Public Accounts Committee on Nov. 20th, 2007

[The Chair, Liberal, Shawn Murphy]

Order. One speaker at a time, please.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Can you provide any details the government might have that would give us, once again, a breakdown of who stands to benefit by tax brackets? Who stands to benefit the most?

Economists tend to put things into terminology that's difficult for the average Canadian to understand. Take the cost of a Learjet; if I'm to buy a Learjet, I'll save $100,000 on that 1%. But that's the equivalent of having to buy 500,000 coffees and doughnuts at Tim Hortons, and I don't think there's a Canadian who could consume that amount throughout their lifetime.

I also notice that our corporations have done quite well over the last year. They are certainly making significant purchases of the sort I've referenced, Learjets and that sort of thing.

Do you have any numbers that show the tax savings for the highest-income Canadians and those with the greatest ability to pay? What kinds of tax savings will this GST cut generate for them as opposed to the guy whose extravagance is going to Tim Hortons in the morning?

[Paul Rochon]

I don't have the numbers with me, but again, we can provide them to you.

The other dimension to the GST cut that I would flag is that there is a low-income GST credit, which was designed to offset the cost of GST payments for low-income Canadians. When the GST rate was reduced in both 2006 and 2007, the value of that credit was not reduced, if you will.

So in relation to the GST paid, the value of the GST credit is significantly more generous now than it was previously. That would be a significant offset for low-income Canadians.

[The Chair, Liberal, Shawn Murphy]

I'm sorry to interrupt, but in terms of the information you're going to get back to the committee--

[Paul Rochon]

We absolutely can give you information on GST paid by income cohort.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

That would be quite helpful.

So the same guy who's saving a penny in the morning--or two cents, I guess, if he gets a doughnut as well with his coffee at Tim Hortons--then goes off to work. How much do we estimate he's overpaying on EI premiums through the year, based on the numbers we have from the past year?

[Paul Rochon]

The surplus in the EI account in 2006-07 was roughly $1 billion, if one excludes interest earnings on the account. That reflects significantly stronger labour markets than were expected at the time the rate was set. For example, in September 2006, which was the basis for the 2007 EI rate projections, the forecast unemployment rate at the time for 2007 was 6.8%. It turned out to be 6.3%.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Again, perhaps we could get a little more detailed information on how that translates for the average Canadian worker who goes out there. As I said, he may be saving a penny, but we have an account, the EI account, that is supposed to be pretty much balanced, and yet your Canadian workers out there have overpaid by $1 billion in the last year. It would be interesting to know how perhaps that might be addressed in the future.

Moving on to Passport Canada, there's tremendous frustration among Canadians. Over the last couple of years we've heard officials from that particular department repeating to us that they have it in hand. We've heard the minister, in the House, saying everything's fixed, yet we still hear that it takes months for people to get their passports.

Lo and behold, we turn around and see that Passport Canada, who I guess lost a couple of million dollars in the past, made in the last year $14 million, almost $15 million, on their services--or non-services--to Canadians. I'd be surprised if a business could run that way: you don't provide the service, but at the same time you turn around and make this huge profit on the non-service you're providing.

Any explanations on that particular department?

[The Chair, Liberal, Shawn Murphy]

Go ahead.

[Rodney Monette]

Passport Canada offices--and we don't have detailed information on them ourselves, but I do know they have revisited their fees recently, as you point out. I guess that's accounted for the increase. I know they are making efforts to try to reduce the queue through the Service Canada outlets and to be more responsive.

I'm also aware, from my own family, from the newspapers and media, that there are still some pretty big lineups. I guess I can't really comment more than that. From what I've seen, they are making an effort to try to address that situation.

[The Chair, Liberal, Shawn Murphy]

Mr. Williams, seven minutes.

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

Reading through the supplementary information, “Losses of public money due to an offence, illegal act”, etc., on page 2.19 of volume III--and I hate to bring our national police force back into discredit again, Mr. Chairman, but I see on page 2.19, “Royal Canadian Mounted Police, Fraudulent use of credit card (1 case), $173,040”, and it's all one big dead loss.

Do you have any comment?

[Rodney Monette]

Mr. Chair, Mr. Williams, I guess we don't have any comment on that at this point, other than that obviously it had been caught and reported.

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

Okay.

[The Chair, Liberal, Shawn Murphy]

Did you want them to follow up and get back to you on this?

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

No, because... I'm sorry, but if somebody runs off with a credit card, I would hope that somebody is trying to mind the store.

Talking about minding the store, on the same page, Mr. Chairman, down there at “Public Works and Government Services, Sponsorship contracts, $987,995”, most of it has been collected, but $28,000 is going to be written—no, that's expected to be recovered at a later date.

I thought we were suing for $40 million. Did we ever get that money back?

[Rodney Monette]

Mr. Chair, Mr. Williams, I understand that, as you point out, the amount in the public accounts will be returned. I do have in my briefing notes that there was an additional amount of...I think it was about $40 million or so, an additional amount that had been requested. At this point I couldn't give you an answer as to whether or not—

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

Perhaps you can. I would appreciate that.

I think Mr. Matthews has something to add.

[Bill Matthews]

To clarify what gets reported here, in here we report what is called confirmed losses, so cases that are still ongoing before the courts will get updated as the courts confirm losses.

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

So the $40 million is still coming.

[Bill Matthews]

There's still activity going on in this file, so this will appear for the next foreseeable time until the court action is actually resolved. When the court actually makes rulings, then you'll see the actual loss itself show up in here.

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

Okay.

On to something more serious. Mr. Monette, you're new to the game, I understand. Congratulations, but I see you're interim at this point in time. I presume that's on the way to becoming the official appointee. Am I correct?

[Rodney Monette]

The government will be running a process and they'll be looking at people both in and out of government, so--

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

There is an issue I wanted to raise. We heard a couple of years ago, or a year or so ago, about the estimates where the Auditor General brought to our attention the situation where there was some money spent outside the estimates process that was not authorized by Parliament. A legal opinion had been obtained, a simple, very short half-page legal opinion, that said this money had to be included in the estimates. Somebody else got a long and convoluted legal opinion, going into many pages, saying perhaps not.

Now, in your position as the Comptroller General, are you going to ensure that the laws of the land are upheld and that the estimates process and the integrity of the estimates process is upheld?

[Rodney Monette]

Absolutely. It would be my job to do that.