Evidence of meeting #10 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rules.
A recording is available from Parliament.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Do you have any suggestions as to some of the technology that is currently being used to track the tax evasion that's happening?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
No, certainly from a technological or operational perspective, we're not well placed to comment on that.
Something that we have seen in the past.... The raison d'être for our organization is one of transparency. Certainly there seems to have been an impact with the creation of our office and the accuracy and transparency around economic and fiscal forecasting on the part of the Department of Finance and the government.
That's something that's been concluded by the International Monetary Fund and the OECD. Potentially having something similar or having us play a similar role around the tax cap, if Parliament deemed it appropriate, could be similarly helpful. Shining a light on the dark corners of the government occasionally provides benefits.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Could you elaborate a bit about what the details of that would be?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
With respect to...?
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
It's with respect to increasing transparency and all of that sort of thing that you mentioned.
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
On the increasing transparency side, I was specifically referring to Bill S-217. It's analogous to the role we currently play on the economic and fiscal forecasting side. The Parliamentary Budget Office has a mandate to undertake this forecasting work that the Department of Finance already does. Some people might argue it's duplication. Certainly I think many parts of the public service would.
Thankfully, the International Monetary Fund and other researchers have concluded that to have a bit of competition actually improves transparency and accuracy in the forecasting. It also better serves parliamentarians, because it forces both the government and our organization to share additional information with parliamentarians, so they have a better understanding of what's going on.
Having another external organization playing a similar role around the tax cap—going back to the operational question you had regarding interventions—I think would potentially provide a very good opening for parliamentarians, if similar work was being done, whether it's by us or by another organization.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
For Canadians out there who would just want to know in plain terms about how this would affect their daily lives, what would you say about that?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Do you mean with respect to tax havens?
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Yes, essentially. How does this end up affecting day-to-day life for Canadians?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Everyone has a really clear sense of the fact that there are people who potentially have money to pay high-priced lawyers and accountants to set up complicated tax structures, so they potentially don't have to pay their fair share. For the vast majority of the 30 million people who file T1 tax returns, it means they have to pay more for the social programs that Canadians value.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Those are all my questions. Thank you, Chair.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Sawatzky.
We will move on now to Monsieur Simard for two and a half minutes.
Bloc
Mario Simard Bloc Jonquière, QC
Thank you very much, Madam Chair.
Mr. Jacques, I don't know if you've already done a study on this, but do you know if there are any mechanisms in place so that before the government awards a company with a public contract, it can determine whether the company uses tax havens?
The example that comes to mind is KPMG, a multinational company that receives a lot of contracts from the federal government. It had been criminally charged in the United States, but if I'm not mistaken, there was an out-of-court settlement in Canada between the Canada Revenue Agency and KPMG.
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I don't know. Mr. Bernier, could you answer?
Director, Budgetary Analysis, Office of the Parliamentary Budget Officer
To my knowledge, there isn't a mechanism to ensure that. Even if there were one, as the senior officials from the Department of Finance and the agency explained earlier, those companies manage to operate in accordance with the letter of the law in most cases. I'm not a lawyer, so I can't assure you that that would be the case. Having said that, even if the government could prove that companies were using tax havens, it might be difficult to deny them contracts for that reason alone.
Bloc
Mario Simard Bloc Jonquière, QC
To your knowledge, isn't there a mechanism that would enable the government to get an idea of that? When contracts are awarded, aren't there any audits to see if the companies have acceptable tax practices? Is that not a criterion?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We aren't experts in that area.
Bloc
Mario Simard Bloc Jonquière, QC
I don't know, but sometimes you do evaluations of government contracts. You can analyze them and see where there are abuses. Is that a criterion that the Office of the Parliamentary Budget Officer can study?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Unfortunately, we aren't procurement experts. I know there are other officials who could answer your question directly.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Simard.
Given that we have about six minutes left for committee time, I'm wondering if it's the will of the committee to split that time equally between the Conservatives and the Liberals in the last round.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
In a report released today called “Planned Capital Spending under Canada's Defence Policy: 2025 Update”, you outlined new defence expenditures that were not included in your September “Economic and Fiscal Outlook”.
Taking this additional spending into account, what are Canadians now facing in terms of a projected deficit?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
As we mentioned in the September “Economic and Fiscal Outlook”, one of the major areas of spending, around which we weren't in a good position to provide an estimate, was the government's commitment to the 5% NATO commitment, and we were focused on 2%. Concerning the difference between 2% and 5%, we continue to not have enough detail at this point.
At this juncture, it's unclear how much of the additional spending will overlap with other areas of spending, but suffice it to say that I think, going back to the testimony that I offered at the government operations committee, it would be tens of billions of dollars of additional spending.