Finance Committee on June 16th, 2020

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you very much for your time.

[The Chair, Liberal, Wayne Easter]

Thanks, both of you.

Coming off that question, I have a couple myself.

During these times, Governor and Senior Deputy Governor, what is happening globally between the central banks? You are absolutely right that this is a global pandemic that affects the economies of all countries globally and certainly the health of people globally. What's your strategy in terms of central banks globally? Are there discussions? How do you work?

[Tiff Macklem]

Well, I'm two weeks into this job, so I haven't had a huge number of discussions with other central banks. I'm going to ask Senior Deputy Governor Wilkins to say a few more words about that, but I will say, as somebody who has spent a long time in the international central banking community in the past, that it is a very valuable community, and there is a certain professional affiliation, a common bond among central bank governors and senior central bank officials, and a long tradition of working together.

Many of us are embarked on unprecedented policies, and there is a fair amount of comparing notes, but I'll let the senior deputy say a few words about this, because she has actually been involved in a number of these meetings leading up to where we are today.

[Carolyn A. Wilkins]

It is extremely valuable, Governor.

He's absolutely right. We've spent a considerable amount of time at the beginning—daily, then a couple of times a week and weekly—in a number of forums as central banks, collaborating on the actions that we thought would be appropriate. We weren't coordinating timing or divulging information, necessarily, but certainly were sharing notes on different programs, some of which we have put in place. For some countries, one of the most visible would have been the U.S. dollar swap lines, which we do have in place but we've not needed to use, although other areas like Europe or Japan have.

We've also been working at the financial stability board on financial stability issues, particularly right now those that are arising in some emerging markets, with Latin America and Brazil being some specific examples, with some close monitoring there. It's interesting. It feels like central bank digital currency and digitalization have nothing to do with COVID, but in fact they've put those issues front and centre, so the Bank of Canada is collaborating with a group of central banks on our work on central bank digital currency.

Within the G7, just as another example, we've been collaborating on digitalization. If this is going to be accelerated and we know that our statistics are not up to the task of measuring the economy at this time, then what can we do to help promote a better universal measurement that all countries can use and benefit from as they design their policies?

[The Chair, Liberal, Wayne Easter]

Thank you very much.

We had better end with that.

We have estimates next. I think there are three departments with 12 witnesses.

Governor and Senior Deputy Governor, on behalf of the committee, I want to thank you very much for coming to the finance committee to answer our questions.

It's not always easy when you've been in the job only a few weeks, Governor. We certainly thank you. You can also pass on our thanks to the staff at the Bank of Canada, the other deputy governors and certainly your board for the work you do. You're a major instrument in the stability of our financial system. We thank you for appearing and for answering our questions.

All the best.

[Tiff Macklem]

Thank you for that, Mr. Chair.

I will be sure to pass that on. It will be appreciated.

[The Chair, Liberal, Wayne Easter]

With that, committee members, we will suspend for about five or seven minutes and then come back to deal with the estimates.

The meeting is suspended.

[The Chair, Liberal, Wayne Easter]

We'll call the meeting back to order.

In the next hour we'll be meeting on the main estimates 2020-21, votes 1 and 5 under the Canada Revenue Agency, votes 1 and 5 under the Department of Finance, vote 1 under the Financial Transactions and Reports Analysis Centre of Canada, and vote 1 under the Office of the Superintendent of Financial Institutions.

We have with us a number of representatives from the Department of Finance, from the Office of the Superintendent of Financial Institutions and from the Financial Transactions and Reports Analysis Centre of Canada.

We'll let you folks make your presentation first, then we'll go to questions.

For the information of committee members, first questions will be by Mr. Cumming, Ms. Dzerowicz, Mr. Ste-Marie and Mr. Julian.

Ms. Bess, go ahead.

[Darlene Bess, Chief Financial Officer, Department of Finance]

Good evening, Mr. Chair and members of the committee.

Thank you for the opportunity to present the main estimates for the 2020-21 fiscal year on behalf of the Department of Finance. Joining me today are departmental officials to assist in providing you with a more in-depth perspective on the rationale and policies that support the numbers within our estimates.

As you know, the Department of Finance develops policies and provides advice to the government with the goal of creating a healthy economy for all Canadians. In 2020-21, the Department of Finance will continue to support the Minister of Finance and the Minister of Middle Class Prosperity and Associate Minister of Finance in delivering on a responsible fiscal plan that will continue to invest in people and in the things that give people a better quality of life while continuing to build confidence in Canada’s economy.

The 2020-21 main estimates reflect a departmental budgetary spending of $99.5 billion and non-budgetary spending of $50.2 million, which is composed of $105.5 million of voted budgetary expenditures, $99.4 billion in statutory budgetary expenditures and $50.2 million in statutory non-budgetary expenditures.

In comparison to the 2019-20 main estimates, these main estimates reflect a net increase of $4.7 million in voted budgetary expenditures, mainly due to increased activity for analytical capacity building within the department to manage government assets including the Trans Mountain Corporation as well as an increase in payments due to collective bargaining.

Statutory expenditures are not included in the appropriation bill, as they have already been approved by Parliament through enabling legislation; however, they are included for information in the estimates documents. The statutory budgetary expenditures in the main estimates reflect a net increase of $500 million in statutory budgetary expenditures, which is mainly due to increases in major transfers to other levels of government. This net increase is offset by decreases in interest on unmatured debt and other interest costs. The statutory non-budgetary expenditures included in these main estimates reflect Canada’s fourth of five equal installment payments to the Asian Infrastructure Investment Bank.

Mr. Chair, this concludes my high-level overview of the main estimates for the Department of Finance. My colleagues and I would be pleased to answer any questions the committee members may have.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Bess, chief financial officer of the Department of Finance.

We'll turn to questions.

We'll start with you, Mr. Cumming.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you, Mr. Chair.

Thank you to all the officials who are here today for the work you put in to create these estimates. In fact, I think I complimented all of you when the minister was here by saying that you're a very talented crew.

Given that we have this very talented crew, can you describe for me as a new parliamentarian how difficult it would be, given the work that's been put into these estimates, to produce either a budget or a budget update?

[Darlene Bess]

I think I'll let my colleague Brad Recker comment on that. I think he'd be able to provide some more information on that front.

[Bradley Recker, Director General, Economic and Fiscal Policy Branch, Department of Finance]

I've been having some trouble with audio set-up.

I'm sorry, but I missed the question. Would you mind repeating it, sir?

[James Cumming, Conservative, Edmonton Centre, AB]

Sure. Given the work that's been put into these estimates, how difficult would it be for the department to produce either a budget or a financial update so that we have a better understanding of the bigger picture of what's going on?

[Bradley Recker]

Producing a budget or an update is a pretty significant amount of effort for the department. It is something, however, that we are able to do and is core to our mandate in general.

[James Cumming, Conservative, Edmonton Centre, AB]

In addition to these estimates, the main budget and the supplementary estimates, do you believe that you'd be in a position to create a budget and/or a financial update?

[Bradley Recker]

The department can and does produce both budget and fiscal updates annually.

[James Cumming, Conservative, Edmonton Centre, AB]

For the last hundred years of Parliament, we've always had one each fiscal year. Is it something that you're currently working on?

[Bradley Recker]

The department continually monitors the fiscal situation as it evolves. We're in constant contact with private sector forecasters, think tanks, etc. We are always working to monitor the situation.

In the current environment, there's a very high degree of uncertainty. This is evident in any of the outlooks that have been put out by international agencies and others. To that extent, putting out any sort of detailed fiscal outlook over a longer horizon would be a significantly difficult endeavour at this point.

[James Cumming, Conservative, Edmonton Centre, AB]

We have seen other governments do it and have seen provinces do it, so it strikes me as something that could be done.

[Bradley Recker]

Several provinces have gone ahead and produced budgets or near-term outlooks, but we do not have a date for an outlook for ourselves at this time.

[James Cumming, Conservative, Edmonton Centre, AB]

Within the main estimates—and this is probably still for Finance—I tried to find a breakdown for the infrastructure programs, and it's spread out through a variety of departments.

Is it not possible, when an infrastructure budget is set, to have clarity within the budget as to where those expenditures went so we are able to find the projects they were allocated to?

[Bradley Recker]

I'm not the expert on the infrastructure profiles. I'll turn that over to my colleague in EDCF.

[Evelyn Dancey, Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance]

I can offer a bit of background on this.

As the member would know, there are now a large number of federal infrastructure programs, both legacy, from the first mandate of this government, and more recent announcements by the government. Overall, the responsibility for integrated reporting on the infrastructure plan is with the infrastructure and communities minister, Minister McKenna, and my colleagues at INFC. They are the ones wrestling and integrating the data—

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I'd like to raise a point of order, Mr. Chair.