Government Operations Committee on May 8th, 2023

[The Chair, Conservative, Kelly McCauley]

I'm afraid that's your time.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

We'll have some more rounds for you, though.

Mr. Johns, go ahead, please.

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

Thanks.

It's my understanding that a 1% corporate tax increase back in 2015 would have generated $2.6 billion. That would have been enough to cover the gap for those 65 to 75 who aren't getting the 10% increase in OAS.

Is it possible for you to formally respond to this committee on what it would cost to increase the OAS by 10% for those between 65 and 75, and what the corporate tax rate of a 1% increase would be in today's dollars?

[Yves Giroux]

If the committee wishes for me and my office to do so through a motion, we'd be happy to do that.

[The Chair, Conservative, Kelly McCauley]

Colleagues, are we fine with that?

[Some hon. members]

Agreed.

[The Chair, Conservative, Kelly McCauley]

Consider it so, Mr. Giroux. Thanks.

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

Thank you, committee members.

Have you looked at and done an analysis...? The U.K. has done an excess profit tax on oil and gas of 25%. Have you considered looking at what that would generate for oil and gas, the big grocery stores and the big banks?

[Yves Giroux]

We have looked at the cost, or we are in the process of looking at the revenue-generating measure of an additional tax on big banks. I think we've already done that analysis, which was announced in the budget.

To be honest, Mr. Johns, we've done so many reports on various topics that I sometimes lose track of exactly what we have done and what we are still working on. I don't think we have done that for the profits of oil and gas companies, but I may be wrong. Sometimes I'm asked questions about whether we've done this or that, and we have and I've forgotten about it.

I can get back to you on that specific question and send you the links if we have done that analysis.

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

I think all of us are dealing with our health care system and the stresses on it. We know that mental health and the toxic drug crisis are adding a whole element to it. It's backing up our health care system. Patients aren't getting the care they need.

Have you looked at the cost of not investing in mental health care and the toxic drug crisis versus the preventative measures of investing in mental health and the toxic drug crisis?

I cite the blue ribbon report on crime that British Columbia developed in 2014, which said that every dollar spent saved $12 to the system.

[Yves Giroux]

Unfortunately, it's not something that we have looked at. It's very difficult for us economists and accountants to look at the costs of not doing something or the additional costs that are incurred by inaction in some areas. It's possible, but we have not done that analysis yet.

[The Chair, Conservative, Kelly McCauley]

Thank you, sir.

We'll go to Mrs. Block for five minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I join my colleagues in welcoming you back to our committee to provide us with more explanations on your report on the mains.

I know that, as you mentioned, the mains were tabled before the budget and they don't include any new spending in the figures that we're looking at. I want to note for you and my colleagues here today that Canadians back home in Saskatchewan are absolutely blown away by the figure of $1.22 trillion in projected federal debt. They are gravely concerned by the $43.9 billion, which is the amount projected to be the cost of servicing Canada's national debt this fiscal year. As it has already been noted, the debt-servicing costs have increased by 60% since last year.

With the plan by this government to continue running deficits, have you done any estimates or analysis on how much the debt-servicing costs will grow under the government spending plans over the next few years?

[Yves Giroux]

To answer your question, we released an economic and fiscal outlook in March, just before the budget. In that economic and fiscal outlook, we estimate that the debt-servicing costs—this was before the budget—will increase to about $46 billion by 2027-28. It's highly contingent on the movement of interest rates, obviously, and on the fiscal path.

Because that was before the budget, and the budget included net new spending, the real figure right now, if we were to update that, would probably be slightly higher than $46 billion in public debt charges by 2027-28.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

In your report on the mains, dated March 3, 2023, you made the following observation on page 2. I think you made this observation when we discussed the supplementary estimates (C). I'll just quote it here: “The Government chose not to table the corresponding Departmental Plans at the same time as the Main Estimates. These plans provide important details regarding what the Government expects to achieve with the money requested from Parliament”. You also noted that “parliamentarians' ability to meaningfully scrutinize [the government's] spending request is undermined by the absence of the Government’s plans”.

I guess what I want to know from you is this: How can we improve the process when it comes to the tabling of departmental reports and plans? Should there be some sort of penalty for departments that don't table their plans in time for the estimates process?

[Yves Giroux]

I like your idea of penalties for departments that don't table their departmental plans in a timely manner. I'm all for that. But I think a more realistic and feasible approach to ensure that you as parliamentarians could better hold a government to account would be fixed dates for a budget, or a fixed window that would be early enough in the year that the main estimates would reflect budgetary expenditures and budget initiatives.

As well, the departmental plans would reflect new items that are in the budget for them. You collectively would have a good sense, when you study the main estimates, of how that reconciles with the budget, because budget items would, by and large, be found in the mains. Departmental plans would also reflect the government's priorities as stated in the budget.

With a budget tabled in late March, or really anywhere in March, or even April, it's not feasible for the departmental plans to reflect budget priorities, and it's not possible for the main estimates to paint an accurate picture of government spending. That's why I've been suggesting, for a while now, that a budget date sometime in February, preferably early in February, would facilitate your job and would also ensure that what is in the mains makes sense to you and reflects what's in the budget.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Thank you.

We'll now go over to Mr. Bains for five minutes, please.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to our guests for joining us again today.

I'm going to ask a little bit about the green economy. The U.S. is offering substantial incentives through investments in the green economy. Budget 2023 is reflecting similar measures to incentivize investment in Canada's emerging green economy.

Do you believe these market-based incentives would ensure that Canada remains competitive as the world shifts to a more climate-conscious economy?

[Yves Giroux]

That's a difficult question for me to answer. Whether or not Canada remains or becomes competitive depends on a variety of factors—the presence of an ecosystem to ensure that these businesses can thrive, a competitive tax regime, inputs that are available at a reasonable price, and an energy supply that allows these businesses to manufacture what will be needed for a greener economy. Of course, subsidies and tax assistance will contribute to making Canada more competitive, but it is difficult for me to assess in a general manner whether this will be sufficient, too much or not enough. It requires a drill-down approach by sector and even by specific types of products.

For sure, though, the government assistance that was announced in the budget will certainly contribute to making Canada more competitive as it reduces the overall costs for companies that want to establish in Canada to build new machinery equipment and new forms of energy.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

Significant funding in these main estimates is going towards new health care transfers. Do you believe these funds would help alleviate some of the issues that provincial health care systems are struggling with right now?

[Yves Giroux]

With the amounts that have been announced and will be provided through the new health accord, I certainly hope they will contribute to alleviating some of the pressures on the health care system, because we're talking about dozens of billions of dollars over a number of years. I'd be very discouraged if they did absolutely nothing. I'm very hopeful they will lead to improvements in the health care system, or, at the very least, a stabilization of the system.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

It was touched upon a little earlier, investment in public service training.

Could public service training investments reduce overall costs in the long run?

[Yves Giroux]

I think they could, especially if the training is targeted to areas that are most in need, when it comes to the provision of policy advice and government services. For example, if one thinks about training for the persons who work in call centres to better handle customer queries, that can only improve and enhance the customer experience, citizen experience or taxpayer experience. If it's well targeted and addresses needs that are documented, it could certainly help improve the quality of services, be it services to Canadians or services to ministers or parliamentarians.