Proceedings of the Standing Senate Committee on
National Finance
Issue 22 - Evidence
OTTAWA, Thursday, March 20, 1997
The Standing Senate Committee on National Finance met this day at 11:00 a.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 1998.
Senator David Tkachuk (Chairman) in the Chair.
[English]
The Chairman: Senators, this is the second meeting of the committee to examine the Main Estimates laid before Parliament for the fiscal year 1997-98. We have with us David Miller, the Assistant Secretary of Expenditure Management Sector, and Michael Joyce, Director of Estimates Division.
For the record, Treasury Board has given us replies to questions asked at the last meeting on Supplementary Estimates (B). The responses have just arrived and will be distributed to all members of the committee.
Please proceed with an opening statement.
Mr. David Miller, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada: Mr. Chairman, I have a brief opening statement in the way of an apology to the committee. Last night, when we were appearing before you, the President of the Treasury Board made mention of a press release. We had planned to have that material available today. It spoke about some of the information that has been in the press this week with regard to the impact of the program review reductions and how much money has been saved between 1994-95 and 1997-98.
It is interesting to note how much interest there is both within the Treasury Board secretariat and the Department of Finance. As a result, the press release has not been finalized. It is my understanding that it will be issued in a few hours. Our debate is not over the numbers but the way the numbers are presented. I did not want to mislead this committee by presenting a document that may not look like the final approved press release which will be issued.
We will have it sent to the committee as soon as it is available this afternoon. I can speak to the numbers and the details now, because those will not change, but I do not have the official press release with me this morning.
Given the statements that the president made last night in discussing the overall approach, I would like to move to any questions that the committee may have in relation to the 1997-98 Main Estimates and the overall spending totals that are included therein.
Senator Stratton: We spoke briefly last night about Part I of the Estimates. Referring to Table 1.3 on page 12, under "Planned Budgetary Spending by Ministry" and the column headed "Planned Spending not in Main Estimates," it is indicated that Canadian Heritage has allocated $24 million which has been described as funding for youth employment initiatives and for CBC radio. Of that, $10 million was for CBC radio. Is the balance of $14 million for youth?
Mr. Miller: That is my understanding. This is an initiative which was announced by the government a few months ago; however, not in time to be reflected in the Main Estimates. It will appear in Supplementary Estimates. There was an allocation to several departments toward that overall objective which was spearheaded by Human Resources Development. Those particular items have been announced and they will appear in Supplementary Estimates later this fiscal year.
Senator Stratton: Does that include the minister's flags?
Mr. Miller: No. The minister's flag program was paid for through reallocation of funds within the ministry. That was included in Supplementary Estimates (B) for the current fiscal year 1996-97. So it was $15.5 million where they were able to reallocate funds from within amounts already approved by Parliament.
Senator Stratton: So there was no new money. It was just transferred from somewhere else into this fund.
Mr. Miller: The way it was displayed in the Estimates was that the money which reflected the operating costs for the flags and distribution came from their contributions vote. They have approximately 30 different contributions ranging in size from fairly small to several hundred million dollars. They were able to find the funds within that vote and ask Parliament to move the money from the contributions vote into their operating vote.
Senator Stratton: I have another question regarding Citizenship and Immigration. It is a small number, but I am curious, when you say "loan write-offs" and "foregone interest costs", what would that have to do with citizenship and immigration?
Mr. Miller: Effectively, when new immigrants enter the country, they have the option to apply for loans to establish themselves here in Canada. These loans are repaid under terms worked out by the individuals. In some cases, these loans become difficult or impossible to collect. At that point in time, Parliament is asked to delete those loans from the accounts of Canada. It is simply identification that that will be a requirement, but it tends to be an ongoing requirement for departments that operate programs such as that.
Senator Stratton: I then go to Justice. On page 14, under Justice, we see funds to implement the firearms control program and anticipated child support reforms. So of that number, $135 million, I would assume, as the minister has stated quite clearly before, that the moneys for firearms control is still at $85 million.
Mr. Miller: I will have to verify that number, if the senator will just give me a moment.
Senator, we have a companion document called "Program Expenditure Detail" which includes some information on that. If you would refer to page 41, about half-way down the page, you will see it indicates the department's approved spending in 1997 of about $82 million relates mainly to new resources for implementing gun control. So from that number, it would appear that the $82 million or $85 million that you mentioned is the level that is included.
Senator Stratton: I take it that the balance of that 135 in Justice goes to the anticipated child support programs. Is that it in its entirety, those two programs?
Mr. Joyce: Yes, senator, I believe it is.
Senator Milne: In advance, I will apologize for what I might ask of you today because I do not think you can answer my questions. Minister Massé said yesterday that for each program there should be a series of measurable, tangible results. What I am concerned about is something that may or may not be going on in Health Canada.
In June of 1996, the Controlled Drugs and Substances Act received Royal Assent. At that point, Parliament charged Health Canada with the responsibility to develop a licensing scheme which would permit Canadian farmers to cultivate industrial hemp legally. The new regulations for this act are still not drafted even after nine months. Without those regulations, the act cannot be proclaimed into force, and the old regime remains in place. In other words, it is still illegal for a farmer to grow industrial hemp today, even though it can be imported, sold and used in Canada.
Other countries are taking the lead in this area. I have some questions that I want to ask of you particularly, so that I know where to focus my attention on this in a manner that can bring me to some sort of conclusion about it. I have looked through your Estimates and have searched the Estimates of Health Canada for the word "hemp" and for the word "cannabis". They are not there.
Can you tell me what line item in the Estimates for Health Canada -- and I have Part III in front of me -- under which they have responsibility pursuant to the Controlled Drugs and Substances Act for the development of a hemp industry in Canada? Have they budgeted for this?
Mr. Miller: You are right, senator. Obviously, I cannot address that question at this time. However, I should say what we say to all parliamentarians, that is, if there are areas or items that you feel should be covered or disclosed, departments welcome the opportunity to hear about them and to discuss them. One thing that is extremely important in the way we are portraying the information, both in terms of the plans and priorities documents and in terms of the performance reports, the first group of which was tabled last October, is that we get feedback from senators and from members of the House of Commons as to what their expectations are as far as information disclosure is concerned, that is, what items they would like to see.
Although I cannot deal specifically with that topic, I would encourage the committee and any interested parliamentarian to contact the department about it. I am sure that they can provide you with that information in the future.
Senator Milne: I do not think "in the future". Perhaps we will come to the conclusion that we have to ask them to appear before this committee.
It seems to me -- and I may well be wrong -- that there is a certain amount of stonewalling going on in the department over this matter, and the only way in which I, or any senator, can reach the department now is through the budget process, through the Estimates process, and through this committee.
I am presently being called by farmers who ask when they can start planting hemp. If the department has not yet begun to draft the regulations, I do not know what to tell them. Apparently, the department has let slip that they may need 18 months to draft these regulations. If that is so, we are not only not looking at this year for a crop of hemp, we may be waiting until after the year 2000. This is my only chance at them.
I know that Ms Jean Peart is the manager of the hemp project, and I want to give you warning of this now so that, in turn, you can warn the department. Her business card indicates that she is with the Bureau of Drug Surveillance and, in the hierarchy, that comes under the Drugs Directorate, which comes under the Health Protection Branch. I have searched and I cannot find anything there. I am curious, therefore, to know where in that hierarchy I can find a line item which indicates what the department is spending, what resources it is devoting to do what I consider to be its duty to develop a regime to allow the cultivation of industrial hemp in Canada. I am assuming you cannot answer me. I appreciate that you are going to have this trouble, but I am not going to let it go at that because this, as I said before, is the only committee that can follow up on what is happening there.
We are being asked to grant $1.5 billion to Health Canada. I am concerned about the department not taking its role seriously. I do not want to think that there is some kind of a stonewall process going on over there. However, Mr. Chairman, I hope that we can invite the officials from Health Canada to appear before us and to explain this.
Mr. Miller: As you know, senator, we reply as soon as we can to any questions raised in this committee that we are unable to answer. We can look into that matter.
It would be unusual for something like that to be identified specifically as a line item. For example, with a department such as Health Canada, changing regulations or dealing with amendments not necessarily in relation to hemp and cannabis but to the myriad legislation and regulations for which they are responsible, tends to be a normal kind of workload. Therefore, it would be included in those kinds of things.
Senator Milne: They mention "tobacco" in there 37 times.
Mr. Miller: Your point is taken, senator.
The Chairman: Are you saying that you will have a reply for Senator Milne? Are you committing to a reply from Health Canada?
Mr. Miller: We are committing to a response from the department.
Senator Taylor: I am a member of the Agriculture and Forestry Committee. We have been conducting hearings across Canada for the last six or eight months on the preservation of fibre. Hemp is considered to be a big substitute. I have gone to the extent of calling the RCMP in Western Canada and, as far as they are concerned, they will arrest anyone found in possession of this material.
I think Health Canada is giving us a run-around. I would go so far as to suspend or try to suspend the approval of the budget for the department until they come forward and tell us what they are doing. There is absolutely no reason for the Government of Canada to pass a law stating that hemp is legal. It is a commercial crop. It is doubly important in Senator Milne's area because, there, farmers are trying to get away from the manufacture of nicotine.
Hemp is quite harmless. You would have to smoke a carload of it to feel happy. The fact of the matter is that we are getting the run-around somewhere. The police are arresting people who are trying to grow something that is legal and the department is saying, "We will give you a report some time." Well, that is not good enough.
Health Canada must be called to task on this. It takes a long time to say that something is illegal, but it does not take that long to say that something is legal.
The Chairman: Should we call the minister?
Senator Taylor: I do not know about calling the minister.
The Chairman: He is responsible.
Senator Taylor: I do not know about that. However, that portion of the budget should not be approved unless we get a valid explanation about what is happening.
Senator Milne: In effect, what it would take from the minister is two words: "Do it."
The Chairman: That is why we should have the minister here.
Perhaps you could have the department prepare an answer for the committee. If it is not sufficient, then we will go on to the next step.
After the interim report is presented, we will have a work meeting to plan how we will deal with the rest of the year in terms of the Estimates. If the answer is not satisfactory, it will be very easy for us to put representatives from Health Canada on our agenda. We will then have the clerk and the department organize the rest of the department. If that is satisfactory, that will be the plan.
Senator Milne: If you think that is the right way to go, fine. I would like to see them here.
The Chairman: I want to see them here, but if you are not happy with the answer, that will be the deal. I am not here to protect the minister or the department, I am here to help you do your job.
Senator Taylor: The same thing has happened regarding the substitute for gasoline in cars. The department has been dancing around this issue for three or four years and there is no need for it. I do not know why the stability to the point of being rooted in the ground persists. I do not even see an economic reason for it.
We are trying to preserve some of our forests for environmental, ecological and native interests. We have a substitute that can be used, namely, hemp. If farmers want to do so, they can go ahead and cultivate hemp, but policemen will arrest them for so doing.
Senator Kelly: I am trying to find reference to the developing countries where, over the years, we have helped fund exploration for oil and gas. Where is that? Is that found under "Geographic Programs" in "Foreign Affairs and International Trade" in the Main Estimates document?
Mr. Miller: I will try to locate that. There are multilateral agreements within the Canadian international border.
Senator Kelly: I am not so much concerned about the amount of money per se or the area where it takes place. I have always been puzzled by the fact that we give such assistance where there is nothing but dry holes. Where some discovery is made, has consideration been given to Canada having some part of the equity in what is discovered?
That is a policy question and you may not want to answer it, but, from your experience, has that been considered?
Mr. Miller: From my experience, that would be very unusual. In terms of oil and gas exploration -- and they are natural resources -- it may be different. Certainly, for helping developing countries in technology or to assist them in moving forward with an agenda in terms of agricultural production and assistance in that way, we have done that as part of our contribution toward world prosperity.
Senator Kelly: Would you acknowledge that gas and, in particular, oil, are somewhat different?
Mr. Miller: In the sense of royalties, yes. We can follow that up.
I would assume that it would be looked at as part of our industrial aid development. Whether it is an ability to produce tractors on their own or an ability to develop their own domestic source of oil, it would be presumed to be under the same domestic program. However, I will have to verify that.
Senator Kelly: I expected that answer. It is the standard answer on foreign aid. I wanted to ask you that question so that you would raise it with the minister involved because I think it is something that we should revisit from time to time.
Senator Taylor: Foreign exploration is my area of expertise. In order to subsidize oil and gas exploration in an emerging nation, in the past Petro-Canada was given a grant by the government because it was a state-owned organization at that time. However, Petro-Canada has been privatized. How are these types of grants administered in these emerging countries now that Petro-Canada is a member of the revenue mob and not a government organization?
Mr. Miller: Although these would be classified as grants, in fact we are providing a grant to the nation which then contracts back with a Canadian organization. That is the case for virtually all our aid programs. That is how the aid program assists Canadian industry as well.
I will have to verify which Canadian companies were involved in that assistance, but I find it unusual that only Petro-Canada was doing that before and that it was not done on a sort of contracted basis for those services.
Senator Taylor: At that time, that was all I could find out. My own company tried to access that process. After all, if there was free money out there to help you drill a dry hole, you would try to access it.
The only people allowed to do that were Petro-Canada, to the extent that it was actually operating in Burma, which I thought was a very bad thing indeed. There was enough PR against it that it pulled out. Burma does not have the most attractive government in the world.
If you could determine how that is being done, I would certainly appreciate it. Perhaps we could ask the minister to advise us as to those countries which had a grant from us to help find oil and gas and to whom we gave a concession.
Mr. Miller: I should be able to get information back to the committee on that process.
Senator Kelly: To clarify the general position I have always taken on these matters, it is understandable that Canada does its job quite well in foreign aid, and much of the money is used properly, but nothing turns up. From the standpoint of straight business, we are talking about taxpayers' money. If taxpayers' money is used to assist an emerging nation and a massive find is discovered, there is no reason why Canada should not have 30 per cent of the action. It makes logical good sense. I believe the emerging nation would agree with these things. It is a question we should continue asking.
Senator Taylor: May I answer the question?
The Chairman: Does Senator Kelly want an answer from Senator Taylor?
Senator Kelly: I do not want to turn this into a discussion.
Senator Taylor: That is why they were using Petro-Canada as a state organization. After they got the grant, Petro-Canada got the concession and, in most cases, received anywhere from 25 per cent to 60 per cent of the profits. It did come back, as you wish. Now that Petro-Canada is no longer owned by us, what is the system they are using to get what you want?
Senator Kelly: With regard to Heritage Canada, the parks department, there is a new item of $2 million for something described as Pacific Marine Heritage Legacy. What is that? Is it a one-time monument?
Mr. Miller: My understanding of this particular item is that it was to deal with the kind of work that is being done to maintain the Pacific coast, both from a heritage point of view and from a conservation point of view. Again, I do not have many details on the item. It is a new program being used to develop a sustainable setting. There are implications within the parks about other lands being there, and this was a companion program to what they were doing on the West Coast.
Senator Kelly: Would you remind me again of the distinction between grants and contributions?
Mr. Miller: Grants are an outright gift and, therefore, must be authorized by Parliament individually. Contributions are an arrangement whereby there is not a direct return or benefit. In other words, normally, we have very detailed arrangements. There are things which must be done or items which must be fulfilled or completed before we will pay a contribution. However, there is normally not a direct return to the Crown.
If we had these contribution arrangements, we may agree with a municipal authority or an individual company to do some improvements or to maintain, in this case, perhaps, the shoreline, and they would be required to complete those things before they received any funds. It is very much like a contractual arrangement.
Senator Cools: I was under the impression that a grant is not an outright gift but a conditional gift in return for the performance of something.
Mr. Miller: That is a more appropriate definition of a contribution. Not to confuse that, there may be many preconditions in order to be eligible to receive that grant, but, once the money is transferred, there is virtually no recourse to the Crown with regard to what happens to those funds.
Senator Cools: I was not asking about recourse to the Crown. I was referring to the purpose of a grant, going back to grants of land and grants which intended a performance of some other function.
That would be an interesting discussion for another time, but grants are not free gifts, in my understanding.
Mr. Miller: Not free in the sense of, again --
Senator Cools: They are not free without some kind of conditions. It was for performance of something else.
Mr. Miller: Perhaps you qualify the Old Age Security as a grant or that we give an assistance grant to the Boy Scouts of Canada. There are very few of those kind of things, but those are the kind of things where you say, "Here is some money to help you in the good work that you are doing. At the same time, you need not report back that this made a specific difference to your balance sheet," or those kind of issues.
Senator Taylor: I was intrigued by your statement concerning loans to immigrants. As you know, we have two classes of business immigrant. As a provincial investment, they pay $125,000 to $350,000 to "buy" their citizenship. We are auctioning it off on the world market, I suppose.
We also have immigrants who pay a processing fee of, perhaps, $1,000 or some such sum.
Mr. Miller: There is a $975 right-of-landing fee.
Senator Taylor: Are the loans to immigrants made to destitute immigrants to pay their processing fee, or are they loans to immigrants who go into business?
Mr. Miller: Again, I cannot cover all of the requirements. We think about it in terms of refugees who arrive in Canada and who are granted refugee status because of the country from which they are coming. There are such arrangements. At that point, we recognize that the person is here as a refugee. They can stay. At the point in time where they are ready to claim landed immigrant status, in other words, when they are ready to move from refugee status to landed immigrant status, they would pay that right-of-landing fee.
My understanding is that there are also loans to assist people to make the transition from one country into Canada. Again, once those people arrive here, they are eligible for all of our hospital and other benefits, both provincially and federally, although the federal government picks up most of those costs. There is an establishment grant or a loan to assist them in making the transition under certain circumstances as well.
Senator Taylor: Are any of these loans made to immigrants who have this business investment? In other words, are we financing our own reinvestment?
Mr. Miller: I would love to say categorically "no" but, unfortunately, I do not have a firm answer to that question. I would assume not, but I would have to get back to the committee to verify that.
Senator Taylor: I would appreciate that. After all, it would be somewhat peculiar if they could borrow the money to invest to bring in the whole family.
Mr. Miller: That is why I am sure that is not the case.
Senator Taylor: It is not unusual for bureaucracies to do things like that. It brings us back to the question of re-establishment of a loan. What criteria are you using? I am not thinking so much from the view of immigrants or from refugees who need re-establishment grants. On the other hand, there are many citizens who cannot get a loan from a bank. I wonder about the size of these loans. Are we talking about $5,000 loans so that the person can get some furniture and buy groceries, or are we talking about $100,000 loans to start up a business?
Mr. Michael Joyce, Director of Estimates Division, Treasury Board of Canada: Are you specifically asking about the size of the loans that are given to immigrants?
Senator Taylor: The range or the size.
Mr. Joyce: I do not have that number with me. I will have to get back to you.
Mr. Miller: Again, it may vary on the individual circumstances. I believe there is enough flexibility to be able to adapt the size of loan to the circumstances of the individual or the family, depending on what they are doing.
Senator Taylor: Perhaps you could bring back information on those two aspects. I am particularly interested in the business investment matter because it seems to be a rather hollow deal if they can borrow the money to do the business investment.
The Chairman: I want to ask a couple of questions on the Parks Canada program. I notice in the 1997-98 Main Estimates at page 3-10, from 1996-97 to this year, there has been a decrease in spending from 310,948 to 291,677. However, we have a revenue credited to the vote of $70,165,000; would that be correct?
Mr. Miller: That is correct, senator.
The Chairman: What was the revenue last year and the year before?
Mr. Miller: That figure would be available obviously in the 1996-97 Main Estimates.
The Chairman: Did we meet the revenue targets set out?
Mr. Miller: What is interesting is the fact that these revenues are credited to the vote. I should take a moment to explain that.
When the government receives revenues, they are deposited to the Consolidated Revenue Fund. However, in some instances when we ask Parliament to approve spending for a particular operation or agency, we include the provision that they receive an amount of money and authority to spend up to a certain level of revenue. If a department then receives what we call a net amount or a net voting and if they do not get those revenues in, then they do not have, in total, the overall expenditure authority to complete their plans.
For example, looking at this fiscal year and moving into Parks Canada, if they did not collect $70 million worth of revenue, then there is no question they would have to adjust their expenditures to reflect whatever that difference was because Parliament has only approved the net amount.
The reason we encourage that is to ensure that if departments are justifying expenditures on the basis of doing work that has value, and if there are services available to people and they are willing to use them, and if the demand for services drops off, then they should not be spending the money. It is a good counterbalance to ensure there is a match between the expenditures associated with an activity and the revenues that those services would then generate.
The Chairman: Those would be park fees, entrance fees, et cetera.
Mr. Miller: That is correct, sir.
The Chairman: Is that revenue included in the taxation revenue of the government? When we look at the overall global budget, is that revenue from those fees? Are they just placed within the budget of each department for accounting purposes, or are they put into the general revenues of the government? Where are they placed exactly?
Mr. Miller: I have to be careful here. To get a balance sheet, they are netted out against expenditures. To talk about the total revenues the government collects, they are shown as revenue coming in. In actual fact, what happens is the authority that they had the ability to use those revenues is reflected, and it is netted out of the expenditures of the Government of Canada.
The Chairman: When you have general revenue, that is your taxation revenue, including income tax, business tax and fees at the border. However, when you have user fees that are a direct charge against the citizen for the use of a government service, that is reflected in the expenditures.
Mr. Miller: Just for those situations where there is a vote netting authority provided by Parliament. There are other situations where fees may not be directly connected to the provision of a service. Those fees go into the Consolidated Revenue Fund and are counted like tax revenues. The government has several billion dollars worth of what we call non-tax revenue. They can derive from a variety of services, such as fines and forfeitures. Obviously, we would not have a department having to rely on fining individuals in order to have sufficient budgetary authority to meet their payroll. With those kinds of things, there was never the intention of vote netting.
In situations where there is a direct relationship between services provided and the revenues collected, then we should disclose all the amounts. However, we think it is a good control and an important element to then ensure that that department or agency works within that net requirement.
The Chairman: How do you manage those funds?
Mr. Miller: Manage in the sense of what, senator?
The Chairman: If I get a hamburger at McDonald's today in Ottawa, when the server punches in the amount, McDonald's Canada in Halifax knows that a hamburger was purchased in Ottawa. What happens in Banff when that $10 is picked up at the gate?
Mr. Miller: We have in place several regulations covering both cash control and the deposit and receipt of public moneys. They are very closely controlled. The individuals associated with that go through a different process in terms of ensuring that not only safeguards are in place, but that they are of sufficient character. It is not a formal thing; it is just recognizing the importance of it.
What happens when an entry fee is received at a park? There are arrangements by which those moneys are deposited, normally on a daily basis, to a local financial institution. Those funds are then electronically transferred through our banking system to the Bank of Canada and recorded as revenues of the Government of Canada.
Obviously, Parks Canada has an entry in their financial system that identifies those as entrance fees. Entrance fees under the authority provided by Parliament, specifically by the Treasury Board -- and you can stipulate the specific elements that could be vote netted -- would be recorded in our books as some of the revenue that would go toward this particular vote and which would be available for reuse.
The Chairman: If I wanted a breakdown of how many people paid a park fee in Banff so I could tell exactly how many people visited that park, could I get that?
Mr. Miller: If there is a charge, certainly.
The Chairman: That is what I mean, if there is a charge.
Mr. Miller: If they are recognizing that as an entry fee everyone goes through the same way, then they would have normal, standard, commercial practices for cash control and accounting. They would be able to identify that for you.
The Chairman: We would be able to get the number of people who visited Banff or Jasper. Would we be able to know how many individual tickets and passes were purchased per week for the park system for the year and, therefore, get an idea of traffic and whether the increases in fees have had a positive or a negative effect on visitors to the park over the last couple of years?
Mr. Miller: I would assume that information would be an important part of planning within Parks Canada itself and therefore would be available.
The Chairman: Is it possible to get the number of dollars collected in this fashion? Let us say we have $70 million for parks. There must be stuff like this all over the government. Could we get a total amount of fees collected of this nature that are up against expenditure?
Mr. Miller: We have a listing that we would be happy to provide to this committee which details the exact type and nature of charges by the federal government for the last fiscal year completed, which is 1995-96. In that list there is contained a breakdown. I am not familiar with the breakdown for Parks Canada. However, for example, in Agriculture, there are at least 30 different categories of revenues that are collected, whether they are for meat inspection or for fresh fruits and vegetables, with the dollar amounts associated.
In the Parks Canada case, if we moved further and asked for the specific number of people who went through the parks and that kind of detail, I would need to confirm with the department whether or not that information is available. Certainly, we have detailed information on the total moneys collected by the federal government. Unfortunately, it is not geographically based. It is based on the type of fee or service provided and how much that represents over all. Our listing is not broken down geographically.
The Chairman: Would not someone have a listing broken down geographically? You should be able to tell me the figures for each park.
Mr. Miller: I would assume that Parks Canada should be able to provide that type of information. Without having spoken to them, I would be surprised if they did not have that.
The Chairman: I would be surprised, too. I tried to get this information before, which is why I am following up today. These user fees bother me because they are another form of taxation.
I know that if Mr. Cohen phoned Halifax today, they would be able to tell him how many quarter-pounders were sold yesterday in a 24-hour period. We would not know how many people visited Banff yesterday.
Mr. Miller: I would assume they have a fairly good idea of yesterday.
The Chairman: Is it possible that you can get a total with regard to user fees that are collected in this fashion and then charged against expenditures?
Mr. Miller: The listing we have does not make a difference between those which are vote netted -- in other words, the way we describe Parks Canada -- and those that simply go into the Consolidated Revenue Fund and are not used to offset expenditure. We have a complete listing of that.
Senator Forest: We are in the hospitality business in Jasper, and I know those figures are readily available at Parks Canada in Jasper. They can tell you on a daily basis what was taken in. When they increased the fees last year, there was quite a write-up in the papers. They had all those figures because those of us who are in the hospitality industry were very much concerned.
The Chairman: I want to know about those program activities where we have a net decrease -- such as 310,948 to 291,677 -- across certain departments. That shows that we are managing our money well and we are trying to get the costs down. However, because of the $70,165,000, I want to know whether the lower expenses are attributable to good management or to increased revenues because we have hiked the fees, as we have in the case of parks.
Mr. Miller: To answer that question, the best thing to examine would be a comparison between the Main Estimates for the two years. In other words, the comparable table that was included in Part II of the Estimates for 1996-97 would have the exact breakdown. You could then see the relative differences.
The Chairman: The Main Estimates would not provide me with the actual revenue collected, would they?
Mr. Miller: They will not, sir. The Public Accounts have great details concerning that.
Senator Cools: Did you mean all those sorts of charges, such as licensing fees? Do you mean all moneys taken in, or were you just referring to Parks Canada?
The Chairman: We should have a list of all these charges which apply to the government.
Senator Cools: There are enormous fees. Some years ago, there was much concern expressed at this committee about that sort of thing.
Senator Taylor: We are getting into a huge field here. There is a difference between a user fee for going into a park and a cost recovery fee for, say, meat inspection. Do we categorize separately cost recovery fees versus fees for services?
Mr. Miller: That is an excellent question, senator. Technically, we do not because we view those fees as providing a service or a benefit to a particular group of individuals and not necessarily to the whole Canadian population. In other words, by meat inspection, we are providing a service to the producers. It is important for the general populace of Canada, in terms of meat safety, but it is equally important to the meat processors in terms of trade.
In recognition of those combined roles, we do not recover 100 per cent of the costs of meat inspection. We recover somewhere between 15 per cent to 20 per cent on that item.
Entry to a national park system is similar. I did not have the opportunity to visit a national park last year. I am perfectly happy that those who did go get to pay a portion of the cost of maintenance. We look at those situations in the same way. We are providing a benefit to a particular group instead of the Canadian population as a whole. Therefore, it would make sense to charge them at least a portion of the cost for doing that.
Senator Taylor: I just came back from Washington where I met with an American agriculturalist on behalf of Canadian agriculturalists. This whole cost recovery scheme gets involved with trade. Up here, we are trying to cost recover. Down there, they are trying to cost recover. At the same time, we are watching each other's cost recovery and arguing that if one does not get as much as the other, then that is an unfair trade advantage.
From these books, which I have not yet examined, is it readily apparent whether a cost recovery meat inspection fee is covering, say, 15 per cent of the cost? My American counterpart might say that we are being duped and that we are really only recovering 5 per cent and that we should be charging more. Is there any way for the agriculture and food producing industries in Canada to tell by looking at your books just what percentage of costs are being recovered in fees?
Mr. Miller: Yes, but that is not available from these books, again, because of the level of detail. Given our approach to cost recovery, it was necessary for the Department of Agriculture and Agri-Food to sit down with industry associations, open their books, tell them what is going on and exactly what proportion of those costs are involved. The industry associations would like to see more efficiency in terms of the operation. However, the idea was for them to recognize the total cost and work backwards. They have available detailed information on the cost recovery which ranges from 1 per cent or 2 per cent in some cases up to a significant proportion.
It depends on the product. Obviously, on grain that is exported, the entire amount of the inspection relates to trade. It is not health and safety. Therefore, they pay basically the entire costs of the Canadian Grain Commission. In other situations, the fee represents a very small proportion of the costs involved. They do have it by category and by type of product, which is information that can be provided very quickly to the committee.
Senator Forest: I am interested in the document, "Getting Government Right." I am a new member of the committee. Your objectives are laudable. How far along are we in this process? Is it just getting going with the change in the Treasury Board?
Mr. Miller: This is an interesting evolution. I would assume that the reference to the document is in terms of the role of Treasury Board as a management board. From an expenditure point of view, remember that the Treasury Board has two sides. I describe it as two, at any rate. One is the expenditure management side; the other is the human resource side, which is the employer of the federal public service.
The combination of events and timing is such that we are now in a position to provide stable, expenditure planning numbers to departments and agencies that, in fact, now extend out to the year 2000. This is still subject to Parliament's approval. However, in the last couple of years we have not gone through a series of short-term or year-end freezes and adjustments. Therefore, they have a fairly stable planning environment.
At the same time on the human resource side, we are re-entering collective bargaining for the first time in six years. There are also all the other things the president mentioned. We are trying to simplify the process.
By combining those issues, we view the Treasury Board as having the ability to look at issues on a more horizontal basis, instead of dealing with transactions.
One of the difficulties that I have had personally, and I believe it is reflected in the board, is to deal with programs that affect more than one department. We have obvious examples of that. They include aboriginal programs which are in seven different departments and agencies. Our hope is that Treasury Board should be able to view not in departmental structures but in overall objectives to ensure there is no duplication and that we are closely tied in to what is going on in other levels of government.
The combination of being able to change the human resource regime and to deal horizontally with expenditures issues from a direction that was seldom used in the past would move a long way to that board of management concept.
We are encouraged by the directions simply because we feel it is a very useful field to involve the board directly.
Senator Forest: That is interesting. I have just come from a meeting of the Subcommittee on Post-Secondary Education where Mr. Mercredi of the Assembly of First Nations was speaking to us. This was one of his concerns.
Is this process still in the conceptual stage?
Mr. Miller: Some of those initiatives have been undertaken. One has started for the aboriginal area. In this case, it is obviously being championed by the Deputy Minister of Indian Affairs and Northern Development. Again, the whole idea is to look at it from a perspective that crosses departmental and agency boundaries.
The Chairman: In the coming fiscal year how much does the government expect to take out of the public service pension plan surplus? Where will this show up in the government's accounts?
Mr. Miller: This is a complicated issue. I am glad that you asked the question, Mr. Chairman.
The total amount invested for the Public Service Superannuation, which includes the RCMP, National Defence and the remaining part of the public service, is $106 billion. Those moneys are invested in the federal government, where I personally think they are very safe.
Actuaries have assessed and evaluated the requirements of providing a pension to all public servants for the remainder of their lives, and for the remainder of the lives of their spouses. They have come out with a number that says the federal government only requires about $86 billion. We have a difference of at least $20 billion between how much is recorded on the books of Canada and how much will actually be required for the federal government to meet its responsibilities toward all existing participants in that program.
During the 1970s, for example, there was an incredible deficit in that account. The way the legislation is written it is the responsibility of the federal government to make up those deficits. Additional amounts were charged to the deficit over all for the government and were put into this account to recognize those obligations. These are all paper transactions; it is not cash.
We then had a series of years in which there was virtually no increase in the incomes of public servants. As well, there was little inflation. By the way, these are indexed. As a result, the actuaries sort of guessed wrong in how much it will take. We now have this large surplus. In the past what has happened is that the Department of Finance has amortized a portion of that surplus to remove it from the books. In the same way, if there was a deficit, they would have to put the money back in over a number of years.
The issue has come to the attention of the participants in the plan, in the sense of saying: To whom does this surplus belong? Does it belong to those who have contributed to the plan for the last 30 years? Does it belong to those who will be contributing to the plan for the next 30 years? Or does it, in fact, belong to the employer? Right now, under the current regulations and rules, the employer has all the financial risk of ensuring that that plan has sufficient funds within it.
It was an odd piece of legislation in that it indicates that the employer, which is the federal government, must make up the deficits, but it does not deal with surpluses. It is a dilemma which we face right now. A portion of it is being amortized over 12 or 15 years in recognition of the fact that there is nothing required.
In the private sector, the employer would have ceased long ago to make any contributions. If a pension plan gets into a surplus position, then the employer no longer contributes to it until it gets back to a break-even point. However, our legislation is written in such a way that the federal government continues to contribute every year.
The Chairman: How much does the government expect to take out of the pension plan surplus and where does it show up in the government's accounts? Do they expect to take any money out this year?
Mr. Miller: My understanding is that the amortization I mentioned is about $1.4 billion this year. I would have to verify that amount.
The Chairman: Will they be taking out about $1.4 billion and placing it in government revenues?
Mr. Miller: That is correct.
The Chairman: Did they do that last year?
Mr. Miller: My understanding is that they did. This is an item that has been there for two or three years.
Senator Stratton: Does the European Bank for Reconstruction and Development fall under Foreign Affairs? We are there as observers, but we contribute to the funding of that bank. As I am aware, we increased our funding this year. We have paid up. I would like to know where I can find that item.
Mr. Miller: The international financial institutions and the payments thereto are contained, in part, under the Department of Finance.
Senator Stratton: Would you send me a little information on it?
Mr. Miller: We will be happy to provide a breakdown on that. I am sure the individual banks are not mentioned.
Senator Stratton: Canada has paid up and is current. The bank wanted a top-up of funds. Having achieved the top-up, they would not ever have to go back to the member countries to ask for more money. At last report, they were at around 25 per cent of the top-up. They would not make any dramatic changes or moves in business until they had achieved 50 per cent of that amount. Where do I go to find out if the other countries have topped up their contributions?
Mr. Miller: We can provide that information to the committee.
The Chairman: Thank you very much, gentlemen.
The committee adjourned.