Evidence of meeting #61 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was health.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Glenn Campbell  Director, International Policy and Analysis Division , Department of Finance
  • Gilles Moreau  Director General, National Compensation, Royal Canadian Mounted Police, Department of Public Safety
  • Jonathan Roy  Senior Policy Analyst, Social Policy, Health, Justice, Culture, Department of Finance
  • Daniel MacDonald  Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
  • John Davies  Director General, National Security Policy, Department of Public Safety
  • Darryl Hirsch  Senior Policy Analyst, Intelligence Policy and Coordination, Department of Public Safety
  • Nigel Harrison  Manager, Legislative and Parliamentary Affairs, Department of Fisheries and Oceans
  • David Gillis  Director General, Ecosystems and Oceans Science Sector, Department of Fisheries and Oceans
  • David Lee  Director, Office of Legislative and Regulatory Modernization; Policy, Planning and International Affairs Directorate, Health Products and Food Branch, Department of Health
  • Samuel Godefroy  Director General, Food Directorate, Health Products and Food Branch, Department of Health
  • Alwyn Child  Director General, Program Development and Guidance Directorate, Department of Human Resources and Skills Development
  • Annette Nicholson  Secretary and General Counsel, International Development Research Centre (IDRC)
  • Lenore Duff  Senior Director, Strategic Policy and Legislative Reform, Department of Human Resources and Skills Development
  • Dominique La Salle  Director General, Seniors and Pensions Policy Secretariat, Department of Human Resources and Skills Development
  • Nathalie Martel  Director, Old Age Security Policy, Department of Human Resources and Skills Development
  • Bruno Rodrigue  Chief, Social policy, Income Security, Department of Finance
  • Annette Vermaeten  Director, Task Force, Special Projects, Department of Human Resources and Skills Development
  • Eileen Boyd  Assistant Secretary to the Cabinet, Senior Personnel, Privy Council Office
  • Neil Bouwer  Vice-President, Policy and Programs, Canadian Food Inspection Agency
  • Lynn Tassé  Director, Canada Gazette, Department of Public Works and Government Services
  • Gerard Peets  Senior Director, Strategy and Planning Directorate, Department of Industry
  • Patricia Brady  Director, Investment, Insolvency, Competition and Corporate Policy Directorate, Department of Industry
  • Andy Lalonde  Manager, Preclearance, Canada Border Services Agency, Department of Public Safety
  • Lynn Hemmings  Senior Chief, Payments, Payments and Pensions, Financial Sector Policy Branch, Department of Finance

3:35 p.m.

NDP

Paul Dewar Ottawa Centre, ON

For the record, Chair, I think you'll find we haven't had a presentation—unless I'm wrong—at the foreign affairs committee. I'm wondering if you've recently had a presentation from our representative to the World Bank at the finance committee.

3:35 p.m.

Conservative

The Chair James Rajotte

We haven't, but for clarification, what does this have to do with the budget act?

3:35 p.m.

NDP

Paul Dewar Ottawa Centre, ON

What was referenced are changes to Bretton Woods, which is touched by the World Bank. If we're going to be looking at this in a fulsome way at some point, I was wondering if you would contemplate having representatives from the institutions that are being touched on.

3:35 p.m.

Conservative

The Chair James Rajotte

For clarification, do these amendments touch on the World Bank at all?

3:35 p.m.

Director, International Policy and Analysis Division , Department of Finance

Glenn Campbell

No, they do not.

3:35 p.m.

Conservative

The Chair James Rajotte

Okay.

We can certainly take it under advisement.

3:35 p.m.

NDP

Paul Dewar Ottawa Centre, ON

It was just a point of clarity. Thank you.

3:35 p.m.

Conservative

The Chair James Rajotte

Okay, great. Thank you.

I'm going to go to Mr. Brison.

3:35 p.m.

Liberal

Scott Brison Kings—Hants, NS

Thank you, Chair.

Thank you for being before us today.

Given the current turmoil and challenges, we understand the rationale for increasing our commitment, and other countries' IMF partners are doing the same. Are we doing so with our other partners proportionally?

Has there been some analysis, or do you have some analysis or insight on the impact on what the prudential strength of the IMF would be if the euro were threatened by a Greek departure and the contagion that would lead to others with similar fiscal challenges potentially doing the same? What would be the potential threats to the prudential strength of the IMF in that sort of event?

3:35 p.m.

Director, International Policy and Analysis Division , Department of Finance

Glenn Campbell

That's a very good question.

On the first one, the agreement pertaining to quota, Canada is participating with its proportional share. The quota determines what our financial contribution is, and a quota system determines the size of our economy and a degree of openness. Roughly speaking, the size of one's economy leads to the amount you must contribute as a commitment to the IMF pending an agreement, and that also translates into voting rights, which you're able to use and exercise when managing the fund.

The basic tenet of the International Monetary Fund, first and foremost, is that it has primary creditor status. It means that whenever it engages in any entity—a sovereignty entity—everything else is subordinated. Whatever happens when the IMF is involved, part of the conditions are that the IMF always gets paid back. That has been the case through the history. When it's been involved, particularly in emerging market crises and Asian crises in the past, agreements under which the IMF lends its balance sheet are always according to very strict stringent conditionality, to which the receiving sovereign must abide in terms of what structuring it needs to make. Then, it's usually monitored very closely by the IMF such that it does in the end get paid back.

The concept of the IMF is that you take a country off borrowing from sovereign markets, you get a lower borrowing rate, and you force it to make structural change such that it's in a position to repay all other countries. At present the IMF has 50 years of experience and a lot of resources at its disposal to withstand any major shock.

May 17th, 2012 / 3:40 p.m.

Liberal

Scott Brison Kings—Hants, NS

That's helpful. I guess to a certain extent it's a subjective judgment. Certainly primary creditor status helps, but you're a maritimer, so if you don't mind my saying, if the arse falls out of the euro, even with primary creditor status these are uncharted territories.

Do you think your firewall commitment is going to be sufficient to get us through this, or is there some analysis now that the current firewall is not going to potentially be a large enough commitment?

3:40 p.m.

Director, International Policy and Analysis Division , Department of Finance

Glenn Campbell

For clarification, are you pertaining to the European firewall or the--

3:40 p.m.

Liberal

Scott Brison Kings—Hants, NS

Yes, the European firewall.

3:40 p.m.

Director, International Policy and Analysis Division , Department of Finance

Glenn Campbell

It's very delicate for me to comment on the situation in Europe at the present time, and perhaps it falls outside the scope of the provision here. However, again on behalf of the minister, we are certainly following closely and are very concerned and mindful of what's happening, and we hope that the European governments make full use of their support facilities.

3:40 p.m.

Liberal

Scott Brison Kings—Hants, NS

Thank you.