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Third reading of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures


Thank you, Your Honour. Senator Smith and Senator Carignan have given a thorough overview of the budget, but I would like to make a comment on a few areas. Specifically, I have five areas I want to make comments on and bring to the attention of my colleagues.

With regard to the budget bill, the first issue I would like to raise is the discrepancy between the Main Estimates and the budget — this happens every year — and also the necessity of having Supplementary Estimates (A), (B) and (C). There was a significant amount of discussion during the past year with witnesses regarding the differences between the total expenditures as indicated in the Main Estimates and the total expenditures indicated in the budget.

Now, this is an issue every year, but just to illustrate for the 2016-17 fiscal year, the Main Estimates indicate total expenditures for the year in the amount of $251 billion, while the total expenditures, as per the budget, are $317 billion. So that's a difference of $66 billion. So this year, Treasury Board for the first time provided a reconciliation of the two amounts, and that was provided in one of the documents. They also made a commitment to address the issue, as well as hopefully reducing or eliminating the necessity of requiring Supplementary Estimates (A), (B) and (C).

The Finance Committee has spent a couple of hearings speaking with officials from Treasury Board Secretariat. The minister appeared before one of our meetings, and we also held a session outside of the meetings whereby he spoke about this initiative.

The members of the Finance Committee support this major initiative of the government, and we're looking forward to a more streamlined process where we can more easily follow the money as we go from the budget to the estimates and to the public accounts. So we're looking forward to the work that is going to be done by the government in this regard.

The second issue I wanted to raise is something that Senator Smith spoke about, and that's defining the middle class. If you look at the 2016-17 budget document, which I brought to the chamber here today, it's entitled Growing the Middle Class. The Finance Committee spent a significant amount of time discussing with witnesses what exactly the middle class is and how we could define it. We raised it not just with witnesses from outside government, but we also raised it with officials within government, the Treasury Board Secretariat, Department of Finance officials and also the Minister of Finance when he appeared.

Specifically, what we were looking for is what criteria an individual taxpayer or family has to meet in order to be considered the middle class. We were quite interested in that definition. It's important because the government has determined that one of its major objectives is to grow the middle class. The budget, of course, includes many initiatives which are intended to do exactly that: grow the middle class.

So in order to determine whether the budget initiatives have actually grown the middle class, we need to know who is currently in the middle class and what criteria they met to be included there. Then, once the budget initiatives have been implemented, we should be able to determine whether the middle class has actually grown, and exactly where they came from. Did they come from the lower class, or are people in the upper category going down into the middle class?

Unless we know that, how are we going to know whether the government has been successful with its budget initiatives, and whether they have in fact grown the middle class?

When Finance officials appeared before us, we actually asked them whether they track government initiatives to find out what is successful and what is not, and they said they do, so I think they are going to be challenged in determining whether this initiative has been successful. Despite raising the issue with a number of witnesses, we never did get a good definition of what the middle class is.

The third point I want to talk about is government's fiscal anchors. I spoke about this in the chamber before. The Liberal platform last year included a short chapter that was called "Our Fiscal Approach." Their platform indicated:

Our plan ensures that the government of Canada remains in a sustainable fiscal position.

Then the platform goes on to state — I think that's the end of the platform — the two anchors are:

In 2019/20, we will:

- Reduce the federal debt-to-GDP ratio to 27 percent

- Balance the budget

So that would be balancing the budget by 2019-20.

However, Budget 2016-17 indicates that the debt-to-GDP ratio, by 2019-20, will not be 27 per cent. Rather, it's projected to be at almost 32 per cent. The budget will not be balanced by 2019-20 as committed in their platform; rather, the deficit is projected to be $17.7 billion in that year, and of course it's $29.4 billion for the current year.

Effectively, the way I look at that is that the government has lost its two anchors, and we don't know when the budget will be balanced. I haven't been able to find any commitment by the Minister of Finance as to when the budget will be balanced.

So, recurring annual deficits over a lengthy period of time is concerning, and as Senator Smith said earlier — and I think Senator Carignan also said it — the deficits of today are the taxes of tomorrow.

The fourth area I want to talk about is something Senator Smith spoke briefly about, and that's the provision of taxpayer information to the Chief Actuary. There is actually a section in the budget implementation act which talks about that.

If you look at the Income Tax Act, section 241 as it exists now prohibits officials and other government representatives from communicating taxpayer information obtained under the act unless they are specifically authorized by the act. This is an issue for the privacy of taxpayers, and of course we're all taxpayers here, so our privacy would be of concern to us and other people, and also the security of that data, after it is provided to the Chief Actuary.

The budget implementation act includes a clause 47. That clause 47 is going to permit taxpayer information to be provided to an official for the sole purpose of enabling the Chief Actuary to conduct actuary reviews of certain pension plans. As I said, privacy issues are always a concern when taxpayer information is concerned and, of course, security of personal data is also an issue.

When the Finance Committee looked at this section, they decided they would refer this to the Privacy Commissioner to see what he thought about it, and also to determine whether this clause within the budget bill complies with the federal privacy legislation. And the Privacy Commissioner responded to us accordingly. I'm just going to share some of the comments, because we had a very lengthy letter from him and he pointed out some interesting things.

First of all, he said the budget implementation bill:

. . . as currently drafted would seem to allow for the sharing of personal information in circumstances where anonymized information would suffice. That is problematic from a privacy perspective since the sharing of personal information should be limited to only what is necessary for the Chief Actuary's purpose.

He said the Department of Finance officials have indicated that the information to be shared will be masked data in order to protect the privacy of taxpayers.

So it leads the Privacy Commissioner to understand that the government's intention is to mask, or de-identify, the information, but the Privacy Commissioner was somewhat concerned about whether the information could be re-identified once it's been de-identified.

He said the intention should have been made explicit in the bill. It is his position that, as a minimum, it should be confirmed in the agreement between the department disclosing the information and the Chief Actuary.

Once the budget bill passes, the Finance Committee will be writing to the Chief Actuary and making sure that the proper arrangements are in place. That would include a formal agreement regarding information sharing and privacy protection measures that will limit the collection of information, establishing retention times and providing for the destruction of information. The Privacy Commissioner in this letter concluded that if such an agreement were reached, then his privacy concerns about the bill would be attenuated.

The last area is program expenditures in general. When we looked at the budget, program expenditures are approved throughout government departments and agencies, but what we found was that certain initiatives are budgeted in a variety of departments and agencies, and it's very challenging to get a handle on exactly what the total program is costing.

For example, infrastructure spending is budgeted in 27 organizations in government. Funding support for First Nations, Metis and Inuit is also budgeted in numerous organizations. I think the number was 50 there. Funding for Syrian refugees is budgeted in a number of organizations. I think it was about five.

Since estimates in performance reporting are provided on an organizational basis, it will be challenging and sometimes difficult to track overall spending and the results of initiatives. This is something the Finance Committee will be looking at when we return in September.

Thank you very much, honourable senators.