Finance Committee on May 2nd, 2022

[Nicholas Leswick]

That's correct.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay, thank you. That's 25%. If we want to talk about fiscal responsibility, that's a 25% increase in spending postpandemic versus prepandemic, and that doesn't include any of the spending that's part of COVID. It's ignoring that.

Second, what's the average spending growth year over year from 2015 to today? My numbers say it's about 7% to 8%. Is that correct?

[Nicholas Leswick]

I think that would be in the ballpark. I don't want to verify that specifically, but let's say it's 6% to 8%.

[Adam Chambers, Conservative, Simcoe North, ON]

Perfect.

Going forward, though, from this budget projecting out through the forecast, we have spending growth projected at somewhere between 2% to 3% per year. Is that in the ballpark?

[Nicholas Leswick]

I'll agree, just based on.... I don't have a calculator in front of me, but based on—

[Adam Chambers, Conservative, Simcoe North, ON]

That is what the calculations show. Can we confirm that there's no money for pharmacare in this budget?

[Nicholas Leswick]

Correct.

[Adam Chambers, Conservative, Simcoe North, ON]

There's no money for sustained long-term increases to the Canada health transfer. There was the one-time $2 billion.

[Nicholas Leswick]

Correct, yes. That's right.

[Adam Chambers, Conservative, Simcoe North, ON]

There's no money for other promises that are part of, perhaps, the agreement with the NDP or other promises that may come up next year.

[Alison McDermott]

Could I just add one caveat to your statement about health care? As a result of the stronger economic growth that we've seen coming out of the pandemic, and as a result of the government's actions, GDP growth is much higher than it was in the prepandemic state. The amount of CHT that will go to the provinces is about $12.6 billion higher than it was before. That's included in this budget forecast.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

I'm really glad you raised that because we're asked to believe, after the government has had seven to eight per cent spending increases per year, every year, that all of a sudden there's a new-found fiscal restraint religion that will keep expenditures increasing only by two to three per cent per year, but we are reminded that there is inflation and growth that will give the government more revenue to spend.

How much more revenue does the government have to spend over the next five years that it did not project from just one year ago.

[Nicholas Leswick]

I certainly follow your line of questioning. I can't offer the—

[Adam Chambers, Conservative, Simcoe North, ON]

No problem. I've done the math, so if we look at budget 2021 and compare the revenue from budget 2021 and the budget revenues from budget 2022 projected out through the forecast, there's $170 billion in extra revenue that the government is going to get over the next five years, or is projected to get, versus what it thought it was going to get last year.

In fact, the entire fiscal plan of the government is based upon inflation. You don't have to answer that question. That's more of a political statement and not a question fair enough for officials.

However, the entire fiscal plan of the government is based on inflation staying high because that's the only way they're going to be able to pay for any spending promises. That to me is an interesting observation.

How many civil servants have we decided or are projecting to add through the forecast, on a gross and net basis, over the next five years? Is that a number that we could get?

I recognize that my time is up, Mr. Chair, but if we can't get that here today, it would be very helpful if we could get that in writing from the Treasury Board Secretariat.

[The Chair, Liberal, Peter Fonseca]

Thank you. We can look for that answer.

We're moving now to the Liberals and MP Dzerowicz for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair. I also want thank all of the officials for their excellent work and for being here today.

As Mr. Chambers said, these budgets are huge amounts of work, and I really appreciate everybody's being here.

I just want to comment off the top very quickly. I think Mr. Chambers asked some really excellent questions, and I think we'll get some additional information from you.

For those who are listening, it's really important, when we're making comparisons with the time before COVID to take into consideration the geopolitical situation and crisis that's under way right now, and the high levels of inflation that haven't been seen in almost three decades, which we're experiencing right now.

We're still fighting COVID. We're still helping the Canadian economy to recover in many ways. As to whether inflation will staying high for the next five years, I don't think anybody can make any prediction given the fact that the world is highly unpredictable right now. I just wanted to provide some of those additional comments because I think it's important for us to have those in mind as we have this conversation.

My first question is about the labour market and jobs recovery. My understanding is that Canada has recovered quite well in terms of jobs recovery to where we were when COVID first started. My understanding is that we recovered about 112% of the jobs, whereas in the United States, I think their employment levels are still 2.3% below prepandemic levels.

Can someone confirm that, please?

[Nicholas Leswick]

Thank you for the statement. Yes, I can confirm that.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

We still have one million unfilled jobs. These are the numbers. There are one million jobs that still need to be filled in Canada, and so there are a lot of small businesses and businesses in general that are saying, “We are looking for people, and we're looking for talent. We are looking for more Canadians.” Is there anyone here in the room or someone from the Department of Citizenship and Immigration or Employment and Social Development who can speak to what is in budget 2022 that's going to help address the significant labour shortages that we have right now?

[Nicholas Leswick]

Thank you for the question. I'll take a shot at it.

You're exactly right. The labour market recovery has exceeded expectations on all sorts of labour market metrics, whether it be employment creation, hours worked or participation rate. We're completely outperforming where we thought we'd be six or 12 months ago.

It's exacerbated into some of these labour markets shortages that we're seeing on a pan-Canadian basis. The government has made efforts on two fronts really: pure labour supply, which is how many hours are worked in the economy, and then addressing elements of skills matching and skill shortages in certain areas.

In labour supply, there are a couple of things. One is that the government made a huge effort in moving forward to implement the national early learning and child care program last year, which would hopefully catalyze the participation of new parents into the workforce. Likewise, there is a pretty ambitious immigration program as well, which brings new workers into the country. Again, that's just from a pure labour supply perspective.

On skills, it's a combination of skills training programs, sectoral support programs that were announced in the last budget, foreign credentials recognition and temporary foreign workers, which I know straddles both labour supply and skills matching. There have been a number of initiatives to advance on both of those streams.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you. That's excellent. It's very helpful.

Housing has been an increasing crisis in our country, and I know that it is true for the residents in my riding of Davenport.

In the budget, we are applying a GST/HST to assignment sales. First, can you explain the assignment sales so that the general public understands them, and how does applying a GST/HST to assignment sales help address the housing situation in Canada?

[Miodrag Jovanovic]

First, an assignment sale takes place typically when you are holding a title to acquire a piece of real estate, let's say a condo that you purchased at phase of construction, for instance. Prices have increased. Now you have an interested buyer. What you're doing is assigning this contract to the buyer for additional compensation. So if you first purchased that for $300,000, let's say, and now it's worth $500,000 or $600,000, the new buyer will give you an additional $200,000 or $300,000. That's typically an assignment.

Right now, if the intent to originally purchase that property was to occupy it as your principal residence, the person doesn't have to pay GST/HST on that additional value. We were a bit concerned, particularly now given the state of the market, that relying on that intent was probably a bit weak as a position. The proposal is to basically require, on all assignment sales, regardless of the intent, charging GST and HST on the appreciated value. That would ensure that it's applied evenly across all transactions and in a way that will help deal with speculation in the market.

[Julie Dzerowicz, Liberal, Davenport, ON]

How would that [Technical difficulty--Editor] supply?

[The Chair, Liberal, Peter Fonseca]

That's your time.

[Julie Dzerowicz, Liberal, Davenport, ON]

If we don't have time. If you could please respond to that in writing, it would be really great. Thank you.

[The Chair, Liberal, Peter Fonseca]

Now we're moving to the Bloc and Monsieur Ste-Marie for two and a half minutes, please.