Evidence of meeting #4 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 report.
A video is available from Parliament.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Does your forecast include the new spending promised in the Liberal Party's election platform?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
No.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
I'm thinking in particular of the promise to increase military spending to 5% of GDP. With this new spending taken into account, what's your estimate of the debt-to-GDP ratio?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I don't think we've done any calculations on that, but we could provide some numbers to the committee in the upcoming days.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Okay.
We're all seeing that spending is going up. The federal budget has a concerning trajectory. It's as if a family were watching their income decrease, but they didn't adjust their financial plan accordingly.
What do you think?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, that's a good analogy. We're waiting for the November 4 plan.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Until then, it's important to think about the future. Based on the current situation, without the restructuring of public finances and without a plan, what will be the consequences for Canada in 10 years?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Absolutely. I think we used the word sustainable in our report. It's an important word. This isn't sustainable in the long term. That's shocking, and that's why we're very much looking forward to seeing the Government of Canada's plan to rectify those forecasts.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
You're saying that the federal government's finances aren't sustainable. This reminds me of three rules of the International Monetary Fund, or IMF, when it comes to budgets: A budget has to be clear, it has to be simple, and it must not be manipulated by the government.
Based on those three criteria, what grade would Canada get?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I don't know. Last week, the Prime Minister gave some clarification on the Government of Canada's fiscal anchors. We still have some questions, though. Progress has been made, but it isn't clear yet.
I would say the grade would be a C right now. As I tell my children, there are still a few evaluations left, and there's still time to improve the work.
Bloc
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
In the medium term, what are the consequences of the current situation for taxpayers?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's clear that there has to be an increase in revenue or a decrease in spending, if not both at the same time. The current situation isn't sustainable. I imagine that the people at the Department of Finance know this and that the plan that will be presented on November 4 will show that there will be changes.
Conservative
The Chair Conservative Kelly McCauley
Before we go to our five-minute rounds, as is the custom, we let the first round run a bit longer for more fulsome answers. Going forward, can everyone keep an eye on the clock?
Mr. Patzer has the floor for five minutes, please.
September 25th, 2025 / 3:55 p.m.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
Thank you very much, Mr. Chair.
Thank you, everybody, for being here today.
I think it's important to take a look at table 2 here for people back home.
The public debt charge for 2024-25 is $53.6 billion. That projection is going to increase in 2030 to $82.4 billion. Is that sustainable?
Director, Fiscal Analysis, Office of the Parliamentary Budget Officer
We also see that the servicing ratio is increasing on the projection horizon. Every dollar spent on debt is a dollar that is not spent elsewhere.
As Mr. Jacques said, the debt-to-GDP ratio is something that we look at in terms of sustainability. That is what we are tracking, and that is what we are very focused on.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
That was one of the hallmark fiscal anchors of the Trudeau government, right? When it was 30.8% it was never going to go higher than that. That was their commitment, yet here we are. In the table here it's 41.7%, increasing to 43.7%.
Again, how alarming is that for the average Canadian taxpayer? There is only one payer, right?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I'll hazard a response.
It should be very alarming, right? I think I used the words in French—which the translators probably got really well—“stupefying, shocking”.
It's not a funny fiscal outlook. It's a really serious fiscal outlook. We don't lightly use the word “unsustainable”. Unsustainable means you don't have the option of saying, “Maybe I'll wait a couple of years and see how things go.” It means, if you don't change, this is done.
It's very serious, and I think as anyone who's managed a household budget knows, if you sit down at the end of the month and you don't have enough money to pay your bills, and it happens month after month after month, you know that something's going to break.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
Along that line, to look at the federal debt number in table 2, in 2024-25 it's $1,281 billion, and in 2030 it's up to $1,655 billion. What impact does that have on the Canadian economy and for businesses, taxpayers and the people who are supposed to be the ones generating the wealth, when we see the government is in debt $1,655 billion in the year 2030?
Diarra Sourang Director, Economic Analysis, Office of the Parliamentary Budget Officer
That's definitely a big driver of what's currently happening in the economy, but there's also heightened uncertainty related to trade policies. However, if we look at the federal government debt, maybe Kristina will be better placed to elaborate.
Something to keep in mind is that a great portion of the federal debt is domestically emitted. Canadian banks are receiving profit from that debt and there are various participants in the financial market who are involved in that debt market, so it's not necessarily foreign actors who are holding that debt. It is important to keep in mind that some domestic actors are also benefiting from that.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
Right, so when we look at what happened with tariffs, for example, the Prime Minister said he's going to collect $20 billion in tariffs. In your report, it says there's only $8 billion.... This morning, CBC wrote an article that the Prime Minister quietly removed even more tariffs than what he initially said. There's a $12-billion shortfall here, and we don't really see a path forward in that situation. What impact is that going to have on Canadians?
Director, Fiscal Analysis, Office of the Parliamentary Budget Officer
In terms of the amounts that the government is collecting from the countermeasures, the government also announced as many measures as we assumed that it collected. As you mentioned, in our report we noted that it could collect $8 billion in the three-year span, but it also announced a lot of support measures to other industries.
Conservative
The Chair Conservative Kelly McCauley
I have to cut you off there because it's past your time.
Ms. Rochefort, go ahead, please, for five minutes.