Exactly. We don't have the data.
Evidence of meeting #85 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 video is available from Parliament.
Evidence of meeting #85 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 video is available from Parliament.
5:20 p.m.
Senior Director, Economic and Fiscal Analysis and Forecasting, Office of the Parliamentary Budget Officer, Library of Parliament
Exactly. We don't have the data.
5:20 p.m.
Conservative
The Chair Conservative James Rajotte
Is there any policy advice you'd advance or things that the committee ought to consider in terms of trying to better match our labour challenges—certain industries, certain areas—with our labour needs in other regions and other areas?
It's an open-ended question, but feel free to comment.
5:20 p.m.
Parliamentary Budget Officer, Library of Parliament
On issues of policy, we just feel way more comfortable saying that it's beyond our mandate. I apologize.
We seem to get into enough trouble just trying to work with what we have.
5:20 p.m.
Conservative
The Chair Conservative James Rajotte
You won't get into trouble. I asked the question.
All right. I appreciate that.
Mr. Caron, you have the floor.
5:20 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you, Mr. Chair.
I would like to come back to the question of fiscal policy.
You say we have achieved long-term structural balance in fiscal policy in Canada. In that regard, changes have been made to Old Age Security and there has been no actual reduction in transfers to the provinces, but rather a reduction in the growth of transfers.
I also see, on slide 18, regarding net debt, that the plan is to significantly reduce the federal government's debt. However, we can see that the debt levels of territorial, provincial and local governments are rising, also significantly.
Is there a relationship between the decisions made by the federal government, in particular concerning transfers, and the long-term forecasts relating to provincial, territorial and federal debt?
5:20 p.m.
Parliamentary Budget Officer, Library of Parliament
Certainly, from the calculation we have done, most of the fiscal gaps at the territorial, provincial and local levels are a result of the changes made to the escalator for the Canada Health Transfer.
5:20 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Do you therefore think that the changes that have been made in relation to health care will also have repercussions for the provinces' fiscal position in the long term?
5:20 p.m.
Parliamentary Budget Officer, Library of Parliament
Yes, that is correct. Before the change made by the indexation clause, there was a narrow gap at the provincial, territorial and local levels. That gap will grow because of the indexation clause.
5:20 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you.
I have another question, and there has been quite a lot of talk about this recently. That is your assessment stating that using the Department of Finance multipliers, you estimate that economic growth in the medium term, and I think that is in 2015, will be 1% lower than what it could be, and 125,000 jobs that could have been created will not be created, one reason being austerity policies.
You say that because of the various policies that have been adopted, and because of recent budgets, the Canadian economy will not achieve the results it could otherwise have achieved.
5:20 p.m.
Senior Director, Economic and Fiscal Analysis and Forecasting, Office of the Parliamentary Budget Officer, Library of Parliament
Yes, in our projection it does reflect the economic impact of government spending reductions and restraint measures, to date. Of course, all else equal, we estimate that the level of real GDP would be 1% higher in the absence of the federal spending reductions and restraint.
5:20 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Just out of curiosity, do the 125,000 jobs that will not be created also include the positions that have been eliminated in the public service, for example? One figure mentioned was 19,200 jobs. Others have even said 30,000 positions.
5:25 p.m.
Senior Director, Economic and Fiscal Analysis and Forecasting, Office of the Parliamentary Budget Officer, Library of Parliament
We do not have a precise estimate for that. It is more of a comprehensive estimate. It might include both.
5:25 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you.
I have one last question, because I have a little over a minute left.
We were talking about employment. Mr. Adler's question is a good one, in the sense that yes, some new jobs have been created. We are achieving a higher level than was observed at the bottom of the recent recession, but we have also not achieved our potential in terms of employment. For example, the fact that there is a difference with the trend rate is mentioned, but it is also due to the fact that job creation is not keeping up with population growth and is also not keeping up with the number of people who want to re-enter the labour market. That explains why the unemployment rate is really not budging, even though job creation is occurring. Is my analysis correct?
5:25 p.m.
Senior Director, Economic and Fiscal Analysis and Forecasting, Office of the Parliamentary Budget Officer, Library of Parliament
We haven't identified the specific factors for the level of unemployment being below its estimated trend, but, yes, you're correct that in the third quarter of 2012, the actual level of employment is roughly 130,000 jobs below what we estimate as its trend level.
5:25 p.m.
Conservative
5:25 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you, Mr. Chair.
I'd like to go back to the conversation we were having about health transfers and the change of track. First of all, the change of track is not happening until 2016-17, so that's not impacting the provincial situation currently or for the next numbers of years.
I see you nodding your head.
5:25 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Yes, okay.
Contrary to, of course, what the opposition says, it's not a decrease, it's a change in track. But certainly 3% or nominal GDP are increases. Is that accurate?
5:25 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you.
I've been involved in health care within the provinces, and I certainly understand the challenges that provinces are going to have. As I understand it, we're increasing at 6%, but if you look at the provinces, they're not increasing at 6% currently, are they?
October 30th, 2012 / 5:25 p.m.
Parliamentary Budget Officer, Library of Parliament
Well, we have historical data over the last 10 years where increases in health spending by the provincial, territorial, and local levels were in the neighbourhood of 6% to 7%.
5:25 p.m.
Parliamentary Budget Officer, Library of Parliament
Yes.
We've also seen periods in the 1990s—which I think speaks to your point, Mr. Chair, that we've seen rates much lower than that during times of restraint. When we do this projection analysis, the same way, I think, the Department of Finance does it, we create baselines based on a longer term history. We project forward. Based on looking at income, looking at population, looking at enrichment, you're going to see health spending in the neighbourhood of about 5% to 5.5%.
5:25 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
I can remember listening to the health minister, listening to the deputy health ministers, knowing that it's absolutely unsustainable to keep on that track. We know there are system changes that can be made. The Ottawa Citizen said in an editorial earlier, that even if federal health care support increased at the current 6% a year indefinitely, the provinces would still have this affordability.... The provinces are going to have to make some changes. Do you believe that the provinces really don't have any intention of ensuring increased efficiency in their health care spending, and that they're not really grasping and grappling with this very important issue?