Evidence of meeting #51 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A video is available from Parliament.
12:35 p.m.
Conservative
Jake Stewart Conservative Miramichi—Grand Lake, NB
Thank you so much.
Mr. Chair, how much time do I have?
12:35 p.m.
Liberal
The Chair Liberal Peter Fonseca
You have about 30 seconds, MP Stewart, and I'm trying to hold everybody to their time—
12:35 p.m.
Conservative
12:35 p.m.
Liberal
12:35 p.m.
Conservative
Jake Stewart Conservative Miramichi—Grand Lake, NB
My last question is to the PBO.
Do you have any final comments on the luxury tax? Is there anything else you want to add on the tax itself?
12:35 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think, Mr. Stewart, you've asked all the right questions, and I did my best to provide you with answers.
12:35 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you very much, MP Stewart.
Moving to the Liberals, we have MP Baker for five minutes.
12:35 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thanks very much, Chair. Thank you, Monsieur Giroux, for being here with us today.
I'd like to go back to Canada's fiscal position.
The budget that was introduced projects a declining deficit, getting down to, I believe, $8.4 billion in fiscal year 2026-27. I think there's a conscious effort behind these numbers, and certainly the decisions being proposed in the budget to achieve those numbers demonstrate the government's commitment to seeing the debt-to-GDP ratio decline. I think you spoke about that a little bit in your interactions with Ms. Chatel.
On April 28, S&P Global Ratings reaffirmed Canada's AAA credit rating. They noted S&P Global Ratings' “view that Canada's high wealth, economic diversification, and ample fiscal and monetary buffers are helping the country recover from the impact of the COVID-19 pandemic, and leave it well-positioned to face future potential shocks.”
Mr. Giroux, my question is this: Do you agree with this assessment by S&P?
12:40 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's true that Canada's fiscal situation is quite strong, especially compared with other G7 countries, so I have no reason to disagree with the overall Standard and Poor's assessment. That said, Standard and Poor's is in a different line of business from mine. They're in the business of assessing credit risk for sovereign countries and subnational countries, whereas I'm a couple of levels down, trying to determine the long-term fiscal sustainability of governments as well as the costs of certain specific measures.
However, there's no fundamental reason to greatly disagree with the Standard and Poor's assessment.
12:40 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
In your response just now, you spoke about our fiscal position relative to other G7 countries. I'm not trying to put words in your mouth, but I think you said something along the lines that it's quite strong.
First of all, could you correct me if that's wrong or tell me if that's correct, and then also explain to me why you feel that way?
12:40 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Well, when we look at the debt-to-GDP ratio of G7 countries, Canada is, if not the lowest, probably the second-lowest. We are certainly among the lowest. With the fundamentals of the Canadian economy and what we know so far with respect to the longer-term trends, the country is still in a fiscally sustainable longer-term situation, and that includes at the federal level. In a nutshell, that's why we can say that the situation is good, fiscally speaking.
One of your colleagues, Monsieur Ste-Marie, talked about the fiscal sustainability report that we regularly publish. In it we look at the provincial situation as well as the federal situation. We will be in a situation to release an updated fiscal sustainability report during the summer, so members of the committee will have some pleasant summer reading with a report that will look at the sustainability of the federal and provincial governments in the country.
12:40 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thank you very much for that. I'm looking forward to spending my summer reading your work.
I have only about 60 seconds left, so I'll be very brief.
The government announced a strategic policy review. Do you support such a review, and what recommendations would you have for such a review of our spending?
12:40 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's an interesting question.
Undertaking a review with the view of reducing spending is a policy decision on the part of the government. I'm not in the habit of pronouncing as to whether specific individual policy items are good or not.
However, as outlined in our note entitled “Issues for parliamentarians”, I would point out that if the government sticks with the budget 2022 plan—and that includes a strategic review—that plan would mean very, very small growth in operating and capital expenditures from 2024 to 2027. We have not seen that in a long time. That would represent a significant departure from the last 10 or 12 years.
12:45 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you Mr. Giroux and Mr. Baker.
We will now go to the Bloc.
MP Ste-Marie, you have two and a half minutes.
12:45 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
As I have only two and a half minutes left, I'll ask my questions in succession.
My first question is about the new tax on certain luxury goods.
This tax will increase the federal government's revenue, but it will decrease provincial revenue because the number of sales will drop and the provincial sales tax on such goods will apply to a smaller tax base. I'd like confirmation that I've understood this properly.
My second question is about Bill C‑19. I'm afraid that the committee will not be able to fully study this mammoth bill of over 400 pages in length, and which includes many parts and divisions.
Do you and your team have any warnings for us, or anything they would like to point out to us, in connection with Bill C‑19? I don't know whether you've had enough time to examine the entire bill, and Part 5 in particular.
I'm thinking, for example, of division 9, which concerns the Special Import Measures Act and other areas. Do you think there are any dangers here?
Is division 15, which is about the Competition Act, put together coherently?
And what of division 16, in connection with the Copyright Act, and division 17, with respect to patents?
I'm also surprised to see, in a budget implementation bill, that there should be a mention of the Civil International Space Station Agreement Implementation Act. That's in division 18.
And division 19 addresses prison strip searches.
Suggested amendments to the Immigration and Refugee Protection Act and the Employment Insurance Act are also found in this bill.
Are you looking at all of that, because it's a budget implementation bill, or are you somewhat overwhelmed, as we are, by the scope of this bill?
Do you have any warnings for us?
May 26th, 2022 / 12:45 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Thank you very much for having asked these two questions.
With respect to your first question, it's true that the tax on luxury goods will increase federal revenue, but unfortunately decrease provincial revenue, at least for provinces that have a sales tax on goods of this kind.
Your second question was about warnings. We haven't studied the parts or divisions that did not include financial provisions or that did not generate considerable expenditures.
However, we did note that division 6 of Part 5 is identical to what is in Bill C‑17. I'm talking here of the transfer of $2 billion to the provinces to reduce health care wait times. These two provisions have exactly the same goal; at least that's how I understand it. I believe that it is included because the government expects to have Bill C‑19 adopted before Bill C‑17. We believe that this deserves the attention of parliamentarians, to avoid duplication in the objectives and expenditures. We are, after all, talking about $2 billion.
12:45 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Ste.‑Marie.
We will now move to the NDP. We have MP Blaikie back with us.
MP Blaikie, you have two and a half minutes.
12:45 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you very much. I'm glad to be back.
I wanted to follow up on questions about the CRA, particularly the expenditures in regard to recovery and the diminishing return you outlined in your report.
There's one thing I've been trying to get to the bottom of. I don't know if it's represented in some of the numbers in your report or if this would be in addition to them. I'm wondering if you're in a position to be able to provide any comment on the investment that the government is making, including some money in this bill, to go after people who applied in good faith for the CERB when they were told to, who don't have much income themselves, who are already living below the poverty line, and whom the government seems intent on pursuing for that money.
I'm wondering how good an investment you think it is to chase the poor for money that they don't have, how likely government is to recoup that money and if you're aware of any data. We've asked government directly. I would say that we haven't had an adequate answer on how many people they believe owe the government money under this program, how many people are below the poverty line, how much debt they think they're owed or how much they actually expect to recover.
I'm wondering if you're in a position to be able to provide any commentary on that as well in terms of what data is available, and how it might help us understand the return on investment, so to speak, although I don't think that's the appropriate term when we're talking about people who are already in financial distress.
12:50 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We don't have data specifically on CERB and its successors, and the potential amount that was paid by mistake or as a result of fraud, but I would think that CRA would quite easily have at least partial data, especially if they do some recoupment between what they paid and whether individuals who received CERB also had other types of benefits or were not eligible because, for example, they were in receipt of income from full-time jobs, old age security or the guaranteed income supplement.
It would be fairly easy for CRA to at least provide this committee with some partial data on the amount it anticipates or expects to have been paid in error or to people who were abroad, and all these payments that should not have been made. I'm a bit surprised to hear that CRA is not providing you with that information.
That's probably as much as I can say, not having received or asked for any data on CERB paid fraudulently or by mistake. That's probably as much as I can say.
12:50 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Blaikie.
Now we're going to the Conservatives and MP Albas for five minutes, please.