Public Accounts Committee on Nov. 20th, 2007

[Paul Rochon]

This is the value of our foreign currency holdings that are converted into Canadian dollars. Therefore, for unchanged currency holdings, when the Canadian dollar appreciates, the value in Canadian dollars goes down, and that's what you're seeing.

[David Christopherson, NDP, Hamilton Centre, ON]

I'm sorry, you'll have to say that again.

[Paul Rochon]

What we're looking at is the value of our foreign-denominated currency expressed in Canadian dollars. Therefore, when the currency appreciates, the Canadian dollar value goes down.

[David Christopherson, NDP, Hamilton Centre, ON]

Ah, so the fact that it's showing less is good.

No wonder John Williams likes you. He likes accounting. Up is down, down is up.

[John Williams, Conservative, Edmonton—St. Albert, AB]

David, when the dollar goes down through the floor, this is going to go straight up.

[David Christopherson, NDP, Hamilton Centre, ON]

I see. Now, if we could just get him to get right and left straightened out, he could start his career all over again.

The last question I have may or may not use up all my time, and that's fine.

In 2004 the government announced that all departments were going to be audited.

It's the whole business of the lack of movement. The Auditor General has mentioned that she expected to see an action plan. Quite frankly, it looks pretty abysmal. If the government made a big announcement in 2004 and here we are at this point in time and they're still not there with their plans, the question of how serious they are is begging to be asked. Is there some particular reason for the delay that we should take into account? It looks as if they're just not moving on it.

[Rodney Monette]

Thank you, Mr. Christopherson.

At the moment we're focusing on the 22 largest departments, and 17 out of the 22 will be ready to have their audits started between now and 2009. Frankly, we think we need to revisit that, because we have departments saying they're ready. We want to make sure that if there is going to be an audit, it's done properly.

There are two ways you can do an audit. One is to go in and look at a whole lot of transactions, or you can look at the control systems and do far less work on the transactions.

The Auditor General has talked to us about making sure that when we do the audit, we do it right. So the work is being taken very seriously.

In the department I left some three weeks ago, National Defence, we had been working on this for two years. We put in a lot of time and effort. A lot of it is going into systems documentation, because if you want to do the kind of audit that makes sense, you have to have good systems documentation. Plus, there are a whole lot of finance and other systems out there that don't talk very well to each other, and we have to make sure they do.

It is being taken seriously. We do have departments that say they're ready. But I would agree with the Auditor General. I think we need to make sure that when it's done, it's done right.

[David Christopherson, NDP, Hamilton Centre, ON]

It sounds like there are two things. One is with the ones who say they're ready and whether they are in terms of what you would consider ready. The second one is with those who are still not at that point and what the delay is. What is with these departments that would justify a delay, or do they need a kick in the pants?

[Rodney Monette]

For example, the department I just left, National Defence, has been working on this for two years. I think the job of documentation is certainly far more significant than a lot of people anticipated.

If I may make one other point, all the departments we're talking about are audited by the Auditor General. It's not to the same level, but they are audited. So even at National Defence, the Auditor General would do whatever work she considers necessary on something like inventory--and I know the Auditor General will correct me if I'm wrong--to give an opinion at the government-wide level.

I wouldn't want to give anybody the impression that we don't have an audit of all of government, because this is all of government that is being audited.

[David Christopherson, NDP, Hamilton Centre, ON]

I understand that.

My time is up, but I have to say I still don't understand why those that aren't there, aren't there. I didn't get that from your answer.

[Rodney Monette]

I think it's the size of--

[David Christopherson, NDP, Hamilton Centre, ON]

But some can do it and some can't. I'm asking why.

[Rodney Monette]

It's the great big ones that have huge.... With National Defence, for example, you have an inventory of $5 billion and assets of--

[David Christopherson, NDP, Hamilton Centre, ON]

But if you're dealing with papers and numbers, it really doesn't matter how big the thing is. I mean, it's still numbers of lines and--

[Rodney Monette]

With respect to inventory, for example, you'd have look at it. You'd have to go to Afghanistan, for example, to do inventory counts and that sort of thing. It gets quite complex, Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

I see.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

Thank you, Mr. Monette.

Mr. Wrzesnewskyj, seven minutes.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Mr. Chair.

I'm looking at your schedule on page 8. We see that revenues are significantly up. The GST revenues are down, but it's income taxes where the government has really increased its revenues. Do we have a breakdown of that?

With regard to the income tax increase that occurred in the last year for the lowest-income tax bracket among Canadians, from 15% to 15.5%, how does that translate into dollars on increased income taxes for the lowest-income Canadians?

[Paul Rochon]

We don't have an estimate of that. In fact, one could only calculate the amount based on detailed revenue data that becomes available more or less two years after the fact.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Would it be possible to get an estimation from your department provided to the committee so we have a better handle on how much the increase in taxes has cost our lowest-income Canadians?

[Paul Rochon]

We could provide an estimate of taxes paid by income cohort.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

That would be exactly what we'd need to look at. Thank you.

What is the projected loss that we'll be looking at in the next year due to this significant GST cut that has been announced?

[Paul Rochon]

The cost of the GST reduction is $6 billion in 2008-09.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So $6 billion. Out of curiosity, that particular tax cut and other tax cuts like it have been panned by all economists--

[An hon. member]

[Inaudible--Editor]