Now, in terms of the plan itself and the questions around it, Mr. Chairman, there should always be open and vigorous debate about a government's spending and its plans. The debate, however, should not be one-sided, and all facts should be brought out.
I congratulate the Parliamentary Budget Officer on being able to stand in a very isolated position and be one of a significant minority when it comes to questioning the credibility of the plan. Of course, all government plans and documentations need to be looked at, scrutinized, and examined as to their credibility.
There was one quote that was used by the Parliamentary Budget Officer related to the International Monetary Fund. Just quickly about our plan, I would like to read from the report from the International Monetary Fund, which says, “The authorities appropriately target a return to balance at the federal level over the medium run, with an ambitious and growth-friendly plan.”
Another quote, from page 3 of that report: “...Canada is the only G-7 country that virtually recouped the loss in employment (apart from Germany) and output during the recession by mid 2010...”. That's on page 3 of the IMF report. Also, I have another quote: “The rapid turnaround of activity and vigorous domestic demand owes much to the government’s rightly-sized and well-targeted macroeconomic stimulus.”
From page 13: “The mission praised the fiscal response to the crisis during 2009-10 and supported the authorities’ medium-term plans under the budget.” That is support for those plans.
I have another quote, again on page 13, that it was “noted that the March 2010 Budget was appropriately focused on balancing the budget over the medium term”.
From page 15: “From an international point of view, Canada’s overall fiscal outlook in the aftermath of the crisis stands out as among the best in the G-20.”
This is the International Monetary Fund. I would also note that the IMF predicts that the Canadian economy will return to full potential one year earlier than the Parliamentary Budget Officer predicts—that is, in 2015 rather than 2016. Finally, the International Monetary Fund predicts a much smaller structural deficit—in fact, $5 billion—than what the PBO predicts, which is $10 billion in 2015-16.
Mr. Chairman and colleagues, the plans and the economic forecasts of our government are based on a process that has been used since 1994. If you'll recall, it was not a Conservative government that started that process in 1994. That process involves a well-publicized list of a variety of economists and people who do the predicting of economic interest rates, etc. It's a well-publicized list. They're consulted every year. From that consultation, then, a decision is made in terms of what kinds of factors will go into the budget.
Now, all of those predictors, all of those forecasters, are used, and were used, in us establishing the timeline of getting our deficit virtually to zero or close to zero by a certain point in time. It was from their predictions that the plan was endorsed. I will say that it's one thing to be courageous, which I think the PBO is. But he is basing his questions in absolute contrast to all of the economic predictors with home government consults and a significant array of reports from the IMF and the OECD. It is absolutely his right to do that, but when talking about this, we need to understand what he is going in the face of, and we are in fact ahead of that reduction plan.
Now, Mr. Chair, we talked about how we are going to get there. Basically, we are into, now, a three-year operational freeze of government spending. That $54 billion of operational spending—which goes across the board—we are freezing for the next three years. We also have, as you know, in place a strategic review every year, where we ask a certain number of departments and agencies to do an overview of all of their expenses and look for 5% savings, prioritizing in each of those. We are continuing to have success in that particular program.
These are the basics of the elements we are using to make sure we stay on track, a process that, as I have said, is still to this point largely endorsed by the IMF and by all of the predictors with whom we work.
Mr. Chair, I would just close by saying, in light of comments made by the Parliamentary Budget Officer on one thing that seems to have grasped some media attention of late, that the amount of attrition we have in the federal government service—that is, public servants leaving the federal government—is largely due to retirement. It's not entirely so; they go on to other professions or leave for other reasons. Depending on which year you're talking about, it's just over 11,000 people.
Now, Mr. Chair, in his own statement of February 1, 2011, the PBO challenged that. It's certainly his right to challenge it, of course. But I want us to question and think about the accuracy of the challenge, because it's not based on fact. He makes the comment:
The President of the Treasury Board has noted that public service attrition will be a primary mechanism to achieve the operating freeze savings targets....
Well, I didn't say that, but I did say, as he said here,
...approximately 11,000 public servants vacate their positions each year.
He said I said that. I did.
Then he goes on to say, in his next point:
Using publicly available data for 10 relatively large departments from the 2010-2011 reports on plans and priorities documents, we
—meaning, that is, he himself—
note that the cumulative reduction over three years amounts to about 1100 employees.
Some people, Mr. Chair, say that in the “1100”, he was talking about something different. Well, he wasn't, because in his final sentence on that point he goes on to say: “This figure is well below the 11,000 annual attrition figure highlighted by Minister Day.”
Mr. Chairman and colleagues, a cursory survey of all documents will easily show to somebody who is not even an expert in surveying documents that the attrition rate in the federal public service is over 11,000 a year. The PBO is insisting it is 1,100. He is grossly wrong. I am not saying he has done that intentionally. I have no idea why he would perpetrate a figure like that, but when somebody is so off base—over 1,000%—on an easily attributable and documented number of over 11,000, then you have to question the methodologies. I do not question the intent; I certainly question the methodologies.
Mr. Chair, we are on track. I'm happy to report, as I have, the observations from around the world about the Canadian economy. We hope it continues. We are in a fragile global recovery, so we are proceeding with caution, but we are on track and we are going to get there, and not by slashing programs to people, not by slashing health care, not by slashing provincial transfers—we are going to maintain the transfers, and in fact, we increase them by 6%—but by freezing our own government operations, by continuing to reduce corporate taxes for small business and medium-sized and large job creators, and by maintaining efficiency in terms of our own spending.
I believe we'll get there, barring a cataclysmic fiscal global event, and that's the path we are proceeding on.
Thank you for your interest. I look forward to your questions.