Government Operations Committee on Oct. 19th, 2023

[Jenica Atwin, Liberal, Fredericton, NB]

It also had me thinking about digital service transformation as a whole and how this encompasses some Canadians who don't have access. I'm thinking about perhaps remote indigenous communities, seniors, or the disability community. Should we focus only on those cost savings, even though we might not be able to include everyone? I'm interested in your opinion on that.

[Yves Giroux]

I think digital services can help make services more accessible for those in remote communities, for example, or those with mobility impairments. Being able to access these services in the comfort of your home, to use a well-known formula, can be very handy and useful for people who don't have the means to get to government offices. However, it can also serve as an impediment if you don't have access to a bandwidth or a computer.

There are pros and cons, but I think it boils down to the fact, or it suggests, that even though digital service is probably what most Canadians expect, there always has to be another alternative for clients to access the services if they can't or won't access services digitally.

[Jenica Atwin, Liberal, Fredericton, NB]

More broadly, what considerations should the government keep in mind when looking at spending reviews?

[Yves Giroux]

That's a very interesting one. It depends. I think the government has to keep in mind what its ultimate objectives are and have a clear set of criteria as to what services or programs it wants to maintain and which ones it's ready to let go of, as well as whether it wants to do spending reviews to reduce some programs or services or whether it wants to target only internal services. Then that leads to different paths for service or program reviews.

[The Chair, Conservative, Kelly McCauley]

Thank you very much. We're right on five minutes.

Ms. Vignola, you have two and a half minutes.

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

Thank you very much, Mr. Chair.

Mr. Giroux, in your memo on the digital services tax, you say that your analysis does not take into consideration the fact that the government will have to expend additional resources to manage this tax.

In your opinion, with 1% of the population being federal public servants, does the government have the internal resources to manage this new tax? If not, how many public servants would need to be added, roughly speaking?

I know it's hard to answer this off the top of your head.

[Yves Giroux]

It depends on how the legislation would be drafted to implement such a tax.

The difficulty comes from the fact that design greatly influences implementation. However, given that the number of platforms to which a tax of this nature applies is not very large, there is probably no need for hundreds of public servants to administer it. We just need to have the right legislative tools. I don't think this tax would require a lot of resources, given that the players to which it would apply are relatively few and easily identifiable.

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

Thank you.

In your report on the economic and fiscal outlook, do the calculations on the deficit and what is projected over the next few years take into account the President of the Treasury Board's request to cut $15 billion? If so, should that amount be increased so that it would have a real impact? How much would the budget cuts have to be in order to have a positive effect on the deficits? We do not want this to have a negative effect.

[The Chair, Conservative, Kelly McCauley]

I am afraid you won't have time to answer that in this round. You can answer in writing, or perhaps in the next round.

Mr. Johns, you have two and a half minutes.

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

Your report on full-time equivalents in the public service shows that the number of FTEs is projected to decline from 428,000 to 400,000 by 2025-26. That's 4.7% higher than prepandemic levels. However, according to StatsCan, Canada's population is projected to grow 5.7% to 9.3% in that same period, so the public service could grow by as little as half as much as the population grows.

Would you expect to see a decline in the availability or quality of services Canadians receive if the population continues growing faster than the public service?

[Yves Giroux]

That's an interesting question too.

It depends on where these additional public servants are placed and where any additional increases happen. We've seen the government announce additional public servants in areas where they provide direct services to the population. However, we've also seen an increase in public servants on back-end applications—in internal services, for example. Those are public servants who are not directly responsible for direct services.

To have an impact on the services, it would depend on where these additional public servants are or would be in the future.

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

Looking at the size of the federal public service compared with the size of Canada's population, it's pretty revealing. I think that in the 2006-07 fiscal year, the public service size was 1.06% of our population size. Following prepandemic declines, our public service has reached 2006 levels again. In 2022-23, it was at 1.07% of our population. However, we're projected to decline again. In 2026, we're expecting the public service to dip below 1%.

Have you analyzed which gaps in the public service would result from this decline? We saw the Conservatives cut, say, a third of Veterans Affairs, which led to a backlog that is costing more money for people and to Canadians not getting access to benefits. There were cuts to DFO too.

What does it look like for cuts?

[Yves Giroux]

We have not looked at the impact of potential reductions in the size of the public service—for example, where those would be, what they would look like and what their impact would be on services. It's something we will consider doing once we can get more information and once the plans for the $15 billion in reallocations or reductions have materialized. It's something we are considering doing in 2024.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mr. Genuis, you have five minutes, please.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

I am very pleased that we have the Parliamentary Budget Officer with us at committee today.

Sir, could you start by telling us what Canada's current national debt is?

[Yves Giroux]

I had the number handy and I've lost the page. Roughly speaking, it's about $1.2 trillion, based on our most recent economic and fiscal outlook.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Canada has a federal national debt of $1.2 trillion.

What was Canada's total national debt in the year 2015, when Prime Minister Justin Trudeau took power?

[Yves Giroux]

I don't have that number off the top of my head. I don't have historical numbers. I'm sorry.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Do you recall it approximately?

[Yves Giroux]

Approximately, it would be around $500 billion to $600 billion, if my memory serves me well.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

The national debt was $500 billion to $600 billion in 2015 when Justin Trudeau took office. It is $1.2 trillion now. You're using an approximate figure historically, but are you fairly confident that the national debt has more than doubled in the eight years that Justin Trudeau has been Prime Minister?

[Yves Giroux]

If not more than doubled, it has close to doubled. Given that I am going on memory here, I wouldn't want to be too definitive.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

If not exactly, then approximately....

What are the total debt servicing costs projected for this fiscal year? That's the cost associated with having that debt.

[Yves Giroux]

We estimate that it will be $46.4 billion in the current fiscal year.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

According to the numbers I have, that is a significant increase in debt servicing costs over the last year. If I understand correctly, it's because of an increase in interest rates.