Thank you, Mr. Chair.
We're here to present and answer your questions on division 2 of part 4, clause 103 of the budget implementation act, which introduces the proposed borrowing authority act. This act authorizes the Minister of Finance to borrow on behalf of the crown and provides for a maximum amount of borrowing.
In budget 2016, the government restored parliamentary approval of government borrowing, which was last in effect prior to 2007. In budget 2017, the government proposed to implement this framework by introducing legislation seeking parliamentary approval of government borrowing.
Under the proposed borrowing act, Parliament is being asked to approve a borrowing limit. A requirement is also proposed for the government to return to Parliament at least every three years to report on the government's aggregate borrowing relative to the limit and potentially to propose a new limit, if needed.
Relative to the current framework, whereby the Governor in Council approves the flow of government debt only for the current fiscal year, the proposed borrowing authority act adds transparency to Parliament by focusing on the stock of debt—the overall level of debt of the government. The new borrowing authority act also amends the accountability to Parliament by introducing the requirement that the reporting be on government debt as well as the crown corporation debt. Basically, we're not only including the federal debt, but also looking at the crown corporation borrowing.
As presented in clause 103, in proposed section 4 of that borrowing act you can see that the limit currently being asked for this year is one trillion, one hundred and sixty-eight billion dollars. Let me explain to you how we got to this number.
Basically, the first number that we take into consideration is the stock of government debt. As of the end of the last fiscal year, the fiscal year 2016, the stock of the federal debt was $691 billion. To this number, we add the agent crown corporation market debt. This number is $276 billion. To this stock of debt, we add the financial requirements set out in budget 2017 for the next three fiscal years. This number is $103 billion. On top of this, we add the expected crown borrowing over the next three years. This number represents $43 billion.
To this number, we add a contingency margin equal to 5%. The 5% is taken from the highest level of the combined government and crown corporation debt over the next three years. The amount we're adding is $56 billion for the next three years.
Overall, this explains the one trillion, one hundred and sixty-eight billion dollars of borrowing approval that we have included under proposed section 4 in clause 103. It should be noted that in terms of increasing borrowing requirements, we're talking here about an increase of $146 billion over the next three years.
This concludes my summary remarks.