Proceedings of the Standing Senate Committee on
National Finance
Issue 33 - Evidence
[Editor’s Note]
CORRECTIONS
At page 33:14 of the
printed Issue, eighth paragraph, lines 4 and 5, the text reads:
…of sales and
transfers of what was formerly private property to private developers.
The text should read:
…of sales and transfers of what was parkland, public property, to private developers..
—————
At page 33:23 of the
printed Issue, fifth paragraph, the text reads:
The legislative act does
not include a requirement to provide one service. They are two different corporations.
The text should read:
The legislative act does
include a requirement to provide one service.
They are not different corporations.
OTTAWA, Tuesday, March 12, 2002
The Standing Senate Committee on National Finance met this day at 9:32 a.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 2003.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Colleagues, last Wednesday, Treasury Board officials appeared before the committee to answer questions on Supplementary Estimates (B) for the fiscal year that ends on March 31, 2002 — this year. Traditionally, the minister, the President of the Treasury Board, appears before the committee in late May or early June to answer questions before the government requests full supply from Parliament.
Today, our witnesses are officials of the Treasury Board of Canada. I understand that Mr. Bickerton has an opening statement, and I invite him to begin.
Mr. David Bickerton, Executive Director, Expenditure Operations & Estimates Directorate, Treasury Board Secretariat: Mr. Chairman and honourable senators, it is a pleasure to be here this morning to discuss and respond to your questions concerning the government's Main Estimates for 2002-2003. 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 28. The final part of the Estimates, the Reports on Plans and Priorities for individual departments and agencies, will be tabled in late March.
Before going into some of the specifics for the 2002-2003 figures, let me briefly review the key elements of the Estimates documentation. The Estimates consist of three parts, tabled at various times throughout the fiscal year. Part I of the Estimates provides an overview of the federal spending and summarizes the relationship of the key elements of the Main Estimates to the current expenditure plan as laid out by the Minister of Finance in his December 2001 budget.
Part II of the Estimates directly supports the Appropriation Act. The Main Estimates identifies spending authorities — or votes — and the 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.
[Translation]
We expect the interim supply bill for the Main Estimates will be tabled in the House on or about March 19, followed by the full supply bill in June. I understand you will have the opportunity to review the full supply bill later in the spring in the context of the departmental Reports on Plans and Priorities (RPP) that will be tabled later this month. The RPPs will include detailed spending plans by department.
[English]
Part III of the Estimates, the departmental expenditure plans, is divided into two components. The first, the Reports on Plans and Priorities, is the individual spending plans for each department and agency. They provide substantially more information for each department than the Blue Book, including details on strategic outcomes, business-line objectives, initiatives and planned results. This information is linked to the relative resource requirements over a three- year period. The documents are tabled on or before March 31 each year.
[Translation]
The second component, 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 in this year's Main Estimates. The Minister of Finance's budget of December 10, 2001, set out the government's budgetary expenditure plan, amounting to $172.9 billion. The 2002-2003 Main Estimates represent budgetary expenditure authorities totalling $168.3 billion.
[Translation]
This represents over 97 percent of the expenditure plan as set out in the Minister of Finance's December 2001 Budget. The balance includes provisions for further adjustments to spending under statutory programs or for authorities that will be sought through Supplementary Estimates.
The difference between these main estimates and the planned spending announced in the budget relates primarily to initiatives that require legislation before seeking spending authority such as the new airline security authority, or to initiatives that were not sufficiently developed at the time the main estimates were finalized. This includes other items announced in the Budget in December.
[English]
Spending authorities for these items will be sought through Supplementary Estimates through the course of the 2002-2003 fiscal year. When one adds the $2-billion requirement in non-budgetary spending, the 2002-2003 Main Estimates total $170.3 billion, which is an increase of $5.2 billion, or 3.1 per cent, over the 2001-2002 Main Estimates.
The Main Estimates for the upcoming year total $170.3 billion and consist of two broad categories, these being appropriated, or voted, items, with the spending authorities being sought through the Estimates. For 2002-2003, these items amount to approximately $56.3 billion, or 33 per cent of the published Main Estimates. The second category is statutory items, those expenditures for which spending is authorized through previously approved legislation. This includes employment insurance benefits, elderly benefits, CHST, and transfers to provinces and territories. Statutory items in the Main Estimates total $114 billion, or approximately 67 per cent of the total Main Estimates.
The Main Estimates are further categorized as between budgetary and non-budgetary authorities. Budgetary expenditures include the cost of servicing the debt, operating and capital expenditures of departments and agencies, transfer payments to individuals, organizations and other levels of government, and payments to Crown corporations. Like non-budgetary transactions, budgetary expenditures may be authorized through appropriation or statute. In 2002-2003, budgetary expenditures are forecast to be approxi-mately $168.3 billion.
The following is an overview of the major changes affecting the 2002-2003 Main Estimates.
Based on a threshold of $100 million, the main increases include the following: $3.8 billion for statutory adjustments to the net EI benefits to individuals and administration as reflected in the consolidated specified purpose account; $1.3 billion for the Canada Health and Social Transfer payments; $1.2 billion for direct transfers to individuals, such as increases to Old Age Security and the Guaranteed Income Supplement; $613 million for public security and anti- terrorism initiatives announced in the December 2001 budget; $439.1 million for salary increases, including funds for salaries for judges, RCMP members, and members' and house officers' remuneration as adjusted in accordance with Bill C-28; $382 million for increased operating costs to meet CCRA's workload requirements, address rust-out, provide for investment requirements and restore historical service levels; $349 million in payments to various international financial institutions relating to Canada's commitments under multilateral debt reduction agreements; $348.6 million for National Defence spending, including $110.6 million for pay and benefit adjustments approved for military and civilian personnel; $348.1 million in transfer payments under the Infrastructure Canada Program; $216.2 million to address core operational and/or capital requirements, including recruitment, retention and learning initiatives, going to a variety of departments; $169.8 million for the establishment of the primary health care transition fund; $155.9 million in contributions to the new strategic highway infrastructure program; $143.5 million for the fisheries access program, support to transfer of fishery licences to Aboriginal fishers and to address sustainable economic development and exploration of Aboriginal and treaty rights; $140.5 million for employer contributions to insurance plans for Public Service employees, largely due to an increase in health care and other insurance programs and provincial health payroll taxes; $113 million for the provision of government office accommodation — additional space requirements of the government departments, increased costs and temporary space required to allow maintenance to the existing inventory of office space; and $107.6 million to meet increased demand for ongoing programs and services, including the implementation of the Labrador Innu Comprehensive Healing Strategy.
Major decreases in the Main Estimates include the following: a decrease of $5.4 billion in public debt interest and servicing costs; $183.8 million due to the completion of the 2001 census of the population and the 2001 census of agriculture; $133 million for the Canada Jobs Fund due to the June 2000 decision to close down the fund; and $101.7 million in payments to international organizations relating to the encashment of notes by international development association in accordance with the Bretton Woods and Related Agreements Act and payments to International Monetary Funds, poverty reduction and growth facility.
Non-budgetary expenditures are outlays that result in changes to the composition of the financial aspects of the government. Non-budgetary transactions may be authorized through appropriations or through statute. In 2002-2003, they total approximately $2 billion and are represented primarily by the payments to various international financial institutions.
On the non-budgetary side, there is a net change of $200 million, with the major increase being $223.4 million in payments to various international financial institutions and the major decrease being $100 million related to the loans disbursed under the Canada Student Financial Assistance Act.
[Translation]
As I indicated earlier, we expect that the interim supply bill for the Main Estimates will be tabled in the House on or about March 19. That bill will seek some $16.908 billion in interim funding out of the total $56,3 billion in voted appropriations being requested in these Main Estimates.
[English]
The remainder of the supply, some $39.4 billion, will be sought from Parliament in June.
Mr. Chairman, honourable senators, that concludes my opening remarks. We would be pleased to try to answer any questions you may have.
Senator Lynch-Staunton: I have several questions, the first of which arises from your statement, Mr. Bickerton.
At the bottom of page 3, top of page 4, you say that certain requirements or initiatives were not sufficiently developed at the time the Main Estimates were finalized and that this includes other items announced in the budget.
Does that mean that there are items in the budget that have not been fully costed and that some refinement of the Minister of Finance's estimates must be made, which in turn might affect his figures quite shortly?
Mr. Bickerton: When the Minister of Finance tables his budget, he includes a variety of initiatives. He is dealing with departments to finalize the numbers for them. What we mean by that statement is that at the time we were putting the Main Estimates together there was still a requirement for the departments to outline to Treasury Board the nature of their expenditures, how they would organize their programs and how they would deliver the programs that are being announced in the budget.
The cost allocations included in the Minister of Finance's statements will not change, but Treasury Board, in pursuing its role, reviews all submissions for those types of program submissions, and they were not ready in time for inclusion in these Main Estimates.
Senator Lynch-Staunton: I think that clears the matter up.
I noticed that no reference was made to the Old Port of Montreal Corporation in the Main Estimates, although it has been seen previously. It was even in one of the supplementaries. What is the reason for that?
Mr. Bickerton: There is a Privy Council vote, under the Office of Infrastructure and Crown Corporations of Canada. We will be coming through Supplementary Estimates to provide resources for the Old Port of Montreal Corporation, if in fact they need it, but they were not ready at the time the Main Estimates were being put together.
Senator Lynch-Staunton: There are many items in the Main Estimates for next year that did not appear in previous years, which means they are new items. For instance, there is an item for the Federation of Canadian Municipalities, to develop a national guide to sustainable municipal infrastructure, $5.385 million, nothing for the Estimates of 2001-02.
Just to give you another example, hoping that you will understand where I am going with this, on page 17-7 there are many items. This is under National Resources, support of electricity distributors to promote the sale of electricity from emerging renewable energy sources, $3 million, and there is a contribution to the International Energy Agency Weyburn CO2 Monitoring Project, $1.6 million.
The Estimates have a number of items like that where the subject matters did not appear in the previous year. Have all these items for which spending approval is sought appeared before Parliament previously, either via the budget or via ministerial requests, or do they appear for the first time in the Main Estimates?
Mr. Bickerton: With respect to the first contribution that you identified, it was for resources transferred out of the Treasury Board Secretariat when the cabinet change took place in January.
Previously, the Minister of the Treasury Board was responsible for the infrastructure program. With the creation of the responsibilities for Minister Manley, we set up a separate department. If you look at the Treasury Board Secretariat's Estimates, you likely will find that that will be one item listed where it is not required in this upcoming fiscal year.
We are simply transferring resources from one organization to another. It had been tabled and included in previous Estimates.
Senator Lynch-Staunton: Can all of this be found in the notes in the book?
Mr. Bickerton: In the introduction to the Blue Book, and I do not have the specific reference, we did provide an explanation of the impact of the cabinet changes that took place in January, where we talked about the realignment of responsibilities, and that was one of them.
In the case of Natural Resources, those are new contribution programs; they are appearing for the first time. These would either have been approved by cabinet and subsequently endorsed by the Treasury Board, and it would have been a new program that they are launching this year, or is the first time they would appear in Main Estimates. I am afraid I cannot get any more specific than that, senator.
Senator Lynch-Staunton: Okay. That means that many of these programs are before Parliament for the first time via the Main Estimates?
Mr. Bickerton: That is correct, senator.
Senator Lynch-Staunton: Parliament, in effect, has no ability to discuss them, except through the Estimates or if the minister is willing to appear before the appropriate committee and expand on them.
Mr. Bickerton: Mr. Chairman, all of these contribution programs are within the legislative authority of the various ministers. In this case, it is Natural Resources, so it would be one of that minister's existing pieces of legislation that allows him to put this program forward.
The Chairman: Is there a statute governing the Infrastructure Canada program? I should know that. Did Parliament actually pass a bill?
Mr. Bickerton: Mr. Chairman, I do not know.
The Chairman: It is an exercise of the federal spending power that comes to the Estimates and the government decides. It is a tripartite program, is it not, involving the provinces and municipalities?
Mr. Bickerton: Yes, that is correct.
The Chairman: You refer on page 7 of your statement to the new Strategic Highway Infrastructure Program, $155.9 million. Is there a statute governing that new program? What do we know about that program? What minister has responsibility for that?
Mr. Bickerton: The Minister of Transport has responsibility for that. This particular initiative was announced in the Speech from the Throne in October 1999. A new physical infrastructure program was announced, to enhance economic growth and improve the quality of life for Canadians. In the 2000 budget, $2 billion was allocated to the initiative for the municipal component. The provincial highway component is $600 million, the Strategic Highway Infrastructure Program.
The Chairman: Is that all we know about it, other than what might have appeared in press releases or announcements of various kinds? Is there a statute governing these?
Mr. Bickerton: No, I believe it was done within the legislative authority of the Minister of Transport.
Senator Corbin: I have a pointed question, and in this respect I ought to refer honourable senators to pages 4-24 and 4-25, Canadian Heritage and National Library.
I am sure honourable senators are all familiar with the latest of the unfortunate episodes affecting the National Library, including water, fire, and so on. The latest of these episodes occurred last week. In fact, there have been some 72 damaging incidents since they began recording them in 1993.
I notice that the Estimates do not show much growth. In fact, one could always interpret the figures we have before us as recessionary. That, of course, has to deal with normal salary increases, benefits, and so forth, which means that the mandate of the national librarian is put at grave risk. His mandate, if I may refresh our collective memories, is to collect, preserve and foster access to the collection.
As a result of the latest incident, the national librarian threw up his arms and thought for a split second that perhaps he should resign. The situation has become impossible.
I do not think anyone here would care to go into a work environment where rubber boots and water vacuums are waiting for you, where overhead sewer pipes occasionally drip on your collections and work papers, and where some 10 or 12 freezers wait for another emergency to occur, and so on. I will not bother you will all the details.
However, honourable senators, there has been a significant decrease in the funds allocated to the National Library, thereby creating a handicap for the librarian in the proper performance of the duties that were assigned to him by Parliament so many years ago.
What is the explanation for all of this?
Mr. Bickerton: Mr. Chairman, I have the reference in front of me. There is a small increase being provided to the National Library.
Senator Corbin: What is the increase?
Mr. Bickerton: It is about $500,000.
Senator Corbin: Is that out of $36 million?
Mr. Bickerton: Yes. I am not aware that the national librarian has come into the Treasury Board as a result of the incidents that occurred recently. The National Library has an opportunity to do that, if in fact it is not able to respond or to reallocate priorities. Anything that is approved by ministers would be approved through Supplementary Estimates.
Senator Corbin: My understanding is that the national librarian has no direct access to Treasury Board, that he must go through the Department of Heritage Canada. That is a serious handicap in the assuming of his responsibilities and duties.
That has been the problem over the years. His alarm calls have not been taken seriously. There are intermediaries who do not even bother to go down there to determine the problem. When we talk about the public, we are talking about a network of 500 important libraries in Canada.
The current situation at the National Library, compared to the City of Toronto Library, for example, is a bloody shame. They do not even have the proper containers to preserve our newspaper collection, which is the most important collection of Canadian newspapers in the world. I visited the site yesterday. It is surrounded by the largest collection of fuel and gasoline oil tanks in Ottawa. That in and of itself poses an imminent threat. There was a fire in the hangar next door to that collection a month or two ago.
No one seems to be taking the urgent calls of the national librarian seriously. There seems to be blockage in the upper echelons. The figures you have given us this morning are indicative of this.
[Translation]
You are ignoring these urgent requests. It has been the case for some time now, and the problem goes beyond the current administrator of the National Library. The situation goes back at least ten years. I am taking advantage today of the rare opportunity given to us to bring this issue to the attention of Parliament officials via this committee. Would it be possible to get answers?
On the one hand, almost everyone, for the past 12 to 15 years, has been forced to show fiscal restraint. On the other hand, we have endangered our collective memory. If the administrator of the National Library publicly shares his concerns —, it is time for us to wake up, given that we are in charge of voting the government's budget and that we are responsible to ensure the law is respected. I would like to see your report, on the audit of these accounts, make definitive mention of these facts.
In the meantime, could the witnesses build a realistic and factual assessment of the National Library's budget, of the amount it has been granted over the past 10 or 12 years? We could then analyze the current situation with respect to the current needs the Library has. We could see the amounts available dissociated from inflation and economic factors that have a negative impact on the operations.
I would really like this message to be delivered to the appropriate people.
[English]
Mr. Bickerton: I would offer two comments, Mr. Chairman. We obviously do not have the information going back 10 years with us today. We will undertake to send that information to the committee soon.
In this fiscal year, the Treasury Board Secretariat received a request from the National Library for additional resources related to operational requirements. In the past year, they were getting an additional $1 million to deal with preservation issues and some of the long-term IT needs. There will likely be a Supplementary Estimate this year for a continuation of that. However, I do not know whether that will meet all of the requirements put out by the national librarian.
Finally, the Treasury Board Secretariat has a policy of encouraging departments to prepare long-term capital plans to try to maintain the facilities they have in proper working order. Departments are encouraged to develop these and submit them to Treasury Board. They will be considered in due course. A number of departments have done this, and some of the changes you see in the Estimates reflect adjustments related to that.
I do not know whether the Department of Heritage and/or the National Library have prepared such a plan.
Senator Bolduc: I have noticed, and not for the first time, that there is a fairly wide discrepancy with respect to Old Age Security costs. Each year, you come back with an increase of about 4 per cent. I have difficulty with that. A 4-per- cent error is a big one. This year, you ask for more than $1 billion in transfers for Old Age Security, which amounts to 4 per cent. I do not understand that.
Mr. Bickerton: All of the forecasts related to the statutory programs are done based on the best information available. There is a cut-off for that, where we try to finalize the numbers. Over the course of my brief time here, I have seen that there have been changes up and down in a number of statutory programs, but it is usually done based on the best information available.
Senator Bolduc: This should be a fairly precise Estimate because it is based mainly on demographics. I know that there is the factor of income supplement, but a 4 per cent error is a huge one.
Mr. Bickerton: In the information used to forecast that, a number of adjustments are taken into account. When it is being done by Human Resources Canada, the factors taken into consideration include not only the number of beneficiaries but the average payments being made. At this point, that is the nature of the change that is being forecast for this particular statutory payment.
Senator Cools: My questions are related to those of Senator Corbin, but they deal with another aspect of what I would call the maintenance of our heritage. I am looking at page 4-20, Canadian Heritage, specifically the National Capital Commission. I have been following media reports recently and I have a gnawing sense that the National Capital Commission appears to have abandoned its stated policy of deferring to local government on land development issues.
I have been deeply concerned that the NCC seems to be pursuing a determined course of conflict and friction with local communities and local municipal bodies, particularly in the area of sales and transfers of what was formerly private property to private developers.
When I looked at this page, I noticed two things: first, revenues are listed at $32,888,000; above that there is another item, real estate management and development, with expenditures in the area of $115 million. I have several questions, and you can deal with them as you see fit.
When I look at the revenue side, the $32 million, what percentage of that projected revenue income for the next year is to be derived from the sale of real estate assets? What properties are involved, and how much net revenue will the NCC be projecting?
Mr. Bickerton: If I can respond to your first question, my understanding is that the revenues shown in this set of statements for the National Capital Region would not include any proceeds of sales. It would be regular programming and sale of items within the National Capital Commission.
Senator Cools: So that would be proceeds from the collections they take up on the canal and the different events that are run?
Mr. Bickerton: Yes, I believe that is the case.
Senator Cools: So there are no proceeds from real estate transfers here.
Let us move then to the expenditures. In respect of this question of the NCC in these conflicts with local communities and municipal bodies, I am wondering what portion of these projected expenditures are designated to pay lawyers, planners and other experts to prepare and testify, say, at the OMB hearings? I am trying to get some insights into this huge area that seems to be going on in our communities. It has been very well publicized and it seems to be eluding or escaping Parliament totally.
Mr. Bickerton: I do not have the specific details as to the makeup of the expenditures, but I can give you information in terms of the reasons for the increases. There was an overall increase of some $34 million. You are quite correct, Senator Cools, in that most of it relates to the real estate management and development side of the business. The single largest increase in there is approximately $46 million for capital funding for the revitalization of the LeBreton Flats, including site decontamination, roadwork servicing and the development of the site for the new Canadian War Museum.
There is another small increase related to collective bargaining for salary costs. There are two decreases, one of about $11 million related to capital funding for the rehabilitation of Rideau Hall and another of just under $3 million related to the selling of the loan to rehabilitate the Portage and Champlain Bridges. That brings it down to the $34 million. If you wish, I will give you the information in terms of professional and special services monies for the NCC.
Senator Cools: While you are looking at that, perhaps you could also give us an idea of the number of properties that are soon to be designated for sale. I have been following this pretty closely. It occurred to me that we really know very little about the NCC. It seems to be a mystery that needs to be shared.
Mr. Bickerton: We will attempt to provide the clarification, Mr. Chairman.
[Translation]
Senator LaPierre: The issues I would like to address concern the Library and the National Archives. I am aware of the situation since I am a consultant with the minister of the Library and the National Archives.
[English]
Having chaired the committee after the English report to bring about the unity of both institutions, for all kinds of reasons that the English report suggests — I just wanted to make that point.
I should also like to say that both the National Archives and the National Library, if I remember correctly, did not receive additional monies arising out of the digitalization project, which is run out of Canadian Heritage. Unless the structure of the institutions are changed, they become a single Crown corporation and the building is transferred to someone else with a new building built here or in Gatineau, we will never resolve the existing problems in the library. I wanted to make that point. I have made it to the Minister of Finance often. I do not think it should be made to the Treasury Board, since they merely administer funds.
While I have the floor, if I may ask, as a non-member of this committee, I understand you are responsible for the control of the expenditures — the expenditure operation?
Mr. Bickerton: Yes.
Senator LaPierre: People have been asking me for 40 years: Why is it that every year the Auditor General finds disasters with respect to the control of government expenditures?
Mr. Bickerton: Mr. Chairman, I have been there for about nine months. I do not think I have all of the answers at this point in time.
Senator Cools: Mr. Chairman, these officials before us should not be answering for the Auditor General.
Senator LaPierre: I just wanted to know why this happens. Is it because people count things in a manner different than the Auditor General? If there is no answer, that is fine; I will keep telling them there is no answer.
The Chairman: A question that someone should ask and get an answer to eventually is why the National Library building has been springing leaks all over the place. That is not the most ancient federal building in Ottawa, not by a long shot. Was it badly constructed in the first place? Have they tried to cut corners on the maintenance? What is the problem? I do not know. I have not seen an explanation anywhere.
Senator Banks: I am sure that our guests are tired of hearing about the library, but that subject will lead to the subject of my other questions.
If there were a balance sheet — and I know there is not — in which we counted assets, the assets of the National Library and the National Archives would be inestimable. They are priceless. There is no way to ascribe to them a specific value. I would hope that you might suggest to your colleagues that, if there were a fund someplace in nicely measurable dollars that was somehow being placed at grave risk to the national interest, Treasury Board would be exceedingly concerned about it, as would others, and that it would direct its glaring attention to the question.
That is what is happening. We have a national asset of inestimable worth, which is not that easily counted or accounted for. If you asked 50 different experts, they would give you 50 different evaluations of it. It is at risk, exactly the same as if some specific fund were at risk.
I hope you will take our concerns back to your colleagues at Treasury Board so that when they are dealing with these questions and with ministers with regard to those appropriations such questions can be at least in the mind.
My question has to do with the general subject of the scrutiny of Parliament as it applies to spending authority. I understand that for practicality of operation there has to be a great deal of spending authority vested in the government and the cabinet. They have to be able to respond immediately to emergent situations.
Let us take last year's example, where the Minister of Transport, I think it was, following September 11 fairly quickly announced I believe it was $160 million in aid to airlines. He did so under the aegis of the Aeronautics Act, which permits him to do that. At least, it says it does.
Senator Lynch-Staunton: Someone said it does.
Senator Banks: If you read far down in it, it says that he can spend money to obtain those objects. Such things cannot be anticipated, of course. I have a concern about the extent of money that is spent in that way and the very tiny portion of money that we spend, $170-odd billion, that is non-statutory. How far ought those statutes go in allowing expenditures that are approved after the fact, if at all, by Parliament?
I believe my concern is a general one that some of my colleagues will share. I am satisfied with the answer with respect to the airline spending, but there are other expenditures made under what appears to be statutory expenditures that are odd.
I would like to ask you about an area on which we will address our concerns later, that is, contingency votes. Everybody must have a contingency if they are operating anything. How does that work? What proportion of the budget is contingency? Is there an envelope around it? Is there a limit to it? Is it actually sitting someplace? Is it the Treasury Board that decides who has access to monies to be spent under a contingency vote?
Mr. Bickerton: Mr. Chairman, I think in this particular case the items under statutory authorities are all passed through separate legislation through Parliament. That is where they derive their spending authority.
Senator Banks: I understand. Are there any parameters around that spending? I understand we have to make a law this year to establish this program, and that in future years it may cost some more money, but is there any limit to the increases under statutory spending?
Mr. Bickerton: Mr. Chairman, each statute is different. Each statute has the objectives of the statute and whatever requirements the government in sponsoring it is putting in place, and those monies are approved. I do not know whether there are statutory limitations in terms of time or dollars. I suppose there are.
If I could move on to your question about the contingency vote, there is a contingency vote within the Treasury Board Secretariat. It has been around almost since Confederation in one form or another. This particular one is one that is voted every year. It shows up in the Treasury Board Secretariat Estimates. It currently stands at $750 million. It has vote wording that permits the government to make temporary advances for emergencies, minor miscellaneous and unforeseen. It is being dealt with by departmental submissions to the Treasury Board, and they make the decisions as to what amounts will be approved. We then put them in the Supplementary Estimates at the first opportunity. That has been the practice now for many decades.
Senator Banks: If I understand what you have just said, the amount of the contingency fund is in part arrived at, as opposed to being picked out of the air, by things that are anticipated, because you said that ministers come and make submissions, and on the basis of those submissions the contingency vote is made. Therefore, at least part of that $750 million, which I think is a modest amount in respect of the budget — it is under 5 per cent — is determined by expenditures that are in some way anticipated.
Mr. Bickerton: Mr. Chairman, the nature of the vote is that it should be unforeseen or unanticipated. The particular vote stands at $750 million. I think it was increased two or three years ago to that level. Historically, in the Treasury Board, we have looked at trying to keep that figure somewhere between 1 per cent and 1.5 per cent of voted items. It does allow the government some flexibility. There are criteria in place for judging the amounts of money that can be drawn out of it. All of these are considered by the Treasury Board ministers based on requests from departments, including the one for support to the airline industry that took place last fall.
Mr. Chairman, when the Supplementary Estimates are tabled and passed through Parliament, that is an authority again through the vote wording of the Treasury Board contingency vote that those monies are then returned to the Treasury Board and can be reused and the appropriations are provided through Supplementary Estimates to the departments concerned.
The Chairman: As you know, we will do a study on that very vote. We have been collecting and I think distributing some material to aid us in our work.
Senator Bolduc: The discretionary amount that is budgeted is about $56 billion, and we are talking here of about $750 million, about 2 per cent, the other one being the statutory expenditures that are already set out.
Mr. Bickerton: I really cannot argue with that. I will take the senator's word, of course.
Senator Callbeck: I am not a member of this committee, but having just looked over this book in the last few minutes there are several things I would like to ask about.
In your presentation, you mentioned a major decrease, $100 million, related to the loans distributed under the Canada Student Financial Assistance Act. Could you explain that?
Mr. Bickerton: Mr. Chairman, that particular one relates to the Canada Student Loans Financial Assistance Act. The department was to change the number it expects to spend, using better information to forecast the volume of student loans.
Historically, there is a provision in there for the number of students we anticipate will proceed to student loans. We have found over the last little while that only about 90 per cent of the students that are applying actually proceed to a student loan. We are able to make adjustments based on this.
The 2002-2003 forecast is more accurate since it is based on the volume of loans that are likely to be negotiated with students. We figure it could be somewhere in the order of about 470,000 student loans or loan certificates, valued at about $1.8 billion. This is a forecast prepared by the department based on its forecasting tools.
Senator Callbeck: In other words, there are no changes being made to the program. It is just that the students are not taking up the amount of money that was in the budget; is that right?
Mr. Bickerton: Mr. Chairman, that is a correct statement.
Senator Callbeck: On page 7-2, there is the total figure for equalization in the CHST. Where can I get the breakdown of that?
The Chairman: What breakdown are you looking for, senator?
Senator Callbeck: The breakdown for provinces.
The Chairman: It is certainly available. We are now preparing a report on equalization.
Mr. Bickerton: Mr. Chairman, I am not sure I have the breakdown by province. The breakdown is provided by the Minister of Finance in his budget. There may be more information there.
Senator Callbeck: In the budget documents?
Mr. Bickerton: That is correct.
Senator Callbeck: With regard to the CBC, the projected revenue for last year was at $528 million. This year it is at $455 million. Why would there be such a reduction?
Mr. Bickerton: Mr. Chairman, I would like my colleague Laura Danagher to answer that question.
Ms Laura Danagher, Senior Director, Expenditure Operations, Treasury Board Secretariat: In my previous life I worked for the Canadian Broadcasting Corporation so I am familiar with how they do their revenue forecast. For the current fiscal year, they had a one-time programming event, the Olympics, in Salt Lake City. Thus, you will see a decrease in their revenue forecast because that event does not occur again in 2002 and 2003.
As well, the corporation has been reducing its commercial airtime. For example, with respect to The National, commercials have been reduced by 50 per cent. As well, some of their prime-time programming slots are commercial free at this point in time.
That is the major reason for the change.
Senator Callbeck: Is the $528 million figure in the budget for 2001-2002 fairly accurate?
Ms Danagher: Generally, the CBC reviews its revenue forecasts for the last five months of the year. They do it on a monthly basis. I was speaking to them last week and they said they are still within 5 per cent of that target.
Senator Callbeck: Is the CBC planning to continue this trend of cutting back on commercials?
Ms Danagher: They have been, yes. I think the biggest impact will be in 2002-2003. After that, there should not be as much of a drop.
Senator Lynch-Staunton: Just to finish on our previous discussion, am I to understand, then, that there are in the Main Estimates new programs and requests for new spending authorities that are justified by an interpretation given to ministerial authority? I do not agree that the Aeronautics Act justified $160 million to help those affected, that is, airlines and others. However, that is a discussion for another day.
My basic question concerns ministerial authority. Is it such that the department can include in the Estimates a request for funds for new programs and the only time Parliament can discuss those programs is once the Estimates are before it?
Mr. Bickerton: Mr. Chairman, I should would like to go back to the comment that was made earlier about the new contribution programs under Natural Resources. I believe those would have been provided or approved under the auspices of the Energy Efficiency Act. It would allow the minister to put contribution programs in place to deal with items that fall into that piece of legislation.
It is not a case where they can do it for any purpose. There must be a foundation based in legislation for the program that they will be putting in place. They then make submissions to either cabinet, in the case of new funding, or to the Treasury Board, for contribution programs to which they either want to reallocate money or there are other sources of funds. They are all considered by the Treasury Board ministers prior to being included in the Main Estimates, or the Supplementary Estimates for that matter.
Senator Lynch-Staunton: If there is a specific piece of legislation that authorizes that, then I go along with that completely.
To get back to the $160 million for the airlines and others affected by September 11, that authorization was under the Aeronautics Act, was it not?
Mr. Bickerton: I believe you are correct, senator.
Senator Lynch-Staunton: Although this might be a discussion for another time, my impression is that some of these acts are written in such a general way that they probably give departments more latitude than Parliament intended. However, that is Parliament's responsibility, which is not a topic of discussion for today.
As you said, Mr. Chairman, we will get to this on another occasion.
My last question is specific. Not being a traditionalist, however, I believe in supporting long-term traditions, one of which is having Lieutenant-Governors. I notice on page 4-6 that grants to Lieutenant-Governors toward deferring the cost of travel, et cetera, are being decreased. I am wondering whether those amounts are a net decrease or whether there is a change in the accounting and the decrease can be found elsewhere so that they are back to what they were before.
Mr. Bickerton: Mr. Chairman, I am looking on page 4-2. I see that under ``Payments Under the Lieutenant- Governor's Superannuation Act'' it stays the same.
Senator Lynch-Staunton: I am looking at 4-6.
The Chairman: We are trying to root out creeping republicanism, Mr. Bickerton.
Senator Lynch-Staunton: And I am trying to encourage it, so I can support you on this one.
The Chairman: Careful, senator, you are the leader of Her Majesty's Loyal Opposition in the Senate, I remind you.
Mr. Bickerton: Mr. Chairman, on page 4-6, I see that the change amounts to a grand total of about $60,000.
Senator Lynch-Staunton: Why?
Mr. Bickerton: I will find that out and provide the committee with a response.
Senator Bolduc: I should like to come back to the $155 million in contributions to the new Strategic Highway Infrastructure Program. Was that program established on the basis of the 1989 legislation, or is it only a cost-sharing agreement with the provinces?
Mr. Bickerton: It was a program, Mr. Chairman, that was announced in October 1999. It was included in the budget as well. If you are referring to an act, it goes back to 1989. It would not be the same.
Senator Bolduc: Was it the case that the Minister of Transport had the statutory authority to establish a program for financing highway infrastructure?
Mr. Bickerton: Mr. Chairman, I am afraid I do not know the basis for that. Again, we will try to provide that answer to you.
Senator Corbin: I shall be brief, Mr. Chairman. For the Canadian Broadcasting Corporation-Société Radio- Canada, I do not see any breakdown in the figures as between the two operations. They conduct themselves very much as if they were independent, yet for budgetary purposes they are all lumped in together, which does not give me a very good picture of what costs what and what services Canadians are getting for their dollars.
Why do you take that approach in the presentation of the figures? Should they not be segregated?
Ms Danagher: You can get that segregation every year when the corporation comes out with its annual report. It does provide that information between the French- and English-language networks.
Senator Corbin: For purpose of this study, why is it not broken down so we can have a discussion of it?
Ms Danagher: It is generally a very high-level macro presentation in terms of getting the spending authorities.
Senator Corbin: I listen to both the CBC and Radio-Canada — CBC at 7:00 and Radio-Canada at 8:00.
[Translation]
It seems like they are two different entities, not only with respect to content but also by their approach and the way they present themselves. In fact, they behave as two completely different corporations.
By law, are they considered as two distinct corporations or is simply a front for publicity and public relations? You know, I am a former employee of Radio-Canada.
[English]
Ms Danagher: My understanding is that it is not in the legislation. It is one service that they provide, but we are required to provide it in both official languages. The legislative act does include a requirement to provide one service. They are not different corporations.
The Chairman: Thank you, Mr. Bickerton and Ms Danagher. That concludes our meeting.
The committee adjourned.