Moved second reading of Bill C-14, An Act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures.

She said: Honourable senators, I’m pleased to have the opportunity to present this bill. I intend to fashion myself after former Senator Baker, only because we’re all very concerned, of course, about the exposure of multiple numbers of staff within the Senate precinct in order to support our sitting. Although most of us are virtual, they are there and present. I know the Speaker and leaders of various groups within the Senate have expressed a desire that we move quickly.

To your relief, I have discarded the very long and most eloquent speech that I prepared for this, and I intend to run through the bill. I see Senator Griffin applauding that I have abandoned my speech.

I intend to go through the highlights of the bill. It’s a very straightforward bill. There are essentially seven or eight policy goals that are set out in the bill and my intent is to go through them. If there are technical questions, I will do my best to answer or we can hopefully count on the fact that if we pass second reading today, and if we pass referring it to the Finance Committee, the minister and her officials will have the opportunity to answer more detailed questions at that time.

In a number of clauses, the bill sets out the commitment that was made in the November 30 Fall Economic Statement. In fact, the bill is entitled An Act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures. Part 1 of the bill is an amendment to the Income Tax Act and the Children’s Special Allowances Act.

As we all know, and dealing with families in our own communities and in our own regions that we represent and people we talk to and connect with, there are many families who have faced a lot of uncertainty and a lot of financial burdens. Certainly the uncertainty around whether schools are in session or virtual sessions only, the opening or closing of child care centres — and this has been, of course, dictated at the provincial level where the responsibility for operations and delivery of these programs is designed — it has often meant additional costs for Canadians with families.

This provision will amend the Income Tax Act, and it would provide temporary support this year — totalling up to $1,200 in 2021 — for each child under the age of 6 for families who are, firstly, entitled to the child benefit and then, secondly, who have children under the age of 6, and then thirdly, the amount they will receive, up to $1,200, will depend on the family income. All of the eligibility, gradations and the entitlements remain under the existing child benefit program, but for those whose family income is below $120,000 a year, they would receive four instalments of $300 each, which would total the $1,200 over this 2021.

For those families whose family income is above $120,000, that amount for children under the age of 6 would be cut in half. It will be, in fact, $150 a month and so exactly half, and that would total up to $600 a year for those families.

These provisions will be paid out on a quarterly basis. As I mentioned, the Fall Economic Statement was in November, and at the beginning of January the bill was introduced into the House of Commons. It sets out that the first quarterly payment will be for those who would have been eligible in January of this year, and it is indicated in the bill that the payment will be paid out as soon as this bill receives Royal Assent. The second quarterly payment will be in April, and so that would be available by the time this bill is passed and has Royal Assent if that occurs, then the next two quarters, the last one being in October.

Therefore it’s a very important provision. These are temporary. It is in addition to the $300 top-up that was given last year, and when I was reviewing this I was thinking this is very helpful but, of course, the larger problem is accessibility to quality child care. Also, I note from yesterday’s announcement in the budget — and we’ll have to wait to see how that program becomes designed in discussions with provinces and territories — we have that broad outline of how it will be implemented, so the amount for this year, and that will be augmented and enhanced in terms of supports to families with children to be implemented following the budget bill, estimates and supplementary estimates.

The second provision of Part 1 of this bill is with respect to the Canada Emergency Rent Subsidy, which is a rent subsidy to help businesses, charities and not-for-profits that are experiencing a sizeable drop in revenue, and the criteria was set out last fall, allowing them to claim for a relief provision from the government on the expenses they have paid.

It quickly became clear that for a lot of organizations, in particular for small businesses but for some parts of the charitable and not-for-profit sector as well, it was impossible to have the necessary cash flow to pay the rent and then claim the expense.

The government has announced that they will allow the due date for the payment of rent to be the applicable date for the subsidy to be transferred. In other words, it will be provided in advance of the rent being paid. The rent has to be paid within 60 days. There are auditing procedures to keep the integrity of the program, but based on the fact that rent is due, that expense will be covered.

You can imagine the importance of this. We heard not just from individual organizations and businesses but also from major business lobby associations and advocacy associations. This was clearly what was asked for and the government responded and included it in the economic statement and in this bill.

Parts 2, 3, and 4 of this bill have the same provisions, just applied to different acts. This is with respect to interest relief on student loans. The three pieces of legislation covered in Parts 2, 3, and 4 are the Canada Student Loans Act and its predecessor legislation, which is under a different name and which is why there are two provisions, and the Apprentice Loans Act.

This measure will allow for the elimination of Canadian student loans interest for the period of this year; no interest will accrue and no payment of interest will be required. This is important. In the government’s statement, they referred to the challenges that students have faced. With fewer summer jobs and internships available, and new lockdown orders, student loans have become a difficult financial burden for students. On top of other relief the government has distributed, and enhancements it has spoken about with respect to summer jobs and internship programs, it is looking to provide students with relief.

Those three sections are the same exact amendment to the three governing pieces of legislation for Canada student loans and apprenticeship loans.

Part 5 of the bill is a regulation-making power. It amends the Food and Drugs Act and authorizes the Governor-in-Council retroactive to October 2 of last year to make regulations requiring persons to provide information to the Minister of Health about food, drugs, cosmetics, devices or activities related to these products. This is to protect, prevent and then address, if not prevented, shortages of necessary drugs in Canada.

There have been some developments that have occurred since this was introduced. For example, in December, the United States implemented a package of reforms that works with state operations and programs that would allow those entities — pharmacists, hospitals and others — to order bulk drugs imported from Canada — and from other jurisdictions, but in this case, we are concerned about Canada — and that provision caused the Government of Canada to bring forward a regulation that would allow it to stop that bulk export if in fact these are drugs that are facing critical shortage and are necessary in Canada.

This regulation-making power is exactly what we have already passed in the COVID-19 Emergency Response Act of last year. That power was put in place initially through to October of last year. The provision in Part 5 of this act would reinstitute it and make it retroactive to when that date expired.

The only regulation that has been made under that regulation power is the one I just spoke about, and it has not been used. There have been productive conversations, in this case regarding the United States, through our embassy, so it has not had to be used. The fact there could be other states that bring forward these kinds of bulk exportation provisions, or other issues that arise, indicates that the government needs the ability to make regulations that would protect the retention of drugs if a shortage appears on the horizon and is imminent.

Again, it is an extension or a revitalization of the provision that we already passed in last year’s emergency response bill.

Part 6 is further split into two parts, which are spending authorities. The first authorizes up to $206.7 million to be paid out of the Consolidated Revenue Fund to regional development agencies, which include the Atlantic Canada Opportunities Agency, the Federal Economic Development Initiative for Northern Ontario, and Western Economic Diversification Canada. These funds will be paid into the Regional Relief and Recovery Fund, which already exists. Around $900 million was transferred into that fund last year, and the requirements of that fund had been set out in the recovery fund, and is governed and administered through the regional development agencies.

I have a couple of comments about what has been achieved by this fund top-up thus far. According to the government records, the top-up has helped 130,000 jobs and has supported more than 14,700 businesses during COVID-19, and more than 9,000 of those are clients in rural areas. Additionally, almost 6,000 of those supports have been provided to women-owned businesses. The total support in this particular fund will be more than $2 billion.

The second part of the provision in Part 6 refers to a requisition for funding from the Minister of Health. As with the regional development agencies, this a bridging effort from the time of the Fall Economic Statement through to the end of the fiscal year. Both of these departments determined they did not have sufficient cash flow or flexibility in the program allocation of their dollars to accomplish what they believed was necessary for the last two quarters of the fiscal year.

Remembering the amounts that have already been put forward, these would be supplemental. They’re in the areas of mental health, substance abuse and investments in long-term care — we heard a couple of announcements about those amounts — and would support innovative approaches to COVID-19 testing, like rapid testing, its expansion and a range of other treatment options to be further supported: virtual care and mental health tools for Canadians; medical research countermeasures; vaccine funding and developments; border and travel measures, and; funding for isolation suites, which, as we know, was a more recent announcement.

That particular list of issues will be providing $505.7 million to long-term care facilities, including funding to prevent the spread of COVID outbreaks, infections and deaths, and it will be funding support for the Wellness Together Canada portal, which connects Canadians to peer support workers, social workers, psychologists and other professionals. If people want the breakdown of the amount in each of those areas, I can provide it, but again, it is for the last part of the fiscal year, so we have in fact passed that point in time.

The next section, which I believe is within section 6, is a winding down of fund provision for the CERB benefit. As you will know, the CERB benefit has come to an end. It has been wound up and replaced by the Canada Recovery Benefit.

There are at least — and I say “at least,” because it’s still open that some claims might have been filed and might not be included in this number — 35,000 applicants whose claims have not been approved yet, or been delayed in their approval. The most common reason, and in the majority of cases, it is because there is further auditing and verification of eligibility work that is going to take place, or has been taking place. It is believed that some of these may be fraudulent complaints. A number of them will in fact be determined to be individuals who are eligible and the money will be forwarded at that point in time. However, there is a need for this provision in order to ensure that, now that the program has wound up, we have enough money within the programmatic line for CERB to wind up these other complaints.

The last section of Bill C-14, Part 7, is an increase in the maximum amount which may be borrowed by the Minister of Finance under the Borrowing Authority Act. This borrowing authority has not been increased in about four years at this point in time. Last year, again, through some of the emergency response bills and specific COVID-related expenditure bills, there have been a number of dollars allocated here. They were not dollars were initially included under the borrowing authority. Those will now be recognized, rolled in and be part of the limit for the borrowing authority, as well as predictions for dollars that are going to be required to continue to deal with and respond to COVID supports and the rollout of other program initiatives as we go forward.

The current amount proposed is $1.16 billion, and the new amount will be $1.831 billion. Some of that includes a 5% prudence amount, so that if there are unexpected expenditures that need to be made, there will be the borrowing authority for it.

I want to be clear that this is not authority to spend. This is the ceiling authority on how much the government can borrow up to. The provisions for spending authorities by Parliament will come through specific bills and/or, as we can see now, a budget that was set out yesterday, for which there will be estimates and supplementary estimates brought forward to examine the actual expenditures and authorize those expenditures. This provision under Part 7 is not an expenditure approval or authority.

The other point that I want to make on this is that for all of you who listened to the budget yesterday — although, as many have commented, it will take us time to go through the 700-plus pages of the budget — a number of the announcements we have heard or read about since will show that these provisions — almost all of them in the entire act — will be augmented, enhanced and extended through provisions in the budget. Some of these specific proposals around health expenditures, student loan forgiveness and other supports have now been announced, which may extend the period of some of these and/or may enhance them.

Last is a comment on the budget. This was from the fall economic statement. It will be overtaken in many areas, but it is still required to have the authority. For example, the administrative solution that was found to ensure that rent subsidies can be made before the actual business or organization’s rent is due, and making that retroactive to November, is a useful provision or administrative workaround that was created, but it is not sufficient for the long term. This must be embedded in legislation with parliamentary approval. That holds for a couple of other things as well.

I will not make any comments about the overall need or the desire of these provisions. I know we will have an able critic response from Senator Marshall, who is the expert on this in the Senate. I know that if the Senate chooses to pass this bill at second reading and refer it to committee, the hearings will begin quickly and the minister and her officials will be able to answer more technical questions at that time.

Honourable senators, thank you very much. I will wrap it up with that. I will say, shucks, with sponsorship this was my only opportunity to give a speech longer than 15 minutes, and I’m giving up that opportunity so we can keep things brief and respect the health of workers and others within the Senate precinct.

There is a senator who wishes to ask a question. Senator Lankin, will you take a question?

Only if it is not from Senator Plett. No, I’m kidding.

That was not nice, Senator Lankin. You wanted to talk a little longer, so I thought I should give you the opportunity.

Thank you, sir.

Senator Lankin, our caucus is very supportive. In fact, our Conservative Party is very supportive of getting financial assistance to Canadians who have been hurt financially by the pandemic. However, the Canada Child Benefit seems to be a blunt instrument for accomplishing this. It is not income-tested, will not be subject to income tax and there is no way of knowing whether the recipients of the additional payment through the Canada Child Benefit were actually negatively impacted by the pandemic.

Of the $2.4 billion that will be spent on CCB payments, an estimated $337 million will go to households making $100,000 or more per year, and over $50 million will go to families with a combined income of more than $150,000. Blunt instruments were understandable in the early parts of the pandemic but, at this point, I would have thought that the government would be a little more refined in their targeting of COVID assistance.

Now, I’m sorry that it is me asking you the question, Senator Lankin, but I do want an answer. Can you explain why your government chose to use the CCB as a means to offset the financial impact of the pandemic rather than a more precise measure to ensure that financial help goes to those who really need it?

Thank you very much, Senator Plett, for your question. You know I said that with humour, and only because I know your sense of humour and that you would not be offended.

I appreciate the question. I would first like to assure you that it is not my government. I’m working in this respect as the sponsor of the bill, which is simply to guide it through the processes and present the information as provided to me by the government. Appreciate just that distinction that, as an independent senator, I do not represent the government in any way.

Second, I think the points that you make have some validity. I looked at the chart in terms of those over $120,000 and those under $120,000 and the impact. The majority of the money goes to lower-income Canadians but, as with the Canada Child Benefit, all families have an opportunity to apply and be eligible. The eligibility criteria for this is that you must be eligible for the Canada Child Benefit.

There are provisions and mechanisms in place for how CRA implements that, assesses the eligibility and moves through CRA for those payments. This will be administered outside of that direct pool, but CRA will be the determining authority as to whether or not individuals are eligible. Of course, there are tax filings to indicate what the family income will be, judged either over or below $120,000.

Perhaps like you, I, along with others, know that the early learning and child care announcement that we have heard holds promise. We will have to see how it is developed, negotiated with the provinces and territories, and what the design looks like. But it holds great promise and I think that’s where we need to move.

I will say that this blunt instrument, as you indicated — which was understandable in the earlier days of the pandemic — was in fact announced in the Fall Economic Statement. The fact that it has taken a few months to come to the Senate, here we are here. But the point that you reference of this being, relatively speaking, a blunt instrument, I would agree with.

Lastly, you made reference to your support for getting assistance to Canadians, and I appreciate that. That has been evident among all political parties in the House of Commons, with appropriate debate and deliberation about the actual provisions, but it has been generally supported.

In this case, the committee did entertain four amendments. Three of those amendments were ruled out of order. They were to make the interest relief on student loans permanent, and it was ruled out of order because it would have invoked the Royal Prerogative.

The last amendment moved in committee was with respect to the borrowing authority. There was controversy about whether the amount was the right amount, should it be a lot less than that or a little less than that. That amendment was defeated. There were no amendments at third reading in the House of Commons and, in fact, four out of five political parties in the House of Commons supported this bill.

Thank you, Senator Lankin. You suggested I shouldn’t have taken offence at your comment. Let me ask that you not take offence at this one either: When you sponsor government legislation, you represent the government. Thank you.

I will take that as a second question — never lose the opportunity to respond. In fact, while I am presenting the bill as the sponsor in the Senate, I am not a member of the government and your direct comments were “your government,” so I take issue with that. It’s neither here nor there. We can have different opinions about that.

Thank you.

Thank you, Senator Lankin, for your remarks on Bill C-14. I will be repetitive in some areas, but I won’t be 45 minutes. I will also try to give you an idea as to what I will be looking for when the bill goes to the Finance Committee.

As Senator Lankin indicated, Bill C-14 proposes to implement some of the initiatives announced in the federal government’s Fall Economic Statement, which was tabled in the House of Commons in December 2020.

The bill consists of seven parts, and I will provide some remarks on most parts, but not all of them.

The first one relates to the Canada Child Benefit, and that was the subject of a conversation between Senator Lankin and Senator Plett. That part of the bill is to provide additional financial support to families who qualify for the Canada Child Benefit.

For each child under the age of 6 years, the government is proposing an additional benefit of four quarterly payments in the current year. The first two quarterly payments will be based on the family net income in 2019, and the final two quarterly payments will be based on the family net income in 2020. Specifically, families who qualify for the Canada Child Benefit and have a family net income of $120,000 or less will be entitled to quarterly payments of $300 per child under the age of 6 years, and then for families with a family net income greater than $120,000, quarterly payments will be $150 per child under the age of 6 years.

Based on the wording in the bill, families must have already qualified for the Canada Child Benefit based on their 2019 family income in order to qualify for this additional support. Given that the deadline for tax returns for the 2020 calendar year is just a few days away, clarity has to be sought regarding eligibility for the Canada Child Benefit and the additional support proposed in this bill.

I don’t know why the government is focused on eligibility based on 2019 tax information. It seems it would be better to use 2020, especially since 2020 was the year of the pandemic and families who wouldn’t qualify in 2019 would probably qualify in 2020.

And as indicated in the Fall Economic Statement, it estimates that this initiative will cost about $2.4 billion dollars in 2021.

Part 1 of Bill C-14 also amends the Income Tax Act so that rental expense can qualify as an expense under the Canada Emergency Rent Subsidy program when it becomes due, rather than when it is paid, provided certain conditions are met.

Bill C-9, which we passed last December, addressed some of the problems associated with the rental program, because that program has had a lot of problems since it started last April. It soon became apparent after Bill C-9 was passed that businesses would have to pay their rent before they could claim it and receive the money from the government. This was a major problem for businesses who had no cash to pay their rent in advance. Hence, this amendment will allow the government to reimburse business owners for their rent before it is actually paid.

Clarity has to be sought as to whether the government will ensure these payments are used for the purpose intended and, if so, how the government intends to do this. I would expect that officials testifying at the Finance Committee will be able to provide that information.

Parts 2, 3 and 4 of Bill C-14 proposes to reduce student debt by eliminating interest on the federal portion of Canada Student Loans and Canada Apprentice Loans for the 2021-22 fiscal years. Specifically, these loans are not subject to interest from April 1, 2021, to March 31, 2022. In addition, during this same period, a borrower is not required to make any interest-related payments with respect to the federal portion of the Canada Student Loan, and the Fall Economic Statement estimates that this measure will cost approximately $329 million.

Clarity has to be sought as to how the government will implement these changes and how they will affect student loans written off and loans forgiven.

One thing we do in the Finance Committee almost every year is to review loans written off because the supplementary supply bill has a provision to write off some student loans. In addition to loans written off in accordance with the supply act, there is a substantial number of loans written off under the authority of the Financial Administration Act and loans forgiven under the authority of the Canada Student Financial Act and the Canada Student Loans Act. Loans forgiven and loans written off amount to hundreds of millions of dollars, so we need to look at how this provision in this bill affects the loans written off and loans forgiven.

Part 6 of the bill authorizes payments to be made out of the Consolidated Revenue Fund for three purposes, totalling $1.6 billion. The first purpose is for the Regional Relief and Recovery Fund for the six regional development agencies in the amount of $206.7 million. Clarity will be sought in the Finance Committee as to criteria to be met to qualify under this program, how funds are to be dispersed and any follow-up required after funds have been dispersed.

The second purpose of the bill is to provide $901.3 million for a number of health-related areas affected by COVID-19, including mental health and substance abuse, long-term care, innovative approaches to COVID-19 testing and virtual care and mental health tools. Clarity has to be sought as to who will qualify for funding, criteria that have to be met, what the funds have to be used for, as well as any follow-up required after the funds have been disbursed. This funding will have to be linked to budget initiatives announced yesterday.

The third purpose is to make $500 million available in income support payments under the Canada Emergency Response Benefit Act, and this relates to the CERB benefits paid out over the past year. This will be a wind-up of that program.

Part 7 of Bill C-14, which is the part of the bill that I was mostly interested in, proposes to increase the limit on Government of Canada borrowings. The limit is established by the Borrowing Authority Act. I can remember when that act was implemented. It was enacted in 2017 by the Budget Implementation Act, and it permits the Minister of Finance to borrow money with the authorization of the Governor-in-Council.

I was on the Finance Committee at the time, and that part of the Budget Implementation Act received a fair bit of discussion. So this bill provides a maximum limit on the amount to be borrowed. In 2017, the Borrowing Authority Act established a limit of $1.168 trillion. This included the current stock of government borrowings in 2017, plus the estimated borrowings of the government for the subsequent three years, plus the borrowings of the Crown corporations and, finally, a 5% contingency fee on the total projected borrowings at the end of three years. Senator Lankin made reference to that 5% contingency fee.

Each year, included in its budget document, the government outlines its debt-management strategy. Since there had not been a budget for over two years, government outlined its debt-management strategy for 2020-21 in its economic and fiscal snapshot issued last July, and then it further updated its debt-management strategy for 2020-21 in December’s Fall Economic Statement and outlined the proposed amendments to the Borrowing Authority Act that now appear in Bill C-14.

Included in the Fall Economic Statement is the new proposed limit of the $1.831 trillion as well as an analysis of how the new proposed limit was established. The analysis in the Fall Economic Statement, which outlines the calculation of the new debt ceiling, is somewhat confusing because it uses the combined debt at the end of October 2020 as its starting point rather than at the end of the previous fiscal year. The analysis includes several components, and it effectively builds the new proposed debt ceiling to the $1.831 trillion from the existing ceiling of $1.168 trillion. It is a proposed increase of $663 billion, or 57%, over the next three years to March 31, 2024.

The magnitude of the $663 billion increase has been the subject of much discussion, as have been the individual components that make up the increase. For example, the increase in the debt ceiling includes $100 billion in new stimulus spending that was identified in December’s Fall Economic Statement but which was not included in the government’s fiscal framework at that time.

The $100 billion received significant attention from the Parliamentary Budget Officer, the C.D. Howe Institute, the International Monetary Fund and others who questioned the necessity of a $100 billion stimulus program. However, given the new initiatives announced in yesterday’s budget, the $100 billion will have to be reviewed in that context.

In addition, the $663 billion includes an $87 billion contingency amount based on 5% of the proposed debt ceiling. Why government would need a 5% contingency on debt already incurred has not been explained. In addition, the 5% contingency was already provided on the initial debt ceiling of $1.168 trillion back in 2017, so why is the same 5% contingency amount being provided a second time on this same debt ceiling?

Other issues concerning the significant increase in the debt ceiling need to be addressed by government. For example, parliamentarians will be interested in knowing whether any of this increased debt will be purchased by the Bank of Canada.

In a recently released report, the Parliamentary Budget Officer is projecting borrowing requirements to increase the debt to $1.7 trillion by March 31, 2024, which is just $125 billion below the proposed debt ceiling. Since the Parliamentary Budget Officer’s projections do not include the $100 billion in stimulus spending, any of the new budget initiatives or other items, such as the $5.9 billion Air Canada assistance plan, it raises the question as to how this additional spending will be funded. Will it be by a further increase in the debt ceiling or the imposition of new taxes?

The last point I will raise relates to transparency.

As honourable senators are aware, I have often spoken in this chamber about the difficulty of tracking government’s COVID-19 spending. The funding proposed in this bill is primarily for COVID-19 spending programs. The government needs to clarify how these expenditures will be disclosed and how they will be reported in its financial documents, such as the estimates, supplementary estimates, the fiscal monitor and the Public Accounts. How these expenditures relate to the budget initiatives announced yesterday will also have to be determined.

In addition, the government must clarify to which fiscal year these expenditures will be charged. Which of these expenditures will be charged to the 2020-21 fiscal year just ended, and which expenditures will be charged to fiscal year 2021-22, which began three weeks ago?

Honourable senators, this concludes my comments on Bill C-14 during second reading. I will have further comments at third reading. Thank you.

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 second time, on division.)