Government Operations Committee on June 21st, 2022

[The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)), Conservative, Robert Gordon Kitchen]

Good afternoon, everybody. Thank you for bearing with us while we went through the votes, etc.

Welcome, everyone, to the committee and to meeting number 27 of the House of Commons Standing Committee on Government Operations and Estimates. The committee is meeting today to hear from the Parliamentary Budget Officer regarding the Parliamentary Budget Officer’s report on Canada’s military expenditure.

For the last 30 minutes of the meeting, we will go in camera to discuss committee business.

Today’s meeting is taking place in a hybrid format, pursuant to the House Order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. Regarding the speaking list, the committee clerk and I will do our best to maintain a consolidated order of speaking for all members participating virtually or in person. I would like to take this opportunity to remind all participants of this meeting that taking screenshots or photos of your screen is not permitted.

Given the ongoing pandemic situation, and in light of the recommendations of public health authorities and the directive of the Board of Internal Economy on October 19, 2021, the following is recommended to remain healthy and safe: As we're all aware, there is hand sanitizer at the front of the room when you come in. Please use that. Recognize that we have mechanisms to wipe down your mikes, seats and tables. You're asked to wear a mask when circulating around the room and maintaining a distance during that time. As the chair, I will be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.

I would like to welcome Mr. Giroux back to the committee.

It's good to see you again, sir. Thank you very much for agreeing to attend and bearing with us during this last hour's delay. You have five minutes to make an opening statement.

[Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Thank you, Mr. Chair.

Good afternoon, members of the committee.

Thank you for the invitation to appear before you today. We are pleased to present the findings of our report entitled “Canada's Military Expenditure and the NATO 2% Spending Target”, which was published on June 9, 2022.

With me today I have the lead author of the report, Christopher Penney.

Consistent with the PBO's legislated mandate, my office prepared an independent forecast of the military expenditures needed for Canada to meet the North Atlantic Treaty Organization's (NATO) 2% defence spending target for the period from 2022-23 to 2026-27.

In 2006, NATO members agreed to the policy goal of setting their annual defence spending to at least 2% of GDP. This target includes, in addition to Department of National Defence spending, expenditures for veteran pensions and benefits, as well as the Coast Guard, among others.

We estimate that total Government of Canada military expenditures will increase from $36.3 billion in the 2022-23 fiscal year to approximately $51 billion in 2026-27. The corresponding increase in the share of military expenditures to GDP is from 1.33% in 2022-23 to 1.59% in 2026-27. In order for military expenditures to reach 2% of GDP, the Government of Canada would need to spend an additional $75.3 billion over the next five years.

Chris and I would be pleased to respond to any questions you may have regarding this report or other PBO work.

Thank you, Mr. Chair.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Giroux.

We will now go to questioning. We'll start with Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Mr. Chair.

Mr. Giroux and Mr. Penney, thanks for joining us again. I appreciate the report.

What year was it that the government changed how it calculates the 2% for the defence spending? I understand it was a change over pensions.

[Christopher Penney, Adviser-Analyst, Office of the Parliamentary Budget Officer]

That would be in the fiscal year ending in 2017.

[Kelly McCauley, Conservative, Edmonton West, AB]

This report shows 2017 forward under the new numbers, but previous to that it's under the old numbers.

[Christopher Penney]

That's correct.

[Kelly McCauley, Conservative, Edmonton West, AB]

Would we be able to get a similar report with the old numbers? What would be required to have that happen?

[Christopher Penney]

We could put forth an information request to National Defence to get that breakdown, in order to see whether there's any difference in the calculation between 2015-16 and the discontinuous break in 2017.

[Kelly McCauley, Conservative, Edmonton West, AB]

You can probably imagine what I'm leading up to.

Do you require a committee motion to access those numbers from DND, or would they be readily available otherwise?

[Yves Giroux]

It would probably be easier to have a motion from the committee. They could be readily available otherwise, but it certainly facilitates our work to have a motion to back up a request for information.

[Kelly McCauley, Conservative, Edmonton West, AB]

Chair, I'm going to introduce a matter-at-hand motion. That is what I was mentioning to Mr. Jowhari, and I'll read it into the record. I'll do it now, and I'll use up my time for the motion.

I move:

That the committee request that the Office of the Parliamentary Budget Officer update figure 2-1 and figure 2-2 in its June 2022 report, titled “Canada’s Military Expenditure and the NATO 2% Spending Target”, to reflect the reporting standard used prior to 2017; and that the update be provided to the committee by September 15, 2022.

This is just to get an apples-to-apples comparison of the spending so that we have a better idea.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. McCauley.

Do you have that electronically so that you can...?

[Kelly McCauley, Conservative, Edmonton West, AB]

I just have it on paper, but Paul had it electronically. I have it in French as well.

[The Chair, Conservative, Robert Gordon Kitchen]

Okay, thank you.

We'll circulate that as quickly as we can.

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, it's a pretty straightforward motion, just solely to update two of the tables in the information to reflect pre-2017—so 2016, 2015 and 2014—so that we have an apples-to-apples comparison so we can see the increase or decrease.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

With that we will go to....

Are you done, Mr. McCauley?

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes.

If we can settle that, I'll just finish up my time.

[The Chair, Conservative, Robert Gordon Kitchen]

Okay.

[Kelly McCauley, Conservative, Edmonton West, AB]

If my colleagues would agree or if they have any feedback on it...?

Do we need a vote on this or is that satisfactory?

[The Chair, Conservative, Robert Gordon Kitchen]

If we have agreement, then we don't need a debate on it.

Is there agreement around the room to...? It doesn't have to be unanimous.

Mr. Johns, you have your hand up.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I just always appreciate the motion being read back to us, if we could.

[The Chair, Conservative, Robert Gordon Kitchen]

Certainly. He's going to read the motion so we can hear it again.

Mr. Johns, the clerk will also send it out right away as well.

Mr. McCauley, can you read it back so we can hear it?

[Kelly McCauley, Conservative, Edmonton West, AB]

Sure. The motion asks:

That the committee request that the Office of the Parliamentary Budget Officer update figure 2-1 and figure 2-2 in its June 2022 report, titled “Canada’s Military Expenditure and the NATO 2% Spending Target”, to reflect the reporting standard used prior to 2017; and that the update be provided to the committee by September 15, 2022.

That's three months from now, just before we return.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

Mr. Johns, did you have anything further? Thumbs-up, okay. I'm seeing thumbs up around the room.

(Motion agreed to)

You have two minutes and 30 seconds.