Proceedings of the Standing Senate Committee on
National Finance
Issue 30 - Evidence - November 28, 2012 (Evening meeting)
OTTAWA, Wednesday, November 28, 2012
The Standing Senate Committee on National Finance met this day at 6:42 p.m. to study the expenditures set out in Supplementary Estimates (B) for the fiscal year ending March 31, 2013.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this evening, we will begin our study of Supplementary Estimates (B) for the fiscal year ending March 31, 2013.
[English]
We thought we would take a little break from dealing with Bill C-45 for a period, and we are now into Supplementary Estimates (B). Our committee began consideration of the Main Estimates for this year, 2012-13, in early March, as honourable senators will recall. Consideration is ongoing and we have a mandate to deal with the Main Estimates throughout the year, and we will continue to do so and do a final report at the end of the year.
This constitutes the beginning of the examination of Supplementary Estimates (B). We did Supplementary Estimates (A) before the end of June and now we are into Supplementary Estimates (B). In all likelihood, there will be one other supplementary estimate, typically before the end of the fiscal year, maybe late December or January. I am sure our witnesses will be able to help us with that.
We are pleased to welcome back officials from the Expenditure Management Sector of the Treasury Board of Canada Secretariat. Appearing this evening are Bill Matthews, Assistant Secretary; Sally Thornton, Executive Director; and Marcia Santiago, Senior Director. Those who have been on the committee for a while will know that we are welcoming back this team that helps us greatly in dealing with supplementary estimates.
Mr. Matthews, welcome back.
[Translation]
Bill Matthews, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: As you mentioned, I am here with two colleagues to answer your questions about the Government of Canada's Supplementary Estimates (B).
[English]
Before doing that, I would like to spend a few minutes taking you through the deck to give you some background on what is in Supplementary Estimates (B). I want to make sure all senators have a deck in front of them. It looks like they do.
This deck provides a quick refresher of what is in the supplementary estimates and what the purpose is, and then we will take you through the numbers, as well as a few of the highlights in terms of what is in the Supplementary Estimates (B) package.
As the chair mentioned, Supplementary Estimates (B), or supplementary estimates, is a normal course of action for the government. The way the supply cycle works in the Government of Canada is the Main Estimates are the way we start the year. As departments bring items in for Treasury Board approval during the year and those items get approved by Treasury Board, and they are looking to spend money, we then package those up three times a year into Supplementary Estimates (A), (B) and (C) and bring an appropriation act in front of Parliament and the Senate for approval.
At the end of the day, these estimates are meant to help the Senate and others study the appropriation bill they will be asked to vote on. It is the appropriation bill itself that gets voted on, not these estimates. These are meant to support the study of those.
If I can start on slide 3, the way these Supplementary Estimates (B) are organized is very much like previous years. There is an introductory section that outlines the purpose and major changes to planned expenditures. That includes both voted and statutory items. It highlights the major changes in terms of amounts as well as any changes in structure.
I will highlight in Supplementary Estimates (B) that there is a change in structure between Health Canada and the Public Health Agency of Canada.
We then move to a section on horizontal items. Horizontal items are ones in which multiple departments are involved in the delivery of that item. There is a list of, I believe, 14 horizontal items in this Supplementary Estimates (B). If that item has received funding in previous estimates during this fiscal year, we will also note that for you. If there is something in Supplementary Estimates (B) that also received funding in Supplementary Estimates (A), you will see that noted for you.
Then the largest section of the document itself is department by department, a rundown of the funds being requested. I will also highlight for you that at the end of the book are the proposed schedules to the appropriation bill itself, which is a little preview of what is coming before the Senate for approval.
Finally, there is also additional information on line. If you are interested in changes in statutory forecast, things like projected amounts by standard object of expenditure and allocations from Treasury Board central votes, those items can all be found on line. We have the website there for you, if that is of interest.
On slide 4, we have a breakdown of what is in these supplementary estimates, both in terms of voted and statutory, as well as budgetary and non-budgetary. There is nothing unusual about these Supplementary Estimates (B), but I will say that normally the fall supplementary estimates, the second one of the year, are our largest. Again, this is the case so far this year. Voted items are amounts that get rolled up in the appropriation bill that I mentioned. The statutory items are here for information purposes only. They are not subject to a vote. However, any changes to forecasts — and, in this case, all of the statutory items that are subject to a change in forecast come from the Department of Finance, at least the vast majority do — are here for information purposes.
You will notice we have budgetary and a column for non-budgetary, which is full of zeros. There is nothing non- budgetary in these supplementary estimates, but that would be an item like a loan or something we expect to recover and will not affect the bottom line of the Government of Canada at the end of the day. There is nothing like that in Supplementary Estimates (B).
If you are curious about the split between voted and statutory items, normally at the end of the year roughly 60 per cent of government spending is statutory and 40 per cent voted. When you look at Main Estimates, it is around 65 per cent statutory, 35 per cent voted. Typically supplementary estimates are more about voted items than statutory ones, and that is the case here as well.
If I could take you to slide 5, which shows the estimates year-to-date compared to previous years, it is always a little dangerous to compare current year estimates to previous year estimates in the middle of the year because sometimes the timing of certain items changes from year to year. After Supplementary Estimates (B), it is the right time to make comparisons.
If you compare the voted amounts this year to the previous year, we are now indeed lower than in the previous year. We are also lower than in 2010-11. We are back in line with around 2009-10, where we were on the voted front.
Statutory is roughly around the same as it was in the previous year. If I were to give you an example, and this will come up later about why it can be interesting to compare one year's estimates to the previous year's estimates, the RCMP has a fairly large amount in the supplementary estimates around contract policing. If you were to look back at the Main Estimates for 2012-13 and compare them to the previous year, you would notice that the RCMP looked like it had a drop in funding. The reason for that is that the contract policing negotiations had not occurred in time to be included in the Main Estimates, so we have come along in Supplementary Estimates (B) and put those back in. That is why I say it is sometimes challenging to compare one year to the next, but by around Supplementary Estimates (B) you can make a pretty good comparison.
If you compare voted, we are about $1.6 billion lower this year than we were at this point last year.
On slide 6, we have the major items that are in Supplementary Estimates (B). I will highlight a few of them for you. I will say these major items make up about $1.7 billion of the total funding, which is about 70 per cent of the total. Again, the total we are looking at for Supplementary Estimates (B) this time around is a total of $2.8 billion which is $2.5 billion in voted and $0.3 billion adjustment in statutory.
The first item on the list is RCMP contract policing. I mentioned that in previous years this would have been included in the RCMP's Main Estimates. If you looked at the 2012-13 Main Estimates, there was a drop for the RCMP. The reason was these contracts had not yet been negotiated. They had expired after 20 years of agreements. The new agreements came into force on April 1, for a period of 20 years again, and it is for police services on a cost- recovery basis — so it is shared — to 8 provinces, 3 territories and roughly 150 municipalities. That is what is in here for the RCMP.
I am aware you have officials from other departments following us after this hour. You will see the second item here is Health Canada, First Nations and Inuit Health Benefits for $226 million. I suggest that if you have questions on that front, maybe leave it to the next group.
National Defence has the third largest item here, which is $206 million. That relates to a court case called Manuge, related to disability benefits for income security, and it was around integration of benefits. It was a court-ordered settlement that the government has had to respect. That is why National Defence has $206 million here.
The last one I will highlight for you on the first list of voted is Public Safety, Disaster Financial Assistance Arrangements, $180 million. That is very much related to some of the flooding that occurred in 2011 in the provinces of Manitoba, Saskatchewan and Quebec.
The way Disaster Financial Assistance Arrangements work is it is cost-shared with the provinces. The federal government is on the hook to pay once the provinces submit their claims. The 2011 claims have come in for those provinces. Those disasters were of sufficient magnitude that the federal government is funding part of the recovery and we pay the bill when it comes in.
On the statutory front, I will just highlight the three major changes for information. On the sales tax harmonization, $733 million relates to a payment to the Province of Quebec for their harmonization of HST. For the additional fiscal equalization of $680 million, there is basically an arrangement in place where total transfer payments to the province between the current year and the previous year cannot drop. When you look at transfer payments en masse, this is to sort of hold the level of funding steady. In that $680 million is $362 million for Quebec, $201 million for Manitoba, $102 million for New Brunswick, and $13.5 million for Nova Scotia.
The last item on the statutory front is a decrease in the estimated amount related to public debt interest. If I recall correctly, that is because of a downward revision in the long-term forecast of interest rates by the Department of Finance.
The Chair: Does that indicate downward, negative?
Mr. Matthews: Yes, negative.
On slide 7, I had mentioned earlier the horizontal items. We have a good number of them here this time. We have 14 of them. I will say that a fair amount relate to immigration and law enforcement. Several of those relate to the Beyond the Border Action Plan, which is a joint arrangement with the U.S. on areas such as addressing threats early, trade facilitation, economic growth and jobs, cross-border law enforcement, critical infrastructure and cybersecurity. There are a couple of items there on that front, as well as items for First Nations water and waste water, Indian Residential Schools Settlement Agreement, and community infrastructure for $75 million. That community infrastructure amount, I should mention, is for existing infrastructure, so it is improvements to existing infrastructure.
Slide 8 is an interesting one. You may be curious about how the Budget 2012 Spending Review is reflected in these estimates, because we have not yet seen any of that reflected. What you have, if I can remind you of the Budget 2012 Spending Review or, as some people have called it, the Strategic and Operating Review, $5.2 billion in savings was identified over three years in the budget. We are in the first year of three. Of that amount, $1.3 billion is in play in the current fiscal year for voted items. Of the $5.2 billion in total, you have $1.3 billion in the current year.
Main Estimates and supplementary estimates were tabled before we had a chance to actually adjust for these reductions. Departments effectively had items in their reference levels, in their Main Estimates or supplementary estimates, where really there had been a subsequent reduction in the case of Main Estimates.
We had the same approach for our strategic review. During the year, when a department comes in for new money, if they have existing funding that they are not allowed to spend anymore in terms of dollar amounts, we subtract it off; we do a netting. We only come to Parliament when we want to actually increase the amount of the appropriation. When there is a decrease, we do not have to come to Parliament; we can manage that internally.
We do this offsetting. If you look at some departments, you will see a section called ``funds available.'' If I could turn you to an example, on page 133 in the English version and page 66 in the French version.
You see the Treasury Board Secretariat. Down at the bottom, the last part of the page, you will see:
Explanation of Funds Available (dollars)
Vote 1: . . . total authorities available within the Vote due to savings identified as part of the Budget 2012 Spending Review.
That basically says there was money in the Main Estimates that the Treasury Board Secretariat, in this case, had in the reference levels and they were reduced because of the budget spending reductions, so we are offsetting the new request by this amount and we effectively come to Parliament only for any net new increase. That is the way you will see this.
It is the same approach that was used for strategic reviews. If we did not do this, we would actually have to bump up the appropriation bill for amounts that departments would not be able to spend.
Finally, slide 9, $2.5 billion in voted expenditures and a forecasted increase of $0.3 billion in statutory amounts. There are 63 departments and agencies in here.
This is the second appropriation bill for the second of three planned supplementary estimates. The chair mentioned that there are usually three. The third one will be in the new year, so you will not see us until after Christmas. Again, a reminder that what actually gets voted on is the appropriation bill itself. These estimates are meant to help the study of that bill.
Before I wrap up, I should mention something I highlighted for this committee before. In the House of Commons Standing Committee on Government Operations, they have been spending a fair amount of time studying how to improve the estimates, Parliament's scrutiny of the estimates. They published a report back in June, if I recall, and the government has recently tabled its response. I thought it might be worthwhile highlighting what might change as a result of that response.
The reports by the Government Operations Committee contained 16 recommendations. Eight of those recommendations were directed at standing committees and other things outside the government, but really eight recommendations were directed at the government. I thought I might just quickly highlight for you what those eight were and what the government response was, because it will result in changes to future estimates. This is not in your slide deck, but I thought I would spend a couple of minutes on them. If you do have questions on these, we would be happy to take those as well.
The first recommendation the committee made was that the government has been challenged to look at how the appropriation should actually work. Should they be on a cash basis or an accrual basis? That was a question raised by the Auditor General 10 or 12 years ago. The government has been studying it for many years and made a few changes.
The committee reiterated that it would like the government to conclude its study of the question of accrual or cash. These estimates you have in front of you today are on a cash basis, and the recommendation way back when from the Auditor General was: ``Please move to accrual.'' The government had committed to completing its study of this issue by March 31, 2013, and the government's response reiterated that it will conclude its study by March 31, 2013, and hopefully settle this question once and for all.
The Chair: Can you tell us what is being done on a cash basis, or near-cash basis, and what is being done on an accrual basis now?
Mr. Matthews: If you think about the government's overall reporting structure, the federal budget is on a full accrual basis. The resulting Public Accounts Volume I financial statements are on an accrual basis because the two match. The estimates of the Government of Canada and the appropriations are done on a near-cash basis. I would say cash for simplicity purposes. The companion piece to that is Volume II of the Public Accounts. If you ever want to know what a department was authorized to spend and what they actually spent, that is the comparison piece there and you can go back and do a comparison. We are dealing still, on an appropriations basis, on a modified or near-cash basis.
The Chair: Volume II of Public Accounts is cash?
Mr. Matthews: Yes. It is the companion piece to the estimates.
The Chair: Public Accounts Volume I is accrual?
Mr. Matthews: Yes. Volume I goes with the budget; Volume II goes with the estimates. That is the way I think of these things.
If you are going to put a report in front of anyone with a plan, you should then follow up with a set of actuals on the same basis. The federal budget is on accrual. We close the story with Volume I of the accounts, which is accrual, so you can see what actually happened. The estimates and appropriations are on a basis cash. This is a plan. When you close out the end of the fiscal year, we produce Public Accounts, which tell you what the department has actually spent against these plans. That is the reason for that.
The only other one I will mention for you, since we are on the topic, is quarterly financial statements, which is a relatively new invention for departments, not tabled in Parliament but available online. They give the department and parliamentarians and senators a sense of how the department is spending the money during the year and how they are spending against the authorities provided by Parliament. They are done on a cash basis as well, the same basis as the estimates. If you are curious about a particular department, for each of the first three quarters of the fiscal years, 60 days after quarter end they would produce online their quarterly reports.
That was the first recommendation, accrual versus cash.
The second recommendation, which is probably the most substantial and challenging, is around the vote structure. You will be aware that departments generally speaking receive votes in the areas of operating, capital, grants and contributions, but they also provide information to parliamentarians through various reports on programs. When departments are discussed, it is very often in terms of programs, not in terms of capital, operating, grants and contributions. People want to know about a particular program.
The question is whether the vote structure should be changed so that the vote is based on some sort of program structure. That was the recommendation put forward. That would be a substantial change. It would take years to implement. The government took a cautious approach in its response. They said they would look at providing mock- ups. We would go back and recreate the estimates on a program-based structure for a few departments and have a discussion, because it would be a shame to do all that work and then have parliamentarians say that is not really what they wanted.
The commitment is to do some mock-ups and have a discussion about what this new vote structure might look like if it was based on some sort of program structure rather than capital, operating, grants and contributions.
If you think about a department's Report on Plans and Priorities and departmental reports, there is lots of information in there on departmental programs, but it is not voted on by Parliament. It is there for information purposes only and the vote is actually on capital, operating, grants and contributions. That is an interesting one.
The third recommendation was around the Reports on Plans and Priorities for departments. The idea is that it would be useful if there were three years of history and three years looking forward of what departments were going to spend on their programs — again this theme of programs. That recommendation was agreed to by the government, so there will be three years of history and notional figures going out about what spending might be by program.
The fourth recommendation related to the government that is of interest to us here is that any changes in those program-based forecasts or actual versus forecasts should be explained in the departmental documents, Reports on Plans and Priorities and departmental performance reports; again, a theme of information related to programs.
Next, that committee is very interested in the disconnect between Main Estimates and budget. Why do we see things in the budget that we do not see in Main Estimates? The answer is timing. The estimates have to be prepared before the budget is ready, so you will often see new budget items in Supplementary Estimates (A) or (B). The recommendation from the committee was that there be a fixed budget date. They thought that if everyone knew when the budget would be — and they suggested February 1 — that would make life easier.
In fact, it does not solve the problem. More important, the Department of Finance was not keen on having a fixed budget date. They like the flexibility of being able to table a budget when they best see fit, so the government rejected the recommendation to have a fixed budget date.
The Chair: In addition to fixed, there was also some talk at one time of having the budget come forward in the fall.
Mr. Matthews: Yes, and that would allow us to get a lot of the budget stuff into Main Estimates. Finance was not keen on that.
As a reminder, there is a legal requirement to table Main Estimates every year by a certain date. There is no requirement for a budget. It is very much a policy document.
Again on the theme of linking new funding to budgets, there was a recommendation with which the government did not agree 100 per cent, but it has agreed to do something slightly different. Where there is new funding in an estimates document for the first time for a new program or something, it will be highlighted in which budget that was mentioned. That will help reference. If you see a new item for the first time in an estimates document, it will say that item is from Budget 2010 or Budget 2011, just to help people understand the connection between the various documents.
There was a recommendation on tax expenditures. Tax expenditures are the responsibility of the Minister of Finance. Again, this is one where the government agreed with the spirit of the recommendation, but is doing something slightly different to fit the bill. It has been agreed that there will be a link made between RPPs and the tax expenditures report that is done by the Department of Finance so that information on tax expenditures can be found more easily. Tax expenditures are not studied by committees, so there was a concern about that.
Finally, the recommendation that is probably the most exciting for many of us is around an online searchable database with expenditure information. The government agreed with that recommendation and committed to come back by March 31 with a plan for when this database, open to the public, could be up and running. This would make life easier for the public and parliamentarians in terms of finding information and history.
The Chair: What would be found there?
Mr. Matthews: It is early days yet, but we would hope to have some authorities information and a little bit of history, as well as some actual spending against the authority. You would be able to get a sense of what each department has been resourced for through the various Main Estimates and Supplementary Estimates (A), (B) and (C) — some history, although I cannot commit to how many years back we might be able to go, in order to get a sense of what the change in profile is and what actual spending has looked like against those authorities would be a good start. We are still working on that, but the government has agreed to build that database and we will come back by March 31 with a plan as to when it might be ready.
The Chair: That is interesting. I appreciate your taking the time to bring us up to date on the government's response, because we were aware of the recommendations that went out from the House of Commons on that. Now we can see that things have moved ahead.
We will send to everyone the coordinates to make it easier for you to do your own review of all the recommendations and the government's response. Ms. Thornton has helped us find that. We appreciate that and we will get that to all members of the committee.
Senator Buth: Thank you for coming and speaking today, but you speak very fast. I know there is a lot of material to go through. Some of my questions might be for further explanation.
I have lots of questions, chair.
The Chair: You are the only one on the list so far.
Senator Buth: When I came into government I was surprised that, after Main Estimates, departments keep coming back looking for more money.
Using the Industry Canada Business-Led Networks of Centres of Excellence as an example, there seems to be a substantial amount there. That is on page 21. Can you explain why it is listed in the supplementary estimates instead of the Main Estimates?
Mr. Matthews: It starts with legislation. No money can be spent out of the Consolidated Revenue Fund without the approval of Parliament, which means we have to get the funding into an appropriation bill. To get into an appropriation bill, you have to go through Treasury Board. When there is a program, be it a new program or a program that has a time limit on it, if it is being renewed you have to come back to Treasury Board to get approval saying either that the program is now well designed and here is what it looks like, or asking for the same kind of approval around a renewal.
In Main Estimates we are collecting things that have been approved by the Treasury Board up until early December of the previous year. If it is not approved by that point, it has to wait for the next cycle. Items that were renewed in the budget and new items in the budget cannot be included in the Main Estimates because they have missed the window for Treasury Board approval. In that case, departments get their submissions together and go to Treasury Board and get into the next possible supplementary estimates.
In this case, Industry Canada got their material together in time for Treasury Board to get it into Supplementary Estimates (B), but it was not ready in time for the Main Estimates.
Ms. Thornton can add some detail on that.
Sally Thornton, Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board of Canada Secretariat: Was it the process or the specific item? These were launched in 2007, but time limited, but it was Budget 2012 that announced $12 million per year ongoing. Therefore, it now becomes an ongoing, but that was not announced until Budget 2012. None of the process — getting to the Treasury Board or getting the supplementary estimates — could start until we had that budget confirmation.
Senator Buth: These projects or programs were in place and this is a renewal of how many years?
Ms. Thornton: They are ongoing. We deal in five-year terms. Unless there is a decision to change it, it is ongoing.
Mr. Matthews: That is an important point, because Parliament votes money annually. Yes, it is ongoing, but things can always change.
Senator Buth: If it is a new program, then you would never see it in the Main Estimates?
Mr. Matthews: That depends. If it is an item that was in the budget, you would typically not see it for the first time in Main Estimates, but you can. If money will be spent during the year, you will typically see it in Supplementary Estimates (A) or (B), but you would see it again. Next year, it will be included in the department's Main Estimates because we now have it.
Senator Buth: On page 6 of your presentation you talked about Public Safety and the Disaster Financial Assistance Arrangements. It makes sense that you do not see it in the mains because you are waiting for provinces to come in. You said that was for the floods in Manitoba, Saskatchewan and Quebec. Can we expect more expenditures in this area? Were there any other commitments that the government made for which we are waiting for provinces to submit expenses?
Mr. Matthews: There are indeed. The formulas vary, but basically to receive funding under this program, the disaster must be of a certain size. Once it is agreed upon that, yes, a disaster meets the criteria, the government is then on the hook to reimburse the province when they come forward with their invoices. Depending on the nature of the disaster, it can take months or sometimes years for the province to collect their bills. This is what we know about right now, but there will be more forthcoming for sure.
Senator Buth: That is like a liability, essentially; the government will have to pay at some point?
Mr. Matthews: It is.
Senator Buth: Where does that get recorded? How would we ever know what is coming?
Mr. Matthews: How would you know what is coming? That is an interesting question. The government is not liable until the province puts together their claim, but, you are right, there is kind of an upfront negotiation or agreement that there is a disaster here and the government, I believe, pays, in this case, on a per capita basis, based upon how much the province has actually expended. You will get a sense through the department's Departmental Performance Report at the end of each year what was actually spent on that. However, the forecast about how much is coming is a very difficult thing to do.
Senator Buth: Where are departmental performance reports? When are they filed and where do we find them?
Mr. Matthews: They are filed — online is the best place to find them. If you think about the Public Accounts of Canada, the whole-of-government piece that typically gets tabled around October following the fiscal year that ended on March 31, typically departmental performance reports are available within a few days of the Public Accounts. If you go on to any department's website, you can find the report on plans and priorities, which tell you what they are planning on doing, and their Departmental Performance Report, which says what actually happened.
Senator Buth: Okay. Can I keep going, chair?
The Chair: Yes; please do.
Senator Buth: You drew attention to an example on page 133.
Senator Hervieux-Payette: If we follow in the French version, we cannot follow when you mention the page. Could you mention the subject matter?
Senator Buth: Yes. This is Treasury Board Secretariat. Actually, you probably have the page number in French.
[Translation]
Mr. Matthews: It is on page 66 of the French version.
[English]
The Chair: Does it take that many more words to do it in English?
Mr. Matthews: It is about the alphabetical order.
The Chair: Oh.
Senator Buth: Thank you for pointing that out.
Senator Hervieux-Payette: I can now follow what is going on.
[Translation]
Mr. Matthews: I myself could not find it.
[English]
Senator Buth: Under Treasury Board Secretariat is something that caught my eye. You have compensation adjustments.
Mr. Matthews: Right.
Senator Buth: Transfers to departments and agencies for salary adjustments. What is that?
Mr. Matthews: That is a very good question. Departments, for their regular salaries, have funds in what we call the reference levels. For regular departmental employees, they have enough funds to cover their wage bill. We have things called terminable allowances, which is a very unfortunate name. When we have a particular occupation where we are having a hard time recruiting or retaining, but we do not want to give a permanent wage increase, we have something called a terminable allowance. It is basically a temporary wage increase.
Senator Buth: What is terminable is the allowance, not the employee?
Mr. Matthews: Correct. Where we have those in place, we keep those centrally because they are meant to be temporary in nature. Once they become permanent, we would transfer them out to the departments. We have a number of allowances for certain groups that have effectively now been rolled into salaries because they have been around for long enough that we have said, let us just fold these into salaries. We are transferring those resources out to departments now.
To give you a few examples of what is in that amount, we had allowances for the architecture, engineering and land survey group. We had another one for health services that included doctors and nurses, and there are all sorts of terminable allowances in there for recruitment and retention, especially up North. We have another one for university teachers. To give you a sense of the number of people in each group, the architectural group is roughly 3,600 people; the health services group I mentioned is roughly 2,300 people; and the university teaching group is about 200. There are five or six in total, but I have highlighted the big three for you. That is what that is.
Senator Buth: Who decides that these are incentives to keep people within the workforce or to attract them into the public service workforce?
Mr. Matthews: They are collectively bargained. As part of the collective bargaining process, you would see these come up for discussion, and that would be informed by recruitment and retention stats around that particular group. You would know that either there are many vacancies, which is a signal that there is a recruitment issue, or that people are leaving, those sorts of things.
Senator Buth: This does not have anything to do with Budget 2012 in terms of cuts or anything?
Mr. Matthews: No. As I said, it is an unfortunate name and, because of the name ``terminable allowances,'' that is the assumption people make. However, it has nothing to do with Budget 2012.
Senator Buth: Where are university teachers? I do not understand where those people would be working.
Mr. Matthews: The best example I can give you there is we have some teachers with our military college, which I suspect would be part of that group. I am speculating, but I believe that is the group that would jump into my mind. Is there another one? That is the one that springs to mind.
Senator Buth: I have to look at my list here.
The Chair: I can put you on round two.
Senator Buth: That would be great. I have kind of exhausted my first round.
[Translation]
Senator Bellemare: I would like to come back to the recommendations concerning tax expenditures. How will you calculate that? How will that be compiled? What exactly is the recommendation regarding tax expenditures?
[English]
Mr. Matthews: There are really two recommendations in play in spending. I will touch on a couple.
There is the question of should it be accrual or cash is a change. The accrual piece would be difficult simply because what is at play in this whole report is Parliament wanting to understand better the estimates. What is great about cash is that everybody understands it. Could we do accrual? Yes, we could. We think it would cause additional confusion, but we think we could do it.
The more interesting one I suspect you are targeting is about how department votes should be structured. Should it be on this program basis or on the traditional basis of capital, operating, grants and contributions? Because the vote is on capital, operating, grants and contributions, the challenge for us there is that departments have built up a great deal of controls to make sure their information is quite exact because it is illegal to overspend. You do not want to overspend.
The information we have that we provide on programs is for information purposes. Departments do their best, but there is not the same rigour, because it is not illegal to underestimate or overestimate what you will spend on your program. If we were to contemplate such a change, we would want to go back to departments to do two things. One is to have them confirm their program structure and say does this structure still make sense; and the second is to take a good hard look at those amounts and make sure they actually have them nailed down. Right now they do their best, but they are there for information purposes. If you are actually having Parliament vote on it and it is illegal to overspend, you want to make sure you have the right amount. That is what we have to do there.
[Translation]
Senator Bellemare: But the government has already published the tax expenditures, right? Yet they are not displayed here because it is a matter of tax credits, of shortfall.
[English]
Mr. Matthews: If you are interested in the tax expenditures — and maybe I can back up — the information that would be provided is not under the control of the department. If you think about designing a program, you would have two choices. You could actually say here is some money and you could mail it to every household and say, ``Please enrol your children in fitness programs;'' or you could offer a tax credit to do the same thing. If there were a new program, it would get studied. The tax expenditures are studied via the budget and do not show up in any estimates. That is your point.
Senator Bellemare: Yes.
Mr. Matthews: They show up every year when the Department of Finance produces a publication on tax expenditures — it is all tax expenditures. The commitment made by the government is that they will link the Reports on Plans and Priorities better to the report on tax expenditures so people can see the tax expenditures related to a given department.
[Translation]
Senator Bellemare: Unless I am mistaken, huge amounts — several billions of dollars — are involved in terms of tax expenditures?
[English]
Mr. Matthews: Yes.
The Chair: How does Treasury Board determine whether a request by a department to spend $2 billion on something is appropriate? You prepare the Main Estimates before the budget is out, and the RPP comes later. How do you determine whether the request is reasonable?
Mr. Matthews: That is why there is a lag. Most often the budget will highlight an amount that says the government will spend x dollars on a new program. The department then designs a program. It is usually done in two steps, and you might have a memo to cabinet.
When it comes to Treasury Board submission, we are looking for detailed spending plans. Are they spending on people? How are they spending their money? The key ones are: What are the performance indicators? How will they judge the success of this program? What is their plan to evaluate that? It is at that stage the Treasury Board submission becomes very important, because that is where you can actually assess how the department will spend the money and whether it is the right amount. You will have a discussion about the amount for operating dollars versus grants and contributions and C's and what administrative overhead is needed. At that stage, the discussion happens.
Sometimes we look at comparisons to other departments. Sometimes we look at previous experience with the department. Sometimes, if it is a brand new program where we have little experience, it is a tough decision to make, but we will run for a few years and then take a look at the evaluation. It is very much based on the detailed design done by the department; and we have a discussion at that point.
The Chair: When does Treasury Board receive that detailed plan?
Mr. Matthews: It is part of the Treasury Board submission. As a condition of getting into these books, you need a Treasury Board submission that outlines how the money will be spent, what the success factors or performance indicators are and how the evaluation will work out.
The Chair: As parliamentarians, where do we see that Treasury Board submission?
Mr. Matthews: You would not see the Treasury Board submission. Through the RPPs, you would see information about the program and any evaluations done on the program, which are also made public. You can get information on the program, the actual performance metrics for judging the success of the program, any evaluations done on that program, and any internal audits that relate to the program. That is all public as well.
The Chair: The timing is such that plans and priorities are out before we are required to vote for main supply but not interim supply. We vote interim supply before we have a chance to look at the RPPs.
Mr. Matthews: Correct. The whole point of interim supply is recognition that departments need to spend money on April 1 each year, and they need authority from Parliament to spend money. However, the various committees have not had an opportunity to study the mains and the RPPs in enough detail. Interim supply is about giving departments three months' worth of funding, give or take, while parliamentarians on the various committees study the Main Estimates and the RPPs in preparation for voting on full supply.
The Chair: We are into supplementary estimates, which is a request to spend money based on something that could not be put in the Main Estimates because, say, the budget was not out at that time. A submission would have been made to Treasury Board for these expenditures, but it is not in the RPPs because it has already been prepared.
Mr. Matthews: It is not in the RPPs in some cases. If it is a brand new program, they may not have had time to put it in there. If it is a program that is up for renewal, it might be in there. However, to get information on a brand new program, you would see it first in next year's Reports on Plans and Priorities.
The Chair: We are asked to vote on faith.
Mr. Matthews: You also have the chance to query witnesses from departments; and that is the whole point of the study.
The Chair: I am trying to help my colleagues to understand the process here a little more, and when I ask the questions, it helps me to understand a little more.
We were referred to page 21, the horizontal items included in the supplementary estimates. We looked at funding to support Business-Led Networks of Centres of Excellence. Do you see that entry? I thought you said that this is the first time, although the program has been around for a while, that the budget actually made this permanent. Is that correct?
Ms. Thornton: Yes. It was launched in 2007 as time-limited. It is now permanent and ongoing.
[Translation]
Senator Hervieux-Payette: Where in our book should we be looking?
[English]
The Chair: It is under Industry.
Senator Hervieux-Payette: You gave us the page.
The Chair: We are looking under ``Industry'' down to ``Social Sciences and Humanities Research Council.'' You have to look back to the horizontal funding by sort of flipping two pages back and forth to see the three different ones. I chose Industry. The second item down under ``Voted Appropriations'' is the third item under ``Horizontal Items.'' It refers to horizontal, but it does not say that this is new. You had told us earlier that if it is the first time that it is in this, we would see some indication.
Mr. Matthews: The government's response was just tabled roughly two weeks ago. Its commitment was that in future estimates documents we would make it clear where an item was receiving funding for the first time and which budget it was from. We obviously did not have time to do that for these estimates, but you will see that future change; again, it is for the first time.
Ms. Thornton: Next year's Supplementary Estimates (A) will be the first time that we will have that in place. Our commitment is to start it for the next fiscal.
The Chair: Good. I was testing your evidence, and I understand it.
Senator De Bané: Mr. Matthews, am I correct to say that in the big picture there are three kinds of expenditures: those authorized by law, such as pensions; the repayment of the debt that has reached maturity; and those expenditures approved by Parliament. Is that it? Did I miss a category?
Mr. Matthews: The only clarification I would make is around debt. Interest on the debt falls under statutory items.
Senator De Bané: There are those that we have to pay by law, and those that are approved every year.
Mr. Matthews: They are approved by vote.
Senator De Bané: For those approved every year, Treasury Board is the only one that exists by law, contrary to the others.
Mr. Matthews: That is correct.
Senator De Bané: The law says that even if cabinet has decided to spend $50 million to build a bridge or a new road, it is approval in principle only. An actual disbursement of funds requires the approval of Treasury Board.
Mr. Matthews: To get into an Appropriation Act, you run through the Main Estimates, where it has to be, yes.
Senator De Bané: After it is approved by cabinet, then it has to get the approval of Treasury Board.
Mr. Matthews: Then it has to come to Parliament.
Senator De Bané: Yes. The approval of cabinet is in principle only. No money can be disbursed without the approval of Treasury Board.
Mr. Matthews, please remind me of the different secretariats or directorates. Is there still an evaluation branch?
Mr. Matthews: There is still an evaluation group that sits underneath my sector. There is the Office of the Comptroller General of Canada, who has responsibility for the accounting policies and some of the contracting policies, as well as the internal audit policy.
There is the Office of the Chief Human Resource Officer, who has responsibility for all of the HR policies related to government. There is the Chief Information Officer, who has responsibility for all of the policies related to information management and IT for the Government of Canada.
Then there is our group, which is the Expenditure Management Sector, and we have responsibility for the estimates, as well as the performance information, which is the policy around setting up performance information of programs, as well as the evaluation function you already mentioned.
That is at a high level of the policy components of Treasury Board of Canada Secretariat.
Senator De Bané: I want to say something I have never forgotten. One day I was talking with the Secretary of the Treasury Board and he had been the deputy minister in several departments. By training, he was a physician and a former dean of a faculty of medicine. I asked, ``Where have you seen excellence in your life?'' He told me only in two places: the Mayo Clinic and the Evaluation Branch of Treasury Board. I never forgot that.
Mr. Matthews: I will be sure to pass that on to my director of evaluation. She will be thrilled. Thank you.
Senator De Bané: He said those are the two places where he really saw excellence.
When it comes to your group of evaluation and let us say the cabinet for whatever reason wants to do some expenditure, if your group comes to the conclusion that it is a lousy project, what would you do?
Mr. Matthews: The evaluation function is now one where they are done by departments. They have the expertise around the programs themselves. An evaluation will be done typically after about five years. The evaluations are not done with a view to say if it is a lousy program or a great program. The evaluations are done with a view to determine if a program is achieving results. If it is not, then how might you change the program so it is better at achieving results? Those evaluations are actually done in departments now.
In Treasury Board of Canada Secretariat, we have the policy on evaluation. Every five years, you have to do an evaluation. Here is what a good one looks like. We would look at evaluations done by departments to ensure they are respecting the spirit of the policy.
Senator De Bané: Thank you.
[Translation]
Senator Chaput: I want to see whether I understand correctly. First, we have the Main Estimates. Then, we have supplementary estimates A, B and C. Each of those budgets diplays a total. Then we have credits, which are funds available in cash. Are those credits separate?
[English]
If so, can we add all these together and get the big picture?
Mr. Matthews: If you are looking for the financial position of a department, you start with the Main Estimates. Whatever the most recent estimates document of the day are, they will show you what has happened to the department — if they have actually had money added to the reference levels, transfers, et cetera. If you take the first couple pages of any department, you will get the history up to date.
I would say, if you are really looking for the big picture, my recommendation is to always start with the budget tabled by the Minister of Finance, because that gives you the sense of what the total spending will be for the year.
Senator Chaput: Then A, B, C?
Mr. Matthews: Yes.
Senator Chaput: How about the credits and the cash — les fonds disponibles en argent? Are they included in these budgets?
Mr. Matthews: The credits are reductions, so that when you get the Appropriation Act, we are only asking Parliament for the amount that departments actually need. Therefore, the credits here are just a way of netting off funds that departments no longer have access to.
Senator Chaput: Which means what? Are they included in the expenses here or not?
Mr. Matthews: Typically, in this case, they would be included in the Main Estimates. Therefore, yes, for us to net them off, they have to be previously included.
Senator Chaput: Thank you.
The Chair: There are the Main Estimates and then A, B, C?
Mr. Matthews: Yes. For us to net funds available — the reduction — they have to have been in a previous document.
Senator Buth: Thank you. On slide 6 under ``Major Statutory Items,'' you commented on additional fiscal equalization to Quebec, Manitoba, New Brunswick and Nova Scotia. Can you give more detail on that?
Mr. Matthews: I can give a little bit. I will try to be a little slower this time.
Senator Buth: Thank you.
Mr. Matthews: This is again a Department of Finance Canada responsibility, but there is essentially an arrangement in place called Total Transfer Protection. If you think about the various transfers that go from the federal government to the provinces — there is health, social, and quite a large number of them — this Total Transfer Protection says, ``All of those transfers in total cannot result in a department receiving less this year than they received last year.''
This was about the Department of Finance Canada looking at all of their forecasts for the various transfer payments to provinces and figuring out if any of the provinces would end up with less in 2012-13 than the previous year. Based on their forecasts — and again, these are forecasts — Quebec, New Brunswick, Manitoba and Nova Scotia were at risk for receiving less. This is a way to top them up to their 2011-12 numbers.
Senator Buth: Was this included in Budget 2012?
Mr. Matthews: Yes, it was.
Senator Buth: This is the commitment, then.
Mr. Matthews: This is reflecting it.
Ms. Thornton: Explicitly, it was included by Bill C-38, which was the act that received Royal Assent on June 29.
Senator Buth: Thank you.
I would like to go back to Treasury Board Secretariat, which in English is on page 133. In French, it is somewhere in the 60s. You have a transfer of $2 million to the Privy Council Office to support the Regulatory Cooperation Council. The $2 million is in the negative and I assume it is because it is offsetting the new request with the cuts that were there. Can you explain that?
Mr. Matthews: No, this one is a little bit different. When you see transfers, we are transferring the funds from Treasury Board Secretariat as a department to another department because they will actually conduct the work. In this case, the Privy Council Office is getting the funds from the Treasury Board Secretariat related to their Regulatory Cooperation Council. Specifically, that is money that was originally sitting in Treasury Board Secretariat because of the red-tape reduction work, if I recall correctly. It makes more sense to do that out of the Privy Council Office.
Ms. Thornton: The function was created in 2011 and it was originally within the Treasury Board Secretariat. In July 2012, there was a machinery change announced by the Prime Minister. The responsibility for the Regulatory Cooperation Council moved from the Treasury Board Secretariat to the Privy Council. These resources are now being transferred to accompany that responsibility.
Senator Buth: Thank you for that one. I think that is all I have, Mr. Chair.
[Translation]
Senator Hervieux-Payette: I would like us to look at the item titled ``Department 1B.'' One column title is ``Transfers'' and another one is ``Adjustments.''
When we talk about adjustment, it is either an increase or a decrease. Where does the transfer come from? Where does the $2,205,228 come from? If you want to look at the French version, this is on page 67.
[English]
Mr. Matthews: One of the oddities of the estimates is that net we are transferring out, so there is a reduction. To actually be in the Appropriation Act itself, we have to have a dollar amount that is positive. To basically make space for us in the Appropriation Act, we have a $1 item, so we can actually add a dollar to have Treasury Board Secretariat show up in the Appropriation Act. The net effect is a reduction of TBS dollars, which is why you see the bracket.
Again, it is back to this notion that we only go to Parliament and include in the Appropriation Act any items that will increase the department's authorities. When we bump into something where we are changing the wording of something — changing the wording of a vote is the best example — we have a $1 adjustment just to allow it to get into the Appropriation Act.
[Translation]
Senator Hervieux-Payette: Do the amounts in bold not represent increases?
[English]
Ms. Thornton: The bold is the total going out. If you look at the numbers above it, you have two that are not in brackets. They are transfers coming from the Public Service Commission into Treasury Board Secretariat. Then we have a transfer going out, and the bold is the net amount, the overall total.
As Mr. Matthews indicated, the actual request within the Treasury Board Secretariat, when you look at the bill, is a $1 item because we are not asking for any money, but for authorities. There must be a dollar item attached to it in the bill because parliamentarians may approve, reduce or negative, but you need something to reduce or negative; the dollar is the price of admission into the bill. The bold is simply the net.
[Translation]
Senator Hervieux-Payette: Could you explain the term ``transfer'' to me? Where does the money come from? Do you not have to take the money from one area to transfer it somewhere else?
[English]
Mr. Matthews: From one department to another.
[Translation]
Senator Hervieux-Payette: So we do not know whether it comes from one, two or three areas? On page 67 of the French version, you have ``Ministry Summary — Budgetary,'' where it says ``Privy Council'' at the top of the page. I want to know what ``transfer'' means.
Mr. Matthews: On page 66 of the French version, you will see the title ``transfer.''
[English]
Under there you will see the various transfers that actually add up to the total, about halfway down the page in the written text.
[Translation]
``Transfer of $115,000 from Federal Economic Development Agency for Southern Ontario (Vote 50)''
Senator Hervieux-Payette: So, the money can be taken from all over and does not necessarily come from a single source?
[English]
Mr. Matthews: Multiple places. We can roll them up.
[Translation]
Senator Hervieux-Payette: And where do the adjustments come from? Does the department tell you that they do not have enough?
[English]
Mr. Matthews: No, when you are dealing with transfers, as Ms. Thornton already mentioned, there is a function moving from one department to another.
[Translation]
Senator Hervieux-Payette: I do understand. However, the column next to transfers is titled ``Adjustments.''
[English]
Mr. Matthews: Right. The adjustments are the new items and those are typically the $1 amounts. If you see anything under the adjustments, that is a new item added in the Supplementary Estimates (B). If we can walk through those columns, I will try to find the reference in English as well.
[Translation]
That is on page 67 of the French version.
Senator Hervieux-Payette: Yes.
[English]
It is page 131 in English.
[Translation]
Senator Hervieux-Payette: This time, we are not talking about $1 but about $2 million. That is a more considerable amount.
[English]
Mr. Matthews: You will see both. The first column is authorities to date. That is the authorities the department had coming into these estimates. Then you have transfers, which is movement from one department or multiple departments into the department. The last column is adjustments, which is new money in the Supplementary Estimates (B). If there are any new funds in Supplementary Estimates (B) you will see it under adjustments. We are including the $1 items in there as well, which is the price of admission into the bill.
[Translation]
Senator Hervieux-Payette: Perhaps everyone knew this, but I did not. Thank you, Mr. Chair; I understand better.
The Chair: That is a good question. Thank you for the information.
[English]
I will conclude with a question of clarification. This is under Health and I know we have Health coming up next.
We have been looking at this Hazardous Materials Information Review Commission at page 71, English version, under ``Health, Ministry Summary — Budgetary.'' The almost $5 million that has been approved, I assume, was for the entire year. In the event that this commission disappears, which it may do if the legislation is passed, can you tell me if we could expect a recovery or a transfer? Perhaps some of this work will be done by another department. Will we see a transfer like we have just discussed? What might we be looking for there?
Mr. Matthews: There are a couple of combinations. If there are activities being transferred to another department and that other department will be resourced, you would see a transfer.
The Chair: Of that amount of money?
Mr. Matthews: Or it could be part of that amount. I am just speaking generally. I am not speaking about this organization in particular.
If an organization is being shut down, ceasing to exist and no activities taking place, you would see nothing here because the department has some money and they just would not spend it. What you would have at the end of the fiscal year is what we call a lapse. A lapse is when a department or organization had money and it was not spent. It would depend on what the plan is for the organization. If there are activities being taken on by others, it would end up with a transfer. If it is an organization being shut down with no new spending, then we would let the money lapse and it will be unspent.
The Chair: If we look to Public Accounts following that, will we find out how many was actually spent and how much lapsed?
Mr. Matthews: Yes.
The Chair: Thank you.
Senator De Bané: You have told us that essentially there are two categories of expenditures, some already set in the law and those that have to be approved by Parliament and by Treasury Board. What is the percentage of those two categories?
Mr. Matthews: Generally speaking, by the time the fiscal year is over, it is about 61 per cent statutory, which is approved in law, and 39 per cent voted, give or take a few per cent.
Senator De Bané: When the government says we will try to reduce our expenditures by 5 per cent and you have to put that on the 39 per cent, it is a lot more than 5 per cent on the discretionary expenditures.
Mr. Matthews: You are referring to the strategic and operating review of Budget 2012. They looked at establishing a base and much of the spending where there was a legal obligation to spend — statutory — was excluded from the base. What was left was a base of about $75 billion to actually conduct the review on. As we know, departments were asked to come up with 5 per cent and 10 per cent reductions and that is how they resulted in the $5.2 billion. It was really on a base of about $75 billion.
Senator De Bané: Thank you very much.
The Chair: Thank you, Ms. Santiago, Mr. Matthews and Ms. Thornton. You call yourselves the Expenditure Management Sector of the Treasury Board of Canada Secretariat. We appreciate you coming and helping us with another one of these supplementary estimates. We expect that we may see you again in January or February, which we will look forward to.
If you want to find in your supplementary estimates, we will be going to Aboriginal Affairs and Northern Development Canada, and Health Canada, which will be the two areas we will be looking at shortly.
[Translation]
The Chair: Honourable senators, we are continuing our study of Supplementary Estimates (B) for the fiscal year ending March 31, 2013.
[English]
This evening, for the second panel, we welcome officials from the Department of Indian Affairs and Northern Development: Mr. Michael Wernick, Deputy Minister; and Susan MacGowan, Chief Financial Officer.
We are also pleased to welcome officials from Health Canada: Glenda Yeates, Deputy Minister; and Jamie Tibbetts, Chief Financial Officer.
Thank you all for being here. You have heard Treasury Board Secretariat and our discussion with them earlier, so you know how we like to get into your departments and understand what your plans are and why you are here under supplementary estimates, looking for funds. Shall we start with Ms. Yeates and then Mr. Wernick? You have the floor.
Glenda Yeates, Deputy Minister, Health Canada: Thank you very much, Mr. Chair and senators. It is a pleasure to be here. On behalf of Health Canada and the Health portfolio, we do appreciate the opportunity to talk to you about the spending that is in addition to the spending we have had in the Main Estimates. I am here, as was noted, with Jamie Tibbetts, our Chief Financial Officer. With me also are some officials in the back from the Canadian Institutes of Health Research and the Public Health Agency of Canada. If you have detailed questions for them, they will be pleased to answer.
[Translation]
As my colleagues from the Treasury Board Secretariat briefly explained, Supplementary Estimates (B) include important initiatives from the health portfolio. Those investments will help us improve First Nations community health and support health care innovation.
[English]
Health Canada has asked for a net increase of $198.1 million in the 2012-13 Supplementary Estimates (B). This will increase our total to over $3.7 billion. Most of the increases are strategic investments that were announced in Budget 2012.
The major increases for Health Canada are, first, $226.4 million to maintain the current level of non-insured health benefits for eligible First Nations and Inuit members. This includes existing and new clients for the NIHB program, including new clients that result from the McIvor decision and the creation of the Qalipu Mi'kmaq First Nation band in Newfoundland and Labrador.
Second, there is approximately $55.9 million to continue the implementation of the Indian Residential Schools Settlement agreement, which includes provisions for mental health and emotional support services to eligible former Indian residential school students and their families.
Third, there is $25.6 million to support the implementation of the First Nations Water and Wastewater Action Plan. This funding supports activities such as monitoring the overall quality of drinking water, providing advice on drinking water safety, and safe disposal of wastewater, renewing infrastructure project proposals, and training community members.
Fourth, there is a proposed sum in the amount of $1 million to support the development of community-integrated palliative care models. This funding is part of a four-year program that started in 2011 and will end in 2014.
Those proposed increases total $308.8 million for Health Canada and they are offset by two items: $71.8 million reduction that is related to savings identified in Budget 2012 in the spending review, and $39 million in transfers out of Health Canada, the largest of which is related to a transfer to the Public Health Agency of Canada as part of our shared services arrangement.
The Public Health Agency of Canada increases put forward include $20,000 for the reinvestment of royalties from intellectual property and approximately $37.7 million in transfers. If there are any questions related to these, my colleagues from the Public Health Agency of Canada are here with me.
The Chair: We are hearing a bunch of numbers and we are trying to follow this. Are you able to go to your ministry summary in the supplementary estimates and just point out some of these numbers?
Ms. Yeates: Certainly. Let me get my place.
The Chair: It would make it a lot easier for us. This is under ``Health — Ministry''?
Ms. Yeates: Yes. Details for Health Canada are on page 72. I was basically looking at that first set of four numbers, which are the voted appropriations. There is the $226.4 million, if I round, which is in that first column. This was to maintain the provision of supplementary health benefits to eligible First Nations and Inuit.
The Chair: That is over on the total to the right.
Ms. Yeates: The total to the right in the far right-hand column, $226.379 million. That is for First Nation and Inuit programs in terms of dental, medical transportation and prescription drugs. That is an additional amount to what we have in the base appropriation. This is the additional amount you see there.
The second note there, and again in the far right column, $55.9 million is for the mental health and emotional support services under the Indian Residential Schools Settlement agreement. Those are the two largest figures we have there.
Third, as I mentioned, is the First Nations Water and Wastewater Action Plan. As we see in the far right-hand column, that is $25.563 million. That is for Health Canada's portion. It is part of a broader horizontal initiative with our colleagues in Aboriginal Affairs. Health Canada's responsibilities are to help support communities in the testing of the water. We do not construct the plants, but we help train community members to do the water testing. We sometimes help with advice in terms of how to construct, what kind of wastewater or water system will work in a particular geographic situation, and what kind of advice we can provide there. Much of that is to support communities as they do the testing.
Finally, this very small item, but it is this additional one, is the $1 million I mentioned. That is to help develop new community-integrated palliative care models. That is working with the Canadian Hospice Palliative Care Association to develop some models there.
Those are the increases in the supplementary estimates. The remaining entries are transfers back and forth between us, largely, and the Public Health Agency of Canada. As part of our reductions, we have worked together to have some common services.
For example, whether it is HR, IT or some of our other corporate services such as communications, audit and evaluation functions, we are actually combining those between our two departments. We have a common minister and related mandates. We think this is good efficiency. It does mean that in the plates you will be looking at today there are many transfers back and forth between us and the Public Health Agency. Those are actually nets to and fro, but the four I mentioned are increases for Health Canada.
The Chair: Could you tell us why the three major First Nations expenditures that you have just described to us are in supplementary estimates? Why were they not in your Main Estimates?
Ms. Yeates: Year after year, there are significant supplementary estimates for the NIHB program. A lot of estimations go into the precise number of eligible clients. For example, as I mentioned, we have had some increases in numbers of clients this year with the McIvor decision adding about 23,000 new eligible recipients. Other considerations are whether we add new drugs in a given year, whether some drugs come off patent, and whether the patterns of medical transportation change.
We have a base budget of around $950 million in these current Main Estimates, and we do the final estimation with central agencies and others, and that is reflected in the supplementary estimates.
The Chair: Thank you. We will go on now to Aboriginal Affairs and Northern Development.
[Translation]
Michael Wernick, Deputy Minister, Aboriginal Affairs and Northern Development Canada: Thank you for the invitation to speak to Supplementary Estimates (B).
[English]
I think I can speed things along a little bit. Like Health Canada, most of the supplementary estimates here flow from decisions that were taken in the March budget. They were not in the Main Estimates because the mains did not reflect budget decisions, so this is the opportunity for the appropriations. The largest items that you will see in the departmental summary, which is on page 85 in English, reflect budget measures and the instalment for this fiscal year for initiatives that were announced by Minister Flaherty.
Rather than go through them all, I will touch on the highlights. The biggest one, the first line item, is a decision in the budget to extend the First Nations Water and Wastewater Action Plan. As my colleague indicated, our department takes care of financing the design and build of facilities and we collaborate on the training of operators. Health Canada takes care of the science and monitoring, the water testing part of that. We did not know we were going to get this money until the budget came out, so that is the largest item.
The Chair: That is $136,469,000.
Mr. Wernick: Exactly, and that is part of an ongoing series of renewals of activity on water and waste water that the government has been pursuing for several years and several budgets, and this will take us through another couple of years.
The next two items are related to the Indian Residential Schools Settlement agreement, with which I think senators will be familiar. The agreement was reached in 2006 and implementation started in 2007. We are now in the sixth year of implementation of that. I would be happy to go through the components of the agreement. Again, the decision on putting money aside for the next few years on the implementation of the agreement was taken in the budget, so those funds flow through supplementary appropriations.
Part of it is for the operational side. There is pre-adjudication, adjudication and post-adjudication work on the claims of former students, and Ms. Yeates' department takes care of the mental health supports for people who are participating in the process, because there are issues about triggering, trauma and mental health supports required for people to participate in the process.
The Chair: Is there more uptake on this than you had anticipated?
Mr. Wernick: There are six main pieces of the settlement agreement financially, but the two big ones are the common experience payment and the independent assessment process. The difference between the two is that with the common experience payment, as it suggests, everybody who could demonstrate that they attended a school got a payment, and the payment was proportional to the number of years they attended. There were about 79,000 recipients for that. We are about 95 per cent of the way through processing those payments. The deadline for application was a year ago. There are still a few cases in which they are ironing out eligibility, but that part is essentially done.
On a separate track, but largely with that pool of potential applicants, people could present claims related to physical and sexual abuse while they were students, and there is a series of adjudicators who hear the claims. This is all under the court settlement. The terms, the point scale and the way things are done is all pre-determined by the court settlement. We are acting essentially as the court's administrator for this process. There is the secretariat that supports it, and the management of the monies before and after and so on is something that a branch of our department looks after.
There was no reliable way of knowing how many people would apply. Based on some academic estimates, when the settlement agreement was reached, people thought it would be between 15,000 and 20,000 students. The deadline for application just came up this year, five years after the initial period, and we will have over 35,000 applicants, which indicates a very high rate relative to the pool of students that attended the schools, which means that, at the rate of adjudication of about 4,000 cases a year, we will probably be processing those claims until about 2016.
The Chair: Unless you get more revenue.
Mr. Wernick: There is a maximum, senator. There are only so many competent adjudicators who can handle it. There are only so many legal counsels available to support it. There is a maximum somewhere. The courts that supervise this have set a target of 4,000 hearings a year. We have managed to get to about 4,500, but I think it would be very difficult to do much more than that.
The other item is related to the part of the budget that had to do with First Nations education. There was $275 million injected into the education area through the budget, and the part that would flow this fiscal year is the fourth item, the $45 million that you see on that page.
There are many other small pieces. I would be happy to take questions on them, but, rather than go through them all exhaustively, I am happy to take the ones that you are most interested in.
The Chair: That was very helpful and got us started. I now call on senators.
Senator Eaton: Thank you. I have a quick question out of interest. Funding for mental health and emotional support services, funding for awards to claimants, funding for development of systems and supports to ensure readiness for First Nations education legislation — are these programs designed by the First Nations themselves with the government paying for them, or do we design the programs and pay for them?
Mr. Wernick: It is a bit of both. They are federal programs. They are allocations of money from Parliament, through to our department, and then we flow them out to First Nations through funding agreements. The contribution agreements begin with money under a particular program design or formula for delivery of a particular service. For the most part, the actual administration and delivery is done by First Nations. The First Nations run the schools, build the water plants, manage the housing and so on. Ms. Yeates has a bit of an exception to that because they actually run health stations in communities, but it is largely a model where money flows from Parliament, to us, to the First Nation, and they deliver the activity.
There is a great deal of back and forth with a variety of First Nations organizations on the design of programs and how they should work and be improved. This is all described very well in the Auditor General's report of May 2011.
Senator Eaton: Thank you.
Senator L. Smith: I will start with a simple question. On page 85 of Indian Affairs, vote 1, vote 10, total; how many votes do you have? Are there numerous votes that you go through in setting up budgets? How does it work?
Mr. Wernick: There are two for the most part and a little rump on the other. Vote 1 is essentially our operating dollars. It is salary and non-salary operating, and vote 10 is the grants and contributions, which I just described, which essentially flow out through recipients. We have a tiny amount of money that is for capital. The only thing we do with capital money essentially is the high Arctic research station project where we will build something.
Senator L. Smith: In the document we received with major items, we had First Nations Inuit health benefits of $226 million, which Ms. Yeates went over; then under Aboriginal Affairs Health, we have four items. As a simple question, why would they not be sort of clumped together? It seems like they are segmented or segregated, but why would they not be just all together? I do not understand.
Mr. Wernick: I do not have the document you have, senator.
The Chair: We will give you a copy of it. We received this from the Treasury Board Secretariat. We will bring you down a copy.
Mr. Wernick: Okay.
The Chair: It is at page 6 of that Treasury Board Secretariat document.
Senator L. Smith: From a simple comprehension, I would have Indian Affairs and then my four amounts listed so that the readers can get it, because it can be misleading when you look at it. You say, oh, you had your Health First Nations Inuit benefits at $226 million. You then go down the page and you see the other ones, and I wondered if there was a reason for that.
Mr. Wernick: I think it is essentially the way the whole spending process is structured. Parliament appropriates money to my department. My minister's answerable for it and I am the accounting officer for it for my programs and activities. Some of it is appropriated to Health Canada. Ms. Yeates' minister is accountable for that and she is the accounting officer for that. There are 34 federal departments involved in some way or another in Aboriginal issues. We have most of it, and I think between the two of us we would be accountable for about three quarters of the spending.
Senator L. Smith: When you look at your budget, you see the total budgetary expenditures on page 84 of about $8 billion, if I understand correctly.
Mr. Wernick: It is probably closer to $12 billion if you include the housing that is at CMHC and some of the training programs that are at our colleagues at HRSDC. We have about three quarters of it. I think the all-in number, I would not be too far wrong if it is between $11 billion and $12 billion a year.
Senator L. Smith: It must be quite a challenge for you to be able to plan. I was lucky enough to see in some visits to the First Nations the way they have their country set up. It is not the country of Canada. It is the First Nations and the various groups within. From a planning perspective, is this sort of like a moving target because of the number of issues that you have to deal with? It must be very difficult to plan each year in terms of what you will spend.
Mr. Wernick: I will certainly let my colleague chip in on that.
Senator L. Smith: It is not a trick question, by the way.
Mr. Wernick: No, it is a very good question.
Senator L. Smith: I would be interested to see how you guys do it.
Mr. Wernick: We are often described as sort of an eleventh province, but a very strange one, because First Nation Canadians — on-reserve, to be more precise — they are turning to us for things like primary education, health care, child protection, getting the roads fixed and all that sort of stuff. Other Canadians would turn to their premiers and their provinces for that. Our province, though, is a little archipelago of 600 islands spread across the country, and somehow we have to make that work.
There is a lot of diversity across the nations. They are at different stages of development. They have different relationships with the provinces in which they live, so, yes, it is complicated. There is certain continuity. We know because of the people that are on the registry how many kids there that are going to show up for school and want to be educated. We can do some planning based on demographics, and those services will continue to be asked for.
Not to be repetitive, but sort of the structural, fundamental issues were very well described by the Auditor General's report in how difficult it is to make sustained progress in this. She has some prescriptions to suggest.
Senator L. Smith: Is it tough to prioritize in terms of all the activities that you undertake?
Mr. Wernick: Yes.
Senator L. Smith: It is all tied to numbers.
Mr. Wernick: I think you are always torn between sort of remedial programs to sort of deal with crises and emergencies, and putting patches on things and investments in things which would make a big difference down the road. We would like to move child protection to a more preventative model so that you do not have to pay a lot of money in maintenance down the road. We are working to try to get more skills and training for young adults so that we will not end up paying welfare, and so on. We would like to turn the policies more towards prevention.
The more economic activity there is in communities, the more people have jobs and income and revenues, the less dependency there will be on government programs down the road, but these are structural issues that will not be turned around overnight.
Senator D. Smith: Thank you.
The Chair: Thank you, Senator Smith. Next is Senator Hervieux-Payette from Quebec.
[Translation]
Senator Hervieux-Payette: I would like to discuss two specific topics —food subsidies and drinking water.
Regarding drinking water, it was said earlier that there were two budgets: the budget for in-service installations — regarding their operations — and a construction budget, I guess. Where do things stand when it comes to improving the quality of drinking water on reserves?
I see here some amounts that are definitely not huge, so I am wondering. This is certainly a good amount of money, but as I have worked in engineering offices, I know that it is not a lot of money for installing drinking water plants. What kind of work are you doing? Have you established a five-year program so that reserves will have drinking water by the end of that term? How are you planning that? I am under the impression that this will still not be finished in 2050, if no clear timeline is set.
Mr. Wernick: In a way, that work will never be completed because this service will be a permanent necessity for the community. The action plan the document refers to includes three streams of activity. The government's approach consists in tackling all three streams to achieve sustainable results.
The construction of water treatment plants is certainly an important element, but the second element — and we saw this in other communities, such as Walkerton, Ontario, or Prince Albert — is the professional training and capacity of service operators.
The third element is a governance and accountability regime with very clear standards. When it comes to that, we have very clear guidelines from the Auditor General and other sources, whereby everything must be integrated in a legislative framework. These are the only communities in Canada that are not regulated through legislative standards when it comes to drinking water. That is why we are moving forward with Bill S-8.
Senator Hervieux-Payette: Here, it says treatment of wastewater and drinking water, and — if I am reading this correctly — we are talking about $136,439,000. Is that the total amount that will be spent over the course of the year?
Mr. Wernick: That is a summary of the fiscal year, but I think the government has spent over $3 billion since 2006.
Senator Hervieux-Payette: Three billion dollars?
Mr. Wernick: Yes.
Senator Hervieux-Payette: For drinking water initiatives?
Mr. Wernick: Yes.
Senator Hervieux-Payette: It seems to me that this method is more expensive than what we use in our small towns. To me, reserves are sort of like small towns. There are 600 municipalities in Quebec. Many of them are about the same size as a reserve. The installation of wastewater treatment facilities takes longer than that of drinking water treatment facilities, but drinking water is vital to health. People cannot be healthy without drinking water.
Mr. Wernick: We want to be very transparent regarding the discrepancy between what we have and what the needs are. We have invested millions of dollars into an assessment by engineers of each plant in each community. Those data have been available on the Internet since 2011. That is a very clear assessment of where things stand in a number of areas, and we follow risk assessment criteria. In addition, annual progress reports are produced.
There are occasionally issues regarding the quality of source water in the region and, sometimes, it is a matter of capacity, considering the population growth.
There are a number of factors involved. However, investing into capacity enhancement without, at the same time, meeting the challenges of having well-trained operators and clear standards may not be efficient.
Senator Hervieux-Payette: I have participated in the implementation of certain programs for the fluoridation of drinking water in Quebec. The training was provided. Technicians, rather than engineers, are needed. That way, jobs are created on the reserve. So, if there are 600 reserves, 600 jobs would be created with this approach. And these are probably not full-time jobs. It would depend on the size of the reserve, as the same technology is not used on all reserves. Therefore, the figures would depend on the number of individuals and the fact that planning is done over a minimum of 10 years, if not 20 years. So this cannot be done in only a few years.
How long will it take to meet the needs of the Aboriginal community? We assume that planning is done over a certain number of years. Renovations and additions may be required. We have 600 reserves in Canada. When will the installation of drinking water plants in reserves be finished?
Mr. Wernick: I cannot estimate the timeline. That depends on the investments in future budgets that we cannot guarantee. We follow the risk assessment framework, we tackle high-risk situations as much possible, and we also try to explore other funding methods.
This is a very simple model. We wait for Parliament to allocate funds to the Department of Indian Affairs and Northern Development, but non-Aboriginal municipalities use other funding methods.
Senator Hervieux-Payette: Is an annual amount charged?
Mr. Wernick: We pay for drinking water. This system is underdeveloped in Aboriginal communities. We are working in public-private partnerships and looking for other ways to speed up the progress.
Senator Hervieux-Payette: Based on that, I will have retired before this is finished.
Does the funding to support the operation of Nutrition North Canada apply only to Nunavut, or to the Northwest Territories as well?
Mr. Wernick: The program applies to communities with no road access. So there are 110 communities, but I think that most of the program is delivered in Nunavut. The second-biggest beneficiary is Nunavik, in Quebec's far north.
Senator Hervieux-Payette: Is that a subsidy for transportation?
Mr. Wernick: It is a subsidy provided directly to retailers. They receive compensation from the government based on a framework — a few cents per kilogram for certain eligible foods.
Senator Hervieux-Payette: So not everything is eligible. You do not subsidize candy, I suppose?
Mr. Wernick: No. That is another area of co-operation between our departments. There is another aspect, which is public education on nutrition. We try to limit taxpayer subsidies to the most basic foods.
Senator Hervieux-Payette: The word ``carrot'' always comes to mind because it travels better than broccoli. It is very practical.
But I have always told myself that they need specific vitamins that come from certain foods. Clearly, always eating the same vegetables is boring, but at least, those vegetables contain essential nutrients.
People cannot live only on seal meat and fish. They also need vitamin supplements. Is the $2.5 million for this year?
Mr. Wernick: The annual subsidy amount is about $53 million or $54 million. Another $6 million or $7 million is provided for administering the program and for public education. So we subsidize as many kilograms as we can with the available funds.
Senator Hervieux-Payette: This year, I worked on a project called Wapikoni mobile. You have cut $500,000 in subsidies. That was a program for rehabilitating young Aboriginals in reserves. It was developed because of mental health problems and suicide rates.
Professors visit reserves in trailers and educate young people about media, so that those young people can regain their self-confidence and find a job.
Where and how is this program assessed? Talking about quick implementation and withdrawal is fine and well, but we still need measures to ensure that, in a short period of time, the whole group of people who earn very low wages compared with public service employees —
I can tell you that the professors come from the National Film Board. They are professionals who used to earn at least three times what they earn now, but they remained involved in the program because of their passion. You cut this program that had to do with both health and education. Another very modest amount, which affects a number of reserves, has been cut. How are those decisions made?
Mr. Wernick: I am not familiar with that specific program. We always have to make decisions when it comes to requests and available funds. Is that a Health Canada program?
Senator Hervieux-Payette: It was a Health Canada program, but it had an impact on your operations, as it was used to train young people. At the same time, it greatly helped prevent youth suicide.
Ms. Yeates: I am also not familiar with the details of that program. There are many health and mental health programs. Some programs are very specific to one region or another. Regional developments are unique.
So there are many programs, and I was not familiar with that specific one. However, we can take down the question and come back to you with some details.
The Chair: Can you send us a letter with explanations?
Ms. Yeates: Yes.
[English]
Senator Buth: Thank you very much for being here this evening.
Ms. Yeates, can you explain what the McIvor decision was? You also mentioned another reason why the supplementary health benefits to eligible First Nations and Inuit would have increased.
Ms. Yeates: Yes. Thank you for the question.
I should say, first, that the Non-Insured Health Benefits program covers about 896,000 recipients, so this is a program unlike some of the others we have been speaking about, which are limited to on-reserve First Nations people. Our Non-Insured Health Benefits cover registered First Nations and Inuit, whether they are on or off reserve.
There was a court decision in McIvor that actually changed the eligibility based on an assessment of the way that certain past rules had been applied in terms of who was eligible to be a registered First Nations person. That has altered, again, the number of people under my colleague in Aboriginal Affairs, the lists. The registration changes as a result of that court decision increase the number who are considered to be First Nations, and that then affects our program. Whether people live on reserve or off, they become eligible recipients.
Mr. Wernick: If I could just clarify. The court decision was a challenge to the Indian Act provisions that said that there was gender discrimination. People had lost status throughout marriage. Parliament repaired that through legislation about two years ago.
Some of you might remember a bill, which was Bill C-3, at the time. It was called the Gender Equity in Indian Registration Act. It basically restored status to a number of people, essentially women and their descendants, and reinstated their ability for two generations.
You are correct, senator. We have a process for people to apply. The main questions are ``who is your grandmother'' and ``what was her situation?'' We process those, grant the status and issue people identity cards and so on. As of last week, there were 24,000 people who had essentially moved from being non-status to status. That then poses an issue for Ms. Yeates, because those people are eligible for benefits under her program.
Senator Buth: Did you say that the total number of recipients is 896,000?
Ms. Yeates: I should be clear; that is the total number of eligible clients. Not everyone is a recipient of a benefit every year because some people would not use any of the program benefits. However, those are the numbers. Again, as Aboriginal Affairs registers more people, some of those people would use benefits under Health Canada's Non-Insured Health Benefits program.
Senator Buth: Do you think that that would be the total, then? Is that a finite number?
Mr. Wernick: No, people can continue to apply. I am checking my numbers here. We still have several thousand applications in the hopper, and there is not really a cut-off. Someone might turn up a year or two or three from now. We think that most of the people who are aware of it and likely to apply have come in. The projections of our demographers said it would probably level off around 40,000, which is significant on a base of 800,000 or so.
Senator Buth: Did you mention another reason why?
Ms. Yeates: Yes, there was a new band created in Newfoundland and Labrador, the Qalipu Mi'kmaq band. Again, Aboriginal Affairs goes through the legal process and the establishment, and they give us an estimate, obviously, for our planning purposes. We are now starting to see those people actually come forward and register. At this point, we have about 23,000 people who have registered as a result of that band. Again, some of those will begin the process of seeking out NIHB benefits. At this point, we do not know precisely how many will seek our benefits, but they become eligible.
Mr. Wernick: These are people, senator, who lived in Newfoundland and, when Newfoundland joined Canada in 1949, were not immediately made Indians. They successfully sued and won the court case, so we have had to give them status as Indians, not exactly like in the rest of the country, but essentially analogous. Again, we register them and they become clients of Ms. Yeates' programs.
Senator Buth: Thank you.
Senator De Bané: Just a question of vocabulary. In French, Ms. MacGowan has a title that I understand.
[Translation]
``Dirigeant principal des finances'' — that is very clear. Mr. Tibbetts' title in French is ``contrôleur ministériel'' — which translates to ``ministerial controller.'' He controls the minister.
[English]
He controls the minister? No.
[Translation]
I think the title ``dirigeant principal des finances'' is better.
[English]
Because, in English, the two are the same — Chief Financial Officer.
[Translation]
Both are translated as Chief Financial Officer.
[English]
Okay, I will leave the semantics and vocabulary.
Tell me, we know that there are some Aboriginal people sitting on oil reserves, and they are millionaires, et cetera. Tell me, what is the percentage of the Aboriginal people of our country who are in the middle class, and what is the percentage who are poor? Do we have a big picture?
Mr. Wernick: I do not have that data at my fingertips. The snapshots we get of Aboriginal Canada come mostly through the census, so there is data that we have on our website from 1996, 2001 and 2006. In May of next year, we will get, from our colleagues at Statistics Canada, data from the 2011 census.
I am not sure that I can give you that kind of income distribution. There is no question that, in comparison to the rest of the country, we have a sense of education levels and income. I do not think I have ever seen a distribution among Aboriginals. That would be an interesting question, but you would have to get into individual data. I am not sure exactly how you would do that.
Senator De Bané: Do you think that I am off the mark if I say that, both in the United States and in Canada, it is a tragedy to be born an Aboriginal because of the chance of belonging to the poorest community? Despite the great expenditures that we make, they are still mostly among the poorest Canadians and Americans. Is that too simplistic?
Mr. Wernick: I think our two ministers would say that there is no question that there is a lag and a gap between the social, economic and health conditions of Aboriginal people — particularly those who live on-reserve — and other Canadians. About half of status Indians live off-reserve in surrounding communities. There are large numbers in all of the Canadian cities, but there is a measurable gap between reserves and others.
The government, which we serve, is committed to trying to increase the economic participation. It is the same recipe that we would apply to other disadvantaged communities. Get them through high school and try to close the gap in education rates. That is why the government made such a big deal about education in the last budget and why we hopefully will be bringing you education legislation next year.
There is skills training and employability, things that will get people out of dependence on government programs and into the economic mainstream. Those are the kinds of things that the government is pursuing. Other governments have also done so, but there is a real focus, at the moment, on economic participation.
There is no question that there are other things and pressures that will fall on government, but we will never close that gap that you very eloquently described if we do not give those kids a good education and a good start in life. They might stay in reserve communities, move to neighbouring communities or join the global economy and work in Shanghai, but they need that start in life, in particular, to really succeed. That is a focus.
Senator De Bané: Thank you. What is the main characteristic of the First Nation Education Act that will be enforced in two years time?
Mr. Wernick: Since we have not written it, I am not sure that I can describe that for you.
Senator De Bané: Yes, but there must be something in that formula, in that new act, about education, which, as you say, is really a base.
Mr. Wernick: It is a very big topic. The Auditor General's report from May 2011 indicated the lack of a legislative framework to hold people to account. Who is responsible for what? What are the norms? What are the expectations? What are the obligations of government? That is a big missing piece. The Standing Senate Committee on Aboriginal Peoples tabled a report on education and gave very clear advice. We conducted a national consultation with the Assembly of First Nations with an expert panel — people who know education. They have given us their advice, and there are other sources of advice.
The point of the legislation is largely to pull it all together.
[Translation]
A legislative framework similar to the one we have in the provinces.
[English]
It is to make it clear what the expectations —
Senator De Bané: You are optimistic that it will be a significant improvement?
Mr. Wernick: I think it will be more effective than pouring in money and hoping for the best.
Senator De Bané: May I have one last question?
The Chair: We will put your question and get the other senators who have questions. We will get all the questions out, because we are running out of time. You may put your question, but hold the answer.
Senator De Bané: We saw a community that did not have clean water, and no one could understand that. What percentage of people living on reserves have clean water?
Mr. Wernick: I can get back to you in writing with a response. There is an enormous difference. Some communities are 5,000 people and some are 200 people. In terms of the percentage covered by good systems, we can get you that information.
The Chair: Send to us in writing any information you may have.
I would like to get the questions and points of two senators still on my list on the record. Please note their questions. If you are able to give a quick answer, that is great. If not, please send us a written answer.
Senator Nancy Ruth: Back to the planning and the McIvor stuff, once the court made the judgment — and Parliament took some time making the law — did you start planning then for costs of the introduction of the two generations?
I understand McIvor is under appeal at the United Nations. What planning, if any, are your ministries doing about that?
[Translation]
Senator Chaput: My first question is for the Department of Indian Affairs officials. It is about the funding to continue to support the implementation of the drinking water action plan. How long has this plan been in operation? Your objective was to have drinking water on all 600 Canadian reserves, correct? Where are you at in terms of that? Do any reserves still lack that drinking water?
My second question is about the RCMP. There is a transfer to the RCMP, and document disclosure is mentioned. If my understanding is correct, money is taken from the Department of Indian Affairs, it is transferred, and it is used to pay the RCMP for providing you with documents. Is that right?
[English]
Mr. Wernick: In reverse order, we are the conduit for money to the RCMP to organize, digitize and get its documents to the Truth and Reconciliation Commission, which is collecting the historical record. They were a big piece of the history of residential schools. Perhaps after us and Health Canada, those are the major sources of documents.
Yes, we plan for various contingencies in the courts. We started planning as soon as we had the legislation in play. We will start planning for proposed legislation that is currently before Parliament. The water plan was launched by Minister Prentice in 2007.
Senator Chaput: Do you have an objective?
Mr. Wernick: We would like to get to sustained high quality in all First Nations.
Senator Chaput: Where are we now?
Mr. Wernick: The evaluation still shows high-risk systems.
Senator Chaput: In how many reserves?
Mr. Wernick: I do not have the numbers at my fingertips. I think we are about two thirds of the way, but there are still communities at high risk.
The Chair: We still have half a minute. Senator Nancy Ruth, did you get your questions answered satisfactorily?
Senator Nancy Ruth: Sort of. It is a crap game; you do not know what any judge or institution will say.
Mr. Wernick: The United Nations finding would have no legal force on us, as opposed to a Canadian court decision.
Senator Nancy Ruth: I guess it would have political force that would then force the government to do stuff again.
[Translation]
Senator Chaput: My last question is for Health Canada. Among the transfers, we can see a transfer from the Public Health Agency for audits, verifications and international affairs services. Can you give me an example of what that is about? It is on page 132 of the French version.
[English]
Senator Chaput: It is on pages 72 to 75 in English.
Ms. Yeates: International Affairs, as I mentioned, has joined with the Public Health Agency of Canada in sharing services. We have one international affairs unit that serves both departments, so this is the to-ing and fro-ing of the staff salary dollars for this unit that supports both departments.
The Chair: It looks like I have exhausted my list just at the right time. I thank Mr. Wernick and Ms. MacGowan, from the Department of Indian Affairs and Northern Development; and Ms. Yeates and Mr. Tibbetts, from Health Canada, for telling us what you are doing in your departments and why you are under Supplementary Estimates (B). We look forward to continuing to hear good things from both departments.
(The committee adjourned.)