Public Accounts Committee on March 5th, 2013

[Earl Dreeshen, Conservative, Red Deer, AB]

Okay, in the analysis of the six topics—and I don't know what everyone has talked about, so I'll just go through some we have discussed. We have pension income splitting. These are different things that have come in the budget since 2007 up to 2012. Then the Auditor General said let's take a look at these things and see how they've been assessed throughout.

So we have the pension income splitting; the reduction of the goods and services tax, the GST; the maintenance of the GST/HST credit; the introduction of the tax-free savings account; the new growth rate for the Canada health transfer; and the change in the age of eligibility for old age security. Those are the things that you looked at. You also have a series of tools that you are using for the assessment. I believe the Auditor General talked about the partial equilibrium accounting model, the T1 or the static microsimulation model, as well as the overlapping general equilibrium model. Could we see which ones of those tie into the six areas of tax and spending measures that were discussed?

[Benoît Robidoux]

As the report of the Auditor General mentioned, the one we tend to use most to do the overall analysis is the partial equilibrium accounting model, because it basically takes all the measurements and puts them into a framework that spits out what the impact is. Measure by measure it's quite different. The T1 model, the static microsimulation model, is the tax model. So any tax measure would go through that model. For the big ones it's even more important than for others. We go through that model to figure out what the basic impact of the measure is. After that we could use the two other models to see what it might mean in the future. But this gives us a good benchmark as of today for any tax measure we could think of.

In terms of the overlapping generation model, it's a much more complex model we use to look at the implications, for example, of aging on interest rates, on economic growth. We look at how people will react to aging, how this will affect the wage rate and businesses, and all those things. This helps us to figure out the possible implications of aging on the economy and then on the fiscal situation. It's more a complementary model we use to help us to benchmark our overall analysis, which is the partial equilibrium model. It is easier to use and is able to handle the multiple measures we have in the budget.

[The Chair, NDP, David Christopherson]

Thank you. Time has expired.

Over to Mr. Allen, who now has the floor.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair. I'm going to split my time with my colleague, Madame Blanchette-Lamothe.

Mr. Robidoux, I have a couple of quick questions. The action plan said we're working on budget 2013 and we'll get that model, projection, whatever term we like to give to the forecasting, if you will, to the Minister of Finance. Is that completed at this point? I recognize it's today's date on this piece, but sometimes that just means the report is from before. How far along are we on that?

[Benoît Robidoux]

It's under way, but it's not completed.

[Malcolm Allen, NDP, Welland, ON]

Okay. So this current piece dated March 5 is actually telling us that it is under way. Can you tell me what proportion is under way? Is it 50% done, 75% done, 90% done, 10% done?

[Benoît Robidoux]

I would say the structure and the model and everything is ready to run. We'll have to finish the budget before we can implement that run, and it will take some time to do it, but we'll be able to give that to the Minister of Finance before the end of the process. But we are still within the core process of the budget, so it's a bit difficult to close the game on this at this point.

[Malcolm Allen, NDP, Welland, ON]

I understand the difficulty of the modelling. For me, it was an issue on how close we are getting.

The other piece, of course, is to go back to the recommendation because you did say earlier, sir, that the preceding analyses were done, given to the minister, not reported. We've all agreed they weren't reported publicly. You said that was the government's decision, not the department's decision. In the recommendation that you agree to, you will publish, it says, long-term fiscal analyses. So do you now have a green light, sir, on when these are done? Granted, they may not be done every single...but they ask for it. They should be done every year if there's a budget cycle. Have you now been given the green light to actually go ahead and do it, or do you still have to take it back and ask for permission to let it go out?

[Benoît Robidoux]

For every document we publish, we always as a department consult with our minister, and he approved these publications. So we'll have to go back to him, but again, the government here, this is a commitment from the Department of Finance, supported by the government, to publish every year a report. It's a commitment, so I believe it will happen.

[Malcolm Allen, NDP, Welland, ON]

I'm stealing time from my colleague, but the only reason, sir, that I'm raising this is that your department's response—and I'm not saying you individually, sir—is “will publish”. That's not “will publish if we get permission”. I would ask you now, sir, should it have said, “will publish with permission from the finance minister”? I think that's what I'm hearing you say. You're not saying that you can go ahead; you do not have a green light to publish unless the minister says it's okay.

Sir, if you need to clarify what you said and what's in your work plan, I would ask you to do that now.

[Benoît Robidoux]

I don't think we need to clarify. It's a misreading of what is a commitment. This is a commitment of the Department of Finance and the Minister of Finance, implicitly.

[Malcolm Allen, NDP, Welland, ON]

So in other words—

[Benoît Robidoux]

It's not in black and white, but—

[Malcolm Allen, NDP, Welland, ON]

—it will be published. Okay. That takes me to my next question.

Now that we are going to do this, as you just said the minister implicitly has given an instruction, if you will, it's understood, when can we expect the one for 2013? I don't expect it before the budget gets announced. When will you publish the one for 2013? Will you commit to publishing so that parliamentarians on both sides of the aisle can actually use that material to help make a decision on spending which is going to be in this next budget? Again, to be abundantly clear, I'm not asking for the information before the minister has an opportunity, but I am asking for this to be published before we have to vote. Can you make that assurance to the committee, sir? And then I'm finished.

[Benoît Robidoux]

No, I couldn't. It's a question for the Minister of Finance to decide when he wants to publish a report.

[Malcolm Allen, NDP, Welland, ON]

It takes me back, sir, to my initial question: you don't have a green light to publish unless the minister says it's okay.

[Benoît Robidoux]

We have a commitment to publish over this year with no—

[Malcolm Allen, NDP, Welland, ON]

We're not in a court of law. We're really splitting hairs on this one. But I'm eating up my colleague's time, so I'm going to let her continue on.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Mr. Robidoux, we need a clear and precise answer. Earlier, you said that you would accept part of the second recommendation. Does that mean you are not accepting the second part of the second recommendation?

[Benoît Robidoux]

I can confirm that the Department of Finance has rejected the second part of the recommendation to publish projections for all governments.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you for clarifying.

As a member of the Standing Committee on Public Accounts, I am concerned about the department writing “agreed” with regard to the recommendation. You can write in your reports that you accept the recommendations, but if you do not accept the recommendation fully and you still write “agreed”, you are playing with words. You do not specify whether or not you will comply.

If the Standing Committee on Public Accounts is not the place for transparency and accountability, I don't know what is. I would like to submit that argument to the committee and the chair. If the recommendation is not accepted fully, I think the department's response regarding the recommendation of the Auditor General should at least be clear.

We have one last question about Old Age Security. I will let my colleague ask it.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

I will try to be quick.

Ms. Cheng, I would like a yes or no answer.

In paragraph 7.36 of the report, you state that your studies yielded no documented evidence to support increasing pension age to 67. Did you find any documented evidence suggesting that the old age pension system was unsustainable?

[Nancy Cheng]

Mr. Chair, I apologize for not being able to say it in a yes or no answer. There are a number of sources of information on this particular piece.

In 2009, paragraph 7.36, that was a piece that was conducted by a consultant hired by the Department of Finance—

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Is that a yes or a no, madam?

[The Chair, NDP, David Christopherson]

Monsieur Giguère, you're way over time.

Madam, you may finish your remarks, and then we're concluded here.