The Standing Senate Committee on National Finance met by videoconference this day at 2:30 p.m. [ET] to study on: a) certain elements of Bill C-13, An Act respecting certain measures in response to COVID-19; b) the provisions and operations of Bill C-14, A second Act respecting measures in response to COVID-19; and, c) the government’s response to the COVID-19 pandemic and its economic consequences.
Senator Percy Mockler (Chair) in the chair.
The Chair: Honourable senators and participants, please bear with me. I’d like to start first by saying to the clerk and her team and the staff, thank you very much for a job well done. We’re trailblazers, I would say. To all the senators, thank you for participating.
My name is Percy Mockler, a senator from New Brunswick and chair of the committee.
Senators, today we are conducting the first virtual meeting of the Standing Senate Committee on National Finance via video conference. Although the Senate staff has worked very hard to make this possible in such a short period of time, it remains a work-in-progress. Since it remains a work-in-progress, I thank you in advance, senators, for your patience during this meeting. There is no doubt that I will need support.
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We will now begin with the official portion of our meeting.
Honourable senators, I would like to introduce the members of the committee who are participating in this meeting: Senator Forest, deputy chair; Senator Richards, steering committee member; Senator Boehm; Senator Dagenais; Senator Deacon (Ontario); Senator Duncan; Senator Galvez; Senator Harder; Senator Klyne; Senator Loffreda; Senator Marshall; Senator Smith. I have also seen Senator Pate, Senator Lankin, Senator Gagné, Senator Gold and Senator Martin, and we also want to welcome other senators who will join us.
I wish to welcome the honourable senators, and all viewers across the country who may be watching on television or online. This is a first. As a reminder to those watching, the committee hearings are available online at sencanada.ca.
Honourable senators and members of the viewing public, the mandate of this committee is to examine matters relating to federal estimates generally, as well as government finance. Today, we start our study on certain elements of Bill C-13, An Act respecting certain measures in response to COVID-19, the provisions and operations of Bill C-14 and, finally, the government’s response to the COVID-19 pandemic and its economic consequences, which were referred to the Standing Senate Committee on National Finance on April 11, 2020, by the Senate of Canada.
Honourable senators, today, during the first part of the meeting, we are hearing from officials from the Department of Finance Canada.
On behalf of the senators and the Finance Committee, I would like to introduce the participants: Senior Assistant Deputy Minister, Tax Policy Branch, Andrew Marsland, who is accompanied by Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Evelyn Dancey; Associate Assistant Deputy Minister, Economic and Fiscal Policy Branch, Alison McDermott; Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Suzy McDonald; and Associate Assistant Deputy Minister, Financial Sector Policy Branch, Soren Halverson.
Welcome to each of you, and thank you for accepting our invitation.
Mr. Marsland, I have been informed by the clerk that you have some comments to make. I will now recognize you to make your comments.
Andrew Marsland, Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance Canada: Thank you, Mr. Chair and honourable senators, for inviting us to appear today.
I’d like to make some brief opening remarks just to give an overview of the government’s economic response plan, which is comprehensive in nature.
The plan includes over $5 billion in support for a coordinated federal, provincial and territorial action to protect the health and safety of Canadians, including through the purchase of personal protective equipment and supplies and support for critical medical research and vaccine developments.
The plan also provides direct support for individuals, notably through the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy. It also provides timely additional support to families through the Canada Child Benefit and to low- and modest-income individuals through the goods and services tax credit, as well as several programs to help students, seniors and vulnerable groups, including today’s announcement of a one-time payment to seniors.
The COVID-19 Economic Response Plan provides direct support to businesses, including through the Canada Emergency Business Account. This program provides interest-free, partially forgivable loans of up to $40,000. It is offered through financial institutions, such as banks and credit unions, in cooperation with Export Development Canada.
The plan also includes measures that provide direct support for sectors dealing with unique and specific challenges, including air transportation, agriculture and agri-food and the energy sector. In addition, yesterday the Prime Minister announced that the government will establish a large employer emergency financing facility to provide bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, in order to keep their operations going.
Mr. Chair, in addition to direct support, the COVID-19 economic response plan provides significant liquidity support — $85 billion in tax and customs duty payment deferrals to meet liquidity needs of businesses and households and to help stabilize the Canadian economy.
The government has also acted to support financial sector liquidity and market functioning, which in turn has enabled continued support to Canadian businesses and consumers in need. This was done in close cooperation with the Bank of Canada, which has responded by lowering interest rates, intervening to support key financial markets and providing liquidity support for financial institutions.
Mr. Chair, my colleagues and I would be happy to respond to any questions the honourable senators may have regarding the government’s COVID-19 economic response plan.
The Chair: Thank you for your statement, Mr. Marsland.
We will now proceed with questions from the senators. I would like to remind senators that the order for questions from members has been pre-set by the steering committee. We have agreed that each member will have a maximum of five minutes. Therefore, honourable senators, I will ask senators to ask their questions directly and the witnesses in question to respond succinctly. The clerk will make a hand signal to the chair if you go beyond five minutes.
If other senators wish to ask questions of the witnesses, I invite you to indicate that to the clerk using the raise-hand function of the application. There will be a 10-minute period at the end of each session permitting questions from senators who are not members of the committee, if there is time left. The order of questions for that portion of the meeting will be randomly drawn.
Finally, I invite all senators, when they ask a question, to clearly identify to which witness it is directed. If another witness wishes to add something to the answer, I invite him or her to use the raise-hand function.
Senator Marshall: Thank you to the witnesses for being here today.
My question will be directed to Mr. Marsland. I have a general question about the government’s finances. I have been tracking the individual programs, but I’ve been focusing on the deficit and the debt. Last month, the Parliamentary Budget Officer projected a deficit of $252 billion for this fiscal year, but that was three weeks ago and before newer programs were announced. I was looking for the government’s projected deficit but couldn’t find current deficit information on the government website.
I was also looking for the government’s current borrowings. I did see in a finance report a figure of $133 billion referenced, but that took us only to April 24. I do know a year ago government’s total market debt was just over a trillion dollars, and that includes almost $300 billion for the Crown corporations.
I know that the COVID-19 programs are being financed to debt — that includes CMHC and Export Development Canada. In addition to that, some of us would appreciate a fiscal update.
I have three questions. First, what deficit is the Department of Finance projecting for this fiscal year? How much has the government, CMHC and Export Development Canada borrowed since March? When will the government provide a fiscal update?
Mr. Marsland: Thank you for your question. With your permission, Mr. Chair, I’d like to ask my colleague Ms. McDermott to respond to the question.
Alison McDermott, Associate Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance Canada: Thank you very much for the question.
Just to clarify, the Parliamentary Budget Officer has come up with their own independent estimate of what they think the fiscal deficit would be. All of these estimates are subject to quite a bit of uncertainty, and the federal government has not yet made a fiscal estimate public. We’re in the process of beginning that fiscal update, which, of course, involves consultation with the private sector. We expect to be able to provide a fiscal update in the coming weeks, but I don’t think the government has made any announcements about the timing of that at this point.
In terms of the figures that were released in the last FINA report, we are updating those in terms of the information on government borrowing. This Thursday, we should have new information in relation to government borrowing.
I’m happy to answer questions about the types of impacts that the measures announced to date will have on the deficit, but we just haven’t put out a comprehensive assessment.
Senator Marshall: Is there a date on a fiscal update? The problem that people who are interested are having is that in order to get a handle on government spending, they’re having to go to CMHC and Export Development Canada. There’s not much on the Department of Finance website. The Bank of Canada provides an update every week. They provide a copy of their balance sheet. I find it almost amazing or incredible that the Bank of Canada can provide this information, but the Department of Finance, who has all these very intelligent and smart people over in the department, can’t provide us with more fiscal information.
Ms. McDermott: I will add a little bit of information if you haven’t made yourself aware of it. The finance reports that are being released every couple of weeks do contain information on the overall economic impact of the measures that have been announced so far by the government. Just to give you a bit of interpretation of that, I’ll look at the last figures that were released. On the pages that describe the economic impact, they are very close proxy, at least the first part of them, the sections under direct support measures and protecting health and safety. Those impact measures are very close to the fiscal costs. For example, we’ll come out in a couple of days with an updated figure for the funding for the impact of the measures that are designed to promote health and safety. They total $5 billion. That’s a very close estimate of what those —
Senator Marshall: Excuse me, is my time up, Mr. Chair?
The Chair: We may have a second round. On this, to the witnesses, if you want to add to what you have said, please do so in writing through the clerk.
Senator Forest: My question is for Mr. Marsland and concerns the Large Employer Emergency Financing Facility that was announced this past Monday. The government announced the Large Employer Emergency Financing Facility, which essentially lends money to large corporations that are unable to finance themselves on the private market.
The Prime Minister pointed out that this was not a blank cheque. However, I do have some concerns. First of all, what will the limits be on these loans, what will be the term of the loans, which sectors will be given priority, and what will be the terms and conditions? How will the government be able to ensure that the corporations in question will have done everything possible to finance themselves in private markets? How will the government be able to secure clear commitments from the large corporations to guarantee that these loans are not used to provide more compensation and more money to the senior executives of the corporations in question? My three questions are for Mr. Marsland.
Mr. Marsland: Again, can I ask Ms. Dancey to respond to that question?
Evelyn Dancey, Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance Canada: Thank you for the question. I will answer in English.
The LEEFF program that was announced yesterday will be made available to large companies across the economy. What has been said in terms of companies that would not have access is those in the financial sector, because they are subject to a separate and stringent oversight regime. There will be a standardized approach to terms for the loans. The amount of financing available will be determined on a company-by-company basis according to their unique cashflow requirements and what is required to sustain their operation through the period of the economic shutdown and into recovery.
We have quite a detailed application in mind, which will be delivered by CDEV, the Canada Development Investment Corporation. We will be requiring the cooperation of the companies’ current lenders and their current creditors as a means of ensuring that the company has explored and exhausted its other resources and to also ensure that the funds provided by taxpayers, by the government, will be directed to sustaining operations rather than used toward other non-core purposes such as share buybacks, dividends, executive compensation, et cetera.
Senator Forest: So, if you provide this type of emergency financing, do you have any formal commitments? Are you going to be able to check after the fact to make sure that the conditions have been met?
Ms. Dancey: Yes, the requirements of the recipient organizations will be codified in terms of the lending arrangements, and there will be points of accountability upon the company and its board, as well as overseen by the Canada Development Investment Corporation.
Senator Forest: Thank you.
Senator Richards: My question is something like Senator Marshall’s. We know we are in uncharted territory, and we know it will be difficult to predict our long-term future. However, Canada entered a new era of accountability with the introduction of the Federal Accountability Act and related legislation some years ago. Now that we are committed to spending billions of dollars on everything from businesses to diagnostic testing for vaccines, do we have measures in place for accurate oversight and accountability, and will these measures be followed and adhered to? Will there be a transparency test for these billions of dollars we are spending?
The Chair: To whom do you address that question, Senator Richards?
Senator Richards: Anyone on the panel, Mr. Chairman.
Ms. McDermott: Thank you very much for the question.
I don’t want to use up too much time, but just to report that the minister is reporting to FINA every second week on the expenditure of funds on this plan, but the normal processes still apply. This funding is either all being approved by parliamentarians or being approved through the estimates process with the approval of Treasury Board, where required. All of this will be reported through the public accounts. It’s also subject to the Auditor General’s examination. This is just to provide some comfort that, indeed, we are continuing to be accountable to Canadians and parliamentarians, as we always have.
Senator Richards: Thank you very much.
Senator Harder: Thank you, Andrew Marsland and officials. I have two areas of inquiry. The first is identifying gaps in situations that are either advertent or inadvertent, and the second is a few comments on process.
On gaps, I’d like to know whether the CEBA, the $40,000 loan facility, is available to religious organizations.
Soren Halverson, Associate Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance Canada: The requirements for the Canada Emergency Business Account interest-free loans include having a business banking account. That would be the first piece. The second piece would be that there is a payroll. If the organization is of a nature that it has that information, then it ought to be eligible for that program.
Senator Harder: Thank you. I’d like to follow up, if I could. I’m aware of a religious organization, the United Church of Canada — which is the largest Protestant organization — which, on inquiry, was told that this program was not available to religious organizations because of what was called “pre-existing conditions.” This is through BDC-EDC. One of the preconditions was that it is not a union, charitable or religious fraternal organization, which seems to be at odds with your commitment. I wonder if you could help us get clarity on this. I know that the organizations involved would very much like to participate and have a good case to make and have been somewhat stifled in the ping-pong of trying to run this down. If you could make that commitment, I’d be grateful.
Mr. Halverson: I absolutely can, but I would add, Senator Harder, that there were certain modifications made to the attestation. I’m not certain as to the timing of when this question made its way to you, but it may be that this inquiry, in fact, is related to something that has changed in the attestation.
Senator Harder: I hope so. My information comes as recently as this morning, so if we could bring this to ground. There has been confusion, shall I say. I must say I’ve worked with some members of Parliament on this as well, and I do think it would be useful to bring clarity.
The second gap, if I could, is with respect to foreign students. There were good measures announced, and we dealt with that in the Senate last week, but there is a gap with respect to those foreign students who are not landed immigrants in Canada. This represents a population of about 380,000, which is a significant number and contributes to a significant finance resource base for our universities. I made a suggestion in the Senate that there might well be an extension of this program served through the student aid facilities for foreign students in various institutions. I wonder if there’s any willingness to look at the issue of foreign students and to identify and deal with the gap that exists.
Suzy McDonald, Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance Canada: Thank you very much, Senator Harder, for the question.
With regard to foreign students, they are eligible, for example, for the CERB if they meet the criteria of having worked in Canada. I understand that foreign students are permitted to work up to 20 hours a week, and many of them will have met this criteria.
With regard to gaps that continue to exist for foreign students, I wasn’t certain if your question was with regard to the Student Emergency Response Benefit that was coming out.
Senator Harder: Yes.
Ms. McDonald: That’s certainly a question we can take back and continue to examine. As we’ve done with other programs related to the COVID response, as we identify gaps, we’re certainly listening to stakeholders, understanding what those gaps look like and looking at ways that we can improve the programs.
Senator Harder: Thank you. I appreciate that.
Senator Smith: Chair, I’d like to ask Senator Marshall to ask some questions on my behalf due to my technical incapacity here at the present time.
Senator Marshall: These are Senator Smith’s questions: The Minister of Finance has quite bluntly stated that Canada’s economy is in a state of recession. When asked about the possibility of raising taxes to finance the ballooning debt and fiscal measures announced due to COVID-19, the minister refused to comment, saying only that his focus was to continue to support individuals and businesses during this crisis. How is your department mobilizing at the threat of an economic recession? Does your department have a war room which proactively identifies potential threats to the economy?
Ms. McDermott: Thank you for the question.
Yes, we do. We are on a kind of heightened focus right now within the entire department on mobilizing the government’s resources to respond to the crisis at hand. As the minister has stated, it really is an unprecedented degree of economic decline. Of course, it’s a person-made coma that we’ve tried to put the economy into, and the focus right now is on providing this form of economic support to help individuals and firms make it through this period of disruption so that they will be strong enough to do well once we start the process of economic restart.
With respect to the fiscal situation and the cost of these measures, indeed, this is something that the department is looking at very closely and over the longer term will be giving consideration to our debt-to-GDP ratio, to keep it on a downward track and so on. Our view is that right now, it’s a time for support.
Senator Marshall: That’s fine.
The second question from Senator Smith: The federal response to COVID-19 includes billions in direct spending as well as tax deferrals and credit supports for businesses. Has Finance Canada undertaken any kind of a forecast analysis on the take-up of these programs, and how does that analysis compare with the acts and participation rate of each program? What metrics are being used to measure the success of each program?
Ms. McDermott: As mentioned, the FINA report is the latest place where we report our estimates of the fiscal impact of these measures. Those are public. We will, as mentioned, put out updates on our tracking of what we believe to be the fiscal costs of these measures. We are beginning to see some results from some of the programs like the CERB take-up and early results in terms of CEWS and some of the other measures, but for others, it’s very early days. You will see more reporting from the government over time. We haven’t yet —
Senator Marshall: So you’re looking at the programs individually, but have you done an overall analysis? Or are you just looking at the cost of each program individually rather than the overall cost to government and therefore its deficit?
Ms. McDermott: You are absolutely right. We’re looking at all of them both holistically and then we’re picking up data where we can on individual programs in order to try to track and make adjustments as needed.
Senator Marshall: Thank you.
Senator Dagenais: My question is for Mr. Marsland. Mr. Marsland, you are aware that when the state of emergency is over, we will be able to more closely examine the quality of the actions taken by the government. We have learned from journalists that companies are trying to set up fraudulent schemes to allow their employees to access the CERB amount by delaying the payment of their salary.
In addition, they have informed us that a directive at the Revenue Agency instructs public servants not to open an investigation when faced with suspicious cases.
Do you agree with a directive like that? If not, what are you going to do or what will the government do? Fraud can have very serious consequences and this type of situation must be stopped. I gather that it must have started happening.
Mr. Marsland: Thank you for the question. Indeed, it’s a good question.
In designing these programs, we were very much aware of the need for a timely response. We needed to make sure that the programs, whether they be the CERB or the wage subsidy, be delivered to those in need as quickly as possible.
Having said that, we do have built into them essentially the ability to go back after the fact to verify that the attestations made by the applicants were indeed correct. We made sure, working with colleagues in Service Canada and the Canada Revenue Agency, that we had the mechanisms in place to deliver, for example, the wage subsidy quickly, to do basic checks at the front end, but to make sure that we have the ability to go back and verify them. That’s one reason why the government introduced the wage subsidy through the Income Tax Act, because it allows all of the infrastructure of the Income Tax Act, the investigative powers of the Canada Revenue Agency, interest and penalty structures to be there to go back and verify that the claims were made appropriately.
I think the approach taken balances the essential need for timely delivery with the ability to do ex post verification and take whatever action might be necessary.
Senator Dagenais: Do I have time to ask another question?
The Chair: Yes.
Senator Dagenais: My question is for Mr. Marsland. For some time, we have seen Mr. Trudeau trying to avoid addressing a sensitive issue at media briefings, so I am going to ask you about it. We know that a lot of money, millions and even billions of dollars have been distributed, and I consider that it was all justified. Can you tell us today whether a tax increase is being considered? If your answer is no, how are we going to refill the coffers? Sooner or later, we will have to do it.
Mr. Marsland: Thank you for the question.
I’m sure you won’t be surprised that, as an official, I can’t speculate as to future policy decisions the government may or may not take. I think my colleague Ms. McDonald indicated that the department is working and will continue to work on ensuring that after the crisis is over, that we are in a position to provide advice to the government on what steps could be considered to restore our fiscal situation.
Senator Galvez: My questions are with respect to the transparency and efficiency of these measures.
With respect to transparency, I think that we are all worried about the EDC and the Canada Account. We understand that FINA will report on the CERB, CEWS and CESB measures, but what about Canada Account and EDC?
On the aspect of efficiency, I was happy to hear that the new program, the LEEFF program, will not give money to companies that have been convicted for tax evasion. However, I think the key word is “convicted.” Given that so little has been done by CRA in order to find fraudsters, and given that the big corporations can pay tax lawyers in order to keep on going with tax avoidance and tax evasion, we expect that only small players can be caught. How are we going to make sure that the money meets the purpose we want it to?
I have another little question if there is time available. My question was to Mr. Marsland.
Mr. Marsland: Perhaps can I respond to the second part of your question. My colleague is probably better placed to talk about the Canada Account.
In terms of tax evasion, tax avoidance, perhaps I would say that the government has taken significant steps — governments have taken significant steps. In recent budgets, we’ve invested over a billion dollars in resources for the Canada Revenue Agency to address aggressive tax avoidance and evasion, and they’ve instituted a range of programs to do that.
We have recommended and the government has accepted a number of legislative amendments that ensure that we’re implementing the base erosion and profit shifting recommendations of the Organization for Economic Cooperation and Development. A number of steps there.
In terms of the LEEFF announcements, the government did indicate that it wouldn’t be available for corporations convicted of tax evasion, as you indicated, and also that there would be an examination of the overall employment tax economic activity of the corporation to weigh its contribution to the Canadian economy.
Maybe I’ll leave it there. My colleague may wish to talk about the Canada Account.
Mr. Halverson: Thank you for the question, senator.
With respect to the Canada Account, there are several reporting mechanisms that will be connected to the support that is enabled through that channel. The first would be that Export Development Canada produces its own report, and that’s a statutory requirement, in respect of activities that happened through the Canada Account.
In addition to that, you do have, as my colleague Alison McDermott mentioned, regular reporting that is happening through the ministers’ submissions to the FINA Committee.
Ultimately, these programs, it would be fair to say, will all be the subject of evaluations that are done by the Auditor General and others. There is a fair amount of scrutiny on programs that are supported through that channel, as there is in others.
Senator Galvez: We all know that the bail-out of the automotive industry in 2008 was inefficient. I would like to know what is different from this bailout planning. What are the main differences, Mr. Marsland?
Ms. Dancey: I’m happy to address the question, at least in the first instance. I know one of my colleagues on the line, Soren, knows more about the previous auto file than I do.
I would just say, in respect of LEEFF, the intention is to provide short-term liquidity for firms that would otherwise be viable but for the COVID-19 economic shutdown. It is not intended to be a workout fund or a source of financing for restructuring of firms. It is intended to help companies weather this storm and be on a stronger footing for recovery but not to displace more significant workouts that companies may require to become sustainable.
Senator Galvez: I don’t hear anything.
Senator M. Deacon: Thank you to our colleagues at Finance Canada for being here today. I appreciate that.
My question is going to Mr. Marsland — thank you — regarding Canada’s Emergency Commercial Rent Assistance Program, that aspect. As I understand, the program certainly allows for the mortgaged-property owners to apply for support and for assistance. Then they are expected to reduce or forgive the rents for their small business tenants for the months that the owners are receiving this funding. Is there a way a tenant can check and see if the property owner has applied for this program? Certainly, in listening to different folks involved with this commercial rent, I’ve heard concerns that property owners can apply for it, but they may not actually be reducing the rents. They may be pocketing funds — perhaps using it for things not intended. I’m wondering what safeguards are in place to try to respond or to prevent this. Then I’ll ask another question. Thank you.
Mr. Halverson: Thank you, senator.
Essentially, the administrative details of that program have yet to be announced. I think all the points you’re making are well received and ought to be reflected in the design of the program as those details are released.
Senator M. Deacon: Thank you.
In that piece, as we get the accountability part of it in place also, I do wonder if, at some point in the consultation and planning, the tenants were able to apply for the funds directly? Was that given any consideration?
Mr. Halverson: Thank you.
The program was designed in the context of an environment where there were already arrangements between tenants and landlords with respect to deferrals and relief, and we were seeing quite a bit of that happen in different ways across the country. This is really being put forward as another option in a set of arrangements that people are coming to around these landlord-tenant relationships at this time.
Senator M. Deacon: My colleague Senator Harder talked about gaps. He addressed two gaps. Of course, one was a question about churches, and the other was about foreign students. My question is a little more general on gaps. I am wondering if you expect, Mr. Marsland, any upcoming changes to the CERB in order to fill in any emerging gaps that you’re seeing, as we all are, within the system?
Mr. Marsland: Thank you for the question.
While I can’t indicate what the government may or may not do, I would point to this process. It seems like it’s been around for a long time. That’s because it’s been such an intensive process. I think we’ve seen a process of necessary adjustments. I’ll take the wage subsidy as one example, where the government announced, in the background, what the approach would be. We benefited from significant input from industry, from other stakeholders and from parliamentarians, and we reflected that in the legislative design of the program. Similarly, the CERB started with a particular model and adjustments were made. If past history is any indicator, then I suspect the government would make adjustments as necessary to this suite of programs.
Senator Klyne: I have two quick questions. The first one I believe would be for Mr. Halverson. It relates to the government announcing that it set aside $3.2 billion in the Provincial Money Market Purchase Program and $13.6 billion for secondary market purchases of Government of Canada securities. Could the ministry provide an overview of the intent and aims of these programs and how they are contributing to the response to the COVID pandemic?
Mr. Halverson: Thank you for the question.
Like a lot of the other programs that the Bank of Canada has announced in the last eight weeks, the focus of those particular interventions was around ensuring that well-functioning markets were in place for key elements of funding. That happened on the provincial side. As well, it happened on the corporate side for corporate debt, including bankers’ acceptances and commercial paper.
What we’ve seen since mid-March, when there were pretty severe discontinuities in many financial markets, is very much a return to stability. By all appearances, provinces are having success in having markets that allow for them to issue debt.
I would say kind of going on some of the comments made earlier by some of my colleagues that, while it’s quite early to be judging the efficacy of these measures, the immediate effect does seem to be there in this case, and we’ve managed to succeed in having financial markets that are serving the purposes they’re intended to serve at this point in time.
Senator Klyne: Thank you for that.
I did have a second question. I think this one might be for Ms. Dancey.
My home province of Saskatchewan, like many provinces in the West, is facing challenges that are unique to our regional economies, but there are a couple of sectors that serve the country as a whole. The energy sector has fallen out, and the ag sector could come under some pressure as the shocks to supply and demand seem to be the order of the day. I expect that infrastructure investments aimed at economic recovery, I assume, are on the horizon. Has your department been collaborating with the ministry of infrastructure towards working with provinces on identifying any infrastructure projects that will provide jobs in the short term but leading into ensuring long-term economic growth and recovery for these sectors? Again, at the expense of being repetitive, oil and gas and ag do serve the country.
On the oil and gas side, are they coming together with the provinces and working on finding that balance with climate change but getting the export markets going, and in that regard, infrastructure to support that and make sure these projects work? We should be able to collaborate and find that made-in-Canada solution.
The other part of that, I’m also thinking about renewed interest in the Diefenbaker canal project and taking that one to the next level.
Ms. Dancey: Just briefly — I’m conscious of your time, senator — there have been a number of measures focused on this current lockdown and recovery period, both for oil and gas and for agriculture. I’m happy to follow up separately with the clerk to ensure that you have the necessary materials for those two sets of sectoral relief measures.
In terms of stimulus, I guess what I can say right now is we’re still very much in the stabilization period of our work to support the government. Certainly, stimulus would be something of interest on the horizon as the economy is ready to enter a restart and recovery phase. It’s not to say that we can’t use our brains for the short term, medium and longer terms. Certainly there are discussions that have commenced in terms of sequencing different activities as between restart and stimulus, but it’s too early for the current time to be more specific about stimulus.
The Chair: Thank you. Ms. Dancey, if you want to add additional information, please do so through the clerk.
I believe, honourable senators, we have the time for more questions to our first panel.
Senator Boehm: Thank you very much, Andrew Marsland and your colleagues, for joining us today at what is a historic meeting.
First of all, I would like to underscore the point made by my colleague Senator Harder concerning international students. I spoke yesterday with Paul Davidson, the President and CEO of Universities Canada, about how some of them are falling through the cracks. These students are an important investment in our future. Unlike some countries, we have not told them to go home, and many of them are benefiting from a little bit of leniency and flexibility on the part of IRCC in terms of their status in our country. I just wanted to underscore that point.
However, my question concerns the amendments to the Export Development Act, particularly the rationale behind having the EDC take on so much rather than the BDC in terms of its traditional mandate. I’d like to know whether there is a time limit provided in terms of EDC’s role or whether, in fact, there are plans to change that mandate and make it a little bit more permanent. That’s the first question.
The other is that the EDC registered a net loss of $914 million during the first quarter of this year as opposed to a $59 million profit or healthy balance at this time last year. There are obvious reasons for this. I’m wondering what sort of considerations are going into the determination of the Minister of Finance in terms of increasing the authorized capital of the EDC and where that will go.
I don’t know if this is for you, Mr. Marsland, or your colleagues, but over to you. Thank you.
Mr. Marsland: I’m afraid I don’t have the answer to that question. I don’t know if one of my colleagues does or if we need to get back to the committee on that. Soren, would you know the answer to that?
Mr. Halverson: I’m sorry, I don’t. I think we need to confer with colleagues in another branch of the department that isn’t represented at this committee today.
The Chair: Is that sufficient, Senator Boehm?
Senator Boehm: I think, chair, under the circumstances, yes, for now, but I’ll look forward to a more detailed answer. Thank you.
Senator Duncan: I’d like to give the background to my question, if I could. I’m assuming everyone can hear me because I’m not seeing any negative signs.
The Government of Canada has provided $500 million to provinces, and amendments to the Federal-Provincial Fiscal Arrangements Act were noted, and $72 million to territorial governments. I’d like to know how these funds were determined, whether it was through the equalization formula, the Territorial Formula Financing arrangements, or CHST. I would like to have a response to that question, if I could, in writing. I believe these questions are directed to Ms. McDonald.
What we’re seeing is a period of time with perhaps unprecedented cooperation and agreement in federal-provincial-territorial relations, and it’s also a time of innovation and support for Canadians. CERB particularly comes to mind, and it’s a program that crosses federal and provincial lines; Canada has had to ask the provinces not to claw back CERB from income assistance programs.
Canadians, as a whole, are seeing a patchwork quilt of programs to assist them. What happens is sometimes in a quilt, stitches get dropped. People get overlooked and stitches are missed, so to speak. In order to see that everyone is included and is covered by these programs and this quilt, are there discussions, task forces or public servant groups under way to discuss either — you might know it as guaranteed liveable income or universal income. Senators are preferring the phrase “basic income guarantee.” Are there discussions under way at the federal-provincial-territorial level, or is there a task force or group studying this proposal? Most specifically, does that task force or group include Indigenous relations? And if that answer is to be provided in writing, so be it. Thank you.
The Chair: Mr. Marsland, can you and your team respond to us in writing?
Mr. Marsland: I’m sure we can. I don’t know if Ms. McDonald would like to respond to that or if you prefer an answer in writing.
The Chair: Ms. McDonald, do you want to send it in writing, please, because of the time frame that we have?
Ms. McDonald: I can send it in writing, for sure. I can note that it was done on an equal per capita basis through the Canada Health Transfer, $500 million.
The Chair: Please give us more clarity to the question in writing. Thank you.
Senator Loffreda: Thank you all for being here at this historic virtual meeting.
I do know it’s a dynamic process, and going forward, every time we put together budgets we’d like to look at a best case, worst case and most likely outcome. Have you sat down to look at how much aid has been put out there for Canadians? Have we looked and considered where our debt-to-GDP ratio will be after all this, worse case, best case, most likely outcome? Because, of course, the Canadian consumer, I’ve said it often, is the vehicle of every economy and the motor of every recovery, and the Canadian consumer is being challenged by the lockdown because many are out of work. We may need stimulus going forward. Obviously you did answer previously. That was one of my other questions. What stimulus is the government considering for our Canadian economy? Have we taken a look at all that and given us some resources or leeway to be able to act going forward? To anybody on the panel.
Mr. Marsland: Perhaps I’ll start with the response and begin by stating the obvious. Clearly this was an extraordinary circumstance, unprecedented. I think the first and the current stage we’re in is one of supporting the economy while large parts of it are effectively shut down for health reasons. As the Department of Finance, we have been consumed by that, but at the same time we do look at scenario planning. That’s part of our job. We think about what comes next in terms of at what point is it appropriate to focus on recovery and maybe “stimulus” is the right word, but to shift gears into that. Clearly we are looking at that.
In terms of the fiscal situation, I think we had a discussion earlier about how we are monitoring that and providing advice to the government on the fiscal situation. But I think we will come to a point in the future, in the near future, where we have to think about what steps need to be taken, both in terms of recovery and in terms of fiscal policy.
Senator Loffreda: Now that the economies have opened up and restarted, a lot of Canadians are asking themselves, will there be a wind-down to the CERB?
Mr. Marsland: I’d respond, and perhaps not satisfactorily, by saying that it is an emergency benefit, and one would expect that it would support us through the emergency and then be reviewed at that point.
Senator Loffreda: Thank you very much.
The Chair: This concludes our first meeting using the video conference platform Zoom. I will ask for the guidance of the clerk on whether we need to take a one-hour break in order to prepare the next witnesses. What would be the time frame looking at our time zones across Canada?
Maxime Fortin, Clerk of the Committee: We are still scheduled to start the second panel at 5 p.m. Senators can stay connected to the meeting, you can close cameras, and come back around 10 to 5:00 Eastern Time. We will take a shorter break than expected.
The Chair: We will say to the witnesses, through Mr. Marsland, thank you for sharing the information and giving us your comments. We might call you back later on. However, at this stage we want to say thank you very much.
Honourable senators, we will resume our study on certain elements of Bill C-13, on the provisions and operations of Bill C-14 and on the government’s response to the COVID-19 pandemic and its economic consequences.
We now have before us representatives of Employment and Social Development Canada. First is the Assistant Deputy Minister, Learning Branch, Alexis Conrad. He is joined by the Associate Assistant Deputy Minister, Skills and Employment Branch, Elisha Ram; also joining, the Assistant Deputy Minister, Service Canada, Cliff Groen; also joining, the Director General, Program Operations Branch, Patricia Wilson; the Chief Financial Officer and Senior Assistant Deputy Minister, Mark Perlman; and Catherine Demers, Director General, Youth and Skills Innovation Directorate.
Thank you very much, officials, as witnesses, for accepting our invitation so that we can listen to your comments and then move on to the senators to ask questions.
If I may, I would like to thank you for your statements. We will go immediately to Mr. Conrad’s presentation.
Mr. Conrad, would you please make your comments?
Alexis Conrad, Assistant Deputy Minister, Learning Branch, Employment and Social Development Canada: Honourable senators, thank you for the opportunity to speak with you today about some of the supports that the Government of Canada has put in place in response to COVID-19, more specifically, financial supports to students, Employment Insurance measures and the Canada Emergency Response Benefit.
As a result of the COVID-19 pandemic, Canadians are experiencing unparalleled disruptions in ordinary life. Many have lost their jobs, have been forced to temporarily stop work and face uncertain futures. This includes many current and future post-secondary students who rely on work over the summer to help finance their post-secondary education.
We know that supporting Canadians at this moment is critically important, which is why the government has moved quickly to modify existing programs, as well as to create new initiatives to respond to the unprecedented needs created by the pandemic. These programs collectively not only help individual Canadians, but they also support the entire economy.
The programs and the measures that are to be discussed today are examples of the significant actions the government has taken to achieve this. The officials here today are responsible for those programs and can speak to the specifics.
Mr. Chair, rather than use all of the traditional time allotted for opening remarks, my departmental colleagues and I have opted to limit our remarks to just my comments now in order to maximize the time available to the committee to focus its attention where warranted.
Mr. Chair, my colleagues and I are pleased to have the opportunity to appear before this committee today and look forward to answering your questions to the best of our abilities.
Thank you very much.
The Chair: Thank you very much, Mr. Conrad.
I would like to thank the witnesses from the department for taking the time to be here and answer our questions. I would like to make a few comments and also remind you of certain instructions.
The steering committee has agreed that each member will have a maximum of five minutes. Therefore, I will ask senators to ask their questions directly to the witnesses before us. The clerk will use the application’s “raise hand” function to signal that each senator’s five-minute period is up.
If the senators who are not members of the Standing Senate Committee on National Finance wish to ask questions to the witnesses, I invite you to indicate that to the clerk using the application’s “raise hand” function. If there is time left, there will be a 10-minute period at the end for these senators, who also have the right to ask questions.
The order of questions for that portion will be randomly drawn. Finally, I invite all senators, when they ask a question, to clearly identify to which witness it is directed. If another witness wishes to add something to the answer, I invite him or her to use the “raise hand” function to indicate that. If there is time left, I will give the floor to that witness.
Honourable senators, we will move on to questions.
Senator Marshall: Thank you very much to the witnesses for being here tonight.
I wanted to talk about the link between the CERB and the wage subsidy program. I don’t know who to address my question to. I was reading an article yesterday that indicated that the wage subsidy program either will be or might be extended. One of the challenges you’re going to have is transitioning people from the CERB program over to the wage subsidy program because the numbers on the wage subsidy program apparently are very disappointing. The uptake of the program hasn’t met the expectations. Can you talk about how you’re going to transition people over to the wage subsidy program? The CERB is a temporary program. I haven’t heard anything regarding an extension to that program. It would seem that the impression being left is that these people on CERB will go over to the wage subsidy program. Can you speak about that? People are fearful about returning to work. There’s quite a challenge there.
Mr. Conrad: I believe one of my colleagues would be better placed to answer about the CERB program.
The Chair: Mr. Conrad, can you identify the witness from your group?
Mr. Conrad: To be honest, senator, either Elisha Ram or Cliff Groen. I’m not sure which of them is best placed.
The Chair: Can I ask either one to answer the question that the senator just posed, please? Mr. Ram, do you hear us? We can hear you, but —
Ms. Fortin: Sorry, the interpreters can’t hear you at all.
Elisha Ram, Associate Assistant Deputy Minister, Skills and Employment Branch, Employment and Social Development Canada: Can you hear me?
The Chair: Any other person present can take on that question, or you can answer it by writing to the clerk.
Mr. Conrad: Senator, I don’t know if Mr. Groen could answer. If not, we will happily prepare a written response. I apologize.
Cliff Groen, Assistant Deputy Minister, Service Canada, Employment and Social Development Canada: I’m Cliff Groen, the assistant deputy minister responsible for the delivery of the CERB program. Mr. Ram is the assistant deputy minister responsible for the policy pieces. That’s why Mr. Ram would be best positioned to answer this question, but I’ll give you a couple of pieces.
Certainly, we are aware of the interaction between the wage subsidy program and the CERB. One of the key elements that we see on the wage subsidy is that it will allow people to no longer require the CERB benefit. There is an expectation that people will gradually be transitioning off the CERB benefit on to the wage subsidy. You are correct that the wage subsidy has been either officially or the government has decided that the wage subsidy program will be extended. We’re very much aware of that interplay and are working on ensuring that people can effectively transition from one to the other.
The wage subsidy program is delivered through employers, so employers need to apply for the program. Although the numbers are a little less than had been projected, to my understanding it is still well over 1 million Canadians who are benefiting from the wage subsidy at this point. It’s still early days related to the wage subsidy. It has been in place only for a few weeks, and we’re expecting that number will increase in the coming days and weeks as well.
Senator Marshall: It doesn’t completely answer my question, but I’ll move on to the next one.
Can somebody explain the link between the EI program and the CERB program? I’ve been talking to people who have been employed for a number of years. They were laid off at work, and they told me they were put on the EI program initially, and then they were moved over to CERB. Why is that? If CERB is going to terminate at the end of the three-month period, can you tell me, do they then go on to the EI program? How do you transition? Can you explain that?
Mr. Groen: You’re very right; CERB is part of the EI program. It is being jointly delivered by Service Canada and the Canada Revenue Agency. When the CERB was designed and then launched, we realized that we had to be able to implement a program very quickly, given the millions of Canadians that would be without a job due to COVID-19. We also knew that the EI program, as it existed at the time, was not designed to be able to take on volumes of millions upon millions of Canadians applying. So as part of the overall policy design we designed this new program, CERB, which is a temporary program, which is a flat-rate payment of $500 and which is eligible for essentially anyone who has lost work due to COVID-19. There are other eligibility factors, but that’s the basic one.
For people who had applied for EI and were eligible after March 16, which is the start date for the CERB benefit, those individuals who had applied for EI, in the middle three weeks of March, we received well over 2 million EI applications. Those people that had already applied for EI were transitioned on to the flat-rate payment for CERB, and they’re eligible for up to 16 weeks, so that would bring them from the middle of March until early July.
For those individuals who have applied for EI, if they are still unemployed after the 16-week benefit period, they will be able to be transitioned onto the EI program. They’ve already submitted their application, and we are going to be transitioning them onto the EI program.
Senator Marshall: Do I have time for one more question?
The Chair: We’ll have to go on a second round, Senator Marshall.
Senator Forest: My question concerns the Canada Emergency Student Benefit. A lot of people believe that this could create an imbalance in the labour market during the summer months in sectors such as agri-food, nurseries and retail. Companies are actually concerned that they may not be able to find sufficient human resources.
My question is, would it not have been simpler to offer a wage subsidy to employers to encourage them to hire students, as is done with summer programs?
What was the reason for introducing this universal benefit rather than a wage subsidy? Why not have an incentive that would allow students to keep some of the universal benefit while working, to encourage those young people to contribute to the economic recovery during the summer months?
My question is for Mr. Conrad, but he may refer it to the individual he feels is in the best position to answer it.
Mr. Conrad: Thank you, Mr. Chair. With the senator’s permission, I will respond in English because I was using interpretation.
I appreciate the question, senator. I should stress the purpose of the student benefit is to help students who either cannot work or cannot find work. Nothing about the bill and the program is designed to discourage anyone from working. In fact, there are elements of the program that are still to be announced, but certainly from a legislative perspective I can speak to it. There are elements of the program that actually are going to help students and encourage them to work.
There will be a minimum amount of money that the student can earn over the four-week period and therefore still keep working while they get the benefit. This will allow students to work part time if that’s all the work they can find.
We are putting in place measures — in fact the legislation requires the minister to make employment opportunities available to students. Certainly we are building links through tools like Job Bank, which is a national job service. Many employers in Canada use that service, so we can push students in the direction of finding jobs. Our strong belief is that most students, in fact almost all students, would prefer to work and not only gain money but gain work experience over the summer, but some of them, because of restrictions or because of family circumstances or other reasons, will not be able to work or will not be able to find enough work. This legislation and the program underlying it are meant to support those students.
I can assure you there’s a significant effort to help students find work. Certainly one of my colleagues, Catherine Demers, I think, can speak to some of the efforts around Canada Summer Jobs and other programs where the government has taken deliberate actions to make more job opportunities available to students. Our sincere hope is that the minimum number of students who need to use this program do so because it means that the job market is available to them and the measures we are putting in place will help them find work. It is definitely designed as a support measure, not to replace work.
Senator Forest: Could you be more specific about the incentive for students to find work outside of government agencies in private companies?
Mr. Conrad: Senator, I can answer part of this, and I will refer to my colleague Ms. Demers for a little bit on some of the other programs.
Certainly through this program, as I said, we are setting a dollar limit and saying if a student earns up to a certain amount of money over the four-week period, they are still entitled to the benefit. That in itself should be encouragement to work rather than not work. It’s an important part. We are also using existing tools like Job Bank to push students there and to provide them tools that will help them not only find a job but learn how to find a job in this environment. There are literally tens of thousands of jobs out there, as well as connections to all sorts of sectors. The majority of agricultural producers, where there’s a definite need, use the Job Bank. We are pushing students in those directions to try to encourage them to find work with employers who are desperately looking for labour. That’s one piece of it.
If you allow me, I’ll refer to my colleague Ms. Demers to fill in a little from the programmatic perspective and how the government is also creating job opportunities for students in the private sector.
Catherine Demers, Director General, Youth and Skills Innovation Directorate, Employment and Skills Development Canada: I am pleased to help answer this question, because student employment is a complementary aspect of the April 22 announcement. We need to continue to support youth and student employment this summer and in the coming year. New investments have therefore been announced, and all of this will make it possible to draw on existing programs. These are additional funds to create paid placements, meaning jobs for students and youth in all sectors.
These measures obviously include the private sector. The additional funds were allocated to the Youth Employment and Skills Strategy program: $153 million will go to creating at least 6,000 additional placements in what are known as “critical sectors.” These are areas that have increased demand —
The Chair: Ms. Demers, I must stop you there because we have exceeded the time allotted to the senators. If you wish, you may come back to the question and ensure that you complete the answer, taking into account the last question asked by Senator Forest and the explanations provided by Mr. Conrad. You may do so in writing to the clerk, Ms. Fortin.
Senator Richards: I’ll continue on with this line for a second. There seems to be a bit of a mixed message here about work and not working. What are the eligibility requirements for returning to work? If a company opens, for instance, and reopens, and workers are worried about going back because of social distancing or whatever, because we’re still in the midst of this pandemic, are there specific stipulations to warrant them returning to work, or can they stay on the benefits they’re going to get? And how will that affect their business?
Another question for anyone on the panel: Coming from a university town, many of the students are up in the air about when this money is going to be available and the dates they can apply for it. I would like someone to answer that for me. Thank you very much. Anyone on the panel, please.
Mr. Conrad: Thank you, senator.
I can answer the second question from the honourable senator as far as program launch. You’re correct that the legislation did not specify the date the program would be launched. That is something that will be set in the regulations, which will be issued by the minister very shortly. I cannot scoop an announcement, but I can tell you that the launch of the program is very close. We fully understand the need to launch the program quickly, because we do believe the need is out there and the government is firmly committed to meeting it.
The Chair: Would anybody else from the department like to add to that?
Senator Richards: The first part of my question, please.
Mr. Ram: I’d like to apologize for not being able to respond to the first question by Senator Marshall. I was having some technical difficulties, but I’m back now.
Senator, to your question, the legislation that created the Canada Emergency Response Benefit is very clear that individuals cannot quit their job voluntarily and benefit.
Ms. Fortin: Sorry, Mr. Ram, but the interpreters still can’t hear you well. Do you have a microphone attached to your earphones? Can you try maybe talking closer to the microphone on your computer? The interpreters still can’t hear you.
The Chair: Mr. Ram, could you please go back to the question that was posed and answer it in writing to the clerk? Would that be satisfactory? If you want to bring more clarity, please do so. Also, you mentioned that you would like to respond to Senator Marshall’s first question. Please do that also.
Mr. Ram: I shall. Thank you.
Senator Harder: Welcome to our official guests.
I have a couple of questions. The first is with respect to the student and colleges student support program. I very much welcome the initiative that was taken but feel there continues to be a gap with respect to foreign students, those 380,000 students who do not fit the criteria of the program as it was announced. I’d be grateful if the department could respond as to whether or not they are prepared to work with the university and colleges associations to put in place programs that would meet the unmet requirements of that cohort that is so important to our institutions.
My second question is a suggestion, really. I’d welcome the department providing the committee with certain progress benchmarks with respect to the programs that you’re administering. I’d like to know whether the T’s and C’s for the programs have been approved. Have all Treasury Board submissions been approved so that the programs can be launched? If not, when do you anticipate launching the programs so that we can, in our oversight role, have some sense of how you are going about it?
My final point is a suggestion. When the earlier governments instituted what was called the Knowledge Infrastructure Program, the KIP, the implementing department brought in auditors right at the beginning to sit with the program managers and the deliverers of this initiative to, in a sense, prepare for the inevitable AG report on the success or the problems identified at the start of a program. I’m wondering whether the department is considering doing that for the inevitable review in the months and, indeed, years ahead by the Auditor General to better prepare us collectively for such a report.
Mr. Conrad: I can certainly start to answer the first part and a little bit of the other parts of Senator Harder’s questions. Some of my colleagues may want to jump in and provide other details, specifically on the more horizontal issues.
Senator, I fully appreciate there is a discussion going on in some places around the needs of international students. This program, the legislation passed by Parliament, limits the student benefit to Canadian students or protected persons and Canadians studying abroad. It does not cover international students who are studying in Canada. From a legislative basis, that is in there.
We do know there are hundreds of thousands of international students in Canada from around the world, and Canada’s international education market is a significant success. Canada’s international education strategy is targeting growth in the sector, which is important. Certainly I cannot speak to what the government might do in this space, if anything, but I can tell you that we have had lots of representations from different groups. I have followed parliamentary testimony, I’ve met with several of the associations themselves, and we understand well why they think there’s a need.
Government has put in certain measures to help international students. Certainly it has taken some restrictions off of work permits to make it easier for international students to work more, which we felt was important. Those supports, we do feel, are important to helping international students find work because that is definitely part of a lot of their plans while they’re here. But as of now, the legislation passed by Parliament does limit it to Canadians and protected persons. Beyond that, I can simply say that I’m aware of the discussion.
From the student benefit process, from a launch perspective, we have all the authorities in place. Parliament has provided the authorities, the minister will launch the program through regulations, and we are fully committed to getting that under way quickly, so that in itself is covered quite well.
I’ll stop there, but some of my colleagues may want to weigh in on some of the broader issues.
The Chair: On this, I notice that we’ve elapsed five minutes. Again, Mr. Conrad, to you and to your officials, your partners, if you want to answer the questions that were just posed by Senator Harder and provide a follow-up in writing, we would appreciate that. Is there a commitment on your part?
Mr. Conrad: Certainly, senator. We will look through the summary of the testimony, and if there are any gaps where we feel a question was asked that wasn’t answered, the department will follow up in writing. We’ll commit to looking at the Hansard testimony afterward.
The Chair: Thank you.
Senator Smith: My earplugs are on the way, so I’ve passed my questions on to Senator Marshall, who will fill in for me again.
The Chair: Senator Marshall, I recognize you for five minutes, if you please.
Senator Marshall: I don’t have the questions.
Senator Smith: Oh, great.
Senator Marshall: Sorry, I haven’t received any questions.
The Chair: Senator Smith, any other comments?
Senator Smith: No, I’m good. Thank you very much. I apologize.
Senator Dagenais: My first question is for Mr. Conrad. Mr. Conrad, I would like to talk about oil. The drop in the price per barrel that occurred before the COVID-19 pandemic is catastrophic for a province like Alberta; it will obviously have repercussions on the entire Canadian economy.
Although oil is criticized by environmentalists, it remains a leading industry, especially when we understand that it is not just used to run cars and trucks. Does Canadian oil still have a future? How do we save those jobs?
Mr. Conrad: Thank you, senator. I think one of my colleagues, Mr. Ram, may be a little bit closer to some of the issues that are going on in the oil patch. If the senator agrees, I will ask him to see if he can answer and apologize for putting him on the spot.
The Chair: Mr. Ram, if you can come very close to your mic, please, maybe we could have better reception.
Mr. Ram: Okay. Are you able to hear me now? Can the interpreters hear my voice?
Ms. Fortin: No, the interpreters can’t hear.
Mr. Ram: I apologize. I don’t know why that is. We will certainly provide a written response to that question, if that’s okay with the chair.
The Chair: Absolutely, after you look at Hansard, Mr. Ram, and please do so directly in writing to the Clerk of the Finance Committee.
Senator Dagenais: I have a second question for Mr. Groen. When the assistance programs end, many Canadians will find themselves unemployed. For years, Canada has looked to immigration to fill jobs in the high-tech or agricultural sectors. Will the pandemic force the country to review its policies for welcoming immigrants if we find ourselves with a surplus of unemployed Canadians?
Mr. Groen: Thank you very much for the question. I am responsible for service delivery, but not for processing policies or labour market strategies.
Mr. Ram will be better able to answer that question. As we are currently having difficulty with his microphone, we will give you a written response later. We apologize.
Senator Dagenais: Thank you.
Senator Galvez: Some of my questions have already been asked, so I’m going to ask something more global, and hopefully our guests can answer. This pandemic, COVID-19, has put in evidence something very important, which is that the economic value of a given employment is inversely proportional to the social benefit of it. We have, in the low bottom economy, workers who have very low pay but face very high risk. I’m talking about the nurses, the police, the firefighters, the cleaners, the chauffeurs, and they receive very small compensation during this pandemic.
I can tell you that in my province of Quebec, 40% of the workers in the medical area are missing because it’s too low pay for the risk that they run. I know there has been some announcement on increasing the wages for these workers, but do we have something else to offer them to come back to work, having in mind that there will be a second and maybe a third wave and that our health system is already very much weakened? Thank you.
Mr. Conrad: Senator, unfortunately, some of the workforce questions are generally Mr. Ram’s responsibility. I know he’s having some technical issues. I’m sure he would love the opportunity to respond to the senator’s questions. Beyond some general statements, I’m not necessarily the person who could answer the question, and I feel it may be better, if Mr. Ram’s technology is not working, for us to provide a written answer, because I think the senator deserves the best answer the officials can provide.
The Chair: As chair, I would like to bring to your attention, can you give us a time frame of at least five to ten working days to get the answers in writing?
Mr. Conrad: Yes. We are fully committed to as quickly as possible, and it seems like a reasonable time frame for us to be able to find the answers and send them to the committee.
The Chair: Thank you.
Senator Galvez: The graduate and undergraduate students work on research, and the research projects have stopped. There is very important research going on for the vaccine, the treatment and many other things. The economy needs to be relaunched at a point. How fast are we going to bring research work back into the labs of Canadian universities?
Mr. Conrad: To the senator’s question, all Canadian universities and the university sector and provinces and the Government of Canada are concerned about the broader impacts on the post-secondary system in Canada, and that certainly includes the research part, which is an important part of Canada’s post-secondary system and Canadian economy and our innovation. There have been lots of discussions with the university sector about how to make sure that we don’t lose that research capacity, including not losing access to international researchers who come to Canada and are funded to work here, which provide an important contribution.
I cannot put a date on it. In fact, because the universities are regulated by the provinces and have a certain amount of autonomy themselves, they will make their own decision about when they can open and what they can open on what basis, but certainly the Government of Canada’s financial contribution to the research community has been strong and will continue to be. These are incredibly important positions and work for the Canadian economy.
Senator M. Deacon: Thank you for being here today. Certainly we appreciate all the work you’re doing and the agility on which it must be done by.
As we continue to look at COVID-19 oversight, I have two questions, one general and one specific. As we listen and look at the aspects of this, wage subsidy, CERB, our student emergency relief, some programs that are two-month, three-month, four-month windows and trying to continue to respond and keep up to the needs of Canadians, perhaps even trying to get ahead of the curve, I’m wondering from your perspective what you see as your biggest challenges as we move from June, July, August through to September. Some things we don’t know, but we do know there’s diversity in this country of actions, recoveries, re-imagining the work and the family worlds. I’m wondering, as you’re trying, and it’s hard, to look around that corner, what you might see as your biggest challenges in the next three or four months. Mr. Conrad.
Mr. Conrad: Thank you, senator, for the question.
You’re right that there is a lot of agility required in this space. The sheer number of programs the government has quickly launched over the last couple of months is almost staggering historically. Programs have been designed in a very flexible way in many cases to adapt to changes. We are, as you articulated, dealing with a pandemic that is severe, widespread and uncertain in terms of when we will have the epidemic not only under control, but when business and life as per normal can start again and what that recovery looks like. The government and Parliament have made decisions to put programs out in a certain style for a certain period of time. I think the government has shown, as any issue has come up during the program launches and since then, a willingness to adapt and listen and try to make sure the programs are flexible.
I’ll give you an example of the student benefit. I know this was a conversation during the parliamentary process. A lot of the authority rests with the minister to issue regulations to define different types of students and to set the amounts and duration of the benefits. While I know that is a question Parliament wrestles with, the balance between the regulations and the legislation on an ongoing basis, it is a purposeful and useful tool in this environment to give the government flexibility to make changes as the situation evolves.
The challenge for the country is, yes, there are different impacts across different jurisdictions in the country, different communities and the changes are different for everyone, so we have to adapt to that environment. We have done our best to design programs that are flexible, but the sheer pace of how the virus evolves means we constantly have to be on guard to see where the impacts and gaps are, and that’s something we’re firmly committed to. As you pointed out, it requires an agility that we have never really seen before and that we are doing our best to manage.
Senator M. Deacon: Thank you.
One of those areas that you just touched on for a moment — thank you — relates to education and our students. Looking around the corner, students, of course, are thankful for work they can do and for financial support they will be receiving mid‑month. However, we know now that universities are pretty much going to be an online learning environment. You’re hearing the announcements perk up each day about universities and decisions that it’s going to be online, and this is what it might look like from September to December or more.
We are now sort of wondering about students who could be foreign students who are spending $50,000 a year to come to school in Canada, whose parents may be paying, and Canadian students who are saying, “Really, online for me is not how I want to learn this fall. I get it, and I understand it, but I want to take a pass on school this fall so things can settle down and I can find a university environment that is better suited to my learning for a number of reasons.”
Is there any thought yet around the table of what that might look like in the fall for students who may not have the money to be in school or might make the choice that the return on their investment is not good for them in online learning and now they’re looking for work and choosing not to be in school at this moment in time?
Mr. Conrad: Thank you, senator. I can answer both of the questions, I think.
On the first part, the student benefit is designed to make up for lost income, which students use to live during the summer, but also it’s an important component of paying for post-secondary in Canada. It’s an immediate program, but the government at the same time has announced plans to significantly increase student grants, in some cases weekly loan limits, to waive certain restrictions, also recognizing that students will need more support, particularly lower-income students who are the focus of financial aid programs and are the most vulnerable to economic changes in terms of their post-secondary participation, and those grant increases including temporarily doubling the basic grant is critical to allowing them to afford to go to post-secondary. Whether the school is physically open or whether online learning is the right tool, that will allow, we believe, hundreds of thousands of Canadian students to be able to afford it, in the same way the program works every year that helps finance post-secondary education for lower-income students. So that’s important.
The other part in terms of when students don’t feel comfortable going, whether the campus is open and they didn’t feel comfortable or they don’t feel that online learning is the key piece of it, one of the elements of the legislation to establish the student benefit actually allows a student to receive the benefit — allows the student to attest to the fact that they are going to go back to school before February 1, 2021, rather than September 20, when school would normally go back. That’s an acknowledgment that the post-secondary system has a lot of uncertainty. We don’t know whether schools will be open. We don’t know if all programs will be open. Some are very difficult to do online, as we well know. That basically is a time period that is usually in the second semester, which means that they can claim money over the summer if they can’t find work and to afford to go to post-secondary later.
The Chair: Mr. Conrad, again, thank you very much. I have to cut you off on that. Please, again, with our patience, we’re becoming what I call moving forward with the new technology. If you don’t mind, again, if you want to complete your answer in writing, it would be appreciated.
Senator Marshall: I did have the email with Senator Smith’s questions. It was buried deep with my other emails.
This is Senator Smith’s first question: A record number of Canadians have applied for federal assistance over the last few weeks. Federal departments tasked with this monumental job have been overwhelmed. For example, some people have been paid twice as a result of EI and CERB claims, there are problems with transferring over pregnant women’s EI applications to CERB, and finally there are reports of long wait times to reach agents. How has your department prioritized building system capacity to deal with the additional requests for help? Has the department drafted protocols ensuring that application backlogs and wait times are reduced?
Mr. Groen: Thank you very much, senator. I will answer those questions.
Certainly the volume of applications that we have experienced over the last almost two months now has been unprecedented. All I can speak specifically to is the Canada Emergency Response Benefit. When we initiated the design of the benefit, there were three key criteria that we set up in order to be able to deliver it: It needed to be simple because we knew that we needed to make changes to our systems that would allow it to be implemented in a very fundamental, easy way. Second, it needed to be speedy. We knew that when Canadians were losing their jobs, that we needed to be able to provide a really timely benefit payment to them. Third, it needed to be safe.
Our systems, as many of you would know, are not state-of-the-art systems. Our EI system is over 45 years old, as an example. We needed to make sure that the system would be able to handle the volume.
We are very pleased with how the system has responded and note the overall program has been able to be delivered. Over 98% of the people who have applied either to the Canada Revenue Agency or to Service Canada for the CERB have been processed and they have been paid. We are very pleased as well that our technology has stood up against the test of time.
We’ve implemented a lot of different fixes related to our technology as well, one of which is on the call centre side. We do know our EI call centre has been overwhelmed with demand as well. We have about 1,000 staff normally in that call centre. We took a number of different measures, some of which was on the technology side. We enhanced the technology. Up until very recently, we had calls trying to come in to our call centre that would be blocked because there was a technology limitation. We were having hundreds of thousands of people being blocked at that level every day. We implemented a technology fix a couple of weeks ago, and now no one is being blocked coming into our EI call centre. Everyone is able to get into the automated system, in which they can receive lots of information and actually submit information that allows them to continue to get paid.
We also stood up a new call centre specifically for the CERB. It’s a new 1500-agent call centre that we stood up. Within nine days, we had stood that up. It was launched on April 6. That call centre over the last just over a month has answered over 500,000 calls.
We do know that there continue to be Canadians who are trying to get through to the EI call centre who are having challenges. We are continuing to hire additional staff there. We expect to increase the capacity of that call centre by over 50% in the coming weeks and short number of months as well.
There are lots of different measures we are implementing. Things overall for the vast majority have been working well. We know when we’re dealing with these types of volumes there will always be challenges, and we are doing our absolute best to be able to respond on a very timely basis to all Canadians.
Senator Marshall: Thank you for that very timely and thorough answer.
Has the department identified groups of people with extraordinary circumstances who don’t meet certain criteria or are unable to benefit from the programs? Are there any ways that people can channel their needs so that the department can respond?
Mr. Groen: I’ll maybe speak to two examples. One example is tied to your earlier question as well related to maternity benefits.
There had been a challenge that pregnant women had encountered when they were initially applying for the CERB benefit. That’s because in the EI system, which we are leveraging to deliver the CERB on the Service Canada side, we do ask applicants if they are pregnant. The reason we ask that question is to be able to help transition someone off of EI regular benefits onto maternity benefits.
When we first launched that, we weren’t able to have an automated solution in which we could have them apply under CERB and then transition onto maternity benefits. We’re very pleased to confirm that we implemented a fix for that last weekend. Now, as a result, all women who have applied for the CERB are receiving the CERB. Their next payment will be reflected at the CERB flat payment amount. They will also be able to transition onto the maternity benefits when their child is born.
Related to other measures to help Canadians, we are particularly concerned about vulnerable Canadians who may not have access to the internet and may have other challenges, so we have arrangements across the country with different community organizations that work with the most vulnerable people in our society. We have dedicated service being provided to them in which we provide streamlined access and service to help those Canadians that are having particular challenges as well.
Senator Marshall: Thank you very much.
Senator Klyne: Welcome to our panel.
This question is likely for Service Canada, Mr. Groen. It’s in the realm of the Canada Emergency Wage Subsidy and CERB. I know it’s early in the game, one might say, relatively speaking, in terms of lessons learned, but has your ministry considered how the responses today may shape how Employment Insurance works in the future?
To take that a step further, looking at the future, I think there will be very different expectations from support programs. Has your ministry thought about how programs such as EI, training subsidies for apprenticeships or other programs will look as we come through this into a post-epidemic economy?
Mr. Groen: Thank you, senator. I don’t believe my colleague Elisha Ram has addressed his technology issues. I’ll answer a couple of pieces, but it is more in Mr. Ram’s bailiwick.
Certainly COVID-19 has demonstrated and has challenged governments around the world related to the accuracy of different responses. Certainly the EI program — we know the way that it was set up and the way it’s delivered — would have been unable to meet the dramatic increase in demand that we have seen. That is why we implemented the CERB. Essentially, we’ve put the EI program, for many intents and purposes, on hold for the time being. We also know that the transition off of CERB onto EI is going to be one of the huge challenges going forward, because we do expect there will be lots of Canadians who will unfortunately still be out of a job.
We are absolutely tracking lessons learned. There are initial conversations under way related to what this means for the future, related to appropriate income support measures and how we can leverage lessons that we have learned so far. We’re very much in the midst of the wage subsidy program. We are very early on related to that. We do anticipate that take-up will increase significantly. Then the interplay between those two benefits is something that we’re absolutely going to be looking at going forward. So thank you.
Senator Boehm: I’m in hot pursuit on Senator Klyne’s question and the earlier question from Senator Smith as conveyed by Senator Marshall. That is regarding data and how it is being collected for future use. There are a lot of people who have fallen between the cracks. There are new programs coming forward. There are differences in our country in terms of bandwidth capability and also those who are most vulnerable. I was encouraged to hear, Mr. Groen, that the call centres are faring better now and that there are systems in place. As a former bureaucrat myself, I know that one quickly establishes standard operating procedures and lessons learned and all of that.
It’s really twofold: We would, as a country, have to be prepared for a second wave of this or perhaps something unknown, a COVID-20 or a COVID-21. Second, if you assess all of this and if, in your not-so-ample spare time, you have a chance to make policy recommendations, is this not the time to look at a guaranteed liveable income as a possible solution for all of those who would fall between the cracks — including seniors because, after today’s announcements, they’re going to be making applications? Many of them are not internet-literate or might even have difficulties with call centres. Thanks.
Mr. Groen: Thank you, senator. Maybe I’ll start with the latter part of your question and then tie it to the earlier part.
First of all, related to the new grant payments that were announced today and that will be going out to seniors, I’m pleased to confirm that, in fact, people will not need to apply for that benefit. The grant will be available to Canadians who are receiving the Old Age Security benefit, as well as the low‑income recipients of the Old Age Security, so those who receive the Guaranteed Income Supplement. Those senior citizens will not be required to apply. Instead, we will be able to simply deliver the program without any application. There will not be a requirement for people to navigate the complexities of needing to apply.
Certainly, more broadly, in terms of your questions about the broader considerations and lessons learned, I can primarily speak on the delivery side because that’s my scope of responsibility. To be frank, we knew prior to this, and we had business continuity measures and plans in place, but there’s nothing like a real crisis to make us realize how adequate were our plans. To be frank, we were concerned about the resiliency of our systems. I’m very pleased to be able to confirm that we have been able to continue to deliver the programs largely seamlessly for millions of Canadians.
That said, the overall program design of our existing programs has certainly made it difficult to provide timely benefits. That is why we implemented different measures to address that gap. Certainly, moving forward, as we look at a post-COVID world, whether it be in the event of future crises, and with nature of crises, you can never actually predict what the next crisis will be, but also just in a broader changing environment, those are definitely pieces that we are trying to build on lessons learned. Certainly, I’m sure, in the coming months and years, there will be further considerations about what other measures would be appropriate.
Senator Boehm: Thank you.
Senator Duncan: Thank you to the panellists and my colleagues for this first Zoom session.
The panellists have mentioned cooperation between departments, EDC and CRA, and how there’s been a certain agility to respond. My first question pertains to that cooperation between departments. I’m asking, as I’ve asked earlier, whether there is a working group, at the officials level or at the ministerial level, looking into the basic guaranteed liveable income programming going forward.
I look forward to that response, but I’d like to add to that. I haven’t heard, in any of the responses, of the involvement of CIRNAC or Indigenous Services Canada. We are aware that there are a number of areas where program gaps have been identified. There are differences in the programs that are delivered, on-reserve, off-reserve, by self-governing First Nations, by those who are not self-governing. Would the officials please elaborate, either today or in writing, what cooperation or what identification of work with Indigenous Services or Indigenous populations has been undertaken to ensure there is no one left behind in these programs? Thank you.
The Chair: Mr. Conrad, would you have any comments? Then we could ask the other officials, please.
Mr. Conrad: Thank you, Mr. Chair. I can touch on the senator’s second question around Indigenous Services and engagement with Indigenous peoples from a student perspective.
We do actually work very closely with Indigenous Services on a day-to-day basis anyway, but certainly through the development of the student benefit. We wanted to make sure that, for example, when the regulations come out and we defined the list of institutions where students are going to be eligible for the funding, that we take into account Indigenous institutions and the specific needs of Indigenous peoples. We also very much, with their participation, take into account the different ways that Indigenous students are funded to ensure that when we say $1,000 or whatever amount is the maximum someone can earn, that we exempt certain assets and certain scholarships and other bursary programs through Indigenous organizations to not penalize the students unnecessarily. That level of cooperation is very strong.
The government was also very clear to ensure that the eligible students included anyone registered as an Indian under the Indian Act. All of these measures, including our existing programming, are very much working with Indigenous Services and CIRNA, where necessary, to make sure that we capture as many eligible people as possible, particularly in the Indigenous space where they certainly are the experts and we rely on them for policy guidance.
I’ll stop there and see if any of my colleagues have any comments on the former question.
The Chair: Do the other officials have any comments on that question? No comments? Did you have another question, Senator Duncan?
Senator Duncan: Could I go back to that question? What I’m hearing, by the lack of a response, is that there is not any kind of an intergovernmental — federal or provincial — interdepartmental group in the Government of Canada looking at a guaranteed basic income or minimum income guaranteed for Canadians. The preferred name is the basic income guarantee. There is not a group looking at this, not a task force, not officials, not ministerial. Could the officials confirm that, please?
The Chair: Mr. Conrad, can you bring any clarity to the question?
Mr. Conrad: I would invite any of my colleagues to supplement my answer.
Senator, I would prefer you didn’t take our lack of a response as any position on what the government is doing. It’s actually more a reflection of our responsibilities and what they are. I don’t know if any of us here actually would be the person who could speak to that kind of policy work going on, so I can’t say that it is or is not happening. I can simply say that I’m not aware of it just by the mandate of my job, and I think my colleagues are probably in the same space. This is something we can follow up on and see if there is anything we can provide in writing.
Senator Duncan: Thank you very much. I appreciate that.
The Chair: Thank you, Mr. Conrad. Again, going back to your answer that you need to bring additional information, with the officials that we have now and appreciate in our meeting, if there is a dire need to have officials or professionals who are not here, there’s no doubt that you can bring those questions to their attention for a response. Do we agree on that?
Mr. Conrad: Yes, senator.
The Chair: Thank you.
Senator Loffreda: Thank you to the panel for being here.
In the business community, in the essential services, there has been some concern about labour shortages and people wanting to return to work. As businesses start to open up and as the provinces and territories start to open up, to restart, the concern is: Has the CERB acted as a disincentive for people seeking employment? Do you have any statistics, or has there been any discussion around that that you can share with Canadians and the concerned business community? What mechanisms are being used to monitor and ensure that the CERB recipients are accepting reasonable employment opportunities, especially when offered by their previous employers?
Mr. Groen: Thank you, senator. I will answer some of these questions. Again, Mr. Ram would be more able to answer some of the nature of them, so perhaps we can get back in writing on this.
To be eligible for the CERB, people need to have either lost their job or been quarantined or sick due to COVID-19 or be taking care of someone who needs to be taken care of related to COVID-19. People are not eligible for CERB if they voluntarily quit.
We are certainly aware of the interest in having people be able to come back to work. That is one of the reasons why, shortly after the CERB was first launched, the criteria were changed. Initially, people were not allowed to earn any income, and then that shifted to now people are allowed to earn $1,000 of income.
We are aware of the issues related to people being able to return to their jobs. As we continue to move forward, one of the reasons the wage subsidy was introduced as well was actually as a different mechanism, so people would not be required to be on CERB but their employer could be on the wage subsidy, and they could be looking for employment opportunities there.
Related to follow-up measures related to the overall integrity of the program, both Employment and Social Development Canada and the Canada Revenue Agency do have a number of different mechanisms where we will be able to confirm that people are meeting the entitlement criteria related to the program, and we will be working together on addressing those measures.
In terms of broader policy pieces, that is much more Mr. Ram’s bailiwick than it is mine. Thank you.
Senator Loffreda: On another point, and just to follow up on Canadians falling through the cracks here, according to the Canadian Centre for Policy Alternatives, there are approximately 850,000 currently unemployed Canadians that will not receive Employment Insurance or CERB benefits. Is there a program or something being looked at — not to get specific but in general — to ascertain that most Canadians do receive benefits and are not left behind?
Mr. Groen: Thank you, senator. Related to different policy options that are being explored, unfortunately, it would be Mr. Ram who would be better positioned to answer that question than myself. My apologies.
Mr. Ram: Thank you, Senator Loffreda, for your question. It’s clear that when the Canada Emergency Response Benefit was introduced, my colleague has already expressed the key intent was to put out a benefit that was simple and that could be quickly implemented.
As the government has gone along and we have learned more about the current crisis, changes were made to make the benefit more accessible and to bring additional Canadians within the scope of support. The number that my colleague has already quoted, I believe, in terms of over 11 million claims and almost 8 million individual claims, show that the benefit is reaching the majority of Canadians. Of course, we continue to monitor the situation, and the government, I’m sure, will make additional decisions as we learn more about the current situation. Thank you.
Senator Loffreda: Thank you very much.
Mr. Conrad: Senator, I would simply just add, just to fill in one of the gaps, that the student benefit itself is designed to fill in what was felt to be a significant gap for populations who needed income support. Our estimates were about 800,000 students were eligible for CERB. That still leaves over a million students in Canada who wouldn’t be, some of whom are part‑time students and work at different times of the year, and this benefit is designed to help fill in what was deemed to be a significant gap that’s important and is a big part of any number. Thank you.
The Chair: Thank you.
Honourable senators, let us go back to the first session we had earlier, before the break. We had the steering committee, and we had advised all senators and all participants that we would also consider senators be able to ask questions even though they are non-members of the Finance Committee. We do have senators who are present, and we could, as per the directives that we had shared with you, ask those senators to ask a question. That would be in consideration of asking Senator Martin, Senator Pate, Senator Lankin and Senator Forest-Niesing to each ask a question. Honourable senators, and all the Finance Committee and to all Canadians who are linked to us, this would show that the trailblazing, new type of information for Canadians can work.
Senator Martin: I want to first say that I’m actually attending as ex officio, as Senator Plett’s designate, as he is the Leader of the Opposition, and to also acknowledge the good work of the committee. Thank you very much.
This is a question that has arisen in a conversation with some other colleagues. There’s a concern about a recent headline that I’m sure most of our senators, if not all, have read. In light of all the good work that is being done and programs that are necessary, the headline read, “Do not impose a stop pay, federal workers ordered to ignore cheating in CERB and EI claims.” The article describes an internal memo about potentially 200,000 applications to have been red-flagged already. That’s quite a large number. While we can appreciate that there is a need to ensure Canadians who require the CERB to have quick access to the funds that are needed, 200,000 is quite a large number, and Canadians would be concerned about turning a blind eye to potential fraud.
I have a question to Mr. Groen or to others. The minister’s spokesperson, Marielle Hossack, recently described “backend safeguards” to ensure repayment. What does that mean? What kind of tracking of overpayment or fraudulent activity is being done? Is there a time frame to identify these cases, or can a person who took advantage of the situation to receive monies they were not entitled to expect the government to come knocking within a certain number of years down the line? Are there fines or jail time? There are two questions. One, Canadians need to know that we are cognizant that this is happening and we’re aware of what those fraudulent activities or overpayments may be and, two, what will happen to those who are potentially taking advantage of this current situation? I and others would be very eager to know what is meant by the backend safeguards. Thank you.
Mr. Groen: Thank you very much, senator. Certainly we are aware of that media report, and there are a few elements I would like to highlight.
First, we absolutely do take protecting the public purse to be very serious. I’d like to reassure senators and all Canadians that there are a number of different strong, robust integrity measures that are in place to protect the integrity of the program and Canadian taxpayers’ money.
Regarding your specific question, there are a couple of elements. Regarding the 200,000 number, we are aware there are just over 200,000 Canadians who did receive a duplicate payment shortly after the CERB was first rolled out. Those individuals, we believe, mistakenly applied both to the Canada Revenue Agency and to Service Canada. We have implemented a control in place in which no longer will there be duplicate payments that will be issued, and for those approximately 220,000 Canadians who did receive duplicate payments, that money will be recovered from them by the Canada Revenue Agency over the coming months. That work is very typical of activities that the Canada Revenue Agency does.
Both Canada Revenue Agency and Service Canada have a number of different program integrity measures in place that support the delivery of the programs that we’re responsible for, and we’ll be leveraging that type of work for the delivery of CERB as well. That includes data matches. We do match data between ourselves and the Canada Revenue Agency, to the largest federal department. We also receive records of employment from employers, and therefore we are able to data match that information against Canadians who have applied, and there are a number of other measures that we can and do pursue.
That said, we knew when we were setting up the benefit that, because of the huge number of Canadians who would be applying for the benefit, initially we had to put a primary focus on delivering the payments. If you put a lot of upfront controls in place, that can slow down the timeliness of the payments. We knew at first glance that we needed to get payments out very quickly, but then absolutely there will be additional programs taking measures of pursuit going forward. I’d like to provide that reassurance. Thank you.
Senator Pate: Thank you to the committee for allowing us to participate, and thank you to the officials who are here.
I’m just picking up on that last question. Our office has been contacted by a number of people who did receive double payments, and when they contacted the officials, they were advised to keep that money aside because they will have to pay it back. I think many of us, and some of the officials I’ve spoken to, have been very heartened by the incredible honesty of many Canadians.
I want to ask a bit about how the CERB is working in particular for Indigenous peoples. Some of my colleagues have asked about what we’re looking at in the coming phases, or the second phase or the going-forward phases in terms of what may be continuing on after CERB, in addition to the wage subsidy. I’d like to ask what you’re looking at in particular for Indigenous communities, particularly those who have not been eligible thus far, and what do you know about the other groups? Could you explain to us, please, which are some of the groups that you know are not being served by CERB? We certainly have been tracking some of them. How are you keeping track of that, and how are you ensuring that, in the future, groups will be protected and will be able to benefit from the resources that are being made available?
Mr. Ram: Thank you, senator. I appreciate the question.
Basically, there are two parts to your question. The first part had to do with how we are engaging with Indigenous groups. At the ESDC, we have a dedicated group that works closely with Indigenous communities, and we have been using those relationships to engage with communities to ensure, first, they are aware of the different programs, not just the CERB but other programs that our department and other governments are offering.
Ms. Fortin: Sorry, Mr. Ram, but the interpreters can’t hear you anymore.
Mr. Ram: I apologize. I don’t know what’s happening.
The Chair: Mr. Ram, can you again go back to answer through Mr. Conrad, and answer the question that was posed, please, in writing?
Mr. Ram: Gladly. I will do so.
The Chair: Thank you very much.
Senator Lankin: Thank you to the witnesses who are here today.
May I just begin by saying that the public service is not often rewarded for taking risks. This has been an incredible challenge that the whole country — and the whole world — has been engaged in. I want to pay tribute to the work that has been done, how difficult we understand that it is and how appreciative we are of the continuing identification of gaps and people falling through the cracks and bringing forward policy design changes and service delivery changes to meet those needs.
I’m going to follow up on a number of the questions. You can tell there are a number of us who are very concerned about the evolution of the program design of programs like CERB. I want to concentrate on that. A group of us in the Senate has been working on collecting case studies of Canadians who are still falling through the cracks despite the program redesigns and the patches and additional eligibility that have been put in place. I know those program fixes came about because you recognized that there was a problem.
Mr. Groen, let me put the question directly to you in terms of the service delivery. You mentioned the number of Canadians who are receiving it, and I think that is a number to be pleased about. It is helping people. You must also have some idea of the numbers of people who have tried to claim and have not met criteria. I’m sure there are others who have not even tried to claim because they’ve read the criteria and don’t believe they meet it.
I would say the same thing with respect to service delivery to seniors with the latest announcement. It’s great that you’re using existing programs that are targeted, minimum income supports to seniors to deliver it, but if you look at John Stapleton’s work and many others across the country, we know there are a lot of seniors who are eligible or would be eligible for OAS and have not applied for that. We don’t have the capacity in the public service right now to reach out and problem solve and try to find these people.
I’d like to know specifically who’s falling through the cracks that you’ve been able to identify, and I’d like to hear whether or not the government puts forward a program to fix that, how you’re gathering that information and how we can work together with you, with the information that we’ve been gathering across the country from Canadians who are still not getting benefit and who are in very dire straits now, in states of desperation from people that we’re hearing from.
Thank you very much for the opportunity to ask a question.
Mr. Groen: I’ll be able to speak on the service delivery and those pieces, and I’m not sure if Mr. Ram would be able to participate.
In terms of gaps, senator, you mentioned the challenge related to old age pensioners or people who have not applied for the Old Age Security pension or the Guaranteed Income Supplement. We have actually been focusing over the last few years and making extensive efforts in terms of outreach to different Canadians who, based on the information we have or that we have received from the Canada Revenue Agency, we believe are in fact entitled to the benefit and should be receiving it. We have actually been able to significantly decrease the gap in terms of the number of people that should be receiving the Guaranteed Income Supplement and in fact are not able to. Those measures have been taken, and we’ve decreased that gap significantly.
However, during this emergency, obviously, we’re focusing on just being able to maintain our critical services. For those people, we will be undertaking additional measures after the crisis to continue that outreach to them, and once we are able to sign them up for the benefit, if they were eligible during this period, they would certainly be receiving that additional income.
The other piece on the service delivery side is we’re reaching out to different community groups because those groups are often working very closely with the most vulnerable people in our society, whether it be the homeless, people with disabilities or different people who have other challenges, so we are doing that outreach as well.
Those are some of the key pieces we’re undertaking.
The Chair: Mr. Groen, you did mention that Mr. Ram could probably tie in with additional information. Would it be sufficient to ask Mr. Ram to do the same exercise we’ve done with previous questions, that he looks at the question asked by Senator Lankin so he can bring clarity to it?
Mr. Groen: Certainly. I’ll make that request.
The Chair: Thank you.
Senator Forest-Niesing: I would like to thank the witnesses. My question is for Catherine Demers, and it is about the Canada Emergency Student Benefit. At a previous meeting, during a discussion on the dimensions of this program, there was talk of recognizing the importance of clear communication and creating opportunities for students, and also ensuring that employers, both in government and the private sector, are able to reach students who are looking for work. You mentioned that you use the Job Bank to facilitate this communication.
How exactly do you reach employers? How do you convey to employers that they need to post available positions on there? If you use other methods, could you elaborate on them?
Ms. Demers: Thank you for your question. I can answer for two of the programs for which I am responsible, and I also have information that may be of interest to you about the Canada Summer Jobs program.
Regarding the Youth Employment and Skills Strategy and the student internship program, these programs create placements providing internships for youth and students in the workplace. We work directly with partners from various sectors. In some cases, groups of organizations or industry groups we work with will make a proposal. They will say, for example, “We have 500 student internships to fill in the so-and-so sector.” So it is all based on project proposals. The project proposals can come from various groups. This is the case for one of the programs.
The other program is somewhat similar. The student internship program is for post-secondary students. They are co-op placements in partnership with employer groups, post-secondary institutions and the organizations delivering the program for us. These organizations bridge the gap between the two. They determine which employers have internships and which post‑secondary institutions have students to place whose skills are in demand for internships. A whole network of partners is helping us to connect with employers.
The Chair: Thank you.
Senator Gagné, you have the floor. You are the last, but certainly not the least.
Senator Gagné: I’d like to thank the witnesses for their presentations and I commend the excellent work being done to serve Canadians in this time of crisis.
Universities and the Canadian government rely heavily on international students, both financially and to build the country’s workforce. In 2018, international students contributed $21.6 billion to the Canadian economy.
I would like to look at this from a different perspective; I come from an official-language minority community and I know very well that international student participation in the various programs at colleges and universities can make a difference to a community’s development and vitality. Their participation can also make a difference in terms of which programs are available in French. Finally, this all helps students get involved in community development.
Was this factor considered when implementing the Canada Emergency Student Benefit, with respect to the development of official-language minority communities? In the future, would it be possible to look into this flaw in the system and find out why international students do not receive the same support as other Canadian students?
The Chair: Senator, is your question directed to a particular witness?
Senator Gagné: To whomever can give me an answer.
The Chair: Mr. Conrad, can someone answer the question?
Mr. Conrad: I can answer the question about international students. As I explained to Senator Harder, the government is well aware of how important foreign students are for the Canadian economy, immigration and communities.
In Canada, a lot of effort is made in different departments to support students, including Immigration, Refugees and Citizenship Canada and Global Affairs Canada. This program, the CESB, is for Canadian citizens, permanent residents and Indigenous people, but although only those groups are eligible for it, many other efforts are made to support international students.
The Chair: Mr. Conrad, I would like to thank you and your team for being here. We agreed that you would refer to the committee proceedings transcript to answer more questions, if possible, and to clarify some answers. We thank you for that.
I would also like to thank the national finance committee team. You have done an extraordinary job.
As chair, I think this could not have happened without the great team of National Finance. Together, we have accomplished an unprecedented exercise. There is more to come. Congratulations to each and every one of you, including your staff. To the clerk, Maxime, thank you very much. I think it’s worth clapping because the team did a super job.
Honourable senators, our next meeting will be Tuesday, May 19, at 2:30 p.m. Eastern Time.
Honourable senators, good evening. Canadians wanted to have an oversight committee. We are one of the committees. We will continue to do our job for Canadians.