Government Operations Committee on Dec. 2nd, 2010

[David Enns]

Yes.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

We've had a very fulsome discussion around this table with respect to the G-8, if they were useful--the G-8 and G-20--and if they had an impact. I can see by what you're telling me that there's going to be a dramatic, positive impact for a lot of people with respect to this. It's good to see that this funding is actually getting out the door and helping people who actually need assistance.

I'm also encouraged by the continuing support of the Canadian Armed Forces through Canada's First Defence strategy. We've often talked about the decade of darkness in this place, and it's good to see that we're continuing to support our men and women in the armed forces to do the job they need to do on our behalf.

There's also something in here, and it's under Export Development Canada: “repayments to the Consolidated Revenue Fund...having received repayments from General Motors of Canada and Air Canada....” Can you go over what that is?

[David Enns]

Those are pre-payments by Air Canada and General Motors to the Canada account.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

For what? They were advanced loans. I know we recently announced a sale of GM stock that Canada had acquired. That's not included in this, obviously.

[David Enns]

No.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Okay. So basically they have repaid the loans they were advanced through the economic action plan. We're seeing, obviously, good things with GM, because they've just announced another 700 jobs in the Oshawa facility, which is quite close to my home in Oak Ridges—Markham.

Also, Madame Bourgeois, you were explaining a bit with respect to the downward revision of the debt. Can I ask you just to go over that again for me? In comparison, how is it done now and how was it done by previous governments or by previous administrations?

[Alister Smith]

I don't think there's any real change--

[The Chair, Liberal, John McKay]

You have a very limited amount of time to answer it, but please take a shot at it.

[Alister Smith]

Okay. I think the change here really resulted from the Jobs and Economic Growth Act, which changed the way the EI account works. We were replacing the old EI account with a new EI account, and interest is no longer paid into the Consolidated Revenue Fund. So that had offset before an accrual adjustment, and that was fortuitous, in a sense, because you could take the number from the budget and it would be almost the same number as the cash number we used in estimates. Once the interest stopped from the new account, the adjustment was too large to just take the budget number for the debt, so they've had to provide a different number. There's no change in accounting standards as such. This has all gone through the public accounts and it's been looked at by the OAG, and there's nothing really--

[The Chair, Liberal, John McKay]

Thank you, Mr. Smith

Thank you, Mr. Calandra.

Madam Coady, five minutes, please.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

I have so many questions to ask, but I want to go back to the EI account again and that change. One of the things I noticed--and this speaks to my colleague Mr. Martin's point--is there's a $4.4 billion increase, but a $2 billion overall decrease. I think that's overall in these estimates. Mr. Calandra brought up a point, as did my other colleague, about the point on the revised forecast for public debt charges relating to the EI account. I think your explanation was given earlier.

I just want to read you this sentence, which comes from the Library of Parliament, from the Department of Finance: “...downward revision of the interest costs on the federal public debt associated with accounting changes....”

Are those the accounting changes?

[Alister Smith]

I think that may be--

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

A different accounting?

[Alister Smith]

You say “accounting changes”. What that doesn't mean is a change in accounting standards. These are still subject to the Auditor General.... It's just the way. It's a methodology for taking a number from the budget and putting it in estimates as a statutory estimate of the public debt charges.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Yes, I understood that, but it's come to almost $3 billion.

I'm seeing you nodding your head. So it's about $2.9 billion?

[Alister Smith]

The $2.9 billion is the number in—

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

So that's the opposite; it's the decrease. Actually, it's more than that.

So when you are looking at overall spending, if I may, which also speaks to Mr. Martin's point, you are saying there's a $2 billion overall decrease in the budget requirements, and almost $3 billion of that is the change in accounting standards—the downward revision in interest costs—plus the repayment to Export Development Canada by General Motors.

So when we look at the increases, we have $510 million for the Department of Finance for transfer protection payments, we have Human Resources and Skills Development increases of almost $3 billion, and we have $590 million for the Office of Infrastructure.

I'm seeing nodding heads again.

That's a tremendous increase in spending. I don't want anyone to be left with the impression that we're actually to the net good, because really we're not. The change in accounting helped, and so did the repayment by General Motors Canada, in offsetting those things.

So we're actually spending more. There's a $4.4 billion increase in spending. There is no real decrease.

[Alister Smith]

No, the decreases are on the statutory side, you're right. There's about a $2 billion net decrease in statutory spending, which offsets the increase in voted spending.

These are not unusual in size. We see these fluctuations all the time in the statutory estimates. I think in supplementary estimates (A) it was about a $2.7 billion decrease in statutory spending.

But just to go to your point, there is a lot of funding still flowing for the economic action plan this fiscal year, including a lot of reprofiling of infrastructure funds, which is boosting spending—and that's appropriate and was planned. Indeed, restraint will really begin after the economic action plan terminates.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

But again, there was some discussion that you're asking for increased spending, yet you're going to have a decrease. Well, the decrease is really not—

[Alister Smith]

Right.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

—a decrease in overall spending.

I want to go to my next point.

Under vote 10, government-wide initiatives, there's $2.5 million for Public Works and Government Services Canada. We did get an explanation that it was for ministers' regional offices.

Why is there an increase in this spending? That was my point last week, not why you're spending money on ministers' regional offices. I understand what they do and I understand their necessity, but why is there an increase showing up in these budget estimates?

[Alister Smith]

There's an extension of new offices, if I'm not mistaken. We have a network now of 14 across Canada, and there are two more offices opening up in Whitehorse and Yellowknife.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

That was what I needed to know, but I didn't get that sense before. So you're opening up two more offices.

[Alister Smith]

Two more regional ones, yes.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Okay. Thank you.

And that's what's going to cost $2.5 million?