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The Estimates, 2020-21

Consideration of Main Estimates and Supplementary Estimates (A) in Committee of the Whole

June 23, 2020

The Chair [ + ]

Honourable senators, the Senate is resolved into a Committee of the Whole to consider the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2021, and in the Supplementary Estimates (A) for the fiscal year ending March 31, 2021.

Honourable senators, in a Committee of the Whole senators shall address the chair but need not stand. Under the Rules the speaking time is 10 minutes, including questions and answers, but, as ordered earlier today, if a senator does not use all of his or her time, the balance can be yielded to another senator. As ordered by the Senate, the committee will receive the Minister of Finance and the President of the Treasury Board, and I would now invite them to enter, accompanied by their officials.

(Pursuant to the Order of the Senate, the Honourable Bill Morneau and the Honourable Jean-Yves Duclos and their officials were escorted to seats in the Senate chamber.)

The Chair [ + ]

Ministers, welcome to the Senate. I would ask you to introduce your officials and to make your opening remarks of at most five minutes.

Hon. Jean-Yves Duclos, P.C., M.P., President of the Treasury Board [ + ]

Thank you. Good afternoon. I hope everyone can hear me.

Thank you for the opportunity to appear before this chamber to discuss the Supplementary Estimates (A) for 2020-21 and Interim Supply II.

We find ourselves in an extraordinary time. Not only are we faced with a global pandemic, but demonstrations and conversations against racism are taking place across the globe. These conversations are important, and we must continue to have them in order to overcome problems that have persisted for far too long.

Our government is determined to keep building a diverse public service that reflects the population it serves. We are committed not just to listening but also to engaging.

As you know, honourable senators, every year, the government tables the supplementary estimates, which sets out its spending plan.

The Supplementary Estimates (A) for the 2020-21 fiscal year present information on spending requirements across federal organizations that were either not sufficiently developed in time for inclusion in the Main Estimates or have since been updated to reflect new developments.

The supplementary estimates bring forward $6 billion in operating and capital expenditures, grants and contributions for 42 federal organizations.

It clearly shows that the government is continuing to invest in people, in the economy, in workers and in businesses to ensure the country’s success and economic recovery.

Senators will have the opportunity to review and vote on these allocations which seek, among other things, to provide important services to Indigenous communities, for safe and secure transportation for travellers, and to support Canada’s Armed Forces. These are in addition to COVID-19-related expenditures.

I also want to assure honourable senators that information on statutory spending is included in these estimates to ensure that the most complete information is available on the government’s planned spending.

As a matter of fact, we know Canadians want maximum transparency from Parliament. For transparency, the estimates document will provide information on spending authorized through the COVID-19 Emergency Response Act, which has already been negotiated, discussed, debated and unanimously approved by parliamentarians. Furthermore, these supplementary estimates also request $1.3 billion in new voted spending to respond to the impact of COVID-19 on Canadians.

These new spending plans include $405.2 million for the national medical research strategy to fund tracking and testing of COVID-19, to develop vaccines and therapies, and to enhance clinical trial and biomanufacturing capacity in Canada; $302.4 million to support small- and medium-sized businesses; and $274.5 million for emergency research and innovation on medical countermeasures.

Madam Chair, I would now like to move on to the proposed interim supply bill, Appropriation Act No. 2, 2020-21.

As you know, honourable senators, this is the second interim supply bill for the 2020-21 fiscal year. This bill seeks approval for approximately $55 billion of the $125 billion in voted amounts presented in the Main Estimates currently being examined by parliamentarians.

The government’s first interim supply bill, Appropriation Act, No. 1, 2020-21, received Royal Assent on March 13, 2020, and provided for the allocation of $44 billion to support the government’s activities from April to June of this fiscal year.

However, on April 20, the House of Commons also adopted a motion to temporarily amend Standing Order 81, thereby extending study of the Main Estimates until December, seven months later than the usual completion date in previous years.

This special measure was necessary because of the extraordinary circumstances resulting from the spread of COVID-19 in our country. Consequently, we proposed a second interim supply bill that provides for $55 billion to support the programs and activities of federal institutions from July to December.

Without this proposed funding, many of those organizations will be unable to continue providing the programs and services that millions of Canadians depend on.

In conclusion, the Government of Canada and Canadians remain resilient throughout the global pandemic.

The new spending plans presented here will continue to help those affected by COVID-19 while supporting the economy and Canadians.

I would like to recognize the essential and extraordinary work of all parliamentarians as we continue to work together to ensure the well-being of all Canadians.

I would now like to take the opportunity to introduce you to Minister of Finance Bill Morneau, who needs no introduction, but also two officials who accompany both Minister Morneau and myself. First, Glenn Purves, Assistant Secretary, Expenditure Management, Treasury Board Secretariat; and Mr. Andrew Marsland, Senior Assistant Deputy Minister, Tax Policy Branch, Finance Canada.

That said, we will be very pleased to answer your questions, honourable senators.

The Chair [ + ]

Thank you, Minister.

Senator Plett [ + ]

My questions this afternoon will be for Minister Morneau.

Minister, last month, during an appearance before a committee in the other place, the Parliamentary Budget Officer was asked if the federal debt would hit $1 trillion for this fiscal year. He responded: “Possible, yes. Realistic? Yes. Certainly not unthinkable.”

Minister, how much is the current debt of the Government of Canada?

Hon. Bill Morneau, P.C., M.P., Minister of Finance [ + ]

First of all, senator, thank you very much for the question. It’s a pleasure to be here with all of you this afternoon, and I’m happy to have the opportunity to answer your questions.

I think the best way for me to answer that, senator, is that we have said we’re going to provide an economic update to the country, and we’re going to be doing that on July 8. At that time, we will be providing an understanding of the investments we’ve made and the underlying economy, which will also show what our situation is in terms of the debt and the deficit.

Senator Plett [ + ]

Minister, you have been asked this question in the past, and I believe Canadians have a right to know. I think Canadians have a right to know every day of the year what the finances are of our government. They are obligated to know every day of the year what their finances are.

The Parliamentary Budget Officer has 42 members on his staff. The Minister of Finance has 800 staff working for him. The Parliamentary Budget Officer, with his 42 staff members, has a pretty good idea of what the debt is.

Minister, if you can’t give me an answer today, then if I were to tell you that I have figures that say it’s $1.3 trillion, would you confirm that that is a pretty accurate number?

Mr. Morneau [ + ]

Again, senator, I very much appreciate the question. One of the things that’s most important for our government — certainly for myself, as Minister of Finance — is to provide accurate information to Canadians. We’re providing to Parliament, to the Finance Committee — and, of course, available to the Senate — an update of our expenditures on COVID-19 every two weeks, and there will be a complete exposition of our current financial situation on July 8. At that time, we’ll be able to give you a level of precision on our current economics and our expectations for this year.

Senator Plett [ + ]

Minister, with respect, you are now in our house, and I think we deserve an answer to a question, not an answer that you are going to give us an economic update down the road.

Again, if you cannot confirm that it is $1.3 trillion, I will have to assume that that is the correct number.

Minister, who owns the debt?

Mr. Morneau [ + ]

First, senator, perhaps I could just say that it would be important not to make assumptions about things as important as our finances.

Senator Plett [ + ]

We need an answer, please.

Mr. Morneau [ + ]

We will give a complete answer; that would be the appropriate way for us to provide an understanding to Canadians on July 8, as I said.

In terms of who owns our debt, there are, of course, many Canadians and many people around the world who seek to own Canadian debt because of the high quality of our debt and the continuing success of Canadians in creating a good and strong economy.

Senator Plett [ + ]

How much of the $1.3 trillion in debt that the Canadian government has right now is debt owned by foreign entities?

Mr. Morneau [ + ]

Sir, we’d be very happy to provide you with more details. If you would like to send the question to my office, asking —

Senator Plett [ + ]

Minister, you have been asked, on our invitation, to come here and answer questions. If I wanted to come to your office and ask your staff questions, I would have done that. You have 800 staff. Surely they have told you how much debt the Canadian government has and how much of it is foreign-owned, and how much isn’t, so please give us an answer.

This Committee of the Whole was struck so we would have answers. We are supposed to approve a supply bill later this week. You are not giving us answers to questions. You are inviting us to your office. We invited you here. You have staff with you. If you can’t answer the question, could you ask your staffer how much debt Canada has and how much is foreign-owned?

Mr. Morneau [ + ]

Thank you, senator, for the question. If the question you’re asking is about specific dollar figures on specific questions that we’ve not prepared for in advance, I think it would be inappropriate for me to give you an approximation or guess as to what the answer would be. I would not put my official in that situation either.

However, I am always pleased to answer those specific questions if they’re submitted to my office. If those questions are more general in nature — ones I can answer without going back for a detailed response from my department — I’m happy to answer those questions.

Senator Plett [ + ]

You were asked some time ago in the House, by Pierre Poilievre, how much debt there is. You have had lots of time to prepare that answer. How much of the $1.3-trillion debt that the Canadian government has is foreign-owned? What are the conditions? Which part of it is for a fixed term?

Mr. Morneau [ + ]

One of the things we are making sure we do, as we manage the treasury function of the government, is to ensure we have a balance between the risks of rollover and the cost of longer debt. As we incur more debt, we’re looking at extending the term and duration of our debt in order to provide us with less rollover risk.

Senator Plett [ + ]

Thank you. You don’t have an answer as to how much is foreign-owned or as to what the fixed terms are.

Let me see if you have an answer to this. I’m surprised you don’t have these answers, because you knew they would be asked. The assets of the Bank of Canada have more than tripled since mid-March and now stand at over $500 billion.

Minister, does the Bank of Canada have a plan to offload these assets, and if so, over what period?

Mr. Morneau [ + ]

Senator, as I think you may know, the Bank of Canada is independent from the federal government. To the extent they’ve done some planning and forecast scenarios, I’m sure I will get information on that, as will you, when the Bank of Canada decides to make that information available.

Senator Plett [ + ]

Minister, since you can’t answer any of these questions, I assume it’s $1.3 trillion. If it’s different from that, then I hope we will have the correct answer before we have to vote on your supply bill later this week. I expect we should have those answers in our hands. We should have in our hands every one of the answers to the questions I have asked, before we are asked to vote on a supply bill of this magnitude, which you spent only four hours debating in the other place. We are doing our job over here. We are refusing to allow the government to hold us to a four-hour debate. We expect the answers here. I’m quite disappointed that you come into our house and aren’t prepared to give me the answers.

Minister, my next question is with regard to the emergency financing of large employers. The only update concerning the Large Employer Emergency Financing Facility provided in your June 8 biweekly report to the other place notes that its application portal opened on May 30. Your department told the media a week ago that zero applications have been approved under this program. How is that possible, minister? You said this program was meant to help our energy sector, which remains in dire need of support.

Minister, how many large employers have applied for financing under this program? Specifically, do you know how many large retailers, airlines or energy companies have applied to this?

Mr. Morneau [ + ]

Thank you again for that question. The Large Employer Emergency Financing Facility we’ve put out is intended to be a provider of last resort of credit for organizations that are going through stress.

Senator Plett [ + ]

Minister, I don’t want an explanation of what the program is supposed to be; I want a number of how many applied.

Mr. Morneau [ + ]

Sir, I was in the midst of my response. What you should know is that, to the question that was asked — how many have been approved — the response was that none have been approved because it takes time to go through these procedures. Going through these applications is relatively complex. These are large organizations.

So we have a number of organizations —

Senator Plett [ + ]

No, minister, my question was not how many have been approved. I had the number of how many had been approved. I knew it was zero. My question was: How many have applied?

Mr. Morneau [ + ]

Could I ask, Madam Chair, what’s the protocol in this house? Is it that the —

Senator Plett [ + ]

For me to ask a question and for you to answer.

Mr. Morneau [ + ]

Is the protocol, Madam Chair, that the senator asks the question and in the case of responding I have the same amount of time to respond to his question?

The Chair [ + ]

The protocol for the Committee of the Whole is that the questioner has 10 minutes for questions and answers. That is what we abide by.

Mr. Morneau [ + ]

I see. So it’s unlike in the house where the responses are of the same duration as the questions?

The Chair [ + ]


Senator Plett [ + ]

Unlike in the house, we actually expect an answer.

The Chair [ + ]

This 10 minutes has been completed. We will now move on to the next questioner.

Senator Cormier [ + ]

Welcome, ministers. My questions are for Minister Duclos on behalf of Senator Raymonde Saint-Germain.

My first question is about your government’s planned financial allocations and expenditures in response to the COVID-19 pandemic. We’ve heard a lot of criticism about how it will take Canadian taxpayers decades to pay back pandemic-related spending. We agree that investing to save lives and support people was crucial, given the global crisis, but do you think the government struck the right balance between the need to save lives and support people and businesses and the need to protect the Canadian economy?

Mr. Duclos [ + ]

Thank you, Senator Cormier. I think you’ve captured the Government of Canada’s two key objectives over the past few weeks. The first objective was to help keep workers, their families and their loved ones healthy. The second was to help them make ends meet and feed their families during a pandemic that nobody anticipated and nobody fully understands to this day. We had to be both quick and careful. That’s what we have done from the start, and that’s what we believe Canadians deserve from their government.

Senator Cormier [ + ]

Thank you, Minister. At the start of the pandemic, it was easy to understand the rationale for your decisions. However, the more we ease restrictions, the more legitimate it becomes to question how these decisions are being made today.

My second question is the following: What criteria were used by your government to make decisions that strike this balance and to establish the government’s spending strategy?

Mr. Duclos [ + ]

I will first talk about the bases for some of the most important decisions we made. These decisions were essentially founded on science, epidemiology, immunology and public health science, which we didn’t know much about before the pandemic, in many cases, but which we understand much better now. With respect to the principles of public policy, the primary objective was to protect our economic and social fabric, to protect the millions of workers who have lost not just their jobs but also their incomes in the past few months, and to also protect the economic environment, particularly for small businesses, which we will absolutely need in the recovery that is just now beginning.

Senator Cormier [ + ]

Thank you. My last question for you, minister, is as follows: What do you say to the critics who believe that your approach will hobble Canada’s economy for many years to come?

Mr. Duclos [ + ]

On the contrary, the approach we have used from the start, acting swiftly and intensively, was the approach that was needed to prevent considerable, long-lasting damage to our economy. We needed to protect the economic fabric and that is what we did with the programs that you’re quite familiar with. That approach has already helped us avoid going from a severe recession to an even worse depression that would have gone on for many years.

Senator Cormier [ + ]

Thank you, minister. I will give the rest of my time to the Honourable Senator Loffreda.

Senator Loffreda [ + ]

Thank you, Senator Cormier.

Thank you, Minister Morneau and Minister Duclos, for being here today. I wanted to thank you at the same time for helping Canadians, helping our economy remain viable and helping businesses stay alive. I’m in constant touch with the business community and at this point in time, they need all the help they can get. So thank you for doing that.

I share a concern, and I would like Minister Morneau to answer this.

I’d also like to hear what Minister Duclos has to say about this.

Senator Forest and I sit on the National Finance Committee and we have the same concern. When Karen Hogan, Canada’s new Auditor General, appeared before the Senate in mid-May, I asked her about her office’s ability to conduct comprehensive audits of the government’s various COVID measures and programs. She acknowledged that the resource constraints right now are having a ripple effect on the organization and that the COVID-related work will likely occupy many resources and a great deal of her time, of course.

I noticed, however, that the Office of the Auditor General is receiving a little less money through these Main Estimates than last year, and no additional funding was requested earlier this month in Supplementary Estimates (A).

My question is: Can we expect a funding increase for Ms. Hogan and her staff in future supply bills to help her fulfil her role and scrutinize the unprecedented expenses brought by the pandemic?

Mr. Morneau [ + ]

I think this question is correctly asked to both of us. We recognize that the Auditor General is facing a particularly large challenge in fulfilling her role. Obviously we’re pleased to have appointed a new Auditor General. We’re looking forward to working with her to make sure she has the resources needed in her situation, as it is certainly the situation of the government at this stage. We are in a very dynamic and changing economic environment, meaning that it would likely be for her, as it is for us, difficult to determine the exact resources.

That said, we know that we will need to work with her. We see her function as important and one that is essential for parliamentarians and Canadians to understand the nature of the investments and the quality of those investments. So you can expect to see us continue with that approach.

I don’t know, Minister Duclos, if you have anything to add.

Mr. Duclos [ + ]

Thank you, Minister Morneau, and thank you, senator. In fact, I spoke with Ms. Hogan a few hours ago to congratulate her on her appointment and to tell her how important her work is. Obviously, she already knew that. As Minister Morneau was saying, her work is important for the Canadian government’s ability to have an adviser that can be there when times are good and also help them navigate the troubled waters we now find ourselves in. I also wanted to express to Ms. Hogan, as Minister Morneau just did, our full support in the relationship we will have with her in the years to come.

Senator Loffreda [ + ]

Thank you for the answer, Minister Duclos.

As economies open, there is concern about the Canadian debt level, obviously. It’s a serious concern. But I’m confident that the Canadian economy, which has historically always been very healthy, will return to being healthy. I think it’s important to keep helping our businesses, like I originally said. As economies open and we transition from support aid to economic stimulus policies, I think the Bank of Canada has done the maximum it can in these circumstances, without repeating what they have done. Congratulations to the Bank of Canada. Thank you for that.

As we transition to economic stimulus policies, can you share some of those policies being considered, if any, as economies start to reopen across Canada?

Mr. Morneau [ + ]

I think, first of all, I’d like to set the frame for that question. I think we’re in an economic challenge that is unlike any we’ve seen before, so the notion of how we might come out of this challenge is likely to be different from what we’ve seen before.

In 2008-09, in coming out of the economic challenge, we saw a dearth of demand. Obviously, in that context, governments look toward how they can, as you say, put stimulus into the economy. We can’t yet predict with any certainty what it will look like as we come out of COVID-19. So in the hopeful situation that the restart we’re in now goes well and that we get to a proper consideration of recovery later this year, we’ll need to think about the challenges at that time, whether it is actually a deficit of demand in which we’ll have to think about measures that might stimulate that demand, or whether there are challenges that might not exactly be that one.

We’ve so far put money into the economy, both in terms of supporting people and in supporting businesses and, through them, people who have, to a great extent, filled up some of the economic challenges that we’ve seen, and that may mean that that kind of measure could hold promise for what we might need to do at the next stage, or we might need to go back to more traditional measures.

I think the important thing from our standpoint is to understand that this is a dynamic situation and we need to make decisions as we have information. Since we’re not yet at the recovery stage, I’m not at the stage where I can conclude on the appropriate ways to deal with demand shortages if they actually occur.

Senator R. Black [ + ]

Thank you, ministers, for being here. It’s great to have you here.

My questions focus on agriculture and are focused to the Minister of Finance. There’s about $20 million in the estimates allocated to the Canadian Food Inspection Agency. Can you give us a brief outline of what those funds are going to be used for?

Mr. Duclos [ + ]

I would be glad, Minister Morneau, to put that question to my official, Glenn Purves, who knows the question quite well, unless, of course, you prefer to answer it yourself with your colleague.

Glenn Purves, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat [ + ]

Thank you very much for the question, senator.

Of the $20 million, $16 million includes for the Canadian Food Inspection Agency being able to respond to emerging vulnerabilities in inspection capacity for food, plant and animal products in light of COVID-19 and to ensure an adequate, safe and reliable food supply for Canadians.

These funds will allow the Canadian Food Inspection Agency to continue performing critical activities by maintaining inspection capacity and investing in technology to facilitate delivery of inspection services.

Senator R. Black [ + ]

Thank you. We’ve heard a lot of complaints recently about the insufficient coverage of the business risk management programs, especially now that we’re going through the COVID-19 crisis.

Do the funds allocated to Agriculture and Agri-food Canada include money to make improvements to the business risk management suite of programs?

Mr. Morneau [ + ]

Minister Duclos, do you want to respond to that question?

Mr. Duclos [ + ]

As you said earlier, to be precise and useful, we will again invite Glenn Purves, who is not only an excellent person but also an excellent expert in this particular area.

Mr. Purves [ + ]

They do, in fact. They are encompassing in terms of covering that area as well.

Senator R. Black [ + ]

Thank you. I have one more question before I turn my time over.

The Minister of Agriculture has announced $75 million for a local food infrastructure program. How will farmers and producers be able to ensure that their surplus food gets to where it needs to go?

Mr. Duclos [ + ]

Again, I would propose that I defer the answer to Glenn.

Mr. Purves [ + ]

This is an item that is separate from the Supplementary Estimates (A). As such, I don’t have the information on that.

Senator R. Black [ + ]

That gives me time to ask one more question then.

A lot of agricultural producers, processors and groups have expressed disappointment in the support measures offered to agriculture in response to COVID-19. Is there more assistance coming?

Mr. Duclos [ + ]

On that I can perhaps provide the right high-level answer. Minister Bibeau has been very actively engaged in supporting farmers throughout the crisis. We know and we feel how difficult the situation is for them. She’s working with her colleagues in various provinces and territories. In many cases, the programs that we are putting into place benefit from and need the support of provinces and territories.

Senator Dagenais [ + ]

I have some questions for Mr. Duclos and Mr. Morneau. Mr. Morneau, when I take a close look at the figures, which isn’t easy to do when new programs are popping up almost every day, I see some concerning — or, at the very least, questionable — discrepancies. Mr. Trudeau sometimes acknowledges that during his press conferences in front of his cottage.

Take the Canada Emergency Response Benefit, or CERB, for example. The CERB is a $73-billion program that provides $2,000 a month. The projections made in May were revised, and the $73-billion total was lowered to $45 billion. That’s nearly $4 billion less per month. What happened to the other $28 billion initially announced, and how does the government explain this discrepancy? This is a lot of money. We’re talking about a $28‑billion error.

Mr. Duclos [ + ]

Senator Dagenais, this isn’t so much a discrepancy as a misunderstanding. The $73 billion you’re referring to, and Mr. Morneau can expand on this, is the amount for the wage subsidy. It’s not the amount for the Canada Emergency Response Benefit.

Senator Dagenais [ + ]

The new programs we’re looking at right now are worth a total of $13 billion. Can we expect to see other discrepancies of that nature, such major corrections? Can you explain this to me in greater detail?

Mr. Duclos [ + ]

I think more accurate words here might be “adjustments,” “evolution” or “adaptation.” The crisis hit quickly, but it also evolved as the weeks went on. That’s why we introduced measures very quickly. Those measures evolved over time based on the public health situation, which was initially the greatest concern, but also based on the economic situation. That is exactly the right thing to do in such circumstances, and by that I mean act quickly to prevent a severe depression and then take steps to adapt to the economic recovery.

Senator Dagenais [ + ]

Since you’re answering me, Mr. Duclos, I have another question for you about the 10 sick days for all Canadians that everyone was talking about. Calculating conservatively, that’s 15 million full-time workers, which is 150 million days at $100 per day, which adds up to about $15 billion. What programs will that money come from? Can you assure us that you haven’t included this expense in the $14 billion transferred to the provinces because it will be $1 billion short? What portion of that $14 billion will be transferred to Quebec?

Mr. Duclos [ + ]

I have a short answer, and then maybe a longer answer to follow.

First of all, we made a commitment to support workers so that they wouldn’t have to choose between protecting their health and protecting their ability to provide for their families. As you mentioned, all this requires a COVID-19 sick leave program. Over the coming weeks, this leave could help us avoid a second wave of COVID-19.

Second, we made it very clear that the Government of Canada was definitely going to shoulder both the cost and the burden of this measure in the short term, because we know that there’s a widespread positive impact when workers are able to self-isolate as needed. That way, they can keep their co-workers and workplace safe from the virus.

Lastly, the $14 billion that the Government of Canada is offering to the provinces and territories is intended to recognize what a heavy burden they have had to bear these past few weeks, as most people, including yourself, understand. This assistance is being provided by the Government of Canada to support the priorities that the first ministers agreed on in their discussions over the past 14 weeks.

Senator Dagenais [ + ]

How much will go to Quebec?

Mr. Duclos [ + ]

Discussions are ongoing. The goal is to carry on with this excellent collaboration between the different governments. This collaboration is important in any context, but it is even more important during a pandemic, as we’ve seen in the past few months.

Senator Dagenais [ + ]

Thank you.

Senator Campbell [ + ]

The fisheries minister, Bernadette Jordan, confirmed on June 15, more than a month after announcing $400 million in relief for the Canadian fishing industry and, as far as I know, the government has yet to deliver any benefits. In fact, new supports, including the $267-million Fish Harvester Benefit and the $202-million Fish Harvester Grant are among those that have yet to be open to applicants.

I understand that things change rapidly in this environment, but do you know of any other situations similar to this one, where the government has said, “We’re going forward on this during the pandemic,” and then for one reason or another the provision has been delayed? I’m sure there are other instances of this, given what we’re seeing here.

Mr. Morneau [ + ]

Thank you. It’s an appropriate question. There are, obviously, many situations where we’ve tried to provide support for different sectors.

The direct answer to your question is, yes, there are places where, to get the administrative details completed in a way that makes sense or to have the appropriate allocation, we need to have the approach verified before we actually move forward. I can specifically give you the example of the Canadian Emergency Business Account where we were hoping to get the expansion out last Friday. In fact, due to some appropriate administrative checks, it’s being worked through as rapidly as possible. We hope that will be completed in the very near term.

In this emergency setting, we’re trying to get things done as quickly as possible and do it with the sense of responsibility that it’s done appropriately.

Senator Marshall [ + ]

My question is for Minister Duclos. Thank you for your opening remarks, minister. They line up quite nicely with my question.

You mentioned the Main Estimates, and they outline $308 billion in government spending. You went on to say that $125 billion is to be voted, because $183 billion is statutory.

Of the $125 billion — by the end of the week, $99 billion will have already been approved by Parliament into interim supply bills. That’s going to leave a mere $26 billion of the Main Estimates to receive parliamentary approval sometime later this year.

I’m hearing rumours that there may be a third interim supply bill to pick up the remaining $26 billion. Could you confirm that the government will be seeking parliamentary approval of the remaining $26 billion in a third interim supply bill? If that’s not correct, what exactly is the plan for the remaining $26 billion?

Mr. Duclos [ + ]

Thank you. These are all excellent questions and demonstrate the substantial ability to understand the process.

In a typical year, there would be Main Estimates that would be tabled. There would be Interim Estimates that would be voted, and then the full main supply bill would be voted by about this time of the year, therefore providing Main Estimates at the disposal of departments and agencies for the whole year.

We are in a different situation this year. We have already had one interim bill voted on earlier this year. We have a second one this time, which in principle should be for the total value of the Main Estimates. However, as the senator just said, there is approximately a quarter of the total Main Estimates that remain, that are not covered by the interim bill of this particular period, which will therefore come back in the fall. Exactly when will be decided and then announced. That will complete the process of Main Estimates.

There are also supplementary estimates. Today we are also talking about Supplementary Estimates (A). Typically, there will be Supplementary Estimates (B) in the fall and Supplementary Estimates (C) at the beginning of next winter. These provide opportunities, as the senator mentioned, to redesign and to increase levels of support as the situation requires.

Senator Marshall [ + ]

Minister, the $26 billion, could you just address that? I’m interested in knowing, will that be a third interim supply bill? What is the plan to get that $26 billion approved?

Mr. Duclos [ + ]

Yes, there is a plan for a third interim bill. However, having Glenn Purves with us in the room is an outstanding opportunity to ask him to come back again to the microphone, and to make what I’ve just said as precise as it can be.

Senator Marshall [ + ]

I would rather speak to you, minister, because I have another question. No disrespect to Mr. Purves.

We are talking about the $125 billion, and there is going to be $99 billion approved by the end of the week. We have until the end of December to study Main Estimates. I don’t see the merit in that study now. You’ve received approval for most of the money.

What do you see as the benefit of studying Main Estimates this year?

Mr. Duclos [ + ]

That is a good question. By the way, the reason I wanted to invite Glenn to speak is that I see Glenn and hear him regularly. You might not have had the same fortune. He’s a very clear, composed and structured person. Perhaps I was too generous in trying to share that with you, but let me, perhaps, be more relevant.

Yes, typically we would be voting on the full Main Estimates at this particular time, but given the situation, we are giving parliamentarians in both chambers the opportunity to further continue their study of Main Estimates, and proceed to debate and vote on the third interim supply bill in the fall.

Senator Marshall [ + ]

Thank you. My next question is for Minister Morneau.

Minister, it’s nice to see you again. I want to talk about the media advisory that your department issued in June about the Economic and Fiscal Snapshot that you’re going to deliver on July 8. The advisory says “The snapshot will provide information on the current state of the economy and the Government of Canada’s response to support . . . COVID-19 pandemic.”

I’ve never heard of the term “fiscal snapshot” before. It doesn’t sound very promising. I’m hopeful that you’re underpromising now and that you will overdeliver in July.

Could you give us some insight into what you will be disclosing in July in your fiscal snapshot?

Mr. Morneau [ + ]

First of all, thank you, senator. I certainly try to make it a practice to underpromise and overdeliver. We’ll see if I meet your standards on July 8.

Our reality right now is it’s extremely difficult to make projections with any sense of precision. The decline in economic activity during the end of March, April and May was, as all of us in this chamber know, unprecedented. For that reason, we think that we should ensure that we provide information on what we know, and don’t try to provide information that is hypothetical or without substance.

What you will see us doing is providing you with our best understanding of the current state of the economy, with a comprehensive understanding of the commitments that we’ve made, and that will go out to the extent we’ve made them, and that will allow us to provide a picture of what 2021 will be, in our estimation.

Senator Marshall [ + ]

Will you be providing numbers such as the debt and deficit even at this point in time? I do appreciate the difficulty in forecasting, but just to find information on the current state of finances in government; it’s difficult and challenging. People who are interested have to go to a variety of sources.

Will you be providing information as of this point in time? For example, Senator Plett asked about the debt and deficit. Will we get that number, or will we have to continue to try to calculate it ourselves?

Mr. Morneau [ + ]

Yes, you will.

Senator Marshall [ + ]

Great. Thank you. Minister Duclos, I have another question for you.

We’ve been doing quite a bit of study of capital projects in the Department of National Defence, and two years ago the Prime Minister announced that the Treasury Board would assume responsibility for key delivery challenges, including defence procurement.

I notice in Supplementary Estimates (A) there is about $700 million for capital projects in the Department of Defence, the largest being $585 million for the Joint Support Ship project. The decision of the Prime Minister to put that responsibility over to the Treasury Board — you can see it when you look at the 2019 update to the Defence Investment Plan because the plan clearly shows Treasury Board at the top of the decision pyramid.

As President of Treasury Board, are you satisfied that capital projects under Strong, Secure, Engaged and approved by Treasury Board are being properly managed in the Department of National Defence, and that the information on the cost and progress of these projects is complete and accurate?

Mr. Duclos [ + ]

Thank you for the question. It’s very important.

I will start by correcting the impression that could have been wrongly sent: Treasury Board is not in charge or the sole agent in those important processes. The Treasury Board is there to support and monitor other important departments in those types of processes.

In this particular case, the departments mostly involved are, of course, National Defence but also PSPC, Public Service and Procurement Canada. We work all together with the respective abilities and responsibilities that we share and put in common. We all work together to ensure that, as you said, there are proper actions and monetary mechanisms implemented in the context of such important capital expenditure projects.

Senator Marshall [ + ]

Thank you very much.

Do I have sufficient time for another question?

The Chair [ + ]


Senator Harder [ + ]

Good afternoon, and thank you, ministers and officials, for being here. I’m probably one of the few people in Ottawa that believes that Treasury Board’s work is really important and exciting. I want to take the occasion to ask the minister some questions about the role of the Treasury Board, particularly in light of the COVID initiatives and the changing dynamic of both programs and quantum that we are approving.

The Treasury Board, as everyone knows, is the traditional department to ensure program integrity, program evaluation, and the promotion of value and prudence for taxpayer funding.

I would like to hear from the President of the Treasury Board regarding the following: What additional steps, beyond those of the normal practices of the department, have been put in place as a result of the COVID initiatives to ensure that this overwhelming and sudden program allocation meets the traditional standards of integrity and program effectiveness?

Mr. Duclos [ + ]

Thank you, Senator Harder. Thank you for being so kind and supportive of the role of the Treasury Board and perhaps its president as well. Yes, it is indeed an important central agency, but perhaps an agency whose work is rather discreet, in many cases, in support of other important agencies or departments across the government.

In the current crisis, we have acted in a different number of ways to make sure we could do things quickly but with the integrity and the value for money concerns that you also signalled, and correctly so.

We have needed to be agile and, at the same time, diligent and responsible. As an example of what we did, there was a clear communication to all departments, officials and public servants at all places and all levels of not only an expectation but a demand that whatever measures they put into place — sometimes in a relatively speedy manner — need to be documented and will eventually need to provide full information to the important institutions, like the Information Commissioner, the Auditor General, and other central agents and agencies in the Government of Canada.

Similarly, we have had to be agile and rigorous in our ability to monitor the important demands on health care and the public health side in providing support for medical research, testing, treatment and vaccination, procuring at a level and speed we have never seen in the history of Canada. That involves working with PSPC and other important mechanisms on human resources, technology and financial management sides that the Treasury Board absolutely needs to do.

Senator Harder [ + ]

I will move on to — if I could put it this way — the “normal” programming activities. What steps are you taking in your department to ensure that the program integrity of the other programs outside of the COVID initiatives continue to be both appropriately resourced and effectively monitored?

Mr. Duclos [ + ]

The short answer is that I and we have the privilege of having, within the Treasury Board Secretariat, a level of expertise and dedication that is unfortunately not too visible; it is not visible enough for most Canadians and even for parliamentarians. I know this now for sure, because I’ve been at the Treasury Board for a number of months now and I can tell you that, even in the context of an emergency like COVID-19, there have been the right levels of efforts, as you suggested, invested in making sure that other aspects of the government’s work were following the right integrity and monitoring procedures. Again, this amazing level of dedication, expertise and commitment ensures the well-being of our country.

Senator Harder [ + ]

My final question to you as President of the Treasury Board has to do with transparency. There’s a lot of commentary around transparency. Certainly, as I look at the various websites of both your department and other departments, there is a good deal of information being put out for public and parliamentarian interest, not only for their information but also as a means of holding the government to account.

One of the challenges is that we have many windows of transparency, but we don’t always see the full picture. I’m wondering if the Treasury Board is giving consideration to how to adjust the reporting requirements on the results side to take advantage of the additional tools — particularly electronic tools — that have been developed in the crisis for the transparency that is appropriate to provide a better context for results reporting, by department?

Mr. Duclos [ + ]

Thank you. I like the phrase that there are different windows to look into the house of the government, but we don’t always see the full picture. That is exactly true. That’s why we and the Minister of Finance were key in doing this. We have provided bi-weekly reports that were tabled in the appropriate parliamentary committees.

We also have two key windows that have been available and filled with important information over the last few weeks. The first one is the Government of Canada InfoBase, which provides important information on the measures and the associated costs of those measures. There is also the Open Government portal, which has led to the automatic and full disclosure of almost 150 separate measures, all focused on the COVID-19 emergency.

In addition to the questions that members in this house and the other house have asked repeatedly and quite legitimately on government operations, there has been a fair amount of transparency. We can always do better, of course, and we should always want to do better, but I think there has been a good level of transparency, given the circumstances.

Senator Harder [ + ]

Thank you.

My next question is for Minister Morneau.

Yesterday in the Financial Times, there was a front-page story saying that Brookfield Properties is chasing small retailers to pay thousands of dollars in rent on outlets that were forced to close during the coronavirus pandemic, even as the Canadian investment group skips payment on its mortgages and asks its lenders for forbearance. The story goes on to describe, through various documentation that has been received, how they are putting the screws to their tenants while seeking forgiveness from those to whom they owe money.

I know this is not obviously a direct responsibility of the Minister of Finance, but you have in the past spoken to the spirit in which the government’s actions have been undertaken and the assistance that the government has provided. I would invite you to comment on how you see the cooperation from large corporations in the exercise of that spirit in their area of responsibility.

Mr. Morneau [ + ]

Well, thank you, Senator Harder. Firstly, I didn’t see that article, so I’m not able to comment specifically on what the situation is with Brookfield and their tenants.

With respect to your broader question, we’ve tried to design programs that would create the right incentives for participants in the market to work together, and the path we took on the emergency rent approach was intended to do that. It was intended to provide an incentive for a landlord to work with a tenant because they would be guaranteed 75% of their payment, and it was incentive for the tenant because they would only have to pay 25%. We see that program is now starting to grow, which is positive, enabled by the fact that many of the provinces have temporarily put a moratorium on evictions of commercial tenants.

To your direct question, we’ve actually worked with some of the largest landlords in the country. I’ve personally spoken with a number of them — not to Brookfield but to a number of other large institutions that have a significant number of commercial tenants. I’ve spoken to large Canadian pension funds and in all the cases, in fact, they’ve told me that they would work with the commercial rent approach that we put in place in order to try to get to a settling of the challenge they’re facing: tenants don’t have the money to pay and landlords, of course, don’t want to take a haircut. They thought the program was appropriately scaled for the challenge.

I think that broadly answers the question you’re asking.

Senator Batters [ + ]

Minister Morneau, your government is once again here asking us to approve billions of dollars in spending with little transparency. This is part of a disturbing pattern. The Trudeau government’s first COVID-19 act gave you the power to unilaterally set up a potentially massive 100% government-owned corporation without parliamentary oversight.

Bill C-14 put a sunset clause of September 30 on that government corporation, but that only prevents the creation of this Crown corporation after that date. It does not prevent your government from pouring in unlimited taxpayer money if it has already been created. And guess what? You’ve already created your giant government corporation. May 10 orders-in-council show you’ve named it the Canada Enterprise Emergency Funding Corporation. So the sunset clause in Bill C-14 on this giant government corporation is now meaningless.

Minister Morneau, why won’t you impose a real sunset clause and close this huge loophole? Canadians don’t want to be on the hook for another Trudeau government power grab.

Mr. Morneau [ + ]

The corporation you’re referring to is one that’s underneath the large enterprise financing facility we have put in place, and it is intended to manage that facility.

We recognize that these large organizations that are going through stress, and might come to the government for this financing facility, will likely go through stress that will go beyond September 30. This is similar to what happened in the 2008-09 crisis when we saw large enterprises challenged and went through a significant restructuring following the actual time of the crisis.

We think we’ve set this up in a responsible way to allow us to support these enterprises with credit. Our goal, of course, is to maintain the possibility for these enterprises to come out of COVID-19, continue to be able to provide jobs for Canadians and enable us to have a strong economy going forward.

As was mentioned earlier, we’ve had a number of companies come forward. In many cases, the mere fact of this financing facility has enabled firms to go out and get financing themselves. Over the last couple of weeks we’ve seen both Air Canada and Hudson’s Bay Corporation go out and seek large financing, which we think is appropriate. They’ve been able to find financing in the market. The large enterprise financing is intended to be for those organizations that cannot. Of course, the emergence of those challenges can happen over time and the stress will become greater for many of those businesses the longer COVID-19 goes on. We just think it’s the right way to support our economy and ensure there are jobs after we get through this crisis.

Senator Batters [ + ]

Minister Morneau, the Conservative government, in the 2008-09 situation, took that action in a much more limited and circumscribed way. Also, Conservatives would only purchase corporate assets out of necessity, not desire. But let’s get back to your giant government corporation.

Have you already used this Crown corporation to dole out taxpayer money? If so, to whom? How much has this already cost Canadians? Are the projected recipients of this taxpayer-funded largess already set? Will the Trudeau government use this corporation to provide massive bailouts to its favoured sons, SNC Lavalin and Bombardier?

Minister Morneau, again, why won’t you close this huge loophole? If you promise to impose a sunset clause on such a significant government power, make it count.

Mr. Morneau [ + ]

Well, to be clear, again, this is not intended to purchase companies. In fact, on the contrary; it’s a credit facility put in place in order to provide liquidity for firms going through challenges. The cost of that credit is relatively expensive, as is appropriate given the situation these organizations are in, with the potential for warrants. Those warrants can be satisfied in cash from the organizations, meaning no equity need be exchanged between the government and the company.

The answer to your direct question is “no.” No funding has been released, because as was asked earlier as to whether any of these potential loans have been approved, the answer is no. There are a number of companies that are under stress. The facility is likely to be useful, but it has not been used as yet because that process is just starting to get under way. Again, we hope it provides us with the opportunity to support some important large organizations through an unprecedented time, which is of course the reason we’ve set it up this way as opposed to the significant but more limited challenge we faced in 2008-09.

Senator Batters [ + ]

Thank you. Minister Morneau, the Parliamentary Budget Officer, Yves Giroux, is also very concerned about the sweeping powers you personally have with this giant government corporation. When the PBO testified at the Senate Finance Committee last month, he stated that vesting that level of power:

. . . without any immediate oversight — in one person, it’s something that, in my opinion, is unprecedented in the current regime and in Canadian history. Even though speed is at a premium right now, it doesn’t mean that the minister should be allowed to act by himself or alone to create trusts by corporations and borrow billions of dollars . . . .

The PBO went on to say:

It is thankfully limited in time, but it is unprecedented and worries me a lot.

Unfortunately, Minister Morneau, the giant government corporation now really isn’t limited in time, since it has already been created. Won’t you give the PBO some small level of comfort and impose a real sunset clause on that corporation?

Mr. Morneau [ + ]

First, obviously, I respect the importance of the Parliamentary Budget Office in completing its work, in providing a level of understanding for Canadians, for this chamber and the House of Commons to have an understanding of the federal finances. I think that’s an important function.

We will certainly put in place the appropriate safeguards around the large enterprise financing facility. We have ensured that there are multiple levels of due diligence as we go through this challenge, and we will continue to take that approach. This is complex. It requires a lot of expertise — expertise that we have in government to a certain extent, but also expertise we need to seek outside, as well as governance that’s appropriate, and we are seeking to do that.

Senator Batters [ + ]

Minister Morneau, back in March, shortly after this whole pandemic crisis rocked this country, you sat in this very Senate Chamber and promised that your Trudeau government would deliver help for the oil and gas sector imminently. You said, “I’m not talking about weeks. I’m talking about hours, potentially days. . . .”

Well, 90 days have now passed since you made that promise, minister — almost 13 weeks and more than 2,160 hours. But who’s counting, right? Well, I’ll tell you who’s counting, Minister Morneau: the oil and gas workers, whose jobs were already threatened due to the anti-energy policies of your government; the small- and medium-sized oil companies that can no longer afford to pay their workers because the aid you promised just isn’t flowing; the withering and now shuttered small businesses and shrinking rural communities; and so many communities throughout my region of Western Canada, whose livelihoods depend on the very energy sector your government seems to have abandoned. When will the Trudeau government cut the platitudes and actually deliver for Canada’s energy sector and the millions of Canadians who depend on it?

Mr. Morneau [ + ]

Thank you. This is a significant misunderstanding and one that I think I should correct on the record.

We need to be very clear that the programs we’ve put in place support all sectors across Canada, support Canadians across the country. The Canada Emergency Response Benefit is obviously for Canadians across the country.

With the wage subsidy, we now have 223,000 unique applicants, with over a couple of million people on it, which is 1 in 7 Canadian employees, including significant large and many small- and medium-sized companies in the energy sector. With the Canada Emergency Business Account, we now have 680,000 applicants who have been approved, including more than tens of thousands in Alberta, many of which are in the energy sector.

The specific program you may be referring to is the reserve-based lending approach with the Business Development Bank of Canada. That program is also going forward but did require some considerable details to be concluded before it moved forward.

So there is aid flowing; there is credit flowing across this country to individuals, to businesses in all sectors, including the oil and gas sector in those parts of the country where that’s an important sector. We’ll continue to look to support all sectors. I’m pleased to see that our measures are doing exactly that. As we find challenges, we’ve tried to improve or change those programs to deal with those challenges, and that will certainly be our ongoing approach.

Senator Batters [ + ]

Your comments you made in the Senate that day are incapable of misunderstanding. You were talking about the energy industry, and your government’s empty promises now won’t pay the bills, minister. You’re 90 days late and billions of dollars short. The anti-energy policies of this Trudeau government have devastated —

The Chair [ + ]

Senator Batters, I’m sorry, your 10 minutes is up.

Senator Forest-Niesing [ + ]

I have two questions for you. Thank you, ministers, for accepting the invitation to appear before us today.

My two questions concern transportation. I’ll ask them and then let you decide who can answer.

I’m asking the first question on behalf of my colleague, Senator Éric Forest. He notes that, compared to last year, there’s been a $500-million reduction in the Public Transit Infrastructure Fund. He asks the following question:

As we know, there are many projects awaiting funding in Quebec and across Canada. Should we expect a major reinvestment in these funds to foster the development of public transit and, in turn, the economic recovery?

Mr. Morneau [ + ]

I’ll start. As I said earlier, we’re now in a cautious recovery, so we’re not yet there. We can’t exactly say what we’ll do with respect to infrastructure, but we know that public transportation is very important. That’s why we looked at improving things for municipalities in our work with the provinces. We recognize that municipalities have some significant needs, and public transportation is one of them.

Our first step in the ongoing negotiations with the provinces is to look at the municipalities’ current situation. We’ll be able to get you some answers after that.

As for a larger investment in the future, and in light of the stimulus measures, I hope we’ll be able to say more in the coming months.

Senator Forest-Niesing [ + ]

Thank you. I have a second question.

This question concerns community and regional airports and their very short-term survival. I noticed that the Main Estimates allocated $38 million for ACAP, the Airports Capital Assistance Program. Additionally, in response to the pandemic, some emergency measures have been enacted to support businesses, but the majority of regional airports that have governance models that involve the municipalities don’t qualify. They aren’t eligible for those measures.

Regional airports are sounding the alarm. They’ve been strongly affected. Many of them are on the cusp of bankruptcy, having lost up to 90% of their revenues and having fixed costs.

Is the government planning short-term support measures to prevent the bankruptcy of these economic and social vectors so vital to remote regions across Canada? If the answer is yes, what are those measures? If the answer is no, can you explain why not?

Mr. Morneau [ + ]

Perhaps I can identify both what we’ve done in this regard and our approach.

I think you will know that we have waived a number of fees from airports across the country, which has helped. We’ve also said that the measures we’ve put in place for industry and for organizations across the country have consistent criteria. The criterion of the wage subsidy is that the reduction in revenue is 30% or greater.

We are looking right now at the extension of the wage subsidy and considering how we might best change the criteria for the wage subsidy to make sure it’s having the desired impact. We went through a series of consultations with businesses and labour unions to get their insights. We’re getting close to the final determination on how those programs will be changed.

I expect that many of the most hard-hit sectors — and I think airports would certainly be included in that — are going to be anxious to see that we’ve considered their challenge in that new policy. I’m confident that we will provide additional support for businesses that have been particularly hard hit through that.

Then, of course, on top of that, the credit measures that we’ve put in place are intended to support organizations of different sizes. The CEBA loans are for the smallest of businesses. The BDC and EDC loans — the BCAP loans — are for larger. And then likely the size of airports you’re looking at are probably on the scale where they’re accessing about $12.5 million of potential credit or, for the largest of airports, if they are over $300 million worth of revenue they can go into the LEEFF program we talked about earlier. Some airports are in that category.

We’re trying to provide support as we can through direct measures like the wage subsidy and then credit support where necessary, based on the situation, and not necessarily looking at a specific sectoral response but more broad-based, helping all organizations that fit the criteria of being directly impacted by COVID-19.

Senator Forest-Niesing [ + ]

My concern with respect to the emergency measures that have already been put in place, specifically with respect to the rent relief for airports, is that the larger airports have been able to benefit from that measure. Regional and community airports, which really are the very important link not only for passenger transportation but also for transportation of goods that are essential to the survival of remote communities, have governance models that render them ineligible given their relationship to the municipality that may own their building and the fact that there may not be a rental obligation or rent payment obligation, so they can’t avail themselves of those measures.

I would suggest there remains a very urgent situation with respect to regional and community airports, and that creativity will have to be part of the consideration of additional measures involving those airports in order to ensure that we do not lose one of the 50 plus that are across Canada and that remote communities depend upon. I leave that with you.

Mr. Morneau [ + ]

What I can say is that I appreciate the challenge. It has been brought up to me from other parliamentarians. We are trying our best to face up to the multitude of sectors that are in immense challenge at this time — that would be one of them — and thinking about different ways we might be able to do that.

Obviously, support from the municipalities is one way that might support these smaller regional airports. But we are not taking the approach that we have a playbook. The challenges that are emerging are continuing to manifest themselves in new ways as this continues on. The additional stress that organizations find themselves in, the longer this goes on, requires us to consider whether our measures are appropriate for the challenge. That’s what we’re trying to do on a daily basis.

Senator Forest-Niesing [ + ]

In the few seconds I have left, I just want to express my gratitude for the speed and creativity of the emergency response of the government to an unprecedented situation.

Senator Martin [ + ]

My first question is to Minister Morneau. In a way, it is in the same vein as my colleague’s questions about the smaller airports, but it’s about smaller businesses.

I know there has been, as you say, credit flowing to businesses. Many businesses have been able to be supported, but it’s the very small businesses, minister, the mom-and-pop, family-owned businesses that were not originally eligible for the Canada Emergency Business Account. They had to wait even further once you did change the criterion, to allow qualification with a payroll lower than $20,000. Because it was EDC and not an entity that already knew credit unions, some of them who had accounts with credit unions had to further wait for accreditation to take place, and that took about a month.

Finally, you announced on May 19 that these businesses could look forward to receiving support. June 19 was supposed to be the day, but on the previous night, you tweeted that the CEBA expansion wouldn’t happen as planned. It was quite a crushing blow to these businesses and families who were waiting. There wasn’t much explanation in a tweet, of course, and no new date.

Minister, what happened to this long-awaited date? They have been waiting for months. Why did you further delay the long overdue support to these businesses, the most vulnerable businesses, as I have come to understand in the calls that we’ve taken? When will you finally implement the CEBA expansion to help these businesses? Is there a date?

Mr. Morneau [ + ]

Thank you. I really think it’s important to put this in context. In what has still been a very brief period of time, we have put in place numerous programs that have had broad applicability across our country. In the case of the Canada Emergency Business Account, just to consider the numbers, as of June 12, we had 680,000 applicants. About 680,000 small businesses were approved for these business accounts for a total of $27.05 billion in cumulative funds disbursed.

I think we need to always start with the context. Of course, there are more businesses than 680,000 in this country that meet the criteria to be eligible, but that’s an enormous number of businesses that have applied for and been approved and received funds.

What we committed to was expanding the range of businesses. With all good intent, we set out the criteria for these businesses up front. People came to us and said, in some cases, they didn’t actually pay their employees in a way that would enable us to use payroll as an indicator. We had payroll as an original indicator because it was something that banks could verify. We always want to make sure, as we’re putting out loans, that the banks have a way of verifying it’s an appropriate organization.

When we found that problem, we decided to expand it. That was the decision that we saw as the enlargement that we were aiming for, and we expected that we would be able to have those loans start flowing this past Friday.

First of all, we are moving forward with that measure. Nobody should be disappointed that they’re not going to get that loan. That loan is coming. The issue was that, over the course of last week, the multiple financial institutions engaged in getting prepared for this new expansion required administrative capabilities they had not previously had. We found out the night before they really didn’t think they could deliver to the standards expected. They asked for a few more days.

My answer was, we want to do this right, therefore we will enable a few more days. I would say through you to those small-business owners that this is still going forward. We are doing this. We’ve expanded the criteria. We are making sure the financial institutions, including credit unions which we have expanded significantly, have the capacity to actually deliver. That will be in the near future. Since we aimed for last Friday but were unable to get it done that day, I don’t want to say I know the exact day today, but they’re working night and day to get this done.

Senator Martin [ + ]

Thank you, minister. You changed in your response from a few days to the near future. You speak about this being a brief period of time but, for these small, family-run businesses, they sometimes work 16- or 20-hour days, and they’ve been waiting for months. So it is critical. And it was tweeted the day before. So, with all due respect, they’ve really suffered, and I wanted to say that on their behalf.

My next question is to Minister Duclos.

Minister Duclos, my questions have to do with the Privy Council Office, which received an additional $48.7 million in funding for communications and marketing related to COVID-19.

A spokesperson for the PBO said last month that $26.7 million of that funding would be allocated to, and I quote:

 . . . other advertising departmental initiatives related to COVID-19 as necessary.

Minister, how much of that money is being spent on the press conferences the Prime Minister is holding every morning on the steps of his “cottage” rather than on Parliament Hill?

Mr. Duclos [ + ]

Thank you for your question, Senator Martin, and for being so kind as to ask it in my mother tongue.

I can tell you right now that, in these times of crisis and pandemic that we have been and are still are experiencing, Canadians are worried. They are worried not only about their pocketbooks and their ability to make ends meet, but also about their health. In most cases, that is their main concern. That is why outreach, information-sharing and reassurance efforts are so important, particularly when it comes to those who are the most vulnerable and the most worried.

The resources that you identified and described are there to support Canadians, inform them and guide them in the personal decisions that they have to make to protect their health and the health of their loved ones. These resources also help them determine how best to go about their daily lives and plan for the future.

It is a very important communications environment that informs, reassures and helps guide people’s behaviour. There are all kinds of activities planned that can be carried out with that funding.

Senator Martin [ + ]

Thank you. I am curious, though, about the amount that is dedicated to those daily announcements. That was the question. In the spirit of transparency, which you have also said is very important, that is the question I have. If that could be provided, that would be much appreciated.

Mr. Minister, there’s $7.5 million here for, and I quote:

Funding to support regional presence, stabilize and enhance PCO capacity and the transfer of exempt staff in Ministers’ Regional Offices

Minister, can you tell us exactly what those words mean by providing a detailed breakdown of how that $7.7 million of taxpayers’ money was spent?

Mr. Duclos [ + ]

Once again, thank you for your question. Getting back to your previous question, I can assure you that the Prime Minister’s presence is important. He has certainly been present for several weeks now. There are also other activities that may be less visible but in which the Privy Council Office and several other federal institutions are participating to communicate with Canadians and reassure, inform and guide them.

As to ministers’ regional offices, during the pandemic, public health directives have been key to all government operations. Public servants were asked to work from home. Some were even forced to. I can provide details later on about what we learned and the good results we achieved, but because members of cabinet and senior officials have also been involved in remote activities and meetings, we’ve had to invest in security and technology in ministers’ regional offices.

The Chair [ + ]

This ten-minute period is over.

Senator Moncion [ + ]

Thank you for being here with us today. My question has to do with the maximum stock of debt. I know you had to answer questions on this at the beginning of the meeting. Subsection 43(1) of the Financial Administration Act was repealed in June 2016. This change restores the requirement that the Minister of Finance obtain the authorization of Parliament for his borrowing activities. To satisfy this requirement for authorization for renewed borrowing, Parliament passed the Borrowing Authority Act, which came into effect on November 23, 2017. This legislation establishes the maximum stock of market debt for the Government of Canada and Crown corporations at $1.168 billion and gives the Governor-in-Council the power to authorize borrowing within that limit. Under that act, the government must report to Parliament on the state of borrowing at least every three years.

Since the country’s financial situation is evolving quickly in the current context and given the government’s obligation to report to Parliament every three years, when can we expect the government to report to Parliament under this act or introduce a bill to establish a new maximum stock of debt?

Mr. Morneau [ + ]

Is the question for me?

Mr. Duclos [ + ]

I believe so. It’s a little too technical. It is rather unfair to ask Minister Morneau to speak to the technical aspects. Some are governed by orders-in-council. If senators are more interested in the technical aspects, I can ask Mr. Purves to answer.

Mr. Morneau [ + ]

We know that it is very important to follow the rules. We intend to follow the rules concerning information that is to be provided to Parliament. You can rest assured that we will report before the scheduled dates.

Senator Moncion [ + ]

I want to correct the amount right away: we are talking about $1.168 trillion, not $1.168 billion. It would be wonderful if the debt were that small.

The government’s emergency expenses made in response to COVID-19 are in large part financed by the Bank of Canada and part of the government’s borrowings from markets. This means that the provisions contained in the Borrowing Authority Act are not applicable in the present case.

Can you give us some explanation regarding COVID-19 debt funding and how this will be reflected in the government’s financial statements?

Mr. Morneau [ + ]

We will be reflecting the overall borrowings in the financials. That would include, by extension, the debt of the Bank of Canada as well. That will be clearly demonstrated in the accounting that we bring forward. That will give the transparency and the understanding of our borrowings, and the challenge that we’re facing as a result of COVID-19. We’re looking forward to doing that.

Senator Moncion [ + ]

Will we be expecting more clarity on the amounts at the financial update that you’ll be providing on July 8?

Mr. Morneau [ + ]


Senator Moncion [ + ]

Thank you.

If Senator Pate would like to have the rest of my time —

Thank you to both ministers for appearing, and also to your government for the economic support that you’ve provided to Canadians during this important time.

The cost of leaving people in poverty is estimated at between $72 billion and $84 billion each year, including government budgeting for health care, criminal legal issues and emergency support costs.

The Bank of Canada has advised that a permanent CERB-like program would be a good investment and would enable more expeditious responses to individuals in need in future times of crisis.

The Parliamentary Budget Officer estimates the cost of the temporary CERB measures, including the recent eight-week extension, at $71 billion. For comparison, the same office says that the net cost of operating a guaranteed liveable income for a year would be $44 billion. On top of this, a guaranteed liveable income would save $15 billion or more for provinces and territories in terms of social assistance costs.

The benefits of guaranteed liveable income go beyond financial ones. A guaranteed annual liveable income for all Canadians was one of the Calls for Justice of the National Inquiry into Missing and Murdered Indigenous Women and Girls. It has also been recommended by the Office of the Federal Ombudsman for Victims of Crime.

What consideration has the government given these various recommendations as part of its budget process, in particular given the downstream cost savings that a long-term guaranteed liveable income program could offer by reducing poverty-related strain on health care, criminal, legal and other systems, and better equipping Canada to weather future crises like COVID-19?

Mr. Duclos [ + ]

Thank you, Senator Pate. I value that question very much, and I equally value your sensitivity and knowledge of these issues and the importance of not only recognizing the short-term cost of poverty, which is significant, as you said, but also the long-term cost of poverty, vulnerability and exclusion.

That’s one of the reasons we needed and wanted to act quickly and impactfully in this particular crisis; because there was an obvious risk, not only of entering into a severe economic depression, but also the serious risk of entering into a severe social crisis. No one around this room has yet to imagine the level of social crisis that would currently exist in Canada if millions of people and families had nothing to put on the table.

We should all be mindful, of course, of the fiscal integrity and fiscal rigour that governments have to abide by, but also the social responsibility that we have for citizens who have nothing else if we don’t help them.

It’s also related to the important debate and discussion around the guaranteed minimum income. That philosophy, in fact, has inspired the introduction of the Canada Child Benefit in the first mandate, a benefit which still reduces the level of poverty among children by 40% every month. That has also influenced and determined many of the measures we have put in place to support seniors through enhancements to Old Age Security, the Canada Pension Plan and enhancements to the Guaranteed Income Supplement, always with the perspective of providing a social safety net that is both efficient, in the sense that you mentioned, and fair for everyone.

Looking forward, we have learned lessons from the crisis, including the fact that our Employment Insurance system wasn’t designed to go through these crises and, of course, before the crisis, it wasn’t entirely adapted to the changing labour market circumstances and social circumstances of our country.

We value your input very much. We encourage you to continue your advocacy because we all believe that these are important things to discuss and to keep in mind.

Thank you very much. I want to quickly go to another issue.

I was disturbed to hear earlier, and very happy to see some of it abandoned, a focus on looking at going after individuals who were seen as falsely or mistakenly applying for the Canada Emergency Response Benefit. I was pleased to see some of the comments you made, Minister Duclos, in this respect. However, I’m curious as to what the budgetary impact of fraud associated with the CERB would be compared to the prevalence and monetary amount of fraud associated with other forms of COVID-19 economic support measures, including measures geared toward businesses for which these types of penalties were not considered and, more generally — this is probably more for Minister Morneau — the amounts of tax revenue lost each year as a result of tax evasion and tax avoidance by businesses and wealthy individuals.

The Parliamentary Budget Officer recently estimated that losses due to offshore tax evasion and avoidance by multinational corporations could amount to $25 billion per year. I haven’t heard anywhere close to that amount being related to potential CERB benefit mistakes.

The Chair [ + ]

I am sorry; your 10 minutes is over. You’re always welcome to send in a written answer.

Senator Tannas [ + ]

My question is for Minister Morneau. There are a number of programs — the Co-Lending Program, the loan guarantee program — that are under way right now. I think there are more to come around mid-market programs, all with partners such as financial institutions, major banks, credit unions and so on.

I can tell you that in my field of contacts, it doesn’t appear that the financial institutions are jumping to the pump on this. Notwithstanding the guarantees, they still have to take risk and they are reluctant to do so. We’ve seen this. This has played out over decades with the small business loans programs where banks have been reluctant to use it — too much paperwork, and lots of excuses.

Are you satisfied with the take-up? Do you think that the partners — specifically, the banks and credit unions — are displaying the appropriate effort and enthusiasm? These loans are going to be important in the relaunch. If you or your people see resistance, which would be traditional resistance, now is the time to do something about it. What are your thoughts?

Mr. Morneau [ + ]

Thanks. I would start by saying I think it is quite an important question. We put in place these measures because we think that having liquidity in the market is critically important right now, and it’s particularly important to find a way to ensure businesses can get through this time.

I would say candidly that some of the programs we’ve put in place have been phenomenally effective. I identified the Canada Emergency Business Account. Certainly we’re not at perfection, because there is more we need to do; however, it has delivered credit to a large number of organizations, very rapidly. The financial institutions, broadly speaking — the banks and credit unions — have been very effective at doing that.

In terms of the BCAP program, I would have two observations. The first is that it is too early for me to fully answer your question. When we look at the rollout of the BCAP program, which was successful in 2008 and 2009, we see a similar pattern. The program did not have high levels of take-up in the early days; as organizations got more stressed, it had greater and greater levels of take-up.

I think we are still at a stage where it’s important to remember that we’re providing a significant amount of money, liquidity, to organizations through the wage subsidy and we’re providing help for their employees through the CERB. I’m not yet able to give you a clear answer on whether we should be believing that the take-up is where we would expect it to be.

That said, I’m trying to stay on top of this. I am in constant contact with our financial institutions. We have an 80% guarantee on those loans, and that was put in place because we want the credit to flow. We will be taking what I think was your advice in terms of staying on top of this and continuing to push to make sure this program is having the desired impact. That will be an ongoing issue that we’ll need to address.

Finally, in the large enterprise financing, I think those organizations are sufficiently sophisticated to know whether they need to use that financing, based on other sources of credit.

You’ve pointed out the right place where we need to focus our attention, but I’m not yet able to tell you that I have enough information to determine whether it’s meeting our desired goals.

Senator Tannas [ + ]

I’ll give you another unsolicited piece of advice, and that is to find a listening post close to the front lines. You may get a different answer than you will in the executive offices of Bay Street.

I’ll yield the balance of my time to Senator White. Thank you, minister.

Senator White [ + ]

Thanks to both ministers and staff for being here.

To Minister Duclos: Treasury Board created the Expenditure Management System in about 2007. Primarily, Treasury Board required that all new program proposals go through a systematic examination, ensuring they meet the needs of Canadians, focus on federal responsibilities, produce results and provide value for money.

We’ve had a number of new programs, worth billions of dollars, in the last couple of months. I’m trying to get assurances from Treasury Board that the same standard is being met with these new programs as would have been envisioned with programs previous to that, and that, whether or not the Expenditure Management System is being used as expected.

Mr. Duclos [ + ]

Thank you, Senator White. Let me answer in three different steps.

First, we did indeed have to act quickly.

Second, we regularly adjusted our policies in order to adapt them to not only the evolving situation but to the input that was regularly provided by Canadians, and businesses in particular.

Third, I made clear to my team at the secretariat — which all departments and agencies have understood — that while we do this, we need to keep a level of integrity and monitoring that is expected of the federal government, in particular, in the value-for-money context that you describe.

The Expenditure Management System and its value and importance remain during the crisis and will continue as we go through the remaining part of this crisis, as we emerge from it, and as we implement some of the lessons we learned in the last few weeks.

Senator White [ + ]

In a similar vein, we certainly understood the government would have to provide billions of dollars’ worth of programs and services in order to effectively respond to COVID-19. In fact, Treasury Board allowed for time limit increases to emergency contracting limits.

However, at the same time, Treasury Board has emphasized that departments should not undertake one-off procurements outside of the coordinated purchase of commodities, for example, that has been organized by PSPC. As well, Treasury Board has advised departments to track expenditures associated with COVID-19 as part of each department’s Response Expenditure Report.

Are you confident that the departments are not engaged in one-off purchases outside of PSPC’s coordinated purchase and that departments are accurately tracking all of the pandemic expenditures? Second, have you put in place an audit process to assure the public?

Mr. Duclos [ + ]

As you said, and as you hinted, there are important joint responsibilities and relationships across departments and agencies. Treasury Board is obviously one of those agencies that has the responsibility to provide important administrative, monitoring and enforcement support that other departments may require.

We do this in a manner that is, in this particular crisis, mindful of the urgency and transparency expected with regard to our actions. We will continue to do so because, as you said, it is not only a matter of having the right actions and impact but also a matter of keeping the faith of Canadians in terms of the integrity of our institutions.

Senator White [ + ]

Thank you very much.

My last question is for you, Minister Morneau, if I may. A number of not-for-profits that have been pursuing capital expenditures across the country to try to build homeless shelters, some here in Ottawa — homes for homeless veterans, for example — are having real challenges in terms of receiving the same level of giving that they were getting pre-COVID.

Has there been any consideration given from the government to increase the tax credit to those who donate to those types of projects, in particular, capital expenditures, not-for-profit, to try to entice further giving and, at the same time, increase the level of construction, as we’ve seen in some states in the United States about 15 or 20 years ago under homelessness initiatives?

Mr. Morneau [ + ]

Thank you. We have been trying to use approaches that consider the direct impact of COVID-19 and supports that would be related to that challenge.

You’ve seen us with wage subsidies to use the reduction in revenue as the proxy for how we decide to deliver to organizations across the country facing those challenges, including not-for-profits.

We have been working not to use the tax code, which is very broad-based, for what might be specific challenges for people for tax code changes. That’s not our first approach in trying to address these issues.

I’m not saying we’re taking any idea off the table, but our direct support is very much about trying to directly support people and then directly support organizations so that they can maintain employment of those people.

As for the longer term issues and challenges, we’re hopeful that we can address those, including through the tax system, when we get into a state of more normal operations.

Senator Galvez [ + ]

Thank you very much, Minister Duclos and Minister Morneau, for being here to answer our questions.

My question is about maximum transparency, as you mentioned in your introduction, Mr. Duclos. We have these action plan programs of open government and, according to your website commitments, user-friendly open government, financial transparency, accountability, corporate transparency, and digital government and services are supposed to be respected.

Bill C-13 enabled the government to increase the liability amount for the Canada Account, and therefore, on June 5, it was published in the Canada Gazette that the amount of the total liabilities and obligations for the Canada Account shall at no time exceed $93 billion.

This is an incredible amount of money for an account that, first, risks taxpayers’ money, and second, that the Auditor General, despite our commitments to transparency, could not access information on as per their report in 2014.

The government has chosen to exclude, in Part I, page 2 of the supplementary estimates, the payments to Export Development Canada on the basis that their programs do not receive payments from the Consolidated Revenue Fund. However, the Canada Account does receive payments from the CRF.

I’ll read you an excerpt from the EDC, 2015-16:

The Government effectively assumes the associated financial risks for Canada Account transactions by providing all monies required for any transaction from the Consolidated Revenue Fund (“CRF”).

We have heard ongoing criticism on accessibility and transparency of the data, including from the Auditor General in 2014 about the deficient disclosure practice of the Canada Account. Why has your government chosen to exclude these transactions from your estimates?

Mr. Duclos [ + ]

Thank you very much, Senator Galvez. I’ll reply briefly and will invite Minister Morneau or Mr. Purves, who is the expert in this room on financial accountability, to provide further details.

On the Auditor General, as I said earlier, we are absolutely making sure that as the crisis evolves, all agencies and departments understand that they have the responsibility to keep all the information about the process taken, actions and decisions being made so that the Auditor General receives the information she requires further on when it comes time to learn the lessons from this crisis.

When it comes to providing transparency of information, as I mentioned earlier, there are at least two important and fully accessible portals. The first one is the Open Government portal, which for the last few weeks has released almost 150 full and proactive disclosures of important files around COVID-19. There is also the Government of Canada InfoBase, which provides the level of information that you deserve to have on the various measures, including those covered by the estimates process.

The estimates don’t include everything. There are aspects, for instance, of tax expenditures that are typically not in the estimates process. In fact, the supplementary estimates also include what we call “legislated funding,” which comes from authorities that have been granted by Parliament, including the Senate, prior to these estimates having been built and then tabled.

I will end here and leave open the possibility for Minister Morneau and Mr. Purves to provide further information.

Mr. Morneau [ + ]

I’m very satisfied with your answer.

Senator Galvez [ + ]

Minister Morneau, last month the National Finance Committee heard from the Canada Revenue Agency, and they confirmed that they had more than 3,000 cases in front of the Tax Court of Canada and the Federal Court of Appeal for corporate tax evasion and had performed over $14 billion in tax reassessments.

Canada’s 2018-2020 National Action Plan on Open Government, which I mentioned before, includes a set of milestones that target corporate transparency. Given that one of the issues to be addressed as listed in the plan is tax evasion, have actions taken as part of this plan been successful in reducing instances of corporate tax evasion? How is this indicator being measured and followed up with?

Mr. Morneau [ + ]

This has been a very important issue for us since we’ve come into government. Our approach in dealing with tax avoidance and tax evasion has been multifaceted. First, obviously, in terms of international issues, we’ve had to work with international colleagues. We’ve done most of the work through the OECD, looking at how we can have common reporting standards around the world, reporting of accounts from around the world so we can get transparency of information. We’re also working on standards around what’s called “base erosion and profit shifting,” organizations that move their revenues and their profits to advantage their situation. We’ve worked hard to come up with common international standards that have been quite successful.

During the course of each one of our budgets, we also have significantly increased the funding to the Canada Revenue Agency. That was intended to give them the resources that they need to be able to examine and make sure that individuals and corporations are properly reporting on and held accountable for the taxes that they pay.

Finally, of course, that brings about the issue of the requirement for adequate judicial resources to deal with the challenges that come to the judiciary around the enforcement of those rules and those efforts. That is a continuing issue as well, and one that I know we were looking at in the context of the Budget 2020, which was delayed, unfortunately, for reasons that we all know about. But we intend to continue to look at all of these facets and to work internationally to make sure we have rules that work. That is challenging ongoing work, giving the adequate resources for the CRA and ensuring that we also have the judicial resources to follow up once we find people who are acting inappropriately.

Senator Galvez [ + ]

Thank you.

Senator Miville-Dechêne [ + ]

First, thank you for being here. I will start by asking a question on behalf of my colleague, Senator Pate, for you to answer, Minister.

How would the budgetary impact of “fraud” associated with the CERB, compared to the prevalence and monetary amount of fraud associated with other forms of COVID-19 economic support measures, including measures geared towards businesses for which these types of penalties were not considered?

The Chair [ + ]

Minister, we understand that you have to leave. Thank you for coming.

Mr. Duclos [ + ]

The first thing I would say is that the vast majority of Canadians are honest people.

The second thing I would say is that the vast majority of errors that were made, particularly with respect to CERB in the recent weeks, were made in good faith. That’s partly because a number of Canadians, for very understandable reasons, didn’t understand exactly how the new benefit would be provided and they asked, in some cases twice, by going through Service Canada and through the Canada Revenue Agency. Many of those mistakes made in good faith have been corrected. In fact, a large number of Canadians — we estimate around 200,000 — have already reimbursed their overpayments.

The third thing I would say is there will be instances of fraud, as there are in all programs, including business programs. We have full confidence that the public servants at Service Canada and the Canada Revenue Agency will do what they can, and what they must, to find those instances of fraud, correct them and apply the appropriate penalty, if necessary. That must be done in a manner that is adapted to individual circumstances, including individual business circumstances, and in a manner that both leads up to their responsibility and to the importance of maintaining confidence in the system.

Senator Seidman [ + ]

Thank you for being with us this afternoon, Minister Duclos and Minister Morneau, who has sadly had to leave, I suppose. Thank you to your staff as well.

I did have some questions for Minister Morneau, so now you’re going to be the recipient of all my questions, and I’ll have to hope that you can answer them.

These estimates contain about $40 million in voted appropriations for the Canadian Institutes of Health Research, which includes funding for emergency COVID-19 research and innovation. The government’s biweekly update to the other place notes, with respect to the CIHR funding announcement of April 23, that the program details are being finalized.

When does the government expect to confirm the program details?

Mr. Duclos [ + ]

Thank you. Although Minister Morneau has left, Mr. Purves is with us. I don’t see him, but I feel his reassuring presence in the back. He will be able to provide the important details.

At a high level, of course, we all understand the importance of funding researchers, through the CIHR in particular, in the context of a pandemic, which is having a huge impact on the health of thousands of Canadians, and also a significant impact upon our economy. Mr. Purves, are you still there?

Senator Seidman [ + ]

Thank you so much, but before he begins, what I really want to know — and perhaps it is Mr. Purves who could answer — is when the government expects to confirm the program details. What is the timeline? This announcement was April 23.

Mr. Duclos [ + ]

That’s an excellent question. I could give you an answer, but I would prefer to give you the right answer, so I will ask my colleague, the Minister of Health, to get back to you with the information you correctly need and have asked for.

Senator Seidman [ + ]

That’s fine.

In that case, the estimates also include over $400 million in voted spending to various agencies and departments, in relation to the National Medical Research Strategy for COVID-19. As government entities enter into agreements with companies on vaccine development — the National Research Council is working with a Chinese company, for example — how is the issue of proprietary rights being handled? What would the government own in this regard?

Mr. Duclos [ + ]

Thank you for raising the absolute importance of proprietary rights, not only in our relationships with enterprises outside of Canada but also in the context of working with businesses within Canada.

The broad answer is that this has been top of mind of the Minister of Public Services and Procurement, the Minister of Innovation, Science and Economic Development and Treasury Board. We’ve had serious discussions at the Treasury Board on making sure that what we invest is invested in a manner that yields the biggest, most important and most secure benefits for Canadians.

Senator Seidman [ + ]

My next question concerns funding for ongoing science and medical research, unrelated to the subject of the COVID-19 pandemic. Over the course of this pandemic, many research projects have been suspended; some are at risk for being imminently discontinued. There have been significant shortfalls in industry and philanthropy funding for these vital projects.

In response, the federal government announced $450 million in funding to help Canada’s academic research community. The Canadian Institutes of Health Research has also announced the reinstatement of their spring 2020 project grant competition, whose peer review process is currently ongoing.

While I recognize that important steps have been taken to support the research community, will this funding be enough to mitigate the major impact that COVID-19 has had on their work? Also, does the federal government plan to adopt any more measures to account for the disruption the research community has experienced?

Mr. Duclos [ + ]

Thank you for making the link between the research community and the emergency through which we have been living.

Initially, we knew we would need to invest in the design, development, testing and production of tests, vaccines and treatments. We simultaneously put into place measures that the Minister of Finance summarized recently on the emergency wage subsidy. Unfortunately, many of the research institutions you mentioned were not eligible for the emergency wage subsidy because they were associated with public administration.

But we did put in place, as you said, almost $500 million of investments that mimic, in some sense, the emergency wage subsidy support that we provide to businesses overall. We mimic that for the health and academic research environment.

That being said, we also signal the importance of continuing that support, because it’s a fragile support. It’s easy to lose researchers who would be tempted to go abroad. We can’t afford that in the current context, and we can’t afford that to prepare for future pandemics.

Senator Seidman [ + ]

Thank you.

If I might tackle a slightly different subject, across Canada there are a number of long-term care facilities that are outdated and in desperate need of renovation. These are facilities that contain wards with multiple beds in the same room, shared washrooms and bathing areas, and crowded dining halls. They have significantly contributed to the spread of COVID-19.

In their pre-budget submission this year, the Canadian Association for Long Term Care requested funding for the “construction, renovation and retrofit of 400 long-term care homes to meet current design standards and the needs of today’s seniors, especially those living with dementia, by 2023.”

Minister, does the federal government plan to use infrastructure funding to upgrade long-term care facilities across Canada? If yes, when can we expect these projects to begin?

Mr. Duclos [ + ]

Thank you.

There are two quick elements to your important question. First, as we’ve learned in the last weeks, and something I’ve personally learned from my experience as a Quebec member of Parliament, is that the treatment of our seniors has been far below what they need and require to live in dignity. It’s about dignity, safety and the health of our seniors. Despite all of the jurisdictional differences between provinces and territories, this is a lesson we need to talk openly about.

Second, as we move forward in continuing our investments in infrastructure, as you correctly alluded to, there are opportunities for the federal government to be both a partner and a leader, again in some jurisdictionally appropriate manner when it comes to building safer and healthy homes for seniors. One thing we have in mind, and Minister Hussen is working on, is the National Housing Strategy. That is a $55-billion housing strategy that we have started to implement. There are obvious and important opportunities to link that type of funding with the support that provinces and territories will also want to provide in giving seniors a dignified life.

Senator Seidman [ + ]

Again I talk about seniors, who have been significantly impacted by the COVID-19 pandemic as well as by the increase to their cost of living. Many have had to bear additional expenses, including grocery delivery fees, increases in prescription dispensing fees and transportation costs.

On May 12, the federal government announced a one-time, tax-free, top-up payment for seniors to help counteract these additional living expenses. Those who receive Old Age Security benefits will get an extra $300, while those who receive the Guaranteed Income Supplement will receive $200. While many have welcomed the OAS and GIS top-up, they have also voiced that these payments should be targeted to those most in need and recurring.

Minister, does the federal government plan to provide more financial relief to Canadian seniors, especially targeted funding to those seniors who really need it?

Mr. Duclos [ + ]

You are looking at me with stern eyes.

The Chair [ + ]

Yes, because the allotted 10 minutes is gone. We have to move to the next 10 minutes.

Senator McPhedran [ + ]

I’d like to thank you, Minister Duclos and Minister Morneau and your officials, for joining us here today. I will share time to question you on behalf of Senator Mobina Jaffer regarding the measures your departments are taking or will take to deal with systemic racism, followed by my own question if time allows.

Let me use a little bit of this time to ask you, please, not to experience rude interruptions by a previous questioner as a reflection on the rest of us in the chamber today, and to express to you my regret the conduct that descended to that level.

Senator Jaffer begins:

I recognize that the Plus of the existing Gender Based Analysis is intended to represent race, ethnicity, religion, age, and mental or physical disability. While this recognition is commendable, I believe that an explicitly race-centric policy oversight is necessary to ensure that targeting racial injustice at the legislative level does not become another secondary consideration.

Consequently, and in light of the words of Prime Minister Trudeau, we should focus on dealing with our systemic racism problems in Canada through real actions on institutional levels.

Senator Jaffer then asks:

Are your departments considering implementing race-based analysis and if any action to fight systemic racism is under way, can you tell us what these actions are?

Mr. Duclos [ + ]

Thank you, senator. Maybe I should start with the GBA+ comment that you made. It’s all about giving everyone a fair chance in life. Let me give an example of the type of unequal opportunities that exist in Canada: Take two baby girls born on the same day: one Indigenous and one non-Indigenous. The Indigenous baby girl will have a 10 time higher probability of being jailed once in her lifetime than the other baby girl.

That is a demonstration of the fact that there is no way to deny we have unequal opportunities in Canada. That’s why those things that may seem technical, like a GBA+ analysis, are absolutely essential. We need to talk about things. The first thing we need to do before we tackle issues is to recognize that they exist. Once we recognize they exist, we can openly discuss why they exist and how to make sure they don’t exist any longer.

To admit that systemic racism exists in Canada is the first step to correcting it. That’s why this conversation is so important — to support subsequent actions that must be taken. Systemic racism is one of the reasons we have an inequality of opportunity in Canada and the reason an Indigenous baby girl doesn’t have the same chance in life as a baby girl who is not.

Senator McPhedran [ + ]

Minister Duclos, please share these questions with Minister Morneau as well.

Canadians must spend their savings or borrow more to make ends meet, but Canadians already carry among some of the highest consumer debt in the world. StatCan just reported that for every $1 of disposable income an average Canadian held, they had $1.77 in debt. This debt includes mortgage debt, credit card debt and line of credit debt.

Today, average big-bank CEO compensations come to around $10.5 million per year. This is more than 200 times the per capita income of a Canadian.

Minister, the Prime Minister and Finance Minister both told Canadians back in April that banks need to “do more.” Minister Duclos, what has the government actually accomplished to make the big banks deliver genuine, sustainable economic relief and, yes, to stop profiting from this pandemic? Because — and I’m truly sad to have to say this — I and the 90,000-plus other signers of the Democracy Watch petition that has been brought to your government’s attention can find nothing of substance that the big six banks have done for Canadians during COVID-19 that will have a lasting, ameliorative impact.

Mr. Duclos [ + ]

Thank you. This speaks to the joint responsibility that we all share in the context of the COVID-19 crisis. I agree that we — inclusive of everyone — all have something to do with maintaining the economic and social fabric of our society.

One of the first things we did at the beginning of the crisis was to ask banks, including credit unions, to provide a moratorium on the payment of capital and interest for six months, so until September 2020. We then worked with the banking sector to make sure this would apply in a more substantial manner for students.

We — when I say “we,” it’s the Minister of Finance — took a decisive role in working toward a decrease in some of the interest charges on credit cards. This said, these are all, as you say, relatively modest measures from the banking sector in the context of the big crisis. I will transmit your message to the Minister of Finance. I know he continues to work strongly and effectively with the banking sector because, as you said, if we want to emerge stronger and united from this crisis, we all need to do our part.

Senator Miville-Dechêne [ + ]

I will ask this question on behalf of Senator M. Deacon:

The government has nearly doubled the projected cost of the CERB, while at the same time it scaled back estimates for the wage subsidies. Many in Quebec and elsewhere have argued that the CERB provides a disincentive to work. The wage subsidy was intended to allow employers to keep their employees and pay them their wages.

Has there been any research into why the take-up on this was so small? Will it be retooled and tried again?

Mr. Duclos [ + ]

Thank you. First on CERB, yes, 8 million Canadians have received at least one payment. On the wage subsidy, approximately 2.7 million workers have received support through the emergency wage subsidy.

It is true that it started relatively slowly. There are two important reasons for that. First, this was a new program for businesses, and it took time for them to get to know the nature of that program, and to be reassured when it came to understanding if they would be eligible for the program.

The second issue was also about uncertainty on the part of the businesses themselves. Many of the businesses, before deciding to rehire or keep their workers, obviously had in mind whether their short-term and long-term economic future was really in a condition to support their participation in the wage subsidy.

It did take a little while. That being said, there has been an acceleration that we’ve seen in the take-up of the wage subsidy. We expected this from the start. We’re pleased to now be able to observe it from a more evidence-based perspective. As Minister Morneau said a moment ago, there will be further changes and flexibility that he will soon announce, on how we believe the wage subsidy program to be important and effective in driving the economic recovery.

Senator Miville-Dechêne [ + ]

I’ve spoken with Canadian footwear manufacturers who fear that their clients, retailers, will face a liquidity crisis in the fall, which means they won’t be able to purchase or pay for their merchandise. It’s extremely risky for manufacturers to sell to retailers on credit. Have you considered any kind of targeted government assistance to ensure that the supply chain doesn’t collapse?

Mr. Duclos [ + ]

I love it when someone talks about the importance of maintaining the supply chain. I know I’m using up a lot of time, and I can see the Chair giving me a stern look, but I’m going to tell you a little story anyway.

Towards the beginning of the crisis, I was on a plane that was flying through a ferocious storm. We needed to land while keeping the passengers and crew safe and the plane intact. The plane represents small businesses, who also represent the plane’s engine, while large companies are often up front in the cockpit, flying the plane. The wings represent supply chains. Without supply chains, there are no wings to restart the economy. We needed to implement easily accessible programs with broad applicability, as Minister Morneau put it earlier, to preserve the integrity of this supply chain. We’ve been quite successful so far, to put it modestly, but you’re right to say that there will be more challenges ahead that we’ll have to confront.

Senator Patterson [ + ]

With all due respect, Minister Duclos, I have come all the way from Nunavut to ask questions of Minister Morneau, within his authority. What I will do with my few minutes here is get those questions on the record. I spoke to his official about getting written answers. I may proceed in that way.

My first question is a question that Senator Plett graciously asked Minister Morneau on April 11, when he was here, about the exclusion of non-revenue-generating industries from the Canada Emergency Wage Subsidy program. Minister Morneau said, “If there are specific sectoral issues that we need to consider, we will be looking at those . . . .” It’s several months later, and the issue has not been addressed, as far as I know.

In the mining industry in particular, junior mining and exploration companies do not qualify for the existing supports to small- and medium-sized businesses. They don’t qualify for the wage subsidy program because they are non-revenue-generating — they raise their revenues from flow-through shares and investors — nor have they qualified for funding from the Canadian Northern Economic Development Agency.

Organizations such as PDAC have lobbied your government for support. I know for a fact that this concern was reiterated in a joint submission to the wage subsidy which was signed by Senators Duncan, Anderson and Bovey from the three territories and the Churchill region, and myself.

Will your government allow for non-revenue-generating businesses, including junior mining and exploration companies, to apply for the wage subsidy?

My second question is about the northern tourism industry. It’s facing a significant threat because, as you know, COVID-19 has led to the creation of strict travel restrictions, especially in the North, to protect and insulate vulnerable populations. While, of course, we applaud measures like this and, I’m happy to say, our territory of Nunavut is COVID-free as a result, the unfortunate side of this has been the struggle of many industries, including the northern tourist industry and hotels in particular. There remains no certainty when normal operations, even with enhanced safety precautions, will resume in the North.

In a brief to Minister Joly, signed by representatives of all territorial hoteliers in Yukon, N.W.T. and Nunavut, it was made clear that as a result of this uncertainty, the travel industry businesses will have even greater challenges to fund negative cash flow in 2020.

Will your government provide bridge funding to support hotels north of 60? They’ve asked for a subsidy for vacant rooms until the pandemic restrictions are lifted. They haven’t been able to get relief from the Canadian Northern Economic Development Agency to date.

My third question is about airlines, which of course you understand are a lifeline in the North. I want to thank the government for the support that has been given to northern airlines, but that support is to end at the end of June. Until pre‑pandemic service levels can be achieved, further support is required.

Will your government extend the Northern Essential Air Services Relief Program beyond June for the entire course of the pandemic?

There is also a request presented by the Northern Air Transportation Association to temporarily suspend merger undertakings imposed on Canadian North last year — they are no longer relevant during this pandemic — until the resumption of regular service levels.

Finally, there was a request from Mr. Joseph Sparling of the Northern Air Transportation Association to the Standing Committee on National Finance, that the minister use his good office to explore gateway route traffic as another effective tool to provide financial relief to these struggling northern airlines.

Those are my three questions on the record. I thank Minister Duclos for listening, and I thank you for responding.

Senator Wells [ + ]

I have a question for Minister Duclos. Thank you again for coming in and for the work you are doing.

Minister, the supplementary estimates include a voted appropriation of $203.5 million for funding the government pay system. Minister Anand confirmed this is for stabilizing the Phoenix pay system. You would be familiar with that.

Minister, why is this appropriation not in the Main Estimates? It seems impossible for me to believe the government didn’t know they were having problems, obviously, with the pay system. I believe all of Canada knows that. Why did the government not anticipate an expenditure of over $200 million in the supplementary estimates as opposed to the Main Estimates?

Mr. Duclos [ + ]

Thank you for the question. I will start by providing the broad context for those sorts of investments.

We all recognize it’s totally unacceptable for the public service or any workers in Canada not to be paid for the services that they give to their employers. It certainly isn’t acceptable for the Government of Canada not to appropriately pay its workers.

We are making important progress when it comes to solving the still-too-large number of workers who have yet to receive the exact payment and on time. That’s why those investments are so crucial.

The probable reason that wasn’t in the Main Estimates is there was probably insufficient information at the time, essentially prior to February, or January more likely, for that item to appear in the Main Estimates. If you want to be reassured, I can ask Mr. Purves to confirm that this is the case.

Senator Wells [ + ]

I would like to be reassured. I think all Canadians would like to be reassured, so I will listen to Mr. Purves’s response.

Is it expected that there will be further requests in future supplementary estimates?

Mr. Duclos [ + ]

You’re asking if there will be further requests for Phoenix? It’s very likely that there will be further work on Phoenix because, as I said briefly, there is still work to do. Although over the last few months there has been a significant decrease in the number of unresolved files, there are still too many of them. We absolutely need to give every public servant the level of service that they not only need but they deserve. So there will most likely be further investments, however, as I said, we are entering into a stage where we can be more confident that we will finally settle this problem and open up the world of opportunities in a better and more significant manner.

Mr. Purves [ + ]

Minister Duclos is absolutely correct that typically there are times when there are costs that are not developed in time for Main Estimates. This is why we have the supplementary estimates. There are other items in the supplementary estimates like that.

The funding, the 203, is going towards eliminating the backlog and stabilizing the pay system by sustaining employee capacity to be able to do this, increasing processing rates and increasing the automation of as many transactions as possible through system enhancements.

Perhaps just a couple of quick numbers. As of May 27, the number of transactions waiting to be processed at the pay centre has decreased by 49% since the peak of January 2018, representing a reduction of 310,000 transactions, from 633,000 to 323,000.

Senator Coyle [ + ]

Thank you for being with us, minister, and thank you for your work.

My question is a question from Senator Wanda Thomas Bernard, a fellow Nova Scotian:

In Nova Scotia the non-profit sector employs 20,000 people in the province, 68% of whom are women. In April 2020, the Community Sector Council of Nova Scotia conducted a survey of non-profits which showed the precarity of non‑profits including increased demand for services for at‑risk community members while experiencing significant difficulty operating on insufficient funding. If any non-profit organizations are forced to close due to irreparable losses as a result of COVID-19, the closures will disproportionately impact the employment and livelihoods of women, while simultaneously detrimentally impacting vulnerable populations served . . .

We know that some non-profits have been receiving the wage subsidy program, are participating in that, but we want to know what other specific supports the government will offer to non‑profit organizations post-pandemic to help these organizations survive the financial hardships caused by this pandemic.

Mr. Duclos [ + ]

Thank you so much. You’re correct in alluding to the fact that vulnerabilities prior to a crisis become extreme during a crisis. The problem is that once these vulnerabilities are enhanced or augmented, then it becomes even more difficult for people and organizations to emerge from the crisis.

We have been very mindful to preserve and help people, and particularly vulnerable Canadians. We need the community sector and the non-profit sector. That’s why the wage subsidy was immediately applicable to non-profits. We also created an emergency community fund of $350 million that was delivered to help community organizations, and another $150 million investment at the very start of the crisis to help provide support to women’s organizations. Unfortunately it’s the case that in crises of this type, women suffer a disproportionate impact of the tragedy. Finally, another $110 million was quickly announced initially to provide support to fight homelessness.

In addition to that, as you know, the Minister for Women and Gender Equality and the Minister of Diversity and Inclusion have been working very hard together so that not only do we provide this support during the crisis, but so we’re also there to help after the crisis.

I will certainly share your important thoughts with them and ask them perhaps to connect directly with you.

Senator Massicotte [ + ]

Thank you for joining us today. I want to congratulate your government for taking such swift, skilful action. It was crucial for our economy and our communities. The government made sure to respond quickly, and all the measures have met with resounding, well-deserved success.

I wanted to get a sense from you, from a fiscal big picture point of view. Not the details. I know the details will come out in the next two weeks. There has been a report from Bennett Jones, with David Dodge as the principal author, saying plan A, if things work well and we get recovery from a lot of the jobs, our debt level will go up but it’s manageable.

He also alerts us to say that if we have a second strike of the coronavirus, then our country will be challenged in raising the money. Our country will be challenged in making sure it’s fair for all Canadians. This will be an ultimate test.

Could you comment on that? I know we’re all talking about the future, but I think Canadians should be aware of the consequences of another strike of the coronavirus and what it could mean to all of us.

The Chair [ + ]

You have 30 seconds to answer that question.

Mr. Duclos [ + ]

Thirty seconds. My answer will necessarily be unfair. I will just say thank you for that. The key word here is “prudence.” We need to be very prudent to avoid a second wave. We all have a responsibility in this. Following the health guidelines is absolutely key if we want to protect, as I said, our economy, our society, vulnerable Canadians and avoid living through another wave of the pandemic.

The Chair [ + ]

Honourable senators, the committee has been sitting for 155 minutes. 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.

Ministers, on behalf of all senators, thank you for joining us today to assist us with our work. I would also like to thank your officials.

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.

The Hon. the Speaker [ + ]

Honourable senators, the sitting of the Senate is resumed.

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