Thank you, Ms. Bisaro. Deputy Minister Aumond.

I’m trying to do some quick math in my head and I’m struggling again, I guess. So, if we are…and my quick math tells me that we’re losing about $20 million in personal income tax that we expect to get for ’13-14. If that’s the case, I don’t understand why Finance is estimating $104 million or $105 million for ’14-15. If we are so far down in ’13-14 and we’ve got these numbers from the federal government on, basically, kind of actuals,

why are we not estimating revenues that are closer to this year’s actuals? Why are we going up some $15 million? Thank you.

I think it’s getting slightly less murky. So, we’re still working with an estimate of revenues for ’14-15, so it could go down at any time, I guess, or in May we’ll get a better idea and it could go down. If I understand rightly, the $30 million that the Minister has referenced that we’ve lost is basically revenue in this current budget year. It sounds to me like the revenue we expected in the ’13-14 year didn’t come through. Am I right on that? Thank you.

Yes, I got that, so thank you for that information.

The next question that I have with this loss of revenue, I have yet to understand, in all the discussions that we’ve had so far, what we’re going to do to our budget, how we’re going to mitigate this loss of revenue. We’ve got a budget before us but we are expecting less revenue, so we’re already in the hole. What are we doing in this budget to mitigate for that loss of revenue? Thank you.

Thank you, Ms. Bisaro. Mr. Miltenberger.

Thank you, Mr. Chairman. In this budget before us, we have about $6.8 million in passive restraint. We capped our forced growth at I think it is 2 percent and we are trying to limit the growth of government. Going into ‘15-16 we are going to be looking for a total of $30

million in re-profiling to pay for the budget that is currently before us, with the addition of the Heritage Fund bump-up from 5 to 25 percent. Thank you.

Thanks to the Minister for the info. I understand the $6.8 million in passive restraint. That is a number that I can deal with. Capping our forced growth at 2 percent, how much money does that net us? I’m trying to get us up to the $30 million or whatever that we need to find to balance the budget. Thank you.

Thank you, Ms. Bisaro. Mr. Aumond.

Thanks to the deputy minister. So, we are looking to save about $7 million in passive restraint and we are going to “go in the hole” for the other, say, $25 million, is that right? Thank you.

Thank you, Ms. Bisaro. Minister Miltenberger.

Thank you, Mr. Chairman. The passive restraint is the main reduction exercise, cost controlling exercise with the ‘15-16 looking to re-profile and save $30 million, which is an election year budget, I might add. Thank you.

Thank you, Mr. Miltenberger. Next on my list I have Mr. Dolynny.

Thank you, Mr. Chairman. My questions will be around the same theme as my colleagues, around the personal income tax and the corporate income tax.

I guess to set the stage here is to look at what the past has shown us, and if you look at the past tabled documents when it looks at the main estimates, the curiosity I have here is I find that there has been some revised-revised estimates, that I am looking at here with respect to the ‘13-14 revised estimates. But that’s fine. We kind of got the explanation here from the deputy minister.

I just wanted to be clear; we have heard from the Minister here that we have had a shortfall of calculations or miscalculation of about $30 million. What we heard today was more like $38 million in terms of a shortfall in both personal and corporate income tax. So let’s set the stage here so we can

get at least that number accurate. Can I get that number accurate, please?

Thank you, Mr. Dolynny. Minister Miltenberger.

Thank you, Mr. Chairman. First, just to point out that if it is not already clear, these are very fluid numbers, the projections that are changing with CIT. Corporations can reach back years to file, decide when they are going to file, where they are going to file. Personal income tax, people file at different times and it takes months. So these numbers are fluid but, yes, $38 million is the number.

Now we’re dealing with a number all of us can understand. So we’ve got a $38 million problem. This $38 million problem is being dealt with in this fiscal budget and the next fiscal budget, from what we hear. We’ve heard from both the deputy minister and the Minister that this is a fluid problem. We don’t have a good understanding. We’re at the mercy of the federal government. Things change, seven years forward, seven years backward, if anyone does CRA type of initiatives knows that.

We’re dealing with a problem where we’re really at the mercy of a lot of unknown variables. We’ve heard from the department here that we’re going to be doing a rolling five-year average to try to mitigate and try to take a dart and a dart board to try figure out what our taxation is.

I want to shed a little light for the Department of Finance. They’re not alone. They’re not alone. The Auditor General of Canada has written a nice little report for the federal government on their own books on how they collect their own taxes, so we’re not unique here. I wish we were, but we’re not.

The federal government has also been given a little bit of a heads-up that they’ve got to clean up their backyard in terms of how to do predictability better with their federal forecasting. So I’m glad we’re doing this exercise, Mr. Chair.

The question I still have remaining is we’re still looking at being very aggressive in the 2014-15 Main Estimates given what we know today. What key indicator do we have now that would tell us that we are going to see the lifts that we’re seeing, especially in personal income tax from I’m going to call them the revised-revised 2013-14 estimates? How do we know that?

It’s currently by looking back and looking forward and hoping we’re not going to move into a 2008 type of year that’s going to catch everybody by surprise.

The other big issue is while we look at our revenues, which is an important issue, we have expenditure issues, as well, where we’re spending almost every cent we make. We’re working hard to

manage that. So one way to deal with it is, of course, to keep looking for more money. The other side is to try to control our expenditures and the growth of government and size of government and program creep and all these things. Between the two is where we’re trying to seek that balance. Clearly, for 42,000 people, we have not only revenue concerns but we have expenditure challenges. Thank you.

I’m not going to disagree with the Minister on some of those comments, but he brought up the 2008 subprime mortgage issue. I’m not sure how that fit into the response, but anyway.

I think Members on this side of the House have made things perfectly clear. We are very concerned going into this budget on this shortfall. I believe, personally, that this shortfall has caused a tethering, if you will, in the fiscal strategy of this government. It’s unfortunate that we weren’t able to calculate that properly and I think that has put a real kink in the cogwheel in terms of what our forecasting will be for the initiatives that this government has so boldly wanted to go forward with. I am very much in concern how we’re dealing with this personal and corporate income tax, so much so that I believe that the five-year rolling average, in my humble opinion, is not going to work.

Historically, if you look at public accounts, if you look at main estimates for the last 10 years, this personal income tax and corporate income tax has been a yo-yo. It’s been all over the map. It’s been the highs and the lows. Unfortunately, when it’s on the high, government gets really excited because they have a high year personal income tax and corporate income tax and we hit the ground running and we have all these great ideas to spend it, which is fine if you have the money. But when you build a financial forecast on a high and it turns into a low, as we have I believe this year, we’re scrambling.

The tools have been before us for many years. I don’t believe we’ve used all the tools at our disposal or in our tool box, Mr. Chair. I would like to move a motion.

Go ahead, Mr. Dolynny.

Thank you, Mr. Chair. I move that this committee strongly recommends the Department of Finance take the steps necessary to create a stabilization fund for taxation revenues to counter the uncertainty of tax revenue forecasting and subsequent impacts on fiscal planning. Thank you, Mr. Chair.