Public Accounts Committee on Dec. 18th, 2024

[Annie Boudreau]

I haven't read the letter you're referring to, so I can't confirm its validity.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Okay. This is an excerpt from a press release that was sent out by the union on November 26, 2024:

The Professional Institute of the Public Service of Canada (PIPSC) strongly opposes the government's decision to transfer $1.9 billion which exceeds the allowable surplus from the Public Service Pension Plan (PSPP) to its general revenue, a move that ignores workers' equal contributions to the plan at a time when many face layoff notices.

It seems odd, and I think the government would be better off working more closely with its union. Indeed, the $1.9 billion coming out of the pockets of public sector workers still seems enormous.

I will indeed need a written answer as to why there is a $7‑billion difference between 2023 and 2024 on public sector pension plan assets. I would be very grateful if you could let us know the nature of that information.

My next question is for Mr. Forbes.

I put the question to your officials on Monday during the question session on the economic statement, but I didn't get a lot of answers. Now that the time has gone a bit, I hope I get one from you, Mr. Forbes.

Where did the $1.3 billion budgeted for borders come from? Also, has the Department of Finance started to develop a plan on what that means, $1.3 billion in spending on border control?

[Chris Forbes]

Yesterday, a couple of ministers made an announcement about the plan to explain, with some details, the $1.3 billion.

I don't have the announcement that was made, but it gives the details of the border plan.

[The Chair, Conservative, John Williamson]

Thank you very much.

Up next we have Mr. Cannings, who is joining us virtually.

You have the floor, sir, for six minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to start off by picking up where Madame Sinclair-Desgagné was going with the pension fund situation.

I think all MPs across the country have heard a lot of concern from public servants who are putting deferred pay into their pension funds. Now they find they've been paying so much that it's created a surplus that has gone above the legal amount, and part of that surplus has gone into general revenue.

As you know, these pension funds come from the contributions of both the workers and the government, and I think workers and pensioners are upset that they don't seem to be getting.... If they've been paying too much, they're not getting that money back directly or through other mechanisms. It's just going into general revenue. They don't mind the government portion going back, I'm sure.

Is there any mechanism to do that? Are there any plans? If there aren't, why aren't there? It seems to be patently unfair, and that's why we are being swamped with messages from our constituents.

[Annie Boudreau]

When the surplus was put in the document tabled by the President of the Treasury Board, she mentioned that the government is looking at options for the future, and she will be discussing that with stakeholders.

I don't have more information at this moment about when it will be discussed and which stakeholders will be involved. There's nothing else I can tell you today on that.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Would those options refer to what to do with the extra money, or are there options to make sure we don't have such an incredible surplus in the future?

This all started, I believe, back in the Harper administration. They changed the structure of the pension funds so that new employees were getting a different kind of pension and would have to work longer to get it. It seems there has to be some rejigging there for the future and in what to do for the present.

Do you provide any advice to the government on those options?

[Annie Boudreau]

As I was saying, the president is required to do something when there is a surplus above 125%. That is what she did. She tabled a document that was supported by the actuary, and it showed the non-permitted surplus situation. That amount will be transferred to the consolidated revenue fund.

Again, some discussions will happen in the new calendar year with key stakeholders, and she will be in a position to provide more information next year.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'll move on to the statement in the public accounts that said revenues increased by $11.7 billion. At the same time, income tax revenue decreased 0.7%, mainly due to lower corporate taxable income and income from non-residents. If revenues from corporate taxes were down, who paid this extra $12 billion and how did they pay it? Who picks up that difference?

[Chris Forbes]

I'm not sure it's a question of difference. Different revenues grow at different paces. We have other large sources of revenues. Personal income taxes grew, as did GST revenues. A number of other revenue sources grew. Those offset the effects of the corporate tax revenue decline, and it is normal in any fiscal year that different revenue bases will grow at different paces depending on the state of the economy and other developments.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Do you have any sense of why corporate taxes went down?

[Chris Forbes]

Well, as we said, the growth in corporate taxable income was one piece of it, for sure.

I could turn to my colleague Ms. Dancey, who may have other information and the specific details.

[Evelyn Dancey, Assistant Deputy Minister, Fiscal Policy Branch, Department of Finance]

I'm happy to add.

What we've described in the fall economic statement.... In annex 1, there's a bit of a discussion about the current fiscal forecast.

As our deputy minister noted, there's a general slowdown in the economy, which has been facilitated to arrive at a soft landing, and it has resulted in a lower corporate taxable income or profit stream than we had previously foreseen.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Can you just tell me what the total revenue from corporate taxes was in the last year? Does anybody have that figure?

[Chris Forbes]

The corporate tax revenue recorded in the public accounts was $82.5 billion.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

What was the amount for personal income taxes?

[Chris Forbes]

It was $218 billion. I think I have the right number.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I think it's well known that big corporations especially—and I'm not talking about small businesses at all—have elaborate ways of going through loopholes to decrease their tax amounts. It's been calculated that we are losing $10 billion a year from these loopholes.

Would anybody here today provide advice to the government on how to close those loopholes? I don't think we want to put an extra burden on companies that are suffering and struggling. If they are, obviously they're not paying much tax because they're not making much money, but for the companies that are—

[The Chair, Conservative, John Williamson]

Mr. Cannings, you're well over your time, but I'm going to have Mr. Forbes answer your question. We'll come back to you.

Mr. Forbes, you can answer that.

[Chris Forbes]

I have a couple of points.

We work very closely with the Canada Revenue Agency to identify places in the tax system where there is an avoidance of taxes that should otherwise be paid. I think there have been a number of steps taken in the past few years to tackle some of this unfair tax avoidance and tighten the rules.

There's an ongoing effort, quite honestly, with the Canada Revenue Agency to identify these pieces because the fairness of the tax system.... It's important that corporations and individuals feel that the tax owed is being collected. It's an ongoing battle, and we work closely with the Canada Revenue Agency to tackle those issues.

[The Chair, Conservative, John Williamson]

Thank you very much.

That ends our first round. Our second round will consist of six members with various times each.

Ms. Rempel Garner, you have the floor for five minutes.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Well, thank you. Allow me to put on the record that Teddy is a wonderful dog. I just feel like that should go in Hansard.

Mr. Forbes, have you developed an economic analysis of a potential 25% tariff on exports to the United States should the new American administration implement this measure in January?

[Chris Forbes]

We're certainly working on a range of scenarios for what might happen. It was a statement, but obviously the new U.S. administration has not placed—

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Can you table any interim results that you have on that with this committee?

[Chris Forbes]

I would have to see what I have available, but we have done some work in this area.