Evidence of meeting #13 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was economy.
A video is available from Parliament.
Deputy Auditor General and Interim Commissioner of the Environment and Sustainable Development, Office of the Auditor General
I might just add one piece.
I am also not a betting man, but we did mention in our 2019 report when we were looking at non-tax subsidies that, although the purchase of the Trans Mountain pipeline was after our audit period, this would be the sort of action that we would expect Environment and Climate Change Canada at least to consider in terms of their analysis.
Liberal
The Chair Liberal Wayne Easter
All right. We'll have Mr. Cumming, and then we go over to Mr. McLeod.
Conservative
James Cumming Conservative Edmonton Centre, AB
Thank you.
Thank you to all of the witnesses for being here today.
Mr. Giroux, I'll start with you or Mr. Jacques. Either of you can probably deal with this.
We heard from other witnesses today on some specifics, For example, BlackBerry received money from the federal government towards subsidy of a larger program that they put capital into. The argument was that, in the work plan or the application that was put forward, there would be jobs retained or added. It strikes me that this would be difficult to determine because the private sector had already put money into the project. Which was responsible for which? Did it really add that much value?
I get to Mr. Julian's point of view on a study of the use of public dollars towards these sorts of events. The list of departments within the government that are in the business of handing out money for a variety of different programs is enormous. I went through it in preparation for this meeting, and I was shocked by the depth of it.
Within the study, would there be the opportunity to look at...? We could look at the efficiency of those programs, whether there were jobs created or whether the loans were repaid and the efficiency of that.
I want to come back to my colleague's observation. Would there be a way to study if that capital was made available to the private sector through a reduction in taxes or a reduction in burden and the potential job creation of having that money back in the economy rather than picking companies or picking sectors? It strikes me as incredibly dangerous. We have a lot of small businesses that do not partake in any types of subsidies. They're just trying to make a living, and without having measurables or being able to figure out the efficiency of these programs, perhaps we'd be better off just coming up with a tax strategy that creates investment and brings investment in.
Do you have any comments on that?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I have probably one general comment.
Based on my general knowledge of businesses in the country, what I've seen is that when you ask entrepreneurs and business owners what their biggest irritant is, they will always rank as the top two—and they will compete for top spot—taxes and red tape. I've rarely seen the lack of government support or subsidies being in the top two.
Maybe it's a policy choice, and maybe I'm venturing too close to the line of policy choice, but reducing taxes, if that's the trade-off to reduce subsidies, reduce taxes and reduce red tape, based on what I've seen, it wouldn't seem out of line.
That said, there are very valid policy reasons that some subsidies are being provided. As elected individuals, you are in the best position to make these judgment calls—for example, on the need to have a defence sector that is strong so that Canada does not rely on other countries to procure its weapons or in the defence sector.
What I'm trying to say is that there are a lot of considerations, but it certainly would be possible to look at what the impact would be in terms of reducing taxes, and how many jobs that could potentially create.
The part of the ledger that would be more difficult to determine is how many jobs would be lost if we took away all these subsidies to corporations. It's very difficult to measure. As you alluded to, sometimes it's jobs created, sometimes it's jobs maintained, and that's quite difficult to determine. Is it true? Is it 40 jobs? Is it just two or more than that? Evaluating these programs is very difficult.
I've given free range to Jason to kick me, but the table separates us so he can't.
Liberal
Liberal
Michael McLeod Liberal Northwest Territories, NT
Thank you, Mr. Chair, and thank you to the presenters.
I want to ask a question regarding the 2020 fiscal sustainability report. I'm from the Northwest Territories, so my interest is in the north.
On page 27 of your “Fiscal Sustainability Report 2020”, tabled last month, you determined that policy actions equivalent to 11.4% of territorial GDP are required for territories to achieve fiscal sustainability ranges. Given the limited tools that territorial governments have, what actions could they take to address that gap?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Unfortunately, there are not that many tools. It's either reduce spending, which would be very difficult considering the needs of populations in the north, or increase taxes, which is not a very palatable solution in many jurisdictions.
It's either that, a combination of that or seeking additional transfers from the federal government, but the TFF, territorial formula financing, is already quite generous compared with other transfer programs. Under current policies, we don't see that many alternatives. It's reducing spending, increasing taxes or more generous transfers from the federal government. Unfortunately, there are not that many solutions.
Liberal
Michael McLeod Liberal Northwest Territories, NT
The Northwest Territories and the other territories have a different type of relationship with the federal government. The federal government still has certain responsibilities that they have control over and are responsible for.
Would significant federal investment in nation building, transportation or hydroelectric infrastructure projects that create jobs, that lower the cost of doing business and spur investment opportunity, be one way that we could look at addressing this gap?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Certainly. Any investments that would increase the GDP or enhance the productivity of the territorial governments or the territorial businesses, that would increase the tax base more generally, would reduce that gap. It would contribute to faster growth in the north. It would certainly help businesses grow and the private sector expand, and expand the tax base, generating more revenues for the territorial governments.
Liberal
Michael McLeod Liberal Northwest Territories, NT
The TFF, the territorial formula financing agreement, has been an issue for some time now. It's a very small pot of money. The numbers that are accumulated in that fund are our housing corporation, Deh Cho Bridge and the power corporation. All these projects have revenue generators. Would you agree that something that could be looked at is moving it out of what is considered debt into a different category so that they can make more room?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I have to admit I would have to look into it in more detail. I'm not familiar with all the intricacies of the various government entities in the north, whether it should be out of the government perimeter or whether it should be part of the debt ceiling or not. I worked on that in a previous life, but it's been a while.
Liberal
The Chair Liberal Wayne Easter
You're pretty well out of time.
We'll go to Mr. Poilievre, and then back to you.
Conservative
Pierre Poilievre Conservative Carleton, ON
Have you been able to get a list of all the projects the government has funded so far under its infrastructure program since it took office in 2015?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We've asked that question many times. We never were able to get a full list. I think the issue is that there is no centralized record holding at Infrastructure Canada because the various programs are delivered by multiple departments and a list doesn't seem to exist. We've asked more than once—and Jason can attest to that as Jason was part of these discussions—and we never got a complete list of projects under the investing in Canada plan or the infrastructure programs.
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
So far it's tens of billions, certainly.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
If they know, they're not telling us all the details of where each dollar went.
Conservative
Pierre Poilievre Conservative Carleton, ON
You don't have a list of projects that adds up to the total. Is that right?
Director General, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
We currently do not have a list of projects. At the behest of interested members of the House, we did follow up with Infrastructure Canada and the government in January with an updated information request. We are in active and ongoing negotiations with Infrastructure Canada and multiple departments and agencies to try to compile a list.
Director General, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
It has taken potentially a little longer than we anticipated.
Conservative
Pierre Poilievre Conservative Carleton, ON
If I go to the grocery store and spend a small fortune on groceries, and my wife asks what the hell I spent 500 bucks on, she'd expect to see an item-by-item receipt.
Wouldn't you, honey? She's back there.
