Proceedings of the Standing Senate Committee on
National Finance
Issue 9 - Evidence - June 15, 2010 - morning meeting
OTTAWA, Tuesday, June 15, 2010
The Standing Senate Committee on National Finance, to which was referred Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, met this day at 9:02 a.m. to give consideration to the bill (topic: Parts 7, 8, 10, 11, 15 and 23).
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. Thank you all very for being here.
[Translation]
Honorable senators, we held our first meeting yesterday to consider Bill C-9, an Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures.
[English]
Over the course of that meeting, departmental officials reviewed provisions of Parts 1 through 3 inclusive of the bill. As colleagues know, this bill has 24 parts and a total of 2,208 clauses. We did very well yesterday at our first meeting.
In the coming days, we will be hearing from officials who will explain each one of those parts to us. We will try to have a clear schedule to you of the various parts and when we will be dealing with them. We hope that we will be able to go through phase one, the first look through of the bill, this week.
This morning we will be focusing on Parts 7, 8, 10, 11, 15 and 23. These parts deal with such diverse issues as parliamentary salaries, Governor-in-Council appointments, an agreement on social security between Canada and Poland, Export Development Canada, Canada Post and the Telecommunications Act.
To help us understand Part 7 of the bill, which amends the Expenditure Restraint Act, we are joined by Ron Wall, Director, Parliamentary Affairs, with the Privy Council Office.
[Translation]
We would also like to welcome Claudette Levesque from the Privy Council Office. Ms. Levesque is the Director of Appointments and Selection Processes. She will help us understand part 8 of the bill.
[English]
Colleagues, as we did yesterday, we will begin with one part, deal with it and then move on to the next. We will get under way with Part 7. Mr. Wall, everyone has Bill C-9 here and we would like, as much as possible, to refer to sections of this bill because that is the exercise we have to go through at the end of this process. We have to go through it clause by clause, so we want to be sure that we understand what we are voting on. You have the floor, sir.
Ron Wall, Director, Parliamentary Affairs, Privy Council Office: Thank you, Mr. Chair and honourable senators. The government's March 4 budget included a commitment to freeze the salaries of the Prime Minister, ministers and members of the Senate and House of Commons for the 2010-11, 2011-12 and 2012-13 fiscal years. The salaries of the Prime Minister, ministers and parliamentarians are fixed by law. Accordingly, the Bill C-9 that you are reviewing contains provisions to freeze the salaries for the period of time mentioned in the budget.
By way of background, I should mention that Part 7 of the bill amends a Budget 2009 provision which limited the increase for members of the public sector, including parliamentarians. It limited their salaries and allowances to a 1.5- per-cent increase for the 2009 and 2010 fiscal years, so there was a requirement then to amend those provisions with respect to the 2010 fiscal year to implement a freeze in the salaries of the Prime Minister, ministers and parliamentarians.
Part 7 of Bill C-9 continues that freeze for the subsequent two fiscal years. Then, starting in the fiscal year 2013-14, the provisions that were adopted by Parliament in 2005 to increase salaries and allowances by a private sector wage increase would return into effect. That is the outline of Part 7. I would welcome any questions that you have.
The Chair: In 2005, parliamentary salaries were tied to the private sector wage increases, so there is a parallel. Then, in 2009, there was a change in that for two years, limiting it to 1.5 per cent.
Mr. Wall: Correct.
The Chair: This year, we are just being asked now to freeze salaries at the 2009 level for three years. After the three years, do we fall back to 2005 or do we fall back to the second year of the 1.5 per cent?
Mr. Wall: To 2005, Mr. Chair.
The Chair: Does everyone understand that? Are there any further questions on that particular matter?
Senator Eggleton: I am trying to understand what you said just now.
The Chair: Could you repeat that in words that other people would understand?
Mr. Wall: Sure. In 2005, there was a change in the indexation for parliamentarians' compensation. The previous government had implemented a linkage between salaries and judicial compensation. In 2005, Parliament agreed to a change in that structure to link parliamentary compensation to a private sector wage increase.
That continued for three years. Then, with the 2009 Budget, there was a cap on salaries to 1.5 per cent. In the 2010 fiscal year, Bill C-9 would implement a three-year freeze. After that freeze, parliamentary compensation would return to the index formula adopted in 2005, which is the private sector wage index.
Senator Eggleton: Are you saying that there will be a big increase at that point in time to make up for the time of the freeze?
Mr. Wall: No, as Senator Murray has indicated, it is not retroactive. You would just get the one year.
Senator Eggleton: I wanted to be sure of that.
The Chair: He has already spent it. Do you understand it now? We go back to the base year of 2009.
Mr. Wall: Correct.
Senator Ringuette: I have one question that can have three answers. For the three budget years that we are talking about here, what are the savings?
Mr. Wall: As honourable senators will be aware, the compensation for a senator is approximately $132,000 a year. For members of the house, it is about $150,000 a year. Then there are additional increments for chairs of committees and ministers.
If we take an average salary of about $150,000 a year, a 1.5-per-cent savings would be about $2,000 a year. The population of parliamentarians is roughly 100 in the Senate and approximately 300 in the house, so about 400 times $2,000 would give you almost $1 million a year in savings.
Senator Ringuette: It would be $1 million a year?
Mr. Wall: Yes.
Senator Callbeck: I am wondering if you have the figures for the last five years to compare increases to members of Parliament and senators with the average increases in the private sector.
Mr. Wall: The Department of Human Resources and Skills Development publishes an index which started to be applied to Parliament in 2005. Over the last five years, the index for private sector wage settlements has been between 2 per cent and 3 per cent, approximately. That index was applied to parliamentarians between 2005 and 2008, so parliamentarians were receiving between 2 per cent and 3 per cent over that period.
The wage settlement increase in 2009 was roughly 3 per cent. However, the provisions in Budget 2009 superseded that and limited parliamentarians' compensation to 1.5 per cent. Therefore, there was a gap, if you like, between the private sector settlement and the compensation for parliamentarians. It has been equivalent up until 2009.
Senator Callbeck: Thank you.
The Chair: Do any other honourable senators wish to comment on this part or we will go on? We will go on to the next, then.
Let us move on then to Part 8, which is found at page 472. Ms. Levesque, please go ahead.
[Translation]
Claudette Levesque, Director, Appointments and Selection Processes, Senior Personnel, Privy Council Office: Mr. Chair, I am accompanied by my colleague, Karl Salgo, Director of Strategic Policy, Machinery of Government, at the Privy Council Office. He will deal with issues concerning the machinery of government.
[English]
Good morning. Part 8 is basically the result of a review of approximately 2,700 GIC, Governor-in-Council, positions which was done throughout about 200 federal organizations across 24 ministerial portfolios. It stemmed from Budget 2009; the government wanted to have a look at all the organizations and try to ensure effective governance of the best size of organizations.
The reductions being proposed are 245 GIC positions. They include GICs on boards of Crowns, agencies, administrative tribunals and, in smaller cases, a conversion of GIC positions to ex-officio positions, whereby a federal bureaucrat can fill the position.
Part 8 essentially amends about 40 pieces of legislation and various organizations with some consequential amendments to the FAA, Financial Administration Act, and the ATIP, Access to Information, Act. It also amalgamates the Canadian section of the NAFTA, North American Free Trade Agreement, secretariat within the Department of Foreign Affairs and International Trade. The third part of Part 8 basically repeals the Intercolonial and Prince Edward Island Railways Employees' Provident Fund Act. The position had been vacant. The fund was being administered by the CN Railway, and the last person who was receiving funding passed away. Therefore, we can now repeal it and there are no consequences to doing so. In a nutshell, that is Part 8. He was 99 and had a good life.
The Chair: What was he receiving compensation for?
Ms. Levesque: It was for the work they had done on the railway, way back in the 1920s, I think. They kept this fund going and CN was managing it until there were no more people receiving it.
The Chair: Were they former employees?
Ms. Levesque: Yes. There was one left.
The Chair: I do not think there is any railway on Prince Edward Island — is there? There is no railway on Prince Edward Island but you were paying an employee of the railroad?
Ms. Levesque: I could not tell you about the whole mandate of the fund, but it existed.
The Chair: It is good we should direct our attention to that. Thank you.
Senator Ringuette: Thank you, chair. How many of these 245 GIC positions are not filled?
Ms. Levesque: The majority were actually vacant positions. Currently, 211 of those positions are vacant. This does some cleanup, basically, and reduces other positions. There are currently 25 encumbered positions and the other ones are vacant.
Senator Ringuette: What will happen to the 34 positions that are occupied now?
Ms. Levesque: You will notice in the act that the coming into force will be set at a later date. The minister is responsible for the organization where there are encumbered people. He will work with the organization, develop board profiles and look at the competency skill mix required on these boards to identify, not the person, but what skill set could be let go on the board.
Hypothetically, let us say you are transitioning from a board of 13 to 11. There is one encumbered position in those two cuts. If you have three lawyers and one accountant, you might get rid of one of the lawyers on the board to maintain the right skill mix on the board to ensure the organization can meet its mandate.
Senator Ringuette: Why not have a fixed date so that this can be dealt with more expeditiously?
Ms. Levesque: The date will likely be in September. We want to give the time for ministers to work with the organizations to determine a good competency matrix, basically. We did not want it to be "first one up, first one out," because that could be the example of having one accountant; if his term is up, you do not replace him.
It will give the time to work with the organization and develop that, then for the minister to write to the incumbent to advise that their position is being eliminated following this review.
The likely coming into force would be September, so there is enough time to do all that in a proper fashion.
Senator Ringuette: Could you indicate to us what the savings will be for this current year?
Ms. Levesque: When we did this review, it was not about cost savings. It was really about effective governance and efficient organizations. You would not look at it in a cost-saving mindset, but more so in a cost-avoidance way. Due to the fact that most of the positions had been vacant for some time, the monies to be paid to the individuals were not even budgeted. It is more cost avoidance, and it is estimated at $1 million to $1.25 million.
Senator Ringuette: I am looking at the list for the three divisions proposed here. I understand there are some boards that might not require as many people on them. However, we have some major boards. For instance, the Business Development Bank of Canada, BDC, is a major organization. With those, how many board members are you moving to?
Ms. Levesque: I will give you that for the BDC —
The Chair: Can you refer us to the section?
Ms. Levesque: The clause for the BDC is clause 1660. The Business Development Bank will be going from a board of 13 to 11, a reduction of two positions.
If we look at Crown corporations and if we also compare to boards in the private sector, the norm is about 11 in a private sector. Canada Post, one of the largest Crown corporations we have, has a board of 11. We were trying to streamline and have the most effective size of boards. Bringing it down from 13 to 11 is in line with the most effective governance structure.
Senator Ringuette: The next one is about the Canadian Grain Commission.
Ms. Levesque: Which clause is that?
The Chair: Page 474, clause 1662.
Ms. Levesque: Regarding the Canadian Grain Commission, we are eliminating assistant commissioners, which are positions that were not filled and not used. That is essentially a cleanup of the act. It is not reducing capacity. They are positions that had not been encumbered for a long time.
Senator Ringuette: Then for the Canada Mortgage and Housing Corporation, CMHC, is it from 13 to 11?
Ms. Levesque: No. For CMHC, we are eliminating three vice-presidential management positions that had been established by legislation — management jobs — to be appointed by the Governor-in-Council, but which were not being filled by the Governor-in-Council. CMHC, like most organizations, names their executive team. Therefore, we are eliminating those three positions that had not been encumbered for a long time.
Senator Ringuette: These three positions, not on the board, are currently full-time permanent employees. Therefore, there are no savings involved.
Ms. Levesque: There are no savings because the positions were filled by management, not by Governor-in-Council positions. We were looking at Governor-in-Council positions.
Senator Ringuette: We are not saving any money in that regard.
What about the Canada Pension Plan, CPP?
Ms. Levesque: Regarding the CPP, we are reducing the cap for the review tribunals. Legislation provided for up to 400 positions. They were never filled to that limit. Currently, about 299 positions are filled. The recommendation was to reduce positions not being filled. We reduced the cap from 400 to 360, a reduction of 40 positions.
Senator Ringuette: My understanding is that these tribunals are established in different regions of the country. Which region will have reduced CPP tribunals?
Ms. Levesque: These positions were never filled. Therefore, no region will be impacted by this. We had the capacity in legislation to fill positions if needed. It was identified that there was no need; there was no impact.
Senator Ringuette: In regard to the Canada School of Public Service Act, it notes "Related Amendments to the Access to Information Act." What is that amendment? I am going through the briefing, which is more comprehensive.
The Chair: For those honourable senators following the statute, can you refer to a section for us, Ms. Levesque?
Ms. Levesque: It is clause 1671 for the Canada School of Public Service Act.
Karl Salgo, Director, Strategic Policy, Machinery of Government, Privy Council Office: Amendments to the Canada School of Public Service Act reflect changes made to streamlining of the government's human resources management structure and, in particular, the creation of the Office of the Chief Human Resources Officer.
Previously, the Clerk of the Privy Council was chair of the school in legislation. The position is better aligned with the position of Chief Human Resources Officer now that it has been created. Therefore, that person is now the chair, and the clerk is in a position of nominating another member from the public service. Presumably, a senior member of the public service will be nominated.
Senator Ringuette: Who is the Chief Human Resources Officer?
Ms. Levesque: Daphne Meredith.
Senator Ringuette: It notes "Related Amendments to the Access to Information Act." How will this impact the Access to Information Act?
The Chair: Clause 1674 on page 477.
Mr. Salgo: I understand those are consequential amendments. As a result of the change in title, you have consequential changes to the Access to Information Act. It is not a substantive change to the coverage of the Access to Information Act.
Senator Ringuette: Is it possible it was enacted in 2005?
Mr. Salgo: There is reference to the Public Service Human Resources Management Agency. It was a separate agency. Again, as part of the government's human resources management streamlining, it was brought into the Treasury Board framework. The Chief Human Resource Officer is part of the Treasury Board Secretariat. You do not have the stand- alone entity any more, and it is no longer listed under the access to information legislation.
Senator Ringuette: It continues with consequential amendments to the Financial Administration Act. How does that apply to the Financial Administration Act?
Mr. Salgo: These changes reflect the elimination of a previously existing organization that is now part of the Treasury Board Secretariat. They are listed in various schedules and provisions under the Financial Administration Act as part of the government's financial administration regime. Consequently, the Public Service Human Resources Management Agency is removed from those schedules and from this legislation.
The Chair: Are these amendments that should have occurred when we considered the public service reorganization act a few years ago? They are not triggered by other changes made in this legislation. Rather, it is cleaning up something that should have been done previously.
Mr. Salgo: I believe that is the case. These are consequential to changes made with streamlining the management structure.
The Chair: Could you confirm that for us? That is what it looks like.
Mr. Salgo: I will confirm that.
Senator Ringuette: It has an impact on other legislation — the Official Languages Act, the Privacy Act and the Public Servants Disclosure Protection Act, which is from 2007.
The Chair: They are all linked together.
Senator Ringuette: I am sorry, I was waiting for your confirmation that the Public Servants Disclosure Protection Act, which was the accountability act, was from 2007?
Ms. Levesque: It was about then.
Mr. Salgo: Yes, around that period.
Senator Ringuette: The Canadian Centre for Occupational Health and Safety Act eliminates four governors.
The Chair: That is on page 480, clause 1684.
Ms. Levesque: This was a large and cumbersome board. It will be reduced from 40 to 22 members.
Senator Ringuette: That is a large number. If my memory is correct, there was representation from different sectors — industry, employer, employees, unions, et cetera. Which positions will be cut?
Ms. Levesque: Again, we are not cutting positions. These positions were all vacant.
Senator Ringuette: Vacant means there were sectors that were not represented on the health and safety board.
Ms. Levesque: There are 22 members appointed by the legislation. Therefore, they represent the various stakeholders they are supposed to represent. The additional positions being cut had not been filled.
The representation that currently exists at the centre will remain. There are no reductions of representation on the current composition. They are the positions that had not been filled for quite some time.
Senator Ringuette: Could you provide us with a list of positions that had not been filled because I believe each of those positions has a specific target area in regard to representation?
Ms. Levesque: Is it the list of current appointed positions?
Senator Ringuette: No, it is the list of the 18 positions that were never filled by any sector through the GIC appointment process.
Senator Neufeld: Further to that, how long have they been vacant? Have they been vacant for the last 10 years, 5 years or the last 20 years? If you can do that, it would be helpful in bringing closure to some of these things.
Ms. Levesque: We will get that information to you.
Senator Ringuette: Then maybe you can provide us with a list of the 22 positions that are currently occupied and in which sector or profession.
Ms. Levesque: We will provide those as well as the authority under which they were appointed.
Senator Ringuette: Thank you; next is substance abuse.
The Chair: Clause 1687, page 481 of the bill, which is the Canadian Centre on Substance Abuse Act.
Senator Ringuette: Where is that centre?
Ms. Levesque: I believe it is based in Ottawa. I would have to check. I do not have all the details on every single organization, unfortunately. I believe they are based in Ottawa. I can check that for you as well and confirm it.
Senator Ringuette: It says that you are eliminating one GIC position and one non-GIC position.
Ms. Levesque: This board is being reduced from 15 to 13. Some of the individuals are appointed by the GIC to form the board, and some of the positions are appointed by the board to be included in the board.
[Translation]
An equal number of positions: one from the governor in council and one from the board.
Senator Ringuette: Does the board agree with the reduction, in terms of the position it can appoint?
Ms. Levesque: Yes. All the recommendations that were proposed and implemented had been the subject of consultations with the appropriate departments.
[English]
Senator Ringuette: Then we go to the Canadian Institutes of Health Research Act, and this eliminates two positions, from 20 to 18.
Ms. Levesque: That is right.
Senator Ringuette: They are not filled already.
Ms. Levesque: No, they were not encumbered.
Senator Ringuette: The Canadian International Trade Tribunal Act is a very important entity, as far as I am concerned. That is two GIC positions bringing the Canadian International Trade Tribunal from nine to seven. That eliminates two.
Ms. Levesque: Yes.
Senator Ringuette: What is the workload of this tribunal?
Ms. Levesque: I cannot give you the specifics of the workload of the tribunal. All I can say is when the evaluation had been done with the department and the organization, which currently has a tribunal of seven, they had the necessary membership. They looked at past cases to determine the needs, and their recommendation had been to reduce from nine to seven because that is what they required to meet the workload obligations.
Senator Ringuette: I notice further down there is also reduction to the NAFTA.
Ms. Levesque: It is an amalgamation. Mr. Salgo can speak to that. We are not eliminating the section. It is being merged into the Department of Foreign Affairs and International Trade instead of being a stand-alone.
Mr. Salgo: Just as Ms. Levesque said, it is essentially a movement from being a stand-alone body into foreign affairs.
Senator Ringuette: Are you talking about the international trade tribunal?
Mr. Salgo: I am talking about the NAFTA secretariat. It is, in fact, consistent with the structural arrangements of our NAFTA partners. There is no requirement under NAFTA that the organization be a stand-alone organization. The decision at the time it was created was to set it up as a stand-alone organization, but as a general principle of organization within the government, you need a good reason for setting it up as a stand-alone organization because, generally, there are efficiencies to including it within existing organizations and not having a separate apparatus.
Senator Murray: There is no such thing as a stand-alone organization. Everyone reports to someone. Who did that outfit report to?
Mr. Salgo: It would still be within the portfolio of the Minister of Foreign Affairs; that is correct.
Senator Murray: You are making the position a public servant position. What was it previously?
Mr. Salgo: It was a Governor-in-Council appointee. Now it will be a position within the public service.
Senator Murray: Do you know the name of the incumbent?
Ms. Levesque: The position is vacant currently. The person had resigned recently.
Senator Ringuette: Will that position be filled through the Public Service Commission open-job process?
Mr. Salgo: That is correct. It would be subject to the normal public service staffing provisions, Public Service Commission requirements, now that it is a public service position.
Senator Ringuette: Then we move on to clause 1697, the Canadian Race Relations Foundation Act. You are eliminating eight GIC positions. For that foundation, is there a certain position for certain identified ethnicities?
Ms. Levesque: No, it has a competency mix. This is a Crown corporation, as any other organization. It does not have to have specific representation on its board. It was a weird composition, basically. Twenty board members on a Crown corporation is a large organization, and this organization has never been filled to its maximum, so that is why it was brought down. Managing a board of directors of 20 is insanely big. There was no legal requirement to have a representation from diverse communities. That was not a requirement.
Senator Ringuette: To whom would this foundation report?
Ms. Levesque: It falls under Minister Kenny's portfolio at immigration. It used to be under Canadian Heritage, and it was transferred to Mr. Kenny a couple of years ago.
Senator Ringuette: Then clause 1698 repeals section 23 of the act, the elimination of the investment committee.
Ms. Levesque: We will explain this. Again, it was a bit of an odd establishment in the act. The foundation was established following an endowment fund that had been given to that. The investment committee was a completely separate organization that provided advice on financial investments to keep the funding at a certain level. Normally, in a Crown corporation you would have a separate board committee that would be providing this or financial advisers who would be providing advice on that. We are just eliminating this investment committee, and it will be merged into the responsibilities of the corporation.
Senator Ringuette: Would that investment committee not be like a subcommittee of the board?
Ms. Levesque: It should be and that is what it will become. It will be the members of the board forming part of the investment — whatever they want to call it. They will establish it by bylaws in order to provide advice to the board on how they should be investing.
Senator Ringuette: Moving on to clauses 1700 to 1711, which amend the Canadian Radio-television and Telecommunications Commission Act and the Broadcasting Act. This will eliminate six part-time positions?
Ms. Levesque: Yes.
Senator Ringuette: How many current full-time positions are there?
Ms. Levesque: Thirteen. There is the chair plus two vice-chairs plus the members.
Senator Ringuette: Plus there were six part-time positions?
Ms. Levesque: Six part-time positions, which are vacant.
Senator Ringuette: All the part-time positions will be eliminated?
Ms. Levesque: Yes.
Senator Ringuette: Moving along, we have the Canadian Space Agency. Are we eliminating the executive vice-president from there?
Ms. Levesque: Yes.
Senator Ringuette: Why?
Ms. Levesque: The position has never been filled, and the requirement for the position from the recommendation was that there was not a necessity for it, so they have eliminated it.
Senator Ringuette: The Canadian Tourism Commission, CTC, is a major initiative. You are reducing the board from almost half of what it is now?
Ms. Levesque: Yes.
Senator Ringuette: More than half.
Ms. Levesque: Yes.
Senator Ringuette: From 26 to 12, so you are reducing it by 14 positions. If my memory serves me right, the tourism commission is a little bit like the health and safety one; it is a representation of the different industry sectors, the different regions of the country and the different marketers of the industry. Please tell me, therefore, what sectors of the tourism industry will not be represented any longer.
Ms. Levesque: The CTC had a rather large board, with all kinds of various representation and legal obligations. The Department of Transport together with the CTC did a governance review and looked at how it functioned. Again, it was a very large board, which was very difficult to manage. It was not the most effective and efficient board.
In the review, it was perceived that what would be beneficial to the organization is to not have organizations with just representation from various sectors, so just bringing one perspective. As an example, there were seven representatives from the tourism operators. The recommendation had been that there would be a CTC representing a broad spectrum, such as a board of directors bringing various expertise to a table. That was the proposal, and that is what the board will look like when the changes are made.
Senator Ringuette: You are reducing the representation of industry at the tourism commission by 14 positions. With respect to the explanation you just gave, this is a major restructuring of its board.
Ms. Levesque: Of its governance, yes.
Senator Ringuette: What sector will be eliminated from the board?
Ms. Levesque: There will no longer be sectors. There are currently 12 encumbered positions. This is one where there are encumbered positions. As I explained earlier, the minister will work with the organization in his office to determine how best to set up the board of directors, and then make recommendations to the GIC on which positions should be eliminated.
Senator Ringuette: I thought you said earlier that a review had been done, and now you say the minister will be doing that.
Ms. Levesque: It is because they are GIC positions. It is on the ministerial recommendation of the responsible minister that positions will be either eliminated or people will remain on the board.
The governance review of the organization was done in collaboration with the department and the organization, but recommendations obviously went to the minister. It falls within his responsibility since it is his portfolio.
With regard to the encumbered positions, in developing that competency matrix and the requirements of this organization, that is how the positions will be identified. It will no longer be that you represent a sector. Instead, you will bring your skill set to the board.
Senator Ringuette: There was more than the sector issue; there was also the regional representation on this commission to make sure there was adequate input —
Ms. Levesque: Yes.
Senator Ringuette: — from the regions with regard to the tourism commission. They have quite an advertising budget. Will the regional representation be eliminated from the board?
Ms. Levesque: Because it will be all —
Senator Ringuette: Yes, the regional representation will be eliminated from the board?
Ms. Levesque: Yes. As with all other GICs, that will be taken into account as a factor to determine the composition of the board with respect to regional representation.
Senator Ringuette: Could you provide the committee with a copy of the review that was completed that you are talking about?
Ms. Levesque: I do not have that. The department or the minister's office has that. I can find out if it is something that can be shared.
Senator Ringuette: Yes, because as an Atlantic Canadian talking about a board that is now in B.C., I am very concerned about the input the Atlantic region will receive with regard to that. If eliminating 14 positions and reorganizing the previously agreed-upon composition of the board will be occurring, I have major concerns with that.
Ms. Levesque: If I can, I will seek out a copy of that.
The Chair: A supplementary under this section. This is at page 487, clauses 1717 and 1718. We are dealing with the Canadian Tourism Commission Act. It says up to nine directors shall be appointed by the minister. All of the other ones we have looked at were appointed by the Governor-in-Council.
Ms. Levesque: It says with the approval of the GIC.
The Chair: All of the other ones say they were appointed by the Governor-in-Council on the recommendation of the minister. This one says they were appointed by the minister with the approval of the GIC. Why the different wording?
Ms. Levesque: I cannot explain the different wording, but the process is exactly the same. In order to initiate a GIC appointment, it initiates from a ministerial recommendation and then comes through the process and an appointment is made.
The Chair: That is not what this says.
Ms. Levesque: It is wording. It is legal wording. I cannot explain why the drafters drafted it this way in the past and then might have drafted it in a different way for another organization.
The Chair: I am following a basic principle of legal interpretation. If it is drafted different from something it is intended to be, it means something different. Could you find out what the difference would be in terms of the tenure of the person appointed?
Ms. Levesque: There is none. I can tell you that. The process comes through my office — I have left PCO. It comes through the director of appointments at PCO. It follows the exact same process, whether it is the minister making the recommendation with this type of wording or another type of wording.
The Chair: That is interesting.
Ms. Levesque: I cannot explain it in any other way. It is with GIC approval, which means it comes through with the ministerial recommendation. All the same checks are done and the same process is followed. It is submitted to cabinet exactly the same way. There is no difference in the process.
Senator Murray: Does an order-in-council issue?
Ms. Levesque: There is an order-in-council that is issued as well.
Senator Murray: For those appointees?
Ms. Levesque: Yes. The same process is followed, with cabinet approval.
Senator Callbeck: I have a supplementary on the tourism commission. You said that regional representation will not be looked at?
Ms. Levesque: It will be looked at when they are establishing the competency matrix of the board.
Senator Callbeck: How is that board structured now?
Ms. Levesque: I am not an expert on the CTC, but you have tourism operators and then various consultations with the public sector and with the provinces on the names that are being put forward. It will be established once they have determined the needs of the board and then who they will be consulting to identify the candidates.
Senator Callbeck: Is it possible that there might not be anyone from Atlantic Canada on that board?
Ms. Levesque: I cannot speak to the recommendation that would be coming forward. It is a hypothetical.
Senator Callbeck: That is pretty serious. In my province, tourism is one of the main industries.
Ms. Levesque: Unfortunately, I cannot speak to the whole analysis that went behind it.
Senator Ringuette: I am anxious to get the additional information that we have asked for because I share Senator Callbeck's concern about the Atlantic regions and the consultation with the provinces. Year after year, New Brunswick invests a lot of money in marketing tourism, and the support and input of the Canadian Tourism Commission is very necessary.
Here, we lose any kind of guarantee or whatever. I would like to have some kind of letter from the minister indicating that the Atlantic region will be represented in some form on that new 12-member board.
Senator Neufeld: Further to Senator Ringuette's question, when we are asking the minister for some response in regard to this, would you be in favour of including in that a bit of the history of this 26-member board? How has it been apportioned, has it always been apportioned, have they always been filled from every corner of Canada and what is transpiring now? A 26-member board is a pretty big board, but I do not know all the things they do either. Therefore, it would be helpful if we were a little bit fuller in our explanation than just reducing it to 12 and asking will the Atlantic region be there? We need some history.
The Chair: Do you understand our sensitivity here?
Ms. Levesque: I do. I will contact Industry Canada and get as much information as I can for you.
Senator Ringuette: Thank you, I appreciate that.
Moving on to the Department of Human Resources and Skills Development, HRSDC, Act, what is this ex-officio position?
Ms. Levesque: It is a deputy minister. It is making it an ex-officio deputy minister position. It is regularizing what has been done in the past. The appointment is only made on an emergency basis; and it was determined that the deputy had been the ex-officio in the past, so they were regularizing it. It is that simple.
Senator Ringuette: Okay, then we will move on to the Energy Supplies Emergency Act.
Ms. Levesque: Sorry, I thought that is where we were; I apologize. I was talking about the energy supplies; it is the same thing for both.
Senator Ringuette: Okay, because I was looking at human resources.
Ms. Levesque: I apologize. For HRSDC, again, it is making two ex officios. It is the deputy and associate deputy, who have been chair and vice-chair. It is cleaning up the legislation to put it in line — the same thing with the Energy Supplies Emergency Act.
Senator Gerstein: As a point of information, is there any limit as to how long a question can go on? This is the first time in the year-and-a-half that I have been on the committee that it has been endless.
The Chair: You are right. However, what Senator Ringuette is doing is what we had asked Ms. Levesque to do, which is to go through each section and tell us what the impact and effect are. If it is not Senator Ringuette, I will ask Ms. Levesque to go through each section, each corporation, and tell us what the changes are. If there are any questions on that, that will give you a little —
Senator Finley: All of the changes are already detailed, including Senator Ringuette's absolutely wonderful arithmetic, in the briefing books we have. I do not know why we are repeating all of this.
The Chair: Because we want this on the record of this session. We want those people who are watching at home, who do not have the advantage of your briefing book, to know what is going on in this legislation. You are going to be asked to vote on each one of these sections and I want you to understand them.
Senator Finley: I have read them all.
The Chair: And you understand them all?
Senator Finley: Pretty well.
The Chair: Maybe we should have you at the end of the table to explain these to us then. Please carry on, Ms. Levesque.
Ms. Levesque: I can continue the clause by clause, if you wish.
Senator Ringuette: Before you do so, I would like to point out to my colleagues that, for instance, in regard to the Canadian Tourism Commission that we have just discussed, all the answers and explanations and impact of this change are not in the briefing book. It is only by questioning the officials that we are able to get some information, and if information is not readily at hand, to get it before we vote on these clauses.
The Chair: This is a briefing book prepared by the government in support of the government's changes that we are supposed to oversee and understand. If honourable senators would like Ms. Levesque to do this exercise for us rather than Senator Ringuette, I will put Senator Ringuette on round two.
Senator Ringuette: Absolutely.
The Chair: Could you finish off, Ms. Levesque? You are almost done.
Ms. Levesque: We will move on to the Export Development Act, at clause 1729.
The Chair: Have we finished with the Energy Supplies Emergency Act? Is there anything special or different there, other than reducing the size of the board?
Ms. Levesque: It is actually making the deputy minister the ex officio. It is that simple.
The Chair: Just to put into law what is already taking place.
Ms. Levesque: Yes.
Senator Murray: Mr. Chair, the witness is going to take us through but we will hold our questions until after she is finished, is that correct?
The Chair: Correct, and then we will come back. I have a list of a number of senators who would like to intervene.
Ms. Levesque: Okay; clauses 1729 to 1730 amend the Export Development Act. It eliminates two GIC positions, bringing the number of directors appointed by the GIC from 15 to 13.
Clauses 1731 to 1732, which is the Farm Products Agencies Act, bring the maximum number of board members down from nine to seven. It is amended to reflect the new maximum. The previous piece of legislation stated that the GIC shall try to ensure one-third from the Western provinces, one-third from the central provinces and one-third from the Atlantic provinces. Now that we have reduced it to seven, an unequal number, we have amended it to ensure equal representation from the four Western provinces, the two central provinces and the four Atlantic provinces when making an appointment.
The Chair: That is not unlike the wording that honourable senators were looking for in the tourism commission — something to ensure that there is regional representation. It is in this particular piece of legislation.
Ms. Levesque: That has been done there, yes.
The Chair: But it is not in the tourism legislation.
Ms. Levesque: It is a different change.
The Chair: Thank you. Okay, let us continue.
Ms. Levesque: Clauses 1733 to 1737 amend the First Nations Fiscal and Statistical Management Act. Clause 1733 eliminates two Governor-in-Council positions of the First Nations Fiscal Management Board, bringing the maximum of directors from 15 to 13. Clause 1734 amends the legislation to eliminate two GIC positions as well to the First Nations Financial Management Board, bringing the number from 11 to 9.
Clause 1735 is amended to reflect the elimination of two GICs of the First Nations Statistical Institute, bringing it down from 15 to 13. Then there is a modification to the legislation whereby it brings the maximum number of directors appointed by the GIC from 13 to 11.
The Chair: These are varying types of administrative bodies —
Ms. Levesque: Absolutely.
The Chair: — all under that same piece of legislation.
Ms. Levesque: Absolutely. Yes, there are two organizations.
Clause 1738 essentially amends the Freshwater Fish Marketing Act. It abolishes the Freshwater Fish Marketing Corporation advisory committee, which was a committee that was not set up. There was no longer a need for it, so it has been abolished.
The Chair: Are there any other unforeseen consequences of eliminating a piece of legislation that we should be aware of?
Ms. Levesque: This is just an advisory committee that was not set up which was not required. This same piece of legislation establishes a freshwater marketing agency, which is not being touched. This is just a cleanup of an advisory committee that had just not been used.
The Chair: Part 2 was the advisory committee.
Ms. Levesque: Clause 1740 relates to the Historic Sites and Monuments Act. It is amended to reflect the elimination of two GIC positions, one Ontario and one Quebec, of the Historic Sites and Monuments Board. That will bring the number of positions appointed by the Governor-in-Council from 15 to 13. You had one representation from the various provinces. You had two from Ontario and two from Quebec, so now we have one from each. That is how it is being changed.
Clause 1743 amends the International Boundary Commission Act. It provides a definition of Surveyor General as having the same meaning as in subsection of 2(1) of the Canada Lands Surveys Act, which defines the Surveyor General. It makes the Surveyor General of Canada Lands the ex-officio Canadian member of the International Boundary Commission. Again, this is regularizing what has been done in practice. The Surveyor General has been the individual in question, so this is cleaning up the legislation.
Clause 1746 amends the International Development Research Centre Act. We have changed definitions from chairman to chairperson. Clause 1747 is amended to reflect the elimination of three Governor-in-Council positions, bringing it down from 21 to 18. Again, we have cleaned up the chairman to make it chairperson everywhere possible within the legislation. Vice-chairperson has also been changed. The rest is all a clean-up of the legislation.
Clauses 1755 and 1756 amend the National Defence Act. This section is amended to reflect the elimination of the two GIC portions from the Military Police Complaints Commission, bringing the number of members from 7 to 5.
The Chair: That is pretty straightforward.
Ms. Levesque: Clauses 1757 to 1758 amend the National Research Council, NRC, Act. It is amended to reflect the elimination of three GIC positions of the NRC, bringing the maximum number from 22 to 19.
Clauses 1759 and 1760 amend the National Round Table on the Environment and the Economy Act. It is amended to reflect the elimination of eight GIC positions from the round table, bringing the size of the round table from 25 to 17.
Clauses 1761 and 1762 amend the Natural Sciences and Engineering Research Council Act. This again reflects the elimination of three GIC positions, bringing the size of the council from 22 to 19.
Clauses 1763 and 1764 amend the Public Sector Pension Investment Board, PSPIB, Act. It reflects the elimination of one GIC position of the PSPIB, bringing the board from 12 to 11.
Clauses 1765 and 1766 amend the Roosevelt Campobello International Park Commission Act. The act is amended to reflect that one of the three alternative Canadian members will no longer be appointed by the GIC.
Clauses 1767 and 1768 amend the Social Sciences and Humanities Research Council, SSHRC, Act. It reflects the elimination of three GIC positions at SSHRC, bringing the size of the council from 22 to 19.
Clauses 1769 to 1773 amend the Standards Council of Canada Act to reflect the elimination of one public sector representative member position and the elimination of one private sector representative member position, bringing the maximum number of private sector members appointed by the GIC from 11 to 10.
Then there are amendments within the legislation to make those.
Clauses 1774 and 1775 amend the Status of the Artist Act. Section 4 in the heading before is repealed to reflect the abolishment of the Canadian Council on the Status of the Artist. Again, as with the Freshwater Advisory Committee, this council was actually never established by the Governor-in-Council. It has been vacant. The mandate has been done; the Canada Council for the Arts and the Canadian Conference of the Arts have been delivering on the mandate of this council, which has never been established by the GIC. That is why it is being eliminated.
The Chair: The next division is Division 2. You have already talked about the amalgamation of the North American Free Trade Agreement Implementation Act. You have described in general terms what is happening there but we have Mr. Salgo to help us in the event there are further questions on that.
Could you go back to page 494 and tell us what the impact of that proposed subsection 10(3) is? It says:
Two of the governors who are Canadian citizens, other than the Chairperson and the Vice-Chairperson, may be appointed from among the members of the Senate or the House of Commons.
Ms. Levesque: Only the titles were changed; it was chairman and vice-chairman. We have not amended the meaning of anything; we have just changed the titles. That is what is in the current piece of legislation.
The Chair: That is the International Development Research Centre Act. It says that members of the House of Commons and the Senate may be members. Is that extraordinary? In most of these situations, would they not be able to be members? Why are members of the Senate and the House of Commons highlighted here?
Ms. Levesque: Again, I cannot explain the logic behind the legislation that was written back then. I cannot tell you why they provided for that.
The Chair: From your experience with other orders-in-council, are senators and members of the House of Commons entitled to serve on boards?
Ms. Levesque: I would not say it is the norm, no. It is not something you see in a lot of pieces of legislation. I cannot provide you the logic the drafters used to draft this all those years ago.
The Chair: Supplementary.
Senator Runciman: I would like a confirmation at the outset of this discussion. You mentioned this was a cost- avoidance measure.
Ms. Levesque: Yes.
Senator Runciman: It was a cost avoidance of roughly $1.25 million, was it not?
Ms. Levesque: It was $1 million to $1.25 million.
Senator Runciman: We have spent well over an hour on that. In most elected bodies, that would be described as a filibuster. I wanted to have that on the record.
The Chair: I had you on the list. Was that your point?
Senator Runciman: Yes.
The Chair: The point has been made. Thank you.
Senator Murray: Mr. Chair, my concern — born out of bitter experience — is that sometimes provisions are slipped into these massive bills that escape the notice of parliamentarians at the time, but come back to haunt us later. Such an event occurred in the 2007 omnibus bill when — shame on us for not noticing it in either the House of Commons or the Senate — the government slipped in a provision to take away Parliament's right to have government borrowing bills brought before it.
Even this particular part we are dealing with has 135 clauses. I look at the explanation in the background document provided by the government that Senator Finley has referenced. Several paragraphs explain what it is and then simply list the acts amended. It says that Part 8 amends a number of acts to reduce or eliminate certain Governor-in-Council appointments, including NAFTA. They mention the Intercolonial and Prince Edward Island Railways Employees' Provident Fund Act and so forth. I do not know how to ask this. Are you aware if there is anything in Part 8 that does anything more than what the notes suggest?
Ms. Levesque: No.
Senator Murray: Sometimes even a change in reporting relationships in the government, as you know, can make a world of differences.
Ms. Levesque: We are not amending accountabilities or responsibilities. We are reflecting the GIC reduction of positions and making the required changes.
Senator Murray: Okay. I have not read this whole document. Unlike Senator Finley, I am not a speed reader. I have glanced at it. At random, let me take a couple of provisions of interest.
Clause 1666, on page 475, talks about CMHC:
No person shall be appointed or continue as President or as a director from outside the federal public administration if that person . . . .
I do not know what the present provision is, but I find it odd that this item is in this cost-avoidance section on administrative reorganization. What is that all about?
Ms. Levesque: All parts related to CMHC concern the elimination of the vice-president positions. Any reference in the legislation to VPs was removed. We have not amended the intent or meaning of the legislation. We have simply eliminated reference to vice-presidents because we eliminated those positions.
Senator Murray: "No person shall be appointed or continue as President. . . ." Did it say "or as vice-president"?
Ms. Levesque: There would have been "as vice-president" as well.
Senator Murray: ". . . or as a director from outside the federal . . . ." Why did they include "or continue"?
Ms. Levesque: That was already in the original.
Senator Murray: As a matter of interest, "if that person" what? Is in the building business or mortgage business?
Ms. Levesque: I do not have the whole passage.
Senator Murray: I am simply curious to know.
Ms. Levesque: It is all ineligibilities. Proposed subclause (2) provides what the person is ineligible to do, including divesting of investments. It is basically ineligibility criteria when making those appointments.
Senator Murray: Again, Mr. Salgo spoke of the Chief Human Resources Officer as if it was a fait accompli. Perhaps it is. They probably found some government organizational statutes under which to do this.
It seems to me that subclause 1675(1) on page 477 makes an amendment to the Financial Administration Act to create the position of Chief Human Resources Officer: "The Governor in Council may appoint an officer called the Chief Human Resources Officer to hold office during pleasure, who ranks as and has the powers of a deputy head of a department."
Are we creating that position or are you telling me that, somehow or other, you managed to create it already and we are simply rubber-stamping it?
Mr. Salgo: I will have to get back to you on the specifics. As I understand the provisions, we had the creation of the Office of Chief Human Resources Officer, I believe, in March 2009.
Senator Murray: How was that done?
Mr. Salgo: This will be a change in legislative reference to give the person that title and position. This may be consequential, giving statutory effect to the 2009 change.
Senator Murray: I assume there was some statutory authority that he or she was appointed in the first instance.
Mr. Salgo: The head of the Public Service Human Resources Management Agency was brought into the Treasury Board. You effectively have someone — I want to be careful about this — with a comparable mandate for human resources management generally. If I understand your question, you are asking if this is the statutory authority to appoint that person. The answer is that I will have to get back to you on whether this is where that statutory authority is created.
Senator Murray: It appears to be clear, "the Governor in Council may appoint an officer. . . ." You will get back to us to confirm that.
On page 479 is the Public Servants Disclosure Protection Act. Our Speaker, Senator Kinsella, has a great deal of interest in this and can be properly called the godfather of this part of the law.
Is there any substantive change or does this simply reflect some kind of reorganization? I am not clear. Clause 1679 proposes to replace subsection 10(4) and states: "Subsections (1) and (2) do not apply to a chief executive if he or she declares, after giving notice to the Treasury Board Secretariat . .. ." That is the change. Who did he or she give notice to until now?
My apprehension may be totally misplaced, but, I repeat, sometimes a change in reporting relationships can make a world of difference. This is an extremely sensitive area, as you know.
Clause 1680 continues:
(2) Within six months after the end of each financial year, the Chief Human Resources Officer appointed under subsection 6(2.1) of the Financial Administration Act must prepare and submit to the President of the Treasury Board a report for that financial year that provides an overview of the activities, throughout the public sector, respecting disclosures made under section 12.
Senator Runciman, it is not the relatively trivial amount of cost that is avoided. It is the changes that are, perhaps, being made in some important areas of public administration. This is why I take any interest at all. For $1.2 million, I am quite prepared to move on.
Get back to us if you like. I do not want to hold up the committee unduly.
Mr. Salgo: I will get back to you. The only thing I can say again about the CHRO, Chief Human Resources Officer, versus the present Public Service Human Resources Management Agency is that I am not clear on what authority the appointment was made in December 2009.
Senator Murray: I appreciate that, but do get us a paragraph or so about what is being done under the Public Servants Disclosure Protection Act, what the effect of these changes are, or brief your minister when he or she comes.
I have two other matters. One is on page 491, and it is the Freshwater Fish Marketing Act, clause 1738. Part II of the Freshwater Fish Marketing Act is repealed. There is no explanation for that, Senator Finley, in the briefing notes. What does it mean?
Ms. Levesque: It is the elimination of the advisory committee that has never been set up, and it was set up under that piece.
Senator Murray: That is all that is?
Ms. Levesque: That is all it does. It eliminates the advisory committee.
Senator Murray: Finally, regarding Campobello, I do not understand what you are doing. That is an international park in which the governments of New Brunswick, the State of Maine, the federal government of the United States and of Canada have joint supervision or ownership or whatever it is. What are you doing with that?
Ms. Levesque: The current membership for the Roosevelt Campobello Park is three members from Canada, three members from the U.S., three alternates and three alternates. I will just read the recommendation exactly. It says:
The Governor in Council shall appoint no more than two of the alternate members to the Commission.
I am going by memory, but I believe the act provides that the government may appoint. We are saying here in the amendments that the Governor-in-Council will appoint two of the alternates. Another appointment could be done in a different fashion. It could be a ministerial appointment. There could be other means of making an appointment, so the recommendation here is that the Governor-in-Council shall appoint.
Senator Murray: Do we pay these people?
Ms. Levesque: The alternates are not paid, and I do not believe they have voting rights.
Senator Murray: What is the purpose of making that change? What is the cost avoidance involved here?
Ms. Levesque: I cannot give you the entire —
Senator Murray: I will not speculate, Mr. Chair. Thank you.
Senator Callbeck: I wanted to go back to the number of boards and commissions where the government is making changes. I believe it was March 8 when the President of the Treasury Board said the changes would be coming. Now, does Bill C-9 include all of those changes, or can we expect more?
Ms. Levesque: Bill C-9 makes the legislative changes. There are a few organizations that are established through OICs, orders-in-council, or through articles of incorporation. Those will be done in parallel to the budget bill as well. Would you like the list of the other ones and how they are established?
Senator Callbeck: Yes, I would.
Ms. Levesque: You have through orders-in-councils various boundary commissions. We spoke about the International Boundary Commission earlier, making the Surveyor General the ex officio. There are other provincial boundary commissions as well. We are doing the same thing, namely, making ex officio the Surveyor General of Canada. You have the Alberta-Northwest Territories Boundary Commission, the British Columbia-Yukon-Northwest Territories Boundary Commission, the Manitoba-Saskatchewan Boundary Commission, and the Saskatchewan- Northwest Territories Boundary Commission, which will make the Surveyor General, again, the ex-officio member. That is with respect to the orders-in-council.
You also have the National Aboriginal Economic Development Board, which will be reduced from 20 to 13. This organization was established by order-in-council, not through legislation, so the reductions will be done through the order-in-council, the establishment.
Other organizations are established through articles of incorporation, for example, various Crown corporations. You have the Canada Development Investment Corporation, Marine Atlantic Inc., Parc Downsview Park and VIA Rail, which are established through articles of incorporation, not through legislation. They fall under the Financial Administration Act, and the reductions will be done through their articles of incorporation as well.
Senator Callbeck: Is that it, then?
Ms. Levesque: That is it.
Senator Callbeck: I am concerned about regional representation. We talked about the tourism commission here, the possibility that it might be set up without one representative from Atlantic Canada. With respect to the boards and commissions, where there are changes being made, how many of these changes will affect regional representation? You probably do not have that right here, but I would like to have a list of boards or commissions where there will be changes that will affect regional representation. On that tourism commission, it is possible Atlantic Canada could be shut out completely.
Ms. Levesque: I do not think I have that information available, especially for the incumbent positions. We have to remember that 90 per cent of these positions are already vacant, so there is no impact. The current encumbered positions have not been identified yet. The fact that we are reducing the board has been decided. The position as such has not been decided, so I cannot provide you with a snapshot of that as of yet because that has not taken place.
Senator Callbeck: The tourism commission as it presently exists, before this bill, has regional representation; is that right?
Ms. Levesque: Yes.
Senator Callbeck: After Bill C-9, if it passes, we will not have that.
Ms. Levesque: As I explained to Senator Ringuette, I do not have the full evaluation of the CTC, and I will endeavour to provide to you as much information as I can from Industry Canada on the CTC.
Senator Callbeck: It is not only the tourism commission. I want to know whether there are others where regional representation is being dropped.
Ms. Levesque: No, we have looked at the legislation. None of this was targeted at regional representation. It was at the whole picture of board governance. I cannot speak to encumbered positions because they have not been identified by the responsible ministers yet.
Senator Callbeck: Maybe I am not making myself clear, but on the tourism commission, right now, there is regional representation. When Bill C-9 goes through, there will not be regional representation.
Ms. Levesque: When Bill C-9 goes through, there will not be immediate impact because the coming into force has not been established yet, so there will be a period where there will be identification of the required needs, including regional representation on these boards, including gender, diversity and all the other issues we look at when making appointments.
Senator Callbeck: I thought you said regional representation would be eliminated in the tourism commission.
Ms. Levesque: The legislation is being changed to have a board with a certain number and not necessarily sectoral or regional representation. That is what is being proposed.
Senator Callbeck: I want to know what other boards or commissions we are changing that have regional representation where it will be dropped under this legislation.
Ms. Levesque: I do not believe there are any. I can do a complete review. That is the only one, in my view, that has that regional division identified in the legislation.
Mr. Salgo: I cannot answer your question any more specifically than Ms. Levesque has, and, as I say, she has undertaken to clarify and confirm this. If you look at the nature of the changes globally, a large majority do not entail structural change to the organization, for example, the elimination of maximum numbers or the reduction of the global number, without any connection to the specific structural change. For example, the elimination of the representation from a certain area is exceptional in that case. I think another case is where you have one in Ontario and one in Quebec.
Ms. Levesque: Historic Sites and Monuments Board of Canada.
Mr. Salgo: Yes. In the great majority of cases, if you look at them, they are just reductions in overall numbers, either absolute numbers or maximum numbers. They do not imply any inherent structural change.
Again, as to specific exceptions to that, we will look into that. Globally, if you are thinking about the thrust of the change, it is not of that kind of structural nature.
Senator Callbeck: You mentioned national sites and monuments. How are those being changed as far as regional representation is concerned?
Ms. Levesque: That is one where there was regional representation from all the provinces and territories, with Quebec and Ontario having one additional member. There were two members from Ontario and two members from Quebec, and we are reducing one of those positions in each province.
Senator Callbeck: Will you review all of these changes to see if there are any others that affect regional representation?
Ms. Levesque: We will give it a regional overlook, but as I have mentioned, I do not believe there are any.
Senator Callbeck: Clause 1731 modifies the Farm Products Agencies Act. The current act states: In making appointments under this section, the Governor in Council shall try to appoint one-third of the members of the Council from the four Western provinces, one-third from the two Central provinces and one-third from the four Atlantic provinces. That is one-third, one-third, one-third.
You have changed this by saying: In making appointments under this section, the Governor in Council shall try to ensure equal representation for the four Western provinces, the two Central provinces and the four Atlantic provinces. Is that not the same thing? We have equal representation, a third, a third and a third.
Ms. Levesque: Because we reduced the number to seven, it was difficult to do a third, a third and a third. Therefore, we proposed equal representation to reflect the intent of the previous legislation.
Senator Callbeck: You are dividing it into three. Is that how you are dividing seven?
Ms. Levesque: It says "shall try" again. It is not always a given that there will be an exact number, so we try to have as many representatives from each region as possible. It would be two, four, six and then an additional person. That is the intent of the previous legislation.
Senator Callbeck: Where is that additional person coming from?
Ms. Levesque: That will be up to the Governor-in-Council to determine.
Senator Callbeck: I vote from Prince Edward Island.
Ms. Levesque: Again, this is one where it is up to, so one would have to leave flexibility.
Senator Callbeck: With respect to the North American Free Trade Agreement Secretariat, you say that was a stand- alone organization. Who did it report to?
Mr. Salgo: That would be in the portfolio of the Minister of Foreign Affairs.
Senator Callbeck: Tell me, why are we changing that?
Mr. Salgo: Essentially, it is an efficiency mechanism. Broadly speaking, when you speak of organizational structure, our default presumption is not in favour of stand-alone organizations because there is a separate administrative apparatus. There are certain efficiencies of scale that are lost whenever there is a stand-alone entity, which always brings into question the merits of a stand-alone entity for a small function.
In general, there must be a strong need to have it organizationally separate. In general, the default would be in favour of not having it as a separate organization. I am sorry; I cannot speak to why it was created separately in the early 1990s when it was established, but I can say that is certainly not a requirement of our NAFTA commitment, and it is not the way our other NAFTA partners structure their secretariats; they are not separate stand-alone entities. In the judgment of those doing the review, there was no structural or organizational need to have a stand-alone entity.
Senator Callbeck: How many people work in the secretariat?
Ms. Levesque: It is a small organization. I think there are four or five individuals working there, and they will be merged into the department.
Mr. Salgo: I do not know the exact number but it is a very small organization. Again, in general, it is not an efficient way to run very small organizations, with a handful of people.
Senator Callbeck: By going under the department, there will not be less people?
Mr. Salgo: From an organizational perspective, there is the potential — again, I do not know the particulars. I do not know what they will do with it. Let us be honest, in a straightforward answer, I do not know how they will organize it.
One does not have to replicate certain kinds of administrative functions when they are part of a department than when they are stand-alone. There is the potential for that, but I do not know what the outcome would be in that respect.
Senator Callbeck: The government is making the move, then, you say because it will be more efficient and you think economic?
Mr. Salgo: Yes. I would characterize this as an efficiency change, not a structural change aimed at other purposes or anything. I would characterize it as efficiency oriented.
Senator Callbeck: I wanted to ask about Export Development Canada. Clause 1833 grants the power to the minister to authorize —
The Chair: Sorry, Senator Callbeck, we have not gotten there yet.
Senator Callbeck: I am sorry.
The Chair: You will hold that question, then?
Senator Callbeck: That is fine.
The Chair: Thank you. Presumably, some instructions, Ms. Levesque, went out to all of the order-in-council boards asking them something that resulted in this initiative of reducing the size of the boards. Was it a general instruction? What did that instruction consist of?
Ms. Levesque: How the review took place — the intent was announced in Budget 2009, and it was led by the President of the Treasury Board. He and his department worked with the portfolio ministers and the portfolio departments, so the request went through from the President of the Treasury Board into the portfolios who then worked in collaboration with the organizations within the minister's portfolio. That is how the consultations took place. Recommendations went back from the portfolio deputies and ministers to the President of the Treasury Board. A task force had been established to review all this and compile it, confirm it and challenge it. That all took place, and then a final recommendation was provided from the president to the Prime Minister.
The Chair: Are you able to provide us with a copy of the instructions that went out to each board?
Ms. Levesque: I do not believe we would have that. Like I said, the responsibility with regard to the consultations with the organizations rested with the portfolio departments directly with their organizations. How they went about it was entirely up to them.
The Chair: Do you know if any boards recommended that they should increase in size, or is this all about reduction?
Ms. Levesque: The purpose of it was reduction. It was not a governance review as far as an amending review of organizations. It was about looking at the most effective way of running these boards and administrative tribunals.
The Chair: That could result in a larger and more effective board, but you say the instructions were to reduce the size?
Ms. Levesque: Yes, to look at reduction.
The Chair: As part of that instruction, was it taking into consideration gender balance, regional balance and those issues that have been brought up here?
Ms. Levesque: Absolutely.
The Chair: We wanted to make sure of that.
The other point I want to make before we go to round two is that this committee deals with Main Estimates, supplementary estimates and supply. Periodically, we vote an amount to go to the office of the appointments commissioner. Is that your budget? Is that the budget you use since there is no appointments commissioner?
Ms. Levesque: I do not know. We fall within the Privy Council Office; I am not the Public Appointments Commission Secretariat.
The Chair: That is in PCO.
Ms. Levesque: It falls within PCO, but not within my shop.
The Chair: We will find someone else to help us track that down. As far as you know, that budget line is not the —
Ms. Levesque: It is not in senior personnel, no.
The Chair: Thank you. That is helpful.
Senator Gerstein: Thank you, witnesses, for a comprehensive and fulsome outline of what we have just gone through. Our Conservative government believes in sound stewardship of public funds. That is a solemn obligation we feel we have to Canadians. To achieve this, we have, on the record, frozen departmental operating costs, government salaries, administration and overhead, frozen the Prime Minister's salary and senators' and MPs' salaries.
Would you characterize what we are talking about as nothing nefarious, nothing hidden? This is nothing against regions; it is simply about one thing — being more efficient and saving taxpayer dollars.
Ms. Levesque: Yes, I would agree.
Senator Gerstein: Thank you.
The Chair: You are allowed to give the whole answer, if you want. Did you have anything you wish to elaborate on that?
Ms. Levesque: No, I do agree it was about effective governance.
The Chair: And reducing the size of the boards.
Ms. Levesque: And having the proper size, yes.
The Chair: Proper size?
Ms. Levesque: Yes.
The Chair: It is conceivable that some boards might think they should be larger.
Ms. Levesque: Some may.
The Chair: Did any?
Ms. Levesque: I do not have that information.
The Chair: Would you find that out for us? I was with you when you said reduction in the size of boards, but now you are saying "proper," which means something completely different.
Ms. Levesque: In my view, the mandate of this review was to ensure effective governance by reducing large boards essentially, or administrative tribunals that had sometimes old pieces of legislation that we needed to clean up. The mandate of this review was to identify positions that needed to be reduced.
Senator Ringuette: I would like to go to clause 1740, the Historic Sites and Monuments Act. The briefing I have here indicates we are reducing one Ontario and one Quebec position, reducing the board from 18 to 16. Is the National Capital Commission a member of this board?
Ms. Levesque: I would have to check the legislation to get the full composition of this board because I do not have it in front of me, unfortunately.
Senator Ringuette: I am assuming that there is one representation from each province on this board. I think the National Capital Commission probably would be responsible for most of the historic sites and monuments in the capital region, so I suppose they are in there, but could you supply us with that information — and if every province is represented in here? Maybe this is the same case as another board we were looking at, where Ontario and Quebec had two provincial representatives and now they are being downsized to one, but I certainly would like to know.
The Auditor General has made a major report in regard to historic sites and monuments. They are deteriorating and I think we should have a particular interest in what will be happening with this board.
Ms. Levesque: We will provide you with that.
Senator Ringuette: Thank you.
Clause 1747 is eliminating three GIC positions, one Canadian citizen and two non-Canadian citizens. The original number of this board was 21, now reduced to 18. This is also a very important tool for Canada — international development research. Could you identify the composition of the 18?
Ms. Levesque: You would like a list of the board?
Senator Ringuette: Yes, and if they are Canadian citizens or non-Canadian representatives.
Ms. Levesque: Absolutely.
Senator Ringuette: On clause 1755, the National Defence Act, I am supposing the two positions that are eliminated were not positions that were filled?
Ms. Levesque: No.
Senator Ringuette: Okay. The National Research Council, elimination of two positions. Again, here, I want to stress the industry sectoral representation that is inherent to the National Research Council and its board. For the two positions that are going to be eliminated, is it the same situation as the tourism commission where sectors are being removed? Is this a total governance restructure that is proposed?
Mr. Salgo: I can confirm that this is not a restructuring of the organization; it is just a reduction in the number of positions. We have not restructured.
Senator Ringuette: What are the two sectors that are being eliminated from representation on the National Research Council?
Ms. Levesque: It is three positions that are being reduced, which are vacant currently.
Senator Ringuette: Three?
Ms. Levesque: Yes. I do not believe it is from a particular sector; they are vacant positions. We are reducing a very large board to streamline it and make it more efficient.
Senator Ringuette: I find it funny because when you say reducing some of the large boards, some we are reducing from 22 to 19, some we are reducing from 22 to 17, and some we are reducing from 22 to 12. There does not seem to have been any consensus in regard to what is the natural standard here.
On the Roosevelt Campobello International Park Commission, which is clause 1765, who will be appointing the alternates? It says one of the three alternates will no longer be appointed by the Governor-in-Council. Who will be making that appointment? Is it the Province of New Brunswick? This not a reduction; this is just a change.
Ms. Levesque: The GIC will be appointing no more than two of the alternates. As I mentioned, the act provides that the government may appoint up to three. There is one position that is on the recommendation of the Province of New Brunswick. That is not changing; there is another position there.
Alternately, it could be an appointment made by ministerial recommendation, but it will not be a Governor-in- Council appointment. That is what it means.
Senator Ringuette: That brings us to the issue you brought up. Why do we have a Governor-in-Council appointment in the Canada Gazette, but I do not think a ministerial appointment is a Canada Gazette issue?
Ms. Levesque: Ministerial appointments are not published in the Canada Gazette.
Senator Ringuette: No, they are not. This is not a reduction; this is just bringing one position totally under the appointment process of the federal minister, is it not?
Ms. Levesque: Yes, it is that he may appoint.
Senator Ringuette: Then there is the NAFTA issue. I understand the shift made a few years ago in regard to putting trade under foreign affairs instead of industry, which it was prior to that.
In Supplementary Estimates (A), there was a request for funding for a challenge under NAFTA. I think we are still waiting on the issue, some $50 million. However, did I hear you say there were only three employees now?
Ms. Levesque: No, there are more than three; I think there might be four or five. I do not know the full secretariat size but I know it is a small organization.
Mr. Salgo: This is a secretariat function so this is not a tribunal kind of function. Passing judgments on disputes is not part of the dispute resolution mechanism. It is a secretariat support of an administrative nature.
The Chair: Thank you for that. That was very helpful. I note that at page 502, Division 3 is where we see the Prince Edward Island railway employees' function that you mentioned earlier, Ms. Levesque.
In effect, this part is divided into three different divisions. I say that so we have it clear in our minds.
On behalf of the committee, I would like to thank you for taking the time to go through each of these clauses and divisions so we understand them. As Senator Murray pointed out, we are looking for unintended results.
Senator Murray: It is intended ones I am worried about.
The Chair: The unintended results are things that come back to haunt us later on and people will ask why the Senate did not do its job. You have helped us do our job on this part and we thank you for that.
Honourable senators, we are now at Part 10 of Bill C-9 on page 540 of the 800 pages. We are over half way through the bill.
Part 10 deals with the Agreement on Social Security between Canada and the Republic of Poland — Retroactive Coming into Force. We are pleased to have Rakesh Patry, who will give us background on this. Mr. Patry is the Director of International Policy and Agreement with Human Resources and Skills Development Canada. Welcome. Help us out with Part 10, which is not too long. What are its ramifications?
Rakesh Patry, Director, International Policy and Agreement, Human Resources and Skills Development Canada: Thank you, honourable senators. Before explaining the provisions within this particular part, with your permission, I will offer some brief background on international social security agreements and what they entail.
Essentially, Canada negotiates international social security agreements that coordinate operation of the Canada Pension Plan and the old age security program with comparable social security programs of other countries. Specifically, the agreements help to ease the qualifying conditions for each country's social security benefits. They provide for the elimination of situations where corporations and their employees posted to work in another country are forced to contribute to two social security programs for the same work.
There are essentially two components to a social security agreement. First is the payment of benefits and easing qualifying conditions for payment of those benefits. Second is the elimination of "double" coverage where companies and employees are forced to pay into two social security systems while working in another country.
Canada currently has 50 of these agreements in force. The Agreement on Social Security between Canada and the Republic of Poland, as a matter of international law, came into force on October 1, 2009. For Canada, both the Old Age Security Act and the Canada Pension Plan programs are included within the agreement.
In the Old Age Security Act, one of the legislative approval steps requires that an order-in-council approving the text of the agreement be tabled in both houses of Parliament. However, and unfortunately, due to a departmental procedural oversight, the order for the agreement with Poland was tabled in the House of Commons. Regrettably, it was not tabled in the Senate. As such, old age security, OAS, benefits currently cannot be paid under the agreement, as old age security-related provisions do not currently have the force of law in Canada.
Clauses 1828 to 1830 of Part 10 of Bill C-9 seek to ensure that the agreement will be deemed to have come into force retroactively on October 1, 2009, when the treaty with Poland was deemed to have come into force. This will ensure that Canada respects its treaty obligations to Poland. It will also ensure that affected pensioners will be entitled to receive the full benefits to which they would otherwise have been entitled had procedures gone as they were intended.
In a nutshell, that indicates what Part 10 of Bill C-9 will do and what this agreement with Poland seeks to do.
Senator Eggleton: This item was left out inadvertently. Therefore, it is included when it normally would not be. It gives me an opportunity to ask questions.
We have social security agreements with a number of countries, but there are a number of countries with which we do not have agreements. Hence, we have Canadians who may be receiving something under old age security after a year and others who have to wait 10 years. Basically, I believe you must wait 10 years to receive old age security. You need 40 years to receive the full amount. It is all pro-rated. Is that right?
Mr. Patry: That is correct.
Senator Eggleton: CPP is a different matter.
We have a situation where people live side by side. One person has to wait 10 years to receive OAS and another person receives it after one year. This does not seem too equitable. It occurs because we have these agreements with some countries and not others. Is it our intent to have these agreements with all countries from which immigration originates? How well are we proceeding to bring agreements into effect and, thereby, removing the inequity?
Mr. Patry: Before we can conclude a social security agreement with a country, they must have a social security system in place with which we can harmonize. Essentially, they have to pay benefits on an ongoing basis to allow for that.
Every two to three years we conduct a framework exercise. We analyze the countries with whom we have agreements, and those with whom we have not been able to conclude agreements. We consult closely with the Department of Foreign Affairs and International Trade and Statistics Canada to obtain statistics on immigration patterns and trends as well as countries with which we have free trade agreements. We try to develop a list of countries we will approach for negotiations in that two- or three-year period. We try to be as aggressive as possible in matching immigration and trade trends with the countries with which we have agreements in force.
To return to another point you raised, these agreements help to ease qualifying conditions for old age security benefits. As you correctly indicated, someone can be eligible for benefits after a period of time of less than 10 years through an agreement. However, it is through totalling years of residence or contribution in another country in addition to years of residence in Canada. For example, if someone has five years of residence in Canada and five years of residence or contribution in another country, the two are added. The person is still only eligible for five-fortieths of the OAS pension, not the full pension. It is pro-rated.
Senator Eggleton: I understand that. However, the person receives nothing if we do not have a social security agreement with the country. Correct me if I am wrong, but I heard that we do not have these kinds of agreements with about half of the countries from which most of our immigration comes currently. Is that correct?
Mr. Patry: I do not think that is true. I do not have the exact particulars with me. However, if you take the top ten source countries for immigration to Canada, we have agreements in force with about six or seven of them. There are a couple with whom we cannot have an agreement because they do not have a system that pays pensions on an ongoing basis.
Senator Eggleton: Which countries are those?
Mr. Patry: It is not possible with Pakistan or China because of their social security programs. We are currently negotiating an agreement with India.
Senator Eggleton: I assume they are rather standard agreements?
Mr. Patry: Generally speaking, the agreements tend to be standard with minor modifications.
Senator Eggleton: If you follow the normal rules and file it with Senate as well as the House of Commons, you will not have it coming back to us in a budget bill.
Mr. Patry: Our apologies for this.
The Chair: Thank you for that clarification, Senator Eggleton.
Senator Marshall: How many people are affected by this agreement and what is its dollar value?
Mr. Patry: I do not have the specific dollar value. It depends on the individual case of applicants and how much they are entitled to. Currently, there are approximately 100 people we believe will be entitled to old age security benefits who are not currently receiving them. There are people who will be entitled to Polish benefits. The Polish government will need to start processing these payments once this comes into force.
Senator Marshall: Will these people receive retroactive benefits?
Mr. Patry: Yes.
Senator Callbeck: You mentioned having these agreements in place with many countries. How many countries do we have agreements with?
Mr. Patry: We currently have agreements with 50 countries.
Senator Callbeck: You said that every two to three years you analyze the agreements with the countries and decide what other countries you will try to negotiate an agreement. You are now negotiating with India.
Mr. Patry: That is correct.
Senator Callbeck: Who else are you negotiating with?
Mr. Patry: We have also launched negotiations with Peru and Colombia. We are currently negotiating with Brazil, Argentina and Serbia.
Senator Callbeck: Will retroactivity create any problems?
Mr. Patry: No. In fact, not having retroactivity would probably create more problems than having retroactivity. Essentially, people were entitled to benefits as of October 1, 2009 because the treaty was deemed to have come into force as a matter of international law on that date. To ensure that those people who should be eligible to benefits receive them is the reason we made it retroactive to that date.
The Chair: Clause 1828 indicates the treaty was signed April 2, 2008 and deemed to come into force one year after that date. Is that correct?
Mr. Patry: Following the signing of all treaties, including this one, they must first be tabled by the Minister of Foreign Affairs in the House of Commons for 21 sitting days. Treaties must then be tabled by the Minister of Human Resources and Skills Development in the House and Senate for a period of 30 sitting days. Following that period, the Department of Foreign Affairs and International Trade exchanges diplomatic notes with the other government. The treaty is deemed to come into force on the first day of the fourth month following the exchange of diplomatic notes, hence the lag time between signing the agreement and the date it was deemed to come into force.
The Chair: October 1, 2009 was the date that, had we not had this little glitch with the Senate, it would have come into force,
Mr. Patry: Precisely.
The Chair: We are now making it happen.
Mr. Patry: Exactly.
The Chair: The next clause, 1829, is basically asking for forgiveness.
Mr. Patry: Essentially, yes.
The Chair: We thought we had done it all right, we exchanged information, et cetera, so forgiveness in retroactivity. I think I understand that.
Senator Ringuette: If it was not for the retroactivity, you could just do the process in the Senate, and both houses would have agreed to it. However, it is the payment of the retroactivity that you have to have agreed upon by both houses.
Mr. Patry: Essentially, the House of Commons has already approved the treaty, which, as a matter of international law, is considered to have come into force from October 1, 2009.
The issue was that, if we went through the entire approval process again and tabled the documents, it would be quite a while before the agreement would come into force domestically, and give us the domestic authority to pay old age security benefits. There are people who were eligible for these pensions and benefits as of October 1, 2009 but, because we do not have the legislative authority from the Senate to pay those benefits, they are not able to receive them currently, and the processing of those payments is stalled. The reason for the retroactivity is to ensure that people who were entitled to receive the benefits from October 1, 2009, will receive them.
Senator Ringuette: I understand that, but since the House of Commons has already agreed to this and the process, could you not have just have tabled the same documents in the Senate?
Mr. Patry: Department of Justice officials advised us that, essentially, to ensure that the process was fulfilled completely, one of our options was to go through the entire approval process again because the order-in-council that allows us to table it in the Senate would no longer be valid. We would have to obtain a new order-in-council and go through the tabling process again. The other option was to obtain legislation such as this that would allow it to come into force.
The Chair: In the provisions in this treaty, there is an assurance that there is not double-dipping. For example, someone coming from Poland to Canada would not be entitled to continue to get the social security payment in Poland and also qualify to get it in Canada. Is that in there? Can you give us that reassurance?
Mr. Patry: There are some social security benefits they would be entitled to from Poland, and there are some that they would be entitled to receive from Canada. There would be no duplication of it. Essentially, there is a portion of the payment that the government of Poland is responsible for, and they will continue to pay that. There is a portion that the Government of Canada would be responsible for, based on the years of residence or contribution to the Canadian system, and we would only pay the amount that we are responsible for based on the years of residence and contribution to the Canadian system.
The Chair: Does that go the other way as well, if a Canadian goes to Poland?
Mr. Patry: Exactly.
The Chair: I see no other names on my list, so we thank you very much, Mr. Patry, and thank you for finding this oversight and getting it cleaned up.
Mr. Patry: Thank you.
The Chair: We will go to Part 11, which appears at page 540, and we are pleased to have Jennifer Purves, Senior Economist, International Trade and Finance, Department of Finance. Thank you for being here. Can you do the same thing? It is another fairly short section, running two pages. Can you give us a little bit of background on why we need this?
Jennifer Purves, Senior Economist, International Trade and Finance, Department of Finance Canada: Part 11 of the bill will be introducing a number of legislative amendments that were flowing from the 2008 legislative review of Export Development Canada, EDC. This review is done every 10 years. It does a comprehensive overview of the mandate of the organization and its governing legislation, and in that review a number of recommendations were made by the consultants and also by the Senate which studied the report that was tabled. The government agreed with these recommendations and so has proposed three changes.
You will see in clause 1831, the first amendment is to amend paragraph 10, which will be clarifying EDC's asset management powers, specifically related to portfolio risks and portfolio management.
Clause 1832 will amend section 17, which is an amendment to grant EDC new power to open offices outside of Canada. Their current powers permit them to establish offices in Canada or within diplomatic premises or consular offices.
The third amendment is clause 1833, which pertains to Canada Accounts, subsection 23(6), clarifying the minister's ability to authorize EDC to undertake a debt restructuring or a workout, which may entail a partial forgiveness of debt or obligations.
The Chair: The final one is to allow for the forgiveness of debt portion. We have seen the Canada Account situation previously. It is not that the minister has the authority to ask Export Development Corporation to get involved in a project that is a higher level of risk than they would normally be comfortable with — that would be the Canada Account — but this is now authorizing the forgiveness of certain of those pre-authorization pre-directions. Is that correct?
Ms. Purves: That is correct. Ministers would have had to authorize the transaction in the first place, and with this amendment, ministers would still need to authorize the corporation to undertake any restructuring or debt workout, which would be done in the interests of presenting the best outcome for the government's assets. Bear in mind that this would not be done without ministers' knowledge or authority. They would still need to go back to both the Minister of International Trade and the Minister of Finance for approval to restructure certain obligations, which may include, for example, the forgiveness or reduction of interest rates made on loans. This was done in the airline industry in 2007, so this will still be done under ministers' approval and guidance.
The Chair: It seems strange that authority is just flowing now to allow them to open offices outside of Canada, with the Export Development Corporation. They had to operate from Canada helping Canadians externally, but no offices.
Ms. Purves: Yes, currently they are only allowed to collocate within DFAIT, Department of Foreign Affairs and International Trade, missions or embassies, as I previously mentioned, and EDC suggests that while this works in certain circumstances, there may be countries where they do need more flexibility to open their own office for commercial space location reasons or other reasons, so the government agreed with this recommendation and is including it here.
Senator Ringuette: I found it strange, and I am referring to clause 1832 in regard to the establishment of offices outside of Canada. I remember, clearly, Export Development Canada being in front of us and my asking how many offices they had in Canada and outside of Canada, and I think they had one or two more offices outside of Canada than in Canada. This clause is enabling them to increase the number of offices outside Canada.
Ms. Purves: It is enabling them to establish their own independent offices. It would still be subject to ministers' approval on a case-by-case basis. The corporation would need to apply to the Minister of Foreign Affairs and International Trade to open their own office, but currently they can open an office within an embassy, and I believe they have around 14 such offices that are located outside of Canada at the current time.
Senator Ringuette: This is becoming more and more intriguing. I would like to go to clause 1833, the Canada Account. With respect to forgiveness in whole or in part of any debt or obligation, could you give us examples of "debt or obligation"?
Ms. Purves: For instance, in 2007, a number of the airline companies that EDC had loans with were bankrupt, Northwest Airlines being one of them. EDC was asking the government if it would be able to enter into a restructuring agreement and reduce the interest rates on some of the loans made for the airlines. That is an example of forgiveness in whole or in part, a reduction of an interest rate. Ministers would need to review that transaction and say yes or no, we agree.
Senator Ringuette: Are you saying that there were already powers to do that because they had done that in 2007?
Ms. Purves: Yes, they have done this. This amendment is clarifying their ability; it is not granting them new power.
Senator Ringuette: Clarifying how?
Ms. Purves: Here we are putting in specific words. The first part starts off with "authorizing the corporation to make any investment or into any transaction" and the new words would be "including the forgiveness in whole or in part of any debt or obligation that is necessary."
Senator Ringuette: Is that a result of the loan made to the auto industry?
Ms. Purves: No. This is flowing from the 2008 legislative review, which reviewed pieces of EDC's legislation and found that there was an inconsistency between this legislation and, for example, the Financial Administration Act, which deals with forgiveness of debt to the Crown. Legal counsel recommended it would be better to clarify within the ED, Export Development, Act that EDC also has the authority once ministers authorize them to go ahead and do this. If they did not have the authority, they would need to do a separate submission and seek parliamentary authority for ministers to do this. The view was presented that it would be better to clarify this within the legislation, and this was a recommendation made back, as I mentioned, in 2008-09 from the legislative review.
Senator Ringuette: How does it work with regard to public process and public knowledge of the forgiveness in all or in part of any debt or obligation? How is it publicized?
Ms. Purves: Canada Account reports are published and are available on EDC's website.
Senator Ringuette: Does it clearly indicate forgiveness in whole or in part of any debt or obligation?
Ms. Purves: It would not be on a specific transaction-by-transaction basis, no. However, you would see loan by loan would be detailed on an annual basis, so you would see the difference in those loans.
Senator Ringuette: In a global amount. What would not be identified? Maybe I did not understand.
Ms. Purves: You would not necessarily see a verbal description, but you would see the detailed amount of the loan that had been reduced, the number.
Senator Ringuette: Would you see the entity that the loan was provided for?
Ms. Purves: I believe so, yes.
Senator Ringuette: You believe so?
Ms. Purves: Yes. I can verify that.
Senator Ringuette: Yes. I would certainly like to know how the public and parliamentarians would be made aware of forgiveness in whole or in part of any debt or obligation that follows this legislation. When could you provide the public means to us?
Ms. Purves: I will verify how they are described in the Canada Account reports, and I will provide that to you.
Senator Eggleton: Is this changing the accounting procedure, or is this just the authority to write off? I take it now it is done at the cabinet level, but does that delegate the authority to EDC with the approval of the minister to be able to do this?
Ms. Purves: This is not changing the ministerial approval process, no. It is just clarifying it in the legislation. EDC already has the powers within the act.
Senator Eggleton: In whose books are these accounts on, then?
Ms. Purves: The Department of Foreign Affairs and International Trade.
Senator Eggleton: As stated, there is no change in the accounting procedure?
Ms. Purves: No.
Senator Marshall: My question is also on clause 1833. The corporation was already doing this, were they not?
Ms. Purves: Yes.
Senator Marshall: When they testified before us.
Ms. Purves: That is correct.
Senator Marshall: We asked them what percentage were write-offs. What has changed? Is there some doubt now whether they had the authority to do that?
Ms. Purves: As I mentioned, back in 2006-07, there was a lot of pressure to restructure these assets, and there was legal opinion that said we do not know if it is in the act or if you have to look at the Financial Administration Act.
When we conducted the legislative review, a number of participants made the recommendation that it would be better to write it explicitly in, even though, as you read, the act is very broad. EDC already has the ability under the minister's authority to make an investment or any transaction, and a restructuring agreement is considered a transaction. However, there was the view presented that because the FAA speaks specifically to debt forgiveness, perhaps the ED Act should as well because, as EDC mentioned, they do it on their corporate account, so it would be useful to include it. It is just a clarification; nothing is being changed in terms of the oversight process or management of.
Senator Marshall: They are not doing anything now that they had not done in the past?
Ms. Purves: No. When they do these workups, they do them on their corporate account at the same time, so they are looking to manage the government's assets as they would their own for the best outcome.
Senator Callbeck: You mentioned there was a review of Export Development Canada completed in 2008?
Ms. Purves: Yes.
Senator Callbeck: Who conducted that review?
Ms. Purves: The Minister of Foreign Affairs and International Trade engaged International Financial Consulting Ltd., IFCL, to conduct the review. Subsequent to that, he tabled the report that the Senate Standing Committee on Foreign Affairs and International Trade then reviewed.
Senator Callbeck: You mentioned there were recommendations, which are included in Bill C-9, but were there other recommendations that the government did not pick up on?
Ms. Purves: In terms of legislative recommendations, no. These are the legislative recommendations.
Senator Callbeck: Thank you.
The Chair: Honourable senators, that concludes this particular section. On your behalf, I would like to thank Ms. Purves for explaining this section on Export Development Canada and the amendments to the act. It was very clear and succinct and helpful to us. Thank you.
Honourable senators, we will now adjourn until this afternoon. We will be meeting back here at three o'clock. We have sent out the sections we are dealing with in each of these time frames, but it was not as clear as perhaps you would like to have seen, so we will try to have a clearer program for the rest of the week. We will try to pick up on those parts that we did not get to on Thursday and Friday.
(The committee adjourned.)