THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, May 15, 2019
The Standing Senate Committee on National Finance, to which was referred Bill S-246, An Act to amend the Borrowing Authority Act, met this day at 6:51 p.m. to give consideration to the bill; and, in camera, for the consideration of a draft agenda (future business).
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: My name is Percy Mockler. I’m a senator from New Brunswick and chair of the committee. I wish to welcome all those who are with us in the room and viewers across the country who may be watching on television or online. As a reminder to those watching, the committee hearings are open to the public and also available online at sencanada.ca.
[Translation]
I will now ask the senators to introduce themselves.
[English]
Senator Boehm: Peter Boehm, Ontario.
[Translation]
Senator Pratte: I am André Pratte from Quebec.
Senator Forest: I am Éric Forest from the Gulf region in Quebec.
[English]
Senator Klyne: Marty Klyne, Saskatchewan.
Senator D. Black: Rob Black, Ontario.
Senator Forest-Niesing: Josée Forest-Niesing from northern Ontario.
Senator Eaton: Nicky Eaton. Nice to see you, Senator Day.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
The Chair: I’d like to introduce the clerk of the committee, Gaëtane Lemay, as well as our two analysts, Alex Smith and Shaowei Pu, who team up to support the work of the committee.
[English]
This evening, we begin our study of Bill S-246, an Act to amend the Borrowing Authority Act. Bill S-246 was introduced in the Senate on March 1, 2018, by our colleague Senator Day. It received second reading on November 27 and was referred to this committee the same day.
Today, as the first witness for this study, we welcome the sponsor of the bill, Senator Joseph Day.
[Translation]
As chair of the Standing Senate Committee on National Finance, I’d like to thank you, Senator Day, for a decade of tireless dedication to the committee, not to mention leadership. A pivotal year is coming up for you. You’ll be leaving the Senate in 2020. Thank you for your tremendous contributions to New Brunswick and Canada and for your leadership as a senator from New Brunswick and, now, as the Leader of the Independent Senate Liberal Caucus.
I’ve always had great respect for both you and your wife, a former New Brunswick MLA and minister.
[English]
You are the sponsor and the first witness. Senator Day, honourable senators, will make an opening statement, to be followed by questions directly to the sponsor of the bill.
[Translation]
Hon. Joseph A. Day, sponsor of the bill: Thank you very much for those kind words, Mr. Chair, and thank you, honourable senators, for taking the time to examine Bill S-246.
[English]
Colleagues, I have some opening remarks that I will try to follow as closely as I can. I’ve been involved with this particular issue for some time. The purpose of this bill is to protect the institution and the rights of honourable senators in their role here in the Senate, which I’ll discuss as I go through this particular private member’s bill.
Thank you for allowing me to appear. It’s been a while since we started this, but we have found this opportunity to go ahead now, which is very much appreciated.
I can’t claim exclusive authorship of this particular matter. It builds heavily on the work of our former colleagues Senators Murray and Moore. Other senators have also been involved in the past; Senator Banks was involved in this issue.
Over the years, beginning in 2008, both Senators Moore and Murray introduced bills similar to this one. In fact, each of them, over the time they were senators, introduced three bills along the same lines as this one. For various reasons, those bills expired when prorogation took place, which happens.
If we don’t deal with this bill before this particular session ends for the election, then we’ll have to start over again. That’s fine, because it’s important to discuss this issue to make sure that we have good support. I’m hopeful that we can move this measure along so that we can send it to the House of Commons and let them know what the position is.
As I begin, I think it important to set a bit of historical context. I have no intention of repeating what I have said in speeches in the chamber about the history of this issue. I’d invite you to take a look at that if this particular matter intrigues you. I will share some basic facts, so we can all be clear about what has taken place and where I believe we should go.
First, Parliament’s power over the public purse is fundamental to our system of democracy. It is Parliament that authorizes the spending of money, and it is Parliament that determines how that money is to be raised. Traditionally — and by that, I mean since Confederation or even earlier — whenever the government projected expenditures for a particular year were going to be greater than its predicted revenues from tax sources and otherwise, it would come to Parliament and seek permission or authority to borrow the difference. That authority was usually contained in what we call a supply or appropriation bill. You still deal with those, but there used to be in there authority to borrow.
As government finances grew more complex, the Speaker of the House of Commons ordered that a clause authorizing borrowing in a large supply bill be removed and debated on its own. In the view of that Speaker of the House, including it in the supply bill meant that it could not be properly debated; it just got lost. You understand how that can happen.
That was in 1975, colleagues. From then on, whenever the government wanted to borrow money, it would come to Parliament with a separate stand-alone bill they called a borrowing bill. That requirement is enshrined in law in section 43(1) of the Financial Administration Act.
Since deficits were the order of the day for many years at or about that time in 1975, at least one borrowing bill was introduced each year. They were normally dealt with quite quickly. I can give you an example. A bill would come in, it would be dealt with at second reading for a day or so, come to committee and then probably go out within the week. The bill received those various readings quite quickly because you’re studying in conjunction with the supply bill.
The committee held one meeting on this particular bill and then moved it along. This particular bill was Bill C-10 in 1996, and that was the last traditional borrowing bill that Parliament passed. I’ll explain why.
From 1975 to 1996 there was that pattern of the bill coming in separately from the supply bill but in conjunction with it.
Now, both Senators Bellemare and Moncion noted that between 1996 — that was the last bill, as I mentioned — and 2007, there were no borrowing bills. Senator Moncion, on November 8, 2018, when speaking to my bill, stated:
Between 1996 and 2007, Parliament did not once review the government’s authority to borrow.
It’s quite true. There were no borrowing bills during that period.
And on May 1, Senator Bellemare asked me this question about the requirement in the Financial Administration Act for borrowing bills:
Did you know that it was never applied between 1996 and 2007?
That’s true, but think about why. There was no need for a borrowing bill because the government was running surpluses. The government doesn’t normally put in a bill to get you to approve surpluses. They’re a very welcome thing to have. No borrowing was needed, and that’s the answer to those points that were made at second reading before this bill came to you.
As was explained in the 1998 budget plan on page 140, in 1997 and 1998 the federal government would post its first balanced budget since 1969-70. If the government has a balanced budget, it does not need to borrow money, and that’s okay and that’s the reason why, as I pointed out, there weren’t any. But in 2007 the government changed how it was going to deal with future deficits and fiscal requirements.
At page 272 of the budget plan in 2007, the government said it was projecting:
. . . a revised underlying surplus of . . . $10.6 billion in 2007-08 . . . .
However, at page 322 the government stated:
The government proposes to amend the FAA to provide greater transparency and accountability regarding the government’s borrowing activities and increase flexibility to meet future borrowing needs . . . .
Thus, transparency, accountability and increased flexibility for the government. When governments of whatever political stripe promise to make changes to improve transparency and accountability and to make things run more smoothly, I think we should be taking particular notice of that promise.
We have seen similar promises in the past that have resulted in some disappointments, and this was no exception. At that time, the government slipped into the 2007 omnibus implementation bill — Bill C-52 — the following short sentence at paragraph 43.3:
The Governor in Council may authorize the Minister to borrow money on behalf of Her Majesty in right of Canada.
There is no other explanation. The Governor-in-Council — cabinet — may authorize the minister to borrow money on behalf of Her Majesty in Right of Canada. There is no parliamentary role to play at all.
The government could then, needing only cabinet’s approval, borrow any amount of money whatsoever it wanted without seeking any permission or authority from Parliament. Until this change was made, the government authority to borrow money was restricted in the Financial Administration Act to refinancing existing loans, which we understand because that had been approved earlier, and the temporary loans not to exceed six months. But with the new clause 43.1, there were no limitations on what a minister could borrow.
As has been explained, this small provision in the omnibus budget bill slipped through both chambers without notice or debate. It was not until some time after the budget implementation bill received Royal Assent that our late colleague, Senator Banks, noticed what had occurred. He drew this to my attention because I was, as our chair has pointed out, chair of National Finance at that time, as well as caucus chair.
He also immediately drew this same issue to the attention of Senator Lowell Murray. Senator Murray had been the Government Leader in the Senate under Prime Minister Mulroney and for many years had himself chaired this committee.
Senator Murray and I were both very surprised and disappointed by what Senator Banks brought to our attention. We were disappointed that we had not noticed the clause when it went through committee and the various readings in the house and surprised that the government had done such a thing.
Senator Murray quickly introduced a bill to restore Parliament’s authority over government borrowing. His second reading speech on the bill on June 10, 2008, is well worth reading for those interested in this issue. Unfortunately, his bill died at prorogation, as I mentioned. Other bills were introduced by Senator Murray and then Senator Moore picked things up when Senator Murray retired.
Finally, the current government of Prime Minister Trudeau repealed this section, but as I explained in my second reading speech on May 1, 2018, how that repeal took place was not what we had been led to believe or had expected. I won’t get into all of the details, but this is a brief summary of what occurred.
In the 2016 Budget Implementation Bill, No. 1, Bill C-15, in clause 182, repealed the offensive clause 43.1. But this new clause that repealed it was never made into law. It was passed and just sat there but was never implemented.
In the following year, Budget Implementation Act Bill C-44 was passed, and to make matters worse, when clause 43.1 was finally repealed over a year after we passed the law to repeal it, it was immediately replaced by another provision in a new budget implementation bill that appeared to provide the government with the same effective powers that the offensive clause from a year earlier had given to government, albeit with some wrinkles.
Bill C-44, on page 290, omnibus budget bill at page 66, division 2, under the heading “Public Debt,” there was a new act; a Borrowing Authority Act. The Financial Administration Act and now a new act inside the Budget Implementation Act. So an act within an act. In the Borrowing Authority Act, clause 3 gave authority to the Minister of Finance to borrow money on behalf of the government — much as the old section 43 had done — gave cabinet the authority to borrow the money. Now we have the Minister of Finance borrowing the money.
There were two new details in the Borrowing Authority Act. Again, the new Borrowing Authority Act was contained, as I mentioned, the larger Budget Implementation Act. First, clause 4 of the new act set up an upper limit so the government said there will be an upper limit. We can borrow within that, but when we get to the upper limit we will have to come back to Parliament. That was the first thing they did.
Second, they provided that there would be a report to Parliament on a three-year basis. Every three years they would be required to report on what had been borrowed. It states that the outstanding government and Crown corporations’ market debt was projected to be $1.070 trillion by the end of the 2019-20 fiscal year. The upper limit was about $100 billion more than that, which gave the government, under this new law, $100 billion they could borrow without coming to Parliament. That would work out to roughly three years depending upon what deficit they might be running. It was important that these numbers deal with both government accumulated debt and Crown corporations combined.
By a happy coincidence, I suppose, the first three-year report on the government borrowing will not be available to Parliament or the public to examine until well after the next election. That’s the problem with putting these things off for only three years as opposed to running on an annual basis like all our other fiscal matters do.
My bill would change the way the government deals with Parliament on fiscal matters. First, notwithstanding that upper borrowing limit already approved by Parliament, if the government wished to borrow money in any particular year it would still need to obtain Parliament’s approval but only if the government was running a deficit. In that case they would have to come and get Parliament’s approval.
Second, instead of reporting only every three years, they would report on an annual basis as to what the state of affairs is with respect to accumulated debt, the amount they should borrow and why they need to borrow that amount of money.
It may be asked why it is so important to have the government come to Parliament every year it wishes to borrow money now that Parliament has already approved this upper limit, which is $1.168 trillion. There is an explanation how the government came to that magic number.
To answer that, I would like to turn to something that Senator Murray stated in one of his speeches:
In the past, in the years when deficits were being run, there was at least one borrowing bill every fiscal year.
These were occasions for Parliament on financial management to debate matters on financial management, on economic policy and on borrowing strategy. It was the focus that allowed parliamentarians to talk to the government about these matters. It was another occasion in which the government was accountable to Parliament.
What the former government did in 2007 to give cabinet an unrestricted power to borrow whatever money the government wanted to borrow without parliamentary approval was wrong. There was absolutely wrong. To paraphrase Senator Murray, it was a way for the government to remove one of the ways it would be accountable to Parliament.
What the current government did in 2017 to temper that power was a reporting requirement with an overall upper limit. That was an improvement, but, in my view, not sufficient. I have to point out to you that there was no discussion. We had been on to this issue for years before the 2017 budget. There was no discussion with anyone who had filed and had taken through one of these private members’ bills to try to correct that. No discussion from the government other than to say they had rectified it and this is the rectification which, in my view, is not satisfactory.
What is needed is a return to the traditional relationship between government and Parliament for government borrowings. A relationship that, as I explained, predates Confederation. It goes back a long way. If the government needs to borrow money in any particular year, it should come to Parliament to explain why. As things now stand, it needs to offer an explanation only every three years, after the fact. Lots of things happen in three years that we wouldn’t be aware of under the current legislation. That is not, in my opinion, what being accountable to Parliament is all about.
For that reason I respectfully submit to you for your consideration this private member’s bill, Bill S-246, which would return us to a proper accountability situation. Those are my opening remarks.
The Chair: Thank you.
Senator Marshall: Thank you, Senator Day, for being here this evening. I have a couple of questions. You were going through the history of the changes to the legislation.
The current government, when they ran in the 2015 election, they had in their election platform — specifically their commitment was and this is a quote:
We will . . . require the government to receive Parliament’s approval on borrowing plans.
They made the change, so do you not agree that they have met their commitment?
Senator Day: It’s not the commitment that those of us that have a particular interest in, and I’m including all of you around this table on the National Finance Committee. What happened was that nothing happened for a while. We had the private member’s bill. The Minister of Finance came in and said, “I have rectified things for you.” Then we saw the budget implementation bill that had that clause saying 43.1 is gone, and we have returned to the way it used to be. There had to be parliamentary approval. If they had stopped there and declared that, it would have been perfect.
What happened was that particular clause in the budget implementation bill that met the Prime Minister’s promise and the government’s promise before the last election was not ever brought into force until a year later. By that time, another section was brought and allowed the same thing to happen.
There was no consultation with anybody about this next step that took place. There was no discussion about this upper limit that they introduced and there was no discussion about the three-year reporting. Those two things, along with putting back in the section 43.1-type clause that allowed the government to borrow without parliamentary approval, and then the approval only being, well, we approved the upper limit and we haven’t gotten there yet, is hardly giving us the opportunity to engage in debate on this.
Senator Marshall: So the upper limit of $1.68 billion, you didn’t remove that. That doesn’t get removed if your legislation goes through. Why did you leave that in there? If you have to come back every year to have your annual borrowing approved, why would you need to keep the upper limit there?
Senator Day: Frankly, that was a decision of the Minister of Finance and the current government to have that upper limit. I don’t think we need it. I don’t think it’s necessary or desirable, but we have to have something there until we get this other part sorted out. I didn’t want to make this any more complicated than it need be. If the government that introduced that without consultation wishes to remove it, you won’t be seeing a private member’s bill on that one from me.
Senator Marshall: When the Borrowing Authority Act came in, there was a section in the Financial Administration Act, 46.1, and I’m wondering if your bill will change that. It’s the one relating to emergencies. Under the Financial Administration Act, section 46.1, it allows the Governor-in-Council to authorize the minister to borrow money for extraordinary circumstances. Will it change that?
Senator Day: No. I had no intention of taking away that discretionary power of the government to deal with those emergency matters. There’s also the refinancing of loans that had already been debated and approved. There is no reason why parliamentarians need get involved in the refinancing aspect of it and that will be the same as section 46 of the act.
Senator Pratte: I was trying to remember the debate on Bill C-44 where this issue was raised by you. I think the sponsor of Bill C-44 was Senator Woo if I’m not mistaken. I remember there was a debate on this. I’m trying to remember, what were the government’s arguments in favour of what they adopted in 2017? Maybe you could remind us what were the government’s arguments and what was your response to these arguments, if you can?
Senator Day: The best recollection I have is — and we’ll hear from government people later — that these amendments provided for flexibility, made it run more smoothly. The government wouldn’t have to come back every year, just in three years. And this upper limit gives plenty of room for the government to borrow without having to come to Parliament.
Those provisions that make it easier for the civil service to function aren’t always in the best interests of parliamentary oversight.
Senator Pratte: I was struck by something. It’s an issue of translation, maybe, and the legislative clerks look at this so they’re probably right, but in English it’s written:
The Minister may, under and in accordance with an Act of Parliament . . .
So I understand that means is that, each year, Parliament will have to vote for the government to have this borrowing authority. Am I correct?
Senator Day: That’s correct.
[Translation]
Senator Pratte: In French, it reads, and I quote: “Le ministre peut, en conformité avec les lois fédérales….”
[English]
In English, it speaks of an act of Parliament.
[Translation]
In French, the language used is “en conformité avec les lois fédérales….”
[English]
I suppose the translation is correct but to me, it doesn’t mean exactly the same thing.
Senator Day: And “les lois” could include the laws that provide for refinancing of loans as well as the new borrowing, which would be a new borrowing law that deals just with the new borrowing situation. There are other provisions, like emergency situations and refinancing.
[Translation]
Perhaps the term “les lois” encompasses those situations.
[English]
Senator Pratte: In your answer to Senator Marshall, section 4 dealing with the upper limit, is not really necessary. If we follow your reasoning and your attempt to give Parliament back this authority over government borrowing, this upper limit would not be necessary.
Senator Day: It would not be necessary, but it’s another tool that they offered.
Senator Pratte: Thank you very much.
Senator Eaton: Senator Day, I mostly agree with what you say and what you want to do with this bill. I’m intrigued, though. If you had a minority situation, and knowing how partisan the other chamber can be, the other place can be, what would happen if Parliament turned down the authorization for borrowing? Does the government fall? Is it like a budget bill?
Senator Day: I would not say it’s a matter of confidence, unless the government declares it a matter of confidence to try and rally the team around. But there may be a certain initiative or two that the government is contemplating that they won’t be able to go ahead with because they don’t have the funds for it.
Senator Eaton: They would have to make changes but the government would not necessarily have to fall.
Senator Day: That would be my view.
[Translation]
Senator Forest-Niesing: Thank you, Senator Day, for being here today and agreeing to answer our questions.
Like my fellow senator, I have no issues with your bill, except for one small thing. Do you share my concern that requiring parliamentary approval for borrowing could hamper or slow access to funding in emergencies or contingency situations?
Senator Day: I hope not. If the legislation is clear, it’s like a supply every year. Obviously, these bills need to be passed so that the government can function, and it’s the same if the government needs to borrow money. As parliamentarians, we are well aware of that fact and willing to pass the legislation as quickly as possible.
[English]
Senator Forest-Niesing: With respect to the upper limit amount, that is specifically stipulated and I understood your earlier response that there is no desire to change that amount, that we need not go there, then.
But I’m wondering has any thought been given to that? In light of your presentation that indicates to us how much time important changes such as the one that you’re proposing can take and given that, and also that amounts with the advancement of time change in value if they remain the same, they have an unintended impact being reduced.
Senator Day: The effect of inflation.
Senator Forest-Niesing: Has any thought been given to the possibility to the amount being stipulated, maintained as it is but stipulated in a regulation that can then be updated more easily to account for inflation and actuarial considerations?
Senator Day: That would be another step away from parliamentary oversight. I’m trying to achieve the opposite direction, to create tools for parliamentarians to have oversight.
Senator Boehm: I will pass as my question has been asked and well answered.
[Translation]
Senator Forest: This is a really appealing bill. My first question stems from my days in municipal politics. When we wanted to borrow money, we had to pass a borrowing by-law. In this case, we are studying Bill C-97, the 2019-20 budget bill.
Bill C-97 — and time will tell whether we pass it — includes a $19.8-billion deficit.
As I see it, if we pass the budget bill, we are giving the government implicit authority to borrow $19.8 billion. Regardless of the reason for the deficit, does the bill, in your view, require the government to obtain a parliamentary resolution to authorize the deficit if, come the end of the year, it were $22.8 billion, as opposed to $19.8 billion?
To my mind, when the budget bill is being passed is when Parliament has an opportunity to give its approval. If the deficit ends up being more than what was set out, regardless of whether it is due to inflation or something else, is the time for parliamentarians to approve the increase to $22.8 billion, from $19.8 billion, at the end of the budget exercise?
Senator Day: If this bill passes and the budget is amended along the way, for whatever reason, another bill would have to be passed to authorize the difference. It can be thought of as a sort of discipline mechanism for the government.
Senator Forest: I think it would have the benefit of tightening up the budget exercise. Now, when we pass a budget that’s introduced in March, three months later, Supplementary Estimates (A) come out, followed by Supplementary Estimates (B). In those circumstances, there is less control over the budget than in a case where we are passing a budget with a planned deficit. If the government goes over budget, it has to return to Parliament for authorization. I think that would add rigour to the process.
Senator Day: I agree with that.
Senator Forest: By passing a deficit budget, we are giving the government implicit authority to borrow money to make up for the shortfall set out in the budget. I support annual reporting, because triennial reporting doesn’t ensure transparency.
This is a really good bill, in my view. The principle is quite clear to me. If we pass a deficit budget, it means we are authorizing a deficit, and, if the government goes over budget, it has to go back to parliamentarians for approval.
Senator Day: Precisely.
The Chair: That’s a good summary, Senator Forest.
[English]
Senator Andreychuk: First of all, I apologize for being late because I had another meeting. You spent many years chairing and being on the Finance Committee —
Senator Day: Finest years of my life.
Senator Andreychuk: Between you and Senator Marshall, it’s quite interesting to be on this committee. You’ve thought about a lot of these issues, and then I apologize I had to be late.
Did you compare it to other countries? I heard a lot about we’re losing control over the budgets; people don’t understand it; society is getting more complex. Did you study more parliamentary oversight, which is in essence what this is about?
Senator Day: Yes.
Senator Andreychuk: Other countries, like countries that have similar issues?
Senator Day: No. I’d like to say I did, and maybe that would be a nice project, Mr. Chairman, for us to embark upon sometime.
I compared history to the present and what happened since — we inherited the British system. Runnymede, it started then. That goes back for quite a ways. And forward from Confederation here in Canada what we did up until that change took place — and the change took place for efficiency purposes and more smooth functioning of the government. For those reasons that, as I pointed out, that’s not always compatible with the best interest of parliamentarians and our role.
Senator Andreychuk: Thank you.
The Chair: Thank you.
Senator Duncan: Thank you very much, and I also have to apologize for being late.
I appreciate the review of the history and how we got to here. I would like to share with you, if I might briefly, the Yukon example. In 1987, we got the Territorial Formula Financing funding arrangement, where Ottawa transfers on a three-year basis funding to the territory. Shortly thereafter, we had a government leader, premier, who introduced and passed the Taxpayer Protection Act, which said that the territory could not go into debt and could not introduce a new tax without calling a referendum. Those were the provisions of the Taxpayer Protection Act.
Those were difficult financial times when I was in government. I can’t remember the exact details, but Senator Marshall and I have had this discussion about borrowing against the CPP and allowing provinces to do that. I’m curious what the current state is.
I know we did that. The successive government amended the Taxpayer Protection Act under the guise of the change in the accounting rules, and it allowed the government then to borrow against the assets and to have the capital cost of all of the assets of the territory show so that the books were “balanced.” I use the term in quotation marks.
That was as opposed to efficiency and transparency. It was financing the territory, and it also allowed the Crown corporations to go into debt using this borrowing against the assets. I mean, you’re never going to sell a school, but these were new accounting rules, the changes to the accounting.
So my question is: We’re borrowing these millions of dollars, trillion, against what? I’d like to build on Senator Andreychuk’s suggestion of other countries. I’d like to know what the provisions are in other provinces for this financial accountability. Also, if I might, the discussion I had with Senator Marshall about who’s borrowing against the CPP and how much and who’s looking out for the Canadian taxpayer. That’s my question. Thank you.
Senator Day: I’d like to have a discussion with Senator Marshall too about this. I think the thrust of this bill is to put in the hands of parliamentarians the tools to test all these things. If there’s a change in the accounting rules, why was there a change in the accounting rules and what are the long-term effects of that? If you don’t have the tools, you don’t have the opportunity to investigate these things, and there needs to be some oversight.
Senator Duncan: I agree.
Senator Day: If we can accomplish that by getting them back to where we were 10 or 15 years ago, I think that will put us on the right road to keep an eye on those items that you raised.
Senator Duncan: Thank you.
Senator Marshall: I have to say I find the debate very interesting because we talk so much about the budget, but we never talk about the actual dollar amounts. Everybody focuses on the budget. When the financial statements come in, nobody looks to see what actually happened. We’re only looking into the future.
We don’t talk about the debt. Most people don’t know what the debt of the government is. I did ask the library analysts for a running total of our debt. I think people would be surprised to see how much our debt has increased over the last 10 or 12 years. There was that period of time, Senator Day, where you mentioned it went down, but it’s really revving up now. By the end of 2020 — these are based on actuals up to 2018 and then projections for the next two years — it’s well over $1 trillion.
I think that if we had an act like what you’re proposing, it would force debate on the debt. They used to get a borrowing act every year, back in the 1980s. I went back and looked at some of the debate. In 1985, when they requested borrowing authority for whatever they had to borrow, Senator Bill Doody — and Senator Allan MacEachen was on the opposition — had quite an interesting and vigorous debate on the debt. I think we would really benefit from something like that.
But that’s not my question. My question is —
Senator Day: I agree with that, though.
Senator Marshall: I just wanted to get that in.
This triennial report that you mentioned, I don’t understand. Do you have any insight into the logic of that? The government issues a debt management report every year, and it seems like what’s included in that debt management report is going to be in this triennial report. I can’t mesh the two, and I’m suspicious. I think I’m missing something, but I don’t know what I’m missing. Have you looked at that?
Senator Day: The reason for every three years —
Senator Marshall: What’s the big secret?
Senator Day: First of all, let me say that I’m glad you’re suspicious, because that’s exactly the kind of thing — we need parliamentarians to wonder and to be asking these questions. I don’t know the answer to that, but we have government personnel here. Perhaps that would be a good question to ask them when they come.
Senator Marshall: Yes, they’ll tell us.
Senator Day: There seems to be nothing in the material as to — I know why they chose the $1.1 trillion upper limit —
Senator Marshall: That will bring us over the next election.
Senator Day: That was explained in one of the documents. You mentioned that the projected accumulated deficit is well over $1.070 trillion at the end of this fiscal year.
Senator Marshall: That’s right.
Senator Day: It’s always important to look at what’s included in that. In this particular case, there are government departments and Crown corporations. We always have to start by knowing what the base is and work from there. But why the three years? I didn’t like either one of them, the three years or the upper limit. I would have much preferred that they left it the way it was.
Senator Marshall: I’ll be asking the officials that question.
The Chair: Thank you. Before we close, I don’t think I’ll have the opportunity to ask this question to the senator in 2020.
Senator Day: Sure, you will.
The Chair: I have a question for you, Senator Day.
Senator Day: You’re not going to get rid of me that easily.
The Chair: I read your comments in the past on modernization of the Senate. As a matter of fact, I was a member of the committee, and still am, I guess. But the nuance you have brought forward in your comments, it’s evident that you’re looking at putting an instrument in place such that parliamentarians will be part of the discussion and will accept it going forward, regardless of which political party forms the government. If you don’t want to answer the question, I will respect that.
In January 2014, the current Prime Minister, Mr. Justin Trudeau, when he was leader of the Liberals in the House of Commons, said:
If the Senate serves a purpose at all, it is to act as a check on the extraordinary power of the prime minister and his office, especially in a majority government.
My question to you, when I look at Bill S-246: Would this bill be an example or a part of an instrument that the Senate — acting in the way the Prime Minister said five years ago — would better give instruments to parliamentarians from coast to coast to coast who could partake in a discussion, when you look at the objectives of Bill S-246?
Senator Day: Thank you for the question, Mr. Chair. When I first heard the Prime Minister make that statement, I agreed wholeheartedly with it at that time. I’ve used it in some of my speeches, as a matter of fact, along the way.
You’re absolutely right that this bill, if adopted by the Senate and implemented by the government — as a result of the Senate and the House of Commons telling the executive branch that this is what we want — if we had that, it would provide for a better opportunity to keep proper oversight and perform the role that we, as parliamentarians, have.
Sometimes we get awfully busy. I was caught up in that, as I explained. There was a mea culpa in my remarks. We missed an extremely important part of the budget implementation bill. Those of you who were with me after that know that we spent a lot of time doing clause-by-clause consideration of the budget implementations for that reason. We’ve got to do our role, and we’ve got to make sure we don’t give up tools and opportunities to allow us to do that. The public is counting on it.
The Chair: Senator Day, there are no additional questions. Thank you very much for your professionalism and leadership.
Honourable senators, we now have before us officials from the Department of Finance.
[Translation]
Joining us are Nicolas Moreau, Director General, Funds Management Division, Financial Sector Policy Branch.
[English]
Mr. James Wu, Senior Director, Funds Management Division, Financial Sector Policy Branch.
[Translation]
Please note that Mr. Moreau will be making a statement, followed by Mr. Wu, who will be making remarks as well. Mr. Moreau, you may go ahead.
Nicolas Moreau, Director General, Funds Management Division, Financial Sector Policy Branch, Department of Finance: Mr. Chair, I appreciate the opportunity to speak to the members of this committee about parliamentary approval of the government’s borrowing activities.
We understand that the purpose of Bill S-246 is to restore Parliament’s oversight over borrowing activities of the government and for the government to report to Parliament annually in this regard.
Senator Day gave an eloquent explanation, but I will also provide a brief overview of the history of Parliament’s authority over government’s borrowing to provide context for, and comparison with, the recent developments.
I would suggest to you, honourable senators, that the new framework legislated in 2017 is consistent with the objectives of Bill S-246 because the framework provides greater oversight to Parliament over the government’s borrowings and greater transparency to Parliament and Canadians than ever before.
First, before 2007, Parliament did have a role and authorized government’s annual incremental borrowing. However, Parliament’s role was limited and Parliament’s consideration and authorization was not required if borrowing amounts did not increase.
Then, in 2007, Parliament’s authority to approve increases in borrowing was delegated solely to the Governor-in-Council, in other words, cabinet. Parliamentary authority was restored in 2017 when the new Borrowing Authority Act was enacted, and we now have a new and — I submit — improved framework for parliamentary oversight of government’s borrowing activities.
Under the new Borrowing Authority Act, Parliament has given its approval for the government to borrow up to the maximum approved amount of $1.168 billion.
The new Parliament-approved borrowing amount is based on projections in the budget. It is based on three-year projections from Budget 2017 and a contingency margin of 5 per cent to address unexpected fiscal circumstances.
Additionally, the Borrowing Authority Act requires the Minister of Finance to report to Parliament within three years. The report would update Parliament on the government’s aggregate borrowings relative to the maximum amount and provide an assessment of whether a new maximum — increased or decreased — would be appropriate.
Let me now highlight two key features of the new framework that distinguish it from previous frameworks.
First, it provides Parliament with greater oversight of the government’s borrowing activities than ever before. Parliament now has the authority to approve market borrowings for the government and for agent Crown corporations for the first time. This is important since the liabilities of agent Crowns are legally the liabilities of the government and agent Crowns do borrow.
To be clear, the maximum amount of $1.168 billion approved by Parliament under the Borrowing Authority Act is for the combined federal and agent Crown market debt.
The second improvement over the previous frameworks is transparency and accountability. Parliament’s authority not only covers the incremental borrowing needs, but it also now covers the entire stock of market debt. This is important in providing transparency regarding the government’s total level of indebtedness.
Transparency is further enhanced by requiring the Minister of Finance to report to Parliament on the borrowing situation at least every three years, even when the level of market debt is stable or declining. There was no such requirement in the pre-2007 framework.
In fact, under the pre-2007 framework, the government last sought parliamentary approval for borrowing activities in fiscal year 1996-97. From 1997 to 2007, the government did not seek new borrowing authority from Parliament as the level of debt did not increase. As a result, the government did not engage Parliament to discuss its borrowing activities for about a decade.
There are also other reporting requirements and parliamentary approvals related to borrowing authority that I will highlight.
First, in addition to the new three-year reporting requirement, the government also provides annual reports to Parliament on its borrowing activities to bolster accountability and transparency.
These reports include the annual Debt Management Strategy, which sets out the government’s borrowing plans for the upcoming year; the annual Debt Management Report, which accounts for the past year’s borrowings and uses of funds; and the annual Public Accounts of Canada, which set out detailed information on outcomes for each fiscal year.
All three documents provide updates on the parliamentary borrowing authority. In summary, the new framework also provides Parliament with enhanced oversight of all government borrowings, including for the first time borrowings of agent Crown corporations, for which the government is liable.
The new framework also provides enhanced transparency, referencing the total outstanding stock of market debt, or total government indebtedness, for the first time in a borrowing authority. Additionally, to address the problem that existed prior to 2007, when the government did not engage Parliament about its borrowing authority for a decade, the new framework also requires the minister to regularly report to Parliament on government borrowing with respect to the legislated maximum amount, even when the level of market debt is stable or declining.
I will now turn the floor over to my colleague, James Wu, who will address Bill S-246 in greater detail.
[English]
James Wu, Senior Director, Funds Management Division, Department of Finance Canada: Mr. Chair, honourable senators, we recognize that a clear intent of Bill S-246 is to require the government to seek authority from Parliament every year that the government needs to increase borrowings. With respect, I would suggest this could pose some challenges and I am happy to enumerate some of those.
First, to implement fiscal policies, Parliament’s spending approvals are generally provided through the estimates and appropriation bills processes, which have been discussed. It would be problematic for Parliament to approve spending, but then not the associated borrowing to fund the spending. Government operations could be impacted if borrowing authorities are insufficient to cover approved spending.
Second, and by example, there have been U.S. debates about spending and borrowing approvals that have resulted from time to time in U.S. government shutdowns. A couple of examples are in 1995 and 2013.
Agent Crown corporations borrow funds from the Consolidated Revenue Fund, from financial markets or from financial institutions. They would also be impacted because an annual parliamentary approval process could create uncertainty regarding their funding that could curtail their operations.
Finally, an overly stringent borrowing authority framework could create risks for the government in financial markets, for example, with regard to credit ratings. Uncertainty over the government’s ability to borrow, fund operations and implement fiscal policies could cause concerns for market participants, for instance, regarding the government’s ability to support the economy. This could potentially increase the cost of borrowing for the government and also agent Crown corporations. An example of this is in the U.S. in 2011, when Standard & Poor’s ratings agencies downgraded the U.S. government and cited as one of the reasons being the debates over the debt ceiling in the U.S. as causing uncertainty over U.S. borrowing activities.
In contrast, Mr. Chair, using a three-year horizon for this framework strikes a balance — a balance between providing government with a reasonable planning horizon, avoiding uncertainty regarding implementation of fiscal policy and funding of government operations, and providing the needed transparency to Parliament so parliamentarians have regular opportunities to exercise their oversight over government borrowings.
The three-year planning horizon is based on the five-year horizon used in the budget, and the government’s budgets are tabled in Parliament and present the government intentions to spend and hence borrow over five years.
Parliament then reviews and approves spending requests annually through the estimates and appropriation bills processes and borrowings would be consistent with that approved spending. The current framework has many checks and balances on government borrowings. The existing Governor-in-Council annual borrowing approval process ensures that the government’s annual borrowing activities do comply with the Parliament-approved maximum borrowing amount, currently the $1,168 billion figure. Additionally, the debt management strategy and other annual reports tabled in Parliament provide Parliament with an update on the Parliament-approved borrowing authority.
The debt management strategy includes borrowing plans of the government as well as explaining the purposes for which the money is needed to be borrowed.
This year’s debt management strategy, for instance, has a page discussing this current borrowing authority from Parliament in the budget.
Even in years where borrowing plans change, such as, for instance, during the financial crisis, supplementary debt management strategies are tabled in Parliament to inform parliamentarians when the government’s borrowing plans change. Thus, parliament has multiple opportunities each year to confirm that the government is complying with the legislated maximum borrowing amount, ask government questions, study reports or issues, ask witnesses to appear and, with respect, I believe nothing precludes debates or senators from exerting checks on government or the executive branch in this regard. This is even with the amount being based and set on a three-year horizon.
In closing, I would like to thank the chair and committee for giving us this opportunity to brief you on this important topic. We’re happy to respond to your questions.
The Chair: Thank you.
Senator Marshall: Thank you very much for your presentation. But you didn’t convince me.
I don’t see how you can say that the three-year projections are superior to having the government come to Parliament on an annual basis and ask for approval. To suggest for three years into the future we won’t go over this amount of $1.1 billion, I don’t see how that is more informative or better information to Parliament than requiring government to come to Parliament every year and say, “We’d like to have your approval to borrow $100 million.”
I know for several years before 1996 there was no need to come in and ask for approval to borrow, but back in the 1980s government used to go to Parliament and ask for approval to borrow. I know in the Senate they debated it. So it can be done. It seems like for all the issues you have raised, it seems they could overcome them in the 1980s and now, 20 or 30 years later, I don’t see why we couldn’t overcome them again.
I think from government’s perspective and maybe even from the officials’ perspective that it’s much easier to get the approval of the Governor-in-Council than the approval of Parliament. I feel that’s the crux of the issue and all the other things are out there on the periphery. So I won’t say anything else about that.
There is one issue I always thought fairly peculiar, and I think you’ll be able to answer it, and that’s the triennial report. Why is it triennial? I read the strategy put out at budget time, and I read the annual debt management report. What’s going to be in that triennial report that’s not going to be in the debt management report? By saying every three years, there must be something really good in it. It seems like all the good stuff is in the annual report. What am I missing?
Mr. Wu: Thank you very much for your question, honourable senator. I’m happy to respond to it.
First, on the historical process, I think it is a valid question. It bears some study to assess what happened in history. As I understand it, the questions around spending and borrowing became more complex, so it evolved such that the borrowing decisions were made separately from spending, but we can examine that.
In terms of some of the potential risks, though, and I do appreciate it seemed to have worked reasonably well in the period between the 1980s and 1996, because there were a number of parliamentary authority acts approved. The example of the 2008 financial crisis where the government had to respond to the situation, as I recall, Parliament was not sitting during that time.
Senator Marshall: But section 46.1 in the Financial Administration Act provides for those emergencies, does it not?
Mr. Wu: Financial crises and natural disasters are the two exemptions or powers we put in there. I admit I’m not a fortune teller. I don’t know what potential eventualities could occur that could require the government to borrow in times when Parliament isn’t sitting and isn’t there to approve additional borrowing. Those are some powers there to provide certain flexibilities, but they may not cover all eventualities.
Senator Marshall: Can you speak to me about the triennial report. You have to give me an answer on that because that puzzles me.
Mr. Moreau: If I can respond. You said something interesting. You said, “What’s missing when I look at the report? Because I already see the management strategy in the management report.” It seems like the government is already transparent in showing the result and also showing the borrowing needs for the future.
Why three years? Because we believe we have enough reports coming on an annual basis. Three years provides us with flexibility in managing the debt program and with our Crowns because they are operating on different fiscal years. It’s difficult to ensure we have all the forecasts for all those different Crowns. To do it on an annual basis, it’s difficult to have the flexibility we need, where we come to Parliament and ask for a certain limit that we won’t go above. And when we say three years, it’s a maximum of three years.
If we need to increase borrowing above that level, the government will need to come back to Parliament ahead of time. We’re not allowed to go above that level. That’s why we say it’s a maximum of three years before we report, but we also have the other reports that we will be providing to government.
Senator Marshall: What will be in the triennial report that I can’t find now? I can find out the borrowings of the Crowns and the borrowings of the government. I might have to look harder. It would be easier if someone would give it to me, but it’s there. You can find it if you look for it. So what’s going to be given to us extra?
Mr. Moreau: The triennial report will provide a revision of the ceiling, the limit that the government will be allowed to borrow. So it will combine what you see in the budget in terms of forecast on the government side in terms of expectations of deficits but will also combine everything that the Crowns are expected to borrow plus the 5 per cent contingency.
Senator Marshall: And that’s all.
Mr. Wu: As we highlighted and as you rightly indicated, honourable senator, the annual reports do offer a lot of information. There are opportunities to engage with government and to ask for witnesses in respect of the annual reports. The intent of this triennial report is to provide an update on the specific borrowing limit, the approved maximum borrowing amount and how it is composed.
Also, the intent was to provide another tool to have this discussion with government, with parliamentarians, because the minister would have to table this and provide an assessment of whether or not he or she thinks that the maximum amount should be adjusted, either increased or decreased. It was also meant to be another tool to engage in this discussion.
Senator Marshall: Thank you.
[Translation]
Senator Pratte: I’m interested in Parliament’s role as it relates to Crown corporations. Prior to 1996, when Parliament approved government borrowings, did it also approve the borrowings of Crown corporations?
Mr. Moreau: No, not then. That’s a new recommendation that came about in 2017.
Senator Pratte: Let’s say we passed the bill. It says that the minister can borrow money. That’s also what the existing Borrowing Authority Act stipulates. When a Crown corporation borrows money, does the minister do it on the corporation’s behalf? No? It borrows the money directly?
Mr. Moreau: Currently, Crown corporations can borrow money in two ways, either through the Crown Borrowing Program—so directly through the government—or the Governor-in-Council grants them borrowing authority and they borrow money on their own. The bulk of borrowings included in the maximum amount are borrowed directly through the government.
Senator Pratte: Taking advantage of favourable borrowing arrangements, the government borrows money on their behalf or lends money to them. Is that correct? How does it work?
Mr. Moreau: The government borrows money for them at the federal government’s borrowing rate.
Senator Pratte: How would having Parliament approve government borrowing on an annual basis impact the funding, flexibility and interest rates of Crown corporations?
Mr. Moreau: Crown corporations’ investment plans or borrowings usually span a number of years.
Therefore, creating uncertainty surrounding the ability of Crown corporations to repay their loans year after year can complicate funding for certain projects and make investors more hesitant to invest and contract a debt.
Mr. Wu: May I add something? My apologies, but I would prefer to answer in English.
[English]
Also, when the Crowns borrow, they borrow basically under the name of the government because they are agent Crowns. By chance if an overly rigorous borrowing authority were to create concerns among financial markets that might impact Canada’s credit rating, that would also impact the ability or the costs for the Crowns to borrow from markets.
Senator Pratte: For this uncertainty to exist, the markets would have to be worried that Parliament would reject the government’s request for borrowing authority. That would be the source of the uncertainty.
Mr. Wu: I believe that is correct. I believe that is the nature of the concern that was expressed by Standard & Poor’s in regard to the U.S. in 2011.
Senator Pratte: In the case of Canada, has that ever happened?
Mr. Wu: To my knowledge, no, but it’s a risk nonetheless.
Senator Pratte: You never know what’s going to happen, that’s what you’re saying. Thank you.
Senator Andreychuk: The bill that we’re looking at really is increasing parliamentary oversight. Most of us do not spend the time that you do, thankfully. You are looking at the borrowing and the spending. We have other tasks and things, but very important is our parliamentary oversight on the finances.
It seems to have been eroded, because, as Senator Marshall said, there are all these reports. We don’t have the skill. We don’t come here as financial experts. We don’t have the skill or the time or, sometimes, even the resources.
The budget is, of course, now increasing. It seems to be less budget, more policy. That’s confusing. We really don’t know what we’re spending, and we’re being told it will be in the regulations later.
My difficulty is not with Standard & Poor’s. My problem is I think one of our fundamental responsibilities is the public purse. I think we have to get back on it.
Your attempt on the three-year framework, the new initiatives, is great, but it’s more complex. It zeros in on the debt and borrowing, and I think the public can understand that concept.
That leads me to have you rethink whether we need it as complex, which may make more sense on the finances, but I think accountability is just as important. I want you to think about that.
You’re using a U.S. example. We are not an American-style government. I understand the political tool in the Congress and the president. Our system is dramatically different. I see our ratings based on our economic prosperity, development, risk when they don’t know where projects are going, rather than Parliament holding something up.
We need to be tested, at least, whether we would be the same. I would be more interested in a Westminster model.
I’m not sure how the U.S. is important to us in this case.
Mr. Wu: Thank you for your comments, honourable senator.
I think there was a question earlier about whether or not people had looked at other jurisdictions, and the U.S. was an obvious one because it’s one where a debt ceiling is discussed from time to time, and there is a lot of examination of that question. I’m not aware of a Westminster model that has a debt ceiling, but we can certainly look into that.
I do appreciate your comments about re-examining the need for such a complex framework between spending and borrowing approval. I’m happy to look at that.
If I may suggest, yes, there are debt-management strategies and reports. They may be somewhat complicated. They are tabled in Parliament, and I believe parliamentarians and committees can ask to study them. We officials are available to assist in going through those reports if there is a need.
The Chair: Thank you.
[Translation]
Senator Forest: Thank you for being here.
To my mind, this private member’s bill deals with the accountability and oversight surrounding the budget process. In examining the subject matter of Bill C-97, a budget bill that sets out revenues and, implicitly, deficit spending in the amount of $19.8 billion, my sense is that we are authorizing the government to borrow that amount.
Let’s assume there is a deficit at the end of the fiscal year, whatever the reason. There are reasons why deficits can occur; after all, we are talking about an area where nothing is immutable. In such a case, the government has a responsibility to explain why and, pursuant to the bill, to obtain authorization from parliamentarians in accordance with its responsibilities as a manager of public money.
Personally, I haven’t managed large sums of money. It has nothing to do with the government’s budget. This is my first budget process. I’ve been on the National Finance Committee since being appointed to the Senate. A budget was tabled in March, and, three months later, we are already studying supplementary estimates. I was astounded to see a department, three months later, ask us to authorize $652 million in essential spending that had not been provided for in the recently tabled budget. I can’t wrap my head around that. The benefit of the proposed bill, as I see it, is that, after passing a budget, we, as parliamentarians, would be able to authorize borrowing in the event of a deficit. Otherwise, the government couldn’t borrow.
I think that would tighten up the supplementary estimates process, because we don’t tend to be overly concerned when the government doesn’t budget properly. We know we can always rely on Supplementary Estimates (A) three months later.
Last year, two months before the end of the fiscal year, we studied Supplementary Estimates (C). We saw then that certain departments were coming to us with significant spending requests. We asked them whether the spending had already been committed and how they would launch a request for proposals within the budget time frame.
The bill adds a layer of accountability, rigour and oversight to the budget process, and that’s what makes it so appealing. As I see it, having the limit set at $1.168 billion is like giving the government access to the cookie jar. It will keep taking cookies until they are all gone, at which point, the government will return to Parliament for approval.
That brings to mind issues that arose in Quebec. When awarding certain contracts, the government would pre-authorize a 10-per-cent contingency margin. Contractors were never required to go back to the government for approval of cost overruns because it had already given the authorization. I’m not saying that’s what is happening here, but suffice it to say, these conditions aren’t the most conducive to transparency and accountability.
That’s what makes the bill so attractive. It compels each department to carefully consider its expenditures, resulting in a more transparent and accountable budget process. If the government doesn’t meet the targets in the budget, it will have to answer for that and obtain authorization from Parliament. The budget process is being reformed to build in a layer of accountability.
The Chair: What is your question?
Senator Forest: Do you agree that the bill should add more rigour to the government’s budget process? Forgive me, my preamble was a bit long. I got carried away.
The Chair: Would you like to comment?
Mr. Moreau: I take your point with respect to spending, but your interpretation doesn’t take account of the revenue dimension. Revenues are quite difficult to estimate on an annual basis. Year-over-year variations can be considerable. Economic activity is also tough to predict. The government can’t control the markets or the things that happen across the country. Ours is a small open economy.
It’s good to consider the expenditures, of course, but, on the revenue side, certainty is lacking. I think we have a good bit of rigour when it comes to spending, but enhancing that rigour does not bridge the gap between revenues and spending. Consequently, at the end of the year, it’s possible to have a larger than expected fiscal imbalance.
Conducting the exercise solely on an annual basis somewhat restricts the ability to manage the debt. When preparing a debt management strategy, the idea is to be as transparent as possible by telling market participants what will be issued in relation to the sector and the benchmark.
Currently, that’s one of the government’s strengths. Canada is a leader in debt management because of its transparent approach. The marketplace knows exactly what Canada is going to issue, when it will do so and how much the amount will be. Applying an annual horizon, as opposed to a triennial outlook, gives rise to slightly more uncertainty. That, in turn, restricts the process and aligns with the idea that highly accurate revenue projections aren’t possible. That dimension is always subject to uncertainty because of economic volatility.
Senator Forest: The volatility nevertheless works both ways, and can be justified. The fact of the matter is that if the targets are surpassed, there is nothing to justify, but the markets will still take note.
The Chair: Do you have any other comments, gentlemen? No? Thank you.
[English]
Colleagues, this concludes the study of the bill. One of the reasons that we go through the budget implementation bills carefully is to ensure that we don’t miss any important elements. You have identified certain things in the past. It is one of the many effective practices brought in by Senator Day during his tenure as chair of this committee. There is no doubt in my mind that his objectives has always been objectives that we have collectively: transparency, accountability, and predictability.
To the witnesses from the Department of Finance —
[Translation]
— thank you for your input. You may now take your leave. Thank you for your professionalism.
[English]
Honourable senators, this concludes the hearing of the witnesses on Bill S-246.
Would you be ready, honourable senators, to proceed to clause-by-clause consideration of this bill? And to do so, I need your guidance as a committee.
Senator Pratte: I would not be. I feel that the committee is very favourable to this bill. I understand why, but I think we’ve had important information. We had great testimony from Senator Day, information from the Department of Finance, some of these issues are quite complex. I’d like to have a bit more time to reflect on it.
The Chair: Honourable senators, is there a consensus around the table? As chair I could ask to review individually what was tabled or brought forward by Senator Day and the officials, and the chair and steering committee will bring it back to the committee for direction.
Senator Marshall: I’m ready to proceed to clause by clause.
Senator Eaton: I’m with Senator Pratte. I like a lot of Senator Day’s bill, but I’m worried about the parliamentary annual thing. I’d like to hear one or two more witnesses, perhaps, even if it’s from another Westminster system to see how it actually works in a parliamentary system. I know it worked fine in 1985, but we’ve entered a time in a very crisis-ridden world. I’d like to have another couple of witnesses.
The Chair: Any other comments? The chair will recognize senators on the matter of going clause by clause.
[Translation]
Senator Forest: I agree with Senator Pratte. It would be useful to meet with the Parliamentary Budget Officer, who has peripheral vision, if I can call it that. We heard what Senator Day and the department officials had to say, so it may be helpful to hear what the Parliamentary Budget Officer thinks.
[English]
Senator Boehm: I too would like a bit more time to reflect. I did ask the Finance Minister a question about debt-to-GDP ratio the other day. Our debt-to-GDP ratio is in fact going down and we’re in pretty good shape that way as a country. But I think Senator Day raised some very important points. I like the historical argument as well.
I too think we might want to look at other models in the Westminster system. It’s great to look at the U.S., they’re close, but their system is different from ours. I would prefer a bit more time for reflection.
The Chair: Any other comments, senators? If not, the chair will make the following ruling that we will bring the matter to the attention of the steering committee after the break. If you have additional comments, I will be open to it and bring it to the steering committee. A decision will be made on how we will proceed on Bill S-246.
I will now suspend the meeting to go in camera for consideration of one final item, if there is consensus around the table to go in camera for one item.
(The committee continued in camera.)