Government Operations Committee on March 18th, 2024

[Jill Giswold]

Is that for Indigenous Services, or...?

[Parm Bains, Liberal, Steveston—Richmond East, BC]

I mean any of the negative values that have been seen. You can pick whichever one you like.

[Jill Giswold]

I can provide one example. It can often be for transfers between organizations. If you see a negative amount, it could be from one organization transferring that amount to a different organization, so you'll see—

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Is that common?

[Jill Giswold]

It is, but it requires parliamentary approval, which is why you'll see it come through the estimates in order for the transfer to be made.

[The Chair, Conservative, Kelly McCauley]

Thanks very much, Mr. Bains.

Mrs. Vignola, go ahead, please.

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

Thank you very much, Mr. Chair.

Mr. Giroux, Ms. Vanderwees, Ms. Giswold, thank you very much for being with us.

We received the supplementary estimates (C) in February. We then received the main estimates for 2024‑25, except that the federal budget itself will be tabled on April 16, 2024. What does that tell us about the main estimates data we've received?

[Yves Giroux]

This indicates that the main estimates you are being asked to approve as parliamentarians present only a very partial picture of the government's plan. It contains the budget appropriations you are being asked to approve, but none of the budget initiatives. So it's a very partial picture, since it doesn't include the measures that will be presented by the Minister of Finance on April 16, but you're still being asked you to consider it, approve it, or at least debate it. That doesn't give you a clear picture of what the government wants to do over the course of the year.

That's also why, when you, as parliamentarians, receive the government's budget on April 16, you won't see the same amounts that you will have seen in the main estimates at all, because the federal budget is tabled after the budget appropriations. So the numbers don't match up at all. It would be simpler to reverse the order of things so that the federal budget is tabled in February, for example, which would allow Treasury Board officials to include more budget measures in the estimates and make these two documents comparable or at least better aligned with each other.

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

Okay. If I understand correctly, things are kind of done backwards at the moment.

[Yves Giroux]

Yes, it's a little backwards, at least in terms of the supply procedure for departments and agencies, since you are being asked to approve most of the funding for departments before the federal budget, that is to say the government's budget plan, is tabled.

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

Earlier, you were talking about interest on the debt, which is increasing, particularly because interest rates are also going up. However, budgets are also increasing, reaching levels that are not even comparable to what we saw during the pandemic. However, the support programs put in place during the pandemic have ended. What could explain this exponential increase in spending and, ultimately, interest on the debt?

[Yves Giroux]

A number of measures have been introduced over the years. Some of them were related to COVID‑19, obviously, and they expired. In previous documents, it was estimated that a good part of the budget flexibility over the years, $180 billion out of some $500 billion, as I recall, applied to expenditures unrelated to COVID‑19.

This is reflected in the fact that the government's operating expenses are 50% higher than before the pandemic. That's quite considerable. Spending on staff is also significantly higher than before the pandemic, and there are many more full-time equivalents in the public service. As a result, from year to year, total compensation or staff costs have been steadily increasing, even though pandemic supports have expired or are no longer needed.

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

I'm going to circle back briefly to one of your previous reports, on the carbon tax. It's actually from 2022, so it's not that old. I'm going to summarize it to put us all back in context, but I advise everyone, including the general public, to read the Parliamentary Budget Officer's reports, because your analyses, which cover a host of subjects, are very enlightening.

The report talked about the net cost of carbon to households and the tax and economic implications, and compared the current situation to that of 2030 or 2031, when the tax will be at its highest in dollars per tonne of carbon emissions. Overall, if I understand correctly, eight out of 10 households, mainly low-income households, receive and will receive a little more money than they pay in carbon tax annually, and mainly the wealthiest are penalized, ultimately. Is that correct?

[Yves Giroux]

Yes, that's a solid interpretation of the conclusions of our successive reports that have estimated the impact of the carbon tax.

When we look at the direct costs of the carbon tax, for example when you heat with gas or fill up your car with gas, the indirect costs, for example the goods and services you buy that have an energy component, as well as the goods and services tax, in other words, when we look at everything that is paid as well as all the rebates paid to consumers or households, we see that, in the provinces where the federal carbon tax applies, about 80% of households receive more in rebates than they pay. The 20% who pay more than they receive are primarily high-income households, because obviously they consume more. That's not to say that all low-income households receive more than they pay, but on average, that's what the consumption models show by income bracket.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mr. Bachrach, please go ahead for six minutes.

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

Thank you, Mr. Chair.

Thank you, Mr. Giroux, for your presentation. I'm sorry that I'm not there in person.

It's not directly related to the supplementary estimates, but a few days ago there was some reporting on the proposed cuts to Indigenous Services and to the Crown-indigenous relations department. I believe it was around $417 million over three years. I saw that you were quoted in the article, so I thought I'd use this opportunity to ask you about it.

These cuts come at at time when many indigenous communities, including those in northwest B.C., are struggling to deliver basic services for their communities in the face of scarce financial resources from the federal government.

We know that indigenous communities struggle with serious housing issues, with poverty and with transportation challenges, particularly in the north. The ministers have said that these are not going to impact service delivery. I find that somewhat difficult to believe.

I'm wondering if you can unpack for us how cutting $417 million could not impact service delivery when it comes to Indigenous Services and Crown-Indigenous Relations and Northern Affairs.

[Yves Giroux]

I think it's a bit early to be certain that there won't be any impacts on services.

However, based on what the Indigenous Services and the Crown-Indigenous Relations and Northern Affairs departments told us, and based on the information that was provided, it seems that the savings will mostly come from reserves, at least in the first year—reserves that Indigenous Services has set aside to, I think, attend to unforeseen events. It is possible that these savings will not lead to significant reductions in services, but there will be a reduction in some travel expenditures. That's what we've been told by the departments.

If it's true that there won't be any impact on services, it probably means that these are savings that would have taken place anyway—for example, money that would not have been spent during the fiscal year and that would have lapsed or that was returned to the centre in terms of funding that was not necessary for the delivery of the mandate.

As I said, we've received these general terms, so there's not a lot of information. If we take that at face value—and there is no reason not to believe that information—it seems that there won't be a meaningful impact on Indigenous Services.

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

I'm looking at this article. Indigenous Services claims that the focus is going to be on things such as travel, consulting and grants and contributions.

To me, those are all directly connected to the delivery of services. I think that members of the public who are trying to understand these budget matters are wondering, if there's money just sitting there that's not being used efficiently, why that has been allowed to persist, and if it was being used to deliver services, why it is getting cut.

How should a member of the public distinguish between something that is unnecessary and something that is actually a cut to services that communities depend on?

[Yves Giroux]

That's indeed a very good question. If there are savings that are painless, the question that this raises is why these funds were not saved before.

One point that you raised that also concerns me—and I've raised it before—is savings in terms of grants and contributions to organizations. Typically, in the Indigenous Services and Crown-Indigenous Relations and Northern Affairs departments, if there are savings to be had for grants and contributions—and it's apparently after consultations with stakeholders—then I'm not certain that it will be easy to achieve a reduction in spending on grants and contributions to indigenous organizations. I don't see how these would be achieved if they don't reduce services to indigenous populations.

However, again, we have received very little information as to the details of that. That's something that will be quite interesting to see as it unfolds over the next fiscal year, the one that starts on April 1.

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

You were quoted in the article as saying that details are too vague to be able to say at this point whether service delivery will or won't suffer, which I think reflects what you're saying today. At what point do you feel you will have a line of sight on that question of whether services are impacted by these cuts?

[Yves Giroux]

I think it's once we determine or we know which organizations are receiving lower amounts or no grants at all. That's the point at which we'll know the impact on services.

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

Will you be looking into that as a normal matter of course in your work, or would it require a request from the committee to undertake that inquiry?

[Yves Giroux]

It probably would require a motion from the committee, as I would not normally look at that granular level of detail.

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

Thank you very much, Mr. Giroux.

Mr. Chair, that's all I have for my first round.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Now it's Mrs. Block for five minutes, please.