Good afternoon, Mr. Chair and members of the committee. Thank you for the invitation to appear before you today.
We are pleased to be here to discuss our analysis of Bill C-32, the fall economic statement implementation act, which we published in our report entitled “Fall Economic Statement—Issues for Parliamentarians” on November 15, 2022.
Additionally, this morning my office published three separate legislative costing notes: our analysis of the residential property flipping rule, the doubling of the first-time homebuyers' tax credit, and eliminating the interest on federal student and apprentice loans.
With me today, I have Kristina Grinshpoon, who is director of fiscal analysis.
In accordance with the PBO's legislative mandate to provide impartial, independent analysis to help parliamentarians fulfill their constitutional role, which consists of holding government accountable, our report on the fall economic statement highlights key issues to assist parliamentarians in their budgetary deliberations.
In terms of funding and new budgetary measures, revisions to the private sector economic outlook and fiscal developments in the fall economic statement provide a total of $81.2 billion in new fiscal room, which finances $52.2 billion in net new measures over 2022-23 to 2027-28.
Of note is the government's $4 billion enhancement to the Canada workers benefit, which will automatically provide advance payment to individuals who qualified for the benefit in the previous year. The substantial cost of this measure is largely due to the government's policy decision not to recoup these advance payment when recipients' incomes rise and they become ineligible for benefits or eligible for lower benefits. Not requiring repayment of federal benefits for ineligible individuals is a pronounced departure from the existing federal tax and transfer system. This expensive policy change was not mentioned in the fall statement.
Further, the government identified $14.2 billion in new measures without providing specific details on this spending, which represents 27% of all new measures, totalling $52.2 billion, in the fall economic statement 2022. This lack of transparency presents challenges for parliamentarians and the public in scrutinizing the government’s spending plans.
The timeliness of financial reporting also continues to present challenges. This year the Public Accounts were tabled on October 27—seven months after the close of the fiscal year. Canada continues to fall short of the standard for advanced practice in the International Monetary Fund's financial reporting guidelines, which recommends that governments publish their annual financial statements within six months. Parliamentarians may wish to request that the government publish the Public Accounts of Canada and the Departmental Results Reports, which have not yet been published, within six months of the close of the fiscal year. Legislative amendments to that effect could be considered.
Finally, the government highlighted that it exceeded its first spending review target of $3.0 billion by achieving savings of $3.8 billion from lower-than-anticipated spending on certain COVID‑19 support measures in the previous fiscal year, 2021‑22. However, the source of this saving is inconsistent with the intention and timing that was announced in Budget 2022. The FES provided no explanation for this discrepancy. This puts into question the credibility of the yet-to-be-launched strategic policy review supposed to generate savings of $6 billion by 2026‑27 and $3 billion in annual savings.
Ms. Grinshpoon and I will be pleased to respond to any questions you may have regarding our analysis of the fall economic statement or other PBO work.