Evidence of meeting #113 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was saskatchewan.
A video is available from Parliament.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
—which probably means they don't remember either.
The numbers you mentioned seem high, as if it costs so much to administer, but how much is assessed is often a number significantly different from what ends up being collected.
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you very much.
My understanding is that they expected to collect $200 million in the first year and about $165 million every year thereafter. If that is the case and their experience is that they're assessing only 49 million dollars' worth of penalties, should the government take what effectively would be a writedown to adjust what they project to assess and collect for future years, since it's not bringing in what they believed it would?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
If the amounts assessed so far are indeed the final numbers or are indicative of what the government is expected to collect overall, I think there will need to be a correction in the budget in the revenues to be collected. If that's indeed the case, and it's not just that there were some difficulties getting the initial collection effort under way, then we should see that reflected in the fiscal plan when the minister tables the budget on April 16.
Conservative
Adam Chambers Conservative Simcoe North, ON
Do you believe it's appropriate for the CRA, when implementing a new tax like this, to consider the cost to taxpayers of compliance with respect to the amount of direction or clarification they provide taxpayers? Is that something they should be considering?
There was an article yesterday that suggested that taxpayers are paying anywhere between $500 and $1,000 or more per filing of paperwork for the underused housing tax, which they have to do every year.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It certainly would be a good idea in terms of policy-making for the CRA and the Department of Finance to introduce that into the equation when they're briefing the minister or ministers—and cabinet, ultimately—to introduce new tax measures. That would at least provide an idea to the ministers as to how much the burden will be on individuals and businesses. I know they include the number of employees they will need for administering these new taxes or amended tax provisions.
It's data that would certainly be possible to have, at least in order of magnitude, when introducing new measures such as the underused housing tax.
Conservative
Adam Chambers Conservative Simcoe North, ON
I want to thank you very much for the work you've done on tracking departmental spending plans and the impact on the government's people plan. The government has continuously sent legislation to this Parliament with no projections for the impacts on people. Your office is the only office that shows consistently, time after time, that when the government suggests a people projection, it fails to meet it every single time. In fact, the numbers go up every year instead of down as the government projects.
How do you recommend that parliamentarians get a better handle on or require more transparency for the government's people plan?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Having more clarity as to exactly how many employees initiatives will require for their proper administration would be a good first step. Also, the employee impact of reallocation measures would certainly be good to know.
I'll stop there for lack of time. I'm sorry.
Conservative
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Thanks, Mr. Chair.
I want to inform you that we would like to raise something before you put the gavel down—just after I'm done.
I would like to thank our officer of Parliament, who always does a good job.
I want to talk about the November 2022 report, in which you analyzed the impact of climate change on Canada's GDP. I believe that, according to the report, the impact was almost 1%.
Can you briefly describe your analysis of how climate change affects Canada's GDP? Do you remember it?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
My memory isn't that good. We release a number of reports each year. However, I have the report in front of me.
Our estimates are based on various external data sources, including the Intergovernmental Panel on Climate Change. Surface temperatures changed by around 0.9°C and precipitation increased, compared with the average from 1961 to 1990. This already reduced the GDP level in 2021 by 0.8%. Ongoing changes will reduce the GDP level by a further 1.6% by 2100.
We made this finding based on a number of assumptions, including the assumption that all global commitments to reduce greenhouse gas emissions will be met.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Okay.
I want to discuss the report that has everyone talking. It's your most recent report on the impact of pollution pricing. I think that my colleague, Mr. Kusmierczyk, touched on this. When you analyze the economic impact, do you assume that there won't be any technological adoption over the next 10 years? Are the variables in this analysis constant?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The variables aren't exactly constant. Our models, such as the general equilibrium model, take economic changes into account.
The costs are calculated between now and 2030, a relatively short time frame in an economy such as Canada. We often say in briefings that nothing shows that there won't be any economic benefits after 2030. However, between now and 2030, the costs are measurable. The benefits of a transition to a less carbon‑intensive economy won't be felt yet. It's relatively brief. There isn't time to meaningfully introduce new technology that can offset the negative impact of a transition to a less carbon‑intensive economy.
For example, many assets are already based on a fossil fuel economy. If we eliminate them quickly, there will be a cost. We call these sunk assets. Eliminating and retiring assets before the end of their useful life carries a cost. This explains much of the costs.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Most economists tell us that the fastest way to meet targets is through pollution pricing. Economists have even won Nobel prizes for this. It shows the markets the way forward. Basically, when we use a carbon‑intensive product, we must pay for it. When consumers see this limit, they naturally think that it would be better, for example, to buy an electric car in five years to avoid having to pay for gas.
Do you also take this into account in your analyses?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, if we can do so, we take into account the behavioural effects of the scenario under consideration. As I said, the impact of maintaining or increasing a carbon tax… Five or six years isn't enough time for the positive effects to outweigh the negative ones. However, having a planning horizon with a certain level of certainty clearly increases the benefits of carbon pricing.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
I want to remind committee members to inform farmers that they are eligible for part of the rebate for the price on pollution they pay. It's not the full price, but it's up to $1.86 per $1,000 in farm expenses, so I encourage them to sign up.
I'm sure my colleagues Mr. Lawrence and Ms. Kramp-Neuman, who have farmers in their area, would encourage them to sign up.
Thank you, Chair.
Conservative
The Chair Conservative Kelly McCauley
That was a wonderful plug, even if it was a few seconds over. Thank you for joining OGGO and making that plug. We should charge you an attendance fee for that.
With that, we thank Mr. Giroux, Ms. Giswold and Ms. Vanderwees, as always, for joining us. We appreciate your time.
Mr. Sousa.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Mr. Chair, I'd like to confirm the motion that was brought forward earlier today outlining the procedures and processes by which we'll proceed going forward.
I have not received any idea.... No one on this committee has been notified of a meeting anytime soon. We don't know what witnesses are coming before us.
I want to confirm with the committee and with you that we have no more meetings this week. Is that correct? I want members to engage.
Conservative
Conservative
The Chair Conservative Kelly McCauley
The meeting notice for tomorrow is out already. It went out before today's meeting started.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
That's not now in compliance. Is that correct? We don't have agreement.
Conservative
The Chair Conservative Kelly McCauley
I believe it is in compliance, to my understanding looking at the motion.
We also have future meetings booked for the NDP study on Canada Post, and we have the red tape reduction meeting booked with witnesses.
I assume the motion is for future studies we are starting, and we will follow it then.