Proceedings of the Standing Senate Committee on
National Finance
Issue 1 - Evidence - Meeting of May 2, 2006
OTTAWA, Tuesday, May 2, 2006
The Standing Senate Committee on National Finance met this day at 9:34 a.m. to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 2007.
Senator Joseph A. Day (Chairman) in the chair.
[English]
The Chairman: Good morning, ladies and gentlemen, and welcome to the Standing Senate Committee on National Finance.
We are being televised this morning so I will take some time to introduce the members of the committee. My name is Joseph Day, from New Brunswick, and I am chair of the committee. On my immediate right is the deputy chair of the committee, Senator Anne Cools, from Ontario. During her many years of public service she has been involved in a wide range of public issues and has been extremely active in various senate committees and other public bodies on which she serves. In addition to this committee, she is a member of the Standing Senate Committee on Legal and Constitutional Affairs and of the Standing Committee on Rules, Procedures and the Rights of Parliament.
On my immediate left is Senator Lowell Murray, from Ontario. He has served in the Senate since 1979 and, during this time, he has served as Leader of the Government in the Senate, Minister of State for Federal-Provincial Relations, Minister Responsible for the Atlantic Canada Opportunities Agency, and Acting Minister of Communications. He has also served as chair of this committee on one occasion and of other Senate committees.
Next to Senator Murray is Senator James Cowan, who has a legal background and represents Nova Scotia in the Senate. He is a partner with Stewart McElvey Stirling Scales, the largest law firm in Atlantic Canada. He is a member of the Canadian Bar Association, Nova Scotia Barristers' Society and the Canadian Council for Public-Private Partnerships. He is also active in many social causes in Nova Scotia.
Next to Senator Cowan is Senator Grant Mitchell, who is a political, community and business leader from Alberta. He has served in the Alberta legislature, where he was Leader of the Opposition. He has experience in the public sector and in business as an executive with the Principal Group Ltd.
Next to Senator Mitchell is Senator Art Eggleton, from Toronto, where he served as a city councillor and as mayor from 1980-91. He was elected to the House of Commons in 1993 and served as a minister in various capacities, including President of the Treasury Board, which is highly important to this committee, prior to his appointment to the Senate.
Second on my right is Senator Ringuette, from New Brunswick. Senator Ringuette was the first francophone woman to be elected to New Brunswick's legislature and, subsequently, to Parliament. She is also a member of the Standing Senate Committee on Legal and Constitutional Affairs.
Next to Senator Ringuette we have a pinch hitter today. We welcome Senator Mac Harb from the city of Ottawa, representing Ontario in the Senate. He comes to the Senate after having served several years in the House of Commons, representing a riding here in Ottawa.
Finally, we have Senator Nancy Ruth on our committee today. She is from Ontario and has played an active role in various religious, professional, political, educational and non-profit organizations in Canada, Britain and the United States. She has been a recipient of a number of distinguished awards. She has spoken extensively about the Canadian Charter of Rights and Freedoms and on issues concerning women's rights, poverty, politics and economics.
Those are the committee members here today. I would like to introduce our two witnesses. Mr. David Moloney is assistant secretary of the expenditure management sector. Laura Danagher is executive director of the expenditure management sector, expenditure operations and estimates division of the Treasury Board Secretariat.
The committee is meeting today to begin its study of the Main Estimates for fiscal year 2006-07. The Main Estimates are the federal government's annual expenditure plans. Should there be a change in the government's financial requirements over the course of the year, there will be subsequent supplementary estimates.
Later this year we will delve in detail into different aspects of federal administration, but today we will begin our study of the Main Estimates for this fiscal year.
To help us do this, we welcome our two witnesses from the Treasury Board Secretariat. Mr. Moloney will read an opening statement, and then we will go to questions.
David Moloney, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you very much, Mr. Chairman. Honourable senators, good morning. It is nice to be in front of this committee again.
I am appearing before you this morning to discuss the government's Main Estimates for fiscal year 2006-07 that were introduced in Parliament on April 25 of this year. Laura Danagher, as the chair indicated, executive director of the expenditure operations and estimates directorate, joins me today.
The Main Estimates tabled last week support the government's request for parliamentary authority to spend money to ensure the continued operation of government. These Main Estimates reflect total budgetary spending of $198.6 billion for 2006-07 and non-budgetary spending of $1.1 billion, for a total of $199.7 billion. Of this amount, $70 billion will be subject to vote by Parliament through the interim and full supply bills related to these Main Estimates. The remaining two thirds of the spending relates to statutory provisions presented in the Main Estimates for information purposes only, as they have already been approved by Parliament through other legislation.
Comparing these Main Estimates to those tabled in February 2005, budgetary spending in 2006-07 increases by $12.7 billion, or 6.8 per cent. However, a year-over-year comparison of Main Estimates can be a misleading indicator of changes in actual government spending, since spending that was approved later but had yet to be reflected in the Main Estimates the previous year can distort the spending growth rates implied by such comparisons.
This is certainly the case for 2005-06, where significant adjustments — for example, to the equalization formula — were not reflected until supplementary estimates were tabled in Parliament later in the year.
Of course, budget announcements of voted spending later reflected in the supplementary estimates and, in some cases, funded thereafter through Governor General's special warrants, were not included in the 2005-06 Main Estimates, but are now included going forward in the 2006-07 Main Estimates.
These Main Estimates are fully consistent with the expense plan laid out in the February 2005 budget that forecasted a 5.3 per cent year-over-year growth in actual spending.
The bulk of the mains-over-mains spending growth can be linked to increases in statutory spending, particularly in health and equalization transfer payments. This includes the impact on transfers arising from the first ministers' meeting of 2004.
With regard to the direct program spending component of the change, the major drivers of the increase are collectively bargained wage and salary increases, and spending on defence and on public security.
Implicit in what I have already noted is that these Main Estimates reflect the decisions taken by the previous government rather than the current one. This government's decisions regarding spending, both in total and in the details, will be announced in budget 2006 that, as senators know, will be tabled later today. It will be reflected in the supplementary estimates to be tabled in the fall.
However, I qualify this statement in one respect by noting that most of the machinery-of-government changes that were announced by the government on February 6, 2006, have been reflected in how spending is displayed in these Main Estimates. The only exception is where the changes were more complex; for example, where it involved moving pieces of a program between organizations or, as in the case of the Office of the Registrar of Lobbyists, designating an office as a separate entity.
The latter changes required the rewriting or creation of program activity structures, the creation of new votes and vote wording, and thus Treasury Board approvals, as well as possible legislative amendments.
For similar reasons, despite the amalgamation of Foreign Affairs and International Trade, as well as of Human Resources Skill Development and Social Development, these departments are still displayed separately, though sequentially, and under the same departmental title in the Main Estimates. All of these more detailed changes will be reflected in future estimates.
As you are aware, the process for Main Estimates and interim supply was delayed this year due to the dissolution of Parliament for the purposes of a general election in January and the return of Parliament on April 3. Normally, under House standing orders, the Main Estimates are required to be tabled on or before March 1 each year to ensure that interim supply is in place prior to April 1, the start of the new fiscal year for the government.
Interim supply allows the ongoing operations of government to continue for a fixed period, normally through June, while Parliament considers the government's request for full spending authority for the year. Since Parliament was not sitting in March of 2006, this could not occur.
As a consequence, special warrants were issued on April 1 to ensure that the ongoing operations of government would continue until such time as the government could table Main Estimates and introduce and receive Royal Assent on its interim supply requirements.
Under section 30 of the Financial Administration Act, the funding provided under this special warrant runs out on May 15, and no further special warrants can be issued as of Parliament's return on April 3; hence the critical need to have interim supply in place by May 15.
Amendments to section 30 introduced in 1997 limited the use of special warrants to when Parliament was dissolved for the purposes of a general election and not beyond 60 days following the return of writs. This is the first time, therefore, that special warrants have been used to cover payments spanning two fiscal periods since these amendments were introduced.
[Translation]
Given the critical need to have Royal assent for interim supply no later than May 15, a motion was adopted in the Senate on April 4, allowing for a special order covering the business of supply for this supply period. This Special Order provided for the following timelines relating to the business of supply.
First, the Main Estimates were tabled on April 25; second, the related interim supply legislation will be introduced on May 3; and finally, the related full supply legislation will be deferred until the fall supply period, that is until December.
As a result of these decisions, interim supply will cover operational spending requirements until December, or for nine months of the twelve, and the departmental Reports on Plans and Priorities will be deferred until the fall.
The delay in the timing of full supply will allow Ministers and departments the opportunity to recast their planning documents and align them with the plans and priorities to be announced by the government in the Budget today as well as any other decisions that are forthcoming through the spring and summer.
This will also allow the committees in both Chambers adequate time to review the Estimates and report back with any recommendations. They will be required to report back in late November. The timing will also coincide with the tabling of the fall Supplementary Estimates which, as I noted earlier, will be the first opportunity for this government to lay before Parliament spending estimates that reflect its more detailed plans and priorities.
This respects the role that Parliament plays in the approval of spending plans by allowing the government the time it requires to undertake a fulsome planning process and then aligning spending with its plans and priorities before laying these plans before Parliament.
[English]
I would like finally to draw your attention to some specific details in these Main Estimates. First, it should be noted that the funding provided through the Governor General special warrants is not in addition to amounts presented in these Main Estimates but is included in these amounts, as required under the Financial Administration Act. Therefore, the interim supply bill that will be introduced tomorrow has been adjusted to show the net requirements of the government until December. A new table has been introduced in these Main Estimates, which you will find in the English version at pages 1-99 through 1-104, that provides a clear reconciliation of supply through each of the special warrants, interim and full supply.
Second, I am pleased to say that these Main Estimates reflect revised vote wording for Treasury Board Vote 5, known as the government contingencies vote, which has been discussed with this committee many times in the past as well as with the Office of the Auditor General. The concerns raised by both the Auditor General and this committee have run along similar lines and have focused on clarifying how the vote was used, the government's accountability to Parliament on its use, and the overly broad wording previously used in the vote itself, particularly in defining ``miscellaneous, minor and unforeseen'' needs and in ensuring that the vote is used strictly for urgent requirements.
While Treasury Board's actual use has been far more conservative than the legal interpretation of the vote wording would allow, the changes that we have introduced in these estimates, in consultation with both this committee and the OAG, we believe address the substance of these concerns.
As I, my predecessors and previous Treasury Board Presidents have acknowledged in the past, the Treasury Board Secretariat has certainly benefited from the consultations and recommendations that this committee has provided to us relating to this issue.
Mr. Chairman, honourable senators, that concludes my opening remarks. We would be happy to try to answer any questions you may have.
The Chairman: Thank you, Mr. Moloney, and thank you very much for acknowledging the work that this committee has done with respect to emergency funding under Vote 5. Perhaps we will get into more discussion on that in due course.
Senator Murray: I want to express our satisfaction with the change in the wording of Treasury Board Vote 5, as recommended by this committee some time ago. Hats off to our former colleague, Senator Roch Bolduc, who was the inspiration for many of the detailed changes that we recommended both in the wording of the vote and the administrative guidelines that govern its use.
Can you remind us how many of the recommendations we made for changes in the guidelines have been adopted?
Laura Danagher, Executive Director, Expenditure Management Sector, Expenditure Operations and Estimates Division, Treasury Board of Canada Secretariat: I believe that most of the recommendations you have made have been adopted in the guidelines. I do not have a copy of what we tabled with you last fall, but I would say almost 100 per cent were adopted.
Senator Murray: Thank you. That is more good news. Perhaps you could let us have a copy of the guidelines.
Ms. Danagher: Yes, I will.
Senator Murray: One of our recommendations was that the board itself, as a committee of ministers, adopt those guidelines that, up to now, have been — I will not say ``merely administrative guidelines,'' but they have been administrative in the sense that the secretariat was responsible for them. One of our recommendations was that the board ought to make it official. Has that been done?
Ms. Danagher: That was pre-empted over the winter due to the election, but we are currently working on a submission to go before the board this spring.
Senator Murray: Perhaps you would flag that for the minister for tomorrow night. We will have a word with him about that.
There is one other issue that I would like to raise, and it has to do with the Vancouver Olympics, our total exposure to the funding of those Olympics and to possible overruns.
On February 18, 2003, this committee had as a witness the Honourable Sheila Copps, then the Minister of Canadian Heritage. There was a series of questions, some of which I put myself from the chair, and others by the aforementioned Senator Bolduc, on the question of the federal government's commitment. Ms. Copps and her officials, in particular Mr. Blais, held to the position that the commitment of the Government of Canada was capped at $310 million, which, as he said, is part of the capital cost and the legacy of the games. We asked them about what appeared to be a wish list of $845 million that had been drawn up in British Columbia, including $387 million for roads and railways, $33.4 million for sports venues, $171 million for the Olympic village and $9.6 million for media. Ms. Copps and Mr. Blais simply held to the position that the government's commitment was $310 million, period, under the Department of Canadian Heritage, and said that if there were other requests or pressures, they were being directed at other departments or agencies of the Government of Canada.
Senator Bolduc finally intervened, saying:
...we are talking about one and half billion dollars. The data we have for sports activities are $600 million. There is $800 million for roads, Olympic villages and the rest...Would it not seem wise to you to recommend a budget to Treasury Board for this so that we know how much it is going to cost? Is it going to cost two billion dollars? I am beginning to wonder whether Mr. Drapeau was not a bit frugal in Montreal.
If anything, the concerns multiplied in recent weeks and months. I will not take you through the press clippings that I have here, but there is talk of a very tight labour market in the construction industry in that part of the country, talk of 50 per cent overruns. It states the committee is seeking an additional $55 million from the province and $55 million from the federal government, and a further quote from the provincial minister says that no one should hold out any hope that the B.C. government will cough up more money to deal with increased labour costs. However, the Honourable Colin Hansen, the provincial minister, suggested Ottawa might increase its funding if the games go over budget.
I am sorry to take up so much time, but you get the picture. We need to know our total exposure. Further to that, we need to know who is in charge. It is all well and good to say Canadian Heritage's contribution is capped at a certain amount, but the involvement of other federal departments and agencies is something we should know about. Is there a coordinating committee watching the budget and watching our commitment? I am aware that Mr. Emerson is the minister responsible and that is fine. He is a British Columbia minister. His job, properly, is to promote those games for all they are worth.
Who is in charge here and what do you know about our exposure to this? I see that the Department of Canadian Heritage spending is increasing by $266 million in these estimates due to an increase of $242 million in grants, contributions and other transfer payments, and the main components seem to be the Winter Olympics.
I will leave it there; tell us what you can and perhaps flag it also for discussion with the minister tomorrow night.
Mr. Moloney: We will be happy to provide an overview in writing. I can provide the outlines orally if senators wish.
The senator made reference to the initial commitment, which was indeed $310 million over six years towards capital, as the senator noted; $255 million for what were referred to as legacy costs; a $55 million contribution to the 2010 games operating trust; and also to provide federal essential services, such as immigration, customs and security, which were originally earmarked at $100 million.
The Province of British Columbia matched this initial commitment. In addition, the province is itself responsible for covering any deficit that could occur. In addition to this initial commitment, Budget 2005 provided $37 million in additional funding over seven years for federal coordination and the creation of a host First Nations secretariat; $20 million over three years for known operating cost shortfalls associated with the operations of the Paralympic Winter Games; and an additional $30 million over seven years for federal essential services.
The only other Government of Canada organization that is requesting funding through the 2006-07 Main Estimates in respect of this purpose is Environment Canada, for a total of $1.56 million. Environment Canada has a key role in planning and delivering the games in three areas: meteorological services, environmental assessment and implementation of sustainability principles.
A number of other smaller amounts will be involved out of regular budgets of a variety of other departments, which the government would expect to seek through future Main Estimates in respect of future years.
If the senators would like, we can provide this in writing and we will flag it for the president.
Senator Murray: What is the total? Did you add those numbers up?
Mr. Moloney: The total is just under $400 million.
Senator Murray: Okay. That is up from an original $310 million mentioned by Ms. Copps, although that was the exposure of her department. Where does the other $90 million come from?
Mr. Moloney: The $37 million over seven years and the further $20 million and $30 million are also being sought through the Department of Canadian Heritage at this time. Environment Canada is that much smaller amount, $1.6 million at this time.
Senator Murray: What about the organizational arrangements within the government to oversee our participation in these Olympics?
Mr. Moloney: We should provide that to the senator in writing.
Senator Murray: The Treasury Board is at the centre of it, is it not?
Mr. Moloney: Treasury Board clearly needs to authorize all actual spending that the government commits to, in terms of the details as to how it will take place as individual ministers bring it forward. There will, however, be coordinating machinery in terms of planning and execution.
Senator Murray: That is what I am getting at. Is there an interdepartmental committee? Who is in charge of it?
Mr. Moloney: We will provide that to you in writing.
Senator Murray: Thank you.
Senator Ringuette: I have a few general questions and then I will move to a more specific regional development question.
On page 2-2, there is this new spending called the Cattlemen's Association Legacy Fund, for $5 million. Can you explain this legacy fund for the cattlemen's association?
Mr. Moloney: I am sorry; we do not have that detail. We will come back to you, if that serves.
Senator Ringuette: Yes please, because that is intriguing, a new program funding a cattlemen's legacy. I had this bizarre vision of what it could be.
Mr. Moloney: My colleague has dug up a one-sentence explanation, if I would be permitted.
It is an increase of $5 million, as a result of an approval last June, to a $50 million statutory grant over 10 years to support market development activities of the Canadian Cattlemen's Association Legacy Fund — $5 million per year for 10 years. It is for market development purposes.
Senator Ringuette: However, the cattle market development purpose is also somewhere else in spending. It is also under Agriculture and Agri-food.
Can you provide us with more information? You say that it is an increase. It cannot be an increase because it is a new program.
Mr. Moloney: It is a new program, so it is an increase in Agriculture and Agri-food Canada's spending to allow them to undertake this new grant program.
Senator Ringuette: I have another question. On page 2-5, there are grants for organizations for adaptation and rural development to the tune of $30.3 million. Could you provide us with the list of organizations that benefit from these funds and their location?
Mr. Moloney: This would be in the manner of a class grant. We can provide the senator with information on the terms and conditions for what would constitute an eligible organization.
In respect of past years, the public accounts will, after the fact, list the precise recipients. We would not be able to do that yet in respect of 2005-06. However, if this class grant existed for 2004-05, we could pull out that information.
Senator Ringuette: If you could provide us with that, it would be appreciated.
With regard to regional development agencies, I find it interesting that in these estimates the economic development agreement for Northern Ontario is nowhere to be found. There are no estimates or provisions — there is nothing. The word ``FedNor'' is no longer there. That sounds an alarm, especially with the severe impact of the forestry situation in Northern Ontario communities.
Can you tell us why there is no provision for FedNor at all? However, I see that there are provisions for Western Economic Diversification Canada on page 27-6. There is an additional $60 million for economic development. I certainly agree that Saskatchewan and Manitoba need support for economic development, as do the northern areas. However, there is $60 million more there. I would like to know where it is anticipated that money will be spent.
In the same general area, on page 7-3, there is an additional $67 million for economic development agencies for the regions of Quebec. Last but not least — and this is a major cause of concern for me — the Atlantic Canada Opportunities Agency, ACOA, is receiving $18 million less to do economic development.
Could you provide me with some details as to why some of these agencies, such as FedNor, have nothing, why some agencies have considerably more and why ACOA has a lot less?
Mr. Moloney: The operation of FedNor is fully included in the departmental estimates for Industry Canada. In fact, the total amount in these estimates is $47.3 million for 2006-07.
Senator Ringuette: Can you take me to the page, please?
Mr. Moloney: It is not a separate organization.
Senator Ringuette: It is not even under Industry Canada.
Mr. Moloney: It is within Industry Canada.
Senator Ringuette: It is not identified.
Mr. Moloney: It is not separately identified.
Senator Ringuette: Why is that?
Mr. Moloney: The department and minister have chosen to include that within their core activities.
There is a specific line where the amount of $47.3 million to which I have referred is to be allocated to the Northern Ontario Development Fund. The senator can find that on page 16-7, under the second panel. That panel shows a set of detailed contributions. In about the middle of that panel, one will find the contributions under the Northern Ontario Development Fund.
Senator Ringuette: You mentioned earlier that it would $47.3 million, yet in the book it is listed as $34.75 million. Would the difference be in the operating costs for the program?
Mr. Moloney: There may also be grants that are listed. This is one larger item that goes to that organization. It is a fund that promotes business development and economic diversification in that region of the North.
With regard to western economic diversification, the Main Estimates this year for Western Economic Diversification Canada are $315.5 million, which is a net decrease of $77.2 million. There is an increase to which the senator was referring.
Senator Ringuette: You are including infrastructure while I am excluding it. I am looking only at the economic development program per se. These agencies are simply delivery mechanisms.
Mr. Moloney: There was a specific increase of $52 million for western economic diversification for the purpose of the Alberta and Saskatchewan centenaries. It was to support commemorative capital legacy projects that will have long-lasting economic and social benefits for community development and sustainability in those two provinces.
There was also an increase of $30 million to support expanded community partnerships, international competitiveness and technology commercialization in Western Canada under the Stronger West Initiative.
Senator Ringuette: If you look at the details on page 27-6, you will see community economic planning, development and adjustment. That is almost a 200 per cent increase, from $31 million to $93.7 million, in that program alone. I am saying that, typically, the main purpose of these agencies is to do economic development.
I do not understand the removal from your totals of the infrastructure program. The Office of Infrastructure Canada has an increase in funding of $1 billion in these estimates. However, if you look at the agencies responsible for delivering infrastructure programs in their regions, you will see that they all have a major decrease in infrastructure funds.
Are we to assume that all these regions will not have access to that increase of $1 billion to the Office of Infrastructure Canada?
If you could supply me with more information about these specific issues, I would certainly appreciate it.
Mr. Moloney: We will supply those details. The gas tax funding has an integrated effect on the funding of infrastructure. In the case of Western economic diversification, excluding the infrastructure funding, there is a net increase, as the senator was alluding to.
Senator Ringuette: I hope that will be targeted for the provinces that need it most, such as Manitoba and Saskatchewan and the northern regions of these Western provinces. Some are more fortunate, so there is a question of equity and fairness here.
Senator Harb: Thank you very much, Mr. Moloney, for your presentation. My question is focused on the Governor General's special warrant. It is my understanding that for the special warrant to be issued, you have to meet certain criteria, one of which is that the Parliament will not be in session; second, if there are no other appropriations available from which a payment can be made; and third, that a payment is urgently required for the public good.
Before you go from one to the next, you have to meet certain criteria. In this particular case, before a special warrant is issued, you will have to look at those criteria.
My question is whether or not special warrants can provide supplies where an authority does not, in fact, exist. For example, can the special warrant be issued to establish new grants or to increase existing grants from the Main Estimates?
Mr. Moloney: Thank you for that. The short answer is no. Indeed, a report was tabled in Parliament on April 11, a statement on the use of Governor General's special warrants, which outlines in some detail the three Governor General special warrants issued in respect of 2005-06, and the fourth and final special warrant in this current series, which was issued on April 1.
Indeed, as you have said, senator, the government needed to go through a detailed process to, firstly, establish that all existing appropriations had been used, which means that all central votes had to be allocated to the most urgent needs. Each individual department needed to establish that any vote that a possible expenditure would lie within had been fully allocated to urgent needs in the public interest meeting that same task, and needed to provide in writing to the expenditure management sector that indeed any possible reallocations had been undertaken.
There is a further condition in addition to the one that the senator set out, which is that monies cannot be moved between votes through Governor General's special warrants. Subject to those, and ministers warranting those other conditions, then urgently required spending could be undertaken; however, no new grants, no increases to grants.
That was the case coming into the new fiscal year as well. There had been, obviously, no authorities available, so departments were restricted to proposing, through a fourth special warrant, only the amounts that been approved by Parliament in June 2005 for 2005-06. In the case of CIDA, their contributions are listed as well.
Senator Harb: Are you aware of any grants issued under these special warrants, and if so, what are they?
Mr. Moloney: For 2006-07, as I was trying to explain, those grants that had previously existed had been approved at levels no greater than had been approved by Parliament. They were authorized for 2006-07 in any amounts necessary and normal prior to May 15. For the first three Governor General's special warrants in respect of the last fiscal year, that was not the case. The senator would find those grants detailed in this statement, specifically listed in respect of this fiscal year.
Senator Harb: You are not aware of any new grant that the special warrant was used for, a grant that has not been authorized by Parliament? There was a report recently that the government had issued a grant for the Terry Fox humanitarian group in the amount of about $10 million. I wanted to find out under what authority the grant was issued.
Senator Cools: I wonder if Senator Harb could give the source of that report, because I think it is an important point. He said that there was a report asserting that such a grant was made.
Senator Harb: It was an article in The Globe and Mail on April 14, 2006.
Senator Cools: Thank you very much. Do you have the name of the author?
Senator Harb: Gloria Galloway.
Mr. Moloney: The report that I will refer the senator to is the Statement on the Use of Governor General Special Warrants, page 77, which was tabled in Parliament on April 11.
There are two parts to the answer. To the best of our ability, and detailed due diligence was conducted, we believe it fair to say that no new grant, nor any increase to any existing grant, was in fact funded or pursued under the authority of Governor General special warrants. Our own due diligence processes and the instructions to the departments were clear and our vetting was precise.
As the government of the day moved to establish the overall allocation of central votes prior to the dissolution of Parliament, it was in a position to determine whether or not there were urgent needs to which they should be allocated.
On page 77 of that report, one will find a grant to the Terry Fox Humanitarian Award Inc. in the amount of $10 million, which is the amount that you are referring to, and that is under the use of Treasury Board contingencies Vote 5 items.
Senator Harb: My final question deals with the issuance of those warrants. Normally, are they done on a first-come, first-served basis or on the basis that, as you indicated, they are urgently required for the public good?
When Parliament was dissolved due to the election, it automatically triggered this notion of the special warrant payment. I want to find out if there was any additional cost to the Crown as a result of that delay. As well, after the election and before Parliament sat, there were a number of programs that were twisted and changed; some changes have taken place. My colleagues and I want to find out if any cost that was not authorized came about as a result of those elements.
The first would be the use of the special warrant. Was it on a first-come, first-served basis, or urgently required? The second one would be the actual cost, the net cost, to the public purse.
Mr. Moloney: First, senator, I do not believe there would be any first-come, first-served nature to the use of Governor General special warrants. There is no limit on their use in the sense of a fixed pool or a fixed envelope that would need to be applied.
In fact, we approached the management and development of the process of preparing the warrant in rather the opposite manner. We contacted in a very formal way each department, each deputy, each senior financial officer, and then the staff under those senior financial officers. As we looked at the balance of the fiscal year, to be able to take us through to March 31, whether Parliament came back or not before then, it was quite evident we would be very unlikely to have further opportunity to seek estimates.
As a result, we asked every single department, the 122 appropriations-dependent agencies, to provide us with their detailed cash flow requirements, set out over planning periods of 30 days, a second 30 days, and a third period of 40 days, which is within the Financial Administration Act guidelines, and which we view as giving a limit, by convention, of up to 45 days. We extended that third period to 40 days in order to not have a 10-day warrant, and as the senator may know, a special warrant cannot bridge two fiscal years.
We informed the departments by letter immediately following the dissolution of Parliament that we needed to have their detailed cash requirements for each of those three periods, their full statement on the current planned use of existing votes. We instructed them to, to the extent possible, reallocate internally; we instructed them clearly on the fact that grants that had been proposed through the supplementary estimates but had not been approved by Parliament could not proceed. There was a potential source, possibly, of fiscal use, fiscal authority, if you like, in terms of the overall budget.
We went through each department, and they replied in writing for an initial period, with two further planned periods and replanned for the second period. Then, when it became evident that Parliament would not be recalled in time to table supplementary estimates, we went ahead and planned the third special warrant period of 40 days.
No activities were funded solely through that purpose that had not been previously contemplated in terms of budgetary authority through Parliament. Could one construe that there were costs associated with this process? There were no net additional costs. Certainly, the time and effort, and in that sense, use of the budgets that had been proposed to Parliament for departmental corporate planning and financial administration activities, as well as, clearly, some of the time and allocation of Treasury Board Secretariat resources, were certainly turned to a use that had not been planned, but we delivered those special warrants within existing budgets.
Senator Cools: I would like to take the opportunity to welcome you before the committee. I understand that many departmental staff remain constant when governments and ministers change, and this is, in fact, the very first meeting of this committee since the convening of Parliament. It is interesting, as it means that you are now the officials of a different government. I want to take the opportunity to thank you.
My question is not so much substantive as to clarify the record. Will you, for the sake of the record, identify, first of all, the number of warrants that were engaged; secondly, the dates on which they were engaged; thirdly, the quantum for which they were deployed; and also, the responsible minister or Prime Minister who would have taken the initiatives?
Many of us know this information, but I am of the opinion that it is important that the committee proceedings today record this.
Mr. Moloney: Certainly. I will refer to page 21 of the document that was tabled, not these Main Estimates, but the report. The report that was tabled in the House, Statement on the Use of Governor General Special Warrants, records a total of $15.648 billion in four Governor General special warrants, covering three periods in the 2005-06 fiscal year. Of those three, an initial special warrant was issued that covered the period December 22, 2005, to January 20, 2006, in the amount of $1.13 billion.
A second special warrant was issued covering the period January 21, 2006, to February 19, 2006, in the amount of $755.77 million. A third special warrant was issued in respect of the period from February 20, 2006, to March 31, 2006, in the amount of $2.92 billion. Finally, a fourth special warrant was issued on April 1 covering the period April 1 to May 15, 2006, in the amount of $11.47 billion.
These special warrants were signed by the Governor General on the advice of Special Committee of Council through an OIC. The Special Committee of Council received attestations in two ways: At the time that there was such an OIC proposed, the then President of the Treasury Board needed to attest to the committee of council and to the Governor General that no other appropriation was available from Parliament to give effect to the proposed spending.
As well, individual ministers attested to the urgent requirement for the public good of the individual spending items listed. Subject to an OIC being approved by committee and the Governor General signing a warrant, those items were listed in the Canada Gazette thereafter.
Senator Cools: I do not want you to misunderstand, witnesses. I know a fair amount about these processes. There is both an infinite and a copious amount of material before us, but not that much of it gets onto our record. It is important that our proceedings reflect that information. We are now in an era, if senators will bear with me, where many senators will never have opened any of these documents. It is important that we bring the information forward via the official route, which is the committee proceedings.
Thank you very much for that.
Senator Mitchell: As I understand it, a good deal of this book will be obsolete by this afternoon. I would like to focus first on one area in which the government has made announcements; that is, the environment. I notice that the environment department's budget specifically is down about $31 million, although other, related agencies, in particular, the Canada emissions reduction incentive agency, have new funding that would at least offset that.
I am interested in knowing how much actual reduction in the Environment budget will occur as a result of the government's announcements to this point. How much of that funding reduction is related directly to areas that would address the reduction of greenhouse gas emissions?
Mr. Moloney: Senator Mitchell, the document in front of the committee represents the full request to Parliament for appropriations authority in an amount of almost $200 billion. The government, as the senator is referring to, will propose a budget to Parliament later today. That will likely propose some new spending, as would be in the normal course of events, through supplementary estimates.
The bulk of the spending that the government will undertake this year will, nonetheless, be fully presented and displayed in these Main Estimates. As the estimates and supply requests catch up to the government's planned overall budgetary posture in the normal course of events, there will certainly be some specific changes.
No spending decisions taken by the government that came to power on February 6 have been reflected in these Main Estimates. Where there are changes in a department's spending at a detailed vote level — that is, a grant, a contribution or operating expenses — those follow from the plans of the previous government. There are certainly cases where there were individual approvals that had a certain lifespan, be it one year, three years, five years, and those had come to an end. The government has not gone forward to ask Parliament for further appropriations in some of those specific cases. That is true throughout this document. One will not find spending decisions in either direction that have been taken since February 6, since the dissolution of Parliament.
Senator Mitchell: I was led to believe that some items that had been announced would be reflected in this. That is absolutely not the case. Despite the fact that the Minister of the Environment has announced withdrawal from the Kyoto Protocol, from our Kyoto plan, and despite the fact that she has said that she is reviewing 100 agencies and will be cutting the climate fund, we do not see it in this document, and we will not see it until this afternoon, one would think.
Mr. Moloney: I cannot comment on what we will see this afternoon, but we certainly do not see any such decisions here. Any change that was in this document would already have taken place.
Senator Mitchell: When we see the new accountability act — and again, that will, perhaps, be addressed this afternoon — it conjures up this problem that government will grind to a halt because there is so much checking of the checkers of the checkers. Is there a way to pull out of the estimates, across departments, the money spent on internal audit, special audits, special inquiries, the Auditor General, the Treasury Board guidelines and reviews and, ultimately, the addition of the special prosecutor and the whistle-blowers?
Senator Murray: Appearances before parliamentary committees?
Senator Mitchell: Yes, so that we can check the checkers as well. Has that already been considered? How onerous would that task be?
Mr. Moloney: The latter task is a delight for officials.
We could certainly provide the senator with a compilation of costs of the internal audit functions of departments. There is an internal audit function, and a coordination function then within the Treasury Board Secretariat inside the Office of the Comptroller General. We do clearly see in these estimates the amounts appropriated for the purpose of the Office of the Auditor General of Canada. We can quite readily provide an estimate, some of the numbers of which would not be immediately displayed here, in terms of internal audit. Some departments' internal audit and evaluation are a joint function, so there would be a joint office with a single manager to bring those together, but we can get back to the senator in writing on those amounts.
Further amounts that would be involved in terms of managing guidelines overall would be more difficult for us to pull out.
Senator Mitchell: I am interested in the approach being developed in Alberta through collaboration amongst the universities of Lethbridge, Calgary and Alberta. It will be called collectively the Canada school of energy and it will address a variety of environmental, energy, and sustainable economy issues. If that money is not in the budget today, or in these Main Estimates, what is the process whereby a government can be presented with that project, make that decision and find the money? Is it, again, supplementary estimates later in the year? How does the government come to grips with issues like that?
Mr. Moloney: If the senator is asking how the Government of Canada might choose to provide some financial assistance —
Senator Mitchell: Yes, to a project about which they have not made a decision prior to tabling this budget.
Mr. Moloney: A minister of the Crown would need to propose to cabinet a specific program, grant, contribution or other kind of activity to support the achievement of a certain end. Cabinet committees would need to review such a proposal and the government, and cabinet, ultimately, would need to assess whether or not that was an eligible or a worthy proposal for allocation of new funds in a subsequent budget.
Alternatively, a variety of ministers have budgets that they could choose to allocate towards such a use, possibly within a variety of departments, for example, Natural Resources in that case, Environment Canada, possibly a regional development agency, Industry Canada. There would be a potential set of departments or ministers who may choose to allocate existing budgets quite separate from the capital B budget allocating new resources.
Senator Mitchell: Does that imply that departments set aside money on a contingency basis to anticipate projects of this kind?
Mr. Moloney: A number of departments maintain contribution and grant programs aimed at general objectives. Treasury Board ministers need to approve the precise terms and conditions under which any such payments can be made. Those amounts are set aside to achieve quite specific purposes, but the specific payees or recipients are not pre- identified for Parliament unless listed that way.
Senator Eggleton: The staff at the Library of Parliament gave us some useful briefing notes in which they raise a number of issues, some of which have tweaked my interest. Senators Mitchell and Harb have already asked some questions I was intending to ask, but I have three left.
First, the Canadian Grain Commission has a more than five-fold increase in its budget. Pages 2-11 and 2-12 of the document tell you about program activity and strategic outcomes, but not why this mammoth increase has occurred. Can you explain that? It has gone from $5.9 million to $35.2 million.
Mr. Moloney: The information we have is that Main Estimates for the Canadian Grain Commission are proposed at $35.2 million, which is a net increase of $29.3 million, mainly as a result of $30 million in new funding for essential ongoing operations. An increase of $28 million and $1.9 million in capital is proposed to maintain the commission's ongoing activities, which are aimed at ensuring the safety and quality of Canadian grain. This is up from $21 million that was provided for this purpose.
The operations of the Canadian Grain Commission are funded, in part, through fees for mandatory services it provides to the industry. The increases in funding proposed through appropriations have been necessary to address shortfalls resulting from decreased revenues through such fees.
These revenues have decreased since 1999-2000 as a result of lower volumes of offshore grain exports and a moratorium on fee increases for services, which include inspection, weighing and licensing. The commission is still charging user fees based on 1991 price levels, although the cost of providing these services has been increasing through inflation, contract settlements, et cetera.
The commission and Agriculture and Agri-food Canada are exploring options for delivering the mandate in a financially sustainable manner. The core issue is their sustainability under what was intended to be principally a fee- based financing system.
Senator Eggleton: Are they not collecting as much of the fee now? That is a huge jump in one year.
Mr. Moloney: The notes we have suggest that they are caught on both points of the scissors, on increasing costs and an inability to increase their fees on a per-unit basis; and the amount of traffic is actually falling.
Senator Eggleton: Is it foreseen that this kind of drastic increase will continue in future?
Mr. Moloney: The department is looking at alternatives to deal with the situation.
Senator Eggleton: Do you know when that will be reported on?
Mr. Moloney: We do not have that information. I can get back to the senator.
Senator Eggleton: If you could find that out.
With respect to Natural Resources Canada, there is an increase of 31.4 per cent in their budget. A lot of that, I would imagine, has to do with implementation of Kyoto provisions. However, the government has said it intends to wind down 15 climate change programs; and, of course, Senator Mitchell has talked about the environmental programs as well. I understand the One-Tonne Challenge is one of them.
How can we look at this 31.4 per cent increase in the budget for Natural Resources Canada, knowing that it is not realistic? If they go the route of winding down 15 climate change programs, as they say they will, how much of a difference will that make in this budget, particularly to the percentage increase; or maybe we will get a decrease?
Mr. Moloney: The Main Estimates for Natural Resources Canada total $1.426 billion, which is, as the senator is commenting on, a significant net increase of $340.4 million. The key development in the case of Natural Resources Canada is an increase of $420 million in statutory contributions: payments to the Newfoundland offshore petroleum revenue fund of $279.8 million; and to the Nova Scotia offshore revenue fund in an amount of $140 million.
There is a small additional increase for collective bargaining costs. The department is asking for a total of $108.5 million less in planned climate change programming for 2006-07. Again, that reflects an end to what had been planned previously for ongoing climate change programming.
Senator Eggleton: That would relate to the announcement about winding down programs?
Mr. Moloney: Those were pre-existing funding decisions with a certain sunset clause. No decision taken by the current government affects these amounts. This was planned funding that ended last year. The government is not, at this point, requesting anything further.
Senator Eggleton: It is not requesting a continuation of those programs?
Mr. Moloney: In those amounts.
Senator Eggleton: The Canada emission reduction incentives agency, a creation of the previous government relevant to the Kyoto Protocol, is asking for $49.5 million in these estimates on page 8-2. What is its status? What will its ongoing role be in view of these programs ending? What will it do?
Mr. Moloney: There is a request in these Main Estimates for $49.5 million in appropriations for the Canada emission reduction incentives agency. The current Minister of the Environment will be determining the ongoing role of the agency and any potential changes to its mandate, possibly within the context of the government's made-in-Canada plan for a cleaner Canada. Should there be any such changes, these amounts would be adjusted or Parliament would be informed in future supplementary estimates.
Senator Eggleton: Given a review of the environmental programs in the environment ministry, and also the other climate change programs in Natural Resources Canada, it sounds as if this agency will not have much to do for a while.
Mr. Moloney: The government will be announcing its plans when any such decisions are made, and the request for parliamentary authorization will be adjusted accordingly. In the meantime, if the government makes any such plans, it will determine the timing for which spending will begin or cease.
Senator Cowan: I understand that these estimates reflect the spending priorities of the previous government. In answer to a question from Senator Mitchell, you said that the estimates do not reflect any announcements made by the current government.
The second budget bill last year under the previous government announced $6.5 billion in spending priorities. I understand that at the end of this fiscal year, March 31, the current government set aside monies in trust for certain priorities. Could you explain how that happened and where I would find that in the estimates? How would that be accounted for in these documents?
Mr. Moloney: I believe the senator is referring to what is known as Bill C-48, which provided statutory authority. That means there will be no request for voted appropriations to Parliament at any time under any spending that any government might choose to undertake under that authority. It is essentially a permissive authority that is statutory in nature because the bill passed both Houses and received Royal Assent.
That bill authorizes a government, after the end of a fiscal year and subject to conditions that include a fiscal surplus of a certain amount, to undertake spending up to a maximum amount for specific purposes. Those amounts would be reported in the Public Accounts of Canada, should there be any such spending after the fact before those accounts would be closed in respect of 2005-06. Any such decision under Bill C-48 would have to be taken, announced and all the conditions met. It would then be reported through the Public Accounts of Canada as statutory spending.
Senator Cowan: Was there not an announcement or suggestion that some money, rather than being allocated and used to pay down the public debt, was set aside so that payment on account of the public debt would not be necessary? How was that done?
Mr. Moloney: The legislation gives the government the ability, should it choose to do so, to take a decision to spend money — to incur a fiscal liability — after March 31. As the senator suggested —
Senator Cowan: That is 2005.
Mr. Moloney: That would be after March 31, 2006 or 2007. This bill provided authority in respect of each of 2005-06 and 2006-07. After March 31 of any fiscal year, it is not possible, beyond some narrow technical limits, to charge spending back to the previous year. Certainly, no new decision can be taken such that the fiscal consequences are reflected in the previous fiscal year. Should a government find itself in a situation where it has an unexpected surplus, that will automatically reduce the government's net liabilities — the net public debt.
The purpose of Bill C-48 was to allow, under specific circumstances of a surplus of at least a certain amount, spending of no more than a specified amount in, I believe, four particular areas in respect of these two fiscal years only.
Senator Cowan: I understand what was done and with respect to what fiscal year.
Mr. Moloney: It was 2005-06 and 2006-07.
Senator Murray: It was done at the end of 2004-05.
Mr. Moloney: It was during the fiscal year 2005-06, when Bill C-48 was passed and received Royal Assent.
Senator Cowan: I do not comprehend your comments. I understand what happened with Bill C-48 and that it permitted, under certain conditions, spending in three or four areas, although I do not recall them now. What did the current government do with respect to that money? Was it set aside in a trust? If so, how is that accounted for?
Mr. Moloney: This government has not announced any decision in respect of Bill C-48 for purposes that would be charged to 2005-06.
Senator Murray: Someone sent a letter to the provinces recently that was leaked; I suppose, by one of the provinces. I believe that it stated that the money, although I cannot remember how much, would be available for various infrastructure and post-secondary education purposes, et cetera. An article in The Globe and Mail of April 25, 2006, talks about a government-tapped surplus for $3.3 billion. It states:
The Conservative government is dipping into last year's budget surplus for $3.3-billion, the bulk of which is going to the provinces under a controversial measure the Tories fervently fought while in opposition.
The money, earmarked for public transit, low-income housing, post-secondary education and aboriginals, was quietly negotiated by Prime Minister Stephen Harper's government last month...
Provincial sources say they have been told that the measure, which sets aside cash in five separate trust funds, is expected to be announced in the federal budget next Tuesday.
The provinces can tap at least four of the trusts to make capital investments in post-secondary education, infrastructure, public transit, affordable housing and off-reserve aboriginal housing. It is not known what the fifth trust would be used for.
The Conservatives are transferring the cash using the same budget mechanism developed by the Liberals last year in Bill C-48...
I will not read the rest of the article, which is available to senators, from The Globe and Mail of last Tuesday, April 25, 2006.
Your testimony is that the current government has not announced anything and you do not consider a letter to the provincial governments as having been an announcement.
Mr. Moloney: To my knowledge, the government has not announced any use of Bill C-48. Should there be one, I am sure the government will announce it.
Senator Murray: One of the most eloquent defenders of Bill C-48 was Senator Eggleton.
Senator Cools: I would ask that the document from which Senator Murray was reading be photocopied and circulated to members of the committee.
The Chairman: We will ensure that that happens.
I have two small points that arise from the questioning thus far. The first one deals with Senator Murray's questioning in respect of the 2010 Olympics and the importance for all parliamentarians of being able to draw together all the different expenditures coming from diverse departments. We were most appreciative of Treasury Board Secretariat in the past including a section in the estimates of expenditures of horizontal items. We went to various departments and they brought this together for us; and it was very helpful. You must be tracking that but I do not see it in the estimates. I assume you will have it in the supplementary estimates when they come forward. Why do you not reflect it here?
Mr. Moloney: I believe that you are referring — positively — to the detailed horizontal information that we provided in the supplementary estimates tabled last fall.
I think the practical answer to the question is that although that document was large, a relatively still manageable number of items in the nature of specific initiatives were proposed, and we undertook to draw together those on which individual departments are moving forward.
We are looking at how to make these Main Estimates more useful, understandable and helpful. However, as one looks at the full $100 billion of program spending of departments, there are quite a number of links that one could draw. We have not, so far, found a formula or an approach that allows us to draw out, in a helpful way, all the horizontal linkages for a specific initiative such as the Olympics. We can certainly undertake to do so.
One of the advantages of the 90-some reports on plans and priorities that individual ministers will bring forward is that is another opportunity for the government to draw out more of those horizontal linkages, because each minister and department will have one such report. Where a department plays a significant lead role in an initiative that involves a number of others, it gives us an opportunity to draw out more horizontal information.
We are also looking at the possibility, as we do with the reports on plans and priorities now, of having on overview document that draws out some of the horizontal information as well.
The Chairman: May I encourage you to try to continue that. We found that very helpful. If you want to put in a caveat there and say, ``We might have missed some items, but this is an interdepartmental, horizontal look at a subject matter,'' that would be most helpful.
My second question is along the same lines, of trying to make these documents clearer and more understandable for parliamentarians so that they can check the executive on their expenditures and their planned expenditures, and I would like to refer you to page 1-109 of the Main Estimates. You were talking with Senator Ringuette about these various regional economic agencies. What you are outlining are changes in authorities, presumably as a result of some government pronouncements, where there is not an increase in expenditure but it is changing from department to department. You have made those changes, but there are no policy changes in this document.
I am looking at the Atlantic Canada Opportunities Agency, and the statutory item, Minister of Atlantic Canada Opportunities Agency salary and motor car allowances, is now displayed under Foreign Affairs and International Trade. That is where I go to find the expenses of ACOA.
The second one is economic development for the regions of Quebec. The statutory item, Minister of Economic Development Agency of Canada for the Regions of Quebec, salary and motor car allowance, is now displayed under the Department of Human Resources and Skills Development. One is in Foreign Affairs and one is in Skills Development. Why would you do those things? How would we as parliamentarians be able to find the costs of ACOA or regional development in Quebec if we have these expenses tucked away in other departments?
Mr. Moloney: Senator, the underlying explanation is relatively simple and is not, in fact, provided at this point; we should take under advisement the extent to which these documents provide broad explanation.
In this particular case the explanation is quite straightforward. The current government has chosen to realign some of the machinery of government, and to the extent that it has been possible for us in a relatively short time to, not change spending but display it where it aligns with the minister to whom the current government has assigned responsibility, we have done so.
In the particular case of these agencies that the senator is pointing out, the Prime Minister has assigned the ministerial responsibility differently, has created a different number of ministers, and so we find that in the case of Atlantic Canada Opportunities Agency, for example, the minister who is seeking authority under Foreign Affairs and International Trade would, under statute, be eligible to receive a salary and motor car allowance in respect of another responsibility. Spending would be aligned there because there was spending in 2005-06 for that purpose.
Therefore, as we go from estimate to estimate — and this is normally the case — there will be some movement, some jobs that are put together or split apart. In order to allow Parliament to track whether there is spending that continues, we align it with the current ministerial responsibility, as opposed to where it would have been in a previous fiscal year. We could have explained that better.
The Chairman: Because the Minister of Foreign Affairs and International Trade has responsibility for Atlantic Canada Opportunities Agency, he now has the right to two automobiles?
Mr. Moloney: We can go to page 3-2 and see there that for the Minister of Atlantic Canada Opportunities Agency, there was a salary and motor car allowance last year, but none is charged this year.
The Chairman: Then you would have a charge under Foreign Affairs and International Trade?
Mr. Moloney: On page 11-2, we find that there is a single salary and motor car allowance in respect of the Minister of Foreign Affairs and Minister of Atlantic Canada Opportunities Agency.
The Chairman: That is helpful. With that explanation, I now understand your earlier explanation.
Senator Murray: There is provision in the federal accountability act for some changes in the method of appointment of various officers of Parliament — the Commissioner of Official Languages, the Auditor General and so on.
This committee has taken quite an interest in the budgetary process for those officers of Parliament and we believe both Houses of Parliament, through various committees, ought to be involved in preparing and approving the budgets so that those officers are not totally at the mercy of Treasury Board Secretariat. There was talk of a pilot project last year. What can you report to us on that and is this also a matter that we might flag for a discussion with the minister tomorrow night?
Mr. Moloney: Certainly, we would be pleased to alert the president to your interest.
In fact, a pilot project, as the senator suggests, was undertaken last year. Because Parliament was dissolved, that process made its way to a certain point.
However, the traditional Treasury Board process had to be followed in the event of actually finalizing the budgets.
Under that pilot process, a panel of MPs was set up to examine the spending by officers of Parliament. The new mechanism includes the establishment of a parliamentary oversight panel. There was a commitment by the government in the federal accountability act to continue with that pilot program for a new funding arrangement for all officers of Parliament.
Senator Murray: Does that include MPs and senators? One assumes wrongly, perhaps. You should flag it. We will have a little chat with Mr. Baird tomorrow night.
Mr. Moloney: I cannot confirm whether both MPs and senators were included.
Senator Cools: I have a quick question for the witnesses with respect to the summary of special warrants at page 1- 102.
If we go down the page and stop at vote 20, reading down the column we see the Commissioner for Federal Judicial Affairs, the Law Commission of Canada and the Supreme Court of Canada. I wonder if the witnesses could tell us what those amounts appropriated by special warrants were for. You refer to the previous authority that had authorized them.
Mr. Moloney: The only quick answer I can give to the senator, though we can confirm it by looking into the further detail in the special warrant report, is these are amounts that these particular agencies brought forward to fund their normal, ongoing, core functions. There are no new amounts. These are simply their requirements in the 45-day period.
Senator Cools: I am curious as to what they were doing that would have been so urgently required. Perhaps you can give me the answer to that tomorrow evening.
Senator Ringuette: My question is in regards to page 23-2, Government Works and Public Services. Could you send me a written explanation of those revolving funds?
Mr. Moloney: Certainly.
Senator Ringuette: Specifically, the item of concern to me is payment in lieu of taxes to municipalities and other taxing authorities.
There was an agreement between the federal government and all municipalities containing federal government real estate that instead of the usual property tax being charged by the municipality, a comparable payment system would be set up.
With regard to the estimates for this fiscal year, there is no money. Does that mean there will be no money given to the municipalities in lieu of taxes for those properties? What does that mean? There are zero dollars indicated here. Is this an item currently being reviewed or renegotiated? For some municipalities, this is a considerable amount of money.
Mr. Moloney: We can provide further details to explain that.
I can assure the senator that those payments to municipalities do continue. This is a revolving fund, so the government has not projected a need to come forward for new spending, new appropriations authority. Those payments do continue.
Senator Ringuette: What will the payments be? We cannot compare to other years.
Mr. Moloney: That is correct. Those funds have their own separate reports, I believe, so we can provide that information to the senator.
I believe I am correct in saying that the public accounts are the venue for that detailed reporting, but we will confirm that.
Senator Mitchell: Is there a debt repayment plan embodied in this document for the Government of Canada? If so, what will be the last day on which we would not have debt under that plan?
Mr. Moloney: There would be nothing in this document in respect of debt, with the sole exception of informing Parliament of the latest estimates of the statutory spending in respect of servicing the debt in the current year.
Senator Mitchell: That would be in the form of interest.
Mr. Moloney: The spending authority is being requested of Parliament.
Senator Mitchell: To this point, debt repayment comes out of whatever surpluses there are after certain statutory opportunities to spend money on certain things?
Mr. Moloney: I think it is fair to say that the government informs Parliament of its plans in that respect through the budget, not through the Main Estimates.
Senator Eggleton: If you were looking for revitalization of the Toronto waterfront in a program context, the last place you would think to find it would be under Citizenship and Immigration. However, that is where it is, on page 6-4. That is obviously because in the previous government, the same minister was responsible for the revitalization of the Toronto waterfront. This government has decided on a change of responsibility, and it is now under the authority of the President of the Treasury Board.
When will this money be transferred? How much will be transferred? Would all of it be transferred? During this period, with the changing responsibility and given that the money is still sitting in Citizenship and Immigration, does this create a further hiatus? Not that the Toronto waterfront has not already had a long hiatus, but does this create a further one in terms of spending this money?
Mr. Moloney: I could ask my colleague to speak to how we give effect to this in a technical sense, but the bottom line is that the operations continue.
The Toronto waterfront is an example of one of the more complex cases organizationally, in the sense that this was neither funded nor supported in a stand-alone manner. We need to adjust the votes and the program activity architecture of both, the sending department, Citizenship and Immigration, and the receiving department, Treasury Board Secretariat. That will be done through the supplementary estimates when next tabled before Parliament.
In the meantime, we have mechanisms by which the minister seeking appropriations authority formally delegates to the minister given political responsibility and accountability by the Prime Minister for the ongoing exercise, supported already, in a de facto sense, by the deputy minister, to the President of the Treasury Board. Parliament will see that through the supplementary estimates.
Senator Eggleton: There should not be a hiatus, the way you described it. The amount under the jurisdiction of the Treasury Board would be the full amount shown here, $115.8 million.
Mr. Moloney: We will be transferring use of those funds, unless the government chooses to make a policy decision to change them in either direction.
The Chairman: Thank you, honourable senators, for being here and expressing understanding through your questions.
The good news is that we will continue to study these estimates of government expenditure throughout the year. We have received a reference from the Senate chamber in that regard, and we may well decide to delve more fully into certain departments as we move along. We look forward to the budget this afternoon.
On behalf of the deputy chair, myself and all the senators, I would like to thank Mr. David Moloney and Laura Danagher of the Treasury Board Secretariat for being here and getting us started on this interesting journey into these expenditures. We look forward to your return with the President of the Treasury Board on May 3 in this very room.
The committee adjourned.