Politics

Senate committee recommends improvements to COVID-19 emergency programs

The Senate finance committee says significant gaps remain in the federal government’s response to the COVID-19 pandemic, despite efforts to adjust and improve emergency support programs rolled out over the previous several months.

Liberal government must plan for time when benefits run out but jobs remain scarce, report says

Sen. Percy Mockler, chair of the Standing Senate Committee on National Finance, speaks during a press conference in Ottawa on Tuesday, July 31, 2018. The committee released an interim report Tuesday examining the Liberal government’s emergency support programs. (Justin Tang/Canadian Press)

The Senate finance committee says significant gaps remain in the federal government's response to the COVID-19 pandemic, despite efforts to adjust and improve emergency support programs rolled out over the previous several months.

The upper chamber released an interim report Tuesday recommending the Liberal government make further improvements to existing programs and plan now for what will happen when pandemic benefits run out.

"The government's response has likely prevented financial devastation for millions of Canadians and avoided what could have been a much worse economic crash," the report reads.

"[However], the committee is concerned that the government has not provided sufficient clarity to Canadians who will continue to be unemployed or are unable to find full-time work and to businesses that are looking to reopen."

The report comes a week after the finance minister released a "fiscal snapshot" that forecasts the federal deficit for the fiscal year will reach $343 billion — largely due to pandemic-related support programs that have pushed government spending to historic highs.

What happens when the CERB runs out?

The Senate report says the federal government should spell out how it will continue to support unemployed Canadians and those without enough working hours once the bedrock COVID-19 benefit for individuals runs out.

The Canada emergency response benefit (CERB), which pays $2,000 a month to people who lost their jobs or had their hours reduced because of COVID-19, is currently scheduled to end in September.

Over 8.25 million people have applied for the benefit and $54.7 billion has been paid out in direct payments as of July 5.

"The CERB has been a vital lifeline for many Canadians, providing them with the financial support to pay for basic necessities," the report says. "Unfortunately, finding adequate employment will continue to be a problem for workers, as many businesses, especially in the tourism, hospitality and aviation industries, will be unable to rehire their employees anytime soon."

The senators say the government should consider reducing the amount paid to CERB recipients on a declining scale based on income instead of abruptly turning off the taps on September 30.

Senators also say the government should give "full, fair and priority consideration" to a permanent basic income guarantee to help people meet their basic needs in the future.

Also known as a guaranteed livable income, such a CERB-like benefit would replace a raft of overlapping social support programs that leave many to fall through the cracks, the report said.

Expanding support programs for businesses

The committee report found that while programs like the wage subsidy have provided vital support to many businesses, many companies in need remain ineligible.

The wage subsidy targets companies that have seen a drop in revenue of at least 15 per cent in March or 30 per cent after that. It subsidizes 75 per cent of employee wages up to $847 per week, per employee. Companies are expected to pick up the remainder.

The wage subsidy program is the centrepiece of the government's plan to get Canadians back to work following several months of restricted economic activity — but the program's uptake has not been as robust as the government had hoped.

"The take-up of the [wage subsidy] has been much lower than expected, possibly because the eligibility threshold has been set too high," the committee noted. "The committee ... does not believe a business should be ineligible from all support simply because its revenue only declined by one per cent below the threshold."

A closed store front boutique business called Francis Watson pleads for help in Toronto, Many businesses are likely to go bankrupt due to the COVID-19 pandemic. (Nathan Denette/The Canadian Press)

The Senate report recommends expanding eligibility to include companies that don't have commercial business accounts — currently a requirement to qualify — and to cover hard-hit sectors like tourism, hospitality and airlines.

Prime Minister Justin Trudeau announced Monday the Canada emergency wage subsidy would be extended into December and that details would be forthcoming later in the week.

The committee also urged the government to expand eligibility for the Canada emergency business account and the commercial rent assistance program. The former provides interest-free loans of up to $40,000 to small businesses and non-profits, while the latter provides forgivable loans to cover 50 per cent of monthly rent payments for small businesses that have faced financial hardship.

Getting Parliament back to normal

The senators also expressed concern about a "lack of accountability and transparency" on government spending and said Parliament should return to its normal procedures.

"It is time to return to traditional procedures for approval by Parliament of government spending in order to provide appropriate oversight of government expenditures," the report says.

Parliamentarians have been meeting as part of a special COVID-19 committee four times a week in the Commons, with a small number of MPs in the chamber and the others participating virtually.

The Conservatives have pushed hard for a return to regular, in-person debates and question period in the Commons, but the Liberals have resisted. Instead, they've opted for a format that allows MPs to question ministers daily and permits all or most of the MPs to participate, but sets aside significant portions of the typical proceedings.

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