Evidence of meeting #61 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was transfer.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Glenn Campbell  Director, International Policy and Analysis Division , Department of Finance
Gilles Moreau  Director General, National Compensation, Royal Canadian Mounted Police, Department of Public Safety
Jonathan Roy  Senior Policy Analyst, Social Policy, Health, Justice, Culture, Department of Finance
Daniel MacDonald  Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
John Davies  Director General, National Security Policy, Department of Public Safety
Darryl Hirsch  Senior Policy Analyst, Intelligence Policy and Coordination, Department of Public Safety
Nigel Harrison  Manager, Legislative and Parliamentary Affairs, Department of Fisheries and Oceans
David Gillis  Director General, Ecosystems and Oceans Science Sector, Department of Fisheries and Oceans
David Lee  Director, Office of Legislative and Regulatory Modernization; Policy, Planning and International Affairs Directorate, Health Products and Food Branch, Department of Health
Samuel Godefroy  Director General, Food Directorate, Health Products and Food Branch, Department of Health
Alwyn Child  Director General, Program Development and Guidance Directorate, Department of Human Resources and Skills Development
Annette Nicholson  Secretary and General Counsel, International Development Research Centre (IDRC)
Lenore Duff  Senior Director, Strategic Policy and Legislative Reform, Department of Human Resources and Skills Development
Dominique La Salle  Director General, Seniors and Pensions Policy Secretariat, Department of Human Resources and Skills Development
Nathalie Martel  Director, Old Age Security Policy, Department of Human Resources and Skills Development
Bruno Rodrigue  Chief, Social policy, Income Security, Department of Finance
Annette Vermaeten  Director, Task Force, Special Projects, Department of Human Resources and Skills Development
Eileen Boyd  Assistant Secretary to the Cabinet, Senior Personnel, Privy Council Office
Neil Bouwer  Vice-President, Policy and Programs, Canadian Food Inspection Agency
Lynn Tassé  Director, Canada Gazette, Department of Public Works and Government Services
Gerard Peets  Senior Director, Strategy and Planning Directorate, Department of Industry
Patricia Brady  Director, Investment, Insolvency, Competition and Corporate Policy Directorate, Department of Industry
Andy Lalonde  Manager, Preclearance, Canada Border Services Agency, Department of Public Safety
Lynn Hemmings  Senior Chief, Payments, Payments and Pensions, Financial Sector Policy Branch, Department of Finance

4:20 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

Any projection as to the costs is going to rely on data that we don't have right now. It's going to involve projections of whatever our gross domestic product will be at that time.

4:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

So the projected formula is not based on projected costs?

4:20 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

The formula is an extension of the 6% for three years, and after that it's drawn from a parallel. As I mentioned, the GDP approach is drawn from the equalization formula, so you have a parallel to treatment in other transfer programs.

4:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Do you have any sense of what the per capita impact of the change might be? Are there some provinces that are going to have a differential impact compared to some other provinces?

4:20 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

That will depend. You have a couple of variables in there. You have what the population of the province is going to be in whatever particular year you're examining. As well, past the date when the GDP floor takes effect, what is the GDP? We know we have a minimum of 3%. Beyond that it would be a projection.

4:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Do you see demographics for provinces playing a role beyond GDP in terms of the age of the population or the influx of immigrants into the province? Are there any demographic factors that could have a differential impact on this particular formula and the funding that would result from it?

4:20 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

I would simply mention that provinces and territories have the authority to administer their health systems. This provides a certainty as to what the federal funding contribution will be beyond 2013-14, and that enables and supports them to take decisions as to how various factors that influence different provinces would apply.

4:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

If there is a province where the population is aging and there are fewer young people coming into the province, what would be the impact of these changes on a province like that?

4:20 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

If you look solely at demographics.... I think you're referring to the Canadian Institute for Health Information, which has put out, for example, various cost profiles by age, which demonstrate that health costs do vary by age.

4:25 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

They increase, most likely.

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

You have younger people and older people.

That's going to be one factor the provinces and territories are going to take into account as they allocate their funding to administer their health systems.

4:25 p.m.

Conservative

The Chair Conservative James Rajotte

We can come back.

I have Mr. Jean.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Yes, thank you very much.

Thank you for a very thorough presentation indeed.

Further to what Ms. Nash was asking, has the formula itself on transfers ever taken into consideration the demographics or particular trends of demographics in the country? Has it always been the same way as it is today?

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

For example, the formula now is an equal per capita cash and tax allocation. We're going to be moving to an equal per capita cash allocation, so it's always been—

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I understand, but demographics has always been considered the same way in the formula as it is today. Is that fair to say?

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Also, you said that the money was paid based upon projected growth of GDP. That's part of the formula.

Is there ever a proper accounting based on the actual growth of GDP, or is all the payment made on the projected growth?

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

It's all on the projected growth, because you're determining a payment for a province for that year. So you're using the data that you have for the year that you're paying, and the two prior years, which is going to contain a mix of Statistics Canada data and forecast data.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I understand that. But is there ever a proper accounting based on what actually happens in future years? We're paying and paying and paying to the provinces every year, and it's a different amount based on projections of GDP and real growth in the economy or whatever. We get the figures a year later. Is there ever an accounting done with each province, based upon what actually takes place?

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

No. For certainty to the provinces and territories for their budgeting, we leave the amount that's been allocated to them.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Even though it's allocated based upon nothing more than a projection?

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

Your total envelope is going to be allocated on the growth in GDP. That's going to set the envelope that's allocated across.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I understand that it's not based on actual numbers.

4:25 p.m.

Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance

Daniel MacDonald

And for the estimates that are currently used to allocate where the population is, we'll continue to follow a cycle that we do now. So they are updated afterwards.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Is a proper accounting done at that stage, once they're updated?