Proceedings of the Standing Senate Committee on
National Finance
Issue 1 - Evidence - Meeting of February 25, 2009
OTTAWA, Wednesday, February 25, 2009
The Standing Senate Committee on National Finance met this day at 6:30 p.m. to examine the Supplementary Estimates (C), 2008-2009, laid before Parliament for the fiscal year ending March 31, 2009.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: This evening, we begin our review of Supplementary Estimates (C), which was referred to this committee yesterday afternoon. It shows how expeditious we can be in the Senate.
As members know, supplementary estimates serve two purposes.
[Translation]
First, they ask for the authority to revise the expenses, which Parliament would then have to approve with an appropriation act.
Second, they inform Parliament about the changes to anticipated expenses which will occur when previously passed legislation expires.
[English]
To begin our consideration, we are joined by two of our favourite witnesses, two officials from Treasury Board Secretariat: Mr. Alister Smith, Assistant Secretary, Expenditure Management Sector; and Mr. Brian Pagan, Executive Director, Expenditure Operations and Estimates Division. Gentlemen, thank you for appearing again. We have had lots of dealings with a number of issues and Treasury Board is always helpful in providing guidance; the Treasury Board Secretariat in particular. We thank you for coming back here again to help us in our initial meeting with respect to Supplementary Estimates (C) and what is in this particular, significantly-sized document.
Alister Smith, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you. I would like to take you through a brief presentation. I hope you all have a copy.
[Translation]
Good evening, everyone. My colleague Brian Pagan and I are pleased to be here.
The Chair: Excuse me, before we begin, a number of people do not seem to have the documents. Check to see if you have a document entitled Supplementary Estimates (C).
[English]
If not, it will be given to you. We will ensure everyone has the same document.
Now we are all talking from the same deck, so to speak.
Mr. Smith: On page 2 of this deck, we briefly go through the purpose of supplementary estimates. I think I can be brief because committee members are well aware of this having just been through Supplementary Estimates (B).
I will lay out a little bit more about the context and do an overview of the document which is, as Senator Day mentioned, a sizable one. Additionally, I will speak to some key points we would like to register and we would also like to make a few comments on the 2007 strategic reviews.
On page 3 of the deck we are seeking Parliament's approval for the spending authority required to implement planned spending for items that have been approved by cabinet and Treasury Board but not yet proposed to Parliament. We seek approval to realign or transfer some existing spending authority between voted appropriations and to allocate other spending that cannot be fully specified in earlier estimates, such as compensation adjustments, and to inform Parliament of updated projections of statutory spending.
On slide 4, as you know, these funds were tabled on February 12. They are the third and final instalment of supplementary estimates for 2008-09. Supplementary Estimates (A) were tabled in May with supply on June 18. Supplementary Estimates (B), originally tabled in November, were tabled on January 29 and the related supply bill is before you this week.
We should mention that with consideration of Supplementary Estimates (B) postponed due to prorogation, we were in a compressed time frame. Departments were instructed to manage within existing authorities and to curtail activities as necessary. We are hopeful that Supplementary Estimates (B) will clear the Senate and we will be able to move back to our regular schedule for supply.
Turning to the Supplementary Estimates (C) on page 5, you will see the standard table you have seen from us before. It outlines that these supplementary estimates total $3.94 billion, of which $1.48 billion is new voted appropriations. There is $2.46 billion in statutory spending, on which votes are not taken.
I will not go through page 6 in too much detail, but the document itself has a lot of detail. We have an introduction to supplementary estimates, along with a breakdown of summary tables. These estimates include allocations from central votes, horizontal items, transfers and the usual detailed estimates by department and agency. It is worth looking through the document to acquaint yourselves with some of the details, if you have not had the chance.
On page 7, we would like to register some key points. Supplementary estimates do not represent new spending beyond that in Budget 2008. The estimates do not represent the spending in Budget 2009. They still reflect the 2008-09 fiscal year. They reflect normal end-of-year approvals and adjustments to departments' reference levels in support of government programs.
Three items account for 50 per cent of the $2.25 billion in gross voted requirements, or 75 per cent of the net requirements of $1.48 billion sought in these supplementary estimates.
These items include, first, funding for Treasury Board for direct allocation to departments and agencies for salary adjustments resulting in signed collective agreements. This funding accounts for $707 million. This item is a standard one you will have seen before for wage compensation in departments pursuant to collective and other agreements. Second is funding to Agriculture and Agri-Food Canada to facilitate the transition of Ontario flue-cured tobacco producers from the industry. Third is funding to Health Canada to accelerate tripartite agreements with British Columbia and to begin associations with other provinces on health innovation and core health programs for First Nations.
On slide 8 are a few words about the strategic review process. As you know, the government has been reviewing direct program spending as well as the operating costs for major statutory programs over a four-year cycle to ensure spending is in line with new priorities. This review was initiated and mentioned in Budget 2007, and results for the first round were included in Budget 2008. A summary of the savings from the 2007 strategic reviews of departments and agencies was included in Budget 2008. You will see the results of those savings, both reallocations and reinvestments, in Supplementary Estimates (C). The savings, in particular, are listed on page 10 in the Blue Book. Savings for 2009-10 and future years will be reflected in Main Estimates.
These savings were set aside within the 2008-09 budgets of affected departments and were used, along with other funds available, to reduce or offset the amount of new appropriations sought by departments in their supplementary estimates.
We can move to the final slide, next steps for appropriations. Main Estimates will be tabled tomorrow. Tabling of the first instalment of supplementary estimates for the 2009-10 fiscal year is planned for the middle of May. The first supplementary estimates for 2009-10, Supplementary Estimates (A), will be a critical piece of the government's efforts to implement the stimulus measures included in Budget 2009.
That concludes this part of the presentation.
[Translation]
Mr. Pagan and I will be happy to answer your questions.
[English]
The Chair: Can you clarify your last statement where you say a "critical piece''? Is this Supplementary Estimates (A) that will be forthcoming in April or May?
Mr. Smith: Yes, it will be in May.
The Chair: It is a critical piece. Will it have the entire stimulus package in it or will it have some of the stimulus package we learned about in the Main Estimates, with the balance in Supplementary Estimates (A)?
Mr. Smith: Part of the stimulus package will be in the budget implementation bill.
The Chair: Apart from the statutory terms, in terms of estimates and supply bills, it will not be in the Main Estimates where we will see that but rather in Supplementary Estimates (A)?
Mr. Smith: Supplementary Estimates (A) will have, like last year, a large number of the budget initiatives from Budget 2009. Last year, we picked up 60 per cent of the budget in Supplementary Estimates (A). This year, we will use Supplementary Estimates (A) in the same way. It will be a budget-oriented supplementary estimates. In addition, there will be the budget implementation bill, and Main Estimates will be tabled tomorrow. We will see what happens.
The Chair: The budget implementation bill is Bill C-10, which we will receive, in due course, maybe by the end of March?
Mr. Smith: Yes.
The Chair: Is it correct that the Main Estimates were prepared before the budget was announced?
Mr. Smith: Yes, the Main Estimates and the budget are not produced in a fashion that allows Main Estimates to reflect budget initiatives fully. Last year was an extreme example where they were tabled within two days of each other. We begin work on Main Estimates in the fall and we cannot reflect budget initiatives in Main Estimates when we table them, as we must, before March 1.
Therefore, it is generally not possible to reflect individual budget initiatives in Main Estimates.
The Chair: Are there any questions from honourable senators in relation to the points I have raised? If not, I will go to my list.
Senator Ringuette: I want to clarify an issue here. On page 10, table three, strategic review savings for 2008-09, are those the different cuts made to departments in regards to the review?
Mr. Smith: Senator Ringuette, I prefer to use the word "reallocation'' rather than "cuts'' because it is really not a cuts exercise. Yes, we have identified them as savings.
Senator Ringuette: Savings that went where?
Mr. Smith: Maybe I should start with introductory remarks on the strategic review process, to put that item into context.
The Chair: Please bring us up to speed on that process, as there are new senators here.
Mr. Smith: The strategic reviews are a systematic assessment of the relevance and performance of all direct program spending. We intend to review all direct program spending in departments over a four-year cycle. We look at relevance and performance, value for money. It is not a cuts exercise, because the idea, first, is to review comprehensively all programs, identify those programs that are lower priority and lower performing, and reallocate funds from those programs to other programs that are higher priority and better performing.
The reason why the term "cuts'' to me is not quite correct is because you will see reinvestments of these funds that exceed the reallocations in some cases. If the exercise is a savings exercise, we did not save much money in round two, for instance, because money is reallocated and reinvested in other priorities. That information is a bit of context.
What you see in 2008-09, for the first time, are the effects of the reductions on departments. Sprinkled through the document are also the reinvestments for these departments. They are all listed in detail in the two budgets. You will see that the reinvestments and reallocations for 2008-09 are a comparable size, so the money essentially was recycled.
Senator Ringuette: I understand what you are saying and the process involved. I will give you an example. I know that the Public Service Commission of Canada has had its base budget cut in 2008-09, yet it is not listed here.
Mr. Smith: The Public Service Commission was not in this round; it was in the next round of strategic reviews.
Senator Ringuette: However, they received less money in the 2008-09 budget.
Mr. Smith: The review of the human resources departments and agencies was in the round that was recently completed, the results of which were outlined.
Senator Ringuette: So my question should be asked in the main?
Mr. Smith: These changes will show up in future instalments. If you look at the budget document, at the annex and strategic reviews, the details of what was done are laid out there. Those changes will show up later.
Senator Ringuette: Let me move on to what I am interested in. There are a few big items here. For instance, the Canadian Food Inspection Agency, $16.6 million; Foreign Affairs, as a department, $71.6 million; Canadian International Development Agency, $52 million; and the International Development Research Centre, $6.9 million.
With regard to the review based on value for money, what were the low-priority programs that were cut in those four departments that I listed, and reallocated for better-performing programs?
Mr. Smith: Let me start with one other point here. You mentioned, for instance, Foreign Affairs and International Trade Canada. The reallocation is $74 million and the reinvestment is $65 million. For CIDA, the reallocation was $52 million, and the reinvestment with CIDA and IDRC was $59 million. Both sides of these changes are important. The net changes are small.
Senator Ringuette: However, what we are missing here is the lower-priority programs that were removed from the department and the higher-priority, or better-performance — to use your words — programs that were initiated into the department.
Mr. Smith: The actual analysis that underlies strategic reviews is a cabinet confidence. The results are shown in the budget.
Senator Ringuette: I see the results, the numbers.
Mr. Smith: It is important to underscore that ministers own the reviews.
Senator Ringuette: There is no issue of cabinet secrecy here. I want to know the lower-priority programs that were cut from these four departments and the programs that they were replaced with, through the new reinvestment, on page 30.
It is not cabinet secrecy. I do not want the analysis per se. I want the list of programs.
Mr. Smith: In this case, since each minister owns their review, it is important for them to speak to their review and communicate their review. It is not for me to try to explain each review. The results are in the budget, but some ministers have already been specific on individual items, and I think it is important that I let them answer those questions about the main.
The Chair: When you referred to page 30, did you misspeak?
Senator Ringuette: I meant the reinvestment he referred to. We have the numbers, but we do not know what the reinvestment is for.
The Chair: Page 10 of Supplementary Estimates (C) provides the total savings, and on which page are the reinvestments?
Mr. Smith: I do not think it is on page 30, because those are the overall numbers.
The Chair: I want the record to be clear. Can you tell us where it is?
Mr. Smith: No.
The Chair: Are they within each department?
Mr. Smith: They are within each department.
The Chair: "Page 30'' should be struck from the record.
Senator Ringuette, you have the floor.
Senator Ringuette: Chair, when do you expect this committee to report on the supplementary estimates?
The Chair: It is up to this committee, once we have satisfied ourselves that we have the information and we understand what is in here. We are only starting.
Senator Ringuette: It seems that only the ministers can tell us which programs were of low priority and which new programs were brought into their different departments. We need to have at least two ministers before us: the Minister of Agriculture and Agri-Food, and the Minister of International Trade.
The Chair: We heard your question; thank you. Do you have any other questions of these witnesses?
Senator Ringuette: No.
The Chair: Next on my list is Senator Callbeck from Prince Edward Island.
Senator Callbeck: Thanks for appearing again. One of my questions concerns page 10. Is it standard procedure that when there is a review like this, the savings are listed and there is no explanation whatsoever? Has that procedure been used in the past?
Mr. Smith: No, it has not. In fact, we listed these savings in the interests of providing an account of the savings in 2008-09, rather than sprinkling them through the document. Individual ministers own their strategic reviews and communicate them. Much of this information has already been provided by ministers throughout the year.
In the estimates document, we do not have to report in detail on the individual programs that are included under these votes. That information is detailed. For the sake of clarity, we have included these savings, because we were asked for this information by the committee in June. We were asked to identify the savings in 2008-09, and that is what we have done. It happens at a level below the level that was reported here.
It is important that ministers explain the context for the individual decisions, the reinvestments. This information is not standard procedure. Normally, we do not report on reductions in estimates. Normally, we are asking for money in incremental, new requirements in supplementary estimates.
Senator Callbeck: In past budgets where savings have been listed, there has never been an explanation for them?
Mr. Smith: I may need to be corrected on this, but I think it is within the powers of the executive to make reductions. When we ask for additional new resources, it is Parliament's role to say either yes or no. There have been lots of hearings in the past on particular expenditure reduction exercises.
The Chair: Mr. Pagan may have something to add to this discussion as well.
Brian Pagan, Executive Director, Expenditure Operations and Estimates Division, Treasury Board of Canada Seretariat: I wish to underline that very point. The strategic review initiative was announced by the government in Budget 2007. As Mr. Smith said, the intention is to review the totality of government spending over a four-year period. This is not the first time government has undertaken exercises of this nature. There was an expenditure restraint initiative in 2006. Going back a decade, there was something called program review, and there have been other iterations.
Mr. Smith's point was that Parliament approves expenditures. That role is a fundamental role of Parliament, as we discussed yesterday. When Parliament approves those expenditures, it is the executive's responsibility to ensure they are well managed and continue to meet their purpose. Where a process is identified to review those expenditures and to reallocate those monies, Parliament does not approve the reductions or the reallocations. They approve only the reinvestments if they result in transfers between votes, transfers to other departments, or increases in monies to be appropriated. That is an important point and that is why Mr. Smith said that, to understand a detail in a department, it is the minister who is responsible for those decisions and for presenting advice to Treasury Board.
Senator Callbeck: On the budget of the Canadian Food Inspection Agency, $16.6 million has been cut out of that total figure. In the last Auditor General's report, a section stated that the agency lacked the technology in the management systems in certain areas. The agency recognized this lack. They have known about it for some time. They agreed that something should be done about it.
Yet, when I look at this document, we have to bring the minister here for me to find out whether this $16 million affects our technology more.
Mr. Smith: In this case, there was a substantial reinvestment of about $21.6 million in 2008-09, which exceeds the reallocation. Some of that funding, no doubt, went to new technology, but I am not sure how much. The minister responsible for CFIA, the Minister of Agriculture and Agri-Food, would be best placed to identify where those reinvestments are allocated.
Senator Callbeck: In other words, there is no way to obtain that information without having the minister here?
Mr. Smith: The information would be available from the minister responsible for the Department of Agriculture and Agri-Food. I believe that the minister has spoken about the strategic review in the past year as well.
Senator Callbeck: I raised a question with you previously on Supplementary Estimates (B) about the Canada Small Business Financing Act. There was an increase in the Supplementary Estimates (B) of 25 per cent. It has gone up again and is now at $115 million. How much of that $115 million is already covering claims? How much of it is already used up?
Mr. Smith: It is a difficult matter to sort out. They included a supplementary estimate in Supplementary Estimates (B) for $23 million under this program. This amount was to cover claims and other potential claims over the period through to March 31. I think there is an additional requirement here under this program.
When the first estimates for Supplementary Estimates (B) were undertaken, probably in August or September, they made an estimate of the claims required under the program until the end of the fiscal year. As the economy worsened, they have increased the estimate of claims, and they have now asked for funding to cover the estimated claims until the end of the fiscal year.
How much of that funding represents actual claims experienced to date and how much of it is yet to be experienced, I do not know. We can ask them that. This was their best estimate when they prepared Supplementary Estimates (C). They would have reflected the weaker economy later in the year when they prepared their estimate.
Senator Callbeck: Could you provide me with that figure later?
Mr. Smith: Yes.
The Chair: As a supplementary question to Senator Callbeck, can you look at page 10 of Supplementary Estimates (C), where you talk about the savings; and then look at page 91, the Canadian Food Inspection Agency? On page 91, they ask for $1.3 million. Do you see that?
Mr. Smith: Yes.
The Chair: There was a savings of $16.6 million and you said that may be reallocated. Does the fact that we do not see a transfer from one vote to another here mean that the reallocation was all within votes? That is, the transfer did not require parliamentary approval to go from one vote to another?
Mr. Pagan: In this case, all you are seeing from the Canada Food Inspection Agency is a transfer into the department from other departments. The agency has no supplementary estimates requirement at this time. The agency is not asking for any additional funding to be appropriated from Parliament. Therefore, the amounts identified through strategic reviews that are available to offset future appropriations will not be used this fiscal year. That money that is available in the event of a future appropriation would lapse. It is money they would not spend this year. The result of that decision will be reflected in subsequent main and supplementary estimates. They will have their A base, if you will, adjusted to account for whatever the agreed upon reference level is.
The Chair: Might we see in the Main Estimates a request to bring forward that money that has elapsed? At the end of March, they may want to bring all or a portion of that money back again. Other than the 5 per cent they can carry forward, might they want to bring the rest back for other purposes?
Mr. Pagan: The decisions for the first round of strategic reviews, the 2007-08 round, which are referenced on page 10, have now been taken, and departments are implementing those decisions. You will see the effect of those decisions in the 2009-10 Main Estimates. In some cases, these decisions will result in changes in program activity. They will do more of one thing and less of another. In some cases, it will result in a simple reduction to an activity. As Mr. Smith said, in some cases you will see a reinvestment that succeeded what had been identified as a reduction.
Of course, every department is different and has achieved different results. They have all been treated in the same manner. They go through the same process, but the findings vary by department, and they will be represented differently.
The Chair: We receive the Main Estimates tomorrow. Let us talk about the same department. If there was a saving of $1million in a particular vote, will you highlight that saving and say, last year the department wanted $15 million; this year, the amount is $14 million. Do you put a little star there and say, by virtue of strategic review, there is a saving of $1 million? Will you tell us that or must we go through all these documents?
Mr. Smith: In Supplementary Estimates (C), we have highlighted a saving under the individual items due to strategic reviews. In a number of cases, you will see an asterisk that the net appropriation has been reduced by essentially the savings from strategic reviews.
The Main Estimates are a different story in that they establish the budget for the department for the upcoming year. If we were to break down that ultimate budget number, we would take the previous year's departmental budget number and all the pluses and minuses that brought us to a 2009-10 number for the department. It would be complicated to break out all those changes. All kinds of other changes would occur so we would not separate out all of those items.
The Chair: Let us look at the Canadian Food Inspection Agency on page 10, $16.6 million, under Amounts excluding Employee Benefit Plans. Where in this book can I see what vote that was to compare it to another vote from a previous year so that I know how effective this program is?
Mr. Pagan: Senator, using that example, CFIA, because they are not requesting an appropriation, there is nothing else to illustrate. We do not break out in the supplementary estimates the department's program activity structure to show the different business lines and program activities.
However, we include that information in the Main Estimates. In the Main Estimates to be tabled tomorrow, there is not a specific section on strategic review or any summary table of it because, as Mr. Smith said, it is part of the process of additions and subtractions, and realignment and repositioning of priorities in a department.
I believe you are familiar with the structure of the Main Estimates. You will see tomorrow that Part I provides an overview with some summary detail and then the detail by portfolio, department and agency. In that front end of the Part I, we present the number and then we slice it in a number of different ways — voted, statutory, budgetary, non- budgetary and by sector. We group departments according to their cousins and the family in which they operate. Then, to explain at a high level the changes in that sector, there are point-form notes about major additions and major subtractions. This information is not highlighted and in many cases it is not mentioned because if you are dealing with a multi-billion dollar department, and their strategic review number is $5.9 million, then it may not be material to the different additions and subtractions over the course of the year.
We try in the front end to highlight the most major or significant of changes, both increases and decreases. There are instances in the front end of the Main Estimates where there will be a specific reference to a number and perhaps a vote, a grant and contribution program or an operating program, but it is dependent on the department, as Mr. Smith said. They own the strategic review. They tell us whether the exercise is material to their overall program, what effect it has on their overall program and what impact it has on their Main Estimates.
We will be happy, and prepared, to walk through the Part I description and the briefing notes that we have from the departments that explain this number, if it is material. Clearly, in some cases it will be and perhaps in some others it may not.
The Chair: I suspect we will have the pleasure of talking to you more about this issue, so if you can be prepared to elaborate when you come back for the Main Estimates, that will help to gain an appreciation of this area.
Senator Di Nino: Did I understand either of you to say that there may be examples in the supplementary estimates where some of the savings are listed here, because of the requirement of additional funds? If I understood you correctly, can you give us an example so we understand it a little better?
Mr. Smith: Sure: on page 182 for Transport, under the Explanation of Funds Available (dollars), you can see, vote 1: 4.5 million in total authorities is available within the vote from savings identified as part of the government's ongoing strategic review of departmental spending.
To clarify again, where the information is not shown, if the department is not looking for new appropriations, then we are not netting against anything.
Senator Di Nino: It either lapses or not.
Mr. Smith: The money is secured so it lapses and that is how the savings are accomplished in the 2008-09 fiscal year.
Senator Di Nino: Thank you, Mr. Chair. That information is helpful.
Senator Ringuette: I understand Mr. Smith's explanation. One of the elements is that we will see these numbers in the supplementary estimates, but we will not see them in the Main Estimates because in the main, all the new programs are listed and the monies are allotted to these programs, so from my perspective, we cannot move to the Main Estimates before understanding the reallocation that has been done here, at least, for the big numbers.
For the Canadian Food Inspection Agency and Foreign Affairs and International Trade Canada, we are looking at $130 million. From my perspective, that amount of money is considerable.
Can we at least understand what happened there? We will not see these numbers in the Main Estimates. The Main Estimates will show us the department's current program spending and not the reviewed ones.
Am I clear, in my English from northern New Brunswick?
The Chair: Does either witness want to comment? We are still trying to find our way through here.
Mr. Smith: Take the case of Foreign Affairs. It is true you identified $133 million here of reallocations. There are $124 million of reinvestments. At the level of the organization, the department, that amount represents significant change in programs and it will show up in programs. If one wanted to do the analysis, one could piece it together. It is complex, but that is why it is important also for the departments to explain themselves: how they have undertaken the transformation from those programs to these better programs. Even if it does not show up at the high level in the numbers, it all occurs at the program level.
That is why I tried to provide lists of detailed breakdowns on both sides.
The Chair: You referred to the note on page 182. I guess that, in our simplistic way, we wondered whether that number was part of the $12.5 million of savings that you highlighted on page 10, and you are telling us we cannot find that information in that way.
Mr. Smith: That is correct. As I mentioned, we provide a net requirement of Parliament for the funding. We offset some of their requirements by the savings that have been identified in the strategic reviews and other sources of funds. You are seeing a net requirement.
The Chair: I suppose you are right, in essence. Normally supplementary estimates ask Parliament for approval for more money. This amount is here for information purposes. You are not here asking us for approval to save money.
Mr. Smith: That is right.
The Chair: We are glad that you are providing that information. It is nice to have it. We have gone off on a sideline trying to figure out how you are showing it.
Colleagues, we are here to obtain information on the money that the government is asking to spend, and to decide whether we should approve it.
[Translation]
Senator De Bané is the former chair of this committee. He is the senator from the senatorial designation of De la Vallière in Quebec.
Senator De Bané: Mr. Secretary, tell me; the Department of Foreign Affairs is asking for an amount in excess of $20 million because of variations in exchange rates. Is there not a better way to protect ourselves against these variations?
[English]
Mr. Smith: That is a good question. This is a standard procedure to compensate the Department of Foreign Affairs for fluctuations in the value of the Canadian dollar relative to foreign currencies. As you know, many costs are borne by Foreign Affairs in paying salaries for locally engaged staff or making assessed contributions to other international organizations like the UN and international financial institutions. These contributions are usually paid in U.S. dollars, and there are many other reasons why one needs to adjust for these changes in currencies every year.
We essentially use the exchange rates in effect in the fall for Main Estimates in making some of those calculations. By the time supplementary estimates come along, there have been further changes in currencies.
Senator De Bané: Do private firms that have world operations and must deal with similar situations have different strategies to protect themselves? Can the Government of Canada use the same techniques to hedge those variations?
Mr. Smith: Large financial institutions hedge their currency exposures. In this case, I think the choice was made some time ago not to hedge but to try to offset some of those expenses.
[Translation]
Senator De Bané: There is an amount of $50 million in CIDA assistance to some countries to match contributions from Canadians. Would you be kind enough to send us a document explaining how this program works? What concerns me is that cultural communities in Canada from wealthy countries can easily accumulate funds in Canada and then, clearly, CIDA will match them. There are other communities in Canada from poor countries, which is why they are in Canada. They cannot accumulate a lot of money. This fine program does not allow them any significant matching contributions from CIDA. It would be helpful if you could send us a document explaining how that works.
[English]
Mr. Smith: We will pursue that question with our colleagues at CIDA.
[Translation]
Senator De Bané: Thank you so much. I would like to direct your attention to page 160, under the heading Canadian Heritage. From pages 160 to 163, we see what happens with this department's budget. We see a number of organizations like the Council for the Arts, the Canadian Museum for Human Rights, the CRTC, Library and Archives Canada, and the National Battlefields Commission.
[English]
The Chair: This is page 96 in the English version.
Senator De Bané: In the French version it is page 160.
[Translation]
So Canadian Heritage has a huge number of organizations under it. Some of them, such as the CRTC, Library and Archives Canada, the National Battlefields Commission and so on, have budgets that have stayed the same. But others, the National Arts Centre in Ottawa, for example, have received an increase and others are receiving less. The first thing that strikes me, Mr. Chair; if we look at CBC, we have "Payments to the Canadian Broadcasting Corporation for operating expenses'' on line 15c. There is a $5.6-million reduction there. Then, on line 25c, capital expenses have been increased by the same amount. Operating costs have been reduced and capital costs have gone up.
I refer you now to the Canadian Museum of Civilization, on the next page, line 30c, where capital costs and operating costs are together. So, for CBC, we are reducing operating costs, the salaries, the employees, and we are increasing capital costs.
For the Canadian Museum of Civilization, operating costs and capital costs are on the same line. So it is all together. For CBC, we have two lines to distinguish between operating costs and capital costs. The Canadian Museum of Civilization is not consistent.
Mr. Pagan: It is not necessarily a reduction in costs when we show a reduction in one area and an increase in another. The agency or department can transfer between its different areas.
Senator De Bané: What I am saying, Mr. Pagan, is that for CBC, it is very clear. You reduce operating costs by $5,658,000 and you increase capital investments by the same amount.
Mr. Pagan: Yes.
Senator De Bané: So it is very clear, we understand what is happening. With the Canadian Museum of Civilization, operating and capital costs are lumped together. It is not very consistent.
Mr. Pagan: The difference is in the criteria used to establish a vote. There is a Treasury Board policy that says that if a department, any department, needs more than $5 million, a separate vote is needed for any amount in excess of that.
CBC is different. This is a large corporation that owns networks across Canada with a number of radio and television stations and a lot of buildings. The corporation must have an amount for capital costs. That is not the case for the Canadian Museum of Civilization because the organization is located in one place only. I imagine that they need something in capital, but, by and large, the objective can be achieved with one vote only.
This changes from year to year. This year, Revenue Canada had a situation like the Museum of Civilization, a vote for programming. I know that, for next year, 2010-11, the Canadian Revenue Agency is in the process of creating a new vote for their capital needs. It is a question of level.
Senator De Bané: I do not want to focus on this too much, but it is much better when the two are separated. At the National Gallery, for example, they separate operating expenses from the purchase of works of art. You can see everything very clearly. In financial statements, you put operating expenses and capital expenses on different lines.
As for that policy that was announced at some point, about women no longer being able to sue for equal pay and so on. Has Treasury Board undertaken a study on the impact if women can no longer sue for equal pay?
[English]
Mr. Smith: Senator, is your question whether the Treasury Board Secretariat has undertaken a study on the impact of pay equity?
Senator De Bané: Of the impact on the public treasury.
Mr. Smith: On the impact on the treasury of pay equity: Can you elaborate a little more?
Senator De Bané: As you know, there was an announcement at some point that from now on, women would have to negotiate any settlement related to pay equity, but they could not use the courts or special administrative tribunals to pursue those claims. Also, has that announcement essentially had the motivation of reducing expenditures? Was a study made about that projected decision of policy?
Mr. Smith: Probably, I cannot address this question well, but of course, legislation has been introduced, and I understand is being considered, in the other house. I believe the motivations were well addressed in the documentation that was provided on why it would be viewed as being better to link this matter to collective bargaining, as provinces have done.
The Chair: In spite of the question, you do not have explain motivation of legislation.
We will study that legislation and we will ask the minister to come here, and that will be the person we will ask on that matter.
Senator De Bané: Mr. Chair, I go along, of course, with your decision, but I was not asking about motivations but only the dollar impact, the financial implications.
The Chair: Yes, and certainly you are qualified to talk about the dollar impact. Has there been any study in that regard?
Mr. Smith: I do not have any estimates of that sort.
The Chair: For Senator De Bané's question, do you know if any studies are being conducted?
Mr. Smith: I will ask and respond.
The Chair: That is what I believe Senator De Bané was looking for, and I was concerned you were entering motivation issues.
Mr. Smith: I only wanted to explain the motivation that has already been stated for the legislation.
The Chair: Yes, thank you.
Senator Mitchell: I want to follow up on Senator De Bané's question. The point has been made, in defence of their initiative to no longer allow women and others to take cases of pay equity to the Canadian Human Rights Commission, that this initiative will save money. However, there is no evidence of any studies to that effect. I second the initiative to find out whether that issue has been studied, and whether or not you can assess how much we would save by it.
My second question is on page 98, with respect to the status of women. A number of lines have been underlined, which is rare — I do not know if I have seen it anywhere else. It seems that you are adding something there, but it implies there is payment here for potentially more than one minister without portfolio or one minister of state.
This question is specific and you can answer it later because we are running out of time.
Mr. Smith: My colleague can answer it.
Senator Mitchell: I will list these items. The estimate is $35,465,000 now for the status of women. Can you tell me how much lower that amount is than last year? We will see how much lower it will be next year.
My final questions are about agriculture. I notice that under vote 10c, the department has requested $287.9 million for the buyout element of the Tobacco Transition Program. That buyout is a great idea of course. However, we apparently received a $1.1 billion fine from tobacco companies, for which, I might say as an aside, no senior executive or anybody was ever charged, amazingly enough. The government is prepared to put 14-year-old children in jail for life but not charge an executive who defrauded the Canadian people.
Is that $1.1 billion a one-time revenue source that would artificially diminish or reduce the budget or has it has gone somewhere else where is will not be construed as a revenue source?
Finally, because we are all worried about the government making announcements for commitments of money that they never spend, on page 90, at the bottom, the second last line indicates $45 million "from delays in the ecoAgricultural Biofuels Capital Initiative,'' one of the few climate-change-related initiatives of the government. How long has the initiative been delayed and has this $45 million been "saved'' because of the delay? What has finally been spent and, in addition to that $45 million, how much that was announced has not been spent?
Mr. Smith: We will follow up on all those issues. My colleague, Mr. Pagan, can answer the question.
The Chair: The other points are on the record and if you can follow up on those, it would be appreciated.
Mr. Pagan: When vote wording that had been approved in Main Estimates or in a previous appropriation act is proposed to be changed, the common practice is to underline in the detail, what the change is. What you see here is new wording that would be part of the appropriation act to be introduced in March. That is the reason for the underlining.
Senator Mitchell: Does the wording imply that there is more than one minister of state or minister without portfolio that will be paid as a result of this change, or what does that wording mean?
Mr. Pagan: I can tell you that they have requested $332,000 to fund the operating expenses associated with the Office of the Minister of State for Status of Women, and this funding is being transferred from the Department of Heritage.
We have a number of other take-aways but I can speak to one now, if time permits.
The Chair: We are running out of time and I want to have all the questions on record, if you do not mind. You are good with follow-up. The next person on my list is Senator Di Nino.
Senator Di Nino: When we spoke about page 10 — that took a lot of our time earlier on — you suggested that the rationale, the explanations, were generally announcements made by ministers at the time that happened. Did I understand that explanation correctly? When the policy questions were asked, and I am not asking you to answer those questions, I believe you said that when this happens, the minister usually puts out a press release so that information is out in the public if we need it.
Mr. Smith: That is correct. This issue is about good governance so each of these ministers will explain what changes they made to improve the effectiveness of government spending in their ministries.
Senator Di Nino: I do not think this practice is particularly germane to this government. I think all governments on a regular basis normally conduct a review and try to streamline the governance of the country. I think that practice is good.
A certain amount of money was transferred to the World Bank for a climate change program. Can you show me where the amount is in the book?
Mr. Pagan: It is a program of the Canadian International Development Agency.
Senator Di Nino: On what page?
Mr. Pagan: It shows up as the first item on page 124 of the Main Estimates.
Senator Di Nino: That was vote 25: $85 million given to the World Bank, the Climate Investment Funds pilot program to support climate change adaptation. Is that it?
Mr. Pagan: Correct.
Senator Di Nino: That is all I wanted at this time because of the time consideration.
The Chair: Thank you, Senator Di Nino, for your quick questions and thank you for your quick answers. That worked nicely.
[Translation]
Senator Chaput: My question is about linguistic duality. The English title is Road map for Canada's linguistic duality.
Quite some time ago now, the federal government unveiled the road map for linguistic duality and told us that there would be a considerable amount of money for it; I do not have the amount with me, I cannot remember it. But, as I look at the Supplementary Estimates (C), I found the road map for linguistic duality in Canadian Heritage, I found it in the Department of Health, and in WD, Western Economic Diversification, for example.
When I look at Immigration Canada, I can only see the Canada-Quebec Accord, I can see nothing for the Canada- Manitoba Agreement. Could it be that the other departments that contribute to the road map have not yet planned their expenses and that it will appear in future estimates? Could we find it somewhere else?
Mr. Pagan: Very quickly, fourteen agencies cooperate in that program. In the supplementary estimates, seven of them have identified needs at the moment.
[English]
They are Canadian Heritage, Public Works and Government Services Canada, Atlantic Canada, industry, Western Economic Diversification, health and the economic development agency for the regions of Quebec.
[Translation]
Each of those departments has a program approved by Treasury Board and shown in these estimates. Possibly, the other programs are to come.
Senator Chaput: Thank you very much.
The Chair: Thank you very much for that question.
[English]
The Chair: Those are all the names on my list. You have given us a number of undertakings, which we appreciate. The next meeting of this committee will be next Tuesday morning. If any senators have a suggestion for future witnesses, please let us know. I will ask the steering committee to stay afterwards for a short while to talk about that subject.
I thank Mr. Smith and Mr. Pagan on behalf of the Standing Senate Committee on National Finance for their attendance. We look forward to their re-attendance in the near future. This meeting is now adjourned.
The committee adjourned.