Evidence of meeting #72 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 cost.
A video is available from Parliament.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It would require more refined analysis to look at the number of advisories and the capital expenditures since that report and whether the government has reallocated some funding from capital spending to operating costs.
NDP
Gord Johns NDP Courtenay—Alberni, BC
There has been $2.5 billion requested for the bilateral agreements for four priority areas: mental health, long-term care, health care workers and primary care.
Can you talk a little bit about how that funding will roll out in terms of the needs? Right now we say that we have universal health care in this country, but when it comes to mental health, we have a two-tiered system. Most people can't access mental health supports if they want to or when they want to. Usually someone has to get arrested to get the help they need when they need it, or they have to go to drastic measures, sadly.
Can you talk about what it would take to get to parity for mental and physical health care, so that people could get access to it and it would be costed out, and what parity for mental and physical health would look like?
Also, since we know it costs society $50 billion a year, what is the cost of not doing anything more when it comes to mental health?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We have not costed how much it would be to provide a certain level of services when it comes to mental health. That's something we could consider if there was a committee motion to do that. It would be quite an undertaking, because we would need to have clear parameters as to the expected level of service to be provided by provinces and where the funding would be coming from.
We have also not looked at the alternative costs of doing nothing and of leaving those who need mental health services and care without access to these services.
Conservative
The Chair Conservative Kelly McCauley
Thank you, Mr. Giroux.
Perhaps you can get back to it in the next round, Mr. Johns.
Mr. Perkins, you have five minutes, please.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Thank you, Mr. Chair, and thank you, Mr. Giroux.
I'm going to be asking all my questions about the VW contract. I think I'm probably the only MP here who's actually read it, and I've spent quite a few hours on it.
I would like to start with your analysis and your report on it this morning. It's actually two contracts. There's the construction contract, which is from the strategic innovation fund, and then there's the subsidy contract for the production.
Your report this morning was essentially just on the construction part, as I understand it. By your calculation, there's another $2.8 billion of spending. That means that the announcement made three months ago, when there hadn't even been a shovel in the ground to build this thing, is already 20% over budget.
That being said, the Minister of Finance, in a press conference before question period, said that you got it wrong. She said she provided you with all the information, but you still got it wrong. Then she ran out of the building, and we haven't seen her since. She wasn't there for question period.
Can you comment on that first?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We asked for information from the Department of Finance—well, from the Minister of Finance and her officials—as well as from Minister Champagne from Innovation, Science and Economic Development. I believe we got all the information that we were told exists and all of the information that we requested.
There was nothing in the information package we got that suggested that the government has any plans to make that assistance non-taxable. Under current legislation, it's clear that the assistance the government plans to provide—as per the contracts we've seen, as per the statements that have been made publicly and as per legislation, as I said—is taxable under Canadian tax legislation.
We also verified with officials from both departments that our interpretation is the correct interpretation. I am quite confident from the information we got, and based on our interpretation of the legislation, that the assistance the government will provide will indeed be taxable.
If you put that together with the stated aim of the government to ensure that the assistance provided to Volkswagen in Canada will be comparable to what it would receive in the U.S., where it's non-taxable, these two elements together clearly lead us to the conclusion that the amount will be $16.3 billion, or very close to that, under current parameters.
That being said, if the government has plans to amend legislation to make that assistance non-taxable, it's the first time I've heard about it. That was not information provided to us in our information files.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Thank you, Mr. Giroux.
Every contract of this kind that the government signs has a sort of “net benefits to Canada” section, presumably for a foreign company that's making an investment in Canada.
Are there any “out clauses” in the contract that allow the parts that will be bought or created and then assembled at this plant to be bought from countries outside of Canada, like China? As we know, most of the world's anodes and cathodes for EV batteries are made in China, as are most of the critical minerals.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
My office was provided with the two contracts, in fact, but they were provided to me with the caveat that they were to be used for our report and not to be discussed publicly because of their commercially sensitive nature. I don't feel comfortable talking about specific clauses in the contract unless the government itself and Volkswagen tell me that they're fine with my talking about the contracts. I feel bound by the commercially sensitive nature of the contracts.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
You replied earlier to a previous question that it wasn't $10 billion a job in the subsidy, but $5 billion. Your report says it's 1,400 construction jobs, so if I do the simple math here at the table, it means that it's 1,400 jobs in production. That's how you half that to $5 billion. Is that correct?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We used the public number on the number of jobs for the production phase. The government has stated 3,000 jobs when the production is in full swing. Then there's another element—
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, that's direct jobs. That's what has been publicly stated.
Conservative
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Okay.
The minister said at the industry committee that the ROI statement comes from the Trillium report, which is a public report.
I've searched through it to look for something in reference to Volkswagen and I can't find it. Have you seen any evidence in this that they produced an ROI calculation?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think there's a—
Conservative
The Chair Conservative Kelly McCauley
Mr. Giroux, I'm going to have to ask you to respond to Mr. Perkins in the next round.
Mr. Bains, go ahead, please, for five minutes.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Thank you, Mr. Chair.
Thank you, Mr. Giroux and Ms. Vanderwees, for joining us today.
I'm going to pick up from where Mr. Johns left off.
In your report, you note that $2.5 billion has been requested to improve health care for Canadian”, with one of the areas of focus in provincial-territorial bilateral agreements being access to mental health and substance abuse services.
How much of this funding is going to British Columbia, Alberta and Ontario, the provinces particularly hit by the opioid crisis?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We don't have the provincial breakdown for these additional amounts, unfortunately.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Okay.
Since 2015, the government has improved estimates by tagging items in supplementary estimates that stem from a federal budget. Do you believe that these changes are helpful?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I believe that improves the traceability of funding, which is helpful in allowing us to provide information to parliamentarians.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Thank you.
Department mandates change constantly to meet the challenges and demands that we're faced with as a government. In previous years the PBO has been critical that at times the results and targets, both in departmental plans and departmental results reports, have not been measured or set in a consistent way, which skews the report and doesn't give an accurate picture of the work and achievements of the department.
Do you have any recommendations for how we can keep the reporting more consistent?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Usually, setting performance indicators that are consistent over time is a good practice, with the understanding that priorities can change. However, the indicators themselves should not change that much from year to year. There should be relative consistency of performance indicators over time.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Okay.
I have a question around Volkswagen. You indicated that the jobs deliver a return after five years. Was that...?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's what the government said.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Would it have been better to wait to acquire more information about job creation instead of including that in the report right now?