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Results: 106 - 120 of 459
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-03-18 11:04
Thank you.
Good morning, Mr. Chair and members of the committee.
Thank you for the invitation to appear before you today. We are pleased to be here today to discuss our recent economic and fiscal analysis related to your study of Bill C-14, An Act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures.
As you mentioned, Mr. Chair, I am accompanied today by Xiaoyi Yan, Director, Budgetary Analysis.
Consistent with my mandate to provide independent, non-partisan analysis to Parliament, my office has worked diligently since the beginning of the pandemic last March to provide parliamentarians with reliable estimates of the impacts of the unprecedented COVID-19 response spending on the government’s finances and the Canadian economy.
We have also published independent cost estimates of a number of components of the government’s COVID-19 Economic Response Plan.
On December 10, we released our assessment of the Government of Canada's fall economic statement. Our report identifies several key issues to assist parliamentarians in their budgetary deliberations, as well as updated fiscal and economic projections.
In terms of transparency, the government's fall economic statement does include elements that are essential for credible fiscal planning and scrutiny, such as a detailed five-year fiscal outlook.
However, the statement falls short on transparency in several areas, such as the absence of a fiscal anchor, the lack of clear thresholds for fiscal guardrails and the lack of detail related to the employment insurance operating account.
In addition to our report, my office has also released independent cost estimates of selected measures contained in the fall economic statement, including the elimination of interest on Canada student loans, the Canada emergency wage subsidy and Canada emergency rent subsidy programs.
We would be pleased to respond to any questions you may have regarding our analysis of the government's fall economic statement 2020 or other PBO work.
Thank you, Mr. Chair.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-03-18 11:07
Thank you Mr. Giroux, for keeping your remarks brief. That gives us more time to ask you the questions we need answered.
Bill C-14 includes a request to raise the debt limit by a historic $663 billion—approximately 57% over the existing ceiling. This includes $100 billion of undefined stimulus spending, and another $223 billion of additional unallocated borrowing capacity.
I'd like you to comment on the merits of asking for a massive increase in borrowing capacity in the absence of a budgetary framework, and in the absence of any fiscal anchors to guide the government's management of its finances.
Yves Giroux
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Yves Giroux
2021-03-18 11:08
It's an issue that we have expressed concerns with in our December 10 report following the fall economic statement. In that December 10 report, we indicated that it's a bit unusual to have such an increase in the debt ceiling when there are items that are included for which there is no clear path forward. For that, I refer to the $100 billion that was mentioned in the fall economic statement—$70 billion to $100 billion to be spent over three years for which there are no clear indications as to what the amounts will be spent on.
We've flagged that as an area worth considering for parliamentarians to ask questions to the government, because that's unusual. It's unusual because there are no clear identifiable areas of spending for that amount, and the debt ceiling already includes some contingency amount of about $87 billion, so there is enough room to at least get that spending going if the government wishes to provide economic stimulus.
In summary, we find that a bit unusual, and that's why we raised it in our December 10 report.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-03-18 11:09
Is it not more prudent to first table a proper federal budget and then request the borrowing authorities required to support that budget?
Yves Giroux
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Yves Giroux
2021-03-18 11:09
That's the usual way to proceed with increases in the debt borrowing authority. It's usually included in a budget or accompanies a budget bill. That's usually the way to do it. You present your longer-term spending plan to parliamentarians and Canadians, and then you also seek, by the same token, an increase in the borrowing authority to accompany and to accommodate these spending plans.
Some would say the fall economic statement was a mini-budget, and in that respect it contained many budgetary measures, but it's not a traditional budget in the sense that we expect it to be, because, as all of you know, it's been two years that we haven't seen a budget.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-03-18 11:10
As you just mentioned, there is a contingency already built into the debt ceiling, and yet there's a massive amount of discretionary spending or borrowing available beyond that. With respect to that additional discretionary spending and unallocated borrowing authority, do you believe that the amount is reasonable? We're talking about $100 billion of stimulus funding and then, beyond that, there's still some $223 billion of additional unallocated borrowing capacity.
Is that reasonable? If not, what would be a more appropriate ceiling to consider?
Yves Giroux
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Yves Giroux
2021-03-18 11:11
Well, “reasonable” is all in the eyes of the beholder, sir, so I would probably say it's amply sufficient. It's largely sufficient certainly, to say the least, to cover the needs expressed in the fall economic statement and then some.
In my humble opinion, the $100 billion is probably premature to include in a borrowing authority act, although it's up to you parliamentarians to decide on that. It could have waited until such time as the government lays out its plans for that additional spending. If there are any unforseen expenditures that need to take place, they could have been accommodated or they could still be accommodated with that contingency amount of some $87 billion, which is, again, a very significant leeway in the context of a borrowing authority.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-03-18 11:12
Mr. Giroux, you've raised concerns over the inability of parliamentarians to properly evaluate and scrutinize the government's borrowing and spending plan. Could you comment on what you consider to be the minimum amount of transparency one should expect of a federal government when it's asking for massive debt ceiling increases and billion of dollars of discretionary spending?
Yves Giroux
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Yves Giroux
2021-03-18 11:12
Well, traditionally when the government tables a bill that seeks to increase its borrowing authority, it does that together with a budget that clearly lays out its plans going forward—usually five years into the future. We haven't seen that yet. We see a borrowing authority limit that's being sought before Parliament, but we don't have the same full picture that is usually accompanying such an increase through a budget.
Hopefully, the next budget will provide additional plans that will probably seek to better justify this increase in borrowing authority, but so far it's only been a partial picture through the fall economic statement.
View Sean Fraser Profile
Lib. (NS)
View Sean Fraser Profile
2021-03-18 11:13
Thanks very much.
I appreciate your being with us, Mr. Giroux. I have just a few questions.
I will start where my colleague Mr. Fast left off, on the issue of the borrowing authority sought in Bill C-14. Some of my colleagues on this committee have previously referred to it as a blank cheque. I think Ms. Jansen actually used that phrase in the previous panel.
I just want to get confirmation. There is a significant difference between the borrowing authority and spending decisions of Parliament. Could you just explain that distinction, please?
Yves Giroux
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Yves Giroux
2021-03-18 11:14
The borrowing authority is the maximum amount the Minister of Finance can borrow to finance government operations. It doesn't necessarily go together with the spending authority. The spending authority itself is granted through separate bills, and can be such legislative statutory authorities as employment insurance or old age security, which are permanent programs on which Parliament does not need to vote every year. There are also operating expenditures, grants and subsidies and so on, for which Parliament has to grant authority to spend on an annual basis. That's done through main estimates and various supplementary estimates.
Even though the borrowing authority can be increased, it does not grant authority for the government to spend. They have to seek spending through separate bills.
View Sean Fraser Profile
Lib. (NS)
View Sean Fraser Profile
2021-03-18 11:15
There would be an opportunity for parliamentary scrutiny over new spending programs that the government could introduce in the upcoming budget or through some of the measures you've suggested. There would be an opportunity for parliamentarians to actually scrutinize and potentially vote on those new programs at the appropriate time. Is that correct?
Yves Giroux
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Yves Giroux
2021-03-18 11:15
That would normally be the case, indeed, but that's assuming we revert to the normal legislative process. The government benefited from extraordinary powers in the previous session.
Assuming we have the normal procedures for approving spending, yes, you are right, sir.
View Sean Fraser Profile
Lib. (NS)
View Sean Fraser Profile
2021-03-18 11:15
Certainly.
I want to talk for a moment about the wisdom of having parliamentary authority over the borrowing limit. This is something that is relatively new. In 2016 we actually adopted a new legislative requirement that the government, every three years, seek a review or permission to increase borrowing authority, should they wish to do so.
This is, in my view, an exercise in transparency. My understanding is that we have actually now come up on the legislated deadline. Can you confirm whether it's actually an option for the government to ignore the requirement to come back to seek further borrowing authority?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-03-18 11:16
I would have to get back to you on that. Not being a lawyer myself, I'd have to look at the details of the legislation.
Results: 106 - 120 of 459 | Page: 8 of 31

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