Finance Committee on Feb. 3rd, 2020

[The Chair, Liberal, Wayne Easter]

We shall call the meeting to order.

Pursuant to Standing Order 108(2), we'll start our study of the pre-budget consultations for 2020.

We have a number of witnesses here from the Department of Finance Canada who will have a presentation in a moment.

First, I want to thank all of the parties for getting their witness lists in on time under a very tight schedule. The clerk tells me that one of the difficulties is that pretty nearly all the witnesses have accepted in response to the initial calls, which surprises me, given the tight time frame. That's a good thing.

I just want to remind people of the other things that we agreed to the other day on the schedule, if people want to make note of these dates while the witnesses are going through some of these areas. On February 18, there is a 6 p.m. deadline for the submission of recommendations to the committee clerk. On February 19 at 3 p.m., we hope that we'll be able to distribute all of the recommendations by all parties to all committee members. We'll meet on February 20 from 11 until 2 and from 3:30 until 6:30 as a committee to discuss the report and the recommendations because—and we talked about it the other day—we have to give the Library of Parliament time to get its work done so that we'll be able to table the report in the House. There will be meetings, as necessary, during the week of February 24 to finalize the report.

Are there any questions on that?

Seeing none, we will turn to the witnesses from the Department of Finance. We have Mr. Leswick, assistant deputy minister, economic and fiscal policy branch; Mr. Marsland, senior assistant deputy minister, tax policy branch; and Ms. Dancey, associate assistant deputy minister, economic development and corporate finance branch.

Welcome.

I'm not sure who is leading off.

Are you, Nicholas?

[Nicholas Leswick, Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance]

Yes.

[The Chair, Liberal, Wayne Easter]

Go ahead. The floor is yours.

[Nicholas Leswick]

I'll just make a few short opening remarks.

Good afternoon, Mr. Chair, and honourable members of the committee.

Well, you've introduced me, Nick Leswick, the assistant deputy minister of the economic and fiscal policy branch, with overall responsibility within the department for economic and fiscal forecasting and the production of the federal budget.

Andrew Marsland is our assistant deputy minister of tax policy. Evelyn Dancey is our associate ADM of the economic development and corporate finance branch.

I have other officials from the Department of Finance behind me who can assist us in providing responses to your questions.

I will speak briefly about the preparations currently under way at the department for budget 2020. Every year, the Department of Finance organizes its own pre-budget consultations in addition to the consultations that you, the committee members, are hosting.

Through town halls, focus groups and online surveys, and by receiving emails and regular mail, the consultations allow the Government of Canada to hear directly from Canadians on what measures could be included in the upcoming budget.

This year's pre-budget consultations are focused on the themes from the Speech from the Throne, themes that we know are important to Canadians and that the government has stated as its clear priorities: strengthening the middle class, protecting our environment, keeping Canadians safe and healthy, and reconciliation with indigenous peoples.

These pre-budget consultations were launched on January 13. The objective was clear: inviting Canadians and experts to share their ideas and help build the upcoming budget.

As you may know, Minister Morneau and Minister Fortier, as well as Parliamentary Secretary Fraser, who is at this committee, have held town halls and round tables across the country to date.

Also, 15,000 Canadians have responded so far to online surveys on our website, and responses come in every day.

The consultations are ongoing; therefore, there is still time for Canadians to share their ideas and their priorities with the government, whether that is online or at events across the country. The government wants to hear from as many Canadians as possible.

With that, Mr. Chair, we will be happy to answer any questions the members of the committee may have as they pursue the various themes under this year's pre-budget consultations.

[The Chair, Liberal, Wayne Easter]

It is a different lineup from last time.

Who is first over there, guys? I never asked you earlier.

Mr. Morantz.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I just have a question about the promise about the basic personal amount that was made in the campaign.

During the campaign, the parliamentary budget office said that in 2023-24 the cost would be roughly $5.6 billion. Its most recent estimate is $6.8 billion in 2024. Your report, “Lower Taxes for the Middle Class and People Working Hard to Join It”, has the number at roughly $6 billion in 2024.

Which number is correct?

[Andrew Marsland, Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance]

Perhaps I can give some background on my understanding of those numbers.

I believe that the costing of the platform was based on the basic personal amount only. There are essentially three credits: the basic personal amount, the eligible dependant credit and the spousal amount, which are equivalent. If your spouse isn't working or you're a single parent, then you get, essentially, the basic personal amount. My understanding is that the costing was based on only the first of those, and the actual proposal includes all three.

In terms of the most recent Parliamentary Budget Officer costing, I think the difference is largely explained by a different database. The Parliamentary Budget Officer uses Statistics Canada's SPSD/M model, which basically takes some taxpayer information and some survey data and builds a model.

The department uses, essentially, taxpayer information. We use the tax returns filed by Canadians to build a microsimulation model, and that results in a more accurate, in our view, picture of the cost.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

In your view, your number is the most accurate.

[Andrew Marsland]

That would be...yes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Would you say the parliamentary budget office is incorrect?

[Andrew Marsland]

What I'm saying is that the numbers are derived from different data sources, which sometimes give somewhat different results.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Okay.

[The Chair, Liberal, Wayne Easter]

You still have plenty of time.

Your number is what figure, Andrew?

[Andrew Marsland]

It's just over $6 billion, I believe.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I still have more time. This was my first time asking a question.

[The Chair, Liberal, Wayne Easter]

You still have about three minutes left, Marty, or Pierre can take it.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'll pass. Those were my questions. I'm sure we'll be circling back to that question.

[Pierre Poilievre, Conservative, Carleton, ON]

Yes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'll pass it to Mr. Poilievre.

[The Chair, Liberal, Wayne Easter]

Not a problem.

Mr. Poilievre, the rest....

Just so we have it, what was the exact number, Andrew?

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

The department's number was $6 billion in 2024. I have $6,210,000,000.

[The Chair, Liberal, Wayne Easter]

Thank you, Marty.

Go ahead, Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Were there any other factors that explained the difference, other than the differing data methodology and the addition of the spousal and dependants amount?

[Andrew Marsland]

As I understand it, the Parliamentary Budget Officer also included a behavioural response, which had a very small proportion of a very small.... I think it was something in the region of $20 million. Over $6 billion was the difference.

[Pierre Poilievre, Conservative, Carleton, ON]

Was there anything else, though, in terms of economic data? Was there an update on the economic data environment when you published the most recent numbers?