Proceedings of the Standing Senate Committee on
National Finance
Issue 31 - Evidence - May 12, 2015
OTTAWA, Tuesday May 12, 2015
The Standing Senate Committee on National Finance met this day, at 9:30 a.m., to consider the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2016.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this morning, we are continuing our study of the 2015-16 Main Estimates.
[English]
In our first hour this morning, we're pleased to welcome a number of officials. From the Canadian Museum of History, we welcome Mr. Mark O'Neill, President and Chief Executive Officer; and Mr. David Loye, Chief Operating Officer and Senior Vice President. By video conference from Montreal, we welcome officials from Telefilm Canada: Carolle Brabant, Executive Director; and Denis Pion, Director, Administration and Corporate Services.
I understand that each organization will have brief introductory remarks, and then we will proceed with our usual question and answer session.
We will start with Mr. O'Neill, followed by Ms. Brabant.
Mark O'Neill, President and Chief Executive Officer, Canadian Museum of History: Thank you very much, Mr. Chair. It really is a pleasure to appear before the Senate, and we've appeared before you on several occasions in the past couple of years. I am happy to be back. I'll try to be brief.
These are exceptionally productive times at both the history and war museums, as many of you will know. I appreciate the opportunity to talk about some of our work with the honourable senators today.
[Translation]
My opening remarks will focus primarily on the three major items highlighted in that document. They are the renovation of the Canadian History Hall, and our new role as the administrators of both the Virtual Museum of Canada and the Online Works of Reference.
I will conclude by speaking more generally about our current activities and how they align with our new mandate.
[English]
The single largest addition to our appropriation this year is earmarked for the renovation of the Canadian History Hall. I think the word "renovation," which is used in the estimates, might be somewhat of an understatement. We are not refreshing or updating an existing exhibition; we're dismantling, reimagining and rebuilding close to 40,000 square-feet of gallery space — almost two entire floors of the Canadian Museum of History.
We're doing so to create something entirely new. It will be the largest, most comprehensive exhibition about Canadian history ever developed. For decades to come, this inclusive and engaging exhibition will be the signature gallery in Canada's museum of human history and the destination for anyone who wants to learn about this country and its people.
[Translation]
This is, as you can imagine, a huge undertaking. We have already been working on the project for the better part of two years. At this point, we are on the verge of finalizing the exhibition's story line and content as well as the architectural design, defining the visitor's experience and developing the exhibition design. It will then be time to start the construction and our team of historians, curators and museologists are hard at work.
Hence the need for this new appropriation, which represents almost half of the government's total commitment to the project, as announced in October 2012.
[English]
By the way, I'm pleased to report that we're still on schedule for a public unveiling on July 1, 2017, the 150th anniversary of Confederation.
I look forward to answering any questions you may have about the Canadian History Hall.
I'll turn briefly, Mr. Chair, to the Virtual Museum of Canada and the Online Works of Reference, whose administration was recently transferred to our museum from the Department of Canadian Heritage.
I referred at length to these programs during an appearance before the Standing Senate Committee on Social Affairs, Science and Technology in May last year, as some of you who also sit on that committee will recall. Given the time limits, I will not repeat that testimony but will review the basics with you.
The Virtual Museum is primarily an aggregator of digital information produced by public not-for-profit institutions throughout the country. Its website provides free access to hundreds of virtual exhibits and collections, videos, teaching resources and other materials relating to teaching and educational resources. It's a wonderful place for educators and others to access this information.
[Translation]
The museum also promotes the creation of new digital content through a funding vehicle called the Virtual Exhibits Investment Program. That funding will now come from our museum, as reflected in the new appropriation.
The other program is the Online Works of Reference. It provides free access to The Canadian Encyclopedia and the Dictionary of Canadian Biography.
[English]
The encyclopedia is published by Historica Canada, and the dictionary is produced through a partnership between University of Toronto and L'Université Laval. That will remain the case going forward, and both educational institutions are satisfied with that arrangement.
All transfers have gone very smoothly, and we're eager to work with our partner institutions to further build upon the success of these programs.
[Translation]
As I said at the outset, these are exceptionally productive and exciting times at both our museums. At the Museum of History, our recent exhibition Canada's Titanic — The Empress of Ireland, and our current exhibition Terry Fox — Running to the Heart of Canada, have drawn attention and acclaim across the country.
[English]
They're proving once again that Canadians have a thirst for stories about their history and heritage, and a desire to see those stories told in their national museums.
We are also looking forward to our presentation this summer of original copies of the Magna Carta and the Charter of the Forest, two documents that helped lay the foundation of modern democratic life in Canada and around the world. In June, we will celebrate the opening of The Greeks — Agamemnon to Alexander the Great. It's the most remarkable exhibition about ancient Greece ever to tour North America, and the Canadian Museum of History was instrumental in its development.
At the War Museum, where we just celebrated the museum's tenth anniversary already, our commemoration of the First World War centenary is enhancing public understanding of this pivotal chapter in Canadian history. The museum's presentation this summer of Gladiators and the Colosseum — Death and Glory will provide visitors with a captivating and enlightening look at these iconic figures from ancient Rome.
[Translation]
Our new mandate calls on us to enhance Canadians' knowledge, understanding and appreciation of events, experiences, people and objects that reflect and have shaped Canada's history and identity, and also to enhance their awareness of world history and cultures.
[English]
I'm proud of our success in fulfilling our mandate, and I look forward to continuing to do so. Thank you for your attention. I look forward to your questions.
The Chair: Thank you. It sounds like you have some exciting times ongoing at the two museums.
I will now proceed to Telefilm Canada.
[Translation]
Carolle Brabant, Executive Director, Telefilm Canada: Mr. Chairman, members of the committee, thank you very much for the invitation to take part in the committee's examination of the Main Estimates for 2015-16.
[English]
My comments will focus on the following three areas: a brief overview regarding Telefilm Canada's role and support for the Canadian feature film industry, our successes and challenges, and our priorities in our new strategic plan.
[Translation]
Telefilm Canada is a federal cultural agency with the mandate to foster and promote the development of the audiovisual industry in Canada. We play a leadership role through financial support and initiatives that contribute to the industry's cultural, industrial and commercial success.
Last year, we supported the production and marketing of some 90 feature films and the development of more than 300 projects, while also helping to promote Canadian talent in Canada and international festivals, for a total investment of $92.2 million.
Telefilm also administers funding programs for the Canada Media Fund, which totaled $354.5 million in 2013-14. Finally, we make recommendations regarding the certification of audiovisual treaty co-productions to the Minister of Canadian Heritage and Official Languages.
Building on almost 50 years of investment, Telefilm, together with its partners, has helped shape a landscape conducive to creativity in movies and audiovisual storytelling. We have now reached a maturity that enables us to produce and export works of excellent quality. As CMPA research indicates, Canadian and foreign film production in 2013-2014 reached $1.4 billion and accounted for over 26,000 full-time jobs.
Whether it is TIFF, Sundance, Berlin, Cannes, Venice, or at our own Canadian Screen Awards and Jutra, the profile or our talent has never been higher than it is today. More and more, we are being seen as a country that produces talent. A number of Canadian directors are increasingly in demand outside Canada.
Despite these successes, we still face challenges. They include the following: independent films occupy less screen time and fewer screens in mainstream cinemas; most viewers watch feature films at home and not in theatres; and the distinctions between platforms, territories and launch windows for the content have changed.
While the market's appetite for content is strong, the marketplace is increasingly crowded. Our greatest challenge is the discoverability of our films. In a world of overabundance of content, how do we attract Canadian consumers with our compelling and engaging films on multiple platforms?
[English]
Our new 2015-2018 strategic plan, Inspired by Talent. Viewed Everywhere., addresses how we will face this and other challenges ahead. First, we need to promote the excellence of Canadian content by conducting effective promotion of the industry and its successes directly to consumers.
Second, we need to foster more ground-breaking marketing practices by connecting with a larger number of viewers. We encourage the industry to find new ways of getting viewers to be more engaged with homegrown stories by, for example, trying out new marketing strategies adapted to viewers' new expectations.
Take Corner Gas: The Movie, which was launched during a three-week period last December and drew more than 7 million viewers on multiple platforms all driven by a large and loyal fan base. It's one Canadian out of five that saw that film.
Third, we need to take decisions supported by meaningful metrics. It's vital that we make informed decisions based on value-added research.
Fourth, we need to help the industry diversify its sources of funding by attracting new funding partners, which is the main objective of the Talent Fund.
Fifth, we want to work towards creating an ecosystem of companies such that we can offer production companies that have achieved an outstanding level of performance access to a fast-track funding stream. This approach provides for greater autonomy and accountability for Telefilm's clients while also giving them predictability for project funding.
Finally, our sixth objective is to achieve organizational excellence. We are very proud that Telefilm received the Award of Excellence in Financial Reporting for Crown corporations in 2014 from the Chartered Professional Accountants, and we have also been recognized by the Gartner consulting firm as being the top 25 per cent of companies in a comparative study they conducted on the use of information technologies.
As our client surveys reveal, the level of satisfaction with regard to Telefilm's programs and their implementation has improved with 85 per cent of clients expressing their satisfaction. Telefilm will continue to maintain its low administrative expenses, not exceeding 6 per cent. In fact, for 2014-15 our rate of administrative expense will be 5.2 per cent.
Telefilm's vision for the future is clear: We want Canadian creative content to be accessible and to be viewed everywhere. To succeed, we need to have all our support mechanisms working together to fund the initiatives that are needed. This means taking creative risks, experimenting with marketing and promotion strategies, as well as leveraging strategic partnerships and industry-wide resolve.
Canadians are naturally drawn to their stories, and what more powerful way to experience them than through film? Today, I am very inspired by the success of our industry and its future, now more than ever. We have taken the opportunity to send the committee a more detailed background presentation that you should have received. Thank you once again for inviting us to appear today. We welcome your questions.
The Chair: Thank you very much, Ms. Brabant. We appreciate the background and we will see that the other material you indicated you have sent to us is circulated.
Before I go to honourable senators, could you explain to us the synergies and relationship between Telefilm Canada and the National Film Board? We had the National Film Board here last week, and if I look at the mandates, they seem to be pretty close.
[Translation]
Ms. Brabant: The National Film Board is an organization that is a producer. Telefilm Canada oversees the development of the industry and its promotion by investing in private-sector producers who produce content for the broadcasters, for the cinemas. Therefore, we are not owners of our content; we are not investors or producers of content. We develop private sector content production, which it is achieved with a great deal of success, in my opinion, because Canada's private sector audiovisual industry is thriving.
The Chair: Thank you. We will now begin with Senator Eaton, from Toronto.
Senator Eaton: To follow up on Senator Day —
[English]
You're very different from the National Film Board, and obviously Radio-Canada and the CBC, but surely when you talk about broadcasting your products, could you not use the National Film Board in its big new building at the Place des Festivals in Montreal? And TIFF, Radio-Canada, will they not help you market your very excellent products?
[Translation]
Ms. Brabant: As I mentioned in my introductory remarks, we work very closely with our partners, whether it be CBC/Radio-Canada or the National Film Board. As you know, I sit on the National Film Board board of directors, and Mr. Joli-Coeur sits on ours. We work very closely together and we have parallel mandates, but that do not overlap. We use the facilities as much as possible; we work with Radio-Canada on the Tou.tv platform and with the NFB on its new platform. When the new buildings are ready, we will work very closely with them. We work with the CBC/Radio-Canada for the promotion of our content. The broadcasters are our significant partners for broadcasting the content that is produced and financed by Telefilm Canada.
Senator Eaton: Thank you.
[English]
Mr. O'Neill, you talked about the Virtual Museum of Canada and online works of reference, the Virtual Exhibits Investment Program. Out of all those things, and with this wonderful new museum of Canadian history, are you going to put together a virtual museum that teachers all across Canada can use in their classrooms to teach Canadian students the history they're not getting?
Mr. O'Neill: Thank you very much, senator, for the question. Yes, we are and I should pay some regard to my former colleagues in the Department of Canadian Heritage where the Virtual Museum came from. In fact, already there was a huge amount of content that teachers were using from the work that was done on the Virtual Museum over many years. We certainly think this is an opportunity for the Canadian Museum of History to reach out to more institutions, more history museums and also other users of that virtual museum to add even more content. Yes, we think we can, and we think the Virtual Museum will be an important part of the visitor experience to our museum.
Senator Eaton: You know, of course, that there are only four provinces that teach Canadian history in a chronological fashion in Canada.
Mr. O'Neill: Yes.
Senator Eaton: The other six and the territories are kind of starving.
Mr. O'Neill: Senator, I know you have had some of the attendance numbers of our two museums, and combined, it's about 1.8 million Canadians. What's gratifying for the members of the committee to know is that the Canadian War Museum, for example, in the summer months, 60 per cent of the attendees are families from outside the capital who are coming to see a war museum that is now attracting approximately half a million visitors a year.
I think the museum corporation is offering an historical experience to Canadians that they value.
Some of you will be familiar with the American online community called BuzzFeed, which recently considered the Canadian War Museum to be one of 39 must-see museums in the world. It was number eight and the only Canadian museum to make the list. I think Canadian museums are demonstrating to visitors around the world an importance in promoting history and culture and heritage.
Senator Eaton: I'm thrilled about that. I worry about students in our six other provinces who are not getting any Canadian history in a chronological fashion, and they're not all going to come to Ottawa or they can't come to Ottawa.
Mr. O'Neill: I think you're right about that, and I think we know that our museums have to have very rich presences in all those communities across the country. I think the virtual museum allows our museum, along with our travelling exhibitions and our loans of artifacts through a history museums network that we established two years ago, to reach more and more Canadians where they live. You're quite correct, senator. We're very conscious that we have to be in the communities where Canadians are, we have to attract more and more educators and we have to be virtually much more prominent. The Virtual Museum of Canada will help us do that.
Senator Eaton: Do you think you will have a budget for that when you open?
Mr. O'Neill: Yes, I do.
The Chair: The encyclopedia is published by Historica Canada. Will there be a transfer of funds from the museum to Historica Canada to look after the costs?
Mr. O'Neill: I wonder, senator, if I could ask Mr. Loye to answer that question, as chief operating officer.
David Loye, Chief Operating Officer and Senior Vice President, Canadian Museum of History: Yes, there will be. What was transferred to us for what's called the Online Works of Reference is essentially from a contribution program at Canadian Heritage. It was the sum of $2.1 million, and those funds support two initiatives in two institutions. One is Historica, which has the Canadian Encyclopedia. They receive $1.1 million per year now from the museum. The other institution is the Dictionary of Canadian Biography, and that's managed by the University of Toronto and the University of Laval, and they will receive $1 million a year. Those numbers are consistent with what heritage was funding, and now that has been transferred to us. We have maintained those funding levels to those two institutions.
The Chair: We will see that in future estimates, grants and contributions, from the Canadian Museum of History to University of Toronto and University of Laval.
Mr. Loye: We have already signed a new three-year agreement with both institutions which guarantees that funding for the next three years.
The Chair: Thank you.
[Translation]
Senator Chaput: My first question is for Mr. O'Neil of the Canadian Museum of History. I know that I asked this kind of question when you appeared before the Standing Senate Committee on Social Affairs, Science and Technology on which I also sit, but I would like to ask it again today. It deals with the Virtual Museum, the digital content, the Online Works of Reference and everything that adds to this component.
My question is very simple. Is all of this done in both of Canada's official languages?
[English]
Mr. O'Neill: Thank you very much for the question. The museum operates in both official languages. All of our projects, whether they are online, travelling exhibitions, research projects or public programs, are in both official languages. We strive very hard to make sure that we also work with partners who are able to distribute and create content in both official languages.
There is no question that from time to time our efforts are not sufficient, which is clear when you read the commissioner's annual report on official languages, so we're constantly trying to improve, but subject to the act, we take it seriously and we work and deliver our projects in both official languages.
[Translation]
Senator Chaput: What is the biggest challenge you face in terms of providing all of the information in both official languages? What is the greatest difficulty? Is it an issue of money or of human resources?
Mr. O'Neil: That is a very good question. I think it is the ability of partners elsewhere in the country to do their work in both official languages. As you are no doubt aware, not all institutions in the country work in both official languages. In the case of our company, it is important as a national entity to work with the institutions that have committed to promoting both official languages.
As the president of the Canadian Museum of History, I think it is probably the greatest challenge.
Senator Chaput: My next question is for Telefilm Canada. Reading the documents that we have before us, including the strategic plan, I see that you have four offices in Canada. Where are these offices located, and are employees assigned to them?
Ms. Brabant: Thank you for your question, Senator Chaput. Our four offices are located in Halifax, Montreal — where our head office is located — Toronto and Vancouver. Our employees travel regularly across Canada to meet with our various clients, including producers.
For example, last summer, they travelled to Manitoba to meet with francophone producers, to introduce them to our programs and to consult with them on the various problems they are facing. Our main program organizers travel. There are indeed employees in all of our offices.
Senator Chaput: How many employees are in each of the offices?
Ms. Brabant: Obviously, given that most of the production in Canada takes place in Montreal or in Toronto, the majority of our employees are found in those two cities. In Vancouver, we have some 20 employees, in Halifax we have four, and in Toronto some 40 employees.
Denis Pion, Director, Administration and Corporate Services, Telefilm Canada: We have approximately 140 employees in Montreal.
Senator Chaput: Do all of these offices operate in both official languages?
Ms. Brabant: Absolutely. We ensure that the service is provided in both official languages, in each of every one of our offices in Canada.
Senator Chaput: As the chair was saying, the National Film Board's representatives have offices across the country. Are your offices situated in the same places as those of the National Film Board?
Ms. Brabant: Some of the offices are in the same locations. For example, in Vancouver, in an effort to achieve some economies of scale, we moved our offices to Radio-Canada's offices. If memory serves me well, the National Film Board has a few more offices than we do, but we have never had more than four offices across the country. The people are now served through specific meetings or by electronic communications.
Senator Chaput: I see that you administer the Canada Media Fund's funding programs, and that you have done so for several years. Have you done so from the outset?
Ms. Brabant: Yes. Since the creation of the Canada Media Fund in 2005, Telefilm administers its programs. We are very proud of this cooperation. We have just renewed a three-year agreement, and I think that this partnership works perfectly.
Senator Chaput: Given that you are responsible for the administration of these programs, can you withhold a percentage of the funding as an administration fee?
Ms. Brabant: Yes. An agreement between the Canada Media Fund and Telefilm Canada provides that Media Fund will cover the costs incurred by Telefilm, which will result in economies of scale for both organizations.
In one of the documents we sent you, last year, the figure was approximately $10 million in administration fees that were transferred from the Canada Media Fund to Telefilm Canada to administer the programs. Approximately half of Telefilm Canada's employees work on program delivery for the Canada Media Fund and that will be in all of the offices.
Mr. Pion: This definitely contributes to ensuring our regional presence as well as maintaining the quality of the information systems that we have in place.
Senator Chaput: As for the renewal of the fund, have the criteria changed? Are the criteria and the way to proceed the same as in the past?
Ms. Brabant: The agreement signed between the Canada Media Fund and Telefilm Canada is an administrative one. There are changes every year in the administration of their programs, but there have been no major changes except to facilitate the administration between the two organizations.
Mr. Pion: Given that the agreement is over a longer time frame, we built some flexibility into the overall management so that we would not have to review it every year in order to make the necessary administrative changes. That is the main difference.
Senator Chaput: As for the allocation of these funds, are the criteria the same? If I am not mistaken, I believe there were guidelines concerning the fact that a percentage of these funds would go, for example, to French productions in Quebec, and that another percentage would be allocated to French productions outside Quebec, et cetera. Is that still the case?
Ms. Brabant: That is still the case, but all policy matters come under the Canada Media Fund. Telefilm Canada is only the administrator of the programs. Any decisions related to policies or to the programs as such come under the Canada Media Fund, but if memory serves me well, there have been no changes. Mr. Pion could confirm that.
Mr. Pion: I can confirm that all of the programs are still in place.
Senator Chaput: Thank you very much.
[English]
Senator L. Smith: Mr. O'Neill, what type of measurement systems do you have besides the number of people who come into the museums; what type of measurement systems will you set up for your virtual exhibits, your online works and Historica Canada? It seems like you're into new areas.
I don't have the backup information, but there's no discussion of revenue. Is there a revenue generation element of what you do? What is it and how much? We need to understand how you're not getting funded but you're doing something proactively.
Mr. O'Neill: I thought I would let Mr. Loye handle the revenue generation aspect, if that's all right.
Generally speaking, we do have a visitor studies component. We fund and staff a visitor studies area in our museum. We rely upon topic testing, some of the evaluations, we talk to visitors on site and we have adopted churn studies on visitors who don't come. We have a good sense of what visitors are interested in and what they are looking to see.
In terms of measuring outcomes, we have participated in the past in general polls. Learning outcomes in museums are very difficult to do to really try and demonstrate the impact. That is why a lot of museums rely upon the satisfaction rates of visitors and attendance. I will mention briefly, senator, what is a standard practice in museums.
Most museologists will use the amount of time that visitors spend in a museum, the length of their visit, as a proxy for learning outcome. We know, for example, the average visit to one of our two museums is four and a half hours, which is considered to be quite a substantive visit. Then we are able to break down the people who visit the museum in many different ways based upon who they are, their levels of education, and we solicit feedback from them in many different ways.
If that's all right, Mr. Chair, I will ask Mr. Loye to handle the question on revenue generation.
Mr. Loye: We do have our own records as well. About 20 per cent of our total budget will come from our own revenues and primarily comes from gate admission fees charged to visitors. Then we have what you'd expect to find in most museums. We have boutiques and food operations, facility rentals where we rent our spaces out for evening events, parking concessions, as you would find in most typical museums. We average $14 million to $15 million a year from those sources.
Senator L. Smith: If I understand correctly, if your total ask is increased because of the fact that the museum is being completed in terms of the renovation of the Canadian Museum of History for $11.5 million, of the $83.3 million, about 20 per cent of that comes back as revenue; is that what you're saying?
Mr. Loye: On that number it would be slightly less than 20 per cent.
Senator L. Smith: Right; are we talking $14 million to 15 million?
Mr. Loye: That's right.
Senator L. Smith: Do you talk about whether that would be considered a good accomplishment in terms of results?
Mr. Loye: There was a study done by Canadian Heritage a number of years ago which compared revenue generation of all major museums in the country. The Museum of History was one of the leaders in the country, with some of the other large museums such as the AGO or the ROM, in terms of what it's generating from its own sources.
Senator L. Smith: Getting back to Senator Eaton's question, Mr. O'Neill, maybe you could help us. A number of provinces actually use some of the content. Could you explain whether you actually have a conscious plan of trying to increase that number? Here we have Canadian history, including the various elements and packaging that you're doing to get into the virtual market and the high-tech market. Is it only six provinces that use some of the content?
Senator Eaton: Four provinces in high school: Nova Scotia, Quebec, Manitoba and Ontario.
Senator L. Smith: We recognize education is in the domain of the provinces, but would trying to get some influence into those areas not be a priority high on the list?
Mr. O'Neill: Senator, you've mentioned the difficulty of the constitutional provisions, I suppose, for us as a Crown when it comes to education, but we do work with a variety of educators and educational associations at the national level — teachers, historians across the country, and other professions — and they're very much engaged in our museum in helping us do outreach.
Specifically, as I mentioned briefly in my earlier comments, two years ago we created a history museums network of large and small museums. The idea is to collaborate, share more resources and work with like-minded museums across the country. I will give you a brief example, if I may.
Right after this committee meeting I go on to the opening of an exhibition at the Royal British Columbia Museum in Victoria, which we're partnering on as a national museum, and there are other examples of this. As a museum, we feel the best contribution we can make is to work physically with as many like-minded institutions to loan objects, create public programs and travelling exhibitions.
As I mentioned to Senator Eaton, we have had the transfer of the Virtual Museum of Canada to our museum and our already existing online tools. Even without the Virtual Museum of Canada I believe we get about 55 million visits a year on our website, and we've already digitized a significant portion of our objects over the past 25 years. We also have the Virtual Museum of New France, which has been part of our museum corporation for a good 25 years or so. We're working with as many tools and partners as we can within our jurisdiction to reach as many Canadians as we possibly can.
I share your concern about history and we're working out a way in which we can be a major player right across the country.
Senator L. Smith: A sensitive subject, of course, in terms of various elements of investment by government is with Aboriginal Affairs. Excuse my ignorance for asking the question, but is there an important element of Aboriginal history involved at all with your museum?
Mr. O'Neill: Absolutely. What I can mention to you briefly is in terms of content. We have the Grand Hall in the museum, which is the large hall that showcases the totem poles, among other artifacts, and behind it the First Peoples Hall, which is a massive four-zone gallery. In the new Canadian History Hall, we're going to begin the Canadian narrative with First Peoples from time immemorial. That story is not there now. The actual experience begins with the arrival of the Europeans in the 11th century.
I should also mention that the museum is actively involved in the Treaty Tables right across the country, given the richness of our collection and the fact that a large percentage of the museum's collection, with the nature of archaeology in Canada, is Aboriginal in nature.
[Translation]
Senator L. Smith: Hello to the people of Montreal. Go Habs Go! Are you hockey fans?
Ms. Brabant: Yes. Go Habs Go!
Senator L. Smith: You mentioned your priorities, including two points in particular.
[English]
Marketing practices to enlarge the new marketing strategies in number of viewers.
[Translation]
The other is the ecosystem. You want to play a role in the development of production companies. Can you give us some examples of your philosophy? It is good to put these two points in your strategy, but what are your activities, if you could briefly summarize them?
Ms. Brabant: As far as marketing strategies are concerned, I will take the example of Corner Gas. Until recently, we would market Canadian films in the same way, more or less, as we would present a film like X-Men. There is the theatrical release, and the platforms are quite distinct. Our studies have shown that, particularly for independent film — which Telefilm Canada funds, and independent cinema is not funded by the major American studios — consumer habits have significantly changed. People prefer to watch films where and when they please; on their platform, on their own big screen and in cinemas. They choose to go and see a film such as X-Men in theatres, but they will choose to watch another film on their own screen. We wanted to receive innovative film marketing projects, and Corner Gas is an excellent example. For those who are not familiar with the series, this was a television series that was enormously successful in the late 2000s. The producer finished her film last year, and along with the broadcaster, the cinema operators decided to maximize the viewing window over three weeks.
Therefore, at the same time as it came out in theatres, the film was also available on CTV. Everyone worked together — it was not easy to change old habits — and the result was that 7 million Canadians saw the film over a three-week period. We hope that will happen again. It is pretty amazing. In the end, we fund films so they will be seen by Canadians. This is part of one of the innovative practices we hope to see more and more.
Now, we have to move away from a one-size fits all approach. We must understand the public for which the film was intended and adapt the marketing practices in that regard. Another example I will give you is the film Aurélie Laflamme. We choose to use social media to attract fans. We want to address a young audience, because young people often go to the cinema. In a short period of time — we have many ideas — these are two examples that I believe illustrate what we want to do well.
Senator L. Smith: Congratulations on your contribution to the success of Corner Gas, with its audience of 7 million people. From a marketing perspective, give me one component to demonstrate Telefilm Canada's strategy. It is good that everyone is working together, but what have you done specifically to contribute to the success of this programming element?
Ms. Brabant: In fact, we do not do any direct marketing for the productions, because they belong to the producers and the distributors. We called for innovation. Normally, this project should not have received the support of Telefilm Canada, because it off the beaten path. We found that it was a well-structured project, and we gave our consent for a pilot project with the hope of understanding the new mechanisms and being able to draw conclusions that could help us adapt other projects in the future.
Senator L. Smith: On the topic of "ecosystems," do you approach production centres? Do you work upstream or downstream with them? Is it you that decides, after having identified a few production houses, to approach them, because they have an interesting record, or do they approach you to ask for assistance?
Ms. Brabant: I would say that it is a bit of both. Our success index is innovation, which we are very proud of.
[English]
What gets measured gets done. It was very important to implement a better tool for measuring the success of the production companies as well as the film and the filmmakers. So we introduced a measure called the Success Index, which enables us to measure the success of the production company based not only on the box office but also on their capacity to attract international sales, international investment, selections at festivals and events as well as prizes received at certain festivals, and so on. It is a composed index that helps us to identify the companies over a certain period of time, five years at least because it is an industry of research and development where successes are not easy to predict. We were able to identify the 11 most successful companies in Canada.
These companies have been allowed fast-track financing. The remaining funding, because we also have a mandate to encourage newcomers and emerging talent, is done more selectively based on the project and the associated team.
Senator L. Smith: There are other questions and we could go on.
The Chair: They were all good questions and good answers.
Ms. Brabant: If you are interested in more detail, I would be very pleased to give the details of the index.
The Chair: You may find that some other senators have an interest as well. I have six senators who wish to engage in questions and answers; and we have 15 minutes left. I will ask each senator to put his or her questions first and then if Mr. O'Neill and Ms. Brabant feel that the answer would take some time, perhaps you could provide a written response. I want to make sure that all senators get their questions on the record.
[Translation]
Senator Bellemare: My first question is for Mr. O'Neill. The Auditor General produced a special examination report in 2013, and on page 2, it says, and I quote:
The Canadian Museum of Civilizations Corporation —
— which you represent —
— has put in place a corporate governance framework that meets the expectations of best practices. However, the effectiveness of the corporate governance framework is limited by the board not fulfilling some of its roles and responsibilities, and by weaknesses relating to the board's continuity; the orientation and training offered to trustees; values, ethics, and conflicts-of-interest practices for board members; and information the board receives.
Could you comment on this exit and tell us what you have done since to remediate the situation?
The Chair: Senator Bellemare, do you have another question after that?
Senator Bellemare: My question is for Mr. O'Neill.
The Chair: For Telefilm Canada? I will take all of the questions at the same time.
Senator Bellemare: In regard to Telefilm Canada, you provide assistance for private films. You have a pool of good candidates and, I believe, you select them based on merit. However, I would like more clarification on the criteria you use in making your choice. The film industry benefits from a tax credit. Is this tax credit enough in comparison with tax relief offered by other countries?
[English]
Mr. O'Neill: Very quickly, the board of trustees has worked very diligently in the past two years to respond to all of those concerns by the Auditor General. As a very quick example, all of the terms of references of the committees of the board and the bylaws of the board have been reviewed and updated. The corporation continues to work on the other governance issues as identified by the Auditor General.
[Translation]
Ms. Brabant: We take into account several criteria, including the record of the people associated with the project, such as the production house, the director, the screenwriter and the actors. The script is an important aspect, as is the application submitted to Telefilm Canada, the editing, the proposed marketing strategy for the project, the film's budget and the financial partners who have already bought into the project. As for larger projects, we require market interest, either on the part of a distributor or a sales agent in Canada or elsewhere, to guarantee that there is an interest, within the market, to fund the specific project.
The Chair: Can you send us a written response regarding the tax credits?
Ms. Brabant: Yes, we can send you a written response. Perfect.
Senator Maltais: Mr. O'Neill, I have two short questions for you. As part of the 150th anniversary of Confederation, will the battle of Quebec — I am not talking about Wolfe and Montcalm, but the battle of Quebec with Montgomery and Carleton — be showcased as the war of 1812-13 was? And will the group in charge of rebuilding the armoury participate in the project?
As for Ms. Brabant, I would like to know if you look at the scripts before granting a subsidy. If yes, is the quality of the French an important factor to you? Thank you.
[English]
Mr. O'Neill: For the first question, I will get back to you with the specifics. I will talk to our curators. For the second question, no, we are not involved in that particular project.
[Translation]
Ms. Brabant: The first answer is yes. We read the scripts for all proposed films. We respect the director's specifications for the proposed project.
[English]
Senator Gerstein: Mr. O'Neill, you are the president of two of Canada's great gems, the War Museum and the Museum of History. I must say when any family or friends suggest a visit, it is always a great highlight. The only complaint I have ever heard is that they didn't allocate more time to their visit.
My question is with regard to something Senator Smith raised, which is accessibility for Canadians as it relates to your need to generate revenue. I would be interested to know how you determine what the entrance fee is that you charge Canadians when they visit the capital.
Mr. O'Neill: Mr. Loye can respond to that very quickly. It is under his auspices.
Mr. Loye: It is a great question. We also have to juggle between attendance and revenue generation. We do watch other museums. Some museums around the world have free admission, for example. Most Canadian museums do have an admission fee. How we set the fee is based on marketing studies and comparisons of like institutions. It is also based on feedback we get from visitors. We ask people, "When you visited the museum, did you get value for money?" We gauge that feedback, and all that comes into analysis in terms of how we set our prices. It is also driven to some extent by the marketplace as well. Its a complicated analysis we go through in terms of pricing.
One thing we always do is make sure that a period of time is set aside for free admission so that anyone who has an economic barrier to attending can attend. Right now, it is Thursday evenings for four hours. It has been that way for a number of years. If people do feel a barrier from an economic perspective, there's always an amount of time set aside to be free.
In addition, we have a fund-raising program called the School Access Program where donors support a program that allows us to subsidize school visits. In many cases, those visits become free. We target inner-city schools and what are called beacon schools so that those schools also, because of economic disadvantages, don't feel a barrier to visit the museum.
Senator Gerstein: I appreciate that answer. I was particularly interested in the free period you set aside. Thank you for clarifying that.
The Chair: Before the War Museum was opened, there was a major public fund-raising campaign. General Paul Manson, I know, was instrumental as chair of that committee. Do you continue that public fund-raising activity?
Mr. O'Neill: We do, Mr. Chair. The Passing the Torch campaign that you referred to was, at that time, the most successful national capital cultural fund-raising project in Canada, at some $18 million at that time.
We do continue. Fund-raising is very difficult right now, as many members of the committee will know, particularly for non-capital projects, but we do have a fund-raising strategy in place. We do have a dedicated development branch, and we are working with our board of trustees and others to try and raise as many funds as we can from diverse sources.
Senator Wallace: Ms. Brabant, as you point out, Telefilm Canada has four offices across the country — Halifax, Montreal, Toronto and Vancouver. I'm wondering if your organization has a predetermined formula for allocating your financial resources among the regions of Canada. For example, being from Atlantic Canada, I'm always interested to know if there's a fair allocation of funding being allocated to the Atlantic region. As we have seen, in particular from Newfoundland and the comedic success of Newfoundland productions, which I think for the most part have been done in Halifax, there is great talent. I'm wondering how your funding is allocated to ensure there is equity across the regions of the country.
Mr. O'Neill, I was interested in Senator Smith's question concerning the national network of history museums, which developed within the last year or so. As of a year ago, eight provinces, I understand, had signed. Have any additional provinces signed at this point? Being from New Brunswick and the home of the oldest museum in the country in Saint John, I'm interested to know if New Brunswick and, in particular, that museum are part of the network.
Ms. Brabant: I can give you a short answer and provide you more detail in writing. The short answer is that we allocate our funds in order to have a diversified portfolio that will reflect the diversity of Canada. We do finance projects from all regions of Canada. Particularly in the Atlantic region, last year was a very successful year. As you know, we had The Grand Seduction, Cast No Shadow, a short microbudget program that competed for the screen awards as the best film. We also financed How to be Deadly, Relative Happiness, Heartbeat, all films coming from the Atlantic region.
Yes, we are. I can provide you with more information in writing.
Mr. O'Neill: Senator, I might be wrong, but I believe there are close to 18 members of the network at present. I'm pleased to tell you that the New Brunswick museum in Saint John, as you point out, the continuously oldest operating museum in Canada — most Canadians don't know that it predates Confederation — is a proud member of that network. We do very good work with the New Brunswick museum. We consciously ensure that we have museums from across the country.
[Translation]
The fact that the institutions can respect both official languages is a very important factor in the context as well.
[English]
We reach right across the country. I can literally say, at this point, from coast to coast. I'm not sure about the other coast just now.
The network continues to grow. We're developing an affiliate program of smaller museums that don't have the capacity to be reciprocal in this relationship, so we can involve them as well. We had the last meeting of the network at the recent Canadian Museums Association Conference in Banff, Alberta.
[Translation]
Senator Rivard: My first question is for Telefilm. The Talent Fund is a fund made up of Canadian companies, donors and patrons. Does Telefilm contribute to this fund?
Ms. Brabant: It was created with two objectives in mind. The first is to link Canadians from other business communities to the film industry, and to engage them in this successful industry which contributes significantly to Canada's GDP. That was the first objective. The second is to collect funds. The fund was recognized by the CRTC, and the largest portion of the $14 million dollars collected comes from the agreements signed when Astral was sold to Chorus and Bell. Telefilm does not contribute directly to the Talent Fund. The money comes from private donors.
Senator Rivard: I am thinking, among other things, about specialty TV Channels, like Évasion, and almost all of the shows where the credits indicate "with the participation of the Government of Canada," and often "the Government of Quebec." Does that money come from Telefilm or from another organization?
Ms. Brabant: It probably comes from tax credits, and often, from the Canada Media Fund. When you see something saying that the program has been produced with a contribution from the Government of Canada, it is referring to tax credits.
Senator Rivard: I have one last question. I asked it of the people from the NFB last week. You have a board with members who are spread across Canada, people who have experience in the film industry. Give me the highlights of the past fiscal year. Which successful initiatives were taken by the board? You may answer in writing, unless you have some examples in mind.
Ms. Brabant: The Telefilm board members must be completely independent.
Senator Rivard: They are appointed by the Governor-in-Council.
Ms. Brabant: And free of any conflict of interest.
Senator Rivard: My question was not on that aspect. I know that there is no conflict of interest. I know that the members are appointed by the Governor-in-Council. Generally, they are chosen for their experience in their respective industries in Canada. Their first role is to appoint an external auditor, to review the financial statements and to deal with criticism. Above and beyond those tasks, the people from the NFP told us, "More specifically, our board recommended such and such a thing that has proven successful." I am asking the same question. Which accomplishments flow from the guidance provided by the Telefilm Canada board?
Ms. Brabant: We can provide a written answer. The most significant accomplishment from last year is the Telefilm's strategic plan. The board is responsible for developing the Telefilm strategic plan and for governance. Telefilm has extremely sound governance, and the board plays a very important role in that.
Senator Rivard: I am very satisfied with your answer, Ms. Brabant. Thank you.
The Chair: Mr. O'Neill, does the Auditor General of Canada have jurisdiction over you? Does he visit you?
[English]
Do they come in and see you on a regular basis as the Auditor General, and how frequently?
Mr. O'Neill: They do, Mr. Chair. The senator referred earlier to the special exam of a few years ago, which the Auditor General can undertake, and the Auditor General is our auditor. For our annual test, the Auditor General works with us.
The Chair: On an annual basis.
Mr. O'Neill: Correct.
[Translation]
Senator L. Smith: You mentioned the success index and the 11 most successful companies. Could you send us a short overview of the success index for the 11 companies and a breakdown of the way that funding was shared among the groups that were the most successful and the other people or production companies in Canada? Would it be possible to prepare a one-page overview?
Ms. Brabant: We would be pleased to provide you with that information.
[English]
The Chair: Unfortunately, we have run out of time. There is a lot of interest in both of our witnesses today.
Colleagues, thank you for your cooperation in getting through our list. On your behalf, we thank the Canadian Museum of History, the Canadian War Museum and Telefilm Canada.
We look forward to receiving your written undertakings as soon as possible so we can get our report in, so we can then approve the appropriations for each of you for the coming year.
[Translation]
For the next part of our session this morning, we will continue our consideration of the Main Estimates for 2015-16.
[English]
From Aboriginal Affairs and Northern Development Canada, we're very pleased to welcome Paul Thoppil, Chief Financial Officer; Scott Stevenson, Senior Assistant Deputy Minister, Regional Operations; and Stephen Van Dine, Assistant Deputy Minister, Northern Affairs.
Mr. Thoppil, we're glad that you are here. You are the only group in this second panel, and we look forward to your presentation.
Paul Thoppil, Chief Financial Officer, Aboriginal Affairs and Northern Development Canada: It's a pleasure to be back before the committee. My colleagues and I are looking forward to this time with you to review the department's 2015-16 Main Estimates.
[Translation]
Before I do, I first want to draw the senators' attention to a document entitled "2015-2016 Main Estimates and Financial Overview," which I have tabled.
The deck provides an overview of the 2015-16 Main Estimates, as well as expenditure information trends for major program areas, and ends with a summary of the demographic and geographic profile of our clients.
[English]
Turning to slide 2, with respect to financial highlights, as presented in the Main Estimates, proposed spending under the minister's portfolio, in 2015-16, is estimated at $8.3 billion approximately and includes Aboriginal Affairs and Northern Development, at $8.257 million; Canadian Polar Commission, $2.6 million; and Indian Residential Schools Truth and Reconciliation Commission at $3.7 million.
[Translation]
On slide 3, it should be noted that the 2015-16 Main Estimates are the first step in the fiscal cycle and do not include additional approvals or funding stemming from Budget 2015. Funding for additional approvals will be accessed through future Main Estimates and supplementary estimates.
[English]
On slide 4, expenditures in the 2015-16 Main Estimates for Aboriginal Affairs and Northern Development Canada comprise: one, about $7 billion or 85 per cent of our funding flows through grants, about 18 per cent, and contributions, 67 per cent; about $1.1 billion or 14 per cent in operating, of which about 36 per cent or $407 million relates to salaries and benefits for about 4,500 full-time equivalents. It should be noted that operating expenditures include statutory and fiduciary obligations of around $530 million; direct program delivery costs of $369 million, negotiation costs of $70 million; and administrative overhead of $164 million.
The remaining funding, less than half a per cent, is for loans for claimants involved in negotiations, $70 million, and for capital requirements, primarily for the Canadian High Arctic Research Station, and software system development of around $36 million.
Slide 5 shows that, of the $8.3 billion departmental spending, $8.1 billion is captured by four strategic outcomes covering 15 programs, with the remaining funding, $234 million, for internal services programs, which support all of the strategic outcomes. It should be noted that the "people" strategic outcome makes up the largest portion of the funding, $4 billion or 48 per cent, and includes the two largest programs, education and social development, with funding at $1.8 billion and $1.7 billion respectively. The "government" strategic outcome accounts for a further 25 per cent or $2.1 billion, and the "land and economy" strategic outcome accounts for 19 per cent or $1.6 billion. The remaining funding is allocated to the North for about $395 million.
In slide 6, overall, the 2015-16 Main Estimates reflect a net increase of approximately $177.8 million, or 2.2 per cent, above last year's Main Estimates. Furthermore, most of the major increases, the only exception being the 2 per cent growth for ongoing First Nation and Inuit programs, relate to items that were not included in last year's Main Estimates but were accessed through the 2014-15 supplementary estimates.
Of note, the 2014-15 Supplementary Estimates (A) included funding for the First Nations Water and Wastewater Action Plan, federal contaminated sites, and comprehensive claims and self-government negotiations.
Further, the 2014-15 Supplementary Estimates (B) included funding for the Canadian High Arctic Research Station and Aboriginal participation in West Coast energy development.
Finally, the Supplementary Estimates (C) included funding for emergency management, the First Nations Infrastructure Fund and the Nutrition North Canada program.
[Translation]
In addition, on slides 7 to 10, we have provided additional information — including expenditure trends and major budget investments — for major program areas. These major program areas — namely education, social development, infrastructure and capacity, and specific claims — account for about $5.5 billion, or two-thirds of the overall $8.3 billion in the Main Estimates.
[English]
In this regard, actual expenditures on education have increased by about 22 per cent over the period 2006-07 to 2013-14, or about 2.9 per cent annually, while actual expenditures on social development have increased by about 28 per cent, or about 3.6 per cent annually, over the same period. Further, actual expenditures on infrastructure and capacity have averaged about $1.2 billion annually over this period, while 125 specific claims, valued at $2.2 billion, have been settled in this time frame.
Finally, the last few slides, 11 to 14, provide an overview of program delivery at the department, as well as outlining the demographic and geographic realities we face: an Aboriginal population that is young — almost half of Aboriginal people are less than 25 years of age — along with small and dispersed First Nation communities across our country.
[Translation]
Mr. Chair, the Main Estimates reinforce our government's commitment to improve the quality of life of aboriginal people and northerners. This funding will strengthen our department's ability to improve social well-being and economic prosperity in aboriginal and northern communities. It will support the efforts of aboriginal people and northerners as they develop healthier, more sustainable communities and participate more fully in Canada's political, social and economic development.
[English]
I look forward to discussing any aspects of the Main Estimates with you, and, together with my colleagues, we welcome your questions regarding my presentation. Thank you very much.
The Chair: Mr. Thoppil, thank you for a detailed presentation. We appreciate getting the slide deck as well. You have been before us before, fairly regularly, because of the supplementary estimates. There were quite a few last year. We're into the Main Estimates now for this fiscal year. Should we expect to see you back again because of significant supplementary estimates, or do you know at this stage?
Mr. Thoppil: It's always a pleasure to be back at the committee.
The Chair: That's why you spread it out.
Mr. Thoppil: I do expect to be back.
The Chair: Thank you. We can expect to see you then.
Senator Eaton: It is a nice morning to see the three of you here again. On slide 11, you say: "About 80 per cent of resources are used to fund programs delivered by First Nations community governments, tribal councils, et cetera. The federal government is committed to providing services on reserves, comparable to those typically provided by the provinces. Provincial standards guide program delivery leading to variability across regions."
Are you being challenged in any way, or what are Aboriginal Affairs and Northern Development's main challenges when you think of those three things you've just said with regard to accountability, transparency and governance? I'm thinking of provincial standards guide programs. I'm thinking of housing or clean water. Are those still challenging for the department, or how are you dealing with them?
Mr. Thoppil: All very good questions. I'll start and then ask my colleague Scott Stevenson to continue. To answer your question at the very beginning, provincial variation in standards does provide an added complexity. That being said, we take the view in principle that residents in a province should be treated the same, so we need to work together with our provincial counterparts in ensuring delivery of programs to First Nations.
Senator Eaton: Are there some provinces where you have an easier time going on reserve or getting better reports than others?
Mr. Thoppil: Every province has a different level of engagement with First Nations. They are not all the same, as we know, in terms of their existing capacity and the degree of —
Senator Eaton: Accountability.
Mr. Thoppil: — accountability or ministerial portfolio, perhaps, and the existing bureaucracy and systems that support that. That being said, we have found in the past recent years a tremendous uptake with our provincial counterparts to engage, understanding the importance of this part of the population in terms of improving their quality of life and their contribution to the economic development of the province.
Senator Eaton: I know this is very difficult, but from our point of view, from the taxpayer's point of view, we hear constant complaints from First Nations: They don't have clean water, they don't have fire engines, their buildings aren't up to code. It's very hard for us when you come here. How is this going to help First Nations in the long run if we can't find out which provinces are really good at accountability and which are not? Which systems are working and which are not?
I'm sure you can sense our frustration when we see all this money going out the door, yet it's like Jell-O on a wall; you can't pin it down anywhere. You can't go on reserves, can you? You can't check housing. Some First Nation communities must be more cooperative than others. Shouldn't they be singled out as examples of something that is working well? All we hear from are the ones that aren't working well.
Mr. Thoppil: I think that's a very good comment, senator. You are totally correct. What you will hear about, primarily through media, are only those First Nations that are not working well, but there are a tremendous number of First Nations that have successes in economic and social development.
I'd like to ask my colleague Scott Stevenson, who is responsible for the regions, to elaborate.
Scott Stevenson, Senior Assistant Deputy Minister, Regional Operations, Aboriginal Affairs and Northern Development Canada: Mr. Chair and senator, if I may, your question gets into accountability, transparency and governance, particularly around areas of water and housing but also infrastructure and sustainable funding for infrastructure.
I think the experience of the department in implementing the policies of the government touch on a couple of areas. One, certainty with regard to standards, as you have explained, is something that in implementing Bill S-8, in relation to clean water for First Nations, we are now in the stage of regulatory development. We're working to take a model that is regionally based and to take into account provincial standards and conditions on reserve and to build those regulations —
Senator Eaton: But will you be able to go on reserve? Who will check that those poor people living on reserve will actually get the standards that we all have outside the reserve?
Mr. Stevenson: Full implementation of that law will require an enforcement and compliance capability. The specific enforcement and compliance capability — who will do it and where — will depend on the jurisdiction. The department is currently working with the provinces, First Nations and other federal departments to arrive at which model will work best in each jurisdiction. For example, the Atlantic region is the most advanced right now in terms of those discussions, and we have four provinces to work with. We're working actively on developing that solution.
Another jurisdiction that's more advanced because it's simpler is the Yukon. South of 60, in the Atlantic, we're the most advanced, and then we'll learn from that and apply it in the other jurisdictions.
We are actively engaged in discussions on the development of regulations in the other areas, such as Ontario, where we have the largest Aboriginal population. We want to be able to get those regulations in place sooner rather than later, but it is a painstaking process.
Senator Eaton: Thank you. I should let me colleagues have their turn.
The Chair: Shall I put you down for round two?
Senator Eaton: Yes. Thank you.
The Chair: Could you clarify: Ontario has the largest Aboriginal community in Canada?
Mr. Stevenson: I believe that demographically, the Aboriginal population in Ontario is larger than any other jurisdiction.
The Chair: I would have thought British Columbia was up there.
Mr. Stevenson: It may be by proportion, as well as Manitoba, I believe. I don't want to put myself forward as an expert on Aboriginal demographics in Canada, but my understanding is that the population served by this department in Ontario is larger than any other region.
The Chair: Could you provide to us a written reply in that regard? It would be helpful for us to have that information.
[Translation]
Senator Hervieux-Payette: I would like to refer to page 8, which deals with housing and the program.
Near my home in Quebec, there are currently five-room homes housing 14 people. There is clearly a major shortage, and it is not simply a question of eligibility.
Was your section also responsible for the issue of home ownership for people living on reserve, as to whether or not they were eligible for ownership? Can they deal with the CMHC? Can they, like in the rest of Canada, buy their homes, especially since the interest rates are at 3 per cent? Has this basic issue been resolved?
Mr. Stevenson: As regards the basic issue, yes. I will give you some data, but the answer may not be as detailed as you would like it to be, if you are looking for a list of all of the aboriginal communities where members can be owners. There are some communities, like Orange, in Saskatchewan, where they have put in place a system allowing community members to buy their own homes and be owners, but the system exists in a context where management for all housing belongs to the community. There are also cases where members have financed and purchased their own homes.
The implementation of this system varies and depends on the governance of each community that is prepared to move in that direction. Policies for property management, such as the CMHC's policies, are in place, but these are initiatives that depend on a partnership. They are possible and we promote them.
In other communities, our programs are based on capacity development and access to finance, in other words departmental guarantees and direct subsidies under our program.
Senator Hervieux-Payette: That does not give me any indication as to how people will be housed in the months and years to come.
My other question deals with the Nutrition North Canada program, to which you have added $14.6 million. Is work underway to ensure that the people who live in Canada's north, who enable us to claim sovereignty over the territory where they live — have access to fresh food at the same price as in any other large Canadian city? You won't solve the problem for 85,000 people with $16 million.
That represents 17.5 per cent of the population, or 85,639 people who live in areas where their food must be flown in. When can we expect to see these 85,000 people be able to eat fresh fruit and vegetables and buy their food at prices that are comparable to prices in each province?
It is completely unacceptable for milk and orange juice, and most products, to cost two or three times more. That causes people to turn to foods with no food value. Do you have a five-year action plan that aims to ensure that these people can eat like all Canadians?
Stephen Van Dine, Assistant Deputy Minister, Northern Affairs, Aboriginal Affairs and Northern Development Canada: Thank you for your question. You have raised a very important point. We began work on the Nutrition North program in 2011, and since the program has been in place, the cost of food has gone down by approximately $27 per month for a family of four.
Senator Hervieux-Payette: What percentage is that?
Mr. Van Dine: In terms of percentages, it is an improvement over the Food Mail program. In terms of comparability with people who live in Montreal, Ottawa, Halifax and Vancouver, there will never be price comparability, because of the fact that it costs a great deal less to deliver food products to large cities than it does to deliver the same products to remote regions.
Consequently, we have focused on how suppliers could offer products effectively so that they are accessible in a situation where the program does not exist.
[English]
So you are right. The cost of milk in many small communities would actually be significantly higher than it is today if the program did not exist. To be able to provide the program with the same cost as it would be for other Canadians in other parts of Canada, it would require a significant reexamination of how we're offering the program.
[Translation]
Senator Hervieux-Payette: There are two options. Either you give the people more money so that they can buy the expensive food, or you pay the transportation costs. I know that Loblaw's delivers goods to the Caribbean. So that company is certainly in a position to deliver to the Territories, except that the cost of transportation is exorbitant and should be taken care of by the federal government, which has the fiduciary responsibility.
People in the Territories should not have to pay the price, because they are the people who are being of service to us and to will eventually enable us to develop the North and to maintain the territorial integrity of this very wealthy part of the country. People from Toronto and Montreal are certainly not going to move there to guarantee Canada's sovereignty in the Far North. That will be done by the inhabitants of these regions, and they should not be punished.
They can no longer feed themselves in the traditional way, and at present, they are in the worst situation. There traditional foods have practically disappeared, and ours is unaffordable. So what do they eat? Potatoes from New Brunswick that must be expensive to deliver by plane, and rice? Foods which, ultimately, are not necessarily good for raising healthy children.
The diabetes rate there is the highest in the country. I urge you to do your homework, to calculate how much it would cost and to submit an evaluation to the Department of Aboriginal Affairs and Northern Development. You should simply accept that it is the Canadian government's responsibility. I do not know any Canadians who would disagree with that.
Mr. Van Dine: The issue is very complex. There are a number of factors that have an impact on the price of food. First of all, the Government of Canada has transferred to the territorial governments approximately 45 per cent of the budget earmarked for programs.
[English]
As a government, through Finance Canada, we transferred to each territorial government, through the Territorial Formula Financing, about 85 per cent of their operating budget. In the case of Yukon, it is just under a billion dollars; Northwest Territories, it is just over a billion dollars; and for Nunavut, it is close to $1.4 billion.
[Translation]
The governments of the three territories are responsible for social programming —
[English]
— income assistance, education, public health — all those factors which do touch on individuals' circumstances.
The Nutrition North Canada works in cooperation with many other programs to increase the access of healthy and perishable foods to individuals, who might not otherwise have access to it.
In addition to that, the program works with the First Nations Inuit Health branch and all the jurisdictions that the programs serves, to ensure that nutrition education programs are offered to increase the level of understanding and technique with respect to how to provide nutritious meals at costs that are more affordable.
Without question there are some people in very dire circumstances living in the North. In the case of Nunavut, the income support payments per family are about $23,000 per individual. As you can imagine, the cost of living in Nunavut is quite a bit higher.
It is performing far better than the previous program in terms of: maximizing benefit to individuals; more nutritious food shipped; and lower prices. We have the program information to compare that to. Again, it is difficult to make the comparison, as you have mentioned, between the larger centres and living in the North. Food costs in Canada have been increasing on average by about 2.5 per cent since the program began, while in the North, that same average has actually gone down because of the program.
So demands are high. The need is high. The program is targeted to nutritious and perishable goods whereas the previous program wasn't. The dollars are working harder and actually producing more, but as you have correctly pointed out, the needs are quite significant.
[Translation]
Senator Hervieux-Payette: Mr. Thoppil, how many aboriginals work at the Department of Aboriginal Affairs and Northern Development? I see that 2 per cent of the departmental budget goes to operations. So how many Aboriginals work in the department?
[English]
Mr. Thoppil: We are the leading ministry in terms of employment of aboriginals in the public service. It hovers between 28 to 30 per cent of the ministry that is Aboriginal.
Senator Hervieux-Payette: I see.
The Chair: Mr. Van Dine, it perhaps would be helpful for us who have an imperfect recollection of the old subsidization program for the North if it were compared to the new program that came in a couple of years ago: Are you able to briefly tell us what the focus difference is?
Mr. Van Dine: Briefly, as I know the committee's time is very precious: the former Food Mail Program appropriated originally from Parliament about $28 million annually, but it spent in excess of $58 million in the last year of the program. That was an overrun.
Various parliamentary committees looked at the former food program, and the department undertook a number of studies to see how that program could be better engineered and structured.
The dominant changes that were made from the former program to this program were the following: Canada Post was the primary delivery agent, and through Canada Post there were subcontracts to a number of airlines to help move the items from here to there. We have changed that model to a direct service relationship between retailers. We're no longer involved with the airline companies. Through that change we have allowed the retailers to determine the most cost-effective way to get goods from the supplier to northerners.
We have seen some positive results on that approach.
The second component was also transportation-related. Perhaps members of the committee will recall that Val-d'Or was a mandatory point of entry into the North. As a result of the way we engineered the program previously, there was a cost associated with getting the goods to Val-d'Or, from Val-d'Or onto the planes and then up North. We have removed the mandatory entry points, allowing it to be much more efficient and market driven.
The third change is that we made it a focus program on healthy and perishable foods. The previous program included all kinds of things. As anecdotal evidence, snow machine parts to ornamental pumpkins were things being shipped by air at the cost of taxpayers. We have put the emphasis particularly on healthy and perishable foods.
We have added a little bit of money with respect to our First Nations and Inuit health programming, having people involved in nutrition education, which didn't exist before.
The final large area I will speak to is around transparency and engagement. With the previous program there wasn't a lot of performance data. There wasn't a lot of information in terms of what was available that one could see on the Internet or by publication, so we did a couple of things. The minister formed the Nutrition North Canada Advisory Board. That advisory board is composed of northerners who have mandatory meetings up to three times a year in each of the areas. We try to hit all of the regions in the North that the program is served by.
We have publications in terms of how we are performing, the performance data on what is being shipped and how much is being consumed. We are using that information.
Since the program began — and I will conclude on this point — it was subject to an internal evaluation by the department. It was also subjected to an internal audit by the department, and both those audit documents and the evaluations were provided to the Auditor General of Canada, who did their own report that came out last November. In many instances the Auditor General confirmed many of the changes we were beginning to undertake were necessary. We are doing that.
The biggest recommendation that the Auditor General made, which we implemented April 1 of this year, is that we have changed the contribution agreement with each of the retailers to require them to make it absolutely clear that profit information and historical profit information needs to be made available to our audit team to ensure that the subsidy is being passed on.
We were very sensitive to that recommendation, and we acted immediately to make sure that our contribution agreements with the retailers were very clear that that requirement be there.
The program has not been around for a long time, as you have pointed out. We have seen some increases in the amount of goods shipped. We have seen prices come down, and we have seen some increased accountability tools being applied to this particular program.
The Chair: Thank you for that summary.
[Translation]
Senator Chaput: I have two questions. The first one, about the Nutrition North Canada initiative, was asked by my colleague Senator Hervieux-Payette. I fully support her comments. I am a member of the Standing Senate Committee on Social Affairs, Science and Technology, where we are studying the issue of healthy foods and possible causes of obesity in Canada. We have heard evidence on this initiative, and the comments are not very flattering. The initiative does not really seem to help people living in the north to eat a healthy diet. I would like to get a better understanding — because we are short on time we would like to receive information in writing — and analyze the difference between the first initiative and the one we are currently dealing with as regards criteria, changes made and outcomes.
After that, I would like you to carry out a very methodical and scrupulous analysis of the initiative's impact on people of this region to make sure that the program truly meets the food needs. I'm not convinced that this program is working. Do you have any comments to make?
Mr. Van Dine: Thank you for your question. This gives me the opportunity to give you a more in-depth answer. A certain number of indices show that the current program works better than the former one. However, you and your colleague mentioned that the demand for healthy food is rather important, especially in northern Manitoba, Saskatchewan, Ontario, and Quebec. That is the reason why it is important to take into account the context in which this program is offered.
[English]
It is responding to a specific requirement to allow retailers to offer goods at a better price than they would be able to otherwise offer.
In terms of the other program suite that is necessary to get at healthy education, healthy early childhood education components or other aspects, there are other programs offered by the province or by the First Nation with which the program operates in cooperation.
As to the long-term impact of the program, it is early days. I believe your question is fair in terms of being able to attempt to measure its impact. At the end of the day we need to know whether it is making a measurable positive improvement on overall health status. We are beginning to collect some of that information, but we will need a bit more time before we're able to determine, in comparison to the former program, the extent of its impact.
Senator Chaput: In your evaluation, will you also be evaluating the retailers themselves? You are working with them, right?
Mr. Van Dine: Yes.
[Translation]
You have raised an important point.
[English]
The Nutrition North Canada Advisory Board is interested in making sure that retailers are not gaining at the expense of the beneficiaries. We are making sure that we have the accountability instruments, the checks and balances, in place in terms of performance audits, other compliance mechanisms to ensure the retailers are doing what they are supposed to be doing and bringing a benefit to their customers.
We have just been made aware of a federation.
[Translation]
The Fédération des coopératives d'alimentation du Québec has implemented a program to make sure that each factor shows the percentage reached under the Nutrition North initiative.
[English]
So they've just started that transparency program. Our advisory board is going to be offering our minister advice on whether that clarity should be rolled out across the country where the program is being served.
[Translation]
Senator Chaput: I have another question that I could ask during second round if we still have the time.
[English]
The Chair: I would assume, to conclude that line of questioning, Mr. Van Dine, that there are a lot of retailers in the North who are pretty much monopolies. There are very few, if any, competitive forces that would help keep the prices down. So you need something else to try to control that, and presumably that's what you are trying to do with this program of requiring the retailers who are involved with receiving subsidies to do some accounting.
Mr. Van Dine: That's absolutely correct, Mr. Chair. Thank you for highlighting that. Yes, there are very few retailers; and of the larger ones that are operating in the remote settings, they're operating in an environment where they have a higher cost structure. That's why there are so few retailers operating; the cost of doing business in the North is incredible when you are taking into account things like heat, fuel, electricity, labour costs and other business costs.
[Translation]
The North West Company gave a presentation to us that compares a Giant Tiger in Winnipeg and a store in the north.
[English]
It compares the cost structure between the two. I think they would be very happy to talk to members of the Senate around the cost of doing business.
The interest for us in trying to counteract transparency questions is to make sure that we have as much transparency as possible about how much subsidy is going out, who is getting it, how much goods are going out as a result of that, and where those payments are going to in terms of the type of food and the random audits we're doing on each of the retailers. We are publishing the results of those audits on our website as well for each of the retailers.
[Translation]
Senator Bellemare: First and foremost, I would like to congratulate you for the slides that you have provided as they are full of information.
I also have a general comment about slide 5 where we see a breakdown of the Main Estimates by general fields. I am taken aback by the numbers that I see and I hope that they will be temporary because we see that certain elements are paired with significant expenditures that, we hope, will not extend into the long term.
I will give you an example and I would like you to comment on it. If the answer is too long, you could always send us a written submission on the subject. In the "Government" section, there are two elements, "Governance and institutions of Government" and "Management and implementation of agreements and treaties." The latter is paired with a $740 million budget. This is a significant envelope compared to "Community economic development" and "Aboriginal entrepreneurship" for example, which are sectors where we would like to see good progress being made but where hardly $300 million has been allocated.
In the "Education" section, we are glad to see a $1.8 million sum. These are small seeds we sow that will produce flourishing results. However, with regard to the general sectors, there is an imbalance that, I hope, is merely temporary, especially when it comes to governance.
I also have a particular question that I would like you to answer even though we do not have a lot of time. It concerns the "Urban Aboriginal Participation" section. Is this $53.5 million sum for aboriginal persons who live off reserves? In slides 12 and 14 I noticed that there are 1.4 million aboriginal people in our country, 500,000 of whom live on reserve. So, if I understand rightly, there are approximately 900,000 aboriginal persons who live in cities. Is this $53 million sum allocated to this significant population that lives off reserve?
[English]
Mr. Thoppil: Many questions, all are valid.
In terms of the money allocated under the government, some of that is actually permanent. It is about self-government agreements, and that is long standing. That's where we want to engage with First Nations to act more on their own in terms of responsibilities, in terms of their functions, in terms of managing the reserves. What we would like to see is an uptick in terms of self-government agreements, as long as they're willing and able, in order to achieve that. That is the agenda. Putting money into the governance and institutions line item is, in fact, temporary — in part, in order to get to the self-government agenda that we're all working toward.
That's the answer. Hopefully I have responded to your first question.
You are also correct, based on what we've provided you: There are a number of Aboriginals living off reserve, and we do provide some programs to assist those people. Obviously, the majority of our money goes toward those communities on reserve.
[Translation]
Senator Bellemare: But did I understand correctly? There are approximately 900,000 people who live off reserve? There are 1.4 million Aboriginal persons, 500,000 of who live on reserve. This must therefore mean that the others live off reserve. The information is on slide 12 and 13. I am trying to understand which populations will be targeted.
[English]
Mr. Thoppil: That's correct. In fact, the number is probably even larger because there are a number of people who don't self-identify.
Senator Wallace: On page 6 of your deck, you indicate that there's a $17-million increase to facilitate Aboriginal participation in West Coast energy development. Can you tell us what is meant by "Aboriginal participation"? Is it to attend meetings, to hear the approval processes and formalized hearings, or is there more to it than that?
It again refers to "West Coast energy developments." What projects were considered when that amount was budgeted? What projects and what participation by the Aboriginal community is anticipated?
Mr. Thoppil: Thank you, senator, for the question. It can be overwhelming for a community when you have a large company or companies come in and explain that they want to do something for which they have no historical or cultural background. It is hard, therefore, to then go through that duty to consult and get their approval in order to do that project that's on their traditional lands, which is a key component.
Therefore, the program aspires to achieve a number of objectives, which is information; education; availability of procurement opportunities in order to maximize their ability to generate economic benefits from the major project; understanding what is essentially just the governance process associated with trying to achieve that approval in terms of environmental assessments; what are their rights under that, and so on.
Then, of course, there are other issues, such as environmental aspects, to make them aware of what may result from the project. What type of projects are we talking about? You may be familiar with a number of LNG projects that are being considered in British Columbia, and those are typically multi-billion dollar projects. That's exactly what this program tries to do; namely, engage Aboriginals to give them an understanding and hopefully get their support in fostering these LNG projects.
Senator Wallace: You describe it as funding the participation in the development. But from what you said, it could also be funding participation that would oppose the development. It would enable people to attend hearings and voice their opinions, which they're fully entitled to do. It seems to position it in a positive way to encourage development, but am I correct that it could also fund opposition to projects?
Mr. Thoppil: The issue is one of education and understanding. If you don't understand, you're most likely going to say "no" right from the get-go.
So the issue is sitting down and understanding what the implications and opportunities are for the community in terms of what a project will bring them. But if you don't bring that education to them or if they start off with the status quo they'll probably say "no," and I don't think that is the objective, either.
Senator Wallace: It's just that you described it not as participation in the process; but as participation in the energy development. That's the point I'm getting to. You're talking about funding participation in the process.
Mr. Thoppil: It's early and ongoing engagement —
Senator Wallace: It might not actually be the development.
Mr. Thoppil: It's about dealing with mitigating concerns on environmental action, creating jobs and growth in the communities, and fish habitat restoration that may be impacted. It's all part of that process of seeking their approval.
[Translation]
Senator Chaput: Mr. Chair, if we do not have the time, perhaps the information could be submitted to us in writing.
On page 6, it is said that there will be a progressive elimination of targeted funding to improve education in the first nations. This is a $133.4 million decrease. How long has this initiative existed? When did it begin? How much money has been spent on a yearly basis up to now? What have the results been? What improvements have been made to first nations education? Do you have tangible examples? Why is it being eliminated and will it be replaced by something else?
The Chair: This is a question with —
Senator Chaput: These are sub-questions.
The Chair: Could you give us a brief answer now?
Mr. Thoppil: Perhaps I could give you a quick answer.
[English]
The economic action plan was a sunsetted program, and like a lot of those programs, they can't continue. In fact, it has continued; Canada's Economic Action Plan 2015 had announced $200 million in terms of the renewal of Strong Schools, Successful Students Initiative and the Education Partnerships Program. As well, $500 million is being advanced toward school infrastructure.
Those items have not yet shown up in the mains, and you will see them, potentially, in future supplementary estimates.
[Translation]
Senator Chaput: But what did this one accomplish? I understand that work is still underway, but what has been done in real terms to improve first nations education thanks to money that has been spent up to now?
[English]
What was done?
The Chair: There must have been a briefing note prepared saying, "We should continue this; this is what we achieved and we should continue."
Mr. Thoppil: We would be pleased to provide that response to you.
The Chair: As soon as you can would be helpful, because we are anticipating doing a report on this to support our position in relation to appropriations.
On behalf of the Standing Senate Committee on National Finance, we would like to thank each of you for being here, for responding clearly to our questions and accepting the undertakings you have given. We've been hearing from Aboriginal Affairs and Northern Development Canada, and we look forward to receiving your other answers.
(The committee adjourned.)