Finance Committee on May 30th, 2024

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 144 of the House of Commons Standing Committee on Finance.

Pursuant to the House of Commons order of reference adopted on Wednesday, May 22, 2024 and Standing Order 108(2), the committee is meeting to discuss Bill C-69, an act to implement certain provisions of the budget tabled in Parliament on April 16, 2024.

Before we begin, I'd like to ask all members and other persons participating to consult the cards on the table for guidelines to prevent audio feedback incidents. Please take note of the following preventative measures in place to protect the health and safety of all participants, including the interpreters.

Only use a black, approved earpiece. The former grey earpieces must no longer be used. Keep your earpiece away from all microphones at all times. When you're not using your earpiece, place it face down on the sticker placed on the table for this purpose.

Thank you all for your co-operation.

Today's meeting is taking place in a hybrid format, pursuant to Standing Order 15.1. In accordance with the committee's routine motion concerning connection tests for witnesses, I'm informed that all witnesses have completed the tests required for the connection tests in advance.

I'd like to make a few comments for the benefit of the members and witnesses.

Please wait until I recognize you by name before speaking. For members in the room, please raise your hand if you wish to speak. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your understanding in this regard.

As a reminder, all comments should be addressed through the chair.

I would now like to welcome our witnesses from the department on parts 1 to 4 of Bill C-69.

Members, before we get to our officials, you received an email from our clerk at 12:16 p.m. yesterday. It was regarding approval of the budget to study the FES bill, Bill C-59, and the ATIP request. I'm just looking around for approval.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

That's terrific.

We are now going to get to our officials.

We do have many here. I understand that approximately 75 officials are with us from all of the different departments to address questions on parts 1 to 4 of Bill C-69.

If you are called upon and you do come to the table, I ask that you let everybody know the department that you represent and who you are before answering the members' questions.

I understand there are no opening statements for the first panel, which is the officials in the first hour.

As you know, each party will have up to six minutes to ask questions.

We're starting with MP Chambers for the first six minutes.

Go ahead, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

Welcome, everybody.

Is Mr. Hammond here from OSFI?

Please join us. It's not like church. There are some extra seats up here. You don't have to stand in the back. You're more than welcome to sit up here.

[The Chair, Liberal, Peter Fonseca]

Could you identify yourself and tell us where you're from?

[Michael Hammond, Chief Financial Officer, Office of the Superintendent of Financial Institutions]

My name is Michael Hammond. I'm the chief financial officer at the Office of the Superintendent of Financial Institutions.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

Before we get started, I will say that I'm sure it's very annoying for all of you to show up here in person, but it's actually really nice to see people, instead of seeing you online. Thank you for coming in person. I appreciate that.

As I understand, OSFI is receiving an increased maximum amount that it can be advanced as part of the budget. Can you—

[Michael Hammond]

I can elaborate a little bit on that for you.

OSFI's funding is obtained through the financial institutions that we regulate. We bill them on an annual basis in the July-August time frame, following the financial results for the fiscal year.

This provision allows us to have access to the CRF before we have done that invoicing in order to fund our operations in the early part of the year. Once we receive the funding from the financial institutions, that money is then reimbursed into the CRF.

[Adam Chambers, Conservative, Simcoe North, ON]

It's kind of like a revolving credit facility.

[Michael Hammond]

That's correct.

[Adam Chambers, Conservative, Simcoe North, ON]

Obviously, either the funding requirements of the organization are bumping up to the $40 million, or you need to expand them. Is that right?

[Michael Hammond]

That's correct.

[Adam Chambers, Conservative, Simcoe North, ON]

I'm very interested in what's happening at OSFI in terms of the growth of the organization. Obviously, the reason you need the money is that you have funding requirements—

[Luc Bisson, Acting Assistant Commissioner, Policy, Correctional Service of Canada]

Am I going to get a question?

[Adam Chambers, Conservative, Simcoe North, ON]

No, Mr. Bisson, not quite yet, but I might get to you.

It's my understanding that the organization has actually grown substantially over the last five years.

Is that a fair point?

[Michael Hammond]

Yes. The organization has gone through a period of growth to address the risk environment that OSFI is responsible for overseeing.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay. I don't expect you to have those specific numbers for me now, but if you wouldn't mind, I would appreciate an ability to see, not every year, but say, five years ago, what the organization looked like from an organizational structure in terms of not just the gross number but also where these individuals work today, by organization. Is that something you could provide to the committee?

[Michael Hammond]

Yes. I'd be happy to take that back and to provide that back in writing. We can provide you with a trend in terms of budget over the last five to six years, if that's helpful.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you. That's very helpful.

Since you mentioned addressing the risk environment, I think it would also be helpful to understand what division these individuals work in, as an example, if that's something you can do.

[Michael Hammond]

Sure. Absolutely, we can do that for you.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay. Thank you very much.

Are you involved with, or aware of, the new Basel rules, or is that outside of your purview?

[Michael Hammond]

That's a bit outside of my purview. As the CFO, I'm more responsible for the internal operations of the organization, but I'm happy to take questions back and to provide a response in writing.

[Adam Chambers, Conservative, Simcoe North, ON]

That's fair enough.

You could tell some of your colleagues that they should pay attention to what's happening in the United States, because the U.S. Federal Reserve, which is in charge of the equivalent regulatory body there, is delaying and will make material changes to the implementation of Basel for the sole purpose that they're worried that banks will restrict lending. We've seen banks, very recently, actually identify how much less lending they will do because Basel is introduced.

I don't expect you to engage on that, but if you could bring that back to them, that would be great, because we haven't had any one here from OSFI in the last year, other than yourself. That would be very helpful.

[Michael Hammond]

Thank you very much. I will take that back.

I know the superintendent is very interested in coming to appear at FINA and is very happy to come when he's invited.

[Adam Chambers, Conservative, Simcoe North, ON]

We look forward to having him when he's able. Thank you.

Ms. Gwyer, because you're in tax, and you're there, I might as well stay with you.

Actually, this was a very good question from the library. The document they provided was excellent.

How has the government ensured that the potentially partisan nature of Canadian journalism organizations does not impact eligibility for the Canadian journalism tax credit? Is there any kind of test that's being considered for that?

Mr. Baylor.