Deputy Prime Minister and Minister of Finance Chrystia Freeland is seen during a news conference in Ottawa on October 20, 2020. THE CANADIAN PRESS/Adrian Wyld

Senators question Freeland on transparency of aid package for troubled businesses

Senators question Freeland on transparency of aid package for troubled businesses

OTTAWA — Finance Minister Chrystia Freeland is pledging to fill a gap in the government’s bid to bolster hard-hit businesses with rent relief, but she faced stern questions from senators about transparency.

The House of Commons agreed last week to pass a proposed package of measures quickly, but none can be enacted until the Senate passes it as well.

The aid bill known as C-9, now under review by the Senate finance committee, would extend the federal wage subsidy until next summer — cancelling a previously planned decline in its value — and expand a popular business loan program.

The legislation would also redo a widely criticized program for commercial rent relief. The revamped program includes a requirement that entrepreneurs pay their rent before applying, putting the subsidy out of reach for many cash-strapped stores.

Facing backlash from industry, Freeland promised Thursday an interim solution “to make sure that rent payable is an eligible expense from day one.”

While the aid bill now before the Senate will not cement that revision, the government will “swiftly” table legislation after C-9 is passed to formalize the pledge, she said.

In the meantime, Freeland has informed the Canada Revenue Agency of the government’s plan.

“Given that this is our clear and publicly stated intention, we are confident that the CRA will consider rent payable as an eligible expense from the moment the new rent program is launched,” Freeland told senators. “There will be no delay.”

The hitch was revealed last week when Canadian Federation of Independent Business president Dan Kelly posted tweets warning that the legislation would make businesses cough up rent to be eligible for the cash.

The question of financial health and transparency related to the broader aid bundle came up repeatedly at Thursday’s Senate committee hearing.

“Why is the government refusing to provide program and financial information to parliamentarians?” asked Conservative Sen. Elizabeth Marshall, calling for monthly updates on costing figures that are “very much lacking.”

Conservative Sen. Larry Smith argued that Freeland and Prime Minister Justin Trudeau seem to have “two different opinions” of financial accountability, with the one calling for a “limited and temporary” fiscal response to the pandemic and the other brushing off the notion of fiscal anchors to ground government spending.

Freeland, replying that she and the prime minister are “like-minded,” laid out finance department estimates.

The Canada Emergency Wage Subsidy, launched in the spring, will have provided an estimated $65.5 billion through December, she said.

The government will spend another $2.2 billion between now and the end of the year on the proposed Canada Emergency Rent Subsidy and top-up help for businesses whose revenues crash due to local lockdowns during the second wave of COVID-19.

More than one-third of small businesses are still seeing revenue declines of 50 per cent or more, the CFIB’s Kelly told the Senate finance committee.

The spike in COVID-19 case counts has prompted a further sales drop at more than half of the country’s 110,000 small- and medium-sized enterprises, he said.

“That’s deeply worrisome to us.”

Pointing to “giant gaps” in the proposed programs before the Senate, Kelly called for new businesses to be better accommodated under the subsidy packages, most of which require businesses to have been operating before March 2020 to qualify.

“A franchise restaurant that opened, they put $470,000 of investments to get their restaurant up and running, they opened their doors in June, shut down again now and are completely ineligible to use the subsidy,” he said.

The government should also double the wage subsidy amounts available to applicants of the revised wage subsidy, said Lauren van den Berg, vice-president at Restaurants Canada.

The industry group, whose 40,000 members have seen job losses of 188,000 this year, is demanding a subsidy of 1.6 times the decline in sales, up to a maximum of 75 per cent of wage costs.

Under Bill C-9, many entrepreneurs would receive a wage subsidy of just half that sum, or 80 per cent of sales.

“I know it sounds drastic to double it, but that’s because the assumptions made back in June have been cut in half,” van den Berg said.

“When the government proposed the extension of the wage subsidy back in June and July, we were more optimistic as a country. The sun was shining, the weather was warm, patios could be enjoyed again,” she told the committee.

“But the reality is that we’re now in the middle of a second wave. Now, winter is literally coming and indoor dining rooms are being shut down across the country.”

This report by The Canadian Press was first published Nov. 12, 2020.

Christopher Reynolds, The Canadian Press

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A nurse gets a swab ready at a temporary COVID-19 test clinic in Montreal, on Friday, May 15, 2020. Health Canada has reversed course on home test kits for COVID-19, saying it will now review applications for such devices. THE CANADIAN PRESS/Paul Chiasson
Employee at Bethany CollegeSide in Red Deer tests positive for COVID-19

An employee at a Red Deer continuing care facility has tested positive… Continue reading

The Government of Alberta has identified 1,828 new cases and 15 new COVID-19-related deaths, which brings the provincial death toll to 590. (File photo)
Alberta identifies 1,828 new COVID-19 cases on Friday

Central zone has 1,251 active cases

Higher sales of cannabis helped Canadian farmers come out in the green. (Black Press Media File)
Drumheller RCMP lay charge for unlawfully distributing cannabis

A joint forces investigation involving the AGLC investigation team partnered with Drumheller… Continue reading

Three weapons have been seized and four people are facing charges following a police operation in central Alberta. (Photo contributed by RCMP)
RCMP, Lacombe Police seize loaded guns, arrest four people

Four people have been arrested and multiple prohibited firearms are off the… Continue reading

The Salvation Army's 2020 Christmas Kettle Campaign includes a new $5 tap feature for pandemic-friendly donations. (Devon Bidal/News Staff)
Salvation Army officers safe, touchless options for Kettle donation this year

The Salvation Army in Red Deer needs help. Kettle donations are needed… Continue reading

Dan Cochrane, senior pastor at CrossRoads Church. Contributed photo
CrossRoads Church closes its doors for two weeks after staff member tests positive for COVID-19

CrossRoads Church made the decision to cancel in-house services for two weeks… Continue reading

Montreal Alouettes' Michael Sam is set to make his pro football debut as he warms up before the first half of a CFL game against the Ottawa Redblacks in Ottawa on Friday, Aug. 7, 2015. Sam became the first publicly gay player to be drafted in the NFL. He signed with the Montreal Alouettes after being released by St. Louis, but abruptly left after playing one game. THE CANADIAN PRESS/Justin Tang
Study finds Canada a “laggard” on homophobia in sports

Study finds Canada a “laggard” on homophobia in sports

Canada's Kadeisha Buchanan (3) and Mexico's Jacqueline Ovalle (11) battle for the ball during a CONCACAF women's Olympic qualifying soccer match Tuesday, Feb. 4, 2020, in Edinburg, Texas. THE CANADIAN PRESS/AP-Delcia Lopez
Lyon defender Kadeisha Buchanan named Canadian Women’s Player of the Year

Lyon defender Kadeisha Buchanan named Canadian Women’s Player of the Year

Winnipeg Blue Bombers' Andrew Harris celebrates his touchdown against the Hamilton Tiger-Cats during the first half of the 107th Grey Cup in Calgary, Alta., Sunday, Nov. 24, 2019. Running back Andrew Harris, who was instrumental in the Winnipeg Blue Bombers ending their Grey Cup drought in 2019, tops the CFL team's list of potential free agents. THE CANADIAN PRESS/Nathan Denette
Grey Cup MVP, top Canadian Harris among Winnipeg Blue Bombers potential free agents

Grey Cup MVP, top Canadian Harris among Winnipeg Blue Bombers potential free agents

24Toronto Raptors' Fred VanVleet (23) goes up for a shot agains the Boston Celtics during the first half of an NBA conference semifinal playoff basketball game in Lake Buena Vista, Fla., Friday, Sept. 11, 2020.. Watching Connor McDavid let a slapshot fly or Fred VanVleet sink a deep three can be a salve to the soul of a sports fan run down by the difficult realities of the COVID-19 pandemic. THE CANADIAN PRESS/AP-Mark J. Terrill
Bubbles are best: experts say return of sports risky as COVID-19 pandemic continues

Bubbles are best: experts say return of sports risky as COVID-19 pandemic continues

Coastal Carolina's Grayson McCall (10) scrambles past Texas State's Nico Ezidore (95) during the first half of an NCAA college football game in San Marcos, Texas, Saturday, Nov. 28, 2020. THE CANADIAN PRESS/AP-Chuck Burton
BYU presents tough challenge for Chanticleers, Canadian Makonzo this weekend

BYU presents tough challenge for Chanticleers, Canadian Makonzo this weekend

Meng Wanzhou, chief financial officer of Huawei, arrives at B.C. Supreme Court to attend a hearing, in Vancouver, on Friday, November 27, 2020. The U.S. Department of Justice is refusing to comment on media reports that its lawyers are seeking a plea deal of sorts with Chinese tech executive Meng Wanzhou. THE CANADIAN PRESS/Darryl Dyck
PM won’t confirm reports U.S. Justice Department seeking plea deal with Meng Wanzhou

PM won’t confirm reports U.S. Justice Department seeking plea deal with Meng Wanzhou

Alek Minassian is shown in a handout photo from his LinkedIn page. A psychiatrist retained by the defence will testify for a fifth consecutive day today at the trial for the man behind Toronto's van attack. Dr. Alexander Westphal says Alek Minassian does not truly understand the moral wrongfulness of killing 10 people, but says criminal responsibility is a legal opinion, not a psychiatric one. THE CANADIAN PRESS/HO
‘I know what I did was morally wrong,’ Alek Minassian told psychiatrist, court hears

‘I know what I did was morally wrong,’ Alek Minassian told psychiatrist, court hears

A look at what provinces and territories have said about COVID-19 vaccine plans

A look at what provinces and territories have said about COVID-19 vaccine plans

Most Read