Evidence of meeting #2 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
A recording is available from Parliament.
4:30 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Not all of it, no. For example, most of the budgetary measures in the 2007 budget that would apply to the fiscal year 2007-08 would not have been in the main estimates.
4:30 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I agree with that, but would they not have been captured by this time in supplementary estimates (A)?
4:30 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
They're largely captured in supplementary estimates (A), but adjustments still take place between now and the end of the fiscal year. You may have transfers, for example, one-time transfers for organizations that need to be effected. There could be informational changes to statutory programs that are reflected in the final supplementary estimates.
4:30 p.m.
Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
I was going to add that, as Coleen said, all the fiscal arrangements here in our supplementary estimates (B), which are statutory programs, so we are not requiring new...the money is automatically there in the statutory programs. These will be revised. We revise our numbers in December of every year under the new legislation, so in December we'll have new numbers and the next supplementary estimates might represent those.
4:30 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Can someone explain to me the brackets around the $890 million under “Interest and Other Costs” on page 149? I don't understand what's happening.
4:30 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
That's a reduction.
4:30 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I understand that's a reduction, but is that interest we haven't earned? I don't understand what that is.
4:30 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
That's there, again, for informational purposes. It reflects a revision to public debt charges between the main estimates and the budget. The main estimates were based on a projection for debt charges in the 2006 fall update. Between the 2006 fall update and the budget, we revised down public debt charges largely because there was a $9.2 billion surplus in 2006-07.
4:30 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
After applying the money to the debt that materialized due to the surplus and our paying down the debt, that is the interest savings that Canadians are getting, based on what we've put in there.
4:30 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
That's part of it. There are also revisions to interest rates over that time period. This is the down revision to the projection in public debt charges for the year 2007-08, between the main estimates and the supplementary estimates.
4:30 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I'll be very quick.
Just a quick answer for me on this next page then. Can someone explain to me, in two sentences or less, Bretton Woods? “In accordance with the Bretton Woods and Related Agreements Act...”.
4:30 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
These are a series of acts related to Bretton Woods that largely govern our relationships with the International Monetary Fund.
4:30 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you.
On the books we get on how you perform, I have two questions. We got this recently for March 31, 2007. This is really for the fiscal year 2006-07, and by the time I get it, it's seven months old, plus what happened the year before.
I have two questions. When you are doing your work, I know there are budget changes every year and so on, but how far do you do your planning and projections? Is it a two-year plan, a five-year plan, or an annual plan, just because of the nature of the business? I know things will change, but in terms of planning purposes, what is your policy as a department? What do you want to accomplish?
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
The easiest way to answer that is, we plan on the basis of a five-year framework for the fall update or the economic statement, as was presented this year in the fall, and in the budget we go forward on a two-year basis.
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
In the budget, yes.
4:35 p.m.
Conservative
The Chair Conservative Rob Merrifield
Yes.
There are about nine minutes left, and I'd like to split it up because the NDP are not here to take their time. I'd like to split up three minutes per party in this segment.
Mr. Pacetti, you have three minutes.
4:35 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chair.
To continue with what Mr. Wallace was asking, can you go over that? I think Mr. McKay was asking why you budget for five but only forecast for two.
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
In fact, in the fall update we provide a five-year forecast for both the economy and the fiscal position of the government.
In the budget, decisions are made on a two-year basis, and the projections are provided over the same time period, two years.
4:35 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Mr. McKay was asking about the agreement with Nova Scotia. Do you know what the forecast amounts would be for years three, four, and five?
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
We assumed essentially, as an operating assumption for years three, four, and five, that equalization would grow at roughly 3.5% per year.