Finance Committee on Oct. 24th, 2016

[The Chair, Liberal, Wayne Easter]

Okay.

Mr. Ouellette.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Thank you very much for coming here today.

I was just looking at the projections for GDP growth, the gross domestic product, and the Bank of Canada said that they see growth of 1.1% in 2016, 2% in 2017, 2.1% in 2018. You have similar projections, but, in fact, yours are a little bit more optimistic about growth. I was just wondering if you could explain those differences.

[Chris Matier]

Sure.

I think the biggest difference is in 2017. As you noted there's the 2.3% versus 2% from the bank. Looking at least at the composition of growth, it appears that the bank would have a weaker contribution of growth from the housing market. This may reflect some of the timing of the recently announced housing market measures, but for us, the adjustment in the housing market occurs later on in the projection horizon.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

You also mention in your report that the rates for employment insurance premiums were going down, from $1.88 for every $100 in contributions to the new break-even point of $1.63 for every $100, meaning Canadians will have more money in their pockets when they're working. What impact would that have on the economy?

[Mostafa Askari]

It's additional money in the pockets of individuals, and obviously those firms also pay less for EI premiums. We haven't really separated that impact in our analysis in terms of exactly how that's going to impact the economy.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

So that's a good thing, if you want the economy to grow.

[Mostafa Askari]

Certainly, it has a positive impact.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Okay, perfect.

This is a question for Tim Scholz.

I was intrigued with your new report coming out in a few days, on Thursday. I was just wondering if you had looked at indigenous employment.

[Tim Scholz]

We have not.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Why have you not? It sounds like you looked at every province. I go into a lot of communities and they have 75% unemployment. We're not really sure of the statistics. I'd like to know if those statistics are true. If they're not real statistics, how can government make really good policy in order to have a positive impact on people's lives? I know you're interested, but is there something you could do to be looking into that?

[Tim Scholz]

We rely quite heavily on Statistics Canada's labour force survey data. We'd be happy to look into the micro files and the data, and then see what we can find on that and get back to you and let you know what we could do.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

It's important that the public know. I think if there was 75% unemployment in Alberta there might be a small revolution, but indigenous communities seem to have been a little bit forgotten for so long. With the more light that's shone on that, we can make a difference.

The next question concerns fiscal estimates.

During his appearance on September 29, 2016, before the House of Commons Committee Standing Committee on Finance, Sahir Khan, from the University of Ottawa's Institute of Fiscal Studies and Democracy, advocated reforming the estimates process consistent with the 2012 recommendations of the Standing Committee on Government Operations and Estimates. According to Mr. Khan such an approach would allow parliamentarians to “vote on program activities representing key business lines within government departments” and “get both financial and performance information...to support their scrutiny”.

Would such a reform to the estimates process, in your estimation, enable parliamentarians to conduct a more thorough review? What other measures could help parliamentarians conduct a more thorough review of estimates?

[Jean-Denis Fréchette]

Before I ask Jason to maybe elaborate a little bit more, as you are probably aware, the minister this morning appeared before the government operations committee to table his new proposal about exactly what you mentioned. It's going to be interesting because our position is a little bit like what the 2012 government operations committee report was about, more in line with programs. Certainly the big problem—and after that Jason will elaborate, he likes that issue a lot—will be for parliamentarians to have the time to review all those. If you have the best data or the best information, you still have to take the time to review all this.

Jason.

[Jason Jacques]

To elaborate on the PBO's point, I think, broadly speaking, the position we've had in the office is that the 2012 government operations committee report did represent a consensus among parliamentarians of all political parties with respect to the 16 recommendations to the House of Commons at the time, regarding how the estimates and budget process and the business of supply needed to be reformed to serve all parliamentarians better. Those 16 recommendations, for the most part, as Jean-Denis mentioned, were focused on the content, the quality of the reports being presented to parliamentarians.

In addition to that, it was also a question of capacity in which we play a very limited role, but also the capacity in training available to parliamentarians and the time available to them. There's a question of time devoted by committees to look at the work, but also how much time you are provided to examine the work, taking the example of the timing around which main estimates are tabled and how quickly the first appropriation bill has to be approved. You're currently waiting for supplementary estimates (B), which will be the fourth appropriation bill, and how many weeks or how many days you have to devote to scrutinizing the additional billions of dollars' worth of expenditure.

It's not for us to advocate a specific position to the House. Consistent with the PBO's mandate, our only role is to analyze and research the estimates. It's up to the members around the table and the members in the House to determine what makes the most sense, but going back to the last time parliamentarians spoke on the 2012 report, it's a very good starting point.

[The Chair, Liberal, Wayne Easter]

Thank you.

On this particular issue, where part of the problem is, is in the budget documents. I've been around here for a while and in the early years in the budget documents, in the budget itself, you could determine program by program in each department how much money was spent over a five-year period. It isn't done that way now. In the budget documents for, probably 1993 to 1997-98, it was clear where the money was spent. You could understand it easily by looking at the budget document. You didn't even have to wait for the estimates. That's not the case now, so this does have to be simplified. We shouldn't have to take a lot of training. It's a matter of the Department of Finance laying out the figures in a way they can be understood by a layman.

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

You're in a position to make those changes now, Mr. Chair.

I'd like to ask a couple of questions about a slide in your presentation.

It's the five-year gross domestic product and employment growth slide.

[The Chair, Liberal, Wayne Easter]

It comes out of the analysis done by the Library of Parliament. That slide is in their documents.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Let me preface it by saying this particular slide says year-over-year real gross domestic product growth and employment growth. It runs from quarter one of 2010 to the current quarter. With one blip for a couple of quarters, it shows growth in the two and a half to three year range right up until quarter one of 2015. Does that ring true with what you have concluded?

Let's assume that the analysts have the information correct because they always do.

[Jean-Denis Fréchette]

Chris is looking into—

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I'm curious to get your response to this.

This seems to me to be a chart that shows real growth in the economy over the last five years of somewhere in the range of 2% to 3%. However, the finance minister has consistently said that one of the reasons for plunging the country into a $30-billion deficit is that we've gone through a period of slow economic growth. Who's right? Are these numbers correct? Is the finance minister not looking at the right numbers, or is this chart not an accurate reflection?

[Chris Matier]

I agree. I think the numbers are probably correct in that chart. I would agree with the statement that we have seen real GDP growth and moderate employment growth over the last several quarters. I think the issue is more about what we see going forward.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Right now, I'm interested in going backwards.

[Chris Matier]

Okay.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Would you disagree that we have not had a period of slow economic growth over the last five years?

[Chris Matier]

It has been slow compared to historical growth rates, even relative to estimates of a potential growth rate. That's partly why we have.... You'll recall the Governor of the Bank of Canada saying that the Canadian economy is operating well below it's sustainable capacity. You get to that point by having growth that is weak and low.