Government Operations Committee on Sept. 16th, 2025

[Jason Jacques]

We will also have a housing forecast as part of our economic and fiscal outlook, which will be tabled next Thursday. Without giving you precise numbers, we do have a slowdown in the housing market. In the housing market over the next 24 months or so, we think a slowdown will happen on a national basis. For the precise details, stay tuned until next Thursday at 9 a.m.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Will those details include the factors that are leading to the decline?

[Jason Jacques]

It won't focus exclusively on housing, but what you will see in housing are the traditional factors that one would expect at this point.

Obviously, there's a supply-side story of the number of homes that you can actually get at this point. There are obviously constraints on that side that the government seems to recognize and seems to be moving on. On the demand side, you have the traditional factor of interest rates: How easy is it to get a mortgage, and how much do those mortgages cost? Then there's the labour market: Do you have a job, so that when you go into the bank you actually have a T4 slip or a letter from your employer that says, “This person has this amount of money”?

It will incorporate those things, and we will certainly be able to speak to them.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

I have one last quick question for you here before I pass it on to my colleague.

Briefly, did the government ever contact or consult with the PBO before moving forward with their emissions cap or production cap? Did they contact your office before implementing it?

[Jason Jacques]

Similar to other reports, again, we were in contact with the technical experts in various government departments with respect to the modelling that they do.

In terms of contacting us in advance and going forward and consulting with us, I'd have to check. It would be exceptional were that the case. The government typically doesn't consult us. They usually know what our opinion is going to be, and they're usually not interested, but I'll check on that and get back to you.

Again, there's the government and then there are the non-partisan technical experts in the public service. It's all the same geeky people who have studied the same things and then engage in the same types of modelling or use the same calculators. We're always talking. There are only 36 of us, and there are 360,000 of them, so we're always consulting with them to say, “Oh, well, this is how we're planning on doing it. Should we round in one direction or another?” There's that type of technical consultation.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Thank you very much. I'll pass my time to Mr. Gill.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Patzer.

Mr. Jacques, don't feel bad. They don't consult with me either on these things.

Mr. Gill, go ahead, please. Welcome to OGGO.

[Harb Gill, Conservative, Windsor West, ON]

Thank you, sir.

Thank you for being here, Mr. Jacques.

You touched on quite a few points that are of interest to me, like uncertainty, stability, continuity and the fact that we won't be going back to what we had with the U.S. before the second term of Mr. Trump.

The issue I have is that we have a very high unemployment rate, close to 11%, so you're right; it sucks over there. There's very high youth unemployment as well. Where do we go from here if the U.S. is not available to us?

Secondly, are we truly a transparent nation when it comes to sharing our fiscal issues in terms of whether we are responsible and accountable? Are we truly transparent, so that we give folks out there confidence to come here and invest, or is that one of the reasons a lot of capital is leaving our country and going south of the border?

Thank you, sir.

[Jason Jacques]

In terms of the policy question on where we go, again, I'm the interim Parliamentary Budget Officer, not the interim parliamentary policy officer. That said, to go back to the seminal work by the Prime Minister when he was the associate deputy minister of finance in 2005, one key aspect that he highlighted in that microeconomic framework was the idea that you needed to build other trading relationships. Whether it's purely open trade, you need to find other markets where people want to buy our goods or benefit from buying our goods and services. I think you see that happening right now. The government's been very.... Even beyond the current government, if you roll back the clock over the past 20 years, there's been a really strong emphasis on building, signing and negotiating those other trade relationships.

In terms of fiscal issues and transparency, I'll say this on the record. I think Canada has “high-class problems” when it comes to fiscal transparency. That's not to say that you can do away with the parliamentary budget office, because that's one reason that we have high-class problems as opposed to more severe problems. I would say that, when you look at other jurisdictions, we're actually a lot further ahead. It's relative. Things are tight. There's definitely room for improvement. We're not France. I don't know whether anybody else has been following what's been happening with French 10-year bonds over the past two weeks. That's not here.

To go back to a point I made earlier with respect to the ratings agencies and the quantitative versus qualitative elements, there's still a fair amount of qualitative confidence in the way that we manage. It's not to say that things are good and are going to automatically get better. At the same time, over the past.... Since I've been working, Canada has demonstrated a remarkable ability to reinvent itself during recessions. Canadians and entrepreneurs have demonstrated their willingness to pick themselves up off the floor, deal with shocks, retool and re-engineer their businesses, cut back, hire more people and reorient themselves. I don't know, but on my end, I'm confident.

Regardless of the rupture—and again, to go back to the basic framework of the Canadian economy—it's people. That's one, and then it's how they're organized. We have the same people, the exact same talented, intrepid individuals. It's a question of, “Well, we are organized in one way—to sell, primarily, and be integrated with the U.S.—and now we need to organize ourselves in another way.” The question, in budget 2025, is this: How is that reorganization going to be supported?

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Colleagues, I'm going to exercise the chair's prerogative and ask a few questions myself, if you don't mind.

I have just a couple of quick questions, Mr. Jacques. First of all, thank you very much for your answers here today.

Is the PBO under the 15% cut directive, for lack of better words?

[Jason Jacques]

No, we are not. We were exempted from the government's comprehensive expenditure review. I would say that, shortly after I was appointed, during one of the first all-staff meetings that we held, shortly after we had a discussion about the 100,000 job losses across the economy over the course of the summer, there was a feeling that we actually should be doing more. That's why we decided to voluntarily offer up a 5% cut to our budget, starting in 2026-27—the year ahead—and on an ongoing basis. That's going to be immediate.

As part of that, there's also going to be a fairly significant down payment from the people who can afford it most, and they're the executives at the top. The position of the Parliamentary Budget Officer, interim or otherwise, will have a $50,000 reduction in its salary, starting immediately.

[The Chair, Conservative, Kelly McCauley]

Is it for you, by you, your executive, or is this all on you?

[Jason Jacques]

That's all on me.

[The Chair, Conservative, Kelly McCauley]

That's remarkable.

[Jason Jacques]

In comparison to where we were, even six or eight months ago, the context has changed. I take the Prime Minister at his word that it's going to require sacrifices from all of us. I'd say, certainly on my end, that I'm in an incredibly privileged situation in which I can take a $50,000 pay cut, and hopefully it offsets some of the operating deficit. The 100,000 people who were laid off over the course of the summer have less say, and potentially, for a lot of them, they don't have $50,000 that they can kick into the consolidated revenue fund, the government's coffers, to offset the deficit.

[The Chair, Conservative, Kelly McCauley]

Thank you for that.

You mentioned that you met with Finance regarding the budget. Whom did you meet with? You mentioned it was a short meeting. What was the general gist of the meeting?

[Jason Jacques]

We met with Department of Finance officials, and the focus of the meeting was their ideas around the capital and operating budget definitions. Some people may recall that the Liberal Party of Canada's platform indicated that they would be consulting with the parliamentary budget office and that our organization would play a role in evaluating or assessing the new definitions. That was part of the consultation. It was squarely focused on that.

[The Chair, Conservative, Kelly McCauley]

Do you get the sense that there will be a separate appendix, like we have for other matters within the budget, better explaining the capital and operating breakdown?

[Jason Jacques]

I don't know. It wasn't a presentation. It was still relatively early days. They indicated that they were in the midst of consulting with others. I don't know where they're ultimately going to end up.

We provided feedback to them, consistent with the observations I made today. One observation I made was that it might be easier to use the approach of the U.K. They could also take Toronto's or Quebec's. Another was that when you're redefining terms that parliamentarians haven't seen, it has the potential to create additional uncertainty, because people haven't seen them previously. There's also the importance of having a fiscal anchor.

Based on what's currently being considered, regardless of how you split the funding allocations and what buckets you put them into, the most important aspect is whether the nation's finances are sustainable. Those are the considerations that we highlighted to them.

[The Chair, Conservative, Kelly McCauley]

I have two quick final questions, and then I'll let you return to your day.

You mentioned that you meet with the rating agencies often. Have they expressed concerns at all about the change in the budget, transparency issues around that or a lack of a fiscal anchor?

[Jason Jacques]

I wouldn't say they have concerns, but they have questions. Everyone has questions. Again, it's an odd context for everybody right now. In some situations, it's more so in the case of Canada, because of the timing around the election.

They have questions. I definitely wouldn't characterize them as concerns.

Everyone knows what the ratings agencies are, so you can definitely invite them in, read their material and ask them questions about how they feel about it.

[The Chair, Conservative, Kelly McCauley]

I'm on to my very last question.

We've seen a back-and-forth about the 15% and reorganization among FTEs in the public service. I think the Prime Minister just went back to saying that attrition is how they will find cuts.

Is there a concern about that? If it's based on attrition, we could end up with.... We're looking to try to grow the RCMP, but we've put a cap on hiring and there's a disproportionate number of retirees from that department, or the CBSA or defence procurement. Is there a concern that we're going to be basing this on attrition with a cap that could actually hurt services and the ability of the government to operate?

[Jason Jacques]

The more constraints you put on changing government operations, the harder it is to implement and the greater the likelihood is that there are unexpected outcomes. In the case of attrition, based on what you described, that's certainly a possibility.

I would say more broadly, because there have also been statements about looking at lower-priority areas or less efficient areas, that attrition is potentially part of that. I don't know, but that approach is typically.... When you look at other jurisdictions, that's what they encourage you to focus on.

I know everybody's read the Prime Minister's mandate letter with the seven priorities. He's been very clear that he expects the entire public service to be focusing on those priorities, and if you're not part of those priorities, you'd better figure out how you're going to be contributing to them. Typically, that's a better way of going about things. It's an easier way of going about things, especially if you want to implement a lot of change across government in a very short period of time.

[The Chair, Conservative, Kelly McCauley]

Thank you for your time with us. We will excuse you, although I think the members will probably want to chat with you afterwards.

We're going to just be two quick minutes, everyone.

On Thursday, we're having a subcommittee meeting, and then we're going to plan out our future meetings from that. We don't have anything set for Tuesday and Thursday next week. The subcommittee will decide a way forward, but we won't be able to get witnesses or a study plan that fast, so I'm seeking everyone's permission to leave it with me and the clerk to fill in next week. I'm thinking of the Auditor General. She has emailed all of us with information about three of her most recent study reports that overlap with OGGO's, so I'm thinking of bringing her in. We may also have a briefing from the Public Service Integrity Commissioner, who ostensibly reports to OGGO. We were trying to get her before, but she's been away. Perhaps we could invite the procurement ombudsman for an update, and others who are related to OGGO.

If everyone is fine with that, we'll go ahead for next Tuesday and Thursday.

[Some hon. members]

Agreed.