Ottawa – The federal government should return the power to approve spending to Parliament and provide quarterly fiscal and economic updates for the duration of the COVID-19 pandemic, the Senate Committee on National Finance said in an interim report released Tuesday.

The committee has been studying the government’s response to the pandemic and its economic consequences. The government’s response has been robust — many witnesses expressed sincere appreciation for the financial supports that were quickly put in place and that likely prevented a more severe economic crash. However, the government has used extraordinary powers to achieve these aims.

On March 24, 2020, Parliament passed Government Bill C-13, the COVID-19 Emergency Response Act, which granted the government considerable spending power and exempted the government from having to request Parliament’s approval to expand its borrowing authority. The Parliamentary Budget Officer, in his evidence to the committee, noted these powers are “unprecedented … in Canadian history.”

While the committee recognizes the initial need for a quick response to the pandemic — and applauds those who worked hard to launch extensive support programs — the government continues to use its new powers to put in place additional spending measures. Parliament has a fundamental role in reviewing and approving government spending, and the threat of COVID-19 shows no sign of abating in the near term. Consequently, the committee recommends a return to traditional parliamentary procedures with regard to government spending.

The committee also recommends that the government provide quarterly financial updates for the duration of the economic crisis to ensure Canadians, parliamentarians and policy-makers have accurate information about the country’s financial health.

Canada has so far avoided economic disaster. It must now plan for recovery — the livelihood of many Canadians depends on it. The committee will focus on recovery strategies when it continues its study in the fall, and it will make recommendations about how to build a smarter, fairer and more sustainable economy.

Quick Facts

• The total cost of federal financial support programs is $212 billion and rising. The government is also providing credit and liquidity support of $686 billion.
• Businesses and their employees have been deeply hurt by the pandemic. In response, the government created the Canada Emergency Wage Subsidy, which pays out 75% of employee wages to businesses that have suffered a 30% drop in their gross revenue. However, some witnesses said the threshold is set too high and the program — initially expected to cost $71 billion — has so far only paid out $18 billion. The committee recommends adopting a scalable threshold for this benefit, so more businesses will receive the support they need to survive.
• The Canada Emergency Response Benefit (CERB) has been a lifeline to Canadians. It provides up to $2,000 a month for people who have stopped working because of COVID-19. As currently structured, people who return to work part time are cut off from the benefit, even if Employment Insurance cannot meet their financial needs. The committee therefore recommends restructuring CERB as a declining benefit, based on income, which could also provide an incentive for people to return to work.
• The committee also recommends that the government consider a basic income guarantee. The Parliamentary Budget Officer told senators that having a basic income in place prior to the pandemic could have reduced the need for the Canada Emergency Response Benefit.

Quotes

“As life with COVID-19 becomes the new normal, it is important that parliamentarians adapt. While the government and public service acted with commendable speed in implementing crucial financial supports, public and parliamentary scrutiny of spending measures will be crucial for Canada’s economic recovery.”

- Senator Percy Mockler, Chair of the committee

“The Canada Emergency Response Benefit shows the need for simple and effective income support in uncertain economic times. Many witnesses and senators strongly suggested that the government consider implementing a basic income guarantee to mitigate the economic uncertainties that will inevitably arise in the post-COVID world.” 

- Senator Éric Forest, Deputy Chair of the committee

“The pandemic has caused tremendous upheaval for people across the country. We hope that our study will lead to improved programs and services that will see all Canadians share in the economic recovery. We look forward to laying out a vision for this recovery when we continue our study.”

- Senator David Richards, member of the Subcommittee on Agenda and Procedure

Associated Links

• Read the report: COVID-19: Relief in times of crisis.
• Follow the committee on social media using the hashtag #NFFN.
• Sign up for the Senate eNewsletter.

For more information:

Alexandra Scott-Larouche
Public Relations Officer | Senate of Canada
613-614-1180 | media@sen.parl.gc.ca