Proceedings of the Standing Senate Committee on
National Finance
Issue 27 - Evidence - February 25, 2015
OTTAWA, Wednesday, February 25, 2015
The Standing Senate Committee on National Finance met this day at 6:47 p.m. to study the Supplementary Estimates (C) for the fiscal year ending March 31, 2015.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this evening, we will continue our study on the Supplementary Estimates (C) for the fiscal year ending March 31, 2015.
[English]
We have a busy evening. We are dealing with Supplementary Estimates (C) and we've got four different departments to hear from, honourable colleagues. We will have to be tight with our questioning. I will be watching the clock to try to make sure that we get everybody's question on record and hear from the various departments who are anxious that we vote in favour of their request for funds.
In our first session this evening we are pleased to welcome officials from Foreign Affairs, Trade and Development Canada, sometimes known as DFATD. It's not DFAIT any longer; "Development" is in there. We welcome Arun Thangaraj, Acting Assistant Deputy Minister and Chief Financial Officer; and Lauren Webster, Director, Financial Management.
From Aboriginal Affairs and Northern Development Canada, we welcome Paul Thoppil, Chief Financial Officer; Sheilagh Murphy, Acting Senior Assistant Deputy Minister, Regional Operations; Stephen Van Dine, Assistant Deputy Minister, Northern Affairs; and Marla Israel, Director General, Social Policy and Programs Branch.
I understand each of you has a spokesperson. Can I assume that Mr. Thangaraj would be going first?
Arun Thangaraj, Acting Assistant Deputy Minister and Chief Financial Officer, Foreign Affairs, Trade and Development Canada: Yes, I will.
The Chair: You will give us your submission first and then we will go to whoever else you have chosen, following which we will go into a question and answer period with honourable senators.
Mr. Thangaraj: Thank you, Mr. Chairman, and thank you for the invitation to appear before the committee this evening. It's a pleasure to be here again. I will make a couple of brief opening remarks, and after my colleague presents, I will be pleased to answer your questions.
[Translation]
Our last appearance before this committee to discuss estimates was in the latter part of the last fiscal year, in mid-February 2014. The new, amalgamated department is ensuring the delivery of coherent foreign policy, trade and development mandates. Over the last year, the department has promoted Canada's values and interests internationally, enhanced prosperity, alleviated poverty, addressed humanitarian and global security challenges and served Canadians at home and abroad.
The breadth, scope and international reach of the department's mandate makes DFATD one of the most complex departments in the Government of Canada. This international reach is highlighted by the department's management of Canada's international platform — a global network of 174 missions in 107 countries, which provides a range of services to Canadians and Canadian businesses, while also supporting the international work of 26 federal departments and agencies, crown corporations and provincial governments.
[English]
In terms of our mandate, Canada has taken a leadership role on a number of issues through the department. With respect to international development, this role is no more pronounced than with respect to securing a future for children and youth. At the Saving Every Woman Every Child: Within Arm's Reach summit this past year, the government renewed its committed to maternal, newborn and child health by announcing the continuation of $3.5billion in funding between 2015 and 2020.
The department continues to face a wide variety of challenges arising from uncertainty and volatility in the international environment in which it operates such as natural disasters, conflict and security threats, and to those we've responded effectively to through our humanitarian relief and other measures.
In light of the department's international operations and presence, our annual expenditures are influenced by fluctuations in foreign currency, various rates in foreign inflation and changes in assessed contributions related to memberships in international organizations. Against this backdrop of complexity and volatility, as well as the department's expanded mandate, the department continues to place an unwavering emphasis on prudent and careful financial management to deliver its mandate in a sustainable, effective and efficient manner.
In these supplementary estimates, the department is requesting new funding of $296.96 million, which will bring our total authorities to date to $5.94 billion.
The funding request includes $126 million for the extension of the Stabilization and Reconstruction Task Force and global peace and security funding. In addition, there is $52 million for the humanitarian assistance for the Ebola crisis response, $36.67 million to support the global fund to fight AIDS, tuberculosis and malaria, and $28 million in response to the crisis in Iraq. The department is also requesting additional grant ceilings in the amount of $25 million to allow Canada to address global requirements for humanitarian and development assistance in areas such as food and non-food relief, logistical support to humanitarian relief operations, protection, health and education needs.
The Chair: Could you point out the $25 million for us on page 2-19? The other figures are fine, and I was following it.
Mr. Thangaraj: It is 2-19 and it is shown a little bit more than half way down the page. It says "Transfer from contributions to grants ($25,000,000)," and it's vote 10-C.
The Chair: Vote 10-C, okay.
[Translation]
Mr. Thangaraj: The department has capitalized on the unique opportunity created by the amalgamation to leverage the former department's respective strengths and best practices, as well as a broader pool of talent and expertise. Although amalgamating two organizations of the size and scope of the former Department of Foreign Affairs and International Trade and the former Canadian International Development Agency is a complex process, major progress has been made and much efficiency achieved.
[English]
Over the past year, the department has focused on the effective amalgamation of resources, including the careful identification of potential risks in cost-saving areas. Progress has been made in fully integrating our corporate and administrative functions.
The department has also established a new governance framework and implemented a new organizational structure that has been critical in driving policy and program coherence. These efforts have found their concrete expression in, among other examples, the elaboration of new directions policy on development, the agility of our response to humanitarian needs and our fully coherent response to major crises. The department continues to pursue opportunities for increased policy coherence across business lines at headquarters and in a unified cohesive workforce at home and abroad.
This enhanced coherence and integration will ensure the department continues to manage its resources through a departmental ecosystem of sound, robust financial management policies and frameworks. The department continues to place emphasis on effective internal controls, risk management and strong performance measurement, all while ensuring an ongoing high quality of support to our programs and operations.
[Translation]
Mr. Chair, I will conclude by underscoring the department's ongoing commitment to the responsible stewardship of resources and sound financial management in order to ensure its goals are achieved and its program results are delivered. The department continues to be guided by an overarching vision aimed at finding ways to better serve Canadians, promote our values and interests, contribute to global solutions, and enhance Canada's prosperity. Thank you, Mr. Chair.
[English]
The Chair: We will go on to Mr. Thoppil and then we'll engage in some discussion.
[Translation]
Paul Thoppil, Chief Financial Officer, Aboriginal Affairs and Northern Development Canada: Mr. Chair, thank you for giving me the opportunity to speak to Supplementary Estimates (C) 2014-15 for Aboriginal Affairs and Northern Development Canada.
I am well aware of the important role this committee plays in examining the department's estimates.
[English]
To change the rhythm, instead of a speech, I've given the members of the committee a deck, a presentation which you have in front of you. I will be speaking to the deck in the course of my presentation.
The Chair: The document we have to vote from is the supplementary estimates, so what we're doing is following two different documents, your presentation and plus the other. So if some numbers that you put in here are a combination of two numbers in the estimates, it causes confusion. All you have to do is tell us what this number is and then we're on our way again.
Mr. Thoppil: Thank you for the clarification. We will try and make it as simple as possible.
[Translation]
These supplementary estimates include items totalling $115.8 million, resulting in an investment amount of $8.8 billion during the fiscal year.
[English]
I'm referring to page 2 of the deck.
[Translation]
Approving these supplementary estimates will support and help advance the Government of Canada's plan to improve the lives of Aboriginal people and northerners. More specifically, Supplementary Estimates (C) will provide the financial resources required to implement certain key initiatives. I will now briefly describe the main items.
[English]
Starting on page 3, the largest item in the supplementary estimates, $69.1 million, will go to fund on-reserve emergency response and recovery.
[Translation]
You can see before you the objective, outcome and status of the program.
[English]
Unfortunately this was a bad year in terms of emergency impact on First Nation reserves, primarily caused by the flooding in Ontario, Manitoba and Saskatchewan as well as some forest fires.
[Translation]
The second largest item of the supplementary estimates is an envelope of $15 million for the First Nations Infrastructure Fund.
[English]
These funds will permit the department to address infrastructure requirements beyond schools, water and housing. The focus will be on roads and bridges, energy systems, solid waste management, skills development, connectivity and disaster mitigation. As you will note in the request from First Nations to date for next fiscal year, we appear to be well oversubscribed for the available funding, which will enable us to select good quality proposals to advance this agenda.
[Translation]
Next, the third largest item of the supplementary estimates is the $13.4 million for the Urban Aboriginal Strategy.
[English]
This initiative consolidates three former Canadian Heritage programs for urban Aboriginals together with one at Aboriginal Affairs Canada in order to streamline administration and strengthen program management. As you will note, the National Association of Friendship Centres, the main deliverer of this initiative, will enable the program to expand its reach to urban Aboriginals from 15 to 119 urban centres.
Then the next item is $11.3 million for Nutrition North in order to provide subsidies for nutritious food for northerners to keep pace with the growing rate of demand. This program, between 2011 and 2014, has enabled the price of eligible food to be reduced. At the same time, there has been an increase in the volume of food shipped to northern communities compared to the previous program.
There are two supplementary estimates which can be categorized under what we call the self-government agenda. First is the renewal of First Nation agreements for Carcross/Tagish and Westbank for $3.9 million and the implementation of Yale and Tla'amin First Nation final agreements for $1.3 million.
Finally, there is a $1.8 million amount for incremental and non-treaty agreements and consultation protocols to advance engagement with First Nations in British Columbia and Alberta in response to the Eyford report.
[Translation]
Mr. Chair, I would like to close by thanking you and your colleagues for inviting our department to appear before the committee today and for allowing me to elaborate on Supplementary Estimates (C) 2014-15.
[English]
The Chair: Thank you. I was following your figures, not in your deck that you so conveniently prepared for us. I apologize for that, but I was following them in the supplementary estimates. The last item that you talked about doesn't seem to be lined up. I have $1.2 million, but that's under "Total." I'm at page 2-24.
Mr. Thoppil: Correct.
The Chair: So the total is made up of $292,000 and $1.6 million. One is vote under 1 and one is under vote C. They both seem to be related to funding for the implementation of the Yale First Nations agreement and another final agreement.
Mr. Thoppil: If you're referring to the last one, you'll see $1.75 million for the "national Incremental Treaty and Non-Treaty Agreements," and I referred to it as $1.8 million for rounding purposes.
The Chair: That's fine. And then the next item you refer to that as $1.3 million in your deck.
Mr. Thoppil: That's correct. It's the aggregation of $292,000 and $1 million below it.
The Chair: That relates to final First Nation agreements.
Mr. Thoppil: That's correct. In my presentation I aggregated both the funding for renewal of the Carcross/Tagish First Nation and Westbank First Nation amounts of $3.9 million under vote 10C, as well as the funding for the implementation of the Yale First Nation Agreement and Tla'amin Final Agreement in my remarks as "advancing the self-government agenda," because both amounts relate to that.
The Chair: The vote 1 is operations and vote 10 is contributions or transfers?
Mr. Thoppil: That's correct.
The Chair: I think we're starting to understand. Thank you very much.
[Translation]
Senator Rivard: My question is for Mr. Thangaraj. When you talked about the amalgamation of CIDA and the Department of Foreign Affairs and International Trade, you referred to major efficiencies. Are you talking about hundreds of thousands of dollars or millions of dollars in savings?
[English]
Mr. Thangaraj: The efficiencies that we were referring to are not necessarily financial. We have been able to generate a lot of synergies in terms of how we approach policy development. There have been some savings. For example, both former organizations had chief financial officers and both former organizations had IT functions and two heads of human resources.
The savings that we were able to generate by not having duplicate positions we were able to reallocate internally to higher priority functions. The savings allowed us to reallocate in order to manage new priorities and pressures and capitalize on the synergies that we were to achieve by pulling together trade, development and diplomacy.
[Translation]
Senator Rivard: Basically, we cannot put a dollar figure on the efficiency gained.
Now, I would like to turn to the Global Fund to Fight AIDS, Tuberculosis and Malaria. The Global Fund was created in 2002 and has raised a total of $4 billion through the contributions of various countries. Is this a one-time contribution or does Canada make a contribution every year? If so, what is the amount?
[English]
Mr. Thangaraj: It is dependable. The global fund every four years has what's called a pledging conference where countries around the world will indicate what their support is for the mandate of the global fund, which is to end AIDS, tuberculosis and malaria.
Canada's contribution has been steady since 2002. It's steady from year to year, so for each four-year period you have the same amount. On average the contribution works out to $170-odd million per year, but it is the exact same amount per year. In these supplementary estimates we're asking for $36.7 million to increase the contribution for them.
[Translation]
Senator Rivard: When Canada contributes to the fund, is it also involved in decisions or is it faced with a fait accompli? They need x millions of dollars, and we provide the money, but do we have a say in the decisions being made?
[English]
Mr. Thangaraj: This is an organization that Canada is very much involved in. As a donor that has had significant presence with the global fund since 2002, Canada has a seat on the board of the organization, which it shares with Switzerland. It is also involved on the finance committee. As the chief financial officer of Foreign Affairs we represent Canada to ensure that the treasury function is being managed well, the organization, so the operating funds are managed well and they fit with standards of probity in terms of grant making. In addition, we're part of the strategy and investment committee. We have a Canadian representative there that ensures the efficacy of the individual investments and the overall global strategy to end those diseases.
Again, we share a seat with Switzerland. They act on our behalf and we coordinate efforts, but they sit on the audit committee. We have pretty much a full circle of involvement in that organization, from the board to the various governing organisms that are subservient to the board.
[Translation]
Senator Rivard: In terms of the fight against AIDS, tuberculosis and malaria, do you have any statistics showing whether these diseases are regressing or progressing?
[English]
Mr. Thangaraj: I have a little bit of information here. We know that these diseases are three of the most profound health challenges facing the developing world, predominantly in sub-Saharan Africa. Despite the persistence of the diseases, we are seeing progress.
If we look at the rate of increase of AIDS, there are about 2.2 million new HIV cases. While that's not a good statistic in and of itself, it represents a 33 per cent reduction in infection rates. As infection rates decline through the use of anti-retroviral therapies and things like that, we are seeing some success.
With respect to malaria, again, this is a preventable disease. We've distributed a significant number of bed nets, about 450 million through the global fund. So the number of deaths related to all three diseases has decreased by about 40 per cent since 2002.
Senator Wallace: Mr. Thangaraj, I was interested in your response to Senator Rivard's question about the cost savings, cost reductions as a result of the amalgamation of DFAIT and CIDA. In your presentation, you indicated that there was careful identification of potential risk and cost-saving areas. I wasn't quite sure from your response how it relates to an overall cost savings. In my own mind, I'm picturing at the beginning you had two organizations with identifiable costs, and then once the amalgamation took place, was a forecasted overall reduction expected? If so, was that realized?
Mr. Thangaraj: The amalgamation was not about achieving cost savings. It was about achieving coherence in foreign policy, trade and development. Any area that you go to, you see how there is significant interplay.
When I was talking about cost savings, we were careful when we looked at risk. Finance is an important area. There is duplication, and there were a lot of duplicate functions, but with that duplication you also had enhanced responsibility. Foreign Affairs had a budget where it was very capital-operating focused and the grants and contributions budget really assessed contributions. The UN was saying, "Here is your assessed contribution."
On the CIDA side, it was a completely different line of business. So the savings that were achieved in terms of realizing duplicate positions, and the same thing with IT, allowed us to bolster certain functions in the systems area, in certain programming areas.
Yes, there were efficiencies in savings, but there was no overall cost-reduction target for amalgamation. It was about finding where there was overlap and reallocating that to higher priority functions.
Senator Wallace: I just find in that description, everybody seeks to find improved efficiencies, but "improved efficiencies and cost savings" seems to roll off the tongue and they mean quite different things. It's coming down to the hard-core number.
Good. I've got your answer to that.
I'm interested in the item that relates to the funding for humanitarian assistance for the crisis in Iraq. My sense of it — and if I'm wrong, you can correct me — is that the overall level of humanitarian assistance in Iraq is inadequate to deal with the present circumstances. Of course, that's spilling over into Jordan, which is dealing with hundreds of thousands of refugees, let alone Syria.
The $28 million that we're providing in Iraq, is that even approaching what's required to do the job? Also, what percentage is that of the total amount being provided by the allied forces or the common forces that are contributing to that assistance?
Mr. Thangaraj: I unfortunately don't have the total. The $28 million is additional funding that we have requested for this purpose. It is not the totality of funding that we're providing in the region, not just in Iraq, but it is a very persistent, complex crisis facing the region. The number of displaced persons is growing. In addition to humanitarian and the typical issues that you see with refugees, given the persistent nature, you're seeing education and the longer-term impacts of this.
I will have to get back to you on the total level of funding, but the additional funding that we're asking for here is for urgent humanitarian needs. We are addressing humanitarian needs through our base budget, but this is to top up those efforts. If the committee wishes, I can provide you the total level of spending for that.
Senator Wallace: If you could, that would be appreciated.
Mr. Thangaraj: I would be more than happy to do that.
The Chair: I think that would be helpful. You can provide it to the clerk, who will distribute it to everybody.
Senator L. Smith: Mr. Thoppil, I have questions in terms of the on-reserve emergency response. On page 2-25, what was your base emergency fund for the year plan? You've asked for $69 million as a supplementary amount. Was 35 the actual plan for the year in terms of an emergency fund? The reason I'm asking about your yearly plan for emergency funds is that in other parts of government funding, natural disasters have become a major part not only for the Aboriginal population but for Canadians as a whole. How did you come up with that number? The additional number that you asked for, I think you're looking at the base of some years' experience to try to figure out how much more you needed. Was it enough and did you cover all of the outstanding cases in terms of disasters in the community?
Mr. Thoppil: Thank you, senator, for the question. As you know, trying to come up with a financial estimate each year for emergencies yet arising across our vast country in remote areas and given climate change is a tough challenge for us.
What I've tried to do on page 3 of the deck is to indicate how we came to that $69.1 million estimate for Supplementary Estimates (C) so you could understand the basis for our request for Parliament approval.
There are two components, as it says here. We took an average of the bills that we have paid over a certain period of time, taking outliers that were significant for certain years, and getting to one component, which is $29.3 million, which is the ongoing ask going forward.
Senator L. Smith: That's based on the average of events over a period of time from 2005-06 to 2012?
Mr. Thoppil: Correct, taking out outliers.
Of course, this year, as I said in my opening remarks, was particularly bad in terms of spring flooding, particularly in certain parts of the country, as well as forest fires. So we've had to come for an additional request of around $40 million to deal with the extraordinary events of this year.
We've given an example in the deck of the type of costs we have to incur when we go through an emergency response. We've also tried to quantify for you, the committee, the number of these events: 149 across the country, 43 involving partial evacuations and 2 general ones.
Estimates of what's going to happen across our country going forward will continue to be a challenge in terms of estimating the impacts in these communities.
Senator L. Smith: Basically, you're saying you'll address it as it comes. Is that what you're saying?
Mr. Thoppil: Health and safety for First Nations is the ministry's top priority, so that will always be our first challenge and priority. Based on the definition of estimates, we have come out with our best guess based on the average. We'll have to continue to monitor it to see how relevant it is going forward.
Senator L. Smith: In your First Nation Infrastructure Fund, I see you had estimate of $1.237 billion and you've asked for an additional $15 in funding. The first thought comes to mind, that's like nickels and dimes. What's your rationale behind that one? You're talking about roads, bridges, schools, water. We talked about this last year when we talked about the number of wells and the percentage of First Nations people who have fresh drinking water, et cetera. That $15 million, where did it come from? Is it just a plug or what?
Mr. Thoppil: That's a good question. As you may know through the committee work and through your colleagues' work in other committees, infrastructure needs are immense across First Nation communities across the country. There have been significant investments by this government targeted at schools, water, waste water and housing, but the needs are still there. That, therefore, precludes opportunities to make investments beyond those categories, and that's the reason for the $15 million, which is actually not the amount in totality; there is more. This is just the start of dealing with projects of larger scope, more multi-stakeholders that can embrace projects that can involve more than just one First Nation, and into areas and sectors we don't necessarily try to get into.
That's why on page 4 we tried to give you an example of some of the projects we are funding this year across the country. With your permission, I'd like to ask my colleague, Sheilagh Murphy, to elaborate.
Senator L. Smith: That would be helpful.
Sheilagh Murphy, Acting Senior Assistant Deputy Minister, Regional Operations, Aboriginal Affairs and Northern Development Canada: Certainly. The $15 million is part of a larger amount of money that's been given to the department over 10 years. It's the First Nations' portion of the Building Canada Fund that provinces and territories get as well for infrastructure. We use that to fund the First Nation Infrastructure Fund, so we use the Building Canada Fund and also the Gas Tax Fund. That money is merged into an envelope for funding, and the $15 million represents the 2014-15 drawdown of the 10-year Building Canada Fund that is for the First Nation Infrastructure Fund.
Senator L. Smith: Could you give us a gross number for that fund? I understand that $15 million is part of it.
Ms. Murphy: The Building Canada Fund is $155 million over 10 years, and the Gas Tax Fund is $139 million over five years. Those two are combined into what we call the First Nation Infrastructure Fund and they're on different cycles. We recently got Building Canada Fund money approval, so this is coming in as a tranche for 2014-15.
Senator L. Smith: The Gas Tax Fund of $139 million is for all First Nations across the country?
Ms. Murphy: Yes. Those two are combined. We do other things. We have water, waste water and schools programming. This is for a specific fund for six categories of projects. It's planning and skills development, solid waste management, roads and bridges, energy systems, connectivity and disaster mitigation.
Senator L. Smith: The first question that comes to mind is what type of population are we talking about? How would that compare to the gas tax distribution that takes place across the country?
Ms. Murphy: It's the First Nations' share based on their population, a calculation that's done. That's their share of the gas tax, the same way they would do a population distribution by province.
Senator L. Smith: It would be based on similar situations.
Ms. Murphy: Yes, it's based on the same methodology.
The Chair: Are we seeing this in the supplementary estimates this late in the season because it hadn't been calculated prior to that? Why haven't we seen it much earlier than this?
Ms. Murphy: I would think it's just the process of drawing down the money, getting through the Treasury Board submission, having it approved and coming through in Supplementary Estimates (C).
The Chair: Shouldn't we be seeing drawdowns for the rest of the country on gas tax and rebate? We haven't.
Ms. Murphy: You mean for the provinces and the territories?
The Chair: Yes.
Ms. Murphy: I can't speak to the timing of those. We negotiate separately and distinct from each province and territory. The First Nations negotiation is something we do with Infrastructure Canada. Provinces and territories have their own negotiations. Those are on different timelines depending on when agreements are reached.
The Chair: We like to think of these supplementary estimates as being either new initiatives, which they aren't in this case because there is already an established program, or something that couldn't be calculated earlier on. By the time it was calculated you're into Supplementary Estimates (A, (B) or (C). You're right down to the wire on this one. Can anybody give me an indication as to why we're waiting so late?
Mr. Thoppil: I can't speak to the process other than we've gone through significant consultations in order to get the programming right, and we've gone through the internal government approvals in order to get this program done, thus leading towards the timing that it is.
On page 4 of the deck, it does give you the description of what has been advanced already based on the projects this year across the country.
The Chair: Yes.
Ms. Murphy: And this is a continuing program. The gas tax money was probably already in place. It just continues to roll through. We've had this program for many years. It's just the reestablishment of the levels that come out of the Building Canada Fund and the Gas Tax Fund on an ongoing basis.
The Chair: Thank you.
[Translation]
Senator Hervieux-Payette: My question will be quick. In terms of Aboriginal Affairs and Northern Development Canada's infrastructure program, who makes the decisions about capital expenditures? Who sets the priorities? Although the amount is substantial, the needs are certainly much greater. Who establishes this entire process? Who awards the contracts?
Mr. Thoppil: For which department?
Senator Hervieux-Payette: For Aboriginal Affairs and Northern Development Canada.
[English]
Ms. Murphy: Are you talking about the $15 million?
[Translation]
Senator Hervieux-Payette: There is an additional amount, but the estimate is $2 million. I am sorry, I don't have the right page.
[English]
Ms. Murphy: The way in which the infrastructure program works is that there is a very large budget. A portion of that money goes out as core to First Nations on an annual basis for them to run and maintain their infrastructure assets.
We then have water and waste water. We have a system of prioritizing and ranking systems on reserve based on work we've done to determine where the most high-risk areas are in terms of human health and safety. We work through the allocation of resources by community on the basis of priority. We do the same thing in schools. We work on a prioritization basis. We have a formula for that.
Also, each year First Nations put together a community infrastructure plan with their priorities over the coming five years. That gets rolled up into a total plan for the department. We look at those priorities. We match those against our priority ranking framework to make sure we're dealing with the highest risk priorities first in large capital projects, and on the basis of that, we work with First Nations to provide funding for both minor and major capital.
[Translation]
Senator Hervieux-Payette: Who hires the contractors and oversees the work?
[English]
Ms. Murphy: Once we have made the decision on funding projects, the money actually goes to the First Nation. The First Nation is responsible for managing the project, selecting the contractor through a public tendering process, and then working with that contractor to build the infrastructure. We provide support to communities, especially those that have lower capacity, so we monitor, but the First Nation is responsible for overseeing the development of infrastructure in their communities.
[Translation]
Senator Hervieux-Payette: You must recall how surprised we were when we noticed a section in the budget with expenditures for certain buildings that we did not expect to see. Let me go back to the big opening ceremony for the High Commission in Britain. If I remember correctly, the building was sold for almost $750 million and the renovations were $250 million. Have we spent the entire $750 million from the purchase of the building, or is some money left over from the sale and renovation?
[English]
Mr. Thangaraj: Senator, you're correct. I'm looking for the amount that Canada House sold for. I believe it was $550 million or $530 million, around there. For the overall construction project, the project is finished, as we all have seen. Bills will still come in and we'll do the final tally, but the budget for the project was in the $250 million range. The project will be on budget.
Those funds that are in excess, the proceeds of sale will be returned to the Consolidated Revenue Fund.
Senator Hervieux-Payette: There was a building behind that was bought by you to enlarge au commissariat, otherwise there would not be any place to put the staff. What was the cost of that building?
Mr. Thangaraj: The cost of that building, 2-4 Cockspur, was about $120 million, approximately.
Senator Hervieux-Payette: So you had a surplus?
Mr. Thangaraj: Yes.
The Chair: We saw the television coverage on that. The high commissioner said $300 million was sent back to Canada.
Mr. Thangaraj: That's correct, $300 million was sent back to the Consolidated Revenue Fund.
[Translation]
Senator Bellemare: My first question is for Mr. Thangaraj. I am a little surprised by the macro data in the 2013-14 budget compared to the 2014-15 budget. That is to your advantage, hence the following question. The operating expenditures in 2013-14 were $1.3 billion for a total of $2.63 billion in budgetary expenditures. Today, the operating expenditures for 2014-15 are $1.535 billion. There is a small increase, but the budgetary expenditures are $6 billion. So, somewhere, the ratio between operating expenditures and grants and contributions, and capital expenditures has increased significantly to your advantage. In other words, your operating expenditures have not increased proportionately to the grants and contributions that you manage.
How did you do that? How did you make those gains, because we could say in a sense that these are efficiency gains?
[English]
Mr. Thangaraj: The previous CFO would say it was all his good handiwork, but the response is related to amalgamation.
When CIDA had a very large portfolio of grants and contributions, about $3.1 billion to $3.2 billion, and operating expenditures of $100 million, in the governance of that grants and contributions budget there was a tremendous focus on efficiency, ensuring that all the normal fiduciary steps were taken to make sure money was well spent, the right partners selected in the right places and Canadian investments to relieve poverty were protected. But we worked in such a manner to get down to the lowest possible administrative overhead rate. Again, if the Government of Canada is spending money to relieve poverty, we wanted to make sure that we weren't operating the business but actually spending money to relieve poverty.
What you see is a very small operating budget being incorporated into Foreign Affairs, which had a bigger operating budget given its international mandate and presence. So the operating budget didn't go up significantly, but the grants and contributions budget did.
[Translation]
Senator Bellemare: Thank you for your answer. Now my next question is for the officials from Aboriginal Affairs and Northern Development Canada.
What exactly do you do in terms of the grants for the implementation of comprehensive land claims and self-government agreements? The total budget is $420 million. An additional $5 million is estimated for a total of $425 million. But what is being funded? The implementation of the agreements? Does this mean that there are agreements allowing communities to take charge? Are consultants being funded? In other words, what are you funding?
In addition, who prepares the contracts related to the contributions provided for water, housing and so forth? Is it the Aboriginals, themselves, or the municipality, people from the south who go up north? I'd like you to explain that, if you would.
Mr. Thoppil: Thank you for both of your questions.
[English]
I'll start with the first one. On the management and implementation of agreements and treaties, those are contributions to First Nations that we've already entered into self-government arrangements with. That's money for things like governance, for running their First Nation on the terms of that agreement to act as a level of government, in effect. They have a number of obligations in order to respect those treaties with Canada.
On a First Nation you're dealing with municipal-level activities, provincial and federal-type activities all in one band, so the costs are significant. That's what you get for those dollars.
[Translation]
Senator Bellemare: Is it to pay salaries?
Mr. Thoppil: Yes, precisely.
Senator Bellemare: It is to pay salaries to Aboriginals so they can control their own affairs and establish their own government?
Mr. Thoppil: Yes, exactly.
Senator Bellemare: That way, they will eventually be able to manage the contributions themselves?
[English]
Mr. Thoppil: That's right, and doing their fiduciary responsibility like any level of government in terms of accounting and putting their financial results online, organizing the community in terms of voting on their community plans and their leadership, much like you would expect in any municipality across the country. That's the first question.
The second question related to the issue of infrastructure and who does what. That's always a good question, given the amount of money that we are spending.
As my colleague Sheilagh Murphy indicated, we give these monies over to First Nations and they are, by the contribution agreement, in accordance with their community plans, responsible for engaging in terms of their infrastructure requirements, whether it's schools, housing, water or waste water.
That being said, we all know that in terms of risk profile each First Nation across the country is different from Canada as the funder to the First Nation as a recipient, in part because of various factors. One is the degree of remoteness from an urban centre; degree of capacity generally. We also talk about that First Nation's own-source revenues, which is what types of revenues they collect or earn in addition to the funds that Canada bestows upon them.
We take all these factors into account in what we call a general assessment of each, from a risk-profile perspective. Depending upon the risk profile that we categorize related to that First Nation, we may put some extra controls in, in order to ensure that our fiduciary responsibility as funder is maintained in terms of the infrastructure deployed by that First Nation.
Take for example a high-risk profile First Nation; we will supplement the actions that the First Nation will do in terms of contracting. We will bring in, for example, a monitor, a professional engineer, to ensure appropriate conduct of that. Or we will increase the number of field service visits by our personnel over the course of that project, or we will engage in a number of project milestone meetings to ensure progress related to the plan for that infrastructure project.
Again, the nature of engagement related to each infrastructure project at each First Nation ultimately depends upon the risk profile we have associated with that First Nation, and of course the degree of the complexity and magnitude of that infrastructure as well.
[Translation]
Senator Bellemare: So, basically, you are overseeing the implementation of the grants and contributions, and the First Nations are responsible for awarding the contracts. Contracts can be awarded to people from either the southern part of the country or up north. You make sure the work is carried out in accordance with the objectives. Is that right?
[English]
Mr. Thoppil: You are correct, senator. It's an interesting balance because in the end it's up to them. The accountability rests on them. That being said, there is a fiduciary responsibility on us as Canada so it's a tricky balance.
[Translation]
Both elements have to be properly managed in order to find the right balance. That is the challenge the department must respond to.
Senator Bellemare: Indeed. Thank you for your answer.
[English]
Senator Wallace: My question is for Aboriginal Affairs. As I'm sure you are well aware, there is a study of Aboriginal housing needs and infrastructure needs in the country. Senator Patterson chairs that committee, and certainly the challenges that are faced, both in terms of housing and infrastructure in Aboriginal communities, are immense.
You're requesting $15 million for the First Nation Infrastructure Fund. My understanding is that there are tremendous needs in the Aboriginal communities. How would you describe the progress over the last five years that your department is making in addressing the infrastructure needs in First Nations communities in this country? I'll leave the housing aside, although housing and infrastructure are very much interrelated.
Mr. Thoppil: I'll start and then ask Sheilagh Murphy to delve into some degree of detail for you, senator.
I concur with you by saying that the infrastructure needs of First Nations across the country are immense, but the government has invested has targeted investments of up to $4 billion since 2006 in a number of areas, primarily infrastructure, in order to try and make some degree of redress on the deficit situation experienced by First Nations.
We have made significant advancements, I think, in waste water and water in particular, and schools are coming on-stream. All that good news has not yet come out, but we are making, slowly, good progress. The needs are still there, but the economic action plan has bestowed upon the ministry significant monies in order to keep going at this.
Ms. Murphy: I can add a little bit. Yes, there is a long list of communities that still need schools, a long list of communities that could use upgrades to roads, bridges and other community infrastructure.
A number of targeted investments, as Paul has said, have really helped us move the bar. In the area of schools, for instance, there has been a lot of investment over the last couple of years so that we have been able to advance a number of school projects now and into the future. That's been very helpful in terms of also trying to attain better educational outcomes. Some of that comes down to school facilities.
The same thing with water and waste water. We did a large study a couple of years ago to look at the condition of water and waste water on reserve and found that many of the facilities were at risk. The government has invested there as well through the First Nations Water and Wastewater Action Plan, FNWWAP, to upgrade facilities, and we have worked on training individuals to be able to maintain those facilities.
There have been advances for sure, but the need does outstrip the overall budget of the department and of First Nations to meet their needs.
We are also looking at, as part of our ongoing work, how to help First Nations access capital and investments outside of our transfers to help them improve on infrastructure.
There are a number of mechanisms that First Nations are experimenting and piloting with that gives them access to capital outside of transfers. We have seen progress there as well where they are applying own-source revenue and other means.
Senator Wallace: Have you developed benchmark targets that would assess the infrastructure needs across the country in Aboriginal communities so you can measure the progress that your department is making on an annual basis? Is there anything we can look at to see how the $15 million you are requesting now in this estimate relates to the targets that you are seeking to meet on a national basis? Does that exist?
Ms. Murphy: It exists in pieces. The $15 million is for the First Nation Infrastructure Fund. It is focused on certain types of infrastructure activity. We know the list of what those are through the annual capital facilities and maintenance list rolled up from regions that show all of the projects that communities would like to receive. We can look at those and see, as we move through in Finance, what we are taking off the list.
That would be for general infrastructure, but we certainly have the results of the water and waste water survey so we can see how we are doing against what came out as high-risk systems and whether we are starting to make progress on those high-risk systems through targeted investments.
We do the same thing with schools. We have a national schools list, so we can show progress against that list.
Senator Wallace: Mr. Chair, it might be useful not only for this year but in going forward to measure the requests against those performances.
The Chair: I agree.
Anything you could provide us so that we can see that would be helpful. Then we would be testing you against your own criteria.
Ms. Murphy: You have to realize that that changes every year. It is not a static state. As we take things off the list, other things get added to the list as well, so there is always that.
Senator Gerstein: My question is for Foreign Affairs and really for clarification to help my understanding of your request. I'm looking at page 2-19.
The first item is "Funding to support the Global Fund to Fight AIDS, Tuberculosis and Malaria," $36,666,667. I take a look at that and assume we've got a commitment of US$30 million. There is a global fund, as you've indicated. This is approved; you translate it into Canadian dollars and you send them $36,666,667.
It's the second one I don't understand: "Funding for humanitarian assistance in response to the crisis in Iraq," $28 million. That's not a fund. I'm assuming it is exactly what it says — humanitarian assistance. It could be trucks, medical supplies, NGOs, training, whatever. Am I correct in that? In other words, in the second one, where it is not basically a fund where you are sending off a cheque, is the department involved in procurement of different things in fulfilling different kinds of items?
What does the $28 million approval mean, or am I incorrect in even assuming what the $36.6 million was?
Mr. Thangaraj: Let me start with the $28 million and what those funds will be used for. Those will be used for, like you said, humanitarian requirements. This would be food, water, water and sanitation facilities, health care, shelter, education.
Senator Gerstein: But who is doing it? Is it Canada or is it going through a fund?
Mr. Thangaraj: It would go through the United Nations.
Senator Gerstein: That's the question.
Mr. Thangaraj: And the Red Cross movement.
Senator Gerstein: It is a Red Cross or a United Nations initiative?
Mr. Thangaraj: That's correct. The United Nations would have a call for funding internationally and Canada would contribute. Again, we are asking for funds.
Senator Gerstein: In effect it's the United Nations fund or the Red Cross fund?
Mr. Thangaraj: That's correct.
Senator Gerstein: That's what I didn't understand, whether in fact Canada was itself getting involved in terms of having to go out and provide the different items of humanitarian aid.
Mr. Thangaraj: No, this is working through grants, through trusted partners and international organizations.
The Chair: Thank you very much for that.
Mr. Thangaraj, do you have sitting in a drawer at your desk the total number of properties sold in missions throughout the world?
Mr. Thangaraj: I do. I can get that to the committee.
The Chair: I think I might have asked you that before, but that would be nice to have.
Mr. Thangaraj: Yes, we will do that. It's a list that gets updated, and so we will have an updated list of the properties that have been sold.
The Chair: And how much has come back?
Mr. Thangaraj: That's correct, with dollar amounts attached to that.
The Chair: I was reminded of it when I saw the $300 million coming back from the U.K., and I know that Ireland is in a different situation than it used to be.
Mr. Thangaraj: Yes, it is.
The Chair: That would be very helpful. What we're looking for is "net back."
Mr. Thangaraj: We can provide you with information on all of those.
The Chair: Foreign Affairs and Aboriginal Affairs, thank you each for being here. This is the last time we'll see you on the supplementary estimates for this year, but we get the Main Estimates referred to us tomorrow. We will be starting on those very soon, so we may well see you again.
Colleagues, before us now is the second and final panel for this afternoon and, indeed, for our work on Supplementary Estimates (C). With all of the witnesses here, we should find out everything quickly. A number of witnesses we have seen before.
[Translation]
Honourable senators, this evening, we are continuing our study of Supplementary Estimates (C) for the fiscal year ending March 31, 2015.
[English]
In our second session this evening, we are pleased to welcome a number of officials. We have limited space at the table. We also have limited space in the gallery, it looks like, but that's good. We've invited two officials per organization to sit at the table, and if others have to join to answer a question, please identify that person for the record and make sure they speak close to a microphone for interpretation.
From Public Works and Government Services Canada, we welcome Alex Lakroni, Chief Financial Officer, Finance and Administration Branch; and Pierre-Marc Mongeau, Assistant Deputy Minister, Real Property Branch.
From Public Health Agency of Canada, we welcome Carlo Beaudoin, Chief Financial Officer; Rodney Ghali, Director General, Centre for Chronic Disease Prevention, Health Promotion and Chronic Disease Prevention Branch; and Dr. Theresa Tam, Deputy Chief Public Health Officer and Branch Head, Health Security Infrastructure Branch.
From Shared Services Canada, we welcome Elizabeth Tromp, Acting Senior Assistant Deputy Minister, Corporate Services, and Chief Financial Officer; Kevin Radford, Senior Assistant Deputy Minister, Operations; and Manon Filion, Director General, Finance, and Deputy Chief Financial Officer.
Would anybody else like to get introduced? Who would like to start? We will have Public Works first, Public Health Agency second and Shared Services third.
[Translation]
Alex Lakroni, Chief Financial Officer, Finance and Administration Branch, Public Works and Government Services Canada: Thank you. Mr. Chair, committee members, I am pleased to be here today as the Chief Financial Officer of Public Works and Government Services Canada, or PWGSC, to discuss the department's 2014-15 Supplementary Estimates (C). With me is Pierre-Marc Mongeau, Assistant Deputy Minister of the Real Property Branch.
PWGSC supports the consistent delivery of high-quality services to Canadians and measured value for the tax dollars with which it is entrusted. These ongoing achievements are the result of sound financial management and a steadfast focus on client service.
With responsibilities that range from preserving the Parliament buildings to issuing all Government of Canada payments, PWGSC provides a diversified portfolio of services that support the Canadian public, parliamentarians and public servants, and also help departments and federal agencies deliver on their mandates.
In Supplementary Estimates (C), the department is seeking net funding of just over $51 million, bringing PWGSC's 2014-15 net spending authorities from $2,930 million to $2,981 million.
[English]
Within the requested funding is $17 million to cover non-discretionary expenses associated with the Receiver General's acceptance of bank and credit cards, such as price and volume increases in banking fees and postage fees. The card acceptance initiative is helping the government fulfil its e-commerce commitment while reducing the administrative burden associated with cheque and cash payments. It also offers increased payment options and greater accessibility for Canadians.
On an annual basis, there is approximately $3 billion of bank and credit card payments made by Canadians through more than 10 million electronic card transactions.
These supplementary estimates are also seeking the authority to access just over $16 million from the sale or transfer of 13 real property assets that occurred during this fiscal year. The proceeds of sale will be reinvested in the life cycle management of the PWGCS multi-billion dollar asset base. More specifically, these funds will be used for material and direct labour costs, management fees, construction, supervision and the design of projects required to maintain the integrity of assets. Such projects include work on roofs, exterior cladding, as well as mechanical and electrical systems.
The department is also requesting the reimbursement of $9 million related to the cost of office space occupied by employees who administer pension funds. Pursuant to the Public Sector Pension Investment Board Act, Bill C-78, the costs associated with the administration of the public service's major pension funds are to be charged to the respective funds and not borne by federal departments.
[Translation]
As a result of responsibilities transferred from the former Enterprise Cape Breton Corporation to PWGSC in June 2014, funding in the amount of $5 million is being requested for environmental and other obligations. The department's new responsibilities associated with the transfer of Enterprise Cape Breton Corporation operations fall under three main areas: first, the management of lands impacted by coal mining, including the remediation, long-term maintenance and monitoring of former mine sites and water treatment facilities; second, the management of former miners' benefits, such as early retirement incentive programs, medical benefits and life insurance coverage; and third, the portfolio management of real property holdings, encompassing over 800 properties covering some 12,500 acres.
PWGSC is also requesting $2 million to cover occupancy costs at the National Library and Public Archives building, which serves as the substitute location for the current ceremonial events room for the House of Commons, until the renovation of the Sir John A. Macdonald Building is complete.
[English]
Finally, PWGSC will receive a net amount of $2 million from other government departments. This is mainly for the remediation of the south jetty at the Esquimalt Graving Dock in B.C. as part of the federal Contaminated Sites Action Plan. This is consistent with our efforts to lower risks to human health and the environment, to benefit local communities and to reduce the burden of future environmental liability for all Canadians.
In keeping with the government's priorities of job creation, economic growth and long-term prosperity for Canadians, the department supports the consistent delivery of high-quality services to Canadians and a continued focus on value for money.
Thank you, Mr. Chair and committee members. My colleague and I would be pleased to answer your questions.
The Chair: Thank you very much. Some of that information sounds awfully familiar to us, and we'll pursue that after we hear from the other departments.
The Public Health Agency of Canada is next.
[Translation]
Dr. Theresa Tam, Deputy Chief Public Health Officer and Branch Head, Health Security Infrastructure Branch, Public Health Agency of Canada: Mr. Chair and honourable senators, good evening. Thank you for this opportunity to discuss the Public Health Agency of Canada's Supplementary Estimates (C) and activities for 2014-15.
With me today at the table is Carlo Beaudoin, our chief financial officer. Other agency representatives are also in the room to provide further information if needed.
I had the pleasure of being before you in October on the Main Estimates. At that time, I took the opportunity to update you on shared responsibilities relating to public health and on the activities of the Public Health Agency of Canada in support of our mandate to enhance and protect the health of Canadians.
Over the past year, West Africa has been facing the world's most significant Ebola virus disease outbreak to date. Last summer, on August 8, the World Health Organization declared Ebola a public health emergency of international concern. Widespread and intense transmission of Ebola has occurred in Guinea, Sierra Leone and Liberia.
[English]
Although there has never been a case of Ebola in Canada and the risk to Canadians remains very low, Ebola virus disease remains a public health issue of national and international concern. There is a clear role for the federal government to protect Canadians and demonstrate leadership internationally by making investments to counter Ebola and prepare for any case of Ebola reaching our shores.
The Public Health Agency has been very active in addressing the outbreak in West Africa. Canada has been at the forefront of the international response since April, contributing funds, expertise and equipment. We donated over $2.5 million in personal protective equipment. We sent mobile laboratories to Sierra Leone to assist with rapid laboratory diagnostics. We provided over 800 vials of Canada's experimental vaccine that was discovered in our National Microbiology Laboratory in Winnipeg.
Mr. Chair, I would like to point out that the new director general of our Winnipeg lab, Dr. Matthew Gilmour, is with us this evening.
Work continues on the Ebola front. An amount of $22.4 million in the 2014-15 Supplementary Estimates (C) relates to funding for Ebola virus preparedness and response initiatives to protect Canadians at home and abroad. This funding is being used for work towards the development and acquisition of a vaccine and treatments for Ebola, towards ensuring that Canadian communities are prepared for and able to manage any suspected cases of Ebola, and towards ensuring that any potential cases are identified before people with the disease cross our borders.
We are investing in the accelerated production and clinical testing of medical countermeasures, such as vaccines and treatments, to protect Canadians from the threat of Ebola.
In addition, the funds are being used to bolster the preparedness of Canadian communities, the delivery of essential information to front-line workers, the deployment of federal rapid response teams as surge capacity for provinces and territories, and to ensure that protective equipment for caregivers is available when needed.
The funds are also being used to increase the number of quarantine officers at points of entry to Canada in order to screen all travellers from Ebola-affected countries for symptoms and risk factors and to ensure follow-up by local public health authorities.
Through these commitments, the agency continues to do its part to protect Canadians from Ebola.
The supplementary estimates also include $800,000 in funding for the continued monitoring of Creutzfeldt-Jakob disease, a neurodegenerative illness that could be a manifestation of bovine spongiform encephalopathy, or BSE, in humans. Through its surveillance system, the agency continues to monitor, detect and investigate all suspected cases of this disease to identify any emergence of illness in humans that could be of animal origin.
The agency directly executes nearly all the diagnostic analyses for this disease in Canada and is conducting targeted research to improve and update the laboratory methodologies used in this work. Funding for these activities has been renewed for a five-year term until March 2019.
The last item for the agency, in the amount of $126,000, is funds for the Food Safety Information Network to strengthen the national ability to detect and respond to food hazards.
In Budget 2014, the government announced $43.8 million over five years for the Canadian Food Inspection Agency, Health Canada and the Public Health Agency of Canada to establish a food safety information network amongst federal, provincial and territorial food safety authorities and food testing laboratories to more effectively anticipate, detect and respond to food hazards.
The Canadian Food Inspection Agency has the overall lead for the governance, implementation and project management, as well as the coordination and outreach with the provinces and territories and private laboratories.
Health Canada contributes comprehensive, continuously updated data that it generates and collects on the chemical and microbial contamination of food consumed in Canada.
[Translation]
The Public Health Agency of Canada will leverage the agency's existing web-based electronic platform — the Canadian Network for Public Health Intelligence — which facilitates collaboration, surveillance, knowledge management and event management among more than 4,300 federal, provincial and territorial public health professionals across the human, animal and environmental health domains by expanding it to food safety.
These Supplementary Estimates (C) funds are being used to support the initial planning and information gathering required as part of the process to expand the Canadian Network for Public Health Intelligence.
The eventual expansion of this platform to include food laboratories will facilitate near real-time sharing of knowledge, information and laboratory data to help prevent and address food-borne illnesses.
Thank you for providing me with the opportunity to give a brief summary of our Supplementary Estimates (C). We will be happy to take your questions.
[English]
The Chair: Thank you.
We will go to Ms. Tromp of Shared Services Canada. How are you growing? Shared Services has been growing very rapidly.
Elizabeth Tromp, Acting Senior Assistant Deputy Minister, Corporate Services, and Chief Financial Officer, Shared Services Canada: I don't know if we're growing.
I'm very pleased to be here today with my colleagues to review and discuss the additional funding for Shared Services Canada for fiscal year 2014-15 as provided under the Supplementary Estimates (C) recently tabled in Parliament. I'll take the next few minutes to highlight two items. First I'll talk about how our department is investing the $34.3 million it will receive in new funding. Second, I will speak to the $5.6 million of net transfers received by partner organizations.
[Translation]
Shared Services Canada's purpose is to transform and streamline federal information technology services to deliver better value for our citizens.
[English]
An important part of how we achieve this goal involves our partnering work with other federal departments and agencies. Together we're consolidating IT services, making them more secure, modern and robust. This is a key component of the government's broader efforts to work smarter and be more efficient in how services are provided to Canadians.
With respect to new funding, Shared Services Canada will receive $32.5 million to build a new, secure IT infrastructure for the National Research Council, replacing a legacy system that had been compromised by a highly organized cyberattack.
Second, SSC is requesting $1.8 million to provide infrastructure support to Employment and Social Development Canada as well as Citizenship and Immigration Canada for enhancements to the Temporary Foreign Worker Program.
The other key area I'd like to highlight is the $5.6 million in net transfers between SSC and federal partners. This amount includes $2.5 million in permanent transfers related to SSC's creation and ongoing work and $3.1 million related to projects and initiatives.
Of the $5.6 million in net transfers, $2.4 million will be transferred from Employment and Social Development Canada for accommodation and data centre space; $2 million is to be transferred from Public Works and Government Services Canada, Correctional Services Canada and Health Canada for data centre consolidation; and $1.4 million will be transferred from National Defence for services and equipment in support of the Mercury Global military wide band satellite project, as well as for IT-related renovations at the Royal Military College in Kingston.
[Translation]
These investments are part of a broader range of work that Shared Services Canada is undertaking to transform federal information technology infrastructure.
[English]
My colleagues and I would be pleased to answer your questions.
The Chair: Thank you very much.
Can you tell us how many employees Shared Services now has?
Ms. Tromp: We are currently at 6,100.
The Chair: What's the increase compared to last year at this time?
Ms. Tromp: It's not actually an increase.
The Chair: What's the decrease?
Ms. Tromp: When we were created, we had in the realm of 6,400, and it has gone down gradually over time. Part of that is due to the savings realized as we roll out the ETI, the new email system for government, the enterprise email system. So we are seeing reductions in our overall complement.
The Chair: Some of these transfers from other departments that you're getting, the employees that have worked in those other departments have moved to you?
Ms. Tromp: That's true.
The Chair: And now you're getting the funds?
Ms. Tromp: At the time SSC was created, there were employees transferred and salary dollars to create the organization. For some of these new project initiatives, we are receiving money to enable us to do the necessary project work, for example, but it does not mean we're getting resources or people transferred in for that work.
The Chair: I think I understand. The people that were working in other departments are now working for Shared Services, and you're getting a transfer of the funds that had gone to that department under Main Estimates and other documentation that we approved earlier. Now it's being transferred to you because you are now doing that activity.
Ms. Tromp: Some are adjustments that relate still to SSC's creation, adjustments to the finances or, for example, providing us the resources because it's now our accommodation. That's another example.
Some cases relate to project funding where we would be given monies that we could use to bring in temporary staff or others to do the necessary work that's, because it's new requirements. It's new work.
The Chair: Thank you.
Dr. Tam, you talked about the Winnipeg lab and the vaccine that was developed there. Did that vaccine turn out to be effective? I can't recall the media coverage on that.
Dr. Tam: The vaccines or treatments are not approved for use in humans at this point. This particular vaccine that was discovered at the National Microbiology Laboratory has just undergone initial clinical trials. They are there to test the safety of the vaccine and some of the dosage requirements of the vaccine in 15 different sites. These results are only just being rolled up.
We do know that the results look good from the safety perspective, and vaccine trials have just started in West Africa using this vaccine in Liberia.
The Chair: That's a very positive story, and Canada is contributing very effectively. You did indicate the new director general of the lab is here this evening?
Dr. Tam: That's right.
The Chair: I wonder if we could have Dr. Matthew Gilmour stand up so we could say hello. Thank you.
Hon. Senators: Hear, hear!
The Chair: On behalf of the Senate of Canada, congratulations on the work that you're doing, and I hope you will take back our congratulations to all the members of the lab. We very much appreciate the work you're doing. Thank you.
A number of senators have indicated an interest in following up on certain points.
[Translation]
Senator Bellemare: My questions are for the officials from Public Works and Government Services Canada and Shared Services Canada.
The Standing Senate Committee on Banking, Trade and Commerce conducted a study on credit cards. We listened to what the witnesses had to say and we asked them questions. It says here that you are requesting a budgetary appropriation of $17 million to cover expenses associated with the Receiver General's credit card acceptance services and postage fees.
If I understand correctly, then, people can now make payments by credit card, so you operate as a retailer would when it comes to accepting credit cards and paying companies such as Visa and MasterCard fees.
In your presentation, you said that this enables you to reduce your fees, which I don't think you indicated. At the same time, you are requesting $17 million in funding. How do you benefit from accepting credit cards? Although the consumer certainly benefits from credit card acceptance services, the additional cost to you may not be outweighed by the benefits. Is it an ongoing cost? I'd like you to elaborate a bit on the cost-benefit aspect, if you would.
Mr. Lakroni: Thank you, senator, for asking such an important question given the economic considerations associated with today's technology. I'm going to start with a bit of clarification around PWGSC's role in the government apparatus.
The program we administer is under the auspices of the Receiver General. We manage the payments the government receives — and when I say government, I'm referring to all departments with cost-recovery programs. That includes programs related to passports, immigration and Parks Canada.
That makes for a fairly high volume of transactions, given that Canadians can, depending on what has been decided, do business with the government however they choose. Just to put that into perspective, in 2012-13, we took in $2.7 billion in revenue. In 2014-15, that figure rose to $4.7 billion government-wide. That's a 75-per-cent increase. Obviously, we receive a fixed amount of funding, leaving us with a budgetary shortfall, and we are seeking the authority to make up for that.
You asked specifically about the benefits. There are a number of them, and I'll list a few. Clearly, in its transactions with Canadians, the government anticipates that they will exercise their choice to pay by credit or debit card. The payment is guaranteed. And that saves us money government-wide from a payment collection standpoint. It's a guaranteed method of payment, which means that when Canadians choose that payment option, we receive the money instantaneously. As a result, we enjoy significant operational efficiencies. For example, a face-to-face transaction costs an estimated $30, whereas an online credit card transaction costs just 13¢.
Senator Bellemare: That includes the fees charged by the credit card companies?
Mr. Lakroni: I don't believe so, because these are fixed costs. The fees change depending on the amount owing. A 10-year passport, for instance, costs $160, so it's 1.5 per cent.
What's nice is that we are responsible for negotiating the contracts of those who administer the credit cards. We just negotiated a seven-year deal with a new company, which is saving us $10 million over that term.
And the Department of Finance informed us that Visa and MasterCard agreed to lower their rate from 2 per cent to 1.5 per cent. So, in assuming the role of negotiator, we are achieving efficiencies. Those efficiencies, however, are spread across the entire government. If the management of this file was left to each department, it would give rise to a cost. It would not be an efficient way to function, so we manage this element directly for the Receiver General.
Senator Bellemare: Were the fees associated with this method of payment passed on to the consumer? Were the fees adjusted accordingly?
Mr. Lakroni: That is exactly what we don't want to do. We want Canadians to be able to access government services without having to pay an extra charge.
Senator Bellemare: Is that where the $17 million to be spread across the entire government comes from?
Mr. Lakroni: Precisely. Your understanding of the file is spot on.
[English]
Senator L. Smith: Ms. Tromp, for the strategic direction of Shared Services, what are you building? It would appear you're providing services that were historically within departments and you're doing a consolidation of these services, almost like a major player such as CGI does with big data centres that service outside parameters. How far will Shared Services go in providing services to the different departments within the government? What's your plan?
Ms. Tromp: Thank you very much for that question.
Shared Services Canada was created to do exactly what you have described. We have a mandate to achieve savings, to enhance security and improve service. It's essentially a consolidation of the IT infrastructure across 43 departments in government.
We were created in 2011. We are responsible for infrastructure, which includes data centres, networks and, of course, email. We more recently have been given responsibility for consolidation of hardware and software for workplace technology devices.
Senator L. Smith: What would your template look like? If you had a war room with each department on the wall, what would your configuration look like? How many data centres would you have across the country and ultimately how long would it take you to get to a point where you can say that you have accomplished 80 per cent or 90 per cent of your target.
Ms. Tromp: We have a transformation plan that would see us modernizing and consolidating over the next seven years. We started out with 485 data centres. By consolidating, modernizing and closing, we are bringing that number down to no more than seven modern and secure data centres at the end of the day.
We already have in place an enterprise development data centre and a production data centre, two in fact. So we are establishing the enterprise data centres and at the same time beginning to close old data centres. We're doing that. That's part of the plan.
We are moving from over 50 networks to one network, so that work is under way. There has already been some significant procurement to make that happen, so we're building that foundation.
Of course, on the email front, we are consolidating from 63 email systems to one, and that, too, is at the early stages of implementation.
Senator L. Smith: Is there a consolidated target number dollar wise that you're working towards on an annual basis for all of these departments? If so, what is it?
Ms. Tromp: We have already identified and produced savings of $150 million further to Budget 2012. Email will generate another $50 million on top of that. These are achievements we have already made.
For the rest, as we create efficiencies by consolidating our procurements, as we modernize, we are using those efficiencies that we are generating to invest in the actual transformation. As you can imagine, it's a very significant undertaking, quite complex.
Senator L. Smith: What type of people number savings will you get out of this?
Ms. Tromp: We anticipate productivity gains, of course, by doing this.
Senator L. Smith: I used the wrong word, sorry. What type of productivity gains?
Ms. Tromp: Yes. Obviously if we do this right, and we certainly expect to, we will be more efficient and more effective with fewer people. Over a seven-year span we are looking at productivity gains in the range of 20 per cent, just by consolidation.
Senator L. Smith: What does that constitute in numbers of people, ballpark?
Ms. Tromp: If you look at where our numbers are now, we anticipate a further reduction in that realm over time. We're carefully managing that through our workforce management strategies and how we can repurpose people from what they're doing currently to the areas where we need them to be.
Senator L. Smith: I will ask one more question of Mr. Mongeau because he's so helpful to us.
[Translation]
Mr. Mongeau, as you know, the senators are very excited about the Centre Block move slated for 2018. From time to time, your associates give us updates on how the work is coming along. Behind the scenes, however, as the guy at the top of the chain, you are the person responsible for the project. Can you give us a status update on the work? Where are we? Are there additional obstacles?
[English]
Pierre-Marc Mongeau, Assistant Deputy Minister, Real Property Branch, Public Works and Government Services Canada: It has been two years now since I left the precinct, so I can't really answer the question of the senator. However, Ms. Chahwan is the ADM of the Parliamentary Precinct.
Senator L. Smith: I didn't see you because you were hiding in the back. Would you like to give us a two-second update on where we're at? I apologize for not recognizing you in the back.
The Chair: Could you identify yourself and then answer the question as briefly as possible?
Nancy Chahwan, Assistant Deputy Minister, Parliamentary Precinct Branch, Public Works and Government Services Canada: I'm Nancy Chahwan. I'm the ADM responsible for the Parliamentary Precinct within Public Works and Government Services Canada. I'm a colleague of Pierre-Marc Mongeau and Alex Lakroni. Thank you for inviting me to the table.
For an update on the different moves of the Senate, we are currently working on planning for the Centre Block rehabilitation. Because of the increasing criticality of the building systems, we would like to have the Centre Block empty of its occupants by 2018 so that we can start the major rehabilitation. To support that, we are securing space for the Senate functions, including the chamber, committee rooms and senators' offices, in the Government Conference Centre at 2 Rideau.
The design is advancing. We are about 25 per cent complete for the design of that space and the rehabilitation of the building, which will also serve the long-term purpose of that asset within the portfolio of Public Works. That rehabilitation will be completed in time for the move of the Senate into the interim chamber in the GCC by 2018.
Senator L. Smith: Are you confident that we will be ready by the delivery date you have talked about?
Ms. Chahwan: So far, the project is proceeding on time.
Senator L. Smith: On budget?
Ms. Chahwan: On budget also. It's early days, but it is on budget. This is a building that's very complex. As we are doing investigative work, we are uncovering situations we were not aware of, but we will always work within the budget that we have when we can.
Senator L. Smith: It's really important for us to preserve whatever historical elements the building has. We went through a bit of a bump with the kitchen, as you know, but hopefully we will be able to restore some of the history of that particular element so that after we use it, at the end of the day it will be a facility that will stand the test of time and can be used for revenue generation for Public Works.
Ms. Chahwan: Absolutely, senator. The designs right now call for the recreation of the walls and the exact imprint of where the famous kitchen accord has occurred. We will give that to the Senate to use as they see fit to preserve the memory of what happened.
The Chair: Thank you very much for that. We appreciate you reminding us that there was some media coverage on that kitchen accord just a week or so ago.
[Translation]
Senator Hervieux-Payette: My questions have to do with the vaccines. How much did this year's flu vaccine cost? You may have noticed that some of the people speaking are a bit sick, so it wasn't all that helpful this year. What did it cost? Who paid? Did the federal government cover the entire cost, or did the provinces pay a portion? What role does the federal government play when it comes to the measles?
My colleagues and I received complaints regarding the diagnosis and treatment of Lyme disease. I find it strange that we aren't as advanced as the U.S. on the issue.
Dr. Tam is always well prepared.
[English]
Dr. Tam: Thank you for the question.
This year influenza activity was quite high and many people, probably some people in this room, had influenza. If you had influenza, it was most likely influenza A and the strain we call H3N2.
Unfortunately, the vaccine did not match that strain very well, and that's the fundamental challenge with influenza vaccine. You are always trying to forecast the strain that might be circulating. Sometimes by the time you finish manufacturing the vaccine the virus has mutated, and that is what actually happened in this case. Vaccine effectiveness against that particular strain was definitely much lower than we would like to see.
However, there are other flu viruses circulating and some are beginning to circulate right now called influenza B and other strains, and those are matched by the vaccine. We still recommend getting the flu shot even if one of the strains is not a match. With influenza AH3, the population hit the hardest is the elderly population. That's what we've seen as well in terms of hospitalizations and deaths as well.
In terms of purchasing the vaccine, provinces and territories are responsible for influenza programs, so the cost essentially is borne by the provinces and territories. The Public Health Agency works with Public Works and Government Services to facilitate bulk purchasing of that vaccine and arranges for more than one vaccine manufacturer so that there is sustainability in the vaccine contract. Health Canada probably pays for some in terms of First Nations. However, we do not directly support the funding of the influenza vaccine.
Senator Hervieux-Payette: Is it fabricated in Canada?
Dr. Tam: We have several vaccines in use in Canada. Some are manufactured in Canada at Quebec, at the GSK plant. Others are manufactured in Europe, including the Sanofi Pasteur vaccine, but there are several vaccines available in Canada.
[Translation]
Senator Hervieux-Payette: What about the measles?
The Chair: Senator Hervieux-Payette asked three questions, and the witness has answered only one. We have to wait for the witness to answer before asking more questions.
[English]
Dr. Tam: So measles, la rougeole, Dr. Matthew Gilmour happened to have done some interviews lately on measles. Measles had been eliminated in Canada in 1998. There is no actual Canadian measles virus strain. All the measles that we get are imported from other countries. There has been a big effort in terms of immunization programs over the years to get us to the point of elimination.
Unfortunately, measles is still circulating in many parts of world. We found in the last several months that in Ontario there have been quite a number of cases. We have 19 reported to us as of today. In our laboratory, the National Microbiology Laboratory, we can do genetic sequences of these viruses and can tell that the Ontario cases are related and are of the same strain.
Then you move over to Quebec, which has 26 cases, and they have a different strain to that in Ontario. Their strain is called B3. It's linked to the California outbreak, which included a Disney theme park, for example. We actually got travel history from the cases in Quebec, which corroborated with the laboratory genetic sequencing that is related to the U.S. outbreak. Then we have a case in Manitoba, a D8 strain related to travel to India.
When we do a survey of the vaccine coverage in Canada, it is at 95 per cent, which is quite high. We certainly want it higher, but there are pockets of under-immunization. That's what you are seeing: Measles is so infectious that the moment you get a few susceptible people, some communities, for religious or other reasons, are not immune, and it runs through like wildfire.
What it is telling me, though, is that there are three separate strains, three separate introductions, so get your kids vaccinated because they're going to travel. When they travel, they bring back souvenirs that you may not want. Even worse, you might infect other children who are immunocompromised in schools and other settings. So get immunized for your own kids and for other people's kids. It's not that fun to have it as an adult, either.
With respect to Lyme disease, there are two components at the Public Health Agency. We have invested in some public health officers right now that are distributed across Canada to raise awareness for front-line health professionals. As Public Health, we don't diagnose Lyme as front-line healthcare providers. Our role has been to invest in their education and awareness. The National Microbiology Laboratory does reference laboratory testing for Lyme disease according to internationally recognized protocols. I think that we are certainly making efforts on that front.
The Chair: Thank you very much.
I have two senators on my list. Please pose your questions, and then we'll see if the witnesses can answer them quickly. If not, we can ask them to provide a written answer for us.
[Translation]
Senator Rivard: My question ties into the one my colleague, Senator Bellemare, asked regarding the acceptance of credit cards by the Receiver General of Canada. When a taxpayer owes taxes to the government, can they pay by credit card, or do they still have to pay the Canada Revenue Agency by cheque? It seems to me that, on the tax return, it says that payments must be made by cheque to the Receiver General of Canada. You said that the Receiver General now accepts credit card payments. Can taxpayers pay their taxes by credit card?
[English]
Senator Wallace: To Public Works, there is a request for $17 million in funding related to the use of credit cards and bank cards, and the indication was that using those cards was reducing the administrative burden. I suspect, prior to that being implemented, there would have been a number of personnel dedicated to processing cheques and other means of payment. Were there any reductions in personnel in Public Works as a result of implementing this program as opposed to what existed prior to the implementation?
Second, with respect to Enterprise Cape Breton, I see $5 million has been directed toward environmental and other obligations. Will that $5 million address all of the environmental issues that relate to Enterprise Cape Breton? Will this be the end of it, or will we be seeing similar requests going forward?
Finally, Ms. Tromp, you indicated that Services Canada is getting increased efficiencies through the reduction in the number of enterprise data centres, and you had given some numbers of what those reductions were. If you could provide those again to us, I missed them when you were giving them.
I am wondering where those data centres are that were closed. Are they across the country? Are they centred in Ottawa? I think all of us coming from different regions of the country are interested to see how those closures would impact employment in our region. That would be helpful.
The Chair: Can we start with Senator Rivard's question?
[Translation]
Mr. Lakroni: As for the Canada Revenue Agency, it has the authority to decide whether it accepts credit cards or not. Decisions related to programs are made by the departments. Once that decision has been made and Canadians pay to purchase these services from the department, we pay the costs.
I will not speak for the agency, but I do not think that credit cards are accepted. However, they are accepted for passports. I can give you a quick list. There are, among others, passports, immigration, parks, and Employment and Social Development Canada. The Canada Revenue Agency is about sixth in our list of the biggest users.
Senator Rivard: My colleague, Senator Smith, asked a question on the buildings that are being renovated on Parliament Hill. I would like to receive an answer, in writing, as to the status of the work on the former Nortel building. We know that these costs are huge. I would like to know how far along the work is. Will we be taking possession of the building soon? Did you ask for funds, in the supplementary appropriations, in order to pay for the additional work requested by the Department of National Defence?
[English]
The Chair: If you could provide a written answer on that as we are out of time now.
How about the three questions posed by Senator Wallace? Can any of those be answered quickly?
[Translation]
Mr. Mongeau: I can answer briefly concerning Cape Breton. There are two broad elements involved in this topic. First, there is the mines aspect. A lot of research has been done. We are going to need water filtration systems in place for a very long time. We have reclaimed close to 800 sites, and 12 per cent of them are contaminated.
What we are asking for, this year, is for the decontamination process to continue. We will request this every year until we have reduced contamination to a minimum.
[English]
Kevin Radford, Senior Assistant Deputy Minister, Operations, Shared Services Canada: We have 485 data centres. The question was how many we are reconsolidating to. We are consolidating down to no more than seven. We have already opened one data centre in Gatineau. It's a development data centre.
There are two production data centres. One is in Borden, through our colleagues at National Defence at Base Borden, near Barrie, Ontario. We have contracted out another data centre to IBM Canada in Barrie, Ontario. Those are the two production centres that have been created.
Over the last year, we closed 10 data centres. Some of them are very small in stature. They could be just 10 feet by 10 feet. Others are much larger. One of the larger ones we closed down was a data centre at Heron Road for Canada Revenue Agency, and we have moved that facility to the data centre in Gatineau over the last year.
Our plan this year is to close 47 additional data centres as part of the consolidation effort, and we're well on track to do that.
Senator Wallace: Do you have a list of where these centres are located and could we be provided with that information?
Mr. Radford: Yes, we do.
Senator Wallace: We would appreciate getting that. Thank you.
Mr. Radford: Part of our capability in these data centres, we will be able to manage them virtually from other places in Canada. Because a data centre closes down in a location does not necessarily mean with technology today that the people have to be collocated with that data centre.
The Chairman: Is there another outstanding question?
[Translation]
Senator Rivard: There was the question about Nortel. I understand that they will reply in writing?
The Chair: Yes, they are going to provide a reply as quickly as possible, because we have to produce a report on the work we have done here.
[English]
Public Health Agency of Canada, Public Works and Shared Services, on behalf of the Standing Senate Committee on National Finance, we thank you very much for the work that you are doing for Canada in keeping your supplementary estimates as low as possible.
(The committee adjourned.)