Proceedings of the Standing Senate Committee on
National Finance
Issue 17 - Evidence
OTTAWA, Tuesday, June 12, 2007
The Standing Senate Committee on National Finance met this day at 9:45 a.m. to examine the Estimates laid before Parliament for the fiscal year ending March 31, 2008; and to give clause-by-clause consideration to Bill S-217, to amend the Financial Administration Act and the Bank of Canada Act (quarterly financial reports).
Senator Joseph A. Day (Chairman) in the chair.
[English]
The Chairman: I call this meeting to order. I am welcoming you all to a meeting of the Standing Senate Committee on National Finance.
[Translation]
Welcome to the Standing Senate Committee on National Finance. My name is Joseph Day and I represent the province of New Brunswick in the Senate, and I am the chairman of this committee.
[English]
Today, we are pleased to welcome our witnesses Deputy Minister Admiral Larry Murray from Fisheries and Oceans Canada, and George Da Pont, Commissioner, and John Butler, Acting Deputy Commissioner, both from the Canadian Coast Guard. We understand Mr. Murray and Mr. Da Pont have introductory remarks. I apologize for our late start. We will make up for that by asking you penetrating questions once you finish your opening remarks.
[Translation]
Larry Murray, Deputy Minister, Fisheries and Oceans Canada: Mr. Chairman, thank you for the opportunity to appear before you today. I would like to take a few minutes to make my presentation, after which Commissioner Da Pont will offer some additional comments.
[English]
Minister Hearn issued a statement following the tabling of the Auditor General's report — the focus of this gathering this morning — in which he fully accepted the findings of the Auditor General. He had instructed the commissioner and I to develop a realistic plan that would address, to his satisfaction, the matters raised by the Auditor General. I recently provided the minister with a copy of the Coast Guard's business plan, which is the vehicle for responding to the findings of the latest Auditor General's report. This plan has been tabled with this committee as well as with the House of Commons Standing Committee on Fisheries and Oceans and the House of Commons Standing Committee on Public Accounts. It has also been chaired with the Auditor General and worked on with the Treasury Board Secretariat.
Naturally, both the commissioner and I were disappointed with the audit results. The concerns raised by the Auditor General are largely, but not exclusively, management issues and must be addressed. As Deputy Minister of Fisheries and Oceans, I fully accept responsibility for the slow progress to date in responding to the recommendations of the 2000 and 2002 Auditor General reports.
Notwithstanding our failure to complete all outstanding actions with respect to these recommendations, considerable progress has been made on many initiatives and I believe with careful identification of priorities as was suggested by the Auditor General, this important work will be completed. We have produced a document for your information dated February 20 that indicates fairly objectively what had been achieved when the Auditor General tabled her report in February. That was shared with the Auditor General as well as with the Standing Committee of Fisheries and Oceans when we appeared there on this subject.
I would also like to offer a few comments on the context within which this work was taking place and the time frame. When I became deputy minister in April 2003, I knew Coast Guard and Fisheries and Oceans Canada, DFO, faced significant fiscal and operational challenges. I felt that we needed to strengthen and clarify the organizational model, develop a strategic plan on our overall direction and that we needed additional resources for serious operational shortfalls.
A major internal review encompassing the entire department, including the Coast Guard, and known as the Departmental Assessment and Alignment Project, DAAP, together with a parallel Treasury Board Expenditure Management Review, EMR, were the principle vehicles used to complete this work.
With respect to Coast Guard, one of my first actions was to implement clearer lines of accountability. In June 2003, I established Coast Guard as a line organization, and had the assistant commissioners in the regions report directly to the commissioner. Prior to that time, they reported to the department's regional directors general. Because I was also concerned with the "five Coast Guard'' reality, I felt that this change in reporting relationships was an essential first step to address the issue. I still believe that to be the case.
[Translation]
In December 2003, the government announced its intention to further strengthen the Coast Guard's autonomy by making the organization a Special Operating Agency within the Department of Fisheries and Oceans. Various policy and regulatory functions were consolidated in Transport Canada so that the Canadian Coast Guard could focus exclusively on program and service delivery. It took several months of highly focussed management effort to develop and secure approval of the authorities required to establish the Canadian Coast Guard as a Special Operating Agency. The change came into effect on schedule on April 1, 2005.
[English]
Meanwhile, the DAAP and related Treasury Board processes were concluded and resulted in a renewed departmental strategic plan, significant reallocation of internal resources for operational purposes and the foundation of a transformational plan which ultimately produced $55 million in short-term operational relief in 2005-06. In addition, the new Conservative government's 2006 budget included a $99 million permanent increase to our A-base, $45 million of which went to the Canadian Coast Guard. A 25-year fleet renewal plan was also completed concurrently with these various initiatives including the approval of phase 1 implementation in Budget 2006 and phase 2 in the last budget.
However, this entails a great deal of change for already busy managers across the Coast Guard and culture change, which is what this is really all about, does and will take time. I firmly believe that solid progress has been and is being made within the Canadian Coast Guard and that under Commissioner Da Pont's capable leadership the Coast Guard management team is deeply committed to transforming the agency into a strong national institution.
I also want to emphasize the very effective work Coast Guard has done throughout the period in maintaining its day-to-day operations. Here I might note that, contrary to some news reports following the release of the Auditor General's report suggesting that no fishery resource surveys had been conducted since 2001, Coast Guard provided the necessary platforms to ensure that the vast majority of the reports were indeed carried out, although a number were delayed or changed as a result of technical problems. However, out of close to 90 surveys in the Atlantic zone between 2001 and 2006, only two were not completed — both of which referenced by the Auditor General in her report.
My primary point is that the crews who operate over 100 ships of the Canadian Coast Guard year round in some of the harshest conditions on the planet do so with selfless dedication, professionalism and courage. The well-founded criticism of some management practices and a lack of satisfactory progress on previous audits that the Auditor General has delivered in a measured and very effective way, is deserved.
However, it is important to recognize that the men and women of the Canadian Coast Guard deliver excellent operational results, whether in marine search and rescue; or consistently maintaining North Atlantic Fisheries Organization, NAFO, patrol vessels on the Nose and Tail of the Grand Banks 365 days a year in all weather conditions; or responding to unique emergencies, such as the highly successful Hurricane Katrina relief operation in the Gulf of Mexico with a ship, the Sir William Alexander, whose control systems were designed for operation in cold northern waters; or routinely maintaining six to eight icebreakers in the Arctic for six months a year despite always present technical and logistical challenges; and, most recently, the incident off the northeast coast of Newfoundland in which Coast Guard responded magnificently to over 100 vessels with 700 fishers and mariners stranded in heavy ice for over three weeks. As this committee well knows, there are countless other examples I could use.
Finally, and as our minister has emphasized publicly, notwithstanding the management issues correctly raised by the Auditor General, Canada has one of the best records in the world for marine search and rescue with a 98 per cent success rate in cases with lives at risk. The Canadian Coast Guard is one of the key members of the team responsible for this excellent statistic. I offer these observations not as excuses for the slow progress in some management areas for which I take responsibility, but rather as examples of ongoing significant achievement in challenging and very important operational areas.
[Translation]
I will now ask Commissioner Da Pont to conclude our opening statement.
George Da Pont, Commissioner, Canadian Coast Guard, Fisheries and Oceans Canada: I wanted to take a few minutes to talk to you about the way in which we plan on following up on the Auditor General's findings.
First, let me say that the Coast Guard management team agrees fully with the findings of the report. Early last year, just after I had begun to act in the position of commissioner, I launched an A-base review to examine both how we were spending our monies and our internal business practices. We set up a dedicated team of people from all parts of the Coast Guard and all regions to do this work over a six-month period.
While I obviously knew that the Auditor General's staff would cover some of the same ground, I felt that a review of our A-base would look beyond the scope of the audit and take a broader look at our internal practices.
This group reported out in September of last fall. Its findings were broadly consistent with those of the Auditor General. Indeed, they helped to inform her analysis.
[English]
Last fiscal year, I identified five multi-year priorities for Coast Guard that were reflected in our first business plan as an agency. The five priorities remain the focus of the second business plan, which we have shared with you today. They are strengthening Coast Guard as a client-focused national institution; renewal of the fleet; steady progress on our various modernization initiatives; our ongoing contribution to the security agenda; and a focus on our people, especially succession planning.
I believe these priorities provide a good framework for responding to the Auditor General's findings. I also agree completely with her observation that we have tried to do everything at the same time, with unrealistic time frames, and without ensuring that we had adequate human and financial resources assigned to complete the work.
That is why I wanted to use our business plan as the vehicle to respond, so that we could put our response to the Auditor General's findings in the context of all our other business activities to ensure that we do not repeat the mistake of spreading ourselves too thin. This plan is incremental in nature; it provides clear priorities and accountabilities as well as the resources required to do the work.
The elements of the business plan that specifically respond to the Auditor General's concerns have also been tabled with the committee, and I would be pleased to provide you with any details you may require. I did share a draft of the business plan with the Office of the Auditor General. They gave us some comments that have been incorporated in the final version. I have also committed to providing regular progress reports on the plan to the minister to ensure that it is being fully implemented. These progress reports can be made available to this committee if it so desires.
I have also taken a number of concrete actions to begin to address some of the other issues identified by the Auditor General. For example, marine advisory boards, our principal consultative mechanism with the shipping industry, have been revitalized at both the national and the regional levels. We have already engaged in meaningful discussions on the issue of marine service fees, which has been a contentious issue for many years. This has helped us to re-engage with one of the primary users of our services. We are in the process of establishing parallel links with recreational boaters and commercial fishers through existing structures.
We have succeeded in securing approval and funding in the last budget for a second phase of fleet renewal. This means that in the last two budgets the Coast Guard has received about $750 million to acquire 16 new vessels to support our operations and enhance our support role for maritime security activities on the Great Lakes and St. Lawrence River.
I have also created a new group to focus exclusively on vessel procurement — a capacity that has not been in place in the Coast Guard for 20 years. I have created a workforce development unit to establish the capacity for analysis and strategic thinking in how we manage and train our people.
I have taken a different approach to budgeting that I hope will bring more transparency to what we spend our monies on, particularly for maintaining the fleet and for the results of the funding we receive for federal on-water presence.
Finally, I have increased the funding that we allocate for vessel refit and put in place a more structured planning process for how we do the work.
[Translation]
These measures are only a start, and I know that much more needs to be done. But I am confident that we are on the right track to building the strong national institution that we all want.
Let me conclude by emphasizing, like the Deputy Minister, how proud I am of the professional and dedicated work of our employees. Thank you, Mr. Chairman, for having granted me the time to make these comments.
[English]
The Chairman: Thank you. I want to confirm that we have received the documents to which you referred. This is your business plan 2007-10. Each of the senators has received a copy as well as a status report of the Auditor General's recommendations. The Auditor General studied the Coast Guard in 2000 and in 2002. You have given a status report on those studies, but the Auditor General again reviewed the Coast Guard and reported in February of this year. It was that report, to which the Auditor General referred during her appearance before this committee as an officer of Parliament, that caused us some concerns. As you know, our focus is on the financial aspects, the money that is appropriated for various departments.
I remind honourable senators, as well as our witnesses, of the status report. This is a review of what progress was made on the two studies by the Auditor General. The Auditor General stated under the heading "Coast Guard progress'' that progress has been unsatisfactory; under "The building of a strong national institution'' that progress in developing a national approach has been limited and that Coast Guard has difficulty meeting its client needs; under "Completion of initiatives'' that Coast Guard's track record for completing initiatives is poor; and under "Effort to modernize'' that human resource management remains a problem
This is why we asked you to come in to talk to us. We will have some questions on some of these points.
Senator Murray: My question is not directly related to the Auditor General's report, but it may be germane. I am always intrigued by these special operating agencies. You will have to refresh my memory, but I do not believe it takes separate legislation to create a special operating agency.
Mr. Da Pont: No, it does not. Some are created by legislation. In our case, it was not. We have relied on a package of Treasury Board authorities that took effect in April 2005.
Senator Murray: We hived off the department of national revenue and made it the Customs and Revenue Agency by legislation, and did likewise with national parks. I do not believe they are special operating agencies, but they have some status at a remove from their minister and from Parliament, and they were able to demonstrate that the advantage of this was that it liberated them from various obligations, procedures, et cetera, of both a financial and a human resource management nature that existed when they were departments of government.
Admiral Murray said that the status as a special operating agency strengthens the Coast Guard's autonomy. Autonomy from what or from whom? What are the advantages to becoming a special operating agency, and how has that worked out?
Mr. Murray: The move of Coast Guard from Transport Canada to Fisheries and Oceans Canada, DFO, occurred at the time of program review in 1995. I joined the department in late 1997 and was there until 1999 as the associate deputy minister. At that time, we were trying to make a Coast Guard-DFO fit.
When I rejoined the department as deputy minister in the spring of 2003, it became evident to me that, because of the cultures and the need for members in Coast Guard to identify with Coast Guard as a national institution, we needed to make some changes. Within two or three weeks, I changed the reporting relationship to establish Coast Guard as an entity within DFO with the commissioner having line responsibility to this entity.
The government of the day, in December of that year, in examining a number of issues related to post-September 11, a number of possibilities were considered for Coast Guard and other entities. It was decided that the Special Operating Agency, SOA, within DFO would give us the financial flexibilities and so on, but it also put the reporting relationship within a policy framework that it would not change 15 minutes after I or someone else left, so it is a fairly solid construct.
However, the SOA does not bring with it all the machinery a government changes. In the view of the government of the day and the current government and minister, a further change would run counter to a number of the issues that we have been trying to address.
In my view, one of the primary advantages of the SOA is that it has provided the members of Coast Guard with a sense of identity. John Adams, Mr. Da Pont's predecessor, and Mr. Da Pont have worked on that with ministers and with me to try to achieve that. The SOA has also provided us with financial flexibility, which we are starting to realize now, and a clearer identity with industry and so on. Perhaps Mr. Da Pont would like to build on that idea.
Senator Murray: I see your reference on page 7, Mr. Murray, to a culture change. I guess that is to some extent what you are talking about. You spoke about the financial flexibility it gives you. The word "autonomy'' intrigues me. I am interested to know what the real change is in reporting relationships and so forth. I understand the change you have made from regional reporting to having the assistant commissioners report directly to you. Could you explain the financial autonomy? Are you at a greater remove from parliamentary oversight than you were, for example?
Mr. Da Pont: No, we certainly are not. One of major changes in becoming a Special Operating Agency was that, at the time, all of the policy and regulatory functions that had been with Coast Guard moved to Transport Canada. These were responsibilities for implementing the Navigable Waters Protection Act and the Office of Boating Safety.
On the financial side, as the deputy has indicated, it reinforced a direct reporting relationship. Within the Treasury Board authorities that have now been put in place, there is more of a firewall between the funding for the Coast Guard and the funding of the rest of the department. There is now a mechanism for what happens should funding move from one area to another, which essentially indicates that movement of funding can happen under extraordinary circumstances, but the funding would have to be replaced.
Senator Murray: Was that a problem hitherto?
Mr. Da Pont: There had been a strong perception within Coast Guard that money was moving from Coast Guard to other parts of DFO, but when we conducted various studies, it was always hard to get a handle on it. Depending on the year, money moved the other way. While the perceptions were there, it was hard to find concrete evidence for them.
The final financial flexibility is that we did get some minor flexibility in how we manage carry-forwards. This gives us a vehicle to seek additional financial flexibility separate and apart from the needs of the rest of the department.
Senator Murray: Did I understand from the last answer the deputy minister gave that further changes are desirable or contemplated in the organization?
Mr. Murray: The view of the current government, and certainly the view of the current minister, is that the priority focus needs to be on correcting the management issues and providing some sense of financial stability, and not further machinery changes at this time.
Clearly, we would not view a further move of Coast Guard as being desirable at this time. That is the view of the minister and the government.
The Chairman: When you say "machinery,'' you mean machinery of government, within government?
Mr. Murray: I mean that every five to 10 years, there is the sense that Coast Guard might be better off in the Department of Public Safety or the Department of National Defence, DND, or somewhere else. Our view is: Let us get Coast Guard on an even keel in this entity. I would make the same argument if Coast Guard were still within Transport Canada. It is in Fisheries and Oceans Canada. It is a fit.
Once again, we are turning Coast Guard into a solid agency within which members of Coast Guard identify with Coast Guard, but there is a fair amount of work that remains to be done on this. In the meantime, as this committee well knows, Coast Guard has a tremendous 365-day-a-year operational agenda that has to be met, and met effectively. Further machinery changes at this time are not something that Coast Guard needs, in the view of this government, or certainly in the view of the minister.
Senator Ringuette: Have you submitted a human resource plan to Ms. Barrados from the Public Service Commission?
Mr. Da Pont: We have submitted, as part of a broader departmental plan, a human resource plan, but it is probably more of a staffing strategy. One of the commitments we made in the business plan is to develop a clear, focused human resource plan for the Canadian Coast Guard. That is one of our key objectives for this year. We have submitted, technically, a fair bit of material on our staffing vacancies, our anticipated vacancies and what type of retirement picture we envision. You will find a summary of that in the workforce section of the business plan. However, I would not characterize that as a strong, effective human resource plan. As the Auditor General noted, it is clearly one of the areas we have to put more focus on, and we are doing so.
Mr. Murray: If I could add a comment that ties into the last comment about machinery changes. Although machinery changes are not desirable at this time, there is no question that the mandate of Coast Guard is evolving. We find ourselves in the last budget, in terms of fleet renewal, acquiring four mid-shore patrol vessels to be co-manned with the RCMP in the Great Lakes system. We find ourselves involved with DND in the Arctic. We find ourselves in a scenario where the previous approach of hiring casual employees, who provide great work, in the long haul will not cut it, wherever Coast Guard is located.
Your question about a human resource plan is bang on, because Coast Guard has to evolve. We have a professional officer corps with professional training background. We have a professional ships crew scenario but without the infrastructure support that we have for the officer corps. We have to evolve in that regard and move forward if we are to play the kind of role that Coast Guard can play in areas such as marine security and so on.
The issue of "professionalization,'' at one level, and tying that into a human resource plan that ties into the business plan, is essential, and there is a fair amount work to be done in that area.
Senator Ringuette: Do you expect to be doing that in the next year?
Mr. Da Pont: Yes. It is my objective to have a solid human resource plan for the Coast Guard by the end of this fiscal year, which will be implemented next year. That will put a major focus on succession planning and training requirements.
Senator Ringuette: With national area of selection when you have job postings?
Mr. Da Pont: All our senior positions follow the same rules. They are posted nationally, to the best of my knowledge.
Senator Ringuette: In your comments this morning, you mentioned acquisition of 16 new vessels to the tune of $750 million in addition to increased monies allocated for vessel refit. I presume that the new acquisition and refit plans would be about $1 billion over the next few years. What is your procurement plan?
Mr. Da Pont: Obviously, we will go through competitive processes for the vessels and for a package of mid-shore patrol vessels. That process is in place and a request for proposal has been issued and is being evaluated. We would proceed with competitive processes for the procurement of the vessels. They would be built in Canada in accordance with Canada's shipbuilding policies. The construction would follow all of the rules in place for any major Crown acquisition, which vessels are considered to be.
Senator Ringuette: Will DFO do the procurements or will they be done by Public Works and Government Services Canada, PWGSC?
Mr. Da Pont: It is done in cooperation with PWGSC, which manages significant aspects of the process in terms of the bidding. DFO is intimately involved, and I have created a special group to focus on procurement only because we had not procured any new large vessels for well over 20 years. Quite frankly, we have to rebuild that skill set, which will affect, at least in this initial stage, the speed at which we can move forward with the procurement process. Rebuilding the technical expertise will take a bit of time, but the progress is well along.
Senator Ringuette: Would the competition for the new vessels be from Canadian companies?
Mr. Da Pont: It is an open bidding process, but in the case of the mid-shore patrol vessels currently in the procurement process, a pre-qualification took place that pre-qualified five Canadian companies, four of which have chosen to submit bids to the request for proposals.
Senator Ringuette: Thank you.
Senator Mitchell: I would like to ask several questions about the decision to move the two icebreakers, CCGS Louis S. St-Laurent and CCGS Terry Fox, to Newfoundland. Was an official or formal cost-benefit analysis done of this decision? If so, would it be possible for you to provide that documentation to the committee?
Mr. Murray: We put together quite an extensive package that, I believe, is in the translation process for submission to the House of Commons Standing Committee on Fisheries and Oceans. We would be delighted to provide it to this committee as well. Mr. Da Pont will speak to the details of the material.
Mr. Da Pont: The major reason for moving the two icebreakers was cost avoidance. To give the committee the context in brief, a decision was made 10 years ago to divest the Dartmouth Coast Guard Base, CGB, and consolidate Coast Guard operations at the Bedford Institute of Oceanography, BIO, which is also in Dartmouth. Both locations have wharves. In accordance with that decision, there has not been any investment in the Dartmouth CGB for that 10- year period, and we have not moved on building the alternate facilities. That left me in a situation whereby the base and the wharf are in poor condition and Coast Guard staff are scattered in four different locations around Dartmouth.
I wanted to move on the decision and secure adequate facilities, which meant making a decision on what to build at BIO, beginning with expanding the wharf. Quite frankly, to keep the icebreakers at the Dartmouth CGB, we would have to spend $10 million more on expanding that wharf than we would have to spend otherwise.
There is no operational reason to keep them at Dartmouth CGB because those vessels operate six months in the Arctic and the rest of the year, when they are used, throughout all of Atlantic Canada. There is no particular operational reason to keep them in Halifax or to move them to St. John's or anywhere else. The decision was mostly cost avoidance.
As the committee is likely aware, the Coast Guard went through significant reduction with program review and, as the Auditor General noted, we have more shore infrastructure than we need. We went from a fleet of more than 170 vessels to a fleet of about 110 vessels. It made no sense to build additional infrastructure when it was readily available in Newfoundland. We have costed the move of the two vessels in terms of extras — and that information will be made available to the committee. The cost is not great. I appreciate very much how difficult this decision is because I found it incredibly difficult to make, particularly since I worked for two years in the Maritime region. I know the attachment that people and the region have to the vessels. The crews find it even more difficult. However, we have guaranteed people that there will be no job loss. We have guaranteed that no one will be forced to move, and we have put in place a five-year transition period to minimize any personal impacts.
I felt that it was the right decision to make if we are to spend money on operations and not on infrastructure, which we have in duplicate.
Mr. Murray: I do not normally talk about advice to ministers, but I want to be clear on this one. The minister has been clear, and I recommended to him to be clear. This decision was based entirely on recommendations from Coast Guard to the department to the minister. The minister did not have any idea about moving icebreakers from Nova Scotia to Newfoundland until he received the advice, which was given for shore infrastructure savings so we could get on with the repairs and the renovation of the BIO. We do not need to spend money on shore infrastructure.
There are minor operational advantages to having the icebreakers in Newfoundland but, as Mr. Da Pont has said, that was not the reason for the decision. The advice went to the minister, who was not involved until he received that advice. He accepted our recommendation; it was not a politically driven decision.
Senator Mitchell: It seems counterintuitive that it would be less expensive to build a new facility than to renovate an existing one in Nova Scotia. Could you give some details on what those expenses would be?
Mr. Da Pont: First, we have to build the new facility in Dartmouth. The Dartmouth Coast Guard Base facility was built in the 1960s and has issues with asbestos. The property has a variety of other environmental issues that come from having a paint operations and buoy operations for quite some time. Quite frankly, it would be cheaper to build a new building at the Bedford Institute of Oceanography site than to renovate extensively the existing building at Dartmouth. The other factor is that the existing building at Dartmouth would not accommodate all of our Coast Guard staff even it were fully renovated. In my view, the decision to build a new facility in Dartmouth was required, overdue and a good investment for the Canadian Coast Guard; we need that facility.
The only issue for me was to spend an extra $10 million over and above what we have to spend to do that just to keep the icebreakers there when, from an operational perspective, there was no pressing reason for it. It just did not seem like an appropriate decision for the use of Coast Guard money and taxpayers' money.
Mr. Murray: We do have jetties in St. John's, and we do have a cheap lease in the Port of Argentia and technical staff in the vicinity of Argentia. It is not as though we are building new facilities in Newfoundland; it is that we are not building a jetty that we do not need at BIO, which is the science institute under the bridge in Bedford Basin in Halifax, where we will move the entire Coast Guard operation. Our problem was that we had to know whether we would have to build a jetty in order to move forward with the whole package. That drove the timing of the decision and the recommendation to the minister.
Senator Mitchell: You made the points that no one would be forced to move and that there would be no job losses. Does that mean there will be commuting? What are the costs involved in that? I would be interested to know. What would that do for deployment times?
Mr. Da Pont: We agreed to a five-year transition period, where we would continue to crew out of Halifax to allow for an effective transition. The extra cost would be between $500,000 and $700,000 over the five-year period more than we would otherwise spend on crewing. It is hard to make the estimates precisely because for half the year the crewing changes are in the Arctic. It depends on where in the Arctic the vessel is and what the cost is. We have had one round of meetings with each crew member. The vessels are not moving immediately. The Terry Fox will relocate next April. It is scheduled for a major refit over the next couple of months, and that will take place where whoever wins the contract for that refit is located and then it will go to the Arctic. The impact on the Terry Fox in the final year after the move will be minimal. The Louis S. St-Laurent is not moving for two years. In that period and over the five-year period, a number of people will retire. A number of people have an interest in shifting to other vessels operating out of the Maritime region. Some people may ultimately choose to go with the vessels. While we have done costing, it is still a rough estimate, but we are confident it is in the right ballpark. It depends partly on people's personal choices.
I do not envision a situation where we would crew everybody on both vessels from Halifax for the five years. The initial indications are that we will stagger them over time, shifting the crewing to St. John's.
Senator Mitchell: Coast Guard works closely and well with other areas of government such as Environment Canada and the RCMP. Was an assessment made on the impact on those departments and what this might mean for them?
Mr. Da Pont: These two vessels are heavy icebreakers, the biggest in the fleet. The primary role of those vessels, aside from actually ice breaking, is in support of Arctic science. We do not see any impact on that.
The vessels will continue to be used in the Atlantic zone as they have been. Over the last few years, the Louis S. St- Laurent has been tied up at Dartmouth when not in the Arctic. The Terry Fox has been used sporadically depending on conditions that require a heavy icebreaker. We saw an example of that recently in Newfoundland.
We are looking at tasking those vessels more. They have been tied up primarily because of budgeting reasons. As heavy icebreakers, they are not very good vessels to use for fisheries patrols or search and rescue, SAR, incidents, where speed is more important. Therefore, we have some limitations on the effective use of heavy icebreakers. We also have to be careful because being very large vessels with a larger crew than many of our other vessels, they are a more costly response to certain situations. Thus, we try to balance that out.
The Chairman: Mr. Murray, when you appeared before the House of Commons committee, you were asked about a report dated April 1, 2007. It was an internal report that made no mention of redeployment. The minister's announcement was April 12.
Can I assume, deputy minister, that your advice to the minister upon which he acted, was somewhere between April 1 and April 12?
Mr. Murray: I am not sure of the time frame with the minister. Mr. Da Pont may recollect. If the announcement was to be April 12, we would not announce it on April 1.
Mr. Da Pont: We had several drafts of the business plan tabled with you, and we used those for consultations with industry and users of our services, within and outside government. There was an April 1 draft of that document. It did not include reference to moving icebreakers because the announcement was not made until April 12. It would have been inappropriate to include material in a draft business plan before the actual announcement.
It is included in the final version of the business plan released after the minister's announcement.
The Chairman: We are interested in a cost-benefit analysis and that is what the Auditor General was interested in. Is there any documentation that existed before the announcement was made?
Mr. Da Pont: Is that in terms of moving the icebreakers?
The Chairman: Yes.
Mr. Da Pont: Yes, there is a long history to that. The first study on moving the icebreakers was done in 1997, commensurate with the decision to close the Dartmouth base. There have been a number of studies completed since then, so there is a fair bit of documentation. As the deputy minister indicated, we used many of those studies. We will be releasing the documentation upon which we based the advice to the minister. It is in translation and should be available soon.
The Chairman: Could you make that available to us?
Mr. Da Pont: Yes, we will.
Mr. Murray: I might have confused things, but one of the senators asked for it and I had said that we would be pleased to provide it. We will be providing it to the House of Commons Standing Committee on Fisheries and Oceans.
The Chairman: In that cost-benefit analysis, was there any other vessel redeployment or relocation discussions?
Mr. Da Pont: Is that in terms of potentially moving other vessels?
The Chairman: Yes.
Mr. Da Pont: No. The focus was just on the icebreakers as the issue was tied to beginning the work required at the Bedford Institute of Oceanography.
Mr. Murray: With respect to tying those issues together, it may have been in the April 12 announcement, in addition to announcing the move of the two icebreakers, the minister did announce the stationing plans for the 17 new vessels to which Mr. Da Pont has referred; in other words, by region where the various new vessels were to be stationed. That may be the connection that you are recollecting. Therefore, we announced where the 17 vessels would be and, in the context of that stationing announcement, the move of the two icebreakers; and that was all done by the minister in Newfoundland on the April 12.
The Chairman: Am I correct in assuming that the Dartmouth base would not be used by any vessels and therefore closed down once the icebreaker redeployment is done?
Mr. Da Pont: Not at all. We still have a significant number of vessels in Dartmouth. After the move, we will still have six or seven large vessels; in fact, we have about 25 vessels overall in the Maritime region. It will still be one of our biggest facilities.
The Chairman: Earlier you spoke of environmental problems with the building. That is still a problem that has to be corrected. You are not saving by redeploying the vessels.
Mr. Da Pont: There is a difference between the Dartmouth base, which we are divesting and will no longer have and the new facility to be built at the Bedford Institute of Oceanography. It would be cheaper to build a new building at BIO than to refurbish the existing facility at the Dartmouth base given its age, condition and the broader environmental issues to be addressed as part of that.
The issue in relation to the icebreakers was only to save an extra $10 million for building additional wharf space at BIO. We still must build some wharf space there, and that work will start this year. The benefit is cost avoidance, and that was at the heart of the decision.
The Chairman: We are looking for analysis done by you prior to the public announcement on April 12. Will this documentation show the analysis that was completed prior to that date?
Mr. Da Pont: Yes.
The Chairman: Thank you. That will be very helpful to us.
Senator Moore: I want to clarify something you said, Mr. Da Pont. The chairman asked about the future of the Dartmouth base. You are talking about building a new facility at the Bedford Institute of Oceanography. Is the Dartmouth base to be closed and everything to be transferred to the Bedford Institute?
Mr. Da Pont: Yes. That was the decision made 10 years ago.
Senator Moore: The Dartmouth base will be closed?
Mr. Da Pont: Yes, and divested.
Senator Moore: What will be included in the new facility at BIO? Are you building new wharfs or buildings to support the vessels?
Mr. Da Pont: We will be building an expansion to the existing wharf at BIO that will cost about $10 million. That work will begin this year and be finished by the end of next year.
In addition, we are costing the various options for a facility. I hope to have those options by the end of this fiscal year.
Senator Moore: I believe you said, Mr. Murray, that you recommended to the minister deployment of the two icebreakers. Was that recommendation in writing?
Mr. Murray: Yes.
Senator Moore: What was the date of that?
Mr. Murray: I do not know. We can provide that. There is a limit to how much information can be given with regard to ministerial advice, but given the unique situation of this in that there was a sense that this was politically driven, which it absolutely was not, we can provide the committee with the date of that memo. It was late February or early March, but I do not remember the exact date.
Senator Moore: It is important to know that.
Mr. Da Pont: It was in the time period of late February or early March.
Senator Moore: Was a Treasury Board submission required?
Mr. Da Pont: No, this was an operational decision that did not require any authorities.
Senator Moore: A deployment such as this obviously impacts families, businesses and the municipality. Was there any consultation with the municipalities? Did they know this was happening?
Mr. Da Pont: No, there was no prior consultation with the municipalities.
Senator Moore: How are the men and women who serve in the Coast Guard paid? Are they treated as members of the Armed Forces; are they in a union?
Mr. Da Pont: They are all unionized employees. In fact, there are nine separate unions that represent various groups within Coast Guard. One union represents the ships' crews and a different one represents the ships' officers. They are all paid as normal public servants are under the provisions of collective agreements that are renegotiated on a regular basis.
Senator Murray: Under what statute are labour relations conducted between management and members of Coast Guard?
Mr. Da Pont: It is all the normal public service legislation. We are not a separate employer as are some of the other agencies.
Senator Murray: That has not changed?
Mr. Da Pont: No, it has not.
Senator Murray: It is the Public Service Staff Relations Act and all of that.
Mr. Da Pont: Yes, the package of normal public service acts.
Senator Moore: Is the wharf expansion at the Bedford Institute of Oceanography to be an elongation of the existing wharf? You need berthing space for six or seven large vessels as well as 14 or 15 smaller ones. Does BIO not have some of its own vessels?
Mr. Da Pont: They are all Coast Guard vessels.
Senator Moore: The wharf would have to be pretty substantial, considering the size of the Dartmouth facility.
Mr. Da Pont: It is not insignificant. I do not have the dimensions, but we can provide you with the plan.
Senator Moore: That would be helpful.
Mr. Da Pont: It is a substantial investment, as I said, of around $10 million. It is a substantial expansion of the wharf.
Senator Moore: Mr. Chairman, I am hearing about a significant expansion and we are talking about cost analysis. Did you ask that we be provided with a copy of the report demonstrating that to do this is cheaper than to refurbish the existing Dartmouth base?
The Chairman: Let us clarify to ensure that we will be getting that material.
Mr. Da Pont: Yes. I wish to emphasize a couple of things. The decision to get out of the Dartmouth base was made 10 years ago. That has not been changed, and we have not revisited in any substantive way reopening that decision, given the condition of the base and the investment requirements.
We have focused on proceeding with a new facility, and the new facility is required with or without the movement of the icebreakers. The movement of the icebreakers determined how much we would have to spend on the wharf expansion, but not whether we needed a new facility. Those are two separate issues.
Senator Moore: I take it that in the past 10 years you have spent no money on the maintenance of the Dartmouth base.
Mr. Da Pont: To the best of my knowledge, expenditures were minimal, only to meet any occupational health and safety issues that came forward. Therefore, understandably, the facility has continued to deteriorate.
Senator Mitchell: For clarification, you are saying that it will cost $10 million to enhance or upgrade BIO's facilities. How much will it cost to create the facilities necessary for the two icebreakers in Newfoundland? Do I simply add $10 million to that cost to find out what it would have cost to put it at BIO?
Mr. Da Pont: We are spending $10 million to expand the wharf at BIO. Had we kept the icebreakers there, we would have had to spend at least $20 million. In Newfoundland, we are not spending anything for facilities. We will be able to accommodate the Terry Fox at the existing Coast Guard base. We have arranged for a lease at Argentia that will cost about $30,000 to $40,000 a year. There will be minimal expenditure there to get a power hookup, and that is about it.
We have also confirmed that, if there is need, there are other berthing facilities in St. John's Harbour that we could use to accommodate both vessels at fairly low cost, so we are not planning any building of facilities or infrastructure in St. John's. We will either use what we have at the base or readily available berthing space. By the way, we checked in Halifax, and that space is not available in the Halifax-Dartmouth area.
Senator Moore: I believe the answer was that the Dartmouth wharves need $10 million more to refurbish than the cost of setting up in Newfoundland.
Senator Mitchell: BIO needed $10 million more.
Senator Moore: What is the cost of establishing the base in Newfoundland? I am confused about the $10 million. Are you saying that to refurbish Dartmouth would have cost $30 million, but Bedford would have cost $20 million?
Mr. Murray: Mr. Butler is acting as commissioner, but his day job is assistant commissioner for Newfoundland and Labrador. He was heavily involved in the analysis of Argentia and of the base in St. John's and St. John's itself.
Perhaps Mr. Da Pont could start the answer and then Mr. Butler might want to speak about the work done in Newfoundland.
Mr. Da Pont: Simply put, in St. John's, we are not planning to build any facilities or spend any money on capital infrastructure. There are some modest costs that would be involved, which I mentioned, $30,000 to $40,000 per vessel for berthing space that is commercially available should we need it.
Senator Moore: This is on a lease basis?
Mr. Da Pont: That is right. We would be able to accommodate the Terry Fox at the Coast Guard base in St. John's. For the Louis S. St-Laurent, the plan is to have the vessel berth at Argentia, and the cost of leasing there is $30,000 to $40,000 a year. We do not envision any significant infrastructure costs. We do envision a cost for the five-year transition period, which we estimate to be $500,000 to $700,000, to deal with the commitment to crew out of Halifax as a one-time measure to help ease the transition.
In Halifax-Dartmouth, for wharves, we have to spend $10 million at the BIO facility. To have kept the icebreakers there, we would have had to spend $20 million at least. Maybe that is where the confusion lies, because they are both $10 million figures. I can appreciate that it causes confusion because the figure happens to be the same.
Senator Moore: You have a jetty in St. John's where the Terry Fox will be berthed, and if you need extra space there, you have a lease arrangement nearby?
Mr. Da Pont: Yes.
Senator Moore: In Argentia, where the Louis S. St-Laurent will be berthed, you are leasing that wharf at a cost of $30,000 to $40,000? Is that cost not nailed down?
John Butler, Acting Deputy Commissioner, Canadian Coast Guard, Fisheries and Oceans Canada: I do not have the exact number with me, but I recollect it is $40,000. We have a written quote from the Argentia Management Authority, as well as from the St. John's Port Authority, and that information will be made available. I believe Commissioner Da Pont has the right number.
The other point Admiral Murray was speaking to, which he wanted me to comment on, is that Coast Guard is able to support these vessels, both in Argentia and in St. John's. We have a base similar to the Dartmouth base in St. John's, where we have our technicians and our vessel-support people.
In Argentia, there are obviously fewer Coast Guard people. There is a marine communications and traffic services centre a short distance away where we have our electronics technicians. The Argentia Management Authority has an extensive docking capacity. They also have storage buildings in case we need to store any equipment in support of that ship.
The other thing you have to remember is that these are ships quite capable of moving. If, for any reason, we need to bring a ship to St. John's for work, we can do that. We have access to wharf space where we can support the ship, either the Louis S. St-Laurent or the Terry Fox.
On the other hand, as the commissioner pointed out, if the refit of these ships is in Quebec or in Halifax, they are quite capable of picking up and going to these locations. They are quite self-contained. The wharf is just a place to secure them so that some of the shore-based work can carry on.
Senator Stratton: We have a couple of lakes in Manitoba with Coast Guard.
Mr. Butler: One of our senior captains is from Saskatchewan.
Senator Stratton: I had a next door neighbour from the Prairies who served in submarines during the Second World War. Why in the world we do it, we do not know.
I would like to get back to the real reason for you being here — at least my perception of that — which is the report of the Auditor General and how you can assure us that the actions you are taking will overcome her concerns and the time frames, if you are in the middle of a restructuring and you realize that you tried to do too much with too few. Where are we with respect to being able to complete this restructuring so we do not have to deal with the Auditor General or have you back again at committee?
Mr. Da Pont: There is certainly no doubt that the Auditor General found a number of significant management issues. For me, having been affiliated with Coast Guard for a number of years prior to coming into the job, one of the biggest issues is the aging infrastructure. That is at the heart of many of the issues that the Auditor General raised in terms of maintenance and some of our practices.
Our large-vessel fleet is not in the best of condition. Twenty-two out of the 40 vessels are over 25 years old; 18 are between 15 and 25 years old. That is not the profile we want in a fleet. It is like having an old car: It can still do the job, but it will be out of service longer and more will have to be spent on maintenance to keep it doing the job.
The fleet renewal package has been approved. The 16 new vessels, when they arrive, will make a significant improvement in that situation. In the meantime, since that will take a number of years, we have put a larger amount of money into vessel refit. A few years ago, we were spending about $28 million on vessel refit. This year and last year, we set budgets of close to $60 million. We set the money up at the beginning of the year to allow for effective planning. We are spending more money on maintenance and refit to try to keep the vessels in better condition and to improve their dependability.
To be honest, given the age of the vessels, there may be unplanned breakdowns. Our people are doing the best job they can, working with the existing state of the vessels.
The second major issue is that the Auditor General felt there were five Coast Guards and that each region did its own thing. They kept numbers and budgets in a different way, had different criteria and definitions for how they managed even such matters as salary budgets and different definitions of what constitutes certain types of equipment. We are moving to standardize those aspects, but it will take time.
Senator Stratton: What kind of time frame are we talking about, one year, two years, five years?
Mr. Da Pont: It will take three to five years to standardize our practices across the country if we want to be realistic.
Senator Stratton: Thank you. That is important to know. The Auditor General is aware of the transition period that this will go through, and my biggest concern is that you would be very unhappy if you had to go through this again.
Mr. Murray: We worked closely with the Auditor General and her staff on their recommendation in the 2007 update report as opposed to the 23 recommendations. Treasury Board and the minister have agreed on the primary vehicle and the Auditor General agrees with the business plan, although she cannot take ownership of the document. One document will drive the equation in which we clearly articulate the priorities. If someone disagrees with the priorities, that business plan will be the living document that ensures that we move forward in addressing a number of these issues while we try to meet our operational requirements, which are fairly compelling. One of the problems in an organization such as the Coast Guard is that operational matters take priority. However, we have to stay on track strategically or we would be back in the kind of scenario to which you allude.
The Chairman: It is important for us to track the Auditor General's look and re-look into this in February of this year. You have prepared an analysis of the two reports, 2000 and 2004, but she came back with her team in 2006-07 and did another report, which will be our focus to determine how you are coming along with those points.
Mr. Murray: We have agreed to do that with the House of Commons Standing Committee on Fisheries and Oceans. We would be delighted to make some kind of an arrangement with this committee. It encourages us as well to deliver. I suspect that at one point we will appear before the House of Commons Standing Committee on Public Accounts, which has been otherwise engaged. We would make the same offer to that committee. We provided them with the business plan, so we would be happy to do that.
The Chairman: It would be great if you could factor us in and keep us up to date, so that when we meet with you again, we will know what progress you have made and go forward from there.
You talked earlier about requests for proposals on the fleet renewal, and I believe that you mentioned four and six vessels in your analysis. Has there been any appropriation? Can you refresh our collective memory? Are funds available or is this all in the future?
Mr. Da Pont: No, the last budget and the budget before that provided funding in the fiscal framework for the acquisition of 16 large vessels, so the funding is secure. When we access it will depend on how the procurement process proceeds. The money has been provided and is secured in the fiscal framework.
The Chairman: This committee is accustomed to determining money being made available through the Main Estimates and the supply bill that flows from that. The last two budgets have included funds for fleet renewal. Have you had any appropriation of funds whereby Treasury Board has approved money flowing to DFO for the fleet renewal?
Mr. Da Pont: Yes, some funding was covered in the Estimates this year for fleet renewal. As you can appreciate, because we are in the ramp-up stage, our initial requirements are relatively small. I would expect that the decisions of this budget will be reflected in supplementary estimates later in the year.
The Chairman: When do you expect your first delivery of new vessels?
Mr. Da Pont: We are targeting to have the first of the new mid-shore patrol vessels by late 2009 and, thereafter, a new vessel every few months from that contract. We anticipate the first delivery of a new science vessel in 2011.
The Chairman: Did you say "science vessel?''
Mr. Da Pont: Yes. With apologies, I should clarify that a number of the vessels we are replacing are used primarily to support science research.
The Chairman: Is that like the Quest, the ship that was tied up at Halifax for some time and did a great deal of research with the Bedford Institute of Oceanography?
Mr. Murray: The Quest is a DND research vessel. Three of the four science vessels will replace fisheries research vessels, which are old trawlers. These vessels will not be simply trawlers; they will have more capability. The fourth vessel will replace the Hudson, with which you might be familiar.
The Chairman: Yes.
Mr. Murray: That is our largest oceanographic research vessel. It is quite a significant shot in the arm to the science fleet to have three new fisheries research vessels and a replacement for the Hudson.
The Chairman: Are they the first six vessels that were announced? I am looking at your analysis of the Auditor General's report where you talk about six vessels and then about four security-oriented vessels?
Mr. Murray: In the first budget, there are four mid-shore patrol vessels for DFO patrol activities and two DFO research vessels. Elsewhere in the budget, there are four more mid-shore patrol vessels, which I alluded to earlier that we would co-op with the RCMP in the Great Lakes system. In the most recent budget, there are four additional mid- shore patrol vessels for DFO patrol activities and two science vessels, the third fisheries research vessel and the Hudson replacement. A hovercraft, which is a smaller vessel, will be for Quebec and is the seventeenth new vessel to which Mr. Da Pont referred.
The Chairman: Will it be used on the St. Lawrence River?
Mr. Murray: Yes.
The Chairman: In terms of the Special Operating Agency that you referred to, are you in a position to charge back for services you offer to other federal departments?
Mr. Da Pont: Yes.
The Chairman: I am trying to get you some money.
Mr. Da Pont: Yes, we do that at times. One of our legacies is the different charging policies for the same thing in different regions. Again, it is part of the five-Coast-Guard syndrome. As the Auditor General noted, we have to work more at developing a nationally consistent charging and costing policy, where there has been a fair bit of controversy. Our main challenge, and a difficulty for the recipients of our services, is fuel costs, which have increased significantly over the past few years. That is one of the costs that we should pass fully on to our clients. Developing a more precise costing model will help, but we do that now because it is expected.
The Chairman: You are working on a more precise costing mechanism in conjunction with Treasury Board. Is that correct?
Mr. Da Pont: We are working on it internally for the development, but we would have to consult with Treasury Board to ensure that they were satisfied with the mechanics of the model.
Mr. Murray: Earlier, Mr. Da Pont referred to re-establishing or reinvigorating the marine advisory structure with industry. In the context of your question, we have established an internal-to-government committee, which I chair, with all the departments and agencies that Coast Guard provides services to, such as the RCMP, National Defence, Natural Resources Canada and Environment Canada. The committee allows us to keep our feet to the fire to ensure that we meet internally the government-to-client needs. Our first meeting was well-received, and we will likely have such meetings a couple of times each year. That will be a great help.
The Chairman: You might want to look at the parallel in the Department of Justice Canada's legal services offered to other government departments. It is the same in that they charge out for their services to other departments. They were told that they had to do it; we went through that issue one or two years ago.
Could I refer you, Admiral Murray, to page 6 of your written submission? I wanted to clarify this in relation to the transformational plan. It ultimately produce a $55 million, short-term operational release in 2005-06. Once you had the transformational plan, in 2005-06 you got an injection of $55 million that was deemed important for operation, but then the next budget you needed only $45 million. If you need $55 million a year earlier for operations, are you not going the wrong way with $45 million the next year?
Mr. Murray: The $55 million is part of the $99 million. We were between budget cycles and because of the argumentation put forward we received $55 million for the entire department, a portion of which went to Coast Guard. When we got the $99 million permanent increase, $45 million of that went to Coast Guard. A portion of the $55 million went to Coast Guard. The $55 million actually relates to the $99 million as opposed to the $45 million.
The Chairman: We may want to reword this. It applies here as if there is $55 million in one year, and $99 million annexed to the department and Coast Guard $45 million of which went to Coast Guard. It reads as if you got $10 million less to operate the second year than the first year, after your new transformational plan.
Mr. Murray: I would be happy to provide clarification.
The Chairman: We are trying to create a base upon which to track your progress.
I would like to review your five priorities that appear on page 13 and now reflected in your business plan, Mr. Da Pont. We discussed renewal of the fleet and strengthening your client focus. I wish to address the expanding security agenda. That is important. You talked about the Great Lakes and the RCMP, and I am also aware of some cooperation in the past with the Naval Reserve and the Coast Guard, particularly on the East Coast and in Saint John, New Brunswick. Does that continue and is it working well?
Mr. Da Pont: Yes, it is. Last year, for the first time in quite some time, we undertook a joint exercise in the Arctic with the navy, and we are having another exercise this summer. We have enhanced our joint work with the navy. The navy also has a role in supporting us in the patrols of the Northwest Atlantic Fisheries Organization, NAFO, area.
Mr. Murray: The maritime security agenda has moved forward significantly. We now have a truly joint operations centre located in naval headquarters on each coast. All the departments are represented, and Coast Guard is a key player; it functions well. It is a facility this committee might like to look at. We have now got all the information that comes out of our largely fishery-patrol-oriented surveillance flights; it is all provided in this centre. The information from our vessel traffic control all goes into the centre.
For the first time in many years, the Sir William Alexander sailed with the naval task group to Hurricane Katrina because the large support ships in the navy were both in refit or not available. It has a heavy left capability and sailed as part of a naval task group.
On the Maritime security side — and clearly there are more players than DND and us — we are working toward having the same transparency as happens in marine search and rescue with total integration with DND in operations. That is our vision and where we are trying to get to on the maritime security side. Obviously, there are more players. We have a distance to get to where we are at on search and rescue, but that is our goal.
Mr. Da Pont: The Coast Guard's role is in support of maritime security. We do not have a direct mandate, but we work very closely with DND, the Canada Border Services Agency and the RCMP in a support role.
The Chairman: Unlike the United States in that regard.
Mr. Da Pont: Yes, they have a different mandate in this area.
The Chairman: Are you doing anything in the Great Lakes with the RCMP now or will that happen after you get these new ships?
Mr. Da Pont: Yes, we have a program that has been underway for a year and a half. We have been using other vessels. We have done an initial evaluation of the program with the RCMP. The first year of the program was focused on monitoring, surveillance and outreach. That remains the core of the program. The RCMP is looking at how to expand the operation. We are reviewing the type of training needed to support the program effectively. The idea would be that the program would be fully up and running when the new vessels come, so there is a ramp-up in the development of the program, but we are on the water now.
The Chairman: Do you have personnel on the water in the Great Lakes now?
Mr. Da Pont: Yes, we have a significant Coast Guard presence on the Great Lakes.
The Chairman: Is this with the RCMP?
Mr. Da Pont: Yes, we have three vessels on the Great Lakes and one on the St. Lawrence River.
Senator Moore: I want to clarify the short-term operational relief in the 2005-06 budget. The department got an extra $55 million, and a portion of that went to Coast Guard. How much of that $55 million went to Coast Guard?
Mr. Da Pont: I do not remember the exact figure. We will have to provide that to the committee later.
Mr. Murray: It was a significant portion. I will send you information clarifying the $55 million and $99 million, and it will include the amount that went to the Coast Guard. My recollection is that it was in the region of $30 million, but I will confirm that.
Senator Moore: In the next fiscal year, 2006-07, you got an extra $99 million, and $45 million of that went to Coast Guard.
Mr. Murray: Yes.
Senator Moore: On page 16 of your submission, you identified one of the primary users of your service. Who is that? Was that another government agency?
Mr. Da Pont: It is the commercial shipping industry, one of our main clients. We charge the marine service fees where they partially offset some of the services we provide.
The Chairman: Admiral Murray, Commissioner Da Pont and Mr. Butler, thank you very much for being here, answering our questions and giving us the undertakings. We look forward to reviewing that material. We wish you well on the not insignificant challenge you have ahead of you.
Mr. Murray: Thank you very much, Mr. Chairman. We enjoyed the session.
The committee adjourned.