Evidence of meeting #37 for Public Accounts in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.
A video is available from Parliament.
Conservative
Bryan Hayes Conservative Sault Ste. Marie, ON
I do.
Just quickly, on page 1.8 there's a reference to the interest ratio. This ratio has been in a steady decline, reaching 10.4% in 2013-14. I just want to get a sense of what contributes to that decline and what that means to Canadians. When I look at 10.4%, I'm saying, okay, so what? What if it were 20%? What if it were 5%?
What is the significance of the 10.4% to Canadians?
Comptroller General of Canada, Office of the Comptroller General of Canada
Maybe I'll start and then let my colleague from Finance finish.
That's been a steady decline. When you think about the public debt charges, if I recall correctly, going back to 1996-97 our expenses on public debt were eating up about 30% of our expenses. That leaves 70%, just grosso modo, for government programs.
When you can drive down the interest number as a percentage, it basically allows a higher percentage of your spending to be on program spending rather than paying down the debt. In terms of the percentage you're dealing with on interest—here's where my colleague Mr. Leswick can clarify and add additional stuff—there are two things. One is the size of your debt. The second thing at play is the size of your economy.
Debt over the last couple of years has been going up because of the recession; we had the economic action plan, etc. But that came on the heels of a number of years when the government was running a surplus, so there were reductions in debt. Interest rates are lower. That certainly helps. Since the 1996-97 year, the economy has certainly grown as well.
Nick, you may want to clarify or add to that. You're good? Okay.
NDP
The Chair NDP David Christopherson
We're well over time anyway, so we should move along.
Monsieur Giguère, you have the floor, sir.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Mr. Chair, it's always a pleasure for me to work with my colleagues on improving financial reports, instead of trying to remedy deficit problems.
My first question is about the economic highlights set out on page 1.3.
The commentary provided is quantitative, but over the past few years, it has been said—and here I am specifically thinking of American universities—that a qualitative commentary also needs to be provided.
Your document states that 1 million jobs have been created since the recession, but the fact that 650,000 jobs were lost during the recession seems to be easily forgotten. This means that, from 2007 to now, 350,000 jobs have been created.
In its comparison of taxpayers' average incomes between 2008 and today, the Canada Revenue Agency notes a significant drop. In other words, for a given number of work hours, people are now earning less money. In the manufacturing sector, 300,000 very important jobs have been lost.
Why has no qualitative commentary been provided on the economic highlights? That would help us figure out how to remedy the situation—perhaps by creating better paying full-time jobs instead of low-paying part-time jobs.
General Director, Economic and Fiscal Policy Branch, Department of Finance
Thank you for the question.
For the first part of the question, indeed, the Canadian economy has recovered all the jobs it lost, and more, during the recession. We're partners with the United States in trumpeting that dynamic. As for why the economic highlights don't provide more qualitative commentary on income, the quality of pay of jobs, and I think what you mean is income distribution across all the income quintiles within the Canadian population, and also job type, the reason is that we don't do that at the front end of the public accounts. We did produce the jobs report as an appendix to last year's federal budget, which provided a more robust and fulsome comprehensive commentary on the job situation here in Canada.
I don't know if I'd want to go any further, but—
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
The issue is that the unemployment rate is generally coupled with the participation rate. That approach really makes it possible to see whether there is job growth or whether people are leaving the labour market because they are tired of waiting for non-existent jobs. This is the commentary made. Generally, the unemployment rate is coupled with the participation rate. The job growth rate is compared with the population growth rate.
You said that, since 2009, employment growth of 6.4% has occurred. However, the population has grown by 6.6%. The participation rate is 62% in the United States, while it is 64% in Canada. These figures usually provide a better idea of employment growth.
You are saying that all of our jobs have been recovered since the recession. That's good, but if we compare the jobs lost with those gained, we get 400,000 jobs over the course of five years. That works out to only 80,000 jobs per year. That's not so great, especially if we compare it with the pre-recession levels.
General Director, Economic and Fiscal Policy Branch, Department of Finance
I appreciate the question on the labour force participation rate. Again, we boast the highest participation rates in the G-7. We're above our U.S. counterparts in the long-term unemployment rate. We have less long-term unemployed.
As the economic highlights suggest, we have the best job creation record since 2006. Again, I acknowledge it's not presented in the public accounts, but in terms of the information we provided in the budget, the jobs report, and the economic and fiscal update, I think we've stayed pretty current on the state of the Canadian labour force and we provide those statistics on a regular basis.
NDP
The Chair NDP David Christopherson
Sorry, your time has expired.
Moving along to Mr. Falk, you now have the floor, sir.
Conservative
Ted Falk Conservative Provencher, MB
Thank you, Mr. Chairman.
Just to follow up on Mr. Giguère's observations a little, when I look at the EI premiums on slide 5 of your presentation, Mr. Matthews, I see that there were more EI premiums remitted this past year than the year prior, which tells me that there's increased employment. The EI premiums only go up when more people are paying premiums, because the rates don't change. So I'm seeing an increase in employment there from the numbers I see.
I'd like to direct most of my comments to the table found on page 1.9 and I'd like to ask a few questions about transfer payments. Can you explain the major transfer payments to people?
Comptroller General of Canada, Office of the Comptroller General of Canada
Thank you for the question.
I'm going to turn to my colleague to give me the page number—
Conservative
Comptroller General of Canada, Office of the Comptroller General of Canada
It's on page 1.10 in French. Thank you.
This is the transfer payment section and if you look at the public accounts, we list the main elements on page 1.9. We start with elderly benefits, those being your guaranteed income supplement and your old age security. As we've discussed, those numbers are going up because of the increasing elderly population. Those benefits are also subject to indexing for the consumer price index, so that will also drive increases there.
The amount of EI benefits is a function, as we've discussed before, of the unemployment rate. So those are the EI benefits that have flown out.
Then children's benefits are the universal child care benefit, and one other one there that I'm drawing a blank on.
General Director, Economic and Fiscal Policy Branch, Department of Finance
It's the universal child care benefit.
Conservative
Comptroller General of Canada, Office of the Comptroller General of Canada
Those are the major components there, and then that makes up a fairly significant portion of our total spending, as you can see.
What I will say about the transfers to persons, especially the GIS/OAS, is that from a government planning perspective those are statutory in nature, so if you went to the estimates you wouldn't see them actually voted on. Those are statutory obligations. That's just for your reference as well.
Conservative
Ted Falk Conservative Provencher, MB
I'm just looking at that chart and I see transfer payments to other levels of governments. What would those comprise? I see they've all gone up.
Comptroller General of Canada, Office of the Comptroller General of Canada
The big two there are the Canada health transfer and the social transfer, and I believe those were legislated increases in the past year, so those are the two big numbers driving those. You have other ones as well, but those are the two main ones I would highlight for you.
Nick, if you want to add something, feel free to.
General Director, Economic and Fiscal Policy Branch, Department of Finance
No.
Conservative
Ted Falk Conservative Provencher, MB
Could you expand a little bit on what would be included in “other transfer payments”?
Comptroller General of Canada, Office of the Comptroller General of Canada
The “other” would be things like one-offs. If I recall correctly, the transfer to the Province of Alberta related to flood relief is in other transfers. It's not a regular program. That's a one-off you would see. That is driving the change there.
Conservative