Evidence of meeting #6 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 year.
A video is available from Parliament.
4:40 p.m.
NDP
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Thank you very much, Mr. Chair.
Once again, Mr. Robidoux, I have questions for you. Since I'm not proficient in the beautiful language of French, I'll have to speak in English.
I'm looking at the table at the top right of page 1.9, which seems to me to show an accumulated deficit as a percentage of GDP. First of all, my observation is that this has essentially flatlined since the onset of the recession in 2009-10. Am I reading that correctly?
4:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
You read it correctly, but you think this is the deficit. This is the debt.
4:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
The deficit is nothing else than.... It's a standard for debt.
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Yes, fair enough, as a percentage of GDP. And I understand that, in fact, the accumulated deficit goes up, or has gone up in each year, but so has the GDP, so that's why it's essentially flatlined. Is that correct?
4:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Exactly.
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
It also seems to me that it remains at a level that is still slightly lower than the 2005-06 year. Is that correct?
4:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
I will have to verify that. I don't have the numbers with me. It's likely to grow by one percentage point.
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
So the government has actually been able to achieve a flatlined accumulated deficit as a percentage of GDP notwithstanding the worldwide economic recession and notwithstanding a rather large array of tax reductions. Is that a correct statement?
4:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
That's accurate.
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
I know that I am very proud of that achievement, but since you are a civil servant I won't ask you to express your pride in it.
I want to switch now for a moment to Mr. Ralston, because I was intrigued by your comments regarding the new standards of the Public Sector Accounting Board regarding tax expenditures no longer netted against tax revenues but reported as transfer payment expenses.
This applies to tax expenditures that provide a financial benefit through the tax system. I want to make sure I understand that because when I read that, I think about refundable tax credits, for example. Is that a correct interpretation of that?
4:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Yes, that would be an example.
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
All right.
The child tax benefit, is that an example of the kind of thing we're talking about?
4:40 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Yes, that would be an example.
4:40 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
For example, is the child tax benefit an example of the kind of thing that we're talking about?
4:45 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
In effect, it's not actually reducing anyone's taxes, it's putting it into their hands as a transfer. Is that a correct interpretation?
4:45 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Yes, using the tax system as a delivery mechanism....
4:45 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Correct. But it's still not a tax reduction so much as a transfer of wealth, if you like, to the recipients.
Am I getting it?
4:45 p.m.
Comptroller General of Canada, Treasury Board Secretariat
It puts a cheque in the right hands.
4:45 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Right.
It makes sense to me that this does not come out as net of tax revenue, but rather as a transfer. Is that the reasoning for this? Can you elaborate on the reason this change is being made?
4:45 p.m.
Comptroller General of Canada, Treasury Board Secretariat
As I mentioned, that is my understanding of the reason behind the change in the standard. It is meant to better reflect the underlying nature of the transaction.
4:45 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Better and more accurately, the underlying nature of the transaction?
4:45 p.m.
Comptroller General of Canada, Treasury Board Secretariat
I think it would have always been accurately computed. It's just really presentational. It's more visible this way and it groups like with like.
