Finance Committee on Dec. 8th, 2020

[Soren Halverson]

The Bank of Canada works as our agent. They provide us with intelligence in terms of what they are hearing from the market. Our officers work in conjunction with theirs on consultations.

[Ted Falk, Conservative, Provencher, MB]

Okay.

In the economic update, the government indicated that they will return to “a prudent and responsible fiscal path” based on long-term fiscal anchors “when the economy is more stable”. What are the indicators the department is looking for that would confirm to you that the economy has stabilized?

[Nicholas Leswick]

Thank you for the question.

As the minister outlined, the—

[Gabriel Ste-Marie, Bloc, Joliette, QC]

I have another point of order, Mr. Chair.

The interpreter is indicating that they can't interpret what's being said.

[The Chair, Liberal, Wayne Easter]

Mr. Leswick—

[Nicholas Leswick]

I apologize again. I'll try not to forget a third time.

I'm sorry about that, Mr. Chair and members.

On the so-called fiscal guardrails, as they've been titled in the document published last Monday, the nexus of those is really around the labour market: total hours worked in the economy, the unemployment rate and the employment rate and using those as barometers for the strength of the recovery and how to appropriately calibrate and unwind fiscal stimulus over the recovery phase.

[The Chair, Liberal, Wayne Easter]

This will be your last question, Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

When the carbon tax scheme was hatched, it was proposed that farmers would be exempt from paying the carbon tax. For the most part, that works, but there have been situations that arise when heating fuel is being used either for heating the barn or for heating grain dryers, and propane and natural gas have not been carbon tax-free for farmers.

I believe that was an oversight. Will that be corrected in the next budget?

[The Chair, Liberal, Wayne Easter]

I'll turn that over to Mr. Marsland, but I believe it's a policy question.

[Ted Falk, Conservative, Provencher, MB]

Okay.

[Andrew Marsland]

It is a policy question. I'll note the question.

In terms of clarification, I think the exemption from the fuel charge applies to fuel used in farm machinery, which is typically oil and diesel.

[The Chair, Liberal, Wayne Easter]

Okay. I would refer you, Mr. Marsland, to a debate in the House the other day on that subject, in which that came up very vividly in terms of the added cost of drying grain and heating barns.

Mr. Poilievre, we're a little over, but I said I'd give you a minute. You have a minute.

[Pierre Poilievre, Conservative, Carleton, ON]

I'd like to get the officials to tell us how much debt the government will add this year and how much the Bank of Canada's holding of government debt will increase in this fiscal year.

While they are searching for those numbers, I'll just answer the minister's question to me as to whether Conservatives believe in the independence of the Bank of Canada: Of course we do.

She cites Jim Flaherty. Not only did he believe in the independence of the Bank of Canada, but he also never funded his deficits by having the Bank of Canada print money to lend it to the government.

In fact, throughout the entire great global recession, we never relied on the bank to print cash to fund our operations. That is something that this minister and this government are doing. They are dependent on the bank, and therefore cannot be independent from it.

To go back to my question, how much will the debt grow this year, and how much of that debt is being newly held by the Bank of Canada?

[The Chair, Liberal, Wayne Easter]

You've pretty nearly used your minute for your little speech there, Mr. Poilievre, but I'll give them time to answer.

We'll go to Mr. Marsland or whomever. Is it Mr. Halverson?

[Soren Halverson]

What I have in front of me.... I don't have the growth in debt. I have the gross issuance. Is that of value to you informationally?

[Pierre Poilievre, Conservative, Carleton, ON]

The growth in the debt of the Government of Canada is what I'm looking for.

[Soren Halverson]

Okay.

[Pierre Poilievre, Conservative, Carleton, ON]

The published deficit is $380 billion. Would it be fair to say that it's $380 billion?

[Nicholas Leswick]

I'm sorry, Mr. Chair. I think what we're searching for....

Thank you to the member for the question. I think what we're trying to zero in on is what you would like to use, Mr. Member, as the definition of debt—

[Pierre Poilievre, Conservative, Carleton, ON]

It's the growth of the federal debt.

[Nicholas Leswick]

On an accumulated deficit basis, it's exactly as you said. It's the value of the deficit, which is $387 billion—

[Pierre Poilievre, Conservative, Carleton, ON]

Okay. That answers my question.

How much has the Bank of Canada purchased in government debt securities in the same time period?

[Nicholas Leswick]

I don't have that number at my fingertips, but depending on the Bank of Canada's buyback operations over the course of the year, it's going to be within some vector of between $300 billion and $400 billion, I would assume.

[Pierre Poilievre, Conservative, Carleton, ON]

So it's basically the same amount that you're borrowing—

[The Chair, Liberal, Wayne Easter]

Pierre, you're way over time. I've been kind today.

Mr. Fraser will split time with Ms. Dzerowicz.

Mr. Fraser, you're up first.