Proceedings of the Standing Senate Committee on
National Finance
Issue 7 - Evidence - June 2, 2010
OTTAWA, Wednesday, June 2, 2010
The Standing Senate Committee on National Finance met this day at 6:45 p.m. to examine the expenditures set out in the Supplementary Estimates (A) for the fiscal year ending March 31, 2011.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: I call this meeting of the Standing Senate Committee on National Finance to order.
[Translation]
This evening, we begin our study of Supplementary Estimates (A) for the year 2010-11 which have been referred to our committee.
[English]
Our committee has held a number of meetings in relation to the Main Estimates for this fiscal year 2010-11, but this constitutes the beginning of our examination of the supplementary estimates. It is anticipated that this is the first of three meetings we will have with respect to supplementary estimates, and it is also anticipated there will be three supplementary estimates in addition to the Main Estimates, if matters proceed as they have in previous years.
This evening we are pleased to welcome back officials from the Treasury Board of Canada Secretariat. Appearing tonight are David Enns, associate assistant secretary — Mr. Enns, welcome to the Standing Senate Committee on National Finance — and Brian Pagan who knows us well. He is executive director, expenditure operations and estimates division, and we have managed to get him a promotion so, unfortunately, he will not be with us after this evening, which is too bad for us. We have very much appreciated the work that you have done along the way for us, Mr. Pagan. We wish you well in your new endeavours. Also with us is Ken Wheat, senior director, expenditure operations. I think Mr. Wheat has been here before but not as often as Mr. Pagan.
Honourable senators, Mr. Smith, who periodically appeared with Mr. Pagan, has also been assigned new responsibilities and we will not see him as frequently as we have in the past, so it would be appreciated if you could take back our regards and best wishes to him as well.
[Translation]
Mr. David Enns, Associate Assistant Secretary, Treasury Board of Canada Secretariat: Thank you, Mr. Chair. Before answering your questions, I would like to take a few minutes to give you an overview of these Supplementary Estimates (A) and to emphasize the context of the budgetary process, the total amount of these estimates, the highlights of the main initiatives and the implementation of the steps announced by the government in budget 2010 to control expenditures.
[English]
On the second slide, as you know, the purpose of the supplementary estimates is to seek Parliament's approval of the spending authority required to implement approved programs that have not been provided for in the Main Estimates. In these supplementary estimates, the spending authority includes approximately $1.1 billion for Budget 2010 items that have been approved by the Treasury Board to date.
Supplementary estimates are also used to realign or transfer existing spending authority between voted appropriations, and to inform Parliament of updated projections to statutory programs for which spending authorities are already in place. These estimates were tabled by the President of the Treasury Board in the house on May 25 for the supply period ending June 23. As you noted, this is the first of three planned supplementary estimates for 2010-11.
The next slide provides an overview of proposed amounts. The estimates will seek Parliament's approval for $3.3 billion in new voted appropriations, and provides information on a net decrease of $747 million in statutory spending previously approved by Parliament, for an increase in total forecasted expenditures of almost $2.6 billion over the $259 billion included earlier in the Main Estimates.
Major statutory changes include a $2.35 billion decrease in forecasted interest on the public debt, a payment to British Columbia of $769 million for implementation of the harmonized sales tax, and a payment of $719 million to Export Development Canada, EDC, to support export transactions through the Canada Account.
The table on the next slide provides an overview of some comparisons of spending increases. As shown in the chart, Supplementary Estimates (A) represents an additional 3.4 per cent in the funding voted through the Main Estimates. By contrast, last year Supplementary Estimates (A) reflected an additional 5.8 per cent over funding approved in the 2009-10 Main Estimates.
When statutory spending is included, the funding shown in these supplementary estimates represents only a 0.7 per cent increase over spending included in the Main Estimates of this year. In the Main Estimates last year, the figure was 2.8 per cent from mains to supplementary estimates.
The major voted initiatives are summarized on slide 5. The first, G8/G20 funding, will support planning and operations related to policing and security at the 2010 G8 and G20 summits. Funding is to cover security and emergency response, as well as equipment and accommodations for security personnel.
The second item relates to aviation security. This funding will allow the Canadian Air Transport Security Authority, CATSA, to obtain the newest and most effective machines for screening passengers and baggage, to better align with international security requirements, and to meet new U.S. rules for U.S.-bound flights originating in Canada.
The third item, national defence capital requirements, this funding will support ongoing capital projects, including the tactical airlift capability project and the medium-to-heavy-lift helicopter project, as well as 17 infrastructure projects announced previously in Budget 2005 and Budget 2006. The timing of cash requirements for these projects had been amended to reflect updated project schedules.
Atomic Energy of Canada Limited, AECL, $300 million in funding will allow AECL to meet costs associated with ensuring continued isotope production, including the repair and restart of the national research universal reactor; addressing infrastructure and operational upgrades related to health, safety, security and environmental priorities at the Chalk River laboratories; developing new-build reactor technology; funding shortfalls in reactor life extension projects; and managing operational pressures.
The final of the major voted initiatives relates to the response to the earthquake in Haiti. This funding will continue to support Canada's initial whole-of-government response to the earthquake, including contributions to appeals for humanitarian assistance launched by the United Nations, as well as to project proposals by Canadian non-governmental organizations, NGOs, already operating on the ground in Haiti. It also includes a Haiti earthquake relief fund to support humanitarian assistance, early recovery and reconstruction, and the deployment of additional police officers under Canada's police arrangement; and finally, an initial investment to the reconstitution of essential security system initiatives.
A complete list and description of other major budgetary requirements can be found on pages 8 through 11 of the Supplementary Estimates (A) document.
Just to summarize a couple of key messages, these supplementary estimates seek approval for the lowest amount of increased funding in the three years since early supplementary estimates were introduced in the spring. As we can see on the next slide, increases to operating expenditures are approximately $1.9 billion with more than half of that related to Budget 2010.
In addition to the $1.5 billion increase in operating or program expenditures votes that result from federal budgets, $103 million is sought to increase Treasury Board central votes, primarily for non-discretionary labour costs related to severance pay and parental allowances, and the balance is to realign funding either between fiscal years or between votes.
[Translation]
I will stop there, Mr. Chair. By colleagues, Mr. Pagan and Mr. Wheat, and myself will be pleased to answer your questions on these Supplementary Estimates.
[English]
The Chair: Thank you, Mr. Enns. Mr. Pagan, Mr. Wheat, do you have anything further to add or should we now go into discussion?
Brian Pagan, Executive Director, Expenditure Operations and Estimates Division, Treasury Board of Canada Secretariat: No, sir. We are happy to address the questions you may have.
The Chair: Thank you. I have a couple of points before I go to my list. At page 134 of the supplementary estimates is the $300 million that you referred to at page 5 of your slide deck, Atomic Energy of Canada Limited, $300 million. In the past, we used to see a code that would indicate whether that amount arose out of Budget 2010 or a previous budget. Now, you have indicated in your deck at page 2 that $1.1 billion arises out of Budget 2010. Does this $300 million form part of that $1.1 billion coming out of the budget or is this something different?
Mr. Enns: Yes, it does. It is part of the budget allocation.
The Chair: Have you changed your methodology here? In Supplementary Estimates (A), you do not indicate at page 134 that the $300 million is out of the budget.
Mr. Enns: Right. I will start with that and maybe Mr. Pagan can chime in. That was only really done on one occasion last year, due to the extraordinary circumstances of Budget 2009 implementation where we wanted to indicate quick and urgent approvals were required, and we thought that would facilitate things by indicating that in the estimates. We are not doing that this year.
Mr. Pagan: Senator, it is really a question of our system and how it is structured or established. Last year, given the extraordinary interest, attention and need to facilitate timely implementation of Canada's Economic Action Plan, EAP, we endeavoured to attempt to identify to the greatest extent possible the initiatives coming forward that were Budget 2009 initiatives. It was a manual process to do that. Our system did not readily allow us to capture that. We were very accurate in identifying or tagging those Budget 2009 initiatives.
Because our system is not established to readily capture that information, it is not something that, at this point, we are able to replicate with any sort of ease. However, be that as it may, every initiative brought forward for Parliament's approval through estimates has a source of funds, and one way or another we can go back and track or relate it to the government's announcements or budget decisions. The norm is, for the fiscal year that we are in, the lion's share of requirements will be for that fiscal year, but it is quite normal to see requirements from previous budgets, Budget 2005, Budget 2006. For instance, we will see some stuff for national defence that relates all the way back to those budgets, so it is a manual process we can do with some effort but not a regular feature of our automated system as it exists at this moment.
The Chair: Yet, at page 2 you indicate that $1.1 billion arises out of 2010 budget initiatives, so someone has sat down and added up all of the votes and said these are various votes which all relate to and are derived from the budget.
Mr. Pagan: We do have a manual capacity, individuals who compile spreadsheets outside of our system that can track initiatives to budgets, but it is not something automatically produced from our system. Therefore, when we look at individual department requirements and their explanation of requirements, to tag those as budget initiatives requires a manual intervention and is not something that the system as now constructed is able to do.
The Chair: I understand that. It was helpful to us, so it is a tagging, and if any honourable senator might be interested in having that information, he or she could ask you what is included in the $1.1 billion.
Mr. Pagan: Yes.
The Chair: The other preliminary question I have arises from your horizontal items, and we have told you before we find that very helpful in understanding what the government is spending over a number of different departments. You do that in the supplementary estimates for us.
Looking at the two bottom ones, first, with respect to Aboriginal health and the First Nations water and wastewater action plan, there is $162 million and $135 million in two different initiatives. I recall, a number of years ago, Treasury Board tried an exercise that I think we were involved with. It was the First Nations Aboriginal framework, and that was a total horizontal so parliamentarians would know how much money on an annual basis the government spends in all of the different Aboriginal programs. Have you continued with that attempt to draw that information together?
Mr. Pagan: That is a difficult and somewhat complicated question, but I will try.
What is presented to you here in these estimates is the result of individual project approvals on behalf of a department or departments. Beginning at page 57, there is a central table that identifies the various horizontal initiatives. We identify an initiative as a horizontal item if two or more departments are requesting funding for the same purpose, for the same program. The two that you see before you, the wastewater action plan and Aboriginal health promotion, are the collaborative efforts of, respectively, the departments of health and Indian affairs and the public health agency.
As you know, there is a great deal more in the way of activity in horizontal, collaborative efforts in this area and many others. To the extent that those can be aggregated and present a whole-of-government view, we attempt to do that through the annual performance reports and, in particular, the roll-up or aggregate report known as Canada's Performance that is tabled in the fall after the completion or conclusion of public accounts and the tabling of individual departmental performance reports.
What Canada's Performance attempts to do is to consolidate individual and collaborative efforts in specific Government-of-Canada strategic outcomes. Each department will have a number of strategic outcomes and specific program activities. Through Canada's Performance and the system we have that supports the roll up of those departmental performance reports, we can identify the various departments that are contributing to a specific outcome in one area or another. That, at this time, would represent the best picture of a whole-of-government approach to specific areas of horizontal activity or rolled up strategic outcomes for the Government of Canada.
The Chair: If any senators have follow-up questions on that, I am sure they will ask them. I have a list of senators who are anxious to participate in comments and questions. I will begin with the deputy chair of this committee, Senator Gerstein, who is from Toronto.
Senator Gerstein: Thank you, Mr. Chair. It is a pleasure to welcome the witnesses today. I would like to add my good wishes to Mr. Pagan and Mr. Smith, as extended by the chair of the committee. It has been a pleasure. I feel like I am going through withdrawal. It has only been a year-and-a-half that I have served on this committee, but it has been a pleasure having you here in that time.
I am interested in slide 5, looking at the first item, G8, G20 security, $653 million. That, of course, led me to page 8 of Supplementary Estimates (A) where I see you have detailed the breakdown: $321 million to the Royal Canadian Mounted Police; $262 million to public safety and emergency preparedness; $63 million to national defence; and $6.7 million to other expenses.
Then, of course, I went into the verbiage that is next to it, and I wanted to ensure I understood correctly that these estimates are used for the design, plan, coordination and implementation of the security operation for summits.
The point being that, obviously, this money is spent over an extended period of time. I would assume that the planning and what have you that goes into it must take six months or perhaps a year, if not more. Even though the two summits are a relatively short number of days, it is basically a very long planning process so that, in fact, the outcome is, as in the last line of the paragraph:
. . . and ensure the safekeeping of all International Protected Persons attending the summits.
I read that John Kirton, a G8 expert at the University of Toronto recently stated:
The cost for each of the two Canada summits are more or less within range of what G-8 and even G-20 summits have been costing.
Mr. Enns or Mr. Pagan, would you agree with this statement?
Mr. Enns: I will start and my colleagues will help me out.
It is very difficult to make comparative judgments about the costs of different summits. This is the first time these two summits have been held back to back. That changes things. The theatre of operations, if you will, is geographically large and complex in this case, and costing methodologies differ from jurisdiction to jurisdiction. Therefore, a comparative analysis is quite difficult to make.
Senator Gerstein: We have an expert who is saying it is within the range. He must have some feel, and I assume you have the same.
Mr. Pagan: I do not unfortunately have, senator, a comparative basis, but I can speak to the complexity of the requirements before us. Quite simply, security provisions for this event will be the most complex in Canadian history due to a large number of world leaders — up to 50 world leaders from 20 different countries — the dual location of the meetings, 25 different sites along a corridor of 350 kilometres that needs to be secured, a large number of officials and media, upwards of 7,600 delegates and 3,000-plus media, and the involvement of different security partners — federal, provincial and municipal.
If one compares this summit to the last time Canada hosted just the G8 in 2002, that event was held at a remote site in Kananaskis, and under the responsibility of a single police force, the RCMP. Because of the two events in two locations, this one involves a larger number of actors over a much larger area, and therefore represents the most challenging and complex security undertaking that we have ever seen.
Senator Gerstein: I would like to go back to Mr. Kirton because, obviously, he is an authority in this area and he is making the comment that it is within a range of past ones that have taken place. He also stated:
It's a very good investment. Most of the money has permanent benefits, well beyond the G-8.
Can you shed any light on the type of investment Mr. Kirton might have been referring to? What kind of permanent benefits might be in the area that he is talking about?
Mr. Pagan: There are two dimensions to this. There is security, which would include an upgrade of infrastructure and services. Airport screening is an example of a permanent benefit that one would see as a result of investments in this area. There is also the organization of the summit itself, which includes infrastructure related to hosting conference facilities, residents and the ability to house these leaders, and then physical infrastructure related to transportation — roads, upgrades to airports. For instance, at the airport in North Bay, the runway was extended as a result of this event.
Yes, there are clearly lasting physical benefits related to infrastructure and investments in new technologies related to security and information technology.
Senator Gerstein: Thank you. Did you have anything to add, Mr. Enns?
Mr. Enns: No, thank you.
The Chair: Just as a follow-up on that, so it is clear in our minds, these are Supplementary Estimates (A). Were there costs incurred and reflected in earlier estimates? These are supplementary, so are we only looking at part of the picture here?
Mr. Pagan: Yes, that is correct. If I recall, Supplementary Estimates (C) included this item.
The Chair: That is for the last fiscal year.
Mr. Pagan: Correct, tabled in February. It was in the order of $180 million for advance planning preparation.
One issue that we must understand here is related to timing. There was almost a misnomer about the Government-of- Canada estimates. The announcement of Toronto as the site for the G20 was made by the Prime Minister in early December 2009. The way our business works with respect to estimates in the supply cycle is that we had already concluded the Treasury Board meeting related to the identification of costs for the Main Estimates tabled in February. There is a lag between announcements or decisions and the work that departments need to do to develop detailed programs costs that would withstand the scrutiny of ministers.
Following the announcement by the Prime Minister that Toronto would be the site for the G20, the departments involved in the horizontal security aspects of this brought forward a Treasury Board submission early this fiscal year that has been approved by Treasury Board ministers and now presented to Parliament in the Supplementary Estimates (A).
There can be some confusion, and I have to explain this to my own family, about what an estimate is. An estimate is not total costs for a year; it is a reflection of the decision or the approval of Treasury Board ministers of the executive at a particular time. Supplementary estimates exist to be able to update and bring forward new approvals as they are developed by departments. This is entirely consistent with our cycle and our business, whereby departments will bring forward initial preparatory funding in one period in Supplementary Estimates (C), in this case, and then a more complete and fulsome package once they have had time to complete their due diligence and bring forward a truly comprehensive program or plan.
The Chair: Would you anticipate in Supplementary Estimates (B) or (C) that there will be other items and costs that have not been fully developed at this time?
Mr. Pagan: That is difficult to say. It would not be unusual if that happened. Speaking with reference to the recent Olympics, in the years leading up to the Olympics, we saw various requirements brought forward as they came to fruition. As the Olympics were carried out, we brought forward a final requirement.
The G20 has not happened, and it may very well be that there are costs, unforeseen or otherwise, anticipated but not ready for presentation to the executive and Parliament that would find themselves in future supplementary estimates.
The Chair: Are you able at this time to provide all honourable senators with an estimate of the total amount of funds for security that have been requested and/or approved, and the other costs for the other items that you have indicated?
Mr. Pagan: We would certainly be able to provide a roll-up of everything that has been presented and approved to Parliament to this point, yes.
The Chair: If you could do that, it would be helpful.
Senator Finley: For clarification, the $179 million that has been bandied about the media for the last several days was never expected to be the total budget for this entire project. Is that right?
Mr. Pagan: That is correct.
Senator Finley: The cost of this project did not suddenly jump from $179 million to $980 million. Am I right?
Mr. Pagan: Yes.
Senator Finley: Thank you.
The Chair: I suspect that the figures you produce for us will be reflective of the figures that Senator Finley just mentioned.
Mr. Pagan: That is correct.
The Chair: We do not see them here but they are an amalgamation of figures.
Senator Callbeck: Congratulations, Mr. Pagan, and I extend my congratulations to Mr. Smith.
My first question deals with Export Development Canada. On page 11, you are asking for another $718 million to discharge obligations under the Canada Account. It says that the Canada Account facilitates trade by supporting transactions — EDC's risk threshold — but are determined by the government to be in the public interest. What happened to cause Export Development Canada to need another $718 million?
Mr. Pagan: Bear with me because this one is a bit complicated. First, the Canada Account is set up under a separate statute and is not voted on by Parliament. It is included in these estimates for Parliament's information.
The Canada Account is used to support transactions that EDC is unable to support with its own authorities, but for which the Minister of International Trade considers to be in Canada's interest. What characteristics support that public interest? For example, it must be in line with EDC's customary lending or insurance criteria, such as Canadian benefits, financial and technical capability of the exporter, technical and commercial viability of the project, and credit worthiness of the borrower or buyer. It has to be within the government's willingness to consider the country risk and/ or the credit worthiness of the borrowers or buyer, or in the national interest as determined by the government. National interest can include economic benefits and costs to Canada, including the employment generated or sustained by the transaction, the importance of the export market to Canada and foreign policy implications, including bilateral relationships with the country in question.
In this instance, in 2009 the Canada Account generated a net gain of $451 million and a net gain of $114 million in 2008. Unfortunately, we do not have this for distribution, but the Export Development Canada website provides a listing of the different transactions that have been approved by the Minister of Finance. That is important to underline. Before EDC enters into a Canada Account transaction, it requires the authorization of the Minister of International Trade and the concurrence of the Minister of Finance. Transactions exceeding $50 million or those of a sensitive nature are, in practice, approved by full cabinet.
The Export Development Canada website has a listing of the transactions, the principal counterparty, the nature of the product and whether it is financing or guarantee, and the cost. I will table this with the committee clerk because it is publicly available. As an example, one would see on the website transactions with Air Canada, General Motors, Chrysler, Davie Yards, Industrial and Commercial Bank of China, Northwest Airlines and the like. This information is on the website, and I would be glad to table this with the committee clerk.
Senator Callbeck: You mentioned General Motors but, according to the media, General Motors paid back all their loans. Is that not to be deducted, according to what is on page 11?
Mr. Pagan: As I understand the media reports, General Motors has paid back a portion or all of specific loans, but there were other transactions with the government, including the exercise of an ownership stake. The Government of Canada is now an owner in General Motors and, as I understand it, some or all of that transaction may have been facilitated through the Canada Account.
Senator Callbeck: Would that ownership affect this account? When the loans are paid back, they are subtracted.
Mr. Pagan: I do not have specifics on that particular transaction. In general, EDC products involve financing, guarantees or the exercise-of-ownership stakes. That may have been part of their transaction.
Senator Callbeck: You will table a list of transactions. Will you also provide information on General Motors?
Mr. Pagan: I have a list of individual transactions since April 2007 — totalling 17 transactions. It is publicly available and I will make it available to the committee.
Any further questions related to these specific transactions are not something Treasury Board has access to. The transactions are not presented to or approved by Treasury Board. They involve the Minister of International Trade and the Minister of Finance. We have to direct any specific questions on transactions either to EDC or the appropriate ministers.
Senator Callbeck: It simply seems to be a large figure that they are asking for in view of the fact that it was reported General Motors paid back their loans, which would have been subtracted from this account.
Mr. Pagan: I do not have those figures in front of me. However, I recall the media reports indicating GM paid back some or all of the loans.
Senator Callbeck: Can you provide that information to the committee?
Mr. Pagan: We do not have the information. It does not go through Treasury Board. Those transactions involve the Minister of International Trade and the Minister of Finance. They do not come to Treasury Board as a committee. We can make the request on your behalf, but we would have to defer that to the departments and the ministers for that detail. We simply do not have the information.
Senator Callbeck: Will you make that request on our behalf?
Mr. Pagan: Yes, absolutely.
Senator Callbeck: On page 102, Foreign Affairs and International Trade Canada wanted an appropriation of $50.7 million for assessment and potential litigation under NAFTA, North American Free Trade Agreement, chapter 11. The department asked for the same amount in Supplementary Estimates (C) for 2009-10. What potential litigations require this current appropriation?
Mr. Pagan: There are two points. First, trade challenges under NAFTA or preferential trading agreements are on the rise globally as a result of more agreements being in place to reduce trade barriers. This increased trade activity has been offset by heightened irritants, in particular, under dispute mechanisms such as chapter 11 of NAFTA.
Second, this specific funding is related to an unresolved case presently before the courts. As such, we are not in a position to provide much additional detail other than that a potential requirement has been identified by the department and presented to Treasury Board ministers. In the event of resolution, funds are available to make the payment.
Senator Callbeck: Can you tell us what case is involved?
Mr. Pagan: I am not sure that I know; it is not in my notes.
Senator Callbeck: Is it the same case that the department asked for the same amount of money in the last supplementary estimates?
Mr. Pagan: I believe it is.
Senator Callbeck: The last supplementary estimates were in February or March?
Mr. Pagan: That is correct.
Senator Callbeck: In four months they have asked for over $100 million.
Mr. Pagan: This is a voted requirement. Therefore, it lapses with the fiscal year. They anticipated the decision might be rendered before the fiscal year because the case was before the courts, and they sought authority from Parliament to make that payment. The case is still before the courts. Therefore, they are identifying the possibility of a payment for this fiscal year. Sometimes such cases continue for many years, in which case you will see it in a future fiscal year if it remains unresolved.
Senator Callbeck: On page 10, funding related to government advertising programs is $65.4 million to raise awareness of social issues. Do you know what social issues are involved?
Mr. Pagan: This requirement represents various advertising campaigns for 10 different departments. They include Human Resources and Skills Development Canada, HRSDC, Finance Canada, Health Canada, the Canada Revenue Agency, the Department of National Defence, Justice Canada, Citizenship and Immigration Canada, Veterans Affairs Canada, the RCMP and Canadian Heritage.
In the case of HRSDC, $16.7 million is related to several campaigns. Advertising for the jobs of the future apprenticeship training and the labour market information campaign — campaigns related to helping Canadian workers and jobs of the future are $8 million. Benefits for the Canadian families' campaign to inform parents of Government-of-Canada programs and benefits available to support families with young children through programs such as the Canada child tax benefit and the child fitness tax credit are $3 million. There is $2.2 million for the elder abuse campaign, which will focus on raising awareness of the problem of elder abuse and to inform seniors that help is available.
Health Canada has an $8 million campaign to protect the health and safety of Canadians to ensure awareness of, and access to, information on child safety and security. Citizenship and Immigration Canada has two different campaigns for $3 million each. The first is services to new Canadians to inform newcomers about services to help them succeed in Canada's work environment and to make a new home in Canada. The second is the citizenship guide to strengthen Canadians' knowledge and understanding of the responsibilities of citizenship in Canada's history. Those are the primary advertising campaigns related to social issues.
Senator Callbeck: There was $65 million in the supplementary estimates. How much money was in the Main Estimates?
Mr. Pagan: I will confirm that, but to my recollection, there was no money. This particular program results from a 2004 cabinet decision that a certain sum of money will be set aside each fiscal year in the fiscal framework to fund government advertising. Cabinet receives ``applications'' from departments for different campaigns. They select the campaigns that they deem to be a priority.
What you see here today is the decision reflecting recent cabinet decisions related to advertising. There would not have been funds in the Main Estimates for that purpose.
Senator Callbeck: May I continue?
The Chair: I will put you down for round two. We have a number of others senators wishing to ask questions.
Your final answer was that we could anticipate seeing other amounts requested in either Supplementary Estimates (B) or Supplementary Estimates (C), or is $65 million the total that will be spent on advertising for the year?
Mr. Pagan: That would be the total for the year.
Mr. Enns: Not a total spent through this program. Departments and agencies have the authority to spend on advertising for smaller amounts within their reference levels, within their approved budgets. Out of this cabinet-directed fund, this was all of it for the year.
Senator Marshall: Could you discuss the initial estimates and the Supplementary Estimates (A) in the context of the budget? I am looking at a chart there, table 2 on page 8, that seems to show we are right on target. I just want to see how we are doing in relation to the budget.
My understanding is that the budget that was tabled a couple months ago would take into consideration both the expenditures included in the Main Estimates plus the Supplementary Estimates (A). Is that correct?
Mr. Pagan: Close, yes. The budget, as you know, is the primary policy document for the government. It establishes priorities for the year that will be, in many cases, funded through subsequent supplementary estimates. Most importantly, it establishes the overall fiscal framework.
When you refer to table 2, the figure there at the top — budget March 2010, $280.5 billion — that is the overall framework established by the Department of Finance in terms of total expenditures.
Senator Marshall: For the year, okay. If you look at what was included in your main estimates, you have a figure there in the chart of $261 billion. Now you are saying the supplementary estimates is the $1.9 billion, and then you come down with your miscellaneous adjustments and the total is $280.5 billion, which indicates to me we are right on target with the budget. Is that correct?
Mr. Pagan: That is correct. I know that, as a result of some media attention on the recent G8/G20 costs, there was some concern that this was adding to the deficit. In fact, that is not the case. Those costs were provisioned for in the fiscal framework, so they are part of what the government has established here as their total expenditures for the year of $280.5 billion. They are now ready to be brought forward in estimates. It has not, as you say, changed the bottom line.
Senator Marshall: So far so good. However, we will also be getting Supplementary Estimates (B) and (C), will we not?
Mr. Pagan: Correct.
Senator Marshall: This shows we are right on target now, but one of the issues I would like to raise is when you did your presentation, there was an indication that there is a $2 billion decrease in interest. That has been netted against your expenditures, right?
Mr. Pagan: That is correct.
Senator Marshall: If you did not have that decrease in interest, we would not be on target — would we?
Mr. Pagan: No, I would not say that. I am venturing into the finance sandbox here.
Senator Marshall: I will just go on with my next question, then. Has that decrease been experienced or recognized? Is it possible that we just think we will be getting a decrease, but we might not realize the decrease we think we will get?
Mr. Pagan: I really am venturing into the Department of Finance's sandbox here, so I —
Senator Marshall: How do I get the answer to that question?
Mr. Pagan: I will give you a general response and then we will go back to the Department of Finance to get specifics.
It is safe to say that, when the Department of Finance does their fiscal planning, they have a range of scenarios about inflation, interest costs and the cost of statutory programs. They tend to err on the conservative side. What you see here is primarily due to a decrease related to the cost of servicing our accumulated debt.
There are two factors. First, we just learned last week through a report from finance that the deficit for the fiscal year just ended was lower than anticipated. As a result, in establishing their framework, they almost certainly would have erred on the cautious side, expecting a larger deficit. Because the deficit is lower and interest rates are very low, we are paying less than they would have planned in their conservative estimate. That accounts for that specific transaction.
We will have the Department of Finance confirm that they remain on track for their expenditure forecast of $280.5 billion.
Senator Marshall: I was just making sure I understood how the documents come together because you had done a presentation on that during an earlier committee meeting.
On another topic, Atomic Energy of Canada, you provided information on this Crown corporation in a previous finance committee meeting. We had officials from that corporation appear before the committee. You indicate what the $300 million is for, but it is for a variety of items. Can you provide a breakdown of the $300 million?
Mr. Enns: We can do that.
Senator Marshall: You do not have to do it now. I would be satisfied if you could provide it to the clerk.
Mr. Enns: We will give you a general summary and you can tell me if that is sufficient.
Senator Marshall: Sure.
Mr. Enns: The funding is to meet costs associated with ensuring isotope production.
Senator Marshall: How much would that be?
Mr. Enns: The exact amount is unclear, but roughly in the neighbourhood of $60 million.
Senator Marshall: Okay.
Mr. Enns: Addressing health, safety, security and environmental priorities at Chalk River — new-builder reactor technology development and CANDU Inc., which is the commercial arm of AECL, their operating costs.
Senator Marshall: How much is that?
Mr. Enns: The ballpark would be about $48 million.
Senator Marshall: What about Chalk River?
Mr. Enns: Around $18 million. Funding shortfalls and delays for life extension projects on existing reactors — that is the largest at around $151 million.
Senator Marshall: Do you just include this money in the budget or do you track it? Would you expect additional requests to be coming in from the corporation? When they appeared before the committee, thinking back on the condition of their financial statements, I would not be surprised if they were going to come in looking for additional funding. Is that something that the Treasury Board Secretariat would anticipate, or is this the final amount that will be provided to them?
Mr. Enns: We anticipate there will be additional requests.
Senator Marshall: It is possible that, in Supplementary Estimates (B) and (C), there may be additional funding coming forward for them, is that correct?
Mr. Enns: It is possible, yes.
Senator Marshall: Do you also receive information with regard to timelines?
Mr. Enns: That is the kind of thing we are looking for. The Treasury Board ministers have expressed an interest in seeing more details on costing of any additional funds that would be provided.
Senator Marshall: You would do that. You just do not give out the money — you would be looking for additional information.
Mr. Enns: No.
Senator Ringuette: My first question is about that $50 million for a NAFTA litigation situation. I really want to know what the issue is. A few years ago, a major issue we were winning, the softwood issue, was stopped at the eleventh hour. At the end of the day, we lost a lot of softwood industry exports. I would really like to know what issue we are paying $50 million worth of litigation on for NAFTA.
Mr. Pagan: We will get that information. I do not have it. I want to make the point that this is not a duplicate request. It is the reprofiling, if you will, of a requirement that had been anticipated to be resolved last year and will now apparently be resolved this year. We will get back to the committee with more details on that.
Senator Ringuette: I am looking over at all the different export items we have with the U.S. or with Mexico. Would this be related to the oil industry?
Mr. Pagan: I do not believe so, but I simply do not have that information, so we will respond to the committee in writing with whatever detail we can provide from the department.
It goes without saying that everyone understands that, because it is an issue before the courts related to treaties and international obligations, there will be a decision rendered. Once that decision is rendered, we may win or we may lose.
I hate to say the word ``lose,'' but if there is a judgment against the Government of Canada, there will be an obligation to make a payment. If there is no decision against the Government of Canada, there is no obligation. We will get information in terms of what details they can provide.
Senator Ringuette: Would DFAIT, Department of Foreign Affairs and International Trade, be handling this issue?
Mr. Pagan: Yes. DFAIT has policy responsibility and the Department of Justice would be handling the litigation.
Senator Ringuette: I expect it is fairly easy for you to get that information, so we could expect it for as early as next week, right?
Mr. Pagan: Yes, we will have detailed responses for everything we leave the table with.
Senator Ringuette: Thank you.
It has been brought to my attention — it seems in 2001, for the Summit of the Americas in Quebec City with 1,600 delegates, 34 heads of state, the security costs were $35 million. At the APEC, Asia-Pacific Economic Cooperation, 1997 summit in Vancouver, there were about half the number of delegates, but the security tab was $26 million. At the 2002 Kananaskis summit, the cost was $190 million.
With inflation and so forth, I can say it will double in eight years. That would be, what, $250 million or $260 million maximum? Right now we are at $1.2 billion. The Treasury Board is in charge of accounts and disbursement of funds. I think there was a major lack of regard with these expenses.
In addition to these security expenses, for 72 hours, it seems that the federal government has also spent $20 million paying for dancing troupes, singers, fiddlers, meals and floral arrangements for the upcoming G8/G20 meetings. That is just a current estimate; it is not Supplementary Estimates (B) or (C).
Can you provide us with the details of this $20 million? What are those dancing troupes, singers, fiddlers, meals and floral arrangements? Twenty million dollars is a whole lot of dancing and eating in 72 hours.
Mr. Pagan: Let me attempt to respond here and we will see whether I can address your concerns.
First, with respect to these costs in comparison to any other recent international event that Canada has been host to, there really is no basis of comparison because of the fact that it is two events spread over 250 kilometres. That is the first point.
In the three events you mentioned, Quebec City, the Summit of the Americas and Kananaskis, the first two were before 9/11. I think everyone understands the security environment changed considerably thereafter. In Kananaskis in 2002, which was the first G8 Summit after 9/11, the event was held in a very remote location. The G20 is in an urban area. There is no basis for comparison.
I can assure you that, when departments develop their concept of a security plan, they do so with a view to best practices because the intention is to do their job. That concept of operations is discussed with a number of departments and is challenged, as every requirement is, by Treasury Board officials and Treasury Board ministers. I am personally satisfied that everyone involved would have done their job or due diligence in examining those costs.
There are two dimensions. There is security and then the organization and hosting of the summit. As a host, there will be costs of hospitality involved, including meals; hotel rooms and suites for heads of state, ministers and seniors officials; and rental of apartments and hotel rooms for an extended period for employees assigned to the summit management office.
I do not have anything in my notes about floral arrangements or dancing troupes, but I imagine there is a reception or a gala for which there would be some appointments or accoutrements that reflect Canada's culture and hospitality. All of this, of course, is with a view to the government's ongoing attention for value for money and prudence.
Senator Ringuette: I can tell you that $20 million in 72 hours to account for two breakfasts, two lunches and two dinners is a lot of beef and hopefully a lot of Eastern seafood, if that is the way you look at it.
I would like a breakdown of the contracts that were awarded with regard to this $20 million. I know you do not have that on hand, but if you can provide it, I am sure all senators would be happy to review it.
I am looking at page 7 of your presentation. You indicate a $1.027 billion increase due to budget. The increase due to the previous budget is $432 million. What is that related to? That is the previous budget, so it should have appeared in Supplementary Estimates (C).
Mr. Pagan: Not necessarily. In fact, I cannot recall the issue, but I think we brought to the attention of the committee in Supplementary Estimates (C) that there was an item therein that had as its source of funds Budget 1999.
It is important that everyone understands there is not necessarily a correlation between a budget year and an estimates exercise. What the budget does is announce the government's overarching policy objectives and priorities, and there can often be quite a lag between an announcement, which is sometimes simply aspirational, and the development of a detailed program with robust terms and condition that have been the subject of some consultation with clients or stakeholders, in some cases international governments.
We do have an ability to roll these things over and track manually when a submission comes forward to Treasury Board what the source of funds was, but it is not unusual at all to see requirements in the current fiscal year that relate to a budget some time ago.
In particular, in this case we are dealing with DND's capital requirements that were announced in Budget 2005.
Mr. Enns: 2005-06.
Senator Ringuette: I am sorry; I did not catch that. Which capital requirement?
Mr. Pagan: The Department of National Defence has a major item here related to various capital procurements, the provision of equipment and also some infrastructure. The source of funds for that are previous budgets, in particular 2005 and 2006.
Senator Ringuette: Is that for the airlifting and so forth?
Mr. Pagan: I believe that is one of them, yes.
Senator Ringuette: That is the equipment we now purchase but that we used to lease in cooperation with other nations. Now we are spending millions of dollars in capital instead of leasing, like we used to do.
I am also looking at the second item, funding reprofiled from 2009-10 to 2010-11 for $138 million. What are these items?
Mr. Enns: That is related to a number of things potentially. For example, infrastructure projects would be a good example of things that have delays in construction due to all kinds of things. A good example is perhaps projects in the North; weather will intervene, they are unable to meet their original project schedules, they have to be delayed and funding is reprofiled from one year to the next. Items like that are generally covered there.
Senator Ringuette: That is what I suspected. That is why I asked the question. We heard from the Canadian Construction Association that they were worried with regard to infrastructure projects where the deadline was March 31, 2011, and that the government was steadfast that there would be no extension. Here, however, we see that from last year's budget, 2009-10 to 2010-11, there is a reprofiling of funds with regard to dealing with exactly those issues of infrastructure, delay of construction due to the weather and delivery of stock and so forth.
Therefore, there is a constant precedent with regard to that issue, and the Canadian Construction Association is right in that there should be an allowance to reprofile infrastructure funds for projects that have received the okay and cannot be completed as per the engineers' certificates, they call them, by the end of March. Thank you for that answer. You have proven by this presentation —
Senator Finley: Supplementary.
The Chair: I think we will let the witness answer first before hearing a supplementary question. Mr. Enns, please try, if you wish, to provide an answer to that.
Mr. Enns: I think you have to draw a distinction between certain kinds of infrastructure programs that were announced last year, which did have a time limitation, that were primarily designed to provide stimulus to the economy. Those things in fact are time limited, but there are a whole range of other infrastructure programs that exist over longer periods of time where this practice is quite normal. We are talking about infrastructure programming generally but two different slices of it.
With respect to the building Canada fund, for example, you will notice in here there is a project under the previous generation of infrastructure programming, the Canada strategic infrastructure fund, that will be reprofiled as well or drawn down much later.
You have to remember that the infrastructure stimulus fund was for a two-year period, but there are the other programs available for which items can be reprofiled.
Senator Ringuette: I agree with you, and I agree that reprofiling is okay. We live in a geographic area that is susceptible to all kinds of weather situations in the first place.
The Chair: Senator Finley, did that answer satisfy the supplementary you wanted to ask?
Senator Finley: Yes. I just wanted to make sure it was clear there were two different kinds of definitions here. I think the officials have done that extremely well. Thank you.
The Chair: To profile or not to profile is a policy decision of the government that we are not here to question you on. That is important for everyone to understand. We are here to gather facts and information. We can make any arguments we want in another place based on that.
Senator Ringuette: On page 10 of Supplementary Estimates (A), you indicate an advertising program to the tune of $65.4 million. Earlier, you provided examples that this funding is managed through cabinet and that different departments must request funding from cabinet. That is one kind of advertising program.
Last year, there was an advertising program that cost Canadian taxpayers $65.4 million to advertise the stimulus program. The stimulus program is a two-year program. What is the estimated advertising cost for the stimulus program this year?
Mr. Pagan: Once again this year, the Department of Finance is part of the overall advertising program. There are 10 departments, which I have listed previously, including the Department of Finance. Their portion of this $65 million is $10 million for two different campaigns. There is $6 million for the creating jobs and growth campaign, implementing Canada's Economic Action Plan, which will keep Canadians informed about EAP initiatives, programs and benefits.
Senator Ringuette: Did you say that, this year, the advertising is $6 billion?
Mr. Pagan: $6 million.
Senator Ringuette: Yes, $6 million for the stimulus advertising.
Mr. Pagan: That is correct.
Senator Ringuette: In comparison to last year's $41 million?
Mr. Pagan: I do not have that figure, but we can certainly get it. Again, it is important to make clear that any advertising requirements of the Department of Finance last year would have been part of the government's overall advertising campaign, which my figure says was in the order of $85 million in total. We will have to get that detail for you.
Senator Ringuette: I just want to ensure that I have the right numbers. You are saying that last year's total department advertising —
Mr. Pagan: Government-of-Canada advertising.
Senator Ringuette: That would be cabinet advertising programs?
Mr. Pagan: Every initiative is approved by cabinet, and it would have included the Heritage Canada vignette series, DND's recruitment campaign, Canada Revenue Agency and new tax measures. We can provide you a breakdown of last year's requirements as well as this year's.
Senator Ringuette: Thank you. That will be helpful.
That is one source of advertising funding. Last year, all the funding for the stimulus program was through one agency, which was Cossette Communications. Are those advertising campaigns tendered?
Mr. Pagan: I do not have that information, but we can certainly get it. Of course, any contract over a certain dollar value is published on websites, so it is publicly available. We will get that information.
Senator Ringuette: There are also some tender requirements —
Mr. Pagan: Contracting policies, yes.
Senator Ringuette: — from your department, Treasury Board. Was last year's $41 million to Cossette Communication tendered? You are saying that total advertising spending for last year was $85 million.
Mr. Pagan: I will confirm that.
Senator Ringuette: I want to know if the $85 million was tendered, and I want to know if the proposal in these Supplementary Estimates (A) for $65.4 million was tendered and, if so, to whom.
I also see that you are requesting additional funding for the purchase of new airport screening equipment. It is not before the Senate yet, but it is in the public domain that the budget bill, Bill C-9, is putting an additional tax on flights. Will that additional tax on flights cover the purchase of the screening items that you are indicating here?
Mr. Enns: The air travellers security charge is one means through which the Canadian Air Transport Security Authority is funded. Yes, part of that will be going to the purchase of updated screening equipment of which you have all heard in the media. It will also be used to fund general ongoing operations of CATSA. The budget funding provides CATSA with an operating base, and the increase in the air travellers security charge will allow it to maintain existing levels of aviation security for passengers and baggage going on flights, as well as to purchase the technological equipment that is an international requirement. In order to maintain agreements for flights to fly into the United States from Canada, the United States government has placed certain requirements on us. We need to respect that in order not to hamper the industry.
Senator Ringuette: You are saying that that additional security tax on flights is not only for the purchase of new equipment, but that a portion will go toward the operation of the airport security agency?
Mr. Enns: Yes, I believe so. I will check on that to be sure.
Senator Dickson: I am new on this committee, and I want to compliment the Treasury Board on the effective work they do and their presentation before this committee.
Mr. Pagan, I wish you ongoing success in your career. All the best, through you, to Mr. Smith as well.
Mr. Enns, I have a supplementary question that arises from your responses to Senator Marshall on the $300 million for AECL. When you give us a breakdown of the $300 million, could you include what amounts are for purchases of goods and services from third parties so that we will know what the internal costs are versus costs for outside contractors?
Mr. Enns: I do not have that information.
Senator Dickson: Is it possible to get it?
Mr. Pagan: On questions of that detail, we defer to the department. We will request in writing to them that they respond to the committee in writing. We have extracted detail of that sort in the past through those means. That is how we will address that question.
Senator Dickson: Thank you. My next set of questions relates to the Canada media fund. As I understand it from page 9, this funding will support the creation of Canadian content or distribution. Can you give us any information on the type of companies, the location of those companies and the number of jobs that will be either maintained or created as a result of the funding that is being provided?
Mr. Pagan: We would not have information on the number of jobs or even specific partners, but we will request that detail and respond in writing.
As a general answer, the fund supports the creation of Canadian content for distribution on television and on at least one other digital platform such as the Internet or mobile devices. It also supports the development of interactive content and applications created exclusively for digital platforms other than television.
The Government of Canada, through Canadian Heritage and cable and satellite distributors, provides annual funding to the Canada media fund, and the total amount available in 2010-11 has reached $350 million — $134 million from the government and approximately $193 million from the private sector, with a balance from returns on previous investments. We will identify which other private sector participants are contributing to that fund. We will request that of the department.
Organizations supported by the fund include but are not limited to Canadian television and interactive production companies; broadcasters, including the CBC; cable and satellite distributers; and Internet providers and mobile communications operators. I am sure that we are talking about hundreds of potential partners, but as a minimum we will identify those that have contributed to the $193 million in contributions from the private sector.
Senator Dickson: Coming from the Maritimes, I am particularly interested in the companies and the location of the companies that will be benefiting from the Canada media fund.
My next question relates to the Aboriginal health promotion and disease prevention program, $135 million. Do you have a breakdown of what percentage of that money will be going to First Nations in the Province of Nova Scotia?
Mr. Pagan: We do not have detail here broken out by province or region, but we have had requests of that sort through similar programs and I am sure we can at some time put that together. I can provide a twofold response.
First, this is a Budget 2010 initiative. There were questions earlier. This program was first introduced in Budget 2005. It has now been continued through Budget 2010 and renewed funding in the amount of $730 million over five years to enable Health Canada and the Public Health Agency of Canada to continue to build on the initial success achieved when the program was announced in 2005.
Of the money before you today in the Supplementary Estimates (A), $130.4 million is for Health Canada. It will be used primarily at the community level — so I am assuming we can roll that up to a region or province — to address persistent health priorities for First Nations and Inuit citizens, including suicide prevention, diabetes awareness and treatment. These programs include education, screening, support and treatment activities. Funding will also enable Health Canada to continue to strengthen the First Nations and Inuit health system through programs aimed at addressing human resource shortages in Aboriginal communities and promoting the integration of federal services with provincial systems. That is $130.4 million for Health Canada and we will try to break that down for you by region.
The public health agency's requirement totals $4.6 million. This is primarily used to continue to reach 4,500 Aboriginal children living in urban and Northern settings. The program is known as the Aboriginal head start program and it provides culturally relevant early childhood intervention for children up to 6 years of age, with a focus on nutrition and health promotion. The public health agency's share of the Budget 2010 funding is $25 million over five years.
That is the information I have for you, and we will request from the department whatever information they have on a regional and provincial basis.
Senator Dickson: Staying with the health promotion program for First Nations, my last question relates to value for money and the effectiveness of that program. Would any information be available as to the effectiveness of that program?
Mr. Pagan: I have a twofold response. First, details on programs are generally available in individual departmental performance reports, of which I do not have copies with me. However, if one were to refer to Health Canada or the public health agency, there would almost certainly be a reference to the program and some sort of result or benefit from the program. The fact that this is a continuation of an initiative announced in 2005, I think, speaks to results achieved so far in value for money. There is a requirement to audit and evaluate all programs, and that is certainly something that ministers would take into consideration in making decisions about renewing investments. I do not have evaluation information in front of me, but again those are publicly available.
We will try to identify for you the data or the results of the program evaluation. It is almost certainly available on the website, but we will confirm that.
Senator Finley: Senator Dickson managed to burn through 60 per cent of my questions. I would like to think great minds think alike, but this is the second time today it has happened to me.
I want to follow up on Senator Ringuette's questions with regard to government advertising. Could you refresh my memory? The change to government advertising being centralized through the cabinet took place in 2004; am I right?
Mr. Pagan: That is correct.
Senator Finley: So it has been in practice for a while. I do not know how good your memories are. Perhaps you were not there at the time. As I recall, the previous government, from the time of 2004, managed to allocate almost $130 million for government advertising programs. Do you recall those kinds of numbers in two sets of supplementary estimates, one of $68.9 million and one of $59 million? Do you remember what those programs were for?
Mr. Pagan: Which fiscal year are you referring to?
Senator Finley: 2004-05.
Mr. Pagan: Unfortunately, I do not have that detail or memory recall.
Senator Finley: Obviously a highly effective advertising campaign, then.
Mr. Pagan: To be fair, I simply do not know what the government's priorities were at the time. Again, these are generally related to priorities of the government and approved by cabinet. We frequently see references to health promotion, safe travel abroad and Canadian Forces' recruitment campaigns.
Senator Finley: Anti-smoking was a very effective campaign.
Mr. Pagan: There were new programs established for education savings plans and the like. Those are the types of programs that get through the door.
I reiterate the point made earlier that there is essentially an application process. The requirements are vetted by officials at the privy council office and then presented to cabinet for review. This review-and-challenge process is based on identifying the merits of individual advertising campaigns and their link to government priorities. That is the intention, to ensure that the government is promoting those activities that fit its health, safety, social, economic and foreign priorities.
Senator Finley: I was just trying to confirm in my own mind that, first, this was not a new program, a new way of dealing with things in the last few months; and second, that the dollar numbers are certainly not outrageously skewed in any way, shape or form.
The second question I would like to ask takes me to the funding for Canada's initial response to the earthquake in Haiti of $130.3 million. I can read about where the money went. When we spoke with CIDA, Canadian International Development Agency, I asked a question about the matching funds. Do you remember the matching funds?
Mr. Pagan: Yes.
Senator Finley: I was told at the time that the estimate raising funds by the public at large was about $140 million, I think it was. Does this increase in allocation have anything to do with the fact that the original $140 million, in effect, ended up as a much higher number, or was it a much higher number? They were supposed to get back to this committee with an answer, and we have not seen it yet.
Mr. Pagan: I cannot speak for whatever CIDA or officials from CIDA may have told you, but my understanding is twofold. First, there is a precedent for the matching program. The tsunami of 2004 generated an unprecedented outpouring of support from Canadians, much beyond CIDA's initial estimates, and proved to be a very successful way of adding to the pot, because there was an official Government-of-Canada response and then the response of Canadian citizens and NGOs.
If I recall correctly, as a result of the earthquake in Haiti, the government committed to match up to a certain amount, so it was not unlimited; it was capped. I believe that the ``up to'' amount was $220 million and that, in fact, that level was reached through individual donations.
Senator Finley: The individual donations raised by Canadians in the Haitian earthquake — were they at least $220 million?
Mr. Pagan: At least, yes.
Senator Finley: It is strange, because the appeal had actually closed, and they had raised $140 million. CIDA told me that the $140 million would be it. I actually took a bet with some of my colleagues that it would be over $200 million. This particular spending has nothing to do with the additional matching funds.
Mr. Pagan: Let me be clear: If they told you $140 million, it is their numbers. The date was something like contributions up to February 15. There is an audit function involved. If an agency comes forward and says they raised $10 million, CIDA has to verify that before they will match it. That might account for a lag in confirming the numbers, but we will have them confirm that and we will confirm what the government cap was. I believe it was $220 million.
Of the requirements you see before you today, CIDA's matching of contributions forms part of that requirement but goes well beyond just matching contributions. It includes any manner of activities related to reconstruction, provision of basic life-support, basic sustenance, camps, food and the like. That is just CIDA.
In addition, we also see requirements here from foreign affairs related to repairs to Canadian infrastructure and embassies, some funds for the global peace and security, which is providing essential security support or systems in Haiti; citizenship and immigration, with funds related to the prioritization of new and existing sponsorship applications in support of immigration; the RCMP, which is also involved in helping Haiti re-establish its security infrastructure.
If I understand your question, we will confirm the total amount of contributions from individual donors and the amount the government is matching.
Senator Finley: I appreciate that. Thank you.
I want to go to the G8 and G20 summits. Is there any kind of estimate, or will there be some kind of report, perhaps broken into roughly three parts, i.e. how much money was spent on G8, how much money was spent on G20, and how much was spent as a kind of bridge between the two? I ask the question because the G8 was held in a smaller and fairly discreet location. It is only about 30 miles from Algonquin Park. You might enjoy a visit there, by the way. It is discreet and fairly small. However, few places can hold a G20 operation. It has to be in a fairly large centre because of the number of people who attend. It has to be in a large urban setting, which inevitably means more security and more resources.
I would like to get an idea of comparing apples to apples. I know there will also be a fair amount of shared expense as they move G8 participants to the G20 location. There will be a lot of security along the route and so on and so forth.
Senator Ringuette rather ingenuously made three quotes for prior expectations, one from back in 1997 where the ultimate protester was what struck me as 1990's hippies, climbing fences and throwing a few things. I cannot remember the second one that was quoted, and then there was the G8 in Alberta, which was in a small location. They actually started the planning before 9/11. I would not imagine there was a great deal of post-9/11 planning in that. We are not comparing apples and apples. In fact, we are not even comparing fruit and elephants when we look at this.
To go back to my question: Do you have or will there be some kind of breakdown that gives us an indication of how this money was allocated, G8, G20 and for both? Do you think that there will be an outcome in this?
Mr. Pagan: Yes, senator. It will be possible to parse through the total numbers and distinguish costs related to the Huntsville location and the Toronto location. Some of the costs are shared, but there will be discrete costs related to the two events, and there will be an accounting of that.
Senator Finley: For both, apart from the Royal Canadian Mounted Police, we will also presumably have the Ontario provincial police. Presumably we will have Toronto city police. We will have elements of the military, I would think. Will there be costs broken down and analysis done by the various elements in this as well?
Mr. Pagan: Yes. I can tell you at this point that, in the horizontal item you have in front of you, $653 million, the RCMP's share of that — and they are the lead on security — is $321.4 million. That includes funding for salary and overtime costs of their regular members and civilian support staff. This is page 8 of the supplementary estimates, presenting the total requirement of $653 million. There are three primary recipients of funds, and the RCMP are at $321.5 million. With that, they have the lead on security for their regular members and civilian support staff. That includes what they call a perimeter intrusion detection system, so basic security, fences and ability to detect, a unified command centre, requirements related to communications and radio infrastructure, and one must keep in mind this is an area where the RCMP does not normally operate, so they are establishing a communications capacity, and then additional support related to on-site transportation, meals, accommodation and lease costs, warehousing, specialized security equipment and supplies. That is the RCMP's portion. This is for the G8, G20. Once the bills are in, we will be able to identify what portion was for G8 and what portion was for G20.
Public safety and emergency preparedness is bringing forward requirements of $262.6 million. This is primarily for emergency preparedness in collaboration with the provincial and municipal partners. You have mentioned the Toronto police service, which has the lead in G20 venues in Toronto. The OPP will be providing policing and security in Huntsville and the District of Muskoka, as well as, I understand, some traffic management in the GTA, Greater Toronto Area. Peel regional police, the Town of Huntsville, District of Muskoka, Township of the Lake of Bays and the City of North Bay will also be involved in the elements of organization or security related to the event. National defence has $63.1 million in requirements. They will be deploying a large number of personnel and associated equipment in support of various security. I do not think it would be appropriate for me to provide details on that, but it includes the things that they are expert at.
Senator Finley: The most heavily defended delegation is liable to be the U.S. delegation, I would think. I do not know whether you can answer that question for me or not. Do we pay part of, for example, President Obama's retinue, which is absolutely huge? Do we pay any part of that in terms of housing, accommodation, assistance, welding down manhole covers, removing postal boxes, et cetera?
Mr. Pagan: I cannot speak to the size of specific delegations or what is or is not included. There are essentially two elements to this response, and it deals with the overall summit organization.
The Department of Foreign Affairs has the lead as host, and they have identified $70.5 million in requirements to support basic organization of 7,600 delegates, 3,000 media, there is a summit management office and, according to my notes, costs related to conference facilities and sites, media centre and airport operations, hotel rooms and suites for heads of state, ministers and senior officials, rentals of apartments and hotel rooms for employees assigned to the summit management office. There is a protocol in terms of our hospitality, and clearly we are supporting heads of state and their senior officials. That will vary by nation, but there would be limits.
Senator Finley: If a delegation brings — and they will, presumably — their own security force, who pays for that?
Mr. Pagan: I cannot speak to that. I do not know.
Senator Finley: Is it because you do not know or because it is confidential?
Mr. Pagan: Both. I do not know because it is confidential.
Senator Ringuette: With regard to the G8 and G20, I would like to know which specific government status forced the government to host the G8 and the G20 in the two identified localities. Which guidelines might there be for the G8 and G20 countries with regard to the locations of the events? Are there some specific guidelines from those two entities?
From my recollection, I do not think we have any status forcing any Canadian government to identify a specific location for those two events. Have we passed, in the Senate, legislation with regard to that?
The Chair: I want to hear the evidence from our witnesses here.
Mr. Pagan: I have a twofold response. First, G8 summits are held on a rotating basis. They rotate country by country. It is incumbent on the host country to identify a site and determine the venue for hosting the event. That is the prerogative of the Prime Minister and the Department of Foreign Affairs, as the host.
The G20, as you know, in some ways, is a Canadian creation. It is the work over a number of years of previous Canadian prime ministers and ministers of foreign affairs. As I understand, the summit is the first true inaugural summit of this organization, and again is subject to Department of Foreign Affairs and the Prime Minister in terms of where and how to host.
In terms of protocols and requirements, the one thing that I can speak to is that, under international law, the Government of Canada has a legal obligation to ensure the security, protection and inviolability of internationally protected persons. There are dignitaries and heads of state that visit Canada on bilateral visits and summits, and it is our duty, as the host, to ensure their safety and security.
This includes legal obligations related to health so, as part of the horizontal item, we have Health Canada and the Canadian Food Inspection Agency and others involved in ensuring we meet our international obligations.
Senator Gerstein: As I understand it, Mr. Pagan, Treasury Board vote 5 provides for government contingencies. Vote 5, as I understand it, is meant to cover costs of urgent expenses until parliamentary approval can be sought at a later date. Over the past year-and-a-half that I have had the privilege of sitting on this committee, basically vote 5 has always been the subject of a lot of questions, and I might say even some controversy.
I found it most interesting, when I turned to page 56, to observe in these supplementary estimates that there are no allocations being sought for Treasury Board. As a matter of fact, no allocations for a number of other votes.
Could you explain briefly — or in the shortness of time whether you want to respond in writing — as to why there are no vote 5s?
The Chair: If you could answer that quickly.
Mr. Pagan: I think I can. We are here presenting Supplementary Estimates (A) for this fiscal year, and that is a recent innovation. In many respects, it has served to head off requirements that might otherwise come forward through vote 5.
Up until the spring of 2008, the first supplementary estimates of the year were tabled in the fall and approved by Parliament in December. It was not unusual for departments to identify requirements in the period April 1 to December — nine months of the fiscal year. There was often a demand on vote 5 for that.
The introduction of a regular spring supplementary estimates has helped to alleviate some of that pressure. There has also been a concerted effort, over the last two years, to try to get budget initiatives into the first supplementary estimates, or otherwise at the earliest opportunity. Again, that has served to ward off some of that demand.
At the end of the day, we have little control, other than being able to plan regular supplementary estimates. Departments are responsible for programs. If the circumstances related to their programs change and there is an immediate cash requirement, vote 5 exists to provide that cash in order to meet obligations required to run programs. It is a very important part of our tool kit, but something that we take great care in managing and allocating.
Senator Callbeck: My first question is on the media fund that was brought up. Did you say that the private sector was contributing $190 million?
Mr. Pagan: $193 million, yes.
Senator Callbeck: Will you provide a breakdown of that?
Mr. Pagan: Yes.
Senator Callbeck: Could we get a breakdown of the $130 million the government will contribute and how that will be distributed, to whom, and what controls will be on it?
Mr. Pagan: The money will be pooled, as I understand it. We will confirm this, but the money is pooled. The government's contribution is approximately $134 million.
That will be pooled with the private sector contributions and then allocated out. In response to Senator Dickson's questions, we will identify the parties that have contributed and what allocations or disbursements are planned by region.
Senator Callbeck: Will that also include what controls are on it?
Mr. Pagan: Yes.
Senator Callbeck: On atomic energy, you mentioned that there is $150 million allocated to refurbishment projects and shortfalls. How much of that is allocated to Point Lepreau?
Mr. Pagan: Of the $300 million, $67 million is required for the Point Lepreau project.
Senator Callbeck: Another brief question I had was on the foreign affairs appropriation of $1.47 million to deliver an anti-crime capacity building program. It says it builds capacity abroad to ensure the security of Canadians and Canadian interests. In what countries will that money be spent?
Mr. Pagan: This was announced by the Prime Minister on August 9, 2009. It will invest up to $15 million per year to support capacity building initiatives in the Americas, so we will break that down by country, if we can. Projects include learning and development for judges and lawyers in Mexico, needs assessment, training and contribution of equipment related to the control and inspection of shipping containers in Latin America. I do not have any further detail on that, but we will see if we can get anything related to specific countries.
Senator Callbeck: Natural Resources Canada requires $4.9 million to procure advisory services and support natural resources' operations to advance the next steps in the restructuring of atomic energy. Can you comment on what the next steps are?
Mr. Pagan: In May 2009, the Minister of Natural Resources announced that the Government of Canada would move forward with a restructuring of AECL. Restructuring of AECL is part of a broader effort to strengthen Canada's nuclear industry and to better position it to build on Canadian technology and to access opportunities at home and abroad. This requirement is for the provision of financial analysis and advice that would inform the next steps of the restructuring process. I believe that there are announcements from the minister pending on that. I think a decision or a direction forward of it will be announced by the minister this fiscal year.
Senator Callbeck: It will be in this fiscal year?
Mr. Pagan: That is my understanding, yes.
Senator Neufeld: Regarding the $151 million for AECL for existing plant rebuild, Senator Callbeck asked how much money was going to New Brunswick, which was $67 million.
I assume, then, that the other $84 million is for Ontario. Is that correct?
Mr. Pagan: In fact, there are four projects. There is Bruce Power in Ontario, Point Lepreau in New Brunswick, Wolsong in South Korea and Gentilly in Quebec. The only figure I have is Point Lepreau. I do not have the Ontario figure.
Senator Neufeld: Can you get that?
Mr. Pagan: There was a question from Senator Marshall about a more detailed breakdown, and we will aggregate that.
Senator Dickson: My question relates once more to the G8 and G20 security costs. With regard to those costs, my understanding is that the Treasury Board Secretariat worked in close collaboration with the Department of Finance and other agencies of the government that were coordinating and putting together that security package. You reviewed the business cases, as I understand it, and that normal procedures were followed. Am I correct in that understanding, or were there any variances in normal procedures? Are you satisfied with the process?
Mr. Pagan: There were no variances at all. There is a very established process of the government announcing an intention, generally in a budget or as a result of a cabinet decision that identifies a priority and a source of funds. Departments are charged with standing up the program that responds to the government's announcement or priorities. That generally involves a great deal of consultation with stakeholders, other delivery agents, sometimes other levels of government or other national governments, business groups, citizen groups and so forth. Then and only then is a department in a position to bring forward a detailed program that stands up to the scrutiny of officials and ministers. It is an iterative process. There will be a draft. There are comments provided by TB officials to help the department better structure initiatives, and when it is ready, they bring that forward for ministers who give it a very thorough review before making a decision on whether it will go forward or not. There is nothing about the G8/G20 that would not follow that normal process.
Senator Dickson: Are you quite satisfied with the process?
Mr. Pagan: I myself was not involved in reviewing that submission. Colleagues in the program sector responsible for the RCMP and international affairs would have been heavily involved in that. It would not have got to ministers had they not been satisfied that ministers were in a good position to make a decision.
Yes, on behalf of Treasury Board, I would say this process is consistent with how we normally do our due diligence process and present proposals to ministers.
The Chair: I have one question I would like you to consider and, if you would, send us back a written reply on this. It is in relation to your table 2, on page 8 of the Supplementary Estimates (A). This follows from Senator Marshall's questioning.
You have net adjustment from net to gross basis of budget presentation, an adjustment of $16.4 billion. It would be helpful if you could provide us an answer in writing. It is late, we have had that explanation before, and it is something we have to hear a number of times in order to understand it. If you could do that, that would be appreciated.
Colleagues, on your behalf, I would like to again wish Mr. Pagan well in Fisheries and Oceans Camada where he is heading off to. Mr. Enns and Mr. Wheat, we look forward to having you back here again on behalf of the Treasury Board of Canada Secretariat.
(The committee adjourned.)