is a 380% debt-to-GDP ratio, which is the highest anywhere in the G7, with the exception of Japan.

These debts have, thus far, only been sustainable because of low interest rates, but low interest rates are not a sure thing forever. When those rates rise, our people will be shouldering an unmitigated disaster.

The only thing we can do to avert that disaster is to unleash the power of the free enterprise system to create jobs so that our 20 million workers, whom I identified at the outset of my remarks as the solution to this problem, can earn the salaries necessary to pay their bills and contribute to the governmental coffers so that we can continue to afford the programs and services upon which our people rely.

Today's bill is past due. It would finally remove the penalties on workers that I warned about in early May. Hopefully, it would allow us to reverse the damage that the government did throughout the summer. Hopefully, it would allow our businesses to get back on their feet to hire the necessary workers, to rebuild our workforce and unleash the mighty power of our 20 million great Canadian workers. Let us get to work.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, what the member forgets to mention when he talks about unemployment is that 75% of those who had to leave their jobs because of the pandemic have been returned to the workforce, compared with the U.S., which is just over 50%. That is a very important aspect that the member chose not to comment on.

The programs that have been provided to date by this government have been demonstrated to be very effective. All one needs to do is look at those individuals who are back in the workforce that had to leave the workforce because of the pandemic.