Moved third reading of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy).

She said: Honourable senators, I rise today as the bill’s sponsor to speak to third reading of Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy).

Dear colleagues, I am sorry that I cannot deliver my speech in French.

I want to start by thanking all senators who have intervened and participated in the debate here in the chamber during Committee of the Whole and during the subject-matter study of the bill at the National Finance Committee. The Canadian public can be assured that throughout the chamber, at National Finance and yesterday, individually and collectively, senators have been diligent in bringing the concerns of the constituents they represent before the Senate and before government, as well as the views and concerns of minorities, regions and those who are not always heard.

Again, I’m looking forward, colleagues, to your remarks, support and advice on this bill. I’ve recommended Bill C-9 in this chamber, as I believe it recognizes the needs of Canadians and it is responsive to Canadians.

The rent subsidy addresses the underperformance, if I can use that term, of the previous CECRA, and the issue of tenants rather than landlords being solely able to access the funds.

I’m truly confident that government and, administratively, the Canada Revenue Agency and the hard-working public servants are able to implement the intent of Bill C-9, ensuring the funds can be paid efficiently and quickly to the applicants that need them. The Lockdown Support is additional much-needed support.

Colleagues, may I briefly, in my role as sponsor of Bill C-9 and as the senator for the Yukon, address the importance of the extension of the CEWS program, the Canada Emergency Wage Subsidy.

In the previous session of this Parliament, the National Finance Committee studied some of the pandemic-related emergency measures offered by the federal government. Joe Sparling of Air North, Yukon’s Airline, representing the Northern Air Transport Association, was very clear. He was grateful for the support they had received, and he told the committee that the wage subsidy, among other supports, was vital for them to be able to keep their employees and maintain service standards without having to cancel routes or increase prices. Remember, colleagues, air service is essential in many smaller Canadian communities in the North and throughout Canada. Mr. Sparling asked for the wage subsidy to be continued until June 2021, which is what Bill C-9 ensures.

Showing the northern spirit of independence and perseverance, as our colleague Senator Tannas put it yesterday, speaking very plainly, Joe Sparling put it straight to the committee. He said:

Financial relief can’t go on forever, and it is going to take a long time for air travel demand to recover. In the North, we need to find ways to become self-sufficient in the new post-pandemic environment and make relief dollars go further in the current pandemic-impacted environment.

While a healthy and growing economy was able to support a competitive market with a 50-year-plus backslide in traffic, gateway route competition now has the effect of driving up our required financial relief by more than 30%.

I would like to emphasize the point about gateway route competition, colleagues, as it relates directly to observations of the Finance Committee regarding Bill C-9.

Colleagues, throughout this pandemic we have heard that we are all in this together; together, we’re going to get through it. In Air North’s market, with 100% market share on their gateway routes, Joe Sparling stated they would be able to repay every dollar in relief funding received, thus creating opportunities to provide funding for other struggling businesses — that’s if they had 100% market share on their gateway routes. The gateway route competition that Air North is experiencing, despite best efforts by everyone to work with their competition, is a similar challenge to that expressed by representatives of Restaurants Canada. During the Finance Committee’s pre-study of Bill C-9, Ontario’s Premier, the Honourable Doug Ford, for example, urged food delivery companies to work with restaurants so that they might all share in the revenue from consumer expenditures and not have one sector profit at the expense of another.

CEWS and other government support enabled Air North to survive. And I would stress to you, colleagues, that it is owned by the Vuntut Gwitchin First Nation and Yukoners. That said, when governments negotiate supports for larger mainline carriers and other sectors, please consider bringing these issues up and encourage recipient businesses of government support to cooperate rather than compete.

In the case of airlines, specifically those that are currently seeking support, we must ensure that no part of our country is left underserved and that when we are through this pandemic, air carriers and, indeed, all businesses, have survived and all Canadians, no matter where they live, have access to a healthy quality of life and access to services. We must remember — all of us — that we’re all in this together and we’re all part of Team Canada.

Honourable senators, I would be remiss if I did not also speak briefly to other observations of the National Finance Committee’s report. We clearly expressed that businesses that received support from taxpayers’ money should not concurrently pay out dividends to shareholders. We must not forget that there are some sectors that are doing very well these days. If a company has a large enough profit margin to pay dividends, public funds should not be needed to assist them. Those taxpayer dollars are much needed elsewhere.

There is also concern expressed about program predictability. This has been an issue for some senators as the details are only available on the programs until December 19, 2020, and I understand and appreciate those concerns. I also believe that the wording in Bill C-9 will enable the responsible adjustment of the programs through regulation to provide appropriate responses and shifts in how the COVID-19 pandemic affects our economy and our lives in general.

The committee did note with concern that there should be support available for those businesses and organizations who fall between the cracks. I’m optimistic; I do believe that something will be forthcoming from the government to assist those.

Honourable senators, I want to restate my gratitude to all of you for all the hard work that has been done to ensure we have studied and thoroughly considered Bill C-9 promptly. Senators’ staff, Senate Administration staff, interpreters, Library of Parliament analysts — everyone has put in extra hours to support our work, our work being to make sure that Canadians will receive the support they need to weather this pandemic, while keeping human health and safety as our top priorities. Everyone has ensured that we senators have been able to do our job and study the government’s initiative with a fair and critical lens. We know how important this legislation is and the need to adopt it. I thank you all for ensuring that Canadians will receive the support they need in a timely and appropriate fashion. Gùnáłchîsh, mahsi’cho. Thank you.

Honourable senators, I rise today in my capacity as critic to speak to Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy).

Bill C-9, in extending the Canada Emergency Wage Subsidy and introducing the Canada Emergency Rent Subsidy — an updated version of the Canada Emergency Commercial Rent Assistance, or CECRA, program — has brought much-needed relief to small business owners and entrepreneurs across Canada.

I thank Senator Duncan, the sponsor of the bill, for outlining how it will help those who need assistance most.

However, I want to note some concerns about this bill to ensure that they are recorded in the Hansard. For the past few weeks, I have heard several stakeholders speak to Bill C-9 at committee meetings and I have come to the conclusion that this legislation still has major shortcomings.

First, representatives from various sectors expressed their disappointment with the reduced wage subsidy rate. The original wage subsidy’s rigid eligibility criteria punished businesses that saw modest increases in revenues just above the minimum revenue decline threshold, deeming them instantly ineligible. This unintended consequence provided a disincentive for businesses to stay open and keep staff on payroll, the alternative being they would rather shutter their operations until all public health orders were rescinded and they could return to their normal levels of operation.

As a result, the Standing Senate Committee on National Finance, in its study of the relief programs, recommended the government introduce “ . . . a progressive, or scalable, eligibility threshold for the Canada Emergency Wage Subsidy, and extend its duration for particularly hard-hit sectors.”

To its credit, the government did indeed introduce scalability to the CEWS, and although complex in its nature, it did allow businesses to continue their operations without fear of losing access to the much-needed payroll support.

However, the government has taken a step backwards in its update of the CEWS this time around. It has lowered the wage subsidy rate from a maximum support level of 75% to 65%, and it has failed to provide targeted support to sectors hardest hit by this pandemic, notably accommodation, hotels and food services.

The Canadian Chamber of Commerce, which represents over 200,000 businesses across Canada, wrote in a submission:

The reduced CEWS rate of up to 65% is out of step with the support provided in the first wave and over the summer. New job numbers show that the food services and accommodations sector lost jobs in October for the first time since April. These sectors, and others also still struggling, need additional wage support as they grapple with new restrictions after 8 months of record revenue losses, not less.

The September job numbers from Statistics Canada did certainly show the negative impact of the second wave of the pandemic on Canada’s hotels and restaurants. Gains in employment across the country were offset by losses in the accommodation and food services sectors. These sectors, being dependent on the physical presence of people, and unable to pivot like some other industries, recorded losses of 48,000 jobs, mostly due to the additional public health closures in Quebec and Ontario.

There could be even more job losses in the hardest-hit sectors during the second wave. Doug Porter, chief economist at the Bank of Montreal, recently told investors the following, and I quote:

. . . job gains are going to be increasingly tough to come by, especially in the face of renewed restrictions in many provinces.

Senator Smith, would you take a question?

Certainly.

I think there are hot spots and industries, and if you take the example of restaurants and accommodation and you compare that to high-tech industries, many of the high-tech industries have made a fantastic comeback after the initial influx of the COVID-19 malaise, if you like. However, other industries have been so negatively affected that their comeback will be retarded and much slower than in some other industries.

I am suggesting industry-specific examples and what came from the committee, because it’s obviously not from me but from listening to our witnesses. They clearly said that we need to make sure we can analyze and understand who is the most severely impacted and give a larger proportion of help to them, as opposed to those already doing well. I believe that could be the answer to that question.

That is also related to the quality of data, the quality of leadership and the involvement of the federal government working with provincial and local governments. There needs to be strong leadership. It’s not just one person doing something, another person doing something, and suddenly you have everyone trying to do something. It’s not coordinated with strong leadership. People need to see the leadership, and I truly believe it lies in the hands of the federal government at this point to lead and support provincial governments. This balancing act is not necessarily easy, but is something that needs to be done.

Thank you for the question. I’m not questioning Minister Freeland’s leadership. I said to her that there’s an opportunity for strong leadership to coordinate, like a rassembleur, and bring the provinces and the various industry groups together so people can see clearly that, for specific industries that potentially need extra help, it will be there.

Of course, the other issue is that the Minister of Finance said to the former Auditor General of Newfoundland in our committee — in response to her saying we need more transparency, data, up-to-the-minute information — that we’re going to give economic updates but not budgets. We understand there is a need to get out into the market and help people. However, at the same time, there is a need to do the accounting because everything you spend is going to come back and bite you unless you know exactly what you’ve done and where you’re going to go.

Again, this is a balancing act and an opportunity for leadership. This is not a personal criticism — certainly not a personal criticism by me. Who am I to criticize what the Minister of Finance is doing? It’s an observation. We need data. We need information. We’re parliamentarians. We should have it. We have many people with a lot of skill, and Canadians and business people deserve to have the truth in terms of making sure we get information.

Again, it’s not a criticism; it’s an opportunity. That’s how I look at it. I try to look at things positively as opposed to negatively. There is opportunity to take; now who is going to step up and put it all together? To my mind, it has to be the federal government.

Will the senator take another question?

I will try. I’m getting so excited, my blood pressure is going up.

Here we go then; wonderful. First, if you don’t mind me correcting, it’s Jan Kestle of Environics Analytics.

I tried to say that word five or six times, and I actually pre-read it. Thank you very much.

I wanted to correct that because Environics is the firm where I spent my career. I wanted to get the name right here.

I absolutely agree with you with respect to everything you’ve said about data collection. You’ve made some good observations, and there always seems to be frustration. Minister Freeland was here yesterday and talked about data. It’s always a negotiation between the provinces and the federal government with respect to collecting data. They are often not able to collect the data they want in terms of the actual specific data, the level, and the timeliness of the data seems to be a real issue.

I have been told that the federal government actually has constitutional powers, if it wanted to use them, to almost force data collection. They have the power to do so if they wish, but have never invoked such power.

What is your view about this? Do you think the federal government should do that, given the frustration you and others have expressed?

Thank you.

Are you suggesting they would use something like the War Measures Act or an emergency act?

That’s potentially there, yes.

The way I’ve always looked at business situations — because that’s where I come from — is that you have an evaluation process where you intensify consequences as you move forward through a case.

This is, again, an opportunity for the government to analyze where it is and what corrections need to be done. Obviously, we’ve tried to position potential improvements at the Finance Committee. It’s up to the government to take a look at what we presented and assess where they are, what they need to do and how they can create this new balance.

As we look at the United States today and see their situation and how COVID is spiking, that’s exactly one of the things they’re taking a serious look at: What type of planned lockdowns do we implement to stimulate an improvement in our situation?

As we look at Canada, it all comes down to continuous analysis, discussion, dialogue and making sure you’re addressing the key areas and pockets that may not be getting what they need to survive. You have to keep the wheel going in a certain direction. You’re going to steer and maybe veer a bit, but you have to go toward a goal. That goal has to be the balance of living with COVID and rebooting our economy. I certainly believe we have the brainpower to do that, as well as the economic and business leadership, but we have to get together.

Again, I will say it simply: this is a great opportunity for the minister and the Canadian government to step up and take the leadership required. This is a huge opportunity, but it’s a big challenge.

As Senator Smith said, the magic word here is “opportunity.”

Honourable senators, I rise today to speak to Bill C-9, which extends the Canada Emergency Wage Subsidy and implements a redesigned commercial rent subsidy. This is another COVID-19 pandemic emergency bill, aimed at attenuating economic stress. Yet, both the sanitary and economic crises are interdependent, thus efficient legislation must consider them as such.

The second wave of the COVID-19 pandemic is well under way, as was widely predicted by scientists in the public health field. Canada now counts thousands of new cases, and my province of Quebec is the hardest hit. As a country, it seems that we were, again, ill-prepared for the second wave, and now chances are that COVID-19 will remain with us, eventually, as endemic.

Citizens and businesses are running out of endurance and wonder if there are other ways to manage the crisis. Despite that, SARS-CoV-2, COVID-19, is not like smallpox, SARS, MERS, the Spanish flu or swine flu; there are multiple lessons we should have learned from these previous diseases. However, managing COVID-19 goes beyond the poorly understood concepts of herd immunity, elimination or learning to live with the virus, with some politicians pushing for the last option.

Countries that managed the pandemic well have two key things in common: One, they identified people who have the infection in a matter of hours through rapid, reliable testing and contact tracing — how many of us have it in our cells — thus reducing the numbers affected by a particular outbreak; and two, they had much stronger and more flexible public health systems.

Canada still lags in both rapid testing and contact tracing, and our confinement is not tight; hence, we are failing at rapidly identifying places where contagion occurs and evaluating the risk of spread venues.

Small-and medium-sized businesses provide the basic services that make them the cornerstone of local activities and gatherings, and the government needs to find ways to enable them to operate safely.

Bill C-9 attempts to overcome challenges facing businesses by addressing their two biggest expenses: wages and rent. The government needs to give businesses the flexibility they need to pivot so they can meet urgent needs for products and services.

Bill C-9 would extend the Canada Emergency Rent Subsidy until the end of summer 2021. The subsidy was crucial to saving many businesses from closing, and it maintained the employer-employee link because it allowed workers to keep collecting their pay. That’s a good thing that will make the recovery process easier.

The new Canada Emergency Wage Subsidy will address problems with the previous program by, among other things, eliminating the need for landlords to get approval before financial assistance becomes available. To date, only 22% of small businesses have accessed the program, and the government wants to improve that dismal rate.

However, as our thoughtful witnesses at the National Finance Committee pointed out, small businesses are still falling through the cracks. We have a duty to find a better compromise and balance between sanitary requirements, services offered and business bankruptcies. We have a duty to carefully design and redesign these assistance programs according to their feedback and experience from the initial bills from the first wave, starting with Bill C-14.

Stakeholders have asked that programs be more specifically targeted to the needs of various sectors. Some sectors require help navigating the bureaucracy of the programs, while others, such as restaurants, face the extraordinary challenge of the beginning of a Canadian winter. While terraces were allowed to open during the summer and fall, they will be closed during winter months. Their only option is to deliver food and assume high delivery service charges.

Bill C-9 lets businesses fall through the gap, including new businesses, seasonal businesses, professional services and independent professionals. They have been gravely hurt by the pandemic, but they struggle to meet the specific requirements of these programs. Despite their flaws, Bill C-9 and previous emergency bills are essential to keep workers and basic services afloat, but they are very costly and won’t last forever.

There is also the increasing abyss creating two types of businesses. When looking at economic recovery, it is easy to conclude that the pandemic has enriched very few sectors while driving many others to bankruptcy. Indeed, global corporate billionaires have managed to increase their collective wealth by 27.5% just during the last four months of the pandemic. This wealth has increased to $10.2 trillion, based on PwC’s data on billionaires and UBS sustainability ratings.

In Canada, the total wealth of the country’s 20 richest billionaires has grown by $37 billion since March 2020. Those are the richest of the rich, not small and local businesses. As explained in my white paper, despite having 0.5% of the world’s population, Canada is home to the eighth greatest number of millionaires.

A September 2020 poll from Abacus Data showed that 85% of people think it is at least important to include new or increased taxes on the richest Canadians as part of the recovery. Given this overwhelming consensus among Canadians of all political affiliations, I lament that the motion to tax extreme wealth was defeated by partisan politics in the other place on Monday.

Are we then surprised to learn that people distrust government and politicians, or that they resist mandatory lockdowns? Rich people have fled big cities, such as Toronto and Montreal, and have relocated to the suburbs when they are not teleworking from a beach, as reported by The New York Times and HuffPost.

We’re all facing the same storm, but we’re not all in the same boat. Some of us are navigating the waves on luxury yachts, while others barely have a dinghy.

Nations that have managed to control the spread of the virus have already begun planning and implementing their recovery, even though the virus is still present. Canada also needs to do this if we are to come out of this crisis healthier and more prosperous.

The predatory capitalism approach has failed us, and as decision makers we now need to confront the tough decision of which businesses should be supported and which should not. Should we continue propping up businesses who haven’t adapted to a COVID-conscious world, or those who have a doubtful future regardless of the pandemic since they are incompatible with a sustainable and resilient future?

Around the world, the advice is that support should be provided to businesses so that they can innovate and effectively transform to the new reality by either making changes to the services they offer or making changes to the way their services are offered. One approach is to implement a framework that would promote and compensate companies for their social contributions. Rather than having to bail out the hotel business, for example, the government can properly incentivize them to expand their services, including accessible rentals, health services, rental of their space to local schools, academies and gyms, et cetera.

Support should be preferentially offered to businesses and corporations that can demonstrate meaningful contributions to social and environmental well-being so that we can meet ongoing and future crises with resilience. This crisis, as many of us have said, is an opportunity to truly put people before greed and profits, and it is high time we start focusing on how we will recover from this pandemic.

Honourable senators, Bill C-9, and all the other emergency bills, have focused on workers and businesses. None of these measures have addressed homelessness. Perhaps certain types of businesses could have been encouraged to help house the homeless by changing their business model, which would have solved two problems at once.

We should have started planning better five months ago to respond to today’s reality. Our failures are having a very serious impact as we face new lockdown measures. We should learn from the fact that we seem to be perpetually failing at accurately predicting what might come next. This has become abundantly clear in this pandemic. We have to stop failing and start properly planning for the future and for our recovery.

As tax incentives are offered, we need to think about our collective goal and how best to achieve it. Honourable colleagues, rather than returning to the old norms of systemic racism and growing inequality, more severe climate change and environmental degradation, we have an opportunity to move forward more positively, by increasing reconciliation efforts, taxing extreme wealth, making polluters pay rather than subsidize them, and promoting conditionality and transparency when financial assistance is offered.

Colleagues, last week I sent you a copy of a white paper on the recovery in which I outline social, environmental and economic considerations of the recovery and offer specific recommendations for stimulus measures. I really hope the new COVID committee will look at that. The paper proposes a transformative vision to achieve greater overall collective well-being and solidarity among all Canadians, drawing inspiration from over 150 civil society observations and proposals, and government responses around the world. It addresses the downfalls of traditional stimulus measures, a poor governance and transparency track record, unnecessary exposure to financial risk, contribution to climate change and increasing inequality, as well as the benefits of clean and just stimulus, increased social and environmental justice, economic resilience and low-carbon growth.

Honourable senators, I hope that after voting in favour of Bill C-9, we will work together on building the future we want for us, but also for the next generations. Thank you very much, meegwetch.