Government Operations Committee on March 25th, 2014

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Does anybody know the history of that?

[Yaprak Baltacioglu]

Well, the short answer is that we would like an educated workforce, and not all of the university students can access loans and not everybody is privileged, where their families can pay. So governments successively—many governments, including this government—have ensured that there are student loans available to Canadian students. For these loans, the majority of them are paid back, so it's a facilitation for education and it's a policy choice.

[Gordon O'Connor]

I'm not arguing about whether they're paid back or not. I'm not worried about losing money. The issue is, isn't this a provincial responsibility? Aren't provinces responsible to run their universities and to keep their students at university, not the federal government?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I don't think there's any province that's refused the money.

[Gordon O'Connor]

Yes, I know, but—

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

They're entitled to it if they want.

[Gordon O'Connor]

—aren't we interfering with provincial jurisdiction?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Well, I guess in order to answer that question, somebody has to complain, and so far no province has said, “We refuse this money for our students.”

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I think Gordon is.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Yes. When he goes back to university, he's going to refuse the money; I know he is.

[Gordon O'Connor]

I paid my own way.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. O'Connor.

We will now go to Mr. Byrne for five minutes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Minister, and thanks to your esteemed officials.

You mentioned that the EI accounting is eliminated from the main estimates. Will it also be eliminated from the public accounts?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

No.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

The cash in, cash out related to employment insurance premiums will still be calculated in terms of the overall budgetary surplus or deficit from the Government of Canada in a particular year. Would that be correct?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I would say so, yes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

You've eliminated EI from the main estimates to ensure accountability, or to improve accountability, if I'm reading this correctly, but you're maintaining it within the context of the public accounts, which obviously makes sense. Let me ask, if you're eliminating an insurance program, EI, for the main estimates, but you're adding an insurance program, the disaster financial assistance arrangements, if you look at those two things.... EI, from an actuarial point of view, is easily calculated; it's relatively easy to formulate a position on it. But the disaster financial assistance arrangements can be very variable in any particular year, yet we're adding it to the main estimates instead of using reporting through the supplementary estimates.

Why would you do that?

[Bill Matthews]

I'll start specifically with the DFAA, the disaster financial assistance arrangements. It's been in the main estimates before. What happens is that as with any government program, from time to time it expires, and it comes in for renewal. For the last round of renewal, it wasn't ready in time to be included in the main estimates. It was actually included in 2013-14 in supplementary estimates. This year we have the information we need in time for the mains, so it's been picked up in the mains. It's not the first time. It's just the fact that if you're comparing the 2014-15 mains to 2013-14, you'll see an increase, and that's why. I was just trying to explain that.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Matthews, how much are you booking for payouts under the DFAA?

[Bill Matthews]

If I recall correctly, and I'll check it in a second, I have $600 million in my head. Just give me two seconds.

I'll come back to your EI question, because I think it's a good one. Remember that with public accounts there are two volumes. Volume I is the financial statements of the Government of Canada. It equates back to the budget. EI is in the budget. EI is in volume I. Volume II of public accounts equates back to main estimates, and that's the link we were trying to improve. Those two things are now more consistent.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I understand that, but looking at this from the point of view that one of the most important milestones or accountability standards that Canadians want to see reported on, and we certainly do as well, is the overall budgetary surplus or deficit position of the Government of Canada.... You're eliminating EI from the main estimates, but including the surpluses in the public accounts, which is adding to our position and enables us to create a bit of a false sense of a surplus. You're including disaster financial assistance arrangements, which may or may not be paid, instead of including them in the supplementary estimates, which you have admitted is probably the normal process. You're eliminating significant funds from spending from Infrastructure Canada.

Leading up to 2015, this entire document appears to me—and I'll direct this to you, Mr. Minister—as a gerrymander to simply look like a surplus position for the Government of Canada when, in fact, if normal processes had been followed and infrastructure had been spent on the needs of Canadian communities, if Public Safety and Emergency Preparedness didn't book payouts under its insurance program until or unless they actually happened, and if the employment insurance fund had actually been included in the main estimates, we'd have a different situation on our hands in terms of visibility of whether or not we're in a deficit or a surplus, wouldn't we?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Permit me to respectfully disagree. I think there was a report from C.D. Howe yesterday that said the federal government's estimates and predictions on budget were a lot closer to reality than in any other province or territory. We should take some sort of comfort from that independent study.

I would say to you that on the EI account, we pay what is statutorily required. The link is between what is in the budget and then what is paid out in the public accounts. The number in the public accounts is whatever is required to be paid out. Whoever meets the criteria of the program.... We as a government pay that out.

There's no gerrymandering, Gerry. There's simply a requirement to meet our statutory obligations, and that's what we do.

[Yaprak Baltacioglu]

In terms of infrastructure, it is not being reduced. This committee is familiar from years ago when we were presenting on infrastructure spending. The planned spending doesn't always match with what gets built so the money gets carried forward into future years. That's what's happening on infrastructure. It's the same thing with the disaster financial assistance program. The provinces have to submit the bills to us as to what they incurred as part of a disaster, and that's when we pay them. There's usually a lag between what the plan is because we have to plan for everybody getting everything done. But it never works that way, so then money gets pushed to other years. It's the nature of the business in those things.

There's one thing I'd like to say on why EI was removed. Mr. Matthews was working with this committee. He had many appearances in terms of how to improve the main estimates and the estimates process. What he heard from the people who worked for this committee is that this particular number in the estimates was confusing because nothing ended up being added up. We thought it was a technical improvement that got made to these. Clearly, it's causing some issues for the committee. The intention, from the public service perspective, was Mr. Matthews trying to respond to the needs of this committee. Clearly, that probably missed the communications element of that.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you. I am going to have to interrupt you and give the floor to Ms. Ablonczy for five minutes.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Minister, I have three questions.

First, I see that the discretionary spending of government has decreased by 0.9%. There certainly has been a lot of gnashing of teeth for such a very modest reduction. Nevertheless, for the committee's benefit, Minister, would you put into context your vision or your plan for decreases in the discretionary spending of government so that presumably by next year we'll start living within our means. How do you see that unfolding year by year?