Senator Tony Loffreda from Montreal, Quebec.

[English]

Thank you for being here.

Inflation is currently a main concern for many Canadians. How might the implementation of a guaranteed livable basic income be expected to influence inflation?

I ask the question because of the excess liquidity that might result for our economy. In the past, inflation was much easier to control regarding excess liquidity, scarce resources and higher interest rates. Today, additional issues affect inflation, such as geopolitical issues, energy transition and reindustrialization.

I think it still is a legitimate concern. I’d like to have your thoughts on that question and concern.

You don’t feel that it would create sufficient excess liquidity for it to be a major concern?

We are a nation of consumers. The savings rate in Canada before the pandemic was 3%. You’re putting all this excess liquidity back into the system. We’ve seen a bit of that effect with the Canada Emergency Response Benefit, or CERB, after the pandemic when everything was under lockdown and it reopened. It’s a different scenario, obviously.

Are there any studies that you looked into? I did read excerpts from your book. Are there any studies that we have across the world where that is not the case?

Thank you for that.

I would like your thoughts on what potential effects a guaranteed livable basic income could have on workforce participation and productivity.

I hear you, and those are the main concerns. Why hasn’t any country adopted a guaranteed livable income or a basic income? We would be the first country in the world to adopt it. There have been experiments: Ontario closed off their experiment when the governments changed, mind you — maybe it’s not a good example. Why hasn’t any country in the world adopted a guaranteed livable basic income, given that there are so many positives, and there’s no concern over inflation, and no concern over work productivity or labour participation? I’ve heard many positive outcomes. Have you looked into that?

That’s perhaps why the other countries didn’t adopt it either. Thank you for those answers.

Mr. Giroux, thank you for joining us.

[English]

Budget 2023 announced a 15% or $500-million spending reduction in consulting, professional services and travel for the planned 2023-24 discretionary spending. We’ve already discussed how this would be done: by freezing $350 million in spending related to professional and special services, and $150 million in spending related to travel. Spending on professional and special services continues to increase despite the lapses — at the end of the year, the frozen amounts will lapse. Inclusive of Supplementary Estimates (B) for 2023-24, the total proposed authorities for professional and special services are at a record $21.6 billion.

Why do you think that, despite the $500-million spending freeze in consulting and travel, the planned spending in 2023-24 remains above previous years’ spending levels?

What are the main subject matters on which the government uses consulting and professional services? Do you have that information?

What are the main reasons for the heavy reliance on consulting and professional services? Would it not be more efficient to hire personnel to that effect who are specialized in the areas that require most of the special consulting?

When we look at the personnel increase over the years, and then we look at the consulting increase, I question what’s going on. We’re increasing personnel drastically. The expenses are increasing substantially, and then you look at the professional services, and it’s there too.

Talking about personnel, in your PBO report on the supplementary estimates, it’s highlighted that spending on personnel continued to increase, totalling $67.4 billion. Based on The Fiscal Monitor, personnel spending in the first five months of 2023-24 is up 4.2%. In June, we know that the government approved eight collective agreements covering 138,000 public service employees.

Do you believe that corresponds to inflation and a general increase of labour costs? Is it justified, considering the population growth and related increased demand for government services?

Do you believe an external review of service delivery methods could be beneficial for maximizing the use of public funds by the government?

I have a general question. I would like your opinion, given the Fall Economic Statement and what we’re looking at.

With interest rates now at a 20-year high, the cost to borrow all that money has spiked from $20.3 billion in 2020-21 to $46.5 billion in this fiscal year. The debt service charges will march even higher in years to come. Carrying the debt is expected to cost the federal treasury $60.7 billion in 2028-29, according to the economic statement — this means that the debt service charges are now amongst the most costly line items in the federal budget.

There are two extremes and two arguments that we hear all the time. We hear the argument saying that, to put it in perspective, we’re spending $28.9 billion on the Canadian Armed Forces. A number means nothing if you don’t compare it to the trends, or compare it to a ratio or to something else. We both know that. The $28.9 billion is about $18 billion less than what the government will send in payments to bankers and bondholders. Then, you look at the other side, and if we compare ourselves to the G7 and G20, the favourable argument is that we’re still amongst the top of the class.

Every argument is partisan; let’s face it. It’s those who want to get to power, and those who are in power and want to keep the power. I’d like your perspective on that. We’ve had a pandemic. We’ve gone through what we have gone through. We now have these numbers in front of us.

A partisan argument would be “Compared to that number, look how much higher it is today.” Interest rates are higher. I don’t think it’s our government’s fault that there has been a global inflation crisis and supply chain issues like the ones we have lived through. I’d like your perspective. Is that sustainable going forward? How do we compare, if you have those numbers up front, to the G7 or G20 nations, and what about the performance — an independent opinion rather than the partisan opinions I usually hear from both sides?

But is our debt sustainable going forward? Are you concerned?

Thank you.

[Translation]