Costing Fall Economic Statement 2020 Measures

The federal government’s Fall Economic Statement 2020 (FES 2020) was released on November 30, 2020.  It includes numerous new and extended spending measures and programs.

Consistent with the Parliamentary Budget Officer (PBO)’s mandate to provide independent, non-partisan analysis to Parliament, the PBO has prepared cost estimates of selected measures contained in the federal government’s FES 2020.

Federal Investments in Palliative Care

After the Parliamentary Budget Officer (PBO) released the cost estimate for Bill C 7 (medical assistance in dying), he was asked to identify federal investments in palliative care made since Canada had legalized medical assistance in dying.

Fall Economic Statement 2020: Issues for Parliamentarians

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

In January 2019, PBO released a report 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.

Update: Cost of Federal Leave for COVID-19

On July 24, 2020 the Parliamentary Budget Officer (PBO) reported on costs incurred from the Government’s policy of allowing employees to use pay code 699 paid leave for other reasons. Guidance from the Treasury Board Secretariat (TBS) allowed for employees to request 699 leave for a variety of reasons including being sick with COVID-19, having to quarantine, not being able to access the technology they need to complete their work, and having to care for dependents.

Our original cost estimate included data up to the end of May 2020 for 62 of the 88 federal public service organizations governed by the Financial Administration Act Schedules I, IV and V. The Government subsequently shared monthly data from March to June 2020 for 72 of the 89 federal public service organizations through information request IR0504 (July 2020). Using these data, our office published an updated cost estimate on August 24, 2020.

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

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

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.

Fiscal Sustainability Report 2020: Update

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.

Update: Five-Year Cost Estimate of the Guaranteed Basic Income

On July 7, 2020, the Parliamentary Budget Officer (PBO) reported on costs arising from the implementation of a guaranteed income program for the last six months of 2020-21. The program parameters were based on Ontario’s basic income pilot project. PBO presented three estimates based on scenarios that phase out the benefit by $0.50, $0.25 and $0.15 for each dollar of employment income. Additionally, participants receiving Employment Insurance or Canada Pension Plan payments would have their basic income reduced dollar for dollar.

Fiscal Analysis of Federal Pay Equity

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

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

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.

Planned Capital Spending under Strong, Secure, Engaged: 2020 Update

The Government of Canada’s 2017 Defence Policy, Strong, Secure, Engaged (SSE), called for significant increases in funding for the Department of National Defence (DND). In total, the policy projected departmental expenditures of $553 billion over 20 years, beginning in 2016–17. An estimated $164 billion, calculated on a cash basis, was earmarked for the development and acquisition of capital equipment.

The PBO has been monitoring SSE’s planned capital spending with the support of DND. In 2018 the PBO received financial projections for 329 capital projects planned under SSE. This snapshot accounted for all major projects with planned or ongoing spending. In addition, the PBO received updates on planned cash expenditure for 24 projects in July 2019 and 23 projects in June 2020.

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

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

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

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

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

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

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

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.