Evidence of meeting #130 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 subcommittee.
A video is available from Parliament.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Sir, I realize that, but how many would be worse off? Knowing that four out of five are better off under this system, how many would be worse off if the rebate was eliminated?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
This is a hypothetical question that would be risky to answer without having the precise profile of people in your community, unfortunately. I know it's not the answer you'd like to have.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
I know, but you said four out of five families are better off with the carbon rebate. If that was eliminated, how many would be worse off?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It depends on what you eliminate, whether it's just the fuel charge, or that and the performance-based pricing system that applies to large emitters.
However, as I said, if we think that these measures benefit eight out of 10 households in strictly financial terms, we can follow the opposite reasoning and find that the reverse will also apply.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Logically, it could be about the same, eight out of 10. That said, it depends on the profile of people specific to your riding.
Liberal
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
This could be a scenario that applies in your riding if the consumption profile is roughly the same as the country average.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Sir, you've been here in front of this committee now about 20 times since I've been here. I always welcome your testimony and your insights. I feel we're always better off when you come here. You always carry yourself with the highest integrity—with pride—and I know that your reputation is very important to you. Your word carries a lot of weight.
My Conservative colleagues are trying to transform the Parliamentary Budget Officer into the political budgetary officer. This is dangerous.
I want to ask you.... They say that you've been gagged. Sir, have you been gagged by this government?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I answered this question a little earlier, but I would be pleased to repeat my answer.
What Environment and Climate Change Canada officials suggested or told us was not to publish this information that they had provided to us, because it was confidential. That said, in no case did the government or anyone representing the government prevent me from publishing a report or dictate to me the conclusions of a report. My office was in no way muzzled in this sense.
Liberal
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Your conclusion is correct: I was not muzzled.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you very much.
I must admit that I'm a little exhausted, as I would assume you are even more so, Mr. Giroux, with litigating the carbon tax. I'm not here to play games. I'm just going to say it like it is.
If you just take the fiscal impact, it's that eight out of 10 Canadians are better. They can quote me, and they can put that on there. However, the reality, the truth of that, is that once you include the economic impact, six out of 10 Canadians are worse off.
Is that not correct, Mr. Giroux?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
When we include the economic impact of the fuel charge and the output-based pricing system, it's true that the majority of households are worse off. We are in the process of updating our analysis to try to isolate the fuel charge, the impact of the fuel charge itself.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
When economic and fiscal impacts are combined, as you said, the majority of Canadians are worse off. That's correct.
Thank you, Mr. Giroux. I have one last thing on the carbon tax, and then I promise I'll move forward.
The government's own report appears to validate your conclusion. Is that correct?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That is our understanding. They arrived at an estimate of negative 0.9%, rounded to 1% of GDP when including the fuel charge and the output-based pricing system, where we had 1.3% in 2030. That's in the ballpark and is very close for that type of analysis.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
I apologize. I've been reminded by my colleague that I need to get you actually on the record, even though I got a nod, so I'm just going to repeat my previous question.
As you said on page 4 of your report, when you include both fiscal and economic impacts of the carbon tax, of the fuel charge, the majority of Canadians are worse off.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Our report also included the output-based pricing system, so it's not just the fuel charge. It's the fuel charge and the output-based pricing system. Considering the economic impacts and the fiscal impacts of both measures, yes, the majority of households are worse off.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you very much for that.
In my initial round, we talked a little bit about the budget and some of the projections. We talked about the capital gains. Another area that I have concern about the projection for is with respect to the government's prediction of saving billions of dollars by reducing the size of the civil service. The civil service has grown since 2015 by over 40%. Now they're telling us that they will begin a plan by saving $1.3 billion in next year's budget by reducing the civil service by attrition.
Do you share any of the concerns? When I talk to department officials, they never have a plan for reducing the size of their footprint.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I share these concerns because the budget indicates that they'll be reducing the number of FTEs in the public service by 5,000 over four years by attrition. However, the budget also has a number of measures that are reasonably expected to require more public servants, so it will mean that there will be more reductions in certain sectors to make room for this increase in some areas while also reducing the aggregate size by 5,000, or that there will not be any reduction at all.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
We potentially could see greater losses in the civil service. The other negative outcome that is perhaps likely is the fact that, instead of the civil service being reduced in size, it may actually grow. If that were to happen, and if the dollars that are forecasted for reduction...that would put the government off its fiscal anchor of debt-to-GDP ratio—would it not?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It would probably, absent reductions in other areas to compensate for that. I'd add that, based on historical results where departmental plans indicated a reduction to come in their overall number of employees, we have seen instead increases. That's what I'm basing my assessment on.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Either the government is going to miss its fiscal anchors or the civil service is going to have even more cuts than are predicted.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's either cuts to the public service or reductions in other areas if the government is to meet its fiscal targets.
