Proceedings of the Standing Senate Committee on National Finance

Issue 3 - Evidence

The Standing Senate Committee on National Finance met this day at 5:45 p.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 2002.

Senator Lowell Murray (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, we have had referred to us the Main Estimates for 2001-2002.

Before we start, our next meeting will be Tuesday, March 20, at which time we will look at the draft report to be prepared by our advisers on the Supplementary Estimates for 2000-2001. Perhaps we will also have ready by that time the draft interim report on the Main Estimates, on which we are opening our study tonight.

For those of you who are new to the committee, the drafter tries to provide a narrative of the main points, as he sees them, of the discussion. He does not try to include, in his narrative report, every question that was asked by every senator. He gives an overview of what happened. It is then up to us to correct the draft or to change it as we see fit. That will be the purpose of our meeting next Tuesday morning.

I cannot let the occasion go by without issuing a very warm welcome to one of our newest senators, Senator Tunney. Senator Tunney is a dairy farmer from near Cobourg, Ontario, in Northumberland County. I am sure he will be a very valuable addition to the Senate, and I am pleased to have him here at this committee tonight.

We also have with us tonight Senator Wiebe, who is sitting in on behalf of his seatmate in the Senate, Senator Banks. We also have our old friend Senator Watt joining us for the first time.

Our witnesses tonight are from the Treasury Board Secretariat. Please proceed.

Mr. Keith Coulter, Assistant Secretary, Planning, Performance and Reporting Sector, Treasury Board Secretariat: Honourable senators, it is our pleasure to be here this afternoon to discuss and respond to your questions concerning the government's Main Estimates for the next fiscal year, 2001-2002. Parts I and II of the Estimates, otherwise known as the "blue book," were tabled in the House by the President of the Treasury Board on February 27.

The final part of the Main Estimates, the Report on Plans and Priorities, will be tabled in late March.

By way of introduction, because the two exercises were ongoing simultaneously, we had to divide the work. Mr. Lindsey looked after the Main Estimates exercise while Mr. Lieff looked after the Supplementary Estimates exercise. This team will address honourable senators' questions once I have finished.

As you are aware, this is the first year for quite some time in which the tabling of the Main Estimates has not been closely preceded by a February budget. The reason for that is that the government's expenditure plan for 2001-2002 was laid out in the October economic statement and budget update. The Main Estimates reflect the plan articulated at that time.

[Translation]

What I would propose to do today is to first give you an overview of this year's process, starting with the October Economic Statement and Budget Update. I would then briefly review the form and content of the Estimates documentation followed by a macro level analysis of this year's Main Estimates. Finally, I will review some of the highlights of the Main Estimates.

[English]

As we discussed yesterday, the Minister of Finance, last October, delivered an economic statement and a budget update. Among other things, that update reiterated spending commitments from the February 2000 budget for the current, i.e. 2000-2001 fiscal year, and announced new spending initiatives for the current fiscal year, including revising the government's overall planned spending target for 2000-2001. The impact of these announcements is largely reflected in Estimates we reviewed with you yesterday.

The October update also outlined the government's expenditure plan for 2001-2002, which serves as a platform upon which the Main Estimates now before you were developed.

[Translation]

This year, planned spending in the fall Economic Statement and Budget Update tabled in October, in place of a February budget, serves as the expenditure baseline for the Main Estimates. In all other respects, the process this year is the same as in previous years.

[English]

The Main Estimates reflect approximately 99 per cent of the expenditure plan. The difference between these Main Estimates and the planned spending announced in the fall update relates primarily to initiatives that require legislation before seeking spending authority or to initiatives that were not sufficiently developed at the time the Main Estimates were finalized.

Spending authorities for these items will be sought through Supplementary Estimates during the course of the 2001-2002 fiscal year.

Let me briefly review the key elements of the Estimates documentation before going into some of the specifics of the 2001-2002 figures. The Estimates consist of three parts, which are tabled at various times throughout the fiscal year.

Part I of the Estimates provides an overview of federal spending and summarizes the relationship of the key elements of the Main Estimates to the current expenditure plan as laid out in the October budget update.

Part II of the Estimates directly supports the Appropriations Act. The Main Estimates identify the spending authorities -- or votes -- and amounts for each ministry to be included in subsequent appropriation bills. Parliament will be asked to approve these votes to enable the government to proceed with its spending plans.

Parts I and II of the Estimates together constitute what is known as the "blue book" and are tabled together on or before March. This year, this document was tabled in the House of Commons on 27 February.

The interim supply bill for the Main Estimates will be tabled in the House sometime in March, followed by the full supply bill in June. I understand you will have an opportunity to review the full supply bill later in the spring, in the context of the departmental Report on Plans and Priorities that will be tabled later this month. The RPPs will include detailed spending plans by department.

Part III of the Estimates, the departmental expenditure plans, is divided into two components. The first, the Report on Plans and Priorities, is the individual expenditure plans for each department and agency. These plans provide substantially more information for each department than the blue book, including details on business line objectives, initiatives and planned results. This information is linked to related resource requirements over a three-year period. The documents are tabled on or about March 31 each year and we are encouraging parliamentary committees to look at those documents department by department.

[Translation]

The second component of Part III, the "Departmental Performance Reports", are individual department and agency accounts of accomplishments achieved against the planned performance expectations that are set out in the respective reports on plans and priorities. The Departmental Performance Reports cover the most recently completed fiscal year and are normally tabled in the fall.

[English]

I will now try to give you an idea of some of the specific details of this year's Main Estimates.

The 2001-2002 Main Estimates total $165.2 billion, including $1.9 billion in non-budgetary expenditures for loans and investments and $163.3 billion in budgetary spending. This represents an increase of $9.1 billion, 5.8 per cent, over the 2000-2001 Main Estimates.

[Translation]

Revisions to forecast spending on statutory programs, including elderly benefits and the CHST, account for $6.8 billion, or 75 per cent of the year-over-year increase.

[English]

As I mentioned earlier, the spending outlined in 2001-2002 Main Estimates represents 99 per cent of the expenditure plan of $166.3 billion outlined in the October budget statement. The balance of the planned spending for 2001-2002 was not included in the Main Estimates either because it requires legislation to be passed or because the proposals are not yet sufficiently developed. We expect that these items will be included in Supplementary Estimates over the course of the fiscal year.

The Main Estimates' total of $165.2 billion consists of broad categories, these being appropriated or voted items for which spending authority is being sought through the Estimates for 2001-2002 -- they amount to approximately $52.4 billion, almost 32 per cent of the Main Estimates -- and statutory items for which spending is authorized through previously passed legislation. This includes Employment Insurance benefits, benefits for the elderly, the CHST, and transfers to the provinces and territories. Statutory items in Main Estimates total $112.8 billion, or 68 per cent of the total Main Estimates.

The Main Estimates are further categorized as between budgetary and non-budgetary authorities. Non-budgetary expenditures are outlays that result in changes to the composition of the financial assets of the government. Non-budgetary transactions may be authorized through appropriations or through statute. In 2001-02 they total approximately $1.9 billion and are represented primarily by the new Canada Student Loans Program.

[Translation]

Budgetary expenditures include the cost of servicing the public debt; the operating and capital expenditures of departments and agencies; transfer payments to individuals, organizations and other levels of government; and payments to Crown corporations.

[English]

Like non-budgetary transactions, budgetary expenditures may be authorized through appropriations or statute. In 2001-02, budgetary expenditures are forecast to be approximately $163.3 billion. As I mentioned earlier, roughly 75 per cent of the year-over-year change in Main Estimates relates to changes in the forecast of statutory spending. The main increases contributing to this change are a $3.8-billion increase for CHST payments to the provinces, a $1.9-billion increase for direct loans to students dispersed under the new Canada Student Financial Assistance Act, a $1.4-billion increase in direct transfers to individuals for Old Age Security, the Guaranteed Income Supplement allowance payments and Employment Insurance, a $957-million increase in fiscal equalization payments to the provinces and a $182-million increase for contributions to employee benefit plans for all departments and agencies.

[Translation]

The main decreases contributing to the change in statutory spending are: a $653 million reduction in payments to a variety of international financial institutions; a $300 million reduction in interest and servicing costs associated with the public debt.

[English]

There is a $245-million reduction in grants to the trustees of Registered Education Savings Plans, a $204-million reduction for the Canada Student Loans Program due to changes in financing arrangements as a result of the move to directly financed government student loans, a reduction of $166 million for the encashment of demand notes by international financial institutions.

The remaining 25 per cent, or $2.3 billion, year-over-year change in the Main Estimates relates to increases in direct program spending. Based on a threshold of $100 million, the major increases in direct program spending include the following: $507 million for National Defence spending; $360 million for the new Infrastructure Canada Program.

[Translation]

$284 million for salary increases in all departments and agencies except National Defence; $200 million for government contingencies; $196 million for employer contributions to insurance plans for public service employees;

[English]

There is also $144 million in international assistance, $121 million for the implementation of the Canada Research Chairs program, $116 million for the 2001 census, $115 million for Indian and Inuit programming initiatives, $107 million for the establishment of the new agricultural risk management program and $100 million for transfer payments to the territorial governments.

The major decreases in year-over-year programming include $505 million because of the sunsetting of the Agricultural Income Disaster Assistance program, $206 million because of the decrease in resources related to Canada's aid activities in Kosovo, $201 million in grants and contributions programs related to anticipated payments under the terms of the disaster financial assistance arrangement and $174.4 million relating to the payment of loans advanced to departments and agencies to meet the government-wide priority of year 2000 readiness.

[Translation]

And finally, $101 million for reduced payments under the Schoolnet Community Access Program.

That concludes my opening remarks. We would be happy to answer any questions you may have.

[English]

Senator Bolduc: If I understand correctly, outside of the future Supplementary Estimates, the total here is less than the year that we are finishing now?

The Chairman: Including Supplementary Estimates?

Senator Bolduc: Including supplementaries, yes, but excluding the Supplementary Estimates to come in 2001.

Mr. J. Kevin Lindsey, Director, Expenditure Operations, Expenditure Operations and Estimates, Planning, Performance and Reporting Sector, Treasury Board Secretariat: If we compare the Main Estimates for the upcoming fiscal year with the Main Estimates for the year that we are in, the new numbers are in fact higher.

Senator Bolduc: They are a bit higher, but the total of the year that we are in with the Supplementary Estimates is more than the Main Estimates of this year.

Mr. Lindsey: Yes, it is.

Senator Bolduc: It is about $6 or $7 billion.

Mr. Lindsey: That is right.

Mr. Coulter: That is right. If you add up what was spent last year, the total is $170 .4. You are looking at Main Estimates here of $163 .4.

Senator Bolduc: You gave us the diminution in some aspects of expenditure and the increase in the others. This reflects the October budget plus the information you received since October until the publication of that document. It does not include proposals or initiatives contained in the Speech from the Throne. Is that fair to say?

Mr. Lindsey: We are comparing this year's Main Estimates to last year's Main Estimates -- a Mains-over-Mains comparison. The impact of Supplementary Estimates that you reviewed yesterday coming out of the fall update do not factor in here. If I could just talk to the Speech from the Throne part of your question, there is some money for some of those initiatives.

Senator Bolduc: That is what I thought. I thought there were some on the last page.

Having said that, I would like to go directly to one ministry, namely, that of Industry, which is a ministry that gives a lot of grants, among others. On page 14-6 of the Estimates, there is a figure of approximately $.75 billion. Half of that amount is for the Technology Partnerships Canada program. Would you be kind enough to give us some information about that program?

If I understand it correctly, that program is not related to the Canadian Foundation for Innovation, the CFI. There is $700 or $800 million for the CFI, correct?

Mr. Lindsey: We recently announced an increase of $700 million for the CFI, that is right.

Senator Bolduc: There was already a huge amount -- I do not remember how much, but the minister gave us the figure upon the initial announcement. It was something like $700 million or $800 million. And then he added $700 million.

Mr. Lindsey: That is right.

Senator Bolduc: And we have another $1 billion here. In one way or another -- that is, either in the ministry or outside of it, by corporation or another agency -- there is something in the order of $2 billion that is given to companies or businesses. Is it fair to say that?

Mr. Lindsey: The CFI, senator, has been endowed with those sums of money that you have referred to, and it enters into partnerships with universities, companies and various organizations.

Senator Bolduc: They have their own criteria for giving that money to the various public institutions all over the country.

Mr. Lindsey: That is right.

Senator Bolduc: So that is not related to this program.

Mr. Lindsey: No, sir.

Senator Bolduc: Half of that is for the Technology Partnerships Canada program. Could you give us some information on that. The same criteria are not used, are they?

Mr. Lindsey: That is right. Unfortunately, senator, I do not have much detail on the specific criteria of the Technology Partnerships Canada program. We can get back to you on it. I can tell you that CFI is more oriented to funding research programs, specifically in universities and hospitals, what have you. Technology Partnerships Canada is not solely targeted at research initiatives; it is more commercially oriented.

Senator Bolduc: I read recently that Mr. Tobin gave $30 million to a company that is supposed to grow very fast. We know what that means in these days -- high-tech. The Auditor General has been very critical about that system of grant management by that ministry, by HRDC, by Canadian Heritage, or others. I have difficulties with that because we do not know the criteria. It is probably administered by a civil service organization within the ministry. They are not bankers, but they partake in exercises of risk management. I would appreciate getting a little more information about it.

Mr. Coulter: We can definitely provide you with that information. We will get it together and make sure it is in your hands.

Senator Bolduc: The heart of the matter for me is that some civil servant -- competent, good, well intentioned, I make no comment on that -- makes a choice among 1,000 applicants. A whole industry has been built around preparing good applications for the government.

They choose a certain number, and they decide that those ones will be favoured, most of the time. I can tell you that, in my experience, they choose people that are going down. They help them to survive, and then they compete against the best.

I think that the government is playing an unfair game in the market when it does that. I have not been a victim of that, but I have seen it happen in many cases. At any rate, I would like to have an idea of the criteria.

Mr. Coulter: We will obviously send you some information, but the program is run out of Industry. Obviously, they are in the best position to answer questions about that specific program. I should tell that you Mr. Lindsey starts with Industry Canada in about 30 days, so he may be in a better position down the road to answer these questions.

Senator Bolduc: He can come back in a year and tell me if I am prejudiced or if it is true.

Mr. Coulter: I sense that you do know some of the lay of the land.

There is also an international dimension to this. This program supports Canadian companies that are in fierce competition with companies from other companies. It is a program that has been around a long time.

Senator Bolduc: I know.

Mr. Coulter: Industry Canada mentions it. We make sure that their allocations are within the planned spending and look at specific issues that come to the board.

Senator Tunney: I came here with the intention of listening and not talking, but I do have one question. I am sure there is a good answer for it. At the bottom of page 8, we see major decreases, $505 million due to the sunsetting of the Agricultural Income Disaster Assistance program. On page 9, we see $201 million. Am I to take it that that also is a decrease in the payments to Disaster Financial Assistance Arrangements? Are they the same thing? I get heart failure when I see too much tampering with agricultural support.

Is that some other kind of disaster financial assistance?

Mr. Lindsey: Senator, the $201 million item relates to funding of the Disaster Financial Assistance Arrangements program out of the Department of National Defence. It reflects a reduction in the anticipated payments for the impacts of disasters that have happened in the past.

Senator Tunney: So these two items are unrelated. Page 9 has nothing to do with Agriculture, and page 8 is the agricultural assistance program. That is the answer I was hoping to get. I am happy.

Senator Kinsella: I want to pick up on a question from my colleague Senator Bolduc. Is it the position of Treasury Board that you are planning for Supplementary Estimates and that this budget presentation is really not the true story? Is it the case that, in the past, there have always been Supplementary Estimates, so that we do not have the budget before us now but only phase one of the budget?

Why is it that we are not looking at the Main Estimates on the assumption that we there will be no Supplementary Estimates, or are we managing for failure all the time?

Mr. Coulter: A great deal of work goes into preparing the Supplementary Estimates. Each year we have a planned spending figure, and during the course of a year we must ensure that we have all the authorities to spend that money. Some items are not mature enough or require legislation and that kind of thing, and those things are not in place. We cannot put them in an appropriations document right now, and therefore they are not in the Main Estimates.

Senator Kinsella: Is it not true that many governments, even in Canada and certainly around the world, have moved away from a budgetary process that envisaged a first expenditure plan being presented? Is it not true that many governments around the world are moving in the direction of what the corporations have been doing, which is presenting a spending plan that is the real budget? What does the literature tell you?

Mr. Coulter: In a year and a half, I have travelled a fair bit to other countries to look at other models, and I have learned that it is very hard to compare country to country in terms of the systems that exist. However, we can compare ourselves with the Westminster model governments, and some comparisons there are fair. If you look at the U.K. and Australia, for example, they actually do more Supplementary Estimates exercises than we do. They follow the same kind of budget and estimates logic. I would personally welcome anything that would simplify this in the way that we are working through it.

Our position at the Treasury Board Secretariat is to minimize the number of Supplementary Estimates. We work hard to do that and to exercise enough discipline so that we do not have to go through very many of those exercises.

Senator Kinsella: Thank you for that answer. For the record, if you examine the budget examination and review process at Westminster and in New Zealand, it is more rigorous and there is far more accountability than there is in Canada. I put that on the record as a footnote, Mr. Chairman.

Senator Bolduc: There is difficulty here because the Minister of Finance -- I am not talking about the Treasury Board but the Minister of Finance -- is looking at the whole picture. He has to because of the debt. He must look at the rate of inflation and everything. All the economic indicators are there. The Minister of Finance has to tell you, "The target is this amount for expenditure and no more." He will say the same thing for revenue, I suppose, since he takes care of revenue and because the fiscal policy comes within the Department of Finance. He has to have the full amount of forecast expenditures, taxation, income revenues and the debt to make a whole budget. To do so you one must have those data.

I have difficulty with the fact that on one hand you have an expenditure plan that is not exactly what will happen in the Department of Finance when they give us the budget, which, normally, would be at the end of February. This year it is special because of the election, so it will probably be in April. There is about that that I do not understand very well.

Mr. Coulter: For us, the glue in all of this is the planned spending level that we are given by the Department of Finance. We develop Estimates. We have to have many things to do that. These are fairly technical, legal documents, which have to be put into appropriations bills. We have to have enough maturity and certainty around how things will work and ensure that all our rules have been followed before we can put them into the Estimates.

Out of $166.3 billion, there is $3 billion that the Treasury Board Secretariat is not putting into these Main Estimates because we do not have enough certainty that our rules are being met. We sometimes have a tug of war with the departments before we can put them into Supplementary Estimates. We have to ensure that the rules are met, that the frameworks are in place and that they have met all the criteria.

Let us say, for instance, that it has to do with a grant program. We have to ensure that all these things are in place before we can put it in an Estimate and bring it before you.

Senator Kinsella: When the officials go to the Department of Industry for information for my colleague Senator Bolduc, could they also find out, unless they have the answer now, why the amounts for contributions to the SchoolNet Community Access Program have been cut in half over last year?

Why are they cutting that in half, or do you know?

Mr. Coulter: I think we can answer that.

Senator Kinsella: While they are looking that one up, my other question cuts across all ministries. On page 4-6, we are dealing with the vote for the Department of Canadian Heritage on official languages. We see that the amount of money we will spend on official languages is $46 million, which is exactly the amount of money we spent last year, and about which there has been a great deal of concern across Canada. That is a diminution of the amount that we spend on official languages.

That question will have to go to Canadian Heritage, unless you have the answer now.

Mr. Lindsey: Senator, the SchoolNet program was not designed to provide ongoing operating funds for the facilities. Essentially, it was a program designed to install computer terminals. The money was always designed to sunset. This reflects the beginning of the ramping down of that program.

The Chairman: They have got most of the country covered is what you are saying?

Mr. Lindsey: That is right.

The Chairman: It is a success.

Mr. Lindsey: So far. We just have to get people using it.

Mr. Coulter: With respect to your second question, the simple fact is that they have budgeted for the same level for this year. We can get you more information on that.

Senator Kinsella: I would appreciate that.

The other vote that always attracts my attention is the one concerning the Canadian Centre for Management Development, which will have a $1 million increase from last year to this year.

Has there been a change in the mandate of the CCMD? Could we get information on who the directors are now?

Mr. Coulter: There is a board of directors, but --

Senator Kinsella: But most are civil servants, is that right?

Mr. Coulter: The board of directors is composed of public servants. Jocelyne Bourgon, former Clerk of the Privy Council, is currently the head of the institution.

We are sorting through a lot of things around our learning agenda. You have probably seen some things in the newspaper about public service reform. It was referred to in the Speech from the Throne also. There is a big learning piece that has to be dealt with. We are looking at CCMD's reference levels to determine exactly the right formula. As a result of the program review, we know that they need cuts and that we downsized. We are paying a price in terms of the quality of management education that we can provide to public servants, executives in particular, and we are sorting through all that.

Looking one year ahead, what I do know is that they made a very compelling case for an increase to their A-base by the amount that you see here, and these Estimates reflect that increase.

The Chairman: As the employer, is Treasury Board directly involved in the work and the programs of CCMD more so than it would be in other departments?

Mr. Coulter: We are working with them on a number of fronts. The Strong report that was made public about a month ago gave the executive compensation a lot of play. What you see in that report is the need for us to do more coordination between our institutions. We have the Public Service Commission, the Treasury Board Secretariat as employer, CCMD, a leadership network, and PCO plays into things because the Clerk is the head of the public service.

The Chairman: Who does this leadership network come under? It is connected with CCMD, is it not?

Mr. Coulter: No, it is connected with the Public Service Commission. All of those pieces have different mandates and roles. The Strong report says that we need to bring more clarity to those rules and more integration in what we are doing.

With respect to your question, we are working with CCMD on this agenda. We are the management board. We are trying to drive the management piece. They are an institution that provides learning to managers. Obviously, if we are not talking and working together, it does not work very well.

Senator Kinsella: Is your deputy minister on the board of directors of CCMD?

Mr. Coulter: I believe so, yes. Our previous secretary was. I assume that our current secretary is.

Senator Kinsella: There are several deputy heads who are ex officio members of the board of directors of CCMD; is that right?

Senator Cools: We should revisit that entire question.

The Chairman: What entire question?

Senator Cools: The question of CCMD. If you are remember, years ago this particular committee took some strong objections to the setting up of this organization.

The Chairman: That was before my time.

Senator Cools: Yes, it was quite some time ago. Perhaps our researcher could go through the ancient history of this committee and bring forward some of the concerns that were raised.

Senator Kinsella: My final question regards the Department of Transport. On page 22-5, there is reference to the contribution to provinces for highway improvement. To my Province of New Brunswick, $20 million is indicated. Last year, the contribution was $43 million to improve roads in New Brunswick.

On the island of Montreal, I notice that, for a few of the bridges there, $116 million is set aside.

Can we get an explanation as to the relative relationship between spending $116 million on a couple of bridges while, in a province like mine where the Trans-Canada is not twinned, there is only $20 million set aside?

Mr. Lindsey: Senator, the increase with respect to the bridges in Montreal reflects the regular maintenance program for the Jacques Cartier bridge and the Champlain bridge, neither of which has received much attention in recent years. That is the increase for Transport, those bridges still being the responsibility of Transport Canada.

I do not have much detail on the funding for the New Brunswick highway program with me today, but, as near as I can tell from what I do have, the reduction is attributable simply to a cash-flow change in the federal-provincial cost-sharing agreement for New Brunswick. There are not as many projects on the table for the upcoming season. I am sure we could get you more detail if you would like.

The Chairman: They must still have federal-provincial highways agreements under the regional agencies; correct? Under ACOA?

Mr. Lindsey: Mr. Chairman, I am not sure if the agreements exist between the regional agencies and the provinces, or between Transport Canada and the provinces at this point. I know they once did, but I am not sure what the arrangement is today.

Senator Kinsella: I do not think they are under ACOA.

The Chairman: They once had sub-agreements with all the provinces.

Senator Kinsella: I know that any time I crossed the Champlain bridge it was under repair.

The Chairman: We are taking up the time of the committee with this anecdotal stuff, but I happen to know that Senator Kinsella is a New Brunswicker who drives home to Fredericton. Instead of going through the island and over the bridge, he takes the ferry at Hudson over to Oka and goes down through Trois- Rivières. I, however, take the bridges and I encourage the government to keep them in good repair at all times.

As I say, all politics are local. I saw an article in the newspaper in the last day or two. One of our House of Commons colleagues from Nova Scotia was complaining that Nova Scotia was being short-changed on highways vis-à-vis New Brunswick. Anyway, we will find out in due course what is happening.

Senator Tunney: Would this not be covered by what is called the infrastructure program, which is federal, provincial and municipal? The government has been bragging about the benefits of the infrastructure program, especially coming up to election time.

Senator Kinsella: Funny how that happens.

Mr. Lindsey: Senator, the maintenance being done on the Jacques-Cartier and Champlain bridges is being done by the Crown corporations and has been planned for, for several years, as part of the ongoing maintenance programs for those bridges.

The Chairman: Those are federal bridges, totally our responsibility. No municipality or province is going to share in that.

Mr. Lindsey: They fall outside the scope of the infrastructure program.

Senator Cools: I welcome the gentlemen again. You probably have some idea of the questions I am about to ask. I see that you are smiling.

For some years now, I have been trying to find out some important and relevant information about our Canadian judges' international travel and participation in international projects. I am sure that you have been reading the record for some years and are pretty well aware of my repeated questions. Since I believe in prolonged perseverance, I thought I should put the questions to you again.

If you look in the Main Estimates, the questions pertain to pages 9-13, being CIDA, and page 15-8 under the Department of Justice, the Commissioner of Federal Judicial Affairs. We have been told, again and again, that these international programs are going on. They used to be described as good governance. I am assuming that good governance is now found at page 9-13 under "Canadian Partnership." Is that the same program as good governance?

I will back up for a moment. I am referring to page 9-13, under CIDA, at the bottom of the page. There is a subtitle "Canadian Partnership," under which is grants to Canadian, international, regional and developing country institutions. Are you with me?

Mr. Lindsey: Yes, senator.

Senator Cools: We have been told in previous meetings that sums of money are being paid from CIDA to the Commissioner of Judicial Affairs for judges' participation in projects in the Ukraine and a host of other countries.

I have been trying to find this out for some years. Canada was very jealous of the role of its judges and took very stringent actions in respect of how judges were being paid. For example, a judge cannot receive remuneration except through the Treasury and per the statute, which is the Judges Act.

The last time I asked these questions, I did not get too far, but we had the Deputy Minister of Justice here before us. At that time, I asked for a list of the judges who were in the program and the quantum of money being paid and the particular programs.

I have a copy of a letter to Senator Murray from Mr. Rosenberg, but he did not provide most of the information that we were expecting. The letter is dated September 19, 2000.

On the fifth page of the letter, he responds to my question by which I was seeking the source of authority for payments from the Canadian International Development Agency, CIDA, to the Department of Justice and to the Commissioner for Federal Judicial Affairs, the projects involved, the quantum and the names of the judges. That letter is here.

The deputy minister gave me some information, roughly, saying that the total amount of money was $817,000. He lists a few of the items, but I still do not have the list of the judges involved and the quantum they are being paid and, most important of all, the authority under which they are being paid. I am sure you know exactly what I am talking about.

I am grappling with this matter. There is an Office of the Commissioner of Judicial Affairs. If Parliament is voting to grant money to CIDA, then under what authority is that money being moved from CIDA to the Office of the Commissioner of Judicial Affairs, when the Parliament already has a system for appropriating money or for moving money into the hands of the Commissioner of Judicial Affairs?

Could you explain this interesting and unusual financial event so that we can all have it clarified for us and understand it once and for all?

Mr. Lindsey: I am unaware of any connection between the use of that CIDA grant to fund or pay judges directly for any assistance with CIDA programming. I am unaware of the use of that grant for that purpose. I am afraid I cannot shed any light on that in particular.

Mr. Lieff: I do not know anything about that, senator. In general, there are a number of areas where funds are provided to CIDA to provide assistance to governments overseas. Those governments may use those funds in the area of governance to purchase or to support Canadian experts providing information. The money is not going from CIDA to any particular department that might be involved in providing expertise on governance -- for example, the Treasury Board or the Department of Finance with respect to how to manage budgets or set up a budgeting regime, and so on. Money may go to a foreign government that needs that kind of help and that government may in turn use those funds to provide for travel, and so on, to help Canadians provide that expertise.

Senator Cools: I may have the wrong program, but there is definitely a program under CIDA, there is no doubt about that. For example, when the deputy minister, Mr. Rosenberg, came before us on June 6, 2000, he clearly told us that, "Those CIDA funds are administered by the Department of Justice; we are the executing agency for CIDA. Any amounts paid out to the judges are paid out in accordance with Treasury Board travel guidelines."

Clearly, sums of money are being moved or paid from CIDA to the Commissioner of Judicial Affairs, and then those dollars, obviously, are being used to finance these judges' international activities.

Could you gentlemen undertake to get this information, please, to clarify any uncertainty or doubts that I may have been having, once and for all?

Mr. Coulter: I am not sure I can guarantee you that. We will do our best. We can get it from the Department of Justice, but the letter was written to you. It was your letter to Mr. Rosenberg.

Senator Cools: No, this was a letter from Mr. Rosenberg to the committee.

Mr. Coulter: In response to your letter?

Senator Cools: Yes, in response to my questions at that particular committee meeting.

Mr. Coulter: But the letter that went to Mr. Rosenberg?

Senator Cools: There was no letter to Mr. Rosenberg. He was before this committee as a witness and these questions were put before him. Your predecessors have received these questions on many different occasions, to be exact. I have been asking these same questions for about four or five years now. Could you take another run at it?

Mr. Coulter: Yes.

Senator Wiebe: I have a question more for my own information. I want to refer to page 2-5 in the Estimates.

What kind of research does your department do, if any, into the development of the estimates that you present to government, especially in terms of programs that have a tremendous amount of variance in them? I want to zero in, as an example, on the Farm Income Protection Act, the Net Income Stabilization Account. This is a program in which -- for those of you who may not be aware of it -- the amount of contribution that the government puts in is dependent upon the contribution that the farmer puts in. If the farmer makes a profit, that will determine the amount of contribution that he makes and it will also determine the amount of contribution that the government makes.

The cost to the department for this program, for the coming Estimates year, after April 1, is determined by the success of the agricultural industry in the previous year. Hence, there has been an opportunity to assess what the agricultural industry has done during that year in preparing these Estimates.

We all know that the net income for farmers right across this country will be considerably less at the end of 2000 than it was the year before. In turn, that would effect a decrease in the draw-down of government money to match the farmers' contributions.

It always bothers me when I see Main Estimates in which there are variables like this and the Estimates for last year are exactly the same as this year. Does that indicate that you are just throwing the figure out with the hope that it will be enough, or do you actually do some study into what it will actually cost the people of the country for the coming year?

Mr. Lindsey: You are right. At a point in time, the figure is a guess because the Department of Agriculture does not have the income data from the relevant crop year to make a forecast, because of that time lag. The Main Estimates, although they are only tabled by March 1, are the end-product of a relatively longer process. My understanding from Agriculture Canada officials is that they do not have the income data from the relevant crop year in sufficient time to incorporate updated forecasts in the Estimates. To the extent that the actual experience obliges them to pay out more in NISA, say, in the 2001-02 fiscal year, they will change the forecast that you see in the Estimates document. In other words, it might go up or it might go down.

The Chairman: Do you know how close they have come in previous years between their forecast and the actual expenditure?

Mr. Lindsey: I have not looked at it.

Mr. Lieff: I would also like to add a point. If you will notice, those are statutory expenditures authorized under previous legislation. As my colleague said, while the department tries to make the best estimate it can, it does not have the relevant data. That does not mean that farmers will not get paid. The government has the authority to make those payments.

Senator Wiebe: I understand that.

Mr. Lieff: We will update that for you at Supplementary Estimates time.

Senator Wiebe: I understand that, but it would be nice to have the assurance that there is some kind of study or research that goes into developing the estimates on how the country is running, instead of saying, "We picked this out of the hat because it worked last year."

Senator Watt: On page 15-4, under "Transfer Payments," there is a line that reads, "Contributions to the province and territories for the Firearm Program." I have a couple of questions related to that.

When you talk about the Main Estimates, are we talking about the same amount that is described for year 2001-02?

Mr. Lindsey: Yes, sir.

Senator Watt: I will go back to page 15-2, under "Operational Expenditures". The figure there is $303 million.

Is there any way to break that down to give us a clear picture of what it is really costing to implement the firearms program, taking into account not only the transfer payment to the provinces and territories but also the costs that the federal government is bearing? Is there any way to break that down?

Mr. Lindsey: I do not have that breakdown here, senator. My understanding is that in addition to the $10.5 million or so in transfer payments the department has in its operating expenditures vote approximately $34 to $35 million for the program.

Senator Watt: That is the picture at this point in time, but that is actually rolling forward in terms of the actual cost. It is getting bigger and bigger, I would imagine.

Mr. Coulter: That is the picture at this point in time, absolutely.

Senator Watt: What you have provided to me is the rough estimate, the $34 million, the actual federal government expenditure, not taking into account the provincial and territorial transfer.

Mr. Lindsey: I have no information on expenditures in those other jurisdictions, no.

Senator Watt: Will you be updating that information at some point?

Mr. Lindsey: We would not do that as a matter of course, senator, because they are the expenditures of those other jurisdictions.

Senator Watt: They are in their own domain, so you do not interfere with that aspect of it. In order to have that information, a person would have to obtain it directly from them; correct?

Mr. Coulter: From those jurisdictions, yes.

The Chairman: These are contributions to the provinces and territories with respect to administration of the program, $10.3 million for the firearms programs, contributions to the provinces and territories for the administration of the program.

Mr. Lindsey: Right.

The Chairman: Are all the provinces and territories administering it?

Mr. Lindsey: Senator, apparently Alberta, Saskatchewan, Manitoba, as well as the Northwest Territories and Nunavut have indicated they will opt out.

Senator Watt: Opt out in the sense that they will not participate.

Mr. Lindsey: They will not administer the legislation.

The Chairman: They are required to enforce it, of course.

Mr. Lindsey: I do not know whether they are required to enforce it or not.

The Chairman: It is criminal law, is it not?

Mr. Lindsey: Sorry, I do not know.

The Chairman: Those provinces and territories are not administering it, so it is being administered directly by Ottawa in those cases.

Mr. Lindsey: In those jurisdictions, it is being administered by the RCMP.

Senator Tunney: I could add to this, Mr. Chairman. Most recently, the federal government has been setting up its own operations in those provinces that have said that they will not help out on this matter at all. In fact, some court cases are going to the Supreme Court to test the constitutionality.

The Chairman: I think they have been settled. I think the Supreme Court has ruled that it is constitutionally okay.

Senator Tunney: Some of these provinces are saying, "Supreme Court be damned."

The Chairman: I do not know enough about the program, but when you say that the RCMP is administering it in those jurisdictions I take it that that means that the RCMP is handling the registration.

Mr. Lindsey: I believe that is the case, senator, and in those jurisdictions it is a member of the RCMP who is the Chief Firearms Officer.

The Chairman: Yes.

Mr. Lindsey: I could add to my earlier answer, which was somewhat incomplete. The Department of Justice administers the program in the Yukon and in Newfoundland.

The Chairman: The federal department.

Mr. Lindsey: That is right.

Mr. Coulter: The services performed by the RCMP include individual licensing investigations, issuing business licences and authorizations to carry or transport arms, revoking licences, and the administration of the firearms safety training program.

The Chairman: Where do we find the expenditures in those jurisdictions? Are they just under the general departmental operating expenditure? Where are they?

Senator Watt: I would imagine that they are under the operational expenditures, within that $303 million.

Mr. Lindsey: With respect to those jurisdictions where the program is administered by the Department of Justice or the RCMP, the money for that administration would appear in their respective budgets. In those provinces where the provinces have entered agreements with us and are performing the function of the Chief Firearms Officer, the operating expenditures would appear in the estimates of those jurisdictions.

The Chairman: I understand that, but in the cases of Alberta, Saskatchewan, Manitoba and the territories that are not administering themselves and where the RCMP is doing the administration, or the Department of Justice in the case of Newfoundland, additional resources must have been required, finances or person-years and whatnot.

Mr. Lindsey: It is difficult to imagine that some provinces would take on costs that other provinces are not. That said, senator, I am not aware of what compensatory arrangements exist for those provinces that are delivering on our behalf.

The Chairman: Well, no. They are covered under the transfers. Where the provinces are doing it, they are doing it partly, at least, if not wholly, out of the money that we, Parliament, are transferring to them.

Mr. Lindsey: Out of the transfer program.

The Chairman: In the other cases, where the federal Department of Justice in Newfoundland and the RCMP as a federal police force is handling the administration, that is, in Alberta, Saskatchewan and Manitoba, they must have required extra resources and person-years in order to carry out these responsibilities. I am just wondering if we will ever have a real fix on what all this is costing and what is involved in terms of resources.

Mr. Coulter: Part of it is showing up in the "A" bases of the RCMP and the Department of Justice.

The Chairman: Would it be identifiable there?

Mr. Coulter: You could probably capture it going to the departments, but it is not identifiable in our documents. We are not breaking them out that way.

Senator Finnerty: On page 6-4, because I am on the Environment Committee as well as National Finance, I was interested to see that the amount for contributions to support environmental and sustainable development projects has increased. Do you have any idea in what area? You will see that under the heading "Nature", at the bottom of the page.

Mr. Lindsey: This is the item that has gone from approximately $7.5 million to $18 million.

Senator Finnerty: Yes.

Mr. Lindsey: I do not know what that is attributable to. If you could give me a minute, I might be able to get some detail.

Sorry, senator, I cannot give you the reason for that increase or what projects that increase is attributable to today. We could follow up on that, if you would like.

Senator Finnerty: I would appreciate that.

The figure for the contributions to support Canada's international contributions has gone down. Do you know why?

Mr. Coulter: We can include that information with the other information.

Senator Finnerty: I would appreciate it. Thank you very much.

The Chairman: Senator Finnerty has drawn our attention to the environment. I have been eyeballing the items here and I see a $700 million increase under "Contributions for an environmental clean-up of the Sydney Tar Ponds and Coke Oven Sites in the Muggah Creek Watershed." Do you have a short, sharp paragraph supplied by the department on what they are doing on this matter? To read the local media, one would think nothing has been done.

Mr. Lindsey: I do not have any specifics on what undertakings they plan, only that there is an increase to do some work on the coke oven site and the tar ponds.

The Chairman: I have one other question -- and it is a perennial favourite. It refers to the Cape Breton Development Corporation, under "Natural Resources" at page 17-12. It states that they require $31 million in 2001-02. It was $85.9 million in the year that is now coming to a close. There has been a fair bit of downsizing, and perhaps that accounts for the reduction.

As you know, Parliament has authorized the divestiture of the assets of the Crown corporation. The one remaining mine and associated railway and facilities, and so on, are up for sale. Do you have a note indicating that this number here, $31 million, is for a full year's operation of that corporation or whether they expect to have it sold off before the fiscal year is out? What does your note say?

Mr. Lindsey: I have nothing with respect to how long they expect the operations to continue, only what the decrease of $55 million overall is attributable to.

The Chairman: They closed one mine and they have downsized. Is that what they say?

Mr. Lindsey: No.

The Chairman: There was also some one-off items last year having to deal with human resources.

Mr. Lindsey: Exactly. The year-over-year change attributable to the human resource strategy is about $42 million.

Senator Tunney: I wish to offer a bit of assistance here on a subject that we are dealing with. Since some of the provinces would not cooperate in the gun registry, a number of people were sent out to a centre in British Columbia, in the Prince George area, where they are administering this registry. They are using some people from the RCMP and also quite a few civil servants, many of whom just came to work at Miramichi because of the gun registry program. That is the case in other areas as well. It is not a case of hiring a lot of new people to get out in these provinces where the public will not cooperate.

One of the current problems -- and this was reported in today's Globe and Mail -- is that they are taking the RCMP staff back in great numbers to Quebec City for the Summit of the Americas that is coming up in early April. As a result, there are shortages in RCMP strength in various areas. I know this because I received a telephone call one evening after I had registered my hunting rifles. He was fascinated by two or three of my rifles that are valuable and in antique condition.

That is how I came to know about what is happening in these provinces and territories, where they are saying, "No, we will not help with the gun registration."

There is another matter here to which I think we should pay attention, namely, the net figure. It costs an owner money both to register firearms and to possess firearms. Do these figures represent gross costs or net costs?

The Chairman: Do you have a revenue figure from that program?

Mr. Coulter: You are probably aware that in May an improvement plan was announced for this program. Obviously, the federal government has made a big effort to make this work. This issue is one that this committee has looked at on a number of occasions. A lot of what you are describing is the effort to make it work. There is some immediate energy and work hours that must go into it; however, once it is up and running it will taper off dramatically.

On the good news side for this program, two million licences have been issued or are in the process of being issued, and we already have 1.8 million firearms registered. That does not include a fairly significant mailroom backlog.

The restructuring that we have announced involves the streamlining and modernizing of some of these processes that did not get off on the right foot. There will be an improved aligning of some of the accountabilities, responsibilities and simplification of compliance. We are seeing a huge effort to try to get something in a better zone.

Senator Wiebe: I have a question related to the information contained on page 18-4. It concerns "Grants -- Senators and their Offices -- Pensions to retired Senators." According to this, it costs the Government of Canada only $167,000 a year of taxpayers' money for senators ' payments. Am I correct in making that statement?

Mr. Coulter: For the record, it is a correct statement.

Senator Wiebe: I am correct in making this statement, namely, that it costs the taxpayers of this country $167,000 per year for the pensions of retired senators.

Senator Finnerty: We should get that word out!

Senator Wiebe: Thank you. That made my whole day.

Mr. Coulter: The table before it has thousands of dollars.

Senator Wiebe: It says at the top "Transfer Payments (dollars)."

Mr. Coulter: I know.

Mr. Lieff: I believe that there is a mistake on that table, senator. It is $167 million.

The Chairman: There are not that many retired senators. Not to put too fine a point on it, gentlemen, but from an actuarial point of view many of us will put a lot more into the Senate retirement plan than we will ever take out of it, unless the Genome project is so successful that we live to be 150 years of age.

Mr. Coulter: With great regret, we will have to check on that. The table is quite clear that it is dollars, but we have a nagging suspicion that there may be an error here. We owe you that one very quickly.

The Chairman: Someone is doing some further work, and I will not discourage it if it relates to this question.

Mr. Coulter: We are being assured that it is the right amount.

Senator Finnerty: That is amazing.

The Chairman: Do you know how many retired senators there are taking pensions?

Mr. Lieff: No, we do not.

Mr. Coulter: Mr. Chairman, I thought you would know.

The Chairman: I have seen a lot of them come and go.

Senator Wiebe: In case I am asked this question -- and I do not want to prolong the committee meeting, Mr. Chairman -- would I be also safe in assuming that there is a fund set up for senators' pensions? Can I assume that senators contribute to that fund, as does the government? Thus, the bulk of the money that is being paid to senators in retirement comes out of that fund. Is this $160,000 used to top up that fund?

Mr. Coulter: That is what it is looking like.

Mr. Lieff: Senators, this would be the amount of money spent out of the fund. It is not to top it up. It is the government's contribution to the fund.

Mr. Coulter: It is the same thing.

Senator Wiebe: There is a certain amount deducted from my salary each month and it is my understanding that the Senate matches that contribution, and that goes into a fund. Is that right? Then, when I retire, I withdraw from that fund.

The Chairman: Is it a real fund or is it notional?

Senator Wiebe: It is probably notional. The question I have is: Does that sum reflect my part of the contribution on the government side, or is that the sum that is needed on top of what is in the fund to cover senators who are now on pension?

Mr. Lieff: We will check on this for you to be sure because there are some uncertainties here. I believe this is the employer's share of payments into the fund.

The Chairman: The $167,000 obviously is not the total amount for retirement.

Mr. Lieff: I think this is the share for this year.

Senator Wiebe: If it is so, that that is the government's share to match the senators' pensions, could you check to see how that fund is coming along? We hear that senators are receiving $40,000 to $50,000 per year in pension benefits and that it is costing the taxpayers of this country that whole amount. If you multiply that by 10 retired senators, that is $500,000. It would be nice to be able to say that this, basically, is a fund that is looking after itself, and in the event that it cannot it is costing about $107,000 per year.

The Chairman: I think there is something wrong, too, with the last answer. There are 105 senators, each of whom is contributing. If the government is putting only $160,000, in round figures, into that fund, that amounts to about $1,000 per senator per year.

Mr. Lieff: We will check, senator, and provide you the proper information.

Senator Tunney: I think that what we are talking about here is a net figure, when you look at the income from the senators who contribute to the payout by the government to the retired senators.

Mr. Coulter: We have come up with a couple of other possibilities. We owe you an explanation of that table. Beyond that, you would like to know a little bit about the health of the fund; is that right?

Senator Wiebe: Right. I am not a member of this committee. I am substituting for someone else. I would ask our chairman to pass the information along to me when he receives it.

The Chairman: Gentlemen, the questions have been rather diffuse tonight, but interesting, and the answers have been interesting. I know you have made an undertaking to provide quite a lot of further information. Thank you for that. Thank you for your forbearance and for your appearance tonight.

The committee adjourned.