Budget Implementation Bill, 2021, No. 1
Third Reading--Debate
June 29, 2021
Moved third reading of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.
She said: Honourable senators, my speech today at third reading is about Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.
I’ll present an overview of Budget 2021 and highlight the budget measures that Bill C-30 will implement.
First, I’d like to emphasize that Budget 2021 is an ambitious plan that should make a considerable contribution to our economic recovery. It includes major investments in social and physical infrastructure and human capital, which will put Canada back on the path to prosperity.
To support our recovery, the government chose to focus on jobs, growth and resilience. The first and most important task is to beat the pandemic. The fight isn’t over yet, but vaccination is proceeding apace and Canadians’ collective effort to roll up their sleeves is beginning to bear fruit. Still, we have to keep vaccinating as many people as possible as quickly as possible to secure a strong economic recovery.
The government decided to make resources available to Canadians to complete the immunization campaign, as well as to address other needs that have emerged over the past 15 months.
As I mentioned in my speech at second reading, the bill provides for a one-time payment of $1 billion to the provinces and territories to reinforce the rollout of vaccination programs.
Bill C-30 also provides an emergency top-up of $4 billion to provinces and territories through the Canada Health Transfer to help provincial and territorial governments address immediate health care system pressures. This additional funding will help clear the backlog of procedures put on hold due to the COVID-19 pandemic. It will support provinces and territories in ensuring health care systems can continue to respond to and recover from the pandemic and help protect the health and safety of Canadians.
The second part of Budget 2021 focuses on supporting Canadians and Canadian businesses until economic activity has recovered. The government will continue to make resources available to Canadians to protect jobs and support affected businesses and workers. Nearly $27 billion in funding has been earmarked for this part of the budget.
Bill C-30 supports the government’s plan for job creation, the details of which are outlined in Budget 2021 where the government is committed to creating nearly 500,000 new training and work opportunities for Canadians. The proposed new Canada recovery hiring program will help small- and medium-sized businesses across Canada bounce back from the uncertainty and countless challenges they have faced over the past 16 months.
This program will support eligible employers experiencing a decline in revenue because of the pandemic by covering up to 50% of the increase in payroll paid to eligible employees. The program will be retroactive to June 6, 2021, and will be available until November 20, 2021.
The recovery of our small- and medium-sized businesses is indispensable to our broader economic recovery, and I believe this program will help these businesses hire the workers they need to resume their operations.
Furthermore, Bill C-30 would extend the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Lockdown Support until September 25. The wage subsidy has already protected millions of jobs across Canada, and rent subsidies have helped businesses pay fixed expenses as they saw their revenues decline and they were forced to significantly restrict their activities under public health orders.
Other measures are aimed more specifically at helping Canadian businesses do business. The government intends to make available the resources necessary for innovation and greater integration into the digital economy. It aims to remove barriers to internal trade and make it easier to do business in Canada and abroad by continuing to invest in world-class research and innovation.
Small businesses need access to financing so they can invest in people and innovation and to have the space and capital to operate and grow. The government plans to continue its support for small businesses by proposing, through Bill C-30, to improve the Canada Small Business Financing Program by amending the Canada Small Business Financing Act, which will result in an expansion of eligibility and an increase in loan limits.
Honourable senators, by passing Bill C-30, we will be ensuring that Canadian businesses have the support they need to sustain their day-to-day operations and invest in long-term growth.
The next component of the plan focuses on creating jobs and growth for our country. This factors in key elements of the recovery, considers the contribution of women in increasing productivity and of young people in accessing a qualified and competent workforce. The conditions for this success are based on the measures to be taken in the area of early childhood education, access to child care spaces and on the place of youth in the economy, whether in education, employment or succession planning.
In Budget 2021, the government also announced historic and generational investments in our future, and Bill C-30 lays the groundwork for part of this work.
The government announced its vision for the creation of a Canada-wide early learning and child care system. I want to talk about it briefly in this speech, since it’s a measure that is very important for Canada.
This plan would stimulate economic growth, support women’s participation in the labour force and make sure every Canadian child gets off to the best start possible.
This measure will have a long-lasting economic impact. Daycare services help women and families work and contribute to children’s future academic success and overall well-being. These services have an impact on growth and GDP and, consequently, on government revenues and government spending. The economic impact shows that every dollar invested in early childhood education generates an estimated $1.50 to $2.80 in economic spinoffs for the country.
With this plan, the government plans to reduce the average fees for child care by 50% by 2022, with the goal of bringing fees down to $10 per day, on average, by 2026 everywhere except in Quebec, which already has a system that is the envy of the rest of Canada.
To support this vision, Bill C-30 proposes to provide up to $2.9 billion to the provinces and territories to begin working on the implementation of this system, with Budget 2021 providing $27 billion over the next five years.
The pandemic has shown us all just how urgent an economic issue this is. However, this isn’t new. Women have long known that without child care, parents, usually mothers, cannot work outside the home. I believe the time is right to move forward with this long-term investment as a key piece of our country’s social infrastructure. This investment will have an impact for generations to come.
Over the past year, youth have made extraordinary sacrifices to ensure the safety of older people. Bill C-30 would make college and university studies more accessible and affordable by extending the waiver of interest on federal student and apprenticeship loans until March 2023. This will make it possible for the 1.5 million Canadians who are repaying student loans to save some money.
Bill C-30 has a number of important measures aimed at reducing poverty and improving the health and well-being of Canadians.
As mentioned earlier today, the government is proposing to set the minimum federal hourly wage at $15. Note that workers in jurisdictions with a higher hourly wage will receive the minimum wage in effect in their province.
With Bill C-30, the government is also enhancing the Canada workers benefit and simplifying eligibility rules for people working multiple jobs.
The government is choosing to standardize EI eligibility rules and guarantee that severance and other termination benefits do not delay EI benefits. Additionally, it is extending EI sickness benefits to better support sick or injured Canadians and is providing additional weeks of recovery benefits.
In the past 14 months, no one has felt the devastating health effects of COVID-19 more than seniors. We were able to see just how vulnerable they were, and how urgent it was to implement measures to help them financially while allowing them to age at home with dignity.
Seniors deserve a safe, secure and dignified retirement. The government proposes to make a one-time payment of $500 in August 2021 to Old Age Security recipients who are or will be 75 or over in June 2022. Bill C-30 also includes a permanent 10% increase to OAS for people aged 75 and over as of July 2022.
Measures are also being taken to improve the disability benefit and relax the rules pertaining to the transfer of generational wealth from a parent or grandparent to a person with a disability, and to make our communities and workplaces more accessible.
In Budget 2021, the government is committed to continuing its support for Indigenous communities as it invests in addressing COVID-19, child and family services, mental health and education. The government is also working to support Indigenous entrepreneurs in building greater capacity for community investment.
Bill C-30 also makes an important change that would eliminate an obstacle to First Nations’ use of tax revenues. This amendment will facilitate access to financing under the system created by the First Nations Fiscal Management Act.
This amendment will give Indigenous peoples much greater autonomy for the purpose of building and overseeing infrastructure projects necessary to their community development.
In the next part of my speech, I will quickly go over other measures and investments in Bill C-30 that relate to various sectors of the economy.
The government intends to accelerate the growth of our net-zero-emissions economy, invest in our clean-energy industries and greener communities, advance Canada’s climate plan and protect nature. Bill C-30 proposes an investment of $1.1 billion.
The government proposes measures for access to affordable housing; the restoration of tourism and artistic, cultural and sports activities; and the budget lays out support for charities, investment in infrastructure, local and regional development, rural communities, the North and immigration.
The planned investments are in the order of $4.7 billion.
Furthermore, the government’s commitments focus on fairness and fiscal responsibility. Bill C-30 introduces a new retail payments supervison framework that will establish a regulatory framework for payment service providers. It makes important adjustments to the GST for digital services. It implements measures to combat aggressive tax avoidance and close loopholes, expands the scope of measures dealing with money laundering and strengthens certain Canada Revenue Agency measures.
As you can see, this plan has a good number of important measures that were developed in accordance with the economic and social imperatives of our country. This approach should result in strong and sustained economic recovery.
I will now speak about the government debt. Senators will recall that, before the pandemic, the debt-to-GDP ratio was just over 31.2%. We note that this ratio is now estimated to be 51.2% in the estimates for the 2021-22 fiscal year.
A slightly more detailed analysis of the debt indicates that liabilities total $1,799.7 billion, backed by financial assets of $466.2 billion and non-financial assets of $99.8 billion, for total federal debt of $1,233.8 billion.
As for debt charges, they should total $22.1 billion for 2021-22, which represents 0.9% of GDP.
I can well understand my colleagues’ concerns regarding our country’s debt, because I share those concerns.
The debt is costing taxpayers a lot of money. It will be transferred to future generations and, one day, they may find that burden difficult to bear.
When the pandemic hit, Canada was in a strong budgetary position, which enabled the government to provide support to Canadians and businesses. The objective was twofold: to help them deal with the impact of the pandemic and to better position our economy for recovery.
The pandemic had an effect not only on Canada’s debt but also on the debt of all the other countries in the world. It is important to remember, however, that Canada is doing well compared to other countries because it has the lowest debt-to-GDP ratio of all the G7 countries and has maintained its AAA credit rating.
What’s more, in its debt management strategy, the government plans to maximize the financing of COVID-19-related debt through long-term issuance by lowering debt rollover and providing more predictability in the cost of servicing debt.
I’d like to close with the words of the Governor of the Bank of Canada, Tiff Macklem, who said the following in his testimony before the Standing Senate Committee on Banking, Trade and Commerce last week, and I quote:
For working Canadians, a complete recovery means a healthy job market with good opportunities. That includes low-wage workers, women and young people, who have been hit hardest by this pandemic. A complete recovery means companies have confidence that the pandemic is over and they are investing to seize new business opportunities.
Most of the measures proposed in this bill involve significant investments in human capital and in businesses, which will ensure a greener, fairer and more prosperous economic recovery for all Canadians. With that, I urge you to vote in favour of Bill C-30. Thank you for your attention.
Honourable senators, I am pleased to rise today to contribute to this third reading debate on Bill C-30, Budget Implementation Act, 2021.
I very much want to thank the bill’s sponsor, Senator Moncion, for her hard work in preparing and bringing this bill to the Senate. I also want to thank my colleagues at the Standing Senate Committee on Social Affairs, Science and Technology, and especially our chair, Senator Petitclerc, for the time and effort they invested in studying a number of divisions in this legislation.
My comments today are devoted to Division 33 of Bill C-30, titled Early Learning and Child Care.
In just three sentences, Division 33 sets out the first tranche of spending toward the government’s ambitious plan to create a national child care system. But behind the short text of Division 33, colleagues, lies a long history of hopes, dashed expectations, and failed efforts to forge such a system.
It was 50 years ago that the Royal Commission on the Status of Women called for accessible, affordable, high-quality national child care. Its report, released in December of 1970, includes a remarkably modern sounding call for child care, which stated:
We recommend that the federal government immediately take steps to enter into agreement with the provinces leading to the adoption of a national Day-Care Act under which federal funds would be made available on a cost-sharing basis for the building and running of day-care centres meeting specified minimum standard . . . .
That was said in 1970.
Over this half century since the report there were studies, there were promises and there were two major attempts to develop and pass federal legislation. The first of these was in 1987, when Brian Mulroney’s Progressive Conservative government came up with a $5.4-billion plan to create 200,000 new child care spaces across Canada, among other items. That’s a lot of money — $5.4 billion — especially in 1987.
The legislation passed the House of Commons, but when Mr. Mulroney called an election in the fall of 1988 his child care initiative died on the Order Paper right here in the Senate, never to be resurrected after Mr. Mulroney’s government won re‑election. Nearly two decades later, in 2005, Paul Martin’s minority Liberal government promised $5 billion over five years toward a national system. Mr. Martin succeeded in obtaining bilateral early learning and child care deals with all 10 provinces just days before the 2006 election, but those arrangements were terminated by Stephen Harper’s incoming Conservative government.
So 50 years have now gone by without such a national program. For much of this time, a national child care program was seen to be the next big social program to follow medicare, which was our first big social program, but national child care was always on the back burner, always strangely out of reach, and always dominated, behind other priorities. Therefore I think it’s really important for us to understand this journey and the historical moment we find ourselves in today.
We are here to consider this national child care program developed by this federal government under Minister Freeland, with an estimated expenditure of $30 billion over five years. Yes, this is it; this is the real deal. As Senator Moncion said, the first step is an initial expenditure of $2.95 billion in fiscal year 2021-22, and that is what is in Bill C-30. This year’s dollars will flow to provinces and territories in connection with bilateral agreements in respect of early learning and child care. The goal at the end of year one is to reduce the price of regulated child care by 50% by the end of 2022 in all provinces and territories.
Senators, I support the federal government’s involvement in national child care. Child care is important from every possible perspective. For many decades now, women have recognized that independence and equality are advanced only when child care responsibilities can be shared. Child care makes it viable for women to work and to return to work, it increases the quantity and quality of employment opportunities in child care itself — careers that are largely occupied by women — and it reduces barriers to women’s success in the labour force.
Government estimates suggest that this child care plan could add 240,000 employment opportunities for women in Canada. And some experts, like the Vancouver-based Centre for Future Work, predict that as many as 780,000 more women are likely to join the labour force or increase their hours of work in the next 10 years as a result of affordable child care.
With women re-entering the workforce more readily, Canadians should also expect to see material increases to household income, especially among lower-income families, where a return to work was financially untenable with high child care costs. My city, Toronto, consistently shows up as having the highest child care costs in this country in almost every category of child care — infant, toddler and so on — so a 50% reduction in fees is going to be very helpful in my community.
We know that health outcomes are linked to household incomes as well, and we know that children’s outcomes are dramatically improved by access to early childhood education. The prospects for economic growth are also significant. Karen Hall, Director General, Strategic and Service Policy Branch, Employment and Social Development Canada, told the Social Affairs Committee that for every dollar invested in early childhood education, the broader economy receives between $1.50 and $2.80 in return.
Also at the Social Affairs Committee, Craig Alexander, Chief Economist and Executive Advisor, Alexander Economic Views and Deloitte Canada said:
The economic multiplier, the return on investment that you get, has been studied a lot . . . . The estimates range from around 1.5 for every dollar invested to upwards of $5.
So a national child care program will benefit women, children, families and the economy. This is one of the very best ways for this country to “build back better” after the pandemic that has done so much damage to this country and to the world.
As important as it is, I have two concerns about this initiative. The first is that the shape of the child care created by this spending depends entirely on what the federal government negotiates with the provinces. While federal objectives and principles around affordability, training and quality have indeed been set out already in a 2017 framework document, the end result of this process is anything but clear.
Professor Ken Boessenkool from McGill University, who came to speak to our committee, suggested that the child care plan was, as he called it, the “opening bargaining position of the federal government,” and he also stated, “It is all aspiration, with the perspiration all dependent on negotiations with the provinces.”
The government holds up the Quebec system as a model, but there is no guarantee at all that most provinces or even any provinces will end up with this model, so that is one of my concerns. My second concern is that this program is especially vulnerable to being cut as we go forward.
This year’s expenditure, just below $3 billion, amounts to a little less than 10% of the total and high price tag of $30 billion. That’s a lot of money out there that’s not currently allocated. Another government, other priorities, another emergency, concerns about fiscal prudence and concerns about the growing deficit — all of these or any of these may derail this program down the road.
Then, colleagues, we have our history, which I summarized earlier. In 1988, a federal government created a national child care program, an election was called and the program died. In 2005, a federal government created a child care program, an election was called and the program died. In 2021, a federal government created a child care program, an election was called and then what? Will history repeat itself, or will we take a different path?
Colleagues, I am proud and pleased to be a parliamentarian today and to cast my vote for a different and better future.
Thank you.
Honourable senators, Budget 2021 is historic both in size and scope. According to its authors, “. . . it’s about creating more jobs and prosperity for Canadians in the days—and decades—to come.”
I’d like to congratulate our Deputy Prime Minister and Minister of Finance on her first budget and recognize her efforts, including the important creation of a beneficial ownership registry.
However, I will focus my comments on whether some of the budget plans and the legislative authorities in Bill C-30 hold sufficient promise to actually deliver greater prosperity in the decades to come. This includes important investments in child care, as well as digital adoption in small- and medium-sized enterprises, or SMEs. I will also look at the inclusion of the Retail Payments Activity Act in Bill C-30, which the Standing Senate Committee on Banking, Trade and Commerce studied along with efforts to address money laundering. I will finish by examining the budget efforts to harness the potential of the digital economy, discuss the absence of a plan for digital identity and whether the increased investment in our Competition Bureau is sufficient. I’ll focus my efforts on where the budget and Bill C-30 hold promise and deliver, and where I think further efforts will be required.
I want to start by discussing the only way to create greater prosperity, beyond winning the lottery, and that’s improving productivity growth. A simplified formula for increasing prosperity starts with robust competition. That’s because competition is what inspires new entrants to disrupt inefficient incumbents. Equally, it forces and causes mature incumbents to look for ways to improve the value they deliver to their customers.
Competition drives innovation, which produces productivity growth, enabling companies to do more with less and produce greater value from every hour worked. It’s the only sustainable path to increase prosperity, especially in a global economy upended by climate change, digitization and COVID.
Let’s look at the budget promise to invest in child care and early learning. This, in itself, is a positive force for improved productivity. It liberates our current workforce to be engaged, to take risks and to seek opportunity. It reverses Canada’s long-standing underinvestment in early learning relative to other major economies.
Research suggests that the broader economy stands to gain between $1.50 to $2.80 for every dollar invested into child care and early learning. A 2017 Conference Board of Canada study places this number as high as $5.80 for every dollar invested. I’m convinced that the highest returns come from ensuring that the investment does not just deliver child care but the effective early learning that measurably improves the skills that all children need to succeed in school.
It’s tragic that reading skills, which are foundational to the processing of language in all subject areas and aspects of life, remain shockingly low. For example, the 2018-19 results from Ontario’s Education Quality and Accountability Office indicated that 26% of Ontario’s Grade 3 students did not meet the provincial standard for reading. If you are struggling to read in Grade 3, there are decades of evidence to show that your struggle with formal education is only beginning. Sadly, little has changed in the 25 years since I was immersed in this field, working with North America’s leading reading researchers.
Our desire for prosperity in the decades to come demands that we deliver world-leading early-learning programs.
I sincerely hope that the federal government, with the help of its to-be-created national advisory council, will prioritize the recommendation of a 2009 Senate report called Early Childhood Development and Care: Next Steps. This report supported an evidence-based approach to reduce the risk of illiteracy and to help our most vulnerable children to succeed. They cited the Organisation for Economic Co-operation and Development, or OECD, recommendations that investments should include national curricular frameworks, emphasize quality improvement and increase data collection and research. Our colleagues also recommended that an annual accountability review, based on robust data collection, be conducted. This aligns with recommendations made to the House of Commons Standing Committee on Finance in 2016.
I pray we will not miss this crucial opportunity to catalyze the success of all children, especially our most vulnerable. Let’s not just deliver child care for parents but empower their children with the early skills they need to succeed in this increasingly competitive world. I’d argue that unprecedented levels of economic disruption demand that our students be much better prepared than our generation ever was.
Our businesses need to be better prepared as well. Consider the Statistics Canada report that labour productivity in our digitally intensive industries grew three and a half times faster than the rest of the economy over the last 20 years. Yet, in 2019, 19% of small businesses still had no web presence at all. This put those businesses at an incredible disadvantage as they headed into the pandemic. Even more concerning is that sophisticated technologies, those with the greatest productivity growth potential, are not being adopted by SMEs. For example, artificial intelligence, or AI, has the potential to unleash astonishing productivity gains, yet only 1.7% of small businesses and 3.5% of medium enterprises in Canada integrate AI into their operations.
When SMEs do not adopt digital technologies, they struggle to stay competitive. According to the Business Development Bank of Canada, or BDC, digitally mature SMEs are 62% more likely to have higher sales growth, 52% more likely to have higher profits and 70% more likely to be exporters.
These are among the reasons I was pleased to see the budget include significant investments in assisting SMEs in their digital adoption. Budget 2021 will invest $4 billion over four years through the Canada Digital Adoption Program. Additionally, $1.4 billion will be invested through Innovation, Science and Economic Development Canada, or ISED, to create training, advisory and work opportunities to enable digital adoption, and $2.6 billion through BDC to help SMEs finance digital adoption.
The smaller Australian Digital Business Plan announced last September provided AU$800 million, and it’s expected to return an impressive AU$6.4 billion per year in GDP by 2024. Let’s aim for that level of return on investment.
The federal government must ensure that this program delivery ultimately catalyzes greater private investment. In 2020, Canadian businesses only invested 10.5% of capital spending in digital technologies, compared to 14% in Britain and 16% in the United States. Increasing digital maturity is associated with significant productivity gains across the entire economy, but some need more support. This is true for SMEs from equity-seeking groups. It’s good that the budget recognizes that special attention is needed to reduce systemic barriers to opportunity and inclusion, so we ensure our economy is firing on all cylinders.
Additionally, Bill C-30 does well to introduce a long overdue Retail Payments Activities Act, or RPAA. In Part 4 of Division 7 of Bill-30, the RPAA will deliver new payment service options that are far more cost efficient, accessible and secure for both consumers and merchants. This is good news.
Currently, when customers pay with a credit card, merchants must pay up to 3.5% of the revenue to process that payment, and customers pay exorbitant rates of interest if they are late with their payment. Additionally, the Chartered Professional Accountants of Canada estimate that 34% of Canadians are victims of credit card fraud, knowingly or not. Regulatory stagnation has prevented Canadians from accessing globally competitive payment services.
I’m sorry, Senator Deacon, but it’s six o’clock, and I have to interrupt you.
Pursuant to rule 3-3(1) and the orders adopted on October 27 and December 17, 2020, I am obliged to leave the chair until seven o’clock, unless there is leave that the sitting continue.
If you wish the sitting to be suspended, please say “suspend.”
The sitting will be suspended until seven o’clock, at which time you will have the balance of your time, Senator Deacon.
