Government Operations Committee on Sept. 16th, 2025

[The Chair, Conservative, Kelly McCauley]

Good morning, everyone. I call the meeting to order.

Of course, that is the signal to our friends with the media to turn off their cameras and head out.

Thank you very much for joining us today.

Welcome to meeting number two of the House of Commons Standing Committee on Government Operations and Estimates, widely known around the world as the mighty OGGO, of course, the only committee that matters.

Before we continue, I have just a couple of housekeeping items, because we have some new members.

One is just a reminder to keep your headpieces away from your microphones so that we can protect the hearing of our very valued interpreters who are joining us today.

I have a couple of other things. We do operate OGGO somewhat informally compared to other committees, and if you're trying to get the chair's attention, we just ask that you put up your hand and wait until you're recognized before you start speaking, please.

We have our very first guest today. Pursuant to Standing Order 108(3)(c), we're holding a briefing with our interim Parliamentary Budget Officer, Mr. Jason Jacques, who has been with us many times over the years.

Congratulations on your appointment. Although I think we are disappointed that the government ignored the will of the committee in terms of our wish to extend Mr. Giroux's term, I have to say we're very pleased that you've been appointed as the interim PBO. We know you're very dedicated to the role and to the office. Congratulations. Welcome back to OGGO.

We'll open the floor with your opening statement, sir. Please go ahead.

[Jason Jacques, Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Thank you, Mr. Chair.

Good morning, distinguished members of the committee. Thank you for the invitation to appear before you today.

My name is Jason Jacques. I am honoured to serve Parliament as the interim Parliamentary Budget Officer. You have me for another 166 days unless the Prime Minister appoints somebody else for a seven-year term more quickly.

As I begin my term, I'd like to take a moment to acknowledge the work of my predecessor, Yves Giroux.

Mr. Giroux set high standards of excellence that were recognized by the Organisation for Economic Co-operation and Development, the OECD, which ranked Canada as the number one country in the world for independent tax institutions. The entire team at the Office of the Parliamentary Budget Officer, myself included, is determined to maintain the quality and integrity of the work he has done.

My primary message to this committee today is one of stability and continuity. Our office remains steadfastly committed to its core mandate: providing independent, non-partisan analysis of the nation's finances, the government's estimates and the Canadian economy.

Parliamentarians and the public can be confident that our work will continue without interruption. We will continue to provide the clear, accessible and transparent analysis that you expect from our office. Our work will always be guided by evidence and a firm commitment to supporting informed debate within these walls and across the country.

To that end, last week we released an analysis of the family wealth distribution. Later this week, we will publish an updated analysis of federal infrastructure spending. Next week, we will publish the economic and fiscal baseline for the country. In advance of the government's budget—budget 2025, whenever it's published—we think parliamentarians need to see a five-year forecast of where the nation's finances currently stand, so that they are well prepared to consider whatever the government decides to bring forward as part of its economic and fiscal plan.

We recognize that this committee and all of Parliament face key budgetary issues in the months ahead and that your decisions will impact all Canadians. To that end, I want to extend an invitation. Our door is open. We are here to support your work. We encourage you and your staff to reach out for briefings or with any questions you may have. We promise to be responsive, clear and—this is bolded in my opening remarks—impartial.

As committee members know, I have already reached out to their offices to provide them with information about our plans in the coming months.

Thank you for your time. I look forward to any questions you may have.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Jacques. I should have told you it has been customary in the past that the PBO brings doughnuts for the committee at his appearances.

Thanks very much.

We'll start with Mrs. Block for six minutes.

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

Thank you very much, Mr. Chair.

Good morning and welcome to our committee meeting today. I want to echo the chair's congratulations on your appointment as the interim Parliamentary Budget Officer. Of course, as you know, it was a Conservative government that created this office with a view to receiving that very impartial advice that you noted in your opening remarks. I look forward to working with you over the next six months. Hopefully the Prime Minister will see this appointment as being very important and look to putting someone in place on a permanent basis.

I want to get right to some of the questions that we have based on the reports that have been released to date. Would you agree that without a clear definition of what counts as operating spending, it's impossible to evaluate whether the government is on track to meet its fiscal anchors?

[Jason Jacques]

Officially, within the office, I don't know that the government currently has fiscal anchors, which, of course, causes the people I work with a considerable degree of concern at this point. As everyone knows, the government did have fiscal anchors. The previous minister of finance had the fiscal anchor of a ceiling of the annual deficit at 1% of GDP, along with the declining debt-to-GDP ratio. It's unclear where those stand. They haven't been reiterated by the current government to the best of my knowledge.

With respect to your point regarding the capital and the operating side, we haven't seen a clear definition of what would fall into capital and what would fall into operating. At this point, it's impossible for us, and for you as parliamentarians, to assess the likelihood or probability of the government hitting any fiscal target.

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

Thank you very much.

Do you have any idea of when the government will give a concrete definition of its spending criteria and what its fiscal anchors may be, so that you can do the very important work of monitoring the government's spending plans?

[Jason Jacques]

The short answer is no. There's a longer answer I can give you if you have more time, which is that we're waiting for budget 2025 at this point. Traditionally what happens is all is revealed in a 400- to 500-page document, and at that point we will have a clear sense of precisely what the fiscal anchors are. If the fiscal anchor continues to be balancing an operating budget, hopefully at that point there will be a definition of what that operating budget actually means.

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

Thank you.

If the government is impeding the PBO from fulfilling its mandate as a fiscal monitor without any fiscal anchors being identified—a budget that has not been presented yet, and it sounds like it's going to be pushed back even further than what the Prime Minister promised earlier—would you say it creates more uncertainty for potential business investment in Canada?

[Jason Jacques]

The uncertainty is always elevated in a period of low transparency. That goes without saying and is well researched and well demonstrated. That's why the Parliamentary Budget Office was created and set up in 2008. In these situations where, for whatever reason, there ends up being a gap in fiscal transparency, not only will the Parliamentary Budget Office point out that potentially we're operating with incredibly low levels of fiscal transparency, which will feed into business uncertainty among other things, but the Parliamentary Budget Office can actually step in and try to alleviate part of that, which is why next week we're going to be publishing our economic and fiscal baseline: a new five-year forecast, our outlook on the economy, as well as our outlook on the deficit figures for the next five years. Hopefully that will alleviate some of the uncertainty.

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

My next question is this: If the government were to balance its operating budget but continue to increase its inflationary spending, who would end up paying for that spending?

[Jason Jacques]

I would say two things. The short answer to your question is there's only one: the taxpayer. The people of Canada work hard. They send money to Ottawa, which all of you get to vote on and decide how it's going to be spent across the country. If there's additional money borrowed, obviously it has to be paid back at some point, and the people of Canada are going to do that.

I would also circle back to my previous answer with respect to the operating and capital budgets. We currently don't have a definition of the operating budget, so it's purely speculation on anybody's part at this point: What would happen should the operating budget, which has not been defined by the government, be balanced?

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Gaheer, go ahead, please.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Chair.

Sir, I'd like to echo calls from the opposition, and the chair as well, in congratulating you on your interim appointment.

Regarding the line of questions that was just asked, what was the old definition of “operating expenses” that was used beforehand?

[Jason Jacques]

We published a note on this over the course of the summer. There ends up being a standard definition that I think a lot of people will be familiar with in the budget. In the budget, when you're looking at the expense table, you come down and there's a line called “operating expenses”. Typically, those operating expenses, as currently defined by the Government of Canada, primarily include things like salaries and things related to salaries, like professional services expenses, utilities or anything related to the ongoing operations of the government.

Again, anything I would say at this point is speculation, because there hasn't been an official backgrounder issued by the Government of Canada, by the Department of Finance, regarding what the new definition could potentially be. However, that's the traditional definition that all of us are familiar with.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

The minister announced that we're going to increase capital expenses as opposed to operating expenses, so how might the separation of operating and capital expenses affect the transparency of federal spending?

[Jason Jacques]

To go back to a point I made earlier, I think the first aspect is how the terms are actually defined. We currently have definitions of “operating capital” that show up in the budget—people are familiar with it—and they show up in the public accounts, audited by my counterpart, the Auditor General of Canada. If these terms are defined differently to mean different things, there obviously ends up being a risk that people end up being confused, or the terms end up being conflated, even though they mean slightly different things. That's obviously a risk and something we're going to pay attention to. It's something that the Department of Finance and the government are aware of.

I was appointed by the Prime Minister, and I don't need to make his arguments for him, but potentially, someone taking more time to come up with a comprehensive and well-thought-out definition of what “operating” and “capital” look like before rolling out a new definition and a new way of presenting things isn't a bad thing.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

In your viewpoint, were those definitions dated and should they be updated?

[Jason Jacques]

Those definitions primarily come from international accounting standards. In terms of the existing definitions, a point that we made in the report that we published in the summer is that, from our starting point, everyone around the world is familiar with them. The Government of Canada doesn't control those definitions, so they're impartial and independent. If you run a business or you're a small business person, you're familiar with those definitions as well. For us that means that those are the definitions we're going to focus on.

Certainly, I've been here for 17 years, and, from my perspective, parliamentarians get this sense of a bottom line. Are you borrowing more or less money? Do you have a deficit? Do you have a surplus? We haven't had a surplus in a while, so we haven't had to talk about that. Changing the definitions at this point to say, “Well, do you have a surplus in your operating budget versus your capital budget?” will definitely be a challenge, for nomenclature, in trying to explain things.

Also, something members of the committee obviously are aware of is that there aren't a lot of people on the Hill who have a detailed financial background. There are really smart people. Obviously, parliamentarians are smart, committed and willing to put in the time and the effort, otherwise they wouldn't be here. At the same time, they don't have time to go into excruciating detail around the international financial standards definition of what an operating budget is and then do the cross-comparison to something else. That, I guess, is why we're here. Ultimately, whenever the government ends up with a definition, and whatever definition they end up with, the Parliamentary Budget Office will be here to explain it in the best way we know how, to support parliamentarians.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

It's been a long time since I took accounting as an undergraduate—maybe not that long—but I remember that there were several different standards, actually. There was an international standard and there was an American standard. There was a bit of a tussle between the two on which one should reign supreme. Is it still the case that there are several definitions floating around?

I understand the benefit of the continuity of keeping a certain definition, but in today's day and age, to model today's spending expenditures, I think you also mentioned that it's maybe not the worst thing to update those definitions.

[Jason Jacques]

No, not at all. I think, to answer that, because I'm getting the evil eye from the chair, I'll cut to what I think is the most—

[The Chair, Conservative, Kelly McCauley]

It's because of the doughnuts.

[Voices]

Oh, oh!

[Jason Jacques]

We can have a geeky discussion about accounting standards. Is it a bad thing to update standards in the presentation of documents? Absolutely not.

If the approach internally within the government is to move to a decision-making approach where internally within the public service they're going to be focusing on operating versus capital, I would hope that they would be presenting that in the budget, so that people could actually understand how the government is making decisions and what it looks like. It would be non-transparent, or would undermine transparency, to have one way of making decisions inside the government and to then present a set of financial statements or a set of financial information without incorporating what the government knows internally.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

There's always room for improvement, right?

[Jason Jacques]

Yes.