THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, February 10, 2026
The Standing Senate Committee on National Finance met with videoconference this day at 9:02 a.m. [ET] to examine the subject matter of all of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025; and to examine Bill C-4, An Act respecting certain affordability measures for Canadians and another measure.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: I wish to welcome all senators as well as the viewers across the country who are watching us on sencanada.ca. My name is Claude Carignan, a senator from Quebec and chair of the Standing Senate Committee on National Finance.
Now, I would like to ask my colleagues to introduce themselves.
Senator Forest: Good morning everyone. I am Éric Forest from the Gulf senatorial division, in Quebec.
[English]
Senator Pupatello: Good morning. Sandra Pupatello, from Windsor, Ontario.
[Translation]
Senator Galvez: I am Rosa Galvez, an independent senator from Quebec.
Senator Gignac: Good morning. Clément Gignac from Quebec.
[English]
Senator Cuzner: Good morning. Rodger Cuzner from Nova Scotia.
Senator Ross: Good morning. Krista Ross, New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Hébert: Good morning. I am Martine Hébert from the Victoria senatorial division, in Quebec.
The Chair: For our first panel today, we are continuing our study of the subject matter of all of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025
For our second panel, we are beginning our study of Bill C-4, An Act respecting certain affordability measures for Canadians and another measure.
For our first panel, we are pleased to welcome, by video conference, from Réseau BIBLIO du Québec, Ms. Julie Blais, President; from the Canadian Urban Libraries Council, Ms. Mary Chevreau, Executive Director; and from the First Nations Finance Authority, Mr. Ernie Daniels, President and Chief Executive Officer, and Ms. Jody Anderson, Vice-President, Partnerships and Strategy Affairs. Welcome and thank you for accepting our invitation to appear today.
We will start with opening remarks from Ms. Blais.
You have the floor, Ms. Blais.
Julie Blais, President, Réseau BIBLIO du Québec: Thank you.
My name is Julie Blais, President of Réseau BIBLIO du Quebec.
Réseau BIBLIO du Quebec represents regional library networks from across Quebec. We have a history of providing extensive specialized services for libraries in rural areas. We represent more than 750 public libraries in small and medium-sized communities.
A central component of our services is interlibrary loans. This service is at risk with Bill C-15, which you are studying today. This is a favourite service for users. Interlibrary loans, postal service and reduced rates allow books to circulate between small and large centres. This is not an incidental mechanism: It is essential to equal services throughout Quebec.
Annually, approximately 185,000 loans are shipped through Canada Post. To give you a bit of a mental image, the interlibrary loan service allows books to do something incredible, travel between libraries and into the hands of users. The service is available across Quebec, from Blanc-Sablon and Petit-Cap to Val-Paradis and the most remote areas. Without special rates, none of this would be possible.
Bill C-15 proposes to repeal the law that enshrines the rules on postal rates, including reduced rates.
We have a very specific concern, which is that reduced rates cannot depend simply on legislative intent; they must be protected by law. The service is at stake in rural areas and small communities. Municipalities are financially stretched. Regional BIBLIO networks have very little flexibility. It’s impossible for us to cover the additional $2.5 million if the special rates are changed. The minister has stated verbally that this will not be affected. We have taken note of this statement and have no reason to doubt his good faith. However, today’s intention causes us concern. We want it to be locked in for the future.
Rural libraries would certainly become vulnerable to future revisions. That is why we are asking for legislative protection. Even though this amount is marginal for Canada Post, for us, $2.5 million is a huge amount. The impacts are likely to be significant.
Today, we respectfully appear before the Senate with a simple message. We recognize the objectives of Bill C-15 and the importance of Canada Post’s viability. However, for us, equitable access to culture in rural areas is very important. Without these special rates, the interlibrary loan service and the survival of some small rural libraries are at risk. We call on senators to carefully consider the long-term effects that repealing the law could have. We are explicitly asking for a safeguard in the law or, at the very least, an equivalent mechanism that could maintain the special rates on which rural public libraries depend.
Thank you.
The Chair: Thank you very much.
Ms. Chevreau is next.
Ms. Chevreau, you have the floor.
[English]
Mary Chevreau, Executive Director, Canadian Urban Libraries Council: Thank you for inviting me today. My name is Mary Chevreau, and I am the Executive Director of the Canadian Urban Libraries Council, or CULC. Despite my beautiful last name, I am an anglophone, and I appreciate being a witness here today.
CULC represents almost 60 of the largest public library systems in Canada, along with Library and Archives Canada and the Bibliothèque et Archives nationales du Québec. Our members serve more than 8 million active users who annually visit almost 800 locations and utilize virtual services. More than 77% of all Canadians are served by a CULC library.
Furthermore, and probably more relevant to this presentation, CULC oversees access to Canada Post’s Library Shipping Tool by verifying and authenticating all libraries that wish to use and access Canada Post’s library materials rates. We have had a very close working relationship with Canada Post to deliver this service for many years.
However, we are concerned that the amendments to the Canada Post Corporation Act in Bill C-15, specifically those targeting subparagraph 19(1)(g.1), which would be repealed, could significantly impact Canada’s libraries, interlibrary loans and materials for people who are blind or have sight loss.
The interlibrary loan is an essential component of how libraries in Canada operate. The program allows students, researchers and the public to access materials, regardless of their location or their local library size. Libraries rely upon the Canada Post Corporation Act’s protections, including reduced rates and agreements under section 21.1, to offer this service affordably and at scale.
If Bill C-15 proceeds as drafted, Canada Post would be able to increase rates without the oversight from Parliament or the Government of Canada. The repeal of section 21.2 removes an important mechanism for transparency and ministerial accountability, further concentrating authority over library postage rates entirely with Canada Post’s board. Parliament’s ability to provide appropriate oversight would be significantly diminished.
These changes could place substantial new pressures on already-stretched library budgets, inevitably leading to fewer interlibrary loans, reduced sharing of materials, and diminished access to information and research resources across the country. This could also certainly impact rural libraries, in particular, some of which really operate fully through an interlibrary loan program.
We are also deeply concerned about the proposed removal of subparagraph 19(1)(g)(i), which guarantees postage-free mailing of materials for use by people who are blind. This program is widely used across the public, academic and educational library sectors, as well as by national and community organizations. Eliminating the legislative guarantee would threaten access to accessible formats, such as Braille and audio, and undermine libraries’ ability to serve readers who rely on such materials. It would also contravene Canada’s international obligations under the Universal Postal Convention. The proposed changes would effectively eliminate the Materials for the Use of the Blind Regulations without consultation through the standard gazetting process.
Even with our close working relationship, neither CULC nor other library organizations in Canada were consulted prior to the introduction of these amendments, nor have we had meaningful engagement since. Given the scale of the impacts on library services and the communities we serve, this lack of consultation is deeply concerning.
While statements from Canada Post and the federal government expressing a commitment to continue reduced rates for library materials and free postage for the visually impaired are welcomed, these assurances do not replace the certainty provided by legislation and parliamentary oversight over the reduced rate for library materials, as currently provided for in the Canada Post Corporation Act.
Therefore, we respectfully call on the committee to urge the government to remove from Bill C-15 those clauses that impact libraries and to remove those sections that repeal the free post program for people who are blind and those with sight loss.
Thank you for your time.
The Chair: Thank you. Our next witness is Mr. Daniels.
Ernie Daniels, President and Chief Executive Officer, First Nations Finance Authority: Good morning, chair and honourable senators. Thank you for the invitation. My name is Ernie Daniels, and I am President and CEO of the First Nations Finance Authority and a member of Salt River First Nation in the Northwest Territories.
The First Nations Finance Authority, or FNFA, is one of four institutions established under the First Nations Fiscal Management Act. Together, we form an opt-in First-Nations-led framework that supports strong governance, fiscal responsibility and access to affordable capital. This regime has been touted as Canada’s most successful sectoral governance initiative in its history.
FNFA is First-Nations-owned and -governed. Our board is made up of active Chiefs and Councillors from our member nations. We are self-sufficient and do not require core operational dollars from Canada; we raise all of our financing monies in the capital market, and we lend them to participating First Nations to finance infrastructure and economic development projects that are aligned with community priorities. We have a proven track record, and our bonds are sought after by many institutional investors.
In 2014, we issued our first $90-million bond with an A credit rating, which was very historic at the time. Today, FNFA has delivered over $4 billion in financing to First Nations projects and governments, and holds an AA rating from three separate credit-rating agencies. We have done this with zero defaults, generating over 40,000 jobs, and we have contributed an estimated $8 billion in economic impact.
We are here today as part of the pre-study of Bill C-15. We believe it is important to appear because Budget 2025 signalled a shift toward using financing tools, not just annual program spending, to address long-standing infrastructure and economic gaps in First Nations communities. We know that the Government of Canada is faced with a problem related to infrastructure on-reserve, and we, the FMA institutions, come with concrete solutions and practical tools to give wins to all parties involved.
The Standing Senate Committee on Indigenous Peoples heard from Manny Jules, Chief Commissioner at the First Nations Tax Commission, that strengthening First Nations’ tax authority is central to self-determination and economic growth. Bill C-15 advances those objectives by expanding and clarifying First Nations’ tax powers, and FNFA works to ensure those fiscal tools can support affordable financing, infrastructure delivery and long-term economic participation.
Budget 2025 also announced the government’s intention to amend the First Nations Fiscal Management Act to enable FNFA to lend to Indigenous special-purpose vehicles, or SPVs. This is welcome and overdue. Across Canada, First Nations are participating in major economic and resource projects through special-purpose vehicles, often alongside federal or provincial loan guarantees. Today, FNFA cannot lend to those entities, even where a government guarantee already exists. The consequences are immediate: higher borrowing costs, missed opt-in windows and lost equity and generational opportunities for First Nations — the very reasons that FNFA was created in the first place.
Budget 2025 gets the intent right. What we need now is timely legislative action and clear implementation because these projects move on market timelines.
Budget 2025 also points to continued work on bonding and surety, and here I am optimistic. On-reserve contractors face structural and inequitable barriers to accessing surety and bonding — not because of performance risks but because of section 89 of the Indian Act, which says that assets on-reserve cannot be pledged as security; therefore, they are not able to execute an enforceable indemnity agreement.
The government’s intention to explore a bonding and surety backstop pilot is a meaningful step. This is one of the most direct ways to turn Indigenous procurement commitments into real participation, real jobs, increased productivity and lasting capacity. The policy direction is sound; now we need execution.
Finally, I want to address the monetization of government transfers. It is a financing tool that we already use and would allow for more infrastructure to be built now, based on predictable future revenues — in this case, federal transfers that already exist and are already intended for infrastructure. Municipalities have used this approach for generations. For First Nations, monetization would allow communities to accelerate construction, reduce exposure to inflation and delays, and create durable assets that can be maintained over the long term. This project, with critical support from the First Nations Infrastructure Institute, will transform and help to close the widening infrastructure gap in our communities.
Budget 2025’s commitment to explore a stand-alone monetization pilot is significant because it focuses on making existing funding more effective. That is sound fiscal policy and aligns with productivity, reconciliation and long-term prosperity of nations.
We look forward to working with Canada as two partners to advance the work outlined in Budget 2025.
Thank you. I look forward to your questions.
Senator Marshall: My first questions are for Ms. Blais and Ms. Chevreau, although I do have a question for Mr. Daniels also. This change to the Canada Post Corporation Act — I must say that I have been in the Senate for quite a while, and I have received a lot of representation on that amendment, and they are not form letters. These are individual letters which have been authored by the senator, I would take it. Piecing together your two testimonies, you were not aware of the change, and I had the impression that it was a surprise. Ms. Blais, you said you were speaking with a government representative. Were you speaking with anyone from Canada Post? And could you keep your answer short because I have quite a few questions on this section of the bill?
[Translation]
Ms. Blais: No, I haven’t spoken with anyone from Canada Post.
[English]
Senator Marshall: What are you looking for? Are you looking for an amendment to the existing amendment, or are you looking for just some verbal or written reassurance? What specifically are you looking for?
[Translation]
Ms. Blais: We want it in writing. We have received verbal assurances from the minister, but we want the guarantee in writing, an explicit reference. Ideally, we would like it to remain in the legislation, but at the very least, we want a clear regulatory mechanism with a consultation requirement. That is where we are now. That is the good news.
[English]
Senator Marshall: In your testimony — I can’t remember if it was Ms. Blais or Ms. Chevreau who mentioned it — you said that the Canadian National Institute for the Blind, or CNIB, is going to be adversely affected by this change. I don’t recall seeing anything from them. Have you been discussing this with the CNIB?
Ms. Chevreau: I believe that was from me. Absolutely, yes; the CNIB has been very involved. The CNIB actually spoke to the Senate Transport and Communications Committee last week. I was also a witness last week with that committee. The CNIB was there. So the CNIB has been very active to try and ensure that there are guarantees within the bill.
Senator Marshall: Has there been any consideration or is there some sort of coming together of all the affected parties? I ask because I have been getting individual representations from different libraries and different groups. Who is leading the charge? Is there a leader with regard to this issue?
Ms. Chevreau: I can certainly respond from the CULC side. Yes, CULC is leading the charge to some degree, but we have an alliance with the CNIB and a number of other organizations. There is the Centre for Equitable Library Access, or CELA, which also provides resources for the blind and the vision-impaired to libraries. All the library associations across the country are very aware of and very concerned about this, and have rallied together to write letters. There is a lot of letter writing going on, not just by individuals, but also by organizations.
Senator Marshall: My next question is this: This is obviously a cost-saving measure for Canada Post because of their financial difficulties. Are you aware of how much they think this is going to save them? Are we talking about hundreds of dollars, thousands of dollars or millions of dollars?
Ms. Chevreau: I can respond. I can tell you that the revenue for providing this service is about $1 million annually. Through the library shipping tool, which is the only way — by the way, libraries have to be vetted in order to use the special rates; not everyone can use them, and it’s partly CULC’s role to do that vetting — we move about 550,000 units a year across the country. Julie Blais may have other comments.
[Translation]
Ms. Blais: I would like to add that, on our side, many people on the ground are very concerned about what Bill C-15 could do to special postal rates for libraries. Numerous communications from libraries and users attest to how important this is to them. Currently, Canada Post covers 90% of the costs associated with interlibrary loans. It’s inconceivable that rural libraries and regional library networks would have to cover these costs. Any change to these special postal rates would automatically jeopardize equitable access to culture throughout rural Quebec.
The Chair: For the sake of transparency, I would like to point out that I received a letter signed by Minister Joël Lightbound in the last few hours, and it addresses this issue. This letter appears to be a written commitment from the minister to ensure that reduced-cost deliveries will continue. One page is missing in French, and the French translation is not up to standard. I will share it with the committee members and forward it to you, so that you can let us know whether you’re okay with it or whether you want something stronger.
Thank you.
Senator Forest: That has just changed the mood and the tone.
Thank you for being here. I would like to say a special hello to Ms. Blais and the people of Gaspésie, who are in my senatorial division.
Ms. Blais, the example of the Library Shipping Tool shows that it costs $2 to ship a book weighing 3 pounds to Toronto. If the program were eliminated, it would cost $26. Is that a good example? Is the difference really that big?
Ms. Blais: Let me clarify something. Libraries in rural Quebec do not send books to Toronto. However, yes, the difference is extremely significant, and that’s what makes the loss of special postal rates so hard to bear.
Senator Forest: Let’s take the shipment of books from Cap-Chat to Cap-Seize . . .
Ms. Blais: It’s about five to six times the rate we pay now.
Senator Forest: The $2.5 million you mentioned in your presentation, is that just for the Quebec network?
Ms. Blais: Yes, it’s for Quebec.
Senator Forest: Thank you. Quebec only.
We’ve not yet seen the letter. During your meeting with the minister, he mentioned that there would normally be no repercussions. I don’t understand why this measure is included in Bill C-15. Why not just leave it out and keep Canada Post’s commitment as it stands today?
Ms. Blais: We did have a meeting with his office. It’s true that Minister Lightbound confirmed verbally that it would be maintained. However, for us, it goes beyond that. We are talking about repealing the law. Of course, this alleviates concerns in the short term, but there is no guarantee for the future for our sector, which already has very little financial leeway. It’s good that Mr. Lightbound sent you something today. We will have access to that. We have not received anything in writing before. We will confirm what it says and follow up. At least, it is good news that you have received it in writing today. However, we are here to represent 750 public libraries, and so we are asking for a written measure in the legislation or an equivalent measure, that’s for sure.
Senator Forest: Ms. Chevreau, you say that passing Bill C-15 would violate a commitment made under an international agreement concerning the blind. Can you speak to that some more?
[English]
Ms. Chevreau: Yes, I would be happy to. Materials for the blind and visually impaired are shipped for free under the current legislation, and if you have ever seen one copy of a book in print versus the Braille, there are six big volumes of Braille for one little paperback book. To ship those, if there weren’t guaranteed free shipping, it would completely destroy access for those who are blind or visually impaired.
By removing this legislation and the guarantees — and I do appreciate that there is a letter. We haven’t seen the letter either, but there is a letter with some commitment. Like Ms. Blais said, the concern that we have is that this letter is great today, but without that legislative guarantee, Parliaments change, people change, Canada Post changes. That commitment could go away, so our sense is that the only way to protect free shipping for people who are blind or visually impaired and a reduced cost for interlibrary loans is to have it in the legislation and guaranteed through that process.
[Translation]
Senator Forest: Thank you.
[English]
Senator Ross: My question is also for Ms. Chevreau. I’m a senator from New Brunswick, and I’m concerned that New Brunswick is one of the largest users of interlibrary loans, in part because of the exchange of languages, given that we’re the only officially bilingual province in Canada. Can you speak to the constraints that this could cause if implemented?
Ms. Chevreau: Thank you for that question. You’re absolutely right. New Brunswick is one of the heaviest users of interlibrary loans, primarily because it is a dual-language province and materials are shipped across the province. Many rural libraries receive materials, and, obviously, that’s important in a bilingual province, but it’s important for access for everybody. It’s important for access for small rural communities that may have newcomers and may need to share materials. It’s important for libraries that are one-building libraries that literally don’t have the physical space to maintain a collection that would have the breadth that is required within their communities.
New Brunswick is special because of its bilingual nature. You are one of the largest users, and, frankly, some of your rural libraries would close. They would not have a collection that would sustain a community. They don’t have the budget. All public libraries in Canada are stretched as it is. There is an actual threat that, without the sharing of materials, libraries would not be able to provide a service that is relevant to their communities.
Senator Ross: Thank you for that information.
It is quite unusual for the Senate to make amendments on budget implementation acts, but sometimes observations are made at the end of reports that various committees submit. I know you’ve spoken to the Committee on Transport and Communications, and now you’re speaking to National Finance. Do you have a sense that there may be an opportunity for observations to be added to reports, or have you heard anything about that?
Ms. Chevreau: CULC has not heard anything about that, so I can’t really respond to that. Our concern is still that if it’s not in legislation, it won’t have the longevity or the teeth that would be required to protect it.
Senator Ross: This might be a difficult question to answer, but just this month, the federal government loaned over $1 billion to Canada Post. They loaned them $1 billion about a year ago, just to stay solvent and keep running, so they are definitely looking for options for savings. Even if they’ve told you that they don’t intend to implement this, what is your sense of comfort with that?
Ms. Chevreau: Thank you for the question. We are not at all comfortable with this, and we appreciate the comments. We appreciate the spirit of it, but without that legislation, again, and that parliamentary protection, it is difficult to see how this would be preserved for years to come. This program has been in place for many years, even before, I think, the Canada Post Corporation Act. It makes us nervous without that protection going forward in the years ahead.
Senator Ross: Thinking outside the box, do you have any suggestions on how Canada Post could lower their costs?
Ms. Chevreau: If I may, I don’t think, frankly, that the library book rate or shipping materials for those who are blind or visually impaired is the problem with Canada Post. We can all agree and respect that there are significant issues with Canada Post, but, with all due respect, I just can’t see how the library shipping rate or sending materials for people who are blind or visually impaired are the problem.
Senator Ross: Thank you so much for your candid answers.
Ms. Chevreau: You’re welcome.
Senator Galvez: My question is for Ernie Daniels. I’m happy to hear that you support most of the provisions of the budget and that you think this is going to positively impact the projects that are a priority for First Nations communities. It’s an important statement to make. However, my question is regarding Part 5, Division 5 of the bill, which will amend the Red Tape Reduction Act to give all ministers the authority to run exceptions to a law or regulation.
You said that projects have to be a priority for the community, so in the event, then, that a minister needs to make an exception because of other types of projects, interprovincial projects — we’re talking a lot about new pipelines, energy grids and trains — what is your position? How do you see ministers having the power to be exempt from all laws except for the Criminal Code to allow for projects to go ahead? Do you think it will stop your right to be consulted and your prior consent?
Mr. Daniels: Thank you. That’s a good question. I would think that the ministers have to use their power wisely because I know our communities: If there’s something that is not going to go right, they’re going to oppose it. I would hope that the ministers are going to consult us, regardless of the power they have, because I think it’s really important.
I heard the premiers speaking a few weeks ago, and every one of them that got up to the mic said they need Indigenous equity participation in a lot of these projects that are going to go through. If you’re going to do that, you need to talk to the First Nations. You also need to take into consideration the issues that our nations are bringing forward. As a matter of practice and precedent, they should work with our communities, because it’s really important to get it right from the start.
Senator Galvez: Mr. Daniels, I think all the concerns my colleagues have expressed with respect to Canada Post are even more valid for the reduction of red tape, because, as they explained, legislation remains, while ministers go and come back, governments go and come back, civil servants go and come back. Without a very detailed explanation of when they are going to make an obstruction, when they are going to bypass some of these very important protections that we have in health and labour — do you find it a little bit vague and too much power in these provisions?
Mr. Daniels: Yes, I think they are vague. We need to establish some kind of a process or procedure that is going to be acceptable to all parties. That is going to be really important for the government to put in place; otherwise, you don’t have project certainty. If First Nations are going to oppose anything, they’re going to oppose it, and they’re going to do what they can and go to court, probably. Most of the recent court cases have been won by Indigenous people and First Nations that have been putting that forward.
It’s really incumbent on the government to establish a process that can be workable for all parties. I really strongly urge them to consider that.
[Translation]
Senator Gignac: My first question is for Ms. Blais, from the Réseau BIBLIO du Québec, whom I wish to acknowledge.
You’ve received the letter from the minister, and I would like to read it before addressing the subject.
The Chair: You should have it by now. It’s in English and French.
Senator Gignac: Okay.
The Chair: Page 2 in French is missing. I asked the clerk to forward it to the witnesses a few minutes ago.
Senator Gignac: We’re at the pre-study stage, so we can forget about an amendment. We’re now at the submissions stage.
[English]
My next question is for Mr. Daniels of the First Nations Finance Authority. Mr. Daniels, I want to congratulate your organization: You have $4 billion in loans so far; you have created 40,000 jobs for First Nations and with zero defaults on loans. It’s impressive.
I understand that in the Budget 2025, the government announced an intention to amend the First Nations Fiscal Management Act, but we are studying Bill C-15, and some things are there, and other things are not there. Have you received any further details about the government’s intentions regarding the Indigenous special-purpose vehicle as a tool?
Mr. Daniels: Thank you for that question.
We are working right now with the government department that is responsible for this, which is Crown-Indigenous Relations and Northern Affairs, or CIRNAC. We’re working on the amendments right now with the legislation drafters. We just want to ensure it gets put into the next budget implementation bill. It missed this first budget implementation bill. That’s what we want to see.
The intention is good, and we have a good working relationship with the department in bringing this forward. That’s what we want. Any delay is going to delay First Nations that really want to get into some of these projects, because we do have First Nations and Indigenous groups that are working together in a special-purpose vehicle that want to access the FNFA for financing these projects that have a government loan guarantee.
I’m going to ask my colleague, Jody, if she has anything else to add. She has been working on this more closely than I have.
Jody Anderson, Vice-President, Partnerships, Strategy & Public Affairs, First Nations Finance Authority: Thank you, Mr. Daniels, and thank you, senator, for the question.
It’s important to note that we already have Indigenous groups that are asking for this service, and there’s a growing demand to utilize this fiscal tool right across the nation. So, in an environment where infrastructure development is certainly growing and at the core of many things that we’re doing here in Canada, we would like to offer this service. With the SPVs, we’re one of the only groups that doesn’t currently have the ability to lend to Indigenous groups. In Mr. Daniels’ opening statement, that was the very impetus and genesis for FNFA’s existence.
We would like to be able to offer this to those who are demanding it in order to accelerate infrastructure development as well as economic development right across this country. Meegwetch.
Senator Gignac: With this current government that wants to accelerate development across Canada, how much funding will Indigenous special-purpose vehicles need?
Mr. Daniels: Thank you for that question.
They wouldn’t need any funding; there’s no funding required from the government because they will be accessing the federal government’s Indigenous Loan Guarantee Program. That would back up financing, so all of these projects will be financed on a business basis, whether they can produce income for the partners and project proponents. That’s what will happen.
So, there’s no cost to the government to get this legislation done. As a matter of fact, it’s just going to give First Nations a really good option to get affordable financing because we can actually get that financing pretty cheaply from the capital markets. It just needs to be done more quickly.
Senator Gignac: Since that’s the answer that I expected, is there any good reason not to have been included in Bill C-15? Was a deadline missed? What was the rationale not to include it?
Mr. Daniels: That’s a good question. I don’t know the rationale as to why it’s not there. I guess they’re just trying to pick things that can make an impact faster, and I don’t know how this doesn’t meet that, because it does. Like my colleague, Ms. Anderson, said, we have projects that are waiting to access financing and to get the federal government’s loan guarantee.
In a matter of priority, I think this should have been done. There weren’t too many things in the budget that addressed Indigenous issues, but this is one of them. It’s really important that we move forward quickly on it.
Senator Gignac: Thank you.
Senator MacAdam: My questions are for both library witnesses.
I didn’t get a chance to read the letter that was circulated, and some of my questions were already asked, but I just want to say that libraries are very important in my rural province of Prince Edward Island. CBC News recently reported that libraries continue to see rising usage as Islanders borrowed more books than ever in 2025, and economic pressures can be seen to be driving increased library usage.
It was mentioned earlier that the $2.5-million cost is just for Quebec libraries. Is there information on the total cost that would impact all libraries in Canada?
Also, it was mentioned that there would be serious long-term impacts. Is there any documentation that has been prepared regarding long-term impacts that you can share with the committee? I’m thinking, for example, about impacts on circulation statistics, accessibility, staffing, library closures — those types of things that would be a long-term impact on the libraries.
I would like to get comments from both witnesses.
Ms. Chevreau: I can start if that’s okay.
I don’t have all of these statistics for you right now. We can certainly get them for you. Ms. Blais mentioned that the cost of shipping through standard means would be about $26 per shipment, as opposed to $2, and if we have 550,000 units shipped, right now it’s about $1 million, so it would be 10 or 20 times that in terms of shipping costs.
It would be unsustainable for all libraries across Canada, especially rural libraries. The libraries that I represent, the CULC — the urban libraries — are the bigger medium and large libraries, but because we’re involved in the library shipping tool, many of those smaller libraries could not sustain any additional cost for shipping. It is significant because almost half a million units are shipped every year across the country, and most of those are to rural communities.
In terms of the impact, if this weren’t available and interlibrary loans weren’t part of the service, it would impact everything about a library. It would impact circulation. It would impact staffing because there are staff who are dedicated to providing this service. But, more importantly, it would impact access and the community that it’s trying to serve. That is the biggest element. If we don’t have access to information in a democratic society, it is indicative of the well-being of society.
There’s an argument that says, “Isn’t everyone reading e-books and electronic material?” The answer is no. Print is still very much alive and well, and it’s an unfair assumption to suggest that our citizens can have the technology or can afford the technology that is required for e-books or anything in electronic format. Print is very much a preferred format for interlibrary loans and will be for a long time, assuming that we can get this legislation in place.
Ms. Blais, do you have anything to add?
[Translation]
Ms. Blais: I agree with Ms. Chevreau’s comments. Print loans are on the rise. E-book loan statistics remain marginal. Access must be to print materials.
A number of serious impacts have been highlighted. Without interlibrary loan services, access to collections in rural areas will be reduced. This could even lead to the closure of libraries, as Ms. Chevreau also pointed out. The consequences could be disastrous for small rural communities.
Senator Hébert: Thank you.
I’ve taken a quick look at the letter from the minister. It has addressed some of the questions. However, I would like to hear from library representatives on issues related to people with visual impairments. With the aging population, have you noticed an increase in this type of request from customers with visual impairments in recent years?
[English]
Ms. Chevreau: Thank you so much for the question. As somebody who is verging into that demographic, I appreciate it very much.
The short answer is absolutely. We are seeing far more requests for large-print materials. As people age and their eyesight changes, this is becoming core to access to materials across the country. This is not necessarily a rural issue; it’s an issue that we have as a nation. We are anticipating only an increase in terms of access to information in various formats for those who are experiencing sight impairment.
[Translation]
Senator Hébert: I hope the government’s cost estimates will take this into consideration. This is a very timely topic. White Cane Week was just a week ago. These are important issues.
My question on funding is for Mr. Daniels. My colleague Senator Gignac covered many of the topics I wanted to discuss with you. I would like to hear your thoughts on Indigenous businesses that may want to participate in infrastructure projects. Have communities developed any specialized skills, or are we talking about the full range of sectors and infrastructure work in which Indigenous communities have built up expertise?
[English]
Mr. Daniels: Thank you for that question. It’s a really good question. I’ll answer that by saying that it depends. It depends on where you are because not all First Nations are created equal across the country. Some are more advanced economically, and some are less so.
If I look at Atlantic Canada, there seems to be more advanced First Nations there that are looking at partnerships and equity types of projects. An example I can give you is Clearwater Seafoods, where seven First Nations communities in the Atlantic purchased 50% of Clearwater Seafoods, which is the largest seafood company in North America. It has an international market, so that takes a lot of complex negotiations and management of a very specialized industry.
In that regard, yes, they are developing. As a matter of fact, the Membertou First Nation employs about 50% of the population of the neighbouring municipality of Sidney. That’s pretty profound when you think about that economic impact — 50% of the population is working there, generating a salary, and they’re doing other things with that. There’s a spin-off from that, which is that they also purchased St. John’s Dockyard Ltd., which is now called Newdock. It’s one of the oldest shipyards in Canada, which services all types of different vehicles, and that’s very specialized.
If you go to the West Coast of Canada, we have the Haisla Nation, which has an equity participation in the Cedar LNG project with Pembina Pipeline Corporation, a massive LNG project that will be selling its LNG products across all markets. In between that, you have First Nations that are looking at hydro projects, alternative energy projects, wind farms and so forth, that they’re partnering with, so there’s a lot of skill.
The First Nations that work with us are very skilled in doing this. The other First Nations need to get caught up, and they’re working on that. I say that because part of our legislation — our sister organization, the First Nations Financial Management Board, is responsible for capacity building and establishing a standard for financial management that is equivalent to municipalities and other types of governments. So it is increasing. We’re seeing that more and more, and with the Indigenous loan guarantee, there was the Stonlasec8 project in British Columbia, where 48 First Nations took equity ownership in an existing pipeline already. So it is there.
Sometimes it takes more time. Even for ourselves at the First Nations Finance Authority, we have to build up our capacity to look at these different projects because we have to analyze them and make sure that the projects are sound and they will be able to repay their financing. It is incumbent on us to do that.
I think it depends. There is a continuum of First Nations along this line where some are very advanced, and some are not. Many are in between. I think that we are ready. The nations that want to participate in these projects are ready, and they have the skills and capacity to do so. Thank you.
Senator Pupatello: I appreciate we don’t have the letter translated, but I wanted to comment on what the assistant deputy minister, or ADM, who appeared at the Transport and Communications Committee said.
He said:
. . . the proposed amendments are administrative in nature and are not changes in policy direction nor to the provision of specific services. . . .
He went on at length — it is in the transcript.
He continued:
In no way, shape or form do the amendments change the commitment to continue to provide free materials to persons who are blind, nor does it change the commitment to libraries. . . .
For the record, for our committee, that’s what the ADM said. I haven’t seen many opportunities where the ADM is speaking outside of what the minister might write in a letter. I’m hoping that this, in fact, is going to be the content of the letter that is distributed to this committee.
I do appreciate the comment made, though, that you prefer to see this locked into legislation, and I would just share that there was an event last Thursday night where Prime Minister Harper was lamenting at the podium that the government that followed him undid all of their work in legislation during their government and such. We are living in a democracy, so governments do get to change how they do their business with the change of government. I think we’re always going to have that challenge in this country.
That’s just a comment, really. I don’t know if our guests or witnesses need to reply to that. It was just for the sake of our committee.
[Translation]
The Chair: Thank you. We have come to the end of the first panel.
We have sent you the letter and invite you to read it. If you agree or disagree, or have any suggestions or comments, please send them to us for discussion.
Honourable senators, for our second panel, we are pleased to welcome from the Office of the Parliamentary Budget Officer, Jason Jacques, Interim Parliamentary Budget Officer, who still has the word “interim” in his title; Mark Mahabir, Director General, Costing and Budget Analysis, and General Counsel; Govindadeva Bernier, Director, Budgetary Analysis; and Carleigh Busby, Adviser-Analyst.
Welcome and thank you for accepting our invitation to appear today.
We will now hear opening remarks from Mr. Jacques.
Jason Jacques, Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer: Good morning, Mr. Chair and distinguished members of the committee.
We have published three analytical reports related to your study. These include an analysis of the cost of the proposal to reduce the lowest personal income tax rate, an analysis of the filers who would be disadvantaged by this reduction, and an analysis of the GST rebate for first-time homebuyers.
We will answer your questions, but first, let me review some administrative matters.
[English]
The Organisation for Economic Co-operation and Development, or OECD, will publish its first external review of Canada’s Office of the Parliamentary Budget Officer, or PBO, later this month. I commissioned this review in September to assess our institutional framework, operational practices and alignment with the OECD Principles for Independent Fiscal Institutions. While the external review is yet to be published, I am encouraged by recent comments from the head of the OECD’s Public Management and Budgeting Division, who succinctly concluded:
I think Canada is very lucky to have the PBO, and to have a body that has respect from seemingly all stakeholders that we talked to.
In the interests of transparency and accountability, I would also like to draw your attention to our first-ever communications policy framework that was published last week. It formalizes our “parliamentarians first” approach. It also provides details regarding our quality assurance processes and greater clarity regarding how report revisions are communicated to the public.
[Translation]
When I appeared before you last week, I indicated that my office was experiencing some challenges obtaining certain additional information related to the comprehensive expenditure review, and that only one agency had not yet provided the requested information. Shortly after my appearance, my office received the requested information from Library and Archives Canada.
I would like to thank the committee for its attention to this matter.
In closing, my colleagues and I would be happy to answer your questions.
The Chair: Thank you.
[English]
Senator Marshall: Thank you to the Parliamentary Budget Officer and his officials for being here.
I know you are here on Bill C-4, but my questions are a bit broader than that. With Bill C-4 — you can confirm — I see that is already taken into consideration in the budget. Since then, there have been a number of policy announcements by the government and legislation for some additional programs. So, it looks to me like the deficit, which was expected to be $78 billion for this year, may now run a bit higher. Can you comment on that and whether, in fact, you have estimated a new deficit figure for the current fiscal year and even for the years into the future? Can you just speak about the current deficit?
Then, I want to talk about the impact on the debt ceiling, and I will have a general question after that if I still have time.
Mr. Jacques: Okay. With respect to our forecast of the deficit for this year and the years ahead, we will be publishing our updated Economic and Fiscal Outlook toward the end of March or the beginning of April, which will take into account these additional measures.
To your point, to the best of our knowledge, Bill C-4 was incorporated in the fiscal framework for Budget 2025. There have been additional announcements since the budget, most notably Bill C-19, for which we published a cost estimate last week. We don’t believe it was incorporated in the fiscal framework; certainly, it was not explicitly in Budget 2025. In isolation, that would increase the deficit for this year and the years ahead.
Senator Marshall: How about the electricity vehicle subsidy?
Mr. Jacques: That is another announcement. It’s part of the announcement that was made for the automotive sector. We did identify that the electric vehicle subsidy appeared to be new money, and, again, that would also, in isolation, increase the deficit.
Senator Marshall: Before Christmas, when you testified, you indicated to us that there were no new budget initiatives included in the supplementary supply bill. I was very suspicious, and I am wondering if the government is holding back on implementing some of those budget initiatives just in case they wanted to come up with some new programs and they didn’t want the deficit to go any higher.
Have you looked at that? Can you tell us whether any of those budget initiatives have been implemented?
Mr. Jacques: We track the implementation of all budget initiatives. On the website, we publish something you would be familiar with: our budgetary tracking tables. They contain all the measures and initiatives in the budget and how they are being implemented, whether it be through Bill C-15, other legislation or the appropriation bill, so the estimates themselves. We will wait to see what is in Supplementary Estimates (C), but, to the best of our knowledge, we are still waiting on those appropriation bills and Bill C-15.
Senator Marshall: Are you looking at the new programs in relation to the debt ceiling? The government, in Bill C-15, is asking for an increase in the debt ceiling to $2.5 trillion. So, they are bringing on all the new programs, and they implement their budget initiatives. The $2.5 trillion — they projected that further than the three years in advance, so I’m deeply suspicious about that.
Do you think the implementation of these new programs, like Bill C-19, will have an impact on the debt ceiling? Also, do you think the government will be coming forward with a request to further increase the debt ceiling?
Mr. Jacques: With respect to the debt ceiling calculation, there is 5% wiggle room that is built into the estimates, so it does leave additional space for the government, above and beyond the actual underlying calculation. What we have seen up to this point is that it will be well within that 5% of additional space that they built in for themselves.
Further to your point, I would also note that it has only been 18 months since the last time the government came forward to set the debt ceiling, as opposed to the usual triannual cycle — so every three years — which, typically, should be done. It doesn’t preclude the government from coming back and seeking a further adjustment to the debt ceiling as they see fit.
[Translation]
Senator Forest: Welcome back. It’s always a pleasure to have you here.
In Part 1 of the bill, which deals with reducing the marginal tax rate on the first bracket of personal income, you produced a note on the impact of reducing it from 14.5% to 14%. Essentially, you show that wealthy families would benefit the most from this measure. The average savings would range from $50 for a low-income senior living alone to $750 for a high-income couple with children. If the government wanted to better target low-income earners by redistributing this $27.5 billion over five years, what would you suggest as the best tool to use?
Right now, I have a feeling we’re off the mark a little bit. Yes, there will be $27.5 billion in tax cuts over five years. However, families with the highest incomes will benefit, not the most economically disadvantaged people in our society. What measure would really have an impact on people with very low incomes?
Mr. Jacques: I can go first and Carleigh can continue.
The Parliamentary Budget Officer’s office does not have a mandate to evaluate policies or provide a rationale for the Government of Canada’s initiatives. However, as you said, a number of options are available if the Government of Canada wants to better target low-income individuals.
Carleigh, would you like to add something?
[English]
Carleigh Busby, Advisor-Analyst, Office of the Parliamentary Budget Officer: A little bit.
We have a progressive tax system in Canada: The amount of taxes you pay is related to how much taxable income you have. Therefore, with Bill C-4, when we reduce the tax rate, the more savings you would have if you were paying more taxes before. So, dollar for dollar, yes; it may appear that a higher dollar value is going to higher-income families and a lower average value to lower-income families, but as a percentage of their income, it is still a progressive system. Thank you.
[Translation]
Senator Forest: In your opinion, is there any initiative that would have more impact or that would truly target families or people who are more economically vulnerable, given that we have a progressive tax system?
Mr. Jacques: As you said, this initiative will affect every taxpayer. Obviously, there are other options if the Canadian government wants to better target low-income earners. With Bill C-19, we can see that the Canadian government has decided to use the money in a different way. GST tax credits are already designed for low-income individuals. There are options. However, it’s not up to us to evaluate the rationale for, or benefits of, one policy over another. I am not the parliamentary assessment officer.
Senator Forest: I can certainly understand that, but I was looking to your expertise and experience to help us make recommendations to the government that would have a greater impact on low-income individuals. I understand that it’s not your role to make recommendations, but I’d have liked you to shed some light on the matter.
There are several programs. I don’t know whether you will be evaluating these programs that aim to promote home ownership. Often, young people buying their first home will not buy a new home. They will buy a home that’s already on the market, which may not be eligible for the GST rebate. Do you intend to evaluate the various programs that the government has put in place? Concrete efforts have indeed been made, but will you evaluate the relevance and impact of the programs the government has put in place to help young families buying their first home? Do you intend to evaluate the various programs currently in place?
Mr. Jacques: It’s always important for us to factor the historical impact of federal government programs, as well as the situations in provinces with similar initiatives, in our analyses in order to base our estimates on facts and figures and avoid situations where they are based solely on judgment. You can consult the projections we published when the bill was proposed. I believe it was Bill C-20. We published projections regarding the impact on the increase in the number of homes across the country as a result of this proposed legislation. Our analysis was based on the Government of Canada’s historical results associated with that type of subsidy. This is always important. That’s extremely important to us.
Senator Forest: Thank you.
[English]
Senator MacAdam: In June 2025, you released an assessment of the cost of the proposed new GST rebate for first-time homebuyers. According to your report, that measure is expected to cost $1.9 billion over six years. The Department of Finance Canada estimated that this measure is expected to deliver $3.9 billion in tax savings to Canadians over five years, starting in 2025-26. Can you speak to the difference in those estimates?
Mark Mahabir, Director General, Costing and Budgetary Analysis, and General Counsel, Office of the Parliamentary Budget Officer: Yes, thank you for the question.
We use two different models. Finance uses their own model, and we use our own model to project the number of sales and purchases by first-time homebuyers. I know our number is lower, and one reason is that we adjusted our data or calibrated our model based on the program in Ontario for the provincial part of the HST rebate on new homes. In that program in Ontario, we saw that 49% of all new homebuyers actually used the GST rebate program, so only 50% of new homes sold were eligible or homebuyers claimed the rebate. That reduced the number of eligible homes in our model, and that’s why our number is a bit lower — half — than that of Finance.
As well, we looked at the number of first-time homebuyers based on data in B.C., New Brunswick and Nova Scotia. Using that data, we saw that only about 20% of all new homes were purchased by first-time homebuyers. I know Finance and the Bank of Canada used data that looked at first-time mortgage holders rather than first-time buyers, just as a proxy.
Senator MacAdam: Thank you.
I have a question about something you mentioned in your opening statement. You said you were providing information on quality assurance — that you were updating parliamentarians on your quality-assurance processes. Did you change your quality assurance in any way, or did you just decide to provide more information about how it works?
Mr. Jacques: We have not changed our quality-assurance processes in any way. We have put them on the website and made them explicit. I’ll steal some of the thunder from the OECD report: One of the things that the OECD report, to be published in the next two weeks, says is that our office is outstanding, but there are some situations where we don’t document things as well as we could. In the case of the quality-assurance process, one of the recommendations was that what we’re currently doing should be documented and put on the website. So we have done that.
In addition to that, I think it might be a first — certainly the Government of Canada doesn’t do it — across the OECD that if you now go to our website, for every publication, you will see a hyperlink for errata; you can click on the hyperlink and you can see if there have been any changes to the report. When you go to the reports on the website, if there have been changes, you will see a box at the top indicating where there have been changes. Also, if there have been material changes around matters parliamentarians are debating, we will now be doing an immediate push notification. No longer will parliamentarians need to search on the website, wait and watch the national broadcaster to figure out that the PBO might have changed one of its numbers; now, the information will be provided directly to parliamentarians.
Senator MacAdam: Thank you.
Senator Ross: I am also interested in asking a question about the new home rebate. You just mentioned that 20% of all new homes are purchased by first-time homebuyers, which means that 80% of new homes are not purchased by first-time homebuyers. Do you think this will stimulate the purchase of new homes by first-time buyers and change that number? If so, how do you think that will impact supply?
Mr. Mahabir: Thank you for the question.
In our model, we don’t have any behavioural effects or any sorts of increases in supply. We used our economic outlook to determine the number of starts in the market, and that wasn’t adjusted based on the proposal or measure; we did not increase the number of housing starts based on that measure in our model.
Senator Ross: Do you have a sense of how many first-time homebuyers would buy a new home, typically?
Mr. Mahabir: I don’t think we have the answer for that.
There are between 240,000 and 260,000 starts every year, and about 12,000 of those would be eligible for the GST rebate each year in our model.
Senator Ross: Do you think there might be a way to extend this type of a program to those first-time homebuyers who do not purchase a new home? Is there a way this could also work for them, given the way the market is and given that there might not be enough new home starts for first-time buyers to be able to purchase them?
Mr. Mahabir: It is a good question. It would have to be outside the GST program because GST only applies to new homes. For resales, it would have to be a different policy for first-time homebuyers who purchase homes that aren’t new.
Senator Ross: So, the policy is intended to support first-time homebuyers, but it is really only supporting a small proportion of first-time homebuyers. Would you be able to come up with ideas of how other first-time homebuyers might be supported by a similar measure that isn’t related to GST?
Mr. Jacques: For better or for worse, it’s the legislation. It’s not our mandate to come up with ideas. That said, the government does have a range of measures in place through the tax system, for example, the First Home Savings Account. Through the personal income tax system, there used to be a tax credit — I believe it’s still there — for first-time homebuyers. If there’s a proposal from the committee, or if you would like to make a proposal around options, that’s certainly something we could cost, but it’s not our role to put options on the table for parliamentarians. Nobody wants a rogue PBO.
Senator Ross: Those options you’re mentioning would also apply to first-time homebuyers who would purchase a new home, right?
Mr. Jacques: That would be your proposal to make.
Senator Ross: I’m asking that as a question. Those other measures — the income tax measure and the First Home Savings Account — do they also apply to first-time homebuyers who are buying a new home? So they’re not specific to others?
Mr. Jacques: Correct, to the best of my knowledge.
Senator Ross: Thank you very much.
[Translation]
The Chair: The definition in the bill stipulates that the buyer must not have owned a home for at least four years. This means that people aged 50 who have been renting a home for several years will be considered first-time buyers. I assume that you took into account this definition, whereby the person has not owned a home for four years. Is this the definition you used to calculate the figures?
[English]
Mr. Mahabir: Thank you for the question. First-time homebuyers had to be new homebuyers and have not owned a home in the previous five years. I think that definition is from the home buyers’ amount policy. It’s a different policy, so they use a different definition, but that is true.
In our model, we took into account the person who had a recent marriage or common-law breakdown to reduce the number of people that would be eligible for the measure.
[Translation]
The Chair: Am I to understand that you took that into account?
[English]
Mr. Mahabir: We don’t have exact numbers.
[Translation]
The Chair: You don’t have the exact numbers. I’m sorry. Thank you.
[English]
Senator Cuzner: This is my first time here at the Finance Committee. You’ve all been very welcoming. Thank you, Mr. Chair and others.
Just coming off Senator Forest’s question about new homes and somewhat Senator Ross’s question as well, there’s also the provision for a GST rebate for major renovations, so a first-time homebuyer can buy a fixer-upper and not touch the foundation, interior or exterior walls, staircases or the roof, but it’s still a major renovation, and they’re eligible for that, yes?
Do you have any numbers as to how many Canadian first-time homebuyers would be eligible for that?
Mr. Mahabir: We can get back to you on those numbers if we have them.
Senator Cuzner: Thank you very much. The Government of Ontario has legislation ready to go, should Bill C-4 pass, matching the GST rebate. What kind of impact do you anticipate that would have on the market?
Mr. Jacques: As part of our modelling, as I mentioned in response to a question earlier, we’re currently updating our Economic and Fiscal Outlook. Part of that is an outlook on the housing market. Something everybody in this room and watching online is familiar with is that, certainly, a major constraint around housing is the supply side, so even with additional demand-side stimulus or demand-side supports for people to actually buy their first home or trade in — sell their home and move into something larger — there appears to be a very real constraint on the system. So, even with additional reductions on the GST side and on the tax side that make housing potentially more affordable for certain groups of buyers, there’s still going to be that very real constraint.
Senator Cuzner: I see this as one club in the bag with the tax deduction as well. You commented on going from 15% down to 14%. When we look at Canadians with low to modest incomes, is there any way your office is able to give a sense as to some of the measures that have been undertaken recently by the government that would have a greater impact and be specifically targeted to those lower-income Canadians? I know that we have Bill C-19 that’s coming up, which should prove beneficial. The Canada Child Benefit is going back a little ways, but the child-care benefit, pharmacare, dental care — those programs are targeted at Canadians who continue to struggle from week to week. Would you be able to put a dollar figure on that, or do you have some kind of sense as to what the culmination of those programs would have brought, what kind of benefit they have brought to Canadians?
Mr. Jacques: It’s a very good question, one we’ve answered in the past but not recently. We’d be happy to do the work. With a motion from the committee, we would be happy to circle back. To your point, something we have mentioned to the committee in the past is that it’s always important to evaluate a specific initiative of the government. If you’re looking at it in isolation, there’s a risk you’re going to miss the bigger picture of the overall impact of the policy initiative in the basket of policy initiatives, but with a motion from the committee, we’d be happy to undertake the work. I think it would be an interesting project.
Senator Cuzner: I’d appreciate that, if I’m still here. Thanks.
[Translation]
Senator Hébert: Mr. Jacques, you estimated the isolated cost of the proposed reduction in the marginal tax rate at $64 billion. I would like to know whether this amount includes the cost of the offsetting tax credit.
[English]
Ms. Busby: That is just the effect of reducing the taxes paid. As you’ll note, there’s an income recovery, if you will, in that the value of the tax credits is also being reduced, and that’s the $35.7 billion, so the net cost of reducing the federal income tax bracket from 15% to 14% over that five-year period is $28 billion. I hope that helps.
[Translation]
Senator Hébert: I understand that, but the offsetting tax credit comes at a cost. Is this cost factored into your estimates anywhere? How much does it amount to?
Govindadeva Bernier, Director, Budgetary Analysis, Office of the Parliamentary Budget Officer: Are you referring to what was added in Bill C-15 for those adversely affected?
Senator Hébert: Yes.
Mr. Bernier: We’ve not done an independent cost estimate ourselves, but the Department of Finance has estimated it at approximately $10 million per year over five years. This is minimal in relation to the overall cost of the measure.
Senator Hébert: That’s what I wanted to know. Thank you very much.
Still on the issue of reducing the tax rate for the lowest brackets, do you have any idea whether this will affect job offers? Increases and decreases in costs have economic repercussions. Has this been taken into account in the estimates?
Mr. Bernier: Yes. Currently, our office uses what is called elasticity, which is how we capture that response. We use about 10% for people in the first three tax brackets. For each one percentage point reduction in the tax rate, there will be a slightly higher increase in reported taxable income.
About two years ago, we reviewed what was done at the international level in other parliamentary budget offices and other independent tax institutions, because we used to get this question a lot: “Won’t people respond more than that?” There is a lot of academic literature on how people respond. A clear consensus hasn’t really emerged. However, people in the lowest income brackets generally respond less, because they have fewer adjustment opportunities. Someone with a very high income and investment income can always adjust their plans and decide whether or not to make capital gains. People with full-time jobs working 40 hours a week can hardly adjust their working hours.
The consensus among other international organizations that make cost estimates like us is to have either no response for low-income earners or a very low response. We are pretty much on the same level as the others. We did use this relatively low elasticity.
Senator Hébert: Thank you very much.
Following up on the question from Senator Ross, I understand that it’s not your role or your mandate to propose measures to the government. However, I would be curious to know whether you plan to conduct a cost-benefit analysis or an analysis of the effectiveness of the various home ownership measures, including the one proposed here, compared with other home ownership measures in place across Canada. The government already has a tool kit that it uses.
Mr. Jacques: Yes, there is an Auditor General of Canada who has their own specific assessment. That’s their responsibility. As I said, it’s always important to assess the impact of other Canadian government measures and other initiatives.
First, it’s always important to have a historical impact to inform our consideration for our future forecasts. It’s also always important not to evaluate an initiative in isolation. If there is an impact from other initiatives by the Government of Canada, and the provinces and territories, it’s always important to have a sense of the impact of the entire basket of initiatives.
The answer is therefore no from a formal perspective, but in reality, with our modelling, the answer is yes.
However, we have not published a report. If the committee makes a request, we would be happy to publish new documents. It’s simply a matter of resources in our office. We publish a lot of reports that are important for our analyses, but they’re not necessarily of parliamentary interest. If there is something in our office that is of parliamentary interest, then absolutely, we will do the work for you.
[English]
Senator Galvez: Listening to your opening remarks about how the OECD is praising and supporting the workers of the PBO, I feel like I should ask you this question. I see your office as bringing us the information, costing, transparency, fiscal risk and accountability, and I would like to explore with you what would happen if the government gave broad discretionary authorities to ministers. In the previous panel, I asked about the impact of Part 5, Division 5 of Bill C-15, the amendment to the Red Tape Reduction Act, and I would like to frame it in the context of Bill C-4.
You depend on information about how ministers implement whatever policy they are promising. Here in Bill C-4, we have the amendments to the Income Tax Act, and the other one that is of interest to me is the amendment to the Greenhouse Gas Pollution Pricing Act. Will these discretionary powers, which, in my opinion, are vague and broad, create challenges for your office in estimating the fiscal cost and long-term liabilities?
Mr. Jacques: The short answer to the question is maybe. The mandate of our office is to promote transparency for parliamentarians so that you’re in a better position to do your job. Part of the key challenge, and the recurring theme over the past 20 years, has been the government not necessarily being transparent, so not publishing all the data that is relevant. That’s why there are close to 1,000 requests for information on our website. We’re up to 993 at this point, notwithstanding all the information that they publish.
You were here last week. In my opening remarks, I thanked the committee for potentially convincing or cajoling Library and Archives Canada to comply with our information request. The more we have to chase departments and agencies in the government to share relevant information, the harder it is for us to promote transparency, and the harder it is for us to generate cost estimates and analysis that help you do your job.
We’re following very carefully the administrative mechanism through which, if Bill C-15 goes into effect and these carve-outs are in place, and the powers of exemption are in place, they are going to be reported to Parliament and how easily we are going to be able to follow that.
Senator Galvez: Would you make a report on that specific subject if we asked you?
Mr. Jacques: We’re a transparency organization. On that aspect of Bill C-15, it’s close to the border line of our mandate. We can try to do what we can, but based on what is in the legislation, it does cause us concern. It causes the office concern regarding our ability to follow what the government plans on doing, when it plans on invoking exemptions and how those exemptions are going to be reported publicly, in a range of measures, because, of course, if we don’t know when the exemptions are being invoked, it makes it challenging for us to actually incorporate that information into our economic and fiscal outlook, and the 50-plus other reports that we publish every year.
Senator Galvez: Thank you.
[Translation]
Senator Gignac: My colleagues have all asked excellent questions and covered the issues I intended to raise, so let’s move on to another topic.
My question is somewhat related to the answers Senator Forest was trying to get from you. A measure like reducing the marginal tax rate, which affects all taxpayers, is very costly compared with the GST tax credit rebate. These are completely different measures.
How does Canada compare with other OECD countries in terms of taxation? Are we more progressive than the others? How is Canada faring when it comes to low- and middle-income groups? Could you elaborate a little on that?
Mr. Jacques: Unfortunately, I don’t have those numbers at my disposal. However, we can evaluate the OECD numbers and prepare a response for the committee.
Senator Gignac: Perhaps you could just give us an indication.
Let us move on to another topic. With regard to the GST rebate for first-time homebuyers, your report published on June 11 makes no mention of provincial distribution. House prices in Rimouski are very different from those in Toronto or Vancouver.
Do you believe that $1 million or less covers all new homes for first-time homebuyers? Conversely, is there some kind of regional redistribution, because the cost is different? Is it possible to estimate this cost by province, since the savings are much higher in Quebec than they may be in British Columbia or Ontario?
[English]
Mr. Mahabir: Thank you for the question.
The prices were adjusted based on a distribution of prices throughout Canada. We use 17 municipalities. We don’t have data province by province, but we did look at prices throughout Canada to adjust the prices.
In our model, the average price is around $540,000 for the average beneficiary, so it is an average benefit of $26,000 to $27,000.
[Translation]
Senator Gignac: That’s the average price based on the 17 municipalities.
Normally, new homes are smaller. First-time homebuyers buy them, as compared with wealthier people. Can we say that virtually 100% of new homebuyers across Canada will benefit from this? Would that be your calculation? Okay.
[English]
Senator Pate: Thank you for being here. Thank you to the committee, as well. I miss being on the committee, so it’s nice to be back.
I’m conscious of the way you’ve responded to some of my colleagues on this, and given that the provisions we are studying were meant to be looking at those who are least likely to be able to afford costs of living, and given the links we know to extremism and some of the other issues the Prime Minister and the government have indicated they want to address, I’m conscious of you saying that you’re not — I think the term you used was — the assessment office. But the Office of the Parliamentary Budget Officer, historically, has done things like assemble — in a situation where there may be tangential issues, and in this case, the stated objective doesn’t seem to fit exactly with what the provisions are. Predecessors in your office have brought in others and have done comparative analysis. I’m most familiar with it when it comes to the criminal-legal context. They have then been able to provide a transparent assessment of how the objectives are met by the relative provisions.
Are those the kinds of things you see you can still be doing, or are those the kinds of things that you see would be a challenge, in this moment, to be providing?
My second question is if it would be possible to have that kind of analysis. You’ve done other analyses of other kinds of economic interventions that might benefit the very people who are being left behind, who won’t be impacted by these provisions and who are now well below the poverty line — in deep poverty, some of them. Would you be able to provide some of those kinds of commentaries?
Mr. Jacques: Yes, it’s part of the mandate. Yes, we have the technical capacity to do the work.
The mandate of the office, as I interpret it, is not to put options on the table. The mandate of the Office of the Parliamentary Budget Officer is not to propose; it’s to take proposals from parliamentarians, cost them, analyze them and then return them to parliamentarians to have a policy debate.
Otherwise, if there’s a proposal from parliamentarians and a motion from the committee to undertake comparative analysis among alternate proposals, then, certainly, we can do that work.
Senator Pate: How often does the Department of Finance, the Treasury Board or others consult with you about potential options that you may be familiar with — whether within Canada or internationally — that they could be looking at in terms of meeting their policy objectives?
Mr. Jacques: I would say rarely, and the only time it does happen is after an election campaign.
As members of the committee are aware, one of the mandates of the office is to help political parties with the costing of their election promises. During the last election campaign, it was over 100 items that five political parties submitted to us, many of which ended up on our website. Because we and the Parliamentary Budget Officer are taking the first pass on what is ending up in platforms, once a government is elected, the public service is very interested in what the newly formed government had in mind when they sat down with us and asked us to actually cost those proposals.
In the previous election — not in 2025, but in 2021 — we did work for the NDP on the dental benefit, and as part of the negotiations between the NDP and the previous government, we were consulted quite extensively on the work that we had done for the NDP — at the request of the NDP — to sit down with the government to ensure that what the government had in mind for Canada’s new national dental care program was consistent with what the NDP had costed by the Office of the Parliamentary Budget Officer.
Outside of the immediate election campaign, it’s very rare.
Senator Pate: You talked about the fact that this committee asked for information from the Library and Archives Canada. In my experience with your office — and your office has been extremely helpful in a lot of respects — there are very few powers that your office has to compel government departments to provide the information you sometimes need.
Could you comment on whether there would be any benefit to — whether it’s this committee or another parliamentary committee — pushing for that kind of information and how you would see that mechanism working, because it seems to be a bit hit-and-miss? If the question is asked, and the information is discovered, then it can be requested and supported. Otherwise, it seems to be a bit of a vacuum in terms of your ability to get the information you need sometimes.
Mr. Jacques: I would agree with your characterization. I think the only legislative power that we have in the Parliament of Canada Act to compel departments to share information is the fear — and, most notably, last week is an example — of this committee passing a motion and compelling departments to share the information.
In the fall, we did refer another matter around denial of information access to the Speakers of the House and the Senate, and one of the things — I believe there are ongoing discussions between ourselves and the Speaker’s office in the Senate — we would dearly love to see is a formal administrative process through which we can simply send correspondence to the chair of this committee, and this committee can simply act on it, as opposed to going through a more convoluted process and us needing to appear at committee.
I think there’s a benefit in that if for no other reason than that it will allow this committee to take a step back and reflect upon whether the government has a good case for not sharing this information with the Office of the Parliamentary Budget Officer. Is it actually essential?
I have a vision of this committee, potentially, acting as more of a neutral and impartial arbiter, and I also think that this committee could operate fairly quickly and efficiently to build consensus, especially around confidential information.
We can avoid situations that happen — for example, in the fall — where we send in an information request to government departments around the $60 billion in cuts and 40,000 planned layoffs in the federal public service, and we receive a response from the public service saying, “Legally, we have to give you the information. It’s part of your mandate, and you should be analyzing it, and it’s pertinent to parliamentarians, but we’re not going to give it to you now.”
I guess they didn’t read the Parliament of Canada Act, or they just don’t have the same respect for it as I do, and it would avoid that situation where — in that specific instance, it went through the House of Commons, was referred to a committee, and it got a little bit spicier.
For myself, to the extent to which we can avoid the same friction that occurred in the past — and having been with the office since the beginning and thinking of the first Parliamentary Budget Officer bypassing Parliament, going through the media and taking the government to court — we can bypass that, and this committee can potentially be a forum to sit down and work out those differences between an agent of Parliament and the public service. I think it’s a much better way of going about things.
[Translation]
The Chair: Thank you for the suggestion.
I have a comment for you, and I’d like to hear thoughts. I was reading Bill C-4. Obviously, the title includes the term “affordability measures.” Reducing the marginal tax rate on the first personal income tax bracket will benefit the middle class. People who do not pay taxes will not benefit. A look at the new definition of a first-time homebuyer in the Excise Tax Act provided for in Bill C-4 shows that it covers anyone who has not owned a home for at least four years. This means that many people fall under this definition. It even includes people who have saved a lot of money. The goal is to promote economic development and boost the economy and construction, rather than promote affordability. There is still the issue of the carbon tax, which is a bit complex. It will help businesses because it will eliminate a cost of production and affect wealth distribution by removing the distribution of the charge. Inflation was being created, with support for its spread, but other forms of inflation were also being introduced to keep the money circulating. Basically, it seems to me that the goal is much more about economic development to boost construction and reduce costs for businesses than affordability in the broad sense. Have I interpreted this correctly?
Mr. Jacques: I’ll reserve my judgment for now, until we have completed the analysis proposed by your colleague Senator Cuzner.
The Chair: Perfect. We will prepare the motions. We have taken note of that. Other motions have emerged from previous meetings. We will share them with you at the next meeting and we will address them, because several of them concern you, particularly requests for studies. We will forward them to you in the next few days.
Congratulations on the OECD study and the report. We are very proud to be world leaders in transparency and to have staff or an office like yours. Canada is very proud of its rule of law and democratic institutions. Clearly, you are helping to improve them. Congratulations and keep up the excellent work. Thank you.
(The committee adjourned.)