Government Operations Committee on March 18th, 2024

[The Chair, Conservative, Kelly McCauley]

Give a 10-second answer, please.

[Yves Giroux]

I'm afraid I'm not the person best placed to indicate to the committee the impacts of previous non-spending decisions on the military.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

We'll come back around if there is another chance for that.

Thank you so much, Mr. Giroux.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Kusmierczyk.

Next we have Mrs. Vignola.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Mr. Giroux, I like it when you appear because, when you answer questions, you're impartial, you're direct, and the information you give us is virtually unfiltered. I really like that.

When we refer to your data, I think it's important to mention it in its entirety, and not just when it suits one party or another. There are more than two sides to any coin. That's a fairly significant thing, because we represent not only those who voted for us, but also all Canadians, who need to be properly informed. That's what you do in your reports, and I reiterate that it's important to go and read them.

The carbon tax doesn't apply to Quebec or British Columbia, because they have taken other measures. However, this tax applies to the other Canadian provinces because they have taken no action on this.

Suppose we scrap the carbon tax and no longer have any measures in place to try to encourage people to reduce their consumption and avoid the resulting greenhouse gas emissions. What would be the economic impact of climate change on jobs, lost business revenue, and so on? Would scrapping the carbon tax ultimately be an advantage or a disadvantage, all things considered?

[Yves Giroux]

That's a tough question to answer. On the one hand, if the carbon tax were eliminated and not replaced by any measures, Canada's greenhouse gas emissions would probably increase a little more than the current track Canada is on. In addition, it would be perceived as disregard for the agreements Canada has signed on reducing greenhouse gas emissions.

On the other hand, if we scrap the carbon tax and don't replace it with any measures, and Canada increases its emissions by a little or a lot, I don't think it would have a significant impact on climate change, given Canada's ranking in terms of greenhouse gas emissions.

That's why I say it's difficult to answer that question in the context of a hypothetical scenario where the carbon tax is eliminated and not replaced with anything. Canada could be a free rider, do nothing and still benefit from other countries' efforts to reduce greenhouse gases. However, that would cause all kinds of issues in terms of diplomatic and international relations.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Next we have Mr. Bachrach.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I'll return to this question around cuts to Indigenous Services Canada, and I appreciate my colleague Mrs. Atwin adding the context of the general trend—or, as you called it, Mr. Giroux, a sharp increase in investment since 2021.

I think both she and I know that there is a strong argument to be made that even more money needs to be invested in indigenous communities, because we still see an inequality in outcomes, whether those outcomes are in health care or education or infrastructure. There is a massive infrastructure deficit in indigenous communities that still hasn't been fully addressed.

My question is really around this $417 million in cuts and whether that is going to result in a service delivery impact. This idea that the government increased the budget significantly and somehow overshot what the ideal budget investment is and that it now needs to reduce it a little bit to get to that perfect number seems a bit ludicrous, to my mind.

I am very interested in the question that we discussed last round, Mr. Giroux, around whether there is this slop in the budget that can simply be trimmed without any impact on service delivery or whether, in fact, indigenous communities are going to experience a tangible reduction in the services that they require.

Mr. Chair, if it's in order, I would like to move a very short motion: I move that the committee write to the Parliamentary Budget Officer and request an analysis of service delivery impacts stemming from budget cuts at Indigenous Services Canada and at Crown-Indigenous Relations.

[The Chair, Conservative, Kelly McCauley]

I see general agreement.

That being said, I think Mr. Giroux may have done that already. There was a similar one that the committee asked.

Is this with regard to the reported $400 million or $500 million?

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I am simply moving this motion in response to our previous round of discussion in which he indicated that a request from the committee would be helpful in—

[The Chair, Conservative, Kelly McCauley]

That's fair. What I am saying is that I'm just checking with Mr. Giroux if he has already done that as part of the request we made a couple of months ago with regard to the announcement of the half billion dollars.

Is it the same, or is this a separate one?

[Yves Giroux]

It would be for a different fiscal year. What we did the last time around was for the current fiscal year. What Mr. Bachrach is asking, I think, relates to the upcoming fiscal year and the following year, so the one—

[The Chair, Conservative, Kelly McCauley]

I was just clarifying that, Mr. Bachrach.

We seem to be in agreement, colleagues, don't we? So be it.

(Motion agreed to [See Minutes of Proceedings])

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Bachrach.

Mrs. Block, you're up, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

This government obviously saw the pandemic as an opportunity to shovel money to their friends. We saw this with the multiple ethics breaches by members of this government in giving contracts to Liberal insiders and personal friends.

While the government may say that all the spending was justified and necessary due to the pandemic, your own office stated that $204.5 billion, roughly 36%, in spending from March 2020 to April 2022 was not pandemic-related.

Despite all this extra spending—or maybe because of all the extra spending—Canadians are worse off. All we need to do is look at the example of the ArriveCAN scam and your own observations or concerns in response to a question I asked today regarding the increase in spending versus the performance of the public service.

My question to you would be this: How will the cost of the increased debt that we have incurred as a result of this wasteful spending affect the government's ability to deliver services moving forward?

[Yves Giroux]

It's an interesting question, in the sense that it's something that the government has to pay and that we have to pay, regardless of future decisions, because the debt is a debt, and we have to pay interest on it.

We can look at what would have happened had we not seen an increase in debt or what would have happened in the absence of increases in interest rates. A simple way to look at that is to assume what would have happened without the increase in debt servicing costs. The simple answer is that it's money that could have been spent on other things—on, for example, reducing taxes—or spent on other proposals.

That's a highly hypothetical scenario, because we don't know exactly what would have happened in the absence of this additional debt servicing cost. Other decisions would have led us on a different track, obviously.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I'll ask the question a bit differently. Should the debt carrying costs have an impact on planned spending for the upcoming year?

[Yves Giroux]

They will undoubtedly have an impact, because the moment you have to use more of your revenues towards servicing the debt, there's lower spending on other things and other priorities—all other things being equal, of course.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

In your report you mentioned that the estimates include a $1.4-billion acquisition of shares in the Canada growth fund. I'm sure Canadians would appreciate understanding what this Canada growth fund means, and a $1.4-billion acquisition of shares.

Is this $1.4 billion in addition to the $15 billion that was earmarked for this fund, or is it simply a part of it?

[Yves Giroux]

My understanding is that it is a part of it, but it's not something that we have done a report on. My understanding at this point is that it's one part of the $15 billion.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Are you aware if this new Canada growth fund is going to be set up in a similar way to the green slush fund?

[Yves Giroux]

I'm not yet aware of the governance issues around the Canada growth fund.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

As another question, in the Department of Public Works and Government Services estimates, there is a line vote 1c for funding for a cybersecurity certification program for defence contracts. That was in budget 2023 at $798,000. Can you tell me if this is for defence contractors who are employed by the government?

[Yves Giroux]

I don't know the exact details of this item.