Evidence of meeting #157 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 billion.
A video is available from Parliament.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Thank you for that.
You have some concerns as to whether or not the fiscal anchor can be met.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I do, especially if the expenditures recently announced do materialize and the capital gains inclusion rate does not materialize. That would mean that some revenues, several billions of dollars that the government was or is banking on this fiscal year, will probably not happen if that legislation is not passed.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Thank you for that.
Regarding your fuel charge report, I know we've talked ad nauseam about the fact that Canadians pay more than they get back. That's been well-established in your reporting over the last number of years, and that's just an indisputable fact. One aspect that I found interesting, though, when I was rereading your report, was that you actually say in the report that people's incomes will be lower as a result of the fuel charge. I don't think that's something that we asked you about before in committee. Are you saying that, as a result of the carbon tax fuel charge, people's incomes in Canada are actually lowered?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Well, in aggregate, yes, because if you impose a fuel charge or a tax on various sectors of the economy, conventional wisdom suggests that the activity in these sectors will be lower—slightly or significantly lower—but it will certainly be affected by a fuel charge or a tax. Both the labour income and the investment income derived from the affected sectors are likely to be lower—slightly lower in that case—and that's based on modelling from Environment and Climate Change Canada. It's not just our own modelling.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Who would be worst affected? Whose income would be most adversely affected by this policy?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's those who have investment interests in the sectors that are most heavily affected by a fuel charge, so oil and gas. I think transport is one sector that would be affected, as well as individuals working in these sectors in which profits would be lower and, presumably, economic activity will be negatively affected.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
It's not just investment income; it's income from labour as well.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Do you have any numbers on how much, on a sector-by-sector basis...or an example of a sector or a few sectors in which incomes were lowered?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I don't have these numbers off the top of my head, but there are numbers that we have provided in our reports, I think—well, in our previous reports. We have some broad sectors that would be affected, and we have quantified the impacts for these broad sectors.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Is that something that could be tabled?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
I appreciate that.
The $2.6 billion that's supposed to be going back to small businesses, from the small business rebate in the estimates, that money should have been paid annually over the last seven years, but the reality is that the federal government dragged its feet and is, now, finally getting around to paying it. There are businesses that don't exist anymore, that actually went out of business—people who went bankrupt because they couldn't make ends meet—that this money could have really helped. How can we make those businesses whole? Is it wrong that they are not getting money that they should have been entitled to had their businesses survived?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think it will be very difficult to provide that rebate to businesses that no longer exist. That's probably as much as I can say.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much.
Mr. Sousa, go ahead, please.
You're on mute, sir.
December 3rd, 2024 / 12:15 p.m.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Thank you, Mr. Chair.
Thank you, Mr. Giroux, for being with us again today.
My questions are as follows: What criteria were used to determine the allocation of the $24.8 billion in spending outlined in the supplementary estimates (B)? How do these priorities align with the government's fiscal objectives?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The question, if I understand it correctly, is about how we determine the criteria to allocate these fundings. Is that what you're referring to?
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
There are criteria that have been used to determine the allocations of the dollars spent, and I want to know from you how those were assessed and how they meet, then, the priorities of the government's fiscal objectives. You've been following what the government is doing, and now these things have taken place, so I just want your perspective.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's a government decision to allocate spending in the supplementary estimates or to seek spending in the supplementary estimates. The decision to allocate spending is usually made in the budget by the Minister of Finance and the Prime Minister. Depending on the state of advancements of each proposal, they're either tabled or included in supplementary estimates (A) or (B), and whether they're in supplementary estimates (A) or (B) determines how advanced they are in their development and whether there are enough details for central agencies, notably the Treasury Board Secretariat, to determine whether they can let that go in supplementary estimates (A) or (B).
The categories under which they fall are by their own definition and the very nature of these expenditures. If the Department of Indigenous Services, for example, is seeking money to deliver on programs, it is operational money. On the other hand, if it needs capital spending to build infrastructure, then it goes into capital expenditures, which is a different vote structure under the Treasury Board methodology or terminology.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Thank you for that.
Would you be able to elaborate, then, on the expected impacts of the Canada carbon rebate for small businesses and the individuals on overall carbon emissions? I know the prior question made reference to it, but can you tell me about the impact it would have, consequently, on carbon emissions?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Well, the Canada carbon rebate itself would probably not have a significant impact unless the small businesses and the households receiving the rebate were to use that spending to invest in equipment that emits less or no carbon at all.
When it comes to the fuel charge itself, the impact has been assessed by Environment and Climate Change Canada to be at about 15 megatonnes of reduction of emissions by 2030-31, which was included in our latest report.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Can you tell us more about the military procurement spending outlined in the estimates, and how does the spending align with Canada's defence strategy and, of course, our commitments to NATO?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The spending allocated through the supplementary estimates (B) to DND will contribute to funding the military operations. There is some money there for assistance to Ukraine, but there is also quite a bit of money for support of military operations. I think there is air crew maintenance or training. There is also some operational funding for the Halifax-class frigates. These are all contributing towards reaching or getting closer to our NATO spending target of 2% of GDP, even though Canada is not there yet.
That's probably as much as I can say, not being in the minutiae of DND spending.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Yes, I appreciate that. I mean, the purpose of some of these questions is to reaffirm that the government has made some commitments with respect to its budget. It's a living document, so things change accordingly, and other things are advanced. However, it's always with an alignment to succeed in terms of what the government's priorities have been.
For example, my next question is this: What trends, then, do you anticipate in the future budget proposals by government, particularly regarding spending priorities and fiscal sustainability, which is something that we're all preoccupied with?