Government Operations Committee on Dec. 3rd, 2024

[Yves Giroux]

Yes, that's pretty much it. However, I say that with reservations. There has been an increase in the size of the public service, but it also corresponds to increased spending in most sectors.

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

For 18 years, I was part of the world of education, in Quebec. School boards had to stick to an administrative budget of less than 5% of the total budget. This is also often the case for non-profit organizations.

Is it conceivable for the government of a country, such as Canada, to impose a 5% limit on the public service budget?

What would the consequences be if someone decided that the government budget should be as limited as that for external services?

[Yves Giroux]

It's certainly something that's possible. In my experience, it's a consideration that comes up when departments ask Treasury Board and the Department of Finance for funding. I'm talking about the part that concerns administrative costs. That said, it's not a very important consideration.

Imposing a uniform limit would probably have adverse consequences, especially for programs where there is a need for auditing and enforcement. However, it would certainly be possible to impose a limit, allowing some flexibility for cases where more administrative or monitoring and compliance expenses are required.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Ms. Blaney, please go ahead.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you, Chair.

I would like to turn to the resources that we saw under Indigenous and Northern Affairs. I know there continues to be a pretty significant gap for indigenous support, and it's not always delivered as it is announced. I'm wondering if you could talk about the funding gaps you've seen historically and if you feel that these estimates will actually start to address the issues.

I know there is a commitment to reforms to the first nations child and family services program. That has been a very significant gap for a long time, and we know, even though bills have been put forward, that the gap continues to be a challenge. Could you talk a little bit about that?

Again, the money is announced, but do they usually actually deliver the money to the extent they say they will?

[Yves Giroux]

I asked Jill, and she said—and I agree—that in the absence of the departmental results report, it's very difficult to answer that question.

In the absence of last year's DRRs, as we call them, one has to rely on the previous year's departmental results report, and we see that these two departments in charge of delivering services and managing relationships with indigenous people don't tend to meet all of their performance indicators. That's happening despite significant increases in funding to both departments, which leads me to believe that while funding is an essential part of delivering on services and addressing the gaps, it doesn't seem to be a sufficient condition because these departments don't meet their self-imposed performance targets.

That's unfortunately as much as I can say in the absence of the departmental results report.

[Rachel Blaney, NDP, North Island—Powell River, BC]

I appreciate that. I do find it interesting to think that the population who needs the resources because of continuous underfunding since the beginning of Canada sees the money filtered through two departments, and then those outcomes are not met, which is concerning.

One of the issues.... I think my time is up, but can you give me a written response on the non-insured health benefits program? As a person who's dealt a lot with that in my own family, I'm really curious about the timeliness, especially when you compare the dental program for all Canadians and the dental program for first nations, Inuit and Métis. I would like to make sure those are rolled out in the same fashion.

[The Chair, Conservative, Kelly McCauley]

Is that a specific enough question for you?

[Yves Giroux]

Yes.

[The Chair, Conservative, Kelly McCauley]

Perfect. Thanks.

We'll go now to Mr. Lawrence.

Welcome back to OGGO, sir.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

Thank you, Mr. Giroux, for being here, as always.

I want to start by reading a quote of yours back to you just to confirm you still stand by it. It's from BNN Bloomberg:

If it's good news, they can play it up. If it's bad news, they may try to find a more appropriate time where it gathers less attention. It's quite likely that the government will have blown [through] its own self-imposed target of a C$40 billion deficit.

Are those your words, and do you still stand by them?

[Yves Giroux]

If you're saying these are my words, I'll take your word for it. That is certainly something I could have said, maybe in different words, but yes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Perfect.

Here we are. We have the public accounts once again. It's like Groundhog Day. Every year, we get together and I ask you this question about why the public accounts being late is important and what type of impact it can have. I know we've already discussed it a little bit. I think my Bloc Québécois colleague asked some great questions, but just so Canadians can hear it once again, by having the public accounts be months and months late, it creates difficulties for your department and, most importantly, it creates difficulties for Canadians trying to analyze the budget going forward.

Could you expand upon that?

[Yves Giroux]

Yes. In the absence of public accounts, we don't know and you and the public don't know what the deficit was for the year that ended March 31.

However, you, as parliamentarians, are asked to approve hundreds of billions of dollars of spending to various departments and agencies while not knowing how each and every one of them spent the money that you collectively had approved for them the year before. You don't know how well they did last year, but you're asked to trust that the government will do as good a job as last year even though we don't know how they did this year—but please approve hundreds of billions of dollars of spending—and it makes it a bit more difficult to plan ahead for next year's if we don't know what the deficit was the year before.

Without knowing what happened in the recent past, how are we to forecast the near future?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Let's talk about what some of those numbers could hold.

You've said in that quote, and then in other places, that the deficit could be much higher than the agreed upon fiscal anchor of $40 billion—self-imposed, I should say. Is it out of the realm of possibility that the deficit could be above $45 billion?

[Yves Giroux]

Well, in this current year or last...?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

In this current year, yes.

[Yves Giroux]

Yes, it's possible. We've seen recent announcements regarding a GST holiday of two months, and that is expected to cost, according to the government, $1.6 billion if there is no compensation for harmonized provinces. If there is compensation, then the cost would be significantly higher.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

We've also seen—or at least I've heard quite a bit of anecdotal evidence—that folks didn't have a capital gains fire sale. With the deferred announcement of the capital gains, it was projected that something like $6 billion in revenue would be created.

My anecdotal experience, in talking to accountants and accounting firms, is that it really didn't happen. That $6 billion didn't materialize. Plus, with other changes or mistakes made along the way, I mean, it could conceivably be as high as $50 billion.

[Yves Giroux]

Well, it's possible. We're in the realm of hypothesizing, not knowing exactly what will happen regarding the capital gains inclusion rate and not knowing what was the deficit last year. Very often, if there is an unpleasant surprise with respect to the deficit, it tends to carry forward, depending on where or what happened exactly.

It is possible, but it's anybody's guess at that point, depending on what happens for the rest of the fiscal year.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Yes, and it really leaves parliamentarians with one arm tied behind our backs, right, because you highlighted the lack of certainty. We don't know what the deficit is.

In fact, in question period, our leader has repeatedly asked the Prime Minister, who does know—or at least should know—what the deficit was, and we still don't know that. It hinders our ability to have that discussion and to make the policy decisions that we want.

Is that not true as well, Mr. Giroux?

[Yves Giroux]

It negatively affects your capacity to make or suggest trade-offs when it comes to spending and revenues, not knowing what happened last year. Yes.

[The Chair, Conservative, Kelly McCauley]

Thanks.

It's Ms. Atwin, please.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much, Mr. Chair.

Thank you, Mr. Giroux and team, for being with us once again here at OGGO.

I'd like to pick up on the line of questioning by my colleague here as well.

If we could narrow down to some specific ways where you can suggest that we could improve the ways that parliamentarians can scrutinize the estimates, or where we could potentially add additional information, where is it feasible and how that might look.

[Yves Giroux]

There are a couple of ways that would be doable.

I think first and foremost is having the public accounts tabled earlier in the process, which is doable because, by and large, the Auditor General and the government are able to finalize the books in September. Having a tabling date of the public accounts no later than September 30 is doable. Also, removing the requirement that these be tabled only when Parliament sits would increase the flexibility of the government to table when they are ready. It could happen, for example, following an election, when Parliament is not back and is not sitting, which in and of itself delays the tabling of public accounts even though they would be ready.

Another way would be to have budgets sooner in the budget cycle, so that more elements in the budget would find their way into the main estimates and you collectively would have a clearer picture of funding requests that make sense compared with what in the budget currently, when budgets are in March or April.

These are two relatively easy ways of improving or making your job, which is already quite difficult, slightly less difficult, but the flip side of that is that it would remove some of the flexibility the government enjoys when it comes to budgets and public accounts in terms of their tabling.