Evidence of meeting #97 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was finance.
A video is available from Parliament.
4:25 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
What you are essentially saying is that, with the new process, non-market debt, such as for pension plans, is accounted for. If major changes to this type of debt had been made, they would have been included in the 2012-2013 supplementary estimates (B).
Is that what you are saying?
4:25 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
All right.
I understand the difference between market and non-market debt. However, in terms of interest rates, is there a significant difference between the two, between short-, medium-, and long-term market debt and non-market debt?
4:25 p.m.
Director, Fiscal Policy, Department of Finance
I can share with you what we have in terms of the projection base for interest rates, in both the short term and the long term.
4:30 p.m.
Director, Fiscal Policy, Department of Finance
Oui. At the time of budget 2012 our interest rate projection for short-term interest rates was .93% for the T-bills. For the 10-year bonds it was 2.78%.
4:30 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
So that is between 2.78% and 2.96%, if I am not mistaken.
Regarding the accounting for non-market debt, what interest rate is used? Do you have an idea of the numbers? You don't use the same interest rates to borrow on the market and to calculate the debt for borrowing on the market for pension funds, for example.
4:30 p.m.
Director, Fiscal Policy, Department of Finance
I'm afraid I don't have that information. We would have to try to get back—
4:30 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Perfect. I understand.
How much time do I have left, Mr. Chair?
4:30 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I want to go back again to an estimate for the debt. The Parliamentary Budget Officer's report contains the following passage:
[...] the estimate of the sensitivity to changes in interest rates is based on a permanent increase in all interest rates and excludes the impacts on public sector pension and benefit expenses.
When you estimate sensitivity to changes in interest rates, do you only use market debt or do you also include non-market debt?
4:30 p.m.
Director, Fiscal Policy, Department of Finance
Our basis for projecting interest rates is the consensus of private sector economists, and this has been the basis of our projections for almost 20 years I think, going back to 1993-94. So we survey leading private sector economists in the country quarterly and take the consensus of their forecasts and use that as the basis of our budget and our update projections.
In speaking to a previous question about best practice, that has been cited by the IMF and the OECD as a best practice in terms of transparency. So it's not based on internal Department of Finance numbers; it's based on a consensus.
4:30 p.m.
Conservative
4:30 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Thank you very much, Mr. Chair.
I want to continue with what Ms. Nash said, that we are missing a lot of information. I think it is obvious that we need information to make decisions. Also, regarding the process, the Parliamentary Budget Officer asked for information on programs. I can see from the report that 23 departments, including the Department of Finance, did not provide complete information for these. That is in the report on supplementary estimates (B).
Could you explain why the Department of Finance did not provide complete information to the Parliamentary Budget Officer?
4:30 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
We provided a response with respect to our reductions, in alignment with the government estimates process in the program activity information.
4:30 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
I'm sorry to interrupt you. Someone was talking to me at the same time.
4:30 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
We responded with respect to aligning our response to the program activity architecture of the department, which supports the estimates process. We're here today to respond to the committee's questions on the estimates.
4:30 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Let's go back to the Canada Revenue Agency.
Supplementary estimates (B) show that there are measures that were approved in 2011-2012 and that will only be implemented in 2012-2013.
Could you explain what these measures are and why they were not implemented in 2011-2012?
4:35 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
I'm sorry, I can't speak on behalf of another department. I can't speak on behalf of the CRA.
4:35 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Okay.
Can any of you speak on behalf of the Canada Revenue Agency?
4:35 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
I'm sorry. We were asked to come behalf of the department's supplementary estimates.
4:35 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
All right. That changes the nature of my questions somewhat.
Let's talk about the money that was spent. Mr. Simms mentioned $16 million for advertising.
Can you tell us how much was approved beforehand? Why was so much money used for advertising instead of being invested in programs?
4:35 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
The $16 million for the Department of Finance was part of supplementary estimates (A). My colleague can speak to the campaigns.
4:35 p.m.
Assistant Deputy Minister, Consultations and Communications Branch, Department of Finance
The allocation of funds is essentially decided by the privy council and ultimately by cabinet, as it allocates the funds. The money comes from a central government advertising fund. Cabinet allocates this money based on government priorities.
What that means for the Department of Finance in practice is that, in this case, once cabinet made the decision, the department received $16 million for this year's campaign, as my colleague stated.
4:35 p.m.
NDP
