:
We're going to call the meeting to order. Welcome to everyone here.
Colleagues, this meeting is called, pursuant to the Standing Orders, to discuss and review the Public Accounts of Canada 2007, the summary report and financial statements for the Government of Canada for the fiscal period ending March 31, 2007, which are probably the most important set of documents we will review. The Government of Canada takes in and spends approximately $220 billion each and every year, and this is the summary of the revenue and the expenditures, as audited by our officer, the Auditor General of Canada.
We're very pleased to have with us again, Sheila Fraser, the Auditor General. I'm going to have you introduce your officials, Mrs. Fraser.
We are very pleased to have, from the Treasury Board Secretariat, Rodney Monette, who's the interim Comptroller General. This is his first appearance in that capacity before this committee. I want to congratulate you on your position and welcome you to the committee. And of course we have the assistant comptroller general, John Morgan, and Bill Matthews, the acting executive director of financial management and analysis sector. Both Mr. Morgan and Mr. Matthews have been before the committee many times previously.
Representing the Department of Finance, we have Mr. Paul Rochon, the assistant deputy minister, economic and fiscal policy branch.
So without any delay, I believe Mr. Sweet has a motion that was approved.... No, I can't do it because we don't have a quorum. Sorry, we'll do that later on, Mr. Sweet.
I'm going to turn the matter over to you, Mrs. Fraser. Again, welcome. I'll ask you to introduce your officials.
We are very pleased to be here today to brief committee members on our report on the audited 2006-07 financial statements of the Government of Canada. Accompanying me today are Doug Timmins, assistant auditor general, and Marion McMahon and Michael Pickup, principals of our office, who are responsible for the audit of these financial statements. We are pleased to see that the committee is holding this hearing on the public accounts, a key accountability report of government.
The Comptroller General will be explaining the main points in the government's financial statements to the committee, and I will focus on the highlights of my audit opinion and observations.
My report on the 2006-07 financial statements is included on page 2.4 of volume 1 of the public accounts. My opinion provides Parliament with the assurance that the government's financial statements are fairly presented in accordance with the government's stated accounting policies, which conform with Canadian generally accepted accounting policies. It can be referred to as a clean opinion. Our office has been able to issue such an opinion on the government's financial statements in each of the past nine years.
[Translation]
We commend the government for producing financial statements that are fairly stated in conformity with Canadian generally accepted accounting principles. Parliamentarians and all Canadians can be assured that the financial statements provide sound financial information. In our view, Canada continues to demonstrate leadership in financial reporting for national governments.
I would now like to discuss issues that we have presented in our Observations.
First of all, the government's financial results include significant amounts related to transfers to other levels of government, individuals and other parties. Overall, $4.5 billion of these expenses related to initiatives announced in the March 2007 Budget. We focused our audit effort on these expenses and liabilities as they require more judgment in determining the appropriate accounting treatment. During our audit, we concluded that the government's accounting for these transactions was acceptable.
Secondly, in relation to departmental financial statements, as announced in 2004, the government's plan to transform public sector management included measures to strengthen comptrollership and oversight. One of the initiatives was to have the annual financial statements of all departments audited. The Office of the Comptroller General's strategy to implement this initiative is to first focus on the 22 large departments. We understand that in the near future, the government will be re-examining its priorities and strategies for matters related to financial management, including departmental financial statements.
[English]
This year we reviewed the progress that these 22 departments have made toward meeting this objective and have identified key areas where work needs to be done by departments and by the central agencies in order to be ready for audited departmental financial statements. Based on the information provided to us, many departments have a long way to go before achieving the goal of readiness for an audit of their financial statements. For example, while the majority of the 22 departments have completed an initial assessment to determine their level of readiness, many have not yet implemented an action plan to address areas where they are not yet ready.
In addition, the Office of the Comptroller General needs to re-evaluate the overall strategy, including the expected timelines for audited departmental financial statements, and reinforce with the departments the original objective of this initiative. We will continue to work with the government as it moves toward this goal.
Thirdly, there's the question of accrual-based budgeting and appropriation by departments and agencies. The Standing Committee on Government Operations and Estimates issued a report on accrual budgeting and appropriations and made numerous recommendations, including that the government adopt full accrual accounting for budgeting and appropriations. This committee also issued a report and recommended that the government present to Parliament for discussion and debate a model including projected costs and benefits on extending full accrual accounting to budgeting and appropriations within the next year.
We understand that a parliamentary working group was formed with members of both standing committees to discuss a number of models developed by the Treasury Board of Canada Secretariat. Discussions of these models have also recently begun with my office. The government is committed to presenting a model to Parliament by March 2008, and we encourage the government to continue working to resolve this issue.
In our observations we also provide comments on the government's methodology for accruing tax revenues. As the largest and most significant management estimate affecting the Government of Canada's financial statements, it is important that the government regularly monitor the reliability of its estimation process and modify it where necessary to improve the accuracy of its estimates.
At the present time there is evidence of a continued understatement of tax revenues when compared to actual results, particularly in the area of corporate tax revenues. With more than four years' experience in identifying causes of variances between actual and estimate amounts, it is time to implement improvements in the estimation process.
[Translation]
Lastly, we also commented on the lack of clarity regarding the nature of expenses that are to be charged to an appropriation. Our concern is that a liability in substance may not be recorded because it does not meet the legal definition of debt as per section 37.1 of the Financial Administration Act. We understand that Treasury Board will be updating several of its policies including PAYE policies in the future.
These matters are discussed in more detail in our Observations, which are found starting on page 2.30 of Volume 1 of the Public Accounts. In these observations, we have also provided an update on issues raised in previous years. This committee may be interested in monitoring the progress that the various organizations make, for example Treasury Board, and the Canada Revenue Agency, in responding to the Observations.
In conclusion, we would very much like to thank the staff in the Office of the Comptroller General and in all of the departments involved in this work. The actual tabling of these accounts reflects many hours of painstaking work.
Mr. Chair, that concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.
[Translation]
Thank you for inviting me to appear before this committee to discuss the Public Accounts of Canada for 2007.
[English]
As you mentioned, Mr. Chair, I have with me a colleague from the Department of Finance, Mr. Paul Rochon, the assistant deputy minister of economic and fiscal policy, as well as two members of my own staff, Mr. John Morgan and Mr. Bill Matthews.
[Translation]
We are very proud that for the ninth consecutive year, the Auditor General has issued an unqualified opinion on the government's financial statements.
[English]
As you may know, I'm fairly new in the position of interim Comptroller General. I would like to assure you that I take these committee meetings very seriously and have spent a good amount of time preparing.
I'll do my best to answer your questions, but from time to time I may turn to my colleagues for assistance in responding to your questions and observations.
Mr. Chairman, we have tabled a slide presentation outlining some of the key financial results for last year, as well as our preliminary comments on the observations of the Auditor General, included in the public accounts of 2007.
If you like, we can go through the presentation, or, if you prefer, we can simply table the presentation and get straight to committee members' questions and observations. Also, we have brought copies of the 2006-07 annual financial report in case members would like a copy.
[Translation]
Before concluding, I would like to thank the Auditor General and her office for the continuing professional relationship that we have enjoyed.
[English]
Thank you, and I look forward to your questions, observations, and suggestions.
:
This is our presentation, “Public Accounts of Canada 2006-2007”, which members should have in front of them. If you could turn to page 2, this gives an overview of the presentation, basically to explain the financial accountability process and the public accounts. Secondly, there is some basic information on the 2006-07 financial results. Lastly, there are some observations with respect to some of the issues the Auditor General has raised.
Turning to page 3 of the presentation, the financial accountability process, this gives some of the key milestones in terms of documents that are presented to Parliament and others. Mr. Chair, I won't go through all of those; we could answer questions on them later. But one can see that there are a number of key documents that culminate in the Public Accounts of Canada, obviously beginning with a budget document and leading through a number of updates.
On page 4 of the presentation, “2007 Public Accounts of Canada”, you can see there are three volumes.
[Translation]
The first part is a summary of the Government of Canada's financial statements. The second part is a presentation by department. The third part provides special information, including additional information required under the Financial Administration Act.
[English]
On to page 5, “2006-07 Financial Results”. As the Auditor General has mentioned, we do have a clean opinion from her. There is a surplus of $13.8 billion, the 10th consecutive year of surplus. And the accumulated deficit has been reduced over the years; it is now standing at approximately $467 billion.
On page 6 of the presentation, there are some basic comparisons of the financial results compared to the budget. One can see, for example, that the revenues were approximately $8.8 billion higher than budgeted. The total program expenses were about the same; there was not a huge difference. The public debt charge is down, almost $1 billion, and the surplus is up, about $10 billion.
On page 7--I won't go into details through all of these items, in the interest of time, Mr. Chair--it is a further breakdown of the financial results, comparing the 2006-07 results with the 2005-06 results. Probably one of the biggest differences would be that the revenues are up quite significantly, and also some of the program expenses are up as well.
Page 8, “Financial Results”, is a more detailed presentation on revenues. And I do apologize to members if I'm going through this quickly. I'm quite happy to come back and go through any details as members wish. This is just a little bit more detail on the revenues. I won't go into detail on that. I'd be happy to go into detail later if members wish.
Page 9 is a more detailed presentation on expenditures. It shows, for example, the various transfers up at the top, the transfers to persons. You can see that it has transfers to other levels of government. Then it shows the other program expenses a little bit further down. If you look at the very bottom line, it will show you the total program expenses, which were about $222 billion for 2006-07, as you mentioned at the outset, Mr. Chair.
On page 10, we see the financial position with the federal debt. I won't go through all the details, but I will say that the accumulated deficit in 2006-07 is $467 billion, down from $481 billion, which it was previously--about a $14 billion reduction.
Page 11 of the presentation gives a little bit more information on the debt, and it breaks out the debt in terms of what's interest bearing, the debt in foreign currencies, and so forth. It shows you the average interest rates at the bottom. Again, we can answer questions on that if members wish.
On page 12, we have some key observations of the Auditor General, and Madam Fraser did make comments on the departmental financial statements. We do agree with her that it's very important to make sure that work is done appropriately, keeping in mind the capacity of departments to proceed. We will be reviewing that very carefully.
On page 13, we see the Auditor General's observations with respect to accrual-based budgets and appropriations. As the Auditor General has pointed out, there is a commitment to come back by the end of March with an accrual-based appropriations presentation and model.
On page 14, there is a comment on estimating for tax revenues, and there are two parts to that. There are the revenues and also the allowance for doubtful accounts. There is very important methodology used to do that forecasting, and of course we need to have a look at that and make sure it's done appropriately.
Page 15 talks about the policy for payables at year end.
[Translation]
Once again, it is very important to have an effective policy, and we are in the process of revising the policy. There must also be a good discussion with all of the departments at the end of the year to ensure that the policy is being applied properly.
[English]
Those are the payables at year end.
I apologize, Mr. Chair, if I went through too quickly. I wanted to cover that in the time allotted.
Thank you.
It's a lot of information to try to digest in a short period of time after someone has spent a year or more trying to look at it. One of the points made here, and I guess it's been going on for a long time, is that the so-called finance minister has been criticized for underestimating the possible surplus. We seem to have some assurances, from previous discussions in the House and from criticisms of previous finance ministers, that it is a deliberate attempt on his part or on the department's part to underestimate revenues.
I see that we have alluded to that again this morning. Is there a better method, or is it a deliberate attempt to...? I think most of us, in our households, like to have an underestimate. What, Mr. Monette, would you suggest would be a better way of doing it so that our present finance minister is not making the same mistake his party accused previous governments of making?
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I think for the year that's currently under way the government is planning on a debt reduction of $10 billion. I would think this would be sufficient to ensure that the books stay at least in balance.
For future years, the government is planning on a debt reduction of $3 billion a year. Having said that, after accounting for the tax reduction measures announced in the October economic statement, in addition to the $3 billion a year, there's approximately $1.5 billion per year that is left over. So that's roughly $4.5 billion to $5 billion per year of either planned debt reduction or unallocated surpluses.
In the budget tables we provide rough rules of thumb for the budgetary impact of changes in economic developments. Certainly, very large changes in economic developments can lead to significant budgetary impacts. The one significant offset we have, now that we're in an environment of low inflation, is that one would expect that with a reduction in economic activity of the type you're alluding to, the interest rates would also adjust quite significantly, so there would be an offset.
So on balance, I would say that given the risks the country faces in the economy out there, the government's projections, as put out in the economic statement, are roughly balanced.
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The process of estimating revenue is highly complex and difficult. Canada is one of the rare countries that estimates accounts receivable and revenues linked to the fiscal year, and revenues are not accounted for on a cash basis.
The government takes into account the results of income tax assessments, for example for individuals, up until the start of May and estimates revenues based on those results. It does the same for businesses. It uses the amounts businesses have contributed over the year to estimate revenues for a given year.
When we review the actual results, we identify estimation errors. We have told the government that with more than four years' experience in using these methods, it is time to refine them and to identify the causes of the variances.
The most significant variances are for businesses, as they produce their income tax returns every month, whereas individuals produce them at a given point in time. The estimating method employed must be refined. To obtain a better estimate, the factors that need to be adjusted must be determined. Basically, the amounts are the same from year to year, so revenues for a given year reflect reality fairly closely. At the end of the year, there may be a receivable that has not been accounted for, and that situation is repeated year after year.
:
Thank you, Mr. Laforest, and thank you, Ms. Fraser.
Before we go to Mr. Poilievre, at this point in time I want to introduce two distinguished gentlemen who have just joined us, and they're going to be with us.
Mr. Ludovick Utouh, the Auditor and Controller General, the National Audit Office of the United Republic of Tanzania. Also accompanying him, we have Mr. Edwin Rweyemamu, the assistant to the Auditor and Controller General, the National Audit Office of the United Republic of Tanzania.
On behalf of this committee, I want to welcome each of you, and I do hope you enjoy our proceedings.
Mr. Poilievre, go ahead, please, for seven minutes.
:
If I could just clarify, there are two estimates.
One estimate is done for budget purposes; we do not look at that one. As well, there is an estimate to produce the financial statements. Because the government records revenue based on the year of the revenue, it is related to a year; it is not on a cash basis anymore. That's been in place now for four years.
To estimate the revenues that are receivable is a very complex and very difficult exercise. It involves a great deal of estimation based on cash payments received and on actual assessments. The method of estimation has been used now for about four years.
We have noted that when there's a comparison to the actual revenues received over time, the model seems to produce an estimate of revenues that is lower than the actual revenues. We're saying to the Canada Revenue Agency and to government that they should go back and try to adjust or refine the modelling because there may be certain percentages, for example, that would be too low. But the error, if I can explain it, is repetitive from year to year, so the revenues in any one year are reasonably correct.
At the end of the year there may be some revenues that haven't been recorded; they will get recorded next year, and then at the end of the next year there will be the same error. It's simply a question that it's time now, after four years of experience, to look at this modelling and try to refine it to get a better estimate of revenues.
:
Thank you, Mr. Christopherson.
At the moment we're focusing on the 22 largest departments, and 17 out of the 22 will be ready to have their audits started between now and 2009. Frankly, we think we need to revisit that, because we have departments saying they're ready. We want to make sure that if there is going to be an audit, it's done properly.
There are two ways you can do an audit. One is to go in and look at a whole lot of transactions, or you can look at the control systems and do far less work on the transactions.
The Auditor General has talked to us about making sure that when we do the audit, we do it right. So the work is being taken very seriously.
In the department I left some three weeks ago, National Defence, we had been working on this for two years. We put in a lot of time and effort. A lot of it is going into systems documentation, because if you want to do the kind of audit that makes sense, you have to have good systems documentation. Plus, there are a whole lot of finance and other systems out there that don't talk very well to each other, and we have to make sure they do.
It is being taken seriously. We do have departments that say they're ready. But I would agree with the Auditor General. I think we need to make sure that when it's done, it's done right.
:
Can you provide any details the government might have that would give us, once again, a breakdown of who stands to benefit by tax brackets? Who stands to benefit the most?
Economists tend to put things into terminology that's difficult for the average Canadian to understand. Take the cost of a Learjet; if I'm to buy a Learjet, I'll save $100,000 on that 1%. But that's the equivalent of having to buy 500,000 coffees and doughnuts at Tim Hortons, and I don't think there's a Canadian who could consume that amount throughout their lifetime.
I also notice that our corporations have done quite well over the last year. They are certainly making significant purchases of the sort I've referenced, Learjets and that sort of thing.
Do you have any numbers that show the tax savings for the highest-income Canadians and those with the greatest ability to pay? What kinds of tax savings will this GST cut generate for them as opposed to the guy whose extravagance is going to Tim Hortons in the morning?
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Again, perhaps we could get a little more detailed information on how that translates for the average Canadian worker who goes out there. As I said, he may be saving a penny, but we have an account, the EI account, that is supposed to be pretty much balanced, and yet your Canadian workers out there have overpaid by $1 billion in the last year. It would be interesting to know how perhaps that might be addressed in the future.
Moving on to Passport Canada, there's tremendous frustration among Canadians. Over the last couple of years we've heard officials from that particular department repeating to us that they have it in hand. We've heard the minister, in the House, saying everything's fixed, yet we still hear that it takes months for people to get their passports.
Lo and behold, we turn around and see that Passport Canada, who I guess lost a couple of million dollars in the past, made in the last year $14 million, almost $15 million, on their services--or non-services--to Canadians. I'd be surprised if a business could run that way: you don't provide the service, but at the same time you turn around and make this huge profit on the non-service you're providing.
Any explanations on that particular department?
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No, because... I'm sorry, but if somebody runs off with a credit card, I would hope that somebody is trying to mind the store.
Talking about minding the store, on the same page, Mr. Chairman, down there at “Public Works and Government Services, Sponsorship contracts, $987,995”, most of it has been collected, but $28,000 is going to be written—no, that's expected to be recovered at a later date.
I thought we were suing for $40 million. Did we ever get that money back?
:
Thank you, Mr. Williams. That's a really good question.
Of course, I'm interim, and I've been in the job about three weeks at this point, but what I would say is that on technical matters such as accounting treatment and so forth, I feel pretty confident that the view of the Comptroller General would be the final say on those accounting treatments. If there is some need for resolution, it's going to have a very high level of transparency.
At the end of the day, I personally, as an accountant, have a code that I have to work by, and if I thought something was really wrong, it would be my personal accountability not to associate myself with it.
The worst possible scenario is that you would resign over it because you thought it was wrong, and hopefully nothing would ever come to that.
As for my colleagues at the deputy minister level—and before coming to this job I was the associate deputy at National Defence—I think they take the views of the Comptroller General pretty seriously. They don't want, as accounting officers, to have the Comptroller General saying they're not doing something right. They're going to be coming here as accounting officers and having to say what they've done and learning whether or not it's appropriate. I think they'll take the views of the office quite seriously.
:
It's a hugely important function, and, Mr. Williams, I feel it's had a tremendous resurgence in the last couple of years under my predecessor, Mr. St-Jean, who put through a new policy requiring that departments and agencies have external audit committees.
I'm pleased to report that—my colleagues will correct me—11 departments, I think it is, have these in place now. They're all under way, and they have to have them in place by April of 2009. I think they take this very seriously. Some of the folks who might have been wondering about it are starting to see that these audit committees are actually giving them really good advice. They're getting external perspectives, they're getting good advice, and the committees are doing a good job of looking at their control systems and so forth.
Concerning your question about the reporting relationship, Mr. Williams, I've seen your comments previously. I know this is a model you've looked at carefully. I guess I could see it working either way. As you point out, right now it's organized as a kind of functional relationship. What I would say is that if you have a strong relationship with the community, you can make things work and can have your senior auditors feel that they have somebody they can go to if they need help and support.
I think it can be made to work just fine.
Thank you, Mr. Monette.
Before we start the second round, I just have a couple of issues I want to explore.
First of all, this is for you, Mr. Monette. The public accounts committee was written to by the Southern Chiefs' Organization out of Manitoba. I gave you a heads-up on this yesterday, and I don't expect a full answer, but I just want to get it on the record for a response. They indicated that the public accounts for 2005-06 indicated they had received $3,029,396, whereas their records indicate they had received $160,000. There is probably some explanation.
Can I get your undertaking that your office will explore this and get back to the committee with a full explanation as to the discrepancy?
:
Back to you, Ms. Fraser, the second area is an issue of transfers to other levels of government. My concerns are general, but my example will be specific. I'll deal with the $1.5 billion ecoTrust fund. The budget plan was presented in Parliament, the budget was debated and passed, and supply was given. And in regard to the ecoTrust fund, I quote:
The Canada ecoTrust for Clean Air and Climate Change will provide support to those provinces and territories that identify major projects that will result in real reductions in greenhouse gas emissions and air pollutants. The provincial initiatives supported by the Canada ecoTrust for Clean Air and Climate Change will complement industrial regulations and existing federal initiatives. Projects could include provincial technology and infrastructure development, such as carbon sequestration, and clean coal and electricity transmission, that will lead to a significant decrease in greenhouse gas emissions and air pollution. The Government will invest over $1.5 billion in the trust.
That trust fund was referred to in your report on the public accounts; it just refers to the $1.5 billion for clean air as an expense. For a parliamentarian and a member of the public, these are very laudable goals. One would think this actually happened, that the money was transferred to the provinces and spent on these projects. Now, everyone sitting at that end of the table knows that's not the case. The provinces take the position that the money is received in revenue. They take it into revenue and they do not have to spend it on environmental initiatives; in fact, they can spend it on anything they want.
It is my position that there is an absence of accountability here. The provinces rely on some of the directions coming from the Public Sector Accounting Board to support their position when they take the money and don't spend it in any way, shape or form as appropriated by Parliament. It's also my assertion there are other fundamental accounting principles being violated, the principles of consistency and transparency, and that the statements of the Government of Canada should reflect the underlying economic transactions, which I assert is not the case here.
So my question for you, Ms. Fraser, as an officer of Parliament, as the Auditor General, is, can you give this committee and Parliament the assurance that these funds, the $1.5 billion, are being spent on environmental projects? If you can't give that assurance, is it a concern to your office? If it is a concern to your office, do you have any plans as to what you might do with it?
:
Thank you very much for that question, Chair.
We are concerned about very large transfers being made purportedly for certain purposes, but when you look at the actual agreements, there are absolutely no conditions requiring the recipient to use the moneys for the purposes being announced. We are actually currently doing some work, which I hope we will publish in the fall of 2008. It will be basically be an information piece about what the different transfers are, what the indicated purposes of these transfers are, and if there are in fact any conditions.
Some members might recall a few years ago there was a great deal of press coverage of money for a medical equipment fund and the criticism of some provinces that they were in fact using that money to buy lawnmowers. When you actually went to the agreement, even though it was announced as being destined for medical equipment, there was actually no condition that the province had to spend it on medical equipment. So the provinces were quite entitled to spend it on anything they wanted to spend it on.
So we believe there should perhaps be a little more truth in advertising, and we would like to do a piece for Parliament to inform Parliament about what are the major transfers to the provinces, are there in fact any conditions on them, and if there are conditions, does the government have any process in place to actually ensure those conditions are being met?
We would expect that piece to come within a year.
:
Thank you, Mr. Hubbard.
In the report on plans and priorities for the Department of National Defence, and I know this because I worked at that department, there's a full section—and I apologize, I don't have that with me at the moment—that shows the full cost for all of the deployments of the Department of National Defence, including Afghanistan. It shows the information in terms of the incremental cost by year. It also has a full cost as well. That information is in the RPP. I don't recall the exact figures off the top of my head. The incremental cost for the last fiscal year, if I remember correctly—and, please, if I may, Mr. Chair, I'm going from memory here—was somewhere, I believe, in the neighbourhood of about $800 million, the additional cost of being in Afghanistan. That is all laid out in the report on plans and priorities.
The second part of your question, Mr. Hubbard, had to do with veterans benefits. Most of those benefits go through the Department of Veterans Affairs, and they would have a full accounting for that as well in their report on plans and priorities. There are some special funds for the folks who are coming back from deployment. There are some moneys in DND for that.
:
Thank you for that question. I'll just ask my colleagues to jump in if I don't have this right.
For big equipment and capital equipment, basically it's the historical cost that has been depreciated. So it's like a net book value. For example, at the Department of National Defence, I think the figure was about $25 billion. The historical costs would have been something different.
For inventories, again it's the actual cost that we paid to buy those things. And unless my colleagues jump in and correct me here, I'm not aware of any situations where for things like equipment or inventory we actually increase those values. It's always the historical cost.
Now for land holdings and buildings, I believe it's the same. We use the historical cost as well.
:
First of all, I think that once again, we need to start by making a distinction. The type of errors and adjustments Ms. Fraser was referring to are really adjustments that are highlighted when the current year is finalized. These are not errors linked to forecasts as such.
Secondly, you must bear in mind that here we are making a comparison between the 2006 budget and the final outcome. Between the two, the 2007 budget revised this $3.6 billion upward $9.2 billion. You drew a comparison with $11 billion, but I do not know at what point the Bloc did its estimate. It does not matter.
The increase in the projections is mainly a reflection of the economy's strong growth. As far as I know, that is the kind of revision that all private sector forecasters have done. The projected increase is more or less the same. Even when we examine the situation at the provincial and international levels, we see the same trends over the past two years, in other words, generally speaking, revenues have been higher than projected.
:
Perhaps the easiest, Chair, would be to turn to page 10 of the presentation, the balance sheet.
The accumulated deficit is really the difference between the assets and liabilities. It's the same thing in the private sector, which generally accumulates a surplus. When the government has a surplus each year, it's simply an addition to that accumulation. The accumulated deficit is just the profits and the losses, if you will, since Confederation. But the balance sheet is more complex than that. There is the debt less all of the assets.
Theoretically, your accumulated deficit could go down by a surplus in the year, but if you took that surplus and used that money and increased your assets--for example, if you invested more in crown corporations, bought more land, did whatever--your debt might stay at the same level. That's why we're saying there's a difference between accumulated deficit and debt. When you look at this page, you'll see that while the accumulated deficit went down by $14 billion, total interest-bearing debt went down by $1.8 billion. Now, in that interest-bearing debt there is a portion that is pension liabilities, so the actual market debt was more than that. But the financial assets went up $16 billion.
It's the same thing as when an individual earns a certain salary in the year and has a mortgage on the house. You can pay it down faster or you can go out and buy something else. You can keep your debt at the same level. You are richer overall, but your debt hasn't necessarily decreased.
:
Mr. Rochon, is there anything you want to add?
Just before we adjourn, I want one more minute. We have two very brief motions that should take about 15 seconds each, colleagues, and then we'll adjourn.
The first is a motion that's been circulated by Mr. Sweet. This motion was presented, debated, and passed unanimously at a previous meeting before the prorogation. If the committee consents, I would suggest the committee provide its unanimous consent and agree to the motion.
Is everyone in agreement with that?
(Motion agreed to [See Minutes of Proceedings])