Proceedings of the Standing Senate Committee on
National Finance
Issue 27 - Evidence - February 16, 2011
OTTAWA, Wednesday, February 16, 2011
The Standing Senate Committee on National Finance met this day at 6:46 p.m. to examine the expenditures set out in Supplementary Estimates (C) for the fiscal year ending March 31, 2011.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: I call this meeting of the Standing Senate Committee on National Finance to order.
[Translation]
Honourable senators, we resume this evening our examination of Supplementary Estimates (C) for the fiscal year ending March 31, 2011, which have been referred to our committee.
[English]
This is the third and final set of supplementary estimates this fiscal year. We have been assured of that by Treasury Board in our meeting yesterday. Yesterday morning we began our consideration of these estimates hearing from those Treasury Board officials, who provided us with an overview of the estimates and answered a number of questions and undertook to answer a good number more.
In our next two meetings, we will be hearing from specific departments and agencies, certain ones that we have selected for various reasons, to discuss their estimates and programs in more detail.
Honourable senators, this evening we have two sessions over a period of two hours, the first with Canada Border Services Agency and the second with Infrastructure Canada.
For the first hour, we are pleased to welcome, from the Canada Border Services Agency, Mr. Sylvain St-Laurent, Vice-President, Comptrollership Branch, and Mr. Peter Hill, Director General, Post-Border Programs.
Colleagues, we only have one hour, so try to keep your questions to a minimum.
[Translation]
Mr. St-Laurent, you have the floor.
[English]
Sylvain St-Laurent, Vice-President, Comptrollership Branch, Canada Border Services Agency: Good evening Mr. Chair and honourable senators.
[Translation]
I am pleased to be here on behalf of the Canada Border Services Agency to discuss the increases being sought to the Agency's funding for the current fiscal year as outlined in the Supplementary Estimates (C).
[English]
When the former president of CBSA, Mr. Stephen Rigby, appeared before you last March, spending for the security costs related to the 2010 Vancouver Olympic and Paralympic Games was of concern to the agency and of interest to this committee.
Our work during the games is but one example of a large-scale operation undertaken by the agency in addition to its daily business. This past year the agency was also engaged in providing training to Afghanistan customs department officials, working on the ground in Haiti and at Canadian airports to speed the way of evacuees following the earthquake in January 2010, and more recently processing hundreds of ship-borne migrants arriving on our West Coast from Sri Lanka.
In the submissions that you have before you, the CBSA has sought access to funds under the Treasury Board management reserve in the amount of $22 million for fiscal year 2010-11 for costs related to the increased workload created by the arrival of nearly 500 migrants aboard the MV Sun Sea vessel last August.
In accordance with our obligations under the Immigration and Refugee Protection Act, the CBSA processed each arrival, an undertaking which included performing admissibility examinations, the taking of fingerprints and photographs, and performing security and criminal checks. Once we knew the vessel was heading for Canadian waters, the agency redeployed staff to the British Columbia region, set up a task force and engaged our federal and provincial partners to respond to the emerging operational, legal and health issues associated with the arrival of the MV Sun Sea. We set up a temporary processing facility on the dock and made arrangements with B.C. Corrections for transportation and detention services. The cost of detention alone is $190 per day per person.
[Translation]
Honourables senators, the arrival of 500 illegal migrants was a difficult and challenging event, and put a strain on resources. The responsibilities of the CBSA under the law are clear and specific, and we acted diligently to discharge those responsibilities in a fair, humane and fiscally responsible manner.
At a press briefing on August 17 in Geneva, the United Nations High Commission for Refugees praised the manner in which the Agency handled the arrival of the migrants, saying that they "commend the exemplary work of the Canada Border Services Agency in coordinating the arrival and reception of the MV Sun Sea passengers."
We could not have provided for the processing, examinations and other operational requirements without incurring additional expenses, which is the reason an increase to our reference levels is being sought.
[English]
We have also identified a funding request in the amount of $2.8 million for the detention services provided by British Columbia for those migrants from the MV Sun Sea remaining in detention. The committee will note that these funds are to be frozen pending Royal Assent of Bill C-49, the human smuggling legislation currently before the House of Commons.
An additional $1.5 million is being sought for dedicated resources for the investigation of human smuggling networks. It will be used to support operations designed to prevent other migrant vessels from departing for Canadian waters.
The final line I would like to highlight is the $4.7 million being requested for the ongoing implementation of the harmonized sales tax, the HST, in Ontario and British Columbia. As part of our customs mandate, the CBSA has the responsibility for the collection and remission of duties and taxes at the border. With the implementation of the HST, amendments have been made to provincial legislation in provinces with which CBSA has agreements that provide the CBSA with the legal authority to collect and remit the provincial sales tax, provincial tobacco tax and the alcohol mark up and fees and to detain goods should an individual refuse to pay the applicable taxes.
[Translation]
I will conclude my remarks here, Mr. Chair, and would be happy to take questions from honourable senators.
The Chair: Thank you very much for your presentation. I will start with Senator Gerstein, from Toronto, who is also the deputy chair of our committee.
[English]
Senator Gerstein: Thank you, witnesses, for appearing before us. If you total the three expenditures that you have indicated on page 168 for the MV Sun Sea situation, it comes to $26.3 million. I assume through various intelligence services, and so on, that we have learned that there perhaps are other ships on their way either during the winter or later in the year.
My first question is, do you expect that the investments you are making in these new regulations will have an impact on the ability to slow down the possibilities of these coming? My second question is, what kind of activities can CBSA take with their security partners to stop ships before they even depart in the first place in?
Mr. St-Laurent: With the $26 million that we are seeking, we are deploying immigration intelligence officers in specific areas, which will definitely help us prevent the departure or the organization of future vessels. The $1.5 million has already been paying off from that perspective. The $26 million covers activities for this year only. All the changes we have to make on a long-term basis are part of Bill C-49, in which we describe what will happen if there were a vessel coming and how we would treat the migrants from that vessel, as well as all of the efforts, again with our international partners, to be put in place to be able to prevent such a vessel.
Peter Hill, Director General, Post-Border Programs, Canada Border Services Agency: As my colleague mentioned, the CBSA cooperates closely with its international partners. Much of the activity is focused on information sharing, and that can be information with respect to the suspected arrival of future ventures and it also may be information that is exchanged through mutual legal assistance treaties to support ongoing investigations of cases that have already arrived in Canada. That is the nature of the activity abroad in order to prevent an arrival in which CBSA is quite significantly involved. It is much more cost effective, if I can say it from that perspective, to prevent an arrival as compared to dealing with an arrival here on our shores or in Canada.
Senator Gerstein: You talked about your international connections in dealing with foreign situations. Is there a lot of cooperation with CSIS and the RCMP? Are there other facilities within Canada that work together to help you deal with these situations?
Mr. Hill: CSIS and the RCMP are critical partners. We also work closely with our colleagues at Citizenship and Immigration. We work with our colleagues in Defence as well. It is a whole-of-government approach. We believe that is required in order to deal with an issue that is quite complex.
Senator Gerstein: Thank you very much.
The Chair: I am looking page 168 in Supplementary Estimates (C), and Senator Gerstein pointed out the $26 million for this initiative. I note that some of that is coming from funds you already had within your department. Can we assume there are some things you will not be able to do as a result of the funds that you are now transferring to that activity that you had already appropriated? What is not getting done that should be getting done?
Mr. St-Laurent: I am assuming that you are referring the $9.8 million within the existing vote.
The Chair: That is correct.
Mr. St-Laurent: There are three elements basically related to the funds available within the vote. The biggest amount, which is described as the employee benefit costs, is a technical process by which a department that needs to spend more money in salary must set aside resources to cover the employee benefits for these employees. To answer your question, Mr. Chair, this is strictly and only a transfer of a type of resource, and it will not in any way, shape or form limit the services that are covered with these things. It is simply a different way of delivering the services from what we did previously. Instead of using a consultant to do the work, we are using an employee to do it, and we have to set aside the money for that purpose.
Senator Callbeck: Thank you for coming here this evening.
On page 168 in the estimates, there is a figure of $4.7 million for "Implementation of the Harmonized Sales Tax in Ontario and British Columbia." You mentioned that in your presentation. However, in the estimates it also says here that it is to cover affordable living tax credit for Nova Scotia. That would be a provincial program. Why is there money in here for that?
Mr. St-Laurent: — I apologize; I do not have that reference in my book. The $4.7 million is money being provided to CBSA to make system changes to the financial systems that we have right now.
The Chair: That is page 168.
Mr. St-Laurent: I can describe the $4.7 million in terms of the Ontario and the British Columbia changes, but I will have to come back to this in writing to explain the relationship that we have with Nova Scotia.
The Chair: That would be fine, if you could do that.
Mr. St-Laurent: We will, yes.
Senator Callbeck: On the note that has already been referred to, the $9.7 million; you talked about $9.2 dollars of that. There is also an amount in there that was in relation to Canada's response to the earthquake in Haiti. What was that appropriated for? Why has it not been spent?
Mr. St-Laurent: The resources that we received for Haiti were to deploy officers on the ground to do verification and to essentially ascertain that the people that were going to Canada had the right documentation and were not posing any risk to the country. We had people on the ground. We also had people here at the airport to welcome these people coming in.
The money was not spent with Haiti. There was no direct assistance provided to the country. The money that was not spent was because we took advantage of using DND flights from Canada to Haiti. We saved a significant amount of money from a travel perspective. We also had built in our cost estimate a contingency of about $200,000. That money was not spent because we were able to save on the flight and to save also on the personnel that we had here in CBSA for Haiti. There was no money that should have been given to the country that was not spent. Those are essentially savings that we have from a travel perspective and direct costs for the agency, as well as our capacity to absorb other personal costs.
Senator Callbeck: That money then is really from savings because you used the DND flight.
Mr. St-Laurent: Yes.
Senator Callbeck: In other words, there were no amounts of money that were allocated for services to the people of Haiti that were not delivered?
Mr. St-Laurent: That is right.
Senator Callbeck: I want to ask a question about the 2010-11 report on "plans and priorities," which indicated that the CBSA plans to increase spending by $164 million, of which $130 million stems from cash flow adjustment consistent with the 2008 economic and fiscal statement actions to improve spending projections.
This is a strange statement to me. It is suggesting that you will spend $130 million of that $164 million to learn to do better forecasts for spending.
Mr. St-Laurent: We are funded over a number of years to deliver on big projects from a system perspective. In 2006, CBSA received about $400 million to build a totally new system to accelerate information sharing between business and government. There has been some slippage because of procurement, and because of the sheer size of it, in delivering these systems and these projects.
When we were asked by Treasury Board what could we do to help to provide cash so that the government would not have to borrow as much for the implementation of Canada's Economic Action Plan, we loaned $130 million because of these delays in systems to the centre so that they would limit the overall pressure on the fiscal framework.
It is money that was not spent. It is not a forecast problem but it is essentially money not spent because of the procurement systems that we have in place and the staffing process that we have in place that takes time to put that together.
Senator Callbeck: Did you loan the $130 million?
Mr. St-Laurent: That money is coming back next year and the year after in our reference level to deliver the programs, the systems and everything.
Senator Callbeck: As I said, that is a strange statement. I could not understand it exactly. However, if you have lent the money that is very different from how I interpreted that sentence.
[Translation]
Senator Eaton: Thank you, Mr. Chair. Mr. St-Laurent, I have two questions.
[English]
When the MV Sun Sea landed, we obviously looked at people's health, did we not? Were you able to determine whether there would be ongoing health costs? In other words, did people get off the boat with chronic diseases like tuberculosis, HIV and other maladies that will incur ongoing costs to the Canadian health system?
Mr. St-Laurent: When the people arrived there was a complete assessment done. This was covered by B.C. Corrections. There was an assessment made of the health status of these individuals. Health services are being paid for those in need as part of the costs that we pay on a daily basis.
For all of the people still in custody, CBSA is covering the cost of providing health services. The cost of health services is small compared to the overall costs that we are paying.
Senator Eaton: You are saying that there were not a lot of people who have ongoing diseases to look after?
Mr. St-Laurent: I would venture to say that, yes.
Senator Eaton: You raised the issue of Bill C-49. We have been able to see in the last week or so the difficulty that countries like Italy are having with boatloads of fleeing Tunisians and Moroccans. Will this bill help you in what you have to do?
Mr. Hill: I believe the bill itself is designed to primarily address the problem of human smuggling.
Senator Eaton: Yes.
Mr. Hill: What is occurring with respect to the migration from Tunisia is different.
Senator Eaton: They feel that a lot of people coming from Tunisia were the wealthy class of Tunisians that could get themselves on boats. In effect, it was a form of human smuggling.
Mr. Hill: Bill C-49 will address human smuggling in a number of different ways. It will allow the Minister of Public Safety to designate an arrival as an event that relates to human smuggling under conditions where the arrival overwhelms CBSA's resources to conduct the verifications that are appropriate, or where there is suspicion that it is a venture that has been organized by human smugglers. That sets in play a series of other measures, including detention up to 12 months, in order to allow for time to conduct investigations into identity, to address any concerns with respect to admissibility relating to security or criminality.
It also makes amendments to laws that we believe will facilitate charges against those who are involved in smuggling. It will impose mandatory minimum sentences for smuggling and it will make the owners of these vessels liable. There are a series of measures that Bill C-49 addresses specifically.
Senator Eaton: You are asking for another $25 million now, and if another boat arrives, this will incur more costs, will it not? With each boat load the costs will be approximately the same?
Mr. St-Laurent: Yes, the $22 million for the MV Sun Sea was based on what we experienced with the Ocean Lady, which was a smaller boat. If we were to keep passengers from a boat that was the same size, it would generate the same cost.
The costs that we have in British Columbia are essentially the same as what we pay for detention in Laval or in the GTA. The ballpark figure is about $190 to $200. We have also looked at what is being spent by the Australians right now on Christian Island. It is pretty much the same as they are spending on detention. Their unique issue is the cost for transportation between Christian Island and Australia, which is not a cost that we have to incur. That raises the costs from their perspective.
It all depends on the size of the boat. If the boat held only 50 people, we would be more in a position to absorb some of the costs. We have a capacity of about 400 to 500 across the country. Anything that goes beyond 20 per cent of our capacity needs to have this kind of reaction.
Senator Ringuette: Of the 500 persons from the MV Sun Sea, how many were accepted in Canada and are still on Canadian soil?
Mr. Hill: They are all on Canadian soil. Of the migrants that were aboard the MV Sun Sea, as of Monday of this week, we still have 107 in detention.
Senator Ringuette: Why?
Mr. Hill: For a number of reasons: either their identity has not been established or there are concerns with respect to their posing a threat to the safety or security of Canada. Those investigations are continuing. On a regular basis CBSA makes a representation before the Immigration and Refugee Board, which determines whether or not to maintain detention.
Senator Ringuette: In your statement, you said that the cost of detention is $190 per day per person.
Mr. St-Laurent: Yes.
Senator Ringuette: You estimate $2.8 million will be paid to the Government of British Columbia.
Mr. St-Laurent: No, it is much more than that. Out of the $22 million, the total spending to date, just for the MV Sun Sea, was $16 million.
Senator Ringuette: But that is not on detention fees alone?
Mr. St-Laurent: No, but the majority is on detention fees. If I look at my numbers here, we have paid B.C. for detention approximately $9 million out of the $16 million. The rest of it is overtime spent on staff.
Senator Ringuette: You have paid that amount to the Government of British Columbia?
Mr. St-Laurent: Yes.
Senator Ringuette: What kind of detention centre are they in?
Mr. St-Laurent: The men are located at the Fraser Correctional Centre, a minimum security institution for men. We also must put additional trailers on the premises to accommodate their numbers. The women were detained in the Alouette, a women's correction facility in British Columbia. It is essentially a provincial correctional centre.
Senator Ringuette: I find that to be pretty expensive. You say that Bill C-49, which is in front of the House of Commons, will allow you up to 12 months detention. If you look at a cost of $200 a day per person, for one year that is $72,000 per person.
Mr. St-Laurent: Yes. Perhaps I can provide some clarification on the $2.8 million.
Senator Ringuette: Yes.
Mr. St-Laurent: Should Bill C-49 get approved, the $2.8 million would cover the remaining migrants of the MV Sun Sea that have not been released. It would cover the remaining persons from the MV Sun Sea for this fiscal year only. That is why it is a small amount.
Bill C-49 is more for what will happen down the road. The amount related to the detention costs in Bill C-49, when approved, is much more than that. However, the $2.8 million is strictly for this fiscal year. It would not cover anything for the following year.
Senator Ringuette: Of the 320 that were released, I suppose they are no longer under your responsibility?
Mr. St-Laurent: No.
Senator Ringuette: Under whose responsibility are they?
Mr. Hill: They are under various terms and conditions. They are released by the Immigration and Refugee Board and they are subject to terms and conditions. For example, a surety could post a bond maybe in the order of $5,000. They would be required to report to the CBSA every week or two. They would have to report to the CBSA if they were to change their address. All of this is because they are still in the process of having their application for refugee determination. They are released into the community, but they have not been determined to be either inadmissible to Canada or a refugee.
Senator Ringuette: During that in-between time since the event occurred, do you see any defaults of refugees that have been released and are not reporting weekly?
Mr. Hill: No. We track them closely, and all of them are abiding by their terms and conditions.
Senator Ringuette: How do you track them?
Mr. Hill: We track them in accordance with the terms and conditions. They have to report regularly, and that is the primary means by which we keep track of them. We actually physically do that.
Senator Ringuette: Your tracking system must be more than them reporting weekly.
Mr. Hill: No.
Senator Ringuette: That brings me to my —
The Chair: Final question?
Senator Ringuette: No, it is not a final question. It deals with the entire situation between Citizenship and Immigration Canada and Canada Border Services Agency and the flow of information between those two organizations.
A year ago, I called Citizenship and Immigration Canada to ask them who was responsible for people coming into Canada with a working visa. They told me it was you. I asked, "What kind of information do you provide to them? Oh, they know." I said "No. You agree to these working visas; therefore, you must know where these people are, their address and their employer."
Do they provide you with that information?
Mr. Hill: CBSA is responsible for the enforcement of IRPA.
Senator Ringuette: No. My specific question is this: Does Citizenship and Immigration Canada provide you with the data that you need in order to fulfil your responsibility of tracking?
Mr. Hill: Yes. There is an effective information exchange between the agency and Citizenship and Immigration Canada.
Senator Ringuette: Like what?
Mr. Hill: I would speak specifically with regard to the MV Sun Sea cases.
Senator Ringuette: No, no. I will tell you that I asked the same question to Citizenship and Immigration Canada, and they told me they do not provide you with that data and, actually, they hardly have it themselves.
Therefore, how can you fulfil your basic responsibility in tracking people that are no longer legal in Canada or, from the beginning are illegal in Canada, if you do not get the information from Citizenship and Immigration Canada? They told me that you do not get that information.
Mr. Hill: I am afraid I am not sure what cases the department is referring to.
Senator Ringuette: Sir, we get 250,000 foreigners a year coming to Canada with working visas. How do you track them?
Mr. Hill: I guess I would have to undertake to provide you with a written response in terms of tracking of working visas because I am not aware that there is an issue in that area. I would be happy to respond in writing to your question.
Senator Ringuette: In other words, is it not a fact that once these people have come into Canada with working visas, no one knows where they are?
Senator Gerstein: No one said that.
The Chair: Mr. Hill undertook to provide us with a written answer. I think that is the fair thing to do. We thank you for that.
Senator Marshall: Thank you for being here this evening. You were telling us earlier that 107 immigrants are still in detention. Where would the ones that are not in detention be? Would they be on some provincial program? I am assuming that these people are not working, so who funds their living expenses?
Mr. Hill: A great many of those who have been released from detention by the IRB have moved to Toronto, and they have a sponsor according to their terms and conditions. They may be living with a relative or an associate. As far as I am aware, they are not on any particular program, provincial or federal. They are under the supervision of a person who has agreed to do so as a condition of their release from detention.
Senator Marshall: For the 107 immigrants that are still in detention, what would be the time frame? How long will they be in detention? I would think that at some point in time, the remaining ones would be moved to another facility. Could you give us details as to what the future holds for the remaining 107 immigrants?
Mr. Hill: According to the Immigration and Refugee Protection Act, there is a set schedule for detention reviews. The first detention review takes place after 48 hours, the second after seven days and then there are detention reviews every 30 days thereafter.
Basically, for each of these 107 cases, the CBSA must make a representation to the IRB every 30 days in order to argue for detention if that is the objective. We would argue for detention basically for three reasons: To confirm identity, if the person is assessed as posing a threat to the safety or security of Canada, and if they are determined to be a flight risk; that is, if they were released, they would be unlikely to show up for a subsequent proceeding. Under those conditions, which are in accordance with the law, the agency argues for detention. It is up to the Immigration and Refugee Board member hearing the case to make the determination whether or not to maintain detention.
Senator Marshall: Would that be the ongoing detention centre? When you eventually work down to 30 individuals, do you move them into another facility, or do they continue on?
Mr. Hill: They would continue on in the same detention facility. That is right.
Senator Marshall: The $190 a day that you were speaking about, what does that represent? Is it food and clothing?
Mr. St-Laurent: It covers the cost of food, clothing and the building itself.
Senator Marshall: It factors in the building, does it?
Mr. St-Laurent: Yes, as well as the security, the guards around the building. It is the basic care as well as the protection of these individuals.
Senator Marshall: You are saying that $16 million of the $22 million has been spent?
Mr. St-Laurent: Yes.
Senator Marshall: Then $9 million of the $16 million is for detention. What is that $9 million? Is that the cost of the facility or the cost of the facility plus the food plus the people?
Mr. St-Laurent: On a monthly basis, we are getting an invoice from the B.C. government that details how many male days and women days have been experienced by the facility times $190 plus the GST and HST.
Senator Marshall: You have told us about the $22 million. What about the $9 million that was already available within the vote? What was that spent on?
Mr. St-Laurent: As I said earlier, the $9 million involves a decision that was made by the agency to deliver services with employees as opposed to using consultants. Every time you make a decision to use existing resources for consultants you have to set aside resources to cover the costs of employee benefits.
At the end of the fiscal year, that money is frozen by the agency to cover the costs of employee benefits. However, employee benefits are paid by the centre, not being paid by the agency, but the centre charges us. Instead of giving that money back to the centre to pay for employee benefits, the Treasury Board says to use the money set aside to cover some of the costs incurred for the MV Sun Sea.
Senator Marshall: Has the $9 million been spent?
Mr. St-Laurent: The $9 million has been used to offset the costs related to the MV Sun Sea. The money set aside is reducing the overall cost of the MV Sun Sea.
Senator Marshall: Those are my questions.
Senator Murray: It is a small matter in terms of the overall budget, but I still find it peculiar that we are being asked to vote $2.8 million to pay for detention services provided by British Columbia for those migrants from the MV Sun Sea remaining in detention. We are being asked to vote $2.8 million on the basis of an undertaking from the government that the money will be frozen, pending passage of a bill that has not yet passed Parliament. I cannot recall requests of that kind coming here before. I suppose we can check with Treasury Board officials. It is not the kind of thing, frankly, that I would to see made a habit. Potentially there could be problems if we get into this very often.
On the same subject, I am puzzled. We have these people in detention under some colour of governmental power to do so — some legislation somewhere. You want $2.8 million more to pay for them pending this proposed legislation that is still before Parliament. Why did you not ask for the money under the legislation that has put them in detention in the first place?
Mr. Hill: The linkage between the funding request and the proposed legislation is that it is a completely different detention regime under the latter. If the proposed legislation comes into effect, then those individuals who remain in detention are then captured by it. It is retrospective to those who remain in detention. For example, if the proposed legislation came into effect today, there would be 107 migrants from the MV Sun Sea in detention. They would be subject to a new detention regime, which would be detention up to 12 months without a review by the Immigration and Refugee Board of Canada.
Senator Murray: Refresh my memory: what are the terms of their present detention?
Mr. Hill: As I referenced, it is on a much more short-term cycle of 48 hours, 7 days, 30 days, and every 30 days thereafter.
The change is proposed because when 500 migrants arrive in this irregular way as a result of suspected smuggling, the resources to conduct the various required verifications of identity to know who is coming to Canada and whether they pose a threat cannot be done on a timely basis; so time is needed. That is why the detention regime is different.
Senator Murray: There are a couple of lawyers here who might tell us whether it does not raise some interesting problems if you put them in the slammer under one piece of legislation and you keep them there under a new piece of legislation. I think some of the Charter people will have some fun with it, but I do not know.
Mr. Hill: We have carefully assessed the proposed legislation, and it has been determined to be Charter compliant.
Senator Murray: Everything they do is deemed by somebody to be Charter compliant. Far be it from me to argue about that.
Apart from that aspect of it, we are talking about people who are in detention. The idea of voting funds on the basis that the government will freeze them until we pass a piece of legislation is not something we would like to make a habit. Was either of you in Treasury Board before you came to your present positions?
The Chair: Could you contact Treasury Board to ask them if they could explain under what protocol this is done?
Senator Murray: I am not as well informed as I should be about the organization. I remember when it was set up. You are the money man as Vice-President, Comptrollership Branch. Who is the head of the agency?
Mr. St-Laurent: It is Mr. Luc Portelance. He was appointed deputy on November 15. Previously it was Mr. Stephen Rigby.
Senator Murray: He is in PCO now.
Mr. St-Laurent: Exactly.
Senator Murray: You called him "deputy." Is he president?
Mr. St-Laurent: He is president.
Senator Murray: Is he a deputy head?
Mr. St-Laurent: Yes.
Senator Murray: He reports directly to the Minister of Public Safety, not to the deputy minister.
Mr. St-Laurent: He reports to the minister.
Senator Murray: Why do they call you an agency? You are not one of those special operating agencies are you?
Mr. St-Laurent: We are just a department. We are an agency in name only. We are not like the RCMP or CSIS.
Senator Murray: You are an agency, and you report directly to the minister. Are you set apart from the department?
Mr. St-Laurent: We are independent.
Senator Murray: You have your own services and comptrollership and so on.
The Chair: Do you have access to Treasury Board vote 5 emergency funding?
Mr. St-Laurent: Yes.
The Chair: What is this Treasury Board Management Reserve referred to in your submission?
Mr. St-Laurent: The TB vote 5 covers our costs for certain types of expenses such as severance pay and maternity leave. The management reserve is created by the centre and is in two parts: an investment reserve and an emergency reserve. They fall under the umbrella of the emergency reserve which we accessed. Accessing the reserve requires the preparation of a Treasury Board submission.
Senator Murray: Where do we find the Treasury Board Management Reserve?
Mr. St-Laurent: My colleagues from Treasury Board would be in a better position to answer that.
The Chair: Regarding the other point, could you ask him to explain that as well? It is new to us. We understand vote 5 well because we have done a lot of work on Treasury Board vote 5 emergency funding, about when it can be accessed and so on. We may want to look into this, but we better find out what it is first.
Senator Murray: Do you happen to know how much money is in it?
Mr. St-Laurent: It is at the centre.
The Chair: There is $22 million less than there was before.
Senator Murray: Who runs it?
Mr. St-Laurent: Treasury Board.
Senator Dickson: My first question is about your remarks on $1.5 million for dedicated resources for the investigation of human smuggling networks. Are these dedicated resources new?
Mr. St-Laurent: It is an additional effort undertaken by the agency. When we found out about the vessel coming to Canada, we deployed additional people in the field in Thailand and Sri Lanka, to put additional effort into prevention, trying to find information as to whether there were other vessels planning to come in.
Those four people were deployed overseas to work with other governments over there and with the RCMP, to ensure that we could prevent other vessels from coming, as much as possible.
Senator Dickson: Is it your intention that there will be similar dedicated resources on an annual basis?
Mr. St-Laurent: We would like that. Depending on the environment, those resources would move from place to place to deal with the problem. If Sri Lanka was the problem last year but the problem moved to another country, we would move these resources there.
Senator Dickson: Do you anticipate the cost will be far in excess of the $1.5 million?
Mr. St-Laurent: It would be more than $1.5 million, but it would not be in the order of tens of millions of dollars.
Senator Dickson: You administer 90 pieces of legislation and you will have another, so that is 91, together with all the regulations thereunder. Is there any hope of reducing that or simplifying the processes?
Mr. Hill: It reflects the breadth of the agency's mandate with respect to the Immigration and Refugee Protection Act, the Customs Act and a range of legislation pertaining to food, plant and animal. There are many pieces of legislation at the border that the CBSA has a hand in administering.
Senator Dickson: When was the last time anyone reviewed those 90 pieces of legislation — three years ago, five years ago or never? I am trying to get a handle. Sometimes legislation says "shall be reviewed every five years"; I am just curious.
Mr. Hill: I am not aware of the last time that a wholesale review was done. At the time of the creation of CBSA, just over five or six years ago, there would have been a fairly substantial review of the legislation for the creation of the agency. That is probably the most recent wholesale review of legislation.
Senator Dickson: When was the last time the Auditor General did a report on the agency?
Mr. St-Laurent: We had a report from the Auditor General on the commercial examination, I believe, last year. On an annual basis, we have a report from the Auditor General on specific functions that we have as an agency. On the question of an audit on a number of pieces of legislation we are administering, it is important to remember that many of these pieces of legislation are owned by other departments. We are simply administering the legislation.
As for us trying to change them, the direction has to come from the department — for example, Citizenship and Immigration. They hold the legislation on this; we are just executing.
Senator Dickson: Did the Auditor General make recommendations in her last report?
Mr. St-Laurent: Yes.
Senator Dickson: Were those recommendations implemented?
Mr. St-Laurent: They are in the course of being implemented. I can provide you with the specifics of the Auditor General's report. We are in the process of implementing these recommendations, but I can certainly provide you with more details on it.
The Chair: We would be interested in knowing how you are coming along with implementing the recommendations, and if this was purely a financial audit or a performance audit.
Mr. St-Laurent: It is more a performance audit.
The Chair: Do you get a performance audit once a year?
Mr. St-Laurent: At least.
Senator Cordy: I am also on the Social Affairs Committee and we are doing a project on social inclusion. Last week, we heard people talking about the temporary workers permit, I think it is called. They sign a document to say that they do not want to stay in Canada full time, that they are temporary; but this person suggested that some of them do stay and we have no way of tracking where they are. I am wondering if your agency is responsible for that tracking or who is responsible?
Second, regarding the request for $22 million related to MV Sun Sea, $9 million of that is for detention. If Bill C-49 passes, how much increase will you estimate in budgeting for the agency and would you foresee increases in staffing?
We heard earlier from Senator Dickson about the number of bills that you oversee as an agency. Will you be looking at increases in staffing over the next few years as a result of Bill C-49 if it passes, but also as a result of the increases in types of things that you are doing?
Mr. Hill: Temporary worker permits are not my area of responsibility. My understanding is that Citizenship and Immigration is responsible for tracking temporary foreign worker permits. However, I will undertake to provide a response in writing because I am not entirely sure.
Senator Cordy: We heard there is no tracking or way to find anybody who decides to stay in Canada. So you will submit a written report?
Mr. Hill: Yes.
Mr. St-Laurent: With regard to Bill C-49, I can give you a brief overview of the financial impact.
It deals with the new legislation that would be used for detention. The premise of Bill C-49 is, should we have boats coming in with loads of people on them, there would be significant pressure put on the agency to cover the cost of detention.
What Bill C-49 is about is detention; having these people for 12 months, at about $200 a day, would be the essence of it. It is driven by the number of people that we have.
One point I would like to make in relation to that is that on the $22 million for the MV Sun Sea, we have a condition with Treasury Board that any money we do not spend of the $22 million would be returned to the centre. We are not to keep any amount that will not be spent.
Senator Murray: Do you happen to know how many are coming?
Mr. St-Laurent: I wish I did; it would facilitate my planning.
Senator Murray: There is nothing that would indicate there is a vessel coming in on the high seas at the moment. Bill C-49 is future oriented. I do not want to beat this horse to death, but the reason you want a couple million of dollars, which will be frozen until the bill is passed, is that you want to apply it to people who are already in detention.
Mr. St-Laurent: Yes.
Senator Cordy: I will go back to Haiti — the $578,000. I think you said that money was because you took military transport back and forth. What else? That would be a lot of transport money you would be saving.
Mr. St-Laurent: When we forecast the cost to provide services, there was a certain level of activity that was to be deployed on the ground over there. We put people in Haiti. We also had employees left in the country to get these people coming in.
We were expecting many more people to come in. We were at a point, with the flow of people that came from Haiti, where we were able to use regular staff and forces at our airport to cover the work that we had to do with them, instead of having people on overtime. The savings were in the area of transportation, because it was much cheaper for us, though not to the extent of half a million dollars. The largest portion of the savings was from being able to use the regular work force because of the workload instead of using additional people on overtime
Senator Cordy: You are right that the numbers were much lower than we had expected. Certainly, Minister Kenney had put forward a quick access program, yet we took in far smaller numbers than anticipated and far smaller numbers than many European countries and, I think, the United States as well.
What happened that we did not bring in as many as we had thought?
Mr. St-Laurent: I cannot answer that question.
Senator Cordy: They would have to be approved before you start the verification.
Mr. St-Laurent: I do not have an answer to that.
Senator Cordy: The numbers were certainly lower than we were led to believe.
Senator Stratton: I am sitting here listening to the questions. I am not a regular member of the committee. I am interested, and I am sure Canadians are wondering about how we protect the country from more of these ships coming in. You have described in general terms what we are doing, and we should be putting money into preventing them from leaving the other side in the first place.
Will you be able to tell us that a firm agenda will be in place to prevent this and minimize the number of these ships that embark, so that Canadians will not have to face 500 people landing on their shores with the cost of $200 a day? What level of confidence can you give us that that will be minimized? I know you cannot guarantee it, but I think the folks would like to know what you are doing to minimize that event.
Mr. Hill: There is a serious effort to address exactly that question and a serious effort to try to prevent any future arrivals, such as we have experienced in the last two years or so.
The intent is to have a robust, whole-of-government approach. The government has appointed a special envoy, Ward Elcock, to head up a task force on human smuggling, and it is specifically mandated to address and try to prevent future arrivals. He is taking the lead on an international approach to work with Australians and other partners to do everything that Canada can to prevent this country from being targeted by human smugglers. This involves the CBSA, our portfolio partners, the RCMP, CSIS and our colleagues in other departments.
The priority focus is on prevention.
The Chair: Colleagues, that concludes round one. I have two names on round two. I will ask Senator Ringuette and Senator Marshall to state their questions and if you could make a note, Mr. St-Laurent and Mr. Hill, and give us the answer in writing, that would be appreciated.
Senator Marshall: What is the capacity of the Fraser Correctional Institution and that of the Alouette Correctional Institution? I want to know how many migrants they could accommodate in the future.
Senator Ringuette: I would like to stress that my earlier question about the flow of information from Citizenship and Immigration Canada to you and your responsibility in tracking is because I find it unfair to your agency, because of the lack of information.
You mentioned $9 million of consultants' fees that you are not using this year. What kind of consulting fees and work would you have?
The Chair: Could you give us a detailed answer in writing to that? Thank you.
Mr. St-Laurent: Yes, I can.
The Chair: I will call this session to a close and thank you both for appearing on behalf of the Canada Border Services Agency. Mr. St-Laurent and Mr. Hill, thank you very much for being here. I am sorry we gave you so much homework to take back, but if you could liaise with the Treasury Board Secretariat, two or three of those major ones could be dealt with quickly.
We will now turn our attention to Infrastructure Canada. We are still dealing with our primary focus on Supplementary Estimates (C), but sometimes we wander from that and deal with other aspects of estimates as well. We are pleased to welcome a panel from the department, including a number of familiar faces: John Forster, Associate Deputy Minister, Infrastructure Canada; Taki Sarantakis, Assistant Deputy Minister, Policy and Communications Branch; David Miller, Assistant Deputy Minister, Corporate Services; and Nathan Gorall, Director General, Programs Operations Branch.
We have Mr. Forster to open things up with comments.
John Forster, Associate Deputy Minister, Infrastructure Canada: Thank you Mr. Chair and honourable senators. It is always a pleasure for us to appear before the committee to provide an update on our infrastructure programs.
As I outlined when I was last here before this committee, Infrastructure Canada is playing a major role in the delivery of stimulus measures under Canada's Economic Action Plan. Through that plan, Infrastructure Canada was asked to do two things, The first was to accelerate investments under the seven-year $33 billion Building Canada plan.
[Translation]
Second, to deliver more than $5.5 billion in new funding for infrastructure, through the $4 billion Infrastructure Stimulus Fund, the $500 million top-up to the Communities Component of the Building Canada Fund, the $1 billion Green Infrastructure Fund and the $25 million for the National Trails Coalition.
[English]
Since the launch of Canada's Economic Action Plan in January 2009, we have committed over $10.75 billion towards more than 6,300 infrastructure projects across Canada. Together with the contributions from our partners, this investment in public infrastructure now totals approximately $31 billion.
Following the launch of the plan, we working closely with provinces, territories and municipalities to identify and approve projects quickly so that construction could begin as soon as possible and provide stimulus to the economy.
[Translation]
We focused on delivering these funds with the necessary speed, while at the same time ensuring accountability to taxpayers. The Auditor General's report last fall showed that we took appropriate steps for the approval and launch of these programs. We believe we struck the right balance between the need for speed and the management of risks.
[English]
I mentioned that, as part of the plan, there are more than 6,300 projects. While most projects were on track to be completed by the original deadline of March 31, 2011, there were some provincial, territorial, municipal and not-for- profit projects that faced scheduling challenges. They indicated they would benefit from some additional construction time for projects to be completed. To respond to these challenges, the Prime Minister announced on December 2 a seven-month extension for completing infrastructure projects, to October 31. This was for four programs in Canada's Economic Action Plan, including two managed by us.
Applications for extensions were due from proponents at the end of January. We are now going through those. We do not have figures yet on how many projects will be getting an extension. We know that some proponents that could have completed their projects by March 31 are taking advantage of the extra time and sometimes saving costs as a result.
As the recent report on Canada's Economic Action Plan indicated, in the short term infrastructure funding has contributed to job creation throughout Canada. The recovery in employment has been particularly strong, with Canada emerging as the strongest of the G8 countries. Since July 2009, according to labour force survey results, more than 460,000 new jobs have been created, offsetting the job losses during the recession. However, in the longer term, the infrastructure funding will benefit Canadians by ensuring that the economy recovers from recession with more modern public infrastructure.
[Translation]
Before I conclude my remarks, I would like to address the line items that appear in this year's Supplementary Estimates (C).
[English]
You will note there are two information items for reductions in spending that have been reflected for the Provincial- Territorial Infrastructure Base Fund and the Green Infrastructure Fund. These reductions are simply to match the cash flow requirements of our partners and the projects they are constructing. The monies are not lost. They are reprofiled for future years to better match the flow and pace of construction.
I also want to state that with the extension of the March 31 deadline, we will flow some stimulus funding into next year. The amount to be carried over will be determined as we receive claims from our partners for costs incurred to the end of March.
Finally, to meet the resource requirements for the plan, Infrastructure Canada undertook some significant staffing to increase the size of the department and, as a result, our operating costs increased. In the medium term, our operating costs will decline once the EAP programs are completed next year. However, significant effort must still be devoted to monitoring payment processes and close-out of several thousand projects.
[Translation]
I would like to conclude my remarks by noting that Infrastructure Canada's contribution to the Economic Action Plan, and to improving Canada's infrastructure, is due to its successful partnership with provinces, territories and municipalities.
[English]
As the stimulus funding winds down, the government will continue to play a significant role in delivering infrastructure funding through longer-term programs such as the Building Canada Plan. Included in the seven-year plan is the Gas Tax Fund, which has been doubled to $2 billion a year and which the government has committed to making permanent. This represents a stable, reliable funding commitment to cities and communities across Canada.
Thank you very much for your time.
[Translation]
We will be pleased to answer any questions the honourable senators may have.
[English]
The Chair: Mr. Forster, thank you very much. Refresh my memory on these programs where you go to the municipality. You flow through the province and the province decides which municipality should get the funds?
Mr. Forster: Each program is a little different. The Gas Tax Fund, for example, by and large flows through provinces, and there is an allocation formula to cities; they chose their projects. In a couple of provinces, such as Ontario, the province did not wish to flow the money so our agreement is with the Association and with the City of Toronto, but by and large, in most cases it is through the province.
The Chair: Is it the Association of Municipalities?
Mr. Forster: Yes, in Ontario.
Senator Gerstein: Mr. Forster, in your opening remarks, you refer to the $4 billion infrastructure fund, the stimulus fund. This is a lot of money, needless to say. I look back to the fall, when the Auditor General presented her report. She acknowledged that the scale and the urgency of Canada's economic plan created considerable risks dealing with that sum of money because of the urgency; yet her findings were, quite frankly, overwhelmingly positive. As I recall, the heading on her press release was "launch of programs well managed."
As I look back to her report I see, for example, on page 14 she says: "All of the projects that we tested for the infrastructure stimulus fund met the eligibility criteria." On page 20 she wrote: "We found that internal auditors provided management with timely information and adequate advisory services." To pick one more, on page 25, it says: "From our audit of selected Economic Action Plan programs, we found that the government had adequately managed these selected programs by putting in place appropriate management practices and providing programs to eligible recipients in a timely manner."
You get the feeling of what developed from this. My first comment would be congratulations to your department in the manner in which Infrastructure Canada was able to deal with the dispensing of all of these funds.
I suspect that you might have introduced new practices into how you were dealing with pressures and risks of the economic plan such as enhanced audit practices, and streamlined processes for funding applications. In your opinion, should some of these processes be preserved and perhaps incorporated into the way that Infrastructure Canada does business in the future?
Mr. Forster: Thank you for that question. We were pleased by the results of the Auditor General's work. She is not finished yet. She is doing a second round of the audit. She looked at the launch and the set-up of the program. We are working with her office now as she does another review of the program, which will be published in the fall.
This program was a truly national partnership. It was very much also due to the credit of provinces, territories and municipal governments, who really stepped up. It was a remarkable thing in the sense that people recognized that we were under considerable time pressures for everyone to move forward quickly and everyone cooperated, which was quite something.
We did put in place a lot of risk management practices that I think we will be keeping. Every project went through a risk rating so we were able to focus our attention on projects that were riskier and less time on those that were straightforward and posed small risk.
Our internal audit shop also was very much involved in working with our program people like Mr. Gorall in setting up frameworks and control frameworks; our ADM of corporate, Mr. Miller, and our finance people the same. There was a lot of team effort there. The entire department was focused on delivering EAP. We still have a lot of work to do between now and October, and at the end of that, we will sit down and do a more formal lessons learned process and see what we can apply going forward.
Senator Gerstein: They will be included in your going forward program?
Mr. Forster: Yes.
Senator Gerstein: Thank you very much for that answer, and again, Mr. Forster, to you and your associates, my compliments, on behalf of Canadian taxpayers.
The Chair: Is there any indication that the environmental impact assessments that were foregone in order to get these projects going will continue with federal infrastructure programs after this economic downturn stimulus has concluded?
Mr. Forster: The regulations were passed, and they were focused on exempting projects where we could demonstrate there was limited environmental impact. When you are looking, for example, at repaving Steeles Avenue in Toronto, doing a long environmental assessment is probably not a good use of our time and money because Steeles Avenue is Steeles Avenue. We will be looking at continuing to try to streamline those kinds of things so that we are focusing on projects where the environmental issues are more of a concern.
With the stimulus fund, in particular, there were not many projects that required an environmental assessment because whether we would accept them without an assessment tended to be one of the criteria we used in screening projects. If you were to need an eight-month environmental assessment, the stimulus program was not the right program for that project.
Senator Marshall: You talked about the projects that were not finished by the deadline. You talked about the seven- month extension. You did not have any figures but you are looking at the application extension submissions now. I would have thought that those projects not finished by March 31 would automatically roll over into the next fiscal year to meet the new deadline. Could you speak about that briefly?
Mr. Forster: There were some conditions around the extension when we announced it in December. The first was that by the end of January provinces had to come in with a submission with which projects they wanted extended, how much money they would spend by the end of this fiscal year and how much needed to be moved into next year. We also asked for a commitment from the proponent to finish the project and to accept responsibility for any costs after October 31. If it was a municipal project, they needed a council resolution. For the provincial one, the provincial minister had to sign it. Non-profits required a board resolution. That is the material we are going through now to ensure they have met those.
The other key condition will be that they must have started work before the end of March. Therefore, if you have not begun your project by then, there is no point in us extending the deadline for you. They will have to get a claim in for costs incurred up to March 31. That will be the last thing for them to do.
Senator Marshall: You would have no idea at this point in time how much money will be re-profiled, do you? The money will just shift from the current fiscal year into the next fiscal year, is that right?
Mr. Forster: Exactly, yes.
Senator Marshall: Are you anticipating many projects will fall off because they will not meet the October 31 deadline?
Mr. Forster: If you will not meet the October 31 deadline, we will still allow you the extension to October 31. However, you are passing a resolution and committing to us that, one, you will finish it — you cannot leave it three- quarters built — and, two, you have to pay all costs after that date.
Senator Marshall: Therefore the money will shift from this year to the next. However, when you spoke about the Provincial-Territorial Base Fund and Green Infrastructure Fund for 2010-11, you were talking about monies moving forward not just to next year but you used the term "future years." Is it correct that it goes not just into next year but you anticipate some going beyond that?
Mr. Forster: With the economic action plan, there are only two programs: The stimulus fund and a top-up to the program for small communities. Those end in October. The gas tax will go on permanently. The Building Canada Fund, the Green Fund, base fund, are all seven-year programs. Therefore, they will still run out to 2014-15. They are not affected by the October 31 deadline.
Senator Marshall: Congratulations on the audit report from the Auditor General. That is something you can be proud of.
Mr. Forster: Thank you.
Senator Eaton: You should know that Senator Marshall was the Auditor General of Newfoundland and Labrador.
The Chair: Therefore, that was not just an idle compliment.
Senator Eaton: She knows whereof she speaks.
To follow up a bit on a question from both Senators Gerstein and Marshall, can you explain the process of how proponents submit claims after the work is done? I know there is a lag between the time when construction work begins and when funding leaves the federal bank accounts. Can you walk a novice like me through the process?
Mr. Forster: Sure. We pay as costs are incurred, and this was part of the design of our programs; we pay after the fact. It is the same you would do if you were building a roof on your house: You would sign a contract; you might give the roofer 10 per cent up front, but you will pay him when the job is done, the work is completed; and the bills come in.
Senator Eaton: What about overruns for things that do not come in?
Mr. Forster: Right. I will finish the explanation first.
In our case, people can submit claims every quarter for the costs incurred up to that point for their projects, and we will pay our share, which in most cases for municipal projects is one third. If it is a provincial highway, it is half and half. In most cases, we will flow our money to the province that will then pay the municipalities.
In Ontario's case, our money goes to the Ontario government who has agreements with the municipalities and pays their share and our share to the cities for costs incurred as the projects are built. We then pay the final claim when the work is all done and the project is there.
Again, that was part of our risk management strategy. We could have flowed the money out the first day of the fiscal year, but we would much rather pay as the work is completed.
In terms of cost overruns, we do not cover that. We do not do it under any of our infrastructure.
Senator Eaton: That was made clear from the start, was it?
Mr. Forster: That has always been a condition of our funds. The proponent is the one managing the project, managing the contract, and doing the tenders and the estimates.
If we were to accept responsibility for cost increases beyond what we approved, first, we would have to set aside large parts of our program to cover that; and second, to manage our exposure and risk, we would have to get a lot more involved in how the projects are being managed. I do not think anyone wants the federal government trying to tell, for example, Mississauga how they should manage a project. It does not make sense.
It is part of the shared responsibility of the program.
Senator Eaton: In your presentation, you talked about longer-term programs such as the $33 billion Building Canada Plan. What is that?
Taki Sarantakis, Assistant Deputy Minister, Policy and Communications Branch, Infrastructure Canada: The Building Canada Plan is a series of initiatives. First, is the Building Canada Fund, which is about $8 billion. The second is the Provincial-Territorial Base Fund, which is $2.275 billion. It also includes the Gas Tax Fund until 2013 but which the government has stated will become permanent after that.
There are two other initiatives not managed by Infrastructure Canada but are part of the plan. The first is the Public-Private Partnerships Fund, which is run by P3 Canada. The final one is the Gateways and Border Crossings Fund run by Transport Canada.
The total is $33 billion. As Mr. Forster has mentioned, this continues until 2014.
Senator Eaton: Basically, it is continuing to build infrastructure.
Mr. Sarantakis: Yes. It is the government's long-term commitment, announced in Budget 2007. It was the first time there was a seven-year commitment to an infrastructure framework in Canada.
The Chair: Was it the Building Canada Fund that was accelerated for stimulus purposes so there was more up-front money? How much did you accelerate it, and will there still be money for the seven-year program?
Mr. Forster: In addition to the new stimulus money, the other commitment made following a meeting between the Prime Minister and the premiers was that we would accelerate our existing programming. Part of our challenge was not just to deliver the stimulus money but to speed up the seven-year program much quicker to help the economy.
As Mr. Sarantakis mentioned, we moved quickly on a lot of those. I think about 90 per cent of the Building Canada money is committed. However, these are not short-term, two-year projects. These tend to be much larger, more strategic, bigger infrastructure projects; for example, the Spadina Subway in Toronto.
The Chair: The Saint John St. Stephen Highway in New Brunswick?
Mr. Forster: That is correct. Another is the Evergreen Subway in Vancouver. These large projects take a long time to build. They are not something you will complete under a stimulus program in 18-24 months. These programs continue, and the money will continue to flow.
About 90 per cent of that fund is committed to projects, but the actual money will be paid as work is completed.
The Chair: How much of the seven years is left in that program?
Mr. Forster: We are about halfway through it, but if some of those projects go beyond 2014, the money will flow out of it.
The Chair: Without a top-up on that, you only have 10 per cent left.
Mr. Forster: For new projects. There is still a lot of money left —
The Chair: The other projects are already committed and have been announced several times. I am sure if there are any other major projects in the future, they will have to come from some other funding if the same kind of sharing is going to take place.
Mr. Forster: Right.
The Chair: Thank you. Are there any other comments on that?
Senator Ringuette: You have put the finger on the issues that I want to raise by accelerating the Building Canada Plan. There are only three years left and $3.3 billion of possible infrastructure projects on that.
If I look at your statement, on page 1 at the last paragraph you say, "Infrastructure Canada has committed over $10.75 billion." That $10.75 billion would come from $5.5 billion of the new funding for infrastructure, which would leave $5.25 billion coming from where, the Building Canada Plan?
Mr. Forster: From a number of different programs. First, we are not counting the gas tax in that $10 billion. As you know, that is flowing at $2 billion per year.
Senator Ringuette: No, but I want to understand. You say, "First, to accelerate investment under the seven-year $33 billion Building Canada Fund."
Mr. Forster: Right.
Senator Ringuette: You said that 90 per cent is committed. That leaves $3.3 billion. You then say, "Second, the $5.5 billion." From your comments here, I gathered that has all been committed. You then say in that paragraph, "Infrastructure Canada has committed over $10.75 billion." Therefore, I conclude — and correct me if I am wrong — that the $10.75 billion is the $5.5 billion of new funding for infrastructure, which leaves $5.25 billion. Would that come from the $33 billion?
Mr. Forster: Yes. It is coming out of the Building Canada Fund and the Green Infrastructure Fund. Perhaps the best thing we could do is provide you a table by fund.
The Chair: That would be helpful. You did that before when we did this report a couple of years ago and it was helpful for us.
Mr. Forster: To do it verbally, it is just a bunch of numbers. We would be happy to do that.
Senator Ringuette: If there is $5.5 billion from that $33 billion fund, and you said that 90 per cent of it is committed, committed to what? It just does not add up.
The Chair: They will provide us with that.
Mr. Forster: Yes.
Senator Ringuette: Thank you. You then say, "$10.75 billion towards more than 6,300 projects across Canada." What percentage of these projects will be going into the seven-month extension? Is it 10 per cent, 12 per cent, 15 or 20 per cent?
Mr. Forster: About 4,700 are stimulus projects that have to be done by the end of October. Some of them were done last year under "trails." Again, it is complicated, but about 4,700 were stimulus projects, so they came out of the Infrastructure Stimulus Fund or the top-up to the small communities program.
Mr. Sarantakis: In money terms, it is about 50 per cent. Of the $10.75 billion, $5 billion of that is from the economic action plan, which is $4 billion for the Infrastructure Stimulus Fund and $1 billion for the top-up to the communities component. It is about half.
Senator Ringuette: You are saying that 4,700 projects need an extension?
Mr. Forster: No. 4,700 are funded under those two programs.
Senator Ringuette: Okay. My question was: What percentage of projects will need an extension out of the 6,300?
Mr. Forster: Right. As I answered earlier, at this point, the deadline to submit the extensions was the end of January, so we are going through those proposals now. Therefore, I do not have a number for you at this point.
Senator Ringuette: Do you have a guesstimate?
Mr. Forster: I really do not have a number, honest.
The Chair: We believed you the first time.
Mr. Forster: Okay. We should know more as we get into it. Remember, the second condition is they have to give us a bill before the end of March. We will have the ones that they propose, and then we will go through the other board resolution, et cetera. At the end of March, they have to submit a bill to us for the costs incurred up to that year.
Senator Ringuette: For all of these requests for extension, the deadline was January.
Mr. Forster: The end of January.
Senator Ringuette: You have to review the process with certain guidelines that you stated earlier.
Mr. Forster: Yes.
Senator Ringuette: When will these people know that their projects have been accepted for an extension?
Mr. Forster: We will be going back to them probably in the next two or three weeks. They know they have submitted a list. For example, Municipality X knows it submitted six projects for an extension, so we will go through and send them a letter saying, "We have all your paperwork, everything is in order, your board resolutions are there, conditionally you are good. The second condition you must fulfil is that we must get a bill for all the costs incurred up to the end of March. You have to get that in." That will be the second hurdle they must meet for the extension. If you cannot submit a claim for costs incurred up to March 31, it means you have not started the project. If you have not started it by the end of March, you will certainly not finish, so how can you argue for an extension?
Remember, the other issue was we were trying to put as much of the stimulus in the two-year period of the economic action plan as we could, so we want all the bills in. We want as many bills in now that go in this fiscal year as possible.
They will get a conditional acceptance: "We have your application and paperwork. That is fine. Subject to you giving us a claim for your costs up to the end of March, you are fine for an extension. If you do not give us a claim, you will not be extended."
Senator Ringuette: Thank you.
Senator Murray: We have been focused tonight and in your previous appearances here on the job creation and the economic stimulus, the way in which these programs have helped us to fight the economic downturn that occurred as a result of the international financial crisis. That is extremely interesting.
However, I think it would be really interesting if we could find out — I do not think that you have this information now; if you do, so much the better — what all this has done for the national economic potential, for our national productivity. There was mention made of the Saint John, New Brunswick to St. Stephen highway. We all know that is a highway that leads into the United States. Work has been done on the border crossing there, which was a terribly congested point. I do not know whether it was done under this program, but probably so.
The Chair: Yes.
Senator Murray: I think we are looking at some way out of the Windsor-Detroit problems that seem to be evolving. There was Spadina. What was the other one? Was it something in the West?
Senator Eaton: Evergreen.
Senator Murray: Leaving aside the important effect these have had on employment — that is, building these things, buying the materials and the economic stimulus they create — these infrastructure projects are not without considerable impact, I think, on our overall national economic potential and national productivity.
I think it would be great if we could take all this stuff that has been done — there may be some that are dubious; I do not know because I have not looked at them all — and have someone quantify what the impact is likely to be. Some of this stuff is being done earlier than otherwise would have been the case were it not for the fact that we were in economic trouble and had to climb out. That would be extremely interesting. Finance probably is looking at it — whether or not they would tell us, I do not know. However, we could try to get at it.
That raises a second question that I think I raised here before, namely about the great national infrastructure projects. There are the ones that I just mentioned and that were mentioned before, namely, the highway and Evergreen and Spadina. Those are big projects. Most of us can remember the TransCanada Highway and the St. Lawrence Seaway. Those were big projects and they were important to our economic potential; we all know that.
I wondered aloud and never got a satisfactory answer about whether someone at the centre — that is, someone at the national federal government level — has worked out or has a list in mind of national infrastructure projects that we will need in the medium future and what they are, and where they are. "Infrastructure" includes all kinds of stuff, for example, schools, universities, research, the health of the population and everything else. However, are there any huge megaprojects? I was extemporizing on this before the meeting and one of my colleagues said, "Yes, a national electric grid." That is an interesting concept.
I will not ask whether anyone has given this any thought because I am sure someone has, but have you been involved in this kind of forward looking thinking — I will not say blue sky thinking — or have you been totally preoccupied with getting today's job done?
Mr. Sarantakis: I will speak to your first question, which is an excellent point because all these infrastructure projects — and, you talked about thousands of dollar projects and billions of dollars — all have real benefits. They can be direct, in the case of a highway; or indirect, in the case of a subway system. You have Spadina, in Toronto, where you have real costs of congestion in big cities. There are also real costs in terms of human health. We know that pollution kills 3,000-4,000 people a year in Canada.
Now we will have an opportunity to catch our breath after the economic action plan has been done, we want to take the time to quantify some of these benefits. We all know that they are real and important, but we have not had time to go back and say that this many kilometres of highway equals this much net benefit to Canada and this many more transit riders translates into this kind of benefit in terms of congestion.
It is important work and work that we will be turning our attention to shortly.
Senator Murray: If we have a real story to tell there, then we have something to say vis-à-vis our competitors in terms of facilitating trade, and so on.
Mr. Sarantakis: In terms of your second question, it is more difficult to answer because there are needs everywhere. What you are talking about, in a way, is nation building or megaprojects or strategic vision projects. Those can be found in any different realm, for instance, in high-speed rail; in connectivity — that is, connecting all Canadians at points in broadband, in ports, in airports; in transmission links; in ensuring that everyone has access to natural gas, or electricity, or whatever the case may be.
Senator Murray: Is there someone trying to sort out where we should start, given our fiscal realities, the potential economic needs and growth, and so on?
Mr. Sarantakis: These are choices and they all have positives and benefits and negatives and costs. It is a question of the government sifting through priorities at any given time.
Senator Murray: It is a political decision, then.
Mr. Sarantakis: In part, but it is informed by empirical data and empirical realities.
Senator Murray: Thank you.
Senator Callbeck: Thank you for coming here this evening.
You said that Infrastructure Canada was asked to do two things under the economic development plan. One was to accelerate investment under the seven-year $33 billion Building Canada Plan by reducing administrative requirements. What administrative requirements? Could you talk about that? What did you reduce?
Mr. Forster: We did a couple of things. First, we simplified and streamlined the environmental assessment for infrastructure projects. We found, for example, that there are projects that not only do not have an environmental impact but they have an environmental benefit, for example, if you are doing transit, clean water or cleaning up sewage. We streamlined and improved that through regulation. We could not have done the stimulus plan or accelerated Building Canada without those changes. It allows us to focus on the projects where you may have an environmental effect and you need to mitigate these.
Second, we streamlined the business case process we had for large projects. We found that we were duplicating a lot of what provinces and cities were doing. In Ontario, for example, on the Spadina subway extension, we were demanding a lot of information and they ended up having to produce quite a bit. We streamlined that to focus on the key things we needed to make a decision on the project in terms of cost, benefits and the work that was going on.
We put in place a different kind of program, as Mr. Sarantakis mentioned, namely, the provincial-territorial base. This is where every province and territory gets $25 million a year to equal it and help smaller jurisdictions like Prince Edward Island. The province is the one that proposes the do the project there. That is done on a one-page annual capital plan for the year. It is to respond to their priorities and what they want to do. It is a streamlined process for them.
We did a number of things to try to reduce paperwork and streamline the process.
Mr. Sarantakis: The other one that was important in terms of saving time involved was the increase in the financial delegation to the minister for approving projects. That meant that the number of Treasury Board submissions, which are a long process, was reduced considerably.
Senator Callbeck: Under the economic plan, then, there were four stimulus funds, or were there more than that?
Mr. Forster: For our department?
Senator Callbeck: No. You managed two of them.
Mr. Forster: The other ones that are being extended?
Senator Callbeck: Yes, there are four extended. Are there others?
Mr. Forster: For the extension there are only four. There is the recreational infrastructure program. That is delivered by the regional development agency so ACOA in Atlantic Canada and Western Diversification. We are not involved in that. That money is not in our budget; that is in the regional agencies.
Senator Callbeck: The extension does not apply to this?
Mr. Forster: Yes it does. The four that are being extended are the recreational one, which was originally a $500 million program. It is to do rinks, arenas, soccer stadiums and recreational infrastructure. That is not with us; it is with the regional agencies. That one will have the extension.
The second program that is extended will be the knowledge infrastructure program. That is run by Industry Canada, and it does infrastructure at universities and colleges across Canada.
The other two programs that can have the extension are ones we manage, so it is the stimulus fund, which is the big $4 billion one, and a $500 million top-up to Building Canada for small communities, the ones under 100,000. Those are the four that are eligible for extensions.
Senator Callbeck: Which ones are not eligible?
Mr. Forster: There are other programs in the economic action plan that were managed by some other departments, so you would have the Community Adjustment Fund, which was run by ACOA and Western Diversification. It was not just infrastructure, but it could do infrastructure.
I believe First Nations infrastructure is not because the projects were being done by Indian and Northern Affairs Canada and are virtually done.
I think housing agreements between Canada Mortgage and Housing Corporation (CMHC) and the provinces are not being extended because of the nature of that program, since they transfer most of the money out up front.
Senator Callbeck: Were those housing agreements part of the economic action plan?
Mr. Forster: There was no money for housing in the economic action plan. Those were managed by CMHC.
Senator Callbeck: You have the community adjustment fund and the housing, the money going to the provinces. What else is there?
Mr. Sarantakis: I think that is the majority.
Mr. Forster: I think those are the big ones. The other programs that we have do not need an extension because they run longer than the two years. Those were just the ones.
Senator Callbeck: There is one question I have on the supplementary estimates, about the $5 million that you are asking for. It is at the bottom of page 56 of Supplementary Estimates (C). It says that Office of Infrastructure Canada has historically been underfunded in their operating vote. Why has this not been fixed? Why are you in here time after time asking for money?
Mr. Forster: Infrastructure is a recent department. It has only been in existence since 2002, and it started as an agency within Treasury Board, so it is a small agency. It has never had a permanent budget because it is new and it was small. Now, it was not an issue particularly. It took its operating funding from the amounts given to it in budgets for the programs themselves, and we are still in that operating model. That is how we fund the department itself. For example, under the stimulus fund, we were given an allowance of up to 3 per cent to use in the department to manage the program and the department. That is how we fund our administration.
Senator Callbeck: In other words, it will continue that way.
Mr. Forster: That will be a decision for future budgets and government decisions.
Senator Callbeck: Thank you.
The Chair: Have you been involved in any discussions to change this way of funding? This is something we found extraordinary and it should be rectified.
Mr. Forster: We are not in any current discussions.
The Chair: We might suggest that you should perhaps be.
Is there anything else, honourable senators? I think this concludes our evening, right on time.
I remind you that this committee has a report on infrastructure and on all the various programs. The undertakings that you have given, Mr. Forster, will be helpful in upgrading this report. If you wanted to make reference to that, it is our sixteenth report of June 2008. Since then, we have dealt with infrastructure but more from the stimulus package point of view. This gives a very good background.
Senator Gerstein: Could we have that circulated, please?
The Chair: Why do not we do that? If there was a supplement on the infrastructure program, that should be circulated as well so we are all up to date, and then we will understand the material we receive from our witnesses after that.
Mr. Forster, Mr. Miller, Mr. Sarantakis and Mr. Gorall, thank you for being here and helping us with this complicated subject matter. It has been very helpful and we look forward to receiving your material.
The meeting is now adjourned.
(The committee adjourned.)