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THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE

EVIDENCE

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OTTAWA, Thursday, June 2, 2022

The Standing Senate Committee on National Finance met with videoconference this day at 11:30 a.m. [ET] to examine the subject matter of all of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures.

Senator Percy Mockler (Chair) in the chair.

[English]

The Chair: Honourable senators, before we begin, I’d like to remind senators and witnesses to please keep your microphones muted at all times, unless recognized by name by the chair.

[Translation]

Should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk, and we will work to resolve the issue. If you experience other technical challenges, please contact the ISD Service Desk with the technical assistance number provided.

[English]

The use of online platforms does not guarantee speech privacy or that eavesdropping won’t be conducted. As such, while conducting committee meetings, all participants should be aware of such limitations and restrict the possible disclosure of sensitive, private and privileged Senate information.

[Translation]

Participants should know to do so in a private area and to be mindful of their surroundings.

[English]

We will now begin with the official portion of our meeting, honourable senators.

I wish to welcome all of the senators as well as the viewers across the country who are watching us on sencanada.ca. My name is Percy Mockler, senator from New Brunswick and chair of the Standing Senate Committee on National Finance.

I would now like to introduce the members of the National Finance Committee who are participating in this meeting: Senator Cordy, Senator Dagenais, Senator Duncan, Senator Arnot, Senator Galvez, Senator Gignac, Senator Loffreda, Senator Marshall, Senator Pate, Senator Richards and Senator Simons.

This morning, honourable senators, we will continue our study on the subject matter of all of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures, which was referred to this committee on May 4, 2022, by the Senate of Canada.

[Translation]

Today, we have the pleasure of welcoming, virtually, officials from four departments who will be discussing Part 5 of Bill C-19.

[English]

The four departments are Finance Canada, Treasury Board of Canada Secretariat, Privy Council Office of Canada and Employment and Social Development Canada.

Welcome to all of you and thank you for accepting our invitation to appear in front of the Standing Senate Committee on National Finance.

I understand that a few people will deliver a short description of the different sections of Part 5 of the bill before proceeding to question period.

On that note, honourable senators and witnesses, I would like to introduce to you those who will offer short remarks.

From Finance Canada, Galen Countryman, Director General, Federal-Provincial Relations Division; Nicolas Moreau, Director General, Funds Management Division, Financial Sector Policy Branch; Kathleen Wrye, Director, Pensions Policy; Robert Sample, Director General, Financial Stability and Capital Markets.

From the Treasury Board of Canada, Lucas Cherkewski, Policy Analyst.

From the Privy Council Office of Canada, Timothea Gibb, Director of Operations, Parliamentary Affairs.

From Employment and Social Development Canada, Kevin Wagdin, Director, Old Age Security Policy and Legislation; Saajida Deen, Director General, Employment Program Policy and Design, Skills and Employment Branch; Anamika Mona Nandy, Acting Director General, Employment Insurance Policy, Skills and Employment Branch; Douglas Wolfe, Senior Director, Strategic Policy and Legislative Reform, Strategic Policy, Analysis, and Workplace Information Directorate, Labour Program; and Rouba Dabboussy, Director General, Benefits and Integrated Services Branch, Service Canada.

Thank you all. On that note, I have been informed by the clerk that each person will make a short presentation that will be followed by questions from the senators. Therefore, I will now recognize Finance Canada. Mr. Galen Countryman, please make your comments, to be followed by Nicolas Moreau.

Galen Countryman, Director General, Department of Finance Canada: Good morning, senators. I am here to speak and provide an overview regarding Divisions 4 and 6 of Part 5 of Bill C-19.

With respect to Division 4, payments in relation to transit and housing, the bill proposes to authorize the Minister of Finance to make payments to the provinces and territories of up to $750 million out of the Consolidated Revenue Fund for the purpose of addressing municipal and other transit shortfalls and needs and improving housing supply and affordability.

The payments would be subject to the terms and conditions that the Minister of Finance considers appropriate. To increase the impact of this investment, funding would be conditional on provincial and territorial governments matching the federal contribution and accelerating their efforts to improve housing supply in collaboration with municipalities. The amount of each payment would be determined by the Minister of Finance.

With respect to Division 6, regarding the amendment to the Federal-Provincial Fiscal Arrangements Act, this division proposes to amend the act to authorize a $2 billion payment to the provinces and territories through the Canada Health Transfer allocated on equal per capita basis to help reduce the surgical and other medical procedures backlogs caused by the pandemic. This funding builds on $4.5 billion in previous one-time top ups of $500 million in 2019-20 and $4 billion in 2021 through the Canada Health Transfer that the Government of Canada has provided to help address the extreme pressures that COVID-19 has put on provincial and territorial health systems, including the backlogs of medical procedures.

That concludes my summary of these two divisions.

The Chair: Mr. Moreau to be followed by Ms. Wrye.

James Wu, Senior Director, Debt Management, Funds Management Division, Financial Sector Policy Branch, Department of Finance Canada: Mr. Chair, I am James Wu of the department. I can speak to this on behalf of Mr. Moreau.

The Chair: Thank you. The floor is yours.

Mr. Wu: In Division 7, the government is proposing amendments to the Borrowing Authority Act and the Financial Administration Act to improve transparency and accountability to Parliament related to the second time that the government conducted extraordinary borrowings to respond to COVID-19.

Under the Borrowing Authority Act, the government and Crown corporation borrowings are subject to a legislative maximum amount, but the government may borrow funds that do not count against this maximum amount under extraordinary circumstances. These extraordinary borrowings are tracked separately and excluded from the total borrowings or regular borrowings that need to remain under the maximum legislated amount. In response to COVID, the government’s total borrowings were close to reaching the maximum amount, so the government invoked this extraordinary borrowing power between March 23 to May 6, 2021, and borrowed $8.2 billion under this extraordinary borrowing framework. This was the second time that the extraordinary borrowing power was used to respond to COVID.

New legislation came into force on May 6, 2021, that increased the maximum borrowing amount. Now that the government has sufficient borrowing capacity, the government is proposing these amendments to the Borrowing Authority Act to treat this $8.2 billion as regular borrowings to count it against the maximum legislated borrowing limit, and thus to provide transparency and accountability. Treating the extraordinary borrowings as regular borrowings when the conditions allow is consistent with the past practice that was applied to the first set of extraordinary borrowings. Related amendments would also align the reporting requirements on the extraordinary borrowings under the Borrowing Authority Act and the Financial Administration Act. Thank you.

The Chair: Thank you, Mr. Wu.

Kathleen Wrye, Director, Department of Finance Canada: Thank you, honourable senators. My name is Kathleen Wrye, I’m the Director of Pensions Policy of the Financial Sector Policy Branch at Finance Canada. I’m here to speak to division 8 of part 5 of Bill C-19.

This division proposes legislative amendments to improve the sustainability, and long-term security of federally regulated pension plans. Federally regulated plans are those linked to employment in federally regulated industries such as banking, telecommunications and interprovincial transportation, as well as federal Crown corporations and private-sector employment in the territories. The proposed measures would not affect the core federal public service, RCMP or Canadian Forces pension plans, as these plans have their own statutes, nor would they affect provincially regulated plans.

Specifically, division 8 of part 5 amends the Pension Benefits Standards Act, 1985, to do three things. One, introduce a requirement for all plans to establish a governance policy to support strong planned governance and administration and improve transparency for plan members and retirees. Second, the proposed amendments provide a regulation-making authority with respect to plan investments, which will enable the introduction of disclosure requirements in regulations for federally regulated pension plans regarding the consideration of environmental, social and governance factors, including climate-related risks, in their investment decisions. Last, the legislative amendments introduce a new framework for solvency reserve accounts to improve greater funding flexibility for employers with defined benefit plans and help encourage them to fully fund their plans. This concludes my remarks. Thank you.

Robert Sample, Director General, Department of Finance Canada: Thank you, honourable senators. Division 12 of part 5 enacts the prohibition on the purchase of residential property by non-Canadians act, a new statute that implements a ban on foreign investment in Canadian housing. The act prohibits non-Canadians from purchasing residential property in Canada for a period of two years. The prohibition would also apply to certain foreign corporations and entities, and prevent non-eligible foreign persons from avoiding the ban by using corporate structures.

The act provides that certain classes of persons, to be defined in regulations, would be exempt from the ban, with the intention that foreign individuals with work permits and who reside in Canada, refugees, people fleeing international crises and international students on the path to becoming permanent residents in certain circumstances would be exempted. The act also defines relevant terms for the purpose of the prohibition, determines the types of penalties that may apply to persons contravening the prohibition, and authorizes the Governor-in-Council to make regulations to carry out the purposes of the act.

Thank you, that concludes my remarks.

The Chair: Thank you, sir.

Lucas Cherkewski, Policy Analyst, Treasury Board of Canada Secretariat: Thank you and good morning, senators. I’m Lucas Cherkewski with the Canadian Digital Service of the Treasury Board Secretariat. I’m speaking today about division 14, and I’m joined by my colleagues John Millons and Leanne Labelle, about the proposed amendments to the act.

Our mandate at the Canadian Digital Service is to help the government improve how it designs and delivers public-facing services. One way we do this is by developing and offering platform services for government teams to use. These platform services are digital components that address common steps that people take when they interact with government, things like finding information, submitting an application, getting notified of their application status and so on. Adoption by government teams is voluntary, and we recover costs when usage exceeds certain thresholds. The most mature of these services is GC Notify, a text and email notification service that has sent over 40 million messages to people across Canada since launching in November 2019.

The proposed legislative amendments would do two things principally. First, they would enable us through subsequent orders in council to offer these services to other jurisdictions in Canada. This would allow us, over time, to respond to strong demand by provinces and territories, and following the budget announcement, interest from municipalities so we could build on the testing we’ve done during the pandemic with a few of the provincial teams to help them in their COVID-19 responses. Other government organizations across Canada, such as Indigenous governing bodies, could be considered in the future pending appropriate co-development and consultation, and would be proposed, if so, through subsequent orders-in-council.

Second, the amendments would also clarify responsibilities related to the Privacy Act and the Access to Information Act. This pertains both to federal scenarios and those involving other jurisdictions. This would make it clear that departmental clients using our platform services would retain control of the data involved for the purposes of the acts. In particular, this clarifies responsibilities related to handling access to information or privacy requests received by those institutions. Thank you.

The Chair: Thank you.

Timothea Gibb, Director of Operations, Parliamentary Affairs, Privy Council Office: Thank you, honourable senators. My name is Timothea Gibb, I’m a Director of Operations with Legislative and House Planning at the Privy Council Office, and I’m here today to speak on division 13, amendments to the Parliament of Canada Act. The proposed amendments to the Parliament of Canada Act and other acts support the government’s commitment to making the Senate more independent and non-partisan.

As you would, of course, know, in 2016, the government established a non-partisan, merit-based appointment process and put in place an independent advisory board to review and recommend Senate appointments. Since adopting this process, 60 senators have been appointed and three non-partisan groups have formed. The amendments proposed would reflect the current reality in the Senate into law.

I will briefly highlight the four features of the amendments. First, the amendments would allow allowances to senators occupying leadership positions in parties and groups beyond only the government and opposition. Second, the amendments would provide for in the Emergencies Act that at least one senator from each group in receipt of a leadership allowance be represented on any parliamentary committee created under the act. Third, through these amendments, the leader or facilitator of all recognized groups or parties in the Senate would be able to make membership changes to the Senate Standing Committee on Internal Economy, Budgets and Administration and be consulted on appointments of officers and agents of Parliament. Finally, the amendments would add the titles Government Representative in the Senate, legislative deputy to the Government Representative in the Senate and government liaison in the Senate.

These amendments have received past parliamentary consideration. They were initially introduced and passed as Bill S-4 in the Senate in June 2021. The bill died on the Order Paper upon dissolution. To reconfirm Senate support for these amendments, the bill was again introduced in the Senate as Bill S-2 in November 2021, where it was passed and referred to the House of Commons. To reflect the required appropriation, the bill was then introduced in the house as Bill C-7 in December 2021. The text included in the Budget Implementation Act is the same text as has been considered previously. With that, I thank you for your time.

The Chair: Thank you.

Kevin Wagdin, Director, Employment and Social Development Canada: Thank you, honourable senators. I’m here to present a small, technical, no-cost amendment to the Old Age Security Act contained under part 24 of this division.

As many may know, the budget implementation act of last year contained provisions that related to a 10% increase to the Old Age Security pension for seniors 75 and over. One of these provisions amended the definition of “income” in the OAS Act to exempt the one-time payment for older seniors from the calculation of income for GIS purposes. The language of this provision made specific reference to clause 276 of that BIA.

During the legislative process of the BIA, an earlier provision of the bill was struck down. This meant that the provisions of the bill were renumbered. However, the reference in the OAS Act was not adjusted to reflect this renumbering. By correcting the erroneous cross-reference now, it will ensure there will be no ambiguity surrounding the legal authority to exempt this payment from the GIS calculation in July 2022.

This was an issue that was raised by Bill C-12 in the Senate, and the Minister of Seniors and Accessibility is committed that the government will fix this error as soon as possible. I can assure the senators there will be no impacts on clients as a result of this erroneous cross-reference. IT systems and tax forms have already been developed to exempt the one-time payment for older seniors from the GIS calculation, and the exemption will be implemented as intended. Thank you.

The Chair: Thank you. Next will be Ms. Saajida Deen, to be followed by Ms. Anamika Mona Nandy.

Steven Côté, Executive Director, Employment and Social Development Canada: Excuse me, Mr. Chair. I’m here to speak to Division 25. Is it okay if I speak now before Saajida Deen?

The Chair: Please do.

Mr. Côté: Thank you.

From the beginning of the COVID-19 pandemic, the government has supported workers with emergency benefits like the Canada Emergency Response Benefit, known as CERB, and the Employment Insurance Emergency Response Benefit, both communicated as one as CERB, as well as the Canada Emergency Student Benefit. The CRA administered both the CERB and the student benefit, while Service Canada administered the Employment Insurance Emergency Response Benefit.

In the early days of the emergency benefits, some individuals erroneously applied for and received payments from multiple benefit programs during the same periods. These technical amendments are meant to clarify the legislation and allow the government to establish debts as emergency benefit payments — that’s predominantly CERB — or as student benefits, aligning with the original intent of the program.

This amendment also proposes to allow for the calculation of overpayments on a weekly basis so that these individuals are only required to repay the weeks of the benefits that overlapped.

These proposed legislative changes would result in lower debts for these individuals than what would have otherwise been the case if these debts were established under the current provisions of the acts. Thank you very much.

The Chair: Ms. Deen, please go ahead.

Saajida Deen, Director General, Employment and Social Development Canada: Hello and good morning, senators. I’m here to present on Part 5, Division 26, changes to Part 2 of the Employment Insurance Act.

Part II of the Employment Insurance Act enables the provision of Employment Insurance-funded skills training and employment supports. Under the EI Act, Part II, the Government of Canada, working with provinces and territories, makes annual investments in programs and services for those seeking to prepare for, find and keep employment.

Building a modern EI system includes improving Canadians’ access to the programs and services required to get them back to work. This division of the budget implementation act amends Part II of the Employment Insurance Act to achieve this by broadening client and program eligibility to enhance access and responsiveness to labour market conditions.

By helping Canadians prepare for, find and keep employment, the Government of Canada is making sure that employers and industries across the country have access to the skilled workforce Canada needs to fill labour shortages, and to drive inclusive and sustainable economic growth over the long term. Thank you.

The Chair: Ms. Nandy, the floor is yours, please.

Anamika Mona Nandy, Acting Director General, Employment Insurance Policy, Employment and Social Development Canada: Good morning, senators. I’m here to present on Division 27.

This division would amend Part I of the Employment Insurance Act to extend for one year until October 28, 2023, the current EI temporary measure related to seasonal claimants that would otherwise expire on October 29, 2022. It would also clarify how the Budget 2021 temporary measure on monies and separation will come to an end in September of this year.

In particular, regarding the seasonal measure, the proposed amendments would extend the current temporary provision that provides up to five extra weeks of regular EI benefits for workers and seasonal industries. This would enable eligible workers employed in seasonal industries residing in the 13 targeted EI regions with highly seasonal economies to continue to access these five additional weeks of EI regular benefits in their off-season. This includes continuing supports for workers whose seasonal claiming pattern was disrupted by the timing of temporary COVID-19 measures.

With regard to the proposed amendments on the transitional clarification of the Budget 2021 measure, the proposed amendments in this legislation would clarify how the monies on separation measure that was previously announced will come to an end on September 24 of this year. Under this current temporary measure, monies paid on separation, such as severance pay or vacation pay — neither count as earnings for EI benefits purposes nor affect the timing of a claimant’s receipt of EI benefits.

The transitional amendment would clarify that, as of September 25, 2022, these monies paid on separation will resume to be considered as earnings for EI benefit purposes and affect the timing of the claimant’s receipt of benefits.

Unlike other temporary measures announced through Budget 2021, monies on separation can be reported to the Canada Employment Insurance Commission and be allocated at different times. Therefore, a transitional provision was necessary to specify the applicability of this Budget 2021 measure to an allocation start date.

Under the transitional provision, the date of the allocation of monies would determine which rule set would apply. If the allocation start date occurred before September 26, 2021, and September 24, 2022, the temporary rules introduced in Budget 2021 would apply.

Thank you.

The Chair: Thank you, Madam.

The next speaker, please go ahead.

Lorraine Pelot, Director General, Employment and Social Development Canada: Mr. Chair, I’m here with my colleague Kristen Underwood to give an overview of Division 28 of Part 5.

As part of the 2016-18 triennial review of the CPP, ministers of finance agreed to create the Post-Retirement Disability Benefit that came into force on January 1, 2019.

Current legislation contains language that allows for an interpretation different from the policy intent agreed to by ministers. The proposed technical changes would ensure that the calculation of eligibility is consistent for all individuals, whether they are applying for the CPP disability pension or the PRDB.

Kristen Underwood, Director General, Employment and Social Development Canada: Mr. Chair, I’ll continue.

Further, the proposed changes will make modifications to the calculations of the child-rearing and disability drop-in formulas under the CPP enhancement. These changes will also ensure that these formulas are in line with the decisions made during the triennial review. Thank you.

The Chair: Mr. Wolfe, please.

Douglas Wolfe, Senior Director, Employment and Social Development Canada: Thank you very much, Mr. Chair. Good afternoon, senators.

Division 29 of Part 5 would amend the provisions of Bill C-3, An Act to amend the Criminal Code and the Canada Labour Code, to provide up to 10 days of medical leave of absence with pay in a calendar year to employees in the federally regulated private sector.

Specifically, the proposed amendments would, among other things, simplify the rate at which employees earn the days of medical leave of absence with pay; that is, after receiving their first three days of paid leave, employees will no longer need to wait an additional 60 days before earning subsequent days at a rate of [Technical difficulties] one day at the beginning of each month after completing [Technical difficulties].

Second, these amendments would standardize the conditions related to the requirement for a medical certificate. Employers will be permitted to request a medical certificate for leaves of absence that are five days or longer regardless of whether the leave is paid or unpaid.

Third, it will authorize the Governor-in-Council to make regulations in certain circumstances, including to modify certain provisions respecting medical leave of absence with pay.

Fourth, it will ensure that for the purposes of medical leaves of absence, an employee who changes employers due to the lease or transfer of a work undertaking or business or due to a contract being awarded through a re-tendering process is deemed to be continuously employed with one employer.

The amendments would also provide that the medical leave with pay provisions would come into force automatically on December 1, 2022, unless an order of the Governor-in-Council is made before that date. Thank you very much, senators.

The Chair: Thank you.

Rouba Dabboussy, Director General, Benefits and Integrated Services Branch, Service Canada, Employment and Social Development Canada: Good afternoon. I am Rouba Dabboussy, Director General for individual payments and services on demand with Service Canada, ESDC. I am also the lead for the board of appeal project detailed in Division 32 of Part 5.

In budget 2019, the government committed to making the recourse process for employment insurance and income security benefit programs easier to navigate and more responsive to the needs of Canadians. In August of that year, the government also announced significant improvements, including the creation of the Employment Insurance Boards of Appeal, or EIBOA. Those improvements reflect views of stakeholders, including labour and employer groups across the country, following consultations held at that time.

In 2017-18, the third-party review of the Social Security Tribunal of Canada, or SST, included a series of consultations with focus groups held across the country and to which EI commissioners and Employment and Social Development Canada officials participated. External EI stakeholders consulted during the review included representatives from labour groups, unions, business associations, users of the EI appeal process under the SST and appellant representatives. It should be noted that online consultations were also promoted on 14 government websites, and over 17,680 emails were sent to targeted audiences.

In total, 5,967 visits were recorded, and 905 responses were received. Of the 905 responses, 886 responses were related to the EI included in the analysis, representing 661 completed surveys and 225 written comments.

In the fall of 2018, the EI commissioners and their selected peer representatives convened an in-person working group to co-develop a preferred option for the renewal of the full EI recourse process. Following through with these commitments, various client-centred improvements to the recourse process have been put in place in 2020 and 2021. We are now looking to move forward with the last improvement measure, and that is to create the new EIBOA, or Employment Insurance Boards of Appeal, which requires a number of legislative changes. Legislative amendments are proposed to the Department of Employment and Social Development Act, or DESDA, and consequential amendments are proposed to related legislation, including the Federal Courts Act and the Employment Insurance Act.

Key proposed changes to the DESDA include the following: establishing the Employment Insurance Boards of Appeal to replace the Social Security Tribunal general division, EI section, for the first level of appeal for EI; defining board membership for the decision makers; and eliminating low-value legalistic provisions, including the requirement to apply for leave to appeal EI decisions to the appeal division.

With the creation of the new board, the intent is to return to a tripartite decision-making model inspired by the previous EI Board of Referees model. Each panel convened to hear first-level EI appeals will be made up of three members: a member selected from the pool of GIC appointments to act as the presiding member; a member selected from the pool of candidates appointed by the commission to act as the employer member; and a member selected from the pool of candidates appointed by the commission to act as the insured person or employee member.

The tripartite model will ensure that appeal decisions consider the views of the worker and employer communities they serve. It’s expected that some members will be transferring from the Social Security Tribunal, Employment Insurance section, to the Employment Insurance Boards of Appeal, where they will conclude their terms. Regulations to be created will include the new procedures, and the changes will be made at a later date by orders in council. I’ll pause.

The Chair: Thank you.

I would like to tell the senators that you will have a maximum of six minutes each for the first round, and a maximum of three minutes each for the second round. Therefore, please ask your questions directly to the witnesses. Witnesses, please respond concisely.

I would like to ask other witnesses that will take the floor to identify themselves and tell us which department they are from.

Senator Marshall: My question is for Mr. Wu. It’s on Division 7 on the debt management reports. I just want to make sure that I understand the intent of these amendments.

Right now, there are three debt management reports released publicly. One is the annual report that we get 30 days after the public accounts, and then we get the tri-annual report under the Borrowing Authority Act, which we get once every three years. Then we also get the Extraordinary Borrowing Reports, which have to be tabled within the first 30 days when the House resumes sitting, regarding the extraordinary borrowing. So is my understanding correct, Mr. Wu?

Mr. Wu: Thank you very much, senator, for your question. Those three are indeed related to the debt program. There is another one I would highlight, which is the Debt Management Strategy. This Debt Management Strategy is a forward-looking report that has to be tabled within the first 30 sitting days after the beginning of a fiscal year. So there are actually four reports.

Senator Marshall: Is that the same as the Debt Management Strategy that is in the budget?

Mr. Wu: Yes, that’s right. We use the budget to table that report.

Senator Marshall: I just wanted to make the point that we get the tri-annual report once every three years. I remember that when that legislation went in, I questioned why every three years. Why not annually?

We waited 11 months for the annual report for 2020-21. We didn’t receive the report for 2020-21 until March of 2022. We waited 11 months. So, you know, we’re waiting a long time for the reports. But the Extraordinary Borrowing Report — we get those on a more timely basis.

The concern I have is with regard to the focus on accountability and the timeliness. Once these amendments are enacted, won’t the Extraordinary Borrowing Report no longer be reported separately on a timely basis within the 30-day period but rather within the debt management report that we have to wait almost a year for?

Mr. Wu: Thank you again for the question. I think there are a couple of parts to the question. I’ll try to cover everything. If I miss anything, please let me know.

The Extraordinary Borrowing Report needs to be tabled within 30 sitting days after the order-in-council related to that extraordinary borrowing.

Senator Marshall: Very timely, yes. Thank you.

Mr. Wu: It’s very timely. We have always met that requirement, of course. The government has always met that requirement. I think the debt management report you’re referring to needs to be tabled within 30 sitting days after the public accounts are tabled. Again, the government has always met that requirement.

I believe the issue you’re referring to is that the public accounts may have been tabled later than usual this year, and as a result, the legislative requirement for the debt management report was also a little bit later this year. Again, I believe the government met those requirements.

These amendments will not change these two requirements that I spoke of. What will happen is that the nature of the debt, how the debt is treated, will change from what is considered extraordinary borrowing to regular borrowing.

Senator Marshall: Regular borrowing. You go ahead. I’m interested in what you have to say.

Mr. Wu: The government thinks the borrowings will be reported appropriately but under the regular reporting process.

Senator Marshall: Okay. When you include the extraordinary borrowings in this annual report, are they going to be identified separately, or are they going to be merged in with all the other borrowings?

Mr. Wu: When they are considered extraordinary borrowings, they are reported separately. That’s the case, but when they are considered to be now part of regular borrowings, then the report is part of the total of the regular borrowings.

Senator Marshall: When the borrowing limit was first established it was $1.1 billion, so is all debt included in that $1.1 billion? Is there some debt outside that $1.1 billion?

Mr. Wu: Yes, thank you again for the question. Regular borrowings are all calculated as part of or against, in this case, the $1.1 trillion that you’re referring to. If it is extraordinary borrowings, it is still calculated and reported on as you kindly indicated, but it is not held up against this $1.1 trillion limit.

Senator Marshall: It’s not?

Mr. Wu: I can give you a quick example.

Senator Marshall: I understand. How much debt is not included in that $1.1 trillion? Probably what I should be asking is: How much debt is not included in the $1.8 trillion, the new limit?

Mr. Wu: Thank you for the question. Indeed, it is $1.8 trillion now. The first round of extraordinary borrowings has been converted into regular borrowings. That is included in our calculation. The calculation is against the $1.8 trillion. The only amount outside of this treated as extraordinary borrowing still is the $8.2 billion we’re referring to, which the government is trying to include now as part of the regular borrowings.

Senator Marshall: You’re going to bring that in.

My last question to you is: I’m always interested in knowing — because the government’s borrowing a lot of money — how close are they to their $1.8 trillion limit? I have to wait three years to find out. I have asked the Library of Parliament and the Parliamentary Budget Officer, and I’ve been told that is not publicly available.

Before Christmas, I actually tried to calculate it myself, but it meant not only going to Finance Canada’s records but also going through annual and quarterly reports of these Crown corporations to try to dig out the debt and calculate it myself.

Where is it disclosed? Do we have to wait three years, or is it somewhere I don’t know about?

Mr. Wu: Thank you for the questions. I believe the government does disclose this number. The public accounts disclose the relevant borrowing authorities the government uses to borrow, and where the positions are in terms of the numbers. For the recent public accounts, for example, there should be a borrowing authority number there. The upcoming public accounts should be released soon, I believe. The borrowing authority numbers will relate to the end of March 2022. There is no public number yet, but we have an estimate that I can share. The current estimate, as of March 31, 2022, is roughly $1.6 trillion.

Senator Marshall: That’s $1.6 trillion. For people who are interested, that information is not available and it should be. Thank you very much. It was a wealth of information.

[Translation]

Senator Gignac: My questions have to do with Part 5, Division 12, which deals with the prohibition on the purchase of property by non-residents. I applaud what the legislation is trying to do, which is clearly to address real estate speculation. Bill C-8 sought to do the same thing by imposing a 1% tax on vacant properties owned by non-residents.

Here’s my question. Of all the real estate transactions in Canada, do you know what percentage non-residents account for? In cities such as Toronto, Montreal and Vancouver, the proportion of non-resident real estate transactions can be very high.

I’m not sure who’s available to answer my question, perhaps the finance officials.

Mr. Sample: Thank you for your question.

We don’t have an exact estimate, but the Bank of Canada and the Canada Mortgage and Housing Corporation have done assessments in the past. This policy is one in a suite of policies aimed at making affordable housing available to Canadians.

[English]

This is one measure that is a packaged within a number of measures put in place in Budget 2022 by the government to contribute to better affordable housing outcomes for Canadians, such as a number of housing supply measures and a number of demands for support measures, like the First-Time Home Buyer Incentive. This is one measure in a package that aims to curb foreign demand and to offer more housing to Canadians as a result.

As I was mentioning, the Canada Mortgage and Housing Corporation, or CMHC, has done some reviews of this in the past. They have done some reporting, but there are not a lot of tangible statistics in this area.

Senator Gignac: Thank you. In the context of Bank of Canada already being in the mood to increase interest rates — and I read it could be significant increase — we have Desjardins Group who has already called for home prices to decline by 15%. Here is my question: Why two years? Why is not one year to be renewable or something like that? Is it a risk of [Technical difficulties] at the end of the day? If you combine everything together, the interest rate increase and an inability for foreigners to buy anything, will it be better if home prices decline suddenly by 20%? Why two years? What is the rationale?

Mr. Sample: The government is proposing two years as a measured approach. As you have seen on a number of measures that the government has brought into place over the last decade with respect to mortgage rules and other types of policies that are aimed at curbing demand and supporting a healthy and safe housing market, as well as a sustainable debt market for Canadians, this is a gradual approach that the government is taking. Certainly, yes, the ban would end two years after being brought into force, and it would be under the prerogative of the government and Parliament to look at whether new measures are required at the end of that time.

Senator Gignac: Okay. You exclude some people, for example, refugees and temporary workers. Foreign students, I think, will be able to buy as well. Regarding foreign students, will they have to wait to have a permanent residence or citizenship?

I know that in Montréal, Toronto and Vancouver, housing for university is important to foreign students. For students who arrive in Canada and go to university, their parents often decide to buy a condo, because the vacancy rate is so low they are unable, in a way, to have any home. It is a risky, unintended consequence for universities, because many thousands of foreign students want to come to study in Canada. Rather than renting, they buy because they will be here for four years. Will this group be able to buy or will they be excluded from buying?

Mr. Sample: Thank you for the question. You’ll see in the legislation that it does not set out this specific parameter at this time. The legislation provides Governor-in-Council regulation-making authorities by the responsible minister to bring forward more elaboration of these types of questions that you’re raising. These types of issues are under consideration and analysis by the Department of Finance at this point and will be brought through, afforded by statutory later, by the government.

Referring to what you mentioned around students, the budget did have a reference to their intent around students.

Senator Gignac: Since time has expired, just send a written memo on this one, chair. Thank you for your answer.

The Chair: Mr. Sample, we agree that you will follow up with a written answer?

Mr. Sample: Yes. I wish to add that the budget did flag that the government’s intention to propose restrictions will prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational residential property in Canada for a period of two years. Refugees and people who have been authorized to come to Canada under emergency travel, namely, fleeing international crises, would be exempt. International students on the path to permanent residency would also be exempt in certain circumstances. The “certain circumstances” are being further analyzed by the department and will be proposed to the government at a later date.

The Chair: Senator Gignac, is that sufficient?

Senator Gignac: Yes; thank you.

Senator Richards: Thank you to the many witnesses. I have another committee, so I’m going to ask a quick question. This is for either Mr. Countryman or Mr. Wu, I’m not sure whom. It’s a general question, but an important one.

Bill Morneau, the former finance minister, gave a rather scathing overview of our federal government in the last few days. He said the relationship between provinces and the federal government inhibits and stifles economic growth. He said we needed to depoliticize important public policy decisions. I gather he is talking about Alberta and Ottawa, although it could be other provinces as well. He says that we need a national body that focuses attention and forces discussion on a need for economic growth. He also said he is afraid that our tax and spend policies are going to lead us into greater inflation and greater economic difficulties.

I would like Mr. Countryman, who is a financial expert, to comment on that if he could, please.

Mr. Countryman: Thank you for the question, senator. I don’t have much comment on the former minister’s remarks. I’m here today to speak to what is in Bill C-19. Obviously, Mr. Morneau is speaking much more on a political sphere and at a broader level.

In terms of how the federal government recommends the works of provinces and territories, in many cases there is a lot of cooperation and work. The federal government transfers over $80 billion annually to provinces and territories to support them in various endeavours to equalization, the Canada Health Transfer and the Canada Social Transfer. In that sense, strong relationships between provinces and territories and the federal government have been ongoing for some time.

Senator Richards: Of course, there has been. By “transfer payments,” he was talking about economic growth. He said the trouble with the policies is that there is a kind of poisonous relationship at times between the provincial and federal governments. Do you notice that in your capacity of dealing with that on a professional level?

Mr. Countryman: In my work with my provincial and territorial colleagues, we have an excellent working relationship.

Senator Richards: I have to yield the rest of my time, Senator Mockler. Thank you very much.

Senator Duncan: I would like to express my thanks to all the witnesses that have come before us today.

My questions concern Division 25, the COVID-19 benefits adjustments. There are several of them, proposed sections 385, 386 and 387. I believe my questions will be directed to Mr. Côté, but possibly Ms. Dabboussy, as well.

If you’re not caught up in this process of applying for one of these benefits, it’s a rather difficult to follow in terms of the legislation, although I listened carefully to Mr. Côté’s explanation. I have a very straight forward question. How many Canadians are affected by these changes in these various clauses, 385 to 387? How many of them must repay an overpayment?

Mr. Côté: Thank you for the question. Right now, I only have an estimate of the number of people that have been affected by having received more than one benefit. Right now, the estimate is approximately 700,000.

Senator Duncan: Thank you for that. Are you aware of how many of these Canadians have made requests for reconsideration of Employment Insurance decisions with the Employment Insurance Commission? This is specifically dealing with clause 387, I believe.

Mr. Côté: I don’t have that number, but I just want to clarify the process. For emergency benefits, the process for appeals is different than what it would be for Employment Insurance. Your question pertains to reconsiderations with respect to Employment Insurance, is that correct?

Senator Duncan: That is correct. Although, there are some claimants who have received payments under one program without necessarily applying under that program. It seems that there are some situations where individuals may have applied under EI but received another benefit in their bank account and are now being tasked with repayment. They are appealing to EI.

Mr. Côté: Thanks for the clarification. The proposed legislation will establish these overpayments that are overlapping as emergency benefit payments. These reconsiderations will not be followed through the process normally undertaken for EI. They have to move forward with an appeal process through the Canada Revenue Agency.

Senator Duncan: Could you clarify that please, Mr. Côté? Individuals who have received benefits — forgive the colloquial reference but it’s a bit of an alphabet soup of benefits in that there is CERB, EI and the Canada Emergency Student Benefit Act. People have applied because they are short of money, or they have gone back to work, or they lost their job. They may have been semi-retired and working for a short period of time, applied for EI but received a CERB benefit and went through this appeal process.

What I’m hearing you saying is that they might end up under the Canada Revenue Agency appeal process or under an EI appeal process. How is the ordinary Canadian to make sense of this?

Mr. Côté: Thank you again for the question. Of the 700,000 that I just referred to, these individuals have not yet received their notifications of redetermination. The folks that have already gone through the reconsideration process and have already received notifications of debt would have been only through the Employment Insurance system. Those that are going through that process of reconsideration will continue in that process.

These approximately 700,000 people that I’m referring to — because the legislation has not been passed so their debt has not yet been established — will be receiving these notifications of redetermination after the legislation has received Royal Assent. Following that process, they would be informed of the process that they would be undertaking with respect to the appeal of that particular debt. This is only for the particular debt that I’m talking about for overlapping benefits.

What you’re probably referring to is people that may have received notifications of debt for being eligible for maybe EI or other benefits, not those pertaining to receiving more than one benefit, if that’s clear.

Senator Duncan: It is. I think the difficulty and the challenge for us as parliamentarians is that both members of Parliament and senators are receiving complaints and issues from individuals who are caught up in this process, and every case is different.

If I have a little bit of time left or if it could be in round two, perhaps we could be advised in the discussion of the appeal process, when that new appeal process will take effect and if it will help to deal with and streamline the process for these 700,000 Canadians who are caught up in this other process.

Mr. Côté: Thank you for the question. Just to make a distinction, the changes that are under division 32 will not impact this particular process. Those changes being proposed are different from what this process would be.

The appeals process for Employment Insurance and the appeals process for emergency benefit payments are outlined in legislation in those particular acts, and those remain the same through this process. I do appreciate your question in terms of understanding what appeal process you would have to follow if an individual receives a notification of debt.

What I can say, though, is that for these particular debts that I’m referring to as a result of the proposed changes in this act, these are specifically designed for people who received more than one benefit. These are people who maybe got EI and also applied for emergency benefit payments because they were unsure of when their payments would come in, or their EI claim was ending and they may have applied for CERB because they were unsure of the timing of payments.

What this will do, when they receive their notification of debt after Royal Assent is received and the notification has come out, is they will receive as part of that information pertaining to how they could appeal that. It would be done through the appeal process of the emergency benefit process, not EI, because the debts are being established as emergency benefit debts.

Senator Duncan: Thank you.

[Translation]

Senator Galvez: I’ve been listening carefully and avidly to everything the various witnesses have told us today. I have two questions. The first deals with Division 8, and it’s for Kathleen Wrye.

[English]

I find it very interesting that the government is finally deciding to push for implementing sustainability standards at the federally regulated pension plans, and that we want to improve governance, we want to increase transparency and ask to disclose the requirements of ESG — environmental, social and governance goals — including climate change.

So it has parameters. We have parameters to measure ESG and we have greenwashing of ESG, and we shouldn’t just ask to disclose the climate risks, but we should ask for action. Can you tell me at which state we are and if these issues of harmonization with science, international standards and going beyond disclosure? But also, taking away the conflict of interest — because you’re talking about transparency — the conflict of interest in pension plans. Two weeks ago, it was in the news that members of boards for pension plans sit at the same time, simultaneously, in fossil fuel corporations, so their fiduciary duties are in conflict of interest. One looks for short-term profits and the other has to worry about a worker who will claim their pension in 20 years.

Ms. Wrye: Thank you very much for the question. I think there were two in there. I will answer the ESG-related one first. I very much appreciate your comments about how ESG should be disclosed in plans. This is certainly something that the government will be considering. I would note that what is in this bill is an enabling authority for the GIC to be able to make regulations respecting the disclosure of ESG consideration in investment decisions.

There is more that will be coming on this. For sure, there is a lot of information out there right now about ESG and about climate-related risk disclosures. Many jurisdictions are moving toward it. In particular, in the U.K. they have moved quite far with the TCFD requirements. There is a lot of consultation going on in this country, not specifically with respect to pension plans, but with respect to ESG and climate-related risk disclosure in general. These are all things that the government will consider when preparing the regulations for federally regulated plans, while also very much taking into consideration what the fiduciary duties are of plan administrators, what the purpose is of pension plans, and what the utility is of looking at climate-related risks and other ESG factors.

The purpose of a pension plan is to provide retirement income. As a part of that, plan administrators have a fiduciary duty to consider all the risks to their investments and to their ability to deliver those benefits. I think it’s become increasingly clear that climate-related risks and other ESG factors are things that need to be considered as part of that fiduciary duty to ensure that plans continue to deliver those benefits. That’s what we’ll be thinking about with those requirements, as well as what is appropriate for federally regulated plans, which cover a wide range of plans both in size and sophistication. In short, the government will be proposing regulations on this which will be open to consultations. So there is more to come.

With respect to governance and boards of trustees that you mentioned, there are rules in the federal pension legislation regarding conflicts of interest. Board members who have a real or apparent conflict of interest between their duty as a fiduciary and perhaps sitting on another board or being a part of a company have to be disclosed and taken into account. We do have clear rules at the federal level regarding conflict of interest. While I’m not an expert on all the provincial pension legislation, I would imagine that they do well.

Senator Galvez: Thank you. I have a small question concerning the budget. I think it was division 7, borrowing authority. Maybe this question was already asked by Senator Marshall. I would like to know from where we borrow. This $8.2 billion that will bring us very close to the limit of borrowing — who is our creditor?

Mr. Wu: Thank you, senator, for the question. This $8.2 billion is like any of the regular funds that the Government of Canada borrows in terms of where they come from. Canada borrows from our wholesale market. The wholesale markets tend to be large financial institutions, the large banks, pension funds, investor funds or management funds. There is an auction process that we use to raise funds from the wholesale market.

Senator Galvez: Can you send detailed information so as to know the distribution and how much of each one?

Mr. Wu: We’re happy to send information on how this process works. I’ll double check. I don’t think we disclosed which specific wholesale investor purchases how much of our debt. That’s confidential information, I believe.

Senator Galvez: Can you tell me if there is a foreign contribution?

Mr. Wu: Oh, yes. So wholesale foreign investors do and can participate in our options. Yes, they do.

Senator Galvez: Thank you.

Senator Simons: My question is for Mr. Countryman and involves division 4, payments in relation to transit and housing. The text of division 4 is very simple. It says nothing in the text about matching funds from provinces, but I understood from your comments that these funds will only be released to provinces that match the dollars.

I want to understand how this will work for municipalities. Do the provinces have to request the money or do the municipalities request the money? I gather from your comments that this is not for capital projects, this is to make good, for example, revenue shortfalls that many municipalities face in their transit systems in the wake of COVID.

I ask this because municipalities across the country, especially in my home Province of Alberta, are often frustrated that there is money that is purportedly for municipalities that never flow to them, either because the provinces don’t match or because the provinces have their own plans for the money.

Mr. Countryman: Thank you for the question, senator.

Indeed the legislation is a bit more general, because discussions were under way regarding the terms and conditions at the time of the drafting of the legislation, which was originally in Bill C-17; discussions were still under way about terms and conditions. I can tell you at this stage that, basically, agreements have been reached with all provinces and territories, and the terms and conditions are broadly as follows.

First of all, the provinces and territories do have to match the federal contribution. Also, they have to allocate funding within each jurisdiction to municipalities or regional transit agencies based on transit ridership, with flexibility for jurisdictions with little public transit to allocate according to their needs. Also, provinces and territories have asked to put the funding toward transit operating shortfalls, transit capital or housing. Again, that might depend upon the needs of each jurisdiction. Finally, provinces and territories have been asked to accelerate their efforts to improve housing supply in collaboration with municipalities.

So the funding will flow from the federal government to the provincial and territorial governments. Then the provincial and territorial governments, in turn, will allocate the flow of the funding to municipalities.

Senator Simons: Have all provinces agreed to match?

Mr. Countryman: Yes.

Senator Simons: Is there a sense in the federal government’s decision of what percentage of this $750 million should go to transit and transit-related expenses and projects versus housing? At the end of the day, it ends up being not very much money per municipality per project.

Mr. Countryman: Again, a lot of this was to address the trends in operating shortfalls, and acute and extraordinary transit shortages we’re facing. That’s the primary driver.

The housing element was there to help leverage and encourage provinces and territories to work with municipalities to move forward on ways to improve housing supply, such as looking at zoning and other rules that municipalities can control. That is obviously an area of interest to the federal government.

So the funding is going to each province and territory upon Royal Assent of the legislation.

Senator Simons: Is the vision that 50% of the funding should be for transit and 50% for housing?

Mr. Countryman: No, sorry. We don’t have a breakdown as to how much would go between transit and housing. That would depend on each province’s needs. For instance, Nunavut has no public transit system, so all of their funding would go toward housing, to take an extreme example. In other jurisdictions, there would be a mix. In jurisdictions with large transit systems, the vast majority of the funding would flow to transit.

Senator Simons: It’s always a sensitive issue when dealing with municipal politics, because if you’re Edmonton, Calgary, Vancouver, Toronto or Ottawa, you have a robust public transit system, and those transit systems lost catastrophic amounts of funding when people stopped riding the buses and the trains. You have smaller municipalities that may have very minimum transit or no transit at all.

Is the government’s intention that there should be funds specifically earmarked for smaller municipalities that didn’t suffer a huge drop in transit revenues but nonetheless have issues and financial problems of their own? Or is the government content if this money goes primarily or exclusively to communities that have major transit systems and who suffered major economic shocks?

Mr. Countryman: Again, the provinces have been asked to allocate funding to municipalities or regional transit agencies because transit funding varies. It’s based on transit ridership. There will be flexibility for those jurisdictions that have little public transit — and by “jurisdictions,” I mean provinces and territories that have little in the way of large public transit systems — to allocate according to their needs. But the intent is primarily to support transit and deal with the transit operating shortfalls.

Senator Simons: Thank you very much.

Senator Loffreda: Thank you to all our witnesses for being here this morning. My question is on the ban on foreign investment in housing in Canada. I read that there is some concern that a modest correction is under way in Canada and the housing party may be over in Canada.

My question is more specific: Are there other jurisdictions that have legislated a similar ban on foreign investment in housing in their countries? If so, who are they and has there been an assessment on the impact of the ban? How successful have they been in addressing housing supply or affordability? What are the results and the lessons we can learn from that? It is a question on Division 12, Part 5.

Mr. Sample: Thank you for your question.

Yes, there are similar types of regimes being proposed or that are in place in countries like New Zealand and Australia. Those were reviewed, and the advice was provided to the government. Those regimes have been in place for a number of years in both of the countries I’ve mentioned. I don’t have a particular view from the authorities in those jurisdictions on their efficacy, but I do note that they are still in place.

Senator Loffreda: To remain on the housing supply issues and maybe stay on Part 5 but go to Division 4 with respect to payments in relation to transit and housing, what I hear from builders with the supply issue is that the problem is obtaining permits and licences, and building at a quicker pace. They seem to be having problems with their municipalities across Canada, not to be specific with any one province; there are many Canadian national builders at this point.

Have any consultations taken place with municipalities in reducing the red tape and in accelerating permits and licences being given to builders so the supply crisis can be resolved quickly?

Mr. Countryman: Thank you for the question, senator.

Municipalities are creatures of the provinces, and a lot of the provincial governments have been doing work with their municipalities on these sorts of housing issues. The funding that was provided under proposed Division 4 is there to encourage provinces to continue to work with their municipalities to accelerate their efforts to improve housing supply by looking at rules, such as density, zoning, et cetera.

Senator Loffreda: So the provinces are responsible for having those discussions, I guess? Are you following up with the provinces? Because I’m saying with respect to funding for housing supply that the municipalities play a major role, and we know they’re an important player. How do we know that the funds are going toward transit or housing on the federal side? What follow-up and discussions are taking place to ascertain that it is happening at a pace we are satisfied with?

Many will say the housing crisis is a supply issue. How do we resolve the housing crisis as quickly as possible? It is fine throwing money their way, but federalism is not just throwing files to the provinces; it’s following up and having discussions. It’s discussing with stakeholders and the supplies and builders. Is that happening? To what extent is that taking place?

Mr. Countryman: With respect to the $750 million being proposed, provinces and territories, as part of the terms and conditions, are committed to publicly report on the changes to improve housing supply and affordability taken over the course of the next year.

Senator Loffreda: Thank you for that. If anyone else would like to add something to that, I welcome their comments.

Mr. Chair, do I have time for another question?

The Chair: Yes, another question, please, Senator Loffreda.

Senator Loffreda: My next question is on Division 6, Part 5, the Federal-Provincial Fiscal Arrangements Act, the additional health payments. I’ve raised the issue of medical backlogs in this committee before. Could you provide our committee with an update on how much money the federal government has already transferred to the provinces and territories to help reduce the backlogs on medical procedures? I understand Health Canada estimates that nearly 700,000 medical procedures were cancelled or delayed. I’m interested in knowing how the previous funding was successful in achieving its intended goal to reduce the backlogs.

If I have time, I have another question on that or maybe in a second round I’ll continue on that topic with respect to the health payments.

Mr. Countryman: This funding is being flowed through the Canada Health Transfer. As with all funding that flows through the Canada Health Transfer, there is no specific requirement for the provinces and territories to report back to the federal government on how the money was spent. It is a block transfer by nature.

The funding that has been provided to date — $4.5 billion over two instalments — has arguably helped to address the needs of provinces and territories with respect to the health funding for COVID-19. Regarding the funding that was provided last year, $4 billion, obviously a certain amount of that has been overtaken by events. It’s hard to say in retrospect what the provinces and territories will be able to delineate and how that funding has been able to help because, as we know, there have been subsequent waves since that funding was initially provided that would affect the number of surgical backlogs.

The Chair: I will now recognize Senator Cordy, the leader of the Progressive Senate Group. The floor is yours.

Senator Cordy: It is nice to be here today.

Mr. Wagdin, I would like to thank you for correcting the numbering issue we had in the bill that was before us not too long ago dealing with benefit payments to seniors. You did it very quickly by putting it in the BIA. Thank you very much for that.

Thanks to all of you for being here today. I know a lot of you were at the Social Affairs Committee meeting last evening, so this is likely a busy week for you.

I would like to speak to Division 4 and follow up on some of the questions Senator Simons had earlier. My question is related to the accountability of it. I think it’s great that money is going to transit and housing. The provinces have been asking about that for a long time. Are there stipulations about how the money has to be spent? Earlier, you said it is matched and goes to the provinces and then it is distributed to the municipalities. What is the accountability?

I’ve been around for a while. I remember a number of years ago health payments going to the provinces. In one province, they used the money to buy lawn mowers to mow the lawns at the hospital, but in the public’s mind that’s not what they would consider to be spending on health care. How is the money spent? There must be a filter.

Historically, provinces don’t like to be told how to spend the money, but we do like to have accountability for how that money is spent to ensure it is indeed being spent on housing and on much-needed transit.

Mr. Countryman: Again, it is up to each province and territory to determine how to allocate funding and what their priorities are because we have a very diverse country. Each province and territory has somewhat different needs from each other, but they have been asked to put this toward transit operating shortfalls, transit capital or housing.

Senator Cordy: I understand that the money is allocated by the provinces. I don’t have a problem with that. I want comfort in knowing that the money is, indeed, spent for its intended use. Is there any criteria on the part of the province to get back to the federal government about how the money is spent or do they just spend it?

Mr. Countryman: The provinces and territories are able to spend it. There is no requirement to report back on how the funding was spent. As I mentioned in the answer to a previous question, provinces and territories have committed to report publicly on the progress made and the efforts to improve supply.

Senator Cordy: So the accountability has to at least be public so that we know how it’s been spent.

Mr. Countryman: They committed to publicly report on the housing supply question.

Senator Cordy: Thanks.

My other question is for Mr. Wolfe. It’s about the 10 days paid medical leave, with which I agree, and the medical certificate. I certainly believe in medical certificates. When people are off work, they should have to do that. There is a shortage of doctors across the country, as we’re all very much aware, and a number of doctors have indicated they are quite concerned about the time elements involved in this process. It’s for five days or longer for paid or unpaid leave. We do know that those who are on unpaid leave are likely very low-income people. That could, indeed, provide challenges for them. If you’re lucky enough to be making a good income and you have a family doctor, you go to the doctor and you pay your $10 or $20 — I’m not sure what it is now — for your medical certificate; that’s not a big deal. But if you’re on unpaid leave for five days or much longer and you are a minimum-wage worker, then you may not have a family doctor. Even if you do, the $10 or $20 after a period of unpaid leave is a challenge. Are there extenuating circumstances to allow for that? That would be under provincial jurisdiction.

Mr. Wolfe: First, I’ll begin by talking about what the provision actually does. The medical certificate provision in Bill C-3 created a misalignment between the requirements for paid and unpaid leave under the Canada Labour Code. As currently drafted, employers would be entitled to request a medical certificate if an employee takes five consecutive days or more of paid sick leave and to request a medical certificate if an employee takes three days or more of unpaid sick leave. The government is proposing to amend Bill C-3 to ensure that employers would be entitled to request a certificate if an employee takes five consecutive days or more of sick leave, regardless of whether they are paid or unpaid. The purpose of this amendment is to align the paid and the unpaid requirements for a medical certificate.

In terms of the number of days, we heard from medical practitioners that they would not want to have a short period in terms of medical certificates. Employers, on the other hand, very much asked us to have as short a period as possible. I think it’s really a balance between the two and that’s what the government has sought to do, namely, to reach that balance.

Senator Cordy: This question is for Mr. Wolfe and it’s about changes to the EI Boards of Appeal, which I am very pleased to hear about. I was chair of the Board of Referees for a number of years and with the employer and employee on the board — three people — it seemed to work very well. I understand that it will be in person rather than phone calls, and there should be shorter waiting period times. Will there be also cost savings to the government? I’ve read there will be significant cost decreases because all of the people would be part-time people serving on these boards. Would that be correct?

Ms. Dabboussy: Thank you for the question.

Before I answer the question directly, I should update you. Over the last few weeks, different stakeholders have voiced concerns regarding the proposed EI board of appeal legislation. During appearances at different parliamentary committees, such as the Human Resources Committee and the Finance Committee. As a result, two days ago, the House of Commons Finance Committee voted down Division 32 clauses in Bill C-19 containing the legislative amendment for the creation of the board. Minister Qualtrough communicated at the same time that the government is committed to the tripartite model and legislation would be introduced in the fall.

To answer the questions directly, in-person options will be offered to the appellants. They can choose either virtual or in person. On the cost savings, I will have to turn to my colleague, Mr. Patterson.

James Scott Patterson, Acting Director, Employment and Social Development Canada: I would simply like to add to the cost-savings part. Since we have the intent to go forward after additional consultations and that the structure may change, it wouldn’t be prudent to make assumptions on costs at this point in time.

The Chair: Mr. Patterson, would you please introduce yourself for the record?

Mr. Patterson: I’m sorry. My name is Scott Patterson, Acting Director, Benefits and Integrated Services Branch, Service Canada, working on the implementation or the proposed implementation of the new EI board of appeal.

The Chair: Thank you.

Before I go to Senator Dagenais, I have a question for the director general of the Federal-Provincial Relations Division. It’s a follow-up on a question from Senator Cordy.

Mr. Countryman, if I go back a bit and put on my hat as a former Minister of Intergovernmental Affairs, for the record, can you confirm that we do have federal-provincial committee members who monitor any transfers to provinces or territories and that they, as well as federal-provincial committees, have the responsibility to basically respect transparency and accountability to all levels of government, especially territories vis-à-vis federal, provinces vis-à-vis federal? Is that still a mechanism in place, or has that been dissolved?

Mr. Countryman: I’m not sure what mechanism you’re referring to specifically, senator, but what I can say is that there are a number of the federal-provincial-territorial-level, official-level committees at the assistant deputy minister level and at the director general level that review the four major federal-provincial transfers.

The Chair: That’s right.

Mr. Countryman: Those are the Canada Health Transfer, the Canada Social Transfer, the Equalization Formula and the Territorial Formula Financing.

The Chair: That’s right.

Mr. Countryman: Those committees are ongoing. They exist. I happen to chair one of them. These committees do meet periodically to discuss issues regarding those transfers, particularly with respect to the renewal of Equalization and Territorial Formula Financing. Their authority to make payments gets renewed every five years in legislation.

As part of that federal, provincial and territorial officials meet to discuss whether there are any technical changes that need to be made to update, for example, an equalization to reflect changes in taxation practices.

The Chair: However, is it being monitored vis-à-vis what’s being transferred at both levels, territorial vis-à-vis federal, provincial vis-à-vis federal?

Mr. Countryman: They meet to discuss the rules and the legislation regarding these particular transfers.

The Chair: And the reason they do that is for transparency and accountability?

Mr. Countryman: Well, yes.

The Chair: Thank you.

Mr. Countryman: We discuss those things.

The Chair: Thank you.

[Translation]

Senator Dagenais: My first question is for Mr. Moreau.

During the pandemic, especially during the last election campaign, the Prime Minister promised $1.8 billion in annual funding to improve working conditions and training for care workers in seniors’ residences. That was in August 2021. I don’t know whether he made the promise to get seniors’ votes, but in any case, you’re not here to talk politics. In the budget, I see that only $1 billion was allocated for all of 2021-22, and the details are scarce.

Can you tell me where in the budget I can find the money associated with that promise? The question is for Mr. Moreau.

[English]

Mr. Wu: I’m here to speak on behalf of Mr. Moreau. This item is not related to the item Mr. Moreau was going to cover, which, again, is the Borrowing Authority Act amendments and the Financial Administration Act amendments under Division 7.

[Translation]

Senator Dagenais: Can any of the 27 officials answer my question?

[English]

The Chair: Mr. Countryman, could you have someone answer that question, please?

Mr. Countryman: I’m sorry, Mr. Chair, but I’m afraid I didn’t quite hear the question posed by the senator. Could I trouble the senator to repeat the question, please?

[Translation]

Senator Dagenais: The government had promised $1.8 billion in annual funding to improve working conditions and training for care workers in seniors’ residences. In the budget, I see that only $1 billion was allocated for all of 2021-22. Since the details are scarce, I wanted to know where in the budget I can find the $1.8 billion that was promised. Was it an empty promise, or has the money been spent? The funding was for seniors’ residences, especially during the pandemic.

Mr. Countryman: Are you asking about long-term care homes?

Senator Dagenais: I’m actually asking about the management of funds.

Mr. Countryman: In Budget 2021, three billion dollars over five years was allocated in provincial and territorial transfers to implement the new standards for long-term care. That funding is still the focus of negotiations between Health Canada and the provinces and territories. The Standards Council of Canada is one of the independent parties currently working to develop the national standards. I imagine that once they are finalized, the talks between Health Canada and the provinces and territories will get under way.

Senator Dagenais: Mr. Countryman, I’m going to stay on the same topic. The Prime Minister had promised an initial transfer of $4.5 billion over five years to address the emerging issues around mental health across the country. Without question, the provinces and territories are counting on those transfers, but I can’t find where that money is allocated in the budget. Can you provide any clarity on that? If you don’t know where the money is, does that mean the Minister of Finance forgot about the commitment she made? It is quite a specific commitment, after all.

Mr. Countryman: Budget 2022 does not include any funding in the form of new transfers for mental health. I can tell you that funding is still available to the provinces and territories under the 2017 bilateral agreements.

As far as mental health is concerned, $600 million per year, for the next five years, is remaining. Health Canada is in the process of renewing the 2017 agreements so the funding can be transferred.

Senator Dagenais: I would point out that the Prime Minister made the promise in August 2021. His original commitment was to transfer $4.5 billion over five years. Was that promise kept, or is the money nowhere to be found? You talked about 2017 agreements, but I am asking about the $4.5 billion over five years, starting in 2021. Can you look into that? I want to know whether the money was actually invested, or if the funding was just an election promise that has since been forgotten. I’m having a lot of trouble finding it in this budget.

Mr. Countryman: Obviously, you have Ms. Bennett, the mental health minister, and you have the Health Canada officials, and I believe they are in the process of working on the new transfer.

Senator Dagenais: Thank you.

[English]

Senator Pate: Thank you very much to the witnesses for attending. My first question relates to the disability benefit. I’m curious as to how many individuals received the post-retirement disability benefit and how many of them would be impacted by these changes. In particular, how and to what extent will these changes affect the overall amount of benefits they receive? If it will result in any reductions, how do you intend to remedy that?

Second, I have a question overall related to some of the questions asked by Senator Duncan earlier. Has there been an analysis of the implications of the lack of streamlined benefits, particularly during this pandemic, but also the extent to which there are significant administrative costs associated with this follow-up and trying to remedy the inconsistencies that have been identified, as well as the costs of enforcement, the related costs that will fall to provinces and territories as a result of people being plunged into poverty, presumably after being told they have to repay significant benefits? What kind of cost analysis has been done there?

Ms. Pelot: Mr. Chair, I can address the series of comments about the post-retirement disability benefit.

The number of individuals who would be impacted by these changes is expected to be low as approximately 4,200 individuals who received the post-retirement disability benefit as of July 2021 compared to an estimated 330,000 individuals who received the regular disability pension.

In terms of impact, the technical changes would permit the calculation of a qualifying period and so on for applicants for the post-retirement disability benefit to be aligned with the same approach that is taken for the CPP disability pension. So it doesn’t affect the amount they receive; it affects their eligibility for the benefit. In general, very few would be impacted by the changes, but overall, most of the changes would improve their ability to be found eligible for the benefit.

Senator Pate: Thank you for that information. As more particularized detail becomes available, it would be great to receive that.

In terms of the analysis of the implications, is there anybody who could speak to that?

Mr. Côté: Thank you for the question. I’m not aware of an analysis that’s been undertaken to that level. I can tell you that the repayment process that’s been undertaken here is an empathetic one, one that takes into account an individual’s circumstances. There are a number of flexible payment mechanisms that have been brought into place that would allow for an individual determined to have to repay an overpayment — should they indeed be receiving an overpayment — that would recognize their own personal circumstances.

Again, for those individuals, they would be advised to reach out to the appropriate individuals to talk about those flexibilities. In this case, it would likely be to reach out to the CRA. They would receive a notification of debt for receiving two payments or additional payments at the same time.

Senator Pate: Is there any plan to do an analysis of this sort? Certainly, as Senator Duncan indicated, our office and I’m sure many of us around the table are receiving those sorts of calls. People are potentially losing their housing, losing all kinds of supports and losing the benefits they had prior to the pandemic in some cases and so literally being plunged into not just poverty but abject poverty, which will have another longer-term impact on all of us.

Mr. Côté: Thank you for the question. We have been in contact with provinces and territories with respect to notifying them about when these notifications of determination will be coming out. Each province and territory has the responsibility to deliver the income assistance programs and those different types of programs I think you’re speaking about in their own jurisdictions, and they are administering them on their own.

What I can say about our other process for those that receive a notification of debt from the federal government is that the process, again, is very flexible and empathetic with respect to the individual case circumstances of an individual, and they should speak to the agents about their current financial situations to ensure that the appropriate determination is made. They make use of those flexibilities in terms of their ability to repay so that nobody has financial hardship as a result of those repayments.

Senator Pate: I understand from ministerial discussions that there have been agreements developed or at least negotiated with some provinces and territories. Is it possible to share the details of what agreements have been negotiated with the provinces and territories, particularly with respect to disability and non-disability social assistance benefits?

Mr. Côté: Sorry, I’m not aware of those discussions or those particular agreements that you’re referring to. Perhaps there might be somebody else, but that doesn’t fall under me.

The Chair: Mr. Countryman, is there anybody from your department who can answer Senator Pate’s question?

Mr. Countryman: Sorry, the question is regarding federal-provincial agreements regarding coordination of disability benefits?

Senator Pate: Well, disability benefits is one, but certainly in terms of pandemic relief benefits, it’s well recognized that many people who received benefits have now faced being cut off from provincial benefits as a result of that.

My understanding, from questions I posed to previous individuals, particularly ministers, is that there have been discussions happening at the FTP level. I’m curious what the results of those have been, and I’m presuming ministerial officials have also been involved, such as yourselves.

Mr. Countryman: I’m afraid I’m unaware of those discussions. I can tell you they are not happening at Finance Canada. Maybe there is something Mr. Côté is aware of. There is nothing I can add from a Finance Canada perspective.

Mr. Côté: Thanks again for the question. I don’t know about conversations at the ministerial level, but at the level of officials there are ongoing discussions with respect to when the notifications of determination will go out, what flexibilities will be made, how someone should reach out and who they should contact if they receive a notification of determination of debt.

Senator Arnot: My question is directed to Mr. Countryman. These questions are generated by my colleague Senator Forest. I’m asking on his behalf. I’ll be clear and precise.

Sir, according to the ARTM, or Autorité régionale de transport métropolitain of Montréal, current ridership on transportation there is 84% of what it was pre-pandemic, therefore a shortfall of 16%. They estimate it will take 10 years to regain the ridership to 100% of what it was pre-pandemic.

What is the term, in years, for this particular program? The essential question is this: Is the government considering a longer term? Because this seems to be a long-term problem for public transportation.

Mr. Countryman: Thank you for the question, senator. This is a one-time payment. To date, the government has only proposed a one-time payment of this nature.

Senator Arnot: Will ferry services be eligible for this payment?

Mr. Countryman: That will be up to the responsible province or territory.

Senator Arnot: You said there is $750 million available, to be matched by provinces. Has the magnitude of the need been assessed in terms of the deficit? If so, is $750 million sufficient to meet the deficit in public transit and/or public housing?

Mr. Countryman: This is funding that the federal government has proposed as a contribution toward helping municipalities and provinces address funding shortfalls due to drops in transit ridership due to COVID-19. It is a one-time payment. It is a contribution from the federal government to the other levels of government to support them in addressing their needs.

With matching funding, the $750 million will be $1.5 billion nationwide for dedicated funding. Provinces and territories also have the means, if they wish, to allocate further funding if they have additional needs.

Senator Arnot: I have a third question. I believe you are responsible for this. The bill proposes a payment of $2 billion to reduce surgery delays. The causes of those delays are complex and nuanced.

The question distills to this: Is there enough flexibility in your arrangement to ensure that provinces can train, through universities, more professional services, medical doctors, nurses, physiotherapists, et cetera? Do they have the flexibility to put the money in that investment in their method of reducing the surgery delays and backlogs?

Mr. Countryman: This funding is to go to provinces and territories as part of the Canada Health Transfer, and this transfer provides full flexibility for provinces and territories to allocate funding as they see fit.

Senator Arnot: Are the ferry services eligible for funding on the transit?

Mr. Countryman: It will be up to each province and territory to determine whether ferry services are eligible.

Senator Arnot: Thank you.

Senator Marshall: Seeing that we’re strapped for time, I’ll read my question into the record, and I’ll be satisfied with the answer in writing. I think it’s for Mr. Wu again.

The Public Accounts of Canada 2021 recorded a $19-billion loss related to the Bank of Canada’s purchase of Government of Canada bonds. Rather than recording this as a $19-billion debt-servicing charge, it has been recorded as negative revenue, which is quite unusual. I refer to page 110 of Volume I of the Public Accounts, which shows a negative net revenue of $11,638. I think the $19 billion is buried in that number.

Could the Department of Finance please provide the committee with the composition of this number and identify whether the $19-billion loss is there; and if it’s not, exactly where is it? Thank you.

Senator Loffreda: My question is on the Pension Benefits Standards Act in Division 8, Part 5.

We have all seen the importance of employee retention, scarce resources, supply chain disruptions, et cetera. To what extent could these proposed changes encourage employers to retain or create new defined benefit plans? We have seen a huge decline in defined benefit pension plans in various industries across Canada. Could this increase or create new defined benefit plans and slow the decline in the number of members in such plans in the private sector, and help employers retain their employees?

Ms. Wrye: Thank you very much for the question. I’m not sure I could say with any certainty whether these measures would help create defined benefit plans. I can say that the framework for solvency reserve accounts is intended to help improve employer funding flexibility so that we don’t lose any more defined benefit plans. It makes it easier for plan sponsors to fund their plans.

In essence, the solvency reserve account framework is intended to provide a notional account into which plan sponsors can put solvency funding requirements, which can be quite volatile. They then have easier access to any surpluses that may emerge in the future to take that out of the solvency reserve account than they would under the existing rules. In providing this funding flexibility, we hope to improve the sustainability and long-term security of the existing defined benefit plans.

[Translation]

Senator Dagenais: My question pertains to Old Age Security.

The country is facing a labour shortage right now. We don’t have enough workers, and it’s a serious problem nationwide. The federal and provincial governments are doing whatever they can to find solutions, and that means spending money, whether on training or immigration-based recruitment.

In many sectors, retired workers in good health would be willing to return to the workforce, but the tax penalties they would face, mainly through the Canada Pension Plan, are a deterrent, so they remain at home. Can you tell us how much it would cost the Canada Pension Plan if people between the ages of 65 and 70 were to return to the workforce while keeping all of their federal pension benefits? I would hope you had already crunched those numbers to see whether this was something that could help alleviate the labour shortage.

[English]

Mr. Wagdin: Thank you for the question. Unfortunately, I’m not able to speak to that today, as it’s outside the scope of this particular bill. We would be happy to come back.

[Translation]

Senator Dagenais: Who would be able to answer that question?

[English]

The Chair: Mr. Wagdin, is that under your responsibility or under the responsibility of the Department of Finance? I’ll ask Ms. Underwood.

Ms. Underwood: Mr. Chair, it is outside the scope of the bill today, so I think that we can’t speak to that specifically. If you want us to follow up in writing, we could maybe do that, but I’m not sure if it makes sense for us to respond today in this session.

The Chair: Thank you.

To the witnesses, thank you for your professionalism. There’s no doubt, as I have seen in the past week, that you are requested in other committees. Thank you for your availability today.

This completes the items on our agenda today. I’d like to direct a comment here to Mr. Countryman. There is a question that was asked by Senator Marshall that should be responded to with a written answer. And a response in writing to the last question from Senator Dagenais, also.

Can we agree, Mr. Countryman, that we have a deadline for written responses? Could we agree to send those two written answers to the clerk before the end of the day on Monday, June 6? Is that too demanding vis-à-vis your responsibilities?

Mr. Countryman: Thank you, senator. With respect to the question from Senator Marshall, I’m not an expert on that matter. I would need to consult with my colleagues as to whether they will be able to provide the level of detail that she is asking for. We’ll take note of the question and endeavour to follow up with you in a timely manner. I see my colleague, Ms. Underwood, can speak to the question from Senator Dagenais.

The Chair: Ms. Underwood, do we have a similar agreement?

Ms. Underwood: Yes, we would be happy to respond by Monday.

The Chair: By the end of the day on Monday to our clerk.

Honourable senators, our next meeting will be Tuesday, June 7 at our normal time, 9:30 a.m. ET. More information will be shared with you shortly.

To the senators, job well done. To the professionals, to Finance and the four departments, thank you. It has been informative plus it also meets our motto of transparency in the Finance Committee. The mandate of transparency, of accountability, of predictability and also of reliability when looking at the finances of Canada. Thank you.

(The committee adjourned.)