Evidence of meeting #83 for Finance in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was outlook.
A recording is available from Parliament.
Liberal
The Chair Liberal Wayne Easter
National finance. And are you able, in that documentation, to state where infrastructure money has been spent, as well as where it's projected to be spent across the country?
Parliamentary Budget Officer, Library of Parliament
Where, as in locations, municipalities?
Liberal
The Chair Liberal Wayne Easter
Yes, whatever infrastructure programs have been undertaken or proposed, I guess.
Parliamentary Budget Officer, Library of Parliament
Yes, we do, and we identify those that are like the green infrastructure, and so on, with great difficulty sometimes, to be honest.
Liberal
The Chair Liberal Wayne Easter
Okay.
We'll not have too much difficulty getting a copy of the Senate minutes.
Mr. Falcon Ouellette.
Liberal
Robert-Falcon Ouellette Liberal Winnipeg Centre, MB
Thank you very much, Mr. Chair.
Thank you very much for coming here. I really appreciate the work you do. Even though you might believe it's painstaking and thankless, I think we all thank you for that work you do.
I want to discuss the information that you provided in your documentation here. We provided you direction in a motion that was adopted on February 4, 2016. Essentially, it's a very wide range of things: provide an economic fiscal outlook to the committee on the fourth week of October and April of every calendar year, and be available to appear before the committee to discuss your findings shortly thereafter.
I was wondering if you could discuss what and why you choose the information that goes into this document, because I would like to ask more of a question about why certain information is not in this. For instance, you talk about infrastructure and oil, but not so much about housing, indigenous issues, and other groups that make up the national economy.
Could you talk about the evolution of this document and if there is a possibility in the future that, instead of having a very narrow viewpoint, we could have a larger viewpoint that would allow other committees, for instance, the human resources committee and others, such as the Indigenous and Northern Affairs Canada committee, a greater or better tool to guide their work.
Parliamentary Budget Officer, Library of Parliament
There is probably no limit to including all these topics. There is probably a limitation in terms of resources and time. Already, you've raised the issue of infrastructure. Of course, two years ago in the EFO, there was no infrastructure program, or not as detailed as this one. We are adding to the EFO year after year. Eventually, as I said, it's going to be a matter of resources and whether we can add all these topics you mentioned. We will have to look at it.
Liberal
Robert-Falcon Ouellette Liberal Winnipeg Centre, MB
I asked because I think one of the issues is that if no one shines a light on it, it's very hard to understand what's going on. For instance, we're spending billions on indigenous issues and social housing, and how effective are those expenditures and what benefit do they have on the economy? What's the unemployment rate on reserves? A lot of these things no one really tracks very well.
Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament
I think these are very important issues you are mentioning, and those things can be done separately from what we are doing here. I say this again because this is an overall look at the economy, how it is working, and how this is going to impact the fiscal situation and the bottom line, the balance of the federal government.
That's why it's an important issue that I'm sure the committee wants to know. Those other issues are also important, but those can be done in separate studies, and we certainly would be happy to consider requests from the committee on any of those issues, and we would do our best based on the resources we have to provide the answers to and analysis of those issues.
Liberal
Robert-Falcon Ouellette Liberal Winnipeg Centre, MB
You mentioned, though, that you spent a considerable amount of time in a painstaking and thankless task of going through provincial budgets. There is another order of government, which is the nation-to-nation relationship with indigenous peoples, where we spend billions and billions and billions of dollars.
As an indigenous person, I would like to know the impact of those funds we're spending, not just simply isolated from the larger national picture, but the overall impacts. What are the productivity levels? How do they impact the economy? What are the unemployment levels? What are the education levels that come out of it?
Unfortunately, it doesn't seem.... Once in a while we get the Auditor General to delve into a few of these questions, but no one seems to do it on a continuing basis, and since there's really no independent parliamentary officer looking at it, it's very hard sometimes for parliamentarians or even people in the department to understand what's occurring, or even to have a juxtaposition of those different viewpoints on what's important and what's not.
Parliamentary Budget Officer, Library of Parliament
We certainly do it. As I said, it's a matter of having the proper resources. I'll give you an example. We did a study last year on spending on education in first nations. That was independent, as Mostafa said. We're working right now on the water supply in first nation reserves.
We do these reports on an individual basis as stand-alone reports that are not necessarily linked to this, but it is part of the infrastructure program, as you know. That's what we do every time we have requests—the education one was based on a request. We will look at the requests and certainly pay attention to them and establish a timeline plus a methodology.
Can we meet all the requests that we receive? I can tell you, no, we cannot—not at the moment.
Liberal
Parliamentary Budget Officer, Library of Parliament
It's up to you and your government to provide triple—
Parliamentary Budget Officer, Library of Parliament
—or even multiply our current budget by 10, and believe me—
Liberal
Robert-Falcon Ouellette Liberal Winnipeg Centre, MB
The way things usually evolve, this report probably started as a very small report but has grown over time, with people asking for more and more things to be included. But I still believe that because it comes twice a year, it could be an important tool for various other committees and other parliamentarians to use—not only behind closed doors but also in front of the cameras—to hold government to account. As well, it's useful in enabling various departments to ask themselves what they're actually doing, and then to have to defend their figures against what you might have interpreted from the facts and figures.
That's just my vantage point, because I appreciate the work and would like to see more of it.
Liberal
The Chair Liberal Wayne Easter
Thank you both.
Mr. Dusseault, you're down to three minutes, and then we would go back to Mr. Grewal for five minutes.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
I'll stay on this topic.
Do you think you have the necessary capacities to produce these types of economic outlook reports? What else would you need to improve your reports?
Parliamentary Budget Officer, Library of Parliament
I think the reports are already excellent. You're talking about this report. I think we regularly improve it, just like we improve our macroeconomic model. Like anything else, we can improve it over time.
What else would we need? As I was saying, we've been receiving a number of very interesting requests that we can't necessarily respond to. Are we making the most of our model, for example? Maybe we are, given our capacities.
Remember we have an analysis capacity of about 15 person-years, which isn't much to produce over 30 reports a year. We've rarely said no to projects, but some have been delayed over the long term. Also, not only do we need to develop a methodology for these projects, we also need a great deal of information and economic data, which sometimes takes time to collect. For example, the House of Commons Standing Committee on Health is conducting an extremely thorough analysis to develop a national pharmacare program. Two person-years are dedicated full-time to this analysis. The work will take a few months. We'll likely be able to share our results in the fall.
So, we don't always have the capacity, because we lack some resources. Regarding the level of accuracy of this type of report, I think we've been improving it over time.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
I don't have much time left, so I'll ask you one last question regarding the public debt charges.
Several tables presented in the appendices, toward the bottom, refer to public debt charges. The figures are provided in billions of dollars. In the outlooks, the number goes from 25.6 for 2015-16 to 36.5 for 2021-22. That's a $10-billion increase in public debt charges, even though the public debt is decreasing in relation to the percentage of the GDP.
How can you explain that, over the same period, the public debt charges will increase by $10 billion, according to your forecasts?
Trevor Shaw Economic Advisor, Analyst, Office of the Parliamentary Budget Officer, Library of Parliament
This is broadly a function of our outlook on interest rates. As compared to October, our medium-term projection for both long interest rates—the 10-year government bond—and the 90-day T-bill rates has increased. This has led to a higher projection for public debt charges as well.
I might add that we've also refined slightly our modelling approach for public debt charges. We've added additional detail around pension liabilities and other non-market debt of that sort. It's primarily a function of our higher interest rate outlook over our forecast.