I'm done, thank you.
Evidence of meeting #3 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
Evidence of meeting #3 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
5:10 p.m.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
Mr. Pacetti asked a question awhile ago about how much Canada’s total debt was currently?
5:10 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
Mr. Lapointe, perhaps you can answer.
5:10 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
I mentioned a little while ago that the federal debt came to $494.4 billion.
5:10 p.m.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
In that case, if the interest rates increase by 1%, how come we only pay $1 billion more in interest?
5:10 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
I was talking about an increase for one year. The debt is not renewable each year. Part of the debt is short-term, renewable quarterly, semiannually or within a year, but there is also a part of the debt spread out over 15 years, or even 20 years.
5:10 p.m.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
Finally, there is 20-year financing at a fixed rate of 5.5%.
5:10 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
That is right, yes.
5:10 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
Thank you, Chair.
Not so long ago, the department was dead set against transit passes. The rationale was that they were very expensive. All they did was fund people who were already using the transit system; the increase in users was quite modest, and they did nothing for the infrastructure of transit systems. Is that still the view of the department, or has that changed?
5:10 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
There are a number of reasons why transit passes could benefit from a tax credit. You're talking about an issue relating to the environment, but it would also reduce traffic congestion. It can also be part of an overall strategy to respond to challenges on the infrastructure front and also on the environment front.
5:10 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
But your own studies show that this allocation of money, whether it's $1 billion or $2 billion, had minimal impact on increased usage. What's changed between then and now?
5:10 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
Our studies show that by itself, the impact on ridership is not that great. However, if it's part of an overall strategy, in terms of infrastructure strategy, in terms of the quality of services, then of course the impact is greater than it would be otherwise.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
But everything in this business is about choices. You have a choice as to whether you're going to apply $1 billion or $2 billion towards improving the transit system by allocating moneys to municipalities or by allocating it to users.
The choice that appears to be made here is the choice that is probably least effective. Would you agree with that?
5:15 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
I think there still are some funds going to the infrastructure of cities. In that context, this is a two-pronged approach. It's encouraging the users to use transit but it's also helping municipalities to set up the infrastructure.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
There was already money going to municipalities through the gas tax and things of that nature, to do these very things. This budget takes $2 billion of hard-earned money from taxpayers and allocates it in a fashion that is probably the least effective fashion in which it can be allocated--for transit users as opposed to building subways or buses.
You know, there's no sense having users of the system if you don't have the buses in the first place.
5:15 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
That's why, I guess, there are infrastructure funds.
In terms of the fiscal cost of the transit passes, I don't think it's $2 billion. I think it's half that over five years.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
I just want to confirm that the department's view has not changed on the efficacy of transit passes. Is that fair?
5:15 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
Depending on the models used--
5:15 p.m.
Liberal
5:15 p.m.
Conservative
Rick Dykstra Conservative St. Catharines, ON
I'd like a little clarification on the cost of implementing a reduction in the GST, for example. Taking that a little bit further, actually, I would assume that all ministries, when a federal budget is being put together, would bring forward potential new funding proposals, potential new opportunities, if you will, be it tax reductions or whatever. I would assume that with each one of those proposals there is included a cost measure for the ministry to actually implement the strategy, whether it be an increase or whether it be a decrease. Is that the case?
5:15 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
On the tax front, it's going to be the CRA that will administer the tax measures. So yes, there are some discussions with the CRA as to how much it would cost to administer such-and-such a measure.
In terms of other programs, I'll let the others answer. I'm only talking here about the expenditure programs.
