During the summer of 2008, an extraordinary economic downturn spread throughout the entire planet and has lead in its wake to the greatest recession of the world economic activity since the Great Depression of the 1930s. Canada's economic activity, measured by real gross domestic product (GDP), contracted by 3.6%. However, during the second half of 2009, the economy emerged from recession, with real GDP increasing 0.9% in the third quarter and 5.0% in the fourth quarter. The unemployment rate recently fell to 8.2% following an increase to 8.7% in mid-2009; however, it remains 2% higher than its pre-recession level.[1] Because of the fall in tax revenues and the increase in government expenditures aimed to support the economic recovery, the federal government has returned to budgetary deficits. According to the most recent forecast, the size of Canada's deficit will rise to $53.8 billion for the fiscal year that will end March 31, 2010.[2]

The Committee on Government Operations and Estimates (hereinafter the Committee) undertook the study of the implementation of the Economic Action Plan to understand whether the unprecedented approval of infrastructure funding was actually boosting the economy through the creation of jobs. The Committee did not receive much of the information it requested to determine the real impacts of the stimulus package.

Representatives from municipal organizations, the Parliamentary Budget Officer, and Infrastructure Canada could not give an indication of the exact amount of monies that have been spent or the number of jobs that have either been maintained or created. Given that no witness could provide these hard details, the Committee is also frustrated about the advertising of the Economic Action Plan which has implied the success of the stimulus package and the number of jobs created.

Budget 2009, Canada's Economic Action Plan, which included an economic stimulus package, was announced on January 27, 2009. This budget set out measures totalling $40 billion in support of the economy over the fiscal years 2009-2010 and 2010-2011. The Budget Implementation Act received Royal Assent on March 12, 2009, and its passage authorised almost $6 billion in immediate funding for infrastructure projects as part of the government's stimulus package.

In addition, a significant portion of the stimulus package, the $3 billion Budget Implementation Vote, also known as Treasury Board Vote 35, was created in the 2009-2010 Main Estimates to provide an unprecedented mechanism to enable shovel-ready projects included in Budget 2009 to be implemented as quickly as possible.

The Committee is mandated by Standing Order 108(3)(c)(i) to the review of and report on the effectiveness, management and operation of specific operational and expenditure items across all departments and agencies. The implementation of the economic stimulus package is a government-wide initiative. The Economic Action Plan contained in Budget 2009 set out changes to Employment Insurance, amendments to the tax system, and infrastructure investments in municipalities, provinces and federally-owned buildings.

The purpose of this report is to determine whether, after the first year of the implementation of the Economic Action Plan announced in Budget 2009, the government is on track in its funding of programs and projects aimed at stimulating the economy and creating jobs. The Committee held 14 hearings specifically on the implementation of the Economic Action Plan from March 2009 to December 2009. Given the extraordinary level of stimulus funding put forward by the government, and the need for transparency and accountability in the delivery of this funding, the Committee believed it was imperative to study this issue in an in-depth manner. Canadian taxpayers have the right to know whether federal stimulus dollars are being effectively and efficiently spent.

The recommendations contained in this interim report are based on testimony heard by the Committee from March 5, 2009, to December 8, 2009.

The Committee will continue to monitor the implementation of the Economic Action Plan to ensure that the government is more forthcoming and accountable with information it provides Canadians.