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Appropriation Bill No. 2, 2020–21

Third Reading

June 25, 2020

Hon. Elizabeth Marshall [ - ]

Honourable colleagues, I don’t have a prepared speech, but I do have a few comments. You’ll have to forgive me; I will be talking about a lot of numbers. For those of you who don’t know my background, I was a Grade 4 teacher, so I feel I am going back and teaching a bit of arithmetic.

Before I begin with my numbers, I would like to thank Senator Gold for his comments. He was the sponsor of the bill, and I am the critic.

I want to say a few words. I will start back in February of this year, when the Main Estimates were tabled. It was for $308 billion, and it outlined the government’s spending plan for the year.

When you look at those numbers, the $308 billion — and you have to break it down to see what’s included in it — over half of it is called “statutory”; in other words, over half that money has already been approved by another piece of legislation besides the supply bill. So those numbers are called “statutory”, and the amount was $183 billion. So $183 billion of the $308 billion spending plan has already been approved. When April 1 comes, the government can start spending that.

In previous comments in this chamber, I’ve mentioned that the dollar value is high. It’s almost 60% now, just between 59% and 60%. Even though it’s approved by other statutes, I’ve always felt that we should perhaps pay a little more attention to it.

I do have to give Treasury Board some credit because if you’re interested in seeing what’s in that $183 billion figure, it is disclosed on the Treasury Board website, although every time I go to look at it, I can’t find it, and it takes me a while to track it down.

Really what we’re talking about is $125 billion that has to be approved by the other place and by us. It has to be voted in a supply bill, and it requires parliamentary approval. It’s $125 billion that the government is looking for us to approve.

What happened in March just before we went home and everything was in a flux because of the pandemic was that Bill C-11 was passed. This is called the interim supply bill. That’s usual. It happens every year that the government comes forward, and while we’re studying what we call the Main Estimates, the two houses give government the approval to spend money for the first three months of the fiscal year. Before we end up in June, we usually approve the Main Estimates, the main supply bill, and then the government has its funding for the entire year, except for the supplementaries.

When the interim estimates were passed in March, there was no debate or study, and there usually isn’t much study. There might be a bit of debate, but up to March, that was sort of like the normal process. They got approval for $44 billion of the $125 billion, leaving $81 billion that they haven’t yet gotten approval to spend.

Here we are, at the end of June, we’re getting ready to adjourn for the summer, and the government needs access to that money. Ordinarily, it would already be approved in a main supply bill, but this is a very unusual year, so government came back and they have what you call a second interim supply bill, which is something that’s very unusual.

That’s what we’re talking about today, the second interim supply bill, Bill C-18, and now we’re talking about $55 billion. Like I said, we started out with $125 billion; $44 billion was approved before we went home in March, which brought us down to $81 billion. Now there is another bill for $55 billion, so now I would say they will have approval by the end of the day to spend that, leaving what I call a mere $26 billion left to be approved by both the House of Commons and us.

When Minister Duclos testified the day before yesterday, I asked what will happen to the $26 billion. Will we see a third interim supply bill? Yes, he confirmed. I was surprised. He was very forthright. He said there will be a third interim supply bill, and we will probably see that in the fall. The issue for me is that these money bills are being approved without study and with very minimal debate.

I was asking the minister the other day, if the Main Estimates have been tabled and now we’re just passing these interim supply bills and by the fall they’ll have all their money to spend, what’s the point of the Finance Committee wasting their time spending the Main Estimates? When I asked him that, he didn’t say a lot but it was still interesting. He said, “. . . we are giving parliamentarians in both chambers the opportunity to further continue their study of Main Estimates . . .” — even though it has all been approved, no doubt — “. . . and proceed to debate and vote . . . .”

We might be able to debate and vote on the third interim supply bill. We’ll see. Maybe we’ll study it; I don’t know. That’s something we will have to decide. I expect that my colleagues on the Finance Committee will have some commentary on that. I think we should study the Main Estimates, even though the money has all been approved for spending. We should take the opportunity to look at statutory expenditures. Also, we might want to look at the expenditure plan in relation to the departmental results reports because we don’t really focus on them very much.

However, the biggest concern I have is that the money is being approved, government is spending it and there has been virtually no study of it, very minimal debate in both chambers.

Those are my comments. Thank you very much.

Hon. Donald Neil Plett (Leader of the Opposition) [ - ]

Honourable senators, I want to thank Senator Marshall for the work she has done on behalf of the opposition as the critic of this bill. She is certainly much more knowledgeable about these numbers than I am, but I want to make a few brief remarks.

Colleagues, the short title of the bill before us is Appropriation Act No. 2, 2020-21. At first glance, there is nothing remarkable about this bill. It provides interim supply for votable expenditures listed in the Main Estimates — and we have already heard this — totalling just over $55 billion. On March 13, Parliament passed Bill C-11, as Senator Marshall said, Appropriation Act No. 1, which provided the first $44 billion of supply for this fiscal year. This bill brings that total to $99 billion out of an anticipated $125 billion in votable expenditures.

The Main Estimates, colleagues, tells us that the government was anticipating $308 billion in total government spending for the entire fiscal year. But as we know, this has now completely changed due to the COVID-19 pandemic. According to the government’s latest update on its COVID-19 Economic Response Plan, COVID spending currently stands at $154 billion. The Parliamentary Budget Officer tells us this number is actually $188 billion and that total program spending will hit an all-time high of $553 billion. And yet, in the midst of this unprecedented rise in spending we find ourselves with a government that refuses to be transparent and accountable.

We are three months into the fiscal year and we don’t have a budget. We don’t even have an economic update. We’re now being told that we’re going to get a snapshot, but no one even knows what an economic fiscal snapshot is. What we do know is that it’s not a fiscal update, it’s not an economic update and it surely is not a budget.

Colleagues, in the midst of a crisis, oversight is more important than ever, but all we get from this government is a never-ending stream of excuses about why it cannot be done.

So while the bill before us may appear to be routine, it is anything but. Parliament is providing the government with billions of dollars a day and yet they have no financial road map that they are willing to share with us. I understand that we are living in extraordinary times, but if the Parliamentary Budget Officer can provide us with a fiscal scenario every month and a half, why can’t the government?

It’s like switching back and forth between two different channels that appear to operate in different universes. Go to the Parliamentary Budget Officer channel and you learn that revenues are expected to drop by $39 billion this fiscal year. Switch over to the government channel and we are told there is no way to calculate the numbers. Switch back to the PBO channel and we learn that personal income tax revenue is on track to fall by $16 billion, corporate income tax by $11 billion, excise tax by $10 billion and EI premiums by $1.5 billion. We learn that expenses are going to be up by almost $200 billion and that the deficit is on track to be more than a quarter of a trillion dollars. Switch back to the government channel and all you get is white noise.

This, colleagues, is unbelievable. There is no reason why the government can’t do these calculations. The Parliamentary Budget Officer works with a staff of 42 people while the Department of Finance has 20 times that many. Clearly, the only reason the government has not provided us with these numbers is because they don’t want to or they don’t know. That is scary. This is a dangerous precedent.

Look at how they are handling the infrastructure program. The government tells us it has 52,000 infrastructure projects under way, but it will only release a list of 33,049 of those. That’s 20,000 projects that are unaccounted for.

Analysts at the Parliamentary Budget Office have tried to get the complete list for months, and the government has consistently stonewalled them, refusing to release it. This is a $180-billion program, and the government feels no obligation to provide proper disclosure to taxpayers and parliamentarians on what they are doing with the money.

So here we are today with what should be the routine process of approving supply for the Main Estimates. But, colleagues, this is anything but routine. A government that refuses to release a budget and refuses to disclose spending details, refuses to be transparent, refuses to be accountable but still shows up requesting more money is contemptuous, not routine.

Colleagues, this kind of hypocrisy is not unusual with this government. It happens constantly. Even though it is becoming a familiar sight, it should still trouble us. If it doesn’t, there is something wrong.

Today, colleagues, we will be allowing this bill to pass, reluctantly, because the essential operation of government programs relies on it. But it should be noted that we do so with deep concerns that this government is incompetent and unaccountable. And regrettably, it is all Canadians, colleagues — you, I, all Canadians who are going to bear the cost for that. Thank you.

Hon. Denise Batters [ - ]

Honourable senators, I rise today to speak on Bill C-18, the second interim supply bill. This bill provides the authority for $55 billion in expenses not otherwise provided for. For a government that has basically spun its wheels since its election last fall and provided precious little by way of governance, the Trudeau government proceeds with much haste when it comes to spending billions of dollars of taxpayers’ money. Then, they can’t pass legislation fast enough. We have seen this first-hand in the Senate Chamber.

As I mentioned earlier this week, in one day alone, March 13 of this year, the Trudeau government pushed through Bill C-4, the new NAFTA agreement, after only 24 minutes of debate in the Senate. Bill C-10, a $3.8 billion supply bill, passed through second and third reading in only a minute and a half. Another supply bill, Bill C-11, worth $44 billion, whistled through the Senate in 46 seconds, an unbelievable rate of almost $1 billion per second, honourable senators. Of course, in his hurry to push these bills through, the government leader in the Senate failed to mention that senators were also passing the $115-million Senate budget in that legislation.

Imagine that, honourable senators, bills whizzing by so fast that Senator Gold didn’t even have 20 seconds to spare to alert senators in the chamber that the $115-million Senate budget was passing without any debate or discussion. In fact, the report on the budget from our own Internal Economy Committee is still on the Order Paper waiting to be debated.

This is a worrying pattern of this Trudeau government: spend wildly now; ask any questions later, if at all; dismiss any questions or criticism as partisan; and distract with the feel-good photo ops. After all, avoiding accountability is what this Trudeau government does best.

With the staggering debt load that will exceed $1 trillion, the Trudeau government should respect Canadian taxpayers enough to provide details on the financial state of the country, but no, instead of a bona fide fiscal update telling Canadians where we are and where we are heading financially, the Trudeau government will present Canadians with a fiscal snapshot; fairly fitting for an Instagram government that governs by selfies and photo ops.

We are three months into the COVID crisis, and Prime Minister Trudeau is still hosting daily campaign-style press conferences live from the porch of Rideau Cottage. Just like Groundhog Day, the Punxsutawney PM emerges from his front door to announce, and in some cases re-announce, spending commitments. You would think with all his sunny ways, he would have seen his shadow by now. We are well past waiting six weeks for spring. It’s now summer, and the spending promises just keep coming.

Prime Minister Trudeau is never so happy as when he gets to spend someone else’s money, and he spent a lot of it: $60 billion on the CERB, $45 billion for the wage subsidy, $13.7 billion for the CEBA, and $9 billion for the financial aid to students. The list goes on and on.

While no one disputes that an emergency of this magnitude and the attendant effect of a nationwide economic shutdown would require some form of government support, the problem is that the Trudeau government refuses to be held accountable for the staggering amounts of money they are promising. When he can be coerced into coming out of his hidey-hole, Prime Minister Trudeau gives perfunctory, meaningless talking points. He has admitted before he is only interested in the ceremonial aspects of being Prime Minister. It shows. Meanwhile, his ministers regurgitate the party line ad nauseam in an effort to run out the clock and keep from answering uncomfortable questions.

The Trudeau government rams bills through Parliament in a handful of hours, minutes, even seconds. They refuse opposition calls for the House of Commons to resume regular but modified sittings, instead insisting on the virtual so-called COVID Committee on Zoom. That way, the Trudeau government can better control the issues that can be raised and how long he and his government are exposed to opposition questioning. Meanwhile, the virtual COVID Committee meetings have a disproportionate impact on regions of Canada that have already been worst affected by the Trudeau government. MPs in Western, rural and remote areas often have problems participating in the meetings because of spotty internet connection. They end up cut off and cut out of the meetings, unable to represent their constituents’ concerns or ask the Prime Minister and his cabinet questions on their behalf.

Both the Senate and the House of Commons should resume regular in-person sittings at this point for the sake of the country. While everything in Ontario was locked down for the pandemic, the Trudeau government still insisted that construction workers working outside on renovating Centre Block on Parliament Hill should report to their jobs, all the while insisting that health conditions were simply too dangerous for Parliament to continue to sit inside Parliament. This Trudeau government maintains it is not safe for parliamentarians to meet for the purposes of holding regular sittings of the House of Commons, even with physically distanced, reduced capacity modifications. Meeting twice a week for in-person hybrid COVID Committee meetings in the House of Commons chamber, no problem, but for regular sittings of the House of Commons in the same chairs, with the same modifications but with extra accountability for the government, nope, no can do.

Parliament is an essential service. One of our primary duties as senators is to represent the views of our home regions in the legislative process. Especially at this time of economic crisis, parliamentarians should be voicing the concerns of their constituents, who are struggling with the pandemic, job or business loss, or just dealing with the repercussions of the disastrous policies of this Trudeau government.

Another critical role we have as senators is to undertake careful review of legislation, so that it is as good as it can be for all Canadians. Sitting with reduced numbers, we can be in here safely. No MP or senator has developed COVID-19 from Parliament sitting. The Trudeau government though, it seems, has developed an acute allergy to accountability.

Millions of Canadians have already returned to their own jobs, modifying their workplaces in accordance with best public health precautions. There is no reason Parliament cannot do the same. Our own Senate has only been recalled a handful of times since March, when it has been deemed to be in the public interest. An immediate return to Parliament couldn’t be more in the public interest, honourable senators.

This government is creating programs worth billions of taxpayers’ dollars and steamrolling them through Parliament at breakneck speed. Sober second thought is needed more than ever, yet the Prime Minister is more concerned with holding on to the reins of power at all costs, by shutting down Parliament, silencing the opposition and thereby dodging accountability for his government’s decisions.

Prime Minister Trudeau seems to be governing by infomercial. He has a bad habit of overpromising and underdelivering. He governs on the fly, without a whole lot of forethought or consideration of the consequences. He deflects or dismisses opposition suggestions to improve legislation, only to turn around after the fact and implement, too late, the changes the opposition suggested in the first place.

Finance Minister Morneau sat in this very chamber in March and condescendingly dismissed our opposition Senate leader’s commonsense suggestion to raise the wage subsidy from 10% to 75%. Two days later, Prime Minister Trudeau announced his intention to raise the limit to — you guessed it — 75%. Of course, by that point, many employees had already missed paycheques and no money was yet flowing, so they had to wait even longer because of the Trudeau government’s delay. Yet another Trudeau empty promise, which of course meant more workers laid off and more businesses forced to fold in the interim, never to reopen their doors.

Situations like this could have been avoided, honourable senators, if the government had submitted its legislation through the normal proceedings of parliamentary sittings, to receive the proper legislative scrutiny. The established parliamentary process, especially study in parliamentary committees, allows MPs and senators to review, revise and improve legislation, and to hold the executive level of government to account on behalf of all Canadians.

I understand the need for expediency in the face of the COVID-19 crisis. It is important to deliver emergency programs quickly to help Canadians keep their heads above water. If the Trudeau government presented their spending plans in good faith and were prepared to work constructively with the opposition, I am certain the process could be expedited while still maintaining proper legislative scrutiny.

But look at how this government proceeded with Bill C-13. The Trudeau government took one of the first legislative opportunities they had during the COVID-19 pandemic to make a bold grab for as much power and unprecedented spending authority as possible. Was that governing in good faith or in the best interests of Canadians? No. It was a cynical attempt to use a state of national emergency to grant their minority government practically unlimited spending without legislative scrutiny. This is not good governance. Thankfully, the opposition forced the Trudeau government to revise their original proposal and sunset most of the contentious powers.

One of the measures that did pass in Bill C-13, however, gave the Finance Minister alone the power to establish a giant government corporation. I asked Minister Morneau about this when he was here on Tuesday at Committee of the Whole. Bill C-14 contained a sunset clause on the corporation, but only if it had not been established by September 30, 2020. Of course, the corporation was established in May, so the sunset clause no longer applies. Bill C-13 sailed through the Senate after about 45 minutes of debate; Bill C-14 in just over two hours. Now Mr. Morneau’s 100% giant government corporation is on the books for good, with no end date.

Other bills from this government are worrisome as well. Bill C-15, the Canada Emergency Student Benefit provided $9 billion in funding for students, but the empty shell of a bill read more like a template. It didn’t contain the amount of funding per student or even the timeframe for eligibility in the legislation. Both of these were to be determined by the minister and cabinet. Even the term “student” was not fully defined in the bill. It excluded students who had finished high school but who were not applying for post-secondary education. If the point of the program was to address the financial needs of students who were unable to secure employment due to the pandemic, you would think that students with a high school education should be included.

In any case, Bill C-15 once again flew through Parliament, passing through this chamber after about three and a half hours of debate. If we had proper parliamentary review of this bill and the others rammed through by the Trudeau government since March, I’m sure we would have discovered other flaws as well. As senators, that is our job.

Frankly, at this time of great vulnerability and insecurity for millions of Canadians, it is even more crucial than ever that parliamentarians are able to closely scrutinize legislation and point out shortcomings in the bills that could have major consequences in the everyday lives of Canadians.

Every day of the pandemic seems to bring another Trudeau photo op accompanied by yet another spending announcement, and still the government has given major sectors of our economy the most minimal COVID-19 funding. Two that are crucial to my home province of Saskatchewan are agriculture and the energy sector.

It’s curious how the industries that are the lifeblood of the Prairies have received so little notice from this Trudeau government. Like they say, that might be too coincidental to be a coincidence.

I find it puzzling when the country is simultaneously in the throes of an economic downturn and a health pandemic, this Trudeau government isn’t more concerned about the agricultural sector and the security of our food supply chain and preserving the energy industry, one of Canada’s prime economic drivers.

The Trudeau government did propose an aid package for Canada’s farmers, but it was a scant 10% of the aid that had been requested by the Canadian Federation of Agriculture.

The ag sector has been hard hit during the pandemic with outbreaks at meat processing plants and among temporary foreign agricultural workers, the closure of restaurants, institutions and hospitality industry customers leading to a growing and problematic surplus of food and animals.

Even before the arrival of COVID-19, my province of Saskatchewan was reeling from the downturn in oil and gas sectors. The bottom-of-the-barrel world oil prices combined with the anti-energy policies of the Trudeau government seemingly hell-bent on land locking the west resources, leaving a province like Saskatchewan with no cushion to withstand the devastating onslaught of COVID-19.

Finance Minister Morneau had the audacity to make the empty promise in the Senate Chamber that they would deliver aid for the oil and gas sector imminently, within hours or days. That was on March 25. More than 90 days later and we’re still waiting. When I questioned him about it earlier this week, Minister Morneau tried to revise history claiming that he had not referred to the oil and gas sector specifically.

Unfortunately for Minister Morneau, we have this pesky thing called Hansard that records everything we say in the chamber. That record shows that his hours or days timeline referred to exactly aid for the energy sector and his government failed to deliver.

Minister Morneau danced around the fact that the Trudeau government has done nothing to specifically address the needs of the devastated and unemployed oil and gas workers or the struggling small- and medium-sized oil and gas companies that this pandemic has so affected.

In turn, the closure of these businesses and the laying off of workers chips away at the communities that a depend on the oil and gas industry to survive. Long-time previously thriving businesses have been brought to their knees by this cumulative effect of a stagnant energy industry and COVID-19. Businesses that were family-run for generations — hubs of the community — have closed their doors for good because they can’t wait any longer for assistance.

Their employees are now jobless and they may lose their family’s homes. These are the people we need to keep in mind now, honourable senators, when we consider these bills. We are responsible to do our due diligence to apply our sober second thought to the spending of taxpayers’ dollars, especially when so many Canadians face these types of difficult financial circumstances. I hope you will keep them in mind when you vote on these bills. Thank you.

Hon. Yonah Martin (Deputy Leader of the Opposition) [ - ]

Your honour, I would like to continue and enter debate at this time. I’m quite moved by what Senator Batters has just shared.

And, of course, Senator Marshall, I love how you speak about these big numbers and this very complex process and break it down so that we can understand it. So now I understand why. But I always appreciate how you’re able to help us understand the scope and the breadth of what we’re doing. It’s mind-boggling at the best of times.

Honourable senators, I rise today to add my voice to this important debate on Bill C-18 during what has been an increasingly challenging time for Canadians and everyone around the world, and on a day after Canada’s credit rating has been downgraded by Fitch, one of the U.S.’s big three credit agencies.

For the past few months we’ve been navigating our way through the COVID-19 crisis which has brought grief and financial difficulties to many. As a nation, we have lost loved ones, suffered job losses, made difficult decisions to shut down businesses and came face to face with mental health issues and growing anxiety as we overcome unprecedented circumstances and adjust to our new definition of everyday life.

Our front-line workers have proven themselves to be real-life superheroes who have courageously stepped forward into danger against their instincts, becoming pillars of strength and stability for our nation. I would like to take a moment and thank all the doctors, nurses, health care professionals, front-line workers, volunteers, paramedics, firefighters, police forces and the military men and women who have risked their own lives to keep us safe, provide essential goods and services and protect our most vulnerable during our fight against COVID-19.

This pandemic has impacted every sector of our economy. Some of the hardest hit are microbusiness owners who have already declared bankruptcy or are still just hanging on. In B.C. there are many mom-and-pop shops and start-ups that have desperately contacted my office over the course of this crisis. To protect our communities and stop the spread of COVID-19, store owners obliged with orders to shut down operations and put others first. They closed their doors at the orders of the government with expectation of support from their government should they need it.

These family-run microbusinesses have faced tremendous challenges and setbacks. I’m talking about barbershops, hair and nail salons, dental and chiropractic offices, contract workers and so many sole proprietors who depend entirely on their business-generated income to keep a roof over their heads and their employees’ heads and to be able to put food on the table.

Even with our economy slowly opening up, due to safety restrictions businesses will never be able to return to pre‑pandemic operations. For example, it has come to my attention that dental clinics that are small businesses with rent, payroll, contracts and obligations are under extreme threat. The health and safety requirements imposed on them make it impossible for many of these offices and clinics to remain viable, especially because they can only take a handful of patients each day compared to normally seeing 50 patients a day. I’m told that, in adhering to mandatory safety protocols, it takes upwards of two hours between patients.

So doing the math, which is black and white, you can see why closures of some or many dental clinics across our country are a real threat to all of us.

Let me remind all honourable senators that accessible financial support under the Canada Emergency Business Account, or CEBA, was not available until April 9. Then, finally, on April 16, it was announced that businesses with a minimum payroll of $20,000 could apply. One month later, on May 19, the government announced that microbusinesses with no payroll would soon be able to access the CEBA. However, it is now June 25, over three months since businesses were asked to shut down, and the CEBA loan is still not available to them.

The fact that the CEBA delay was mentioned through a tweet by Minister Morneau the night before the expected release date is telling of the government’s respect and attitude toward small business owners who are the backbone of our economy.

Small- and medium-sized businesses employed 10.7 million people in 2019, accounting for 89.6% of the labour force in the private sector. In five days, it will be July 1, when commercial rent is due again. For tenants with landlords who have not applied, or worse, refused to apply for the Canada Emergency Commercial Rent Assistance program, they are drowning in unpaid bills and debt.

I was going to speak to Bill C-19, so some of these numbers I’ll have to adjust. But for now, in the next bill, Bill C-19 allocates $3 billion for CECRA, yet according to a survey done by Merchant Growth, 80% of Canadian small business owners say their landlords have not applied for the commercial rent subsidy.

Again, this program has come much too late. July 1 marks four months of commercial rent owned with little or no generated revenue or access to credit for many microbusiness owners and new start-ups.

On Tuesday, during Committee of the Whole, Minister Morneau gave a long response to my question about how quickly the government moved in getting financial resources into the hands of business owners. Yet my office has been flooded with calls and emails from constituents across Canada who have fallen through the cracks and are desperately seeking help. To make matters more complicated, businesses who borrow from credit unions could not even begin to apply until the beginning of May because it took nearly a month for all credit unions to become accredited under EDC as approved lenders.

Minister Mona Fortier said in the House that the CEBA program has assisted 669,000 businesses so far. However, these numbers pale in comparison to the number of small- and medium-sized businesses registered in Canada. According to Statistics Canada, in January 2019, there were 1,174,695 small businesses with fewer than 500 employees.

The Canada Emergency Wage Subsidy was not made available until the end of April. Due to the eligibility requirements, employers who started new businesses last year in markets that have low winter — January and February — revenues are unable to apply. Those small business owners cannot prove the necessary revenue decline to qualify for CEWS. To make matters worse, many start-up owners in B.C. and across Canada were also excluded from the CERB as well because they did not earn $5,000 in employment income since many spent their personal savings starting their business the previous year.

The Trudeau government has not given adequate attention to the crucial factor of timing in enacting policies that stimulate the economy. The particular timing of the implementation of the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy renders both to be less effective. Both CEWS and CERB are meant to stabilize the economy, but the combination of CERB’s possibility of financially disincentivizing workers and uncertainty of entering the labour market has so far proven to be inefficient for stimulating the economy.

If businesses generally were benefiting from the CEWS, the assumption would be that they can gain back employees that they lost due to CERB both before and after CEWS was introduced. However, businesses are still in a tight spot. They lost employees due to COVID-19 and the late introduction of CEWS. As businesses try to reopen, they are faced with further difficulty in hiring employees due to the uncertainty of the labour market and the financial disincentives created by CERB.

The Canada Emergency Response Benefit was a needed program that has helped Canadians brace the initial impact of COVID-19 as they lost their jobs. However, the continual extension of the program may become detrimental to the long-term economic growth of the economy as it coexists while the labour market reopens. The government must ensure that there are strong incentives for the unemployed to search for employment. Furthermore, there needs to be changes made to the eligibility of the Canada Emergency Wage Subsidy so that a wider net of businesses qualify and unemployment rates can slowly drop.

Unemployment rates are already at 13.7%. Per person spending by the government is estimated to increase to $13,226, compared to the $9,306 before COVID-19, according to the Fraser Institute. The debt is increasing and unemployment is rising. If this is combined with any other blows to the economy, such as a continuously falling consumer confidence — which is likely in the case of a second wave of the pandemic — and increasing corporate debt, in addition to the central bank no longer being able to lower its interest rates, Canada may face yet another financial crisis. Because the central bank’s interest rate is among the most potent cushioning tools to alleviate economic stress, this could possibly make Canada more vulnerable to both predictable and unpredictable economic shocks.

Again, what Canadians needed was timely support and accessible capital, not support that came so late. My concern is that small business owners may see similar consequences from hikes in capital gains taxes as they might in a credit crunch. According to the Parliamentary Budget Officer, Canada’s expected debt is $256 billion, which is estimated to increase by $17.9 billion with the extension of the CERB for eight more weeks.

For all these reasons and more, Canadians expect complete transparency from the government, yet Minister Morneau could not even answer or did not want to answer two simple questions asked repeatedly by Senator Plett: What is Canada’s current federal debt? Who owns this debt?

The current Liberal government has said time and again that transparency is important. However, that has not been what they have always shown during this global pandemic.

Underscoring the importance of transparency, the Parliamentary Budget Officer clearly expressed during a National Finance Committee in May that his concerns with the unprecedented powers granted to ministers in Bill C-13. In his words, he said:

I’d say I’m very, very concerned about this because even though we are in a crisis situation, providing that amount of power together with all the other powers that you mentioned — borrowing almost without any limit, without any immediate oversight — in one person, it’s something that, in my opinion, is unprecedented in the current regime and in Canadian history. . . .

In the Speech from the Throne, Governor General Julie Payette read that the second bedrock of our stability is our parliamentary system. However, today we have a government that refused to restore Parliament and answer hard questions from opposition parties. It is these tough questions that our nation’s health, jobs and financial systems depend on. It’s a good thing that we’re a bicameral system and that in this chamber we have been able to take more time. Still, we are worried about what will happen in the future.

We must not accept this government’s actions during the pandemic as the “new norm.” It is an affront to democracy and all Canadians who have made sacrifices, lost their jobs or permanently closed their businesses. We must ensure there is complete transparency to properly review all legislation so that all sectors of our economy and individual Canadians do not fall through the cracks any longer. We must support our small businesses, especially our mom and pop stores, because they are the backbone of our economy. On the other side of this crisis, it will undoubtedly be the small businesses that put Canada back on the path to prosperity.

To conclude, I remain highly sceptical and critical of the government’s lack of transparency on how they are spending or deficit spending our way beyond our means. I’m exasperated with the oversights and delays in the programs that have been too hastily announced but too slowly implemented, resulting in the devastation of many businesses.

In spite of my growing concerns at the debt that we are burdening our children and several generations to follow, standing on the shoulders of those who have sacrificed so much before us, on this sacred ground and in this historic railway station where Canadians left their loved ones to go off to war overseas, including those who served in the Korean War, and with my faith in God and in Canadians, including our small business owners who have and will continue to be incredibly resilient, selfless and courageous, I have hope.

Hon. Yuen Pau Woo [ - ]

I wonder if Senator Martin would take a question?

You’ve listed a litany of very difficult challenges that the economy is facing, but your list of challenges runs in different directions. I’m trying to get a better understanding of how we might resolve them.

On the one hand, you point to what you term excessive spending on the part of the government and the mounting debt, which is a serious concern that many of us have. You are also concerned about the lowering of the credit rating by one of the agencies. On the other hand, you talk about how there isn’t sufficient funding for, particularly, the micro businesses. Then you also talk about how the CERB being extended is a problem because of disincentives to businesses to rehire. The CERB, of course, is the one mechanism that micro businesses have access to in order to get some funding for those who do not have payrolls that qualify under the CEBA program. You are well aware of that, I’m sure.

I’m trying to understand this. A lot of what you said will increase the deficit, unquestionably. You’re against a higher deficit and you’re against higher debt. What is the level of deficit that you would be comfortable with so that the government can get some idea of what the comfort level of the opposition is when it comes to further measures to stimulate the economy? We’re at $250 billion or something like that right now. Would you tolerate $300 billion, or are you saying come down to $200 billion? What is the debt-to-GDP ratio that you will be comfortable with? Because that’s the measure that the government has been using. Are you comfortable with it going up, or are you insisting that it go back down?

I’m not trying to be technical, but these are crucial questions. If we don’t get to these essential questions of measures, we’re not going to be able to come up with solutions. We are only going to identify more problems.

Senator Martin [ - ]

Thank you for the question, senator, and thank you for listening to the entirety of my speech.

The Hon. the Speaker [ - ]

I’m sorry, Senator Martin, but your time has expired. Are you asking for five more minutes to answer the question?

Senator Martin [ - ]

I thought we had agreed not to grant extensions on speeches.

The Hon. the Speaker [ - ]

It’s up to you, Senator Martin. Are you asking for five more minutes?

Senator Martin [ - ]


Hon. Dennis Glen Patterson [ - ]

Honourable senators, I rise to speak on this bill with concerns about how the two major federal programs responding to the COVID-19 pandemic have actually unfolded. While I did want to see the CERB program accessible to persons like carvers and artists who don’t have internet access or access to banks — and many Nunavut residents live in communities without local banks — the rolling out of the program has been flawed and ripe for fraud, in my view.

Don’t get me wrong; there were many people who lost their jobs or their self-employment due to the pandemic, and they did need help. However, there are also many abuses of the program due to unqualified applications. The government seemed heedless of this potential from the beginning. A May 12 memo distributed by Employment and Social Development Canada even specifically instructed staff to continue payments, even if evidence of potential abuse of the system was involved.

The existence of this memo has never been denied by the government, as reported by the National Post. Apparently, according to that report, early in the program some 200,000 applications had been red flagged by officials because of dubious claims. When this report of 200,000 applications having been red flagged as possibly fraudulent came out, Employment Minister Qualtrough stated that the 200,000 figure was not “remotely near” the real number. She presumably meant that number was way too high.

Now, as it turns out, that number may have been way too low. In early June, Statistics Canada released its latest Labour Force Survey, suggesting that fraud and error under CERB may have been even significantly more pervasive than previously found. By the middle of May, CERB had been paid to 7.8 million people, but the Statistics Canada survey found that from February to May, only 5 million Canadians had either lost their jobs or worked less than half their normal hours. In other words, there may have been 2 to 3 million claims paid that do not appear attributable to COVID-19 job losses.

Then, perhaps realizing it had created a problem, the government decided to clamp down, drafting legislation that would have increased fines for fraud, cutting off folks who fail to return to work when it is reasonable and fail to resume self-employment, or decline a reasonable job offer when they are able to work. The legislation was not proceeded with, but the CRA updated its program formerly known as Leads online to allow Canadians to snitch on other Canadians suspected of fraud. Statements were made by the government about recovering monies fraudulently paid.

Colleagues, stories of CERB scams are rife on social media. Many cheques have been sent to unemployed prisoners in jails and to homeless shelters. The word went out in Nunavut that all you had to do was call CRA and say your cheque had not arrived and another cheque would surely be sent. Then you could even call again and say that cheque did not come in and another cheque would be sent. I’m talking about mailed cheques. We also know that social insurance numbers were used by criminals to successfully apply.

So what resulted? CERB dollars fell freely from the skies in Nunavut, where it’s fondly known in some quarters as COVID money or free money. Employers couldn’t get people to work or come back to work. Employers have complained that the program was implemented with no incentives to work or to return to work.

I want to make it clear that the money was appreciated and needed by many people. The situation of persons out of work in the performing and applied arts economy, which is significant in Nunavut, and people employed in the service industry, were greatly stressed about feeding their families in a region that already has the highest cost of living in Canada.

But some of the applicants who abused the program and did not meet the conditions of having been previously employed did not spend the money wisely to support their families and pay their bills, it seems. It has been noted that alcohol-related emergency room visits in the Qikiqtani General Hospital in Iqaluit were up by 18% during the pandemic compared to averages in the previous years. The RCMP also reported that alcohol-related calls were up 20% compared to previous months. Also, 92% of all calls in April involved alcohol. This has actually resulted in residents of previously quiet neighbourhoods complaining about public disturbances and police-related calls for disturbing the peace.

Citizens have observed to me that dangerous drugs like crack cocaine are now present in increasingly alarming situations among vulnerable citizens in Iqaluit.

It seems to me now that the government made errors when it introduced CERB. First, it sent signals publicly and within the public service that there would be very little vetting of applications. It was more important to get the money out the door, the Prime Minister said in one of his daily briefings. The initial legislation had no penalties for wrongful claims.

This was such a widespread situation in Nunavut that our premier made a public statement, warning citizens not to apply if they were not qualified. Instead of going after cheats after the fact, as it now apparently intends, the government should have put in place tighter controls before the claims were paid out to unqualified applicants. I’m concerned that many people who were lured into easy money will face future consequences, jeopardizing their status with the Government of Canada, and also that, in many cases, it will be impossible to recover monies paid out by mistake.

CERB applicants need not to have filed a tax return, even though the program requires applicants to have been employed in the year before the pandemic. What will be the consequences for them, having these black marks against them linked to their social insurance numbers? Will this jeopardize their future entitlement to Canada pension or other federal benefits?

Given these facts and wide social media chatter about CERB scams, it is no surprise that CERB costs have exploded. I remember when the CERB program was first announced. It was estimated that the costs would be $21 billion. I heard this in a briefing for parliamentarians early in the launch of the program.

As of June 23, the costs had ballooned to $43.5 billion paid to 8.41 million people. Now the government has decided to extend the program for two more months at a cost of $17.9 billion, which will result in the program ending up costing about three times the original estimate.

The wage subsidy program designed by the government had a hefty budgeted cost of $71 billion. However, many companies — and many northern companies — have found that the Ottawa-centric guidelines, which I have complained about in this chamber already, do not fit their needs. This applies to junior mining companies and exploration companies that do not generate revenue — their revenues come from flow shares and investors — and for seasonal companies in construction and tourism that cannot fit the timelines —

The Hon. the Speaker [ - ]

Honourable senators, it’s six o’clock. I apologize, Senator Patterson, that I have to interrupt. Pursuant to rule 3-3(1), I’m required to leave the chair until 8 p.m., unless there’s an agreement not to see the clock.

Is it agreed, honourable senators?

Senator Patterson [ - ]

Thank you, colleagues.

Minister Morneau has pledged to review and make changes to the wage subsidy program. He actually made that pledge in this chamber when one of the first bills was introduced back in April, but we are still waiting eagerly for the results of that review well into the current financial crisis which is crippling many companies.

The government lowered the wage subsidy budget to $45 billion from the planned $70-billion level and, as of June 15, the government had only approved $13.2 billion in payroll subsidies.

Therefore, the wage subsidy program was under-subscribed because of restrictive eligibility rules and the CERB program seems to have been oversubscribed due to laxity preventing fraud and a failure to bring in penalties for fraud and incentives to work.

Many political leaders have suggested that the CERB program should be an inspiration for developing a guaranteed annual basic income program. However, in my view, this program has in some ways not been exemplary. We also have not had the opportunity to examine these important questions in the houses of Parliament and it is widely considered to have been a disincentive to work.

These are unsettling conclusions. It is unfortunate that, in my opinion, there have been very few opportunities for parliamentarians to ask questions about these very expensive programs and their flaws, and it astonishes me that, with all the serious concerns emerging, the government led the proposal that the House of Commons should shut down until September 21, when these programs will mostly have run their course.

And with the greatest of respect, Your Honour, I was also concerned when your office stated that the June 2 session of the Senate, previously scheduled, would not reconvene and that in fact it was not in the public interest that it do so. I think it is unfortunate that parliamentarians have not had more input into these important and costly programs. We should not have to spend months and years after this pandemic picking up the pieces and trying retroactively to see where Canadians have fallen through the cracks, how guaranteed income programs like CERB could have been better designed and how the wage subsidy program could have not missed important sectors of our economy. Thank you.

Would you take a question, Senator Patterson?

Senator Patterson [ - ]


Thank you very much. I was very interested and listened carefully to your comments about the importance of examining a guaranteed liveable income, and it probably won’t surprise you that I couldn’t agree more. I am concerned, though, about the information you put forth about the degree and extent of CERB fraud being reported. The information that I’ve been receiving and the information I’ve been requesting has shown just the opposite; in fact, that there is very little fraud.

Aside from the anecdotes that you presented, I’m curious where the data is and where the evidence is coming from that you reported. You probably recall during the Committee of the Whole on Tuesday, we asked those questions about how much is being lost to fraud versus how much is being lost to corporate tax avoidance and evasion, and the fact that we haven’t even looked at whether wage subsidies has been a concern. The focus seems to be on the people who have the least and are the poorest, not those who may be benefiting more, whether it’s from offshore tax evasion or seeking wage subsidies without backup.

Could you please advise where you’re getting that data from?

Senator Patterson [ - ]

Thank you for that question.

Honourable senators, I want to pay respect to the Standing Senate Committee on National Finance and the Standing Senate Committee on Social Affairs, which have worked hard in a very short time frame during this pandemic to examine the government’s response to COVID-19. However, I still don’t think there have been proper opportunities to thoroughly examine these questions, as we ordinarily do in both houses of Parliament. I would assure Senator Pate that I do feel that there were many deserving low-income people who needed the CERB program, but I was also concerned that there were many people who were not qualified and who were not in a position to handle that kind of money. I’m talking about what I observed in my region.

I was also alarmed by the bureaucrats’ direction to overlook red flagging fraudulent cases, because I don’t think it’s in the interests of those people who were allowed to abuse the program to now be facing consequences that have been threatened by the government to go after them and collect that money.

I don’t pretend to have a detailed knowledge of the question you asked about how much fraud there was, but I don’t think we’ve had the proper opportunity to scrutinize these very costly and hastily designed programs. Frankly, I am not convinced that Parliament, even with reduced numbers in both houses, could not have met to do its job of demanding accountability for public funds. Thank you.

The Hon. the Speaker [ - ]

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

Some Hon. Senators: Agreed.

An Hon. Senator: On division.

(Motion agreed to and bill read third time and passed, on division.)

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