Proceedings of the Standing Senate Committee on
National Finance
Issue 16 - Evidence - September 30, 2003
OTTAWA, Tuesday, September 30, 2003
The Standing Senate Committee on National Finance met this day at 9:30 a.m. to examine the expenditures set out in the Supplementary Estimates (A) for the fiscal year ending March 31, 2004.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we have before us Supplementary Estimates (A) for the fiscal year ending March 31, 2004. These were referred to us by the Senate on September 24.
You probably know that the Treasury Board team that we came to know and love during many years is no longer in action. Mr. Rick Neville has gone to the Royal Canadian Mint and Mr. David Bickerton is about to take his retirement. I am happy to welcome the new team. It consists of Mr. Mike Joyce, Assistant Secretary, Expenditure and Management Strategies Sector, and Mr. Marc Monette, Acting Director, Expenditure Operations Division.
Welcome both of you. I understand Mr. Joyce has a brief opening statement to make, after which I will turn to senators for questions and comments.
Mr. Mike Joyce, Assistant Secretary, Expenditure and Management Strategies Sector, Treasury Board of Canada Secretariat: Honourable senators, Mr. Monette and I appear before you today to discuss the government's Supplementary Estimates (A) for the fiscal year 2003-04 that the president of the Treasury Board tabled in Parliament on September 23 of this year. As the Chairman just said, Mr. Neville and Mr. Bickerton used to perform this duty and you are now aware that they have both left the Treasury Board Secretariat. More correctly, Mr. Bickerton is in the process of leaving. Mr. Neville's responsibilities for representing the Treasury Board Secretariat on estimate matters have been passed to me. I am told that they had developed a productive relationship with your committee. I hope that I will be able to live up to the standards that they have set and, over time, develop the relationship further.
[Translation]
Let me begin by stating that these Supplementary Estimates seek Parliament's approval for budgetary expenditures totalling $5.5 billion in the current fiscal year. Although these expenditures were not included in the 2003-04 Main Estimates, they are provided for within the $180.7 billion in planned spending set out by the Minister of Finance in his February budget. This Supplementary Budget does not include any adjustments to statutory forecasts. We are currently working with the Department of Finance to update these forecasts and expect to be in a position to release them later this fall.
[English]
Mr. Chairman, honourable senators, that concludes my opening remarks. In case it will help committee members situate their questions and discussion, I have provided the clerk with additional copies of the background material that the president of the Treasury Board released along with these Supplementary Estimates. Mr. Monette and I will now be pleased to answer your questions to the best of our ability.
Senator Lynch-Staunton: Mr. Joyce, we have been well served by your predecessors and undoubtedly that tradition will continue. This is probably the best exercise we have in trying to get down to government priorities in the spending area.
Before getting into general questioning, can you explain why we are getting the Sups so early this year, when traditionally they are tabled in November and March? Why, suddenly, this year, are we getting them in September?
Mr. Joyce: That would be a matter for the House leader to answer. We have been given a parliamentary schedule and our job is to respond to that.
Senator Lynch-Staunton: Is there anything else on the schedule that you have seen that goes contrary to previous calendars?
Mr. Joyce: No, but I would observe that this is not unique. There have been previous years when supplementary estimates have been tabled early. I could provide you with a history.
Senator Lynch-Staunton: I have one, too. It is an exception.
Mr. Joyce: Yes.
Senator Lynch-Staunton: If the House leader appears before us, Mr. Chairman, it would be nice to ask him that same question.
I want to urge again, as I have with your predecessors, that more information appear in the blue book — both for the Main and the Sups. We get a lot of data, a lot of figures, but there is very little support in explanation of those figures.
I will give you two examples, one quickly and the other I will elaborate on more. On page 36, under Canadian Heritage, National Capital Commission, there is a new appropriation of $31.1 million to the NCC for capital expenditures, on top of the $32.3 million already in the Mains — almost double the requirements in only a few months — and the purpose is for the acquisition of real property in Gatineau, Quebec. Nowhere in the backgrounder, nowhere here is there any explanation as to what real property is being purchased and for what purpose.
It would save a lot of time if information of that nature, which is factual and to the point, were included in the blue book. We get quite a bit of information in the backgrounder, which the minister issued at the time of the tabling, but I would like to see that information as part of the blue book. Sometimes, some of us will not get the backgrounder, or will ignore it or we would not receive it through the ordinary channels.
Could you comment on that for me?
Mr. Joyce: You have raised two issues. Let me address the first one. You are correct; there are, on items like this not more than a brief explanation provided in the Supplementary Estimates. As you have observed, that is actually consistent with practice. It is an observation that I would like to take into account in my new job, and see what possibilities there are to improve this. You may recall that the government in the budget made a commitment, in fact, to look at the clarity, transparency and usefulness of the estimates documents. Discussions are going on inside TBS. It does not start with me, but it is something that I would like to pursue. You are not the only person to have made that observation.
Senator Lynch-Staunton: I am sure.
Mr. Joyce: It is certainly something that we will take into account as we look at advising the president on ways to achieve the goal set down in the budget. I can, however, even though it is not in the documents, provide you with specifics on the $31.1 million that is in the Supplementary Estimates for the National Capital Commission. It will be used to fund the proposed acquisition of the Scott Paper Limited lands that are adjacent to the Canadian Museum of Civilization along the north bank of the Ottawa River — the lands situated almost directly across from the Parliament buildings and the Supreme Court of Canada.
It is a once-in-a-lifetime opportunity to reinstate and consolidate federal ownership of the shoreline along the Confederation Boulevard. The National Capital Commission has identified it as a land of particular significance. It part of what the National Capital Commission refers to as ``national interest land mass properties.'' It is considered essential to the development of that objective of the commission. That is why the additional funds are in the Supplementary Estimates.
Senator Lynch-Staunton: I will not get into an argument over the validity of the purchase. To me, it makes a lot of sense. Again, it would have saved a lot of time if we had that information before.
I would also draw your attention to an item on page 61 under the heading ``industry.'' It simply says, ``Assistance to the Canadian softwood lumber sector,'' and it totals nearly $106 million. If you look at that alone, you get the sense that this is money going into areas that have been sorely affected by the decline in the industry's ability to serve the American market and the effects that has on sawmills, employees and so forth. However, if you turn the page to 62, it elaborates a bit and says, ``Contributions under the softwood industry and community economic adjustment initiative.''
This program was announced in October 2002 and did not appear in the Main Estimates, but it does appear in Part III, Plans and Priorities of the Department, which is issued, I think, within a month of the Main Estimates. There, under the heading ``Softwood Industry and Community Economic Adjustment Initiative'' we see $100,087,000, the figure we see on page 62 of the Supplementary Estimates.
Why was this amount not shown in the Main Estimates? These individual plans and priorities come out within a month of the Main Estimates, so the figure had to be known at the time, particularly as the program had been announced the previous October.
As we go on with this discussion, it seems to me that there are elements in the Supplementary Estimates that were known at the time of the Main Estimates, so why were they not included in the Main Estimates? I choose this one in particular because it was shown in Part III.
Mr. Joyce: My understanding — although I would have to confirm this — is that this particular funding is only one part of the overall program that the government has to respond to the softwood lumber industry. I am sure I am not telling you anything new when I say that one of the generic reasons for having items in Supplementary Estimates is that there are occasions when the Treasury Board, based on advice from the secretariat, makes judgments on whether particular items are actually ready to be put before Parliament to seek its authority for spending. In some cases, the advice of the secretariat is that further work needs to be done before the secretariat is prepared to make a recommendation to the Treasury Board. This would have been one of those instances. I am sure that is not a new issue.
I have some additional information on the softwood issue generally, because, as I mentioned, this is only one part of it. I could, if you wish, proceed to give you some information on that. If my answer is sufficient, we could leave it at that.
Senator Lynch-Staunton: Once the government has announced a program, how can the secretariat interfere — if that is the right word — and decide that the timing is not right to confirm the item in the Estimates?
Mr. Joyce: It is a matter of judgment in terms of whether there are particular details that the secretariat would like to get from the department before it is prepared to make its recommendation to the Treasury Board ministers that an item be included in Estimates. It is a judgment that is made all the time.
In the vast majority of cases, because the budget is typically released immediately before the Main Estimates, there is simply insufficient time to get the information from departments into the Main Estimates.
The Chairman: The program was ready for announcement but not for parliamentary scrutiny.
Mr. Joyce: That is correct.
The Chairman: That tells you something, I think.
Mr. Joyce: It was, however, explicitly announced.
To answer your question as to why it was in the report on plans and priorities, those reports are intended to address the broad three-year plans of the department as consistent as they can be with the budget. Therefore, this is intended to ensure that the information put before Parliament to accompany the Main Estimates is as complete as possible with respect to the spending plans that the government has announced in the budget.
There are occasions where you will find explicit reference in the reports on plans and priorities to initiatives that the government has announced, but there may be specific items where the judgment of the Treasury Board Secretariat is that more work needs to be done with the department before we put the items before Parliament for specific approval.
Senator Lynch-Staunton: I have a list somewhere that shows how some of the monies for what one assumes is to help those affected by the state of the softwood industry in Canada are to be applied. One amount of money has gone to increase tourist traffic at a cheddar cheese factory in the Lac St. Jean area and others are of similar nature, which makes me believe that this is more a disguised infrastructure program than one totally aimed at helping those directly affected by the state of the softwood industry.
I will take this up again on the next round.
[Translation]
Senator Gauthier: Two exercises are going on at this time. We have these Supplementary Estimates for $5 billion but there is also some reallocation of funds within the departments, totalling $1 billion.
If I understand correctly, Radio-Canada was expecting $60 million. In these estimates, we have $50 million and $10 million as contributions to the $1 billion that Treasury Board is looking for in order to do its reallocation. However, something is troubling me. There is a rather significant 15 per cent increase of the budget of Canadian Heritage, part of which will be aimed at language training: preparations related to the modernization of human resources management.
What are the details of this plan of action for official languages?
[English]
Mr. Joyce: To respond to your last point first, the action plan for official languages is a horizontal item that spreads through a number of entities in the government for a total of $28.6 million. Budget 2003 provided funding totalling $751.3 million for investment in the areas of minority language education, the development of official language minority communities, access to public services in their own language to help improve the delivery of federal services in both languages, and to increase the use of both languages in the federal workplace. The initiatives included in these Supplementary Estimates account for a portion of this investment.
The objective of the five-year action plan for official languages is to strengthen Canada's linguistic duality, and it is a key government commitment that has been made, as I am sure you are aware, in previous Speeches from the Throne.
The specifics in the Supplementary Estimates of $28.6 million include $14.3 million in the Department of Canadian Heritage specifically to renew that department's official languages program, including the restructuring of the existing promotion, education and development programs. As well, $10.4 million is provided elsewhere in the Supplementary Estimates for the Public Service Commission to address an increase in the demand for language training and to initiate pilot projects to design teaching aids adapted to students with special needs, as well as developing computerized language courses and evaluation tools accessible to all federal public servants. Approximately $2.9 million is being provided to the Privy Council Office and to the Department of Justice to implement the accountability and coordination framework and $1 million is allocated to the Department of Citizenship and Immigration to attract and welcome immigrants to the francophone minority communities.
Those are the specifics of all the items in the Supplementary Estimates that relate to the action plan for official languages.
Senator Gauthier: I want to come back to the television fund.
[Translation]
We find in your estimates an additional amount for the Television Fund. Under Vote 5, Canadian Heritage mentions $150.1 million, which is 20.5 per cent of the original amount of $735 million. One of the most important components is $87.1 million for the Canadian Television Fund.
How are these funds established? You will remember the outcry when some of those funds were to be cut, which led to their reinstatement and, later on, a new cut. Where are they going? On what basis are these decisions made?
[English]
Mr. Joyce: The decisions on the contributions to those funds are made in terms of the annual priority-setting exercise that the government undertakes that leads to the budget. That is where recent decisions have been made in terms of the amount of money. The Canadian Television Fund was actually created in September of 1996. Since the fund's inception, the government has contributed $100 million annually, creating a $200-million-per-year fund. Government funding was to have sunset on March 1, 2002, but the December 2001 budget extended the funding for one additional year, to March 31, 2003. The February 2003 budget announced that the Government of Canada would continue to finance the fund for two additional years, by providing $87.5 million in 2003-04, and $62.5 million in 2004- 05. As background to this, the private sector contributions to the fund have more than doubled, raising the total budget for the fund to $230 million in 2003-04.
The increase in private sector contributions does, in some way, make up for the reduction in federal funding. However, as I said, the actual decisions on the extension of this fund — which was to have sunset — are made by the government as part of its priority-setting exercise and, as you can tell, are reflected in a number of recent budget decisions.
The Chairman: Forgive me, Mr. Joyce, but I recall that there was an announcement made by Mr. Manley in his budget that that fund was to have been reduced by $25 million. The allocation was to have been reduced by $25 million year over year. What followed was a protest from people in that field. Indeed, the minister responsible, Ms. Copps, expressed her displeasure and intention to find some money in various other places and apply it to this fund. Subsequently, Mr. Manley entered an explanation of what had happened very similar to the one you have given us here today — namely, that the fund was supposed to sunset and it was extended, and so on.
Does this supplementary item not go in the opposite direction to that announced by Mr. Manley in his budget, or am I missing something?
Mr. Joyce: Mr. Chairman, I do not think it goes in an opposite direction. My understanding is that the Supplementary Estimates are actually giving effect to the decisions that were made in the budget. They did result, obviously, from a series of discussion that occurred, as you have indicated. However, I am not aware that there have been any decisions made since the profile that was established in the budget that was tabled in February.
The Chairman: It will end up with $25 million less, year over year, will it?
Mr. Joyce: My understanding of the current decision that is reflected in the budget — and I have the document here, so I could get my colleague to check — is that the only funding that was provided in the budget was a declining profile, as I indicated, of $87.5 million in this fiscal year and $62.5 million in the next fiscal year for two years. The current decision, as I understand it from the budget, is that the fund's life has been extended additional two years.
[Translation]
Senator Gauthier: This time, the Senate is studyingBill C-25 relating to the modernization of the Public Service. These Supplementary Estimates mention an additional $14.5 million for the Public Service Commission. I suppose this would be for the new commission, reorganized and modernized, whose single operational principle will be the merit principle.
The Public Service Plan of Action for Official Languages states that its objective is to prepare for the modernization of human resources management. Do you have any details on this plan of action and on preparations for the modernization of human resources management?
The Public Service Commission seems to be giving up on some of its prerogatives which will be transferred to Treasury Board, while it will protect its main objective which is to make sure that the merit principle is correctly applied. I fail to understand how there can be some preparations related to modernization. All this is on the verge of being implemented. Do you have any details on this?
[English]
Mr. Joyce: As I am sure you are aware, the funds that are being provided through these estimates are, as they have indicated, in preparation for the bill should it be passed. It would be inappropriate for the government to be actually appropriating money on the assumption that the bill would pass. Therefore, these monies that are both with the Public Service Commission and with the Treasury Board Secretariat reflect work that needs to be done in the interim and to prepare for the passage of the bill, without actually taking any actions that would require the authority that the new bill provided if it were passed into legislation.
As you indicate, the debates are ongoing. I do not think it would be appropriate for me as an official to be commenting on the direction that is being proposed. That is a matter of government policy and it is proposed in the bill.
I have details, though, in terms of what is being sought. The Public Service Commission, the $4.1 million is for a public service resourcing service, E-recruitment, that is being developed in response to the need for streamlining of recruitment processes to support national competitions. I understand that this issue has been discussed in this committee in its consideration of that bill. It is a way to facilitate the revitalization of external staffing as a basis for sustaining a vibrant public service. The $4.1 million will continue the design work for E-recruitment technology to the stage of preliminary project approval.
This is clearly an initiative that has merit on its own. It would not, I suggest, need the authority of the new legislation to implement it. Therefore, it is perfectly appropriate in authority terms as an expenditure to place before of Parliament for that particular priority.
Senator Doody: Mr. Joyce, in the foreign affairs and international trade section of the supps, there is a rather large amount that is being voted for the International Development (Financial Institutions) Assistance Act. That is a large amount of money. Is this vote for the International Monetary Fund and the World Bank? What exactly is it? This item is found on page 47.
Mr. Joyce: Could you point out the particular item on page 47?
Senator Doody: I refer to the item:
Vote L30a — The issuance and payment of non-interest bearing, non-negotiable demand notes in an amount not to exceed ($193,500,000 — $96,500,000) $97,000,000 in accordance with the International Development (Financial Institutions) Assistance Act, for the purpose of contributions to the International Financial Institution Fund Accounts.
I must admit that it is written in English, but beyond that, it is completely out of my scope.
Mr. Joyce: Thank you for the question. That particular item is a technical adjustment. It reflects the fact that those payments are made to the institution that runs on a fiscal year different from ours. It simply reflects a downward adjustment to the authority that is required this year.
Senator Doody: What is it, though? What is the ``International Development (Financial Institutions) Assistance Act''? The International Financial Institution Funds Accounts is also written in the same breathless paragraph. I will admit it is only $379 million, so it could be very technical.
Senator Day: It is an appropriation of $1.
Senator Doody: I see the appropriation, but what I am asking is what is the Financial Institution Fund Account? Is that the IMF, the World Bank or some other mysterious agency?
Mr. Joyce: I apologize, honourable senator, I do not have information on that and I do not know myself. I will send that information to the clerk.
Senator Doody: In foreign affairs and international trade, there is a vote for the Canadian Landmine Fund and in national defence, there is a vote for the Canadian Landmine Fund. Are there other votes for the Canadian Landmine Fund? Is it possible to get these sundry things into one sum so that we can find out how much has been committed? Sherlock Holmes would doubt some of this stuff the way it is spread around.
Mr. Joyce: I appreciate the difficulty with items that are spread throughout the Supplementary Estimates. We have made an attempt in the backgrounder to identify the major horizontal issues. In this case, we do have some information.
Mr. Marc Monette, Acting Director, Expenditure Operations Division, Expenditure and Management Strategies Sector, Treasury Board of Canada Secretariat: Honourable senators, in terms of the Canadian Landmine Fund, a total of $12.1 million for costs related to the fund is to be appropriated. The breakdown is as follows: DFAIT, $8.7 million; National Defence, $2.9 million; and CIDA, $0.5 million. This is as part of the 8 per cent increase in the international assistance envelope in budget 2003.
Senator Doody: What is the total commitment for the Canadian Landmine Fund?
Mr. Monette: Currently, in these Supplementary Estimates, there are three organizations and the total amount is $12.1 million. In terms of funding to date, which is 2000 to 2003, the grand total is $17.6 million.
Senator Doody: Are there three different votes?
Mr. Monette: Altogether, there are four different votes. There are two votes for foreign affairs, one for national defence and one for the Canadian International Development Agency.
Senator Doody: When you have a split vote like that — a vote split over four agencies in this case — would it be possible to footnote one or all of them to say what that the total amount committed to the Canadian Landmine Fund is? I do not know if it is possible, but it sounds simple to me.
Mr. Joyce: Honourable senators, that is something that we should look at. As I have indicated, we have attempted to do this. This is a more recent practice where, in the backgrounder that is provided along with the Supplementary Estimates, we have identify the major horizontal items where we have actually done that.
What the honourable senator is asking is similar to a previous question as to whether this could be incorporated directly into the actual Supplementary Estimates. As I believe I indicated in my previous answer, that is a suggestion I would be pleased to take back as we look at ways which we might improve the presentation of Supplementary Estimates.
Senator Doody: The national defence vote does not include the total commitment for Afghanistan. That will come eventually from another appropriation, I assume. The Afghanistan bill will be a great deal more than what we have in this vote. The International Security Assistance Force Mission to Afghanistan is here, but that certainly does not cover the cost of the Canadian commitment. Perhaps it is in the operating expenditures total; I do not know. Perhaps you could help me with that. That is national defence on page 76.
Mr. Monette: With respect to the Canadian Landmine Fund, in terms of national defence, national defence will be involved in fielding and promoting the mining technology and will introduce the mining community to new technologies through trials and demonstration of equipment and methods in mine-affected countries.
Senator Doody: Could I have a response to the Afghanistan question?
Mr. Joyce: In regard to the Afghanistan question, as you can see on page 76 of the Supplementary Estimates, a total of $387.7 million is being appropriated through these Supplementary Estimates for assistance to Afghanistan. Perhaps my colleague could assist me, there also would be assistance provided to Afghanistan of a non-military or non- peacekeeping form through the Canadian International Development Agency. Again, I am not sure I have the exact totals with me, but I could provide those as a follow-up.
Senator Doody: I have a question in respect of the implementation of the dispute resolution framework under public works and government services. I assume that this is dealing with the former pupils of residential schools. Is that possible? Do I have the wrong vote? I see the Office of Indian Residential Schools Resolution of Canada programs expenditure. If this is the right vote, does this address the claims for redress from former pupils and how much are the churches contributing toward the total settlement? That is on page 86.
Mr. Joyce: Honourable senators, I do not have any information on additional funding that may be being contributed by the churches, if that was your question.
Senator Doody: That was part of the question.
Mr. Joyce: That is something I would have to obtain from the department.
Senator Doody: It may not be resolved. It may still be up in the air; I do not know. There is a fairly substantial vote here and I was wondering if that was to be the end of it or if it was just an interim.
Mr. Joyce: That particular vote is just for this fiscal year. The current plan for this framework is to resolve claims within seven years. I believe that is the objective of the program. Certainly, you will see continuing appropriations year after year as this office tries to achieve that objective.
Senator Mahovlich: Mr. Joyce, regarding Industry Canada, page 63, the Canadian Tourism Commission is seeking $12.5 million to provide assistance to offset the economic impact of severe acute respiratory syndrome, known as SARS. How are these funds being used? Are the funds earmarked to support marketing efforts for the affected region or to compensate businesses for their losses?
On page 62 of 2003-04 Supplementary Estimates (A), Industry Canada lists a grant to TorontO3 Tourism Recovery Alliance of $10 million. Is this amount part of the $12.5 million set aside to offset the economic impact of SARS? Have other departments provided assistance to offset the impact of SARS?
Mr. Joyce: Honourable senators, I have some details on the Canadian Tourism Commission in terms of how they are expending these funds. The $26 million is to fund initiatives to stimulate the tourism and hospitality industry that was affected by SARS. These initiatives include three main components: A $10 million grant to TorontO3 Tourism Recovery Alliance to promote the greater Toronto area and the Ontario tourism corridor as a tourist destination; a $3.5 million grant to the Toronto Waterfront Revitalization Corporation to fund the Rolling Stones concert that has already been occurred; and $12.5 million for the CTC — that is the commission itself — to develop a marketing campaign promoting tourism in Canada. Those are the specifics I have on the Canadian Tourism Commission.
With respect to the question regarding page 62, I believe the grant to the Toronto Waterfront Revitalization Corporation is being made under the Department of Industry. That would, I assume, be separate but related to the activities of the Canadian Tourism Commission.
My colleague can correct me, but I do not believe I have any particular details on that grant. Again, I would be pleased to get the information for you and particularly its link to the similar activity by the Canadian Tourism Commission.
Senator Day: I understood you to read out that that was the Rolling Stones concert.
Mr. Joyce: That is one of the three items, correct. The $3.5 million specifically under the Canadian Tourism Commission is related to that concert. I do not have similar details on the grant that is under the Department of Industry. I have undertaken to come back with details if I can get them from the department.
Senator Comeau: Mr. Joyce and Mr. Monette, I look forward to working with you over the next while. I hope you can help some of us who are still trying to muddle through how Treasury Board works. I will not even pretend that I understand how Treasury Board functions and operates. I hope you will be able to help us over time to understand the functions more so that we are better able to accomplish our job.
One of the ways that I have been approaching my work on the committee is to zero in on specific areas. If I understand the specific area, then I better understand the full books. One of the areas that I zeroed in on is the firearms registry. I have been following the evolution of the firearms registry somewhat. If you do not have all the answers, by all means, we can get them down the road.
My first question deals with last year's Supplementary Estimates, which had a $72 million request that was pared down to $59.4. That was a $13 million reduction once it went through the Supplementary Estimates (B); therefore, $13 million less was earmarked.
As well, I would add the $10 million from this year that was not spent. I think that is shown on page 88, under the transfers. It is called ``new appropriation,'' which is in fact a carry-over.
Apparently, we spent $23 million less last year than we originally forecast. That raises the question of how the registry was able to operate with $23 million less than originally anticipated in the year that the registry was supposed to complete the registration. That is my first question.
Mr. Joyce: To provide you with a detailed answer, I would need to talk to the Department of Justice or the people who have been transferred.
Generally speaking, for initiatives that have not yet reached an absolutely steady state, the spending plans made during the course of the year cannot proceed as quickly as possible for reasons that are frequently outside the control of the people managing the program. Sometimes it is a supplier problem; sometimes it is the individual project.
While I perhaps should not make assumptions in front of this committee and I will certainly verify that, I would imagine that that is the case — particularly as in a project like this where the funds were under a significant amount of scrutiny. I will talk to people in the firearms program and get the specifics on exactly why the $10 million carry- forward was identified.
This item is, in a way, a new appropriation because we have to appropriate it this year even though it is a carry- forward from a previous appropriation. You are absolutely correct; that is in this year's Supplementary Estimates.
Senator Comeau: For my learning process, would it be normal for Treasury Board to ask such a question of the department, or would that be completely within the realm of the department? In other words, is it something on which the Treasury Board would question to the department, saying, ``Why were you able to get by with $23 million less?'' Is that not a function of Treasury Board?
Mr. Joyce: Honourable senators, that is a very perceptive question. Let me answer that in two ways. The carry- forward policy is intended to give managers flexibility rather than having to plan tightly within an annual budget. As I just suggested may be the case here, in cases where there are expenditure plans for reasons outside their control are slower than normal, they can carry funds forward in their operating budgets. It also recognizes — and this was one of the Auditor General's criticisms years ago — what the Auditor General at the time characterized as ``end-of-year spending.'' It is, perhaps, a natural human tendency; if managers know that their budget will be removed at the end of the year, they will accelerate items of expenditure.
One reason this policy was put in place by Treasury Board was to remove that counterproductive incentive so that managers who arrived at the end of the year could carry money forward. A second reason is that it allows some flexibility in budget planning such that managers who do not need funds for a particular purpose have the flexibility to decide in which year they will make the purchase. In fact, they can deliberately delay expenditure when they think it would be more appropriate to do so.
That is the general reason underlying the policy. The way in which it is applied creates flexibility for departmental managers to manage. As long as they fit within the broad parameters of the policy, they are free to carry the money forward. We do not scrutinize the reasons that managers carry money forward in order to approve or deny that process. The carry-forward, within the rules or the guidelines of the policy, is an automatic provision.
However — and this is why your question is perceptive — when analysts at Treasury Board examine programs, they look at carry-forwards. They will question whether there may be an inappropriate degree of flexibility in the budget if a manager is carrying money forward each year. That could be an indication.
The experience in the Treasury Board Secretariat with these questions that analysts ask the departments when they are dealing with general issues indicates that that is not the case. Generally speaking, most budgets are tight. I am not aware that we have done any formal evaluation of this policy, although I should, perhaps, check up on that. It is our experience, in our interaction with departments, that the policy has achieved the objective and is appropriate. That is not to say that every case is like that. My experience is that it is used appropriately.
Senator Comeau: On February 20, April 14 and June 30, an Access to Information request was placed to the Department of Justice and the Solicitor General asking for the number of employees in the firearms registry. Both departments responded that there were no employees in the firearms registry department on those three dates. I could have a copy of the Access to Information response sent to you, if you are in doubt. I saw your eyebrows go up and I had that same reaction because it is highly unusual to have no employees in a department. I will send a copy of it to you, Mr. Joyce so that you might follow up on it and respond to the committee.
On page 88 of the Supplementary Estimates, it states that the firearms registry personnel expenditure this year is projected to be $22.6 million. If you were to make a rough calculation — a cost per employee of $50,000 — that would add up to about 450 employees for next year, give or take a few.
Would it be possible for Treasury Board to provide the committee with the occupation categories within the firearms registry? How many are at the clerical level? How many at the executive level? That would give us a better idea of the firearms registry personnel figures. I do not know if this is a fair question for Treasury Board or if it would be a question better suited to the registry. If it would be fair, please ask Treasury Board, by all means.
Mr. Joyce: That is a reasonable question to ask. I will obtain the information if we have it at Treasury Board or I could obtain it from the department, should it prefer to provide it directly. I will ensure that you receive that information because we do have it.
Senator Comeau: The Estimates call for $58.9 million for professional and special services. In layman's terms, that would be for hiring consultants. Is $58.9 million not an unusually high figure for consultation work? There is also a figure of $8.6 million for transportation and communications.
Is it usual to have a figure as high as $58.9 million to hire consultants? Is that normal?
Mr. Joyce: Managers make judgments on the hiring of consultants for application to the achievement of program objectives. Sometimes consultants are brought in because the expertise you need lies in the private sector. It can be an efficient and effective use of public funds to get the expertise you need.
On other occasions, consultants are brought in when it is not appropriate to hire full-time staff, perhaps when you know that the budget will decrease. I do not have the specifics on this issue but, again, I would be pleased to obtain the information on that $58.9 million.
Senator Comeau: While you are doing that, would it be possible to obtain the names of the principal contractors for this particular amount or should I ask the department for that information?
Mr. Joyce: I see nothing wrong in my relaying that question to the department on behalf of this committee.
Senator Comeau: On page 14 of the Supplementary Estimates, under ``Transfers,'' there is an entry for $105.4 million. I think that is mainly because of the transfer of the firearms registry from the Department of Justice to the Office of the Solicitor General. Should the transfer not come down to zero in the budget for justice? My experience with budgets and estimates in the past tells me that, in the case of a transfer from one department to another, the figure should come down to zero in the first department.
Mr. Monette: Honourable senators, the figure of $105.4 million shows there so that it is clear that this is a transfer from Justice to the Solicitor General. Generally, it would be zero under Justice. However, in this case, we were asked to show the amount so that the transfer amount from Justice to the Solicitor General is absolutely clear.
Senator Lynch-Staunton: I have a supplementary. We accept that there is a transfer of funds but why is there not $105 million less in the Justice account?
Mr. Joyce: I will respond to that question, senator. The money has been transferred and, therefore, the Treasury Board would have put in place what we call a ``frozen allotment'' that actually removes the access by the Department of Justice to those monies. Treasury Board ministers have taken that action to remove the access to that authority. In effect, that has happened.
Senator Lynch-Staunton: It does not show.
Mr. Joyce: That is correct. It does not show in the way that we display these Estimates.
Senator Lynch-Staunton: Why does it not show?
Mr. Joyce: That is an excellent question. It goes to the clarity of the document.
It is my understanding that this has been a consistent practice in the Supplementary Estimates in use for years. The Supplementary Estimates are used to deal with the increase in authorities sought. We have a practice whereby the Treasury Board has taken action, as I have just indicated. Normally, we offset the amount but, in this particular case given the focus on the firearms registry, we thought it was appropriate to be absolutely clear that that amount is being transferred. That is why we are showing it in such a way.
In effect, the money has been removed from the budget of the Department of Justice.
Senator Lynch-Staunton: It is not clear to me and I do not think I am alone in that.
Senator Comeau: On that last point then, in the last column on page 14 under ``Current Estimates,'' should it not read $64.6 billion rather than $64.7 billion if we are transferring $105 million?
Mr. Monette: Although it is what we call ``frozen'' in the allotment for justice, it is still within the Estimates. It is still within the vote. It is a frozen allotment within the vote. For example, if nothing changes you would see, in public accounts, an amount equivalent to the frozen allotment. It would be printed in public accounts under the heading ``frozen allotment.'' Under that, you would see the subheading ``firearms,'' and then the amount.
Senator Lynch-Staunton: Last year in the Supplementary Estimates, CMHC and Canada Post were transferred from Privy Council to Transport, and a reduction was shown in the Privy Council budget and comparable or corresponding increase in Transport budget. That is clear, so bottom line, the total, zero in transfers. They would even each other out. Then why was that same formula for interdepartment transfer — not ``intra'' but inter — not used in this case?
Mr. Joyce: It is an excellent question. I do not know the answer to that. The one principle I would agree on is that unless we actually reach clear agreement on changing a method of presentation — even if it is a presentation method that causes trouble — we should at least be consistent. That is something that I will undertake to look at to make sure that we are at least consistent. The other issue is, even if we are consistent, are there ways to improve? I would like to look at that.
Senator Ringuette: I would like to make the comment that I reiterate Senator Lynch-Staunton's request to have more information than just a one-liner that raises more questions in our minds and requires you to be here longer than need be.
You seem to have quite a briefing book there. Would it be possible to have some kind of a similar briefing document for us to be able to be more efficient in our duties? That is a comment and you do not need to add anything.
I am looking at industry, page 61, and there is assistance for softwood industry, $105.8 million, and then I look at page 62, and there is FEDNOR, for an additional $9.5 million, which is not softwood related, and western diversification agency on page 70 that has $46.7 million, additional, and not softwood related. For the Quebec diversification agency, page 64, an additional $52 million, plus an additional $24.5 million, and that credit is softwood related.
Coming from Atlantic Canada, I see no additional money for the ACOA agency, whether it is for softwood-related issues or others. Can you clarify this for me? Can you tell me if the $105.8 million vote under industry for assistance for the softwood industry does include a program for the Atlantic region or not?
Mr. Joyce: I will try to do that. First, if I could address the assistance to the softwood lumber sector and perhaps give you some of the background context for this. There have, in fact, been three announcements of assistance to the softwood lumber sector by the government, starting in May 2002, followed by an announcement in October 2002 and then in December, 2002. A total of $134 million has been announced, $105.9 is in Industry Canada to establish the softwood industry and community economic adjustment initiative. As you point out, $24.5 million is for the Economic Development Agency of Canada for the regions of Quebec.
The Industry Canada program is a national program designed to address the adjustment and transition needs of all forest-dependent communities across Canada. It will be delivered by the regional economic development agencies, but in this particular case they will be making the charge back to the industry. This is an arrangement that has been put in place where the responsibility for this program rests with the Department of Industry but the regional agencies, if you like, are being used as delivery arms. This is an arrangement that has been struck between the Department of Industry and the four agencies.
I do not think that I have information about the split between the agencies. I am not sure, necessarily, whether the department does, but I can certainly go back and ask that question so that if there is at least a planned distribution among the four agencies for that particular program in the Department of Industry, I will get you the information.
Senator Ringuette: Setting aside the softwood assistance program, the three regional economic agencies — FEDNOR, the western one and the Quebec one — are getting $108 million additional, but there is not even one penny for the Atlantic region in these estimates.
Mr. Joyce: That is correct, senator.
Senator Ringuette: In previous meetings we have been told by Madam Robillard that there was between $38 million and $40 million from her department that would be available for the Public Service Commission to acquire the additional tools required to remove the geographic limitation barriers to entry within the public service. Can you identify for me where that vote is within these Supplementary Estimates?
Mr. Joyce: Mr. Chairman, I understand that the only items being put into the Supplementary Estimates with respect to human resource modernization — which I believe is where that flows from — is with respect to preparation for the passage of the bill, so that we are prepared should the bill be passed by Parliament.
Money has been set aside with respect to implementing the bill, should it be passed. My understanding is that part of the money that has been set aside for planning purposes relates to e-recruitment. That would have been, if I am correct, what the president would have been referring to. The full amount, at the moment, is planned spending once the legislation is passed. If for any reason the legislation is not passed, then the government would have to reconsider which of the objectives and priorities it wishes to pursue and it could do in the absence of the planned legislation.
The Chairman: I am not sure, Mr. Joyce. We are familiar with this issue in this committee because we had the bill before us, and the issue was that in order to do what Senator Ringuette is talking about, which is to widen the national area of selection, the president of the Public Service Commission had asked for a considerable increase for their part in government on-line. He did not get what he asked for.
I note now in these supplementaries, there is $97.3 million to fund projects related to government on-line — an initiative in the 1999 Speech from the Throne. Of that total, $78.7 million is going to Public Works and Government Services and $18.6 million is going to the Treasury Board Secretariat. Perhaps some of that is related to the national area of selection, perhaps it is not, and perhaps you do not know right now, but it will be interesting if we could find out.
I think what Senator Ringuette is talking about is rather unrelated to Bill C-25. Government on-line is there, and, with or without Bill C-25, the national area of selection is a policy that the government is trying to pursue.
Senator Ringuette: I understand government on-line is one issue. However, the minister did indicate that she had a four-year action plan specifically to deal with technology that would enable the public service committee to deal with the geographic limitation. Will you investigate that for us and come back on that for us, to ensure that everything matches?
Mr. Joyce: Yes. I will do that. I will confirm my understanding that the money for the Public Service Commission is separate from the money that has been set aside for government on-line. My understanding is that the two budgets are both technology-related projects. However, I will confirm the situation of both for you and provide the information to the clerk.
Senator Ringuette: In regard to the firearms issue, I can understand that the department said that they had no employees because, actually, they have no public service employees. It is my understanding the people who are working and have worked on the registry are contracted out. It is an odd flux of the work and does not require permanent, full- time public service employees so it should be contracted out.
However, there is an interesting issue. I am looking at page 89 and there is $16.5 million there for ``contribution to the provinces and territories for the Canadian firearms program.'' Could we have the list of provinces and who is getting how much?
I suppose that since these are Supplementary Estimates, maybe the $16.5 million is not the full amount or is it?
Mr. Joyce: I will have to confirm both answers to you. I do not have information on the distribution among provinces. I know that the design of the program has provinces doing part of the administration and that is clearly the $16.5 million. This is an arrangement with provinces. I would have to get information from the firearms centre in terms of which provinces, what the arrangements are, and whether they have a distribution of this $16.5 million. I will have to come back with that information.
Senator Ringuette: I recall having some provinces shouting pretty loudly against this; on the other hand, if some are getting some money to participate in the program, then that is questionable.
Senator Doody: That is not unusual.
Senator Ringuette: There is a lot of funding for health research, and an entire slate of health research centres. Could you provide us with the list of health research centres, the amount of money that they are getting and for what purposes? Maybe there is more administration than scientific work being done? I would like to look into that.
Senator Comeau: Would you put into the hopper the suggestion from Senator Ringuette that the employees are not employees of the firearms registry and that the government departments were able to bisect my question under access to information by saying there were no employees, because of the fact that they were all contracted as suggested by Senator Ringuette? That would raise two questions to that point.
Are the Department of Justice and the Office of the Solicitor General trying to fool around with straight-forward questions from senators and members of Parliament? If that is the case, because they were contracted employees, would you give us the head count of the contracted employees?
I put that very specifically. I want the head count whether they are employees or contracted workers.
Senator Banks: In other words, how many people are working at the gun registry?
Senator Comeau: Exactly.
Senator Banks: The answer is about half.
Thank you, gentlemen, for being here. Getting back to the television fund at page 33, I need you to help me with whether this arithmetic is coincidental.
The fund used to be $100 million. It was to be cut back to $75 million. Now it is $87.5 million. That means we took out $25 million but put back $12.5 million. Next year, the allocation will be $64 million, so it sounds like we are taking $12.5 million away from next year's $75 million, and adding it into this year. Do I have that right? A promise was made to restore it but we will only restore half, giving us $87.5 million. Is that right?
Mr. Joyce: That is about it. The specific funding level by the federal government to that fund this year is $75 million. That is down from $100 million in the last year. In the next fiscal year, it will fall to $62.5 million, so you are absolutely correct.
Senator Banks: We are robbing from next year to soften the blow and we will recover that amount in the next year.
Mr. Joyce: I understand that is the strategy. This is to provide a transition for the fund until it can rely on the private sector revenue that it earns.
Senator Banks: My second question also refers to page 33. There are two grants: $15 million to the Trans-Canada Trail Fund and $12 million to the National Aboriginal Achievement Foundation.
Members of this committee have before expressed concern, as have others, about certain kinds of grants. Are these grants program-specific, or are they to the capital funds of these foundations that can then spend their proceeds? Can they spend the $15 million and the $12 million now? Is there any transparency or accountability as to exactly what the grants are being spent on, or are these transfers to the ``sinking fund,'' if you like, of these foundations?
Mr. Joyce: The information that I have on the Trans-Canada Trail Foundation is that the grant will be used to establish a fund to be expended in support of community-based trail-building projects over a six-year period.
Senator Banks: It is program money then to be expended over a specific time?
Mr. Joyce: That is the information I have, yes.
Senator Banks: The funds are going to a foundation?
Mr. Joyce: The actual fund was created in 1992 as a non-profit charitable organization to raise funds to build a national recreational trail.
Senator Banks: What about the $12 million to the National Aboriginal Achievement Foundation?
Mr. Joyce: That fund was established in 1985 and its mandate was expanded in 1997 to include the recognition of Aboriginal scholastic and lifetime achievements. This particular payment is a one-time endowment by the Government of Canada to recognize that, despite steady gains in educational achievement, the percentage of Aboriginal Canadians with post-secondary degrees lags behind the average for all Canadians. This was considered to be an instrument to achieve that objective.
Senator Banks: Since it was a grant to the endowment, do we assume that it is gone, in effect, and now will be spent as and when the foundation likes? Does the grant need to stay in that endowment, or is it to be spent within a certain period of time? What happens to the grant at the end of the foundation's life?
Mr. Joyce: I would have to confirm that. The information I have is that the income generated from the endowment is expected to yield between 100 and 300 scholarships annually. That suggests that it is capital and that the interest will be used and therefore it is ongoing. I will have to confirm that because that is just an assumption that I have made. I will confirm that.
Senator Banks: Thank you. On page 2 of the backgrounder, there is a reference to $376.8 million to CIDA. At page 47 of the Blue Book — and Senator Doody asked about this — there are expenditures of $379 million also to CIDA. Are they the same? Why are the numbers different? Are we looking at separate grants that would total more than $750 million to CIDA?
Senator Doody asked about the International Assistance Financial Institution Fund accounts.
Mr. Joyce: As I indicated, that is just a technical adjustment. It does not represent any increased funding. The new appropriations being requested in this Supplementary Estimate total $379.2 million. That does not include the issuance payments on that International Development Financial Institution Fund. The $379 million amount represents operating expenditures of the agency. The bulk of it is, as you pointed out, $368.7 million worth of grants that are listed in the Supplementary Estimates.
Senator Banks: Where in the blue book do we find the $376.8 million to which you referred on page 2 of the backgrounder?
Mr. Joyce: That would be on page 48. The transfer payments are listed there. You can see the grants that are listed.
Senator Banks: I cannot make that out to $376.8 million. Maybe it is an arithmetical error in the backgrounder?
Mr. Joyce: The reconciliation is provided at the bottom of page 47. Under ``Objects of Expenditure,'' right at the bottom it says ``Less funds available.'' That is the adjusting item. You would subtract the $12.3 million.
Senator Banks: That is not $376.8 million. Perhaps the backgrounder is just wrong.
Mr. Joyce: It is possible; I would have to check the backgrounder. It is possible. It is the Estimates that are correct.
Senator Banks: The backgrounder information is talking about — by way of explanation — those items on page 47 and 48?
Mr. Joyce: That is correct, yes.
Senator Finnerty: The Department of Justice is seeking new appropriations of $44 million for the renewal of Canadian legal aid, page 71. Why was this item not listed in the Main Estimates? Is it a one-time renewal or will it become an ongoing item for the department's estimates?
Mr. Joyce: It is actually a three-year renewal strategy for legal aid in the amount of $133 million over three years. What you see in the Supplementary Estimates is this year's portion of that money.
The resources were announced in the budget and represent the bulk of the expenditure plan as set out in the budget. This is much like the situation I mentioned earlier, in which the secretariat wanted to get additional information before it was prepared to make a recommendation to the Treasury Board. That was the reason that we did not recommend it for inclusion in the Main Estimates. We wanted to get further information from the department and the department just did not have time between the publishing of the budget and the Main Estimates to do that.
The Chairman: Mr. Joyce, do you have in front of you the press release put out by the secretariat yesterday on reallocation? ``The President of the Treasury Board reports on reallocation.''
Mr. Joyce: I do, Mr. Chairman.
The Chairman: There is a narrative on the covering page that seeks to explain what it is all about. It is difficult, if not impossible, for a layman to make sense of it. There are two tables.
This press release states that the government has reallocated $1 billion to higher priorities for the current fiscal year. Then there is more than $800 million that you say is being reallocated internally, within departments.
I have looked and looked at the tables here. One table adds up to $825 million. It starts with Agriculture and Agri- Food with $100 million, down to Veterans Affairs, $11 million. I presume this is money being transferred across votes within the department? Is that the case?
Mr. Joyce: That is correct. These are examples of what departments do every year within their budgets. They adjust to changing priorities and reallocate internally. These are examples of which we are aware, totalling $825 million.
The Chairman: The next table adds up to $1 billion. I presume this is the reallocation to other priorities. This is money that these departments are — to put in a sort of vulgar way — sending back to the centre? Is that it?
Mr. Joyce: In some cases, that is correct. The reallocation exercise was announced in the budget. The requirement, post-budget, was that the Treasury Board find $1 billion in reallocation to meet the high priorities that are already being funded in the budget. The budget tables actually showed a negative $1 billion. This was a commitment on which the Treasury Board had to deliver. These listed portfolio contributions are the contributions that the ministers of each portfolio agreed to make, that would, in fact, fill that amount of money, the $1 billion.
The Chairman: It is going back to the centre, though? Somebody has to decide this. The second paragraph quotes the Honourable Lucienne Robillard saying that, ``These measures will help us build the Canada we want through investments in Canadians' priorities — our families and communities, health care, education, and the environment. The Minister further states that, ``The money will also help fund new priorities that have emerged since the budget such as ... SARS, ...BSE, ...the cod fishery and the reconstruction of Iraq.''
These departments, as listed, Agriculture and Agri-Food, is giving up $17 million; the Treasury Board Secretariat — never slow to set a good example — is giving up $41 million. If this is going to be reallocated to other priorities, it must be going back into a common pot of some kind to be reallocated by the ministers, cabinet or somebody.
Mr. Joyce: There is not always a one-on-one relationship between the from and the to, because of the high priorities that were funded in the budget and the high priorities that have been funded since the budget, which is what the president is referring to in terms of the post-budget events that happened.
In some cases, the money has been simply removed from the department's spending authority. In other cases, it is a question of adjusting the amount of funds that are provided for a new initiative, where the department can reallocate to that new priority and therefore reduce the cost that would have otherwise been incurred in responding to the event.
The Chairman: Did you get that, colleagues? I suppose I get it.
Why has not some of this shown up in the Estimates? On the contrary, let us take Privy Council, which made its pace-setting gift of $4 million to the Privy Council Office's agencies in the reallocation process. When I look at the Sups, they are coming to us for a new appropriation $26 million. That is some reallocation; they give up $4 million and they get $26 million in the Sups.
Mr. Joyce: I do not have the details with me, but in the Supplementary Estimates, we have made reductions that take into account the fact that we have removed the spending authority from departments' budgets. In other cases, it is an issue of spending that was either planned in the framework or had to be released for new priorities. The reallocations have had the effect of reducing the amount that had to be allocated to new priorities.
The Chairman: You would have to look at the total Estimates to date and then look at the reallocations to see what the situation is.
Senator Day: May I ask a supplement on your question so that it is clear in my mind? The Chairman was talking about this press release of yesterday, but we have been aware of this$1-billion reallocation for some time. When these Supplementary Estimates were prepared, did Treasury Board have all the information on how the reallocation of $1 billion would take place?
Mr. Joyce: It had not been finalized at the point that we put the Supplementary Estimates together. Clearly, we have been working on this for some time. The president was only in a position to make the announcement yesterday and therefore it was not final until that time.
Senator Day: There is some accounting activity with respect to the $1-billion reallocation that we may see in the next Supplementary Estimates (B) or some time in the future; is that correct?
Mr. Joyce: It is possible. However, the majority of adjustments that have been made to where we are specifically reducing a department's allocated budget have been reflected in the Supplementary Estimates. There may be a few minor ones that would be reflected in Supplementary Estimates (B). However, in some respects that depends on the nature of the items we get in Supplementary Estimates (B), and those we are not in a position to forecast in detail.
Senator Day: At some time in the future, I would like to ask more questions about that.
The Chairman: I know you would, and that is my next point. Honourable senators, we have a deadline — albeit self- imposed — to continue our practice of having our report on the Supplementary Estimates tabled in the Senate before the Interim Supply Bill comes from the House. Our information is that that the Interim Supply Bill will be brought into the Commons on or about October 23.
Senator Lynch-Staunton: That is early. We will have a lot of time to discuss it then.
The Chairman: The supply bill will be before us toward the end of October, let say the last week of October or very early November. If it is the wish of the committee, I can invite Mr. Joyce and Mr. Monette back here a week from today to pursue some of these matters, if you wish to do that.
In any case, these Sups, like the Main Estimates, are before the committee anyway until March 31, 2004. However, they have taken notice of a number of matters and they may wish to bring them back. If you would like to convene the committee next Tuesday morning, we can do that.
Senator Day: I think that would be wise. There are many undertakings. You may have questions.
The Chairman: How do the rest of you feel about that?
Some Hon. Senators: Agreed.
The Chairman: Are you people available next Tuesday morning?
Mr. Joyce: I will make myself available.
Senator Day: Could you try to do the research that you have undertaken to do so that we will have that?
Mr. Joyce: We will do our best to do that.
The Chairman: Thank you very much, honourable senators. Until 9:30 next Tuesday morning, the committee stands adjourned.
The committee adjourned.