Finance Committee on Oct. 30th, 2023

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Okay.

David Dodge, your predecessor, recently said that the federal government is running a very expansionist policy, an increase in the budget balance, that adds to inflationary pressures and forces the bank to run a tighter policy. The PBO has also recently projected that the deficit will be $6 billion higher than the government told Canadians in their budget.

Given that the government grew its spending by 11.5% in the last fiscal year, are you concerned about the trend in the growth in government spending? Is that not helpful either?

[Tiff Macklem]

What I indicated and what we have in our monetary policy report are the spending plans of the government, and what I just indicated is that if you take all of those plans and you add them up, by our estimates, they're growing at 2.5%. The potential output growth, the supply side of the economy, is growing at 2%, so that is growing faster—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I just want to confirm. Is the $6 billion—

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Chair, I have a point of order.

[The Chair, Liberal, Peter Fonseca]

There's a point of order.

[Julie Dzerowicz, Liberal, Davenport, ON]

Can we please allow our guest to respond fully to the question? He's trying to answer the question and he's being interrupted.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Chair, I have a limited amount of time. We've already heard some of the testimony—

[The Chair, Liberal, Peter Fonseca]

We don't want crosstalk, MP Hallan. We don't want you talking over the witness. Allow the witness to finish his answer to your question, please.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Okay.

Governor, with regard to the $6-billion increase in deficit that the PBO told us about, is that included in your bank's projection?

[Tiff Macklem]

I don't have the PBO report in front of me, but in our projections, we take the federal budget and the budgets of all the provinces and we put all that together and make a best estimate of fiscal plans. Those are built into our projections—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Exactly, so we know that the budget is already $6 billion over—

[Julie Dzerowicz, Liberal, Davenport, ON]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Go ahead, MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

I'm very sorry, but the governor was not able to answer the last question or this question. Nobody who is listening would be able to understand the response.

[The Chair, Liberal, Peter Fonseca]

MP Hallan, please, let's have no crosstalk. Let's allow the governor to finish his answer to your question.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I'm trying to get him to the point.

[The Chair, Liberal, Peter Fonseca]

He's trying to finish his answers to your questions.

Go ahead, MP Hallan.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

We know that $6 billion is what they're already over. Is that helpful for you in your projections in bringing down interest rates?

[Tiff Macklem]

Look, I—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Yes or no?

[Tiff Macklem]

I am not going to get into the details of fiscal policy, okay? The government—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

With all due respect, you did comment on fiscal policy—

[Tiff Macklem]

That was because you asked me to.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

You did comment on government spending last week.

[Tiff Macklem]

I'm not going to comment on specific fiscal plans, specific spending plans. What I have said—and I've been very clear—is that if you take all of the spending plans of government for the next year, they imply growth and spending of 2.5%—