Where does that go to?
Evidence of meeting #116 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was accounts.
A video is available from Parliament.
Evidence of meeting #116 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was accounts.
A video is available from Parliament.
4:30 p.m.
Deputy Minister, Department of Finance
Where does the Global Affairs amount go to?
4:30 p.m.
Liberal
Chandra Arya Liberal Nepean, ON
Okay. You can always come back to us on that. Thank you.
The next is table 11.6, page 354 of volume 1. Under Finance, it says,“Mortgage or Hypothecary Insurance Protection” of $350 billion. I understand the two approved mortgage insurance companies are the Genworth Financial Mortgage Insurance Company and the Canada Guaranty Mortgage Insurance Company. On the approximately $350 billion, is the government making any revenue out of the guaranty provided?
4:30 p.m.
Deputy Minister, Department of Finance
I don't have that in front of me, but I could easily get that for you.
4:30 p.m.
Deputy Minister, Department of Finance
Actually I do have it. We raised $22 million in the current fiscal year from that guaranty fee.
4:30 p.m.
Liberal
Chandra Arya Liberal Nepean, ON
That's $22 million for the outstanding guaranty of around $250 to $300 billion?
4:30 p.m.
Deputy Minister, Department of Finance
It's equivalent to 2.2% of the premiums. This is a situation where the two private sector entities are insuring mortgage loans in exchange for the government guaranty, which is a 90% guaranty in the case of default. We charge a fee equivalent to 2.25% of the premiums they raise.
4:30 p.m.
Liberal
Chandra Arya Liberal Nepean, ON
Okay. Do we need to do this? I know you do this justice and say that there's no problem of loss under this guaranty, but do we actually need to do this? Maybe there was a time when these sorts of guaranties were required to make it attractive for the companies to lend the money for a mortgage, but do we still need this?
4:35 p.m.
Deputy Minister, Department of Finance
The guaranty fee is principally in place to provide a level playing field between the private sector insurers and the Canada Mortgage and Housing Corporation, which is also active in the area and insures about a half of the market. Of course, CMHC has an implicit 100% Government of Canada guaranty. So the 90% guaranty to the private insurers was to provide a level playing field between private sector entities and the government's Crown corporation, CMHC.
4:35 p.m.
Conservative
The Chair Conservative Kevin Sorenson
Thank you, Mr. Rochon.
Thank you, Mr. Arya.
We'll now come back to Mr. McCauley.
4:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'd like to take a couple of seconds of my time to recognize that this might be Mr. Christopherson's final public accounts meeting.
4:35 p.m.
NDP
David Christopherson NDP Hamilton Centre, ON
It's not only for public accounts; it might be the last one.
4:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Oh, I see. You're like Iron Man.
Mr. Ferguson, am I correct there was about $9 billion of lapsed funding from the last fiscal year?
4:35 p.m.
Auditor General of Canada, Office of the Auditor General
I don't know the exact amount, but that sounds about right.
4:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Could we assume, then, that there was a billion-dollar adjustment for the discount rates, but that, adding this in, if that money had been spent, we would have been looking at a $28-billion deficit for last year?
4:35 p.m.
Auditor General of Canada, Office of the Auditor General
I guess you could say that if the government had spent any additional amount without getting any additional revenue it would go right onto the bottom line.
4:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Do you know how much of that lapsed funding is identified in next year's budget? I'm curious.
4:35 p.m.
Auditor General of Canada, Office of the Auditor General
That's not information I would have.
4:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I want to go back to the discount rate. You mentioned that public accounts added a billion-dollar deficit and, I think, several billion dollars going forward. Are you satisfied with the partial change in how we're setting the discount rate for the public service pensions?
4:35 p.m.
Auditor General of Canada, Office of the Auditor General
I think they have done a very good job on that analysis. Yes, the amount they've come up with is a sound amount for valuing the obligations for pension promises in the unfunded portion of the pension plan. Yes, I think it's a very good change.