Evidence of meeting #54 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was report.
A recording is available from Parliament.
4:35 p.m.
Parliamentary Budget Officer, Library of Parliament
There are different models to calculate a natural rate of unemployment. Most economists would probably say Canada should have something just under 6%.
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Most would say 4% to 7%; somewhere in there, 5% to 6%, would be common. But in fact Canada was running at a zero unemployment rate in real terms. That's fair to say, isn't it, when we're at 7%? Isn't that fair? It's pretty close to zero anyway.
4:35 p.m.
Parliamentary Budget Officer, Library of Parliament
I'm not sure I understand the concept, but I'm not—
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
You can't get a zero unemployment rate, but you can have what is considered to be a natural rate of unemployment, and you've indicated that to be about 7%. We're at 7%, and you can't get much lower than that. Is that fair to say?
4:35 p.m.
Parliamentary Budget Officer, Library of Parliament
I'm sorry, I think even if we said the trend rate was something just below 6%, we'd still be talking about a gap of about a percentage point. And we're talking about—
4:35 p.m.
Parliamentary Budget Officer, Library of Parliament
—an economy operating about two percentage points below its potential.
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Agreed, and I understand that.
It's just that I never saw anything in your report in relation to what's happening in the economy. In my riding, we provide about $5 billion in income tax payments a year, and that's supposed to go up to $20 billion within 20 years. There are 500 big projects, and with that will come $500 billion in construction in the next 10 to 20 years. But I didn't see that in the report anywhere.
I'm wondering if you could provide to the committee an analysis of that and the impact of these big projects and what it will do to the real growth of unemployment in this country. I can't believe that we are under-performing and that we are going to be losing jobs as a result of what I consider to be a very efficient and productive budget.
You don't have anything in there in relation to the streamlining of the regulations, the encouraging of productivity, the “one project, one review”. These are the biggest things for western Canada and northern Canada that could possibly happen, far bigger than any shot in the arm. Wouldn't you agree with that?
4:35 p.m.
Parliamentary Budget Officer, Library of Parliament
Well, sir, if there's an all-party kind of consent to do a project that looks at infrastructure in general and how it's contributing to the economy, we'd be happy to undertake a project like that.
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Well, I'm not interested in all-party—I'm interested in you doing that for us.
4:35 p.m.
Voices
Oh, oh!
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I would like to have an analysis of these 500 super-projects, of this $500 billion in investment that's going to take place in this country, because I think you've ignored it in your report. I didn't see it anywhere. I didn't see it mentioned in one place in that report—
4:35 p.m.
Conservative
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
—that commodity prices, in your analysis, were going to be low, and we heard from the Governor—
4:35 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
—of the Bank of Canada that they're actually high and they're going to remain high for some period of time.
My time is up just in time.
4:40 p.m.
Parliamentary Budget Officer, Library of Parliament
Well, we do talk about an economy, and we have projections based on increased productivity growth, sustained productivity. We're talking about productivity growth in Canada of about 1% for the labour productivity growth. So we build these into our projections overall, and yes, I think the more that government can produce good quality investment infrastructure, potentially like we did in stimulus, I think the more it can add to Canada's economic potential. These are built into our estimates. They're built into the Bank of Canada estimates.
I think on commodity prices the language we've used, sir, is relative to where we were in the middle of 2011 in terms of weakness. It's relative in that context.
4:40 p.m.
Conservative
4:40 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
If I recall correctly, Mr. Page, the Parliamentary Budget Officer's position was created to provide greater transparency for Parliament, and therefore for Canadians, on the impact of budget decisions, how our dollars are being spent, and the impact of budgets. It was created in the aftermath of the sponsorship scandal, where the Liberal Party had.... Well, we all know about the Liberal sponsorship scandal. It created the need for greater transparency so that we could have a better control over how our money was being spent. Am I correct on that?
I won't ask you to comment on the politics, but your position was created after the Liberal sponsorship scandal.
4:40 p.m.
Parliamentary Budget Officer, Library of Parliament
Yes, I think it was created as part of the Accountability Act. I was appointed in March 2008.
4:40 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Right, and it's to provide greater transparency for Canadians, and greater accountability in terms of how our tax dollars are being spent.
Now, Mr. Van Kesteren said you had a very poor track record on your predictions. But if I look at the F-35 project, which is a massive multi-billion-dollar procurement plan for our military, in fact the government's numbers must have been done on the back of a napkin over somebody's multi-thousand-dollar lunch, and your numbers were much more in line with the Auditor General's numbers, if I'm correct on that.
4:40 p.m.
Parliamentary Budget Officer, Library of Parliament
Well, I think when we were comparing apples to apples in terms of acquisition costs and sustainment costs, what we found through the Auditor General's report was that there were numbers that were being produced by Department of National Defence officials that were similar to numbers that were being provided by the Parliamentary Budget Office to all parliamentarians.
