Finance Committee on Nov. 3rd, 2009

[Kevin Page]

Mr. Mulcair, as I said in English, it is absolutely necessary to have a critical mass to be able to prepare economic analyses, study the financial situation and analyze costs, such as those related to Afghanistan, and review expenditures. You need an experienced team to prepare estimates and cost methodology. In my opinion, I have put together a good team, a strong team. If it is impossible to maintain this team—as I said, there are a number of us on assignment at this point—I believe it would be preferable to close our office rather than continue to pretend we can properly oversee the budget.

[Thomas Mulcair, NDP, Outremont, QC]

As you know, in life—and politics are part of life—it is always a little risky to impute motives, especially when those motives may be disgraceful. We have always felt that your office greatly disturbed the Conservative government, which tends to control everything up to the very words uttered by ministers. We saw the long arm of the Prime Minister's Office as a source of the difficulties you experienced last spring.

When I saw John Baird's obvious contempt in handing you a metre-high pile of documents, saying that you had asked for the information and that you should manage, I understood that our worst fear was beginning to come true. So, on behalf of the NDP, I am asking you to stand firm. We will do everything in our power so that the will of Parliament, expressed both ways, be upheld. First of all, there is the Accountability Act, which indeed created the position you hold to ensure that all Canadians could have access to valuable information on the budget. A testament to that is the fact that your estimates have proven to be more accurate than those of the finance minister, who, as usual, tries to feed us a line.

Then, there is the other side to the will of Parliament, unanimously expressed by the Standing Joint Committee of the Senate and of the House of Commons, which determined that you were to have the right to oversee the budget. As an elective representative, I find it intolerable that someone who is unelected, like the Parliamentary Librarian, and who is obviously in cahoots with those who are responsible for everything that has been going on for the past six months, should thwart the legally expressed will of elected representatives. To my mind, this situation cannot last.

You have our full support, and I speak not only to those who are here with you to testify today, but I know there are several other individuals in your office who do painstaking work and who are constantly finding obstacles in their way. I want to commend you on your patience and on everything you have done to help us.

[Kevin Page]

Thank you.

Do you have a question?

I simply want to say that I do not want to impute motives to anyone.

[Thomas Mulcair, NDP, Outremont, QC]

I have done it for you. There is no problem, Mr. Page.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mulcair.

We'll go to Mr. McKay for a final round.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, Mr. Chair.

I want to go back to this overall picture you're painting here. The revenue projections are in keeping with everybody else's. You're basically stuck with that. Your debt projections are going to be whatever they are. The minister has already said he's not going to touch transfers. Therefore, the only way in which you'd come back from chronic deficits is if you get serious about your program spending.

You're stuck with what the Department of Finance says. They stick a cabinet label on it, saying that this is all secret and nobody can see it, so you're ending up having to look at it, and then you criticize their fantasy projections with respect to sale of assets. Then you rightly comment that their projections with gross spending averaging less than 4% are problematic, given their history.

My question is this. In the context of effectively being stonewalled on expenditures, and in the context of skepticism with respect to the minister's statement that they're going to restrain program spending to around 3%, are you therefore confident that the chronic deficit of $19 billion a year going forward is in fact accurate, or may we actually be looking at something rather more dramatic than that?

[Kevin Page]

Sir, with respect to the context of your point, particularly with respect to direct program spending, as we've said, it would be relatively optimistic, relative to the historical experience, to achieve growth rates for program spending, particularly direct program spending like that of the last few years, as low as 2% per year.

Because again, in that component you're looking at a large compensation component of the federal government. Potentially there's not a lot of downward movement in that. As well, there's a lot of program spending for non-transfer-related programs. Our structural estimate at roughly $19 billion in 2013-14, would be.... We think if there's risk around that number, there would be a risk that the number would be higher.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Yes, I tend to agree with that.

I want to give my friend here a bit of time, but if you're running your program spending at 7% to 8% increases on an annual basis, it seems somewhat less than credible to think that somehow or another you're going to rein it in at around 3% or 4%. I agree with your observations.

Mr. Pacetti.

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

Thank you.

We have talked about jobs and job losses. We also talked about money invested by the government in infrastructure projects. I know that you have a limited amount of information. According to the government's analyses, the government plans to create 220,000 jobs with the funds invested, if I am not mistaken. Based on your assessment, it seems that no jobs will be created. What is your opinion on this matter?

[Kevin Page]

In the third quarterly report, the government said that it would be possible to create and maintain 220,000 jobs. In my opinion, based on our projections and the analysis model that we use, it seems that that is an optimistic assessment,

or the upper end of the range. I think it's important in the context that as we get information on different parts of the stimulus package, we develop information from the bottom up, so that we can test some of those top-down kinds of projections. We're not saying it's not possible to generate 220,000, to create or maintain that number of jobs, but we think it's important that we track the money and that we look at information that municipalities are sending.

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

But on the fact that it's going to be a jobless recovery, we also discussed this with the Governor of the Bank of Canada last week. We're a little bit preoccupied with what's going to happen in the future. You talked about the higher Canadian dollar and the risks that all those attributes will bring to Canada.

In the end, it's all about jobs and making sure that people are working. You talked about lost output and I think the lost output is right there. I don't think we've spent enough time on the lack of jobs and what the stimulus money is actually creating. I think we should probably devote more time to that. I think that's something that's not necessarily highlighted in your report. There should be a large focus on that.

[Kevin Page]

Well, sir, in our report we do say that overall when you look at employment, we've seen some stability in the situation since March. We still continue to see private sector job losses, but that's been offset, in some part, by public sector job increases and increases in self-employment.

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

But is that good for the economy?

[Kevin Page]

I think we'd be happy if we saw a better balance there and had stronger private sector growth. I think implicit in the private sector forecast as well--you used the term joblessness--are some modest increases in employment over this year, but basically being offset by labour force growth and somewhat higher unemployment.... You'll still see the unemployment rate drift modestly upwards.

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

Is that in your figure 1-1, where you're talking about employment and the unemployment rate?

[Kevin Page]

Yes, sir. Figure 1-1 is consistent with that.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Pacetti.

Thank you, Mr. Page. We want to thank you and your team for being with us today and for your opening statement, your responses to our questions, and your ongoing reports. We appreciate that.

I understand you have a meeting with the Senate committee very shortly, so thank you very much.

We'll adjourn and then start another meeting at 10:30.