Proceedings of the Standing Senate Committee on
National Finance
Issue 1 - Evidence - June 15, 2011
OTTAWA, Wednesday, June 15, 2011
The Standing Senate Committee on National Finance met this day at 5 p.m. to examine the Supplementary Estimates (A) for the fiscal year ending March 31, 2012.
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, this afternoon we are going to start our review of the Supplementary Estimates (A) for the 2011-12 fiscal year before our committee.
[English]
Our committee began consideration of the Main Estimates in the last Parliament, consideration which is ongoing and will continue throughout the year. This, however, constitutes the beginning of the examination of supplementary estimates to those Main Estimates. It is anticipated that this is the first of, historically, three supplementary estimates during the year.
This afternoon we are pleased to welcome back — and we hope you keep coming because you are helpful in each of your visits — officials from the Treasury Board of Canada Secretariat. Appearing this evening are Bill Matthews, Assistant Secretary, Expenditure Management Sector; Sally Thornton, Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector; and Marcia Santiago, Senior Director, Expenditure Information Division.
Honourable senators, in addition to Supplementary Estimates (A), we is also the opportunity to discuss Governor General special warrants if you have any questions on those issues. You will recall that at our last meeting the Library of Parliament provided us factual information, much like the background information they provide on these supplementary estimates. We have asked the Treasury Board Secretariat to direct their attention to any of those questions we might have so we can have a complete picture of how the government received its funds and the special warrants during an election campaign.
Mr. Matthews, you have the floor, and then we will go into a question and answer period.
[Translation]
Bill Matthews, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you, Mr. Chair. I am pleased to be here with you this afternoon to talk about the 2011-12 Supplementary Estimates (A).
[English]
As you mentioned, we are here to talk about Supplementary Estimates (A), and we will touch on Governor General special warrants as well. We have prepared for you today a short presentation to give you background information before we go to questions. I want to ensure we leave enough time for your questions, so I will go through the presentation fairly quickly.
Before we actually get into Supplementary Estimates (A), if you will permit me, I would like to give you additional information about what has happened since the last time my colleagues were here to talk about Main Estimates. You may recall that colleagues were here back in March to talk about Main Estimates. Since then, on March 26 — slide 2 of the deck — after there was discussion on Main Estimates, Parliament was dissolved for the purpose of a general election before the appropriation bill, or the supply bill, could be voted on by Parliament. That meant that at the start of the fiscal year departments had no supply: For April 1 there was no supply.
There is a legal framework that governs such situations. It is governed, as you may have heard earlier this week, by section 30 of the Financial Administration Act, which provides for Governor General special warrants in the case where Parliament is not sitting for purpose of a general election. There is a mechanism by which departments can receive supply in such circumstances.
I will also remind you that departments have access to two types of spending. There is what is called statutory authority, which relates to specific legislation. That exists with or without the consideration of the estimates. There are also voted appropriations, which parliamentarians spend more time considering, and that is what the Governor General special warrants are meant to take the place of.
What happened as well is there was discussion of Supplementary Estimates (C). They were never actually voted upon in terms of an appropriation bill for the same reason. Parliament was dissolved before there was an appropriation bill on Supplementary Estimates (C). Because of that we were forced to ask departments to cash manage, as best as possible, under their existing authorities.
Then there are mechanisms to draw down Treasury Board central votes to actually fund departments if we need to, primarily vote 5, which is a vote on government contingencies.
To start the year, April 1, there are a few interesting things I should share with you about Governor General special warrants. First, they can only be approved for the current fiscal year. Even though Parliament was dissolved before April 1, we could not go to the Governor General to get warrants for the new fiscal year until the new fiscal year had actually started. We had to wait until the morning of April 1 to actually launch the supply period.
There are all sorts of rules and conventions around Governor General special warrants. What we ended up doing is going for two special warrants of 45 days each. That means a 45-day period from April 1 to May 15, and then a subsequent period of another 45 days. The reason that was done is not because of a rule; it is simply past parliamentary convention.
I should say, however, that there are three basic criteria for the use of warrants, one of them being that the payment is urgently required for the public good. The reason we typically use short periods for Governor General special warrants of 30 or 45 days is we feel it is difficult to forecast an urgent payment 90 or 120 days out. Therefore, we ask departments to do, in this case, two 45-day chunks.
We also should remind you that Governor General special warrants are not spending: They are authority to spend. When you see Governor General special warrants, it is authority to spend during the fiscal year. We ask departments to forecast their requirements for the first 45 days, then a subsequent 45-day period.
The spending authority does not expire after 45 days. It is actually good for the whole fiscal year. It is just a matter of getting their estimates for the 45 days.
How that links to our current process — the appropriation bill that will be coming for Main Estimates and supplementary estimates — is that we actually subtract the amount from Main Estimates that has already been taken up with Governor General special warrants. When you actually see Appropriation Bill No. 1, related to Main Estimates, you will see Main Estimates amounts, less the authorities requested by Governor General special warrants. We do not want to double count that. That authority has already been granted.
That is a quick overview of the special warrants process, but it is a special year this year.
As seen on slide 3 as we think about Main Estimates and Supplementary Estimates (A), if you are interested in comparisons to previous years, it is a little bit smaller than in the past. In some cases it is a lot smaller. The reason is because we did what is called a directed Supplementary Estimates (A). We went to departments and said to only bring us urgent requirements that they could not live without until the next supply period.
The next supply period would be Supplementary Estimates (B), which will be in December. We asked departments to come forward now with only those items that were urgently required over the summer. The reason is that we are dealing with a shortened time frame for Parliament to consider these estimates because of the agreed-to schedule, so we only wanted those urgent items. It is slightly smaller.
If you look at the voted and statutory amounts on slide 3, 2011-12 Main Estimates, $91.8 billion in the mains, plus $2 billion in Supplementary Estimates (A), for a total of $93.8 billion. That represents an increase of 2.2 per cent from the Supplementary Estimates (A).
If you are curious about the Main Estimates, they had to be retabled. We know the mains were tabled before the election. There was no appropriation bill passed so the mains were retabled, but they were unchanged. The Main Estimates that were retabled were unchanged compared to the ones that were tabled a couple of months ago.
We would normally have a Supplementary Estimates (A) that is a little bit bigger than this. Those items that are not urgent and were not required over the summer will show up in Supplementary Estimates (B). The chair has already mentioned that the norm in the last couple of years has been that we have three sets of supplementary estimates: A, B and C. We are lining up for the same thing this year. You will see a Supplementary Estimates (B) in the fall and likely a Supplementary Estimates (C) over the winter.
The Chair: Do you care to guess as to when we might see Supplementary Estimates (B)?
Sally Thornton, Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board of Canada Secretariat: It would be towards the end of November or December.
Mr. Matthews: Again, it will be voted on the last opposition day, and the period of supply ends on December 10.
If I could ask you to go to slide 4, I thought we should focus our attention on the major items contained in this Supplementary Estimates (A). While a total of just over $2 billion is being requested, the vast majority relates to three items. I thought I would touch on each of those three items.
The first one is called TBS "Paylist Requirements — Funding for allocations to eligible departments and agencies for accumulated severance benefits — $1,300.0 million." This is a little complicated to explain, so bear with me. Treasury Board is the employer for the Government of Canada. You will see some votes for Treasury Board that actually relate to the whole of government. This is one of them. What has happened through collective agreement negotiations with a couple of major unions is that they have agreed to stop accumulating severance pay. You need to understand a little bit about the past practice.
Employees of the government accumulated severance, roughly one week of pay for every year they worked. They received that severance when they left the public service, regardless of whether they left on a voluntary term, retirement or for some other reason. Severance was accumulated and paid out when they left.
Through negotiation, we have agreed for those unions to stop the accumulation of severance on a go-forward basis for voluntary departures. The liability around severance that they have already earned still exists. We are talking about a go-forward basis. Liability is already reflected in the budget of the Department of Finance and has always been reflected that way.
However, as part of the negotiated agreement, we have given employees who are part of those unions the option to take the payment now or to wait until they retire. This is a one-time option to receive the cash.
What we are doing is allowing or resourcing departments to pay out anticipated requests for severance. Again, if someone is still working with the public sector, they can now choose to receive payment, in full or in part, for the severance they have already earned starting about July 1, and we have to resource departments for that.
This is a difficult number to estimate because we have to estimate how many employees will want to be paid now versus how many will be paid later. We have based an estimate on a similar experience that Canada Post went through a few years back. We are estimating about 75 per cent take-up on early payout. That is this resource request. There is no impact on the fiscal framework already provided for. This is a cash resourcing issue.
The second item is $253 million for CMHC. This relates to projects for new affordable housing, as well as repairs to existing units. It is being jointly delivered with the provinces. The work is to start fairly soon, so that is why it is in here.
The third item, $129 million, relates to Natural Resources Canada and the program to manage properly the long-term environmental liability related to nuclear waste. This concerns plans for longer-term remediation and repatriation of some nuclear waste to the U.S. from the Chalk River facility. It is a large amount.
Those three items together are about 80 per cent of the request, so I thought I should spend some time on those three items.
To sum up, the Main Estimates have been retabled, as I mentioned. You will see an appropriation bill for full supply. That is again something a little different this year. You may recall that normally Main Estimates are tabled and then the first appropriation act is for what is called "partial supply" or "interim supply," where departments are resourced for three twelfths of the year to get them going while the various committees study the estimates. Because of the time frames we are under and the fact that departments are operating on Governor General special warrants until the end of June, the first appropriation bill will be for full supply, so twelve twelfths, the entire amount of the Main Estimates, less what we have asked for in Governor General special warrants, or less what has been granted in Governor General special warrants.
Supplementary Estimates (A) contains $2 billion in expenditures and 19 departments in total. You will see a separate appropriation bill for Supplementary Estimates (A). That appropriation bill is not impacted at all by Governor General special warrants. The link to Governor General special warrants is with Appropriation Act No. 1, which is tied to Main Estimates.
Supplementary Estimates (B) and (C), as we have mentioned, we would anticipate returning to a more regular schedule in the fall and through the winter.
That is all I wanted to say to start with, and I would be happy to respond to your questions.
The Chair: That was clear, I think. The impact of the warrants with respect to the Main Estimates and the appropriation bill is treated differently from the Treasury Board contingency handling of funds if you need to advance those to a department during the year. You explained that difference, which I think makes it clear to all of us. There may be other follow-up questions.
On a point of clarification, the $1.3 billion is going to Treasury Board to pay out the accumulated severance entitlement in the earlier collective agreement. You anticipate that only 75 per cent would say, "I would like to have my money now." Why would 25 per cent leave the severance entitlement there when it is not growing? Are you providing for interest payments? What would be the incentive to leave it there?
Mr. Matthews: The way the formula has worked historically is that the severance you have accumulated is based on your highest level of earnings. There are adjustments for inflation over the period. Some people may decide that they want to leave it. It may be a matter of waiting until they are in a different tax bracket. When someone retires, they go into a lower tax bracket, so they may decide it is beneficial to defer that. We are not going to question why they make their choice. The key thing is they have the option for full payment now, partial payment, or they can defer it until they leave.
The Chair: Therefore, even though you have changed the rules, the Revenue Canada Agency has not come along and said it is deemed to have been received by them the day you changed the rules so it is their property?
Mr. Matthews: There has been no discussion with Revenue Canada on that.
The Chair: That is nice to hear.
Senator Runciman: You mentioned that $1.3 billion is your best guess of the entire liability for early payouts of severance, or does that cover the entire obligation?
Mr. Matthews: That is an estimate of the early payouts that will be requested for those bargaining agents that have negotiated this change, about 75 per cent of that liability.
Senator Runciman: Will we see more provisions for payments going forward?
Mr. Matthews: Correct. If you actually looked in the public accounts — and I am going back to 2009-10 numbers — in the detail somewhere you would see a total liability for severance for all of government of about $5 billion.
Senator Runciman: I read a media report that said severance pay accounted for roughly 1.3 per cent of the government payroll. About $390 million a year was allotted for severance. How will that be impacted going forward?
Mr. Matthews: The severance was actually already factored in to the government's liabilities and fiscal projections. When the collective agreements were negotiated, there was a pay increase for the normal cost of inflation. However, in recognition that the members of the unions were actually giving up something, there was also a supplemental increase in their annual rate of pay to compensate for that. There is a net savings here in the government's overall compensation.
Senator Runciman: What does this represent in terms of government employees in numbers or percentages?
Mr. Matthews: I am not entirely sure. However, the syndicates who have negotiated this represent the largest bargaining agents, so it is a fairly significant number of our unionized employees.
Senator Runciman: With regard to the special warrants, you talked about a parliamentary convention and you used the term "urgent need." How is urgent need defined?
Mr. Matthews: That is an interesting question. Urgent need has been defined for the ongoing operations of government. The way we ensure that this is respected is that a few sign-offs are required. It starts with the minister responsible for each department. That minister has to come forward with a submission saying, "I urgently need this money." That then goes to the Treasury Board and there is some discussion, but the President of the Treasury Board then has to sign off and say, "There is no central vote available for me to fund this, so I need to resort to Governor General special warrants." That is where it goes over, but it starts with the minister saying it is urgently needed for the public good.
You cannot use this to create new programs. This is for existing programs urgently needed for the public good. However, that has been legally interpreted as ongoing operations, and it is covered by section 30 of the Financial Administration Act.
Senator Runciman: Theoretically, it would not have been problematic if the government had opted, for example, to come back in the fall rather than early June?
Mr. Matthews: That is an interesting part of it. There are rules around Governor General special warrants. What kicks in is the return of the writs being a key date. You cannot issue a new special warrant — and I will turn to my colleague here in a minute — after about 60 days following the return of the writ.
Had Parliament decided not to come back, we would have had 60 days after the return of the writ to estimate our next requirements, and it would have to have been enough to take us through until Parliament returned. I will ask Ms. Thornton to elaborate.
Ms. Thornton: We spend a great deal of time looking at calendars and dealing with scenarios. You have to issue a Governor General special warrant within 60 days after the return of the writ, but the duration the warrant covers can be the remainder of the fiscal year. There is nothing to guide that.
With that scenario, the latest date to issue a final Governor General special warrant would have been July 22, which was 60 days after the writs were returned on May 23, 21 days after the election. However, that warrant would have to have had a duration of a minimum of 90 days to enable Parliament to come back in September and consider the Main Estimates and interim supply.
Mr. Matthews: I should add that if members are interested in hearing about the due diligence process we go through in assessing the warrant requests, we are happy to elaborate on that process.
The Chair: How extensive a presentation do you have on that?
Mr. Matthews: I have no slides, but I am sure Ms. Thornton can speak for five or twenty minutes; it is your choice.
The Chair: How about five? It is important that we understand that due diligence is being followed and that you do have some guidelines, similar to vote 5 contingency, which we have spent a lot of time discussing in the past.
Ms. Thornton: On the Governor General special warrants, first, the legal requirement pursuant to the Financial Administration Act is that the minster must attest that those monies are urgently required for the public good, which includes core operations. It goes to Treasury Board at that point, where the Treasury Board President must attest that there is no other appropriation from which to make that payment. On April 1 that was a simple process because there was no money.
We then go to the Governor General. Prior to that, however, we do our due diligence within the secretariat. In this instance the timelines were very unusual. Parliament dissolved on March 26; we had to be in with that first special warrant April 1. There was little time. We used two metrics against which to assess whether this was reasonable. We had already prepared interim supply, so we knew what departmental requirements were for the first 90-day period. We know that in a period of Governor General special warrants, departments do not have the authority to use revenues. They can collect revenues, but they cannot spend them. We would know that they would need more money in many instances than they actually requested through interim supply. That was a good metric against which to measure their "asks." We simply halved it and measured the first 45 days against that and, again, the second 45 days against the entirety.
Overall, the requests that came in through the Governor General special warrants for the 90-day period of interim supply were about $2.6 billion less than interim supply. We could see that payments, where they were discretionary, were deferred, and that there was some diligence.
The second thing we looked at was a comparison to a previous series of special warrants. Again, you need to go into the fiscal year with nothing. In 2007, the last special warrant issued during that period was for the same time frame as our first warrant, which was April 1 to May 15. In that year, those special warrants approximated 16.3 per cent of the voted appropriations in the Main Estimates had that happened. This year, the equivalent time frame was 14.6 per cent. We had two good metrics against which to assess diligence.
We did go through them individually, vote by vote, in each organization. In all, 13 organizations requested more through their special warrants than they would have received through interim supply. In each case we requested a rationale. In many cases it was to compensate for the fact they could not re-spend revenues. In other cases they had early payments that had to be made. Some of heritage organizations that had summer festivals had to get the money out of the door in May and June; international agreements have deadlines. Those were essentially the metrics.
Mr. Matthews: I would add to that the transparency around Governor General special warrants. There were two warrants. Each one is published in the Canada Gazette. During the election period, they were published in The Gazette. Within 15 days of the house returning, a statement on the use of Governor General special warrants must be tabled in the house, which was done. You have all the information as to what was actually requested for spending authority there. I think we can stop there.
The Chair: We were disappointed that it was only tabled in the House of Commons and not in both chambers. We did notice that the act only requires it to be filed in the House of Commons; I checked on that.
I want to confirm the numbers. You said there were $2.6 billion less in warrants than had been contemplated in interim supply?
Ms. Thornton: Yes, and that is in their comparable interim supply. Again, we had to accommodate for the fact that departments could not re-spend revenues during the warrants period because they did not have that authority, so we had to gross them up. We took what they would have asked for in interim supply and adjusted it to account for monies that they could not collect and re-spend. Overall it was $2.6 billion less than they would have had dedicated.
The Chair: The total amount over the two warrants is roughly $24.5 billion dollars?
Ms. Thornton: Yes.
The Chair: We are together on that?
Ms. Thornton: Yes.
The Chair: You said the convention is 45 days, but our information is that the first one would be 45 days and the other one is 30 days. Can you help me? Are we wrong?
Ms. Thornton: The convention is to try to keep it in as tight a time frame as possible so that ministers can genuinely attest that it is urgently required for public good and manage it. Typically, when this happens during a supply period where you have partial supply — that is, you might have had interim supply or full supply, and even Supplementary Estimates (B) — 30 days is often the norm. In this case, because that first warrant happened on April 1, had we requested a 30-day warrant we would have been going to ministers two days before the election to ask them for the second warrant. We took advantage of the 45-day option. We also took the second 45-day period to get us beyond a time when Parliament would come back and have an opportunity to examine the estimates.
There is a tradition of keeping it as short and as tight as possible. The shortest time is usually 30 days. There are examples where it has been longer.
The Chair: That explains it.
Senator Marshall: Most of my questions are on the $1.3 billion, but I would like to go back to the special warrants where the funding must be required on an urgent basis. You said that the various ministers have to say certify or attest to the fact that it is an urgent requirement. Who can stop that? From what you are saying, the Treasury Board Secretariat, or your sector, does a review to make sure that this is all bona fide. Who has the ability to come in and say, "No, this is not an urgent requirement; I disagree with the minister's attestation"?
Mr. Matthews: At the end of the day, it does start with the minister's attestation, but the due diligence discussion is amongst bureaucrats. When you actually get a request you can ask, "What is in here; can you defer this?" There is a bureaucratic discussion, but it is the Governor General who actually approves Governor General special warrants. He would have to satisfy himself as well about the due diligence process to make sure he is supportive.
If you are picturing an environment where a list of 100 per cent of the payments is being contemplated and someone approves all of those as being urgent, no, that happens at the departmental level.
Senator Marshall: There is no one within the public service who would say no to the minister's attestation?
Mr. Matthews: No. The attestation is built at the level of the department. If you think about the process that we had in place, departments were already putting forth their requirements for interim supply. They had already put some time into briefing about their interim supply request, which is normally for 90 days. There is that discussion, but it is the minister's attestation. It then comes forward to Treasury Board, and then it is finally the Governor General who approves the special warrants.
Senator Marshall: Did I understand you correctly in regard to the $1.3 billion? You said that is about three quarters. If everyone wanted to be paid right now, the total payout would be about $1.7 billion; is that correct?
Mr. Matthews: The $1.3 billion is about 75 per cent of the total liability for those unions who collectively bargained this.
Senator Marshall: Is the accumulated severance you are talking about only for unionized employees? Is there nothing in there for management?
Mr. Matthews: This is where it started. However, you will see words in Budget 2011 about managing compensation and about extending this to broader areas, including management. It is not in place yet, but that is the commitment.
Senator Marshall: Management is not entitled to severance.
Mr. Matthews: Currently, management is entitled to severance.
Senator Marshall: They lost that right; it is the unionized employees.
Mr. Matthews: The unionized employees negotiated it over the last year. This was a negotiated item. They were given an increase in salary beyond the percentage increase for inflation to compensate for this, but Budget 2011 signals that this will eventually be extended soon to broader groups as well, including management.
Senator Marshall: You were saying the formula is one week for each year, but is there a cap for each year?
Mr. Matthews: I am not aware of a cap, but I have not engrossed myself in the details.
Senator Runciman: The total is 30.
Mr. Matthews: Thirty; there you go.
Senator Marshall: How many employees would $1.3 billion cover?
Mr. Matthews: I would have to get back to the committee on that. It is our two largest unions in this case.
Senator Marshall: Has the $1.3 billion been requested by the employees, or is it just an estimate that you are making provision for in anticipation?
Mr. Matthews: It is the second. The communication has gone out to employees, but we will actually start becoming aware of their elections in terms of what they would like to do over the summer period. We needed to make sure that there was enough cash flow provided to allow for their decisions. It is an estimate and 75 per cent is our estimate of those who will opt for early payment. It is based on the similar experience that Canada Post went through a couple of years ago.
Senator Marshall: If more people ask for their severance than what you have budgeted, we will see that in Supplementary Estimates (B) or (C). However, on the flip side, if you do not have to spend the $1.3 billion, what happens to the excess? Is it available to be transferred to other programs?
Mr. Matthews: No. This is a central Treasury Board vote that is for the management of benefits and compensation for the public service. It is a dedicated vote, so it cannot be used for other programs.
Senator Marshall: Would it lapse?
Mr. Matthews: It would lapse, but it would have to be paid out eventually. It is just a question of when.
Senator Runciman: To tie in with your reference to Revenue Canada, if someone opts to take this out, do they have to take it out in a lump sum or can it be spread over a period of years?
Mr. Matthews: My understanding is that they have a choice in terms of receiving some now and some later, upon retirement. I am not aware of an option to receive, for example, 10 per cent over the next 10 years. I am aware of some now and the balance later or all now or all later.
Senator Marshall: To make sure I understand this correctly, are employees that have not reached their cap no longer able to accumulate? I was under the impression that new people coming in would no longer be able to avail themselves of this severance program but that people who are already in the public service could continue to accumulate to the maximum.
Mr. Matthews: They will no longer accumulate for severance related to voluntary departure. There is a separate set of rules for departures that are involuntary.
Senator Marshall: I understand the distinction.
Mr. Matthews: They will still continue to accumulate under that scenario, but existing public servants will no longer accumulate additional severance leave for voluntary departures.
Senator Marshall: If someone has accumulated five weeks for five years, that is it?
Mr. Matthews: That is it for voluntary departure.
Senator Marshall: I would be interested in knowing how many employees that will cover.
Mr. Matthews: It is 110,000 employees.
Senator Marshall: If you are flooded with requests for these payments, are you able to process all the payments in one year assuming that the $1.3 billion is approved?
Mr. Matthews: The 75 per cent is an estimate, as I have said. We have enough flexibility in the central votes to manage the 25 per cent until the next supply period. If we had a rush, we may come back in Supplementary Estimates (B) for additional funding. The 75 per cent is based on history, but it gives us the flexibility we need in case more is forecasted.
Senator Marshall: If you do not spend it all, you cannot spend it on something else. It lapses.
Mr. Matthews: It is a central vote designed around compensation, so it would lapse.
Senator Callbeck: On page 19 in Supplementary Estimates (A), under Canadian Heritage, the Canadian Radio-television and Telecommunications Commission is asking for $2.6 million for "Funding to conduct investigations and enforcement activities associated for the operation of the National Do Not Call List." What events have generated the need to conduct such investigations?
Mr. Matthews: This is ongoing work related to the program around the National Do Not Call List. If I recall correctly, this is an extension of a program that was set to expire on March 31. This is a continuation of the existing program. It is not related to new events.
I am looking to my colleague to confirm that I have this right.
Ms. Thornton: Yes, it is basically continuing the investigation and enforcement activities for this year that had been previously launched. It was launched in 2008, delegated at one point, did not work. As of March 21, the list includes over 9.4 million subscribers. The amount requested is consistent with what was requested in previous years; $2.5 million in 2010-11 supplementary estimates and $2.6 million in 2009-10. It is the continuation of the investigation and enforcement activities.
Mr. Matthews: This is a continuation of the program that was already being offered in previous years. The funding for the program needed to be renewed through supplementary estimates, which is what we are doing here.
Senator Callbeck: The enforcement for this program is here. What about investigations? How much is being spent on that? What is the breakdown?
Mr. Matthews: I am not aware of the breakdown between the two, but we can undertake to get back to you on that.
Senator Callbeck: Has the Do Not Call List met the purpose for which it was designed?
Mr. Matthews: I am not aware that there has yet been an evaluation of the program. There is a requirement to do an evaluation of our programs every so often, and I do not recall seeing one. When an organization comes forward for additional funding, as in this case, the department would assure us that the actual program is meeting its design purposes, so there is a dialogue there.
Marcia Santiago, Senior Director, Expenditure Information Division, Treasury Board of Canada Secretariat: We do not actually have an evaluation of the program. We do have early results of a survey conducted in February and March of this year, I believe. There is an indication through that survey that approximately 50 per cent of the people on the list are reporting that they are receiving fewer nuisance calls.
Senator Callbeck: Are there any plans to do a complete investigation or evaluation?
Mr. Matthews: The Treasury Board policy on evaluation requires that there be an evaluation every five years on the program front, so there will eventually be an evaluation of this, although there has not been a full evaluation conducted yet. The survey was an interim measure to help justify the continuation of this program.
Ms. Thornton: Another indicator of success of effectiveness is that so far over $1.8 million have been recouped through penalties or fines from telemarketers.
Senator Callbeck: Is that $1.8 million since the program started?
Ms. Thornton: In the past two years.
Senator Callbeck: On page 21, the Financial Transactions Reports Analysis Centre of Canada is requesting an additional $14.7 million, which is a huge amount. It is 40 per cent of what was asked for initially. Why is such a large amount required here?
Ms. Thornton: Budget 2006 had originally set aside annual funding of about $28 million to help FINTRAC, the Canadian Border Services Agency, the RCMP and the Office of the Director of Public Prosecutions to address compliance with international Financial Action Task Force recommendations, operational funding pressures and to comply with recommendations in the 2004 Auditor General's report.
The funding was allocated for five years and ended in 2010-11. There has now been a 10-year evaluation and, based on the positive results of that, we have approved ongoing allocations of funding to support the continued regime. This funding will allow FINTRAC the resources necessary to continue its activities to ensure that they can safeguard against criminal activity. It will specifically enable them to continue to receive reports from financial intermediaries and other reporting entities to analyze suspicious transactions and provide information to enforcement agencies for further investigation.
This is equivalent to monies that had been approved for the past five years. The funding had stopped. There has been an evaluation and a decision to continue.
Senator Callbeck: What was the total amount spent in 2010-11 with the supplements and so on?
Mr. Matthews: Going from memory, the amount was roughly the same as is being requested here. It is basically a continuation of what is existing.
Ms. Santiago: We have an indication in the Main Estimates that in 2010-11 it was in the order of $16.2 million. The reason their Main Estimates was showing so low is that the funding approval for 2011-12 was not available in time to be included in the Main Estimates.
Senator Callbeck: On page 27, we have Canada Mortgage and Housing Corporation. You mentioned that in your opening comments, and I think it is about $253 million. Have the agreements for the provinces been finalized?
Mr. Matthews: The agreements with the provinces have been finalized, and the provinces will be spending their portion in fairly short order. The justification for including this in Supplementary Estimates (A) is so that we can line up with the provinces' plans.
Senator Callbeck: Have all the agreements been signed?
Mr. Matthews: I cannot say that they have all been signed. The agreement is a joint federal-provincial initiative. My understanding is that the provinces are in a fairly large hurry to get the spending going on this front, so that was the justification for the urgency. I cannot speak to whether agreements have actually been signed. Typically, when we have agreements with provinces that are contingent upon something receiving funding, there is a contingency clause built into the agreement itself that says it is contingent upon funding being received to safeguard against this.
Senator Callbeck: You do not have a breakdown of that $253 million.
Mr. Matthews: No, I do not.
Senator Callbeck: Will there be any money for the residential rehabilitation program and emergency repairs?
Mr. Matthews: I know there is a combination of new units as well as repairs to existing units, but I do not have a detailed breakdown.
Senator Callbeck: Is it possible to get that information?
Mr. Matthews: I can try.
Senator Callbeck: Can we get the breakdown according to the provinces?
Mr. Matthews: You would like it by province?
Senator Callbeck: Yes, please, particularly for those two programs. I would like to be able to compare it to know whether there is an increase there, because there is tremendous demand for those two programs in my province.
I saw in here somewhere, but I do not have the exact page, the grant program that was proposed to attract candidates into the Red Seal trades. Could you talk a little bit about that program? Are those grants going to individuals or to institutions?
Ms. Thornton: Senator, I think you may be referring to the apprenticeship grants under the HRSDC portfolio. Two grants are being discussed there and being merged. In each instance, those grants go to individuals. The first is the Apprenticeship Incentive Grant announced in Budget 2006. It is a $1,000 grant to registered apprentices when they complete first or second year of their apprentice program in one of Red Seal trades.
The second grant is the Apprenticeship Completion Grant. It was announced in Budget 2009 and provides a $2,000 grant to apprentices that complete a journeyperson certification in a Red Seal trade.
Together, these grants approach different ends to provide the incentive, the motivation and the ability to continue. HRSDC is simply seeking to merge the two so they have more flexibility in transferring monies between the two to meet the demand.
Senator Callbeck: There is really nothing new here; it is combining two programs.
Ms. Thornton: Yes.
Senator Ringuette: Was the apprenticeship program a sponsorship for the employer and not the employee?
Ms. Thornton: There are a series of apprenticeship programs, and that may well be. In these instances, these two grants are monies that actually go to the apprentices or the individuals, but other programs help support employers to provide training and opportunities.
Senator Ringuette: Sponsorship in the trade program.
Ms. Thornton: Yes. There are programs that do that, but not these two.
Senator Callbeck: On page 34, under Industry Canada, there is $44.4 million to extend broadband coverage. Will some of that money be spent in Atlantic Canada? Could you tell me the details, please?
Mr. Matthews: I do not have a breakdown by province as to how this will work.
Senator Callbeck: Could you get that information?
Mr. Matthews: We can try, although I am not certain we can get that information by province.
Senator Gerstein: Thank you, witnesses, for being before us today. You have been informative.
My question has nothing to do with Supplementary Estimates (A) but rather relates to the opening remarks made by our chair with regard to your introduction. I am fascinated that we have before us an assistant secretary, an executive director and a senior director. My question really relates to you giving us some of the relationship between you in terms of what it is you in fact do for the government. Where I am coming from is that had there been other items in Supplementary Estimates (A), something to do with defence or health, would you be reporting the same way, or are you totally focused on these particular items? I would like to understand more in terms of how you fit into the process of dealing with these.
Mr. Matthews: This is an explanation of how we are organized in the expenditure management sector. I will speak broadly at first to the responsibilities of the Expenditure Management Sector, and then I will turn specifically into the question.
The Expenditure Management Sector has a number of responsibilities, one of which is the reason we are here today — the management of the supply process for the Government of Canada. We also have in the sector the policy on evaluations, responsibility for Canada's performance and the coordination of the reports on plans and priorities. We have some compensation costing analysts, as well as running the expenditure review exercises that have been ongoing in the government for the past few years.
Senator Gerstein: That is all expenditures.
Mr. Matthews: That is all expenditures, yes, of the government.
Having said that, obviously, when you are producing documents that result in submissions from departments, there is interaction with departments. The way we have organized ourselves is to use analysts who are experts on specific files at the departmental level.
The two people with me today are part of my management team, and they are specifically involved around the expenditure management process for the business of supply and estimates. They would have analysts who are actually experts in each department. When we receive a request from a department, there is a dialogue and some expertise within the centre about the request being made.
Ms. Thornton: I report to Bill Matthews. At a very straightforward level, my job is making sure that the money is where it needs to be so it can get to Canadians when it needs to get to them. All of that, excluding statutory, is voted on by Parliament. My goal is to present it as transparently as possible to you so help inform that decision making.
Mr. Matthews: Perhaps you could explain how you have organized your team. Are they broken down by department?
Ms. Thornton: When we come here, we do brief overviews of each area, because we do have teams with analysts who are responsible for various sectors — social programs, economic, justice. They work with the program sector counterparts within the Treasury Board Secretariat to get us some core information for you.
We skim the surface, in many instances, when doing our reports to you because we want to make sure you have a good enough overview so that you know whether you have to invite someone else, such as one of our other colleagues. In Supplementary Estimates (B), which will be much bigger, we will do our best to have as much information as we possibly can, but we cannot provide the same level of information that the departments do. We try to give you an overview to allow you to be able to discern where further follow-up is required.
Ms. Santiago: Most of these analysts who have department or portfolio specific responsibilities report through to me. I am, if you like, the first line of management responsible for making sure the submissions that come to the Treasury Board are reviewed and dealt with appropriately at the point of ministers' initial approval. The analysts in my work groups are also responsible for consolidating that information in order to provide the summaries needed to set up Main Estimates, for example, and to ensure that we have the level of information on the statutory forecasts, the transfer payments and things that need to actually go into the book.
As demonstrated today, I also ensure at this end that we have some technical information, if needed, at the point of the committee meeting to add to the overview information that Mr. Matthews and Ms. Thornton present.
Senator Gerstein: Could you give the committee an idea of how large your group would be if you take the three of you with what you are discussing?
Mr. Matthews: If you take the whole sector for which I am responsible, it is roughly 150 people. If you mean just expenditure management as it relates to the business supply, that is Ms. Thornton's team.
Ms. Thornton: It is 30 people, which includes Ms. Santiago.
The Chair: Mr. Matthews, you have 130 people.
Mr. Matthews: I have 150, which includes Ms. Thornton's and Ms. Santiago's.
The Chair: How large is Treasury Board of Canada Secretariat?
Mr. Matthews: I am going from memory here. I have in my head the figure of about 1,200.
The Chair: That is the secretariat, which is one part of the Treasury Board.
Mr. Matthews: Treasury Board is the cabinet committee. Treasury Board of Canada Secretariat is the administrative support for the cabinet committee.
Did you want to correct me on my guess, Ms. Santiago?
Ms. Santiago: I think it is a little higher, but I am not sure how much higher.
Mr. Matthews: Let us say 1,200 to 1,500.
The Chair: If it is significantly different, you can let us know when you answer those other questions. Thank you for the interesting explanation. Nobody had asked that question in the last few years, so that was very good.
Senator Ringuette: Before I go to the issue of pay benefits, I have some questions concerning page 20. Under Finance, there is the item "Establishment of a Canadian Securities Regulation Regime and Canadian Regulatory Authority," for $150 million. A few items further down, we see the "Canadian Securities Regulation Regime Transition Office" for $11 million. That is a total of $161 million for an issue that has been referred to the Supreme Court of Canada. The Parliament of Canada does not even have the legislation. Why would we have $161 million in requested funding for something that has been referred to the Supreme Court of Canada?
Mr. Matthews: The authorities mentioned here are statutory in nature, so they come from legislation that I believe was in the Budget Implementation Act of 2009. These are for information purposes.
When there is a legal challenge against a framework, it can have an impact on the plans of a department or of a certain program. That being said, this legislation was approved. The spending authority exists. There may not be legal authority yet to do what they have to, and that has to be taken into account when they plan their work for the year. It is an information item that is based on the statutory authority that exists already.
That legal challenge will no doubt have an impact on how the work proceeds. When there is an update on actual spending, you may find that the spending under the statutory authority is not anywhere near what was forecasted because the Supreme Court challenge may delay their plans.
Senator Ringuette: Exactly, so through the fiscal year, we will have Supplementary Estimates (B) and Supplementary Estimates (C). As far as being wise with the spending authority of Parliament and Treasury Board due diligence, this $161 million is essentially in the Main Estimates of this year and we have not looked at that yet.
The Chair: We did in March.
Senator Ringuette: We did somewhat; we started to, anyway.
I do not see the logic for that spending authority because the issue has been referred to the Supreme Court of Canada. It might take another six or twelve months; no one knows. Why ask Parliament to finance an issue that is not yet in existence when there is no need for funds tomorrow?
Mr. Matthews: This is, again, a statutory authority. We are not asking for votes here. I appreciate your point, but I would suggest perhaps looking at the report on plans and priorities for the Department of Finance, where they would articulate in more detail what exactly they have planned under this initiative. It could be anything from their original plans, or it could be around the management of the court challenges, but I am speculating here.
Ms. Thornton: At the moment, these would be in the estimates only for your information. I do take your point, but you are not being asked to vote on these in terms of what you vote on in the appropriation bills. You do not vote on statutory items in the appropriation bills. These are approved through statutes other than the appropriation bill. We present them for your information.
It is a good point, a good question, a good follow-up, and it is noted. However, you will not have to vote on it at the end of this month.
Senator Ringuette: I will have my eye on it; that is for sure.
Ms. Thornton: One of the reasons they are there is for information.
Senator Ringuette: What is the reason for the Department of Finance purchasing domestic coinage for $130 million?
Mr. Matthews: That is another statutory item, and I am not clear on what that item is.
Senator Ringuette: Chair, I think we need to have the Department of Finance here.
The Chair: This is Supplementary Estimates (A), and you are looking at Main Estimates and primarily statutory items under the Main Estimates.
Senator Ringuette: We were just told the Main Estimates would be included in the ways and means, I think.
The Chair: We are dealing with Main Estimates at our meetings tomorrow, but we do not have Treasury Board before us. I see what you are doing and am allowing you to expand your questioning. However, we have less than a half hour left on Supplementary Estimates (A).
Senator Ringuette: I will move on. I have many questions and highlighted items.
One of the items is on page 31, under Industry, "Liabilities under the Canada Small Business Financing Act," and I am very much aware of that program. Is $110 million an increase with regard to the last three years because of the economic situation?
Mr. Matthews: Again, we are looking at the Main Estimates figure. That is a statutory item, so it is an estimate of what will be spent.
Anything with an "S" beside it is statutory, which means it is not part of what will be voted on through the appropriation bill. That "S" signifies "statutory," and the legal authority to spend that comes from other legislation. There is no need for an appropriation bill to be voted for that spending authority.
Senator Ringuette: Then I will give you an item from Supplementary Estimates (A). On page 32, we have the Federal Economic Development Agency for Southern Ontario. With respect to grants, estimates and contributions, there is a requirement for a little over $45 million. When I look at the explanation on page 34, I see "Funding to support construction activities related to recreational infrastructure" for $36 million; "residential and commercial redevelopment in Brantford, Ontario," for $10 million, for a total of $47 million. What is recreational facility infrastructure?
Mr. Matthews: I cannot give you the exact details on which projects this is being used to fund, but there is what is called the RInC Program, which is the Recreational Infrastructure Canada Program. This is a case where we have not enough detail of the actual detailed expenditures. If you want detail on which projects that program will fund, the questions are best placed to officials from the department responsible who can provide the details.
Senator Ringuette: I am very curious because there is an additional $45 million for these two items under a development agency in Ontario, whereas I have seen in the last few sessions of questions in the House of Commons that the economic development agency for Atlantic Canada had been cut and there is no money left with regard to recreational infrastructure.
Furthermore, if you go to the first part of page 34 regarding the question asked by my colleague Senator Callbeck with respect to broadband expansion, there is additional funding for $44 million. We see an increase here, yet we in Atlantic Canada, through the agency responsible for the expansion of broadband in the Atlantic region, have seen a reduction of millions of dollars. Which section of Canada is that increase for?
Ms. Santiago: At this point, we do not actually have the details of which projects are covered under Federal Economic Development Agency for Southern Ontario funding. However, we do have information that all of the funding there is for the re-profiling of projects. Therefore, these were projects that were already initiated in the case of recreational infrastructure under Budget 2009 and for residential and commercial redevelopment under Budget 2006. What you are seeing is not as much new money as re-profiled money. These projects would have begun under those initial budget approvals, and for whatever reason, some parts of them have been delayed. Therefore, the money has been appropriated to them this year to deal with whatever activities have been deferred to 2011-12.
Senator Ringuette: If we are dealing with something that was committed in Budget 2006 and this is Budget 2011-12, I think it would justify a history of that situation. We are looking at almost six years. This is not building a new tunnel.
I would certainly like for you to provide a history of why these additional monies are there for these particular federal economic development agencies and not for other economic agencies in other parts of Canada.
I would like a further description of the additional money for the expansion of broadband coverage of $44 million, while we were told just last week there is no more funding available, or extremely reduced funding, just skeleton funding, to expand broadband in Atlantic Canada.
The Chair: Mr. Matthews, with respect to the two points, if there is anything you can do to help us with background information, I am sure you would not enter these items without having other background information back at the secretariat.
Mr. Matthews: Just to be clear, when my colleague mentioned the word "re-profiled," when you hear about a re-profile, that is not new money. That is money set aside last year or the year before that would otherwise lapse. Permission has been given to carry it forward into a new fiscal year.
It is incorrect to describe a re-profile as new money. It is existing money wherein a project may have been delayed, so you are basically re-profiling old money. It should not be described as new money.
The Chair: Could this possibly be part of the extension of the stimulus funding that was to come to an end at the end of March and then we heard it had been extended through to October?
Mr. Matthews: Aspects of the Economic Action Plan were extended to October, so it is quite possible that is the case.
The Chair: If you could look into this for us, that would be helpful. We will not have time to bring in this agency before we are expected to vote on this $2 billion, so the more information we can get, the better we feel about voting for it.
Ms. Thornton: This is one of the anomalies of having directed supplementary estimates. There are 111 organizations that are not here but that you will be seeing in Supplementary Estimates (B), perhaps very similar things, particularly as we look at the regional development agencies. All of them have similar needs, pressures and reprofiles. FedDev Ontario was unique in that there was no way it could manage until December without having something in Supplementary Estimates (A). The others we signalled we would entertain through Supplementary Estimates (B). You will likely see comparables in the other development agencies through Supplementary Estimates (B). They, however, were able to manage until December by virtue of getting full supply.
Senator Ringuette: Please go to page 38, National Defence. You have $1 listed under 10a.
Mr. Matthews: With respect to $1 items that appear in the estimates, my colleague says it is the price of admission to get into the estimates. That is the amount we use to list a grant. I am not sure if it was my colleague to my left or right who coined that expression.
Where there is a grant to be listed, we will actually throw $1 in, and that basically gets it into the estimates. We actually have to list the grants, which is a requirement, so that is the way it gets listed.
Ms. Santiago: Where grants and contributions are under voted authorities, the vote wording specifically refers to grants listed in the estimates. That is why we have to have something in the Blue Book with the wording for the grant and the amount of the authority. To have it voted on, we have to actually have an amount, so it is a dollar in the appropriation bill.
Senator Ringuette: Voting for this $1 —
Ms. Santiago: Gives them the authority of the vote wording and the grant wording.
Senator Ringuette: — gives them the authority to buy equipment, services, supplies and facilities for defence purposes. That would include any kind of military procurement, would it not?
Ms. Santiago: The dollar that is being voted in this instance is specifically to establish the grant for the Security and Defence Forum Grant Program.
Senator Ringuette: For what?
Ms. Santiago: As indicated on page 40, it is to renew the Security and Defence Forum Grant Program. It is $2.5 million.
Senator Ringuette: Why are you not listing $2.5 million instead of $1?
Ms. Santiago: Because we are not asking to appropriate $2.5 million. They have that money. They are not asking for new money. What they need is an item to be voted on, and in order to list the item in the supply bill, we need to have a monetary value associated with it.
The Chair: These are the various forums across Canada at universities that deal with defence and security issues and the DND grant that goes to them.
Ms. Santiago: I believe so.
Ms. Thornton: Specifically, they are grants for the Centres of Expertise. The Chair of Defence Management Studies awards them to candidates who are pursuing masters, doctoral or post-doctoral studies in security, defence or defence management. The special project grants are to individuals and institutions to finance initiatives that are directly relevant to the mandate of the Security and Defence Forum.
Senator Ringuette: Essentially this $1 is not more than $2.5 million.
Mr. Matthews: The budget for the program is $2.5 million, but the grant to get listed needs to be described as $1. The actual money comes from National Defence's vote 10, as I recall. They have a separate vote for it.
The Chair: Our next questioner is Senator Neufeld from Charlie Lake, British Columbia.
Senator Neufeld: Senator Marshall very ably asked the questions that I had in regard to the $1.3 billion.
The Chair: Thank you.
My question relates to page 19 and the CRTC National Do Not Call List. You will recall that we were talking about that. I thought I heard you say at one time that was delegated, it did not work and it was brought back in. Could you explain that?
Ms. Thornton: This program was launched in September 2008. At one point it was delegated to Bell Canada through a contract with CRTC, and Bell Canada recovers its cost for operations from subscriptions charged to telemarketers. However, investigation and enforcement continue to be the responsibility of CRTC. They are not cost recovered from the telecommunications industry, and they are currently funded through these appropriations.
The Chair: Is the arrangement with Bell Canada continuing, or did I understand you to say that that did not work out and it was repatriated?
Ms. Thornton: My understanding is that arrangement for operations and subscriptions continues, but investigation and enforcement are with CRTC.
The Chair: Thank you for that clarification. I misheard, then.
Page 61 of Supplementary Estimates (A) is "Items for Inclusion in the Proposed Schedule 1 to the Appropriation Bill." That is the real heart of this and that is what we expect to see in the supply bill when it comes; is that correct?
Mr. Matthews: That is absolutely correct.
The Chair: That is what we will be focusing on.
I took some time to look through this and kept seeing the same wording coming up. I wonder if you could explain why the wording "authority to expend revenues received during the fiscal year" keeps appearing? I see it with regard to a lot of different departments. Why would those departments not have had that authority in the past, and why are we giving them that authority now? What is behind that?
Ms. Santiago: Revenue re-spending, in some cases, is an authority given through separate statutes. Sometimes it comes through the enabling legislation of the organization, as in the case of CRTC. For other organizations, the authority to re-spend comes from the vote wording in an appropriation act.
Actually, in most cases, the language that you are seeing in these is the same as the language that has been in prior appropriation acts. It is just that it is actually specified in the detailed vote wording that the operating expenditures vote, for example, or the program expenditures vote, is authority to spend appropriations directly on operating functions but also to re-spend the revenues that they collect rather than to leave them deposited in the Consolidated Revenue Fund.
The Chair: Once they have that authority through this supplementary estimate, they have authority throughout, do they not?
Ms. Santiago: No.
The Chair: It is only with respect to the revenue they collect this year, and then they have to repeat it year after year.
Ms. Santiago: Anything in the vote wording that you see in an appropriation bill is basically refreshed in every fiscal year. That is why in every Main Estimates supply bill you will see the extended vote wording. Sometimes you will see things like, in this appropriation bill, a $1 item for Public Works.
The Chair: Yes.
Ms. Santiago: This is another issue where the appropriation act is not actually to give new money to a department. What we are doing in this act is amending another act.
In the case of Public Works vote 6a, this increases the drawdown of the authority for the Translation Bureau Revolving Fund. In this case it increases it forever. What we are doing in this case is amending another act.
However, in all other cases where the revenue re-spending for anything else is part of the vote wording in a supply bill, it has to be refreshed in every fiscal year.
The Chair: Revenue is received for services that a department normally would offer. I think in here Justice gives legal services to other departments and Justice has money, at least on paper, transferred to it for those legal services. Now we are giving authority to Justice to spend the money that it collects for the legal services within the other departments of government. Is that what we are doing here?
Mr. Matthews: In the case of Justice, they operate almost on a cost-recovery basis. They provide legal services to departments, and there is a mechanism to bill the departments for that service and offset Justice's costs. They are not turning a profit on their legal services, if you will. The way that Justice manages their legal services division is to have a costing system and the services are provided to departments, and then departments are effectively billed for the services.
The Chair: Justice is at page 63. We see the same wording that is repeated in many different departments: "authority to expend revenues received in a fiscal year, and to offset expenditures incurred in the fiscal year" — and that is what you were just talking about — "arising from the provision of mandatory legal services to Government departments and agencies. . . ."
Mr. Matthews: Right.
Ms. Santiago: It is the same language as in Appropriation Bill No. 1. It is also in the proposed schedule for Main Estimates. The same vote wording is applied. Once we enter that vote wording in Main Estimates, unless there is a material reason to change it, we carry it through the rest of the year.
In Supplementary Estimates (A), we are adding $15 million, or whatever that was, for that specific initiative described in these supplementary estimates.
The Chair: It is $15 million in total, I think, rounded to $14.8 million.
Ms. Santiago: I think it is funding for victims of crime.
The Chair: I can make my next comment with respect to this particular item, vote 1a. It would be very helpful for us if you did not put that standard wording. At the bottom of the paragraph you put something that is a completely different idea, paying for Queen's privy councillors, parliamentary secretaries and that kind of thing. It is tucked into the same wording. I am wondering why you could not make two paragraphs so that it would be easier for us to read that.
Mr. Matthews: Thank you for the comment. We are taking notes of how to make estimates documents more clear. We will note this one as well.
The Chair: I almost missed that. I thought, "There is that standard wording again, and I will ask you about that." It appears in the second half of that paragraph under vote 1a: "and the payment to each member of the Queen's Privy Council for Canada who is a Minister without portfolio . . . ." In some of them the wording is you can pay for a car and driver as well. That is fine. We understand that, but let us not hide it away somewhere. Let us be able to read it, understand it and say, "Okay, we are voting for that."
Mr. Matthews: Thank you, chair. We have taken note of that request.
The Chair: They were just comments I had when I reviewed that. I appreciate having the opportunity to bring those out. I do not often have that opportunity.
Senator Callbeck: The next question I have pertains to the Estimates, 2011-12, but you will not be here tomorrow when we deal with them.
Mr. Matthews: No, we will not.
Senator Callbeck: Those estimates will often list savings from this strategic review. For example, it says that the Atlantic Canada Opportunities Agency is expected to save $31.9 million over three years by finding efficiencies in the delivery of programs and streamlining service delivery. They will get 9.3 out of this. This is all through the document. Will you provide us with the details of all those savings so that the committee knows exactly where they came from?
Mr. Matthews: Can I assume, Mr. Chair, that the senator is referring to the budget document as opposed to the estimates document? Which document are you referring to?
Senator Callbeck: The estimates document. I am asking this because you say you will not be here tomorrow, and I think these have to come from Treasury Board.
Mr. Matthews: The approach we have taken on strategic review is to have the departments communicate the impact of their strategic review decisions. The reason is that strategic review proposals were brought forward by individual ministers, so it is the ministers and the departments themselves who will undertake to explain where the strategic review savings will take place.
Senator Ringuette: There is an increase in the number of ministers, so we will have to increase the number of hours this committee sits, Mr. Chair.
The Chair: Senator Callbeck, you have the floor.
Senator Callbeck: This is something I have been trying to find out for I do not know how long. It seems to me there is a real reluctance on the part of government to say where those savings are coming from because what is in the estimates is very vague. There is no way you would ever determine it.
Mr. Matthews: You are correct in that what the estimates present is the expenditure plan for the year. They do not provide approval for what is no longer there. However, the approach taken on strategic review is to have officials from departments and ministers actually explain the implications for their department.
Senator Callbeck: However, it will refer, for example, to improved use of internal resources and administration efficiency. We need a detailed list as to where exactly those savings come from.
Mr. Matthews: It would be up to each department to explain that to you in detail.
Senator Callbeck: On page 52, VIA Rail Canada Inc. is requesting $48 million for incremental pension requirements. That is about 10 per cent of what was requested in the Main Estimates. Why would that not have been included in the Main Estimates? It must be fairly easy to predict, is it not?
Mr. Matthews: No, this is a unique situation in that the pension plan for VIA Rail as a Crown corporation is governed by legislation that governs rules around pension plan funding, so it requires that pension plans be funded to a certain percentage. What happened in the case of VIA Rail is that I believe the market downturn affected their pension investments and they need this extra cash to fund their pension so that they respect the funding requirements of the pension legislation. This was not in time for the Main Estimates cycle. It was an off-cycle request, so it could not make it in time for Main Estimates. It is a unique situation in that it is funding required so that the pension legislation can be respected in terms of the amount of funds that are actually held as assets.
Senator Ringuette: Canada Post is in the same situation as you just described for VIA Rail. It is a Crown corporation. There is a $2 billion unfunded pension liability. Why is Canada Post not being advanced the money just like you are doing for VIA Rail?
Mr. Matthews: First, the legislation does not require that a pension liability be fully funded. It requires a portion. I cannot speak to Canada Post. The key question around the Crown pensions is: What percentage of the liability is funded?
I will take your word that you have the amount right in terms of the unfunded liability. However, the question of whether they need resources is around whether they can respect the legislation in terms of the percentage of the liability that is funded, and VIA Rail was in need of a top-up in this case.
Senator Ringuette: Are they going to refund you?
Mr. Matthews: Are they going to refund us? I am not certain.
The Chair: You touched on the Supplementary Estimates (C) at the end of the year. It was money that departments said they needed to finish out the year, and then they did not get that money. You said to try to cash manage that situation. However, they cannot go from one fiscal year to the other. They cannot dip into the next year. You said the other way they can do it is that they may be able to go from Treasury Board Secretariat vote 5 funds that you make available to them, and then they reimburse you when they get some money later on.
Have you done any analysis as to what happened in terms of real life when Supplementary Estimates (C) never came down?
Mr. Matthews: Yes. At a high level, Mr. Chair, the other choice for departments is to defer. In Supplementary Estimates (C), you are asking for Parliament's approval and there is always a risk you will not get it. There is an option to defer in some cases.
Where we use central votes, TB vote 5 in particular, is to fund departments that had been looking for resources under Supplementary Estimates (C), about $520 million in total out of vote 5. Here are a couple of examples of what that covered.
We had $163 million for the purchase of the old Nortel building by Public Works, which will be used to accommodate National Defence, I believe.
The Chair: Yes, I remember that one.
Mr. Matthews: The reason it needed is because that was a deal on the table and we wanted to take advantage of that.
A second example I can offer you is ex gratia payments around Agent Orange.
The Chair: I remember that one too, Base Gagetown.
Mr. Matthews: Yes, $122 million to Veterans Affairs.
The Chair: It was not nearly enough.
Mr. Matthews: The third example is operating pressures at Atomic Energy of Canada Limited, for $75 million.
Those are the three big items for the $520 million that came out of vote 5.
The Chair: Refresh our memory on how much the departments had asked for in Supplementary Estimates (C). Do you remember the number so we can compare it to $520 million?
Ms. Thornton: The total was $920 million of the entire Supplementary Estimates (C).
The Chair: Nine hundred and twenty million was Supplementary Estimates (C). You had to advance $520 million in vote 5. Did you advance any other funds in any other way, or did the rest just go to cash management and deferral?
Mr. Matthews: The rest is deferral and cash management.
Ms. Santiago: Departments also have an option, if you recall our earlier conversation about re-profiling. There were funds that departments had already received authority to re-profile from 2010-11 to 2011-12, so those funds would have been sitting frozen. One option that we exercised was to release some of those frozen amounts and to say that you will still get the money re-profiled, but it will be re-credited through your capital or operating budget carry-forwards.
The Chair: You can spend the money now, but you will ask for parliamentary approval later on.
Ms. Santiago: We have already asked for it through the operating and capital budget carry-forward votes, which are central votes with Treasury Board. Yes, that is the idea.
The Chair: That is not parliamentary approval; that is administrative.
Ms. Santiago: It is part of the Main Estimates.
The Chair: Yes, but the Main Estimates had not happened at that time.
Ms. Santiago: No.
The Chair: They had not been voted on.
Ms. Santiago: We said, "We will use your 2010-11 money and release it."
The Chair: Yes, I understand what you did. Do you know how much you released and made available? It is not unlike the vote 5 emergency funding, where you make a value judgment that this is such a compelling reason that we will advance the money and then ask for the forgiveness of Parliament. As opposed to asking for permission before, you ask for forgiveness afterwards.
Ms. Santiago: I do not have the details. Total Supplementary Estimates (C) was around $700 million voted, I believe.
The Chair: Did you not say $920 million?
Ms. Santiago: I am sorry. Was it $920 million?
The Chair: Why do you not just send us a note telling us what the total was and how much money you made available so that we can compare and see how the departments made out.
Mr. Matthews: Just so that I am clear, we will re-summarize what was released by vote 5, but you would like us to augment that by the frozen authorities.
The Chair: Dipping into approved re-profiling funds, how much of that. That would be helpful to us.
Ms. Santiago: It would be about $400 million.
The Chair: We will see that re-profiling in one of the supply bills, and some of it has already been spent?
Ms. Santiago: For the most part, we will pay it through the Treasury Board central votes for the operating budget carry-forward and the capital budget carry-forward, I believe 25 and 33, in our Main Estimates.
The Chair: We will vote on those.
Ms. Santiago: You will vote on those in total, not the specific initiatives that were being released.
The Chair: We will see those under Treasury Board central votes.
Ms. Santiago: Correct.
The Chair: That is helpful. Is there anything further?
Thank you very much to the three of you for being here. You have done a fine job in helping us make our way through this maze of documents and different protocols in terms of $1 items in order to buy your way into the document. That is a good comment.
We look forward to seeing you again, I am sure, on Supplementary Estimates (B). We will not see you on the Main Estimates. We already had Treasury Board here for the Main Estimates and they have not changed. We have an extensive report on that. We will just supplement that report but not call it (A) or (B).
Thank you very much.
(The committee adjourned.)