Thank you, Mr. Chair. Yes, I do have an opening statement.
Thank you, committee members, for having me here today. I'm very pleased to be here to talk about budget 2017, “Building a Strong Middle Class”, and how it will help Canadians.
I want to begin by thanking the members of this committee for your hard work in putting together recommendations for budget 2017. Your recommendations this year focused on the theme of what we can do to grow the Canadian economy. They were informed by presentations from nearly 300 groups and individuals and more than 400 online submissions, with ideas from Canadians from all walks of life from across our great country.
Your work is vital to our budget process. You help us in making sure that we're doing our job and addressing the needs of Canadians.
Our second budget represents another step in our government's long-term plan to create jobs and more opportunity for the middle class and those working hard to join it.
When we formed the government about a year and a half ago, we promised Canadians to put middle-class families first. That's exactly what we've done.
We started by asking the wealthiest 1% in our country to pay a little more so that we could cut taxes for the middle class.
Then we introduced the new Canada child benefit. This tax-free benefit is simpler, more generous, and better targeted to help those who need it than the previous child benefit system was.
We then reached an historic agreement with the provinces to help people to retire with more dignity by strengthening the Canada pension plan.
We went even further to support Canadian families by investing $6 billion over 10 years for home care, and $5 billion over 10 years to support mental health initiatives. To date, 12 provinces and territories have accepted the federal offer and received their share of this investment in home care and mental health.
In short, we took the necessary first steps to restore hope to the middle class, and we did that by putting people first.
We are making small investments to help people make better use of their skills, revitalize their communities, and ensure sustainable economic growth.
The measures we have taken so far are having a meaningful and positive impact on the economy and Canadians.
Optimism is on the rise, and with good reason. Forecasters are expecting Canada's economy to grow even faster in the next two years. In the last eight months alone, the Canadian economy has created over a quarter of a million full-time jobs.
We understand that despite these positive signs, people are still anxious about the future. The economy is changing. Global markets are shifting. Automation is on the rise. Canadians want to be assured that their hard work will pay off with a better future for their kids and their grandkids.
That's why budget 2017 puts Canada's skilled, talented, and creative people at the heart of a more innovative future economy. That is why we're not just creating the jobs of today, but are getting people ready for the jobs of tomorrow, because the next job should be a better job. We call it our innovation and skills plan.
With it, we'll support a culture of lifelong learning to help workers adapt to the changing demands of our time. We recognize that we need to do more to help Canada's workers learn, adapt, and have good jobs throughout their working lives.
Budget 2017 significantly boosts federal support through the labour market transfer agreements with the provinces and territories by $2.7 billion over six years.
For Canadians looking for work, this means more opportunities to upgrade their skills, gain experience, or get help to start their own business. For Canadians who have lost their jobs, we'll make it easier for EI claimants to pursue self-funded training while remaining eligible for their benefits.
For Canadians going back to school for retraining, budget 2017 will expand eligibility for Canada student grants so that each year an additional 10,000 part-time students and a further 13,000 students with dependent children can get the financial help they need to pursue a post-secondary education.
At the same time, we're taking action to give our young people the best possible start to their careers.
We are making investments to promote science, technology, engineering, and math, particularly among young women, girls, and indigenous youth, as early as elementary school.
We'll also invest to help make coding a basic skill that our children learn along with reading and writing. To help more young Canadians, including vulnerable youth, make the transition from school to work and to get a strong start on their careers, we'll invest in the youth employment strategy. This comprehensive set of skills and training measures will help Canadians at every stage of their career make Canada's greatest resource—our people—even greater.
But budget 2017 goes further.
Our plan seeks to make Canada a world-class centre for innovation, in part by shining a spotlight on specific sectors such as the digital, clean technology, and agrifood industries.
I'll give you two examples.
Budget 2017 takes action to help ensure that Canada is positioned to take part in breakthroughs in fields like artificial intelligence. We believe that Canada will be a world leader in artificial intelligence. That's why we're launching the pan-Canadian artificial intelligence strategy. This strategy will promote collaboration between Canada's main centres of expertise and will position companies, especially Canada's new companies, together with the new Vector Institute, at the cutting edge of artificial intelligence research.
Second, in agrifood we're positioned for success. We know that by the year 2050, global demand for food is expected to double.
This represents a golden opportunity for us. Our agriculture and agrifood sector already supports more than two million jobs and accounts for more than 6% of the country's gross domestic product.
That means more demand for prairie canola, Atlantic crab and lobster, and B.C. berries. It also means more jobs in the fields of southwestern Ontario and on the maple syrup farms in Quebec's Eastern Townships. Through budget 2017 we'll help farmers, producers, and processors build their businesses globally and help all Canadians get the most out of the innovative economy.
Through budget 2017, the government is also taking action to make our neighbourhoods better, healthier places to live. Total federal investments in infrastructure now top $180 billion over 12 years.
Part of that money will go to improving access to early learning and child care, with a $7-billion investment over 10 years. The goal is to support and create more high-quality, affordable child care spaces across the country, especially for those families most in need.
Canadians will also have better access to housing that meets their needs through the new national housing strategy, to which the government is committing more than $11.2 billion over 11 years to help build, renew, and repair Canada's stock of affordable housing.
To support the next phase of ambitious public transit projects, the government will invest $20.1 billion over 11 years to bilateral agreements with provinces and territories. By investing in infrastructure now, we can strengthen and grow the middle class, create good, well-paying jobs, and make Canada an even better place to call home.
As we prepare Canadians for the economy of tomorrow and help them access the tools they need to succeed today, our government is continuing its efforts to ensure that our tax system is fair.
All Canadians must pay their fair share of tax. The government will continue to improve tax fairness for Canadian families by closing loopholes, eliminating measures that disproportionately favour the wealthy, and cracking down on tax evasion so that every Canadian has a real and fair chance at success.
Over the last 18 months, we've seen positive signs that our plan is working, but we can and will do more to help the middle class and those working hard to join it. As we remain focused on growth, it won't just be for growth's sake.
We are committed to making sure that all, not just the wealthiest, Canadians benefit from that growth.
We will help families feel better about the future of their kids and their grandkids.
Thank you. I welcome your questions.
To close, Minister, I have a question, or perhaps more of a comment.
We've had Dominic Barton and some other representatives from the Advisory Committee on Economic Growth before the committee. We really appreciate their work, though we are not expecting that the government will agree with everything they recommend, for sure. However, as one who comes from the farming sector, I can tell you that that sector is very pleased with that committee's emphasis on the agrifood industry's potential.
My concern is that that the potential is there, but when a whole-of-government approach—and this is not a criticism of Finance—is taken to increase economic growth in one area, another department can hamper that economic growth by new regulations or more paperwork, or whatever.
I'll give you an example. It comes to mind because an individual emailed me about it last night. This is a fairly small farming family of four sons and a mom and dad. On the good agriculture practices, which make a whole lot of sense, as we want to ensure that our food is safe, this is what he said:
—meaning good agriculture practice—
—who is his wife—
and I did it ourselves for years. Then they started demanding more and more, so I just said to my sons, “If you want to farm you have to do this yourselves.” I just could not do it any more. Now my son can't do it alone, so he had to hire someone to help him. It is costing us a fortune. The end result is that we know we can't keep up with all these new rules.
There is a different reality on the farm, and farmers do a pretty darned good job of providing safe food. The reality is, whether it's the Canadian Food Inspection Agency or the Canada Revenue Agency, or any other agency in this town, they don't realize the cost and the time that it takes people on the farm to do paperwork. They're farmers. Yes, you can hire accountants or others to fill it in, but that costs money.
I can give you another example. To fill out an application for environmental protection, where you maybe get $25,000, it will take a volunteer 30 hours to fill out that one application—28 pages. It just makes no sense. Why can't we simplify stuff to keep it down to a page or something like that?
It's not a criticism of you, but it's a whole-of-government thing. We somehow have to create efficiencies on some of these rules that are not taking away from the ability of a farmer, or a recreational stream group, or whatever, to do their jobs. It sits on a desk here in Ottawa for a week or two. I often say that Ottawa is a bubble without reality, and I firmly believe that.
Anyway, my point is that I think the cabinet, you as minister, on these good proposals you may have to attain economic growth, we have to ensure that on the other side of the equation, another department or another agency from the federal government or provincial government is not hampering the ability to achieve that economic growth that you, through your programming, are trying to attain.
That's my point.
Okay, thank you all for your questions. Thank you, Minister and Deputy, for your appearance.
We will suspend for a few minutes and then come back with the officials.
The meeting is suspended.
Good afternoon, Mr. Chair.
As the Chief Financial Officer, I am the lead official responsible for preparing the financial reports and presenting the main estimates 2017-18 for the Department of Finance.
Joining me today are officials who will help me provide a more complete picture of the policy supporting the figures in this document. The main estimates 2017-18 list the total budgetary requirements at $90.1 billion for the Department of Finance Canada, meaning $90 billion in projected statutory expenditures and $89.3 million in voted appropriations.
Those statutory items are included in the main estimates for information purposes and they will not be in the appropriation bill.
The 2017-18 main estimates of $90.1 billion are $679.8 million higher compared to the 2016-17 main estimates of $85.9 billion, due to an increase of $681.3 million in statutory items, offset by a $1.5-million decrease in voted amounts.
Within the statutory forecast, the major contributing factors to the $681.3-million increase are as follows: a $1.1-billion increase in the Canada health transfer, reflecting the minimum 3% legislated growth rate for 2017-18; a $400.4-million increase in the Canada social transfer, reflecting the 3% legislated annual increase; a $373.2-million increase in fiscal equalization to reflect the 2.09% gross domestic product-based escalator being applied to the 2016-17 level; a $145.5-million increase in territorial financing as a result of new and updated data used to calculate territorial expenditure requirements and revenue capacities entering the formula; a $528-million decrease in other interest costs due to a decrease in the average Government of Canada long-term bond rate, which is used to calculate interest on the public sector pension obligations pertaining to service pre-April 1, 2000, debt; and a $764-million decrease in interest on unmatured debt to reflect private sector economists' expectations from the 2016 fall economic statement projections.
The decrease of $1.5 million in vote 1, program expenditures, is mainly due to a decrease in funding for time-limited budget 2015 initiatives, totalling $1 million, and budget 2016 reductions to professional services, advertising, and travel, totalling $0.5 million.
This concludes my overview of the main estimates. I would be pleased to address any questions the committee may have.
Madam, gentlemen, welcome to your House of Commons.
I am very pleased to address some questions to you, because I appreciate that everybody will recognize that we have some people here who rank very highly among civil servants, and especially the Minister of Finance. This is a huge issue for everybody. We're talking about billions of dollars. The last budget was $330 billion. We need strong people to address that, strong people to be sure that everything is going well, and we are very pleased to have those kinds of people in our civil service.
What you tabled a few minutes ago about the projections for this budget was very interesting, but I would like to go back to last October when the Department of Finance published a report on the reality of the situation of the public finances. In that report—and I have talked about it many times in the House of Commons, in interviews, and everywhere I go—there is key information, very important information, on page 14.
First of all, just to be sure we're talking about the same report, it's one that was tabled to the Minister of Finance on October 10. On page 14, this report expressed real concern—by our side and I hope by everybody in Canada—about the future of the administration of this country. If nothing changes, we will have zero deficit in 2055 and we'll have to address debt of $1.5 trillion in 2050.
Those figures, those numbers, came from a report made by the civil servants of the finance department, and we are very pleased to welcome you guys to our committee.
First of all, I would like to know why the Minister of Finance would publish that kind of report.
On the estimates, we have five votes to make. I think you have the estimates paper before you.
Shall vote 1 under the Department of Finance, less the amount granted in interim supply, carry? The amount is $66,960,447.75.
Shall vote 5 under the Department of Finance, less the amount granted in interim supply, carry in the amount of $.75?
Vote 1—Program expenditures..........$89,280,597
Vote 5—Authority for amount by way of direct payments..........$1
(Votes 1 and 5 agreed to on division)
The Chair: Shall vote 1 under the Financial Transactions and Reports Analysis Centre of Canada, less the amount granted in interim supply, carry in the amount of $34,457,116.50?
FINANCIAL TRANSACTIONS AND REPORTS ANALYSIS CENTRE OF CANADA
Vote 1—Program expenditures..........$45,942,822
(Vote 1 agreed to on division)
The Chair: Shall vote 1 under the Office of the Superintendent of Financial Institutions less the amount granted in interim supply carry in the amount of $780,793.50?
OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS
(Vote 1 agreed to on division)
The Chair: Shall I report vote 1 and vote 5 under the Department of Finance, vote 1 under the Financial Transactions and Reports Analysis Centre of Canada, and vote 1 under the Office of the Superintendent of Financial Institutions, less the amount granted in interim supply, to the House?
Some hon. members: On division.
The Chair: Just to inform people, we won't report that until we hear from the Canada Revenue Agency as well, and we'll do the two together.
We have a number of motions that we need to deal with, and I expect that people want to deal with them in public. We can deal with them in camera, but we probably should give them to the clerk so that during the two-week break, the library can work on what it would cost to do our pre-budget hearings this fall, the travel of the committee, and so on. We need to do that in camera. Can we go into camera first, deal with that, and then go public?