Finance committee  What may be confusing is that in this case we're talking about the change in the rate of growth over time. For instance, if you take a look at the operating budgets of the federal government, which had been frozen, they're not declining in that sense; however, inflation still eats away at their value and the amount of services they can deliver, one thing that Kevin Page has highlighted.

Finance committee  I think the issue is that household debt is dramatically higher than government debt. I think if the situation was reversed, if we had a debt-to-GDP ratio in the federal government of 100% and households were at 10% or 20%, it would be a very different conversation. What we are seeing is that the federal government is ideally placed compared to both households and provincial governments, going back to Mr.

Finance committee  Where which debt is going?

Finance committee  It may be a potentially bad thing to increase personal debt.

Finance committee  It depends on what you're paying for, I suppose, with that money you're taking out through a line of debt.

Finance committee  Thank you for the question, and I think it's a good one, particularly on what's causing the personal debt increase. The personal debt increase is largely tied to the increase in house prices, and that debt is largely mortgage debt. What we're seeing is an accumulation of mortgage debt in the household sector.

Finance committee  It could be, and that has certainly been an argument that I've made, particularly if we do see interest rates rise rapidly. We would see households under some duress to try to make increased interest payments, because this household debt is much larger than it has been historically.

Finance committee  As I said, it's people in Toronto or Vancouver trying to buy more and more expensive houses. One of the reasons they've been able to run up these types of debt levels is because mortgage rates have been going down. They're now hitting historic lows, so your monthly payment is actually quite affordable for big leverage to get into large houses, or to get into small houses that cost a lot.

Finance committee  Certainly youth unemployment is approximately double the regular rate. We have quite a concentration of unemployed youth, and I think that is one of the long-term sustainability problems. I'd argue that household debt is probably much more related to interest rates and stagnant incomes than it is to supporting youth who can't find a job.

Finance committee  Looking at the debt levels of households, we have seen some levelling off in terms of increasing household debt, although that has been picking up again in the last year. With regard to debt sustainability, clearly the sector that is most over-leveraged in the Canadian economy is household.

Finance committee  Income splitting would act against the government's goals of reducing its debt more rapidly, if that is the government's goal. Income splitting is relatively expensive. It's in the neighbourhood of $2.5 billion to $3 billion a year at the federal level. It's about half that at the provincial level, from studies that have been done previously.

Finance committee  I'd like to thank the committee today for their invitation on this important and ongoing issue of fiscal sustainability and economic growth. It is unfortunate that five years after the recession we are here still talking about economic growth and the lack of a full recovery in either GDP growth or the labour market.

Government Operations committee  I wasn't particularly concerned with statutory versus non-statutory; I was interested in expenditures, pure and simple, and how they're changing over time at the departmental level. I think what the final number is, whether it's statutory or not, is what should be important. How that's changing over time is what should be important.

Government Operations committee  Both can be useful. As with other parts of budgeting, whether it's accrual or cash, I'm not sure that there's necessarily a right answer. Sometimes looking at capital versus operating expenditures instead of looking at program areas can be useful. Looking at standard objects like salaries and benefits and utilities you pay for can be useful as well.

Government Operations committee  That's my answer: more data.