COVID-19 Emergency Response Bill, No. 2: Consideration in Committee of the Whole

By: The Hon. Jim Munson

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Senator Munson: Minister, thank you for what you are doing, but I’m not sure the banks got the full message. Big banks are charging interest on interest for deferred mortgage payments, deferments up to six months. On average, for some families, this would be another $7,400 to pay in interest on interest. There are 600,000 Canadians who have applied for this. It sounds like a cash grab, in a way. Surely you can’t be happy with this?

Mr. Morneau: Thank you for the question. Our approach has been to try and engage all Canadians — that includes the banking sector and other sectors — in our efforts to get through this challenge. I’ve been working with the banking sector, in particular, because the idea of flowing credit is so critically important. We have released enormous sources of liquidity into the market. Our challenge is to make sure that liquidity is actually out there and working for Canadian businesses. That is quite important.

We have also pushed the banks to be involved in delivering the Canada Emergency Business Account for small businesses, an enormous undertaking for more than a million small businesses, which has now started. Finally, as you would have seen last week, after some fairly extensive discussions, we worked with the banks to get them to reduce their credit card fees in most cases by about half for Canadians who are facing challenges.

There is certainly more work to be done. I expect the banks will continue to be an important part of dealing with this challenge, and I am committed to continuing to work with them in that regard.

Senator Munson: I hope the banks pay a little more attention to these kinds of interest rates, minister. It seems greedy, as one person said.

Briefly, a plumber in Edmonton, Alberta, says his company won’t pay him the extra 25%. The Huffington Post is reporting that the company will get the 75% wage subsidy but now the company will not give him the other 25%. You said on Thursday that you encourage employers to do all they can to top up their employees’ pay to 100%. Can you have stronger words than that, something other than the word “encourage”? I know you want to tell the companies to pay the 100% but some companies are not.

Mr. Morneau: No, we won’t have stronger words than that. We won’t because we think it’s the wrong thing to do. We are saying that the subsidy is for companies that have a 30% or more decline in revenue. Many of them have zero revenue. For a company with zero revenue, we are asking them to keep their employees on and we are paying up to 75%. If we force them to pay the other 25%, then they won’t take the subsidy. It’s the law of unintended consequences, if we take your approach, sir. We have decided that we will go forward with the 75% wage subsidy. That will protect an enormous number of Canadians. For those businesses that can afford to continue paying people, we expect and we know that many of those businesses are willing to pay people up to the 100%, including their benefits. But for those businesses with no revenue, that would be an unrealistic expectation, except in the most benevolent of cases.

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