Finance Committee on March 26th, 2018

[Nicholas Leswick]

Just so I understand your question correctly, over the forecast horizon presented in the federal budget it would be approximately $114 billion.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay. I certainly appreciate that.

I don't have any other questions on the debt, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Thank you all for joining us today.

My first question is a little more technical and it leads me to reflect seriously on the usefulness of the interim estimates. This new tool was supposed to be put in place so that the main estimates, which have to be submitted soon, are better tailored to the budget statement that was brought down a few weeks ago now.

In vote 1 for the Department of Finance, you are asking for $23.8 million, or about one quarter of what is required for the year. The same goes for the other departments.

Still in vote 1, at the very end, you talk about the “authority to enter into commitments not exceeding $95,355,613 in the fiscal year for the purposes of this vote”. “This vote” is asking for $23.8 million.

Why are you asking for the authority to enter into commitments not exceeding $95 million or so? Why did you not just include that in the vote? Why are you going about it this way?

[Adelle Laniel]

As I understand your question, you want to know why we are asking for only 25% of the funds.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

In vote 1, you are asking for $23.8 million, but in the description of the vote, you ask for the authority to enter into commitments not exceeding $95 million. I am wondering what is the use of interim estimates if you are asking for the amounts that will be requested in the main estimates to be submitted next month.

[Adelle Laniel]

A number of the expenditures that we have to make are long term. I understand your point of view that, by requesting funds pursuant to paragraph 32(1)(b) of the Financial Administration Act, we could be faced with a requirement to spend that money. When we enter into contracts, we consider the amounts that are set aside for them. A lot of the expenditures are related to salaries. These are not expenditures for products and services, which could represent a risk for us. We base our expenditures on a long-term plan.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Okay. The word we really have to focus on is “commitments”, I gather.

I would like to ask some more general questions. Other members have been given a lot of latitude and have been able to ask questions that do not specifically relate to the interim estimates. So I am going to give myself the same latitude by asking a question that I did not have the time to put to the minister.

Pay equity was a promise in the budget, but the promise comes with no amount allocated. Pay equity is something very important for the federal public service. Can any of you give me any explanation for this omission?

[The Chair, Liberal, Wayne Easter]

Does somebody want to take a stab at that? Mr. Leswick?

[Nicholas Leswick]

The very short answer is that the methodology to implement a new pay equity regime is still under development and wasn't communicated in the budget, but the government has made a commitment to table legislation and obviously details before the end of the calendar year.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I have another question that I did not have the time to put to the minister.

The 2018 budget statement mentioned recovering $184 million by 2022-23 by cracking down on tax evasion, whereas the Minister of National Revenue, as well as several other ministers, has stated that cracking down on tax evasion was going to enable the government to recover $25 billion.

Why is there such a large difference between these two amounts? The amount announced is $25 billion but, in the 2018 budget documents, the projected revenue from the fight against tax evasion amounts to only $184 million by 2022-23.

[Nicholas Leswick]

I'll take a stab at the answer.

The $25 billion is represented by CRA, and it represents the total annual value of all tax recoveries at both the federal and provincial levels across all compliance initiatives.

What's represented in the budget is a very small subset of new initiatives that would support compliance activities, for instance, in GST/HST evasion. Another example is non-resident income disclosure. Again, it is a very small subset of the larger $25 billion of collections and compliance activities at CRA on an annual basis.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you to the presenters today.

I want to ask a question about the investment in indigenous people that we've seen in the budget. We've seen some significant investments in the last while, and it's made a lot of people happy that we finally have the attention of a government to try to move forward.

I represent the north, and we have huge challenges. Our suicide rates in the north are 20 to 30 times the national average. Some 50% of all first nations children live below the poverty line. The unemployment rate is double the national average. There are so many stats we could point to.

We're starting to see a lot of money coming forward, but it's spread out over many departments. The bulk of the money is coming through the two indigenous departments, the former INAC department, but there are 34 departments across this government that have money earmarked for aboriginal people.

I want to know what the role of the Department of Finance is in terms of providing oversight. Who's actually in charge of making sure the money is going where it's supposed to be going in terms of allocation and all these different checks and balances that we expect to have in place?

[Roger Charland, Director General, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance]

Let me try to answer that question, because it's a fairly complex question.

It goes to the structure, if you will, of the various ministers, and their responsibilities, accountabilities, and portfolios. We at the Department of Finance will be working with all various departments in terms of what their roles are, and their programs and responsibilities. We'll be working with them and making some decisions in terms of the funding and the support in order to advance a cause.

When it comes to the machinery—I think fundamentally the question you're dealing with is the broader machinery of government issue—in terms of whether those programs should be spread or not spread, that doesn't fall within the purview of the Department of Finance. I think that's a broader question. We look at working with the departments.

There has been, and the government is committed to, a rethinking of what used to be called INAC and the two departments. Their consultation is going on right now in terms of what the responsibilities and roles of each of these departments should be. I think that's where part of the conversation is going, and we'll see where it lands fully in the coming months.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you.

I totally agree with you on the financing arrangements and agreements with the different first nations and the Métis and Inuit. It's a very complex issue and hard to track. We have a national indigenous organization table for the Métis, one for the first nations, one for the Inuit, and one for the land claims coalition, but the land claims coalition is broken up into two, those who have settled land claims and those who have settled self-government. We have pots of money flowing here but not to there, and then we have some on reserve and some off reserve.

I was hoping that somebody was providing oversight so that we could really keep a good eye on how things are going. I'm not sure if money is flowing to all different aboriginal and indigenous governments across Canada. That's concerning, because some of those people are in my riding. We have a huge deficit when it comes to trying to bring indigenous people up to the Canadian standard of living. Many people have posed the question to me, how do we ensure that the money is sufficient so that we can try to tackle some of these big issues? They've suggested that maybe we should look at tying the investment to the GDP, a percentage of the GDP. Is that something we can consider?

[Roger Charland]

I think it would be inappropriate for me to comment on what may or may not be. There has been, in budget 2018, some investment; on the question of the new fiscal relationships, there has been some investment to support that dialogue. I think there have been a number of fronts with the various groups to ensure that these kinds of questions are being looked at.

[Michael McLeod, Liberal, Northwest Territories, NT]

I have one final question, then. We know that relative to the Canadian population, indigenous people are not benefiting from Canada's economic prosperity and wealth. Do we have, in terms of facts, research going on within Finance to tell us where we're at in terms of meeting the Canadian standards for indigenous people?

[Roger Charland]

I'm not sure whether we have all of that. I'd have to go back and check. I am not aware of all of this. I could undertake to see what it is we have at the department and communicate it back to the committee via the clerk.

[The Chair, Liberal, Wayne Easter]

Okay.

You have time for a last short one, Michael.

[Michael McLeod, Liberal, Northwest Territories, NT]

Maybe the finance department could tell me what their mandate is in terms of what was in the mandate letter from the Prime Minister with regard to aboriginal people.

[Roger Charland]

I don't have the letter with me, so I'll have to paraphrase. I probably won't do justice to the text of the letter.

The main commitment is working with the Minister of Crown-Indigenous Relations and Northern Affairs on the new fiscal relationship and the question of removing the 2% cap.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We're now going to five-minute rounds.

Mr. Kelly.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you.

My questions will likely be directed to you, Mr. Leswick, in part in reaction to some of what you said earlier in response to a question, but more to what the minister said in his remarks. He talked about the debt-to-GDP level, and how low the federal debt-to-GDP was in Canada, and then compared it with other jurisdictions, such as the United States and G7 countries.

Is that really a proper comparison, given that in the United States, for example, almost all significant social program expenditures, including medicare, medicaid, social security, and so on...? They have a federal department of education, and other services are funded federally. Is it proper to then not include provincial debt in that calculation to compare those two countries?

Do you know, and can you tell the committee, the debt-to-GDP level of all government debt, including crown corporation debt, which is important to consider as well?

[Nicholas Leswick]

Indeed. Thank you for the question, because it helps establish clarification.

The statistic that the minister quotes is an internationally comparable statistic. In other words, there are various adjustments made by the IMF and OECD to establish a common comparison of debt between countries. One of those adjustments is indeed the fact that we would add the value of provincial and territorial government debt into our debt metric. Likewise, the U.S. and other G7 countries would add their sub-sovereign levels of government into their debt metric as well. So it is on a comparable basis.

Extending it a little bit further, though, because the dynamics of government are so different in terms of how we, for instance, fund our social security schemes—we contribute assets into the CPP/QPP, whereas other jurisdictions just throw those premiums into their national revenues—it does become quite a set of adjustments.

I'm saying that quite objectively in terms of—