Finance Committee on April 16th, 2008

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Maybe my question's not clear, but I'm reading from the briefing binder here, and it says that there are amendments that will be made, not potential amendments or changes in regulations.

[Andrea Lyon]

The amendments being proposed to the act are indeed a portion of Bill C-50.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Again, how can this be included in a budget implementation bill if it's going to affect the act?

[Andrea Lyon]

I think Minister Flaherty addressed the question of the inclusion of immigration or IRPA amendments within Bill C-50. He referred to the linkage between competitiveness of the Canadian economy, which appears in Advantage Canada, and the desire to ensure that Canada has the right people at the right time in terms of our ability to respond to labour market demands.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Are you and the finance department okay with that answer? Are there skills in the finance department to make amendments and allow any types of amendments this committee would like to make on immigration and refugees?

[Andrea Lyon]

The amendments that were brought forward and the process the government will follow will involve very close interdepartmental consultation with not only the Department of Finance but our colleagues in HRSDC, the Bank of Canada, and other relevant players. So I am okay with that.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

I know that the Canada Millennium Scholarship Foundation will be dissolved. Can you take me through it? The briefing notes say it will be liquidated within six months of coming into force--and the date. Is the Millennium Scholarship Foundation supposed to liquidate all moneys between now and 2010?

[Rosaline Frith, Director General, Canada Student Loans Program, Department of Human Resources and Social Development]

The endowment will essentially be run down between now and late 2009. The Millennium Scholarship Foundation will continue to disburse bursaries for the school year 2008-09. By January 5, 2010, they should have expended almost all of their endowment fund, and whatever is left will then be returned to its source. So moneys that originated from the government will go back to the consolidated revenue fund; moneys that originated from—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

How much is in there now?

[Rosaline Frith]

There's very little left right now. They will expend about $350 million in 2009, and there will be very little left in the fund at that point.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So you're projecting it to be pretty well wound up by then?

[Rosaline Frith]

That's correct. Then in January and the six months following they will liquidate whatever is left of the assets. I'm not referring to their fund, but to any goods they own.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

You're not projecting it to be a major sum?

[Rosaline Frith]

It won't be a major sum at all.

[The Chair, Conservative, Rob Merrifield]

I want to interrupt very quickly. At the beginning of the meeting we asked for five-minute rounds. We have a motion for later on. We're into seven-minute rounds. If the committee feels it's advisable to continue with five-minute rounds, I think that would be the wiser thing to do.

I see consensus on that, so your time is gone.

Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

With the amendments to the Employment Insurance Act, what would happen if, for example, next year, as a result of the slowdown, we needed more than the $2 billion in the reserve? Legally, how would that work?

[Bill James]

If the reserve is completely used up, the government will continue to pay benefits until rates are increased to replenish the reserves.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You'll be able to go over $2 billion, to spend more than $2 billion if the situation requires it. Is that right?

[Bill James]

If I understood your question correctly, the answer is yes. If the reserve is completely used up...

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Why are you using the word “reserve”? The $2 billion amount is not a reserve, it's a cushion. The difference is that if you go over the $2 billion amount, the excess amount will have to be made up for by premiums later, if I understand correctly. If we had a $15 billion reserve, which is what the actuaries are calling for, there would be no need for immediate reimbursement. It would be cyclical.

Why does it not go by full economic cycle, as under the previous legislation?

[Bill James]

I don't know the basis for the $15 billion reserve you mentioned. All I can say is that the amount proposed by the government and found in the bill is considered sufficient to maintain rate stability, as anticipated.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You're talking about one year, right?

[Bill James]

It depends on the shortfall. It could be one year, three years or more. The program's underlying principle is that we're going to try to match revenue and spending every year.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

If there's a surplus at the end of the year, will it be added to the $2 billion or will it be transferred to the Consolidated Revenue Fund?

[Bill James]

If we anticipate a surplus in a given year, the amount of the anticipated surplus will be transferred to the independent organizations, and will be added, if you will, to the $2 billion, until rates are lowered to bring us back down to $2 billion.