Debates of April 11th, 2020

COVID-19 Pandemic

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Intergovernmental Affairs]

Mr. Chair, it is absolutely essential that, first and foremost, we do everything we can to protect the health and lives of Canadians as we fight this first wave of the coronavirus. What that means is that we must practise physical distancing and we have to stay at home. We are well aware, of course, of the economic impact. That is why we are here in the House bringing in today's economic measures. Of course, we need to work on an exit plan, but we can only do that once we know that we have hit and moved past our peak.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Mr. Chair, we need smart, focused measures that will allow us to relaunch our economy once the worst is over. We have already seen the government change its position on stronger border screenings and for masks in public spaces. We need our economy functioning while protecting ourselves from further outbreaks.

Does the Prime Minister have a plan to relaunch the economy as soon as it is feasible to do so?

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

Mr. Chair, we are definitely working on such a plan, as would any prudent government. I will mention some of the things that are going to be necessary as Canada thinks about how we move past the current stage.

We are going to have to work on serological testing. We are going to need to know who has antibodies against this virus and who does not. We are going to need to be aware and realize, as the Prime Minister and our public health officials said in their presentation this week, that it is quite likely there will be one, two or even three additional waves. We are going to need to have a very sophisticated approach.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Chair, my questions for this round will relate to the wage subsidy program and will be for the Minister of Finance.

My first question is this. Many businesses have cyclical revenues. Consider, for example, many businesses in the tourism industry. Obviously, the details conveyed in this bill will compare off-season months for many of those businesses. Will the government think about possibly changing the criteria to include businesses that will be affected by the COVID-19 crisis but for whom it would not be appropriate to use those months for comparison purposes?

I also have a follow-up question. If such changes were made, could it be done through regulations or would we have to recall the House to amend the criteria?

[Bill Morneau, Liberal, Minister of Finance]

Mr. Chair, I would like to begin by thanking the member for his contribution to our consultations. He has been a great help.

We changed our approach to ensure that companies that operate on a seasonal basis could look at their income for this year after two months, to see whether it has dropped.

We will always consider other approaches if changes need to be made. For now, when it comes to companies that find themselves in a different situation, we think we have found a way to provide them with the assurance that they can compare their situation to last year or to previous months.

If other approaches need to be considered, we will be open to them.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Chair, I thank the minister for his answer and open mind.

My question was about whether such changes could be made through regulations or whether we would have to recall the House to make these changes.

I will take the opportunity to ask my second question, which is more technical.

With respect to the wage subsidy, do the wages paid by the employer include the amounts paid on behalf of employees? I am thinking about the pension plan, insurance, and so on. Furthermore, are tips considered wages?

I would also like to know whether the tips a worker earns count towards qualifying for the CERB. Are tips included in the $50,000 to $1 million income criterion for the emergency loan?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, that is a good question.

We took income into account, not stock options or vehicle allowances, for example. Tips are difficult to account for, since it is not easy for the employer to determine what tips an employee received a week ago, a month ago, or two months ago.

We will look into how we can deal with this situation. For the time being, only the income for which there is data is taken into consideration.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Chair, I thank the minister for his answer.

I want to come back to the first question on the possibility of proceeding to make any changes to the wage subsidy through regulations.

I have an example of a case that applies to what was said earlier. Many professionals, in the health sector for example, have questions, and they believe they could fall through the cracks of the three programs. As far as the wage subsidy is concerned, these professionals are often self-employed workers who pay themselves dividends. It seems that they might not benefit from the wage subsidy.

The same goes for the emergency loans. These businesses pay salaries only to employees who do office administration work. An office that employs just one person will not have a $50,000 payroll. To get the Canada emergency response benefit, the business must stop all activity and no longer treat urgent cases. I am thinking of chiropractors, for example.

Would it be possible to change the criteria for these people through a regulatory change?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, these are important questions.

We are looking at the best way to consider dividends for the purposes of the Canada emergency response benefit. We have not reached a conclusion, but that is very important.

As far as the wage subsidy is concerned, that is a bit harder because the months just before March, in other words January and February, are considered for remuneration. That will make it tough to deal with dividends, since only two months are being taken into account.

Finally, the other question is a matter of legislation and regulations. We will consider using a regulatory change in every case, because we know that is the most efficient option. However, if we have to use legislation, then we will look into doing that.

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

Mr. Chair, I would like to start by taking a moment to thank my team in Rosemont—La Petite-Patrie for their amazing work. I am certain that all of the MPs' teams are busy trying to help the public by providing services and answering questions. On behalf of all of them, I want to say that we need clear answers as fast as possible so that we can help Canadians and answer their questions properly. Some people are really struggling, and impatience seems to be on the rise right now. I am sure everyone is going through this.

Right now, some Liberal MPs are telling people who are not sure if they meet the criteria for the Canada emergency response benefit to apply anyway in case they are eligible. Other MPs and even some ministers are saying that people who do not meet the criteria should not apply. Those are two contradictory messages.

I would like to get a clear message from the Department of Finance. If Canadians need help and are struggling to pay for rent and groceries, they should be told that they can apply. This program is an emergency program, and the government is supposed to be here to help them.

[Bill Morneau, Liberal, Minister of Finance]

Mr. Chair, I realize people want to know exactly what the eligibility criteria are. That is important.

Our first consideration is people who are in a difficult position because of COVID-19. That was our approach, and I think it is very important to keep going in that direction. We need to establish criteria that work. This situation is certainly very dynamic.

If we run into problems with this approach, we will have to make changes as quickly as possible. That is the situation right now. We will look at the challenges and keep making the right support available to people. If we need to make changes, we will.

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

Mr. Chair, I realize the government has good intentions and wants to do the right thing, but the criteria are unclear and a moving target. The information is contradictory.

Would it not have been simpler to implement a universal measure and then get money back from people who did not need it through taxes?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, that would not have been simpler.

We looked at every option for getting money to people as quickly as possible. That is why we opted for the Canada emergency response benefit. We believe that is important because it enables us to get money to people when they need it. That is our approach for people going through tough times because of COVID-19. Our approach is working. Just a few days ago, over three million Canadians received the Canada emergency response benefit. We are going to maintain this approach.

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

Mr. Chair, can a group of artists or a group of musicians who get their income from performing at festivals or selling recordings, for example, but whose members are not officially wage earners, apply for the 75% wage subsidy?

[Carla Qualtrough, Liberal, Minister of Employment]

Mr. Chair, an artist who earned more than $5,000 last year and who is no longer earning that money is of course eligible for the Canada emergency response benefit.

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

Mr. Chair, the government recently announced a bailout for the oil and gas sector. During the 2008 crisis, some of the bailout money was used to enhance CEO bonuses or to pay out dividends. Our concern is that the workers are the ones who need to benefit from the bailout in the current situation.

Are there any conditions attached to ensure that the money will go in the workers' pockets and not the CEOs'?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, with the wage subsidy, we need to know that the money will be paid to the employees. That is a very important condition. We will always look at the best way to help the employees, help the people and ensure that the money is not being used to boost the income of CEOs or others.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, a constituent of mine owns a popular deli that sells groceries. Almost all of his employees have now gone on the emergency benefit. The good news is that his sales are starting to come back and he wants to offer them some work, about 15 hours a week. If they take that 15 hours a week, will they be able to keep their emergency benefit?

[Bill Morneau, Liberal, Minister of Finance]

Mr. Chair, I suspect in the case that the member for Carleton is talking about, there may be an opportunity for the employer to consider the wage subsidy, which in many cases will help them significantly. For those who decide to take the CERB, we are looking at how we can make sure that people who work a small number of hours might be able to continue to be part of that. That work is ongoing and when we have more to say we will say so.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, if they are already on the emergency benefit, they cannot qualify for the wage subsidy. They are now on the benefit. I understand they will be allowed to work up to 10 hours. Why would the government punish those workers for doing more than 10 hours' work? Should we not always reward working, rather than punish it?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, even if the employees are currently on the emergency response benefit, if the employer chooses to put them on the wage subsidy, the employer can do that. People just need to make sure that employees are not going on the response benefit and the wage subsidy at the same time. In that situation, we are hoping the employer will bring people back on staff. That will be very helpful for the employees and will give them a greater sense of confidence. It will help, as we move into the transition, to have that connection with their employer.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, the problem is that workers cannot go off the benefit on Monday and go on to the wage subsidy on Tuesday. They are separated by months. In other words, there will be full months during which workers are effectively banned from doing three-quarters of the work they would normally do, because they would lose the wage subsidy if they did.

We would ask the government to consider gently phasing out the emergency benefit to, say, 30¢ on the dollar, so that people are always better off working than they otherwise would be.

Does anything in today's bill ban businesses receiving the wage subsidy from paying executive bonuses, share buybacks or to boost dividends during the period for which they received that subsidy?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, to be clear, the condition around the wage subsidy is that employers will need to show us, before they actually get the money, that they have actually paid the employees. The up to $847 per week will have already gone to the employees by the time the money actually goes to the company.

There is no way for the business to actually take that money and give it to senior executives or use it for something else. That is very clear. That was one of the things we wanted to ensure was the case, which is why it is designed exactly that way.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, a large corporation receiving the wage subsidy could basically displace money that it would normally give its front-line workers and use that same money for executive bonuses, dividends and share buybacks, which is completely unacceptable. Taxpayers should not be shovelling hundreds of millions of dollars into a large corporation, some of which will then flow into the hands of wealthy executives and shareholders. That is what happened when the government and the Minister of Industry gave Bombardier $372 million. The executives and the owners got huge bonuses, and the workers lost their jobs.

I take the minister's non-answer to mean there is nothing to prevent share buybacks or dividend payouts from this bill.

Also, Sunny and Randy own a Markham business. They have a payroll of just over $1 million. Do they qualify for the emergency business loan, yes or no?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I want to be very clear. It does not matter how we communicate it; in no way are we trying to use trickery to make Canadians think something is happening that is not. The fact is the money that is going for the wage subsidy will go to employees. There is only one thing employers must do. They must show that the money has already gone to the employees. Therefore, it cannot be used for something else; it must be used for that purpose.

For credit around businesses, we are trying to create credit opportunities for businesses of all different sizes. The Canada emergency business account is meant for the smallest of businesses. We have come forward with larger opportunities for credit for businesses that are larger, up to $12.5 million, half of it through BDC and half of it through EDC. We are looking at further credit support that we continue to work on, which we hope to announce in the not too distant future.