Public Accounts Committee on March 9th, 2021

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Sabia, you are therefore confirming that $160 million is the Department of Finance's estimate of the GST revenue shortfall for 2017.

Is that correct?

[Michael Sabia]

Yes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Great.

Mr. Sabia, $160 million is not insignificant. A lawsuit involving veterans regarding an accounting error has been dragging on for 11 years. The $160 million would settle that.

Ms. Hogan, the Auditor General, even told us that her estimate of $169 million was an underestimate. So I guess there are several million dollars more.

You say that you are preparing briefings and a whole host of analyses for the minister. That makes sense, since it is your role to advise the department and the minister. However, you say that you have no data to corroborate the findings of the Office of the Auditor General. I am trying to understand. You say that you have provided analyses to the government. What is your role with the government?

Who didn't want to provide us with the data before? Was it you or the government?

[Michael Sabia]

Madam Chair, I'm in a bit of a tricky situation here. I do not want to comment on the direction or activities of the department in the past.

What I'm saying today is that I feel very comfortable providing this estimate to the committee. That said, I am not in a position to tell you whether or not it is a change.

Our intention is simply to be transparent. In this situation, I think we are well positioned to provide you with such an estimate without compromising our fundamental job of providing important advice to our minister, and through him, to the government.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Sabia, I understand that you are uncomfortable with the situation right now. We are talking about your predecessor.

We had questions for departmental officials on two occasions. Last February, the chair of the Standing Committee on Public Accounts had to send you a letter to—

[The Chair, Conservative, Kelly Block]

I'm sorry, Mr. Blanchette-Joncas, you're well over time. Perhaps you can follow up in the two-and-a-half-minute round.

We will now move to Mr. Green for six minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Chair, you're doing a fantastic job. I appreciate the leeway you're giving us and the spirit, the non-partisan way in which my good friend Mr. Lawrence gave me some leeway for the answer.

I believe Mr. Sabia has been by this committee twice. I'm kind of expended on my line of questioning, but I'm really interested in Mr. Blanchette-Joncas', so I'm happy to concede my time to Mr. Blanchette-Joncas if he wants to continue down his line of questioning. If I recall, this was something very important to him, so I'm happy to do that.

Feel free to take it away, Mr. Blanchette-Joncas, if that's okay with you, Madam Chair.

[The Chair, Conservative, Kelly Block]

Absolutely. It's your time, and if you would like to cede it to another member, you're perfectly able to do that.

[Matthew Green, NDP, Hamilton Centre, ON]

I want to go on the record and let it be known that the Bloc cannot say I never gave them anything, so today I'm giving my friend Mr. Blanchette-Joncas my time.

[The Chair, Conservative, Kelly Block]

Thank you, Mr. Green.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

My sincere thanks to my colleague Mr. Green.

I will continue along the same lines, Mr. Sabia.

I know that this is the second time you have appeared before the committee. However, we have been waiting for almost four months for clarification on the $160 million that you are mentioning today. I am still trying to understand why two letters from the committee and a letter from the committee chair had to be sent to the department. We are even having this appearance before the Standing Committee on Public Accounts to get clarification on a piece of data that the department already had in its possession.

I understand the importance of confidentiality and government analyses. I also understand that, when the Office of the Auditor General tables a report in Parliament, it is our privilege to fully appreciate the work of this non-partisan official who is critical to Parliament.

Are you trying to protect the political power in place or, actually, the power that normally comes from the public?

[Michael Sabia]

Madam Chair, unfortunately, I did not understand the question. I understood the words, but not the meaning of the question.

Can you just repeat it in a different way?

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Yes, it's quite simple, Mr. Sabia.

In your remarks, you talked about transparency. I'm trying to understand why it took three months to obtain a figure that you already had in your possession at the department.

[Michael Sabia]

Okay. That's a reasonable question.

I'll repeat myself a little. Clearly, I always try to honour the past directions of an organization. In this case, it's the Department of Finance. But you also have to find ways for those directions or practices to evolve. That's why I understand the reluctance in the past to disclose an amount like that. The intent was to better uphold the important principle of confidentiality in terms of the advice we provide to the government.

In my view, which is consistent with Mr. Marsland's, we are able to disclose the amount without putting that other aspect of our activities at risk. That's why we made the decision to share it with you, in the spirit of transparency.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Sabia.

I am grateful to you for sharing the information with us, but I must tell you that I would have liked to see you do so before. You know that some work had to be delayed.

I am trying to find out whether the department considered this estimate—which was provided to the minister and was not supposed to be made public until today—to be confidential information.

[Michael Sabia]

No. Actually, the decision to release that number was made by departmental officials. So it does not reflect any intervention on the part of our two ministers.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I would like to understand one thing, Mr. Sabia.

In 2017, the Government of Quebec had already made public its estimate of the tax losses incurred with respect to the QST. It estimated them at $270 million.

Why can't the federal government make this information public?

Why did it take a committee to study this issue, two letters, one letter from the chair of a standing committee of the Parliament of Canada and an appearance by the deputy minister of finance before these figures, which are public by nature, were released?

[Michael Sabia]

Clearly, Mr. Blanchette-Joncas, I was not in office at the time.

The only thing I can tell you is that we feel it is important to be transparent with the committee.

Recently, we have slightly changed our attitude about these issues. I think we made a reasonable decision to share the figure and to be a little more transparent. I don't see any problem with that.

To answer your question, I'm not in a position to explain the department's past activities. I can only tell you that some of those activities have changed and some others will change.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

That's fine.

Of course, I expect your department to be transparent from the start. As you know, the committee is accountable. In order to fulfill its role, we have to ask questions.

I understand that you were not there before, but officials still answered questions on behalf of the department. They must still be around today, unless you can tell me that they were fired for not being transparent in their answers.

[Michael Sabia]

That's certainly not the case at all.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will move on to Mr. Berthold for five minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

Mr. Sabia, thank you very much for being here.

Mr. Marsland, this is the first opportunity we have had to discuss this.

Being appointed Minister of Finance in the midst of a pandemic is certainly a significant challenge for you, Mr. Sabia. I also understand—

[Michael Sabia]

I'm sorry to interrupt you, but you said I was appointed Minister when I'm actually the Deputy Minister.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

You are right.

[Michael Sabia]

There is a significant difference between the two.