Good morning, Mr. Chair and members of the committee.
As Chief Financial Officer I am the lead executive responsible for financial reporting and disclosure of the 2017-18 supplementary estimates (C) for the Department of Finance. With me today are officials to assist in providing you with a more in-depth perspective on the rationale and policy that supports the numbers within these estimates.
The 2017-18 supplementary estimates (C) reflects a net decrease of $463 million in departmental budgetary expenditures stemming from forecasted decreases in statutory spending of $466.9 million and a $3.9-million increase in voted expenditures, representing a net change of 0.5%. That brings the department's total budget to about $90 billion.
These statutory items are listed in the budget document for information purposes and will not be part of the supply bill. However, they are included in these estimates to provide a more complete picture of total expenditures.
Within the statutory forecast the contributing factors to the $466.9 million decrease are as follows.
There's a $503 million decrease in interest on unmatured debt largely driven by lower projected inflation for 2017 and 2018 by private sector economists consistent with the 2017 fall economic statement, which results in lower expected real return bond adjustments for 2017 and 2018. There's a $52 million decrease due to higher recoveries of alternative payments for standing programs driven by an increase in the estimated value of Quebec's basic federal tax. There's a $10.8 million decrease due to a higher use allowance recovery, which also reflects an increase in the basic federal tax in Quebec.
These decreases are partially compensated for through the following increases: a $19-million funding increase for the Canada Infrastructure Bank for the activities the bank will undertake over the short term to establish the organization; a $35-million increase for other interest costs, which represent in large part higher interest rates than what was forecasted by private sector economists, in accordance with the Fall Economic Statement 2017, which has an impact on the average long-term bond rate used to calculate the interest on bonds related to the public service pension funds in terms of services previous to April 1, 2000; finally,
a $44.3 million increase for additional fiscal equalization payments to Nova Scotia due to updated data used for the calculation of the payment.
New vote 1 funding requirements are $3.9 million and consist of the following.
There's an amount of $1.8 million for the department's role in the 2018 G7 Summit. These costs involve policy analysis to shape the finance track work feeding into the G7 Summit and logistical support for related events including outreach.
There's an amount of $1.3 million related to the financial sector policy funding renewal to ensure that Canada's federal financial sector remains robust and effective and meets the evolving needs of consumers and businesses.
There's an amount of $0.4 million for personnel costs to support the corporate asset review program; and an amount of $0.4 million to support the department's oversight role in the Canada Infrastructure Bank.
Supplementary estimates (C) also include an increase of $53.4 million for non-budget expenditures planned for 2017-18 to purchase initial offerings in the Asian Infrastructure Investment Bank, pursuant to the Asian Infrastructure Investment Bank Agreement Act.
This concludes my overview of supplementary estimates (C) for the department.
We would be pleased to answer any questions the committee members may have.