Finance Committee on April 30th, 2013

[Mostafa Askari]

Well, as I said, the way we look at these things is to look at the change in the policy—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Absolutely.

[Mostafa Askari]

—and the impact of that policy per se. Anything else that happens is because of other things that are happening in the economy.

[The Chair, Conservative, James Rajotte]

Thank you. We can come back to this topic, I'm sure, later on.

Mr. Caron, the floor is yours.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Ms. L'Heureux, I want to discuss infrastructure because your office also released a report dealing with that on April 11.

According to the report, since the 2007 budget, nearly $6 billion that the government had promised to invest in infrastructure programs under the Building Canada Fund was not spent.

Is that correct?

[Sahir Khan, Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament]

Some amounts allocated in the government's budget were not spent, but they were used afterwards to boost available infrastructure funding.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

If I understand correctly, then, a good portion of the funding announced in 2013 comes from amounts that have not been used since 2007. So it doesn't represent new investments. The government is actually re-announcing previously announced investments.

[Sahir Khan]

You are correct.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In your view, is that consistent with sound fiscal management?

[Sahir Khan]

When a department can't use funding allocated by Parliament, that sort of practice is acceptable, although not ideal.

Transport Canada changed some of its practices in that regard. It reduced the amount of unused funding owing to the problems tied to the forecasts for a given period. Not spending certain amounts is, nevertheless, problematic.

The other reason this matters is that these expenditures were supposed to be made during a time of poor economic performance. So it's important that the money be spent during that period. In this case, the funds are available for other economic periods. You, therefore, have to determine whether that is useful or not.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

The bottom line is that, since 2007, approximately 35% of the funding that was earmarked for infrastructure projects, and more specifically under the Building Canada Fund, was not spent during that period.

[Sahir Khan]

I'm not sure of the exact percentage, but it was fairly sizeable.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Now let's pick up on Mr. Jean's line of questioning.

I am referring to the 67,000 jobs that were not created. In fact, it's a matter of falling short of the full job creation potential under the 2012-13 budget measures and not meeting those targets by 2016-17. Is that correct?

Mr. Jean was making it sound as though the 900,000 jobs created since the depths of the recession in 2009 were almost entirely due to government measures. The reality is that a large chunk of those created jobs—since we were in the depths of the recession—were restored naturally, without the government's intervention. Am I right?

[Mostafa Askari]

You are right. In fact, I said we look at the impact of the measures put in place by the government. The evaluation shows that the 2013 budget had a negative impact on employment and GDP.

Other economic events could generate more jobs and raise GDP. We examined the effects of the government's budget measures.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you.

What it boils down to is this: saying that the government is responsible for creating 900,000 jobs is almost as absurd as saying that the government is entirely to blame for the 500,000 jobs that were lost during the recession. I will leave it at that.

I have two more questions. I will ask them one after the other, as I have just one or one-and-a-half minutes left.

First, in your report, you stated that current GDP levels were about 2% lower than they could be. What we have now is 2% less than what we could have, further to the measures adopted in 2012-13. I'd like you to comment on that.

Second, I want to discuss the multipliers you used in your modelling. They come from the Department of Finance. I see that, since the 2011 fiscal update, that information no longer appears in the budget. As a result, we, as parliamentarians, have no way of knowing what the fiscal multipliers being used are. Do you think that information should be restored to the budget, so we can get an overall sense of the statistics the government is using?

[Mostafa Askari]

It would be useful for everyone to know the government's multipliers. That would make it possible to measure the impact of the various budget measures.

[The Chair, Conservative, James Rajotte]

Thank you.

Point of order, Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Chair, I'm not sure if the translation is correct because it was in French, but Mr. Askari just said—I think this is what he said and I want to confirm if it came out in English or French differently—but did he say that jobs are just going to naturally come back if government does nothing? Is that what he suggested, that jobs will just come back if governments do nothing?

[The Chair, Conservative, James Rajotte]

Do you just want to clarify that he actually said that?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I just want a clarification on the French to English because--

[Mostafa Askari]

No, I didn't say that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Okay. I thought you agreed, and I thought—

[Mostafa Askari]

I didn't mean to say that if I said it.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Perfect. Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Adler for your round, please.