In response to questions raised at the hearings of November 18 and 22, 2022, Finance Canada provided the following information in a letter to the Committee.

Callable Capital at the Asian Infrastructure Investment Bank

As Paragraph 3 of Article 6 in AIIB’s Articles of Agreement (available on the AIIB website), sets out that payment of the amount subscribed to the callable capital stock of the Bank shall be subject to call only as and when required by the Bank to meet its liabilities.

According to the G20 Independent Review of Multilateral Development Banks’ Capital Adequacy Frameworks, the likelihood that one of the major MDBs, such as the AIIB, might face circumstances requiring it to make a capital call to shareholders to repay bondholders is extraordinarily remote and would be the end point of a cascading series of adverse events, including rating downgrades and selling of its assets. Even if catastrophic shock scenarios were to occur, management and shareholders could deploy multiple policy levers to stop a deterioration of the AIIB’s balance sheet, well before a capital call. As a relatively new MDB, the likelihood of the AIIB falling into such a situation is even more unlikely, as its unencumbered paid-in capital remains high. No major MDB has ever come near to make a call on its callable capital.

In the extraordinarily remote scenario where a capital call were recommended by AIIB management, Canada, as a shareholder, would have the opportunity to vote through its participation at the AIIB’s Board of Directors and the Board of Governors. Should the call on capital be approved by the AIIB’s Board of Governors, an appropriation act would need to be passed by Parliament to increase the limit for payments that can be made to the AIIB for Canada to fulfill such an obligation.

GBA+ Analysis, Regional and Income Quantiles Analysis for the Changes Made for the Canada Workers Benefit

The 2022 Fall Economic Statement proposed to automatically issue advance payments of the Canada Workers Benefit (CWB) to people who qualified for the benefit in the previous year. The CWB is targeted to low- and modest-income workers, who would be the primary beneficiaries.

Roughly half of CWB recipients in a typical year are women, such that the overall impacts of the measure are largely expected to be gender neutral. However, certain groups are overrepresented in the CWB population and are therefore more likely to benefit from any improvements made to its delivery. These include those aged 20–34, those without a postsecondary qualification, recent immigrants, Indigenous people, and single parents. Almost 90% of single parent economic families in receipt of the CWB were headed by a woman.

The measure would introduce a new minimum entitlement for CWB recipients in the year following their receipt of the benefit. This minimum entitlement would be issued to about 3 million Canadians through advance payments on the basis of the recipients’ family net income in the prior year. About 60% of those entitled to advance payments would be in the first two family net income quintiles in the year of receipt of the advance payment, and more than 90% in the first three income quintiles.

In recognition of lower tax filing rates among Indigenous Peoples, the government has made recent investments in outreach, support, and assistance with tax filing, in an effort to improve access to benefits. The CWB also features a supplement for people eligible for the Disability Tax Credit; this supplement will also be subject to automatic advance payment.

Table 1—Estimated distribution of advance payment recipients across family net income quintiles in year of receipt of the advance (e.g., 2023 for those receiving advance payments starting in July 2023)

Note:      Estimated based on linkage of historical tax records with simulated CWB entitlements under current law.

Table 2—Estimated distribution of advance payment recipients across provinces and territories

Uses of the Proceeds of Greenhouse Gas Pollution Pricing

The Greenhouse Gas Pollution Pricing Act requires the government to return 100 per cent of net fuel charge proceeds to the jurisdiction of origin. In jurisdictions that do not meet the federal benchmark requirements, 90 per cent of proceeds are returned to households in these jurisdictions through Climate Action Incentive payments. The government also committed to returning the remaining proceeds to small businesses and Indigenous groups.

Bank of Canada Financial Performance

The 2021–22 Public Accounts include a net profit of $2.8 billion for the Bank of Canada. This amount is included in “Other revenues – Enterprise Crown corporations and other government business enterprises” reported in the Consolidated Statement of Operations and Accumulated Deficit on page 57 of Volume I of the Public Accounts.

The projections set out in the 2022 Fall Economic Statement include a forecast net loss for the Bank of Canada of $0.8 billion in 2022–23.

Explanation for the Variance between Forecasted and Actual Revenues for Crown Corporations

Budget 2021 forecast $7.1 billion in Enterprise Crown Corporation revenue for 2021–22. This was revised up to $12.3 billion in the Budget 2022 forecast, bringing it closer to the $12.8 billion of actual revenue for the year. Upward revisions were largely due to stronger-than-expected macroeconomic performance and lower provision for losses, resulting in higher Enterprise Crown Corporation profits.