Proceedings of the Standing Senate Committee on
National Finance
Issue 20 - Evidence - May 29, 2012
OTTAWA, Tuesday, May 29, 2012
The Standing Senate Committee on National Finance met this day at 9:30 a.m. to examine the subject matter of all of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures introduced in the House of Commons on April 26, 2012.
Senator Larry W. Smith (Deputy Chair) in the chair.
[English]
The Deputy Chair: Good morning, I hope you all had a nice respite. I know you have been very active during the week.
[Translation]
Today, we will continue our review of the subject matter of Bill C-38, an Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
[English]
I would like to welcome the parliamentary delegation of officers of the Rajya Sabha led by Secretary-General V.K. Agnihotri. The committee is here to visit Canada and to observe our committee this morning. We are very pleased that they are with us and we look forward to speaking with them after.
Honourable senators, we have been given the order of reference by the Senate to study the subject matter of Bill C- 38. This is our seventh meeting, and we are grateful for departmental officials who have tirelessly appeared before us to explain the various clauses of the bill. We continue to thank you for your tireless support, because we have lots of work in front of us.
As we have done in previous meetings, after there has been an explanation of the specific clauses and proposed sections of the relevant part of the bill by one of our witnesses, we will see if there are any questions requiring clarification before moving on to the next.
Our first witness is Ms. Eileen Boyd. We will start at Division 25, the Salaries Act. Ms. Boyd, do you have opening comments?
Eileen Boyd, Assistant Secretary to the Cabinet, Senior Personnel, Privy Council Office: I do, Mr. Chair; thank you. I am here to talk today about the provisions concerning the elimination of the Public Appointments Commission. Clause 468 of the proposed jobs, growth and long-term prosperity act will repeal section 1.1 of the Salaries Act, which provides for the establishment of the Public Appointments Commission, including its mandate and appointment provisions for the commissioners.
[Translation]
In 2006, the power to establish the Public Appointments Commission was incorporated into the Federal Accountability Act, in order to follow up on the government's commitment to increase the rigor and transparency of the Governor-in-Council appointments process.
Over the past five years, the government has significantly improved the rigor and transparency of the Governor-in- Council appointments process, especially as concerns full-time positions and executive positions.
The dissolution of the commission and its secretariat will result in savings of approximately $1.1 million for the fiscal framework during this period of spending reductions.
[English]
Given the progress the government has made in improving and strengthening the appointment system, it was determined that a separate body to review appointment processes was not the best use of public funds at a time when savings are being sought across the public sector.
The Deputy Chair: Are there questions?
Senator Ringuette: Ms. Boyd, since 2006, the PAC has been granted quite a lot of taxpayers' money. Could you identify the total amount of money allotted for this commission, which never really operated?
Ms. Boyd: The commission had an annual appropriation of approximately $1.1 million. During the time that the Public Appointments Commission Secretariat was in place, some funds were expended. You will recall that the Public Appointments Commission Secretariat was first established in April 2006 and was operational for a short period of time. The PACS conducted consultations with a number of federal, domestic and international partners and undertook a review of the appointment procedures for the Immigration and Refugee Board.
However, the secretariat was not operational from spring until late fall of 2007. In 2007-08, the secretariat focused on laying the groundwork for the commission, looked at a number of best practices and developed some policy options. It also conducted research and generally assisted us in the efforts to improve the Governor-in-Council appointment processes.
In the first fiscal year of 2006-07, it spent approximately $632,000. In 2007-08, it spent $113,000, as it was not operational. In each fiscal year thereafter, it spent approximately $300,000: $347,000 in 2008-09; $291,000 in 2009-10; $294,000 in 2010-11; and $130,000 in 2011-12.
Senator Ringuette: That adds up to roughly $1.8 million.
Ms. Boyd: Yes.
Senator Ringuette: I have a series of questions for you with regard to the Privy Council. I understand that you will not have the answers with you but you could provide them to the clerk of the committee for distribution to the members of the committee.
How many employees in your department got a notice letter of layoff, by classification? How many went to EXs and how many went to DMs? How many staffers in your department are not under the Public Service Employment Act and under what classification? What is the cost in your department for program management; i.e., what is the total for salaries, expenses, bonuses, et cetera, for the management level of your department and programs? Could you provide that as a percentage of the total?
I also would like to know about the different classifications at the Privy Council Office. In last year's budget, what was the total bonus amount paid to what classifications? By "bonus, " I mean the regular bonus plus the at-risk pay that Privy Council officers likely have access to.
Ms. Boyd: Thank you.
Senator Callbeck: Thank you for coming this morning.
This Public Appointments Commission that spent $1.8 million was set up in April 2006. As I recall, when that was set up under the Federal Accountability Act, there was a lot of fanfare about it, and it meant that government was going to be more transparent and accountable. You say that there was a lot of research done here and consulting other governments and so on. Am I to take it that the government came to the conclusion that it was a mistake to set it up?
Ms. Boyd: While the commission had not been established, the Public Appointments Commission Secretariat undertook to do research and analysis looking at best practices. That information was shared with the Privy Council Office, which has the responsibility of supporting the Prime Minister and cabinet in Governor-in-Council appointment processes. A number of improvements were put into place since 2006, and perhaps I can provide a few examples that will indicate to you how the appointment system has been strengthened and improved.
We now publicly advertise the recruitment and selection processes for leadership and full-time positions. We have a dedicated website, a Governor-in-Council appointments website, that not only identifies the vacancies that are upcoming but also provides a wealth of information with respect to all of the GIC positions and appointees that the government has made.
We have also enhanced training and orientation for appointees so that they understand their obligations. The Prime Minister has set out in accountable government his expectations with respect to public office holders, both from ethical and political activities, and also with respect to the fact that the government wishes to have Governor-in-Council appointments represent the diversity of this country.
A number of improvements have been put into place as a result of the work that the secretariat did share with us and helped us at the Privy Council Office to review our processes and look at ways in which we could improve the rigour of the process that we have in place.
With respect to some of our part-time positions, if you will note on our public website, for example, for Crown corporations, each Crown corporation board is expected to identify a profile that sets out the skill sets and the requirements that are specific to that particular board and the types of expertise that that board should identify. This is to guide the minister and the officials in filling any gaps or skill sets that are required by that board.
Senator Callbeck: I remember asking a witness at this committee a while ago, and I cannot remember who the witness was, about this commission. They indicated that the commission had done several reports. I asked if the committee could get a copy of those reports and, to my knowledge, we have never received them, or I have never seen them. Would it be possible that you forward those reports to the committee so we could see what they spent the $1.8 million on?
Ms. Boyd: I believe you are perhaps referring to a question that was put forth to the Privy Council Office with respect to the reports and the information that the Public Appointments Commission Secretariat had undertaken. One of the key pieces of information was a report entitled The Governor-in-Council Appointments Process: Immigration and Refugee Board of Canada, which undertook a review of the appointment processes for the IRB. I believe we have already provided that information to the Senate, but of course we could certainly provide it again.
There were some best practices that the secretariat had undertaken. They did, for example, a comparison of various jurisdictions, and we would be happy to share that information with the committee.
Senator Callbeck: You will see that the reports come to the committee?
Ms. Boyd: Certainly.
The Deputy Chair: Do you have a supplemental? Very quick.
Senator Ringuette: From what you are saying, Ms. Boyd, am I to understand that there is only one report, or are there many reports?
Ms. Boyd: There is one official report.
Senator Ringuette: There is only one official report in the last five years?
Ms. Boyd: In terms of an official report when the secretariat was operational it was in the first year of operation.
The Deputy Chair: What I understood you said fairly clearly is that many steps have been taken, such as public advertising, website, all the GIC appointments, enhanced training and skill sets, so there has been a major learning that has come forth from this experience, like best lessons, best practices; is that correct?
Ms. Boyd: That is correct, Mr. Chair.
The Deputy Chair: It would probably be summarized in a major report?
Ms. Boyd: It would not be summarized in a specific report, but all of that information is available on our public website in terms of guidelines and best practices and in terms of the information that is put on there for each of the organizations. There is not one particular report that outlines all of this information that I have talked about.
The Deputy Chair: It augers well for the future in terms of establishing a management practice list, if you would like, that could be utilized.
Ms. Boyd: Certainly, Mr. Chair.
Senator Runciman: I thought it might be important to lay out what happened here from my perspective, anyway. The government appointed a very prominent and distinguished Canadian to head up the commission. This was during the minority years. He was, to be polite, put through the wringer by the opposition parties and his appointment ultimately blocked by the opposition parties in a minority government. Under those circumstances, the government had to look at other options in terms of making the public appointments process more open and accountable. I think that is what transpired here. I think it is certainly justifiable, given the rejection of a more accountable public appointments process by the opposition parties of the day. Would you agree? I am hoping for a "yes. " Have I summarized that reasonably well?
Ms. Boyd: The government did establish the commission in 2006, but, as you indicated, when the chair's appointment was rejected by the Government Operations Committee, the other commissioners who had been appointed resigned and the commission was put into abeyance.
Senator Runciman: Right. It was in limbo because of the resistance to having a more public appointments process.
Senator Peterson: Further to that, had the individual who had been selected been approved, do you think this commission would still be in existence today, or was the end objective of the commission to reach the same conclusion that you have given us today?
Ms. Boyd: I cannot speculate on what might have transpired had a commissioner been appointed. I can say that we have put in place a number of processes to strengthen the appointment system since 2006, and I believe that the rigour and the transparency of the system have been improved significantly.
Senator Peterson: What you are saying, then, is that the Public Appointments Commission was not really necessary in the first place because of what you have explained today. In light of the rigour and the transparency and all the reasons you have given us today, it really was not necessary in the first place.
Ms. Boyd: It is not up to me to speculate on what the government's policy approach is or would have been. I can certainly tell you that with the improvements that have been made, particularly with respect to the transparency of the system and with the information that has been made public on our public website, I believe a number of improvements have been made to the appointment processes, and we will certainly continue to look for ways to improve the processes, as all government departments do.
Senator Gerstein: Thank you, Ms. Boyd, for being in front of us. I appreciate Senator Peterson's trying to anticipate what somebody else might have accomplished. If you go back and look at the fact that the government has significantly strengthened the process as you have outlined with the transparency and the website, is there anything from your perspective that you would view that you might have anticipated might have come out of the process that in fact is not happening today and that you would like to see happening?
Ms. Boyd: There are always ways to improve processes.
Senator Gerstein: Absolutely.
Ms. Boyd: The Privy Council Office, in support of the government and its Governor-in-Council appointments process, will certainly continue to look for ways to improve our processes, ways we can help the government continue to contribute to its objectives.
Senator Ringuette: Ms. Boyd, I hate to put you in this position because you have nothing to do with the politics of the current government. However, I would like to say that if it was such a good idea, now that the government has a majority government, why is it removing this supposedly very transparent process from happening?
Senator Runciman said earlier that because it was a minority government the process of transparency, accountability and so forth was denied by the opposition. Now that the government has a majority, why is it removing this very important process in appointments?
You cannot have it both ways. You cannot blame the opposition for this office not moving ahead because you are in a minority and then, once you are in a majority, remove it from the books.
The Deputy Chair: Is there a question or a comment?
Senator Ringuette: Perhaps Madam Boyd would like to comment.
The Deputy Chair: Would you like to answer the comment or make a statement to the comment?
Ms. Boyd: Perhaps I could indicate that it is up to the government to establish its policies and to have established the commission.
I can say that given the significant improvements that have taken place, which the commission and its secretariat I believe had been originally intended to achieve, the government determined that, at this point, it was not the best use of funds, given our current situation.
Senator Callbeck: You say there was no commissioner and there was no commission, but there was a secretariat that spent $1.8 million. Where did they take their direction from? Who told them what to do if there was no commissioner or commission?
Ms. Boyd: The Public Appointments Commission Secretariat was set up as a separate agency of government. There was a deputy executive director who was responsible for managing the secretariat. The purpose of the secretariat was to essentially undertake work for the eventual establishment of the commission. Therefore, the mandate of the commission as set out in the Salaries Act indicated that there would be a number of elements to it.
The secretariat certainly undertook to try to prepare for when a commission was to be established in terms of looking at, as I mentioned, best practices of other jurisdictions. Additionally, there was to be an eventual code of practice that is set out in the legislation. Therefore, they were working towards identifying what could be various elements of that code of practice.
Over the five or six fiscal years that the secretariat was in place, they did undertake to do the work that was necessary to support a commission.
Senator Callbeck: You say that there was a deputy director in charge of the secretariat. To whom did that individual report?
Ms. Boyd: The deputy executive director had the responsibility for overseeing the management of the secretariat. As a separate entity or as a separate agency, it was within the Privy Council portfolio, and as such, that secretariat was part of —
Senator Ringuette: It reported to Wayne Wouters.
Ms. Boyd: It reported through the clerk to the Prime Minister.
Senator Runciman: In the budget, there are a number of consolidations of agencies, boards and commissions. What is the impact, if the budget passes, with respect to the number of total public appointments across government?
There is a reduction. We had testimony last week with respect to a number of pretty significant changes.
Ms. Boyd: Unfortunately, I do not have that information with me, but I would be happy to see what I can provide to the committee.
Senator Runciman: Would you agree it is a fairly significant reduction?
Ms. Boyd: In terms of the organizations that have been identified within the budget, there are certainly a number of organizations that have either been eliminated or situations where there has been a reduction in the number of GIC positions, yes.
The Deputy Chair: Thank you very much, senators. Ms. Boyd, thank you for a good opening to our session this morning.
Ms. Boyd: Thank you, Mr. Chair.
The Deputy Chair: We will move on to Division 26, if I understand correctly, the Seeds Act. That is on page 322, I believe, or page 323. Representing this group, we have Ms. Colleen Barnes and Mr. Michael Scheffel. Would you folks identify where you are from and your positions, please?
Colleen Barnes, Executive Director, Domestic Policy Directorate, Canadian Food Inspection Agency: My name is Colleen Barnes. I am the Executive Director for Domestic Policy at CFIA.
Michael Scheffel, National Manager, Seed Section, Canadian Food Inspection Agency: I am the National Manager of the Seeds Section at CFIA.
[Translation]
Ms. Barnes: Thank you for the opportunity to speak today concerning the proposed amendments to the Seeds Act.
[English]
I wanted to start by mentioning that none of the changes proposed here regarding the Seeds Act have any effect on our strong food safety system in Canada.
In general, the amendments that we are proposing would provide the legal authority to license private persons to carry out seed crop inspections in support of Canada's seed certification program. The amendments also provide the legal authority for CFIA's oversight of these persons.
I would like to explain that this would apply only to non-safety aspects of inspection. The CFIA will not use private persons to fulfill any of its safety-related functions, such as inspections related to plant health or plant pests.
I can go clause by clause, but maybe I will stop here and see if the committee has any questions.
The Deputy Chair: Could I ask one simple question to start? Could you maybe explain what "licensing private persons " means?
Ms. Barnes: Absolutely. Right now, the Canadian Food Inspection Agency inspectors perform the inspection of the seed crops so that they can be certified. We are proposing that we would move to an alternative service delivery approach where a private sector entity would perform that function.
The Deputy Chair: Okay.
Senator Ringuette: Will we be going clause by clause?
The Deputy Chair: Would it be helpful to go clause by clause?
Senator Ringuette: Yes, please.
Ms. Barnes: I will start with clause 473. This amendment provides authority to enable the Governor-in-Council to make regulations respecting licenses that authorize a person to perform any activity specified in the license under the official supervision of CFIA. The licences related to controlling or assuring the quality of seeds or seed crop would be issued by the president of CFIA. The amendment is required to authorize licensed persons who are not designated as CFIA inspectors to conduct that seed crop inspection activity on behalf of the agency.
The next part is paragraph 4(1)(j.1). This amendment provides authority to enable the Governor-in-Council to make regulations requiring private persons to whom the Seeds Act applies to prepare and maintain records and to specify the information in those records and the manner in which the records are to be maintained. Explicit authority to enable the Governor-in-Council to make regulations to require those private persons to then provide that information to CFIA is also provided in that provision. We need this authority so that CFIA can adequately supervise the persons who will be those alternative service delivery providers.
Clause 474 is an amendment where the explicit authority for the president of CFIA to issue a licence to authorize private persons to perform that activity is contained.
The last clause is simply a coordinating, administrative clause.
Senator Buth: Thank you very much for being here today. I have a couple of context questions and then I want to ask you about the alternative service delivery.
First, what does the Seeds Act cover? What is the purpose of the Seeds Act?
Ms. Barnes: The Seeds Act ensures that we have a regime in place to ensure the safety of the seeds, but it also covers the quality aspects. In this context, we were able to regulate the quality of the seed itself and the extent to which it performs and does what it says it will do.
Senator Buth: It is providing assurances, then, to farmers that they are getting a quality product when they are planting seeds?
Ms. Barnes: That is correct.
Senator Buth: I understand you are currently conducting some pilot projects.
Ms. Barnes: That is right.
Senator Buth: Can you describe those pilot projects, and can you comment on what your experience has been and whether or not there have been any issues?
Ms. Barnes: For the last 15 years we have had two pilot projects going with hybrid corn in Ontario and hybrid canola in Alberta. As of last year, we were doing a soybean crop pilot project as well. These projects have gone very well, and I think the length of time for the first two is evidence of that. We have been learning a lot through that process, which has convinced us that we could take this beyond these pilot projects.
The lesson learned coming out of our experiences has been that we need to ensure that whoever the private entities are that are taking over this activity are well trained and supported. We also know that we have to ensure that we maintain our oversight and our audit function to ensure that the alternative service delivery is being done appropriately.
Senator Buth: How will you do that?
Ms. Barnes: If we make this change, we will now be able to develop the protocols we need to put in place to ensure that we are periodically checking in on the alternative service providers. We also have in these changes regulation- making authority, should we need it, to require certain things, such as reporting on the part of the alternative service providers.
Senator Buth: I want to confirm, then, that this does not have anything to do, as you mentioned, with health and safety; this is related to inspection of the crops to ensure that the seeds that are being produced are quality?
Ms. Barnes: That is right.
Senator Runciman: I am curious about the pilot projects you have been operating under for 15 years. What authorization was required for those pilots?
Ms. Barnes: They were pilot projects and we were able to do them under the strength of our authorities under the Canadian Food Inspection Agency Act. We have a fair bit of authority there to enter into agreements with folks. When it becomes something that we want to do more systematically, then we needed to make the legislative change to support that.
Senator Runciman: This will be broadened to cover all seed crops. You talked about ensuring that the deliverers of the alternative service will be appropriately qualified. It strikes me that there would not be an awful lot of people in Canada who would meet that criterion.
What is the situation with respect to being able to implement this? You say 2014. How many people will be involved? Is this a company or companies that enter into a contract with CFIA? How does that process work?
Ms. Barnes: On this one, it would be someone we would actually license ultimately. However, I take your point. I think that is part of the big work we have to do over the next couple of years, namely, to develop that capacity in the private sector to undertake these activities.
Senator Runciman: I am assuming there is some kind of savings to the taxpayers with respect to this process.
Ms. Barnes: Yes. These would be activities our inspectors would no longer have to perform. It comes to about $700,000 a year that we would save.
Senator Eaton: What kind of qualifications would you expect someone to have whom you would charge with seed inspection? Have you developed those criteria?
Mr. Scheffel: I can answer that. Yes, we have. We currently have a system and procedures in place for certifying our own employees as competent to provide the seed crop inspection service. The private sector service providers would be recipients of the same kind of training and checking on an ongoing basis as our own inspectors have currently.
Senator Eaton: Can you tell me a bit more about the training and educational background they would have?
Mr. Scheffel: Certainly. Most of our inspectors would be people who would have some kind of a farm background. This is what generally led them to that career, working in agricultural product regulation. Many of them would be familiar with botany, the growth habits of plants and being able to identify plants in the field, including weeds and other crop kinds that are part of the inspection process.
The actual seed crop inspection itself is a fairly detailed walk through a crop, examining closely thousands of plants at different points in the field to determine that in fact that subpopulation is relatively uniform as to the varietal characteristics, and so on.
It is not impossible to train someone in a fairly short period of time if they have a basic understanding of plants and how they grow, particularly if you are licensing someone to inspect only one crop. In certain parts of Canada there would be a lot of soybeans, for example, in southwestern Ontario. That is the major seed crop grown there. A couple of days of classroom training, followed by three to five days of the student actually following an inspector as they go into fields to inspect them is enough basic training to set them out on their own. We then continue to monitor them at a 20 per cent level, going down to 15 per cent and 10 per cent as they demonstrate their competency in performing those inspections.
Senator Nancy Ruth: I also want to ask about these test programs you are doing. How many acres are under cultivation for each of these tests, whether it is corn or canola? Are they corporate entities or private farmers? How do you put it together? Can you tell us a bit of a story about it?
Mr. Scheffel: Sure. I have a bit of information here. For example, for corn there are approximately 20,000 acres of hybrid seed corn production in Ontario every year. Approximately 90 to 95 per cent of that seed corn production has been inspected for the past 15 years by the hybrid seed corn companies themselves. Many of these companies are fairly large, integrated companies that have hybrid seed corn production not only in Canada but around the world. Several of them, I believe, are ISO 9000 registered companies, so they are committed to quality management within their own organization.
What happens during a seed corn production is that you have to have a team of people who go into the fields to manage the quality of the plants during the summer. Sometimes you have to detassel the female plant to ensure that the pollen from the female is not contaminating the seed production. You are looking for just the male pollen to come on to there.
These companies already have teams of agronomists who are working in the field. About 15 years ago we gave them training to perform the actual inspection for the pedigree certification purposes. It involves completing a form and submitting it to the Canadian Seed Growers' Association, who is our partner in managing seed certification in Canada. They keep all of the records and issue crop certificates for fields that have passed the standards, basically, of procedures for production. In that case, it is what we call a "first party inspection, " where the seed corn company actually owns the seed that is planted, a seed grower is managing the crop, and the company is in there with the seed grower managing the crop.
We have approximately 60,000 acres of canola production mostly concentrated in the Lethbridge area of southern Alberta. Again in that situation, a handful of hybrid canola companies own the hybrids. Instead of them doing the inspections, they have hired an independent third-party company that is a seed laboratory for most of the year and during the summer months, when they are not testing, they redeploy their employees as seed crop inspectors for hybrid canola production. The company has a documented quality management system that is audited by CFIA. All of the inspectors are trained and evaluated by CFIA inspectors. We monitor their inspections at a level of approximately 10 per cent to 15 per cent throughout the year.
Senator Peterson: Thank you for your presentation. You prepare a list of qualified inspectors. Do you call them on an as-needed basis to do some inspections?
Ms. Barnes: They will have to be licensed by the president of CFIA to undertake this alternative service delivery.
Senator Peterson: They will wait until they get a call from you to go out and do an inspection and then go back to their offices. Is that the way it will work? I am trying to figure out how you will save $700,000.
Ms. Barnes: The people doing the inspections go into the field and look for the weeds and the discrepancies in the variety. It is our inspectors now who are writing the reports and sending them to the Seed Growers' Association. The decisions are taken from there. Under the bill, a private company, not our inspectors, will do that work. We will save the money because they can be redirected to more of the safety elements on the seed inspection.
Senator Peterson: Who pays these private inspectors?
Ms. Barnes: That would be the farmers.
Senator Peterson: You are going to transfer the cost to the farmers. You are doing it now for the farmers, but the private inspectors will do it and charge the farmers. Is that how it will be?
Ms. Barnes: There are user fees associated with that activity when we perform it as well.
Senator Peterson: The $700,000 was net of the user fees.
Ms. Barnes: Yes.
Senator Peterson: That is interesting. Will this initiative have any implication for the seed labs in Ottawa and Saskatoon?
Ms. Barnes: This initiative has nothing do with the seed labs.
Senator Ringuette: Ms. Barnes, I will start with my usual series of questions: How many employees in your department got a notice letter of layoff by province and by classification? How many of those letters were sent to EXs and how many to DMs? How many staffers in your department are not under the Public Service Employment Act and under what classifications? What is the cost in your department for program management; i.e., what is the total for salaries, expenses and bonuses for management level of your department and programs? That should be provided also as a percentage of the total.
Will there be a cost to certify an inspector? Will there be a cost for the licence?
Ms. Barnes: I do not know that we have thought through that there would be a cost for the licence, yet. There will be a number factored into training the alternative service delivery providers. That cost will be incurred by CFIA. Our savings were net of that expectation.
Senator Ringuette: How many crop inspectors will be laid off that are doing the specific jobs now?
Ms. Barnes: I do not have any numbers.
Senator Ringuette: How many seed inspectors do you have? You should have that answer because this is specific. If you can say to the members of this committee that you will be saving a net $700,000 a year, you should be able to tell us how many people this will involve.
Ms. Barnes: We will have to get back to you with that number; we do not have that one.
The Deputy Chair: Please get back to us with that.
Senator Ringuette: This is very disappointing. This has been a recurring issue since we started to look at Bill C-38. People in your department, like in any other department, have been receiving notices in the various classifications. You come here and tell us that you will be saving $700,000 a year without being able to say how many crop inspectors that will affect. How did you come up with that number? I am sorry but "$700,000 net " does not come out of thin air. The figure must be generated. There must be studies done. You are telling us that as of yet you do not know whether you will be charging these inspectors for their certification from the president. I am questioning the issue of the information that is provided to the members of this committee and the seriousness of that.
The Deputy Chair: Can you ensure that you get the appropriate information, please?
Ms. Barnes: As soon as possible.
Senator Callbeck: Thank you for coming here this morning. With regard to the saving of $700,000, how much do the farmers currently pay in user fees? What is the total figure?
Mr. Scheffel: Currently in total, the seed growers pay approximately $1.1 million per year for the seed crop inspection services that they receive from CFIA.
Senator Callbeck: Did you say $1.1 million?
Mr. Scheffel: Yes.
Senator Callbeck: My understanding is that this proposed legislation will turn all inspection of seed crops over to the private sector from CFIA. Is that right?
Mr. Scheffel: The bill enables the president to issue licences authorizing private persons to inspect seed crops for the purposes of seed certification officially by the government at the end of the day. However, it is not entirely certain that that means 100 per cent of seed crop inspection in the future will be done by private persons.
Senator Callbeck: Farmers are paying $1.1 million. After the private inspectors take over, what will it cost the farmers?
Ms. Barnes: We do not have that number.
Senator Callbeck: Can private inspectors charge whatever they want?
Ms. Barnes: A market-driven service will be provided.
Senator Ringuette: On a supplementary, how many private sector operations currently provide that kind of service? Could you name them?
Ms. Barnes: In the context of our pilots, we would have that information to provide to you.
The Deputy Chair: Can you provide that to the clerk if you cannot provide that to us now, please?
Ms. Barnes: Yes.
Senator Callbeck: Getting back to the saving of $700,000, I take it from a question by the chair that you will provide the information to the committee to show where you got that $700,000. Is that right?
Ms. Barnes: As soon as we can, yes.
Senator Callbeck: Who asked for this? Is this the idea of CFIA or has there been a call for change? Has a parliamentary committee recommended this? Has there been any consultation with the people involved? Where did this come from?
Ms. Barnes: In the context of our budget deliberations, we were focusing or concentrating on our core mandate at CFIA, which related to food safety and plant and animal health. When we looked at the seed certification activities, it is all quality related. It enables our seed producers to access markets. It was not related to the safety of the products at all. Given our theme that we were following, it made for a proposal that we wanted to look more closely at. You add to that that we had pilots that had been running for quite some time and a more recent one as well that seemed to be well received by industry and seemed to be working well. When you have a private alternative service deliverer available, sometimes they can get there faster than the CFIA could, given the other priorities that we had. Those were the factors that led us to propose it and for the government to decide that this was a worthwhile change to make.
Senator Callbeck: CFIA decided this on its own. In other words, there were no consultations?
Ms. Barnes: There would have been consultations as we worked on the pilots. Those were done closely with industry. This is not a novel idea for farmers or in this area. It is an area where we actually have a lot of alternative service delivery approaches.
Senator Callbeck: I come from Prince Edward Island. Potatoes are the main crop. Would the farmers have been consulted on this in my province?
Mr. Scheffel: First, this does not apply to seed potatoes.
Senator Callbeck: It does not?
Mr. Scheffel: No, it does not. It is only for agricultural field crops that originate with seed as opposed to seed potatoes. The authority could apply to seed potatoes, but it is not part of CFIA's plan to withdraw from seed potato crop inspection, large parts of which are related to the disease status of the plants in the field in addition to the varietal identity and varietal purity of the plants in the field.
Senator Callbeck: I have one more question on the training of these private sector inspectors. Did I understand you to say that CFIA will be doing that?
Ms. Barnes: Yes.
Senator Callbeck: I am reading here in notes where it says that on May 17, while appearing before a committee in the other place, Neil Bouwer, Vice-President Policy and Programs, CFIA, insisted CFIA will make sure that the private sector inspectors will be adequately trained but not necessarily by CFIA personnel. There seems to be some confusion here.
Mr. Scheffel: I would suggest that, in the first instance, the training will definitely be done by CFIA because, in the early stages of the evolution of this program, from 95 per cent delivered by official inspectors to, perhaps, the opposite, in the first few years, it will be necessary for CFIA to do the training, followed by evaluation and licensing of these persons.
As a body of competent, private sector inspectors develops, it will be quite possible for companies who are providing seed crop inspection services either as a third party or as a second party for their contract growers and so on to have the capacity to train their own people. At that point, it would not be as necessary for CFIA to actually provide hands-on training, but we will still be involved in the evaluation of those people and for the licensing of those people and for the ongoing, onsite verification of the services that they are providing by conducting check inspections at a specified level.
Ms. Barnes: If I could add to that, that is why, in the proposal here, the president can put conditions on the licence. We also have the regulation-making authority to prescribe certain characteristics that these alternative service delivery entities should have.
Senator Callbeck: If you are going to do the training, what is the anticipated cost of establishing and maintaining this training? Is that factored into this $700,000?
Mr. Scheffel: I cannot recall exactly if it was a specific line item. Currently, we do this training in any case. Every year, we have attrition and people who move on to other jobs. Every year, we are providing training to our own inspectors, whether it is new inspectors coming into the program or refresher training for inspectors who have been there for a long time. Procedures change over the years, and we need to incorporate those changes into our training. We do have people who are certified crop inspectors at the highest level that are also recognized as trainers and trainers of trainers and so on. We do have a very robust and excellent system of training of people currently in place.
The Deputy Chair: Mr. Scheffel, if there is an incremental cost to training related to Senator Callbeck's question, please send any pertinent information to the clerk. Would that be helpful?
Senator Callbeck: Yes. Thank you.
The Deputy Chair: We will move to a quick second round with Senator Buth.
Senator Buth: I want to follow up on consultation, because my experience with the CFIA in terms of the seed section has been that you consult long and often, to the point where people do not want to be consulted anymore. In terms of the two pilots that you have been running, did you consult with the Canadian Seed Growers' Association, and what was their response in terms of the pilots? I have a follow up to that after.
Mr. Scheffel: Yes, certainly. Originally, when the other two programs were first implemented, it was a pilot project that was actually first discussed at an international standards organization called the OECD Seed Schemes. This is a program under the Organisation for Economic Co-operation and Development. That is an international organization of governments that come together to discuss international standards for seed certification in order to facilitate the international movement of seed.
It was at the OECD Seed Schemes 15 years ago and more where the first discussions and then changes to procedures were implemented to allow for countries to recognize each other's systems and procedures for enabling the private sector provision of services under official oversight that would still result in the official certification of seed at the end of the day.
The Canadian Seed Growers' Association often accompanies CFIA when they attend meetings of the OECD Seed Schemes and they were present at the time, before and after, some of those decisions were made. They were a close partner of ours in implementing both the hybrid corn and hybrid canola seed production programs that we have in place today.
Senator Buth: Did they express any concerns in terms of starting and implementing these pilots?
Mr. Scheffel: No, not at all. There were concerns, obviously, that we needed to do it right, that we needed to have proper oversight and that it was not a matter of just letting people do it and then walk away from it. That is why we do have fairly strong measures in place for the oversight and control of these entities doing these kinds of inspections.
Senator Buth: If you decided that you wanted to take a look at alternative service delivery, then, for wheat or oats or barley, who would you consult with before initiating a licensing program for the inspection of those crops?
Mr. Scheffel: In the first place, the Canadian Seed Growers' Association is a partner with us. We have been working, as the federal government, with the Canadian Seed Growers' Association for more than 100 years for the purposes of improving crops and varieties and procedures for their production in Canada for the benefit of Canadian agriculture. We have a long and successful relationship with the Canadian Seed Growers' Association. Since they are co-managers of the system, we work closely with them and we have been meeting regularly with them for the past six weeks.
The second group would be representatives of the Canadian seed trade. The Canadian Seed Trade Association is the organization that represents many people involved in the Canadian seed trade. They, too, have been meeting with us and the Canadian Seed Growers' Association for the past six weeks on an almost weekly basis to talk about the preliminary design of this program as we work together to develop it and then to implement it over time.
Senator Buth: Thank you very much. I just have a comment that, frankly, I am really glad to see this kind of initiative. Having worked in the agricultural industry, I think that this is the right direction to go in, especially in non- safety related areas.
Senator Gerstein: Thank you, chair, and thank you, witnesses.
As you know, every department has been challenged by the government to be more effective and efficient. This is never an easy process. Is there anything in the process that you have gone through that resulted in the $750,000 savings that concerns you or that, in your view, should concern Canadians?
Ms. Barnes: No, there is nothing here that concerns us. We are very confident that with the support we will provide on the alternative service front, the service will be as good as CFIA doing it itself. Again, we are staying focused on the food safety, the plant health areas and making space for the private sector to take over.
Senator Ringuette: Earlier, you indicated that there was already a hybrid seed company doing its own quality testing of seed. Do you certify their inspector or do they certify their own inspector?
Mr. Scheffel: We certify their inspector, or authorize their inspector to do that inspection and to complete the form that is then submitted to —
Senator Ringuette: And that is necessary because the international community wants to have the certification from your department instead of a private sector person. Therefore, the mechanism that you are now putting forth is that you will take the certification of the person that does the inspection on behalf of the private sector. If there is a fault in the inspection process, it will rely on the inspector that has been certified by you internationally; is that not right?
Therefore, all the problems related to seed inspection internationally will rely on certification that the licensing that your person designed by your president will assume?
The Deputy Chair: What is the question, senator? What are you asking directly?
Senator Ringuette: Right now, there is a process involving the private sector that develops seeds and exports seeds and internationally requires your certification — the credibility of your department in regard to certification of these exports, internationally. I am questioning now what the result will be, internationally, if it is no longer backed by your department but only by the fact that all the inspectors from the private companies are certified by you instead of the product, per se, being certified by your agency.
Ms. Barnes: These private sector individuals we certify will be licensed by us. As Mr. Scheffel has described, there is a long-standing international approach where using the private sector and then being certified by us is acceptable, and we certify whatever we export. All we are talking about here is just the quality of the seed — the seed certification.
Senator Ringuette: There is a seed export happening.
Mr. Scheffel: Yes, there is over $100 million worth of seed export happening, and Canada has an excellent reputation for high-quality seed in various places around the world.
Senator Ringuette: Is the $700,000 yearly savings worth that $100 million worth of export trade in the seed industry? I guess that time will tell.
The Deputy Chair: The question appears to be regarding the impact of changing the certification process. Is it a wash? Is it positive, negative or neutral? What is your assessment?
Ms. Barnes: We do not think it will have any impact on our international markets whatsoever, and this approach is well recognized in the international community.
Senator Peterson: What is the total contribution of CFIA to the $5 billion expenditure reduction? How many dollars?
Ms. Barnes: I think in about year three, it came up to about $50 million.
Senator Peterson: Total? Is that for all departments?
Ms. Barnes: The total is $56 million.
Senator Peterson: Can you provide a breakdown of that? I do not know if we will see anybody else from CFIA in this process, so please provide a breakdown of which departments this impacts.
Ms. Barnes: Okay.
Senator Eaton: Other activities, including sampling, testing, labelling and grading of seed, are all carried out by private persons trained by you, or with the qualifications you approve of, and there has been no problem.
The Deputy Chair: Is that all for questions? If so, we thank you very much for your input.
We are moving on to Division 27, Statutory Instruments Act. Representing Public Works we have Ms. Lyne Tassé.
[Translation]
Ms. Tassé, do you have any comments to add? We have three clauses to examine.
Lyne Tassé, Director, Canada Gazette Directorate, Public Works and Government Services Canada: Yes, thank you. Clause 27 of the bill provides for amendments to the Statutory Instruments Act. First, clause 476 of the bill seeks to delete section 13 of the Statutory Instruments Act.
Currently, the Canada Gazette is published in both print and electronic format. Public Works and Government Services Canada is seeking to publish the Canada Gazette solely in electronic format. Elimination of the print copy would save on printing and distribution costs, prevent duplication between the electronic and paper formats and allow the government to respect its commitment to sustainable development.
The information contained in the Canada Gazette is now more effectively disseminated in the form of an electronic publication which is easily accessed, practical for readers and respectful of the environment. Therefore, the requirement to deliver the print copy to senators and members of Parliament and to sell the print copy of the Canada Gazette to the public must be eliminated from the Statutory Instruments Act.
Second, clause 477 of the bill provides for a technical amendment. It seeks to replace the term "printed " with the term "published ", which has a broader meaning. In fact, the term "published " is used in other provisions of the Statutory Instruments Act.
[English]
Senator Ringuette: Ms. Tassé, since you may be the only person from your department in front of this committee, I have the following questions for you, and you can follow up with the clerk for the answers.
How many employees in your department got a notice letter of layoff, by province and by classification? How many of these letters went to EX and how many to DMs? How many staffers in your department are not under the Public Service Employment Act, and under what classifications? What is the cost in your department for program management; i.e., what is the total for salaries, expenses, bonuses, et cetera, for the management level of your department and programs? Could you provide that also as a percentage of the total?
A very important question here is why Public Service is not following the three directives under the Treasury Board with regard to recruiting outside the Public Service Commission, i.e., staffers, through employment agencies? These are strict guidelines. Not only are you not applying them to your own department, but through the process of MERX, et cetera, you are facilitating other departments to sidetrack these three directives from Treasury Board.
Chair, thank you. These are my questions.
[Translation]
The Deputy Chair: Ms. Tassé, do you have an answer?
Ms. Tassé: Currently, I do not. I will submit one to you in writing.
[English]
Senator Callbeck: Thank you for coming. You will eliminate the hard copy of the Canada Gazette. Who receives that now?
[Translation]
Ms. Tassé: We currently have 223 private subscribers, including law firms, some corporations, private companies, a few university professors and a few individuals. So we have 223 subscribers right now.
[English]
Senator Callbeck: At what cost? What do they pay?
[Translation]
Ms. Tassé: For Part 1, the cost of an annual subscription is $135. Part 2 costs $67.50 per year, and Part 3 costs $28.50 per year.
[English]
Senator Callbeck: All together, you say 223 private. However, then a copy goes to every member of Parliament, right? How many hard copies do you produce all together?
[Translation]
Ms. Tassé: As you know, there are 413 members and senators in Parliament. Only 109 of them requested a paper copy of the Canada Gazette, which represents 26 per cent.
[English]
Senator Callbeck: How much will you save?
[Translation]
Ms. Tassé: Last year, the cost of printing the Canada Gazette was $220,000 and the cost of distributing it by Canada Post was $116,000, for a total of $336,000.
[English]
Senator Callbeck: Some Canadians do not have electronic access. I live in Prince Edward Island, and I believe a quarter of the people there do not have that access. Where would they go? You mentioned the libraries. Where else will they have access to this?
[Translation]
Ms. Tassé: That is right. Canadians can read the Canada Gazette online at their public library or their municipal library. There is Internet access at each library. It is also possible, in general, to print a few pages of required texts at public libraries.
The Deputy Chair: Ms. Tassé, if your distribution is around 300, with a cost of $330, are we to conclude that each copy costs around $1,000? I am trying to understand.
Ms. Tassé: We have 223 private subscribers and 649 non-paying subscribers, among others, members and senators, law libraries and Supreme Court judges, for a total of 872 subscribers. Some subscribers receive parts 1, 2 and 3, while others receive only parts 2 or 3. The total number of copies of the Canada Gazette printed last year, for the three parts, was 80,427 for all of those subscribers.
The Deputy Chair: Was the strategy aimed at change?
Ms. Tassé: Demand for the paper version decreases every year, and the costs remain.
Senator Hervieux-Payette: Let us talk about the time needed to produce the document and send it. Do subscribers of the paper copy receive their copy as quickly or does sending it across Canada mean a different delivery time? Since we are on the Hill, we receive it immediately.
Ms. Tassé: In general, part 1, for example, is published at 2 p.m. on Friday afternoon. It is therefore immediately accessible on the website, and Canada Post begins distribution at the same time. Indeed, in some regions of Canada, subscribers may receive their copy two to three days later.
Senator Hervieux-Payette: I sit on the Scrutiny of Regulations Committee and I receive a pile of regulations. I suppose that relates to section 477. I was wondering about the fact that every two weeks we receive a series of regulations that our experts analyze and on which they make recommendations. At this joint committee, dozens of people receive documents specifically prepared for the committee. Will this committee continue to receive its paper copies?
Ms. Tassé: The committee does not receive those paper copies under the section that would be repealed in the Statutory Instruments Act. Rather, it receives them under section 19 of the Statutory Instruments Regulations. And section 19 of the Regulations will also eventually be repealed.
Senator Hervieux-Payette: The Canada Gazette, for some of my colleagues and myself as well, contains which specific documents? When you say distribution will drop to 872 subscribers, does that number include debates, acts, and regulations that are published before they are passed? Does that number include regulations once they are passed? What documents are we talking about?
Ms. Tassé: The Canada Gazette consists of three parts. Part 1 includes official notices, official appointments, the decisions of administrative boards, for example the CRTC, and proposed regulations for consultation. Part 2 contains regulations, orders-in-council and proclamations. Part 3 contains public acts.
Senator Hervieux-Payette: Do the two clauses concern all of the parts?
Ms. Tassé: Yes, exactly.
Senator Hervieux-Payette: For all of those documents, from now on, will there no longer be a paper copy unless the clients print them themselves?
Ms. Tassé: Yes, exactly. The measure will come into force in 2014. It is therefore not immediate, but will come into force in two years.
Senator Hervieux-Payette: Does the amount of $336,000 represent only the material cost or does it also include staff?
Ms. Tassé: No, it is the material cost of printing and distribution. Printing is done externally. A private company has the printing contract. Internally, the electronic and paper versions of the Canada Gazette are done at the same time. At the time of printing, an electronic version is sent to the printer. Therefore, there is no significant cost for just the paper version internally.
Senator Hervieux-Payette: Is there no big decrease in cost, salary or staff?
Ms. Tassé: No, no cuts in staff.
The Deputy Chair: Are there any other questions? Thank you, Ms. Tassé.
[English]
Next, Division 29, the Customs Act.
Good morning, Mr. Lalonde.
Andy Lalonde, Manager Preclearance, Canada Border Services Agency: Good morning. This morning, I would like to speak to you a little bit about mixed- traffic corridors. First of all, I will describe what a mixed-traffic corridor is. It is when we are faced with a situation where we have to move one of our designated customs offices further inland, away from the Canada-U.S. border, and it causes the commingling of traffic, travellers travelling within Canada and those that are arriving from the U.S. We call it a mixed-traffic corridor.
Under the three clauses that we are proposing for the Customs Act, the first one would provide the minister with the authority to designate a mixed-traffic corridor under extenuating circumstances only. We do not foresee this happening frequently, but it is something that we have learned. I will describe a short-term situation that we have currently going on. In the long term, we have learned from that short-term problem.
The second clause would obligate all persons travelling within that mixed-traffic corridor to report to a CBSA officer and state whether they are travelling domestically or whether they are travelling from the United States.
The third clause is very important. It would allow us to fulfill our complete mandate. Once the persons have to report, then we would be able to have our full program authorities, if you will, including being able to stop impaired drivers and abducted children, the full range of authorities that we have today.
Currently, we have a short-term problem at one of our crossings. It is the Cornwall-Massena crossing where, for the last 34 or 35 months now, we have been operating with limited authority to do what we do, that is question people on where they are coming from. These three clauses would provide the proper legal foundation for us to be able to carry out our full mandate.
The Deputy Chair: Thank you.
Senator Runciman: Have you had a real problem with respect to people pretending, if you will, that they are coming from the island in the Cornwall area rather than from the U.S.? Has that been a problem? Have there been documented cases with respect to that?
Mr. Lalonde: No, there has not been a significant problem with that. The reason is that we have not been able to find another solution other than closing the port of entry. The Cornwall-Massena crossing was closed for approximately six weeks back in 2009. It created some significant social impacts, particularly on the Mohawk community because they represent about 70 per cent of the traffic at that crossing.
There were estimates of anywhere between $750,000 to $1 million a day in economic trade being lost while that was going on.
To close down an office could spell economic disaster. If we are able to move it further inland and continue to do our job, we believe that to be a better course of action.
Senator Runciman: You have not been confronted with a lot of people attempting to skip through the system, if you will?
Mr. Lalonde: No, because we have to close it.
Senator Runciman: You are talking about who will be impacted by this. There must be some negative implications for people. I cannot visualize how this will work with respect to people who are on the island, which is essentially the reserve for, I guess, the Mohawk.
Mr. Lalonde: Yes, the Mohawk.
Senator Runciman: How will that impact them in terms of coming back and forth? Will they have to go through customs every time they —
Mr. Lalonde: Yes, there has been an impact, and they are doing that today. They have to come from the U.S., report to us in the City of Cornwall and then return to Cornwall Island. It has had a little bit of an impact upon them.
There are people who come from the City of Cornwall onto Cornwall Island because there are some excellent hockey arenas and sports facilities there, and they too, as a result, have to come to us to get back to the City of Cornwall because we are not able to identify who is coming from the U.S. and who is travelling domestically. That is the problem we have. These three clauses would provide us with the legal means to be able to ask them to determine whether they are domestic or whether they are coming from the U.S. If we have no reason to suspect otherwise, the domestic traffic would be released right away. If they are lying, then that is another thing. Then we can have the authority to question them, like we normally do in our normal business.
Senator Runciman: How many lanes do you have operating there, on average?
Mr. Lalonde: We have three operating currently in the City of Cornwall, right at the foot of the north bridge.
Senator Runciman: Maybe you could just very quickly remind the committee why the original crossing was closed and what the disagreement there was.
Mr. Lalonde: In 2006, the Government of Canada decided to arm the Canada Border Services Agency officers. There was a disagreement with the Mohawk community about that position, and, on the night of May 31, the day before we were to be armed on Cornwall Island, there was some civil unrest. It got a little dangerous for travellers and for our Border Services officers, and we withdrew our services and closed the bridge at that point.
Senator Runciman: A new crossing has been announced. Am I right in that?
Mr. Lalonde: Shortly, under the Border Action Plan, the economic prosperity partnership plan, there is a move to begin negotiations with the United States to establish a port of entry in Massena, New York.
Senator Runciman: Both countries would be in a pre-clearance station? Is that what we are talking about?
Mr. Lalonde: Yes.
Senator Runciman: What kind of timeline is there for that?
Mr. Lalonde: The negotiations are to be concluded by December 2012. Operationally, we would be in Massena, if the negotiations are successful, sometime in 2015, before it could be built.
Senator Runciman: Thank you.
Senator Ringuette: Mr. Lalonde, you have won my question lottery, so, because I think that you are probably the only person who will appear before us in regard to the CBSA, I have a series of questions here. I would appreciate if you could supply the answers to them to our clerk.
How many employees in your department got a letter of layoff by province and by classification? How many of these letters went to EX and how many to DMs? How many staffers in your department, under what classification, are not under the Public Service Employment Act? What is the cost in your department for program management; what is the total for salaries, expenses, bonuses, et cetera, for the management level of your department and programs? Could you also provide that as a percentage of the total?
Now for specific questions in regard to the issue at hand. I live and have spent all of my life in a border community. You say that this legislation will provide for the minister to designate mixed-traffic corridors. I will give you two examples that have been operating for 25 to 30 years. One is in the Grand Falls area of New Brunswick where there is an unmanned border outpost. People coming into Canada have to call into another office. Is that a mixed station?
Mr. Lalonde: No, that is not a mixed station. I am not fully familiar with the current situation in Grand Falls. I am not sure if it is one of the offices that were looked at for adjusted hours of service. However, we could find out for you and get back to the committee.
Senator Ringuette: I will give you another example. In the community of Perth-Andover we have an 18-hole golf course, one portion of which is in Canada while the other portion is in the U.S. Golfers that go from the eighth hole to the ninth hole have to report to the U.S. authority at a little building on the course and then have to report to Canadian authorities at another little building on the course. Would that be a mixed-traffic designation?
Mr. Lalonde: No, because both countries are still processing the travellers into their individual countries.
Senator Ringuette: Are you saying that this legislation is specifically for the Cornwall-Massena crossing?
Mr. Lalonde: It currently would be, but we have had occasions when we have had to close buildings and designate offices for short periods of time due to floods. We do not want to leave a border crossing closed for too long because the impacts are too significant. If we were able to move it inland and proceed, we would be in better shape.
Senator Ringuette: All of this has been happening because in 2006 your officers began to be armed?
Mr. Lalonde: That is how the Cornwall-Massena issue began, yes.
[Translation]
Senator Hervieux-Payette: Could it happen in the Kahnawake region? It would be about our relationship with the Mohawks, but there is also a Mohawk reserve in Quebec. They are not at all affected and will not be?
Mr. Lalonde: No, exactly. There are no impacts at all.
Senator Hervieux-Payette: There are no impacts for Quebec?
Mr. Lalonde: No.
[English]
The Deputy Chair: Thank you, Mr. Lalonde.
We will move to Division 30, Pension Benefits Standards Act, 1985. We have Ms. Lynn Hemmings and Ms. Diana Cacic. What department are you from, please?
Diana Cacic, Counsel, General Legal Services Division, Department of Finance Canada: I am with general legal services at the Department of Finance.
Lynn Hemmings, Senior Chief, Financial Sector Division, Department of Finance Canada: I am the senior chief of the pension section at the Department of Finance.
Ms. Cacic: We are here this morning to speak to you about Division 30, which contains a fairly short amendment that deems two provisions of the Pension Benefits Standards Act to come into force as at July 27, 2004.
As in previous budget implementation legislation, the government has addressed the concerns of the Standing Joint Committee for the Scrutiny of Regulations through amendments that are made in budget implementation acts. The standing joint committee has called into question the validity of regulations that were made in 2004 and 2009 under the Pension Benefits Standards Act, and in correspondence between the government and the standing joint committee it has been the government's position that the regulations were validly made.
I should back up and say that the standing joint committee called into question the validity of the provisions under which the regulations were made and called for retroactive validation of the regulation-making authorities. These amendments are being made to provide greater certainty that the regulations were validly made while also satisfying the comments of the standing joint committee.
The Deputy Chair: That is an interesting opening statement. What are the statements?
Ms. Hemmings: Are you asking what regulations are being retroactively validated?
The Deputy Chair: Yes.
Ms. Hemmings: They relate to Air Canada's pension plan. There were two sets of special solvency funding relief regulations, the first enacted in 2004 and the second in 2009. The first allowed them to amortize their payments over ten years as opposed to five years; the second provided a moratorium on them making their special payments into the pension plan from April 2009 to December 31, 2010, and then initiated a payment schedule going forward.
The Deputy Chair: Thank you.
Senator Ringuette: What did the committee find that was not correct?
Ms. Hemmings: They found that it was not clear that one could make regulations for one or more pension plans. The amendment addresses their concern in that regard and ensures that there is statutory authority for the regulations. It is essentially a housekeeping amendment.
Senator Ringuette: You gave us the example of the regulation that said that Air Canada had ten years rather than five to fulfil its obligation to its pension plan.
Ms. Hemmings: Yes.
Senator Ringuette: Which other groups of employees would these regulations affect?
Ms. Hemmings: There are none other than Air Canada.
Senator Ringuette: It is solely for Air Canada?
Ms. Hemmings: That is correct.
Senator Ringuette: Ms. Hemmings, you are the winner of my question lottery. Would you please provide the answers in writing as soon as possible to our clerk for distribution to committee members.
How many employees in your department got a notice letter of layoff, by province and by classification? How many of these letters were for EXs and how many for DMs? How many staffers in your department are not under the Public Service Employment Act and under what classification? What is the cost in your department of program management; that is, what is the total of salaries, expenses, bonuses, et cetera, for the management level of your department and programs? Please also indicate that as a percentage of the total for your department.
When did the joint committee give you the report saying that this was uncertain?
Ms. Hemmings: Generally Mr. Rousseau sends a letter to our legal services. As a rule, we respond to concerns from the committee through changes in regulations. In this case, we thought it would be more prudent to exercise an abundance of caution and do it through legislation. If you require copies of the correspondence, we have provided those to the house Finance Committee and we would be happy to provide the same to the clerk of this committee.
Senator Ringuette: Yes. Thank you very much.
Ms. Hemmings: You are welcome.
Senator Peterson: Is there any financial impact of this, either on the federal government or on Air Canada?
Ms. Hemmings: There is no fiscal impact on government.
Senator Peterson: Is Air Canada impacted in any way?
Ms. Hemmings: Do you mean by this amendment?
Senator Peterson: Yes.
Ms. Hemmings: No.
Senator Peterson: You are just legalizing something that was done already?
Ms. Hemmings: Yes.
The Deputy Chair: Thank you. We move right along to Division 31, the Railway Safety Act. We have Mr. Daniel Lafontaine and Mr. Michael O'Keefe from Transport Canada. Could you tell us your positions, and do you have opening comments?
Michael O'Keefe, Chief, Business Planning and Financial Management, Program Analysis and Performance, Transport Canada: Yes, we do. My name is Michael O'Keefe. I am the Chief of Business Planning and Financial Management for Rail Safety.
[Translation]
Daniel Lafontaine, Chief Engineer, Rail Safety Operations, Operations Management, Transport Canada: Daniel Lafontaine, Chief Engineer, Rail Safety.
[English]
Mr. O'Keefe: Division 31 is amendments to the Railway Safety Act, which is a result of one of Transport Canada's deficit reduction action plan initiatives, which reduced funding to the Grade Crossing Improvement Program. This is a program that provides funding to railways and road authorities to make improvements to federal railway crossings across Canada, and as part of that, the reduction involved also reducing the federal contribution portion per project from 80 per cent to 50 per cent. In order not to download costs to the road authorities, which are provinces and municipalities, we have proposed the following amendments to the Railway Safety Act.
The first one, clause 484(1), limits the amount that the Canadian Transportation Agency can apportion to road authorities to a maximum of 12.5 per cent of the construction and alteration costs per project, which is traditionally what they would have been paying under the old 80 per cent rule.
The second amendment, clause 484(2), provides the Governor-in-Council with regulation-making power to exempt any railway work, any person or railway company or any group or class of persons or railway companies from the first proposed amendment.
The third and fourth amendments, clauses 485 and 486, are mostly administrative. Clause 485 adds the new regulations to the list of regulations already under the RSA, and 486 says it comes into force on April 1 of next year.
[Translation]
Senator Hervieux-Payette: I do not understand. You say that you have decreased to 50 per cent. Who is going to pay the other 50 per cent if it is not the municipalities or the provinces?
[English]
Mr. O'Keefe: The railways.
[Translation]
Senator Hervieux-Payette: The railways?
Mr. O'Keefe: Yes.
Senator Hervieux-Payette: That is a good idea. Now, there is an implementation program for these measures, that is if we continue to establish measures to protect railways where there are vehicles that pass, will it reduce the implementation time in places where you have to install barriers, signal lights or other security measures?
In my past experience, there were members who were practically begging to obtain measures that were rather expensive. That was done gradually and it was those who were the most insistent who received the new barriers. Will this new plan delay the implementation program or will it follow its course as expected over the next five years?
Mr. Lafontaine: The program should follow its course as expected. It is a joint effort by the railway company, municipalities and Transport Canada to find the highest-risk places. It is not necessarily those who are the most insistent who factor in, but rather the highest-risk places.
We believe that with the measures, the pace should be the same because the decrease in funding can be offset by our decrease in contribution per project. So we will probably conduct the same number of projects.
Senator Hervieux-Payette: When an overpass is necessary, a major construction project, does the 50 per cent apply or is it another measure? I am thinking first of technical aspects, like gates and signal lights, but when there is an increase in traffic and accidents and the roads need to go over, will the procedure be the same?
Mr. Lafontaine: The program does not apply to overpasses and grade separations. It is only for grade crossings.
Senator Hervieux-Payette: When there is an overpass, what do you do? You do not participate at all?
Mr. Lafontaine: No, there is no funding program for building overpasses under the Railway Safety Act. There is currently no funding.
Senator Hervieux-Payette: So people's best option is to install a gate because it is the only place where the federal government contributes. In this case, were railways consulted?
Mr. Lafontaine: A letter was sent to all stakeholders to advise them of the changes.
Senator Hervieux-Payette: And what sort of bill does that mean for them? You will be saving the difference, so you must know the costs they will have to take on.
Mr. Lafontaine: The bill will increase. We do not have specific figures, but a typical project should be around $200,000 or $300,000. Transport Canada will fund half and the rest can be covered by the road authority and the railway, based on the agreement they reach. If they cannot agree, the Canada Transportation Agency will set the proportion for each.
Senator Hervieux-Payette: How many are there on an annual basis?
Mr. Lafontaine: We are talking about 300 or 400 projects depending on the costs of each one.
Senator Hervieux-Payette: Every year?
Mr. Lafontaine: Yes. There are projects that are more expensive and others that are less expensive. For example, if lights are changed to install higher-efficiency lights, which are less expensive, many more can be replaced. However, installing a conventional system with gates and electronic lights is much more expensive.
Senator Hervieux-Payette: So how much money will be saved?
Mr. Lafontaine: The funding program is $10.9 million.
[English]
Mr. O'Keefe: The reduction per year is $1.9 million. Previously, it was $12.9 million; it will be now $11 million.
[Translation]
Senator Hervieux-Payette: Once the agreement is known, there will probably be a large part that will be paid by railways and the rest will be paid by local authorities?
Mr. O'Keefe: Yes.
[English]
Senator Runciman: I am curious about the process of setting an annual budget. How does that work? Who sets the priorities? Who arrives at X number of dollars being budgeted on an annual basis?
Mr. O'Keefe: It is part of the standard departmental budget process. We have been granted previously $12.9 million per year. It is just part of the grant contribution program of Transport Canada.
Senator Runciman: That is the government's contribution?
Mr. O'Keefe: Yes.
Senator Runciman: You have to be working from some kind of a plan. You talked about a plan here earlier. Who prepares that on an annual basis to submit to the government for consideration with respect to the contribution you will make? Is it just a traditional flat fee?
Mr. O'Keefe: Do you mean in terms of per project?
Senator Runciman: No. There must be some indication on an annual basis; we will do $50-million worth of work on rail crossings annually, for example. Where does that come from? Is the government's role here simply to receive a submission from the railway companies?
Mr. O'Keefe: Yes. We receive X number of proposals per year and then we take those and rank them on order of the safety risk to the crossing. If we have been allocated $12.9 million we can fund maybe 300 or 400 projects a year, depending on the size and scope of project, to live within that window of resources that we have been given by our department.
That is basically the long and short of it. We get our budget at the beginning of the year and say that we can do X, given the number of proposals we receive from the railways or the road authority, depending on the situation.
Senator Runciman: No expression of concern from the companies with respect to ongoing maintenance. I would assume this incorporates ongoing maintenance. You are talking about changing lights and that sort of thing.
Mr. Lafontaine: Ongoing maintenance is the responsibility of the railway company. We do not pay for the maintenance. We pay for the installation or alteration of a warning system or maybe the geometry of a road approaching a crossing.
Senator Runciman: Since the projects are submitted and prioritized on a safety formula, are any concerns expressed, given that companies will have to take on a more significant burden, that you may not get the list that you have been getting in the past with respect to the numbers of projects?
Mr. O'Keefe: It is certainly possible. We have not received anything official yet from CN or CP or any of the short- line railways; but it is possible.
Senator Runciman: Thank you.
Senator Ringuette: Gentlemen, kindly note the following questions and provide written answers to our clerk: How many employees in your department got a notice letter of layoff, by province and classification? How many of these letters were for EXs and DMs? How many staffers in your department are not under the Public Service Employment Act and under what classifications? What is the cost in your department for program management; that is, what is the total for salaries, expenses, bonuses, et cetera, for the management level of your department and programs? Also, could you give us the percentages of the totals?
With regard to railroad safety, following Senator Runciman's question, I assume that on a yearly basis you receive requests from CN or CP on safety issue projects. You said earlier that you look at the high-risk ones. Do CN and CP also indicate, in order of importance, the risk factor in their requests?
Mr. Lafontaine: Yes, we work together on that.
Senator Ringuette: What is the backlog of these high-risk projects? You also indicated that you can do only so much given the amount of money you are allotted. What is the backlog? How many high-risk railroad safety projects are backlogged?
Mr. Lafontaine: I do not have the specific number, but we have to turn down applications yearly because we do not have enough funds.
Senator Ringuette: Do you keep a log of these applications?
Mr. Lafontaine: Yes.
Senator Ringuette: Could you provide a copy of that log to our clerk?
Mr. Lafontaine: Yes.
Senator Ringuette: This entire Division 31 relates to reducing the amount of contribution per project from the federal government. I have not looked at the Supplementary Estimates (A) yet, but are you also looking at reduced amounts from the federal government for these projects in this budget year?
Mr. O'Keefe: Not in fiscal year 2012-13. The reduction in the overall program and the reduction from 80 per cent to 50 per cent take effect on April 1, 2013.
Senator Ringuette: Is this a two-pronged approach with regard to railroad safety projects? Is it the case that the federal government is reducing its contribution per project in the first instance and its usual budget allotment for these projects?
Mr. O'Keefe: Yes, it is both. The theory was that reducing the portion from 80 per cent to 50 per cent would allow us to fund more projects under the envelope that was being reduced. The same number of projects will be able to be done per year, notwithstanding the reduction of $1.9 billion.
Senator Ringuette: You are not very clear, Mr. O'Keefe.
Mr. O'Keefe: We were funding 80 per cent of a project.
Senator Ringuette: Now, you will fund 50 per cent.
Mr. O'Keefe: Yes, but in the model where we were funding at 80 per cent, there would be fewer projects to fund. Reducing to 50 per cent allows us to do more projects under the envelope that we have.
Senator Ringuette: It will be with the condition that you have the same amount of money for the program from the federal government.
Mr. O'Keefe: Yes. That allows us to stay relatively equal. The old model is 80 per cent and $12.9 million, and the proposed change is 50 per cent and $11 million for next year. The changes will come into effect in 2013-14.
Senator Ringuette: We will have to wait until next year if there is to be a major reduction in the allotment for the program.
Mr. O'Keefe: We will see.
Senator Peterson: For clarification, prior to this amendment the railways were paying nothing for crossings?
Mr. O'Keefe: No. Under the old model, the federal government would pay normally up to 80 per cent; the railways would pay 7.5 per cent, and the road authorities would pay 12.5 per cent.
Senator Peterson: Under the new regime, what will it be?
Mr. O'Keefe: It depends. The federal government will pay 50 per cent, the road authorities will be capped at 12.5 per cent as per the previous model, and the remainder will be funded by the railways.
Senator Peterson: The road authority is municipal or provincial.
Mr. O'Keefe: Yes.
Senator Peterson: Who has the authority to stipulate that a crossing will go in?
Mr. Lafontaine: Transport Canada has that authority under railway safety. If there are many applications, they will be analyzed altogether with the railways, the communities and Transport Canada. We set the priority because Transport Canada has the final word.
Senator Peterson: The road authorities and the provinces will have some say?
Mr. Lafontaine: Yes.
Senator Peterson: The railways who are now paying more money will have a lot of say?
Mr. Lafontaine: Yes.
Senator Peterson: Particularly the new CP. They will not take kindly to this, will they?
Mr. Lafontaine: The way it will work is that the railway and the community will work together with the cost balance. If they do not come to an agreement, then there could be a cap to the municipality.
Senator Callbeck: You mentioned that you work with the railways and with the municipalities and the provinces. Is that right?
Mr. Lafontaine: That is right.
Senator Callbeck: I notice that in the material I have here it says that the Railway Safety Act was reviewed recently and amendments were proposed back in October 2011. Are these the amendments?
Mr. O'Keefe: No. Some significant changes to the Railway Safety Act that received Royal Assent last week had all sorts of separate issues and had nothing to do with this.
Senator Callbeck: All right. What was proposed in 2011? They have already been implemented, have they?
Mr. O'Keefe: They have not been implemented because they just received Royal Assent last week. Regulations will have to be developed now.
Senator Callbeck: All the recommended amendments have been covered.
Mr. O'Keefe: I am not 100 per cent sure which amendments you are referring to.
Senator Callbeck: It was in October 2011 that amendments were proposed.
Mr. O'Keefe: Yes.
Senator Callbeck: Could you check that, please, and provide the committee with that information on the amendments? Were amendments proposed?
Mr. O'Keefe: The amendments to the Railway Safety Act were in Bill S-4. I believe that is what you are referring to. That has gone through the parliamentary system and is in place.
Senator Callbeck: Okay. Thank you.
The Deputy Chair: As a little interjection, we usually finish at 11:30 a.m. Honourable senators, I would ask for your consideration on whether we could go to 11:45 a.m. to try and get through. There are about three sections left, not to push time. I recognize we have to analyze things properly, but would it be possible for you to give us a few more minutes?
Senator Eaton: I have a previous commitment that I must attend to before we go to caucus.
The Deputy Chair: Okay. Does anyone else have time constraints?
Senator Gerstein: I have one.
Senator Nancy Ruth: I do too.
The Deputy Chair: Let us wrap this up.
Senator Buth: Thank you, chair.
Can you tell me how long Transport Canada has been providing this grant?
Mr. O'Keefe: I think the program came into effect in 1989.
Senator Buth: These grants are for crossings that are federal jurisdiction. Who is responsible for non-federal jurisdictions in terms of crossings and the costs?
Mr. Lafontaine: That would be the provinces, with their own railway companies.
Senator Buth: What would be the split or percentage of crossings that would be federal versus provincial?
Mr. Lafontaine: I do not have the exact number. I would have to look at it and provide it to you.
Senator Buth: That would be great if you could provide it to the clerk. Thank you.
Senator Gerstein: Mr. O'Keefe and Mr. Lafontaine, what impact if any would this amendment have on the possibility of the new rapid, faster transit rail services we hear about from time to time, particularly in the Quebec- Windsor corridor?
Mr. Lafontaine: There would be no impact as far as I know because it would be a completely new service which cannot be funded through this program. This program is only for existing service.
Senator Gerstein: I see. Thank you for that clarification.
The Deputy Chair: Any other questions before we finish with these witnesses? If not, thank you very much, Mr. O'Keefe and Mr. Lafontaine.
Honourable senators, that concludes our session today. I want to alert you to the fact that we will be sitting down and reviewing our schedule in terms of time allocation so we can get through this work as expeditiously and thoroughly as possible. We will probably be in contact with each and every one of you to make some modifications to our schedule.
Thank you very much.
(The committee adjourned.)