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OTTAWA, Friday, November 13, 2020

The Standing Senate Committee on National Finance met this day by videoconference at 10 a.m. [ET] to examine the subject matter of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy); and, in camera, for consideration of a draft agenda (future business).

Senator Percy Mockler (Chair) in the chair.


The Chair: Good morning, my name is Percy Mockler, a senator from New Brunswick and the chair of the committee.

I would like to introduce the members of the Finance Committee who are participating in this meeting: Senator Boehm, Senator Dagenais, Senator Deacon (Ontario), Senator Duncan, Senator Forest-Niesing, Senator Galvez, Senator Klyne, Senator Loffreda, Senator Marshall, Senator Richards, Senator Smith, and we also have Senator Pate participating.


Welcome, everyone, and welcome to all the Canadians watching us on the Internet as well.


Senators, this morning we continue our study of the subject matter of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy), which was referred to the National Finance Committee on November 5, 2020, by the Senate of Canada.


For this group of witnesses, today we welcome representatives of the Canada Mortgage and Housing Corporation.


From the Canada Mortgage and House Corporation, we have Nadine Leblanc, Chief Risk Officer. She is accompanied by Paul Mason, Senior Vice-President, Client Operations; and Elizabeth Leblanc, Senior Manager, Operations.

From the Canada Revenue Agency we welcome Mr. Ted Gallivan, Assistant Commissioner, Compliance Programs Branch; Geoff Trueman, Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch; and Randy Hewlett, Director General, Legislative Policy and Regulatory Affairs Branch.

Welcome to all of you. Thank you, witnesses, for accepting our invitation. I have been informed that Ms. Leblanc will make a statement, followed by comments from Mr. Gallivan.


Ms. Leblanc, the floor is now yours.

Nadine Leblanc, Chief Risk Officer, Canadian Mortgage and Housing Corporation: Good morning, and thank you, Mr. Chair.


I would like to begin by acknowledging that I am joining you today from the traditional, unceded territory of the Algonquin Anishinabeg people.


When the COVID-19 pandemic reached Canada, the federal government turned to the Canada Mortgage and Housing Corporation (CMHC) to deliver a number of measures to help stabilize our financial system and support the economic well-being of households and small businesses. I am pleased to say that we responded quickly and effectively in every instance.


One of those programs was the Canada Emergency Commercial Rent Assistance for small business, or CECRA. While the program was not housing related, we were pleased to make our real estate expertise available to help struggling entrepreneurs.

The rationale for CECRA was straightforward. The commercial real estate sector makes a substantial contribution to the Canadian economy and its workforce. Moreover, across the country, thousands of small businesses were forced to close or experienced significant declines in revenue due to COVID-19. CECRA was designed to help these impacted businesses cover the monthly rent cost and remain viable until the economy reopens.

To that end, CECRA, which was jointly delivered with provinces and territories, offered forgivable loans to qualifying commercial property owners. The loans covered 50% of monthly rent payments for eligible small business tenants during the period from April 1 to October 30.

If the qualifying property owner reduced their small business tenants’ rent by at least 75 %, and both the tenant and the owner comply with other program requirements, the loan would be forgiven. Tenants were responsible for paying the remaining 25% of their monthly rents. Property owners were prohibited from evicting tenants while a rent reduction agreement was in place.

To be eligible for rent relief, small business tenants had to be paying less than $50,000 per month in gross rent in a given location and have annual revenues of less than $20 million. Moreover, they must have experienced at least a 70% drop in pre-COVID-19 revenues, on average, for the period of April, May and June.

As CMHC did not have the capacity internally to deliver CECRA, we contracted with MCAP, a long-standing participant in our mortgage loan insurance and securitization programs, to subadminister the program. Committee members are no doubt aware that CECRA faced some early challenges due to a large number of applicants, the speed at which the program had to be implemented and the obstacles created by the pandemic. Working together, MCAP and CMHC made a number of improvements along the way to facilitate the application process and encourage the uptake.

For example, we allowed manual application submissions for landlords who did not have internet access. We also provided legal templates so that the property owners would not have to seek legal counsel. We offered additional tailored application support to small businesses in need and we initiated a program to specifically assist large property owners with multiple tenants.

I am pleased to say that CECRA delivered rent relief to thousands of small businesses, preventing an untold number of business failures and associated job losses. As of today, more than 139,000 small business tenants have been supported, representing 1.25 million employees. We have delivered more than $2 billion in rent support and continue to process applications received before the cut-off date.

The financial assistance provided by CECRA for small business is forgivable as of December 31. Over the coming months, we will be conducting a quality review to ensure compliance with the program requirements. Should non-compliance be uncovered, repayment of the financial assistance may be required.

As the committee knows, CECRA ended October 30 and has been replaced by the Canada Emergency Rent Subsidy, which will be administered by the Canada Revenue Agency.

Thank you for the opportunity to make these opening remarks, Mr. Chair. At this time, it would be my pleasure to answer any questions the committee may have.

The Chair: Thank you, Ms. Leblanc. Mr. Gallivan, the floor is yours.

Ted Gallivan, Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency: Thank you for inviting the Canada Revenue Agency to appear before you today.


The CRA is here today as our agency has been tasked as the program administrator of both the Canada Emergency Rent Subsidy and the Canada Emergency Wage Subsidy.

The CRA has administered the Canada Emergency Wage Subsidy since March 2020, with a total of 1.4 million — nearly 1.5 million — approved applications, and with a dollar value of subsidies paid out totalling $46.8 billion. Both of those figures are as of November 1, 2020.

The CRA is well positioned to continue its administration of the program, as proposed in Bill C-9, including possible changes to the rates and top-up calculation.


For those eligible to apply, the CRA will continue to have extensive information online, the calculator as well as a dedicated toll-free telephone number to assist Canadians looking to use these programs.

With respect to the Canada Emergency Rent Subsidy, this will be a new program for the CRA to administer. We are confident in our team’s ability to launch it in an expedited manner. If it is the will of Parliament to pass this legislation, our goal would be to open applications for the subsidy as quickly as possible after Bill C-9 receives Royal Assent, should that happen.

My colleagues and I welcome your questions about CRA’s administration of the two proposed measures contained in Bill C-9.

The Chair: Honourable senators, we will now proceed to questions, and I would like to share some information for this panel. You will have a maximum of five minutes each; therefore, please ask your questions directly to the witnesses, and, witnesses, please respond concisely.

The clerk will make a hand signal to show that the time is over. Then I will proceed to the next senator. However, before I recognize the first senator, I would like to bring to your attention a fact that I want to share with you: Our National Finance Committee is a trailblazer by being the first parliamentary committee to study legislation providing financial support related to the COVID-19 pandemic and Canadians.

Senator Marshall: Thank you very much, Mr. Chair.

I’ll direct my question to both organizations for a response, but I wanted to start with the predecessor CECRA program and the problems parliamentarians were encountering with that.

The biggest problem was the lack of financial and program information. I know the CMHC administered it, and I kept checking the CMHC website for information, but there’s very little information available. We were aware that as of June 30, $196 million had been disbursed, and then the next thing I saw on November 2 was that it had jumped up to $2 billion. So there was very little information. There was a press release, a bit of information in the quarterly financial statements, and then there was a little bit of information in ministerial briefing notes that are on the CMHC website. So I did have a problem tracking what was happening with the program.

I’m not quite sure now; I understand that the Canada Revenue Agency is going to administer the program. I would like to know what the plans are for reporting on the new rental program so that parliamentarians can access current information on the program.

Ms. N. Leblanc: Thank you for this question, senator. I will state from a CMHC perspective that in terms of reporting, we have met our obligation, which included daily reporting to our Minister of Finance, Department of Finance as well as the Privy Council Office. We have also committed to provinces and territories to report weekly, and we have also met that commitment. We do report our results, volumes and targets into our quarterly financial report, which is public on a quarterly basis.

Just to make sure that we’re all working with the latest data, I would like to provide insight as to where we stand today. We have certainly assisted over 139,000 tenants.

Senator Marshall: Thank you. I just want time for the Canada Revenue Agency. The fact that you provided the information to the minister didn’t preclude you from putting information on your website.

Can the witnesses from the Canada Revenue Agency tell us whether you are now responsible for providing transparent information on this program? And what will you provide?

Mr. Gallivan: Thank you for the question. I would say that our focus is to integrate this with the wage subsidy program. Going forward, this will be the responsibility of the CRA in terms of administering the program, reporting and providing the numbers you’re talking about. I don’t know for sure whether it’s going to be a monthly or a weekly type report, but I would say that the public reporting we’ve had to date with the wage subsidy program would be the reporting we provide.

I can confirm internally that we’ll have the data, and we’re monitoring some of this in real time on a daily basis. I think it’s just a question of getting it validated by our chief data officer in public. I don’t want to speculate whether it’s weekly or monthly, but on a regular basis there will be the reporting similar to what you’ve seen with the wage subsidy.

Senator Marshall: As parliamentarians, we require that information, so what’s being provided on wage subsidy is very informative. Yes, I would like to see you proceed in that direction.

Senator Marshall: For the Canada Revenue Agency, since you’re taking over this program, how quickly will you be able to disburse funding?

Mr. Gallivan: We expect to be able to open applications 72 hours after we receive Royal Assent. We’ve built the system in two modules. The first module to accept claims can be in place as early as November 20. We would begin issuing cheques on December 1, and we expect them to be in people’s bank accounts by December 4. Of course, all that is contingent on getting Royal Assent.

Senator Marshall: Thank you very much.


Senator Forest: Thanks to the witnesses for being with us.

To continue in the same vein as Senator Marshall, in July, our committee produced an interim report — an excellent report, by the way — in which we recommended that the Canada Revenue Agency make public the amounts recovered from individuals who received emergency benefits to which they were not entitled or who obtained them fraudulently, clearly identifying the amounts for each program and, if possible, differentiating between applications made in error and those found to be intentionally fraudulent.

Has this been done? If not, do you intend to account for the amounts recovered?

The Chair: Mr. Gallivan, can you answer the question?

Mr. Gallivan: I can confirm that the CRA continues to correct the errors detected in these emergency programs. We also continue to try to identify and categorize fraudulent claims. This work is ongoing. The 2020 income tax return, for example, will be an important tool to properly confirm the accuracy of certain payments.

It is premature to provide such figures, but the fact that we do not have aggregate amounts does not mean that we are not working hard to confirm the accuracy of payments. Taxpayers have already reimbursed the CRA for a number of payments made in error. We also have cases where the non-compliance was more determined. We are therefore working on it, but we will be able to verify the accuracy of claims in 2021 primarily through tax returns.

Senator Forest: Will we then be able to get an idea of the proportions and amounts recovered for payments due to error or attempted fraud?

Mr. Gallivan: Yes.

Senator Forest: Thank you.


Senator Klyne: Welcome to our guests on the panel this morning. I have a number of questions. I’ll start with your recent report where substitution of temporary income support makes CMHC cautious that reported levels of disposable income can support the housing market. I assume that means a bit of a sense of a false economy or security. Further, the wage subsidy offers temporary income assistance until June 2021, which CMHC has noted causes instability.

My question is twofold. If the proposed wage subsidy does not make Royal Assent, is there a concern around mortgage defaults? Second, assuming the proposed wage subsidy will pass, what is the projected timeline until our housing market becomes vulnerable and what regions of Canada are facing the greatest vulnerability?

Ms. N. Leblanc: I can definitely speak to mortgage insurance risk and the housing market risk that we certainly are monitoring, senator, right now at CMHC. We are definitely stress testing the mortgage insurance book, and monitoring the deferral and performance of these loans. Our stress testing would indicate that right now, markets are still very positive and that is a result of all of the income support programs that the government put forward quite proactively at the start of the pandemic.

That said, we continue to monitor, given the second phase, the risk that we see, the severity of the virus and the cases that we continue to see. We are certainly providing some financial results to our quarterly financial report on this matter.

Some provinces have seen greater impact, but as it stands today and as I mentioned, performance of our loans continue to be quite positive and only time will tell, as we navigate through this pandemic, the impact of the housing market.

I will pass it over to my colleague from the Canada Revenue Agency to answer the second part of the question.

Senator Klyne: If I’m satisfied with that answer. Can I ask another question of CMHC?

The Chair: Absolutely.

Senator Klyne: We’re seeing historically low rates, currently set at 0.25%, which means Canadians are stimulated to borrow, and I understand that many of them are doing this to upscale their cocoon or bubble and ride through the COVID storm. CMHC released a residential mortgage industry report that identified COVID-19 measures have resulted in a total of 760,000 deferred or skipped mortgage payments across chartered banks. So there appears to be a tale of two Canadas emerging, those who will benefit from low interest rates and those who are struggling to pay their current mortgages.

As COVID continues to create uncertainty, what proportion of deferrals will become defaults and what are the demographics of Canadian homeowners most likely to default, by region and by ethnicity, if you have it?

Ms. N. Leblanc: This is an excellent question. As it stands today, our deferral percentage stands at 7%. Obviously, this is showing quite a positive decrease in terms of the numbers of deferrals. Our models would suggest that approximately 10% could go into default with the deferral portfolio today, but I would continue to say that it is not known yet how this pandemic will unfold, how long we will be waiting for this vaccine. Therefore, it’s a little bit too premature to exactly quote a number in terms of potential default that we would see coming out of this pandemic.

We do know that through our models, there is stress testing, which is not a forecast. It’s rather a severe scenario that would indicate 10% to 20% of potential deferrals going into default.

Senator Klyne: Is there a region identified as the most vulnerable?

Ms. N. Leblanc: Our models today would indicate that the oil-producing provinces are definitely more at risk, but again it is too early to tell, and we are getting more data and insight on a daily basis.

Senator Richards: I am going to give my allotted time up to another senator today. I’ll sit and listen and learn. Thank you very much.

Senator Boehm: I have two questions. One is for CMHC and the other one is for CRA. I want to ask about support for multi-unit homeowners because of the increasing vacancy pressures in the rental market. Millennials are out of work in some cases and can’t pay their rent. Immigration levels are depressed as well. Students are staying at home with their parents and working online. So those who have multiple units are in difficulty. With the pandemic into its second wave, I’m wondering if there is consideration being given to more relief to those who are multi-unit owners as we look ahead.

Chair, if you wish, I will ask my question of the CRA as well. This is with respect to the same company benefiting from multiple programs. My understanding is that the government cut the amount of funds of the rent subsidy at $75,000 per location and $300,000 for affiliated entities, but I’m interested in knowing whether a company is limited in the number of programs it can apply to. So, for example, the same company, by meeting the criteria of each individual program, could simultaneously benefit from the CEWS, from the CERS and from lockdown support. I think that’s the case, but I would like to hear it.

Ms. N. Leblanc: Thank you for this question on the multi-unit space. Rental is certainly a product that is near and dear to CMHC in order to achieve our affordability mandate and also the delivery of our National Housing Strategy.

I would say that, to your point, we are definitely seeing some shift into the rental space either through foreign students, as you mentioned, immigration trends, and also certainly some impact to rent pricing and levels. This will involve some risk in terms of the valuation of these properties. But what is interesting for CMHC is the affordability piece. Increasing the supply, especially in the large CMAs, will certainly have an impact on the affordability of the rental stock.

We are monitoring these trends. As we all know, vulnerable communities have been greatly impacted through this pandemic, especially renters. It is important that we make sure there is enough supply to meet the needs, and make sure these vulnerable communities have access to affordable housing.

Most recently, you have seen CMHC launch the Rapid Housing Initiative, which gets to the heart of recycling the infrastructure to make sure we can create greater supply and meet the needs of our vulnerable communities that have been greatly impacted. It is certainly a risk that we are monitoring right now in the rental space, but it is also an opportunity for CMHC to deliver on our affordable mandate.

Mr. Gallivan: The short answer is that these two measures are stackable. You could claim up to a maximum of 65% under the wage subsidy, plus the 25% top-up, so 90% of eligible expenses. They are additional, if that answers your question. If you have a more technical question, Mr. Hewlett or Mr. Trueman may come in. These two measures in this bill are stackable and an eligible business could have up to 90% of their expenses subsidized.

Senator Boehm: Thank you very much. That’s what I wanted to know.

Senator Duncan: As Senator Mockler has advised, I’m sponsoring Bill C-9 in the Senate. My question relates to the CMHC representative.

I’m interested to hear this morning your outline and review of the initiatives. I wonder if we could have a breakdown by region. Part of our role as senators is to represent our regions, and I’m wondering if we could have that information by region. Certainly we don’t need to have it today. If you could send it to us in writing, that would be fine.

Mr. Chair, I believe we’ve had the Canada Revenue Agency on record with the time frame of their ability to process payments, and that was my key question this morning. Thank you very much for the opportunity.

Ms. N. Leblanc: Senator, that is not a problem. We will definitely follow up with comprehensive reporting after this meeting.

The Chair: When will it be possible to receive information? Do you have a time frame, Ms. N. Leblanc?

Ms. N. Leblanc: It could be as soon as today or early next week. We do report this type of information to provinces on a weekly basis, so it will not be a problem.

For some reference points, the provinces of Quebec and Ontario are the largest takers of this program, but we will report in detail by province following this meeting.

The Chair: Hopefully today, as this will give us additional information.

Ms. N. Leblanc: Not a problem.

Mr. Gallivan: Again, I want to emphasize that it is a two-tier process. The date we open the system and begin accepting applications and the date we can actually admit payments are distinct. We are going to launch a promotion to encourage businesses to take advantage of the calculator and to help them get it right. Again, it’s driven by Royal Assent and 72 hours thereafter.

Senator Loffreda: My question is for both the CMHC and the Canada Revenue Agency. Thank you for your presentations and thank you for being here.

Bill C-9 has been a great relief for Canadians and Canadian businesses. We rarely explore the other side of the coin, and it is important in order to pay for the relief packages put forward.

What is the Canada Revenue Agency’s projections on revenues coming in for 2020-21? Will the reduction in these revenues increase the deficit and our debt? To what extent are you concerned with that? It is very important with respect to the relief packages being put in place.

My question to the CMHC is on the overall state of the real estate market. I feel strongly that commercial and residential real estate is connected, and I understand and feel strongly that the wage and rent subsidy have helped in keeping both markets healthy.

You did project earlier that property values will decrease from 9% to 18% in Canada. That has not happened. Do you have projections going forward? What is your concern? My concern is about vertical living, condominium projects, which might be affected because of the pandemic. Is that an area of concern? I feel the real estate market is all connected, and I want to be certain that our rent and wage subsidies are good investments. Thank you.

Mr. Gallivan: I will say at the outset that colleagues from the Department of Finance might be better placed to give a more in-depth answer. Speaking from a tax administration perspective, we have our eyes on a few things.

First is the control on the emergency programs, the measures we’re talking about today, making sure they go out quickly but to the right people.

The second thing I’d mention, in my own area of responsibility, is the compliance function. In the large business space and in the sophisticated taxpayer space, it has been a process of adapting. But the number of audits, the volumes and the dollars we’re seeing continue. In that respect, I don’t see a significant change.

In the small business space, definitely moving toward warnings. Insolvency is definitely going to go up. We are planning in terms of our debt management function.

In the business space, I would cite businesses having losses and being able to reduce their income because of their losses, but CRA being in a position to make sure they are accurate amounts and to give early certainty.

From an administration perspective, we’re focused on ensuring the fairness of the tax regime and that sophisticated taxpayers who can handle it continue to pay what they owe, being sensitive to the situation of small business; and then with an eye on debt and losses, trying to be as timely as we can to address those. They’re starting now and I think they’ll be big focuses for the agency in the coming months.

Ms. N. Leblanc: We want to remind everyone that our projection is certainly not a prediction, and that was put forward in the spring. At that time, businesses were closing, there was a drastic impact on the economy and it was not clear where this pandemic crisis was leading us. The results are definitely peak to trough, so we have to remember how to interpret these results and projections.

These forecasts are definitely something that we continue to monitor. The deferral period came to an end on September 30 and time will tell with regard to the performance of these loans.

To your point on condos, this is a risk area we are monitoring. We have seen softening in that market in the last couple of months, and our property risk models are demonstrating a trend such that we need to continue to monitor the condo markets.

Senator Loffreda: Thank you for your responses. I’m glad to see the commercial and residential real estate markets are being well followed and all is being well monitored by the revenue agency.

Senator Smith: I have a question for both groups. In our discussions and deliberations with witnesses, there was some concern over the lack of success of the first trial that was managed by CMHC. For CMHC and now for the CRA, what are the lessons learned from the first volley of this rent subsidy program? What did you learn and what will you improve on in phase two so that there is a higher pickup and possibly a larger success of the program in phase two as opposed to phase one?

Ms. N. Leblanc: In terms of lessons learned, certainly the speed of this program was so critical. Small businesses out there were definitely forced to close and needed support. So for us, the speed was so important and was definitely a decision in our operating model and the execution of our CECRA program.

Certainly the volumes at the onset was something we had to adjust along the way. There are many small businesses out there. It’s an industry that definitely needs that support, and the volume that came in the first few weeks was certainly something we had to adjust along the way.

I would also say the small business community is quite diverse. It ranges from self-proprietors to larger businesses. Some people don’t have access to internet and are manual. There are subsidiaries and all levels of complexity, so along the way we had to quickly tap into our expertise in commercial real estate to understand the diverse community and tailor our approach to make sure we answer everybody’s needs.

The final piece in terms of lessons learned is the new technology within this program needed a lot of communication. Throughout the delivery of this program, we have had constant updates on our website to make sure we brought timely information to our small businesses.

Senator Smith: What advantage does the CRA now have that the CMHC didn’t have in the first volley?

Mr. Gallivan: First, the landlord is being removed from the equation and we can deal directly with the business. Second, payment will be on a sliding scale, so a little more for everyone. Third, we’ve built this on the wage subsidy, which is a known quantity now, so lowering the burden for both businesses, practitioners and ourselves. Fourth, working with stakeholders like the CFIB, CPA and others to extend their reach and get them to give us early feedback on how we’re going to run this thing. And fifth, we do enjoy certain economies of scale. With the second-tier review, for example, I was able to find 1,300 employees, train them and get them ready to handle it. Therefore, we do enjoy certain economies of scale at the agency.

Senator Smith: Thank you very much.


Senator Dagenais: My question is for Mr. Gallivan. Several entrepreneurs have expressed concern about the difficulty they experienced in properly completing the documentation required to obtain government assistance. Could you tell us about the process? How long does the process take? How long does it take to receive a payment? Of course, you have surely taken steps to make public servants more efficient. Finally, are you receiving fewer applications than you anticipated?

Mr. Gallivan: I will begin with the last question. It was hard to predict the number of applications for emergency programs because we had no previous experience. It was also difficult to say what the expectations were because estimates were very hard to make. For us, the important thing was to make sure we were able to manage the applications. So far, we have been able to do that.

In terms of facilitating applications, many of our clients are comfortable with our website. We have a calculator and smart forms, and we can provide assistance. This helps us better support our clients.

With respect to working with stakeholders, you recently welcomed Dan Kelly, from the Canadian Federation of Independent Business. We have been working with him and several other organizations to better raise public awareness. Mr. Hewlett, who joins me today, spends entire days explaining the program. I think it has helped a lot. In addition, we’ve set up dedicated phone lines and assigned hundreds — sometimes thousands — of additional staff to these operations. Finally, we use compliance program liaison officers as a second-level team to contact taxpayers who may have difficulty navigating our website. We have put a huge amount of effort into proactively helping people to claim the benefits to which they are entitled.

Senator Dagenais: If I may, Mr. Chair, I have one last question. Ms. Leblanc, you told us that some Canadians do not have access to the Internet. Have you evaluated how many people were unable to receive the subsidy as quickly for that reason?

Ms. N. Leblanc: Thank you for the question. We don’t have exact figures, but we can certainly send you the information after the meeting. Wait, my colleagues are telling me that 75 handwritten applications were received. I must tell you that the process was just as fast and those individuals received a payment quickly, because we were constantly sensitive to the industry and were able to adapt our processes to the needs of the community. Compared to applications submitted online, handwritten applications were not delayed at all. So, to answer your question, we received 75 handwritten applications.

Senator Dagenais: Thank you very much.


Senator Galvez: At the beginning of these meetings, our chair usually mentions that our three principles when studying bills in this committee are transparency, accountability and efficiency. I agree 100% with those premises. We have discussed a lot about transparency and accountability, and I would like to touch on the question of efficiency.

What indicators are you using to assess the efficiency of these plans for assisting people? I understand that numbers count and both of you are counting how many people you are helping, but are you also counting what we are achieving with this assistance? In particular, for example, I think about the last report of the World Economic Forum saying that the big cities are seeing their citizens going outside the cities. In Montreal, I can tell you that a lot of people just left the city and went to the hills and the suburbs. I live in a suburb of Quebec City, and we have people coming from Montreal, buying land and houses here, outside the city.

What are the indicators that tell us we are doing the good that we are supposed to do, apart from just the numbers of people we are helping?

Mr. Gallivan: Thank you. I would say we’re a bit of a conduit to the Department of Finance in this respect. As the delivery arm, we are interacting with recipients. We are usually focused on gaps, things that the legislation might have missed. You’re quite correct; we’re focused on getting the claims out in 72 hours, how many are accurate, how many are inaccurate.

But I think all of the information and data that we would provide to this committee in terms of the results and to the Department of Finance would inform those societal outcome indicators. I think the Department of Finance would probably be best placed to talk about it.

What I can tell you is from stakeholders and businesses, I’ve heard many feel they would have gone bankrupt had they not received the funds and received them quickly. I think that kind of immediate impact is being felt by businesses. The bigger impact I think is a question for other actors in the federal system.

Ms. N. Leblanc: I would certainly echo Mr. Gallivan’s response in terms of policy efficiency or effectiveness with respect to our colleagues in the Department of Finance.

I would say that from a CMHC perspective, certainly we were there at the onset as the pandemic was at our doorstep in Canada. We have implemented, along with the Bank of Canada, several liquidity measures along with the deferral of mortgages as well as helping our small businesses out there. Certainly our models would indicate that those support programs have played a strong factor in supporting the economy and the positive signs we see in the housing market right now. So to us, the speed and efficiency of the delivery of these programs were factors of success.

The Chair: Do you have another question, Senator Galvez?

Senator Galvez: So you are saying we should be asking the Department of Finance about other types of efficiency? Our worry is that this money is accomplishing something punctual but is not sustainable. If I ask you, Ms. Leblanc, how long can you hold it at this pace? For how many months or years can you hold it at this pace?

Ms. N. Leblanc: Unfortunately, CMHC cannot answer that question. It is a broader question for the federal government. I would say that CMHC continues to execute all programs that are mandated by the government, and we have seen quite a level of success in outcomes there, and we will continue to support the Government of Canada as we navigate through this pandemic.

Senator M. Deacon: Good morning and thank you for being here today. I have two questions.

My first question involves and takes us to the lockdown support for locations significantly affected by public health restrictions. I touched on this yesterday with the other witnesses, but for context, of course, we know there are two ways you can qualify for this funding. The first is if your business is shut down through a public health order, you would qualify for the extra lockdown support. That’s pretty clear. But a business can also apply if they’ve been forced to cease some or all activities where it’s reasonable to conclude that stopped activities were responsible for, to quote from the legislation, “. . . at least approximately 25% of the qualifying revenues . . . .”

Are those processing the applications prepared to handle them when the qualifications are somewhat subjective? Can businesses appeal? Words like “approximately” concern me a little when I see them in legislation. I would really like to see this program succeed and work. Thank you.

Mr. Gallivan: Thank you for the question. I have two quick points and then perhaps colleagues may come in to clarify.

From a review perspective, I think the extra flexibility actually gives us discretion. We have to keep in mind this is almost the CRA working in reverse. We’re used to taking in money. Now we’re trying to pay out money. We have been telling our auditors, “object and spirit of the legislation. This is an emergency program.” Most of our 10,000 auditors are certified professional accountants. They’re trained to use discretion. So in some ways, I think it’s helpful.

Second, you asked about recourse. Yes. We have worked very hard to set up informal recourse where businesses don’t have to get a lawyer, where a third party comes in and, at a head office level, looks at the decisions. We’re trying to be as nimble as we can with sharing examples to define what’s in and what’s out. I don’t think I’m worried from an administrative perspective. I think colleagues can come in with more of a legalistic response, if you want.

Senator M. Deacon: Thank you.

The Chair: Are there any other comments from the CRA?

Senator M. Deacon: I’ll ask my second question, then.

This question comes from my colleague Senator Jaffer. The question is: The government commitment to providing limited rent and wage subsidies is honourable and commendable, but we are also looking at Canadians who are working unsteadily, have insecure jobs — the gig economy, as we’re defining it — and who are homeless or facing immense and seemingly insurmountable financial struggles through their inability to secure long-term or stable employment and housing during the pandemic. Is there anything in these legislative changes that can funnel more strategically to these gig economy workers?

Mr. Gallivan: I am not sure that there is. I don’t know if colleagues from CRA have any insight.

Indirectly, of course, if some of them, even within their gig, are a participating employer, I think they can take advantage of the rent subsidy. So I think indirectly that may be there, but I’m not sure if colleagues can come in if there is an aspect that’s more explicitly on point.

Randy Hewlett, Director General, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency: There is nothing specific in the legislation to deal with gig economy-type situations. It would have to be determined whether or not the entity in question qualifies, whether it’s the wage subsidy or the rent subsidy, on the basis of their current business set-up.

Geoff Trueman, Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency: Thank you. I just wanted to draw attention as well to the availability of other benefits. So we started with the Canada Emergency Response Benefit. We now have the CRB, the Canada Recovery Benefit, as well as the sickness and caregiving benefits. Those are helpful to individuals who may find themselves in the situation of a gig economy or working part time. So those measures would be available. Thank you.

Senator M. Deacon: Thank you.

The Chair: Honourable senators, this is the time allotted, but I have a question for CMHC before we close. I heard you talk about affordability — and you will be providing us with statistics across Canada, thank you — how many provinces have come to you to talk about affordability of housing for low-income individuals?

Ms. N. Leblanc: Unfortunately, Mr. Chair, I do not have this information on hand. I will say, however, that CMHC is committed to meeting and exceeding their targets with the National Housing Strategy. The Rapid Housing Initiative has just launched, and obviously all of these programs were working quite closely with provinces and territories. It is within their mandate around affordability in housing to continue delivering on the housing strategy.

We have seen through recent announcements, going back to the homelessness question, a lot of attention to homelessness, to housing and affordability coming forward with the government and CMHC will continue to deliver on these fronts. It is our 2030 strategy. Certainly we’re using this pandemic to seize the opportunity to really be out there and working with our partners, the provinces and territories, on this mandate.

But specifically to your question, I would have to come back with a more comprehensive answer. I do not have this information on hand.

The Chair: Within the context of legislation, like Bill C-9 or maybe others, could you then also target and let us know — if it’s possible through your metrics that you have — of an example during COVID-19, where we are when it started in March and where we are today, what impact it had on low-income Canadians?

Ms. N. Leblanc: Absolutely.

The Chair: We would appreciate that, Ms. Leblanc.

Ms. N. Leblanc: Thank you for this question. It is something that we’re monitoring, especially the income gap and the impact of more vulnerable communities. So we will definitely provide information after this.

The Chair: If you could, extrapolate it on the basis of regions of Canada — Atlantic, Quebec, Ontario, Western Canada and Northern Canada.

Ms. N. Leblanc: Yes, we will do.

The Chair: To the witnesses, I think you have been informative. As Senator Galvez related, it’s about transparency, accountability, predictable and reliability. So we have a common denominator. Let us continue to do that. I also want to thank you on behalf of the committee for your professionalism.

Honourable senators, the panel has now concluded. I want to thank the witnesses for their availability every time we’ve asked for them.

We will suspend for five minutes. Senators, please stay connected so we will then proceed into an in camera meeting.

(The committee continued in camera.)