Public Accounts Committee on March 5th, 2013

[The Chair, NDP, David Christopherson]

Sorry, folks, time has expired.

Over to Mr. Williamson.

You have the floor, sir.

[John Williamson, Conservative, New Brunswick Southwest, NB]

This is I think to the auditor's side. I'm curious to probe the idea of the long-term reporting that involves the provinces and territories. I know it's in the report and I know you've mentioned it again, but can you just explain it to me? I'm trying to get my head around the point you're trying to get to with this data and the precision.

[Nancy Cheng]

Mr. Chair, the question is not to get to a point of precision but for the perspective of completeness. Currently, Finance has agreed to provide the information at the federal government level, but it doesn't include the provinces or the territories, so the overall fiscal outlook of Canada is incomplete at the moment and it's to try to encourage Finance to consider doing that.

We do know that they do that kind of analysis and it does have information. Perhaps it's not as precise as it can be because they don't have direct access to all the cabinet assumptions and all of that stuff, but Finance certainly has the capacity and the information to do so and it would provide for a much more complete picture if we could have the provincial element in that.

[John Williamson, Conservative, New Brunswick Southwest, NB]

I can see that you get a better picture, but again, why is it up to the federal government to provide that data when it is largely available through provinces and groups like the OECD to stitch it together? You can find this data out there.

I raise that just because for this to be relevant it has to be honest. The OECD can do that, think tanks can do that. Is there not a concern that if the Government of Canada is reporting on my home province of New Brunswick...they have grave fiscal problems right now. Alberta is facing huge deficits. Are they not responsible for reporting on their own challenges, their own paths forward, their own predictions as opposed to the federal government?

We want our levels of government to be responsible for their jurisdictions and the 10 provinces are responsible. I worry that your suggestion puts the federal government at the supreme level when the federal government is responsible for its jurisdictions, as are the provinces.

[Nancy Cheng]

Mr. Chair, essentially we're looking for a complete picture. So by having the federal situation, and if we just go on what we just outlined, the federal government seems to be on a sustainable path. Some of the provinces seem to be struggling with the fiscal situation moving forward. What does that combined picture look like? Unless and until you get the total picture, you don't know whether Canada as a whole is moving forward in the future in a sustainable way or not, and hence it underscores the value of having a combined report.

The other point we made is that there's really only one taxpayer. So as a taxpayer, you don't know how one tries to wrestle with the picture of 10 provinces vis-à-vis the federal government's financial position and what that outlook looks like.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Right. That's true, I suppose.

Let me take it from this way, because I'm trying to actually understand this. I actually think there's much value in this information, and I don't think there's a lot of trouble finding that information publicly now. It's just not coming from the federal government.

That information is important for the finance minister as he's drawing up his budget. It is important for parliamentarians to have the information as to what impacts we're going to have on the provinces in order to assess both the impact of the budget on the country as well as on their home provinces. Why is it important for that information to come from the federal government? Do you not worry that if they're reporting it they're going to have to provide a softer version? They'll give averages; they'll look at the impact nationally. I'm sure I've seen budgets in the past that have shown provincial debt levels and federal debt levels with the charts going up, which gives us a snapshot. I'm just trying to get a sense of at what point information should be reserved for the minister, and at what point information should be made publicly available.

[Nancy Cheng]

Mr. Chair, I think that's a fine distinction that the Department of Finance officials, in conjunction and in consultation with the minster, have to make themselves. I don't think we're in a position to tell them what information they should be privy to and what should be made public.

I think at the public level you want to have general information out there in terms of the fiscal outlook for Canada as a result of a series of changes that we're making to the fiscal framework, so that people understand how we're moving forward, and what the changes mean in the longer term, and not just at the federal level.

As for whether the federal government has to be the only one to do it, well no, because up to this point in time, as you have pointed out, the PBO does it and some of the private sector think tanks do it. So there is some information out there. There is not a void. The recommendation is crafted in the spirit that it would be good if we could do that. I think first and foremost we were more concerned about having information at the federal level, and we are very happy that the Department of Finance has indeed done so. It would be even better if we could have a combined picture, but at the end of the day, it will be the government's decision as to whether they do that or not.

[The Chair, NDP, David Christopherson]

Over to Mr. Byrne. You have the floor again, sir.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Mr. Chair.

The Auditor General in his report to Parliament states: This lack of reporting means that parliamentarians and Canadians do not have all the relevant information to understand the long-term impact of budgets on the federal...governments in order to support public debate and to hold the government to account.

I'll note that the Department of Finance in its action plan that was tabled with the committee has indicated that they will indeed this year provide the minister with long-term fiscal sustainability analyses to budgetary proposals before the budget is actually drafted and tabled. That's a commitment that the department has given to not only the minister, but to us as well.

There is a presumption that in order for this information to be valuable to parliamentarians, it has to be delivered before a decision on appropriation is made by Parliament.

Would you agree, Ms. Cheng, that in order for this to be valuable, that information.... As the Auditor General says to us that there is a disconnect, that there is a problem that parliamentarians don't have this information, would you agree, and do you think the Auditor General of Canada would agree, that having this type of information available to the minister is important? Also, given the fact that parliamentarians are the ones who openly vote and appropriate these resources, would it be valuable for Parliament to have this information before such votes are taken?

[Nancy Cheng]

Mr. Chair, first and foremost, we feel that the minister needs to have this as one piece of many pieces of information for him to recommend to his colleagues and finally have the government support the budget, so that, in the first instance, is the essence of our recommendation.

The recommendation doesn't go as far as requiring the government to table information in whatever form. In principle it would be important for information to be out there, so that it can support parliamentary debate. It really depends on the level of detail that really would be necessary and what kind of measure we might be talking about. I think it would vary from case to case.

Certainly, some information would be relevant to parliamentarians with regard to supporting its study of the estimates.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

In relative terms, zero information is not a good basis on which Parliament can make decisions. Would you agree with that statement? I understand there have been no reports made available to the public or to Parliament, as of yet.

[Nancy Cheng]

From our perspective, information would help parliamentarians fulfill their responsibility to study the estimates.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much.

I'll ask our representatives from the Department of Finance, is there an intention of making this information available to Parliament before the votes on appropriations are made regarding the business of supply for 2013?

[Benoît Robidoux]

I would repeat that we made that information available in October. We published a report which you don't seem either to be aware of or to want to recognize. A report was published in October 2012 and we committed at the same time in the AG report to publish one in 2013. That is one every year.

This is matched by only a few other OECD countries. Most other OECD countries publish every four or five years, so we're going to be the highest standard with that commitment.

I just want to be clear about that. Maybe there is some—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

There is something unclear because what you agreed to, what the Department of Finance agreed to, is as follows:

Starting with Budget 2013, the Department of Finance Canada will expand its internal analysis to provide the Minister of Finance with an assessment of the overall long-term fiscal implications of new budget measures before the budget is finalized.

Are you suggesting, Mr. Robidoux, that budget 2013 was finalized in October 2012?

[Benoît Robidoux]

No, I'm expressing—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Okay. Mr. Chair, we'll move on then.

The answer is pretty clear that this committee is being provided some pretty dubious information by the Department of Finance on two points of action within an action plan, two issues that the department said they would follow-up on. They are suggesting that they provided that information to Parliament and to the committee in October 2012 regarding budget 2013. Fantastic.

Let's move now to the Public Pensions Reporting Act. Under the old age security and GIS system, we have a system of actuarial advice provided to the Chief Actuary of Canada.

I'll ask Mr. Domingue, in the course of your audit of the change in the GIS eligibility or benefits, and the analysis of those changes with regard to long-term fiscal sustainability, are you aware if the Office of the Chief Actuary, which is mandated by Parliament to actually provide forecasting advice to Canadians, to Parliament and to the government, was ever advised or asked for their opinion on these changes?

[Richard Domingue, Principal, Office of the Auditor General of Canada]

Mr. Chair, as part of this audit we did not include the Chief Actuary in the scope. We focused mainly on the analysis provided to us by the Department of Finance.

[The Chair, NDP, David Christopherson]

Your time has expired, thank you.

Mr. Dreeshen, you have the floor, sir.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you, Mr. Chair, and thank you to the witnesses for being here today.

I have a couple of things. I get an opportunity sometimes to speak to parliamentarians from other countries, and of course, they simply wish they had the issues that we deal with on a day-to-day and a month-to-month basis. When we talk about how we fit in the G-7.... Again, hearing of the advances, maybe it's delayed as far as some folks are concerned, but the type of reporting that will be out there is to be championed as far as Canada is concerned.

It's important that we look at that, but also, by the same token, look at how proactive the government is in addressing future challenges and make a comparison for what we are doing at the international level.

Perhaps, Ms. Cheng, you could go through some of those aspects and then I'd like comments from Finance as well.

[Nancy Cheng]

Mr. Chair, as part of the audit we actually have looked at what other OECD member countries have done in this area of long-term fiscal sustainability. There is a fairly extensive table on pages 19 and 20, which shows the various jurisdictions and what they do in this area. In the narrative paragraph 7.51 we have also indicated that a good number of countries have actually published 40-year projections. Some of them do it annually. Some are on a 50-year cycle. In the United States they actually go 75 years out. It gives you a bit of a sense of what the benchmark might look like in terms of some of the more developed countries. As I mentioned in my opening statement, now with the government tabling its report—they tabled it in October and plan to publish it every year—we would be standing in good stead among the member countries of the OECD.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Robidoux, perhaps you can expand. I'll give you an opportunity to explain where you feel we are in the reporting stages.

[Benoît Robidoux]

I believe this is a good survey of what other countries are doing. I think doing it every year for the federal government is something fairly impressive.

The other commitment we made, at the suggestion of the Auditor General's office, to brief the Minister of Finance at the end of a cycle on the budget, is also something I'm not aware other countries are doing. I discussed this with colleagues and officials from other countries, and I'm not aware of another country that does that. Again, this will add vigilance into the system to make sure our minister is fully aware of the implications of the decisions he is making on the long-term fiscal state of the country.

[Earl Dreeshen, Conservative, Red Deer, AB]

In all of the situations you're talking about then, you are taking into account the demographic changes that we as Canadians are going to be looking at in the next 20 or 30 years and so on, and no doubt looking at the costs as we get older, as those particular demographics change. So you're looking at those items as well, I take it.

[Benoît Robidoux]

Yes. The report is based on Statistics Canada's projection of population taking into account the impact this will have on the economic and fiscal situation of the country. I guess this is standard in that kind of analysis, and we are within the standard.