Finance committee  In this report, what we've done is produce our own independent estimate of potential output. In previous reports, we relied on estimates from the Department of Finance over history and on going-forward estimates from the Bank of Canada and private sector forecasters. This time around, it's a fully independent estimate.

Finance committee  They're not that much different in terms of the gap between what we observed to be the actual unemployment rate and where we think it should be or where it is close to its structural estimate. What has happened through time is that these trends have moved. When trends typically move, it's somewhat misleading to compare levels across time.

Finance committee  Yes. That's correct.

Finance committee  Yes, in June.

Finance committee  Yes, for their August survey, as well as for the level of nominal GDP, which matters the most for--

Finance committee  Relative to our June outlook, there is a slight improvement in the near term. That's for real GDP growth in 2009 and 2010.

Finance committee  We've tried to provide the projections underlying the estimated economic impacts in annex 1 of budget 2009. This budget provided the end point of 189,000 jobs, and from the other assumptions on projected unemployment rates we've tried to back out the estimated levels of employment.

Finance committee  Yes. That's the level of employment in thousands. If the world unfolded as was envisaged in the budget 2009 outlook, we probably would have stayed very close to that middle line--also assuming none of the stimulus impacts took effect that early on. But the world did not unfold that way, and there were significantly more job losses than had been forecasted.

Finance committee  Thank you. The data we requested.... We provided a list of all the series we needed in an attached spreadsheet, both for the fall economic and fiscal statement as well as for budget 2009. The projections we requested...the numonics for all these series are available. We have a good knowledge of the macro-econometric model the department uses to do forecasting, and indeed we've used it ourselves in our past jobs there.

Finance committee  In terms of nominal GDP growth, I think Mr. Drummond's projection for 2009 is in line with what we have. I think it's a decline of 4.4%, but in his projection he's also taking views or changing views on the underlying, let's say, the income composition. So the corporate profits might be quite a bit weaker than he had, whereas when we're using fiscal sensitivities, the underlying assumption is that the reductions are spread across proportionately.

Finance committee  I would think so. In our presentation we've tried to flag the downside risk to our projections, and I would imagine that if we did do a fully independent projection, based on our monitoring for the first half of the year, we would have significantly lower nominal GDP growth than even Mr.

Finance committee  Yes. It's almost a $30 billion decline in the first year, and about $35 billion in the level of nominal GDP in the next year. That's slide 15 in our presentation.

Finance committee  I would hesitate to call them projections, because these are using not our own fiscal sensitivities, and this really isn't a new projection, but just a rough calculation to provide an idea of how things would be compared with budget 2009. The fiscal sensitivities that Finance Canada provides would directly and indirectly capture those impacts, from the labour market.

Finance committee  We are not being provided with the underlying details of the projections in the budget that would correspond to, let's say, the level of employment. The unemployment rate is being provided, but key variables, such as corporate profits and wages and salaries, which matter crucially for tax revenues, have not been provided to date.

Finance committee  I would just point out, from my experience on the sensitivities, that there is, I think, an implicit assumption that the break-even contribution rates are operative in this case. To that extent, the numbers we've provided probably would understate its fiscal impact.