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

4:25 p.m.

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

Daniel MacDonald

We have a regular estimates cycle for the allocation on the transfer now, and we'll continue to do so in the future, which reviews the calculation of the years to follow.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

But it only makes adjustments for projected. It doesn't actually claw back any money or adjust the money based upon what actually takes place as far as the GDP growth or—

4:25 p.m.

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

Daniel MacDonald

On the GDP, no.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Interesting.

So in essence, if you're off by one-tenth of 1% on a projection, and the actual is much different, the province may actually receive much less or substantially more than what they actually should be entitled to, based upon the formula if it were based on actual and not projected.

4:25 p.m.

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

Daniel MacDonald

You're going to catch a lot of that. You're talking about a three-year moving average, so you have a window that's moving through. So you're going to have common data points that are updated for the following year's allocation, or your following year's growth.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I understand, and I don't want to belabour the point, but it seems to me that it could be adjusted subsequently to actually reflect what takes place, and what the costs of each province are.

For instance, in my particular community I've had 8% growth year over year, and yet Statistics Canada continually lowballs the number of residents in my community by a substantial number--I mean, 20% or 25%. As a result of those projections, my province, along with other provinces—for instance, Saskatchewan—may not actually receive what they're entitled to, based upon projections rather than actual figures.

4:25 p.m.

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

Daniel MacDonald

The information that's used to calculate the allocation, which includes population and under the current formula includes tax data, is updated through the regular estimates process, and that follows some time afterwards.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Yes, but it always deals with projections, not actuals.

4:25 p.m.

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

Daniel MacDonald

When you're making a calculation for.... The challenge we're faced with is that we're trying to project for a year that's coming—what it is for provincial budgeting purposes.

4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I don't think I have any problem with the method you use for projections. I have no problem with that, and I think you understand clearly what I'm driving at.

4:30 p.m.

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

4:30 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

I have no problem with what you do that way, but based on the actuals that take place, I think it would change. But that is something I'll look into.

Thank you very much.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Jean.

We'll go to Mr. Brison.

4:30 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Thank you, Mr. Chair. I have a couple of questions.

Ms. Nash raised the demographic issue, which is more of an issue now than it was 15 years ago, as an example, with the baby boom generation but also with migration within the country. There are provinces, for instance in the Maritimes, in which we're seeing an aging population with a lot of young people leaving for opportunities elsewhere.

Have there been some discussions and consideration of adjusting the transfer formula to reflect what is more of a trend today, in terms of demographic shift, than it would have been ten years ago, when we had the last negotiation of the health care accord? We were actually negotiating ten years ago the 2004 accord; the process of negotiation had been an ongoing one. Has there been some consideration of it? Is that part of the current discussion with provinces?

4:30 p.m.

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

Daniel MacDonald

The minister's announcement in December 2011 confirmed what the future transfer arrangements are going to be. It has been determined that it will be on an equal per capita basis for the Canada health transfer past 2014-15 and that the growth rates will be as set out.

4:30 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Yes, and of course there were no discussions with the provinces during which the provinces might have expressed some concern about that.

Will the extension of the CHT escalator be applied to the 2014 base CHT, or will it be the 2014 base CHT amount plus the funding included for wait times reduction and medical equipment, which was part of the 2004 ten-year accord?

4:30 p.m.

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

Daniel MacDonald

It's the CHT.

4:30 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Why would it not also include the funding included for wait times reduction and medical equipment that's part of the original accord?

4:30 p.m.

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

Daniel MacDonald

Those were specific initiatives that were undertaken as part of the 2004 accord. Any decision about that hasn't been taken.

4:30 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Hmm.

That's all I have right now, Mr. Chair.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

I want to clarify a couple of points. The demographic issue is obviously one the government has focused on in many ways, but the per capita cash allocation is in response to a lot of provinces saying that they're not getting their fair share in terms of transfers to the provinces. If you allocated provincial transfers for health care based on demographic issues, you would actually move away from equal per capita cash transfers to the provinces.

I'll give you an example. The province of Saskatchewan, where you have a younger population perhaps, would not be getting equal per capita cash transfers if you took demographic considerations into account.

Am I correct in that?

4:30 p.m.

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

Daniel MacDonald

You're correct, in that if you weight any population count by any factor, it will be different from equal per capita, yes.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

So if we choose to include demographic factors in the way we as a federal government transfer health, we would be moving away from an equal per capita cash transfer. That's the implication of doing that.

4:30 p.m.

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

Daniel MacDonald

You would be getting away from a system in which relativities.... We have an equalization program that measures fiscal disparities between provinces. You would be putting in another allocation method, yes.

As I said, if you took any factor and applied it to raw population count, you would get a different allocation, whatever the factor was that you chose.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

So the finance equalization program addresses some other challenges provinces might have in terms of revenues—