When the federal government launched the Canada Emergency Wage Subsidy in 2020, it took the highly unusual step of publishing weekly statistics on the use of the program.
Those data, along with a separate database of CEWS recipients, allowed for a high degree of public scrutiny of the program, whose ultimate cost has topped $100-billion. The Globe and Mail, and other media outlets, published investigative pieces that dissected flaws in the program – efforts that were immensely aided by the window the federal government put in place.
That didn’t only result in catchy headlines. Scrutiny from the media, and business groups, prodded the government into numerous tweaks of CEWS that (for the most part) improved the program, one of the most expensive initiatives in the federal government’s history.
It appears Ottawa has learned its lesson from that experiment in transparency; that window has been painted over. One of the first signs was the change to the corporate registry for CEWS, altered from a full public database to just a search function.
More significant, however, is the federal government’s failure to publish data on the programs meant to supplement and replace CEWS: the Canada Recovery Hiring Program, the Tourism and Hospitality Recovery Program and the Hardest-Hit Businesses Recovery Program.
To be sure, the government has promised to publish such data. Indeed, I first asked the Canada Revenue Agency about the matter last summer, and the agency said statistics would be published in “coming weeks.” Months later, the agency said it still planned to publish data but “...initial publication of data of this sort requires time to ensure that the data, and the format that it is presented in, is accurate.”
The agency then did provide limited data on the CRHP, previously shared with the Commons finance committee, that showed the hiring subsidy program had disbursed only a fraction of its budget.
But a full set of data, with regular updates, is what the government promised. It has not delivered on that promise for months – and now the programs themselves have wrapped up.
Why the delay? Data quality issues are supposedly the reason. But it stretches credulity to believe that such issues take months to resolve, in the case of the CRHP, particularly given that there was is a single application process for both the hiring subsidies and wage subsidies. Businesses filled in the particulars of their situation and then were shunted to either the CRHP or CEWS, whichever resulted in a higher payment.
So if there are such dire data quality issues for the CRHP, why did that not affect the compilation of statistics for CEWS?
Perhaps it is just an unfortunate coincidence that the program plagued with such persistent data quality issues is also the program that is, according to the only public information, an enormous failure in its stated mission of supporting businesses in hiring workers and boosting their salaries.
Perhaps it is just a matter of poor timing that the data will only be published after the programs have expired – and months after the Liberal government tripled the budget for the hiring subsidy program to $2.2-billion.
Perhaps all of this will become clear, in coming weeks.
Taxing questions
A Report on Business Magazine article on the economic distortions that result from the capital gains exemption for the sale of principal residences sparked a lively debate on Twitter, including one tweet that asked how deductions for the costs of renovations and mortgages might work.
If gains in the value of principal residences were to be taxed, it would need to be on the same basis as other assets. So, interest costs, plus the costs of expenditures that increase the value of the home would need to be deducted in order to arrive at the true capital gain.
Hear that? It’s the sound of a can of worms being opened. Do you have itemized receipts for that deck you installed five years ago? How about that lovely hardwood floor that replaced the linoleum in your family room, circa 2011?
Any move to start taxing principal residences would run headlong into an administrative thicket, unless the approach was to tax only future capital gains. (Even then, it would involve a great deal of paperwork both for homeowners and for CRA auditors.)
Mortgage interest, at least, would be more straightforward to calculate. But allowing homeowners to deduct mortgage costs would carry its own risks. For one, it would encourage home buyers to take on large mortgages. In effect, the tax break would subsidize carrying costs. And mortgage interest deductibility would also discourage the rapid paydown of mortgages.
Line Item
Work shift: University of Toronto economics professor Elizabeth Dhuey highlights the challenges confronting Ontario’s labour market in a new policy paper for Ontario 360. One (among many) insights: a significant geographic divide in the province for jobs at risk because of automation. Those regions with a higher risk of job loss are more rural, have larger goods-producing sectors, lower-skilled workers and smaller shares of working-age people, Prof. Dhuey writes.
Follow me on Twitter, @PatrickBrethour or ask your Taxing Question here.
Sign up for the Tax and Spend newsletter here
