Honourable senators, the Senate is resolved into a Committee of the Whole on the subject matter of Bill C-13, An Act respecting certain measures in response to COVID-19.

Honourable senators, in a Committee of the Whole senators shall address the chair but need not stand. As ordered earlier today, the speaking time is five minutes — including questions and answers. As also ordered by the Senate, the committee will receive the Minister of Finance, and I would invite him to enter, accompanied by his official.

(Pursuant to the Order of the Senate, the Honourable Bill Morneau and his official were escorted to seats in the Senate chamber.)

Minister, welcome to the Senate. I would ask you to introduce your official and to make your opening remarks.

Honourable senators, thank you for having me here today. We all understand that COVID-19 is a crisis unlike any we have ever faced. The outbreak of the disease is rapidly evolving, and the government’s ability to respond must be rapid too. It must be nimble, responsive and, above all, able to take rapid action. We must be able to protect Canadians’ health and protect our economy.

The legislation that I tabled in the House of Commons earlier this morning, and which is now before the Senate, will enable the government to do just that. It will help to fund our health care systems, support Canadian workers, support Canadian businesses and stabilize the Canadian economy.

First and foremost, our priority is protecting the health of Canadians. The proposed legislation provides authority to the Minister of Health and myself to requisition funds to support federal efforts to prevent and control the spread of COVID-19.

The legislation also proposes to provide one‑time funding of $500 million through the Canada Health Transfer for provinces and territories to ensure our health care systems can continue to deliver world-class care.

We also know that many Canadians don’t have access to benefits when they’re sick. They’re worried about being able to afford groceries, to afford their rent, to afford medicine. We’re proposing the new Canada emergency response benefit. This benefit would provide support for up to 16 weeks for workers who lose their income as a result of COVID-19. The CERB would be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit. This approach supports any Canadians who find themselves in a situation in which they lose all of their income as a result of COVID-19. It supports Canadian businesses by preserving employees so they do not have to be laid off. It’s a wage subsidy delivered directly to people.

This includes workers who are still employed but aren’t receiving income because of work disruptions related to COVID-19. It will help businesses keep their employees as they navigate these difficult times and make sure they can quickly resume operations when the time is right.

We’re also proposing to support families through a temporary $300 top-up on the Canada Child Benefit for each child, which will be delivered in May. For Canada’s 12 million low- and modest-income families, a special top-up will be delivered through the GST credit payment.

We’re also proposing a six-month pause on Canada student loans. For seniors, we have reduced the minimum withdrawals from RRIFs by 25%, helping to protect their savings from market volatility. The legislation also proposes a wage subsidy for small organizations on top of the direct wage subsidy to citizens to help them keep Canadians working.

In addition to the subsidy, as I mentioned, the Canada emergency response benefit permits employers to furlough employees that they can’t pay, knowing employees will receive money directly from the federal government.

We know that businesses need support to weather the storm and to keep Canadians employed. During this time, businesses may require liquidity. With this legislation, we’d make amendments that will give government the flexibility to help more businesses through the Business Development Bank of Canada and through Export Development Canada. These changes will allow BDC to provide more financial support to Canadian businesses and give EDC the flexibility to deliver financial and credit insurance support to affected Canadian companies.

We’re also proposing to strengthen our ability to act through the Canada Account. The Canada Account is an important tool that can support Canadian companies with financing and with guarantees.

We know that financing is crucial right now for businesses across the country. We’re proposing to strengthen Farm Credit Canada to support our farmers in the agri-food sector during these times and make sure they have access to financing.

The government is taking action to help the Canada Mortgage and Housing Corporation increase liquidity in the financial sector by providing stable funding to banks and mortgage lenders to support continued lending to Canadian businesses and individuals. This work is absolutely crucial.

It’s our collective responsibility to ensure that the government has the tools to respond quickly to protect Canadians and to protect our economy. I’m asking my honourable colleagues to support this legislation. There can really be no delay. Canadians are counting on us. Thank you.

Minister, my questions will be succinct, and I hope your answers will be as well so I can get through as many of these as I can in five minutes.

My questions for you concern support for the foundation of Canada’s economy, our small- and medium-sized businesses that are suffering enormously at this time.

Regarding the wage subsidy for small businesses, your government is offering a 10% subsidy. The U.K.’s subsidy is 80%; Denmark’s is 75%. Our SMEs and business groups, including the Canadian Federation of Independent Business, are calling for a similar level of subsidy from your government. Helping small businesses keep their employees will help us to recover faster when this crisis ends. Small businesses appreciate any help they can get, but 10% is too small to do any good.

Minister, why did you choose this method of supporting small businesses? Can you explain how you arrived at the figure of 10%? Do you still believe 10% is sufficient or are you looking for a further increase?

Senator, this is a fast-moving and dynamic situation. It’s obviously unprecedented and I’m going to have to correct you because what you’re saying is actually incorrect.

The way that we have decided to move forward on this is we are providing a wage subsidy that’s going to go directly to employees. A week ago, as you may recall, we were talking about delivering the benefit through the Employment Insurance system with a separate benefit. We’ve actually decided that the way we need to move forward is to provide support that will allow us to ensure that people have the capacity to be furloughed from their place of work, exactly as is the case in the United Kingdom. They will be allowed to do that so they can continue to get this benefit. It will be delivered directly from the government, and, on top of that, there will be this 10% subsidy for the workers who continue to be actively at work.

If you take a close look at what’s going on in the United Kingdom, you will see our approach is largely similar. I spent time yesterday morning on the phone with the G7 finance ministers, and that was our conclusion.

Separately, if you look at what Denmark is doing, I think you will conclude that, in fact, ours is superior. In Denmark’s case, they are only allowing firms that have a significant reduction in revenue to have access to that wage subsidy. What we’re proposing is that people who find themselves out of work for any reason related to COVID-19 — that could be for sickness, quarantine, because you’re caring for an elderly parent, caring for a child, because they’re off work, they don’t want to go to work or their employer has asked them to be off work — will get access to this benefit. Workers will not be separated from their place of employment, so that will allow them to come back quickly.

When you do the math — I know this will be coming in a couple of days — I think you will see and I know that small businesses will see that this provides them with significant support.

Of course, there are other areas we’re supporting as well, but this is critically important, and we believe what we have done now puts them in a much stronger position.

It is clear to me, and I hope to you, that this is a bad time to raise taxes on small business. Minister, do you have plans to defer or cancel planned increases to CPP payroll taxes and EI premiums, or the hike in the carbon tax coming on April 1?

We have taken a position that it’s quite important for us to enable businesses and individuals to defer the payment of any of their income taxes until August 31. That’s a $55 billion deferral, so that’s making sure that $55 billion that would have come out of the economy is not going to come out of the economy, allowing people to continue to do that.

We have also taken a number of other measures that will support businesses, large and small. The most important, from our perspective, is we know we’ll be making sure credit is available to bridge people through this time.

We have not taken any measures off the table. This is an unprecedented time. We continue to work on ensuring that we’re supporting businesses. I know that what we’ve put forward at this stage will help to ensure people can bridge this time. As we don’t know either the depth or the duration of the challenge we’re facing, we think it’s important we have the capacity — and through this legislation we do have the capacity — to continue to react appropriately.

I’m 15 seconds away so I won’t bother starting the next one.

Welcome, minister. Everything seems to be moving quickly and in a positive way. My question is simple.

According to the government, some of the proposals, such as the COVID-19 emergency care benefit, will be implemented in early April, while increases in GST transfers as well as increases in the Canada Child Benefit are slated to begin in May. The problem is that vulnerable Canadians require financial assistance now.

In January 2019, a survey conducted for MNP suggested that 46% of Canadians were $200 away from being unable to pay their bills and therefore faced insolvency.

Minister, could you explain the reasoning behind the implementation dates for these programs? Did the government review other potentially faster and more efficient means of delivering the programs?

Thanks for the question, senator. There aren’t faster ways to get money into Canadians’ hands. That is the challenge we are facing in this particular situation. The approach we took — and this was a whole-of-government approach — was that we needed to find a way we could get support for Canadians to them in the most simple, efficient and time-sensitive way.

In looking at the way we can do this, that is how we came to our conclusion. What you are seeing with this new Canada emergency response benefit is a change from where we were last week, because we realized this is the way we can deliver for Canadians most efficiently and in the most time-appropriate manner. It will be delivered both through the Canada Revenue Agency and the Employment Insurance back-end systems, but it will be simplified. It will be simplified so people only have to go online to satisfy some very limited conditions saying that they have had $5,000 in revenue over the last 12 months and that their income has gone down to zero as a result of the COVID-19 crisis. It’s a simple and effective way for us to get money to people. We are working hard to make sure that happens rapidly. We expect that the week of April 6 is our target date. But as we work to have an exact date, we will get it out to Canadians so they can have confidence.

With respect to both the GST low-income credit and the Canada Child Benefit top up, the earliest they can be delivered, from a systems standpoint, is in the month of May. It’s not that we didn’t want them to happen in the month of April, but the capacity is not there to deliver in that time frame. That’s how we got to the time frame of May. Should we find ourselves with the ability to do it more rapidly, which we are working toward on a daily basis, recognizing that no one has ever used the systems in this way, we will move forward more rapidly.

Recognizing the pressure on the system, do you have the ability to be able to deliver with the volume of requests that have already been proposed by Canadians? With restaurant businesses, I’m very close to it. My son has a restaurant he had to close down. They started closing down over two and a half weeks ago, laying off all their employees. For the small-business person, timing becomes a critical issue. Do you have the capacity within the various departments to be able to deliver the service, especially with the incredible strain that has been put on the system now? What type of confidence do you have in the system to be able to deliver?

Clearly, this is unprecedented. The systems were not built for this sort of stress and strain.

The answer is that we have put forward measures we believe we can deliver under the time frame we said can deliver on. We are working to make sure we can do that.

I want to talk about your son specifically. Your son has a restaurant with a number of employees. He has laid them off. Any of his laid-off employees will be allowed to go into this new program, backdated to March 15, and it is for 16 weeks. That’s what they will be applying for. If your son’s business is not generating any revenue for him, he will also be able to do that. Unlike the typical way we do these things, he will be able to apply himself. On top of the benefits for his employees and himself, we are working to make sure there is credit available for him during this time.

There will be more we are going to be talking about in the days to come. We are working literally overnight with the banking sector to make sure we can find ways to bridge that gap. Over and above that, we’ve decided we don’t want him or any of his employees paying taxes during this time because that would be inappropriate. All of those things are being delivered. I can tell you that we are also considering other things we can do in order to make sure that when this is over — and we hope and expect it’s temporary — he can get his business back up and running in a rapid way. That’s what we’re trying to achieve.

First of all, minister, thank you very much for all of the hard work you have been doing on behalf of Canadians in putting this incredible package together.

Over the past few week, we’ve heard about the impacts of the crisis in economic terms, in terms of job loss, layoffs and consequences for entire industries like tourism, the cultural sector, hospitality, retail and so many other sectors. They have been devastated.

Taking into account the measures that you have put forward, can you give us your analysis of the state of the economy? We’ve heard talk of recession. I’d like to know your view of the likelihood of recession, how severe you think it might be, what might be the timetable for recovery. I’m looking for your analysis. I know we all hope things will get better and I know it’s a fast-moving situation, but your department does these projections. This is what the Department of Finance does. I’d like to get a sense of your analysis, at least of the scenarios going forward.

Thank you, senator. I think we’d all like to know things that we don’t know right now. I appreciate that the question is in absolute good faith. We’d like to know that we understand the depth of this challenge. We’d like to know about the duration of this challenge. We’d like to know whether it will come in waves. We don’t know any of these things.

When the Federal Reserve in the United States lowered their interest rates just a few days ago, although it feels like a long time ago, they didn’t put any financial projection out because they concluded that that would really not be worth doing in this particular situation because they couldn’t actually come to an analysis on where they’re going.

I spoke to the Ontario Minister of Finance last night. They’re delivering their fiscal update today. I can’t upstage his update, which is coming today, but he expressed the same sort of challenge in trying to get to those conclusions.

My department is trying to ensure we understand the financial implications of all the measures we’re putting forward. That’s what we’re working hard to do. You saw that announcement last week. There will be another announcement, at least, this week. That will articulate for Canadians what we think we will need to invest in the face of this challenge. It would be wholly inappropriate for me to give you an estimate that is not founded on credible analysis. We do know that we have enormous job loss going on right now. We hope and expect it will be temporary.

As you think about that and about what’s going to happen, in particular, to consumer demand over the next period of time — I can’t determine exactly that period of time — you can see that we will experience significant decline in economic activity during that period of time. A reasonable expectation is consumer demand will increase once we get past this. That’s what regular economic analysis would get you to, but it is fair to say that there’s nothing regular about what we’re facing. For me to make an argument that we know something that we don’t, I’m not going to do that. We’re going to be transparent about what we know, what we don’t know and deal with the situation as we find it.

Minister, thank you for being with us today. I’m going to continue in the same vein as my colleague, Senator Smith. Many independent workers, unemployed people, sick people and caregivers are extremely worried about the red tape they’re running into when applying for assistance. As you know, a vast number of Canadians have no income at the moment.

I’d like to know what measures you’re planning to take. As we know, public service employees are working from home right now, and the computer networks and teleconferencing systems are overwhelmed. What specific measures are you going to take to deal with that? Quebec Premier François Legault mentioned April 6 as the date when benefits would start to be paid out. Is that indeed the case?

Thank you very much. I want to reiterate that we think it is very important to find a simple and effective way to get money to people who are in a difficult situation. We know that it’s important to make that happen quickly for people who are sick and for others who have to stay at home, regardless of the reason. That’s why we opted for a very simple approach involving just two questions. First, did the person making the claim earn $5,000 in income over the past year? Second, is that person currently in a situation where they’re not receiving any income because of COVID-19? With our system, we believe it will be possible for people to get some money within two or three weeks. That is the situation. I can’t be more specific, but I believe it will be around April 6 or the week of April 6.

It is clear that our systems aren’t adapted to the situation we find ourselves in. That’s why we’re working every day to ensure that the systems work given the number of people who are in a difficult situation.

My second question is about fair treatment for the self-employed. Why should they have to go 14 days with no income when you’ve done away with the waiting period for unemployed workers? To be clear, self-employed workers are earning no income at all. As everyone knows, their income tends to be irregular because they get big contracts here, small contracts there, or maybe $20 for a music lesson. Why have you set the bar so high for self-employed workers who are now in a particularly precarious position?

Let me explain our approach. We’re talking about everyone who has earned $5,000 over the past 12 months; so, the vast majority of workers such as freelancers, Uber drivers, and so on would fall into that category. If these individuals no longer have an income because of COVID-19, they will be able to collect benefits as of March 15 for a 16-week period. That’s exactly what will be available to other people in our economy who receive employment insurance benefits.

My question, more specifically, is this: Why 14 days without any income when we know that, under normal circumstances, self-employed workers might have all kinds of different contracts? You’re setting the bar very high. These individuals can’t have an income of $20 or $40 a week if they want to get these benefits.

We’re not talking about 14 days. I don’t understand the question.

They cannot have any revenues for 14 days in one month. That’s what I read. If they have any revenues, they will not be able to access the help. That’s a really high threshold for those workers, I find, because they have many contracts. They can have a contract going on, which is really small, but may have lost their bigger contract.

Senator, we have to turn to another questioner.

Thank you for being here today, minister. The government has tasked the Business Development Bank of Canada, the BDC, with executing a significant part of the financial aid to small- and mid-sized business. Given the situation as it is now, is there a danger of the BDC becoming swamped and not being able to respond to all requests in a time frame that will keep businesses from folding?

I would like to respond to the senator. The decision was that it has to be for people who have no revenue. That’s a decision we took because that’s the way we can administer it.

In fact, senator, the Business Development Bank approach is not suggesting that people need to go to the Business Development Bank of Canada nor to Export Development Canada. In fact, they are standing behind the banks. That means a small business can actually go to its current banker to get a loan. That loan will be supported with a credit facility from Business Development Bank of Canada.

We continue to have the entire capacity of the Canadian banking system as a way for people to come on board. It was the same approach used in 2008-09 when 10,000 small employers actually used this approach to get credit during that time period. We are using an approach that was already in existence, that worked, that used $11 billion in capital at that time. We believe the most efficient way for us to do this is using the credit availability from the Crown through BDC delivered through our banks. It’s broader than just our six large banks. It also includes other smaller banks and Desjardins, for example, so we can continue to have people use their existing banking relationships to deliver the aid.

I have a further question. This is not 2008. I believe it’s going to be way worse than 2008 by multiples. BDC acts as the backup to the financial community; I understand that. However, I really worry that at some point, they could get overwhelmed with the sheer volume of requests coming down the road. I want to be sure that you’re in a position to monitor the capacity and effectiveness of the BDC, and have a plan if they do become swamped. As you said, we are going into an area where we have no previous experience. That’s my concern.

Senator, that’s a valid concern. We are most definitely in a situation that we have not seen before. Our systems, our approaches to dealing with business on a regular day-to-day basis have not been stressed to deal with an unprecedented challenge. That is exactly the reason we chose what we think is the best way to deliver credit to businesses. We don’t think there’s any other better approach. We stand ready if there are people who have ideas on ways we can either change that approach or improve it. We will be monitoring it not on a weekly basis but on a daily basis to see what the challenges are. Among the things we are continuing to consider, we’re working with the banks to understand their administrative capability to do that.

This situation is going to be a very dynamic one. We need to be thinking about the actual benefits, the scale of the benefits and how they’re delivered. That includes everything from benefits directly to employees to loans to businesses. Trust me, should we find we need to change, we will change. One of the reasons that this legislation is intended to give us some capability we wouldn’t normally have is because we don’t know. We don’t pretend to know where we’re going to be in the coming days and weeks.

Thank you, minister. For what it’s worth, I do trust you.

Thank you, minister, for being here today. It’s so important.

I have three quick questions on behalf of my group, the progressive group in the Senate. The first question is submitted by Senator Lillian Dyck from Saskatchewan and it is about the Indigenous people.

A budget of $305 million is set aside. There is concern because in the H1N1 pandemic the numbers were so high in comparison to other Canadians. Can you explain how $305 million will be sufficient to provide protection and treatment for COVID-19 in Indigenous communities? I will go to my second and third questions as we have time.

Thank you. We recognize that the COVID-19 crisis will affect literally all of us in terms of how we’re living our lives, and perhaps some of us in more dramatic ways based on our situation, for example, people living on reserve or people who don’t have the same access to health care. That is why we allocated special funding to Indigenous peoples. Of course, the funding we’ve put for the entire country is also funding for every Canadian, which is important for us to consider.

Our ability to continue to deal with this public health crisis, which is in the legislation you’re looking at, will allow us to respond appropriately to issues as they arise. This will include the ability for us to deal with challenges, as they emerge, facing Indigenous peoples.

I will tell you that we allocated $305 million for this right now because we think there are measures we need to take immediately. To the extent there are additional measures we need to take because of emerging situations that cannot be predicted at this time, we will move forward and take those measures.

Thank you, minister. In terms of EI benefits, many Canadians don’t have access to a computer, and in many communities schools and libraries are closed. How do those Canadians apply if there is no way for them to apply online? Where do they go? What do they do? I think there is some desperation in trying to get these forms in quickly. There are many Canadians who don’t have this technology.

First, there will be multiple challenges because there are many people who aren’t in the EI system, as you know. About 5.7 million of the 19 million Canadian workers aren’t in the EI system, so in most cases they have no familiarity with the system at all. That’s why we’re introducing a very simplified approach, which is critically important for people to be able to receive benefits.

In the case of those individuals being able to go online — and I acknowledge that not everyone will have that capacity, although most Canadians do — they will be able to go online and receive direct deposit. We are working with the banks to increase the number of people who have direct deposit capability. Currently about 70% of Canadians through the CRA system have direct deposit. We are looking now at how we can increase that 70%, and the banks are working on it.

For those who don’t have access to online facilities, we acknowledge that there is a bigger challenge. We are moving significant numbers of people from the work they’ve been doing into the work they will need to do in call centres. We set up a call centre at CRA rapidly. In the EI system, we’re moving about 1,300 people to this function. Of course, in the CRA system we have a significant number of people who can respond because we have deferred the tax administration, so there are another thousand people or so.

Those numbers are current as of yesterday. We will certainly have to be nimble and respond to this as we see calls come in that will likely be more significant in number than ever before.

Thank you. In terms of credit card debt, will the government coordinate with major credit card companies and banks to offer relief to their customers via payment or interest rates during this unprecedented time?

Credit card debt is actually debt from the banks. We have been working with the banks to look at how they can help people during this time. Importantly, we have obtained the banks’ agreement on ideas like the ability to skip a payment on credit card debt.

There are three kinds of debt that are in the unsecured category or similar to credit card debt: credit card debt, auto loans and unsecured loans. The banks have developed protocols so that people can skip debt payments. We’re working to ensure they communicate that to Canadians. We are also looking at other ways we can be supportive, but that’s an important start.

Dear minister, amendments in this bill to the Export Development Act allow greater discretion for government to increase liabilities, adjust authorized capital and broaden the type of activities that can be supported by adding a new domestic business mandate to EDC and paving the way to important bailouts.

These packages, as you said, should be economically efficient and protect Canadian workers, not like in the 2008 bailout of the Canadian auto industry that left Canadian taxpayers billions of dollars short of investment money that was never recouped, and without lasting improvement for workers, since factories are still closed 10 years later.

How can Canadians be reassured that these mechanisms will be used to invest in the industries of the future and not in those of the past, and in building a truly sustainable, resilient economy rather than keeping corporate welfare on life support for sunsetting, high-polluting industries? How can Canadians trust that investment will align with climate action, reconciliation and respect for human rights, since there are no such safeguards in the present law?

Senator, I appreciate your question. The subtext of your question is that we are living in normal times, and we’re not. We’re in a situation where a significant number of businesses, small and large, will find themselves under extraordinary duress in the coming weeks and months.

Through this legislation, we’re seeking the capacity for us, through this time, to support those employees and businesses that, of course, are significant employers across the country. We are not discriminating on the basis of one business being better than another business or one employee being somehow superior to another employee.

We recognize that people are under severe strain and that people, in short order, won’t have enough money for groceries. We need to find a way to ensure we get money to them. We need to find a way to ensure that, through this time, we bridge for these businesses so that employment will be there for people when we come back. That’s what we’re seeking to do.

The situation will be different for the various industries, absolutely. However, I can tell you that in the past days I’ve spoken to business leaders in various industries, ranging from the airline sector, to the broader tourism sector, to the energy sector, who are in a situation where, if they don’t have some sort of credit or some other way for them to deal with their challenges, their businesses will not be able to continue and we will see ourselves with a very different economy going forward.

You can expect that we will work to put people first. You can expect that we will try to protect, in every way we can, the government and the people — who are obviously the most important, Canadians — as we seek to work with businesses to get them through this time.

Through this legislation, we are seeking the opportunity to do that. We know that Canadians will agree with us that this is urgent and important, and it should be without particular bias at this moment, other than a bias to support people through this time.

Can you reassure us that you will reflect on how we got to this point and what were the multiple factors in society and in the economy that brought us to this point of high vulnerability, in order that will we not be placed in the same situation in the future and in order that we are prepared for the next crisis?

I do appreciate your question in the sense that everything is not perfect in Canada. However, we enter this particular crisis at a very good starting point, better than most other places in the world that are facing this. We enter it with a strong health care system; a strong banking system, I would argue the best banking system in the world; and in a fiscal position that allows us to invest in dealing with this.

The situation itself is absolutely unprecedented. So asking whether we can be prepared for a situation like this, I think the best we can do is to support our strong institutions that allow us to respond to challenges like this. We’re fortunate we have done that. It enables us to respond in a way that I think is appropriate, and we hope that we will come out at the end in order to answer the kinds of questions you’re asking about how we can help all Canadians to continue to be successful.

Thank you, minister, for coming today. Soon after the COVID-19 outbreak was officially declared a pandemic, the government issued a travel ban and Canadians were urged to take necessary precautions to help contain the spread of the virus. With the conditions changing daily, many Canadians made the necessary and responsible decision to cancel their travel plans. Airlines responded by presenting so-called flex travel options, which offered customers the possibility of deferring travel instead of a refund. As such, many Canadians chose the lesser of the two evils — reschedule the trip or travel at a later date — rather than risking their lives and health.

Many Canadians during this time need money in their pockets in order to pay bills and buy food and essential supplies. A travel voucher won’t do that. What will the government do to make sure that Canadians get a refund, and can the government ensure that Canadians receive a refund from the airlines once they have been bailed out?

Thank you for the question. I’m sure we will face challenges in places that right now we can’t expect. One of the challenges most certainly will be around our ability to travel in the near term. There will be a challenge for the airline industries and we will be engaged with them in working to deal with that situation. Obviously, at an individual level, the challenges you’re talking about are real.

My focus right now is the urgent need to deliver a benefit to Canadians that will allow them to bridge a time where obviously a huge number of people will be unable to have their normal source of income. That’s job one.

Clearly, part of the next step in that job, which is not weeks away but is hours away, is figuring out how we can make sure that businesses have the capacity to be bridged from this into the next step. For small- and medium-sized businesses that is critically urgent. And for some large businesses like the airline businesses where not only are they not getting revenue from bookings; they’re actually getting negative revenue because they have to give money back in refunds. So we’re working with them. Of course, enabling them to succeed will help us to enable consumers to be dealt with appropriately, and that’s what we’re working towards right now.

Thank you. In addition to the economic pressure being placed on provinces due to the coronavirus pandemic, Alberta, Saskatchewan, Newfoundland and Labrador are dealing with the collapse of energy prices, the lowest price in about 20 years.

Minister, you have been talking about stimulus such as cleanup and abandoning oil wells. What exactly will the government do to help these provinces and our energy industry at this exceptional time, and what form will this support take and how fast will it be delivered?

Let me first address the issue. Obviously, the energy sector is in a particularly challenging situation. There are really three things facing that sector as opposed to one enormous thing facing every other Canadian sector. They are facing the combination of the situation right now with OPEC, with Russia and Saudi Arabia not agreeing on a stable oil market; they’re facing tumultuous equity markets, which are presenting very big challenges for funding of any sort; and they’re facing COVID-19. So the issues are real. The stresses and strains for the provinces you mentioned are real. We’ve been in daily contact with them to think about how this is impacting the provincial government revenues. We’re also in hourly contact with the energy sector to think about how we can bridge the time by providing some sort of appropriate credit opportunities for them. That is work that is going on right now.

I don’t have the final answer on the exact hour that will be delivered but I’m not talking about weeks. I’m talking about hours, potentially days, that we can ensure that there are credit facilities for especially the small- and medium-sized firms in that sector. Then the larger sector, the 10 largest companies in the oil and gas sector, most of them have existing credit relationships with their banks, in most cases with available credit. But they are under strain, too, so we’re also looking at individual issues in that sector.

Those are all important issues. However, as I’ve said to others today here in this chamber, our primary focus is on people. We’re looking at how we can support businesses, and we’ll continue to do so.

Thank you, minister, for being here and putting together a fine aid package along with all the members of the House of Commons, which is much needed at this point in time.

Our banks are healthy and wealthy. You mentioned that. Thank you for making them part of the solution. We’ve had some fine results on an individual basis deferring mortgage payments for six months. I know that it’s on a case-by-case basis, but have we explored similar treatments for small- and medium-sized businesses at this point in time? My concern as a former banker is when we do sit down and look on a case-by-case basis and look at those balance sheets and income statements, in a few months they won’t be very healthy and projections won’t be very interesting to look at. So have we explored a similar treatment?

Second, have we looked at the BDC maybe guaranteeing some of those distressed loans, direct guarantees? I know you’re working with the banks to fund future loans, but it would be interesting to see or elaborate on some of those discussions you’ve had with our banks. As you know, it’s important to get Canadians back to work to have a quick recovery. We don’t want unemployment spiking.

Last but not least, have we explored with the BDC, not competing directly with the banks but maybe putting together some programs or forgiving — loan forgiveness is not a good term to use as a banker — but putting together some programs to put an incentive package together to help companies that have retained workers or are hiring workers? Have we explored those avenues with the BDC or explored other avenues to get the BDC to be much more active in supporting our banks?

Those are two separate questions. The first question is in regard to have we been working with the banks in order to consider how they would be able to deliver support to their clients or the organizations that are not currently their clients that might need their support. This work is ongoing right now, and really given the state of those discussions, I’m not at liberty to talk about where we are at them, but I can assure you that we’re working to make sure that the availability of credit, the oxygen that businesses need to succeed, will be there.

You’ve seen us work with the Bank of Canada and the Office of the Superintendent of Financial Institutions to increase liquidity into the banking sector. We have put about $500 billion of additional liquidity into the banking sector, providing the opportunity for credit of about $1.4 trillion versus the $900 billion we had before this. The issue is now how to ensure that lending capacity is utilized. We are working on that.

With respect to the BDC working directly on approaches that are, from what I understand, non‑commercial, we are taking the approach that it’s the government working on the non‑commercial ideas and the BDC is working to provide the commercial support as that is its mandate, and that includes the development of the backstop for the Business Credit Availability Program, which is the specific idea that we’ve used for the BDC being engaged in this.

There will be more details on these measures in the coming days. We think that they will provide significant help. As I’ve mentioned, we will remain open to other ideas to deal with this crisis.

Thank you very much for the response. I think it’s crucial to get all Canadians back to work. I thank you for all that you’ve done.

If we look at what we’ve done for individuals, the message is clear; they will defer mortgage payments for six months. We also have to send a clear message to our businesses. I’ve had many questions from former clients, and it’s not clear what we’re trying to do. That applies to the BDC or the EDC, as well. Messages are not clear. I think we should have a uniform message to our banks saying here, it’s a uniform message, this is what we’re looking at.

On the individuals, I think it’s clearer. We’re deferring mortgage payments for six months, we’re willing to do so, come and see us, case by case. With the businesses it’s not that clear. If we have to focus somewhere, giving them some certainty that once all this is said and done, the banks are there to support us, the BDC will step up, play a bigger role and send a clear message to everybody that we’re there to help them. If I were to focus on one thing, this is where I would focus for the upcoming months.

Welcome, minister. Let me start by acknowledging the extraordinary work of our colleagues in the other place in passing this bill to not only help Canadian workers, but also protect Canada’s democratic system.

Minister, the majority of financial and tax experts I was listening to this morning were saying that the government’s approach of giving money directly to workers to cover their costs was without a doubt the worst approach given the fact that more than one million workers have applied for employment insurance benefits and five million Canadians aren’t registered.

Why not take the same approach as other countries like Norway that have supported private businesses and introduced wage subsidies to allow them to retain their workers? The approach you’re taking, minister, could create a break in the employer-employee relationship. When the crisis is over, these employers will have a serious recruitment problem. Is it wise to fund millions of workers instead of funding thousands of employers so that they can retain their employees and ensure that the employer-employee relationship is still intact when business resumes? Your approach is breaking the employer-employee relationship.

Thank you for the question. Clearly, we don’t agree. Our approach will let us maintain the relationship between businesses and their employees. With our approach, there’s no reason for companies to have to separate from their employees. In this way, it’s possible to pay money directly to people. That allows us to know that these people have no income, which is very important. At the same time, the measures will help employers by giving them a subsidy.

We believe this approach works. In my opinion, it’s preferable to the approach taken by Denmark, where companies have to prove that they’re generating less revenue. Our approach of making direct payments is important for people and businesses alike, because businesses can maintain their ties to their employees. That’s why we decided to use this new approach, which isn’t part of our employment insurance program. This means that, after the crisis, anyone who can use the EI system will be able to do so. However, the measures we’re now proposing are different from the employment insurance program in that there’s no separation of employer and employee.

There is something that either I don’t understand or you don’t understand. I recently spoke to some accountants. Right now, most of the work of accounting offices consists in issuing termination notices so that people can access the government assistance. This means that the employer-employee relationship is severed. I don’t quite understand why you are saying that the companies will now be able to maintain the employer-employee relationship when these companies are forced to terminate employees so that they can be eligible for your program.

As a matter of fact, we have changed our approach. If employees are in a situation where they’re without income, because their employer isn’t paying them, they can receive benefits. A termination of employment isn’t necessary. They simply mustn’t receive any money from their employer. In that sense, this is a wage subsidy for employers.

To deal with the last question first, I won’t speculate on what we might or might not do in a situation that we haven’t declared.

With respect to the other parts of your question, the idea that some people are finding it challenging to get the benefit is absolutely true. We announced the benefit yesterday. So we are working right now to make sure that we have the administrative capability to deliver it as rapidly as possible, and that is built on systems that we know have the capacity to work on behalf of Canadians.

From my perspective, what we’re trying to achieve is to make sure that we get money to people who are impacted as a result of this crisis. I appreciate that there are people who have ideas on how we could change our system to have guaranteed annual income. I’m sure that debate will continue.

That’s not what we’re facing here right now. We’re not talking about the long-term idea of changing our system. We’re talking about the short and immediate issue that in two weeks, in three weeks, people won’t have money for food, they won’t have money for medicines and they won’t have money for rent. That’s what we’re trying to deliver in the short term. And in the very near term, we have many businesses facing enormous stress.

April 1 is around the corner. Small- and medium-sized businesses will have to pay their rent on April 1. There are significant issues that we need to deal with right now. So we’re not going to be dragged into a discussion about how we should restructure our system for the long term. It wouldn’t be appropriate to do that right now.

We will, of course, consider your suggestion and other suggestions on how we can have appropriate insights and governance during this time of stress for all Canadians. That’s appropriate. We’re seeking powers here that are more extensive than we ever thought we would be seeking and that’s because of where we’re at. We acknowledge that means we need to have appropriate conversations, have appropriate governance and we’ll work to do that as well.

We have three minutes left in our session.

Thank you very much. Regarding the distribution of funds to be allocated by Bill C-13, there is already a system in place that allows for the Canada Revenue Agency to deposit money directly into Canadian taxpayers’ bank accounts.

Has the government considered using direct deposit to distribute funds as opposed to sending cheques in the mail or creating some new bureaucratic delivery system? After this crisis is over, there will be many cash-strapped and weary Canadians who will have spent their life savings and EI benefits on rent, groceries and credit card payments. This is not like 2008. How will we increase consumer confidence after this is over?

Those are two important questions. To your first question, I think you heard me reference earlier that we are not trying to send cheques to people. We are trying to use the Canada Revenue Agency system and other systems that we have to do direct deposit. That is fundamental to our approach to how we want to get this done.

My understanding is that right now, about 70% of Canadians have direct deposit through the CRA system. It is one of the reasons why that system is something we’ve been working on for the last week. The addition of the ability for banks to put more people on direct deposit will be of significant benefit. That is something we are working on as we speak.

Of course, there will be people who will need to get cheques. We’re also testing to ensure that process is as short as possible, and I’m assured that is also quite efficient. That is critically important.

With respect to your second question, we need to see this problem and challenge in phases. The phase we’re in right now is where we’re trying to get things done that are urgent and important. We will need to think about how to get people out of this challenge for more consumer confidence. The idea that we can get consumer confidence right now — while people are asked to stay at home and, by definition, are not really consumers — is not really the right time, but we’ll get there.

Honourable senators, the committee has been sitting for one hour. In conformity with the order of the Senate of earlier this day, I am obliged to interrupt proceedings so that the committee can report to the Senate.

Minister, on behalf of all senators, thank you for joining us today to assist us with our work on the bill. I would also like to thank your official.

Hon. Senators: Hear, hear!

The Chair: Honourable senators, is it agreed that the Committee rise and that I report to the Senate that the witnesses have been heard?

Hon. Senators: Agreed.

Honourable senators, the sitting of the Senate is resumed.