Evidence of meeting #49 for Public Accounts in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was question.
A recording is available from Parliament.
Deputy Auditor General, Office of the Auditor General of Canada
Mr. Chair, I don't want to get into the debate about which government did what.
Liberal
The Chair Liberal Joe Volpe
Mr. Wiersema, that's fair.
Just a second, Mr. Saxton. I'm just interrupting. You have three minutes.
I think you asked me to make a ruling earlier on, and I think everybody agreed that we're not going to ask our witnesses policy decisions, and where you're headed is in a policy direction.
I think Mr. Wiersema has answered your question. It's unfair to ask him for something about policy; maybe one of the other opposition members would address that question for you. I think if you stay on the topic, we'll just be fine.
Thank you. We're recommencing at 3:07.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Thank you.
I just want to confirm that this government, the Harper government, did establish--
Conservative
Andrew Saxton Conservative North Vancouver, BC
--yes, it is the Harper government--an independent EI financing board to set rates for 2011.
Deputy Auditor General, Office of the Auditor General of Canada
Mr. Chair, in 2009-10, Parliament passed legislation that closed the former EI account and established a new EI financing board.
Liberal
The Chair Liberal Joe Volpe
Thank you, Mr. Wiersema.
I am going to repeat, for Mr. Saxton, that we're going to try to stay away from policy questions to our witnesses. He has addressed the issue in the public accounts. Let's go on, Mr. Saxton.
Conservative
Andrew Saxton Conservative North Vancouver, BC
This is about account management, and it is regarding the public accounts of Canada, so I think it is in order.
Now that the EI premium funds—
Liberal
The Chair Liberal Joe Volpe
It's also in order for them to say no to the question, and I will respect that.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Now that the EI premium funds will be deposited in a separate account, can those who pay into this fund have confidence that it will be used for EI purposes?
Deputy Auditor General, Office of the Auditor General of Canada
I'll state again that the changes in the legislation were made in 2009-10, so future premiums have further restrictions on them. My understanding is that the new EI operating account now has a deficit of some $4 billion, or it did as of last year. So there are those surplus funds to transfer to the EI financing board at this time.
If and when there are surplus funds, they could be transferred to the EI financing board. As I understand it, the financing board can have a statutory reserve of up to $2 billion. We're nowhere near that at present; the program has a deficit at this time.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Thank you, Mr. Wiersema.
My next question is for Finance. Could you outline how the global economic recession affected the Canadian economy?
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
The impact has been important. The global recession has been fairly large. It affected the U.S. significantly. This is our main trading partner. The first channel of impact was through exports. Our exports went down significantly. It also affected confidence in Canada. In October of 2008 we saw a huge and sudden drop in confidence. Domestic demand, consumption, and investment followed along quickly, and we ended up with a large reduction in GDP, similar to the reduction we observed in the early nineties in Canada.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Following that same train of thought, could you explain how Canada's economic action plan has helped to cushion the economy and get Canada out of the recession?
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
When we put the plan together, the first objective was to stop the reduction in confidence in Canada, to try to stabilize the system, and to instill more confidence in the economy, for both consumption and investment. This was our first goal. In addition to directly stimulating the economy through the package we put together, we directly affected the economy through infrastructure spending and tax cuts. That helped Canadians to spend more, to keep more of their tax dollars with them. We've put out some seven reports. We tracked the plan and the economy in these seven reports. And we believe that the plan has been instrumental in supporting the economy and mitigating the depth of the recession by increasing output and employment and supporting the recovery in Canada.
Liberal
The Chair Liberal Joe Volpe
Thank you, Mr. Robidoux.
I'm going to go to Monsieur D'Amours. I'm going to try to stay on track here, rather than entertain speculation.
Liberal
Jean-Claude D'Amours Liberal Madawaska—Restigouche, NB
Thank you, Mr. Chair.
Mr. Wiersema, I have a quick question for you.
With regard to employment insurance, it was the government's prerogative to decide to invest in new funds or start over at zero. It was the government’s choice. Am I right?
Deputy Auditor General, Office of the Auditor General of Canada
Perhaps I'll ask Ms. Cheng to expand on that.
My understanding is that the surplus funds, if and when there are surplus funds in the new EI operating account, are transferred to this new financing board. The board then sets the premium rates based on the balance in that account. But I believe—
Liberal
Jean-Claude D'Amours Liberal Madawaska—Restigouche, NB
That’s right. It was the government’s prerogative.
Mr. Comptroller, you’re there to supervise and control spending. Right? That’s your role.
Answer yes or no; it’s not complicated.
Comptroller General of Canada, Treasury Board Secretariat
My role is to establish financial management policies, among other policies.
Liberal
Jean-Claude D'Amours Liberal Madawaska—Restigouche, NB
Mr. Ralston, do you think that spending half a billion dollars on consulting contracts is a good way to manage, supervise and control public spending?
Conservative
Terence Young Conservative Oakville, ON
Mr. Chair, I have a point of order.
That is a policy question, and it's unfair to ask the people who are here today to decide whether it's better to hire full-time employees to do specific work or contract out specific things. To be consistent with your previous decision, he should be asking a different question.
Liberal
The Chair Liberal Joe Volpe
Thank you, Mr. Young.
I'll be happy to consider my own consistency or not, but I think he's asking a question on the accounting practices of the Comptroller General.
Conservative
Terence Young Conservative Oakville, ON
You have got to be kidding. You are the most biased chair in this Parliament.