COVID-19: Earnscliffe Update #7

COVID-19: Earnscliffe Update #7

The tone in Ottawa became more partisan today with an argument over the contents of the government’s legislation to respond to COVID-19.  Negotiations between the parties delayed the emergency sitting of the House of Commons which was only supposed to last for a few hours. Parliament suspended late in the day to allow negotiations to continue behind the scenes to reach a consensus on the details of the legislation that would support the first phase of the government’s stimulus package.

At the same time, the prime minister reported that further measures for businesses and individuals will be announced soon, and that the repatriation of Canadians from abroad (now from an additional five countries) continues at a rapid pace. First Ministers met last night to ensure ongoing federal-provincial-territorial cooperation to facilitate the movement of medical supplies, food, and other critical items. They did not agree on the imposition of the federal Emergencies Act.

Meanwhile, the global COVID-19 case count passed 400,000 with no signs of slowing, despite increasingly aggressive efforts internationally to stem the tide of the virus and its impacts.

THE GOVERNMENT’S LEGISLATIVE PACKAGE

In anticipation of today’s extraordinary session of the House of Commons to consider the federal COVID-19 measures, the government yesterday released its draft legislation to the opposition parties.  While the draft contains the legislative authorities to implement the $82 billion aid package announced last week, it touched off a firestorm of criticism because it also included  unprecedented powers to spend, tax, borrow and regulate without approval of the House of Commons. By late last night, the Government House Leader had backed down, saying “We consulted with the opposition and will bring changes to the draft legislation.”

When the House convened, it suspended operations almost immediately to allow for further negotiations on the legislation. The parties did not reach a resolution and the House of Commons remained suspended to allow more time for a consensus to emerge.

The draft legislation addressed a number of expected issues, providing the statutory backing to implement the measures the government has already announced, as well as related and supporting measures. These include augmenting the GST/HST credit and the Canada Child Benefit, implementing the “temporary wage subsidy,” amendments to Employment Insurance and authorizing income support payments to workers who lose income due to the coronavirus.  It also covers changes necessary to support liquidity in the private sector, including increases to deposit insurance coverage, recapitalization of Canada Mortgage and Housing Corporation and the Export Development Corporation, expands payments to the Farm Credit Corporation and authorizes additional transfers to the provinces and territories.

These provisions were all expected, but what was not, were several additional measures that would empower the government to unilaterally raise taxes without Parliamentary approval and amend tax laws through regulation.  The right of elected representatives to hold the government to account by authorizing government expenditures is fundamental to Canada’s democracy.  Ordinarily, the power to impose taxes and spend money is in the hands of Parliament, not ministers, and a government falls if the House of Commons refuses to support its budgetary plans.

The legislation would also create a new act, the Public Health Events of National Concern Payments Act which would authorize the Minister of Health with the concurrence of the Minister of Finance to spend “all money required to do anything” in relation to a public health crisis. She was also given the power to insist on the provision of health information from authorities. The legislative package also includes a measure that would circumvent patent protection by authorizing the government to “make, construct, use and sell a patented invention to the extent necessary” to respond to a public health emergency.  Finally, all these provisions are to remain in place for 21 months, until the end of 2021.

The draft legislation represents an inexplicable lapse in judgement and a huge mistake by the government.  It has destroyed the multi-party consensus among the opposition parties that the COVID-19 pandemic was not a time for the usual partisanship.  In a statement last night, Opposition leader Andrew Scheer said:

“In a crisis, broad all-party agreement is essential, especially when the government has a minority in the House of Commons. And we are prepared to have Parliament sit as needed to transact the business of Parliament.  But we will not give the government unlimited power to raise taxes without a parliamentary vote. We will authorize whatever spending measures are justified to respond to the situation but we will not sign a blank cheque.”

PM’S CALL WITH THE PREMIERS

In the Prime Minister’s call with the Premiers last night, discussions included ongoing challenges, medical supplies needed, and whether to invoke the federal Emergencies Act.  In his news conference this morning, the PM said some Premiers do not believe the Emergencies Act is necessary at this time, but that it remains an accessible tool that the federal government is prepared to use if needed.  It is understood that Premier Legault of Quebec raised significant concerns on the call about use of the Act during last night’s call.  He confirmed that today.  Given the prominence of the Bloc Quebecois in the minority federal Parliament, Quebec’s opposition to the Emergencies Act will require careful ongoing management by the federal government.

EMPLOYMENT INSURANCE CLAIMS JUMP

Illustrating the growing impact of COVID-19 on the labour market, the number of Employment Insurance claims jumped to 929,000 last week.  Normal weekly claims are in the order of 35,000.

UNITED STATES OF AMERICA

The Democrats and Treasury Secretary Steve Mnuchin are nearing a deal that could finally see the $1.8 trillion stimulus package passed either tonight or tomorrow. The sticking point has been congressional oversight of the funds provided to the Treasury department to bail out or otherwise support failing businesses. The markets have so far been cautiously optimistic as a result of this talk of compromise.

The White House team, including the President, but absent Dr. Fauci, choose a Fox News Town Hall over the daily briefing. No policy announcements were made, but the President did use the venue to attack New York Governor Andrew Cuomo, who has been asking for more federal support. The state is in full crisis mode, requires 30,000 ventilators and FEMA, the agency now leading COVID19 response for the federal government, has promised the state 400. The President also indicated in that Town Hall that he would like to see America back to work by Easter.

It is important to note that the COVID19 response has largely been led by the states. The President’s preference to reopen for business will have to pass muster with the governors of New York, California, Illinois, Washington, and others.

ALBERTA

On Tuesday, the Alberta government shifted the electricity file from Energy Minister Savage to Associate Minister of Natural Gas Nally. This move frees Minister Savage to focus on the complexity of the challenges facing the oil and gas sector.  The Alberta Legislature will not sit for the remainder of the week, though MLAs are on standby in the event emergency legislation is required.

ONTARIO

In the Ontario government’s daily briefing, a visibility frustrated Premier Ford began by putting the construction industry “on notice,” issuing new guidance to the industry as it relates to worker safety in light of the spread of COVID-19. The premier was quite strong in his assertion that if the industry won’t look after workers, he will not hesitate to shut sites down — the new guidelines will be released on the Ministry of Labour’s website later today.

The key announcement was the adoption of off-peak pricing for electricity. For a 45-day period, the government is will suspend time-of-use electricity rates, holding electricity prices to the off-peak rate of 10.1 cents-per-kilowatt-hour. The change will appear automatically on hydro bills. The province has also instituted a ban on all hydro and natural gas disconnections for the time being.

The premier also announced help for truck drivers who are crucial to maintaining the integrity of the supply chain – all roadside OnRoute rest areas will remain open for truckers to fuel up, eat and rest; efforts to disinfect and clean these areas will also be stepped up.

Responding to questions from the media about reports of shortages of masks and other protective gear, the Minister of Health assured the province that front line health care workers do have access to all the protective equipment they need to do their jobs; however, she called on hospitals to report if they are in fact experiencing a shortage.

QUÉBEC

Premier Legault offered reassurances that the current challenges caused by COVID-19 are temporary and that the fabric of Quebecois society will remain strong. To make up for the upcoming labour shortage, and the 16,000 temporary foreign workers who will obviously not be able to come to Quebec, the agricultural community and several government departments are considering recruiting unemployed workers in the hotel and restaurant industry and students.

The premier also outlined his conversation with the prime minister last night, emphasizing that medical equipment and more tests needed to be the number one priority, that federal employment insurance cheques would be available April 6 and whether a provincial supplement was needed in the meantime. He also stressed that it was premature to invoke the federal Emergencies Act even if it created uniformity across the provinces and that Quebec needed to maintain flexibility to govern.

ATLANTIC CANADA

In New Brunswick, Premier Higgs today announced several additional measures for employers. The measures include the deferral of provincial loan and interest payments and the extension of operating loans by the government to some businesses. He also announced a one-time $900 benefit for workers or self-employed individuals who have lost their jobs; the benefit will be administered through the Red Cross.

In Newfoundland and Labrador, Premier Ball outlined supports for community-based organizations, including $120 million in core funding for organizations that work to support individuals, communities and families.

PEI Premier King announced a $100 Employee Gift Card program for individuals who lost their jobs as a result of COVID-19, placing the onus on the employer to complete the application, with costs split 75-25 between the provincial government and Sobeys. Also announced were a number of changes to the Workers Compensation Benefit aimed at reducing the impact on businesses.

WE’RE HERE TO HELP

We know there is much uncertainty in a rapidly evolving and complex landscape. It’s times like these where we know how important it is to make the right decisions in order to help mitigate the impact of this global crisis on your organization, your employees and respond to a shifting public policy environment.

As one of Canada’s most experienced teams of government relations, public opinion research and strategic communications advisors, we’re acutely aware you are navigating rapidly changing circumstances and we want you to know, we’re here to help. We can act as a sounding board, help you design specific strategies and adapt to new ways of doing business and emerging public policy. 

Consistent, accurate and regular communication is essential. The team at Earnscliffe regularly works with our clients on how best to engage with their communities – whether in business as usual circumstances, in community engagement and community-building processes, or in crisis scenarios. If you have emerging needs in any of these areas, please don’t hesitate to reach out.

The current situation presents a strikingly more complex crisis environment than we have seen in our lifetimes.   Earnscliffe has the tools to safely, responsibly, respectfully and reliably conduct opinion research and give you a sense of the public mood. At this time, there is no reason to make decisions in the dark if opinion research can shed valuable light to develop strategies and test tactics.

Reach out. We’re here to help.