Proceedings of the Standing Senate Committee on
National Finance
Issue 32 - Evidence
OTTAWA, Wednesday, March 24, 1999
The Standing Senate Committee on National Finance met this day at 5:00 p.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 2000.
Senator Anne Cools (Deputy Chairman) in the Chair.
[English]
The Deputy Chairman: Honourable senators, I see a quorum. As honourable senators know, our mandate is the examination of the Main Estimates for 1999-2000.
Our witness today is Mr. Rick Neville, Assistant Secretary of the Expenditure Management Sector of Treasury Board Secretariat.
Please proceed, Mr. Neville.
Mr. Rick Neville, Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat: Senators, it is a pleasure to be here today. I appear before you today to discuss the government's Main Estimates for the fiscal year 1999-2000 that were introduced in Parliament on March 1, 1999, and the interim supply bill now before you.
This committee has an abiding and longstanding interest in Estimates and the business of supply. The practice has been for the President of the Treasury Board or the Parliamentary Secretary to appear before the committee for Main Estimates, with officials. The Assistant Secretary responsible for coordinating the Supplementary Estimates appears to deal with the Supplementary Estimates. Most recently that has been me.
Interim supply, however, has been treated as a technical matter, recognizing that its purpose is to provide bridge funding to enable the government to function while both the House of Commons and the Senate complete their reviews of the Main Estimates. In the absence of interim supply, the government would effectively shut down on April 1.
Interim supply this year is routine and consistent with normal practice. We all agree that the process of supply is extremely important but very complex. Last fall, we informally proposed a briefing for senators on the "business of supply." I would like to suggest that we have such a briefing before the final supply for these Main Estimates comes before the Senate in June.
It bears repeating that interim supply is a technical step in the supply process. Its purpose is to provide the government with operating funds until Parliament can complete its detailed review of the estimates and deal with the full supply bill.
I believe this is the first time, in my recollection, that I have explained the process of determining interim supply to you; therefore, I would like to take the time to explain to you how we arrive at interim supply.
Funds for interim supply are routinely determined at three-twelfths of the amount of a given vote in the Main Estimates. The funding is intended to cover the first three months of the fiscal year, that is, April, May, and June, when the first regular supply period ends. Therefore, three-twelfths of the year, hence the first three months of the fiscal year.
Departments and agencies may request more than three-twelfths; however, they must justify those requirements to us at Treasury Board Secretariat in one-twelfth increments to a maximum of eleven-twelfths. We do not accept twelve-twelfths from any entity; the most we will accept is eleven-twelfths.
As a consequence, full funding can never be obtained through interim supply, and the rights and privileges of members to question or debate any item in estimates are in no way prejudiced.
Typically, justification for additional twelfths relates to seasonal expenses. As an example, the construction season. Legal and quasi-legal obligations: again, as an example, the government pays grants in lieu of property taxes and interim payments are typically due in the spring. Payment schedules under contract or transfer payment agreements: Again as an example, the Department of Indian Affairs and Northern Development often makes payments early in the year under financing agreements with the bands; and for departments vote netting their revenues, basically to provide bridge funding as revenues are received after costs have been incurred.
Departments that are net voted do not have any funds at the beginning of the year. However, they still have expenditures, and therefore we must cover them off with bridge funding until such time as the revenues start appearing.
I would now like to talk about this interim supply bill. The total amount of authority sought is for $13.8 billion, or 30 per cent of the total amount being appropriated through Main Estimates. You will remember that I mentioned to you that we normally start with three-twelfths, one-quarter, or 25 per cent, so you should expect to see something close to 25 per cent. We allow some departments more than the three-twelfths, for specific reasons, and where it is justifiable; hence when you add it all up, at this point it looks like 30 per cent.
Here are four votes where eleven-twelfths is being sought. Examples are as follows: $12.4 million for the Parks Canada Agency's new parks and historic sites account to meet cash requirements; $6.8 million for the Department of Finance, vote loan 15, resulting from Canada's obligation to subscribe to shares of the European Bank for Reconstruction and Development, payment for which is due April 15; $9.7 million for the Canadian Commercial Corporation to meet cash flow needs associated with obligations to Canadian exporters, especially small and medium-sized ones; $504.2 million for Treasury Board, vote 5, government contingencies, in accordance with past practice.
The very fact that departments are being funded through interim supply means funding is on a cash-to-needs basis, which severely limits their scope to react to unforeseen events.
Typical of other items for which additional twelfths are being sought are: $227.4 million for the Department of Fisheries and Oceans, vote 10, which represents ten-twelfths in that particular instance, for early retirements under the Canadian Fisheries Adjustment and Restructuring program, and for contribution arrangements under the Aboriginal Fisheries Strategy; $4.4 million for the National Battlefields Commission, which represents seven-twelfths, to pay municipal taxes to Quebec; $757.8 million for Finance, vote 20, representing seven-twelfths, in accordance with the financing arrangements entered into with the territorial governments; $58.2 million for the Canada Council, again representing, in this case, six-twelfths, driven by block grants to publishers, paid in April and May, and payments to performing arts organizations, in both cases related to the seasonal timing of the business; $1.6 billion for Indian Affairs and Northern Development, vote 15, again, in this case representing five-twelfths, as a result of funding arrangements with the bands that provide for a large portion of the funding to be paid on April 1 each year.
Other specific agreements, such as the James Bay Cree, Ouje Bougoumou Cree, and Naskapi Band of Quebec agreements, require full payment in early April; $36.5 million for the Department of Foreign Affairs, capital expenditures vote 5, representing in this instance five-twelfths, for their global communications network Y2K upgrade and for cash flows related to overseas construction costs; and $7.9 million for the space agency, in this case representing five-twelfths, due to its annual payment to the European Space Agency, which is due in June.
I trust those are some good examples of where we go to more than three-twelfths.
Interim supply is, of course, directly related to the Main Estimates and the implementation of the government's 1999-2000 expenditure plan set out in Budget 1999. Unlike Supplementary Estimates, where the subject matter generally deals with specific funding issues, the Main Estimates address the whole scope of government spending. With this in mind, perhaps I could start with an overview of the Main Estimates.
[Translation]
The Main Estimates for the fiscal year 1999-2000 total $151.6 billion, an increase of $6.1 billion or 4.2 per cent over 1998-1999. These estimates set out most of the expenditure plans announced in the budget tabled by the Minister of Finance on February 16 last. The remaining items represent funding sought for statutory programs or authorizations that will be requested in the Supplementary Estimates.
[English]
The following is a brief listing of some of the major changes affecting departmental and agency Main Estimates that may be of interest to you. I will present the changes as either increases or decreases relative to the 1998-99 Main Estimates.
First, major increases in budgetary Main Estimates: $874 million for the Canada Health and Social Transfer payments, specifically applicable to the Department of Finance; $840 million for increased employment insurance benefit payments under Human Resources Development Canada; $806 million for fiscal equalization payments under the Department of Finance; $700 million for salary and wage increases, including funding for the salary, wage, and related benefit costs for judges, the military, and RCMP members, basically covering all departments and agencies; $600 million for income disaster assistance for farmers, in response to recent declines in commodity prices, under Agriculture and Agri-food Canada; $583 million for old age security, guaranteed income supplement, and spouses' allowance payments under the Department of Human Resources Development.
[Translation]
A total of $385 million is being requested for the Canada Education Savings Grant, a component of Human Resources Development, along with $383 million for DND capital expenditures, including the restoration of the $150 million cut in 1998-1999. These items are directly related to DND. An additional $377 million is being sought for payments to the provinces to compensate them for damages incurred as a result of recent natural catastrophes, this in accordance with disasters relief agreements in place. This is also a component of DND.
A total of $322 million is being sought for the Canadian Fisheries Adjustment and Recovery Plan, a component of Fisheries and Oceans and Human Resources Development.
A total of $287 million is being sought to assist departments and agencies in becoming year 2000 compliant. Of this total amount, a further $1 million is being requested for the Treasury Board government contingencies fund, in part as a special measure to cover any eventual Y2K problems.
A further $175 million is being sought for the Canadian Student Loans Program, a component of Human Resources Development.
[English]
There is $171 million for Inuit and Indian programming, including $52 million for Gathering Strength, as a response to the Royal Commission on Aboriginal Peoples. There is $42 million for relocation of the Innu of Davis Inlet, and $165 million for transfer payments to the territorial government, including funding for the new government in Nunavut, from the Department of Finance. The sum of $155 million is to partially compensate departments and agencies for the impact of non-salary price increases and increased workload, which is affecting all departments and agencies. The amount of $140 million is for the expected increase in encashment of promissory notes issued to international financial institutions, such as the Asian Development Bank, by the Canadian International Development Agency. There is $135 million to restore the funding of three granting councils to 1994-95 levels as set out in the February 1998 budget, including, natural sciences and engineering, $78 million; social sciences and humanities, $13 million; and medical research, $44 million.
There is $135 million for HIV/AIDS, public education regarding tobacco control, toxic substance research, the Canadian Breast Cancer Initiative, Aboriginal Head Start On-Reserve Initiative, and to provide First Nations and Inuit health services under Health Canada. One hundred thirteen million is for the Canadian Opportunities Strategy under Human Resources Development; $98 million is for the SchoolNet/Community Access Program, which is part of the Connectedness Initiative set out in the February 1998 budget, under Industry Canada.
There is $82 million for the new Millenium Bureau of Canada; $70 million to compensate for the impact of foreign inflation and currency exchange losses on operations abroad and on the costs of Canada's membership in international organizations, as well as salary adjustments for locally employed staff abroad, under Foreign Affairs and International Trade; $70 million to implement measures set out in the 1997 and 1998 budgets as it affects Revenue Canada, and $65 million for the Radarsat-2 Project under the Canadian Space Agency. The amount of $62 million is to strengthen Health Canada's Blood Safety Program -- that is $26 million -- and $36 million for transitional costs associated with the establishment of the Canadian Blood Services Agency.
We can now look at some of the major decreases in budgetary Main Estimates. There is a $1 billion reduction in the forecast of public debt costs in the Department of Finance; $226 million with the end of the transition to NAV CANADA, under Transport Canada; $203 million as a result of reduced payments under the Farm Income Protection Act, due to the completion of various provincial programs, safety net companion programs, decreased payments under the Net Income Stabilization Account, and re-phasing of cash flows under the Agri-food Innovation Program, all of which come under the Department of Agriculture and Agri-Food.
There is $200 million under the Special Retirement Arrangements Act, associated with the end of the early retirement provisions in 1998, which is under the Treasury Board of Canada; $192 million with the sunsetting of the Canada Infrastructure Works Program, including the Atlantic Canada Opportunities Agency $19 million; under the Economic Development Agency of Canada for the Regions of Quebec, $35 million; Industry Canada $72 million; and Western Economic Diversification, $66 million.
There is also $150 million from the Transitional Jobs Fund, $108 million with the sunsetting of funding for Strategic Initiatives. $96 million with the sunsetting of the Atlantic Groundfish Strategy, all under Human Resources Development; and $67 million with the completion of phase 1 programs of the Canadian Adaptation and Rural Development Fund of Agriculture and Agri-Food Canada.
[Translation]
The following are some of the main changes to the non-budgetary spending authority set out in the Main Estimates.
A total of $192 million is being sought to offset lower-than-expected payments collected by the Canada Mortgage and Housing Corporation, along with an additional $133 million for payments to international financial institutions, under the Department of Finance.
[English]
In addition, there are changes in the form and content of the Main Estimates, which are explained in the introduction to Part II. I will point out the most significant changes. Some reflect changes in the organization and structure of government. For example, the new Parks Canada Agency will have, for the first time, a program vote for which the spending authority will not expire until March 31, 2001, that is, after two years. Other changes reflect the creation of new authorities, new votes, or changes to votes, such as the new collective bargaining vote in the estimates of the Treasury Board Secretariat. This vote will allow the Treasury Board to supplement departmental votes for the costs associated with two collective agreements signed with the Public Service Alliance of Canada on December 29, 1998. The intent is to streamline administration of government while maintaining the integrity of parliamentary control.
[Translation]
That concludes my preliminary remarks. I would be happy to answer any questions you have about the Main Estimates.
[English]
The Deputy Chairman: Thank you very much, Mr. Neville. I am certain that many of our colleagues found your remarks helpful. Do colleagues have questions?
Senator Fraser: Going straight to detail rather than an overall question, I was struck by the reference to the European Bank for Reconstruction and Development. What is Canada's share in that, do you know?
Mr. Neville: I do not have that at hand, but we have made a commitment that we have been honouring. We do make a payment early in the new year.
Senator Fraser: Is that in addition to the $133 million more that the Department of Finance is giving to international financial institutions?
Mr. Neville: That amount could be part of it. It is important to understand that interim supply is traditionally three-twelfths, but I gave you some examples that could be for more than that. There is a rationale for why we would have accepted that. When you add that up, it gives you your 30 per cent. I was specifically referring to some highlights in the changes from year to year.
Senator Fraser: What is vote netting?
The Deputy Chairman: Mr. Neville, I think you are doing members a great service by explaining the process. Perhaps you should begin by telling Senator Fraser what "votes" are.
Mr. Neville: That is a good place to start.
The Deputy Chairman: That would allow you to share with us some of the knowledge that you possess. Would you appreciate that, Senator Fraser?
Senator Fraser: Sure. I would appreciate anything.
The Deputy Chairman: Before you talk about vote netting, why not talk about the votes.
Mr. Neville: Votes are basically the vehicle that allows Parliament the authority to determine the specific amounts of money for any one department in terms of its program for a fiscal year, except where it states otherwise. Generally speaking, just as a base point, you would be proposing to Parliament to vote,, for example, $100 million for the year for department X. That department has, from that moment on, up to $100 million to spend during that fiscal year, based on their legislation and requirements. They would actually issue payments against that particular vote that would add up to $100 million. It could not exceed that amount.
That being said, if that particular department were issuing, for example, licences for a particular service, the revenues from the licences would go to the Consolidated Revenue Fund, and those funds are part of the government's overall bank account, if you wish. In a very simplistic sense, the department has the authority, in this example, to spend up to $100 million and there are revenues coming in for work they do that goes right to the Consolidated Revenue Fund.
In specific instances -- and I stress "specific" -- with the prior approval of Parliament, departments are allowed to net some of the revenue they receive against the vote. In the example I used, department X has received authority to spend up to $100 million. In this particular case, because of the specific vote wording, it is entitled to net the revenues that it receives. Let us suppose that it has revenues of $20 million every year. We would present to Parliament a net vote for $80 million -- $100 million gross, less the $20 million worth of revenues being received -- and we would ask Parliament to vote $80 million.
Senator Fraser: But you need the bridge funding.
Mr. Neville: You definitely need that, but there is also something else. One must be careful. For all intents and purposes, the department now has only $80 million to work with. Two things happen. On day one, because they have $80 million, they might be okay because they have a working advance, although it might still be a bit of a problem. However, over the year, they must ensure that they receive the $20 million worth of revenues in order to spend their $100 million. If they do not receive the $20 million of revenues, they cannot spend the $100 million. They must always watch their bottom line.
That is what vote netting is all about. You actually vote money, but you net the proposed expected revenues against that vote.
Senator Fraser: Is this practice increasing, decreasing, or remaining stable? It sounds like a useful control on spending.
Mr. Neville: There are a number of instances where we have vote netting and it is increasing to a certain extent. We are very particular about when we recommend vote netting to Parliament, as it must be in a proper context.
There is a management discipline for having vote netting, obviously, because it is somewhat of a private sector model where revenue is the bottom line. You must ensure that the revenues are there.
On the other hand, you are trying to instil in departments the concept that revenues are closely aligned to expenses, so you want to match expenses against revenues and you want the departments to be more closely linked with the clients. Therefore, if there is a direct relation between receiving the revenues and making the expenditures, you have a better management and a better governance regime.
Therefore, we advocate that in specific instances, where appropriate, but each case is looked at on its own merits. We carry out a judicious assessment and we go to the President of the Treasury Board as well as before Parliament.
You asked about votes, Madam Chairman, of which there are four different kinds. I was talking in this particular case about an operating vote. An operating vote is to pay for the salaries and the costs of running a department for that year.
We also have capital votes. If the expenditures of a particular department are more than $5 million, we require that a separate vote be put forward to Parliament for approval, and that is called a capital vote.
A third kind of vote is called "grants and contributions." When a department will be making grants or contributions to third parties, we require them to have a grants and contributions vote.
We also have loan votes. When the government makes a loan to a third party, be it another country or whatever, we treat it separately and require that it be part of a loan vote.
So those are the four kinds of votes.
Senator Fraser: Could you send us a little "cheat sheet" setting this out?
Mr. Neville: Certainly. That would be a pleasure.
[Translation]
Senator Grimard: You note on page 4 of your opening statement that $9.7 million is being sought for the Canadian Commercial Corporation, in your own words, "to meet cash flow needs." As I understand it, the CCC finances contracts between Canadian businesses and foreign governments.
Mr. Neville: That is correct.
Senator Grimard: Am I to understand that this $9.7 million, which will be used to meet bank obligations, will flow back to the Corporation one day? I would imagine that the CCC does not lose all of the contracts that it finances. I expect that it is reimbursed by governments. What happens then to the $9.7 million awarded to meet gross cash flow requirements?
Mr. Neville: A short while ago, I explained to you that as of April 1, certain expenses will be incurred and revenues may not be collected for some time. In such instances, to ensure that the agency remains financially sound, we must finance some of these expenditures until revenues are generated. In the case of the CCC, a small or medium-sized company may have a contract with the CCC which in turn also has a contract with the foreign government. The CCC gets a certain percentage for its services, but does not receive that money immediately. We need to give them more than the three twelfths given to other agencies so that they can remain solvent until they receive the money from the foreign governments.
Senator Grimard: Among the changes to the non-budgetary spending authority noted on page 13, you refer to $192 million in additional funding to the Canada Mortgage and Housing Corporation. Does this amount remain relatively stable every year, or does it increase and if so, why?
Mr. Neville: It all depends on the year and on CMHC's revenues. For 1999-2000, CMHC is seeking $192 million, less than it has in previous years. The amount requested is similar, but nevertheless lower than last year, when it sought $400 million, This year, the request is for close to $200 million. Therefore, it is seeking less money from the federal government.
Senator Ferretti Barth: You report on page 13 that Quebec will be receiving $35 million less from the Economic Development Agency of Canada for the Regions of Quebec. I would like you to explain the reason for this decrease in funding to Quebec. What criteria were used to determine that Quebec would receive $35 million less? Everyone knows that Quebec needs this money.
Mr. Neville: We have to consider this issue in context. Decisions were made by the government. In 1999-2000, the Canada Infrastructure Works Program, which has existed for a number of years, will come to an end.
Senator Ferretti Barth: Will another program be brought in its place?
Mr. Neville: Perhaps, but in any event, this program will end on April 1, 1999. As far as this program is concerned, Quebec will receive $35 million less for 1999-2000 than it did in 1998-1999. Will other programs take up the slack? That is another matter. But as far as this program goes, it will no longer exist after April 1.
Senator Ferretti Barth: Will the loss of $35 million in funding result in job losses or higher unemployment in Quebec?
Mr. Neville: I do not believe so. One has to know the nature of the Canada Infrastructure Works Program.
Senator Ferretti Barth: Some people will find themselves out of work.
Mr. Neville: This program was brought in several years ago to facilitate infrastructure work across Canada. It was a new program. Expenditures were increased for a set period of time to put in place the necessary infrastructure to address major needs. An agreement was negotiated between the federal government and the provinces for a set period of time. The program was extended several times, but is now scheduled to end on March 31, 1999. Will this cause some problems? One has to understand that the program did not even exist a few years ago. It provided employment for a period of several years. Will it be extended? No, not in 1999-2000. However, the provinces have had plenty of time to react and to put in place other programs to offset the end of this one.
Senator Ferretti Barth: The millennium programs, for instance, involve infrastructures. That is my concern. Those who have been employed under this program for the past three years will be out of a job.
Mr. Neville: That is true. But the provinces have had ample time to react positively to the program's termination and to bring in other programs.
[English]
The Deputy Chairman: Let me say, Mr. Neville, it is always a pleasure to have you appear before us. Many members of the committee are beginning to show a renewed interest in much of this subject matter, which many have treated for some time as dry and uninteresting. Therefore, we welcome your wealth of intellectual knowledge.
Senator Fraser: On page 14 of your brief, you suggest changes of form and content. Could explain both of your items? Are we saying here that this budget is setting aside two years' worth of money for the Parks Agency?
Mr. Neville: I will refer to my previous example of operating votes.
For 130 years, Parliament has always given authority to a department to spend the amount of money that they have in that one vote during that year. That is the Westminster approach.
A few years ago, we were concerned with expenditures at year-end. If you were a manager and you had a budget and you saw that you were not going to spend it all toward the end of the year, you were so worried about losing it until the next year that you would go out and spend it. We thought that was irresponsible and unacceptable from a management perspective.
Therefore, we put into play a procedure whereby we would allow a carry-over of a small percentage, 2 or 3 per cent, until the next year to get away from that. We have now increased that to 5 per cent. That has brought better management across the board.
That being said, suggestions have been made over the last few years that it would be better fiscal management if we could look at a budget not for one year only, but over a number of years. In other words, never mind the 5 per cent, give us some flexibility and allow us to spend that over a three-year period. That way we can plan better, arrange our affairs and not be bound by the 12-month limitation.
Three government entities have sought special agency status. The first was Parks Canada, which is now called the Canadian Parks Agency, which has legislation that was approved this past year in Parliament. That particular legislation has a section that provides for a vote such as $100 million, for example, to be spent over a three-year period rather than just a one-year period. Therefore, if they only spend $80 million this year, they will have the option of carrying over that $20 million. If they do not spend the $20 million the next year, they have the option of carrying it over a third year.
Senator Fraser: In the spending estimates, it will show as $100 million each year.
Mr. Neville: In effect, it will give them the authority to spend over a three-year period as opposed to one year.
Senator Fraser: Let us move to the second item.
Mr. Neville: On the second item which you raise, senator, in a perfect world, once the government signs a collective agreement with a union, we allocate that money to each one of the departments concerned where there are employees of that particular union in the department.
We take that amount of money and we put it into their vote and we ask Parliament to approve it. That is a perfect world.
However, in this particular instance, the government signed two major agreements with the Public Service Alliance of Canada on December 29, 1998, what we refer to as tables 1 and 5.
Senator Fraser: Were these negotiated agreements?
Mr. Neville: We negotiated them, yes.
Between the time the agreements were signed in December and the time the Estimates were published, we have not been able to allocate that $700 million to all departments concerned.
We had two options. The first was to take the $700 million and allocate it to the departments in the Supplementary Estimates (A), put a small amount in each one of the departments, and come in with a book of Supplementary Estimates this thick. In most instances, each department would have a small number, but we would have to print for each one of those departments. The second option was to create a vote and put it under Treasury Board. That number would be up front and transparent to Parliament, stating that we will be allocating the money as soon as we determine the amount. We would ask Parliament to approve it. In that way, we would not have to go through a detailed breakdown of the money in each vote in the Supplementary Estimates.
Senator Fraser: Will there be a report?
Mr. Neville: Public accounts will then show at the end of the day where all the money has been spent.
Senator Fraser: As of last night, we have a new agreement.
Mr. Neville: We have an agreement that must be ratified.
Senator Fraser: Let us assume that it will be ratified. That will cost us more money. Will that come in as a supplementary?
Mr. Neville: Correct.
Senator Fraser: It will come under the same general structure, probably.
Mr. Neville: We will be able to allocate it, probably, to departments. We would come in with that amount in each department. That is probably what we will do.
[Translation]
Senator Grimard: You note on page 11 that an additional $70 million is being sought in the Main Estimates to implement measures set out in the 1997 and 1998 budgets. Could you explain these measures to me?
Mr. Neville: Revenue Canada is responsible for implementing policies an procedures relating to property tax collection. In the 1997 and 1998 budgets, changes were announced. However, it can take time before these changes are implemented. The particular changes announced in the 1997 and 1998 budgets will not be carried out until the 1999-2000 fiscal year.
Senator Ferretti Barth: I can understand full well why Canada would want to help developing countries, but maybe it should concentrate on improving social conditions here at home, before helping others.
A parliamentary committee is in charge of overseeing the distribution of these funds. You mentioned the sum of $140 million.
Why is the government approving this $140 contribution? What is not right in this country and why are we continuing to provide financial assistance?
Mr. Neville: To begin with, the Government of Canada is committed to improving conditions in developing countries and for this reason, it created CIDA. CIDA programs assess which needs are the most pressing. On the basis of program evaluations, decisions are made to increase funding to certain regions of the country. In this particular instance, $140 million is being sought for the Asian Development Bank. A proposal has been developed to meet Canadian government requirements.
Secondly, another parliamentary committee closely scrutinizes CIDA expenditures. Any requests will be carefully reviewed by this committee and any comments made will be retained for future consideration. Such committees are the forum in which real problems are discussed.
Thirdly, on Thursday March 25, departmental planning and priorities reports, including CIDA's, will be tabled in the House of Commons. A booklet will be available outlining CIDA programs for fiscal year 1999-2000 and explaining the amounts sought in the Main Estimates.
I urge you to take a closer look at these planning and priorities reports, 83 of which will be tabled in the House tomorrow morning. CIDA's report is relevant to the issue at hand.
Senator Ferretti Barth: Are the four countries mentioned in Supplementary Estimates (C) included in the $140 million payment to the Asia Development Bank?
Mr. Neville: I cannot answer that question at this time. However, you should easily find the information you want by referring to these reports.
[English]
The Deputy Chairman: We can proceed to other business.
Mr. Neville, we are mostly satisfied with what you did today. Thank you very much.
Mr. Neville: Thank you very much, Madam Chairman.
The Deputy Chairman: I will complete this part of the business and hand the meeting over to the chairman, Senator Stratton.
We should make an interim report to the chamber tomorrow to satisfy the passage of Bill C-74 tomorrow, if that is satisfactory to you honourable senators. It will be clear that it is an interim report and that the study on the Main Estimates shall be continuing and thorough.
Is it agreed, honourable senators?
The Deputy Chairman: We should have a motion.
Senator Fraser: I so move.
The Deputy Chairman: We will make an interim report for the purposes of satisfying the passage of Bill C-74 on interim supply. Is it agreed?
Honourable senators, I declare the motion carried.
I will hand the meeting over to the chairman, Senator Stratton.
The Chairman: I was in the chamber to deal with Bill C-43. There is a tremendous amount on the agenda, as you can see in the chamber, and there is a tremendous amount on our plate right now.
I stood Bill C-43, under the pressures of time. I spoke to Bill C-65, reading the letter from Prince Edward Island into the record. You have all received copies of that. The bill was passed at third reading.
With regard to item six on Bill C-74, I simply spoke to it. That is the interim supply bill that was not referred to this committee. However, I spoke to it by saying that while we were meeting this evening, while we will provide an interim report, we will meet probably on two more occasions to deal with the Main Estimates for 1999-2000. It is a two-inch thick document and we need to spend a little more time on it. That is a summary of what we have been doing today.
I would now like to move to the approval of the three items discussed previously. The first item is the application for budget authorization for the fiscal year 1999-2000; this is the budget of the committee itself. It is at $17,000.
The back side of the next page shows the record of the committee's expenditures from 1998-99 back to 1994-95. For the last two fiscal years we have been very prudent and spent only $17,000.
I would ask for a motion to approve our main budget of $17,000.
Senator Cools: I so move, Mr. Chairman.
The Chairman: Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
The Chairman: I declare the motion carried.
Senator Cools: Perhaps we should discuss the motion.
The Chairman: Yes, we should discuss the motion first and then go to the budget.
Senator Cools: Following our discussion and meeting yesterday, I very carefully looked at the first part of the original motion. We will see if this meets with the approval of the committee members.
The Chairman: Any comments, honourable senators?
Senator Cools: Perhaps, Chairman, you could go to the first clause.
The only difference from what was being proposed before is that it is wider than what was proposed before in that it gives greater freedoms; however, it is narrower in that it does not tie up the votes themselves from the Estimates. The votes themselves are not being referred to, because the subject matter as related to the vote means that some committee members will have no fears of treading on any minister's toes. That way we steer a very wide berth around what could become serious political problems.
It is articulated in the context of the examination of the Main Estimates.
The reason I wrote into it that the subcommittee be constituted is that I thought we should put that into a formal motion -- the fact of its constitution and the powers. What I would like to include -- either in this motion or in another separate motion -- is that the committee members be named, as senators A, B, C and D, because that has not been done formally here in terms of the appointment of the members. If the senators do not mind, could we put that in?
The Chairman: As a separate motion?
Senator Cools: Not necessarily.
The Chairman: I do not have a problem with that.
Senator Cools: That is how it is usually done.
The Chairman: A motion was adopted on February 10:
That the subcommittee consist of five members, three of whom shall constitute a quorum;
That the initial membership of the Subcommittee on Canada's Emergency and Disaster Preparedness be as follows: the Honourable Senators Stratton, Fraser, Bolduc, Cook, and Ferretti Barth;
That the substitution of membership be communicated to the clerk of the subcommittee;
Would it be acceptable to add this?
Senator Cools: Yes, but is that from an in camera meeting?
The Chairman: Yes, it was.
Senator Cools: I am proposing a very formal constitution of a committee, which should be done publicly. My recollection is that it did not happen that way, but it should be done publicly.
Perhaps the second item could be that the subcommittee members be -- and then write in those names.
The next item will be committee members. We must think about this in order to protect the chairman because this is an odd and unusual situation. We have a subcommittee being set up, and the chairman of the main committee is also the chairman of the subcommittee. I have been attentive to the articulation in order to proof that against any potential attack.
Another way to get around it would be to make me an ex officio member of the committee, or we could put in a clause that says the leadership can be ex officio members. It does not matter to me one way or the other. My concern is that we do not run into too many political or caucus or other types of problems.
The Chairman: All we need is you as ex officio. I think that would be as far as we could go.
Senator Cools: Put in that the deputy chairman of the committee, not me personally, will be an ex officio member of the subcommittee.
On the next item, leave the reporting date out, because that date is not cast in stone.
The Chairman: I think we have something to add to that.
Senator Cools: I would expect some discussion on that. Let us move ahead with the other points first.
Is it your wish to have it televised?
The Chairman: Yes, that is very important.
Senator Cools: As far as I am concerned, it is our job to give you what you need.
We should have a full discussion on the question of reporting dates of the subcommittee to the main committee.
The Chairman: The steering committee of the subcommittee had a reasonable discussion on this matter. I think Senators Cook and Fraser have something to add to it.
Senator Fraser: Given that we are fairly well advanced in the year now, we thought it likely that we would not be able to hold hearings here and across Canada and issue a report by October 30. We thought we could probably do a first draft of the report by Christmas, finalize that over the Christmas break, and then present the report when we return.
Senator Cools: Then why not say that the committee shall report by December 31? If you need more time, you can come back and request it.
The Chairman: We would have to come back here. I do not want to go to the floor. I have no problem with that.
Senator Cools: The way we are doing this, there is no need to go to the chamber.
The Chairman: I understand.
Senator Cools: That is why I said October 30. We could change it to November 30 and you could come back here. We are doing this study as a subcommittee within the larger committee's study of the Main Estimates. Therefore, you need not go to the floor of the chamber, you just come back here to us.
Senator Fraser: December? You realize we will quite likely need an extension.
Senator Cools: Make it the end of December.
Senator Eyton: It seems you are always better to be safe in terms of timing. Perhaps phrasing it "not later than" is better than a particular date. If you do it faster, sooner, and better, fine.
Senator Cools: You must remember that this stuff must be credible. We are doing it as a study under the Main Estimates. It does not sound feasible if you are going to March 31. It becomes obvious. That is why I say December 31 and then come back for an extension. It is not a problem. There is nothing here that goes to the chamber; it is all managed in committee.
The Chairman: Any discussion? December 31 is fine, and we can accept it. We can come back here for an extension. The strategy, if I may say so, is that a report tabled just before the Christmas break is less effective, because a whole number of reports hit the floor of the Senate on that last week. We discussed that quite a lot in the steering committee. We felt it was important for us to complete our work prior to next spring. It has to be finished before then. We have a disaster pending out in British Columbia right now, with some major flooding about to occur. Next spring, it could be major flooding in some other place in the country, or some other event like an ice storm. We want our report to have an impact.
By fluke, although Senator Fraser does not believe this, we tabled our report on retention and compensation in the civil service in February, just prior to the introduction of Bill C-43, and it had an impact on that bill.
I think we can leave it as December 31, with the intention of tabling the report, not the last week that we sit in December, but the first week we come back. With that understanding, I do not think we have a problem.
Senator Cools: You do not table in the chamber, but with us. The reason I said "within this year" is that we are not supposed to hang on to the Main Estimates for ever.
The Chairman: We will not do that.
Senator Cools: It must be credible.
Senator Fraser: I think we all understand each other.
The Chairman: Yes, we do. I want to ensure that that is the strategy.
Are there any other items that we need to discuss regarding this motion?
Senator Cools: Would somebody move it? I will move it.
The Chairman: Is there any discussion? Is it agreed? Carried.
We are now discussing the application for budget authorization for the subcommittee on Canada's emergency and disaster preparedness. This budget was approved by the steering committee of the subcommittee. Would someone on the subcommittee move for approval so that we can have a discussion on this.
Senator Fraser: I so move.
Senator Cools: Mr. Chairman, honourable senators, I have studied the budget and have had a series of consultations with individuals who pay much attention to these matters in the Senate. I have been advised that the entire budget for all committees is roughly $700,000. In light of that fact, this request for $196,000 seems very high.
Before this budget is approved, we should consider a serious reduction to it. I propose that we look for some areas in which to make reductions, because as it stands, this budget will not succeed.
The Chairman: The fact is that in order for this subcommittee to do its work, it is absolutely critical that it travel. If it does not travel, it cannot carry out its work.
Senator Cools: I agree. As I said before, travel is a worthy objective. Whether the committee should be travelling is not under discussion; what is under discussion is the amount of money being requested.
The Chairman: How would you proceed with this, Senator Cools?
Senator Cools: I was hoping for some explanation from the people who drafted this budget. I believe that some of the amounts could be greatly reduced. For example, the amount for committee travel includes two consultants. Why do two consultants have to travel with the committee?
Also, I see a sum for expert consultants for communications; 40 days at $500 for a total of $20,000. I see a sum for expert research consultants to be hired on contract. I wonder who they are.
There are items where I see potential for cutting; there are items where I see no potential for cutting. For example, I do not believe that the amount for registration fees for conferences could be reduced.
The Chairman: With regard to the expert consultants for communications, it is necessary to have some expertise in that area. Wherever you go, you must have someone with you for communications purposes. When we travelled on the Wheat Board bill and on the Subcommittee on Boreal Forests, it was a requirement of Internal Economy that we have a consultant.
With regard to the expert research consultants to be hired on contract, we will probably not spend all of that money. We will probably spend in the range of $5,000. However, we may want to have an expert give us an overview on what we should be studying so that we have another opinion. We are currently getting much of our direction from the Institute for Catastrophic Loss Reduction, who are very helpful, but I think we need another viewpoint.
Senator Fraser: Could we have someone from the University of Ottawa as a witness?
Senator Cools: Yes. Why could they not appear as witnesses? We are entitled to pay witnesses' expenses.
The Chairman: If there is such a person at the University of Ottawa.
Senator Fraser: Such a person could come from Toronto. We can pay travel expenses, but those expenses would surely not be $20,000.
The Chairman: That is just an example. Due to the scope of this project, we have no idea what kind of expert witnesses we need. When we were studying the crisis in agriculture, we travelled to Europe and produced a report. We needed an expert to help us analyze the information we gathered and put a package together.
I can foresee us having to do that in this case. Once we have travelled and brought the documentation together, we may need that kind of expertise.
Senator Fraser: I have some years of experience in producing material for publication.
The Chairman: The concern is with the content of our work. I would not mind cutting that amount in half.
Senator Fraser: I would be delighted to cut it in half. You will remember that this is one of the areas I was concerned about at the subcommittee meeting. If we are requesting a sum that is unlikely to be approved, I think that is certainly an area where we could cut.
[Translation]
Senator Ferretti Barth: Five senators, one clerk and one assistant will be authorized to travel. We can ask the subcommittee on agenda and procedure which senators will be travelling. We will reduce our travel expenses. Everything else you explained makes a lot of sense, but I do not think we need to have five senators travelling across Canada or to Vancouver to observe disasters. Three would be enough.
[English]
Senator Fraser: The Chair will also recall that I raised the travel issue in our subcommittee discussions. My recollection of that discussion is that we actually agreed that we would not take a library researcher and we would kill -- in the editorial sense -- one of the two consultants per trip.
The Chairman: My concern is with who will write down the information.
Senator Fraser: The clerk.
The Chairman: No, Senator Fraser.
Senator Cools: I was not privy to any of those meetings and we are not in a position to make a best judgment at this time. What we are dealing with here is that these numbers are way too high.
The Chairman: The normal travel for a subcommittee is five senators. It will end up being smaller because on certain occasions, some senators will not be able to attend. For example, the centre on hail damage in the country is in Red Deer. Perhaps it will be myself and one other senator who will attend, and we will pick up a senator from Alberta.
There may be occasions, for example, when all five want to go to a particular event. We have approved travel for one senator to each of the upcoming events.
Currently, for example, two of us are going to Vancouver on Friday. It is likely only I will be going to Red Deer, but I think we should all go to Toronto. It is critical for us to attend. Montreal is also important. Senators Ferretti Barth and Fraser are from that area. Thus, it will not cost us much.
Senator Cools: You are saying that the numbers are sort of inflated; therefore it should be easy to reduce them.
The Chairman: We can cut one consultant, but we have to have a communications consultant.
Senator Eyton: I have seen lots of budgets, but not this one. In general, budgets are only estimates. We are involved in an exercise here in which we are trying to sell a budget to the Standing Committee on Internal Economy, Budgets and Administration. We will not get anywhere talking about the number of taxis we will take or who will go to Red Deer. We will never get it settled.
We should try to come up with a ballpark number and say, "The maximum we will spend is such and such." Perhaps we will come up with a figure of $160,000. You could have a minimum in your mind as to what is needed to do the job, but you would not say what that is.
You might as well talk about a number and then present it, thus showing that you have thought about these items.
Senator Fraser: If we take out two of the proposed travel people for everywhere we are scheduled to go, we will save $20,000 right there, out of a total travel budget of $90,000.
Senator Eyton: I do not know whether you will be much advanced going down this line by line, because you are only guessing anyway.
Senator Cools: Senator Eyton is saying that we should not be looking at a small number, but instead we should be looking at large ones. If you want to take that approach, what is the large number we should be looking at?
Senator Cook: Senator Cools has said that the global budget for the Standing Committee on Internal Economy, Budgets and Administration for committees is $750,000. We are going in with a figure of around $200,000. I know that the Standing Senate Committee on Fisheries has gone in with the same amount. I sit on that committee also.
My concern is that someone, somewhere, spreads all of these out and makes decisions, and what will be our options when they come back. Will someone, somewhere, arbitrarily decide what this project is worth and say, "This is what you can have, do what you will"? Is that how it works? Or will they say, "We can't afford it"?
Senator Cools: Before we go to the "theys," the first problem we have is this committee. I submit to you that if this committee cannot agree on what amount should go forward to Internal Economy, very little else will go forward.
There are a few stumbling blocks. One is that this is not a study for the entire committee. Thus, the number is extremely high, in view of the fact that it is for one subcommittee. It becomes difficult to defend.
This budget also proposes to spend a large amount for one subitem of the total potential that the committee could be working on. Thus, it has to be kept in perspective. I think the subject-matter is worthy and should be supported, but the proposal has to be credible.
The Chairman: What is the number you have in mind?
Senator Fraser: I propose $165,000. Senator Cools thought it was still high. She was thinking in the ballpark of $150,000.
Senator Cools: Yes. One must not appear to be using a subcommittee system to effect a special committee.
The Chairman: Is it agreed that we submit a figure of $165,000?
Senator Cools: I was shooting for $150,000.
Senator Eyton: Why not ask for $165,000 and then get beaten back? Any number we propose will be criticized.
Senator Cools: I do not think so. If it is submitted properly supported, I think we will do okay.
The Chairman: Let us cut the two consultants. That is $40,000 right there. That brings us down to $156,000; and if we cut $2,000 for hospitality, we will be down to $154,000.
Is that close enough?
Senator Cools: I know you can go a little bit farther, Senator Stratton.
Senator Fraser: If we cut the consultants, then we cut their travel too, so we will reach $150,000 easily.
The Chairman: Let the clerk massage how it is set up. He will distribute it for comment and then we will have it done.
Senator Cools: When do you have to defend this, Mr. Chairman, before Internal Economy?
The Chairman: It has to be sent to Internal Economy before April 15.
Senator Cools: Will that cause us to run into any procedural or political problems, because the chairman has to defend it? Have you given that some thought, Mr. Chairman?
The Chairman: As you know, I have the support of our side of the House. On your side, Senator Cools, I have talked to Senator Carstairs. I have not just her support, but her enthusiastic support. Thus, I think we have a reasonably good chance to go for this.
The concern I have is this. I do not believe in supplementary estimates. I hate them. What I am afraid of is that if we bring it down to $150,000, then we might have to go back for a supplementary estimate. That is my biggest fear.
Senator Fraser: I think we will be comfortable at $150,000. If we are not travelling with consultants, that is $20,000 right there. If we did not travel with a library researcher, that would be another $10,000 right there.
The Chairman: You cannot do that. Someone has to write the report.
Senator Fraser: We can put $5,000 back in for a consultant if we need him, for example.
The Chairman: I know where you are coming from.
Is there any other discussion? Could I ask for the question, then? Do we approve the budget at $150,000, with the condition that there will be no consultants, travel for consultants will be cut out, and the clerk will develop a budget for review by this committee? We will just review it for structure, because it has to go to Internal Economy for comment. After that, we can approve it here, pending minor revisions.
Senator Cools: I understand you to say that the clerk will come back with a new budget that reflects our discussion today.
The Chairman: The Senate returns the week of April 13.
Is it agreed that we approve the budget, honourable senators?
Senator Cools: That we approve the budget with a limit of $150,000.
The Chairman: We understand that. Is it agreed that we approve a budget of $150,000 with the conditions we have discussed?
Hon. Senators: Agreed.
The Chairman: I thank you for your support on this, as it is near and dear to my heart. I will go to bat for you, if you have a special study in mind in the future. I will not ask for another one, because I have had two now and I think it is somebody else's turn.
Senator Cools: This means you now have proper authority for the subcommittee so it can really roll officially, instead of unofficially, as you have been operating, which makes it cumbersome and difficult.
In terms of future business, perhaps Senators Stratton and Ferretti Barth should look at what will be coming before this committee.
The Chairman: We can do that by conference call.
Senator Cools: We have to make a decision to see what is in the pipeline.
Second, in terms of routine workload of the committee, we had decided in December that our next set of witnesses would be from CIDA. Perhaps the clerk can begin to schedule that.
The Chairman: Will we do that as a study of the committee as a whole?
Senator Cools: Yes.
The Chairman: Let's deal with things item by item.
We will deal with the Main Estimates 1999-2000 in April and May. We should schedule a couple of meetings. During the break, you should think about which departments you wish to examine, since you cannot study them all. That would be impossible.
Will you please submit to the clerk of the committee your suggested lists for departments you wish to study in April and May. When we come back, we can decide which departments we will study.
Senator Cools: We decided some months ago that we would move next on to CIDA.
The Chairman: I understand.
We will deal with the Main Estimates. Please give me your lists. It means you should go through the blue book and take a look at which departments you want to study.
Second, we decided to look at CIDA. The committee as a whole will take a look at CIDA.
Last, we discussed, and Senator Cools suggested, a lunch. Mr. Neville has agreed, and I have talked to Senators Ferretti Barth and Cools about this. We should meet with Mr. Neville and have him give an overview, from his standpoint, of what the business is with respect to the Main Estimates (A), (B), and (C), and supply bills. Then we will have a clearer understanding of the process from their standpoint. He can then prepare a document, so that when new senators join the committee, they will at least have a hope of understanding the process.
We will instruct the clerk to have a conversation with Mr. Neville so that when we get back, we can set up that lunch.
Senator Fraser: Could the clerk also please send out a one-paragraph memo on which departments this committee has examined in some detail in the past? We do not want to reinvent the wheel.
The Chairman: That is an excellent idea.
The committee adjourned.