Moved second reading of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy).

She said: Honourable senators, it is a pleasure to rise today to present Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy).

This bill is, in the view of some, an additional request for the Senate to quickly agree to measures adopted by the other place to respond to the COVID-19 pandemic. Honourable senators, in this chamber of sober second thought, learned members have spoken eloquently that we are not here to simply acquiesce.

Something that was shared with me in my early days as provincial commissioner for the Girl Guides was the adage, “Remember: Your signature is your most valued possession.” In these days of tap and swipe with plastic cards, perhaps the next generations are not as aware of this. Every senator, I’m sure, will recall signing that first cheque and perhaps receiving that first paycheque and signing it before depositing it. How important that moment is. It’s why we are here. We know the importance of our signature, the value of the scrutiny we are entrusted to offer. We do not do it lightly, and we will not simply offer our signature as soon as we are asked. We will do so after exercising sober second thought and, I might add, thorough and complete thought.

When I began my service in the Senate not so long ago and became a member of the National Finance Committee, our former colleague Senator Day spoke of the seven hours’ scrutiny given by the Senate’s National Finance Committee to billions of taxpayers’ dollars spent in a budget that the other place debated in 20 minutes.

On this bill, your National Finance Committee spent several days during what some might term a “break week” reviewing the measures contained within this bill. I have every confidence — and, senators, I believe you join me — in the high regard we have for our colleagues, members of the Senate National Finance Committee, their skills, their intuition, and their concern for Canadians and their tax dollars.

Honourable senators, let me delve into what Bill C-9 does and why it’s so essential for us to adopt. I do appreciate that we have had the minister here and she has provided additional information. Also, an important point has been made that we will be speaking with Canadians about this bill. Canadians will be listening, I hope, to our debate over the next few days. It’s important to review the measures in the bill.

First, the bill proposes direct and easy-to-access rent and mortgage interest supports to tenants and property owners until June 2021 for qualifying organizations affected by COVID through the new Canada Emergency Rent Subsidy. Second, it proposes to provide an additional 25% Lockdown Support through the new Canada Emergency Rent Subsidy for qualifying organizations significantly restricted by a mandatory public health order issued by a qualifying public health authority. Third, this bill would extend the Canada Emergency Wage Subsidy until June 2021 to help employers keep employees on the payroll and rehire their workers who may have been laid off as a result of the pandemic.

I would like to start with the Canada Emergency Rent Subsidy. In the early months of the pandemic, the government introduced the Canada Emergency Commercial Rent Assistance — CECRA, for those of you who like the shortened versions — for small business. CECRA provided forgivable loans to eligible commercial property owners who, in turn, gave a rent reduction of at least 75% to their small-business tenants. As of November 5, this program provided over $2 billion in support to over 139,000 small businesses across Canada, employing over 1.25 million people.

Speaking frankly, as if it were a performance evaluation, CECRA did not meet expectations. This new program outlined in Bill C-9 is effective as of September 27, 2020. It provides access to rent and mortgage support until June 2021 for businesses and other organizations that have lost revenue in this crisis. Most importantly, the proposed new rent subsidy will be directly available to tenants, while also providing support to property owners.

As the minister advised earlier, the new rent subsidy would cover up to 65% of rent or mortgage interest payments for the hardest-hit businesses with a revenue fall of 70% or more until December 19, 2020. For businesses that have experienced a decline in revenue of less than 70%, there will be a gradually decreasing subsidy in line with the decline in revenues, delivering more targeted and accessible rent support. Eligible expenses under the new rent subsidy program will include commercial rent for tenants and interest on commercial mortgages for qualifying property owners. Those eligible will include individuals, taxable corporations and trusts, non-profit organizations and registered charities.

Honourable senators, I want to add a point that was not discussed earlier today. It is vitally important that we recognize that Indigenous government-owned corporations that are carrying on a business, as well as a partnership where each member is an eligible employer or an Indigenous government, are also eligible for the new rent subsidy.

Other qualifying institutions include partnerships that are up to 50% owned by non-eligible members, registered Canadian amateur athletic associations, registered journalism organizations and non-public colleges and schools, including institutions that offer specialized services such as arts, driving, language or flight schools. Furthermore, the revenue decline is to be calculated in the same manner as under the wage subsidy program.

Honourable senators, the minister addressed the issue of the rent subsidy and its flexibility for businesses to submit rents payable as an eligible expense. The government has an interim administrative solution which will ensure that rent payable is an eligible expense from day one. It is the government’s clear and stated intention on this.

I would remind honourable senators that I drew upon my experience with the Foundation of Administrative Justice, which instructs public servants that publicly stated intentions of the government, including in situations such as the House of Commons and provincial legislatures, can be acted upon by public servants. I’m very confident that the Canada Revenue Agency and the public servants who have so ably assisted Canadians throughout the pandemic to date will be able to deliver this much-needed subsidy.

Honourable senators, as we have seen over the last two weeks, Canada is well and truly in the midst of a second wave of the pandemic. In that context, I would like to briefly highlight the new Lockdown Support.

As we all know, lockdowns in different parts of the country have been imposed to curb the spread of the second wave of COVID-19 infections. It’s the right thing to do to protect Canadians. It also imposes a great cost to many businesses. The new Lockdown Support will provide an additional rent subsidy at the rate of 25% for organizations that have had to temporary close their doors or significantly restrict their activities due to a public health order issued by a public health authority.

Combined with the rent subsidy, that would mean that the hardest-hit businesses subject to lockdown could receive rent support of up to 90%. That’s an important point that bears repeating.

Honourable senators, those are the new programs that Bill C-9 creates if adopted. I would like to briefly speak to the Canada Emergency Wage Subsidy extension, which is also included in Bill C-9. Specifically, Bill C-9 maintains the current subsidy rate of up to 65% of eligible wages until December 19, 2020, to ensure businesses, charities and non-profits have the support they need to keep their workers paid through the next wave of the pandemic. Provisions in the bill also make the wage subsidy more responsive to sudden changes in revenue.

The wage subsidy, honourable senators, has proved to be a lifeline for many businesses in various sectors during this pandemic. Everyone in this chamber virtually and physically will have a story of a business that has been assisted in their region by the Canada Emergency Wage Subsidy. I look forward to your remarks on this program.

Currently, a top-up wage subsidy of up to 25% is available to employers that were the most adversely impacted by the pandemic. An eligible employer’s top-up wage subsidy is generally determined based on the revenue drop experienced when comparing revenues in the preceding three months to the same months in the prior year. There is also an alternative approach to the calculation of baseline revenues where an eligible employer’s top-up wage subsidy is determined based on the revenue drop experienced when comparing average monthly revenue in the preceding three months to the average monthly revenue in January and February 2020.

To make the top-up wage subsidy more responsive to a sudden change in revenue, this legislation harmonizes the revenue decline test for the base subsidy and the top-up wage subsidy from September 27, 2020, onward. This means that instead of using the current three-month revenue decline test for the top-up wage subsidy, both the base and top-up would be determined by the change in an eligible employer’s monthly revenues year-over-year for either the current or previous calendar month.

For employers using the alternative revenue decline test available under the program, both the base subsidy and the top-up wage subsidy will be determined by the change in an eligible employer’s monthly revenues, relative to the average of its January 2020 and February 2020 revenues.

To ensure that the change in the revenue decline test does not lead to a less generous wage subsidy, the wage subsidy program includes a safe harbour rule, applicable from September 27 to December 19, 2020. This rule entitles an eligible employer to a top-up wage subsidy rate that is no less than it would have received under the three-month revenue decline test.

These proposed changes ensure that the program provides continued support to employers and meets the needs of the health and economic situation as it evolves. An employer with a 70% or greater revenue loss in the period is eligible for a 65% wage subsidy.

Since its launch, the wage subsidy giving support to businesses, non-profits and charities so they can keep and rehire workers has helped over 3.8 million Canadians with over $46 billion paid out through the program so far.

Honourable senators, our colleagues in the other place have provided their support across party lines for the bill’s quick passage. As I noted earlier, the Senate of Canada has provided thorough robust review through the National Finance Committee, where we also questioned the Minister of Finance.

Most importantly, the committee heard directly from Canadians, offering their scrutiny of the bill through their member organizations. Specifically, some of their concerns have been immediately addressed, such as the methodology for the subsidy eligibility.

Toronto’s mayor, John Tory, issued an impassioned plea for a quick passage to some leaders in the Senate of Canada. Yesterday, Manitoba’s premier, the Honourable Brian Pallister, announced the Manitoba Bridge Grant being online and open for applications to support the province’s businesses.

Some of these concerns have simply read as an appeal to senators to please do your job and do it quickly. I think we found a balance.

Honourable senators, I have shared with you today that I believe our colleagues on the Senate’s National Finance Committee, and individual senators offering their questions today and at the Finance Committee, have done their job. In the response for quick deliberation, the Finance Committee has been publicly assured by the Canada Revenue Agency public servants, who have responded so ably and so well during this pandemic. We have been assured that upon Royal Assent, measures outlined in this bill will be implemented, applications can be received and cheques should be in the hands of Canadians by early December. In fact, the officials from the CRA, on the public record, said that the application process can be opened 72 hours after Bill C-9 has received Royal Assent.

The advice and support of Canadians, and the recommendation that has been given with one voice by all these Canadians, is support for the passage of this bill without delay.

Colleagues, as the Yukon’s former finance minister, now serving as a senator for the Yukon, a member of the National Finance Committee and the sponsor of Bill C-9, I recommend this bill for your immediate consideration and adoption at second reading. Gùnáłchîsh and mahsi’cho, thank you.

I would like, first of all, to thank my honourable colleague for the question. I share her respect for the Senate and our work being done here to improve legislation.

I do recall the discussion of CEBA and a mention of it. Truthfully, I cannot recall the exact context and would want to go back and look at the transcripts of the meeting and our discussion with the minister.

I’m not sure if it’s appropriate form or not, Your Honour, but do I provide a written response to my colleague? No, she is shaking her head. I will look for her advice on that.

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill read second time.)

Honourable senators, when shall this bill be read the third time?

(On motion of Senator Duncan, bill placed on the Orders of the Day for third reading at the next sitting of the Senate.)