Government Operations Committee on April 30th, 2026

[Annette Ryan]

It is an important question. I think it speaks to the core of that question of fiscal sustainability. That is a question that can be answered by looking at different scenarios, different tracks of key elements of the economy that generate revenues and drive costs to government.

In the spring economic update, the government did present a number of scenarios of what that might look like. I could turn to Jason if you want to hear more detail on the specifics of that.

Do you want to handle that one, Jason, on the scenarios and downside risks?

[Jason Jacques, Director General, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer]

To your point, the Government of Canada in the spring economic update, as well as the International Monetary Fund about two weeks ago, presented scenarios. I'll quote the Governor of the Bank of Canada in his press conference yesterday with the MPR. He said that, given the incredibly high level of uncertainty that the Canadian economy and the global economy face at this point, there is considerable downside risk. I think that's a quote from the title of chart 26 in the spring economic update.

That's why scenarios were presented. In those scenarios with prolonged geopolitical uncertainty and potentially prolonged supply shocks on the oil side, that feeds into potentially lower growth in the Canadian economy and higher prices for Canadians and in turn higher interest costs and higher interest rates.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

There is at least a reasonable probability of higher interest rates and potentially slower growth. If either, or both, of those events were to happen—I know what-ifs are difficult, but that's kind of your job a little bit—would you have any concern about the sustainability of Canada's finances?

[Annette Ryan]

The short answer, Mr. Lawrence, is yes.

In time, as we settle in and clear off some of the backlog in getting reports to parliamentarians and so on, we could talk about what it would look like to put some of those risks in a more concrete path. Maybe we could test some of these scenarios of just what the government's debt path would look like under different scenarios of interest rates. You can't negotiate away the charges on debt.

That's a really concrete set of the calculations that we could run for the committee. We would be happy to present something like that.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

I very much look forward to those reports.

I want to thank you. After a week's worth of work, to be able to answer that concretely is very much appreciated. I'm sure it's a tribute to the many hours you've already put in.

Thank you for validating some of the concerns I share that if the Canadian economy does experience internal or external shocks, perhaps the government spending rate will not be sustainable.

I'll move from fiscal sustainability to one of the government's claims during the election that said that they were going to spend less and invest more. From your review of the spring economic update, could you assess the validity of that claim?

[Annette Ryan]

On the question of whether the government will spend less, the spring economic update did mention the government's comprehensive expenditure reduction strategy. It was fairly limited in terms of the detail it provided. Of note, it did not provide estimates of savings in year one of its plan by department or by estimated reductions in full-time equivalents for federal employment.

We should keep in mind that currently, we're in year one, so the reductions this year are meant to be 7.5%, rising to 15% over three years. Absent that information by department, we will do our best to look at the main estimates that have already been tabled this year versus last, in terms of where might we see some of that spending less. We'll be coming back to you with that analysis. It's partial and limited. With the spending more, there's a lot more detail on that.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Through 11 years of this Liberal government, I'm used to a lack of detail on spending reductions or so-called spending restrictions.

You said that the amount of debt interest will go from $1,409 to $1,901 per Canadian. That's under current interest rates or the assumptions within the spring economic update. Is that correct?

That could go up dramatically as compound interest, as referred to by Einstein, is the most powerful force in the world. Is that right?

[Annette Ryan]

I'm going to say yes.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Welcome to OGGO, Ms. Martin. It's a day of welcoming new folks. The floor is yours for six minutes.

[Danielle Martin, Liberal, University—Rosedale, ON]

Thank you, Mr. Chair.

I would also like to congratulate and welcome Ms. Ryan.

I'm very pleased to be here to participate in a meeting of this committee for the first time.

It's an honour and a pleasure.

I want to come back to the estimate in the spring economic update that shows a reduction in the projected deficit for this year of roughly $11 billion less than projected through a combination of lower liabilities, increased revenues and generally a stronger economic performance than anticipated, which is great news for Canada.

We know, and you alluded to this in your remarks, that we live in a time of tremendous volatility, and there are many things that can't be predicted.

I'm wondering if you could reflect a bit on whether you see the possibility for continued decreases in the deficit over time, whether it's through commodity prices changing or other factors, either outside or within our control.

I hate to dwell on upside risk, but there is always some, alongside the downside risk. I'm wondering if you could speak a bit to that.

[Annette Ryan]

Certainly.

Let me start off by saying that good news is good news. What we did see in the spring economic update was that, on balance, many of the economic indicators that are critical for government finances came in stronger than had been forecast. There's an important distinction there to say that the economy remains tenuous, there's a lot of headwind and so on.

To the extent that those estimates came in better than had been forecast in the November 2025 budget, that is good news. In a sense, it's secondary good news because it indicates that the government had built a certain amount of prudence into those forecasts that it presented in November 2025.

In terms of upside risks, I think it's also fair to say that the government has presented its strategy of spending less to invest more as essentially a growth agenda that would grow GDP so that the debt that's incurred would be over a larger denominator—a bigger pot. To that extent, if that strategy plays out as expected, then there's certainly upside risk built into the strategy, additional to upside risk that maybe the world turns out to be not so bad.

I think that answers your question.

[Danielle Martin, Liberal, University—Rosedale, ON]

It does. Thank you.

Building on that, under this broad theme of trying to work within what we can control—understanding that there are so many factors we can't control that will affect our economy—I'm thinking about the tremendous work that's under way to try to build a single Canadian economy by breaking down interprovincial trade barriers and doing what we can within our borders to grow the economy within our sphere of influence and impact.

I'm wondering if you could help us understand a little about what might the impacts be—if we should be successful, as I hope we will be—of breaking down those interprovincial trade barriers on future economic projections.

[Annette Ryan]

I see your question, at its core, as this: What would it look like if interprovincial trade were more fluid at higher volumes and with less regulatory friction?

I think it would allow Canada's more innovative entrepreneurs, those who are more careful about their costs and so on, to get those markets internally. In that way, it would have this effect of competition bringing productivity and better choice for consumers. It would essentially give better integration of the economy overall.

As for what that would look like in terms of economic variables so that we could track progress, I think that's something we could certainly do separately, or the government could establish metrics that it could commit to follow in terms of how it plans to target that aspect of what success looks like in interprovincial trade. Whether that's the government bringing that forward through its economic budget, updates, departmental plans and departmental results or whether that's the committee asking the parliamentary budget office to do that within our work plan, it's the type of thing you can put numbers to.

[Danielle Martin, Liberal, University—Rosedale, ON]

That's helpful. Thank you.

I think we all know, of course, that economies are built on infrastructure and investment, etc., but fundamentally they're built by people. One of the things I am very pleased about in the spring economic update, both for the people in my riding and for people across the country, is the very significant investment in the recruitment, hiring, training and retention of new skilled trades workers. In order to build all the things we want to build, we're going to need people to do the building. We know that one of the best protections against economic volatility is a skilled, trained and educated workforce that can help to build the economy.

I'm wondering if you might have—

[The Chair, Conservative, Kelly McCauley]

I apologize, but I have to interrupt. There's no time for an answer. We're actually past your six minutes, but perhaps you'll have a chance in the next round.

Thank you.

Madame Gaudreau.

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

Thank you, Mr. Chair.

First of all, Ms. Ryan, congratulations on your appointment. I look forward to meeting you. I have many report proposals to present to you, of course.

I also want to thank Mr. Jacques for the effective work he has done in such a short time.

First, I'll speak briefly about the appointment process. As you surely know, here at the Standing Committee on Government Operations and Estimates, we had established a monitoring group made up of three members from different parties to make the role of the Parliamentary Budget Officer as impartial as possible. The idea was to follow a hiring process before making a recommendation. As you surely know, not only did that not happen, but there was no consultation at all, at least not with us. Perhaps the Conservatives will say otherwise.

There are two fundamental positions here in this arena: the Auditor General and the Parliamentary Budget Officer. I have concerns about impartiality.

Ms. Ryan, do you feel that you have the independence you need to analyze the budget freely? I'm truly concerned.

[Annette Ryan]

Thank you, Ms. Gaudreau.

Before I begin, I want to say that I'm also very happy to see you here today. Your question touches on a number of things, including the process by which I was hired and the necessity or relevance of changing the process to better involve the parliamentarians I serve. Third, you asked me whether I was independent enough to carry out my mandate.

I'll start with the last question first, because I believe it's the most important one.

I see my position as independent from the government. I have my mandate, and I have legislative safeguards that allow me to conduct independent and thorough analyses, among other things. I have a budget that allows me to hire highly qualified, talented and experienced analysts. So to that extent, I think the broad strokes are heading in the right direction.

I have brought notes regarding the entire process followed for my candidacy—

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

If we want to ensure impartiality, there has to be consultation and unanimous consent, and that certainly wasn't done. So I'm concerned. We cherish the hand that feeds us. This has nothing to do with you personally. You were appointed.

In fact, it was the former acting parliamentary budget officer who proposed a process, and it was ultimately ignored. That worries me, because we put a lot of mechanisms, systems and consultations in place and, at the end of the day, a veto was applied. I could even ask various ministers this question. They should have many more opportunities in the sandboxes to make decisions, but in the end, one person decides.

[Annette Ryan]

On the subject of consultation, I think you should put that question to the government instead, because I wasn't involved in that.

As to whether the process can be improved, I think the answer is yes. Historically, the office has relied heavily on—

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

All right. I don't have a lot of time. We'll see what happens when you come to pass judgment on government investments or other matters. We wish you all the best in your work.

I have a couple of questions about Cúram. In chapter 2 of the economic update, on page 124, there is mention of a $451‑million measure over five years, after deducting amounts already allocated, but it's not broken down by department. It's therefore hard to tell how much the Canada Revenue Agency will receive and how much Employment and Social Development Canada, or ESDC, will receive to administer old age security benefits.

Have you received any information about the amounts announced by the government and ESDC for the new old age security platform, which is based on the Cúram software? Are you aware of this?

[Annette Ryan]

Mr. Jacques, are you aware of that?

[Jason Jacques]

We don't have that information yet. We're in the process of preparing an inquiry, which should be sent out in a few hours.

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

I look forward to it.

[The Chair, Conservative, Kelly McCauley]

Thank you, Madame Gaudreau.

Mr. Gill, go ahead for five minutes, please.

[Harb Gill, Conservative, Windsor West, ON]

Thank you, Mr. Chair.

Ms. Ryan, congratulations on your appointment.

Mr. Jacques, thank you for your continued service.

Ms. Ryan, just so we are clear, your job is to work for Parliament and for Canadians, not the Prime Minister's Office or the government of the day.

A lot of Canadians are frustrated right now. They see committees getting stacked, filibusters shutting down debate and this government's refusal to provide answers. Having said that, on March 23 at the finance committee, you used the phrase “spend less to invest more” several times. That's not just any phrase: That's a government talking point. Your job, as the PBO, is not to repeat government slogans or validate their talking points. Your job is to test whether the numbers behind those slogans actually make sense. How are you going to make sure Canadians see you as fully independent, credible and someone with integrity, and not someone who simply repeats government talking points?