Mr. Paul Thompson
4043-03-22 12:20:00
With respect to the importance of moving to domestic production, there has been a significant shift over the course of the pandemic to more domestic supplies. Dr. Kochhar spoke about the NESS in particular, but if you look more broadly at procurement of PPE, our estimates are that about 50% of the contracts are with domestic companies and about 40% of the value is going to domestic companies..
Jean Yip (Scarborough—Agincourt)
4043-03-22 12:20:00
Thank you. We will now move on to Mr. Dong for five minutes..
Han Dong (Don Valley North)
4043-03-22 12:20:00
Thank you, Madam Chair. This study is great. It kind of takes me back to where we were in 2020. We were fighting a war against COVID-19 and a war we weren't prepared for. I remember, while the health care workers were fighting on the front line, the entire population was working together, whether donating PPE or looking after a neighbour or a friend in quarantine. Then we had our MPs and senators working together. I remember the days when we had those technical briefings on a daily basis. We put aside politics and would give ideas, observations and public service. And you were there every day taking the advice and acting on it. The entire nation was fighting against one single enemy. I really miss those days, by the way. With that, I just want to say a sincere thank you to Public Health and especially to the procurement folks. You guys worked magic in a hyper-competitive market. It's not buying product to satisfy wonks. It's actually buying product to save lives. So every country was being super-competitive going to market and purchasing PPE. Unfortunately, Canada did not have the capacity to produce our own PPE, and you folks had to work around the clock—literally, because some of the producers around the globe are in different time zones. So I just want to say a sincere thank you to the witnesses here today. To Mr. Thompson, can you tell us how your department, in a very short period of time, secured the amount of PPE Canada needed? In Parliament we talk about how the provinces are really having shortages, but we actually never see the bottom of the barrel. It was because our international procurement was doing the magic for a short period of time, and then domestic production capacity caught up. But tell us, what exactly did you do to secure those contracts?.
Mr. Paul Thompson
4043-03-22 12:20:00
As I alluded to in my remarks, a lot of it was just pure effort at the beginning, with the teams working around the clock. But it was also leveraging flexibilities we introduced to make it easier to secure products, such as the ability to delegate authority so we could move quickly, and to use sole-source contracts or advance payments where required. Those were just some of the flexibilities we needed, because we knew when there was a supply available, we needed to move super-fast to secure it..
Han Dong (Don Valley North)
4043-03-22 12:20:00
Exactly. On the report, 50% of the suppliers got this financial viability assessment. That means 50% didn't. Can you tell us what percentage of the contracts weren't honoured—i.e., for whatever various reasons they couldn't deliver the product at the end of the day?.
Mr. Paul Thompson
4043-03-22 12:20:00
With respect to situations where there was advance payment as part of the mix, the vast majority of those were delivered in accordance with the contract. And in the very small number of cases where there didn't happen, there's legal action to recover the payments. But it was a successful endeavour in the vast majority of cases, and the goods and/or the services were delivered in accordance with the contracts..
Han Dong (Don Valley North)
4043-03-22 12:20:00
To build on this success going forward, do you see perhaps a need to develop an emergency procurement protocol so that in case we have a global pandemic or something major happens, the government can have a different set of rules in terms of procurement that will protect the public interest and the integrity of the system? Meanwhile, we get products procured quickly..
Mr. Paul Thompson
4043-03-22 12:20:00
That is certainly one of the lessons learned, and the Auditor General's report is helpful in this regard as to how we can institutionalize some of these practices and make sure that we approach it more systematically. We have a checklist, as was alluded to earlier, so that we know when we're in a situation like this we can follow a set of predetermined procedures. We have procedures in place to rely on financial experts, for example, on this issue of financial viability of the suppliers. Compared to the beginning of the pandemic, it has been a lot more systematized for if and when we face similar situations going forward. We still are facing challenges, for example, with procuring rapid tests, which is one of the key areas where we continue to push..
Jean Yip (Scarborough—Agincourt)
4043-03-22 12:20:00
Thank you, Mr. Thompson. I would like to thank the witnesses for coming today. We need to suspend the meeting to go in camera. Members, you will have to log off and log in for the in camera part of the meeting. Thank you. [Proceedings continue in camera].
Iqra Khalid (Mississauga—Erin Mills)
2024-12-18 12:15:00
I have a point of order, Chair..
John Williamson (New Brunswick Southwest)
2024-12-18 12:15:00
Yes, Ms. Khalid. .
Iqra Khalid (Mississauga—Erin Mills)
2024-12-18 12:15:00
I believe the debate is specifically on scheduling meetings from tomorrow onwards to January 26. I question the relevance..
John Williamson (New Brunswick Southwest)
2024-12-18 12:15:00
He is well within his right. This is relevant. It is not repetitive and he's not reading. Mr. McCauley, you have the floor. .
Kelly McCauley (Edmonton West)
2024-12-18 12:15:00
Thanks. Again, you have to wonder. The government knew Friday that they were going to fire the former finance minister. I accept that Mr. Forbes wasn't told and wasn't preparing the transition binder, but you'd think they would plan a bit better when we're in a crisis right now, a financial crisis. The dollar is cratering, Trump south of the border is threatening 25% tariffs if we don't get our act together on the border and we have defence spending and other issues. .
Francis Drouin (Glengarry—Prescott—Russell)
2024-12-18 12:15:00
I have a point of order, Mr. Chair. Just out of politeness for our witnesses, is Mr. McCauley planning to go on until one o'clock? .
John Williamson (New Brunswick Southwest)
2024-12-18 12:15:00
Mr. Drouin, that is not a point of order. .
Francis Drouin (Glengarry—Prescott—Russell)
2024-12-18 12:15:00
I know, but let's—.
John Williamson (New Brunswick Southwest)
2024-12-18 12:15:00
This meeting has blown up because of you. Do not attempt to pin it on Mr. McCauley..
Francis Drouin (Glengarry—Prescott—Russell)
2024-12-18 12:15:00
It's because of you, buddy. Twenty-four hours, man.....
John Williamson (New Brunswick Southwest)
2024-12-18 12:15:00
Mr. McCauley, you have the floor..
Kelly McCauley (Edmonton West)
2024-12-18 12:15:00
I am shocked that Mr. Drouin would deprive our witnesses of my Christmas offering to them of—.
Voices
2024-12-18 12:15:00
Oh, oh!.
Kelly McCauley (Edmonton West)
2024-12-18 12:20:00
I would certainly like to ask them about that. I would ask them right now, but I don't think they're allowed to take the floor. Perhaps they can sign up to be on the speaking order afterwards. It's a great concern. We have late public accounts. We had commentary about the pension surplus for the public service. I have great concern over the surplus for a couple of reasons. For one, I believe the Treasury Board and the government use a false discount rate. We saw some internal documents from the government about pensions explaining that there's an excessively high—in some people's views—discount rate for the funded portion of public service pensions. Their explanation is that they can have a high discount rate because they take higher risk. They get higher returns because they take higher risks, but they take higher risks because the taxpayers are on the hook for any losses. Instead of using a real return bond, as we use for the unfunded portion of the pensions, I think the pre-2005 portion, we use an artificially high number that perhaps hides a lot of the liability this government has on public service pensions. The C.D. Howe Institute has guesstimated that it's not a surplus but an $80-billion deficit if you use real return bonds like other pensions do. If you look at the public accounts.... I don't have them; they haven't been printed, I think. Apparently, PSPC takes two weeks to print three books this size. Chrystia Freeland managed to get her new book out on a day's notice, in two days, in two chapters, but the government takes two weeks to print a book like this. We don't actually have it here; it's only in PDF. I'd like to be able to look it up, but I can't. I'll explain what the discount rate is. Getting back to what I was talking about, my concern is with the pensions. Ms. Boudreau explained that that was one of the delays. My belief is that if the pension surplus is recognized in this fiscal year, which started April 1 of this year, then that money would be recognized this year. It would not go into a previous year. Mr. Cannings brought that up, and my colleague from the Bloc brought up the pension as well. We certainly would like to ask questions but, of course, the government is blocking our ability to look at that. The government is blocking our ability to look at the whole scandal of the finance minister getting turfed on a Friday but still being told that she had to come back and present the fall economic statement, take the fall for being $20 billion over and then take on a new role in cabinet, where she has no staff and no power, to make way for Mark Carney. I appreciate Minister LeBlanc stepping up to take his role as well. Perhaps it will make it easier for him to access clam scam two or some other favours for the family, as he has done in the past. It makes you wonder. The government knew Friday that Minister Freeland was going to leave her role. We're in an economic crisis right now. We're into our sixth quarter in a row where GDP per capita has dropped, which means that the wealth generated per person in Canada is dropping. We're now at the same level we were in 2018, whereas the U.S.'s has gone up by I think 25%. We used to have an almost even GDP per capita in this country. We're now at about $55,000 U.S., and the U.S. has shot up to $81,000. Ireland, which people used to flee for economic reasons, as my great-grandparents did, now has a GDP per capita of over $100,000 U.S., and we're at $55,000, but I digress. We are in this economic crisis of a collapsing economy. Unemployment is up to 6.8% or 6.9%. Who knows if it's going to break 7%. It's 10% in Toronto and 8% in Edmonton. Again, that's for six straight quarters. Former Bank of Canada governor Mr. Poloz stated that we are in a recession. We're not in a technical recession of two straight quarters of declining GDP. He states that we are in a full-blown recession and the numbers show it. The only thing hiding it is the out-of-control immigration growth. Even the government has stated that they let it get out of control and they have to cut it back. They're flooding the country with new people when we don't have housing, hospitals or doctors for them, but it's propping up the economy and the GDP. They're hiding behind that and saying that we have the best economy in the G7..
Iqra Khalid (Mississauga—Erin Mills)
2024-12-18 12:20:00
Call the vote..
John Williamson (New Brunswick Southwest)
2024-12-18 12:25:00
Mr. McCauley, I'm going to dismiss the witnesses very soon. I suspect Madame Sinclair-Desgagné would like to speak before I do that, but would you yield? I'll put you back on the list. I know you're on a roll and I don't want to interrupt you, but I want to be respectful. You can decline, but it's just to—.
Kelly McCauley (Edmonton West)
2024-12-18 12:25:00
I have so much more, but I'd be very happy to allow Ms. Sinclair-Desgagné to step in for a moment..
John Williamson (New Brunswick Southwest)
2024-12-18 12:25:00
Thank you. I will move you down. I'll turn to Madame Sinclair-Desgagné, and then I will come back to the witnesses..
Nathalie Sinclair-Desgagné (Terrebonne)
2024-12-18 12:30:00
Thank you for your generosity, Mr. McCauley. Thank you, Mr. Chair, for pointing out that I wanted to speak. I think it's a real shame that a motion is tabled at the beginning of the committee meeting, when we're hearing from witnesses and we have an enormous number of questions to ask them. Mr. Drouin, it's customary for a motion to be tabled at the end of the meeting, at the last turn to speak, to let parties like the Bloc Québécois and the NDP speak and ask questions, rather than encouraging the Conservatives to filibuster. Once again, we see that those who don't want to see Parliament move forward are on both sides of the House, and that's a real shame, because we have work to do. Some very important witnesses came today, despite the short notice they received. I'm a little disappointed. I'm not particularly interested in the substance of the motion. I think we had much better things to do today by talking to the witnesses. I'm going to give the floor back to Mr. McCauley, whom we're going to listen to until the end of the committee meeting today. I want, once again, to point out that I think this waste of time is a real shame and could and should have been avoided..
John Williamson (New Brunswick Southwest)
2024-12-18 12:30:00
Thank you very much. Ms. Khalid is not in the room. I will go to the next person that is—.
Kelly McCauley (Edmonton West)
2024-12-18 12:30:00
Thank you. One thing I want to address, besides how disappointed I am that we're not able to ask witnesses questions on this important stuff, is that the motion blocks the committee from meeting. They claim that under Standing Order 106(4).... For those watching at home—there may be five of you now—the Standing Order 106(4) procedure says that if four members of this committee write to the chair, they can force a meeting, but it doesn't allow meetings to delve into the scandal of the green slush fund or the scandal of the CEBA loan, where—.
John Williamson (New Brunswick Southwest)
2024-12-18 12:30:00
Mr. McCauley, I'm sorry. Just hold your thoughts. The witnesses are excused. Thank you very much. We will see you all again in the new year. I appreciate you coming in today and I apologize for this needless delay..
Kelly McCauley (Edmonton West)
2024-12-18 12:30:00
I wanted them here to berate them..
John Williamson (New Brunswick Southwest)
2024-12-18 12:30:00
Merry Christmas. Mr. McCauley, you have the floor..
Kelly McCauley (Edmonton West)
2024-12-18 12:30:00
As the witnesses leave, I just want to yell at them a bit more. Merry Christmas. I appreciate your attempt to get the public accounts to us before Christmas. Standing Order 106(4) does not allow meetings about the scandals. All it allows is a meeting to decide whether there will be meetings. Four members from different parties could sign the 106(4) request and we could come to Ottawa to be present at a meeting to discuss some of the scandals, such as the green slush fund and the finance minister getting fired right before the fall economic statement, with a $60-billion deficit that is causing the dollar to drop, causing uncertainty and, as the papers say, giving a gift to Trump in his fight against us with his tariffs, because it shows us as weak and chaotic. However, members of the government, with their coalition partners in the NDP, could just immediately move to adjourn the meeting, so this is a false outreach the government has put forward. They say, “Oh, you can have a 106(4) meeting anytime in January or February or during a break week”, but it's not really true. As we saw years ago during other times we've had 106(4) meetings, we could get here and the government and their coalition partners could say they don't want to work on a break week. They do not want the committee looking into their scandals. They do not want a light shone on this disaster of a government. I reject the argument that we could have a 106(4) meeting anytime. We can't. The reality is that the government could still simply move to adjourn or block any meeting, period, as we saw in the past on ArriveCAN. It's unfortunate the Auditor General has left, because one of the issues she brought forward in her opinion.... It's not actually in the public accounts itself. You have to look online for her commentary. The public accounts, by the way, which I'm very disappointed in, have gone from an audited opinion to a propaganda piece for the government. If you read some of it—I'm going to call it what it is—it's a lie. The government talks about the carbon tax being revenue-neutral, but it is not revenue-neutral. To say so is a lie. Here we have a government document signed by the comptroller general, signed by the Receiver General, signed off on and delivered by the Treasury Board and signed by the Auditor General, and it has editorial copy—not the numbers but government talking points. In this case specifically, it is a lie, because the carbon tax is not revenue-neutral. The carbon tax has GST. Alberta alone will be paying, I think, $100 million in GST just on the carbon tax. On a straight, revenue-neutral basis, every penny collected from taxpayers would go to taxpayers. It does not. Some is diverted to government operations. I think a couple of years ago, $100 million was diverted to government operations. Some is diverted to small and medium enterprises. Therefore, again, it is not revenue-neutral. It is being used a bit as a slush fund. I have it somewhere in my papers, and I hope to refer to it, but the OECD, in its description of “revenue-neutral”, says that it's taxation money that cannot be used to discriminate or push spending patterns in a certain way, which is exactly the point of the carbon tax. I'm not arguing what the intent of the carbon tax is, which is to drive up prices one way and perhaps force habits another way toward less carbon intensity—that is the whole point of the carbon tax—but the OECD states that such actions mean it is not revenue-neutral. Here we have the OECD basically saying that just the idea of a carbon tax is not revenue-neutral. Of course, we had the oil carve-out for people from the wonderful province of New Brunswick, like our chair, and from other provinces in Atlantic Canada. The Liberal government cynically did a carve-out there, and told those in Alberta and Saskatchewan suffering through -40°C, “We're going to tax you extra to heat your homes. We're going to tax you more, despite the fact that you have some of the coldest temperatures in the country, but in areas where we're polling very poorly and are getting pressure from our MPs, because they're going to lose the next election, we are going to give out a carbon tax carve-out.” Again, it violates the whole neutrality of a carbon tax, and further violates the definition of the carbon tax as stated by the OECD. Getting back to the carbon tax itself, I read this: “The federal pollution pricing system is revenue neutral”. This year, they've added a bit of a disclaimer: “over time for the federal government”. .
A voice
2024-12-18 12:30:00
Merry Christmas..
Francis Drouin (Glengarry—Prescott—Russell)
2024-12-18 12:35:00
I have a point of order, Mr. Chair..
John Williamson (New Brunswick Southwest)
2024-12-18 12:35:00
Go ahead, Mr. Drouin. .
Kelly McCauley (Edmonton West)
2024-12-18 12:35:00
I am quoting from something. .
John Williamson (New Brunswick Southwest)
2024-12-18 12:35:00
You can cite, but just bear in mind that Mr. Drouin is correct. I am not saying you're reading..
Kelly McCauley (Edmonton West)
2024-12-18 12:35:00
Thank you very much. Before I was interrupted by such silliness, I was saying, “The federal pollution pricing system is revenue neutral over time for the federal government.” Of course, in the House of Commons, repeatedly the government has stood up and said that it's revenue-neutral. In previous public accounts, it was revenue-neutral; now it's revenue-neutral but “over time”. Perhaps the budget will balance itself over time for the federal government. You can't have an accounting number being stated as a certainty “over time”. It's either revenue-neutral or not revenue-neutral. It is not. I want to continue with other points from the public accounts. I'm happy to paraphrase them if I can't read the public accounts verbatim. One thing they state is that the government will announce, starting in fiscal 2025, “the share of fuel charge proceeds returned to Indigenous governments”—which is fair, but that's a policy statement—“will increase from 1% to 2%”. I have to ask, where is this extra 100% increase for the proceeds coming from? I'm not criticizing the policy decision. They should actually back it up because there are areas where certain indigenous communities maybe require a much higher increase—those more rural and further north than perhaps southern ones. I'm thinking of the Nk'Mip first nation in B.C., which has phenomenal wines and a phenomenal hotel. B.C. is not part of the backstop—that's just an example—but I think they're a lot less affected by the cost of heating than perhaps McLeod Lake up by Fort McMurray. I wish the government had actually backed that up by saying that they're going to increase them from 1% to 2% based on information or do it based on need, as opposed to saying, “We've increased it. Look how virtuous we are.” They should back that up. Again, where's that extra 1% coming from? It's coming from the general pool. Possibly that makes it non-revenue-neutral. The public accounts further say, “As announced in Budget 2024, the government will return proceeds directly to small- and medium-sized businesses in provinces where the federal fuel charge is in place through the Canada Carbon Rebate for Small Businesses, a new refundable tax credit.” If you recall, this was announced several years ago. Where is this money coming from? If it's coming “in the year” or “for the year”, as the public accounts state, how can it be revenue-neutral? Where is the money they have collected since 2019? It's several billion dollars. It's not noted in the public accounts. It's not noted, from what I can see, in the fall economic statement either. Is it coming from general revenues? It does nothing, of course, to address two issues. I wish our witnesses were here so we could ask about this. I wish I could ask our previous witnesses from EDC, which was administering the CEBA, but of course that was blocked by a Liberal guillotine motion. The government is going to return several billion dollars to small and medium enterprises to offset the carbon tax they had to pay, which is wonderful, but why so late? Also, where is the money coming from? What happened to all the companies that paid into it from 2019 to 2024 and have gone bankrupt or are in receivership? Will they be receiving the money? For the CEBA money, are we going to have assurances that none of the carbon tax rebate will go to the many thousands of companies that have defrauded taxpayers? I think one out of every 11 businesses—9% of the 100,000 and some odd—that received CEBA money was ineligible. That's $3.5 billion so far that we know of. It's probably a lot more. The AG believes so as well. What assurances will we have that the government is not going to send carbon rebate cheques to companies that owe taxpayers that money? I wish I could ask, but of course we cannot. When is the SME rollout going to be? Where is that money coming from? Is it solely from small and medium enterprises? Has it been put into a separate pot of money? We don't know. One funny thing about the payment for the carbon tax rebate is that it used to be on a year-per-year basis so that money collected in a year was paid out in a year. Of course, now it's done quarterly, and with cash accounting, it's recorded when it's paid out. If I get a cheque on April 5, for example, that's five days into the new fiscal year, but it was money collected in the past year. That money collected will be accrued in one year, but the payout will be shown in the next. I believe the government changed this a couple of years ago when we brought up in this very committee that it wasn't revenue-neutral and that money was being taken by the government to fund other programs within the government. It was right in the public accounts that they admitted it, and lo and behold, what happened in the next year? An offset was done. We asked Finance and the AG, “What money is coming in and what money is going out, to be rebated?” and they said, “Oh, we don't know. It's on a different calendar now.” It's collected one year and paid out in another, because, of course, it's paid out quarterly for money that was collected the previous year. Did they do that to hide it? There's Hanlon's razor: Don't attribute to malice that which is more attributable to incompetence. This time I'm really not sure. As I mentioned, there's the oil heater carve-out for New Brunswick and other provinces. There's a huge carve-out for oil heating in Atlantic Canada. I used to live in Newfoundland, and our house was entirely electric baseboard heaters. When we were looking for housing, a lot of houses had oil heaters attached to them, or even buried. The government said they were going to do a carve-out and not charge carbon tax on oil heating; therefore, there would be less money collected. It makes sense. It would also make sense that less money would be distributed, because it's revenue-neutral. Anything collected should be returned, but we have a finance document that states there won't be a reduction in rebates, so where's that money coming from? Are the people in Alberta paying to heat their homes and paying a high carbon tax into general revenue subsidizing the Atlantic provinces? We asked that at the finance committee, and they stated, “No, it's only what is collected.” However, we have a statement saying there wouldn't be a reduction. You can't collect less tax and still pay that out, but apparently that's what the government is doing. I wish I could ask them. Actually, here it is. I apologize. I had it right in front of me the whole time. I am going to read a quote from it. I'm not reading notes. I'm reading a quote from the OECD's “Fundamental principles of taxation”. Why would I have this? Well, why wouldn't I? As I mentioned last week, I have a copy of the Royal Bank of Scotland analysis on flow-throughs for pricing for energy costs, because who wouldn't have that study on their laptop? Anyway, it reads: A neutral tax will contribute to efficiency by ensuring that optimal allocation of the means of production is achieved. A distortion, and the corresponding deadweight loss, will occur when changes in price trigger different changes in supply and demand than would occur in the absence of tax. In this sense, neutrality also entails that the tax system raises revenue while minimising discrimination in favour of, or against, any particular economic choice. That is the exact opposite of the carbon tax: “A distortion, and the corresponding deadweight loss, will occur when changes in price trigger different changes in supply and demand”. I fully accept the carbon tax is meant to change demand. We jacked up the carbon tax, and another increase is coming April 1. We're going to increase it by, I think, another $15 a tonne. It's going to be another 11¢ a litre. Its intent is to change your choice of habits, or the demand for gasoline and home heating. The fact that taxpayers in Alberta are subsidizing folks in Atlantic Canada for heat pumps means that we are affecting choice and demand, because the demand in New Brunswick for heating oil will drop, and the demand for heat pumps should increase. That's part of the plan, but it violates the definition of revenue-neutral. Here we have the Government of Canada pushing in public accounts, which is accounting.... You can't have a different opinion on the accounting books. One and one equals two. I have this argument all the time with my associate from Winnipeg North, who I take great joy in teasing. He takes great joy in teasing me back, and we have a fun relationship that way. Once in the House of Commons, he was going on about cuts to the CBSA, and I pulled out the public accounts from 2016 that showed the Liberal government cut spending to the CBSA. They cut spending in 2017 as well. The member for Winnipeg North then got up and said that it wasn't really right that I was quoting statistics because these things aren't always true, and I thought, “Well, the public accounts don't lie, so someone is lying.” The numbers do not lie. The revenue-neutrality is not true, yet the government puts it into the public accounts. They're lying in the public accounts, misleading parliamentarians in the public accounts and misleading Canadians in the public accounts. We have a government that reopened the public accounts for the first time in history for political reasons. Apparently, this year they delayed the public accounts until the day before the House rose to hide that the deficit blew past the failed finance minister's projections, her line in the sand. Public accounts were signed off on December 9, but the original report had the first go-round, I understand, as early as September 30, to the Auditor General. We knew what the deficit was before it was tabled, but why didn't the government release the public accounts? I don't believe the false reason about pensions, because of Public Sector Accounting Board rules. The surplus was realized in the 2024-25 fiscal year, so it would have no bearing on the past year. There would be zero bearing, yet they trotted that out as a reason the public accounts were delayed. I believe the government delayed the public accounts so that when we asked what the deficit was in November, they would not have to tell the truth, and when we asked in October, they would not have to reveal to Canadians that they blew past their line in the sand. I believe that is why, when we asked last week repeatedly what the deficit was, the government would not release that information. It's very curious. One of the examples they used was $16 billion in contingent liabilities. I accept that, but I don't accept what has changed since the budget was released, as they could have forecast this very recently. It's not the only thing that's very different from the budget, which, again, was released not that long ago—just a few months ago—and from what's in the fall economic statement. I'm sorry if I'm triggering people, but I want to read again from the public accounts of 2023-24. Remember, two years ago, we had the $40-billion line in the sand and had a commitment to a declining debt-to-GDP ratio. “The accumulated deficit (the difference between total liabilities and total assets), or federal debt, stood at $1,236.2 billion”—that's $1.236 trillion—“at March 31, 2024. The accumulated deficit-to-gross domestic product (GDP) ratio was 42.1%, up from 41.1% in the previous year.” It's up. “The government remains committed to its fiscal anchor of reducing the federal debt as a share of the economy over the medium term.” Again, it is up. The government states it's committed to its “fiscal anchor”. Do you remember how many times the fired deputy prime minister stated they were committed to their fiscal anchor of $40 billion? That, of course, turned out to be $61 billion, but they put that in the public accounts. What else is in the public accounts for this year? Oh, here we go again. The accumulated debt was up from last year. The debt-to-GDP ratio was up from last year too. “The government remains committed to its fiscal anchor of reducing the federal debt”. That's the exact same wording as in the 2022-23 public accounts: “the government remains committed to its fiscal anchor of reducing the federal debt”. Again, the accumulated debt-to-GDP ratio was up. Here we have the government in its public accounts admitting that it is higher—it went up—but apparently higher is lower, because when you have a fiscal framework, when you have a debt-to-GDP anchor and when you have a line in the sand, apparently you can lie about it. You can lie to Canadians about it. The accounting numbers don't change, but you can say that somehow down is up and left is right, and that, to the government, wrong is right. That leads into public debt charges. “Public debt charges were up $12.3 billion, or 35.2%, largely reflecting an increase in the average effective interest rate on interest-bearing debt, offset in part by lower Consumer Price Index adjustments on Real Return Bonds.” If you remember, I talked about real return bonds and the public service pension plan. If real return bonds are dropping, the discount rate should not be so high, but I digress. As the former deputy prime minister once stated, “Pushing...our debt into bonds with a longer maturity ensures that Canada's debt servicing costs [remain low].” She repeated that in the House, yet the government stated that interest payments have gone up. How much have taxpayers lost because the government didn't invest in longer bonds, as they stated they would? Argentina, despite their economic problems, was able to float a 100-year bond. There are 50-year bonds available, yet despite the government stating several times, both publicly in the previous economic fiscal update before Ms. Freeland was fired and in the House itself...we don't have to worry about debt charges or interest charges because we're buying long-term bonds. If you recall, a couple years ago, Glen McGregor—I think he was with CTV at the time—asked the PM about the threat of very high servicing costs, and the Prime Minister looked condescendingly at him and said in that special tone of his, “Interest rates are at historic lows, Glen.” What happened? They didn't stay at a historic low; they went up, and we saw a 35% increase in interest payments. I wish we had finance officials here so we could ask how much the out-of-control money printing led to the higher interest rates that led to the higher debt that somehow the government couldn't figure out. If I'm doing out-of-control money printing, I know I'm going to be doing it and I know it's going to cause inflation, you would think I would also know—like insider trading—to push our debt purchasing and bond issuing far into the future to lock in the lowest rate possible, but, of course, we didn't. Just a couple of years ago, in 2022, the budget came out and.... Of course, the budget always forecasts costs four or five years into the future. In 2023-24, looking four years out, the government projected $152 billion in interest payments. This was not a long time ago. This was not 1990. This was a very short time ago. In the 2022 budget, we started out with $152 billion in interest payments, which is a hell of a lot. The fiscal update that just came out—presented by some random Liberal cabinet minister because I guess Randy wasn't available—had $212.8 billion in interest. Interest on the debt, over four years, has gone up by $60 billion since the budget produced two years ago. Think about that. This is how incompetent this government is. They were out $60 billion—basically a 40% higher interest rate to service the debt than just two years ago. It came up in the supplementary estimates (A) in OGGO. They had $2 billion for higher interest rates. The supplementary estimates (A) come out shortly after the main estimates, which was shortly after the budget. How could you be out $2 billion? To be coming to Parliament just a couple months into the year saying you need $2 billion because a couple of months ago you misforecast what the interest payments were going to be.... Did anyone in this room or any of the five or six people watching think two years ago, “I'm going to be out that much”? I'm going to work out the exact total. Bear with me for two seconds. They were out 39%. I'm sure the government is going to argue that things have changed and the economy is slowing, but the revenue increase over four years, as projected two years ago in the fiscal update, was 17% and the budget that I'm referring to shows 16%, so they're forecasting basically the same revenue but somehow misforecast it by 40%. With all the brainiacs we have in finance and all the brainiacs we have at Treasury Board—a massive increase in the number of bodies—somehow they were out by $60 billion over a four-year period. That's for the interest payments. They were only out $20 billion on the deficit over a one-year period. That's almost the same in just interest payments. It's $60 billion. We will collect maybe $200 billion in GST, so they were out 30% of the value of the GST over four years, but just from two years ago. This is not forecasting from the turn of the century, or perhaps the Chrétien-Martin era, the Stephen Harper era or even the early Bill Morneau era. This was the now-fired finance minister herself, two years ago, missing interest payments by $60 billion. That is probably the second-largest line in the budget after OAS. It's greater than what we're paying to provinces for health care support. I hope people remember this when they're waiting in line for eight, 10 or 12 hours at their hospitals for care. The government, if they planned better, could have been spending money on health care transfers and hiring doctors instead of misforecasting $60 billion. Mr. Cannings and Ms. Sinclair-Desgagné were talking about the public service pensions earlier. If I was a public service employee, knowing the same people are nominally in charge of them, I'd be scared silly. It's a good thing that taxpayers are on the hook for public sector pensions, so even though there is a surplus, it doesn't affect public servants one bit. It's the same as if there was a deficit. It would not affect pensions one bit because they're guaranteed by legislation. It's the same with the pre-2005 pensions, which were not funded separately, as post-2005 pensions are. Pre-2005 pensions were just funded out of, basically, general revenue. If you look at the actuarial statement for the year, it shows the two funds separately. I think the 2005 one is underfunded by $7 billion, so that should be applied to post-2005, which technically would bring the surplus below the 25%.... If anything, the argument is, why is the government trying to take the $1.9 billion in surplus, and what are they taking it for? The argument shouldn't be that the surplus should go back to employees, with lower payments. There's one public servant. There's one taxpayer. There are two funds. One is unfunded. One is overfunded. Why don't they count the deficit against the surplus, as any of us would do? If you have a bank account and a mortgage, you don't say, “I have $10,000 in the bank; look how rich I am” if you have a mortgage of $10 million. You count the two of them together—so do companies—but the government counts the two separately. To my colleagues Mr. Cannings and Ms. Sinclair-Desgagné, I think the questioning should not be what they're doing with their surplus, but how they're claiming it as a surplus. The government changed the law in 2019 for the budget. They changed what the surplus would be. I wish we had officials here to explain why the 2005 unfunded portion is not being counted against the supposed surplus. What do they intend to do with that money, roll it in to reduce the deficit? Was Mark Carney going to step in and say that was Chrystia Freeland's $61-billion mistake, that we're in surplus and found $2 billion? I wish we could find out. We could find out next week in meetings or in two or three weeks in meetings, but we won't find out if the Liberals have their way. I'll get back to the public service pension. I wish we could have a bit more transparency about that fund. As I mentioned, it doesn't actually own stocks and bonds, as a lot of us think it does. When people declare that the fund is up x per cent, it's based a bit on market capitalization and Kentucky windage, not a firm amount. The Auditor General referred to it in her notes in her last public accounts report, from last year. She had concerns about how they were working out the value, the valuations, and it was the same with how the CPP comes up with its funding. Speaking of the CPP, I wish we had the officials here so we could ask, as I do each year, about how the government works out their lowest net GDP. When the government talks about their net GDP, they count the CPP money as an asset, but they don't count the liabilities—what they owe to grandma and grandpa. That will be me in five years; unfortunately I'm that old. They don't count the obligations, but they count the assets. When the former and fired finance minister would stand in the House and say that we have the best net debt-to-GDP ratio in the G7, it was true under her formulation, but as the former deputy minister for finance said a couple of years ago, it uses “mental gymnastics” to come up with that number. The Fraser Institute uses these numbers, and the IMF says you can use them, but when you use OECD calculations, we're actually 22nd out of 29. We're the seventh-worst for debt-to-GDP ratio. What brings down our debt-to-GDP ratio is counting CPP. I posed a question to Mr. Sabia, the deputy minister at the time, and his ADM, and said the only way you can count the CPP as an asset is if you have access to use it. Mr. Sabia started with, “Well, yes”, and then he caught himself because he did not want to say the truth, which is that you can only count the CPP asset, the money set aside for seniors.... It's paid for by seniors and companies, not paid for by the government. It's half paid for by taxpayers and half paid for by their companies. They pay into the fund. The only way you can count it for financial or accounting reasons, according to the IMF, is if the government can access the money for operational reasons. That is the dirty secret about the government stating that its net debt-to-GDP ratio is the lowest in the G7. Yes, the U.S. is a basket case, but you can never count the U.S. out. It doesn't take much for it to flip things around like Bill Clinton did. It actually ran surpluses. It has the ability to gear up. When you look at Germany's numbers, I think it has a lower net debt-to-GDP ratio than us. It just announced $100 billion in tax cuts. It will be moving further ahead. We can claim we're the lowest only when you count the money for the CPP—I think it's $700 billion—but you don't count the liability. Anyone watching at home who is collecting CPP, or perhaps whose parents are collecting CPP, should know this: When the government talks about having the lowest debt-to-GDP ratio, it's because they are counting not what's owed to our seniors, but what is set aside for seniors, knowing that they can only count it, in accounting lingo, if they have access to the CPP for operational reasons. I don't think the government is going to do that. It would be suicide. I'm not saying the Liberals would, but they are lying to Canadians when they are saying we have the lowest debt-to-GDP ratio. If we compare it to the OECD, apples to apples, we are 22nd out of 29. We are the seventh worst for debt-to-GDP ratio. I see the chair is motioning me..
John Williamson (New Brunswick Southwest)
2024-12-18 13:10:00
Mr. McCauley, I'm going to interrupt you. We are out of resources, but I'm going to take 30 seconds. In the spirit of transparency—Mr. Drouin, this is not out of spite; I'd already signalled this to one other opposition member—I am planning to have meetings in January, over the 7th to the 9th and several over the 20th to the 23rd. You'll be receiving notices for them. I have endeavoured to work the best I can with the schedule the government has outlined for these documents..
Iqra Khalid (Mississauga—Erin Mills)
2024-12-18 13:10:00
I have a point of order, Chair..
John Williamson (New Brunswick Southwest)
2024-12-18 13:10:00
I am sorry this does not line up with your schedule..
Iqra Khalid (Mississauga—Erin Mills)
2024-12-18 13:10:00
I have a point of order, Chair..
John Williamson (New Brunswick Southwest)
2024-12-18 13:10:00
This meeting is adjourned..
Francis Drouin (Glengarry—Prescott—Russell)
2024-12-18 12:35:00
You'll notice where I'm going. I thought no reading was allowed during filibustering..
Kelly McCauley (Edmonton West)
2024-12-18 12:30:00
You're coming back to me..
John Williamson (New Brunswick Southwest)
2024-12-18 12:30:00
No, I'm going to move you down to the bottom. Well, it's Mr. Jivani, so I will see you instead, Mr. McCauley, since I'm sure Mr. Jivani will be happy to yield his spot to you..
Kelly McCauley (Edmonton West)
2024-12-18 12:35:00
Mr. Chair, I can cite verbatim..
John Williamson (New Brunswick Southwest)
2024-12-18 12:35:00
Yes, you can cite, as you're doing. Continue..