Reports - 2020-21 - Office of the Parliamentary Budget Officer

This report provides a reconciliation of the assessments of the sustainability of the Canada Pension Plan prepared by the Office of the Chief Actuary and the Parliamentary Budget Officer.

The Government’s Expenditure Plan and Main Estimates for 2021-22

Mar 10, 2021 RP-2021-044-S

This report examines the federal government’s Expenditure Plan and Main Estimates for 2021-22, which supports the first two appropriation bills that seek Parliament’s approval of $141.9 billion in budgetary authorities.

Review of PBO Economic and Fiscal Projections

Feb 25, 2021 RP-2021-041-S

This report provides a qualitative and quantitative analysis of the economic and fiscal projections of the PBO and Finance Canada since 2011.

Cost Estimate of a Hybrid Parliament System

Feb 25, 2021 RP-2021-042-M

Senator Rosa Galvez requested that the Parliamentary Budget Officer estimate the costs and savings of a hybrid parliamentary system. In such a system, parliamentarians can participate in the proceedings either in person or remotely via videoconference. This report estimates certain incremental costs (mostly acquisition of IT equipment and increased costs of interpretation services) and the savings (reduction in travel expenses for Senators and Members of the House of Commons that no longer travel to Ottawa to attend in person) of a hybrid parliamentary system.

The Cost of Canada’s Surface Combatants: 2021 Update and Options Analysis

Feb 24, 2021 RP-2021-040-C

In response to a request by the House of Commons Standing Committee on Government Operations and Estimates (OGGO), this report presents a costing analysis of building Canadian Surface Combatants (CSC) with the continuation of the Type 26, as well as the cost for two alternate designs: the FREMM and the Type 31e.

Feb 24, 2021 RP-2021-043-S

This report presents a detailed analysis of the Government’s third and final supplementary estimates for the 2020-21 fiscal year, which seeks Parliament’s approval of $13.4 billion.

Compensation for the delay and denial of services to First Nations children

Feb 23, 2021 RP-2021-038-M

This report estimates the financial cost of complying with a Canadian Human Rights Tribunal decision (2019 CHRT 39) as it relates to children who experienced delays and denials of services which should have been available under Jordan’s Principle. A previous report estimated the cost of complying with that decision as it relates to children taken into care.

Urban, Rural, and Northern Indigenous Housing

Feb 11, 2021 RP-2021-039-C

This report was prepared at the request of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Fall Economic Statement 2020: Issues for Parliamentarians

Dec 10, 2020 RP-2021-037-S

To assist parliamentarians in their budgetary deliberations, this report identifies key issues arising from the Government’s Fall Economic Statement (FES) published on 30 November 2020.

Trans Mountain Pipeline – Financial and Economic Considerations – Update

Dec 8, 2020 RP-2021-035-S

In January 2019, PBO released a [report](https://www.pbo-dpb.ca/en/publications/RP-1819-392--canadas-purchase-of-the-trans-mountain--achat-du-pipeline-trans-mountain-par) assessing the Government of Canada’s 2018 decision to acquire, expand, operate, and eventually divest of the Trans Mountain Pipeline system. This report provides an updated financial valuation of the purchased assets, estimates the valuation’s sensitivity to several key factors, and projects the economic impact of the Expansion Project’s construction activities.

Eliminating the Registered Retirement Income Fund (RRIF) minimum withdrawal amount

Nov 19, 2020 RP-2021-036-M

Mr. McCauley, MP, requested the PBO to cost the elimination of the annual RRIF minimum-withdrawal amount. As a result, RRIF holders would withdraw less, thereby reducing government revenues, as RRIF withdrawals are considered taxable income. PBO has assumed that the annual minimum-withdrawal amounts will remain the threshold for determining whether RRIF withdrawals are subject to tax withheld at the source, in accordance with current rules. PBO has assumed the policy would take effect on January 1, 2021. The cost for the first full fiscal year, 2021–22, would be $940 million. The cost for the last year in the projection, 2024–25, would be $1,016 million.

The Joint Support Ship program and the MV Asterix: a Fiscal Analysis

Nov 17, 2020 RP-2021-029-C

In response to a request from the House of Commons Government Operations and Estimates Committee (OGGO), this report estimates the construction costs of the Joint Support Ship program to build two supply ships and costs of contracting converted commercial vessels named the MV Asterix and the Obelix to provide military support. This report also attempts to compare the two projects by incorporating additional project cost elements. Our independent point estimate of the construction cost is $2.4 billion, with an additional estimated $0.6 billion to account for budgetary contingency, producing a total of $3.0 billion. Accounting for the non-construction costs stated by the Department of National Defence, we estimate the total project cost of the JSS to be $4.1 billion, inclusive of provincial sales tax. The total potential net cost of the government’s contracting of the MV Asterix is $733 million, inclusive of provincial sales tax. We project that a five-year provision of service contract of the Obelix would cost the government $801 million, inclusive of any applicable taxes. As the project costs of the JSS cannot be directly compared to the costs associated with the provision of service contract of the Asterix or any potential similar contract for the Obelix, we opt for a comparison of the JSS project to the cost of the purchase options for the Asterix and Obelix. Our calculations suggest that the Asterix and Obelix replenishment vessels could be obtained by the Government of Canada for a total of approximately $1.4 billion, as compared to our estimated $4.1 billion JSS project cost.

Fiscal Sustainability Report 2020: Update

Nov 6, 2020 RP-2021-033-S

This report updates PBO’s February 2020 assessment of the sustainability of government finances over the long term for the federal government, subnational governments and public pension plans. It incorporates federal and provincial budgetary measures up to 1 September and 30 October, respectively.

Fiscal Analysis of Federal Pay Equity

Nov 4, 2020 RP-2021-032-S

To assist parliamentarians in their role to scrutinize the raising and spending of public monies, this report provides an overview of the spending measures associated with the Government of Canada’s proactive pay equity regime within the federal public and private sectors.

Supplementary Estimates (B) 2020-21

Nov 4, 2020 RP-2021-034-S

This note presents a detailed analysis of the Government’s second supplementary estimates for the 2020-21 fiscal year, which seeks Parliament’s approval of $20.9 billion.

Discretionary Mandatory Minimum Penalties for Murder

Oct 29, 2020 RP-2021-031-M

This report was prepared at the request of Senator Kim Pate. It estimates the impact of a proposed bill in the Senate, S-207, on sentencing for murder and the cost implications of those changes for the Correctional Service of Canada.

Cost Estimate for Bill C-7 “Medical Assistance in Dying”

Oct 20, 2020 RP-2021-025-M

This report responds to a request from a Senator to estimate the financial cost of Bill C-7, which broadens eligibility for medical assistance in dying.

Carbon pricing for the Paris target: Closing the gap with output-based pricing

Oct 8, 2020 RP-2021-019-S

This report updates and extends PBO’s analysis of the additional carbon pricing needed to achieve Canada’s greenhouse gas (GHG) emissions target in 2030 under the Paris Agreement. We provide an updated estimate based on a broad carbon levy and extend our analysis to incorporate additional carbon pricing using an Output-Based Pricing System (OBPS), taking into consideration alternative structures. Estimates of the corresponding impacts on the Canadian economy are also provided.

Estimating the Return of Additional Federal Spending on Business Tax Compliance

Oct 8, 2020 RP-2021-026-S

This report analyses the relationship between federal spending and additional tax revenues generated through business compliance programs since 2015-16 and estimates how changes in funding might affect future revenues.

Cost estimate of a federal dental care program for uninsured Canadians

Oct 7, 2020 RP-2021-028-M

In response to a request based on a motion from Mr. Don Davies (Vancouver Kingsway), this report estimates the cost of establishing a Federal dental care program for uninsured Canadians with a total household income below $90,000 as of January 1, 2021.

Tax Free Seniors Benefits

Oct 7, 2020 RP-2021-030-M

Mr. Ziad Aboultaif M.P. requested the removal of federal income taxes on Canada Pension Plan/Quebec Pension Plan (CPP/QPP) and OAS benefits received by seniors with limited sources of income. The funds to pay for the measure will come from general revenue of the federal government and not from an increase in future CPP/QPP contributions. PBO estimates this program to cost $268.1 million in 2020-2021 and $1,083.4 million in 2021-2022. The time horizon for this costing is aligned to PBO’s September 29, 2020 Economic and Fiscal Scenario.

The Innovation Superclusters Initiative – A Preliminary Analysis

Oct 6, 2020 RP-2021-024-S

Budget 2017 earmarked $918 million over five years for the Innovation Superclusters Initiative (ISI). The federal money will assist with the creation of five “superclusters” across Canada, where the public and private sectors will undertake collaborative research. The Government projects that this initiative will lead to the creation of 50,000 jobs, increase GDP by $50 billion over 10 years, and accelerate innovation. Federal funding is expected to be matched by contributions from non-federal entities, including the private sector, universities and other levels of government. Non-federal partners have announced $1,087 million over the same five-year period. Data shared by the Government as of March 6, 2020 indicate that actual spending is lagging the original budget. The Government originally anticipated that it would have spent $104 million (or 11% of its total budget) by that point. In comparison, only $30 million was spent (29% of the original projection).

Crown corporations’ COVID-19 liquidity support

Oct 2, 2020 RP-2021-022-S

This report summarizes the federal package of COVID-19 liquidity support programs provided through five federal Crown corporations. PBO estimates total liquidity supports through August 2020, and highlights gaps in publicly-available risk metrics for these supports.

Economic and Fiscal Outlook – September 2020

Sep 29, 2020 RP-2021-027-S

This report provides a baseline projection to help parliamentarians gauge potential economic and fiscal outcomes under current policy settings. **PBO’s outlook is not a prediction of future economic and budgetary outcomes.** This report incorporates announced federal budgetary measures up to and including 1 September 2020. Financial results for fiscal year 2019-20 shown in this report are PBO estimates and not final Public Accounts results.

Disability Benefit Processing at Veterans Affairs Canada

Sep 28, 2020 RP-2021-023-M

This report was prepared at the request of MP Rachel Blaney regarding the service standards of Veterans Affairs Canada (VAC) for processing disability benefit applications.

Personnel Expenditure Analysis Tool

Sep 10, 2020 RP-2021-021-S

This report summarizes a few of the key insights of the Personnel Expenditure Analysis Tool, PBO’s interactive online tool to explore overall government spending on personnel or focus on single departments.

Federal Support through Major Transfers to Provincial and Territorial Governments

Sep 3, 2020 RP-2021-020-S

This report examines federal support through major transfers to provincial and territorial governments over 2008-09 to 2018-19.

Public service use of paid leave for reasons related to COVID-19

Jul 24, 2020 RP-2021-018-M

Kelly McCauley, MP for Edmonton West, requested that the PBO report on costs incurred from the federal Government’s policy of allowing employees to use pay code 699 – paid leave for other reasons for leave related to the COVID-19 pandemic. This report presents the findings from 699 leave data provided by the Treasury Board Secretariat and supplementary data provided by the Canada Revenue Agency.

Economic and Fiscal Snapshot 2020: Issues for Parliamentarians

Jul 16, 2020 RP-2021-016-S

The Parliamentary Budget Officer (PBO) supports Parliament by providing economic and financial analysis for the purposes of raising the quality of parliamentary debate and promoting greater budget transparency and accountability. This report identifies key issues arising from the Government’s Economic and Fiscal Snapshot published on 8 July 2020.

Net wealth tax on Canadian resident economic families

Jul 8, 2020 RP-2021-017-M

Peter Julian, MP for New Westminster—Burnaby, requested that the PBO use his recent publication of a refined family wealth model to estimate the revenues of an annual net wealth tax on Canadian resident economic families equal to 1 per cent of net wealth above $20 million. All asset and liabilities are included in the net wealth tax base, except wealth won in lotteries. The PBO estimates 13,800 Canadian economic families would pay the net wealth tax and that the total net revenue of this measure would be $5.6 billion in 2020-21. The time horizon for this costing is aligned to the PBO’s current Economic and Fiscal Scenario, although fiscal impacts can be expected in subsequent years.

Costing a Guaranteed Basic Income During the COVID Pandemic

Jul 7, 2020 RP-2021-014-M

This report responds to a request from Senator Yuen Pau Woo to estimate the post-COVID cost of aguaranteed basic income (GBI) program, using parameters set out in Ontario’s basic income pilotproject. PBO presents three estimates based on scenarios that phase-out the benefit by $0.50, $0.25and $0.15 for each dollar of employment income for the last six months of 2020-21. Also, this reportconsiders the provincial breakdown of the GBI cost. The total estimated gross cost of the defined GBIwould range between $47.5 billion and $98.1 billion based on the three scenarios for the six-monthperiod from October 2020 to March 2021. In addition, the report provides an estimate of the federaland provincial programs for low-income individuals and families, including many non-refundable andrefundable tax credits that could be replaced by the GBI program. PBO estimates the potential offsetsfrom repealing these measures would be just over $15 billion for the same period.

Provincial Government Liquidity Outlook

Jun 25, 2020 RP-2021-013-S

Economic uncertainties generated by the public health response to COVID 19 and record low oil prices have disrupted financial markets. Beginning in March, there was an abrupt global flight to cash, which began to constrain credit access for provincial governments, among other Canadian issuers of debt. Soon after, the Bank of Canada intervened to directly support liquidity in provincial governments’ funding markets by buying short-term and long-term debt, and by purchasing provincial debt on a temporary basis using term repurchase operations. The purpose of this report is to address questions from several parliamentarians about potential uptake of the new Bank of Canada (the Bank) provincial liquidity-support programs. The Bank’s liquidity support programs are designed to address temporary financing challenges. Overall, PBO estimates that provincial governments will have liquidity requirements of at least $195 billion by the end of 2021. This accounts for $67 billion in COVID-related provincial spending, $119 billion of provincial debt that must be refinanced in 2020 or 2021, and $9 billion in planned deficits (pre-COVID-19). On 31 May, the Bank held $59 billion in provincial debt. Relative to their provincial economies, the governments of Manitoba and Newfoundland and Labrador have the largest estimated liquidity needs until 2021. Long-term fiscal sustainability for provincial governments is determined by structural factors and would not be meaningfully affected by these liquidity-support programs.

Canada Emergency Response Benefit – Eight Week Extension and Phase-out Rate

Jun 23, 2020 RP-2021-015-M

Dan Albas, MP for Central Okanagan—Similkameen—Nicola, requested that the PBO cost a proposal modifying the Canada Emergency Response Benefit (CERB) to adopt a phase-out for the benefit of $0.50 for each dollar of employment income above $1,000 per month in addition to the eight week extension announced on June 16, 2020. The modifications to the CERB program are assumed to be implemented on July 5, 2020. PBO estimates the cost to modify the extended CERB program (phased reduction) starting July 5, 2020 to be an additional $3.1 billion.

Scenario Analysis Update: COVID-19 Pandemic and Oil Price Shocks

Jun 18, 2020 RP-2021-009-S

This report provides an updated scenario analysis to help parliamentarians gauge potential economic and fiscal implications of the COVID-19 pandemic and recent oil market developments. This report incorporates announced federal budgetary measures up to and including 12 June 2020.

Estimating the top tail of the family wealth distribution in Canada

Jun 17, 2020 RP-2021-007-S

PBO has developed a modelling approach to estimate the top tail of the family wealth distribution in Canada. The modelling approach produces a new micro database of high-net-worth families to undertake analytical and costing work. This report describes the approach to constructing the database and showcases its analytical capabilities.

Update on the Investing in Canada Plan

Jun 17, 2020 RP-2021-008-S

In response to interest from parliamentarians, the Parliamentary Budget Officer (PBO) updated its monitoring of the Investing in Canada Plan (IICP). Under the IICP, the Government has committed to spend $187.8 billion over 2016-17 to 2027-28. The PBO solicited data from all 20 departments and agencies responsible for delivering IICP programming. Working with Infrastructure Canada, we compiled a data set of 33,112 entries for projects with $34.9 billion in spending since 2016-17.

Proposed Changes to the Canadian Emergency Response Benefit (CERB)

Jun 15, 2020 RP-2021-012-M

A parliamentarian requested that the PBO cost a proposal modifying the CERB to adopt a phase-out for the benefit of $0.50 for each dollar of employment income above $1,000 per month. Extensions and modifications to the CERB program are assumed to be implemented on July 5, 2020. PBO estimates the cost to modify the CERB program starting July 5, 2020 to be an additional $967 million.

Proposed Changes and Extension to the Canadian Emergency Response Benefit (CERB)

Jun 10, 2020 RP-2021-010-M

In response to a request from Dan Albas, MP (Central Okanagan—Similkameen—Nicola), the PBO estimated the cost of a proposal modifying the CERB to: extend the program to January 2021; expand the eligibility for benefits by an additional 12 weeks (to 28 weeks total); and, adopt a phase-out for the benefit of $0.50 for each dollar of employment income above $1,000 per month. The parliamentarian also asked that this modified CERB be compared against another option to extend the existing program over the same time period (to January 2021) and enhancing the benefits duration by the same amount (12 weeks). Extensions and modifications to the CERB program are assumed to be implemented on June 1, 2020. PBO estimates the cost of the proposed measure to extend and modify the CERB program to be $64.0 billion from June 1, 2020 to January 31, 2021. Compared to a counterfactual scenario where the current CERB program is extended until January 31, 2021, where recipients can receive up to 28 weeks of CERB payments, the modified CERB program costs an additional $6.1 billion.

Reporting of Gains and Losses in the Government’s Financial Results

May 26, 2020 RP-2021-006-S

This report responds to the Government’s public consultation, *Proposed Changes to Reporting of Gains and Losses in the Government’s Financial Results*. The report provides the PBO’s comments on changing the way that actuarial gains and losses are reported in the Government's financial results.

Scenario Analysis Update: COVID-19 Pandemic and Oil Price Shocks

Apr 30, 2020 RP-2021-005-S

This report provides an updated scenario analysis that incorporates a revised economic scenario and new federal measures announced up to and including April 24, as well as updated estimates of previously announced measures.

Scenario Analysis Update: COVID-19 Pandemic and Oil Price Shocks

Apr 9, 2020 RP-2021-004-S

This report provides an updated scenario analysis to help parliamentarians gauge potential economic and fiscal implications of the COVID-19 pandemic and recent oil market developments. This report incorporates announced federal measures up to and including 7 April 2020.

Refund of Goods and Services Sales Tax for Small Businesses (July-December 2019)

Apr 6, 2020 RP-2021-002-M

In response to a request from a parliamentarian, the PBO estimated the cost of introducing a refund of the Goods and Services Sales Tax (GST) collected between July 1, 2019 and December 31, 2019 by Canadian Controlled Private Corporations (CCPCs) eligible for the Small Business Deduction (SMD).

Refund of Goods and Services Sales Tax for Small Businesses (January-December 2019)

Apr 6, 2020 RP-2021-003-M

In response to a request from a parliamentarian, the PBO estimated the cost of introducing a refund of the Goods and Services Sales Tax (GST) collected between January 1, 2019 and December 31, 2019 by Canadian Controlled Private Corporations (CCPCs) eligible for the Small Business Deduction (SMD).

First Nations Child Welfare: Compensation for Removals

Apr 2, 2020 RP-2021-001

This report estimates the financial cost of complying with a Canadian Human Rights Tribunal decision (2019 CHRT 39) as it relates to First Nations children taken into care. It was prepared at the request of Mr. Charlie Angus, Member of Parliament for Timmins-James Bay.

The Government’s Expenditure Plan and Main Estimates for 2020-21

Mar 12, 2020 RP-2021-031

This note examines the federal government’s Expenditure Plan and Main Estimates for 2020-21, which supports the first two appropriation bills that will seek Parliament’s approval of $125.1 billion.