Finance Committee on Nov. 28th, 2022

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

There's another analysis I would love to see. It's my understanding that the government, in their fall economic statement, said there will be no new spending. They haven't done that yet, in seven years.

If you took the average amount of that additional spending, taking out COVID spending.... You said that's the amount they're actually going to spend over the next five years. What would the impact be on the deficit and debt?

If you could do something like that, it would be greatly appreciated.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

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

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair. I'm going to share some of my time with MP Dzerowicz.

Monsieur Giroux, thank you for being here today.

I have a series of questions. I'm hoping they elicit brief answers, so we can get through all of them.

The first question I'd like to ask you is about the Canada workers benefit, which you spoke about recently. Would you agree that the Canada workers benefit payment amount begins to be reduced once people reach a net annual income level of $22,944? That equates to, I believe, about $11 per hour for somebody working 40 hours a week. Would you agree with that?

[Yves Giroux]

Yes, that's a fact.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Would you categorize people at this income level as being among the hardest hit, in terms of the impact of inflation?

[Yves Giroux]

Clearly.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Therefore, by extension, the population served by the Canada workers benefit, and those who may have received what has been referred to as “overpayments”.... Those folks are having a particularly hard time with the increasing cost of living. Would you agree with that?

[Yves Giroux]

I have no doubt they have a hard time.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

One of the things I've discovered is.... I don't know whether you've done research on this or are aware of this—or agree with this, frankly—but there are statistics showing that low-income Canadians will often emerge from the technical poverty line, only to move back below that poverty line the following year, in a very short period of time.

Do you agree with that? Have you seen data to back that up? What's your thought on that?

[Yves Giroux]

It's quite possible. I haven't done extensive analysis on movements in and out of poverty.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I understand.

In 2019, a study by the IRPP showed that, for vulnerable groups, the risk of poverty spikes upwards during years of high unemployment. According to the report, “This highlights the importance of having a growing, full-employment economy as the first line of defence against poverty.”

Given that we have a possible economic slowdown looming, for all the reasons we know, do you think supporting vulnerable populations, in this context, is a reasonable public policy objective?

[Yves Giroux]

That's a public policy choice that is certainly very valid. I see where you're going with your questions, and I totally understand that.

My concern is not necessarily about the fact that the government made that policy decision, in and of itself. It's that it wasn't clearly stated as such in the fall economic statement. It was presented as the cost of advance payments—period—not of forgoing advance payments for those who would otherwise not have benefited.

Given the complexity of Canadian society and the tax system, I am convinced there will be cases of individuals going from $20,000 a year, in income, to $100,000 the following year, who will have collected the Canada workers benefit. Those are probably the two main elements of my concern, but I understand your questions.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you.

I will pass the rest of my time to Ms. Dzerowicz.

[The Chair, Liberal, Peter Fonseca]

Go ahead, MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thank you for being here, Mr. Giroux. Thanks to Ms. Grinshpoon as well. Welcome, both of you.

I'm curious about the conversation that's been had around accountability and transparency. I really think it's very important, and I very much value the job you do.

Annex 1 of the fall economic statement includes several transparency instruments. I think one of them that I was looking at was the disclosure of off-cycle spending. My understanding is that this is something that has not been done by a previous government before. Is that correct? Also, do you think this is a positive transparency instrument?

[Yves Giroux]

I'm not aware.... My memory doesn't serve me well, because I don't remember seven or eight years ago that well. I'm not sure if it had been done in the past, but it is indeed a very good instrument in outlining all the initiatives where government spending has gone in what we call the off-cycle period that is after the budget and before the fall economic statement.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

You've indicated a response to Mr. Blaikie's question. What transparency measures would you like to see? You've indicated a number of very helpful suggestions.

Have any of the suggestions you've made ever been done in the past, or are these suggestions in terms of moving forward?

[Yves Giroux]

It's difficult for me to answer, because in previous government reviews I was on the other side, so I was seeing everything. It's difficult to determine what was public and what was not public, but I remember.... I would be hard-pressed to say what was done in the past because I was on the dark side, so to speak, where I was advising ministers as to what to cut and what not to cut. My memory could play tricks on me as to what was publicly known and what wasn't.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Dzerowicz.

Now we'll hear from the Bloc and MP Ste-Marie, please.

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

Welcome to the bright side here with us, Mr. Giroux.

I have a couple of questions about the studies you released this morning, including the one on eliminating interest on federal student loans.

If you reduce the total amount of student loans by that much, it will be cheaper to get an education, which will encourage more people to do so. Has your research team assessed whether the number of students will go up?

[Yves Giroux]

This won't apply until the very end of someone's studies, at least six months after graduation. We may have been wrong, but we felt that it would therefore not have a significant impact on people's behaviour.

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

So, from your point of view, this is more of a measure to help new graduates buy a house or weather inflation, for example.

Can you confirm that Quebec will be fully compensated on a pro rata basis for its students at the college and university levels?

[Yves Giroux]

I can't confirm that for you and I won't commit to that. As I understand it, the Quebec government will be compensated, as it always is with student financial aid measures, but only the federal government can confirm that for you.

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

Thank you very much.

Another study of yours looks at the residential property flipping rule. In this study, you measure the behavioural response to this policy, which is specifically intended to change people's behaviour and discourage them from buying properties to quickly resell them, getting rich in the process.

How did your team evaluate the behavioural response? In your view, the response appears to be based on the assumption that 50% of eligible tax filers will delay selling to avoid paying tax under the new rule. Is that just one of many assumptions, or was your thinking backed by other evidence?