Evidence of meeting #30 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pbo.
A video is available from Parliament.
Conservative
Jasraj Singh Hallan Conservative Calgary East, AB
I mean, we can all sustain a certain amount of money. However, is it responsible?
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
There is room for that track to be responsible, so—
Conservative
Jasraj Singh Hallan Conservative Calgary East, AB
What would you consider to be responsible spending?
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
The criteria that give a view that it's a responsible track are things like Canada maintaining its AAA bond rating, right now. The debt-to-GDP ratio that Canada has, while it may increase from its GDP of 42% and change, is on track to go down to 39% in the medium term. Also, there is the view of the IMF, which recently reviewed Canada and said that there remains fiscal room.
For a number of reasons, briefly, I think there remains room to deal with different shocks. It's worth testing how much room there is, and the PBO can absolutely conduct that type of scenario analysis, such as, “At what point will we get into deeper trouble?”
Liberal
Liberal
Carlos Leitão Liberal Marc-Aurèle-Fortin, QC
Thank you, Madam Chair.
We're back for a second round of questions. Thank you, Ms. Ryan.
I share your opinion on the sustainability of Canada's public finances at this time. It seems that we always need to look at these issues in light of the current circumstances. Right now, we're experiencing a situation where we feel quite unsettled by the events unfolding around us. We can't separate these two elements.
Perhaps you'll be a bit surprised by where I want to go with this. Well, you can comment on that, but you may be surprised by where I want to go with this.
Canada is a federation and a highly decentralized one. I'm hardly exaggerating when I say that maybe five people in Canada really understand the mechanisms of federal transfers to the provinces. You're one of those five people. I'm simply telling you that federal transfers, especially equalization payments, involve a fairly complex system.
In your opinion, is your role not only to analyze budgets and study the long‑term sustainability of public finances, but also to provide information to parliamentarians and the public on this complex system? This system may seem difficult to understand. However, it's ultimately key to ensuring that our federation runs smoothly. Do you see the role that the Office of the Parliamentary Budget Officer can play in these discussions, which I believe are coming up fairly shortly?
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
I agree that complexity is everywhere now and that it's a challenge for parliamentarians to frame debates on matters of importance to Canadians.
Fiscal federalism is one element that shows this type of complexity. I think that the role of the Parliamentary Budget Officer and the Office of the Parliamentary Budget Officer is to look at complex areas in order to find decision points and risk points, and then report back to parliamentarians, setting aside the complexity aspect.
In other ways, I believe that the complexity of the government is hindering the delivery of the previously discussed programs and projects. I think that, given this type of complexity, parliamentarians must be in a good position to ask ministers and public servants the right questions so that they take into account the complexities and risks identified. It isn't just about communication points or risk communication. Let's put it that way.
Liberal
Carlos Leitão Liberal Marc-Aurèle-Fortin, QC
Of course, Canada still has a AAA credit rating. I think that it's well deserved. That said, we need to look at Canada as a whole. The financial position of different provinces also indirectly affects the financial stability of the country as a whole. That's why the transfer system plays such an important role.
As parliamentarians, we must also be able to understand the different jurisdictions. The provinces are responsible for delivering some things, while only the federal government is responsible for delivering others. Canada is complicated, but it works. I think that it actually works well. However, we must always remain aware of the risks at play and above all of the need for dialogue among the different governments.
It seems that, given your experience in the federal and provincial public service, you understand these issues quite well. I think that this would provide a fresh perspective to the Office of the Parliamentary Budget Officer—
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Leitão. Your time is up.
I'll now give the floor to Mr. Lefebvre for five minutes.
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
Thank you, Madam Chair.
Ms. Ryan, when answering questions from my English‑speaking colleagues earlier, you spoke about a $78‑billion deficit. Do you think that a $78‑billion deficit is responsible?
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
Yes.
Conservative
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
I would say that I don't see the difference between “reasonable” and “sustainable”.
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
So you don't see the difference between “reasonable” and “sustainable”. For you, it's all the same.
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
I think that the sustainability issue gives parliamentarians the opportunity to discuss the right level of taxation based on expenditures. I think that this is a reasonable issue for parliamentarians. As I said earlier, sustainability isn't a partisan issue. Provided that we stay on the path to sustainability, there's room for reasonable debate among parliamentarians.
Conservative
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
What do you mean by this question?
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
I mean that a government must introduce a balanced budget.
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
I think that a government has some leeway when it comes to presenting its finances and telling parliamentarians and Canadians where it wants to go and what it intends to do with their money.
The current government stated where it wants to go. In its own words, it wants to “spend less to invest more”. I think that there's room to do this for a certain period. This was established by a number of votes, including Mr. Jacques' vote. In that sense, I think that it's a reasonable question for parliamentarians—
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
Ms. Ryan, I'll stop you there.
I'll quote a former Quebec finance minister, whom I greatly respect. Sorry, Mr. Leitão. He said that balancing the budget wasn't an obligation, but an obsession.
I would like you to share your thoughts on this quote, which states that balancing the budget must be an obligation, an obsession. Do you agree with that?
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
No. I don't think that it should be an obsession.
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
In reality, the deficit has grown from $700 billion 10 years ago to $1,350 billion. We're using the credit card of our children, our grandchildren and our great‑grandchildren. You're comfortable with that.
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
As I said before, the sustainability issue encompasses different measures. I think that it's better to leave lower debts and deficits to future generations. The government's position is to invest in order to improve the economy, jobs and people's incomes. With all due respect, I think that you must decide whether you consider this the right way to go.
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
I'm going to ask my question again, because I didn't word it correctly. The debt has risen from $700 billion 10 years ago to $1,350 billion, and you're comfortable with that.
Deputy Director, Partnership, Policy and Analysis, FINTRAC, As an Individual
To the extent that the current fiscal framework presents a debt-to-income ratio of 11 cents on the dollar, which is going to increase to 13 cents on the dollar, I think I can still support that.