Finance Committee on Jan. 31st, 2022

[Yves Giroux]

No, we have not done that. We have forecasts that go out five years. Over that horizon, we don't anticipate that there will be a return to balanced budgets. That was before taking into account the government's electoral platform promises, which included, as we all know, significant spending measures as well as some tax measures. So the short answer is no.

[Adam Chambers, Conservative, Simcoe North, ON]

If not, and you don't see a return to balance over the five years, do you think we're at risk of creating what experts would call perpetual or structural deficits at the federal level?

[Yves Giroux]

It's likely that we will have deficits for the foreseeable future—that is, beyond a five-year horizon—but that depends on many things, notably the rhythm and pace at which the government will implement its Speech from the Throne and platform commitments, and whether or not this will be accompanied at the same time by strong or not so strong economic growth. We could be in a period of extended deficits, but that is not necessarily a fatal flaw. If the deficits are relatively small, they can still be sustainable if the economy keeps growing.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

We hear a lot about—

[The Chair, Liberal, Peter Fonseca]

You have 15 seconds, Mr. Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

In your fiscal update you did mention with regard to the public pension plan that subnational governments and the federal government sector as a whole do not have a sustainable fiscal plan over the long term.

[The Chair, Liberal, Peter Fonseca]

Could you give us a very short answer, please?

[Yves Giroux]

In fact, public sector pension plans like QPP and CPP are sustainable over the long term. They're very under cost, so they are sustainable for the time being. Small changes in assumptions could make them switch from being sustainable to unsustainable, but that's not the concern we have right now.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, Mr. Chambers.

We are moving to the Liberals and Madame Chatel for five minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you.

Mr. Giroux, when you evaluated the election platforms, did one party promise to return to a balanced budget in the next five years?

[Yves Giroux]

Actually, I did not evaluate the election platforms. It is important to point out that, during an election campaign, my office estimates the costs for individual measures, and only at a party's request. We do not consider election platforms generally.

To answer your question, I am going by memory and I may be mistaken. But I would say that no party promised to return to a balanced budget in the next five years.

[Sophie Chatel, Liberal, Pontiac, QC]

That is also my understanding of the platforms.

Thank you very much.

I have a question for the Green Budget Coalition. I'm part of an initiative in my riding through which we, together with farmers for example, try to evaluate what prosperous agriculture would look like in 2040 in the green transition.

I want to know what exactly are your proposals for folks in rural areas. What are the biggest challenges? We've heard a lot about their concern with the impact of carbon pricing, but there's also a lot of innovation with regard to nature-based solutions, diversification, and changing the level of crops and variations. There are a lot of innovative approaches proposed by rural economies, and I wonder what the angle of the Green Budget Coalition is and how much of a rural consideration you have in your approach.

[Andrew Van Iterson]

Thank you, Ms. Chatel. I'd like to turn to David Browne to respond to that.

[David Browne, Director of Conservation, Canadian Wildlife Federation, Green Budget Coalition]

There's a lot that could be said on that, so just to be to be very brief, I would first point to page 92 of our full recommendations document, which is available online, in which our points are made. I would say our focus right now is on what's called the “next policy framework”, which is essentially the framework that allows transfers to the provinces and creates the spending from Agriculture and Agri-Food Canada for enhancing our agriculture industry. That's where we would like to see these climate considerations and biodiversity considerations tied in.

To your point, there are actually a lot of good win-win situations with agriculture and both of the points you brought up—nature-based solutions and this transition to a low-carbon economy. There are known cost savings that could be achieved, known payments to farmers that result in benefits to the country, recognizing their stewardship to the land financially in order to basically incent certain activities on private farm lands.

If you look into our document, to which I would point you, there are a number of very specific recommendations around regenerative agriculture, supporting the industry in transitioning to a more sustainable framework.

We have good conversations with the industry itself, which wants to be able to access global markets that are asking questions about Canada's agriculture and how it meets certain sustainability and climate criteria. We think the Canadian farm industry can do that, and the federal government has a role to help it do that.

Thanks.

[Sophie Chatel, Liberal, Pontiac, QC]

If I may ask a follow-up question, there's a lot of concern about, as I said, carbon pricing.

In your proposal, Mr. Browne, is there any suggestion as to how this will impact concretely the agriculture sector and any proposal for how to alleviate some of the concerns farmers have?

[David Browne]

Vanessa, you are probably in a better position to comment on the economics of carbon pricing.

[Vanessa Corkal]

Yes. We understand this has been a concern for some time and it's not likely to go away any time soon. Our recommendations—like the recommendations of organizations we've collaborated with, such as Farmers for Climate Solutions—generally support carbon pricing in order to send a strong signal that we are moving away from these fuels. Those need to be complemented by adequate incentives to support rural producers so they can support their livelihoods and afford technologies that allow them to move away from fossil fuels—things like supporting electrifying grain dryers, for example, or incentives to support the electrification of on-farm equipment.

Our document doesn't have specific details about that, but Farmers for Climate Solutions does. It has made specific recommendations on that. Generally, its message is similar to what we would say as well.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, Madame Chatel. That is your time.

We are moving to the Bloc and Monsieur Ste-Marie for two and a half minutes.

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

Thank you.

Mr. Lavigne, in two and a half minutes, could you tell us about your requests in the area of regional development?

[Mathieu Lavigne]

Thank you for the question, Mr. Ste-Marie.

Regional development is indeed one of our priorities and we have focused on the challenges in infrastructure. Actually, we believe that it is where the federal government has a greater role.

The federal government is directly responsible for VIA Rail's high frequency rail project, which is of prime importance. For us, it is critical. In terms of green economic development, it is a wonderful project. Businesspeople in Quebec City, Trois‑Rivières, Montreal, and all the communities along the route are asking for it.

We are very pleased that announcements about the project were made in the last budget. However, we know full well that those announcements cover only a part of the project, basically the studies. Accepting that we are only involved in prebudget consultations, we would like the entire project to be in the budget. If it were, as soon as VIA Rail is ready to start work on the project, having funds available will not be a problem.

We know that the project will require major investment. At the moment, we are involved in a process that is strictly about federal budgets. So it is really important to make it clear that money will not be a problem, that it is being set aside now, and that the project will be proceeding along the best possible route. We have to avoid having to go to battle once more in a few years, in order to have funds set aside in the budget. The project is really important for Quebec's economy.

We also addressed the issue of regional airports. As we know, there is less demand in regional airports. Public health measures mean fewer trips. That makes this exactly the right time to invest, to modernize and to innovate, so that we are ready to respond when the economy has fully recovered. In terms of passenger traffic, we are thinking specifically about workers and businesspeople in the regions who have to travel to Quebec City, to Montreal, or to other places in North America. The infrastructure they need has to be in place.

In addition, there are a good number of requests in terms of the model for air transportation. Support for airports is an item in the federal budget and one that really needs a push. Finally, of course, there is funding for public transit projects. It is important to keep that funding in place and to provide as much of it as possible, so that cities and communities that want to undertake projects have access to the funding.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Lavigne and Mr. Ste-Marie.

We are moving to the NDP and Mr. Blaikie for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

I have a question for Monsieur Giroux. In his report on the fall economic statement, he talked about the importance of government reporting on its public accounts reliably and on time, and he suggested Parliament might consider some changes to legislation to ensure that government does that.

It made me think about some of the larger reforms that were talked about in the 42nd Parliament regarding the parliamentary process for approving government funds. Of course, there were some changes made to the estimates process at that time. I think some of what was done was certainly worth pursuing. There were other elements of that reform that were problematic. All of this went away in the subsequent Parliament, the last one. There hasn't been any real follow-up.

When you were talking about a better date for the public accounts, it made me think that perhaps we should be looking at the entire system, including when the budget lands and the question of a fixed budget date, as well as when the public accounts ought to be tabled and changes around the timing of the estimates that were considered a couple of Parliaments ago.

I'm just wondering if that's something you might be willing to share some thoughts on today, and if it's something you might be willing to report more at length on to the committee in the months ahead.

[Yves Giroux]

It certainly is something I'd be happy to report on if the committee wishes my office and I to pursue more work on it.

That being said, I can offer a few comments. I don't—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Before you offer those comments, I am curious to know from the chair how we would consider whether my request here is sufficient, or if we need something from the committee.

If there are no objections, I would certainly be happy to consider the committee asking for that feedback from the Parliamentary Budget Officer. If there are objections, then I'd be prepared to move the appropriate motion.