:
I call the meeting to order.
Welcome to meeting number 41 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2) and the committee's motion adopted on Tuesday, April 27, the committee is meeting to study the subject matter of Bill , an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.
We're fortunate today to have with us the Hon. Chrystia Freeland, Minister of Finance and Deputy Prime Minister, and quite a number of officials from the department. We'll introduce those officials in the second round.
Madam Minister, welcome. We'll start with an opening statement from you. If you could hold it to not much more than five minutes, that would be helpful. That way we can get to questions faster.
For MPs, the question lineup after the minister completes her remarks is Mr. Fast, Ms. Dzerowicz, Mr. Ste-Marie and Mr. Julian.
The floor is yours, Minister. Welcome, green grass and all.
:
Thank you very much, Mr. Chair. I will leave it to you to introduce the officials later on, but let me say thank you very much to the officials for being with us.
[Translation]
Mr. Chair and members of the committee, thank you for inviting me to speak to you today about Bill , Budget Implementation Act, 2021, No. 1.
After more than 14 months of uncertainty and challenges, Canadians are continuing to fight COVID-19, but we know there is light at the end of the tunnel. As we fight the third wave, more and more Canadians are getting vaccinated.
[English]
Bill is an essential piece of legislation that, once enacted, will allow us to implement our plan to finish the fight against COVID, create jobs and a swift recovery from the COVID recession and lay a foundation for robust, inclusive, green, long-term economic growth.
This budget is about helping middle-class Canadians, helping workers and helping more Canadians to join the middle class. It is about embracing this moment of global transformation to a greener, cleaner economy. It is a plan that will help Canadians and Canadian businesses heal the wounds of COVID and come roaring back.
First, we need to finish the fight against this virus. This bill includes a one-time payment of $4 billion to the provinces and territories to support their health care systems, support that is so essential as we fight the third wave. This is in addition to the $1 billion to support the provinces and territories as they ramp up their vaccine campaigns.
We are making progress in our vaccination efforts, and I know that team Canada can vaccinate even more Canadians even more quickly, and we will. I was vaccinated with the AstraZeneca vaccine at a Toronto pharmacy 15 days ago, and I encourage all Canadians to get vaccinated as soon as it is their turn.
[Translation]
The pandemic has caused a recession, so we need to start by rolling out a comprehensive plan for jobs and growth, to address the disproportionate impact the recession has had on women, young people, racialized Canadians, low-wage workers and small business.
[English]
A cornerstone of our plan is a historic investment of $30 billion over five years, reaching $9.2 billion annually, in permanent investments to provide high-quality, affordable and accessible early learning and child care across Canada. Our goal is that within five years, families everywhere in Canada should have access to high-quality child care for an average of $10 a day. Dear colleagues from all political parties, let's make a commitment together today to all Canadians. Let's get this done.
[Translation]
I want to take a moment to recognize Quebec's leadership, especially that of feminist Quebeckers, who have led the way for the rest of Canada.
While we know better days are ahead, many families are still struggling. Around a million Canadians either remain out of work or are working significantly fewer hours than they were pre-pandemic. We must support hard-hit Canadians and businesses across the country so they can recover as soon as possible.
Bill includes emergency supports for Canadian workers, businesses and families.
[English]
The legislation extends the Canada emergency wage subsidy, the Canada emergency rent subsidy, and lockdown support through to September 25, 2021 which will help protect millions of jobs.
With this legislation, we are providing a bridge for people who are unable to work because of COVID by extending income supports, maintaining flexible access to EI benefits, and extending the EI sickness benefit from 15 to 26 weeks.
Bill also introduces a $15 an hour federal minimum wage. It expands the Canada workers benefit, extending income top-ups to about a million more low wage workers, and lifting nearly 100,000 Canadians out of poverty. These are measurable concrete steps to help Canadians who need help.
[Translation]
We must also help small business, the backbone of our economy and every main street in the country. To do that, we need to improve access to capital and help businesses hire more workers, in particular, through the new Canada recovery hiring program.
Young Canadians have made tremendous sacrifices this past year to protect their elders, and now, they need our collective support.
Through Bill , we will make college and university more accessible and affordable by extending the waiver of interest accrual on federal student loans until March 2023. This will mean savings for more than 1.5 million Canadians repaying student loans. We will not let young Canadians become a lost generation.
[English]
Mr. Chair, I have spoken today about just a few of the measures included in Bill , measures which will make a tangible positive difference in the lives of millions of Canadians.
This is a plan for jobs, growth and the middle class. It is a plan built around helping Canadians recover, succeed and thrive.
I recognize the critical role parliamentary committees play in scrutinizing government legislation, and I'm grateful to all of you for your hard work.
[Translation]
Bill is a historic first step towards recovery and new economic growth for future generations of Canadians.
I would be pleased to answer any questions you have as you study this critically important piece of legislation.
Thank you.
[English]
Thank you very much.
Thank you, Minister, for appearing before committee again.
I again want to congratulate you for being the first female finance minister to deliver a federal budget and, hopefully, it's the first of many to be delivered by women in the future.
I do note, however, that this is also the largest spending budget ever and creates the largest debt and deficits in our country's history. My fear is that future generations will look back on this budget as the one that created a financial burden that undermined their prospects of living the Canadian dream. I certainly hope that is not the case and that, in fact, Canadians still have the prospect of a bright future ahead of them.
With that in mind, I want to refer you to not only the fall economic statement, but also the budget that this BIA implements.
I note that in the fall economic statement you projected GDP growth at 4.8%, but the budget says that it's going to be better than that; it's going to be 5.8%. You projected in the fall that revenues would be around $335 billion. Now, in the budget, you're predicting that it's going to be better than that, and we're going to have $20 billion more. With more cash coming in by way of revenues and more economic growth predicted in this budget, you're still projecting a deficit that is higher than what you projected in the fall economic statement.
The same is true in 2022-23, which is the next fiscal year. Again, the projected revenues are going to be up by about $20 billion, so you have more revenue coming in, more money in the bank account, and your growth is projected to be close to 1% higher than the fall economic statement had suggested, yet you're predicting a deficit that is $9 billion higher than the fall economic statement.
My concern is this. We have better growth; we have higher government revenues in this year and the next, yet, for some reason, you're not only spending all of the unexpected additional revenue, you're also increasing the amount you're going to borrow each year. We're going backwards, big time.
For every extra dollar that comes in in revenue, you seem to think that you can spend that dollar and then borrow even more than you had initially projected, so how is that a sustainable fiscal and debt management plan?
:
First, Mr. Fast, thank you for your kind comments. You made a similar comment that I really appreciated when I delivered the budget. I will take this opportunity to recognize a woman who I think deserves the respect of all of us, and that is Kim Campbell, Canada's first woman prime minister. She was, of course, a Conservative, so I will take this opportunity in turn to congratulate you and your party for having broken that glass ceiling, and to congratulate Ms. Campbell.
You have addressed some questions broadly around fiscal sustainability in the budget and around debt and deficits, and around the FES projections and the budget projections. Let me make a few comments.
The first comment I would make is that when it comes to the growth projections, a long-standing practice, in fact one that dates back to 1994, is that the budget is based on the average of forecasts of private sector economists. I think this is a great example of institutional strength of Canadian institutions and I make that point to the committee to be clear about why the projections have changed. The projections of private sector economists have changed and that has been what we have used as the basis of our fiscal track. Now, I know that members of this committee are well aware of this, but I just want to be clear with all Canadians.
To the second point around the sustainability of our spending, I assure members of the committee that I am very confident that the spending in our budget is reasonable and sustainable. There are a couple of key markers that I would point people to. The first is that we show a declining debt-to-GDP ratio, falling to 49.2% in 2025-26, and likewise, a declining deficit, falling to 1.1% in that outer year. I would also point out that it is not merely my judgment that the debt and deficit track is reasonable and sustainable, it's also the judgment of some important outside validators. I would start by citing S&P. On April 26, they reaffirmed Canada's AAA credit rating, the highest there is, and said that the outlook was stable. That was after reviewing our budget.
I would also point to comments published today of former governor Stephen Poloz, who was, of course, appointed by Prime Minister Harper. He actually spoke about how in his view the assumptions in the budget were actually quite small-c conservative and that he did believe there was a sustainable path.
:
Thank you, Ms. Dzerowicz. It's nice to see you.
Let me just start by pointing out, as you have, that the wage subsidy has been providing, and continues to provide, absolutely critical support to Canadian businesses and, crucially, to Canadian workers. More than 5.3 million jobs across the country have thus far been supported by the wage subsidy. In the province where you and I are both members of Parliament, Julie, more than 1.88 million jobs have been supported by the wage subsidy.
As I know members of the committee are aware, the amount of subsidy a company can claim for its employees is based on revenue loss. The more revenue you have lost, the more subsidy you are able to claim. We think that is fair. It is a way of targeting the support to where it is needed the most. Of course, I know that members of the committee are aware that companies can only claim the wage subsidy for employee remuneration.
Bill , which we are discussing today, includes a further—and I think important—condition for publicly listed companies. If we pass this important legislation, the remuneration of top executives in 2021... If it exceeds their remuneration in 2019, their companies will need to pay back the difference to the government, up to the total amount of wage subsidy they received. That is a new condition we're bringing in with Bill C-30, and I hope members will support that.
Good afternoon, Minister. Thank you for being here.
Thank you, as well, to your team of officials.
Minister, the bill contains a slew of very positive measures. I have a limited amount of time, so I will focus on those I have questions or comments about.
I'll start with division 8 of part 4, which enacts the Retail Payment Activities Act.
I realize that legislation in this area is needed given the current void, so I applaud the measure. I will continue to examine how the legislation will interact with the Quebec Civil Code, which governs person-to-person transactions. I want to better understand why the federal government is regulating these activities.
Right now, though, I am mainly interested in hearing about your plans for the tech giants, major online retailers such as Amazon and Walmart. Does division 8 of part 4 allow them, either directly or indirectly, to provide services currently offered by financial institutions?
:
Thank you for clarifying your intentions as regards division 8. That makes me feel better.
The second issue I want to talk about relates to credit cards.
In the budget, you laid out your intentions to limit interchange fees, or to ensure small businesses are treated more fairly in relation to big merchants, which have the ability to negotiate lower credit card interchange fees. In the budget, you indicated that next steps would be outlined in the fall. Why did you not go ahead and implement the measure through Bill ?
I would remind you that a Liberal member, Linda Lapointe, brought forward a private member's bill to address this very issue in a previous parliament. Her bill was delayed twice, before she was appointed to a position within the government. She then had to abandon the bill.
As I see it, action is urgently needed, especially since the pandemic has hurt small businesses and deepened the inequity between small and large businesses. Why, then, did you not bring the measure into force now?
From what I gather, putting it off means it may not be implemented until after the election.
:
Thank you for your question.
My understanding is that, overall, you support the direction we've taken. That is a positive sign. Thank you for your support.
I agree with you that, from an economic standpoint, small and medium-sized businesses have been the hardest hit and greatly need our help. That's one reason, if not the main reason, why we made it clear in the budget that this was what we intended to do.
We understand that the COVID-19 recession hit small and medium-sized businesses incredibly hard, and we also understand that, because of the pandemic, they are now more dependent than ever on virtual transactions and credit cards. That is why we clearly signalled our intention to move forward on this. I hope we can count on your support.
:
Thanks very much, Mr. Chair.
Thanks to all our witnesses for coming here today. That includes the departmental witnesses. We hope your families continue to stay safe and healthy.
Congratulations, Madam Freeland, for shattering that glass ceiling as the first Canadian woman to present a national budget.
Now, the context of that national budget is that Canadians are suffering through an unparalleled crisis. At the same time, we've seen Canadian billionaires increase their wealth by $78 billion. Hundreds of thousands of Canadians have not been able to return to work. Yet Bill slashes, in just a few weeks' time, as the third wave crashes on our shores—the most devastating wave yet—the CRB from $500 a week to $300 a week. At the same time, it does nothing to address the fact that Canadian students are having to pay back student loans during a pandemic.
Will the government accept amendments to ensure that the CRB is not slashed from $500 to $300 in the midst of a pandemic and that students get a debt moratorium so that they are not having to pay back student loans in the middle of this crisis?
:
Minister, I do not want to rain on your parade, but many of us had hoped this would be a historic growth budget.
I sent a letter to you, suggesting that we needed comprehensive regulatory and tax reform. We asked you to address the flight of foreign direct investment from Canada. We needed a new comprehensive innovation strategy, not just the same old, same old.
As you know, many economists have lamented the fact that this budget is more about short-term benefit than positioning our economy for long-term success.
I am glad you referred to outside validators, because I have a few of those.
For example, Mark Carney, someone you know well, a former Bank of Canada governor, said, “What we’re seeing in some other jurisdictions is that the focus is more squarely on the growth.” David Dodge, also a former Bank of Canada governor, highlighted “a lack of growth-focused initiatives in the budget.” Robert Asselin, a former top economic adviser to your government, described the new spending as “unfocused and unimaginative.”
Finally, today, a former Clerk of the Privy Council, the highly respected Kevin Lynch, made so many different points. I will just summarize a few of them. He said that the budget “misses an urgent opportunity to rebuild our longer-term growth post-pandemic.” He added that “It does not set a clear fiscal anchor.” Furthermore, “Despite the extraordinary emphasis on stimulus, there is little focus and few measures to rebuild Canada’s longer-term growth.” He went on to say, “Our potential growth will drop...due to weak productivity, tanking competitiveness, and labour force challenges.” He ended by saying, “This budget’s intergenerational transfer of debt and risk is unprecedented.”
Minister, your own fall economic statement and budget betray the reality that as you raise more money through tax revenues and otherwise, you're simply going to spend more and borrow more, but there is nothing to position our economy for long-term growth.
This is a huge let down. Why?
Mr. Fast, as you know, I have a great deal of respect for you, as a person, and as a former minister, but I have to very respectfully say that I disagree very strongly with all of your contentions just now.
Let me take them in turn. First of all, when it comes to outside validation of the budget and of the fact that our budget is on a sustainable and responsible fiscal track, from my perspective, there is no better judge than the credit rating agencies, which are paid to assess the credit worthiness of borrowers.
For me, it is therefore really important to underscore for Canadians that S&P, a week after the budget, came out with a very strong endorsement, reaffirming Canada's AAA credit rating, and reaffirming that the outlook for Canada was stable. It really doesn't get better than that.
I would also like to refer members of this committee, and you, Mr. Fast, to the comments of the former governor of the Bank of Canada, Stephen Poloz, who was appointed by former Prime Minister Harper. He gave an interview, published today, in which he talked about the budget as being sustainable. He spoke about the conservatism in the numbers that he saw in the budget, and he spoke about the fact that this sustainable plan was put together without a meaningful increase in taxes of any kind. I couldn't agree more strongly.
When it comes to growth and innovation, let me point to three elements in the budget that, to my mind, are absolutely critical.
One is early learning and child care. We have heard from the IMF, Bank of Montreal, Scotiabank, TD, and from economists across Canada and around the world that investing in early learning and child care is a powerful long-term driver of jobs and growth. That is what this budget does. I think that is well understood across the country.
A second really important investment in long-term growth in this budget is the Canada workers benefit. In fact, BMO picked up on how that investment, which supports the lowest paid Canadians, is going to increase labour force participation.
Finally, I want to mention a third really important element, the unprecedented investments this budget makes in Canadian small businesses, allowing them to invest in themselves and giving them support to become more innovative.
:
Thank you for your question, Ms. Koutrakis.
One of the key components of the budget is support for small and medium-sized businesses. Programs such as the Canada emergency wage subsidy and the Canada emergency rent subsidy will help them finish the fight against COVID-19.
The budget contains a number of other measures to help Canada's small and medium-sized businesses—the backbone of our economy—become more productive and competitive.
Quickly, I can point to three programs.
A new program will be available to small and medium-sized businesses between June and November to help them hire new workers.
The budget also includes measures to make it easier for small and medium-sized businesses to access credit.
Lastly, a newly introduced tax incentive will encourage small and medium-sized businesses to invest.
Minister, as you know, the greater Montreal area and other parts of Quebec are home to thousands of tech start-ups. At the beginning of the pandemic, they told us that the wage subsidy program was inadequate in terms of coverage. A start-up is, by definition, a business where someone puts up their own money while working towards a technological development, which, once ready, they can sell and reap the benefits of. The government turned to the innovation assistance program, administered by the National Research Council of Canada.
Now, some start-ups are asking why the program was not extended until September 25, like other income support programs. As we know, the innovation assistance program provides more than $250 million in funding, largely to start-ups. Some have even warned that, if the program ends, they could go bankrupt by the end of the pandemic.
Why end the innovation assistance program when we are this close to the goal line?
:
Thank you for your question.
I must say, I certainly recognize how important Montreal's innovation ecosystem is. Toronto, where I'm from, has a similar ecosystem. Mr. Julian is here, and Vancouver, in his riding, has an ecosystem as well. The same is true of many other Canadian cities and municipalities.
Start-ups are a very important part of our growth plan. Canadian innovators will find quite a few measures in the budget that are meant to help them, especially small and medium-sized businesses wanting to make growth-oriented investments.
The budget truly focuses on growth and the future, with numerous programs that will be particularly helpful to these types of businesses. If you like, I can put together a list and send it to you.
:
Thanks very much, Mr. Chair.
We're supposed to all be in this together, yet Canada's billionaires have increased their wealth by $78 billion and Canada's banks have received an unparalleled package of liquidity support of $750 billion from various federal institutions, with over $40 billion in profits thus far in the pandemic. This is unprecedented that we've seen these massive levels of wealth, and yet most Canadians are struggling. As we talked about earlier, CRB is being slashed. Students are being forced to pay for their student loans. There's nothing for people with disabilities, despite the fact that half of the people who line up at food banks are people with disabilities.
Given all of that, it is perplexing beyond belief that there is no wealth tax in this budget. I know that there's a luxury tax. The spin is that this brings in a little bit of money. The PBO indicates that's about 1¢ on the dollar of what a wealth tax would bring in. There are no measures around cracking down on overseas tax havens that CRA has already indicated that they don't have the tools to take on, which is why there have been no convictions in the various Panama papers, Bahamas papers, that have come out that show tax evaders.
The question is very simple: Why no legislation to combat tax havens and why no wealth tax when 80% of Canadians support that?
:
I will try to go really fast. First of all, I want to speak to some of the assertions in that question.
Let me just point out, for Canadians who are listening, that the CRB continues to September 25. This is an important extension. The changes we made, the flexibilities we introduced to EI, are extended for an additional full year. We have also expanded the EI sickness benefit from 15 to 26 weeks.
On disabilities, let me point out that particularly for students with a serious but not permanent disability, we have significantly expanded support. That's something that I'm very glad we were able to include in the budget.
In terms of tax evasion, let me say that I believe this budget invests more strongly and more significantly in closing tax loopholes, in fighting aggressive tax-planning schemes and in going after tax evasion than any previous budget. I would like to also point out the measures here on beneficial ownership and shine a light on that.
I wasn't expecting a question in this round, so I'll treat it as a bonus.
Before I do, let me just put on the record my extraordinary disagreement with our colleague Ms. Jansen's perspective on the CERB. I can tell you the feedback that I heard, Minister, in my own community. During a time when people were being forced to stay at home to protect the health and well-being of their families and members of their communities, this is a program that made sure they could pay their rent and mortgages and put food on the table.
I want to direct my question towards the measures targeting young people, particularly students, in this budget.
Before I got into politics—in fact, before I got into anything—I was a student president at StFX University. Go X Go!
I see Wayne shaking his head up there; I'm a homer.
I was one of the folks who went to Ottawa to lobby MPs for important changes. Some of the things in this budget around extending a moratorium on interest on student loans, not requiring students to pay back their student loans until they're earning $40,000 a year, extending the doubling of the Canada student grant—which is going to cover, on average, 90% of the tuition for the lowest-income families in Canada—are all terrific measures. However, there is one in particular that I don't think has got the attention that it deserves. There is a new proposal in this budget that is going to ensure that students don't need to pay back their student loans if their monthly payments exceed 10% of their household income. I should say that they'll still be required to pay that portion back, but the amount beyond that 10% will be covered, both principle and interest, by the federal government.
In the case of students for whom, say, 10% of their monthly income is $400 a month and whose monthly payments are $650, this is going to extend hundreds of dollars every month to low-income students when they're trying to get their feet under them.
Could you tell me the motivation behind this policy and the importance of supporting young people? I'll add that the reason I care about this is that I think the next cure for cancer or the next business solution might be locked in the mind of some kid who can't afford to go to school. It's not just that kid who loses out when he or she can't get an education; it's every single one of us.
If you could highlight the importance of some of these measures to make sure that we can improve the affordability of an education, I would be grateful.
I do want to start by underscoring, as I did in my reply to Ms. Jansen, the strength of my agreement with you about the CERB and the CRB. Our government really stepped in when literally millions of Canadians through no fault of their own were suddenly left without a job and without the ability to find a job. I am really, really glad that we took action to support them. I want to say to those Canadians that we will continue to be there. The support is there to September 25.
On students, again I find myself in violent agreement with you, Mr. Fraser. When it comes to the unprecedented support for students in this budget, let me offer three motivations.
I really believe that young Canadians have made a huge and very particular sacrifice during the pandemic. They have curtailed their social lives and many of them have had to learn virtually. They've really done it for us, for their parents and for their grandparents. I think we owe it to them to support them now.
There is a robust body of academic research suggesting that if you graduate into a recession, your lifetime prospects on everything from income to likelihood of having children to likelihood of marriage to even your health can be stunted. This budget really believes in supporting young Canadians. It does that through the measures to support students that you listed and through aggressive action to create work experience and job opportunities. About 500,000 work experience and job opportunities will be created in this budget.
I know we're at the beginning of a study. I tried to circulate, in advance of our last meeting, a proposal for how we should conduct it. I'll put everyone's mind at ease: I'm not trying to pull any fast ones or table motions on the floor right now, even though the rules would preclude that. I just want to give us an opportunity to have a very short discussion about the next steps in our study.
I'd like to thank each of the critics for taking the time to speak with me over the weekend, or as recently as this afternoon. I had initially envisioned that we would farm out some portions of this bill to different committees purely as a way to expedite matters. Certain members indicated they didn't wish to do that, and I'm happy to oblige if we want to do the entire study at the finance committee.
I've prepared a draft motion and circulated a copy of it to Mr. Fast and Mr. Ste-Marie. Perhaps the clerk can circulate a copy of that motion, if I send it momentarily, to you, Mr. Chair. It is a starting point for future discussions on what the shape of this may look like.
I spoke with Mr. Julian earlier today, and we haven't reached an agreement or anything like that. However, from a technical point of view, we will need to establish our next steps at some stage. Some members have indicated a preference to do this at the steering committee. I'm okay with doing that, and technically speaking, I know you mentioned previously that you sought room for a steering committee meeting.
Given that we're supposed to hear from the officials on Thursday, I'm wondering if the committee would agree to one of two options. I'm happy with either, frankly. We can either adjourn a bit early to allow the steering committee to use the remaining time to develop the plan on how we should proceed, or set some of the meeting time aside for committee business to do the same thing, if that is technically a better option for securing meeting space.
With that, Mr. Chair, I'll have the clerk circulate my proposal, but I'm happy to accommodate feedback. My interest is less in the format of the meetings and more in making sure that we deal with the measures outlined in the BIA in a timely way.
:
Okay. Maybe we'll come back to that in the last five minutes, after the officials who are here, and talk about that a little further to see where people want to go, whether or not they want to farm sections out or try to do it all themselves and set a timeline.
Would it be okay to go that way? Then we can figure out what we're doing on Thursday.
I see some heads nodding, yes. Okay.
We have the officials from the Department of Finance. I'll give you the lineup for questions first. I have Mr. Fast, Mr. Fraser, Mr. Ste-Marie, and Mr. Julian.
We have with us Andrew Marsland, senior assistant deputy minister, tax policy branch, who is here a lot of the time; Nicholas Leswick, assistant deputy minister, economic and fiscal policy branch; Leah Anderson, assistant deputy minister, financial sector policy branch; Evelyn Dancey, associate assistant deputy minister, economic development and corporate finance branch; Katharine Rechico, assistant deputy minister, international trade and finance branch; and Galen Countryman, associate assistant deputy minister, federal-provincial relations and social policy branch.
Thank you very much for attending the first hour and the work you do in this struggle with COVID.
Mr. Fast, the floor is yours.
:
Thank you very much, Mr. Chair, and thank you to officials.
I have the neighbour mowing the lawn just outside my window, so I apologize for any noise pollution.
My first question relates to the proposed investments in Canada's national early learning and child care framework that were included in the budget. Obviously, to the first point you made, Mr. Leswick, around government spending finding its way into the economy, I see this as a major opportunity. I see the investments that will create affordable access to child care and in particular will allow more parents, predominantly women, to take part in the economy compared to the rate at which they do today.
One of the knocks that I hear about the program from folks who are opposed to it is the sticker shock they have when they see that this is a $30-billion investment. I'm curious to know if you've done an analysis on the anticipated economic return associated with this investment. Forgetting for the moment that I think it's the right thing to do from a gender parity point of view, just from a crass economic point of view, what do the numbers show us in terms of the anticipated economic return for dollars spent on this measure?
:
Maybe I'll take that one. I have a couple of comments in response.
The proposed changes to the Canada workers benefit do extend out the range to essentially provide benefits to full-time, minimum wage workers. It also includes a mechanism to ensure the potential disincentive effects, particularly for secondary workers—who are women, more often than not—are mitigated. It excludes the first $14,000 of that secondary earner's income, which is an important aspect in terms of looking at this.
In terms of effect, we estimate that about a million additional workers would benefit from this.
In terms of the broader economic effect, I don't have an estimate of that. There is a considerable amount of literature with reference to the earned income tax credit in the U.S., which demonstrates that this has a positive effect on labour market participation, which of course is a key driver of economic growth.
I'm looking at the analysis of the range. We're in the midst of a third wave. It's growing in parts of the country, as we know. The CRB is not something that should be slashed without having given it a great deal of thought. The analysis done by the finance ministry would be very helpful.
My second question, then, is on the wage subsidy. I wrote to the minister on January 5, and we're still awaiting a reply. When will the actual figures for the wage subsidy provided to companies be released? When will the public actually know? It's the public's right to know, of course.
What is the finance ministry and the CRA doing in the case we've already seen through the The Globe and Mail, the National Post and a number of other intrepid reporters for CBC, CTV and Global? They've already identified companies that have laid off their employees while getting the wage subsidy and providing dividends. They are doing stock buybacks and providing massive executive bonuses.
What procedure is the finance ministry or the CRA taking on that, when there is clear evidence of a misuse of the wage subsidy funds? What steps will the finance ministry be taking?
When are you releasing the figures and what steps are you taking, when, clearly, abuse has been identified?
:
Mr. Chair, that would be me.
Essentially, with regard to the disability tax credit, there are two proposed measures. One is to clarify the criteria applicable to qualify with regard to the mental functions necessary for everyday life—and really, that's to make it clearer under what circumstances one would qualify. Again, this is in response to feedback that we received in part from the disability advisory committee of the Minister of National Revenue.
The second area relates to life-sustaining therapy, and this is, of course, where an individual has to undergo ongoing therapy. There have been issues in the past with how to determine the time required to be spent on such therapy. The proposals in the bill essentially expand, to some extent, the qualifying amounts of time that would be required under that to meet the requirements—again in response to feedback the department has received.
In terms of the Canada hiring program and how it relates to the wage subsidy, you look at the reference. You take a reference period in March or April, a one-month reference period, and then apply a percentage to the incremental hiring from that reference period over the months of the program, and an employer can calculate the wage subsidy that the employer would be entitled to or the amount in the hiring program, and take the better of the two.
Essentially, the objective of that is to support firms that have been significantly affected—employers who have been significantly affected—during the pandemic as they enter that recovery phase, so it supports the rebuilding of the business and the workforce in that period.
Thank you, officials, for being here. I know your hard work has been mentioned today and in previous meetings, but genuinely, I have so many constituents who have benefited because of people like you. I know you have really been there from the very beginning, working all hours of the day and on weekends and being kept away from your family because of it, and the sacrifices you've made are genuinely appreciated.
Mr. Chair, before I ask a question to officials, Trans Mountain has come up here, and in particular Mr. Julian has raised it a few times. It's important to note that in July of 2020, there was a profit reported on Trans Mountain of $29 million, and just today, a profit of $40 million was reported.
Naturally, there will be those who say that those profits are modest, but a profit is a profit. Most importantly, I think for anyone who cares about the environment, these—
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Well, it is a point of debate, certainly.
Just to put my colleague's concerns at complete ease, all of those profits are invested in green projects that benefit the environment, so I think it's important for that to be on the record, and I can see on my screen how excited Mr. Julian is about that.
To the officials, I had a question when was here, about predatory lending and the consultation process that will take place, specifically on the criminal interest rate that currently sits at 60%.
Officials, do you have any information about the number of Canadians who have accessed what would be considered predatory loans, during the pandemic in particular but also in general terms over the past few years? Is there anything you can provide the committee on that point?
I'll try to be brief, but the question for the people from Finance Canada is of a higher level of generality. It comes from my experience of having been in every budget lock-up since 1997, when budgets were shorter but contained more information and were more readable and understandable to Parliamentarians, who are, of course, in theory.... Parliament controls the public purse.
We used to have at the back of a budget the departmental breakdowns. You could compare department by department, last year to next year and so on. I'm wondering if anyone.... There's been a very consistent criticism, by the Institute for Fiscal Studies and Democracy and others, that we don't really know where the money's going in any real sense from reading the budget.
I'd love to hear from any of the senior civil servants here if there's any discussion of going back to the way budgets used to be under finance ministers like Paul Martin and Ralph Goodale. I don't think I've seen a budget in the budget since around that time.
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Thank you, Mr. Chair. I'll take a shot at it, because I really do sincerely appreciate the question.
I feel like we have gone through these ebbs and flows where we've tried to provide more and less information and gauge the utility of such information to Parliamentarians and other commentators, Canadians, and folks like the Institute for Fiscal Studies.
I can't comment much on the seventies, eighties and nineties. In the early 2000s, we transitioned between cash and accrual, so we have found ourselves in this weird space where we budget on accrual now. We have that difficult intersection between our accrual communication of what we're spending versus what you see on a cash basis in the estimates.
There is that confusion. It is at times a very difficult translation. Lending that's done on a cash basis has a different profile on the accrual basis that we demonstrate in the budget.
We work with the PBO to try to add a degree of precision so that our documents are usable to Parliamentarians and understandable. We've tried to create crosswalks between the budget and the estimates so you can see the numbers coming out in the budget and how they crosswalk into estimates, which are the appropriation acts parliamentarians approve for departmental spending.
I'm not trying to ramble, but we would be happy to seek your feedback on how we may.... It's a 750-page document. We're taking all the space we need to try to make sure that we're communicating appropriately and that there's real accountability for where the dollars are going.
I can point to instances—I've been in this job for six years now—where we've tried to provide supplementary information and annexes, having got a lot of endorsement from the PBO and other people who read it. In all honesty, we'd would love to try to find that sweet spot so that the financial information in the budget is usable and understandable.
If you have of examples from generations past of budgets that served more of a practical function, then we'd happy to connect with you and your office and take that feedback on—absolutely.
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Okay, I think, Nicholas, you'll be getting some feedback on that.
Thanks to the officials for coming. We will have to have a quick discussion on whether it's on the motion, or what we will do. We'll see in a minute.
However, on behalf of all committee members, I want to sincerely thank you for your efforts.
Look, we know there are a lot of demands on Finance. If there are demands on Finance, that means there are demands on officials, and during these kind of times, working from home isn't all that easy. There are long days and short nights. We know that.
We certainly thank you, as the programs rolled out over the last year, for showing a willingness to adapt some them.
Go ahead, Ed.
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Thank you. I think everybody is of the same opinion.
Thank you very much, folks. You're released.
Turning to committee members, Sean has sent a motion through the clerk, but I'll just make this statement. We have eight meetings lined up, starting in the week of the 17th. We have eight meetings lined up based on the earlier subcommittee agreement and motion.
On the motion that Sean has put out, whether we deal with it or not, we certainly need to make a decision on witness deadlines. The motion is saying that it's noon on Thursday, May 13. With eight meetings, we're going to need a lot of witnesses. We will have officials here and we'll get the chance to question them again.
The clerk will need time. What makes it more complicated, as well, is that the clerk has to try to send out these headsets so that the translation can work. That's one quite serious problem.
The motion doesn't mention farming this out to other committees. I've talked to other committees. In the system, there just isn't time available. The only committee that has time booked on the so-called break week is HUMA. There are 10 divisions in the that apply to them, if we want to farm that out to them.
We have to make some decisions on whether we want to deal with the motion as is or leave it to the next meeting. I don't know, but we definitely have to do something on a deadline on witnesses and priority lists in order to be ready to roll next week, because it's going to be a busy week.
I'll wait until I get participants up here on my Zoom screen. I'm not sure who was the first in.
We have Peter Julian, Pat Kelly and Sean Fraser.
Go ahead, Peter.
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Thank you, everyone, for looking for flexible solutions.
I'm just wondering if there's any concern about having to have the whole committee effectively ratify the steering committee's report. Would it be more advantageous to take Peter's proposal and make a decision on this on Thursday when everybody's had time to review it, but to do it by setting aside committee business time where we can all be part of that discussion and decision?
I don't feel that strongly about it, but I do recognize, Wayne, the challenge that you've flagged about the potential of spilling into next week. I also just got a flag here, and I think I know where people stand on this. If the committee wanted to refer portions of this to HUMA, I think we've got to make that decision pretty quickly because we're going to lose the ability for them to take it.
As I mentioned before, I'm agnostic as to whether we do that or not. If other members of other parties feel differently, then I would be more than happy to accommodate that point to avoid the pitfall that Wayne flagged. We might be able to take Peter's approach to deal with it in committee business for the first chunk of the Thursday meeting, or something like that.