Thank you, Mr. Chair, and welcome gentlemen from the PBO.
In the projections that are used you noted the sensitivity to interest rate increases in terms of discount rates. For the last 10 years, the other side racked up a lot of debt—I think it was over $150 billion—but actually benefited because rates fell or declined quite a bit. If you look at past budgets, they always overshot what they said their interest expense number would be, because a lot of the debt that was rolling over was rolling over at much cheaper rates due to a very weak economy that the Conservatives presided over for a number of years.
Our situation is a little different. Rates are going up because the economy is doing a lot better. You guys have looked at some of those numbers. When debt, whether new or old debt, matures, and the government goes out to market, it's refinanced at a higher rate, unfortunately, but due to a very good thing because the economy is doing well, and rates are going higher.
I'm glad you also made the observation that with higher rates, the present value of future liabilities declines, so your direct program expenditures fall, which is a benefit for us. I'm very glad that the PBO has highlighted that. It's something I'm proud of because our government has worked with the unions representing those hard-working government workers who work day in and day out to serve all of our residents, whereas the prior government did not and just forced collective bargaining agreements on them.
That was my statement. My my question is on the pricing of carbon. It is a fact that each province will be allowed to do what it sees fit with funds that are collected from pricing pollution. Going to your comment in the report, if the funds, for example, are in B.C. where one of my honourable colleagues is from, those funds can be used for taxation purposes, i.e., to reduce personal and corporate tax rates. If that is done, it will largely offset any sort of impact.
Is that a fair assessment from one of the pages in the report?