Finance Committee on Nov. 24th, 2025

[Jean-Denis Garon, Bloc, Mirabel, QC]

That’s good news.

The government has introduced a superdeduction for productivity. This is accelerated depreciation, which is nothing special and exists pretty much everywhere in the world. Essentially, it is a very small part of the budget, representing $1.49 billion over five years, including $283 million for the first year. In other words, it is a minor measure. The government is telling anyone who will listen that it is a superdeduction. Once again, the minister is exaggerating: This is his trademark.

The minister says that this will generate a windfall of investment in Canada, when we know that accelerated depreciation is even more aggressive in the United States. Although this superdeduction is an ordinary deduction, do we have any idea how much investment it will attract?

At first glance, do you think the government is too optimistic about the effect of the deduction?

[Diarra Sourang, Director, Economic Analysis, Office of the Parliamentary Budget Officer]

At this stage, we are unfortunately unable to determine the exact amount of investment it will generate.

In response to your question about optimism, I would say that when we talk about productivity, we are really talking about the optimal use of capital and labour. Everything will depend on the rate of participation by businesses in the program. We will see this in the coming years.

[Jean-Denis Garon, Bloc, Mirabel, QC]

As economists, can we agree that accelerated depreciation of $1.5 billion over five years is unlikely to generate $1 trillion in investment?

[Diarra Sourang]

To answer your question, I would refer you to our economic multipliers, which give a fairly good idea of the amount of GDP that would be generated as a result of various initiatives.

[The Chair, Liberal, Karina Gould]

Thank you.

Your speaking time has expired.

We will continue with Ms. Cobena for five minutes, please.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you, Madam Chair.

Mr. Jacques, in your report, you call for an independent expert body to review or opine on what the government is including in the definition of capital investment.

It is surprising and it is shocking that we need an independent body to police the numbers. Can you explain why you felt that we needed this independent expert body?

[Jason Jacques]

It goes back to the fundamental principle of separation of responsibilities, which is an accounting concept. Fundamentally, you want to ensure that the people coming up with the budget and then evaluating whether they met the target—those individuals—don't have control over the definition so that at the midpoint they can't change the definition of what falls into those categories.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Apart from good practice, if the definitions had not been changed and made so broad and had the presentation of the budget not been changed, we wouldn't necessarily be calling for an independent expert body. This is a result of the changes, of the layers of difficulty that we have in actually understanding what counts as an operating expense, and what counts as a capital expense. Is that fair to say?

[Jason Jacques]

I would say that is fair. If this were not related to the government's new fiscal anchor of balancing the operating budget, it would be interesting that the Government of Canada came up with and is now defining capital differently than the accounting board and Statistics Canada and the United Nations, but it's something that the government could do. They can come up with any language they want to and define things as they see fit. That's their discretion.

The moment it entered into the territory of “this is our new fiscal anchor and this is how Canadians can judge our performance and this is how we're going to be communicating with parliamentarians”, it turned it into something that certainly requires greater transparency and better controls so that parliamentarians can understand it, know what they're looking at and deliberate over it.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

When I read through the budget, I found that it was very vague. It was not clear what was included as a capital investment and what was excluded. I think that the government was intentional in the vagueness. As a finance professional, I felt that was surprising because it's such an important term and you would expect it to be clearly laid out.

Would you say that having an independent expert who determines what counts as capital investments will allow parliamentarians to make more informed decisions when it comes to reporting and scrutinizing the government's expenses?

[Jason Jacques]

The short answer is yes. And the longer answer, which you probably don't want, involves looking at how changes actually happen to Public Sector Accounting Board standards. There is a draft discussion paper that's published months, if not years, in advance. It's circulated for comments. Those comments are then collated by the accounting board. Then there is a revised draft that is issued for potentially further consultation if there isn't tight consensus, and ultimately the new standard is implemented with a bit of lead time, so everyone can react to it.

Certainly in this situation that's something that could be a good practice, especially were there to be a change in government or change in Minister of Finance. Having transparency around how that Minister of Finance defines capital would be something that would be potentially challenging for parliamentarians if there were to be a new Minister of Finance, and the definition was changing without consultation or any of the information being published.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

When I speak to my constituents, a lot of them are saying that they just want accountability. They actually welcomed this recommendation of an independent expert body because they felt that the numbers would be a little bit more reliable if you took politics out of the numbers. It was actually welcomed based on your report.

Have you received any confirmation or assurances from the Prime Minister or the Minister of Finance that they will be adopting this recommendation of an independent expert body?

[Jason Jacques]

No.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you.

Would you say that this expanded definition of capital investment presents the government's fiscal position in a better situation than it actually is?

[Jason Jacques]

I would say that it's additional and new information. All of the old information is still there. So debt levels, debt to GDP, deficit to GDP, all those data still exist.

The observation that—

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Jacques. We're going to have to end this round there.

Thank you, Ms. Cobena.

We're going to continue with Mr. Sawatzky for five minutes, please.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you, Madam Chair.

I'll pass my time to Mr. Turnbull.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks.

Thanks for being here.

Mr. Jacques, I assume you've read annex 2 of the budget, “Capital budgeting framework”.

[Jason Jacques]

I have.

[Ryan Turnbull, Liberal, Whitby, ON]

It clearly outlines definitions and categories. I'm not sure that the criticism is very fair that it doesn't clearly identify how the government is intending to define capital investment. Would you agree that it actually does define it? Even if you disagree with the definitions, it goes to lengths to create a transparent set of definitions, does it not?

[Jason Jacques]

What I would say is that information is contained within the annex. Based upon the questions that we were asked earlier, the linkage with some measures in terms of their capital nature is a bit strained, a bit stretched, which makes it challenging, sorry, as a professional—

[Ryan Turnbull, Liberal, Whitby, ON]

Yes.

[Jason Jacques]

I'm a professional accountant who has over 20 years' worth of experience dealing with the Statistics Canada system of national accounts, and it makes it very challenging for someone like me to quickly respond and intuitively understand what is in those categories.

[Ryan Turnbull, Liberal, Whitby, ON]

Fair enough. I understand that, but it does define capital investment, correct?

[Jason Jacques]

It provides a high-level definition.