Evidence of meeting #87 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 budget.
A video is available from Parliament.
Conservative
The Chair Conservative Kelly McCauley
I'm afraid that we're out of time, but maybe you can offer a very brief answer, Mr. Giroux.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's not something that we have looked at, the anti-scab legislation or the replacement workers legislation and whether there is associated funding with that legislation for ESDC to fulfill the obligations that would be imposed on it by the legislative provision.
Conservative
Conservative
Adam Chambers Conservative Simcoe North, ON
Mr. Chair, it's a pleasure to be at the mighty OGGO, as I understand we are to refer to it.
Thank you for coming again. Welcome to your team. It's nice to see you. I expect we'll see you, hopefully, one more time at the finance committee before we break for the holidays.
I was looking at the supplementary estimates, and there were a couple of things I didn't see. I'm wondering if maybe I just missed them. I didn't see any money set aside for the new disabilities benefit, any money allocated for implementing pay equity legislation, or any adjustments or additional money set aside for the dental care cost overruns. I understand there are some accruing.
Am I mistaken in not seeing those?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I certainly have not seen anything related to Bill C-22, which could be significant if or when we see regulations that will implement or operationalize the disability benefit. I don't remember seeing anything on pay equity in the supplementary estimates or anything for dental care.
Conservative
Adam Chambers Conservative Simcoe North, ON
I've had a bit of trouble getting an answer from the Treasury Board, Health Canada and the Department of Finance. No one really wants to give an answer to the question about the methodology that the government used to determine how much the dental care program will cost.
Specifically, did the government assume a certain percentage of uploading from the private sector and public sector plans, in which case it has admitted that there will be some crowding out of the private sector, or did it not make any assumptions at all, in which case there will be significant cost overruns as private sector plans and various provincial governments are actually now kicking people off their plans so that the federal government can pay for it? I'm just wondering if you have the same concerns, or maybe you can help us get some of that transparent information in your work.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
When we did the costing of the dental care program, we consulted with Health Canada. I don't remember off the top of my head whether they have included some.... I know that we certainly have included some behavioural impact, but I don't know if they have included some potential off-loading by currently insured individuals and families. I'd have to get back to you on that.
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you very much.
There's another area that the government outlines in every budget. It's called the non-announced measures, and what happens in this provision is that, in every budget, the government is transparent about the changes in that account. For example, money comes into that account and money goes out of that account, and they're very light on the details about what it's for. It's understandable. There are some very legitimate reasons for which they would have some secrecy.
Parliamentarians don't know the total dollar value of the provision that's set aside in the fiscal framework. It's my understanding that you would have to go back, basically to the beginning of time, to add up and then track the changes in that account.
I'm wondering if you may be able to provide some assistance so that parliamentarians could understand the total amount of the government's provisioning for future expenditures that they haven't announced yet, because we just listed a few that have not been accounted for publicly, but pharmacare's nowhere to be seen. We have no idea whether the government's put aside enough money for the liabilities that it's created.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's information that we sometimes try to get. We see the line, a provision for unannounced measures or to-be-announced measures. Every time we see that in a fall update or a budget, we ask and we're told the same answer over and over again: We can't provide you the details because some of these are for anticipated cabinet decisions, and others are for commercially sensitive contracts or negotiations. We would probably face the same wall.
I can understand that there are very valid reasons to want to provide not too much detail on that, but on the issue of going back several years, I think that would be a mission impossible.
Conservative
Adam Chambers Conservative Simcoe North, ON
Surely, though, it wouldn't be secret what the total dollar value is of the provision in a gross number that the government set aside for future liabilities.
Would you agree with that?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, that should be doable.
Conservative
The Chair Conservative Kelly McCauley
Thank you, Mr. Chambers.
Mr. Sousa, please, you have the floor.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Thank you, Mr. Chair.
Thank you for being here again today.
The Governor of the Bank of Canada indicated recently, after the fall economic statement, after the update.... I think he said that the federal government's new fiscal guardrails are helpful for monetary policy in regard to how we move forward and weather through international challenges that affect us here at home.
As we go forward and we look at some of these measures and some of the things that we put in place, he commented that some of these steps are helpful. Can you comment? Do you agree?
November 23rd, 2023 / 4:05 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, I agree that having a fiscal anchor is very helpful. It's helpful for Canadians and it's helpful for financial markets, but first and foremost, it's helpful for the government itself when it has to make significant decisions and trade-offs when faced with various demands. It's something that is very helpful.
One thing that is important with a fiscal anchor is that, once you decide on one, you keep committed to the same to ensure that the credibility of that fiscal anchor is maintained.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Thank you.
In the Treasury Board Secretariat, there are contained some settlements, votes 1b and 10b, that we're discussing related to the Phoenix pay system. As you know, this saga seems to continue—it's never-ending—from a previous government as well.
Can you comment on what these payments are for and how long you foresee this being an issue?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I don't have the numbers off the top of my head.
As to how long these payments should continue, I would hope that we are close to seeing the end, but I would be very optimistic, I think, if I were to say that based on past experience.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
As we look at and consider our future economic position, it's one thing to look at this point in time. The Auditor General looks into things that have taken place in the past, but your role is very much forward thinking. It's a proactive situation. You're looking at what it is that we're going to be doing and how we're going to be able to withstand and prepare in regard to what's happening in the future.
I'm now thinking about the benefits to the elderly, specifically in the medium term. There were increases in cost as a result, because of the aging population, and it's had an effect on our long-term projections. Do you see that effect?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, we see expenditures related to old age security and the guaranteed income supplement rising as the population gets older, and with inflation, of course. However, the main driver is an aging population. We also see the need for expenditures in the health care sector to increase as the population ages.
However, given that, at the federal level, most of the government's expenditures consist of transfer payments to the provinces that are set in legislation and grow in line with inflation, or GDP growth. It is the same with old age security, which grows with population growth and inflation.
We see that the government's fiscal position, in the absence of further measures, should still be sustainable in an environment where interest rates would return to a more normal level.
Liberal
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
They seem to be in agreement, so far, with the credit rating being very solid.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Thank you.
When I look at accounting—and it is getting a bit more convoluted here—it's worth discussing the different methods of accounting for the budget and public accounts, where you use accrual accounting. In estimates, we use the modified cash accounting.
Can you briefly explain the two different methods, and why they apply here?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Accrual accounting, for people who may not be familiar with this method, recognizes the expenditures as they materialize. It's not necessarily when you write the cheque, but if you know that you owe amounts to a specific provider or you have a liability, for example, with respect to future benefits, you have to recognize that expenditure.
When you get an asset.... For example, when you know you are buying warships, you transfer cash and you get an asset. It doesn't affect the bottom line, the deficit, in the first year you transferred. You paid for the warship, but you got an asset, so it does not affect the deficit or the surplus.
Modified cash accounting means that, when you have to pay an amount, you have to seek funding, which is—
Conservative
The Chair Conservative Kelly McCauley
I apologize, Mr. Giroux. I realize you probably need two more weeks to try to explain our estimates process, but we're out of time.
Next, we have Mrs. Vignola for two and a half minutes, please.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you very much, Mr. Chair.
I'd like to get back to my question about the Canada emergency benefit account, or CEBA.
I know it's hard, but I'd like you to tell me if you think tens of thousands of bankruptcies would ultimately have a greater impact on the economy than extending the CEBA deadline to December 31, 2024.