Canada Approves COVID-19 Emergency Package

After negotiations between the government and opposition parties all day Tuesday and into the early hours of Wednesday, both the House of Commons and Senate have passed the Trudeau government’s emergency financial legislation, Bill C-13, the COVID-19 Emergency Response Act (CERA). Governor General Julie Payette gave the bill Royal Assent on Wednesday afternoon, bringing a wild 24 hours of politics to its conclusion.

The legislation implements the government’s aid package, increasing direct supports to Canadians to $55 billion through an expanded benefit to Canadians impacted by COVID-19, and bringing total federal investment in the COVID-19 response to $107 billion.

What Happened in Parliament?

For opposition parties, major sticking points arose over the Liberal’s attempt in a draft version of the legislation to seek unilateral taxation and spending power until the end of 2021 without receiving parliamentary approval. This seems especially difficult for opposition parties given the government’s minority government status in parliament.  If approved, the measures would have provided the Trudeau government with powers that have never been seen before in Canada, not even during the World Wars or during the enactment of the War Measures Act in 1970. Both the Conservatives and NDP made their positions clear on the draft legislation and the government quickly changed course.

Shortly after the House of Commons sitting began on March 24, the sitting was suspended as the parties continued to negotiate both the content of the bill and parliamentary oversight.

Opposition parties insisted on the removal of any provision to raise taxes without parliamentary approval, the expiration of certain spending authority in June instead of September, providing “sunset” clauses to certain parts of the legislation, and regular reporting to parliament through the House of Commons Finance and Health Committees.

In the end, many of the provisions the opposition sought were achieved, either in whole or in part, and the legislation was passed by the House of Commons in the early hours of March 25^th.

What’s in the Legislation?

Bill C-13, COVID-19 Emergency Response Act, is a broad bill that provides the federal government with enhanced authorities to respond to the COVID-19 pandemic, including:

• Authorizing federal spending without parliamentary approval to respond to the pandemic, including a $500 million payment to the provinces and territories.
• Providing the Minister of Finance with the ability to provide funds and determine credit limits for a wide range of agencies, including Export Development Canada, Business Development Bank of Canada, Farm Credit Canada, and the Canada Mortgage and Housing Corporation.
• Amending the Food and Drugs Act to provide the government with ability to make regulations in order to prevent shortages of patented medicines and medical devices and amending the Patent Act to permit the Minister of Health to make application to make, construct, use, and sell a patented invention necessary to respond to a public health emergency that is a matter of national concern.

The new legislation also provides parliamentary approval to many of the financial support proposals announced by Prime Minister Trudeau on March 18, including:

• A one-time additional GST/HST tax credit payment
• Additional Canada Child Benefit payments
• Reducing required Registered Retirement Income Fund (RRIF) withdrawals by 25% in 2020
• The temporary wage subsidy for eligible small employers
• 6-month moratorium on Canada Student Loan payments

The legislation also established the Canada Emergency Response Benefit (CERB), which combines into one benefit the previously announced Emergency Care Benefit and the Emergency Support Benefit.

This new benefit will provide $2,000 a month for up to four months for workers who lose their jobs, are sick or are in quarantine, or taking care of someone who has contracted COVID-19.  It also includes working parents who must stay home without pay to care for children.

Under CERB, someone who is at least 15, a Canadian resident and who in the last 12 months had an income of at least $5,000 from employment (including self-employment) and/or EI benefits will qualify. It is also available to workers who are still employed, but not receiving income due to disruptions to their work situation due to COVID-19, an attempt to help businesses keep employees during the pandemic.

An online portal to access the CERB will be available in early April, as early as April 6, with payments received within 10 days of application. The separate application provides a relief valve to the already-stressed EI system, which is struggling to respond to the high volume of applications received in the past week.

Additional Announcements

Beyond the legislative package, Health Minister Patty Hajdu announced that powers under the Quarantine Act to require all travelers returning to Canada to subject themselves to a mandatory 14-day isolation (except for essential workers).  It is also prohibited to take public transit and to self-isolate in a place with vulnerable people. This will be enforced through the Quarantine Act, with penalties including fines or criminal sanctions.

Indigenous Services Minister Marc Miller announced further details regarding the $305 million Indigenous Community Support Fund:

• $215 million is directed to First Nations communities
• $45 million to Inuit communities via land claim organizations
• $30 million to Metis communities via governing members
• $15 million dedicated to regional, urban, and Indigenous organizations supporting those who live away from their communities

Heritage Minister Steven Guilbeault stated that a simplified application process will be announced for the Canadian Book Fund and the Canadian Periodical Fund, to accelerate the flow of funding for 2020-21. In addition, the Independent Advisory Board on Eligibility for Journalism Tax Measures is now in place, to provide advice on whether a journalism organization meets certain criteria to receive the Qualified Canadian Journalism Organization (QCJO) designation to receive access to the tax measures introduced in Budget 2019.

Parliamentary Oversight of the Federal COVID-19 Response 

The House of Commons is now adjourned until at least April 20, although it can be recalled at any time while adjourned.  The adjournment can be extended with all-party agreement. The Senate has adjourned until April 21.

The House Finance and Health Committees were given authority to hold meetings during the House adjournment to provide briefings on the COVID-19 response.  Meetings will be held at least once per week by phone or videoconference.

Finance Committee also received some additional duties:

• The Finance Minister will provide biweekly reports to the Finance Committee
• Finance Committee can also recall the House, if it is not satisfied with how the government is exercising its powers under the COVID-19 Emergency Response Act (CERA)
• It will also undertake a review of CERA within 6 months and report back to parliament by March 31, 2021.

The Finance Minister will also hold bi-weekly conference calls with the finance critics of recognized parties, in addition to regular government updates to representatives of all opposition parties.

Committee oversight provides additional accountability and oversight to the government’s COVID-19 response. Committee meetings will be made available to the public through the House of Commons website.  Since the Liberals do not hold an outright majority on either Committee, this will require ongoing efforts on behalf of the government to work with the opposition on COVID-19 response measures.

Looking Ahead

The past 24 hours have tested the limits of the Trudeau government’s ability to respond to the COVID-19 crisis. Since the adjournment of parliament on March 13, the federal government has been trying to shift the public service into overdrive to provide a whole-of-government response to both the pandemic and the economic downturn.

In general, the opposition parties have supported the government’s efforts, although the NDP urged the government to go further in providing support to Canadians. Opposition support was briefly in question when the government proposed, in a draft form of the bill, to extend unilateral taxation and spending power to the government without parliamentary approval until the end of 2021.  This would have meant that the opposition parties would have no longer had the power to defeat the government by withholding their support on financial legislation.

While the government and opposition parties were able to negotiate a solution to this temporary impasse, it serves to remind everyone that these checks and balances on a minority government’s authority remain in place, even during a pandemic situation.  The addition of oversight by the two parliamentary committees provide additional transparency to on-going responses and will enhance the opposition’s role in ensuring accountability during the COVID-19 response.

This accountability will be critical as the government’s response continues to evolve to address the concerns of those sectors of the Canadian economy awaiting further relief measures, including Canada’s oil and gas sectors, aviation, tourism, hospitality and small business.

A common refrain we have heard from governments across Canada is that no options are off the table. During this unprecedented time, where basic freedoms that Canadians enjoy are restricted for the common good, it is a good to know that these checks and balances on governmental authority remain in place through our democratic institutions.  Even though it was a rough ride, parties came together to achieve an effective and unprecedented response.