Government Operations Committee on Sept. 16th, 2025

[The Chair, Conservative, Kelly McCauley]

Thank you, sir.

We'll go to Ms. Gaudreau for six minutes.

Go ahead, please.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you, Mr. Chair.

Mr. Jacques, it's a privilege to have you here today. I am acutely aware of our current political reality. I eagerly await your economic report next week. That will help us with our own work.

That being said, I have a number of questions for you, because I need clarification. It must be said, the Prime Minister told us there would be a budget featuring both austerity and investments.

I'm thinking of my fellow Canadians. Entrepreneurs are asking me how we will manage to strike some kind of balance in the future.

Given all the imperatives required for financial stability and economic development, how can we achieve a diligent fiscal policy?

[Jason Jacques]

Thank you very much for your question.

I think the Prime Minister or officials from the Department of Finance would be better placed to answer it, but I can imagine it would be difficult. As we discussed before the meeting, this is a very difficult time economically. There was a loss of 100,000 jobs over the summer. In addition, as we saw this morning, the consumer price index has risen. In the current economic context, it is difficult.

In addition, given the financial context, it is clearly much more difficult now compared to the situation before the election. The deficit will be higher than we previously forecasted. MPs and senators will have to find a solution to change and reshape Canada's economy to ensure sustainable long-term growth. It's important to understand that our supposed crucial economic relationship with the United States is over. To quote the Prime Minister, there was a breakdown.

As you said, it's going to be incredibly difficult. These are not normal times. In my opinion, the current economic context is more difficult than the one we experienced during the pandemic and in 2008 and 2001.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

I think your 17 years of experience will really help enlighten us. We hope to be very satisfied, but I'm not concerned at all.

As for the much-discussed debt-to-GDP ratio, they say that ours is the best in the G7. Is that a smokescreen? Since there's a lot of talk about taxation, the federal budget and the debt rate, what do voters, citizens, need to know about this topic?

[Jason Jacques]

For us, the debt-to-GDP ratio is a simple and important number. I think that's the case for most people and governments around the world. It's a way to quickly assess whether or not the Government of Canada's current situation is stable. There are two aspects to that number: There is debt, meaning all the payments made in the past, and the size of Canada's economy. For us, this aspect is important because it underpins economic growth.

As I mentioned, in the past, Canada followed what was happening with the U.S. economy, because of the supposed crucial relationship it had with that country. That is no longer the case today. As you know, all businesses are conducting their own assessments. Over the past years and decades, we exported many goods and services to the United States. That will no longer be the case in the future.

We need to restructure and grow our economy to ensure that growth remains high and that the debt-to-GDP ratio stays the same or is reduced. We also have to ensure that people's standard of living remains high and that it rises.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

I have another question for you during my next turn.

[The Chair, Conservative, Kelly McCauley]

Thanks.

We'll now go to our five-minute round with Mr. Patzer.

Just so you know, when we get back to the Bloc, instead of a two-and-a-half-minute round, it will be a five-minute round because I'm combining the next two rounds for her. We'll skip her in the next round.

Mr. Patzer, go ahead.

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

Thank you very much, Mr. Chair.

Thank you very much, Mr. Jacques, for being here.

I'm just wondering whether the government has consulted your office yet when it comes to the development of a budget for this fall.

[Jason Jacques]

Yes, the government has reached out to us. Department of Finance officials reached out to us last week. We had a very productive, although short, discussion with them with respect to some of their ideas around the operating and capital budget definitions.

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

There's a rumour that hit the news yesterday and today about the government possibly delaying the budget until November. Does that complicate things for you, or does that throw any wrenches into the gears in terms of how you're able to do your job and able to effectively provide that transparency for taxpayers?

[Jason Jacques]

The short answer is no. It doesn't.

Again, I go back to that being the reason our office was created. If the government wants to take 10 months before it puts up an Excel spreadsheet that indicates what its deficit estimates are for the next five years, that's great for us. We will go in and fill the space.

Next week, you're going to see a five-year forecast from us. If the government wants to go 12 months without producing a budget, as a citizen I would feel a bit uncomfortable, but as somebody who works in the parliamentary budget office, I would say that's great for us, because we will occupy all of the space it decides to give up.

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

That's interesting.

Did you get a chance to look at the Liberals' campaign after they were elected and formed government? Did you get a chance to look at the spending announcements and the promises and give a costing analysis of that? This is post-election, not pre-election.

[Jason Jacques]

No, we haven't gone through the platform.

As you may be aware, one aspect of our mandate is to cost electoral promises at the request of a particular political party. We did some of that work, as you can see on our website, for the Liberal Party of Canada. Typically, we do not circle back after the election to cost the entire platform, because there's usually a bit of space between what's in the platform and what ultimately ends up being implemented.

Especially given the current period of uncertainty, we wanted to make sure that we were focused on what Parliament is actually voting on, because once the election is over, our mandate is to focus squarely on the decisions that parliamentarians are making. It's great to have something in the platform, but if you all—vous—are not voting on it, from our perspective it's a waste of everybody's time.

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

Okay.

There was a request, I guess, by the Prime Minister to cabinet, to find $25 billion in savings by this fall. How hard would it be for the government to find $25 billion in savings by the fall?

[Jason Jacques]

Yes, I don't know. I work for the parliamentary budget office, not the parliamentary spending restraint office.

There's one thing I will say. For the first 10 years of my career I worked in the federal public service in Finance, the Privy Council Office, the Treasury Board Secretariat and the Bank of Canada. I spent a lot of time working on restraint exercises. The timelines are tight. You can certainly find money.

The timelines are very, very tight that the government has in mind, and given the order of magnitude of the funding that they're looking at.... It doesn't mean it can't be done. It just means that, to the best of my knowledge, it is a significant undertaking, and potentially.... I think the public service is certainly up to the challenge, but if you go back to the 2012 restraint exercise, in that situation we had the 2011 election, Parliament came back in June, direction was provided to the public service at the end of June, and then we had a budget in March of the subsequent year, 2012.

In that situation, you were looking at around a 5% spending cut as opposed to.... Now, as I understand it, it's 7.5%, going up to 15%. In that situation, for the 5% spending cut, you were looking at nine to 10 months.

You can do it, but it will be tight for them.

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

It will make it tough when the Prime Minister comes out and announces $13 billion in a new bureaucracy for a housing fund. There's $4 billion for Ukraine and there's $9 billion in defence spending. He just announced $9.5 billion more in Toronto the other week. I mean, on the one hand, he's saying to find $25 billion in savings, but on the other hand, he has announced more than that in new spending.

I guess that in November, when you get the budget, maybe you'll get a chance to see how that's going to pan out. Does that mixed signal make it hard for your office to find clarity in how you're going to account for that?

[The Chair, Conservative, Kelly McCauley]

There is time for a yes-or-no answer. Perhaps we can save it for the next round.

[Jason Jacques]

No. You'll see that we're tracking all of these announcements. I would say that the Department of Finance is very helpful in providing detailed information with respect to the spending—over a five-year period of time—about what each of these announcements is going to cost, and we account for all of it and we keep track of it. You'll see it next week with our updated economic and fiscal outlook.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Ms. Sudds, please go ahead.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you, Chair.

Thank you so much, Mr. Jacques, for being with us today and for stepping up in this new capacity. I'm wishing you well in your 166 days. That's a short amount of time to get a lot done, I know.

We've spoken a bit this morning about the uncertainty that I think is certainly felt in the economy right now and, I would say, particularly in light of the trade war, in both the U.S. and China, and the implications of that in our economy. We've heard repeatedly from our Prime Minister about the efforts to build Canada strong, to build the strongest economy in the G7, with really a focus on making the necessary investments in Canadians and our economy to be able to achieve that and to support us throughout these times.

You mentioned in one of your comments the key to our prosperity being, really, the size of the economy. As we move towards a budget shortly, I'm wondering what or how you believe the budget can contribute, first of all, to mitigating that uncertainty, and second, to growing the economy.

[Jason Jacques]

I think most people in the room would not be familiar with the seminal piece of work that the Prime Minister put together when he was the associate deputy minister of finance in 2005, called “A Plan for Growth and Prosperity”, which was published by the Department of Finance.

Going back to the Prime Minister's own microeconomic framework.... There are two parts, two key things, in an economy. First, there are people. We have, in Canada, about 41 million people who are hard-working, diligent and really talented. Then you have how they're organized and what they have to work with, so you have labour, and then you have the productivity and how you support those people.

Anything you can do at this point.... I think, based upon the government's statements, it's focused more on the productivity side: what tools you provide to people, how you organize them with different types of businesses, and what type of additional infrastructure needs to be put in place so that people can be more productive, earn bigger paycheques and pay more taxes so that we can reduce that deficit.

I think those are probably some of the most important things that I expect to see coming out of budget 2025, as well as something you alluded to on the people side: investments or supports for people for retraining. I'm around for 166 days. Following that, I hope to go back to my old job, unless Parliament deigns to keep me around for longer. If I'm looking for a new job, I'm definitely going to be counting on employment insurance and some of the retraining programs. I'm 50 years old; I think I still have a couple of years left to make a contribution to the economy. That's something else that we're going to be looking at for budget 2025, because of 100,000 involuntary job losses over the summer. The labour market is a lagging indicator, so all of those people are going to be looking for new jobs. They're not necessarily going to find jobs in the fields they were in previously, in what they were trained for. I think all of us know that that's where the government can step in and provide them with some sort of support so that they can make the best contribution possible to the Canadian economy and society.

[Jenna Sudds, Liberal, Kanata, ON]

Just last week, Minister Patty Hajdu made an announcement about retraining and being able to be there for Canadians as the economy shifts and as the job market shifts. I think a really key component of that as our government makes these investments, whether those are through the major projects office and major infrastructure projects or also here in Ottawa with the public service.... I would agree that the talent piece is a big piece, and so is the retraining, as we've seen those commitments.

I'll leave it at that, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Ms. Gaudreau, you have five minutes, please.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you very much, Mr. Chair.

We're in the midst of challenging times. We're all aware of that. I am concerned, as are my fellow Canadians. They told me so when they realized how Bill C‑5 had been passed, that is to say by imposing closure.

Now they're asking us what will happen with the budget. Will the budget process become a ratification exercise rather than a true democratic oversight? Will Parliament be reduced to a mere recording chamber?

I would like to hear your wishes, because people are worried. They don't want things to be done at the expense of democracy.

[Jason Jacques]

I started working here 17 years ago. In all honesty, I share those concerns.

We are indeed living in an era of incredible transformation. It is therefore important to act transparently on Parliament Hill. Having debates among MPs who come from all over the world and who have a great deal of experience is a way to ensure that the government is given the mandate to implement the change. The Organisation for Economic Co-operation and Development, the OECD, has published a few studies on the government's ability to implement changes, such as budget cuts, economic restructuring measures or cuts to transfers to certain organizations to redirect funds to other organizations. What matters most is the public's confidence in the transparency of the process.

That, I think, reflects the importance of the work done by the House of Commons Standing Committee on Finance. I saw that there were over 1,000 recommendations for changes that people want to see in the budget. That's why you're here, for democracy.