Proceedings of the Standing Senate Committee on
National Finance
Issue 11 - Evidence - Meeting of February 27, 2007
OTTAWA, Tuesday, February 27, 2007
The Standing Senate Committee on National Finance met this day at 10:17 a.m. to examine the Supplementary Estimates (B), laid before Parliament for the fiscal year ending March 31, 2007.
Senator Joseph A. Day (Chairman) in the chair.
[Translation]
The Chairman: Welcome to this 29th meeting of the Standing Senate Committee on National Finance that is starting right now. I am Senator Joseph A. Day and I am Chairman of the Committee.
[English]
This committee's field of interest is government spending, either directly through the estimates or indirectly through bills that provide borrowing authority or bear upon the spending proposals identified in the estimates.
Today we will begin consideration of the government's Supplementary Estimates (B), laid before Parliament for the fiscal year ending March 31, 2007.
The 2006-07 Supplementary Estimates (B) seek Parliamentary approval for expenditures that were not sufficiently developed or known at the time of the 2006-07 Main Estimates or the Supplementary Estimates (A) tabled earlier this year and dealt with by this committee before Christmas.
I would like to welcome our witness this morning, appearing not for the first time before this committee, but for the first time in his new role as President of the Treasury Board, the Honourable Vic Toews.
Mr. Toews was first elected to the House of Commons in the year 2000 and was re-elected in 2004 and 2006. He also served as Minister of Justice and Attorney General of Canada. Before his career in federal politics, Minister Toews was a member of the Legislative Assembly of the Province of Manitoba. He is a lawyer by formation and background. Mr. Toews also acted as legal counsel for the Premier of Manitoba at the Meech Lake accord discussions in 1990 and was appointed Queen's Counsel in 1991.
Joining Mr. Toews, and certainly no strangers to our committee, from the Treasury Board of Canada, Secretariat, we are pleased to welcome again Mr. David Moloney, Senior Assistant Secretary, Expenditure Management Sector, and Ms. Laura Danagher, Executive Director, Expenditure Operations and Estimates Division, Expenditure Management Sector. We will all remember those titles.
Mr. Minister, I will hand the floor to you. I understand you have a short presentation, after which senators will be anxious to ask questions on these Supplementary Estimates (B).
Hon. Vic Toews, P.C., M.P., President of the Treasury Board: I appreciate being here. I am pleased to discuss the 2006-07 Supplementary Estimates (B).
After my preliminary remarks, we will be pleased to take your questions and comments. Owing to the experience of my two colleagues, and to my lack of experience, I believe they will be answering most of the questions. It will be a learning lesson not only for honourable senators but also for myself.
Tabling the Main Estimates and supplementary estimates to seek Parliament's authority for spending is a critical part of Parliament's oversight of the government's spending plans. Over the past few years, in response to requests by parliamentarians, we have made several improvements to the estimates documents to provide more meaningful information to parliamentarians and to make these documents more user-friendly.
Changes we have made include providing clearer summary tables, a presentation of the gross funding requirements for each organization, and an explanation of the funds available to offset new spending requirements. In addition, a table was added to each organization's page to reflect all transfers between votes, both within and across organizations, including a full description of the transfer. These transactions are also summarized in the table at the beginning of the document. These improvements allow parliamentarians to get a better understanding of the government's spending plans to hold government to account.
The 2006-07 Supplementary Estimates (B) seek Parliament's approval to spend a total of $424.5 million on expenditures that were not sufficiently developed or known at the time of the 2006-07 Main Estimates or the 2006-07 Supplementary Estimates (A). They also provide information to Parliament about reductions totalling $314.4 million to projected statutory spending that Parliament has already approved in legislation, for a net supplementary estimates of $110.1 million.
Through these Supplementary Estimates (B), the government is moving forward with priorities announced in the Speech from the Throne, Budget 2006 and the November 2006 economic and fiscal update. These priorities include increased funding of $74.2 million for agriculture and agri-food, specifically $40.4 million to support the Cover Crop Protection Program in response to flood damage in 2005 and 2006. That announcement was made by the Minister of Agriculture in my own riding of Provencher, which has been affected by severe flooding over the last number of years. This was certainly a very welcome program.
We have $33.8 million for new opportunities for agricultural initiatives to foster investments that support the transition of farmers, agri-food and agri-product into new areas of opportunity. Again, speaking as a rural MP, this is a very welcome measure.
We have $32.6 million to provincial and territorial governments for the delivery of youth justice services and programs, a program that I was familiar with in my former role as the Minister of Justice, and $30.6 million to implement the reduction of the goods and services tax rate and for measures related to personal tax credits.
Mr. Chairman, these supplementary estimates reflect the government's commitment to deliver on its priorities as promised in the Speech from the Throne, the budget, and the economic and fiscal update.
As I mentioned earlier, providing parliamentarians with better information about the government's spending plans is one of the ways Canada's new government is strengthening accountability and rebuilding the trust of Canadians. It is also why we are moving as expeditiously as possible to implement the Federal Accountability Act, one of the most comprehensive and complex pieces of legislation ever passed. I want to pay particular credit to my predecessor, now Minister of the Environment, for his concerted and difficult work, as well as the work of my staff, in bringing that legislation forward.
That legislation contains dozens of measures. It makes substantive changes to over 45 federal statutes and creates two new ones. Together, these touch virtually every part of government and beyond. As is common with complex legislation, different sections of the act come into force at different times. I note that there has been some debate in the press and otherwise about concern about the act not coming into force immediately in all respects upon proclamation, but, in fact, Mr. Chairman, given the very complex nature of the act, my staff has sat down and set out a timetable, a reasonable and rational schedule, given the amount of consultation that still needs to take place in various respects. I am very pleased with the progress that was made not only before the act came into force but also what is ongoing at the present time.
Many elements of the act came into force on Royal Assent, including the designation of deputy ministers and deputy heads as accounting officers, and the new mandate for the Auditor General to ``follow the money.'' Other provisions of the Federal Accountability Act come into force on specific dates. For example, the new electoral financing rules came into force on January 1, 2007. Restrictions on gifts to political candidates will come into force on June 12, 2007.
Earlier this month I made four announcements on the implementation of the act and the action plan. I announced new penalties and sanctions for anyone who commits fraud against the Crown. These new measures toughen and expand on offences in the Financial Administration Act and the Criminal Code. The new indictable offence will carry a maximum penalty of five years of imprisonment for fraud of $5,000 or less, and a maximum penalty of 14 years for fraud over $5,000.
The act also promised that we would increase transparency and openness in government. We have delivered. Starting April 1, the Access to Information Act will be extended to cover seven agents of Parliament, five foundations, and the Canadian Wheat Board. With this expansion of the Access to Information Act, the government is now more transparent and open than it has ever been before. This is just the first of two major steps in expanding the Access to Information Act to more organizations.
We also announced the launch of consultations on the provisions of the new Lobbying Act. Consultations start on March 1, and I believe the consultation period extends to March 23. These consultations are a critical part of the regulatory process as they ensure that views of stakeholders, lobbyists and Canadians are taken into account to make the new online registry work for its users and for Canadians. These measures increase transparency and ensure that the few who abuse the trust of Canadians and commit fraud will be subject to prosecution and tougher penalties.
Accountability in government is also about stronger accountability for results. That is why I announced immediate steps in response to the report by the Blue Ribbon Panel on grants and contributions. Making these programs more effective and efficient means that we can focus on better results for the individuals and the organizations that use them and the taxpayers who pay for them.
We have accomplished much in the short time since the act received Royal Assent. My commitment is to continue to work to bring the provisions of the act into force as expeditiously as possible, recognizing that all the pieces need to be in place to ensure that affected organizations are ready to properly administer the new activities and to comply with the law. The Federal Accountability Act is the first step in rebuilding public trust in government.
Another step in ensuring Canadians' hard-earned tax dollars are well spent is using our new expenditure management system to improve how spending is managed. In November, we announced the directions for a new expenditure management system. Our goal is to ensure that every tax dollar spent is well spent.
Simply put, our new approach to expenditure management will support managing for results by establishing clear responsibilities for departments to better define the expected outcomes of new and existing programs. It will support decision making for results by ensuring that all new programs are fully and effectively integrated with existing programs by reviewing all spending to ensure efficiency, effectiveness and ongoing value for money. It will support reporting for results by improving the quality of departmental and government-wide reporting to Parliament.
A statistic I bring forward from time to time, a statistic that has really impressed me but not necessarily in a positive way, is that in six years the A-based budgets of Parliament have gone from $45 billion to $90 billion. That is an impact of about $1,500 for every family of four in this country every year. It is a lot of money. I am urging that we adopt this expenditure management review and that we not only look at new programs but also examine past spending to ensure that the money that we are spending on existing A-based programs is in fact money still well spent and that Canadians are receiving value for those programs. Ultimately, this new system will ensure that all government programs are effective, efficient, focused on results and provide value for taxpayers' money.
Mr. Chairman, I have presented the 2006-07 Supplementary Estimates (B) in the context of our ongoing efforts to ensure accountability in government. I believe the estimates will help bring clarity to the government's spending and will help Parliament hold us to account for results. Ultimately, our aim is to ensure that we spend taxpayers' hard- earned money effectively and for the benefit of Canadians. Canadians deserve nothing less.
I will conclude my remarks at this point and would be pleased to address your questions and comments. However, as I have indicated, it may well be that my staff will answer many more questions than I am able to in this context.
The Chairman: Thank you very much, Mr. Minister. I expect a number of interesting questions will be posed. The primary purpose for our meeting today is to deal with Supplementary Estimates (B) so that we can be ready when the supply bill comes through based on this. We do appreciate your comments with respect to the Federal Accountability Act and the schedule for implementing that act. You are quite right that there is a lot of interest within the Senate about the government's intentions regarding that act, probably because there was so much focus on the Senate during its study of the bill.
Senator Ringuette: Welcome, Mr. Minister. I have two questions, and the first has to do with your direct responsibility in regards to human resources for the public service. I see that there is no additional funding here to go towards the objective of removing geographic barriers for public service jobs. I know that there was one objective of removing the barriers for the jobs located in the national capital. However, that is not enough. We need to remove the geographic barriers to all federal jobs throughout the country. It is a question of mobility rights under the Charter. It also would mean that the federal government is giving leadership in regards to labour mobility, which is also an inter- provincial trade barrier. Mr. Minister, I would like to know what your government's prospects are in regard to removing those geographic barriers and what the cost will be under the estimates.
Mr. Toews: A great deal of concern has been expressed regarding the restrictions on individuals being eligible to apply for government jobs in the federal public service. In many cases, eligibility was restricted to people living in the national capital area and the closer surrounding area. In opposition, our party expressed concern about that particular issue, and I think we do need to move to make the public service accessible in terms of employment opportunities to people right across the country. I think that is a good principle to adopt.
There are concerns about that, and there need to be limitations when the perceived benefits may well be outweighed by costs. That balancing act needs to be done, especially for summer jobs or short-term positions. We do not want to move somebody from the Yukon in order to take a three-month term position here. Similarly, we would not want to uproot youth and bring them here for some of the youth jobs in the National Capital Commission. Of course, we have other types of programs, interim programs and others, that perform a function for youth.
Generally speaking, we support the concept of labour mobility and that principle. I do not know whether I can answer anything in respect of the costs at this time. We may have to discuss that in particular with the minister responsible.
Senator Ringuette: I guess the answer to my question is that you support it in principle, but you do not seem ready to act upon the issue.
Mr. Toews: I know that this will be the subject of a debate. A bill is before the Senate, and I believe it will come to the House in due course. As the debate surrounding that bill takes place, we will be able perhaps to flesh out our ideas a little more. The bill itself, although I do not support it in every respect, is a good point to begin that discussion.
Senator Ringuette: My other line of questioning has to do with an additional cost on page 66 of the supplement for funding to implement and administer the Canada-U.S. softwood lumber agreement of 2006. I see that $20.1 million is going towards that cost. I think that is about the same amount that the Government of Canada was facing in regards to the judicial contesting of the previous softwood agreement under NAFTA. I believe there is no gain and no loss in regards to the costs, whether we were contesting under NAFTA or what we have been given as a deal.
The other issue is that the Canada Revenue Agency and the Department of Justice will be seeking a total of $217 million in incremental funding over the next nine years to implement the agreement. Issues developed last week and the U.S. government is not very pleased with the provincial governments that are helping to modernize the softwood industry in their provinces.
Mr. Minister, what kind of good deal did we sign if it will cost us all this money and still we have a big question mark in regards to the Americans saying that we are not living up to that agreement? We lost our sovereignty, we lost thousands of jobs and there are small rural communities that are becoming ghost towns because they lost that revenue from the softwood lumber sector. I see all these costs again for the federal government.
Mr. Toews: The provinces, without exception, supported this agreement, in my recollection. The vast majority of softwood lumber producers supported this agreement. There will always be costs in implementing an agreement. I cannot comment on your suggestion that we have lost jobs because of this agreement. I think that this agreement has provided a degree of stability in the softwood lumber industry. There have always been job losses and job gains in this industry depending upon market conditions. As we know, the American housing market had suffered and had gone down for a while. I do not know whether that was part of the impact on certain communities in Canada, but I understand that the American housing market is coming back. It is looking promising in that respect. The Canadian housing market is strong.
In essence, you are questioning whether this agreement was a wise policy move. All I can say is that that is perhaps better left to the minister himself to explain. Minister Emerson is a very knowledgeable individual. I have heard him explain and defend this agreement numerous times and I have been very impressed with his arguments. He served in that capacity with the previous government. He has not changed his mind on the benefit of that softwood lumber agreement.
My department is responsible for ensuring that the costs necessary to implement that agreement are moneys well spent. If there are aspects of the costs that you feel may not be warranted, I am sure my department will look at that. However, I cannot agree with you that it is bad policy and I think that in order to implement this policy through the softwood lumber agreement, this money is necessary from what I have been able to determine.
Senator Ringuette: In regards to policy, I guess we will agree to disagree, because it seems that the not-too-distant future will prove the policy was a wrong move.
Senator Mitchell: Welcome. The government recently announced an extra $200 million for reconstruction in Afghanistan. Is that net new aid money or a transfer from somewhere else? Or is it for the next fiscal year?
Mr. Toews: Are you talking of yesterday's announcement?
Senator Mitchell: Or very recently.
Mr. Toews: I am sorry, I do not have that information, but I will get it to you.
Senator Mitchell: I would very much like to know whether it is net new money or a shifting.
The Chairman: Please let our clerk have that information and we will circulate it to all members of our committee.
Senator Mitchell: We are waiting for the appointments commissioner to be appointed. It has been probably 75 days since that bill was passed, a long time. In the interim, while we have been told by Minister Fortier that an effort has been made to establish the specifications for that job, a good number of political appointments have been made with only one specification, that the appointees had to be Conservatives, I believe. I am wondering whether you might put a moratorium on those kinds of appointments until such time as you get the appointments commissioner appointed. I notice that you have money applied for that process here, so it is underway. Would it not be appropriate to stop making appointments until you have the appointments commissioner in place?
Mr. Toews: I think that certain appointments will have to continue, whether or not the appointments commissioner is in place. Our government has made those determinations on a case-by-case basis. I think they could have moved more quickly to make appointments in that respect, but I think, because the commissioner is going to be appointed, there has been some delay in making some of these appointments.
As for the suggestion that the only requirement is that they be Conservatives, I certainly have not seen evidence of that. This does not affect directly the appointments commissioner's responsibilities, but I recall, as Minister of Justice, recommending a former president of the Laurier Club with no known Conservative connections. In fact, the only connection she had was as a fundraiser for one of the Liberal leadership candidates. If the criteria were to be a Conservative, then I made a mistake in recommending that individual for the bench.
Senator Mitchell: I can't imagine that. She might be the exception that proves the rule.
Mr. Toews: Actually, I could mention a few others.
The Chairman: We need more exceptions.
Senator Mitchell: Yes, we need more exceptions to really disprove the rule.
I am very interested in the expenditure management initiative and two of the three criteria: managing for results and decision making for results.
I am struck by the fact that earlier in the year the government cancelled climate change programs that were implemented by the previous government. What is interesting, in the context of the meeting, is that those programs were evaluated by your Treasury Board as being exceptionally efficient. We have a memorandum to the minister that outlines the Treasury Board Secretariat's estimate that these programs were costing $10 a ton. That would have contributed to a reduction of 20 mega-tons, which is just under 10 per cent of what Canada has to do under Kyoto. It was hugely significant, but the programs were just cancelled out of hand. I have pursued a number of avenues to try to get information that might support the contention by some of your colleagues that those programs were inefficient. In fact, your own department said that they were very efficient.
The long and short of my question is this: What assurances can we have that this managing for results and decision making for results are anything more than rhetoric? You had information that those programs were efficient and they were cancelled. Under these criteria, clearly those programs were getting results. If we are managing for results, we should have continued them.
Mr. Toews: I guess we could have a debate on the efficiency of those programs. I am not slighting the work of Treasury Board analysts who took a look at that. As we know, often at the onset of programs, things look like they are doable, like they are effective and efficient, and then sometimes the operation indicates that that is not the case. One of the more glaring examples of that was the long gun registry and the problems in the administration there. Obviously Treasury Board had examined the gun registry very carefully, had given the policy directions and made certain determinations. Speaking on a non-partisan basis, I would say the result was very apparent that it was not as effective or as efficient as it should have been.
I think managing for results and decision making for results is appropriate to do, but the last point is reporting for results. I think that third component is every bit as important as the managing and decision making for results, because reporting results gives us the information that allows you and me to have the discussion as to whether or not a policy is good or bad in terms of the effectiveness of money spent.
Senator Mitchell: One quick follow-up, then, because I agree, absolutely. That means that you will be giving us reporting on the results of the transit bus pass initiative, which the former minister, Rona Ambrose, indicated has now replaced the equivalent of 56,000 cars. This is almost incomprehensible to conclude; one can hardly imagine how that could be. Will we be getting a reporting for results on results from you on that specific program to show how efficient or inefficient it is as a climate change initiative?
Mr. Toews: We will not be able to report on every program every year. The schedule of reports as to when programs are reviewed still needs to be determined. In fact, I am having those discussions right now with the Minister of Finance.
I can assure you that it is the Minister of Finance's priority that we have a system where we not only report but have decision making for results and managing for results, and we are meeting very shortly regarding what that will involve, how often a program will be reviewed and how much money it will cost.
Senator Mitchell: It would be important to publish the schedule of which programs will be reported when and which will not be reported so that there is no implication or suggestion that you would be reporting on the programs that seem to be getting results and failing to report on the ones that are not getting results. I would like to see a schedule, as I am sure the Canadian people would as well.
I would also like to see some prioritization. If I can put in a plug, it would seem to me that as important as Kyoto and climate change programs are, they should be reported on all the time because they are controversial. Your group believes it may not even be a problem, but if it is, you are not aggressive about it. Others who are deeply concerned about climate change need to focus the government's, the public's and industry's attention on achieving what I believe to be absolutely achievable results and not falling into this belief that we just cannot do it and throw up our arms.
Mr. Toews: I think your suggestion is an interesting one. I will take that up with the Minister of Finance and other officials. I certainly know that he wants an orderly review of all programs in a specific period of time.
The question of how long a period of time obviously impacts on how much money we will have to put into the process. Some suggestions have been made to me about how we can report on a more regular basis without its costing quite as much money as has been proposed. It is not a cheap program to run.
Senator Di Nino: My first question deals with the additional funding that has been provided for the Canadian biotechnology initiative, which has been around for a while. I do not think enough money has been put into that initiative. I think it should probably be considered at a higher level.
I wonder if you could provide some information on the strategy that exists in that initiative to be able to use more of the resources that we have available to change the dependence we have on fossil fuels, et cetera, and get things going that will both help the economy and address the development of additional alternatives to improve the environment.
Mr. Toews: Indeed, biotechnology is an important issue. I know that in rural Canada especially there is a lot of enthusiasm about biofuels, biodiesel, ethanol and other alternatives to existing fuel sources. It is seen not only as a benefit to our environment but also as a real benefit to making our rural farm economy more sustainable. It is actually a very exciting opportunity.
Detailed questions concerning the Canadian Biotechnology Strategy should be directed to Industry Canada, which was designated as the lead department for this initiative at its inception following cabinet approval in 1998. The Canadian Biotechnology Strategy, CBS, replaced a national biotechnology strategy first established in 1983 as the government's renewed commitment to balance the social and economic benefits of biotechnology against the need to protect the environment and human and health safety.
The CBS is a horizontal initiative involving ten departments and agencies. Work is undertaken according to annual CBS work plans within five elements or areas: innovation in addressing national challenges; supportive business environments; spark regulation; international impacts; and public information and engagement.
Funds transferred from Supplementary Estimates (B) will fund interdepartmental initiatives across all five main elements. More specifically, the funds will be used to strengthen interdepartmental collaboration to deliver Canada's regulatory responsibilities for biotechnology products; to develop a federal bio-economy and bio-products policy agenda; to address biotechnology opportunities for Canadian companies in the health sector; to address regulatory challenges such as aquatic biotechnology and plant molecular farming; to advance Canada's international regulatory interests related to biosafety; to deliver biotechnology communications projects for Canadians and decision-makers; and implement a biotechnology statistics program that provides metrics for Canadian performance.
That is a technical response; more detailed and perhaps more user-friendly explanations could be obtained from the minister involved.
Senator Di Nino: I appreciate your response. I was hoping there would be more of an answer dealing with the partnerships one can create with the private sector. I think there was a mention of the health area. I am convinced that this is a good thing for us to do. Having said that, I think it should be in partnership with the private sector as opposed to trying to deliver it from government itself. I am not sure you can answer that.
Mr. Toews: I was involved in a recent announcement at the University of Manitoba involving private companies taking ideas and marketing them into commercial applications. It is quite an exciting area. We announced that money. I cannot recall offhand exactly how much money it was, but we saw a real partnership between academics and the private sector. That is exactly what needs to be done to transfer those ideas into a commercial project and bring back value and hopefully some tax dollars for the Canadian government.
Senator Di Nino: I appreciate that answer. I think we have to follow up, as you said, with the appropriate minister. This is an exciting program to which we should be dedicating more resources.
One would always applaud a reduction in expenditures generally, but there are areas where I do not think reduction is necessarily a positive thing.
Your supplementary estimates indicate that the funds provided for the Canada Education Savings Grant program have not been taken up. I do not want to say the program has been a failure, but the take-up rates have been very low. That concerns me. I think this program can provide for the preparation of our young people to be ready for the challenges of tomorrow.
There has been some criticism that the promotion of this particular program has not been directed at the appropriate market. Perhaps this should be directed to the appropriate minister, but I wonder if you or your officials would have any comment to make on that.
Mr. Toews: Mr. Moloney would like to comment. However, I am certain that the House would welcome any recommendations from this committee on appropriate marketing and to whom we should direct it.
David Moloney, Senior Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada, Secretariat: Some of the take-up rates have been less than had been expected in respect of these latest changes. Just over a third of Canadian children — according to our statistics, 34 per cent of Canadian children under 18 — are beneficiaries of a registered education savings plan, which is up from just 4 per cent nine years ago. We had Canadian Education Savings Grants in 2006 totalling $490 million.
In relation to timing, there are quite understandable but strict restrictions against communications advertising public opinion research when Parliament is dissolved for the purposes of general elections, and that timing has affected the degree to which the government has been able to undertake new activities to publicize this.
There have been issues with the number of providers who have stepped up in the private sector, as you know, in terms of the plans themselves, and there is work going on there. There is also a fair bit of work underway on better serving low- and modest-income families in this area. That work needs to continue. The Canada Learning Bond, which provides up to $2,000 over 15 years in educational savings to children from low-income families, was part of that. There is an increased matching rate for children from low-income families, and there is an extension of program eligibility to children in care. Some of these further initiatives will take time to roll out, but it seems that the inability of the government to undertake mass media communications has really been part of it.
Senator Di Nino: The information I have, Mr. Minister, is that the segment of the potential market that seems to be least involved is the low- and lower-income families. Obviously I do not think we are doing enough of a job to inform them of the availability of this program. I certainly hope that this information gets back to the appropriate minister so that we can do something about that, because I do think it is a very good tool, and one would think that those in the lower-income brackets would be keener to take advantage of it, because the benefits are also higher in relation to the credits that are available.
Minister, the Auditor General has been concerned about or critical of the increase in the use of supplementary estimates. In effect, I think she has equated the increase in the use of supplementary estimates to the change from a deficit to a surplus position, and she has raised some concerns that I happen to share. I believe she is suggesting that good planning should mean that most of the required expenses should come from the Main Estimates instead of using supplementary estimates. Could you comment on that?
Mr. Toews: I am aware of that criticism, senator. My assistant will provide an answer, but I think it is something we need to take note of. I will let the staff assist me.
Mr. Moloney: As the Auditor General has observed, the government's fiscal situation has moved from a deficit position to balanced and surplus budgets over the course of a decade. The Auditor General's report compares the average size of supplementary estimates in a decade of surplus to that in a decade of deficits. The report draws the appropriate conclusion. In the budgets in the nine years since the fiscal situation has been balanced we have had new spending proposals coming forward that governments decided relatively late in one fiscal year would start in the next fiscal year, and often they will run for a number of years.
We, in the Treasury Board Secretariat, bring to Treasury Board, so that the president can bring to Parliament, Main Estimates that seek appropriations authority for 130 departments and agencies. In the Main Estimates, which the president tabled an hour ago for next year, we have several hundred votes. It is a rather long, detailed and involved process. It takes us a couple of months of pretty intensive effort to prepare those estimates.
It is unfortunately the case that with budgets that take place in late winter, and with standing orders that require that the Main Estimates must be tabled by March 1, we do not physically have the time to be able to reflect in the Main Estimates to be tabled in late February those initiatives that may be decided around that time. In recent years, 2006-07 being an example, sometimes the Main Estimates have actually been tabled before the budget. Hence, a number of policy-related initiatives come forward only in supplementary estimates.
If those are multi-year initiatives, the second year of that spending will be found in the Main Estimates going forward. That is indeed the case with the initiatives the current government brought forward in the Supplementary Estimates (A) last fall. The ongoing amounts in respect of those initiatives are in fact captured in the Main Estimates that were tabled today for next year.
Senator Di Nino: The Auditor General has been looking at this for a number of years, as Mr. Moloney appropriately says. This is not a reflection necessarily of the last supplementary estimates requests or the previous one. It is over the last eight to 10 years. I have the same concern about what the trend seems to be, and I do think that over this period of time we have seen what might be considered another way of getting money other than through the Main Estimates. Your explanation is fair, but this is an area that needs to be examined because it seems to have been growing over the last number of years.
Senator Nancy Ruth: I felt hopeful listening to you talk about the expenditure management system, partly because it is to improve how spending is managed to ensure that every tax dollar is well spent.
In my brief time here I have heard Minister Oda in her capacity as Minister for the Status of Women say that women's concerns are in every department and there is analysis in every budgeting line of every department. I have been trying to figure out how or whether that really happens. How is an analysis of women's concerns conducted in departments and who measures the outcomes of that analysis? I do not get answers to my questions that are in any way satisfactory.
You said that the expenditure management system is about measuring and being responsible for tax dollars. How might the expenditure management system work for the gender-based analysis that Canada committed to in 1995? If that gender-based analysis is not done in the expenditure management system, where is it done within the government?
Mr. Toews: Are you referring specifically to gender-based analysis?
Senator Nancy Ruth: I want to know who measures the impact of budget decisions for the poor, for women, for race issues, for those issues to which Canada theoretically has committed itself. It is the implementation part of it that is so difficult.
We all know that Canada stands first among equals, almost, for what we say. However, when it comes to walking the walk, we are not so good. I want to know why that is, how to get at it, how to improve it and who will do it.
Mr. Toews: That is one of our biggest challenges. As I indicated earlier in my presentation, I had been given the figure on the expansion of A-based budgeting, which does not seem to have any real analysis. Once that is in the A- based budget, it is simply accepted and issues, such as value for money or impact on gender, are not considered carefully. Thinking back to initiatives we brought forward as a result of our election platform, if I may relate back to my experience as Minister of Justice, one of my big concerns was always what happens to resources allocated to priorities when the priorities change. If certain priorities are no longer priorities for our government, what happens to the resources that were expended on those priorities? Are those resources now being moved into our new priorities so that we are not simply adding to existing spending but rather are looking at past spending and why we are spending there and then shifting as much as possible?
There is a definite weakness in our overall system in that analysis. That is why I am hopeful about our new initiative, and I will speak with the Minister of Finance about fine tuning it. We are always mindful of the gender issue in almost every decision that we make, such as the process of appointments of judges.
Senator Nancy Ruth: I really want to know about the money, minister. It is about the money.
Mr. Toews: The money is very important. I can indicate that the thinking of ensuring that there is appropriate recognition for gender in every decision, not only money but also policy, is present. The government expects to see that regardless of the department. The appointment of judges, for example, is always an issue. We are always looking for merit-based appointments but, assuming that people are meritorious, then we look at the issue of gender and try to enhance that. Your comments are timely in terms of the development of clearer criteria in respect of ensuring that reflection.
Senator Nancy Ruth: Minister Oda says that it will happen so women in Canada should not worry about cuts to Status of Women because it is happening in other departments. I am trying to find out how that is happening, who is measuring it, who cares and who will be the whipping boy or girl on it. Is there a role for Treasury Board?
Mr. Toews: I can provide you with a specific answer. For example, the Management, Resources and Results Structure Policy, MRRS, requires that departments define appropriate, expected results and related measures of performance for all their programs. This applies equally to programs having an explicit gender-related objective as it applies to all other programs. The Treasury Board Secretariat is implementing the MRRS policy and related systems which, when fully implemented, will provide government with a comprehensive picture of spending and performance by program. If a program has a gender-based outcome, the MRRS policy instructs departments to establish a target and a time line to reach that target as well as indicators to inform program managers whether they are on track.
Senator Ringuette: It is like the literacy program.
Senator Nancy Ruth: Is there a way for me to find out when it is fully implemented and what these little bits in that paragraph you read actually mean? I want to know who is testing it; who is the evaluator; how we know that it is being done; and whose criteria are being used to do it. It is a real struggle for me to find out how this is happening. I understand it was like that for Ms. Maria Minna when she was on the Commons Finance Committee. She too had a rough time trying to figure it out. All of us are having a rough time trying to figure out whether it is happening and whether Minister Oda is committed to doing it. I simply do not know how it is done. If you could send a more detailed response to this committee, I would be grateful.
Mr. Moloney: I can offer a brief extension that would explain it. First, the MRRS policy requires that departments be more specific about the results they are aiming to achieve. In many specific programs or activities across the country there will be gender-related outcomes and the department should be clear to Parliament about what it is aiming to achieve. Under the policy, the department should clearly report to Parliament on how it is doing with respect to those goals.
Second, the Treasury Board Secretariat looks across departments to see if the results that departments are purporting to achieve align with what we understand to be policy decisions. We also look at the quality of their reporting.
I think I can give you an example from the Treasury Board Secretariat's operations. Each department is accountable, as the senator has said, for conducting gender-based analysis of its own policies and programs, existing and new. The Treasury Board Secretariat undertakes a full-scale policy renewal initiative as we are looking at our entire suite of policies, which are, generally speaking, oriented toward guiding how departments behave and are managed. We look explicitly at each of those policies, which often did not have an explicit gender-based analysis. As we renew them, we pose the specific question internally of how the policy acts advertently or inadvertently in respect of gender issues. That is part of our policy assessment, and the President of Treasury Board brings forward the renewed policies one by one. For each of them, such an analysis will have been done. Each department is responsible for doing that.
Senator Nancy Ruth: First, can I assume that that analysis includes disability, race and other criteria, as well as gender? Second, would it be possible for me to see some of the internal documents that measure the impact of gender- based analysis? If I cannot see the documents, then I do not know that it is happening, and that is part of my problem. I do not have any clear analysis and when I look at the blue books, I simply cannot tell; I can only guess.
Mr. Toews: We will see what we can provide for you in that respect. Certainly, in my short time with Treasury Board I have seen analysis in respect of minority hirings, for example. It has been brought to my attention so I know that across government these kinds of issues are being considered. I have not seen specific figures on handicapped individuals but I know about other minorities.
Senator Nancy Ruth: I will provide an example. If a government makes recommendations for autism, they are effectively making recommendations for boy children and there is no comparative for girl children, be it on eating disorders or any other female-specific issue. That is the kind of thing that troubles me. I see one policy come out but there is not a balance. I would appreciate seeing whatever you can provide to the committee.
Mr. Toews: Are you suggesting that whenever there is a policy on health, for example, that might impact one gender as opposed to the other we find another policy that might impact beneficially the other gender?
Senator Nancy Ruth: Within 12 or 18 months, that would be wonderful.
If we send aid to Afghanistan, can we ensure that CIDA, or whoever is responsible for it, is at least doing 50-50? I think that is happening in Afghanistan. That is a good example of how that is working.
The Senate report on Sub-Saharan Africa does a micro credit analysis but no gender analysis. Everyone knows that over 90 per cent of the returns of loans to women are better serviced than they are to men but there is no analysis in the report. Its absence scares me.
Mr. Toews: There seems to be tremendous success with micro credits to women. We find that the same success does not occur when that money is given to men. You would not suggest, then, that we pour money into the unsuccessful aspect, would you?
Senator Nancy Ruth: No, but if the report does not point it out, we might.
Mr. Toews: That is a good point.
Senator Nancy Ruth: There is no such thing as ``gender neutral.'' If it is not stated, it usually means ``white men,'' which is a huge problem for those who are not white, too — perhaps not in Africa.
The Chairman: You have undertaken to provide us with any analysis and testing of whatever programs are in place now. If you could send that to our clerk so it could be circulated to all members of the committee, we would appreciate it. We are very interested in that.
Mr. Toews: It may be quite an undertaking for every department to do that type of analysis. I am not exactly sure what I can give you, but we can give you what Treasury Board does, for example. That might be a good start.
The Chairman: That would be helpful. We are not asking you to go to every department, but one department must be saying to all of the departments, ``Do you have your work done on this gender-based analysis? This is what we are doing in Treasury Board.'' We would like to see that so we can see how it is being monitored. Are you able to help us with that?
Mr. Toews: Yes, I think so.
Senator Stratton: Welcome, minister and officials. We will be seeing a fair bit of Mr. Moloney and Ms. Danagher soon. I would like talk about the RCMP.
The Royal Canadian Mounted Police get tugged every which way. For example, there was a strike of security guards in prisons in Saskatchewan. Suddenly, the airports are filling up with the RCMP moving out there. You were a former justice minister. How do you handle that in their budget?
Years ago — hopefully it has been cleared up now — you could drive across Manitoba and right into Regina doing 130 or 150 kilometres an hour, and never see a RCMP officer. Are we overcoming that problem? I noted here there is $18.8 million dollars in funding for the RCMP for additional staff. What does that mean? Is it for the Regina strike or is it for actually putting boots on the ground to look after the highways?
Do we know? If you do not know at the moment, could you get that information to me? I would appreciate it.
Mr. Toews: The issue of the RCMP is very important, particularly in rural Western Canada where the RCMP performs most of the municipal policing functions. I am familiar with the role of the RCMP, as the Minister of Justice both federally and provincially. In 1998, as you will recall, the government of the day decided to shut down the depot. I will never understand why a government would shut down the training of RCMP officers at a time when everyone knew that within five years half of all RCMP officers would be eligible for retirement. That decision put us behind the eight ball in Western Canada in terms of policing and we have not yet recovered. It was a disastrous decision.
I recall one morning sitting in Morris, Manitoba, on Highway 75, one of the main arteries into Canada from the United States. I met an RCMP officer there. He told me that he was the only RCMP officer on duty in a 1600-square- mile area. I asked, ``How do you get things done?'' He said he was in an unmarked cruiser and people were passing him at 130 kilometres an hour. He simply could not stop them.
I am very pleased to say that that has turned around. We have made a commitment that there will be 1,000 additional RCMP positions. This funding provides the necessary resources and addresses the resulting increased requirement for prosecutors to handle anticipated additional litigation demands. This was part of our election platform.
As I understand it, we have increased funding to the depot in Regina. I think we are looking at training somewhere in the range of 1,800 officers in a year as opposed to the 800 to 1,000 that were trained under the past administration. The 800 will simply not even keep up with the rate of retirement, so we felt that quite dramatically.
We also noticed that many of the organized crime elements were moving into rural areas. I remember having a discussion with some of my farmers about the gun registry. There were five of them sitting around. Four had not registered but one had because he bought the ammunition for all five. I asked those who had not registered their firearms whether they were not worried about the RCMP knocking at their doors. One individual said, ``Before the RCMP come knocking at my door they have to get by two grow operations for marijuana. I am not worried that they will come looking for my firearm.''
When I think about it cynically, we have RCMP officers enforcing a registry that makes absolutely no difference. We are putting resources into that while allowing grow ops and organized crime to move into rural areas. There are tremendous detrimental impacts from grow operations. There are risks not only for large urban areas but also for health, environment, fire, and threats to our firefighters. That is now spreading into rural areas. I am pleased to see this initiative, especially from a rural MP's point of view. We can no longer look at this as an urban crime or a rural crime; it is organized crime and it is integrated right across this nation and internationally. The increase in the number of RCMP officers is a tremendous benefit for people in my riding and elsewhere.
I could go with example after example, senator. I recall coming upon an accident scene at the corner of Highway 59 and Highway 52. That is the highway to Steinbeck, Manitoba. There had been a major accident involving a gasoline truck. Volunteer firefighters were directing traffic and doing the cleanup. Not an officer was in sight. Where was the officer? The officer was on another call near Plum Coulee. That must be 50 miles from there. That is how short we were of officers. Volunteer firefighters, as well trained as they are, were directing traffic and overseeing an environmental issue. I was thankful that we have these volunteer firefighters, but was that their responsibility?
I am looking forward to our new, young officers. I am very proud to say that I have a nephew in training with the RCMP, and I hope more young people chose that career.
Senator Stratton: Thank you very much.
Senator Murray: I am intrigued by the discussion that has just taken place between the minister and Senator Stratton, and I will ask whether, in the situation that the minister describes, Manitoba had asked for reinforcements or additional police from Ottawa and was told that they were not available.
I will make a couple of comments in general. If you have time and inclination, you can reply. I hear what you are saying, and I think it is very commendable that you want to target the A-bases of the various departments. Programs, as we know, have a tendency to just grow and grow and run away.
I see here, for example, a supplementary estimate for $16 million for additional public security and anti-terrorism initiatives. Our notes say that this is in addition to the $153 million requested for this purpose in the Supplementary Estimates (A) for the fiscal year now drawing to a close. We have a further note saying that since Budget 2001, the government has announced incremental funding totalling $12.5 billion towards this initiative. This supplementary is a horizontal supplementary. However, when I look at that overall figure of $12.5 billion, it seems almost as if we are building an anti-terrorism program from scratch. We all know that anti-terrorism measures in this country did not start with 9/11. I will join you in cynicism. My particular cynical take on this is that any official or any minister in any department who wants to speed up the approval of a request for funds will somehow find a way to tie it into anti- terrorism, because nobody in the government or in the cabinet or anywhere wants to be the one to say ``no'' to an anti- terrorism measure or anti-terrorism funding. A bomb will go off somewhere down the road, and then fingers will start being pointed: ``It was your fault because you did not give us this extra $1 million. Blood is on your hands.'' Such is the level of political dialogue in this country. I wonder whether this whole anti-terrorism field is being subjected to scrutiny that is as rigorous as it should be before the thing simply runs away with the budget.
Going from the sublime to the ridiculous, I see $30.7 million in a supplementary estimate to the Canada Revenue Agency for the implementation of the GST reduction and a few other things. The government has reduced the GST by 1 percentage point. Are you telling me that the Canada Revenue Agency, which has a budget of about $3 billion and change, could not find $30 million to implement this? By the way, why does it take $30 million to implement a tax cut of the GST? You will be decreasing the GST by another percentage point next year. Will they be back for another $30 million, or will they hide it as an anti-terrorism measure, perhaps?
There is one more thing I will impose on you as a former Minister of Justice. I see $18.8 million in funding for the RCMP for hiring additional staff and federal prosecutors. Sure enough, it is there. I would have thought the hiring of federal prosecutors would be in a vote somewhere under your former department rather than under the RCMP. Could you explain that?
Mr. Toews: I cannot, but my colleague here can. I want to leave those questions both on the national revenue issue and on the RCMP and prosecutors issue.
Your first comment was on the RCMP and whether the provinces ask for additional police. Absolutely, they ask. In fact, interestingly, they ramp up their spending and appropriations provincially for the maximum and announce, ``We have now $30 million extra for RCMP,'' knowing that the federal government could never meet those commitments.
Senator Murray: Did Manitoba do such a thing?
Mr. Toews: I understand that that has happened in the past. That way, you can always claim, ``We have asked for that.'' Even under this last government, Manitoba consistently asked for more officers than they knew the government could provide because they were simply not producing enough officers there. Were the provinces asking? Yes. Was the money available? Yes, from the provincial point of view. Of course, that money always lapsed because the federal government could never meet the demand for those officers.
I will leave the other questions to my colleague.
Mr. Moloney: The third question was in respect of the 1,000 positions for the RCMP, which is a total for the RCMP of $18.4 million. In addition to that, there is a smaller amount of $400,000 in a Department of Justice vote. Given that many of those RCMP officials will be engaged in federal policing activities, there is an expectation that there will be an increase federal prosecutions.
Senator Murray: I was interested in the federal prosecutors. Why are they under an RCMP vote and not under a Department of Justice vote?
Mr. Moloney: The senator is perhaps referring to a horizontal item where we have brought the two together. There is, in fact, in Department of Justice's Vote 1, $405,000 specifically for this purpose, and it will be noted as a horizontal. It is related to the government's initiative in this area.
Senator Murray: It is under RCMP, ``funding for additional RCMP positions and federal prosecutors,'' on page 172. You are saying that is under Vote 60. Anyway, it is a very small point.
The Chairman: Maybe you could clarify for us in writing.
Mr. Moloney: Certainly. In the public security area, two specific initiatives are involved. One of them is related to being able to improve the flow of trade in a higher security environment. A total of $5.7 million is being sought by the Canada Border Services Agency for the harmonized risks scoring and advanced trade data initiative, which is part of the Canada-U.S. container security partnership. This basically facilitates the faster flow of goods, of containers containing goods, in this higher security environment.
Second, there is a $10.1-million item that Public Safety and Emergency Preparedness Canada is seeking related to emergency management capacity in both the national capital region and across the provinces and territories. This is related to all sorts of emergencies and disaster planning and communication and so on.
Regarding the Canada Revenue Agency, the $30.6 million refers to a set of initiatives, one of which is the reduction in the goods and services tax rate. I am sorry that I do not have the breakdown across the six different initiatives, but there were costs associated with changing systems and with informing the private sector how to implement that.
Senator Murray: It is $30 million. Perhaps all the $30 million did not go to administering the GST reduction, but most of it must have gone there because the GST reduction is the main point mentioned in the vote.
Mr. Moloney: It also mentions that there were measures related to personal tax credits. There were four totally new measures. There is now a Canada Employment Credit, which is a $1,000 credit to Canadians for work expenses. There is a new textbook tax credit. There is a new tax credit for public transit passes. There is a new children's fitness tax credit.
There were also measures related to corporations around a new apprenticeship job creation tax credit and changes to excise duties in tobacco and alcohol. In those areas, there will be a workload change because of rulings, information technology changes, audits and so on. Therefore, the $30.6 million applies to a bundle of six or more areas.
Senator Murray: I wonder how much of that is put towards hiring new bodies. I make the point again because there has been a decision made by the government that there will be another percentage point reduction in the GST in April. Will they come back for another $30 million or another $20 million? You do not know.
You wonder whether the people who prepare these submissions initially to Treasury Board find some convenient and useful rubric, such as anti-terrorism or the GST reduction, both of which are more than plausible as a policy area. We need a few million dollars, so we will put it in there somewhere. It would take many more analysts than you have at the Treasury Board to get into this, would it not?
The Chairman: Any information you could send us in writing to clarify these points would be helpful. You have made your points well, and if you would like any rebuttal to come back from the department, that would be helpful.
Honourable senators, we will be meeting with the President of the Treasury Board again Tuesday after the break to deal with the Main Estimates for the next fiscal year, which were filed this morning. I am sure those senators left on the list for second round will have an opportunity to cleverly put their questions at the next meeting with the minister.
Mr. Minister, thank you very much for appearing today. We look forward to seeing you again with respect to the Main Estimates.
The committee adjourned.