Public Accounts Committee on May 3rd, 2022

[Roch Huppé]

Honestly, we've looked at that before. First of all, in most years it's tabled around mid-October to end of October, so September 30 would be very aggressive.

Our year closes on March 31. We basically have the tax revenues on personal income tax, which plays a big part. People have up until April 30.... We need to then accrue those revenues that are still not received by these dates. There's a lot of work that needs to be done to close the books, and then a lot of work also with the Auditor General—we had this discussion when I was CFO at CRA—because they need to audit these books.

[Kelly McCauley, Conservative, Edmonton West, AB]

Is it doable?

[Roch Huppé]

Is it doable? Unless something changes drastically and we change the dates, I would tell you that by signing the books...and the audit completed very early in September, it's very aggressive.

Again, we've seen the tabling date by early October in some years. It is feasible and possible, but it is very aggressive with the current processes, I would say.

[Kelly McCauley, Conservative, Edmonton West, AB]

Are you satisfied with the accountability and transparency to Parliament, then, in having the dates as they are?

There a reason that I ask. This year it comes out...and quite often it comes out later. Parliament is asked to vote on the fall economic statement. We're asked to vote on supplementary (A)s before we know how the government actually performed in the previous year. We see the departmental results coming out later, and then this year it was December. Again, we're being asked to approve money when we don't even know how the government was able to produce in the previous year.

[Roch Huppé]

Definitely, Mr. Chair, I would tell you that my goal would be to table around mid-October and as early as possible. I understand the issues and the importance of that information being tabled as early as possible. Again, within the processes, within the time it takes to audit, our goal will always be to be as quick as possible, honestly, recognizing that we need Parliament to sit to be able to table them.

[Kelly McCauley, Conservative, Edmonton West, AB]

I have a quick question, again on that subsequent event.

Could we not have just accrued properly for that settlement? We do accrue expected losses, and we knew what the human rights court asked for. We knew what the total was.

[Roch Huppé]

Yes, you're right. The projected contingent liabilities are an estimate, based on any information that we have. We have to be in a position to substantiate the amount we put forward.

In this particular event, the decision of the court was not known. There was a judicial review on the table. It was not known what the decision of the court would be. That particular decision gave us added information and more clarity on the actual compensation in this particular case. Again, we felt at that time that we had enough information to basically readjust and amend properly.

As I said, if we don't have—

[Kelly McCauley, Conservative, Edmonton West, AB]

In reopening the books, and then pushing this $10 billion into the previous year, what's the effect on this year for the debt-to-GDP ratio? Does it change it?

[The Chair, Conservative, John Williamson]

You have time for a quick answer, please.

[Roch Huppé]

I'd have to redo the calculation with $10 billion removed from it. I wouldn't want to say, but $10 billion over the maximal spend is probably....

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks.

[The Chair, Conservative, John Williamson]

Thank you very much. I'm sure we'll come back to that.

Turning now to Mr. Dong, you have the floor for five minutes.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Chair.

I want to thank all the witnesses and the Auditor General again for coming today.

My first question is to staff from finance. Canada's debt-to-GDP ratio is 47% now, up from 31% a couple of years ago. How does that compare to our G7 allies? What's the average for the G7 nations?

[Michael Sabia]

The answer to that question is pretty straightforward. Based on the International Monetary Fund's comparisons that they do across countries, Canada—on a debt-to-GDP basis—has the most favourable debt-to-GDP ratio of any country in the G7. It's a similar story of strength on the deficit, as well. Again, we are a leader within the G7.

Third, when you look at the rate of deficit reduction of all of these countries coming out of the pandemic, where all countries saw their deficits and their debt-to-GDP ratios increase, the speed with which Canada is returning to prepandemic paths—particularly with respect to the deficit outlook—is among the very fastest of the G7.

[Han Dong, Liberal, Don Valley North, ON]

I want to get a couple of big questions in. That was the first one.

A small follow-up question is, what's the percentage of the charge to service the debt versus GDP? How is it, compared to previous years, especially during those financial crises or in the nineties, when the interest rate was high?

[Nicholas Leswick, Associate Deputy Minister, Department of Finance]

I'd best reference page 34 of volume I of the Public Accounts, which shows our interest ratio as a percentage of revenues and the downward trajectory over the last 30 years or so. This is owed to the secular decline in interest rates and the government refinancing its debt at an effective interest rate that's much lower than it was 30 years ago.

You can see that reference on page 33 as well.

[Han Dong, Liberal, Don Valley North, ON]

Okay. It's much lower than 30 years ago.

I want to change the channel a bit with a question to the Auditor General. I notice in the report that there was a significant amount of money lost to fraudulent activities in the last two years. I cite in total $326 million of lost revenue of public money and property in 2021 to fraudulent activities. This is one thing I've been hearing a lot from my constituents. On phone fraud and email fraud, it says that the Receiver General reported that incidents went up 31.6% in 2019-20. The number of misdirected electronic payments to individuals and businesses more than doubled, jumping 130.5% in 2019-20. That's a lot.

What's happening? Why, all of a sudden, is there an increase in phone fraud and email fraud?

This is preying on the most vulnerable in our society.

[Karen Hogan]

I'm not sure that I have a good answer for you on this. I think what we're seeing is that there are always bad actors in the world and they will prey on the most vulnerable. Many took advantage of the pandemic. With everything being online and virtual, and with so much more reliance on IT, they took advantage of individuals.

When we look at our audit, we don't design our audit to detect fraud, but we expect that the government has internal controls in place in order to prevent and detect fraud. We design our procedures and we make sure that we make them random. We have different procedures in order for us to identify fraud if we can, and we would make the government aware if it occurred.

[Han Dong, Liberal, Don Valley North, ON]

Yes, I think it's seriously—

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Dong. I'm afraid that is all the time—

[Han Dong, Liberal, Don Valley North, ON]

Okay.

[The Chair, Conservative, John Williamson]

—but we will be back to your side again.

Ms. Sinclair‑Desgagné, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

My questions are for Finance department officials and relate to earlier questions about fraud. I would like to talk about fraud cases related to the Canada emergency response benefit and the Canada recovery benefit.

Do you know how many billions of dollars were erroneously paid to individuals? We have an idea, but the exact amount is not yet known.

[Michael Sabia]

We are in the process of checking those amounts, together with our colleagues from the Canada Revenue Agency and other federal departments. I cannot give you any exact figures right now.

We recognize that, given the scope of the financial and human crisis caused by the pandemic, the government's priority was to act very quickly, and rightly so in my opinion. Now we have some work to do to look into this matter. There are and there will be processes to correct situations where individuals may have received certain amounts in error.

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

I have two follow‑up questions.

First, when do you think we will get an answer? You said there is a process. Does that mean there is a timeframe?

Secondly, in the absence of exact figures, can you tell me the order of magnitude? In finance, as you know, it is very helpful to have a range.