I've been talking about public sector de-investment. I did mention in December when I appeared before this committee, as well as briefly in this submission, that it is exceedingly difficult to talk about the incidence of benefits from spending.
It can be done. There are two analysts in the Department of Finance—gee, it was the 1970s and I think as recently as the 1980s—who worked with a fellow named Irwin Gillespie, who was not in the Department of Finance and who had done incidence studies of both tax and benefits. They would be well worth going back to.
The benefits from public spending and the incidence of this has been kind of a school of analysis within Finance that used to exist in the sixties and seventies, when we actually invested and you wanted to make the business case for why you would want to make public investments. It is very easy to do in areas like health care, and it is easy to do in other areas by gender and by income class.
However, the difficulty with the benefits from public investment is.... I'm going to use technical jargon like“returns on investment”. All of us want to see a yield curve when we invest something: I've put $100 into my RRSP and I want to know how much I am getting after five years and after 10 years. Any public investment also has a yield curve, but that's the part that's difficult to calculate. So in year one you can say, where are these expenditures going? What you can't fully capture is the multiple years of the flow of benefits that society is going to get.
That said, you can't do that on tax cuts either. If you're going to talk about who gets the incidence of benefits of tax cuts, you may as well talk about who gets the benefits of spending, too, as best you can. I agree that they're much more widely distributed, which is actually an argument to do them. More people actually benefit from spending than from tax cuts, more universally.