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.
Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
--but we would argue that the tax measures in the budget should assist low-income students--
Liberal
Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
--and that the government, as part of the fiscal balance discussions, has highlighted the area of post-secondary education as one of the priorities.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Mr. Chair.
I have two short questions to ask our guests. Regarding the $1,200 for each child under the age of six, paid in monthly instalments of $100, the federal government in its last budget said specifically that that would not affect the National Child Benefit. However, it says that next year the National Child Benefit Supplement will be eliminated. So there is already a cost related to the $1,200 a year, that is, the disappearance of the National Child Benefit Supplement. Even if it is not doing anything to the National Child Benefit, the government is still going to take tax from families that receive the $1,200 a year for each child under the age of six.
Have you estimated, out of the total of $9.6 billion for this program of $1,200 for each child under the age of six, how much tax recovery by the federal government annually, including the National Child Benefit Supplement, will be worth?
General Director, Analysis, Tax Policy Branch, Department of Finance
Yes, we have estimated these amounts. I could send them to you.
General Director, Analysis, Tax Policy Branch, Department of Finance
For both, about $600 million.
General Director, Analysis, Tax Policy Branch, Department of Finance
Yes. I will have to check to be absolutely certain, but the tax paid to the federal government on the program is about $300 million. And the saving is also about $300 million.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
All right.
You estimate that, with the contingency reserve, in 2006-2007 and 2007-2008, federal surpluses, after the measurements of the last budget, will be $3.6 billion and $4.4 billion respectively. Mr. Flaherty wrote in his budget that for the next budget, in the spring of 2007, he will deal with the matter of fiscal imbalance. To settle this matter, however, talk up to now has been of a minimum of $9 to $10 billion a year for the whole of Canada.
Did you prepare a statement of non-recurring estimates and revenue programs, that are going to end in 2006-2007 and 2007-2008, and also the annual $1 billion saving that you mentioned awhile ago that would make it possible to reach higher levels in the surpluses already recorded of $3.6 and 4.4 billion, for example, starting in 2008-2009, when we will have enough money to settle this matter once and for all?
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
As you know, the budget is showing a surplus of $3 billion, plus $1.4 billion in 2007-2008, and the government undertook to reallocate some resources. For the fall, we are aiming at a permanent amount of $1 billion. There will be other exercises. I do not know what the amount will be for subsequent exercises, but there will be others. So it is another source of additional funds.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Yes. What is the range of amounts attributable to recovery? I do not want to talk necessarily about 2007, but if a budget commitment is made by the Prime Minister as of 2007, do you think that for the following years the range that could be freed up in 2008-2009, 2009-2010 might be enough to reach the amounts I just mentioned? Is that a possibility?
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
All I can say to you...
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
I cannot judge what amounts will be deemed satisfactory; we could discuss that for a long time. Nevertheless, there is already a surplus which is not allocated and there will be additional allocations. I cannot determine the amount right now. No one can know what it is. All I know is that there is an exercise under way at present, that there will be a report this fall and that it will continue afterwards. What amounts will be freed up? I do not know.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Do you think, for 2008-2009, that it is possible that there might be a reallocation of some $5 billion?
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
I would not like to speculate on any amount whatever.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
No, I do not speculate.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
You used to speculate about surpluses in the past. Very badly, but you did it...
Bloc
Conservative
Conservative
Luc Harvey Conservative Louis-Hébert, QC
Earlier, a question was asked about 16%, 15%, 15.25%. I usually stick to the bottom line. The gymnastics required to get to the bottom line do not matter much, it is the final result that counts.
Will that represent a real tax reduction, yes or no?
