I want to start by thanking the witnesses for appearing before our committee today.
As l was reading through this report, and particularly the observations of the Auditor General, it really struck me how important it is for us to have reliable and accurate information, because as government and parliamentarians we require this information to gauge not only how well we, as a country, can meet our financial obligations, but also how we can sustain programs and fund new ones. It's critical that we have accurate data that we can use to make sound decisions, and particularly where there are estimates, it's important that they be reasonable, based on not only sound accounting practices but also on industry's best practices.
I note on page 2.43 in the Auditor General's observations that the government uses discount rates that are “on the higher end”. Even though they are within the “acceptable range” by public sector accounting standards, these rates nonetheless result in “a lower estimate for long-term liabilities”. Contrary to my NDP colleague's pondering of whether or not the government of the day has an overstated deficit, this very much goes against the notion of that, because the discount rate used to estimate the accrued benefit obligations of government-sponsored unfunded pensions is 3.9%, whereas the “benefits sponsored by the consolidated Crown corporations and other entities” have a wide range of discount rates that are used. As stated on page 2.28, these rates can be from 2% up to 3.8% for unfunded pension benefits.
My question to the Auditor General is with respect to the methodology that the government uses. How does it select the discount rates so differently from the other public institutions and the private sector? My second question is, what would the Auditor General recommend with respect to this issue?