Finance Committee on May 2nd, 2013

[Sherry Harrison]

My response to that is we would do our best to respond at the table to inquiries we're receiving from members on the estimates.

[The Chair, Conservative, James Rajotte]

I think we should try to put specific questions and let the officials answer.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Yes. Absolutely.

I will certainly address those questions, Mr. Chair.

In terms of the Department of Finance expenditures in the main estimates 2013-14, the department is asking $5 million in grants and contributions. That is a drop from the main estimates 2012-13. It is a drop of $210 million. Clearly, the drop is the result of stopping debt-relief payments to countries with large debts.

This is what I would like to know. In main estimates 2012-13 and, by comparison with 2013-2014, which countries have benefited from debt relief payments from Canada?

[Nicholas Leswick]

I can try to answer that question. Just to position these payments in context, the Government of Canada provides debt relief to heavily indebted and poor countries in the context of our engagement in the Paris Club. We negotiate this debt relief agreement, but our exposures are held by EDC, the Canadian Wheat Board, and the Canadian International Development Agency.

While the Department of Finance is negotiating the debt relief, we then compensate these organizations because we've just written off their exposure. However, we're now essentially cancelling these payments because the reality is that EDC, the Wheat Board, or CIDA had written down these payments long ago because there was a default or non-performing situation. The writedown was 10 years ago, so essentially the federal government is paying itself to do business, and we thought this was inefficient.

More directly to your question, last year we provided debt relief to the Democratic Republic of Congo and the Ivory Coast.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

I only have one minute left.

Is that a move on the Government of Canada's part that is comparable to other creditor countries that are members of the Paris Club or are we the only ones to do so?

[Nicholas Leswick]

No, it's completely comparable. The Paris Club, which is effectively G-20 representation, has a comparability of treatment for all countries. The Paris Club goes in unison to provide debt relief in the same terms to all countries, and that's effectively at 90%. The Government of Canada chooses to top it up by the additional 10% under the Canadian debt relief initiative. So we're effectively writing off 100% of debts to these heavily indebted and poor countries.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Okay.

I will come back to that later.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Côté.

Mr. Van Kesteren, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you all for being here this morning. You've provided us with some excellent testimony. We want to thank you for the work you do. Often we don't do that. We fail to realize just how much work is being done behind the scenes. It's very apparent this morning.

I know Mr. Brison wanted to ask another question but he ran out of time, so I'll do it for him. I'll ask three questions. We're going to have to get Mr. Catta, as I have a quick question for him as well.

There was a change in the main estimates in the Nova Scotia additional equalization payments. Can you explain how this relates to the new formula for equalization introduced in 2007? That's question number one.

With the second question, maybe we can just wrap up this important issue about government advertising. Mr. Catta, you've provided us with some excellent information here. I think you've demonstrated the importance well, but are we going overboard? Does this government spend more or less than previous governments in percentage of spending, because I also understand the budget numbers change.

I don't know whom I can direct my third question to, but this is in relation to the new bridge. Of course the new bridge is so important to my riding but to the rest of Canada too. I think 30% of trade goes across the Michigan border there, and anybody who has travelled there knows that the old bridge is in a state of total disrepair and there's so much congestion. There has been some tremendous movement on that, but I see that $25 million is being allocated to the bridge construction. Maybe somebody could fill us in as to what those dollars are being used for.

Could you answer those three questions for us, please.

[Nipun Vats]

Thank you for the questions.

I can answer the first one with respect to the additional fiscal equalization offset payment to Nova Scotia and the changes to that.

These offset payments are based on the 2005 offshore agreements with Nova Scotia. They compare the equalization that the province would receive with their offshore resources included in the formula with the equalization they would receive without those included in the formula, and it pays the difference between them.

It protects their offshore revenues from counting against the equalization formula, and changes in those formulas are a function of changes in Nova Scotia's offshore revenues. So as those revenues change, there will be an impact on that amount.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

That's a real good-news story for Nova Scotia.

On the second question about the advertising, if you don't mind, perhaps Mr. Catta could answer that question.

[Jean-Michel Catta]

On the total government advertising, I would suggest that you direct your question to the Privy Council Office, because I cannot speak on the total picture. I'm sure my colleagues at the Privy Council could do so.

In terms of Finance, it is true that in terms of advertising there's been an increase, particularly since 2008 with the economic crisis and the government's response, which is the economic action plan. We were clearly in an economic crisis mode and the government had to respond. One of the tools, again, was through economic action plan advertising, of which a part was provided to the Department of Finance as the overarching...or chapeau, if I can say that, of the economic action plan writ large.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you.

You have one minute, sir, for the bridge story.

[Ross Ezzeddin]

Sure, I can give a brief answer.

Transport Canada could provide more details in terms of the activities associated with that investment. As some of you may be aware, they have a dedicated team that has been working for a number of years to advance the Windsor-Detroit international crossing. This funding is primarily to maintain the activities of that team as the project moves further into the procurement process. There's still a lot of planning and logistical work to do, and also legal work and so forth. As I think people are aware, it's a multi-jurisdictional, large, complex project. This funding is to advance that. It is not to support directly the financing of the construction per se. That would be another step in the process in the future.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

It's to keep the ball rolling.

[Ross Ezzeddin]

Exactly.

As some people are aware, there has been recent good news. A presidential permit has been issued to advance the project in the U.S. That's been welcome news.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Van Kesteren.

Mr. Rankin, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Thank you to the witnesses from the department for being here. Like Mr. Van Kesteren, I want to thank you for the work you do for Canadians.

I'd like to take you to the Parliamentary Budget Officer's report that was released this year, in 2013, entitled “Economic and Fiscal Outlook”. It provides that office's current and medium-term outlook for the Canadian government's finances. It includes updated estimates of the structural budget balance and presents estimates of the economic impacts of measures and revisions to spending levels in the 2013 budget, as well as comparisons to Finance Canada's projections.

In that report, the PBO has pointed to what it considers the real impact of budget 2013: eliminating thousands of jobs, cutting direct program spending, and weakening GDP growth. I'd like to talk about each of those, if I could.

First of all, the 2013 “Economic and Fiscal Outlook” report references $9.1 billion in cuts to direct program spending in the current budget. Is that assessment accurate in your judgment?

[Galen Countryman]

With respect to the $9.1 billion, that's a total over five years. It's the revision to direct program spending between the updated economic projections in the fall, in November 2012, and the budget. There were a number of factors that led to that.

I wouldn't necessarily consider them cuts, but more as forecast revisions for a number of areas. Whether that be expected costs for essential services due to lower inflation, revisions to payments to provinces for resource royalties—they just flowed through the government budgetary balance—this is all affecting the budgetary balance. It's a revenue that has offset an expenditure.

At the same time there's also a similar thing for our crown corporations. Some of their revenues are on the revenue side but they can also be reported as an expense.

So...[Inaudible—Editor]...both your items there.

[Murray Rankin, NDP, Victoria, BC]

Okay. Thank you.

It also said, I think, that 14,000 jobs would be eliminated as a result of the 2013 budget. When taken together with the last budget and fiscal update, it would look like the total number of jobs eliminated by the Conservatives is 67,000. Is that consistent with your measures?

[Galen Countryman]

I'm certainly not an expert on the job estimate itself. That would be some of my colleagues. What I would say is that I understand from the report that what the PBO did was take half of that $9.1 billion that you're referring to. That's a judgment call on their part as to whether that should be flowing through. As I explained, a number of those items are not directly there.

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Chair, on a point of order, these officials are clearly hear to talk about the main estimates, which is what the opposition and this committee decided we wished to discuss. It's obvious these officials are not here to and are not prepared to discuss something entirely outside of the main estimates, such as job projections, etc.

I would ask the chair to rule on whether or not these are relevant types of questions, given that we're here on main estimates.

[The Chair, Conservative, James Rajotte]

On that point of order, we are dealing with votes 1, 5, 10, L15, 25, 30, 35, 40, and 45, so we should have members stick to those particular votes and particular subject areas. The questions are valid, but they are outside the gamut in terms of these specific areas. We did invite the officials here today to address these specific votes.

[Murray Rankin, NDP, Victoria, BC]

Could I ask, Chair, if FINTRAC, the Financial Transactions and Reports Analysis Centre, in the 2013-14 estimates is legitimate, fair ball, as far as you're concerned?

[The Chair, Conservative, James Rajotte]

Yes.

Could we have a FINTRAC representative?