Government Operations committee  Yes. There is an adjustment in the economy that's expected to take place by reducing our use of fossil fuels. That will have impacts, certainly in the short term, while the economy adjusts. That increases the costs, for example, of transportation companies, which presumably will have lower profits to redistribute to shareholders, for example.

Government Operations committee  My understanding is that it is a part of it, but it's not something that we have done a report on. My understanding at this point is that it's one part of the $15 billion.

Government Operations committee  I'm not yet aware of the governance issues around the Canada growth fund.

Government Operations committee  I don't know the exact details of this item.

Government Operations committee  I think that's a question that would be better answered by the deputy minister at PSPC, or the minister, unfortunately.

Government Operations committee  Thank you for doing a very good summary of our economic and fiscal outlook. I should probably borrow that. The 0.8% of GDP that's expected to be the deficit in 2026-27 is about $25.1 billion. That is 0.8% of the GDP in 2026-27. When it comes to how the government could go back to balance if it wished to do so, it could of course reduce spending.

Government Operations committee  It would be for a different fiscal year. What we did the last time around was for the current fiscal year. What Mr. Bachrach is asking, I think, relates to the upcoming fiscal year and the following year, so the one—

Government Operations committee  It's an interesting question, in the sense that it's something that the government has to pay and that we have to pay, regardless of future decisions, because the debt is a debt, and we have to pay interest on it. We can look at what would have happened had we not seen an increase in debt or what would have happened in the absence of increases in interest rates.

Government Operations committee  They will undoubtedly have an impact, because the moment you have to use more of your revenues towards servicing the debt, there's lower spending on other things and other priorities—all other things being equal, of course.

Government Operations committee  I'm afraid I'm not the person best placed to indicate to the committee the impacts of previous non-spending decisions on the military.

Government Operations committee  That's a tough question to answer. On the one hand, if the carbon tax were eliminated and not replaced by any measures, Canada's greenhouse gas emissions would probably increase a little more than the current track Canada is on. In addition, it would be perceived as disregard for the agreements Canada has signed on reducing greenhouse gas emissions.

Government Operations committee  We expect inflation in Canada will go down to 2% by the end of the calendar year—by the end of 2024—and that over the entire year, it will average 2.4%. We expect the inflation rate for calendar year 2025 to be 1.9%.

Government Operations committee  The Governor of the Bank of Canada probably explained it better than I can when he indicated that government spending—not just federal government spending, but also public spending at large—was not helping the Bank of Canada's fight against inflation. I won't put words in his mouth, but that's what he indicated.

Government Operations committee  You're absolutely right to say that. We have not yet reached 2%, but based on our forecast, it should be that by the end of the calendar year. You are right.

Government Operations committee  When we release our economic and fiscal outlook and we project the deficit going forward, it's assuming no new fiscal measures, because it would be very difficult to include potential measures. What would we include and how much new spending or tax measures would we assume to be introduced?