Evidence of meeting #37 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was productivity.
A video is available from Parliament.
Senior Deputy Governor, Bank of Canada
Our financial position rolls up into the government's financial statements at the end of every year, so—
Conservative
Greg McLean Conservative Calgary Centre, AB
On your balance sheet there is an asset, a derivative instrument with the Government of Canada, for $19 billion that it owes you as your asset as well as, cumulatively, your $8-billion loss, or $8.5 billion.
Conservative
Greg McLean Conservative Calgary Centre, AB
At what point in time did you realize the actual derivative instrument here?
Senior Deputy Governor, Bank of Canada
It is only if we sell the instrument, only if we sell the investments.
Conservative
Governor, Bank of Canada
There are certainly some longer-term bonds that will take some time to roll off, so you're going to see that on our balance sheet. I expect you're going to see that for quite a long time. It fluctuates a bit with the market, but it is gradually coming down.
Conservative
Greg McLean Conservative Calgary Centre, AB
Prior to quantitative easing during the pandemic, you used to dividend the federal government. About a billion dollars a year, give or take, went toward consolidated revenue, which is now $8.5 billion in arrears. It's going to be some time before it comes off, and it doesn't look like you're getting anywhere near positive cash flow at any point in time soon.
The issue is that in the budget the government actually says it is going to stop collecting $19.3 million over two years from remittances to the consolidated revenue fund. Do you know what that's about?
Conservative
Greg McLean Conservative Calgary Centre, AB
The government is saying that there is $19.3 million it is not going to collect from the Bank of Canada anymore from remittances.
Senior Deputy Governor, Bank of Canada
We were recently given some additional mandates, and the way the government characterized how those would be funded in the budget was through not collecting remittances. That might have been what you're referring to.
Conservative
Greg McLean Conservative Calgary Centre, AB
All right.
Governor, I noticed here in your annual statement that you think you're at a normal balance sheet now and that you're managing it in a normal fashion, as in you don't have to buy and you don't have to sell Government of Canada securities, yet it says very clearly here that you're going to start quantitative easing again in 2027.
Governor, Bank of Canada
We haven't done quantitative easing since the depths of the—
Conservative
Greg McLean Conservative Calgary Centre, AB
—“Purchases of [Government of Canada] bonds for balance sheet management will likely not start until 2027.”
Senior Deputy Governor, Bank of Canada
We do a certain amount of buying and selling regularly. That's not quantitative easing; that's just managing our balance sheet, so—
Liberal
The Chair Liberal Karina Gould
That concludes the time for this round. We are going to continue now—
Governor, Bank of Canada
Our balance sheet grows as our liabilities grow and our assets also grow. That is routine.
Liberal