Finance Committee on April 28th, 2015

Evidence of meeting #77 for Finance in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was economy.

A recording is available from Parliament.

On the agenda

Report of the Bank of Canada on Monetary Policy

Economic and Fiscal Outlook

MPs speaking

Pierre Dionne Labelle

Dave Van Kesteren

Mark Adler

Also speaking

Stephen S. Poloz Governor, Bank of Canada

Carolyn Wilkins Senior Deputy Governor, Bank of Canada

Jean-Denis Fréchette Parliamentary Budget Officer, Library of Parliament

Mostafa Askari Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament

Chris Matier Senior Director, Economic and Fiscal Analysis and Forecasting, Office of the Parliamentary Budget Officer, Library of Parliament

Scott Cameron Economic Advisor, Analyst, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer, Library of Parliament

11:25 a.m.

Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament

Mostafa Askari

That's correct, but again, that's compared with what the current tax law is. The cost to the treasury is relative to what the current tax law is. The current tax law is that you pay the taxes according to your income, but under the family tax cut, you can have that exemption or the tax savings by making that allocation. Whatever you do would be a cost to treasury relative to the amount of money the treasury would have gained from that income.

11:25 a.m.

Conservative

Mark Adler Conservative York Centre, ON

Okay. Thank you.

Now, when we introduced the transfer payment to parents with children, there was some discussion about whether this was good public policy. We believe, on this side, that mom and dad are the best arbiters of how to spend that money and how to raise their kids. We are unlike the Liberals, who said at the time that this money would just be spent on beer and popcorn.

Can you clarify for the committee that when dollars remain with the people who earn them, the taxpayers, the money is spent on worthwhile endeavours, with particular regard to the universal child care benefit?

11:25 a.m.

Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament

Mostafa Askari

I have to be very careful how I answer that question, sir. I could get into all kinds of trouble.

In the study we did on the universal child care benefit, we looked at which groups of families would receive the benefits from that, and that was the result. The way the program is structured, certainly a large part of the new money added to that program will go to families who typically don't have any paid child care expenses. Now, the money could be used for other things related to children, but in terms of the paid child care expenses, a very large portion of the new program, actually, will benefit families who do not have paid child care expenses.

11:25 a.m.

Conservative

Mark Adler Conservative York Centre, ON

I have a study here that was just put out by the Rotman School of Management at the University of Toronto, hardly a right-wing bastion. I have a quote from it. This is on the universal child care benefit:

Over all, we’re starting to get a full picture of the effects of Canada’s National Child Benefit. It improves the lives of children, an effect that we can actually measure in terms of better school performance and improved health. It is being spent wisely by parents on both necessities for living and direct investments in education.

Do you want to comment on that?

11:25 a.m.

Conservative

The Chair Conservative James Rajotte

We're over time again, but you can make a brief comment if you want to, Mr. Askari.

11:25 a.m.

Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament

Mostafa Askari

Again, sir, in these studies that we do, we don't really judge the validity of the policy. We just provide the consequences of these policies. I'm not going to comment on whether it's a good policy or a bad policy.

11:25 a.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Colleagues, we have time for four short rounds.

I'll go to Mr. Cullen first, please.

11:25 a.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Thank you, Chair.

The Prime Minister famously said at the UN once that if you don't measure, you can't manage. That was a fair comment, and hopefully true. Yet we have the Auditor General's report here that says not only is the government not measuring the impact of their tax expenditures, but they are not providing information to parliamentarians to actually understand what the impact has been. Let's look at some of these right now...so flying blind and playing politics.

The TD Bank pointed out that the investment per $1 in early childhood education, child care, earns back to the Canadian economy anywhere between $1.50 and $2.78. By any economist's or banker's definition, that's a good investment and a good return on money.

You cited in the government's changes to childhood benefits to Canadians that there would be negligible impact on the creation of child care spaces and early childhood education. Is that true?