Government Operations Committee on Jan. 27th, 2021

[The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)), Conservative, Robert Gordon Kitchen]

I will call the meeting to order.

Welcome to meeting number 15 of the House of Commons Standing Committee on Government Operations and Estimates. The committee is meeting today, and I would normally say from 3:30 to 5:30, but we're going to go from 4:10 my time—5:10 your time.

I want to thank the witnesses for being here and staying with us, just to get to this stage. In fairness to them, I think we will just go through the first three rounds today instead of all four, which will be another hour and 20 minutes. I appreciate the witnesses' staying on for that time frame.

We're to hear witnesses as part of the committee's study on the government's response to the COVID-19 pandemic.

Today's meeting is also taking place in the new webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members may have remarked that the entry to the meeting was much quicker and that they immediately entered as an active participant. All functionalities for active participants remain the same. Staff will be non-active participants only, and can therefore only view the meeting in gallery view.

I would like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen is not permitted.

To ensure an orderly meeting I would like to outline a few rules to follow. Interpretation in this video conference will work very much like in the regular committee meeting. You have the choice, at the bottom of your screen, of “ floor”, “English” or “French”. Before speaking, please wait until I recognize you by name. When you are ready to speak you can click on the microphone icon to activate your mike. When you are not speaking, your mike should be on mute. To raise a point of order during the meeting, committee members should ensure their microphone is unmuted, and say, “Point of order”, to get the chair's attention.

In order to ensure social distancing in the committee room, if you need to speak privately with the clerk or analysts during the meeting, please email them through the committee email address. For those people who are participating in the committee room, please note that masks are required unless they are seated and when physical distancing is not possible.

I will now invite the Parliamentary Budget Officer to make his opening statements.

[Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Thank you, Mr. Chair.

We thank the committee for this invitation to appear. We are pleased to be here today to discuss our recent economic and fiscal analysis related to your study of the government's response to the COVID-19 pandemic.

With me today I have Xiaoyi Yan, Director, Budgetary Analysis, and Trevor Shaw, Director, Fiscal Analysis.

Consistent with the Parliamentary Budget Officer's mandate to provide independent, non-partisan analysis to Parliament, my office has been working diligently since last March to provide parliamentarians with reliable estimates of the impacts of the unprecedented COVID-19 response spending on the government's finances and the Canadian economy. We have also published independent cost estimates of a number of components of the government's COVID-19 economic response plan.

On December 10, we released our assessment of the government's fall economic statement 2020. Our report identifies several key issues to assist parliamentarians in their budgetary deliberations, as well as updated fiscal and economic projections.

While the economic outlook presented in the fall economic statement 2020 is broadly in line with our latest projections, we project that budgetary deficits will be $5 billion larger, on average, over the next five years. These larger deficits are primarily due to weaker economic and fiscal assumptions, partly offset by lower cost estimates of measures included in the government's COVID-19 economic response plan.

In terms of transparency, the government's fall economic statement does include elements that are essential for credible fiscal planning and scrutiny, such as a detailed five-year fiscal outlook. However, the fall economic statement falls short on transparency in a few areas, such as the absence of a fiscal anchor, the lack of clear thresholds for the fiscal guardrails and the lack of detail related to the employment insurance operating account.

In addition to our report, my office has also released independent cost estimates of selected measures contained in the fall economic statement, including the Canada emergency wage subsidy and Canada emergency rent subsidy programs. We plan to publish additional cost estimates in the coming days, with three that are to be released tomorrow.

Finally, I would also like to take this opportunity to provide members with a brief update on our progress on the cost analysis of building the Canadian surface combatants and building the FREMM, the type 31e and other possible competing ships. Our analysis continues to advance, and we expect to deliver the report to this committee by the end of February, as planned.

We would be pleased to respond to any questions you may have regarding our analysis of the government's response to the COVID-19 pandemic or other PBO work.

Thank you, Mr. Chair.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Giroux. I appreciate your introduction.

We will go into the first round, six minutes of questioning.

The first will be from Mr. Paul-Hus.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Good afternoon, Mr. Giroux. I am pleased to see you back with us.

My first question is about vaccines, which is a very trendy subject these days.

We would like to know if you have had any information regarding contracts and the amounts invested in vaccines.

[Yves Giroux]

The expenditures to date on which we have obtained information actually fall into a fairly broad category that includes vaccines, but also other items such as research and therapeutic items. As of November 30, the amount spent by the government was $722 million.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

As you say, these amounts are for vaccines and other things, such as research. They probably include the amounts that have been invested in the Montreal research centre. Is this the total amount of money invested in everything related to vaccination?

[Yves Giroux]

That may be the case. I would have to ask my colleague Mr. Shaw for a few more details.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

If it is possible, could you send us the information you have on that? I personally have no other way of finding out more.

My next question is about the economic update. You talked a lot about transparency. In your opening statement, you mentioned again that transparency was an issue. Since you were here on December 10, have you been able to get any more information on the various expenditures in order to update your books?

[Yves Giroux]

Actually, since December, there has not been much progress. We have had some additional information, but the holiday season was a break for a lot of people, including many of the people who usually provide us with information. From mid-December to mid-January we did not receive much additional data. We did receive some updates from some government departments, including Canadian Heritage and Environment and Climate Change Canada. So we have made some progress.

In my opening remarks, I mentioned some of the concerns I had about the fall fiscal and economic update, such as the lack of fiscal benchmarks and the lack of transparency on projected deficits in the employment insurance operating account. As I mentioned in my opening remarks, those concerns are still valid.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

You're talking about different departments. Are you in a position to tell us which ones don't work as well with your office?

[Yves Giroux]

We have had concerns over the past few weeks about Innovation, Science and Economic Development Canada, which seems to be slow to answer. We have also had concerns about the Canada Revenue Agency, although that seems to have been resolved. The Agency was very reluctant to provide information, even if it was anonymized, meaning that it did not include any personal data about taxpayers and there was no way of identifying them.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Do you have any idea why it is reluctant? Is there a fear of disclosing information?

[Yves Giroux]

The Agency is very afraid of making any indirect disclosures. For example, if it is indicated that a person, who is not named, has received the CERB and, in addition, that this person resides in British Columbia and also receives the disability tax credit, the Agency is afraid that the person could be identified.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Isn't that a bit far-fetched?

[Yves Giroux]

It's very far-fetched.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Okay.

Let's go back to Innovation, Science and Economic Development Canada. In this case, is it difficult to access the data across the department or only in certain areas?

[Yves Giroux]

It's some of the programs in particular. Mr. Shaw or Ms. Yan could tell you what those areas are, if they know.

Xiaoyi, Trevor, do you know?

[Trevor Shaw, Director, Fiscal Analysis, Office of the Parliamentary Budget Officer]

No, it's not about specific areas or programs in this department. Unfortunately, I don't have any further details to add at this time.

[Yves Giroux]

We can provide you with the details later, Mr. Paul-Hus.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Yes, please.

Apart from the Canada Revenue Agency and Innovation, Science and Economic Development Canada, are any other departments problematic?

[Yves Giroux]

Generally speaking, things are going quite well. Sometimes, there are small bumps in the road, but they are often the result of certain departments misunderstanding our mandate and our access to data. Once we manage to talk to people, the problems generally solve themselves fairly well, other than the exceptions that we have mentioned.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

From what I understand, the fact that Zoom meetings are held all the time complicates things a little. Because the relationship with people is less direct, there is less pressure.

I would now like to address the Canada emergency wage subsidy. You briefly talked about it earlier.

Do you know how many businesses and SMEs have received the subsidy?

[The Chair, Conservative, Robert Gordon Kitchen]

Mr. Paul-Hus, you have 30 seconds.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Are you in a position to answer, Mr. Giroux?

[Yves Giroux]

No, I don't know how many. I know the total cost, but from memory, I can't give you the number of companies that we estimate may have used the subsidy.