Evidence of meeting #17 for Public Accounts in the 44th 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.
12:35 p.m.
Deputy Minister, Department of Finance
You should talk to my colleagues in the department. They don't buy that.
12:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I will just quickly chat with you about net versus gross debt to GDP. Obviously the government says, and I think you just referenced, that we have the lowest net.
I'm sure you've seen the Fraser Institute's report about not-so-fast when considering net as opposed to gross.
I think we're the only G7 country that tabulates our debt adding in assets from the CPP and the QPP. Do you think it's a fair standard to use? Should we not be using gross debt because we do have that liability that we will have to pay out to seniors?
12:35 p.m.
Deputy Minister, Department of Finance
Chair, on these calculations that are done by the IMF, they have to make a number of adjustments to try to make each country comparable to the other. One of the things—
12:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
On that point, what other G7 countries have assets in a CPP like we have? I don't think the others do. I think they all buy government bonds.
12:35 p.m.
Deputy Minister, Department of Finance
No, but it's a country that in many ways is comparable to Canada, and I just want to give you the example of the Norwegian sovereign fund—Norges Bank. Because of the magnitude of that fund, which is well in excess of a trillion dollars, that has a huge impact on the debt position of Norway as it's evaluated by the IMF.
12:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
But, sticking with the G7, though, because that's what we are considering and that's what you referenced earlier....
12:35 p.m.
Deputy Minister, Department of Finance
That change in the methodology that's applied by the IMF is applied consistently across countries, so all countries that have similarly structured...for instance, pension plans that are to be reported comparably—
12:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
What do you think of the Fraser Institute's comments that—
12:35 p.m.
Conservative
12:35 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
— we dropped to fourth from 29th out of 38 in the OECD?
12:35 p.m.
Conservative
The Chair Conservative John Williamson
Your side will have another opportunity.
We turn now to Ms. Yip. You have the floor for five minutes, please.
May 3rd, 2022 / 12:35 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
I appreciate all the witnesses for being here and answering the questions, as well as bearing with us while we had our votes.
Mr. Huppé, what financial reports are available during the year to update the public in the meantime before the public accounts are tabled?
12:35 p.m.
Comptroller General of Canada, Treasury Board Secretariat
There's a slew of information out there obviously that gets made public during the year. A few come to mind. On a monthly basis we have what we call “The Fiscal Monitor”, which basically updates on the actual spending and revenues of the government compared to previous years with an analysis of the variance.
There are also quarterly financial reports that are produced by each respective department that again provide information on that particular department's spending and compares it to previous years. Then, there's a slew of information that's proactively disclosed every quarter whether it be on travel and hospitality, on transfer payments and so on.
I would say the fiscal updates throughout the year are probably the key ones to update the public on the government's spending.
12:40 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Thank you.
Mr. Sabia, can you tell us about the government's debt management strategy and how the public accounts compare to what was recently announced in budget 2022?
12:40 p.m.
Deputy Minister, Department of Finance
Chair, in an answer to a previous question, I think the two most important aspects of that are, first, the significant reduction by about a couple of hundred billion dollars in our borrowing requirements that's gone on. That's obviously important and reflects a stronger economic recovery, therefore significant changes, strengthening of the deficit track of the government. The second is the point I made about extending the duration of the portfolio. Those are the two most important things.
I would also say with respect to our public debt charges, that's something that we look at pretty carefully. Right now in the base case, I think for 2022-23, those debt charges as a per cent of GDP are about 1%. They step up a little bit over the fiscal planning period to about 1.3% or 1.4% of GDP. But all of that is well below the 2% to 2.5% that those public debt charges were...say, just before the financial crisis.
All that to say, I think from a fiscal stability and systemic stability point of view, a lot of progress has been made here with respect to the government's overall debt management.
12:40 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Thank you.
Ms. Hogan, many Canadians work very hard to receive a pension. I'm going to refer to page 200 of volume I, looking at the Canada pension plan accounts. There's an increase from $2.6 billion to $6.75 billion in “Assets available for benefit payments”. Last week Statistics Canada released some new statistics with regard to populations, and there was a definite increase in seniors aged 85 and up. In fact, this age group has doubled since 2001; one in five seniors will be 65 and up. I'm just wondering if we are planning enough for our seniors and to take care of them with the Canada pension.
12:40 p.m.
Auditor General of Canada, Office of the Auditor General
That's a very interesting question. It's one that I think the government would be in the best position to answer.
There are two different kinds of valuations that you can get from an actuary. One is for accounting purposes, which we look at and consider when we issue an opinion on the Canada pension plan. One is for funding purposes. It's that funding purpose one that really does give an independent perspective to the government, based on actuarial determinations about life expectancy, inflation and so many inputs, about whether or not the Canada pension plan is sufficient to meet its future needs.
I think that would be a better place to ask the question and get a good answer.
It is clear—we see it even within the public service pension plan—that there's an intergenerational issue with so large a number of the population getting ready to access or already accessing pension plans that are out there and fewer people joining the workforce to continue to input to them. The sufficiency of the funding is a good question to ask the government about.
12:40 p.m.
Conservative
The Chair Conservative John Williamson
Thank you very much. That is all the time. We've just finished our second round.
Moving to the third round now, we turn to Mr. McCauley again.
You're our star today—on the Conservative bench, anyway. You have the floor for five minutes.
12:45 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
It's back to the celebrity.
Do you mind if we just pick up where you got cut off there, Mr. Sabia?
12:45 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Yes, should we be using both net and gross? One does not reflect as well, media-wise, but should we be doing both?