Evidence of meeting #11 for Government Operations and Estimates in the 43rd Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A recording is available from Parliament.
NDP
Matthew Green NDP Hamilton Centre, ON
As it relates to liquidity, is that something you would have access to and report on?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's something we could easily have access to if it is provided by the Bank of Canada. The bank is probably the most transparent of all the big Crown corporations, especially when it comes to COVID-19 support and the extraordinary instruments that it has deployed in response to the crisis and—
NDP
Matthew Green NDP Hamilton Centre, ON
I would agree that they're extraordinary. Just to give us relative terms, I think we have $100 billion going out in CERB and the wage subsidies, but $750 billion.... Would you not agree that's very material? I think it happened within the course of about four days. It's something that Canadians would probably want to know about in terms of line-by-line breakdown.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
You're right, and the bank has been transparent in that, at least from my point of view. I'm sure if you asked them to testify in front of your committee they'd probably be very happy to do that. We have touched on the Bank of Canada liquidity and its assets in one of our reports on the financial Crown corporations and the lending support or the financing capacity.
NDP
Matthew Green NDP Hamilton Centre, ON
If I were to ask them, hypothetically, to come before this committee, and let's say, hypothetically, you were me, how would we be able to determine what the impact of the liquidity supports would be for something of that size and scale? What would your office do to determine the impact of those supports?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's a good question. I probably would have to give it some thought to give you an intelligent answer on that. That's a $750-billion question.
NDP
Matthew Green NDP Hamilton Centre, ON
Well, I would put to you, with my remaining 15 seconds, that if you'd like to send it back to us in writing, as I know our chair is about to say.... I think that when we talk about the debt we're in, in this country, everybody is talking about what's going to the workers and the working class. Nobody is talking about the money that went out the back door to Bay Street.
Thank you.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Mr. Green.
Thank you, Mr. Giroux. If you would send that to the clerk when you get it, we'd appreciate it.
We'll now go to Mr. Lloyd for five minutes.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Thank you, Mr. Giroux. I'm just looking over your recent report on the monthly breakdowns of the 699 leave. I understand that this is a huge program spend in a very unprecedented situation, but being in digital affairs, two of the justifications for 699 really jumped out at me: “technology” and “work limitation”.
Looking at it, obviously May was the high period for 699. It went down until August, which is when you finished reporting, but it appears that the proportion of technological and work limitation justifications has remained pretty consistent. The government has told us that every single civil servant has been able to be up and running remotely on a computer as of May, which I was told by the minister of digital affairs.
Why is it that we are still seeing such a large number of people having problems with technology and using 699 for this case?
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's my problem. I was on mute. I knew that would happen to me, and it did. I'm sorry about that.
That's a good question, but I think the person best placed to answer it would be either the President of the Treasury Board or individual ministers in departments where they are still using leave code 699 for technology and—
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Can you break down what “work limitation” means? I can assume that “technology” means they didn't have the proper computer or they couldn't access the network. What does work limitation mean in this case?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It could mean auditors, for example, who have to visit businesses and who cannot go to these businesses on their premises because of physical distancing rules. It could also be that they are prevented from having too many people in the same workspace, such as on the same floor. Those could be work limitations that could be covered by 699. It's a broad category. These are just a few examples.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Okay.
Another question is related to my colleague Mr. McCauley, who'd sent in a request for an analysis. I believe Étienne Bergeron did an analysis related to the proposal to remove minimum withdrawals for registered retirement income funds. What I found most interesting was what the analysis was lacking. Maybe it just wasn't in the purview, but I'm aware that if there were to be a change in that manner, it would lead to changes in OAS, because people could qualify for more OAS.
You're talking about the cost of the program, and it's significant, but there was no analysis on what the potential gains could be from people having a large amount of money in their savings when they die, or later on in life it being taxed at a higher marginal income tax rate. Did you do any analysis on the possible trade-off of giving seniors more flexibility over a longer period, possibly leading to the government getting more tax revenue later on in life?
December 2nd, 2020 / 5:05 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We limited our analysis to the first five years. If we were to provide a much longer-term analysis over time, we would find that the cost in the initial few years would probably be progressively reduced, and maybe even recouped, for exactly that reason. As people don't withdraw the current minimum, they leave bigger inheritances. At one point, somebody has to pay that tax. The government recoups the tax that doesn't get paid in the first few years of the program being implemented.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
As we saw recently in the fiscal update, the government is working to move to apply sales taxes to companies—for example, Netflix, Amazon, Airbnb and other Internet giants. It could be even more, according to your estimate. The government estimated $3.1 billion, but you estimated $4.3 billion. Why was your number significantly higher?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It probably depends on the different parameters of the different assumptions. I'd have to look closely at the details of what the government is proposing versus the details of what we estimated.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Did you do any economic impact on that? Was it overall positive for the Canadian economy?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
No, not that I can recall.... We didn't do an economic impact for the rest of the economy, because that was rather pointed and rather targeted, to say the least.
You have to bear with me. I was preparing for supplementary estimates (B) and the main estimates, so I don't remember all of the reports that the office produced.
Conservative
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Thank you, Mr. Chair.
Thank you, Mr. Giroux.
In your report on the supplementary estimates, you note the personnel accounts for about $1.4 billion in expenses. You also note that the PBO had developed the personnel expenditure analysis tool, or PEAT. I have to tell you that I found the tool and the PEAT report to be very interesting. It shows that over a 12-year period, the number of FTEs has grown from 335,000 to 369,000, which is a gain of about 33,000, much of that taking place in the last four years. A lot of the departments that are driving that growth—CRA, PSPC, ESDC, IRCC—are some of the departments that we've really relied on the most to help us get through this pandemic.
Interestingly enough, the tool also shows that during the Conservative government years of 2011-15, there were annual contractions of federal employees in the amount of about 2.7% annually. Statistics Canada estimates that about 50,000 federal service jobs were cut by the Conservative government during those four years.
I wanted to ask you, if those cuts had continued, what impact would those cuts have had on the government's ability to respond to COVID-19? Would that have a negative impact on the ability of this government to protect the health and safety of Canadians during COVID-19?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's a hypothetical question. The impact would depend on where these cuts would take place.
Of course, if you were to cut in areas that Canadians rely on to protect themselves from the pandemic, it would have a big impact. But if you were to target these reductions to areas that have nothing to do with the pandemic, the impact would be fairly small. For example, if it was only Heritage or Immigration, then the impact would be minimal. But if it was Health, then, of course, the impact could be bigger. So, it depends.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
You don't do that type of analysis, do you, in your work?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Sadly, we look at numbers. The qualitative analysis and the policy impacts we leave to wiser persons, such as members of the committee.