Evidence of meeting #29 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was parliamentarians.
A video is available from Parliament.
Analyst, Office of the Parliamentary Budget Officer
It could be higher as part of total frozen allotments, but we won't know until the public accounts are tabled.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
Right, but if it's only 27%.... I know, Mr. Jacques, that you alluded earlier to how you're not going to be harassing public servants to get that information—to your point, they have another job to do as well—but that could potentially be a lot of money. For Canadians trying to get clarity and understanding around how the budget is going to work, and following up on what Mrs. Block was saying about capital and expenditure, if there's $7.8 billion frozen there and it's not even the total amount of what we know there is, as far as transparency goes there are questions that remain.
Is this a standard practice? Is this something that it's advised to try not to do, or is this just a widely accepted practice, that money can be shuffled across departments or frozen and bumped year over year? We hear a lot of reannouncements. We hear a lot of funding announcements that are, again, reannouncements of old funding. This is a regular thing that happens, and yet we see $7.8 billion in frozen allotments.
Are you getting my drift with what I'm trying to ask around transparency here? I think Canadians have some concern about that. Do you have that concern?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I definitely take your point with respect to the frozen allotments and the ultimate number being higher in the public accounts. I spent the first 10 years of my career, for sins that my father committed probably, inside the core federal public service, including at the Treasury Board Secretariat. Based upon what I saw at that point, there are really good justifications for establishing frozen allotments, especially in situations where there is an announcement made potentially in the budget. Ultimately, when a detailed proposal is submitted to the Treasury Board, potentially it's not fully cooked and potentially ministers kick it back and want to look at it in greater detail. It actually demonstrates a sign of overall prudence and care in the management of taxpayer resources.
In terms of additional transparency, on our end it really comes down to our priorities. Again, our mandate is to promote fiscal transparency. In order to have infinite fiscal transparency, the government wouldn't get anything done. You'd have too many public servants running around trying to generate information for us to analyze. The trade-off really becomes one of what's a priority for parliamentarians. There are only so many hours in the day, and if it's a priority for this committee to dig deep and go into detail around frozen allotments and there's a motion passed by this committee—and I've mentioned this at least five or six times during the 24 committee appearances since September—it's a priority for us.
We have about 40 things on the go on the work plan at any given time, and our ability to trade off and determine whether something is going to take longer or whether we're going to move it ahead and address it more quickly is based upon the interests of parliamentarians. Again, if it's a really bad itch that you need to scratch at this point and your colleagues agree, then that's something we'd be happy to look at.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
In your report and in the research you did, do you know what the breakdown would be by department of what those frozen allotments are? Is there one department for which this is a bigger thing than for others? I know it's all through the Treasury Board, but if ministers are sending money back or not spending the money, is there one that's a greater offender than the others?
Analyst, Office of the Parliamentary Budget Officer
I may not have the numbers on hand, but we can definitely take a look at frozen allotments per organization and figure out which departments make up the bulk of what's being re-profiled.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
Would that be pretty simple with the data that you have available?
Analyst, Office of the Parliamentary Budget Officer
Yes. We wouldn't be able to—
Conservative
The Chair Conservative Kelly McCauley
That's our time. If you can send that to the clerk, that would be appreciated.
Mr. Gasparro, go ahead, please.
Liberal
Vince Gasparro Liberal Eglinton—Lawrence, ON
Thank you, Chair.
Statistics Canada reported this today, and it was reported more widely by Bloomberg that “Foreign direct investment into Canada jumped in the fourth quarter...to the highest level in 18 years”—that's since approximately 2007—totalling $25.1 billion between October and December 2025.
I want to pivot off that foreign direct investment figure and relate it to a comment you made earlier, sir, in regard to the Canadian economy growing, with our population staying flat in 2025 and 2026. Can you drill down a bit on our productivity growth?
I would then like to follow up with a forward-looking view from you in regard to where you see productivity gains coming from within our economy.
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
In terms of today's foreign direct investment release, obviously it's good news, and all of us should take what we can get at this point. We are definitely thankful for any greenery we can see poking up through the snow, especially in cold Ottawa.
More broadly speaking, in terms of the economy itself, I always like to think of the economy in this way. You have people who work. If you count the number of people between the ages of 18 and 64 within the working-age population, that's been pretty much flat over the past year. We expect it's going to be flat in 2026, at least based upon our estimates from this morning. Then, for the people who are working, there is the level of effort they're engaging in, presuming they have jobs. Then you have the final component, which you highlighted, which is productivity.
Productivity growth in Canada has been uneven since the pandemic, so it's been pretty volatile. It wasn't particularly strong. We saw a reduction of growth in productivity over the previous decade or so, which I believe led the deputy governor of the Bank of Canada to highlight that as a significant challenge for Canadians and for the Canadian economy.
In terms of our economic modelling, I would say that in the short term, looking at our most recent economic and fiscal outlook, we do continue to have some unevenness in growth in the Canadian economy. There's a lot going on in terms of changes. On the demographic side, we had substantial increases in the size of the population. It's now flat and returning to something more normal.
There's a lot of uncertainty with respect to trade agreements. The trade data has been particularly volatile at this point. We do have what I would characterize as a very defensible assumption that, over the medium term, looking at year three and year four, we would start to return to productivity growth and economic growth that looks like something more akin to what we saw prior to the pandemic. Again, the underlying assumption is that growth in the economy and productivity growth are driven by the people in the Canadian economy who work, who start businesses and who operate those businesses.
We still have the same people in the economy. They've demonstrated their resilience in responding to shocks in the past, with various types of supports at the federal level and at the provincial level. At this point, there's no reason to assume that the same will not continue once we get through the sticky period we're currently in.
Liberal
Vince Gasparro Liberal Eglinton—Lawrence, ON
Thank you for that. I agree that our economy is based around our men and women within the Canadian economy.
I'll stick to the foreign direct investment and attracting capital into our economy. I'm making the natural assumption, sir, that you agree with our new government's view that strengthening trade relationships with reliable trading partners and allowing our businesses to get their goods and services into foreign markets is incredibly positive, and it is a prerequisite for us to have sustainable growth within our economy in the long term.
Conservative
The Chair Conservative Kelly McCauley
I'm afraid we're past our time, but maybe, Mr. Jacques, you can get back to your opinion in writing, if you so wish.
We'll have Madame Gaudreau for two and a half minutes, please.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Thank you, Mr. Chair.
Let's talk about old age security and the guaranteed income supplement.
The department is reducing its forecasts by $1.6 billion for old age security benefits and $773 million for the guaranteed income supplement. I can count, however, and the number of seniors is rising. Statistically, there is a discrepancy.
What can the discrepancy between the forecast and demographics tell us?
Director, Budgetary Analysis, Office of the Parliamentary Budget Officer
I would like to mention that this is a revision of the forecast made at the beginning of the year. At the beginning of the year, the main estimates committed $84 billion, if I remember correctly, for all three types of OAS payments combined. This is then a $1.5 billion readjustment.
The Treasury Board Secretariat gave the following explanation: ultimately, some seniors had higher incomes. We know that when a certain threshold is exceeded, OAS is clawed back. It is the same with the GIS, which is really for lower-income seniors.
This represents a little more than 1%, or perhaps 2%, of the estimate made at the beginning of the year. However, the budget already provides $88 billion for next year. The following year, the amount will rise to $94 billion or $95 billion. Clearly, this population is increasing, which will account for the significant increase in costs.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
I would really like to make the correlation and see if the curve stays the same or not.
Director, Budgetary Analysis, Office of the Parliamentary Budget Officer
I do not know whether there was a review of the $1.5 billion. Maybe the estimates were miscalculated at the beginning of the year or perhaps it happened out of an abundance of caution and ultimately it was determined that it would cost less.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
In any case, I feel uneasy about the purchasing power of seniors.
I have 30 seconds left. I would like to know why the budgeted amounts for national defence are in the supplementary estimates, and not in the main estimates. I would like your reply to be very brief, unfortunately for you.
Senior Analyst, Office of the Parliamentary Budget Officer
Sometimes programs evolve in such a way that they identify the need for money at this point in the year, whereas they didn't at the start of the year when the main estimates were being crafted.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much.
We're going to suspend in a moment. We also just have to approve a couple of quick budgets at the end.
Before we suspend to bring in our OECD guest, can I just ask quickly about vote 50 for $1 billion? It looks to me a lot like the old vote 40 slush fund from 2017-18, I think it was, when the government was asking Parliament to approve money without telling us what it was for. Do you have any thoughts on our inability to provide oversight of or actually even to know what we're voting on for that $1 billion?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I do recall the short-lived Treasury Board vote 40. I would go back to a point that I made earlier, that it is really up to parliamentarians to decide whether the government's justification for requesting additional flexibility through these central votes outweighs parliamentarians' ceding authority and control around the spending. Again, in the case of vote 40, the vote wording, to the best of my knowledge or recall, was quite similar.
Again, parliamentarians decide how they want to approve the money and how much discretion they want to provide to the government and whether that discretion is appropriate or not.
February 26th, 2026 / 12:25 p.m.
Conservative
The Chair Conservative Kelly McCauley
I recall the vote 40 debate, where government officials said it was presumptuous, on MPs' behalf, to know what they were voting on before the money.... This seems like another case of that. Considering that it takes five to 10 years to get anything to project basis with defence spending, I find it bizarre that they need $1 billion.
Can I just ask quickly, what happens on March 3 if we don't yet have a new PBO announced in that role?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Pursuant to the Parliament of Canada Act, there are several specific responsibilities tied directly to the individual who is the Parliamentary Budget Officer. That includes publishing reports, taking requests from parliamentarians and committees, and sending for or requesting information from government departments.
The office will still exist. We will still be doing work, but we will only be doing work on projects or requests that we've already received. All new requests submitted by parliamentarians will need to wait for a Parliamentary Budget Officer to officially receive them.
Conservative