Debates of May 26th, 2021

Finance—Main Estimates, 2021-22

[The Deputy Chair, NDP, Carol Hughes]

Resuming debate, the hon. Minister of Finance.

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

Madam Chair, since the beginning of the COVID-19 crisis, we have done everything necessary to protect the lives and the livelihoods of Canadians, to help our businesses weather the storm and to position Canada for a robust, resilient and sustainable recovery.

As certain regions in Canada start to reopen, we must remember that we are not done fighting the virus. Our determination to win this fight and provide Canadians the support they need is stronger than ever.

This year's budget, which I tabled on April 19 and which Bill C-30 would enact, meets the three fundamental challenges facing Canadians right now.

First, we must defeat COVID. That means buying vaccines and supporting provincial and territorial health care systems. It means enforcing quarantine rules and it means providing Canadians and Canadian businesses with the help they need to get through lockdowns and to fully recover when COVID is defeated. COVID will be defeated. Vaccines are available to Canadians in ever-growing quantities, and they are working. More than 60% of adult Canadians have received their first dose of the vaccine. Canadians are doing their part and getting vaccinated. My thanks go to team Canada. Together we can do this.

Second, we must punch our way out of this COVID recession. That means making sure that hard-hit businesses can rebound, start growing and start hiring again. It also means helping the people who have been the hardest hit by this recession: women, young people, racialized Canadians, low-wage workers and small businesses. We are doing just that. When fully enacted, this budget will create nearly 500,000 new training and work opportunities for Canadians.

Our third major challenge is to create long-term economic growth and to build a more resilient Canada, a country that is better, more fair, more prosperous and more innovative. That is why we intend to invest ambitiously in the green transition and the new jobs that come with it, in digital transformation and innovation, and in infrastructure like housing, transit and the trade corridors that we need as a dynamic, growing country.

The COVID-19 pandemic has put enormous pressure on our health care systems. That is why, in Bill C-30, we propose to provide $4 billion through the Canada health transfer to help the provinces and territories ease the immediate pressure on their health care systems.

Additional funds for health care will help pay for the many different procedures that had to be delayed because of the pandemic. This will help build the resilience of our health care systems. That is what Canadians deserve and need.

A full recovery from COVID requires a new, long-term investment in social infrastructure. That means providing early learning and child care, student grants and income top-ups, so that the middle class can flourish and more Canadians can join the middle class. We know that without child care, parents, usually mothers, cannot work outside the home. That is more painfully clear now than ever. We intend to invest $30 billion over five years, reaching $9.2 billion annually, to provide high-quality, affordable and accessible early learning and child care across Canada. Our goal is an average cost of $10 a day across the country within five years.

In making this commitment, I thank Quebec's feminists, who have led the way for the rest of Canada. I am very grateful to them.

To minimize economic scarring and to power a robust recovery, we must bridge Canadian businesses through to the end of this crisis. The wage subsidy, rent subsidy and lockdown support had been set to expire next month. This budget extends these measures through to September 25, 2021.

In order to help those who still cannot work, we will maintain flexible access to employment insurance for another year, until fall 2022. Furthermore, to support Canadians who are not covered by employment insurance, the Canada recovery benefit will be extended by 12 weeks.

We are also proposing a four-week extension of the Canada recovery caregiving benefit, which would bring it to a maximum of 42 weeks at $500 a week. Similarly, the employment insurance sickness benefit period will be increased from 15 weeks to 26 weeks. These measures provide tangible and measurable assistance to the people who need help now.

As we build a resilient recovery, it is critically important that we help low-wage workers. They work harder than anyone else, for lower pay. They work on the front lines, and COVID has revealed to us all that the work they do is truly essential. We intend to expand the Canada workers benefit, extending income top-ups to about one million more workers and lifting nearly 100,000 Canadians out of poverty. We also propose to introduce a $15-an-hour federal minimum wage.

Young Canadians must be at the heart of our recovery, not just to help them bounce back from the COVID recession, but because their future success is critical to our success as a country. We intend to make college and university more accessible and affordable. We will create job openings in skilled trades and high tech, and we will double the Canada student grant for two more years, while extending the waiver of interest on federal student and apprentice loans to March 2023. This will mean lower costs for the approximately 1.5 million Canadians who are working to repay their student loans. Our budget will also make an important change so that nobody earning $40,000 per year or less will need to make payments on student loans, and the cap on monthly student loan payments will be reduced from 20% of household income to 10%.

We all know that no one has been hit harder by this health crisis over the past 14 months than seniors. The truth is that many seniors were relying on monthly benefits to make ends meet even before the pandemic.

We are therefore proposing a one-time payment of $500 in August 2021 for old age security pensioners who will be 75 or older in June 2022.

Furthermore, this budget provides for an additional 10% increase in old age security benefits for seniors aged 75 and over, as of July 2021. This will increase the benefits that some 3.3 million seniors are receiving and comes at a time when many are living longer and depleting their savings.

Small businesses have been hit very hard during COVID. We must create the conditions for them to recover and start growing again. This budget offers the Canada recovery hiring program to support business hiring. We will also invest up to $4 billion to help up to 160,000 small and medium-sized businesses buy and adopt the technologies they need.

In closing, allow me to directly address the opposition. Bill C-30, the budget implementation act, is the first major step in delivering jobs, growth and recovery. Vaccines are here, and Canadians want to get back to work. It is time for all of us to get back to work in the House as well.

[Sean Fraser, Liberal, Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance and to the Minister of Middle Class Prosperity and Associate Minister of Finance]

Madam Chair, I would like to begin by thanking the minister. Budget 2021 is a transformational document that will allow us to continue the fight against COVID-19, help us punch out of this pandemic recession and, importantly, ensure that everyone gets to benefit from the growth that we expect to see on the back end of this pandemic.

The pandemic, quite obviously, has not impacted everyone the same. If I can be blunt, there are a lot of people who look like I do who have fared better than many Canadians. Indigenous Canadians, Black Canadians and women have suffered disproportionately when it comes to the financial impact COVID-19 has had on their lives and careers.

The minister spent a portion of her speech focused on the importance of Canada's first early learning and child care strategy and that will be the focus of my comments and question.

From my perspective, there is both a moral and an economic imperative that justify a game-changing investment in excess of $30 billion in this child care and early childhood education strategy. It is clear to me that women more often than men choose to stay home at the beginning of their career to provide care for young children. The economic equation that a lot of families consider understandably justifies their decision to have one spouse stay home in a two-parent household when they look at the cost of care.

I have friends who are spending $4,000 a month for just two kids in child care in some Canadian cities. It may not be that expensive at home, but when a lot of people in my community are looking at whether they can afford the cost of care, they are choosing not to work even though they may want to.

From my perspective, the opportunity to provide care will give more families the choice to work should they want to. It would help more women fill gaps that exist in the labour market, which will boost productivity. However, importantly, there are solutions to business problems and scientific developments that may be locked in the mind of someone who is choosing to stay home because they cannot afford the cost of care, and we are all losing out.

Does the minister see the economic case that would allow this investment to pay for itself? Also, does she believe that having a gender-balanced cabinet and a task force on women in the economy, made up of women from Canada, actually helped influence the arrival of this important and game-changing decision?

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

Madam Chair, the parliamentary secretary's question was very well-informed. I think it will surprise no one in this House that I agree with him very strongly.

For more than 50 years, since the Royal Commission on the Status of Women urgently urged the Canadian government to set about building a universal system of early learning and child care, early learning and child care has been a feminist cause across Canada. What I believe is different today is that there is a wide appreciation in our country, and indeed around the world, that a system of early learning and child care is also an essential economic strategy for driving growth.

In fact, today we are lucky to have the deputy minister of finance, Michael Sabia, with us. Deputy Minister Sabia and his team have calculated that, once we build a universal system of early learning and child care across Canada, that will drive economic growth more powerfully than any policy Canada has implemented since NAFTA, and it will increase growth by more than 1.2%.

In closing, I would like to once again salute the women and feminists of Quebec, who have shown the rest of Canada what can and must be done.

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

Madam Chair, I would appreciate it if you allowed the minister to finish answering my questions about division 8 of part 4 of Bill C-30.

This division enacts the new retail payment activities act, which establishes an oversight framework for retail payment activities. Changes in the banking and financial services sector mean that financial technology companies, or fintech, which include GAFA, now occupy markets traditionally reserved for financial institutions. Obviously, protecting clients and consumers as well as the banking and financial system as a whole is crucial.

My first round of questions is about unauthorized transactions and parties' responsibility. The proposed legislation would protect clients from unauthorized use and errors in electronic funds transfers. The new legislation appears to cover this issue in subclause 17(1) under operational risk management and incident response.

What does the management framework include?

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

Madam Chair, I thank the member for his question and for his work. He truly is an expert economist and always delves into the most complex aspects of the budget and of the work we do here.

As always, he asked a technical and important question. My quick answer is that we will work with all of the provinces and territories on this important issue. I would also like to tell my colleague that I really appreciate this specific and important question and that my team would be happy to set up a briefing to give him more details than what I can get into this evening in the House.

However, I do want to give him an answer. The Bank of Canada will be responsible for ensuring that payment service providers comply with the framework and it will maintain a registry of regulated payment service providers.

The proposed legislation would require payment service providers to establish a risk management framework to identify and mitigate risks. The requirements of the proposed framework would be based on international best practices. These requirements would be set out in the regulations, and may include, for example, reliability objectives; specific policies regarding physical security or information technology security to manage cyber risk; and continuity plans.

I have a lot more to say, but I will cede the floor to the member for Joliette. If he would like, I could get back to what I was saying after he speaks.

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

Madam Chair, I thank the minister for her answer, and I want to ask another question on the same topic.

In relation to the minister's answer, paragraph 101(1)(a) of the proposed new law gives the governor in council regulatory power respecting risk management and incident response frameworks. Are we to understand that the minimum requirements will be set out later in the regulations, as the minister seems to be saying? If so, why?

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

Madam Chair, I want to point out that the requirements will be set out in the regulations.

Knowing that it is important for the Bloc Québécois, I would also like to add that the federal government conducted extensive consultations with the provinces and territories when preparing this bill. The proposed new law takes into account the fact that the federal government and the provincial and territorial governments have complementary objectives and powers with regard to business risk management and safeguarding funds.

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

Madam Chair, again, I thank the minister for her answer.

Here is my last question for this round. It is on the same subject. As it now stands, the bill suggests that the minimum protection provided to a consumer could vary depending on the provider.

What kind of latitude do payment service providers have in that regard? Should that protection not be set out in the legislation rather than in the regulations?

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

Madam Chair, once again, I thank the member for his question.

I want to point out that consultations, especially with the provinces and territories, will be very important in ironing out the details, such as the ones the member asked about in his questions.

Discussions with the provinces and territories revolve around business practices for payment service providers. Federal public servants, under the leadership of Mr. Michael Sabia, will continue to work closely with the provinces and territories on issues related to business practices like disclosure, accountability and dispute settlement mechanisms, and will review options regarding consumer protection, which is of great interest to my colleague across the way. All these discussions will take place in a way that respects provincial, territorial and federal jurisdictions.

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

Madam Chair, my second round of questions is about asymmetry in client and consumer protection.

We know that, in the case of an unauthorized use of electronic funds transfer, such as a credit card, a debit care, a prepaid payment product such as a prepaid card, or even an online or virtual payment, a bank client's maximum liability under subsection 627.33(1) of the Bank Act and section 5 of the Canadian Code of Practice for Consumer Debit Card Services is $50.

Aside from the requirement to notify, which is also in the bill before us, this requirement is more detailed and rigorous in other acts and regulations, such as the Bank Act. There are also other protective mechanisms, such as the grace period for the minimum payment on a credit card balance, the prohibition of overlimit fees and assurance that prepaid products will not expire, to name just a few here.

Another consideration is the bank's obligation to behave responsibly. These standards are laid out for bank clients in the Bank Act but not in Bill C-30.

Although the level of protection for the end user has not yet been determined, can the minister confirm at this point that a user doing business with a fintech company, not a bank, will not be held liable for the unauthorized use of an electronic funds transfer?

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

Madam Chair, that is an important question. The member opposite has highlighted exactly what our work and our consultations should be all about, specifically the consumer's position.

We must always ensure that consumers will be protected if they use a traditional bank or other mechanism. That is why we really need to pay attention to all the details of these regulations. That is why we will hold consultations to lay out the legislation in detail.

My team and I will be more than happy to listen to specific suggestions from the member opposite.

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

Madam Chair, I thank the minister for that answer.

As we have heard from both sides, in its current form, the proposed legislation on retail payment activities would provide end-users with less protection than is offered to a bank's customers.

This asymmetrical legal protection creates an inequity between a fintech company's customers and a bank's customers, although I understand that that is not the minister's goal.

Could this asymmetry be mitigated through regulatory powers, for example? I believe that is what the minister just suggested.

Can the minister assure us that she will balance out this asymmetrical protection through regulation?

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

Madam Chair, I can assure the hon. member that our government and all members of the House are committed to consumer protection. We understand the need to create space for new technologies in the Canadian economy, but we must also ensure that consumers are always protected. That really is our goal, and I think that goal is shared by all members of the House.

I would be quite happy to continue discussing this with the member, to listen to and understand his ideas on how to ensure that consumers will always be protected, even in the 21st century.

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

Madam Chair, I thank the minister for that answer.

Can I get her comments on the broader issue of privacy, consumer consent to access their bank accounts, where required, and consent to initiate an order to pay, as well as the possibility of having the bill cover cryptocurrency?

This is my last question.

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

Madam Chair, it may be his last question, but it is a very complicated question that covers multiple subjects.

I will start with the last part of his question, that is cryptocurrencies. In my view, this is an important issue that must be addressed. We must have a conversation about this with our international partners and allies. In the G7, for example, finance ministers and central bank governors have already begun discussing this at their meetings. I agree with the member that we need to do this.

In my opinion, we must do two things at the same time. We must ensure that Canada's economy is ready to embrace these new technologies. Canada has fantastic technologists, scientists and researchers. We also need to have some ground rules that make it possible to innovate and use new technologies.

However, with regard to the financial sector, we must ensure that we encourage the use of new technologies while continuing to protect consumers and their rights, privacy and personal information. To be frank, it is going to be difficult, but I am convinced that we can do it.

To conclude, I would like to point out that this must be done in close collaboration with our international allies, including the European Union. That is exactly what we are doing.

[The Deputy Chair, NDP, Carol Hughes]

Resuming debate, the hon. member for New Westminster—Burnaby.

Either the hon. member does not have his mike on or we are having a technical issue at this end. Maybe the hon. member could try unplugging and replugging his microphone. Sometimes it does not click in properly.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Chair, I would also like to use my time to ask questions and listen to the minister's replies. I thank her for being here this evening.

In every previous crisis that Canada has lived through, there have been strict laws against profiteering and there has been a sense that we are all in this together. That has not happened this time with the government. Canada's billionaires have increased their wealth by an astounding $80 billion during the pandemic. Other countries have experienced this and have put into place measures such as a wealth tax. A wealth tax is supported by over 80% of Canadians, as the minister well knows.

My first question is very simple. Why does the government refuse to put into place a wealth tax as we go through this pandemic?

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

Madam Chair, let me also congratulate you on the tech support you just offered.

Let me say to the member opposite that I really believe, strongly, that we are all in it together. I share his conviction that everyone needs to pay their fair share. We have introduced measures in this budget to ensure that is the case. That is why we have introduced a luxury tax. That is why we have introduced a digital services tax. That is why we have introduced a tax on vacant property owned by non-resident, non-Canadian owners, and that is why we have introduced the most aggressive measures to fight tax evasion and tax avoidance that have ever been introduced by a Canadian government.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Chair, the Liberals' so-called luxury tax is an utter smokescreen. As the Parliamentary Budget Officer has offered, it is one cent on the dollar of what a wealth tax would bring in.

Here is the contrast. At the same time as there is a refusal to bring in a wealth tax, hundreds of thousands of Canadians who currently depend on the Canada response benefit will see that benefit slashed in just a few weeks. In the middle of the third wave those benefits will be slashed from $500 to $300 a week. The question is how these people will put food on the table. How will they keep roofs over their heads? Particularly as we see record homelessness, why would the government slash the benefit?

The NDP is proposing tomorrow an amendment that would ensure that benefit is maintained at $500. Will the finance minister support that NDP amendment?

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

Madam Chair, as the member opposite knows, our government strongly agrees with him that the first priority during the fight against COVID has been to support Canadians and Canadian workers. I am so pleased that 5.9 million Canadians have been supported through the CERB, 1.95 million Canadians have been supported through the CRB and 5.3 million Canadian jobs have been supported through the wage subsidy, including 621,000 jobs in the member's province of B.C. As the member opposite also knows very well, his province of B.C. and other provinces across the country are making great strides in the fight against COVID. They are opening up the country. They have put forward clear and strong plans, and our programs have to adapt accordingly.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Chair, as we well know, the Parliamentary Budget Officer has also evaluated that a modest pandemic profits tax would bring in about $8 billion. This is the kind of thing we did in the Second World War when we were all in this together.

We know that this would make a difference. The minister has refused to answer my question about the CRB being slashed. There are two other measures from the NDP that the government can support. First, in the budget the government has acknowledged the chronic and desperate poverty that so many Canadian seniors live under and has proposed to raise the OAS by 10%, but only for Canadians over the age of 75. Canadians from 65 to 75, who are the bulk of Canadian seniors, do not have access to that. Canadian seniors organizations have reacted. They are asking the government to change that situation, and the NDP again has proposed an amendment that would ensure that the OAS increase goes to all Canadian seniors. The government has also refused to extend the moratorium on student debt payments.

The question is very simple. The government is refusing to make sure that a pandemic profits tax, a wealth tax, is in place so that we have the wherewithal to make these important adjustments.

Will the government support ensuring that all seniors have access to the OAS increase, and will it put in place a moratorium on student debt payments?

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

Madam Chair, I am very pleased that in the budget we were able to keep our campaign commitment to raise the OAS for seniors 75 and older by 10%. We appreciate, as I think do all members of the House, that as a person gets older, their needs are greater, their savings may be running out and their ability to work diminishes. I am very pleased that for Canadians 75 and older we are able to offer this additional support.

The member points out something else, though, which is so important to me, to our government and I believe to all Canadians. In addition to supporting seniors in our budget, we need to invest in young Canadians. This pandemic has hit our youth hard and they have sacrificed for us. They have sacrificed to preserve the lives and health of their parents and grandparents. That is why I am so pleased that this budget makes an unprecedented $5.7 billion investment in young Canadians. That investment will double the Canada student grant for two additional years, it will extend the moratorium on federal interest and it will mean that 450,000 low-income student borrowers will have access to more generous repayment assistance.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Chair, let the record show that the finance minister is not inclined to provide any supports to seniors between the ages of 65 and 75 and will continue the discrimination that was in the budget. As well, the finance minister is refusing to put in place a moratorium on student debt payments that so many student organizations across the country have called for. These are not answers that Canadians will support at all.

The minister said earlier that the government was taking action against tax havens. The very simple fact is, as the Parliamentary Budget Officer pointed out in 2019, that Canada loses over $25 billion every year in tax revenues that flee to overseas tax havens. There has not been a successful prosecution by the government of any Canadian or any Canadian company tied to the Bahamas papers, the paradise papers or the Panama papers. Thousands of Canadians are using these loopholes to avoid paying taxes.

CRA employees went to the finance committee last summer and said that they did not have the tools to take action against this tax evasion. They have asked for legislation that the government has not provided. My simple question is this: Where is the legislation that even CRA employees are calling for so that we can finally start to take action against overseas tax havens?

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

Madam Chair, I actually agree with the member opposite that it is essential for us to take action against tax evasion and aggressive tax avoidance schemes.

The member opposite began his round of questions by asserting something I disagree with. He said we are really not in this together. Here I part ways with him, because I think we really are in it together. However, to be in it together, it is essential for us all to pay our fair share and for Canadians to know everyone is paying their fair share. That is why I am so proud of the extensive measures in this budget to close loopholes, to make popular tax avoidance schemes no longer permitted, to provide significant additional resources to the CRA to go after illegal tax evasion and unprecedented measures to shine a light on beneficial ownership schemes.