Debates of Jan. 27th, 2021

Agriculture and Agri-Food

[Neil Ellis, Liberal, Bay of Quinte, ON]

Madam Speaker, for farmers to take advantage of new market opportunities on the world stage, they need to meet consumers' demands for sustainability. That is why, over the next 10 years, we will invest $350 million to help farmers continue their stewardship of soil, water and biodiversity.

Carbon pollution pricing remains an important part of Canada's plan for a cleaner and more innovative economy. Since the beginning, we have recognized the special role our farmers play in Canada, which is why we exempt farm fields, greenhouses and farm fuel obtained from cardlock facilities. Alongside these promises, we will continue making investments in the sector to improve the energy efficiency of agricultural equipment.

We are also investing $1.65 million in the new agricultural clean-tech program and $200 million in the climate action incentive fund, financed through proceeds from the federal carbon pollution pricing system, which has already supported more than 200 energy efficiency projects in agriculture, such as helping a farmer replace an old and inefficient grain dryer or install solar panels for watering systems.

We are also developing a greenhouse gas offset system. It could offer opportunities for farmers to generate carbon offset credits through on-farm practices that reduce emissions and store carbon.

Canadian farmers are—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Unfortunately, the hon. member's time is up.

The hon. member for Edmonton Strathcona.

Taxation

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Madam Speaker, throughout this pandemic the government has been very clear: Workers who lost their income due to COVID-19 were going to receive support, the Prime Minister assured us. Again and again, in statement after statement, the Prime Minister told Canadians “We're here for you.” Those were the words that meant everything to Canadians who did not know how they were going to pay the bills and put food on the table.

Today, however, those words ring hollow for hundreds of thousands of Canadians and their families, people who put their faith in this government and believed that the Prime Minister had their backs, only to discover that it was not true.

More than 400,000 Canadians who applied for the CERB in good faith, who were told by the government that they were eligible and who were in fact eligible according to the CRA website, who received CERB in order to survive, have now received a letter from the CRA informing them that they have to pay that support back. Why? It is because their government changed the rules on them. It is not just wrong: It is a betrayal. It is a betrayal of the House and a betrayal of Canadians.

We spent a lot of time working together in a committee of the whole to get Canadians the help they needed to get through the pandemic. The NDP pushed the government at every turn to do better, and often the government listened to us. We recognized that provinces and territories had to implement strict public health measures to combat the transmission of the virus. We knew that these measures would cost people their jobs. We knew that if we did not act, our economy would be devastated and lives would be ruined. I and my fellow New Democrats called immediately and repeatedly for help for those who needed it, and the government listened and made that critical promise to Canadians that help would be coming.

When the government finally brought the CERB forward for a vote, the legislation, Bill C-13, defined those who would be eligible for support as “...a person who...for 2019 or in the 12-month period preceding the day on which they make an application under section 5, has a total income of at least $5,000”, and the CRA website listed the eligible sources of income to include income from self-employment. That is the bill that I and other members of the House voted for, but that is not what self-employed Canadians are getting from this government.

Canadians should be able to trust their government, and if they follow the rules, so should their government.

The CERB was a lifeline for millions of Canadians. It was a way to make it to the next month, and the next and the next. It is the difference between paying rent and becoming homeless and the difference between hanging on and bankruptcy. Now the government has taken that lifeline away from hundreds of thousands of self-employed Canadians. Worse yet, it is throwing them back overboard.

It is inhumane and, quite honestly, ridiculous, and it does not have to be this way. The government can decide right now to reverse this inane decision. Just apply the legislation the way it was written, which means allowing self-employed Canadians to use total income rather than net income to determine CERB eligibility. It means counting income from grants to artists and performers the same way it is counted for tax purposes.

Will this government restore Canadians' trust and reverse this disastrous CERB clawback?

[Irek Kusmierczyk, Liberal, Parliamentary Secretary to the Minister of Employment]

Madam Speaker, I thank the member for Edmonton Strathcona for advocacy on behalf of her constituents.

I want to be clear. The Government of Canada is there for Canadian workers and continues to be there for them. The CERB was the keystone piece of that support. During the darkest months of the pandemic crisis, we helped more than 8.9 million Canadians who lost their income.

Our goal at the beginning of the first lockdown in the spring was to get money into the hands of Canadian workers and Canadians as quickly as possible. This included the self-employed.

We used the definition of self-employment income that was consistent with how people interacted with the Government of Canada for other benefits like the GST and the Canada child benefit. However, as the Minister of Employment, Workforce Development and Disability Inclusion said, we know that some people misunderstood that definition. The Government of Canada strives to be accurate in all its communications with Canadians, especially at call centres. Employees have done a stellar job at helping Canadians throughout this crisis.

We all know that in the initial weeks after the CERB was launched, some of the information provided was at times unclear. We are actively looking at options to respond to the concerns raised by self-employed Canadians about the eligibility criteria and the information they received. Again, I want to be very clear about the fact that no one is being asked to make a repayment at this time. The CRA is only looking to confirm people's eligibility for the CERB.

We know very well that for some individuals repaying the CERB could represent a significant financial hardship and that is why we are taking a compassionate approach to the issue of repayment. If individuals choose to start repaying amounts for which they were not eligible, flexible repayment options are available based on their individual financial situation. The CRA will work with them on a case-by-case basis.

We know that workers and their families continue to face uncertain times as the pandemic wears on and different jurisdictions face lockdown restrictions. The Government of Canada will continue to be there for Canadian workers and their families until the pandemic ends and beyond.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Madam Speaker, this is so disheartening. I feel like the member does not understand the stress and hardship that we are asking Canadians to go through. How will they repay funds when they do not have jobs? The schedule does not matter. If they do not have the ability to do that, it is nothing but a slap in the face. Nobody should be penalized for a mistake made by his or her government.

This new interpretation of the rules should be reversed. It was a mistake made by the government, not a mistake made by the people, with CERB. It is not right, it is not fair and it is not what we voted for. The government can stop this inhumane CERB clawback today if it chooses to. It is simple. If the member is looking for solutions, I can offer them.

The government should just live up to the promises it made to Canadians and apply the legislation the way it was written. It does not even have to admit it is wrong, just do the right thing and cancel the CERB clawback now.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Madam Speaker, as the Minister of Employment, Workforce Development and Disability Inclusion has said, it is unfair to say that we are going after workers. The CERB was there to support workers who had lost their income because of COVID-19.

People who received a letter from the CRA should not assume that they are ineligible for the CERB. It just means that the CRA is trying to confirm eligibility, and it will work with individuals on potential repayment plans.

I thank the member for Edmonton Strathcona for her question. She is a staunch advocate for her constituents.

Canada Revenue Agency

[Paul Manly, Green, Nanaimo—Ladysmith, BC]

Madam Speaker, when COVID-19 forced an economic lockdown in March, this Parliament took a team Canada approach to ensure that Canadians received the financial support they needed.

The government introduced the Canada emergency response benefit, CERB, in a hurry, and it passed with unanimous consent from all MPs and all parties. Speed was necessary under the circumstances, but it created a situation where eligibility requirements were unclear. This was particularly true for individuals who are self-employed.

In December, the Canada Revenue Agency sent out more than 441,000 letters advising some CERB recipients that they may not be eligible for the benefit and may have to pay back as much as $14,000. Many of the people who received the letters are low-income self-employed Canadians.

On the CERB application, the government did not specify whether eligibility would be based on gross or net self-employed income. The CERB Act did not define self-employed income, and did not mention expenses or deductions. The government website stated multiple times that income of at least $5,000 may be from employment and/or self-employment for CERB eligibility. There was no mention of gross or net income.

Immediately after the CERB act was passed, the finance minister stated, both in press conferences and in testimony before the Senate, that CERB eligibility would be based on earned revenue. Revenue, in business terms, means income before expenses, or gross income. It was not until late April, weeks after people started applying for the CERB, that the CRA quietly added a clarifying statement that eligible self-employment earnings were “net pre-tax income”, which is gross income less expenses. This clarification is buried in one of the frequently asked questions on the government website, near the bottom of the page.

There have been many reported examples of CRA agents providing incorrect information about whether eligibility was based on gross or net self-employment income. The union representing CRA workers stated that agents were not given clear directions. Even MPs from the governing party provided incorrect information to their constituents. Clearly the confusion was widespread.

The government has acknowledged that CERB eligibility guidelines, and government advice, failed to clearly specify that income for people who are self-employed meant net income after deductions.

Home-based businesses can write off a portion of house expenses, such as rent and utilities, against their business income. This helps people make ends meet. However, these home-based businesses were not eligible for the Canada emergency rent subsidy.

People who are self-employed or own small businesses will often incur additional expenses in one year versus another for capital improvements, to expand a product line or to start a new business. I have heard from a number of people who were in this situation.

During the pandemic, many large corporations used wage subsidy programs to pay employees at the same time as they increased shareholder dividends and CEO bonuses, and as their wealthy owners raked in billions. This should not have been allowed.

If the government needs to recoup emergency benefits, it should be going after the wealthy who took advantage of these programs, not after self-employed Canadians. The government made a serious error, and it needs to own that mistake. Self-employed Canadians applied for CERB in good faith and should not be penalized. The government needs to retroactively allow self-employed Canadians to use their gross pre-tax income before business expenses when determining their CERB eligibility.

It is absolutely a matter of justice and fairness, and the government needs to own—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The hon. Parliamentary Secretary to the Minister of National Revenue.

[Francesco Sorbara, Liberal, Parliamentary Secretary to the Minister of National Revenue]

Madam Speaker, I am happy to respond to the question by the member for Nanaimo—Ladysmith regarding the Canada emergency response benefit.

The Government of Canada has worked quickly and diligently over the past few months to administer the programs related to COVID-19 in order to quickly deliver emergency payments, including the CERB, to Canadians who needed it the most in this most extraordinary time. In collaboration with Employment and Social Development Canada, the Canada Revenue Agency designed the CERB application process to be attestation-based. This is similar to the approach used in tax filing, where individuals attest to the information they provide when they file their taxes, and the CRA may verify this information at the time of filing or at a later date.

We know that the vast majority of Canadians are honest and forthright, especially when it comes to dealing with the CRA. In order to account for application errors made in good faith, the government has indicated that there will be no penalties or interest in cases where the CERB needs to be repaid.

We regret that communications regarding the eligibility criteria may have been unclear in the first days after the CERB was launched. The CRA was eager, and it was important, to disburse funds quickly to those in need under the exceptional circumstances of a global pandemic. However, we recognize that there was some confusion in the very early weeks of the program that may have led some individuals to mistakenly apply for the CERB. In fact, the CRA has adopted an educational approach regarding cases where the agency lacks sufficient information to determine if an applicant was eligible for the CERB. The CRA has sent letters to certain recipients in order to confirm that their income met the eligibility threshold of employment and/or net self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application. The letter strongly encourages those individuals who have not filed their 2019 tax returns to do so as soon as possible, as this is the simplest way to confirm their eligibility.

I would like to reconfirm, as stated by our Prime Minister in late December, that we recognize that for some individuals repaying the CERB could represent significant financial hardship. As also stated by the Prime Minister in December, we will work with the impacted individuals on a case-by-case basis. The government has developed an approach for how we will address the situation for impacted individuals, and we will be in a position to announce the details of this approach in the coming days.

[Paul Manly, Green, Nanaimo—Ladysmith, BC]

Madam Speaker, I want to reiterate that the government needs to take responsibility for its own error. I have heard from self-employed single mothers and people with disabilities who have home-based businesses and have received these CRA letters. They are stressed out from receiving these letters.

The self-employed people who received the CERB used that money to pay their rent, their bills and to put food on the table for their families. The money is spent, and it is not fair to ask people who did their due diligence and applied for the CERB in good faith to pay back the money. Many self-employed Canadians will never be able to repay these large debts to the CRA, no matter how flexible the terms are. The request for repayment is unacceptable. The government made a serious error, and it needs to own its mistake.

Self-employed Canadians need a break during this pandemic; they do not need additional stress. If the government wants to recoup benefits that were abused, it should be going after wealthy Canadians and corporations that lined their pockets with government relief funds.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Madam Speaker, the government recognizes the economic effect that the COVID-19 pandemic continues to have on both individuals and businesses. For this reason, the CRA has been working throughout the pandemic to provide services and support to those in need of assistance. If individuals receive a letter related to their CERB claim, they should not interpret it as a determination that they are definitely ineligible, nor should it be interpreted as a requirement to make a repayment. The letter simply means that the CRA does not have the information needed to confirm their eligibility.

I would like to emphasize that no repayment deadline has been established to date. People who believe they are not eligible for the CERB may make a repayment any time. In fact, as of today over 1.1 million voluntary repayments have been made. I want to remind members that the government has developed an approach for how it will address the situation of impacted individuals, and we will be in a position to announce the details of this approach in the coming days.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The motion that the House do now adjourn is deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 10 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 8:30 p.m.)