Government Operations Committee on April 30th, 2026

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you.

You had a really interesting point, I thought, in your earlier answer about the difference between investments and spending. On a personal basis, if you think about your RRSPs, or investing in your home, your education or a business, you understand that these are investments because you have confidence that you're going to make a return on those investments. It's not seen as spending.

You also mentioned the need to have tools to develop a national economy. I think, a lot of the time, the difference between what we consider an investment and what we consider spending when it comes to public funding is perhaps more of an ideological outlook than a question of whether it is really an investment or spending. When we're talking about investing in major infrastructure projects, investing in building up the skilled trades or investing in Canadian businesses and developing the Canadian economy, we genuinely see that as an investment, leveraging new private investment and building the economy.

My question, through you, Chair—

[The Chair, Conservative, Kelly McCauley]

Mr. Danko, I'm afraid you're out of time. Can we get to the question really briefly? Maybe we can get a brief answer from Mr. Côté.

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

I'm sorry. I wasn't keeping track of my time well. How do we better allow the public to understand what investment is?

[The Chair, Conservative, Kelly McCauley]

I apologize, Professor Côté. Can you offer a very brief response or perhaps respond in writing?

[Louis Côté]

I missed part of the question.

[The Chair, Conservative, Kelly McCauley]

Try the question again, Mr. Danko.

[Louis Côté]

What was the end of the question?

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

How does the public understand what investment is when we're talking about public funding?

[The Chair, Conservative, Kelly McCauley]

I'm sorry. Be as brief as you can, if possible.

[Louis Côté]

Okay.

This was true not only of the industrialized countries that have performed well over the past 50 years, but also of the emerging economies we were discussing earlier. They gave themselves the necessary financial tools.

We could go on and on about Quebec. Let me remind you that in 1960, we were one of the most backward western societies in many respects because of our history, but let's not dwell on that. Today, we're doing well. We face the same challenges as everyone else, but we have our share of successes too.

What has been significant from an economic standpoint are the tools we've developed—particularly in the financial sector—such as Investissement Québec and the major union funds. That's quite something, unions creating an investment fund. I don't know of many examples of that in the world today. We've managed to build a whole ecosystem that secures investment, particularly from private banks. We need to equip ourselves with the right tools. If we don't have the tools to do this, it's all just wishful thinking. When we put tools like these in place—

[The Chair, Conservative, Kelly McCauley]

I apologize, Professor; I have to cut you off.

If there are any documents or research papers you want to provide that can answer that a bit better, please send them in.

Madame Gaudreau, go ahead, please.

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

Thank you very much, Mr. Chair.

Mr. Côté, I feel like we're reliving the pandemic days when we were calling for an economic stabilizer, when we needed to help our struggling community. That's when the wage subsidies came into effect. From our perspective, we saw just how beneficial they were, and we're still calling for them, not because we are still in a pandemic, but because we are in a geopolitical crisis.

Regarding everything you mentioned, on the one hand, I, too, am realizing that when we talk about the state as a strategist and the state as a firefighter—it's a bit of a downer this morning—democracy has its limits. Ultimately, they tell themselves that it's perfect, that they're helping taxpayers make ends meet by giving them handouts. Yes, it helps.

Earlier, we were talking about the slogans, which, seriously, are practically the same as during the campaign. We were also talking about the board of directors, and the fact that it was going to make its recommendations, but that ultimately, it's the government that will decide, since it has veto power.

Unfortunately, and I am the only one here who can say this because of my position within a political party that is not seeking to retain or seize power, I get the impression that this obstacle we face will mean that, on the eve of the election, people won't even want to look at the failures Quebec has experienced. You had a front-row seat to it.

I'd like to hear your thoughts on this. Where are we going with this right now?

[Louis Côté]

I'm going to use a few examples of what happened in Quebec.

We must remember that, in the mid‑1990s, federal transfers were partially cut. The Quebec government had developed the practice of a fairly consensual approach with all social stakeholders. It was working well. People agreed that cutbacks were inevitable, except that the government was in a hurry. To reduce the payroll, it offered a voluntary departure program, saying that it was an open-door policy and that anyone who wanted to leave was free to do so.

The lessons we learned were that those who left were the ones we wanted to keep, and those we wanted to let go stayed. We lost out, we drained our expertise.

We have to remember what happened in the health care sector in Quebec, namely that we still have problems with nurses and doctors who date back to that era. We have to be careful about the mechanisms we put in place.

We want to support the public, but is it a good idea to lower taxes? Raising taxes is the hardest thing in the world to do. So if you lower taxes, you're shooting yourself in the foot, in my opinion. That doesn't mean we shouldn't help those in the most dire straits. However, we can't apply blanket measures for everyone, thinking that will solve the problem. It's not constructive.

We need to temporarily help those who are the most in need, and, as we said earlier, we need to invest in more constructive things. Otherwise, we'll revert to a government that's more reactive than strategic.

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

Of course, it depends on where one comes from and what one's perspectives are.

What shocks me the most is that, as an entrepreneur, I manage my own funds and assets—that's private money—but here we're talking about public funds. Will there come a point where we tell ourselves to be careful and ask what our mechanisms are? I'd like to know where we're headed in the short and medium term.

That's a big question for a one-minute response.

[Louis Côté]

I don't have a crystal ball, but I think—

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

I'm at four minutes and 30 seconds. You have a minute and a half left.

[Louis Côté]

If you have the resources that the United States has, with a currency recognized everywhere, as well as its power and strength, you can still impose yourself for a while without taking the right measures. However, for all the other countries, it's necessary to establish the right mechanisms and resources. It's not easy.

It also means standing up to the public sometimes. I used France as an example. Everybody there wants to have their cake and eat it too. They have some of the best public services, but they're the most indebted. They are juggling that, and no one can seem to get out of it. It's a completely crazy political debate.

So we need to get our finances in order and be able to conduct the political debate, I think, properly—that's what was noted earlier—but at the same time, we mustn't take populist measures that deprive the government of its means to act over the medium and long term.

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

That's necessary, if one doesn't have a medium and long-term perspective. I can say this myself, because my goal is to be here for as short a time as possible. All the streamlining we've done hurts, as you said regarding the situation in the 1990s. It's gotten to the point where even other provinces, not just Quebec, are all saying that these “fractures” in health care are, in fact, major “fractures”. Honestly, we can't escape it.

I'm out of time, but seriously, I would really like you to give us the key points for the coming months and years, based on your expertise.

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

We're past our time. Can you provide it really quickly? Fix all of our problems in 30 seconds.

[Louis Côté]

I'm a Canadian citizen like everyone else. I'm trying to follow what's going on and understand it. I think that there are some fundamental decisions being made right now. That doesn't mean it solves everything, but I think there are things that seem desirable to me.

At the same time, I'm thinking of the fund we were talking about earlier. The devil is in the details, as they say. We need to determine how it will be managed, how it will be structured, and so on. This idea of setting up a fund, if we don't do it, I think we're refusing to give ourselves the right tools to ensure the country's development. Now, we have to determine how it will be managed, how it will be done.

I will close by saying that Hydro‑Québec has been a driving force for Quebec for 75 years because it has been well managed. I know Crown corporations like Hydro‑Québec. For example, I've seen plenty in sub-Saharan Africa that were white elephants and never succeeded, neither in generating revenue for the state nor in providing a decent electricity service to the people.

It's not enough to have public institutions; they have to be sound and well managed.

[The Chair, Conservative, Kelly McCauley]

Professor Côté, thank you very much. It was very interesting. I wish we had some more time, but perhaps in a future study we can bring you back, just to chat.

We're going to suspend for a couple of moments to bring in our new witnesses.

Again, Professor Côté, thank you very much. I appreciate your patience and flexibility in being able to meet with us.

We're suspended.

[The Chair, Conservative, Kelly McCauley]

Thank you. We're back in session. I appreciate everyone's patience.

We welcome our new PBO, Ms. Ryan. Welcome to OGGO.

Of course, welcome back, Mr. Jacques and Mr. Mahabir. Thank you to the two of you for holding down the fort until Ms. Ryan joined us.

Ms. Ryan, we have time for you to give a five-minute opening statement.

We are running a tiny bit late today, colleagues. I know it's mostly my fault. We have a habit of going over our allotted time for our questions, but please watch the clock so that we can try to get out at a decent hour.

Ms. Ryan, the floor is yours.

[Annette Ryan, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Mr. Chair, Madam Vice‑Chair and members of the committee, thank you for inviting me to appear before you today.

I'm very pleased to be here to discuss the spring economic update and the 2026‑27 main estimates in my new role as Parliamentary Budget Officer, an independent officer of Parliament.

First, I cannot say enough how impressed I have been with the very warm welcome that I have received from the dedicated and highly professional team at the parliamentary budget office. I am particularly pleased to be able to rely on the expertise of Jason Jacques, director general of economic and fiscal analysis. We had the pleasure of working together previously at the Privy Council Office and at the Treasury Board Secretariat, and I am very glad indeed to have the opportunity to do so again.

I'm also grateful to be working alongside Mark Mahabir, director general, costing and budgetary analysis, and general counsel, as well as the directors who led our analysis of the spring economic update and the main estimates. As you know, the office's mandate is to provide independent, non-partisan analysis to support Parliament in its review of public spending and the country's financial situation. I am fully committed to delivering on this mandate with rigour, transparency and objectivity.

I also commit to bring PBO attention to how government proposals are executed as they flow through to main and supplementary estimates and into public accounts. This is core to parliamentary business and to the practical question of what return Canadians get on their tax dollars.

I was appointed last Wednesday and began work at PBO that morning. From day one, my focus has been on getting Parliament the reports that have been delayed by the vacancy of the PBO position and getting ready to provide analysis on the spring update.

Of note, PBO will publish a series of assessments early next week that will assess the spring update in respect of budget 2025, which was tabled last November. We intend to keep systematic and ongoing watch going forward on key budgetary issues. These include the economic and fiscal track. How is the economy developing? What does that mean for revenues and fiscal choices of the government?

We will watch fiscal anchors and fiscal sustainability very closely. Can we afford the government's plans now and through time? What trade-offs are involved? Have we reserved enough buffer space to deal with recessions, pandemics or wars?

We will watch progress on major stated government priorities. What horizontal, general objectives has the government used to seek funds from Parliament? Who is responsible for results if not a specific minister?

We will watch departmental spending and other initiatives. What funds are specific ministers seeking from Parliament year over year? What does that tangibly mean for Canadians?

I will speak briefly to the spring update.

First, on a positive note, it is worth emphasizing that the government's economic and budgetary forecasts have remained solid overall, despite ongoing trade frictions and new oil and gas shocks.

Second and importantly, fiscal sustainability and the transparency and trajectory of overall spending remain a priority concern for the parliamentary budget office. While the government has met its first fiscal anchor of achieving a declining deficit-to-GDP track in the spring update, it has yet to define its second fiscal anchor beyond a general commitment to balance operating spending with revenues.

Let me put our first assessments in concrete terms. Based on the spring update, PBO estimates that federal debt per Canadian will rise from $33,592 this year to $38,295 five years from now. Per the spring update, federal debt charges per Canadian per year, the interest cost of that debt, will rise from $1,409 to $1,901.

Separate from the sustainability question, I'll turn to the government priorities. In its own update, it speaks to key themes raised in November 2025 in the budget, productivity, housing, defence and major projects. The spring update provides some metrics on progress but few critical paths, mentions of risks or specific objectives. The update instead introduced a range of new and rather undefined priorities, strategies and general objectives that, similarly, would benefit from greater accountability, details on governance and other aspects of planning that would inform Parliament as to what results the government is targeting for that spending. The Canada Strong fund is a leading example from that list.

Over the next few days, I will be reaching out to parliamentarians, including the chairs of designated committees, to gather their views on how the office can best continue to support their work—both in terms of what is already working well and areas that could be improved—to ensure greater government accountability.

Thank you again for the opportunity to appear today. I look forward to your questions.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We'll start with Mr. Lawrence for six minutes, please.

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

Thank you.

I would just like to start by thanking Mr. Jacques for his work as interim PBO. I think all parliamentarians thought it was excellent.

Of course, I want to congratulate you, Ms. Ryan, on taking on this position. We appreciate your commitment to your country for doing so.

I want to start off with some of your comments.

You stated that the current national debt per Canadian is set to rise in the next five years from $33,000 to $38,000. That is based on the government's projections. We haven't had a global recession in going on five years. It's very unlikely that it will go another five years without having a recession. What would happen to those numbers if in fact there was a global recession?