Minister Q&A from April 11th 2020

For the past four weeks constituents have contacted our office asking for clarification regarding the various government financial assistance programs. Our office was not able to provide a reason why the government made certain decisions but did send them on to our MPs who were in Ottawa on Saturday for the abbreviated session and during the two hour Question period many were asked. Below are a number of questions and the response from government ministers.

Question: On March 25 the Minister of Finance said a financial support package for energy workers was “hours, potentially days away.” The Prime Minister was asked if the program proposed to cabinet was rejected by a majority of cabinet who are anti oil and gas?

Prime Minister’s response – “I can say unequivocally no. All energy companies can take advantage of the wage subsidy program and many smaller companies can apply for the interest free loans. There will be more coming as we develop sectoral solutions.”

Question: When will financial assistance be announced for seasonal workers, part-time employees and others still earning some income? The Canadian Emergency Response Benefit (CERB) is available only for persons whose income has gone to zero and don’t qualify for Employment Insurance (EI).

Minister’s response – “We are working on revisions to this program creating a threshold where Canadians earning a small amount of income, say anyone working up to 10 hours per week would be eligible. A substitute teacher as an example who is no longer able to get the hours needed. We are committed to an announcement soon.”

Question: What is being done for professional offices, medical offices where partners don’t earn a salary but are paid dividends?

Minister’s response – “We are looking into how to take dividends into account for the purposes of interest free loans.”

Question: Why are self-employed, sole proprietorships and small one or two person businesses exempt from the interest free loan because the payroll is less than the $50,000 ceiling?

Minister Morneau’s response- “We are trying to make the system work the way it is intended. As a starting point it needs to be recognized that many people incorporate because that is the appropriate way in our system to manage their tax situation. Many businesses in this country merely incorporate as an individual in order to manage their tax situation. That is not what we are intending to be supporting with the interest free loan. We are looking to support small business.” The Minister said these persons should qualify for the CERB payment of $2,000 per month.

Commentary: These comments reflect those made by the Prime Minister in an interview in September 2015. Trudeau said “We know that a large percentage of small businesses are actually ways for wealthier Canadians to save on their taxes.”

Question: What is being done to address the high interest rates being charged by banks for credit card balances?

The Finance minister said “We are working with banks in many ways to lessen the burden on Canadians.”

Question: Now that the bill has received royal assent when can small business expect to have “cash in their hands?”

The Finance Minister responded – “Two to four weeks and we are aiming for the earlier timeline.”

Question: What is being done for students who won’t be able to find work this summer?

Minister’s response – “Last year 2.1 million students were looking for work and 1.4 million found employment. We announced the increase in government funding for the Canada Summer jobs program to 100% of wages from 50% but are continuing to look at other options.”

Question: Would expectant parents, who are no longer working and therefore unable to meet the necessary hours for EI, still be able to access full benefits?

Minister’s response – “We are working to ensure there will be no untended consquences for those in that situation.”

Question: How can the government assure taxpayers that abuse of the system won’t take place with so many applicants for CERB and EI while at the same time attempting to get money paid out quickly?

Minister’s response – “We are relying on Canadian’s honesty, integrity and being truthful. We don’t believe a lot of Canadians will try and defraud government.”

Question: Many Canadians EI benefits will be expiring soon and with no job prospects will they be allowed to access CERB?

Minister’s response – “We will be making regulatory changes to CERB and those situations will be addressed in the upcoming days.”

Question: Does the government have a re-launch plan for the economy?

Minister’s response – “First and foremost we are doing everything we can to protect the health of Canadians. We are working on such a plan.”

Question: To qualify for the 75% wage subsidy or to prove you had $5 thousand income last year are things like tips or medical benefits factored into the calculations?

Minister’s response – “No it is just salary, wages, nothing more.”

Question: What assurances are built in to the system so 75% wage subsidy goes to the employee and not for things like dividends or executive bonus?

Minister’s response – “Employers will have to show that the wages have already been paid before receiving the 75% subsidy.”

Question: What is being done to address the fact many companies have a payroll that just exceeds the $1 million threshold and don’t qualify for the interest free loan?

Minister’s response – “These businesses qualify for the wage subsidy. There will also be further credit announcements.”

Question: What is being done for professional offices, medical offices where partners don’t earn a salary but pay dividends?

Minister’s response – “We are looking into how to take dividends into account for the purposes of interest free loans.”

Question: Many small companies in Canada are a branch operation of a larger company and while the corporate entity is doing OK the branch operation has had to shutdown and doesn’t qualify for any of these programs. Why?

Minister’s response – “We made the decision that in situations such as these we had to consider the entire organization when it came to eligibility for these programs. We decided against considering subsidiaries as a stand-alone entity.”

Question: Many seniors have seen their retirement income sharply reduced because of the decline in the stock market. What programs are being considered for seniors?

Minister’s response – “we lowered the amount that seniors have to withdraw from their RRIF for tax purposes and increased the GST low income tax credit. We will be considering other things.”