Evidence of meeting #49 for Procedure and House Affairs in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was costs.
A recording is available from Parliament.
Conservative
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Based on that, let's go back to another piece of information that came out on February 17 of this year. That's when the Minister of Public Safety appeared at the public safety committee, talking about a number of inmates--
Conservative
The Chair Conservative Joe Preston
You're going to have to wait until the next round. I'm very sorry about that.
Monsieur Paquette.
Bloc
Pierre Paquette Bloc Joliette, QC
Thank you, Mr. Chairman.
Mr. Page, I'd like to welcome you and your colleagues to the committee.
With respect to corporate profits and tax revenues, you stated in your presentation that the government has provided an adequate response to the Finance Committee request. However, you are advising parliamentarians to ask the government to provide not only the projections, but the underlying assumptions.
In the document you prepared for the Standing Committee on Finance on February 25, you said that you believe the government is underestimating the impact of tax cuts on tax revenues. Were you able to access the government's assumptions or did you manage on your own to extrapolate the models or assumptions it used in order to arrive at those results?
Parliamentary Budget Officer, Library of Parliament
Yes, certainly. When I said today that I considered the response to be adequate, it was in a context of transparency. We received all the information requested in the motion, but there is a difference. It is possible to compare that analysis and the PBO projections prepared by my office, and those of the Department of Finance. That is very important, particularly in a situation where there is a great deal of uncertainty surrounding economic and fiscal projections. There is definitely an analysis in our February 25 report regarding business and corporate profits.
Bloc
Parliamentary Budget Officer, Library of Parliament
No, I did not have access to those models. Mr. Askari may want to add something. As far as we are concerned, comparing our estimates with those of the Finance Department was enough. However, Mr. Askari may want to briefly address the importance of having this information.
Mostafa Askari Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
The information dealt only with the projection, and not with the underlying assumptions or models the government used to develop those estimates.
Bloc
Pierre Paquette Bloc Joliette, QC
Basically, the government gives us figures, and we practically have to take it at its word. Of course, you did your own analysis, and that has already put us on the right track to a certain extent. However, if we wanted to have a serene and informed debate on this, we would need more information than the simple table we were given on February 17 by the Government House Leader. That is what I understood from your comments.
Parliamentary Budget Officer, Library of Parliament
Allow me to clarify certain points in English.
Even more, perhaps, it was very helpful for us to get the corporate profits projections and to get estimates of the effective tax rates for corporate income taxes, because that allowed us to compare Department of Finance projections not only with ours but actually even with the private sector's. There, what we found was that when you look at corporate profits as a share of income, the Department of Finance was relatively optimistic in terms of a strong recovery in corporate profits--optimistic relative to an average private sector forecast and relative to PBO assumptions.
Their effective tax rates weren't fundamentally...they were a little bit higher than what we were carrying at the PBO. We were a bit surprised by how low, given those assumptions, the impacts were that were provided through the motion, in terms of the magnitudes of the corporate income tax reductions.
That information allows us to do that type of analysis, to put it in a report, and to make it available to all parliamentarians so that all of you collectively have a better understanding of what the planning framework is for the next five years. So it was very valuable. We are appreciative that we received that information. But we didn't get access to the detailed models.
Bloc
Pierre Paquette Bloc Joliette, QC
With respect to its justice bills, you developed a table which appears on page 6, “Criminal legislation: financial information and analysis: a comparison between what was requested by Parliament and the information provided by the Government of Canada”. I would have liked to hear your explanation of this table. In your presentation, you said that the government did not provide an adequate response to the finance committee request. Can you explain this table on page 6?
Parliamentary Budget Officer, Library of Parliament
Yes, I have a copy of the table.
Parliamentary Budget Officer, Library of Parliament
Yes. Perhaps Mr. Khan could provide an explanation.
Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
In order to establish a fairly objective base, we simply compared the information the committee received with what it requested. That reflects some of what we had begun to discuss in terms of comparing our estimates of the costs of justice legislation with those of the government, for example. Without having its methodologies or assumptions, it becomes almost impossible to correlate the figures. For parliamentarians, it's very different and it becomes extremely difficult to understand the sensitivity of certain estimates and factors. So, it's very important to have all the information that was requested by the committee.
Bloc
Pierre Paquette Bloc Joliette, QC
You say there is a summary of estimated cost projections over a five-year period for five bills, but you point out in one note that there no definition of what is meant by “estimated cost projections”. You have to know what it includes in order to make a proper assessment.
For all the other bills, absolutely no information was provided by the government—in other words, there is no summary of estimated cost projections over five years, no breakdown of operating costs, capital costs or any other costs. Are the data consistent with the Guide to Costing? We don't know. The basic assumptions are not identified, the detailed analysis and projections are not available, the costing methodology is not provided and, finally, the costs reflected in the financial planning framework and annual departmental reference levels are not known either.
Basically, this table shows that we are still in the dark as to the overall costs of the various bills you have targeted, which are also partly targeted in the motion passed by the House.
Parliamentary Budget Officer, Library of Parliament
Yes. That may be what Mr. Brison is driving at. It might be important to look at the information that is now available and update that table. That way, we could see whether there is a difference between the information that is now available and what we are able to obtain through an access to information request.
NDP
Yvon Godin NDP Acadie—Bathurst, NB
Thank you.
Is it possible that the government simply doesn't have an answer for the Standing Committee on Finance, and that it has no information to provide? Is it possible that the government drafted a bill without concerning itself with the cost? The Conservatives are very obstinate; they bring forward their crime legislation without even considering the costs.
Parliamentary Budget Officer, Library of Parliament
I agree. All committees need information.
NDP
Yvon Godin NDP Acadie—Bathurst, NB
No, I asked if it was possible that the government has.... I mean, they're coming out with bills, and they don't even have the information about how much it's going to cost?
Parliamentary Budget Officer, Library of Parliament
We would expect, in all normal circumstances, that the government would have carried out its requirements under Treasury Board policy--that the costs would be estimated, all of the front-end due diligence would be done before, and moneys would be set aside in the fiscal framework--and that this information should be made available to parliamentarians.
NDP
Yvon Godin NDP Acadie—Bathurst, NB
All of the information has to be made available, but you didn't receive this, for example, on Bill C-22:
No detailed cost information is available because the Office of the Director of Public Prosecutions cannot predict the number of prosecutions that will result due to this new Act. The penalties provided in the Act are fines, and, in some cases, a maximum 6 month sentence. As a result, the Correctional Service of Canada will not incur additional costs.
Do you believe that makes sense?
Parliamentary Budget Officer, Library of Parliament
We would want to see the information that's contained in that binder to understand why their assumption is that there would be no additional costs. If they say there is to be no additional cost, then I think....
Again, we would like to asses it from the point of view of risk. At some point in time, they may find themselves in a position where they have to go back to Parliament and seek additional appropriations.
NDP
Yvon Godin NDP Acadie—Bathurst, NB
Yes, but again, look what it says with regard to Bill C-4:
No detailed costs estimates are available because any impact of the amendments would be on the provincial and territorial corrections costs. The Bill should not result in cost impacts for Correctional Service of Canada because young persons are rarely held in these facilities.
That means a young person goes into a provincial jail instead of a federal one, so it's not a federal cost. At the same time, as the minister said today, any costs will be negotiated with the provinces. There will be a cost somewhere. I'm sure the provinces will say, “Look, you in Ottawa are not going to dump onto us the cost of all of those bills you're bringing in; somebody has to pay for it.”
Shouldn't the government estimate how much it will cost and not just say no, no, this is going to provinces, so it's not costing us anything?
Are you satisfied with those answers?