Evidence of meeting #38 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 2022.
A video is available from Parliament.
2:45 p.m.
Conservative
The Chair Conservative John Williamson
I'm interested, but I have to cut you off. I appreciate there might be more rounds of questioning on this.
Thank you.
Ms. Sinclair-Desgagné, you now have the floor for two and a half minutes.
2:45 p.m.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Thank you.
I'd like to go back to my last question about the budgeted revenue for Crown corporations in 2022. Those figures come from Section B of Volume 1 of the public accounts.
I reiterate that they reported $7 billion for 2022, but that the actual revenue was $12.8 billion, so almost double that.
Who does the modelling, Mr. Huppé?
2:45 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Do you want to take that?
2:45 p.m.
Associate Deputy Minister, Department of Finance
Regrettably, we at the Department of Finance do these projections. What can I say?
Like for a lot of large financial institutions in North America, results for both the 2021 and the 2022 years far exceeded any projections. Largely, it's just a flow-through of much higher than expected economic activity and much lower than expected business writedowns of activity. Where we thought we would have to do loan provisions and certain provisions against outstanding credit, those never materialized. At the same time, Crown financial institutions' credit and underwriting revenues were through the roof. It was a combination of those factors that led to the result.
2:45 p.m.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Thank you for that response.
What are the primary sources of revenue for these Crown corporations?
2:45 p.m.
Associate Deputy Minister, Department of Finance
I can come back to you with more precise kinds of line items, but for the BDC and the EDC it is mostly both pure credit—business activity—and, likewise, a whole lot less provisioning against existing credit: unwinding loan provisions that were taken in 2020 and early 2021, which fed through into revenues.
For CMHC, it's a little more complicated, but there was a lot of mortgage activity, so some of their premium underwriting revenues exceeded expectations, and obviously probably some of their provisions were unwound as well, so you see the building blocks of what created the unexpected result.
2:50 p.m.
Conservative
The Chair Conservative John Williamson
Indeed it is.
Mr. Desjarlais, you have the floor for two and a half minutes, please.
2:50 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Thank you very much, Mr. Chair.
I want to turn now to volume III, the supplementary information found in public accounts in relation to “losses of public money” and “property”. I mentioned this earlier in my statements today in relation to the importance of social, environmental and governance information to these audits, to paint a better picture for Canadians of how risk in particular could be measured in relation to climate events.
I'd like to begin by asking the Treasury Board what examples of losses of public money due to damages or damage related to climate change and extreme weather events are currently contained in the public accounts.
2:50 p.m.
Comptroller General of Canada, Treasury Board Secretariat
There are some, sadly, in the areas where we say there are “losses” to a “public property”. For example, one of the key ones is in relation to a storm that happened out east not too long ago. Again, absolutely, in relation to severe climate weather, you would see damages to some property, such as to roads, for example, that are under our jurisdiction, and to a lot of our assets.
2:50 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Beyond bridges and roads, is there an amount attached to the total damages?
2:50 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Absolutely: The different departments have to provide that information in relation to volume III, which you were talking about.
If you go to volume III at pages 160 and 161, I would say, in that area, you would see the listing of departments with the details of some of those losses. There is a section in there for losses and damage to property, which is probably the section where you would see most of the impact of the climate.
2:50 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
It's likely that this number is increasing year after year.
2:50 p.m.
Comptroller General of Canada, Treasury Board Secretariat
I can't say that honestly without having an analysis done exactly, so one could only....
2:50 p.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Is there more robust information that could be collected to advance environmental information in these audits and that could paint a clearer picture for Canadians in relation to total losses due to climate change and environmental catastrophe?
2:50 p.m.
Conservative
The Chair Conservative John Williamson
That is an excellent question. It is going to have to wait until Tuesday, I'm afraid.
Thank you very much.
We'll turn now to Mr. McCauley.
You have the floor for five minutes.
2:50 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks very much. I really appreciate all the answers we're receiving today.
Mr. Leswick, in response to questions about the Crown corporations, it seemed to be that lower loan provisions that were needed for 2021 and 2022 led to much higher revenues and profits. Should we be expecting perhaps a reversal of that in the coming year, with the expected recession or expected slowdown? Also, do you think some of these loan provisions were due to...or, sorry, will the coming expected higher provisions be due to the winding down of COVID supports?
2:50 p.m.
Associate Deputy Minister, Department of Finance
You may very well be right. I don't know whether we built that into our baseline. It's part of the fall economic statement—any sort of uptick in provisioning related to enterprise Crown corporation activity, pending an eventual economic contraction. However, you are right. That would certainly be the feed-through.
2:50 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks very much.
I'm going to page 81, “unfunded pension benefits”. The final line says contributions from the employer were almost $8 billion last year and $3 billion the year before.
Why is there such a huge jump—$5 billion in contributions?
2:55 p.m.
Executive Director, Government Accounting Policy and Reporting, Treasury Board Secretariat
Can you repeat the page number, please?
2:55 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
It's on page 81, second from the bottom, under “unfunded pension benefits”. Contributions amounted to $8 billion, of which $100 million represents employer contributions; $8 billion represents special employer contributions, compared to $66 million.
I'm just curious why there's such a huge jump. I know there was a change in the health benefits.
2:55 p.m.
Executive Director, Government Accounting Policy and Reporting, Treasury Board Secretariat
The large one—the $7.8-million special employer contribution—relates to the public sector pension plan, which was subject to the triannual evaluation, where there was a deficit found. That's the catch-up.
2:55 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
It's $7.8 billion, not $7.8 million.
How did we end up with such a massive change? That's quite significant. There was a $2.9-billion change last year, and now we're up to $5 billion more from last year.
2:55 p.m.
Executive Director, Government Accounting Policy and Reporting, Treasury Board Secretariat
The special payment last year would have related to one of the other pension plans, because the forces' plans, the RCMP's plans and the PSPP are done on a triannual basis. I'm not sure which one was last year's.
2:55 p.m.
Conservative