Proceedings of the Standing Senate Committee on
National Finance
Issue No. 20 - Evidence - November 30, 2016
OTTAWA, Wednesday, November 30, 2016
The Standing Senate Committee on National Finance met this day at 6:51 p.m. to examine the expenditures set out in Supplementary Estimates (B) for the fiscal year ending March 31, 2017.
Senator Larry W. Smith (Chair) in the chair.
[English]
The Chair: Welcome to the Standing Senate Committee on National Finance, colleagues and members of the viewing public. The mandate of this committee is to examine matters relating to federal estimates generally as well as government finance.
My name is Larry Smith, senator from Quebec, and I chair the committee. Let me introduce briefly the other members of the committee: Senator Raynell Andreychuk from Saskatchewan; André Pratte from Quebec; Senator Grant Mitchell from Alberta; and Senator Richard Neufeld, from B.C.
[Translation]
From New Brunswick, our superstar, Senator Percy Mockler.
[English]
From the rock, Newfoundland, we have Senator Elizabeth Marshall; and the beautiful Senator Nicole Eaton from Toronto; and one of our superstars who has been on our Finance Committee for a short time but asks great questions, Senator Salma Ataullahjan. Welcome.
[Translation]
Today we are continuing our study of the Supplementary Estimates (B) for the year ending March 31, 2017.
[English]
Today, they are giving us an overview of their funding requests in the Supplementary Estimates (B). We have two departments and one agency appearing as panels.
First, from Health Canada, we welcome Randy Larkin, Assistant Deputy Minister and Chief Financial Officer, Chief Financial Officer Branch; and Sony Perron, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch.
From Indigenous and Northern Affairs Canada, we have Paul Thoppil, Chief Financial Officer, Chief Financial Sector; and David Smith, Acting Director General, Community Infrastructure Branch, Regional Operations Sector.
From Canada Mortgage and Housing Corporation, we have Wojo Zielonka, Chief Financial Officer and Senior Vice-President, Capital Markets; and Michel Tremblay, Senior Vice-President, Policy Research and Public Affairs.
We thank you all for being here with us. Each organization has five minutes to make an opening statement about their funding requests and Supplementary Estimates (B). They will be followed by a question period.
The floor is yours, Mr. Larkin.
Randy Larkin, Assistant Deputy Minister and Chief Financial Officer, Chief Financial Officer Branch, Health Canada: Good evening, committee members. Some of you may recall that I appeared before this committee as the Assistant Deputy Minister of Corporate Services for the Department of Finance this past June. I moved to Health Canada in July of this year. I'm pleased to appear before you this evening as Health Canada's chief financial officer for the first time. Thank you for inviting me to discuss the proposed changes to spending based on what is outlined in the 2016-17 Supplementary Estimates (B).
[Translation]
With me is Sony Perron, Senior Assistant Deputy Minister of the First Nations and Inuit Health Branch.
In these Supplementary Estimates (B), Health Canada has put forward several important initiatives which will result in a net increase of approximately $224 million, with $204 million to improve the well-being of Indigenous Peoples in Canada and $20 million for initiatives that help the people of Canada maintain and improve their health. Health Canada's total budget will be raised to $4.2 billion for the current fiscal year.
[English]
In terms of specifics, Health Canada is seeking funding of approximately $88 million for the interim reforms of Jordan's Principle, which will increase social and health services for First Nations children. This funding will ensure that First Nations children living with disabilities or short-term conditions affecting their activities of daily living have access to the needed health and social services within the normative standard of care in their province or territory of residence.
At the same time, the federal government will have gathered data and worked with First Nations and provincial and territorial governments to determine a long-term approach.
[Translation]
The Department is also seeking $58 million to continue implementing Canada's legal obligations under the Indian Residential Schools Settlement Agreement.
[English]
Health Canada fulfils its part of the obligations through the Residential Health Support Program, which makes mental health and emotional and cultural support available to eligible former Indian residential schools students and their family members as part of the healing process.
[Translation]
In addition, the Department is requesting $57 million to address cost pressures in the Non-Insured Health Benefits Program for the current fiscal year.
[English]
This program provides eligible First Nations and Inuit with coverage for a specified range of medically necessary health-related goods and services when not covered through private insurance plans or provincial or territorial health and social programs. The Non-Insured Health Benefits Program includes prescription drugs, over-the-counter medication, medical supplies and equipment, mental health counselling, dental care, vision care and medical transportation. The annual percentage growth varies from one year to the next, based on demand and external cost drivers. Funding is required for 2016-17 to offset a more significant increase in demand.
[Translation]
Another item included in these Estimates is a request for $1.4 million to enhance and expand the Nutrition North Canada Program to support all northern isolated communities. This new investment helps expand the nutrition education initiatives to an additional 43 isolated northern communities, and supports residents in eligible communities to acquire knowledge and skills for choosing and preparing healthy food. This initiative is viewed as a long-term strategy for improving health in northern communities.
[English]
In order to help the people of Canada maintain and improve their health, the department is investing an additional $17 million in various health science research organizations, such as $11.5 million to support research to further knowledge of the brain through the Canada Brain Research Fund; $5 million to support the Canadian Foundation for Health Care Improvement to identify and introduce innovations in the health care system; and $340,000 to support targeted research on women's heart disease and stroke and to promote collaboration between institutions across the country.
[Translation]
Last but not least, the Department is requesting $2.3 million to continue protecting the health of Canadians from climate change impacts, to assess risks including extreme heat, and to address the specific health needs of First Nations and Inuit communities resulting from climate change.
[English]
In conclusion, the funding being requested in these supplementary estimates will help the department address key health priorities and will support Canada to be among the countries with the healthiest people in the world.
Thank you once again for inviting me before the committee today. I'm pleased to answer any questions that you may have.
The Chair: Thank you very much Mr. Larkin.
Mr. Thoppil, please go ahead.
[Translation]
Paul Thoppil, Chief Financial Officer, Chief Financial Sector, Indigenous and Northern Affairs Canada: Thank you, Mr. Chair and honourable senators, for the invitation to discuss the Supplementary Estimates (B) for fiscal year 2016- 17 for Indigenous and Northern Affairs Canada. I would like to draw the Members attention to a Deck entitled 2016- 17 Supplementary Estimates (B) which I have tabled.
[English]
Turning to slide 2, Supplementary Estimates (B) includes initiatives totally $644.3 million and will bring total investment to the department to approximately $9.4 billion for 2016-17 to address the needs of indigenous people and northerners. These supplementary estimates are primarily accessing the first year of Budget 2016 investments that will support indigenous communities and the aspirations of indigenous peoples.
On slide 3, with respect to financial highlights, it should be noted that the net increase of $644.3 million is comprised of $435.4 million related to Budget 2016 investments, primarily for education and social development programs; $72.1 million related to specifically claim settlements and specific claim tribunal awards; $62.9 million to continue to fulfil Canada's legal obligations under the Indian Residential Schools Settlement Agreement; $53 million related to the settlement of indigenous childhood claims litigation; and $20.9 million for another initiatives, primarily related to the Nutrition North Program that my colleague just spoke to.
Senator Eaton: That is wonderful presentation you have brought us, but if you go right to the end, we won't have time to have any questions.
The Chair: Were you going to go through the whole brick?
Mr. Thoppil: No, I wasn't.
The Chair: You can do this all in five minutes? I know you're a master magician and you're able to do it in five minutes every other time, so I'm counting on you.
Mr. Thoppil: I'm counting on that, too.
Let's move over to page 4, which has the largest item. I think it's worth delving into a little bit. The largest item of these supplementary estimates is the $245.8 million required for supporting First Nations elementary and secondary education. These investments will address the immediate needs and pressures, as well as support long term transformation. First Nations and Inuit students will directly benefit from these investments, which will ensure levels of education comparable to other Canadian students.
Moving on to page 6, specific claims settlements. The second largest item in the supplementary estimates is related to a reprofiling of funds from previous years in order to maintain the integrity of the envelope to fund specific claims settlements. On page 6 are examples of what has been paid out so far this year.
On page 7, another item is the urgent investments in First Nations child and family services programs. This funding will be used to expand the prevention programming that is not there across all provinces, and provide additional capacity and resources for front-line service delivery on-reserve.
Consistent with my colleague from Health, page 8 refers to the funding required for the Indian Residential Schools Agreement so that we continue our obligations there.
[Translation]
The fifth item of $53 million will provide funding for Indigenous Childhood Claims Litigation for settlement of the Anderson class actions — Slide 9. Finally, the last few slides provide additional information pertaining to the key initiatives — including objectives, outcomes and statu, in Slides 10 to 24.
[English]
The supplementary estimates will enable us to continue to take the concrete steps necessary to address the needs of First Nations, Inuit, Metis and northerners.
[Translation]
I look forward to discussing any aspects of the Supplementary Estimates (B) with you. My colleagues and I welcome your questions regarding my presentation.
[English]
The Chair: Thank you.
Who wants to present?
Wojo Zielonka, Chief Financial Officer and Senior Vice-President, Capital Markets, Canada Mortgage and Housing Corporation: It's a pleasure to be here on behalf of Canada Mortgage and Housing Corporation to discuss our Supplementary Estimates (B). I'm joined today by my colleagues Michel Tremblay, Senior-Vice President, Policy Research and Public Affairs; and Charles MacArthur, Senior Vice-President, Regional Operations and Assisted Housing. He is sitting in the back.
As the committee is aware from previous appearances by CMHC, Budget 2016 provided for new funding of $2.3 billion over two years to improve access to affordable housing for Canadians. Due to the timing of the budget, funding for the first year of these new commitments was not included in the 2016-2017 Main Estimates for CMHC. For this reason, earlier this year, CMHC sought parliamentary approval for additional expenditures of $1.07 billion through Supplementary Estimates (A). This is the amount allotted to CMHC for 2016-17 under the Social Infrastructure Fund.
This funding is being used to double federal investments under the investment in affordable housing. As well, targeted investments are being made to improve housing for low-income seniors, to build and renovate shelters for victims of family violence, to repair and retrofit existing social housing units, to address unique housing challenges in the North and in Inuit communities, and to improve living conditions on reserves.
A decision was subsequently made to transfer $35 million of this amount, which was earmarked for Inuit housing, to Indigenous and Northern Affairs Canada. Through the Supplementary Estimates (B), CMHC is seeking parliamentary approval for four additional measures.
First, the government has decided to proceed with the prepayment flexibilities announced in Budget 2015.
[Translation]
This measure allows co-operative and non-profit social housing providers to prepay long-term, non-renewable mortgages held with CMHC without penalty. This new flexibility offers eligible housing providers the opportunity to lower their debt payments, finance repairs with private capital or leverage their land assets for further development.
[English]
CMHC Supplementary Estimates (B) includes $50 million for the first year of the prepayment flexibilities, which have a total funding commitment of $150 million over four years.
We're also seeking an additional $13.1 million this fiscal year to deliver the new Affordable Rental Innovation Fund. The fund that was announced in Budget 2016 was launched by our minister, the Honourable Jean-Yves Duclos, on September 30. The goal of the $200 million fund is to encourage new funding models and innovative building techniques in the rental housing sector. We're looking for unique ideas that will revolutionize the sector moving forward. The fund is expected to help create up to 4,000 new affordable units over five years and will reduce reliance on long-term government subsidies.
Budget 2016 also included $30 million over three years to help close to 400 homeowners in certain regions of Quebec who have experienced significant structural damage due to the presence of pyrrhotite in the concrete of foundations. The Supplementary Estimates (B) includes $10 million in funding for the first year of this measure. The funding is being delivered by the province through an existing program of the Société d'habitation du Québec.
Finally, we're seeking $5 million for 2016-17 to increase funding for the Housing Internship Initiative for First Nations & Inuit Youth. This is CMHC's allocation from the $165 million in new funding for the Youth Employment Strategy included in Budget 2016. This funding will bring our total allocation for 2016-17 to 6 million, which will support approximately 625 internships for First Nations and Inuit youth.
I would also like to update the committee on our work to support the development of a National Housing Strategy. As the Government of Canada's policy adviser on housing, CMHC recently led an extensive fourth-month process to consult Canadians, housing experts and stakeholders, indigenous communities and others on innovative approaches to improve housing outcomes for all Canadians.
[Translation]
We also consulted people who live with housing challenges every day by holding focus groups with homeless people, newcomers, low-income Canadians, seniors and people with disabilities, to name a few.
[English]
The results of the consultations were released by our minister, the Honourable Jean-Yves Duclos, on November 22, National Housing Day in Canada. The What We Heard report is available online at letstalkhousing.ca.
The government is committed to releasing a comprehensive National Housing Strategy in 2017. CMHC will continue to support Minister Duclos in the development and implementation of the strategy, which has been richly informed by thousands of Canadians across the country, including experts in the field, stakeholders and vulnerable Canadians.
Thank you again for the opportunity to be here. My colleagues and I would be pleased to answer any questions the committee may have.
Senator Eaton: Thank you, gentlemen. It's always interesting to see all of you. Let's go to affordable housing social infrastructure for $25.5 million for indigenous, northern and Inuit housing.
I'm just wondering, will those houses be built to code? I've asked that question in years past, and the answer has always been, "No, we're not allowed on reserves.'' So because this is Inuit housing, would that considered a reserve and would they be built to code?
Mr. Thoppil: This is the first time in a while whereby, instead of CMHC, the money is going to the entities themselves that will be delivering the homes. This is in response to the fact that they want to deliver it themselves. So the money is going to Makivik Corporation, the Inuvialuit Regional Corporation and the Nunatsiavut government. They will be taking that funding and doing the construction for their communities.
Senator Eaton: Which I think is wonderful, but the Library of Parliament has given me a figure of almost $30 billion that we've spent on indigenous housing since 1996. I'm wondering why everybody, given that sum of money, doesn't live in a nice, warm, comfortable house. You and I have had these discussions in the past where they have not been built to code. Now that you're handing the money over to these entities, is there going to be some kind of accountability? Are they going to be built to code, or are we just going to give people the money and walk away?
Mr. Thoppil: These aren't on reserve because they're north of 60, so it's different. And these entities have a strong track record of delivery. What I have provided you with, on page 14 of the deck, is some photos of their track record in terms of construction of units. You will see that they look good.
Senator Eaton: They look good, but have the rooves been put on properly and are the windows double glazed. I'm sorry to keep asking these questions, but every year we spend huge amounts of money on First Nations housing or on Inuit housing, and we don't get answers.
Mr. Thoppil: We're transferring it to the entities, which are northern entities, and are going to be developing these homes, which are essentially adapted to northern conditions.
Senator Eaton: And the department knows that.
Mr. Thoppil: Correct.
Senator Eaton: If I build a house in downtown Toronto, I'm inspected constantly and have to pass inspections. Will they be inspected the way a house in downtown Toronto would be?
Mr. Thoppil: These entities do the inspections.
Senator Eaton: So it's not the same standards that I have to go through. If I employ a contractor, he still has to go by a standard of construction. So you're handing this money over to these entities, which you could say, for all intents and purposes, are contractors.
Mr. Thoppil: No, they're not the same. They're not contractors because they are part of a government that is delivering to their community.
Senator Eaton: Fine. But because it's Canadian taxpayer money, don't you think there should be some standards of code, some standards of accountability?
Mr. Thoppil: I believe that when we transfer the monies to them and they are the entities that are delivering on behalf of their communities, the accountability is there, both to the community and to the taxpayer, for the monies that are delivered.
Senator Eaton: So you won't come back here in five years' time and ask us for more money because they're living in terrible conditions.
Mr. Thoppil: I think that the housing stock in the North is probably the worst in the country, and that is due to very adverse weather conditions, as well as the design.
Senator Eaton: I don't disagree with any of that. I don't want any Canadian to live in appalling circumstances. All I'm saying is that if we're going to give them housing or pay for the housing, shouldn't it be built to the same high standard that Canadians south of 60, off reserve, have to go through?
Mr. Thoppil: I think it's important that the entities that are northern have an opportunity to build it according to the conditions that the occupants will be living in in the North. So I'm very excited about the opportunity that these entities will have.
Senator Eaton: So you don't care about the standards. You're going to give them the money, and if their standards aren't met, that's not our concern. That is what you're telling me very tactfully.
Mr. Thoppil: I think there is an accountability that's there between the northern governments and their communities.
The Chair: If I could just interject, I'm not trying to defend Mr. Thoppil, but if you remember last year, we had the Canadian research group that got about $30 million. We had the heads in. This was a new program set up in the last year and a half. I understood them to say that there are different building standards in the North because the conditions are completely different. What they are trying to do is to get the involvement of the northerners, in conjunction with some of the southerners that are up there, and build to the right code for that particular area.
Mr. Thoppil, I'm not trying to put words in your mouth, but isn't the situation slightly different in the Far North than for the indigenous population at the 55th to 65th parallel?
Senator Eaton: I don't disagree with that. I think they should be built to the climatic circumstances they're living in. I'm sure the national codes would know what to look for, and we, once again, are handing money to local entities that don't have any kind of national standards, whether it's built in southern Ontario or Nunavut. They're not subject to what we're subject to. That's all.
The Chair: Mr. Thoppil, any comment on that? Are there reports on a yearly basis in terms of the status of where that money goes, or is it basically that once you give them the money, it's in their hands and they're responsible to face their local communities in terms of what they do? Is that the deal?
Mr. Thoppil: INAC has a regional office network. Part of their job is also to be that relationship and liaison with the entities that do the work. They do site visits as part of the money transfer, and so there will be, as part of that process, a review of the work that was accomplished for the money that was transferred.
The Chair: Does their local government report in to Indigenous and Northern Affairs Canada or CMHC, to support Senator Eaton's questions? Because there needs to be some form of a contact somewhere, where there's a report that goes in and people know the success of what has been accomplished. I think Senator Eaton has a pretty reasonable question.
Mr. Thoppil: In terms of what's happening up North, we will engage with them to ensure that the number of homes that are to be built will be built, and we have a different process on reserve for the housing that's proposal-based that will ensure that the entities receiving the money deliver according to what's been agreed to up front.
The Chair: Senator Eaton, one more question for you?
Senator Eaton: No, I just want to finish with a comment. They won't have to be built to the same standards that any other provincial government, any other city government — no other standards. They'll be accountable in the sense that, yes, they put up these houses, but they won't have to look at the rooves or how deep the basements are. None of that matters, is what you're saying.
The Chair: Mr. Smith, do you have an answer for Senator Eaton?
David Smith, Acting Director General, Community Infrastructure Branch, Regional Operations Sector, Indigenous and Northern Affairs Canada: I can speak to on reserves south of 60.
The way the program is delivered is a proposal-based program. A community would submit a proposal, for example, for a six-plex and funding would be supported for that specific project. The community needs to build the asset based on the provincial codes that are inclusive of federal codes. There will be certain variations from regions, for example in B.C., where there are earthquakes.
Senator Eaton: I understand that completely. Is this a new thing that they are inspected and they're built to code? Last year they didn't have to be.
Mr. Smith: All targeted funds are based on specific outcomes. If you speak to the A-base program, which is our core funding, the portion for housing is given to the core funding, but the new funding under Budget 2016 it's all proposal- based. Before the final payments, because payments are done on disbursements based on certain milestones, the First Nation community needs to submit a certificate of construction, highlighting that the building was built to code, was certified, and has to be recognized by a certified individual who has that expertise.
Senator Eaton: That's nice to hear. Thank you.
Senator Marshall: I have questions for each department, but my first question is for Indigenous and Northern Affairs.
I want to talk about the funding for the specific claims settlement, the $72.1 million. The reason I'm asking about it is because it seems to relate to Mr. Ferguson's audit report that was released yesterday. He was quite critical of the department. I'm wondering if you could talk about what the funding is for in the context of his findings when he did an audit of the program. I'm looking for things such as how many claims are outstanding and how long it's going to take to process them and also what the department is going to do to rectify the problems identified by the Auditor General.
He used strong terms. He mentioned a failure of leadership beyond unacceptable. He's exasperated that auditors flag problems and make recommendations, yet they're never fixed. Then he said that Indigenous and Northern Affairs Canada did not adequately manage the resolution of First Nations specific claims.
Could you just talk about the $72.1 million in the context of his findings?
Mr. Thoppil: Thank you, senator, for the question.
The amount of money that we've asked for, as I said in my opening remarks, is reprofiled from a previous year in order to maintain the integrity of the envelope in order to deal with the claims that are in existence. In terms of the current inventory, as of March 31, 2016, there are about 351 claims of which 134 are under assessment, and there are about 217 claims under a negotiation.
It's very important that that money is maintained in terms of the integrity of that pot. As those claims are negotiated or settled and go to the tribunal for which an award is given, there is a pot of funds available.
Senator Marshall: Is the $72.1 million sufficient to process the 351 claims, or is that being overly optimistic?
Mr. Thoppil: That's a good question. There is a constant review of that.
As part of the response in terms of your question relating to the Auditor General's comments of yesterday, the department agrees with the comments. In fact, before the AG's report came out some months ago, the minister had desired a review and a reform. We are in the middle of a collaboration effort with the Assembly of First Nations to work together on reviewing of the business process issues that were identified in the AG's report in order to figure out a way to address the findings that the AG announced yesterday.
Senator Marshall: How old would those 351 claims be? I'd like to know on average and how old the oldest is. I'm getting the impression from the Auditor General's report some could be 10 years old or more. How old would those claims be?
Mr. Thoppil: Unfortunately I don't have information at my disposal right now, but I could provide that subsequently.
Senator Marshall: I'd like to know.
Mr. Thoppil: I should say that since 2007 until now 134 specific claims have been resolved, and we've paid out over $2.2 billion to First Nations in compensation associated with those claims.
Senator Marshall: The 351 claims won't be settled this year. They're going to be going into future years.
Mr. Thoppil: That's correct.
Senator Marshall: But you're saying that the $72.1 million was reprofiled. Is that because it takes the department longer to process them? You didn't use the money and that's why it's being reprofiled?
Mr. Thoppil: The process currently in place is staged and has to go through a number of phases in terms of historical research validation and so on, and then we try to see whether there are opportunities for negotiation. All of that, just the historical research phase, can take three to four years to validate the claim. So of course the integrity of that fund has to be maintained over fiscal years, and that's why you see the reprofiling request.
Senator Marshall: Is the entire $72.1 million all reprofiled money?
Mr. Thoppil: That's correct.
Senator Marshall: There's no new money there.
Mr. Thoppil: That's correct.
The Chair: To answer Senator Marshall's other question, Mr. Thoppil, what's your average historical claim size? That will help us focus in on how much money is needed.
Mr. Thoppil: It really varies by claim, senator. There is no average, per se. You have to take each claim on its own merits, and they vary significantly.
The Chair: CMHC probably has a horizontal relationship and gives money out to all of these people, and we'd like to understand how the horizontal relationship works amongst the three groups. Just keep that in the back of your minds.
Senator Ataullahjan: My first question is for the Department of Indian Affairs and Northern Development.
In your Supplementary Estimates (A), it is noted that your department requested an additional $245 million approximately for investment in the First Nations elementary and secondary education. Being that education is primarily a provincial responsibility, could you please tell me on the scope of this investment how many First Nations communities will benefit from this investment? Do you have any numbers of enrolments for elementary and secondary schoolchildren in these First Nations communities?
Mr. Thoppil: Thank you, senator. Slide 4 of the deck tries to provide you with the answers to some of your questions.
There are approximately 108,000 students both on and off reserve who will benefit from this funding. The funding for 2016-17 is broken down as follows: $55 million for language and culture; $115.5 million for special needs; $20 million for literacy and numeracy; $6 million for the Martin Aboriginal Education Initiative; and $7.5 million for innovation, research, measurement and evaluation.
There is some money to commence what we'd like to do, which is transformation of the education systems towards school board systems, and another $35 million to address other immediate funding needs. That's the breakdown for that.
Senator Ataullahjan: It's approximately 108,000 students.
Mr. Thoppil: About 70,000 are on reserve. Depending on the First Nation community, they send to neighbouring schools off reserve and so on. There's constant movement back and forth, but the total population is 108,000.
Senator Ataullahjan: Health Canada requested an additional $1.3 million to expand the Nutrition North Canada Program that is meant to support northern and isolated communities — I think you said 43 isolated communities. So Indigenous and Northern Affairs Canada has also requested almost $27 million for the same program. Why are your two respective departments seeking funds for the same program? What are the roles of Health Canada and Indigenous and Northern Affairs Canada?
Sony Perron, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch, Health Canada: Thank you for the question. It is going to help me address a point the chair made about "horizontality'' between the two departments.
Nutrition North is made of two components. One is the subsidy that goes to the retailer to bring down the cost of food in northern communities. The second portion, which is smaller, is the nutrition education component. It's more a public health approach to support northerners to make the right choices in terms of good food to use in their nutrition.
The small funding that goes to Health Canada is directed toward community-level activity that will include kitchen classes, breakfasts at schools, and activities to bring families and kids to make right choice in terms of food. The food subsidies are also directed to some of the products that are considered good and nutritious foods, but somehow you need a promotion element to encourage families to take these kinds of choices.
So the small amount we are getting at Health Canada is disseminated across communities to have this kind of education activity on the ground so people can make the right choices in terms of nutrition.
We are working closely with Indigenous and Northern Affairs Canada because they have the other portion of the program, which is very important, which is to keep the costs of nutritious food lower in northern communities. The amount of money requested in Supplementary Estimates (B) is about supporting 37 First Nations communities in the North to do nutrition activity. There are some more communities that are not First Nation that are supported by the Public Health Agency of Canada for similar activities on the ground.
Maybe my colleagues from INAC want to talk about nutrition and the food subsidy.
Mr. Thoppil: I think you covered it fairly well. We do cover the retailers in order to provide that subsidy. The money for Budget 2016 adds to the number of communities eligible, totalling 37.
Senator Ataullahjan: Is any money earmarked for maternal, newborn and child health? Worldwide, when we look at those numbers, we are really failing in that. Have you earmarked any money specifically on that?
Mr. Perron: Not through this program. This program is really community-based. In fact, communities may decide to target some segment of their population, like young families, newborns or preschool activities. The discretion is really at the community level to determine what kind of activity and what segment of the population they will target.
Over the years, we have seen that sometimes communities will have a mix of activities over time, because this funding is multi-year; it's not only for one year. So they are creating the capacity for these 37 new First Nation communities that will be eligible for Nutrition North. It is their first year, so they are in a planning mode to determine how they will take advantage of these new resources coming in. Before, they were not receiving this kind of funding.
To answer your question, though, we do have a program at Health Canada called Maternal and Child Health. We have had this program for almost 10 years now. It targets prenatal and postnatal visits to support families to deal with new kids and help them to make good choices. They deal with some risk as well around the family. This program targets children at risk in the community and also tries to guide family members to access the services that might be available in the community or surrounding communities to support early life.
This program has been receiving stable funding. We haven't expanded it over the last few years, though.
Senator Ataullahjan: Has there been any upward mobility in the numbers?
Mr. Perron: There is a need for more, because this program is not universal and the population is growing in First Nation communities. The growth of the population is greater than in the rest of the population, so there are more newborns. I was telling you this program received stable funding for a number of years, but no growth means that we cannot serve all the newborns and all the new family members with the resources we have at this time.
This program has had a fair bit of success and mirrors some of the programming you will have in southern non-First Nation communities, but usually with a cultural aspect or cultural safety built in, because it's usually delivered by local workers also supported by nurses.
This is an important program. I will provide you with more information if you want. I was not prepared to talk about it today because it is not in our supplementary estimates.
Senator Mitchell: My first question concerns funding to promote clean growth and address climate change. It's a horizontal item. It appears in the Supplementary Estimates (A) for Indigenous and Northern Affairs Canada and in the Supplementary Estimates (B) for Health Canada. It's $8 million, $9.1 roughly and $2 million-plus in the other. Could you give me an idea of whether it's the same program? Why would it be in those two relatively distinct departments? What exactly does it do? It sounds great because we have got to do something about climate change.
The Chair: We have to understand how horizontally you guys work.
Mr. Larkin: Budget 2016 provided $129.5 million over five years to seven departments. There are seven of us working horizontally on this. It includes Health Canada on the horizontal issue of adapting to climate change impacts.
Health Canada's allocation is a total of $17.5 million over five years, 2016 to 2020, and $1.7 million for ongoing efforts to address the impacts of climate change on health adaptation through the following programs: $8.5 million over five years and $176 million ongoing for heat and health risk assessment; and $9 million over five years and $100,000 on going to contribute funding for First Nation and Inuit communities.
Senator Mitchell: So not trying to fix climate change actually costs money. We have been saying that for a long time now; it's coming home to roost. But we're starting to do something about a carbon tax. It's great.
I'm interested in the CMHC presentation and the comprehensive National Housing Strategy. I wonder if you can give us insight into what that will do about downtown Vancouver and Toronto. When you think about who is going to be able to afford to live and work in basic jobs in downtown Vancouver and Toronto, where would they live?
Michel Tremblay, Senior Vice President, Policy Research and Public Affairs, Canada Mortgage and Housing Corporation: The National Housing Strategy is meant to address the full continuum of housing from homelessness all the way to home ownership. As you know, we have consulted with Canadians through a Web survey. We have received inputs from Canadians and also from experts. As my colleague Wojo said in our opening remarks, we conducted expert round tables and talked to stakeholders.
One of the things that Canadians did tell us — and I invite you to consult the report of what we heard — one of the big concerns of Canadians obviously is affordability, not only in Vancouver and Toronto, but across the country in both urban and rural areas.
We're going to work with our partners to develop strategies to try to address these issues. Part of what we're looking at is whether it's a supply issue. There are all sorts of factors that can go into house prices being elevated.
Senator Mitchell: With respect to Health Canada's Supplementary Estimates (B), there is $340,000 in funding to support targeted research on women's heart disease and stroke, and to promote collaboration between research institutions across the country. That doesn't seem like a lot of money for a serious issue, and I'm wondering if you could put it in perspective.
Mr. Larkin: In Budget 2016, $5 million was allocated over five years from 2016-17 through to 2021. We are bringing in $340,000 this year as they ramp up to this. It's to access that. It's to support targeted research of women's heart disease and stroke and promote collaboration between research institutions across the country. It goes to the Heart and Stroke Foundation, which is a non-profit and health charity that I'm sure you're familiar with.
Senator Pratte: I want to come back to the elementary and secondary education on slide 4. You may not have all the answers to this, but I would be interested in eventually getting them.
I'm interested in the outcome measurements. First of all, I would like to know what you define as short term, medium term and long term, but especially short-term and medium-term outcomes.
The performance indicator for short term is the student attendance rate, so I would like to know whether you have specific goals in mind. Do you have a student attendance rate that we know now? Let's say five years from now you're aiming at this rate and we want to know whether you are following this. For example, after two years, if we spent almost $500 million annually, after a billion dollars is spent, if we haven't reached that outcome, maybe there is something we need to adjust. I would like to know how you're following this and whether we can follow it.
Mr. Thoppil: Thank you very much, senator, for the question.
We have acknowledged that there is a funding gap in education, and so our first initiative is to try to move on addressing the funding gap. But the minister believes in mutual accountability in terms of education monies given to First Nations. We are right now going through a consultation and engagement process with First Nations on defining whether the measures you just referenced in terms of short, medium and long term would be transparent and accountable to both the community and to Parliament for the monies that are expended.
We do track attendance rates and, of course, the nominal roll, because the nominal roll is the basis for the payments for the education bills that First Nation communities incur.
Senator Pratte: So eventually your goal is that the communities themselves would report?
Mr. Thoppil: That is correct. We are in conversations right now on a number of potential indicators that will need to come together. It is a co-development, because there has to be buy-in and consensus by both First Nation communities and ourselves on those indicators, which could be the percentage of First Nation students who graduate from high school, the percentage of students who meet or exceed expectations on numeracy tests, the percentage of students who meet or exceed expectations on literacy tests, student rates on reserve, the number of First Nations who are participating in indigenous-led school boards or systems, and the number of students being educated under authority. Those are a sample of the indicators that we are in discussions on right now, trying to get consensus on doing that tracking of outcomes, and measuring how our money is doing in improving education outcomes for indigenous peoples.
Senator Pratte: Is there some kind of timeline for achieving agreement on those indicators?
Mr. Thoppil: We hope to come back to cabinet with the results of our consultations next year or the year thereafter based on those discussions and consensus.
Senator Pratte: But do we have data now on those on those indicators? For instance, do we know now the student attendance rate for First Nations? Do we have results for reading, writing, numeracy and science? Do we know the graduation rates on reserve and off reserve? Do we have this data now?
Mr. Thoppil: We have data on a number of things. We do have data on the percentage of First Nations students who graduate from high school. We have the number of students who meet or exceed expectations in numeracy tests. We have data on the number of students who meet or exceed expectations in literacy tests. Yes, we do.
Senator Pratte: You could eventually compare two or three years from now where we are.
Mr. Thoppil: Correct. But it's very important that we get consensus and that it's developed jointly so that it's not a top-down approach, which is consistent with the decades of colonialization. It's very important that there is buy-in by both parties as to how we're going to measure so that there is accountability both ways.
Senator Pratte: I understand that. Thank you.
Senator Andreychuk: I have trouble reading these, maybe because I'm newer to the committee. But we get things saying "objective.'' I understand what the objective is. Then "outcome'' — well, really, it's expected outcome. Then you say the "status.'' But the status is in wording and it doesn't give us much detail as to what you are doing.
I come from Saskatchewan. We hear a lot about what we're going to do and how we're going to consult. Then some money is released and I think that's good. Then I talk to the communities and nothing has happened or not enough has happened.
How do we get to a system where Aboriginal organizations understand how much money there is and what the objectives are? How do we get a consultation started and finished so that we can track that it has been meaningful consultation according to the judiciary?
We seem to be moving money and we seem to have goodwill-expected outcomes. I find all the tracking very difficult. That's what I hear from everyone else. I'm not talking to the leadership. I'm talking to the people who say, "How come my kid isn't in school? I don't have the support systems I need.'' The welfare system, too. It goes federal-provincial, too. It seems like it's a maze.
I would like to know more about the expected outcomes. How are you going about it? I think people deserve to know that, both the Aboriginal community and parliamentarians.
We have heard from other departments that they are starting to do more transparent tracking, so you can go somewhere, find it and see what the progress is. You can see the numbers attached to it. You can see everything. I don't think we're there yet on this. We're still in a maze.
Are you thinking about how to finish? Because we have been consulting for many, many years. We have been expending money, and I'm not sure we have accomplished as much as we should. Not because of any ill will — I'm going to give everyone their due — but it's not happening. It's haphazard.
Mr. Thoppil: The government has an ambitious agenda in terms of reform across the board and on the programs and services that we do deliver. That does require a consultation engagement exercise.
Just as one example, there is the pre-design inquiry phase in terms of the public consultation and the amount of engagement with victims that were missing and murdered. That is part of one example of the transparency and the fulsome engagement that was done from coast to coast, leading up to the definition of the terms of reference for that inquiry. That's one example of the transparency that you were referring to, senator.
In another example, in terms of the budget money from 2016 for infrastructure, we are working right now on an interactive map that will go out online for Canadians so that they know where that money is going, by First Nation communities, for schools, to address long-term boil water advisories and so on.
Senator Andreychuk: I understand the examples. I keep getting examples. But I would like to see exactly what we're doing from a federal point of view. Where is the consultation in a very generic way of saying, "Here is how we approach the Aboriginal community''? There obviously will be exceptions. And the missing and murdered women is a totally different issue. In the day-to-day lives of Aboriginal people, where can they see what's being done on their behalf? Where do we see that the money is actually being expended on them? We get bits and pieces, and we get examples.
With all the good intentions this minister has to consult, there have been other ministers who have had exactly the same good intentions perhaps to do it differently. So we're always going to do it differently: "We're going to start and this is going to be the time.''
I hate to admit my age, but I've heard it so many times. I want the dynamics on the ground to change. I'd like to be able to track that we spent X number of dollars for this, this, this. I don't want to see the expected outcome. I want to know what the real outcome was and I'd like to track it year by year. Maybe we should be doing more in one and taking more time on the other, but how do we analyze this?
We were having the same conundrum with infrastructure, which was a lot simpler in my opinion, and we couldn't track it all. How do we track that? That is the real issue if we're going to solve the problem.
I say that because we set up an Aboriginal university at the University of Regina, and really good things started to happen when we had objectives and expectations, but outcomes. You could track what was happening in Aboriginal post-secondary education. I can tell you the outcomes — how many students graduated, where did went on the reserves and how they changed. We started with languages, social work, but went into a master's program for administration on reserves, which was what they needed because an MBA doesn't work on reserve.
There were track lines and there were miscues and over-expenditures and governance problems, but you could see the whole thing. That's what I think we need if we're ever going to solve this. Otherwise it's movement around and expectations and goodwill, but where are the results?
Anyway, there's my speech.
The Chair: Mr. Smith, do you have a suggested response?
Mr. Smith: Senator, thank you very much for your question.
To build on what my colleague Paul has brought forward, we've heard clearly from First Nations, but also from this committee, that we need to communicate better and we will be communicating better. I can say, for example, in your province there are at present 219 infrastructure projects happening as we speak. In the months to come all these projects will be available on the Web. Citizens from throughout Canada, First Nation citizens and all citizens, will be able to go to our website and look at their community to see what is happening.
Again, there are 25 waste-water projects and 125 housing projects happening in Saskatchewan specifically. Those details will be available for all citizens to go to the website and be able to track. I put our investment plans there. What is our yearly objective? Where we are and what will be our annual results at the granular level? It will not just be at the macro, but also at the granular where people can see communities and actual projects.
The Chair: How will you set the website up? Will you have a map?
Mr. Smith: Yes, we are working with specialists in communications. I don't pretend to be one of them. But we wanted to make it user-friendly. We want it done by map and by asset class. We want people to be able to go there and say, "I live in this community or area and I have concerns or issues, and I want to see if things are happening.'' That information will be public. We're moving towards that.
Senator Neufeld: A number of my questions have been asked, but further to Senator Andreychuk, as long as I've been here I've heard about problems with Nutrition North and that it's maybe not meeting the goals that it should. There is more money going into it. How do you measure Nutrition North as actually getting better? Nutrition North is a combination of things, but one thing it does is try to keep prices down in some of those communities in the Far North. I visited one and it seems to me a little bottle of Tide cost just under $40.
When you look at prices in those communities, you wonder how they actually survive. How do you measure? Do you measure that the food is going to get cheaper? The price of some of the food is absolutely ridiculous, but how do you measure it? Is it more money? Where is the measurement that says the person who lives in one of those small communities in Nunavut actually is paying less for their groceries? Is there some measurement you use or is it just more money?
Mr. Thoppil: The current design of the program is focused on healthy perishable foods, so fruit and vegetables. That's where the subsidy is going. It's not the full basket of what's in that cart in terms of all your needs when you go grocery shopping. Therefore we measure that impact based on a basket of equivalents with some StatsCan data. That's how we measure whether in fact that basket is actually cheaper or not.
While that's where the current program design is, the reality is that when an individual goes to the store, they're buying more than just the perishable foods. They are buying Tide, diapers and so on for essential living. Part of the engagement currently going on in terms of consultations with northerners is what exactly are we expecting this program to be going forward? Is it about cheap, healthy foods for northerners, or is it about more food security overall for northerners? Where does country food for northerners fit into that picture? In terms of the consultation engagement rounds that have been going on, that has also been an issue raised by them for which the current program does not necessarily satisfy.
Senator Neufeld: From one year to the next, you would take those items that you're talking about, trying to reduce the cost of them, so if you bought them in September of 2015 and it's September of 2016, would you actually measure that and say it cost $5 less or whatever it is?
Mr. Thoppil: Related to inflation and so on, right, that's what we're measuring now. And also based on the cost of transport, so we do measure that and we say based on the current design of the program, based on that limited basket of fruits and vegetables, it's cheaper. But that being said, what we're finding from northerners though, through the consultation engagement right now, that's not necessarily what they're looking for.
Senator Neufeld: So you're going to figure out what they're looking for and actually do it. Is that what you're telling me?
Mr. Thoppil: The intent is that we're trying to find out what exactly they want. Is it essentially, as I said, food security in terms of that whole basket of groceries that an individual buys every week? Does it include a measure of country foods to reflect the northern dimension, or is it based on the program design as it is and remodified on the margins based on healthy, perishable fruits and vegetables?
Senator Neufeld: Would you provide to the clerk the basket of fresh fruits and vegetables that you're using for a measurement now?
Mr. Thoppil: Yes, I would be happy to do so, senator.
Senator Neufeld: Can we have that and the cost of whatever that was? I know some people up North, so I'll have them watch those items.
Another one is climate change. Senator Mitchell was happy that the government is going to apply a carbon tax north of 60. I don't know whether a lot of people up there are happy about that, but so be it. What other things are you doing on climate change? I didn't get a clear sense that Senator Mitchell's question was answered. What are you actually doing?
When I read the notes, it says south of 60. Are you doing climate change issues south of 60 or north of 60, or is that just a typo? I'm not sure.
Mr. Thoppil: If you look at our Supplementary Estimates (B) deck, page 17 breaks out into two baskets the basis for our clean growth and climate change ask. Both are items in the North. So it works with communities to fund workshops to figure out what they are looking for. It also funds renewable energy and energy efficiency projects, with a focus on trying to reduce the amount of diesel fuel up North.
There are about 23 projects that we have supported this year, which will have completion dates for the next one to five years. Some examples are the Kluane First Nation wind project in the Yukon, to the Innavik hydro project in Inukjuak, Nunavik, and so on.
Senator Neufeld: I'm going to ask again about south of 60. Is this all targeted south of 60? Because that's what your notes say.
Mr. Thoppil: The clean growth and climate change in the Supplementary Estimates (B) is for the North.
Senator Neufeld: For the North. South of 60 or north of 60?
Mr. Thoppil: It's north of 60, sir.
Senator Neufeld: This says south of 60, so explain it to me.
It says under "Outcome,'' at the end of the first bullet, "adaptation projects in First Nations communities south of sixty.'' I don't know anywhere that says north of 60. Maybe I'm just not reading it right. I'm on page 17 of your deck. Maybe it's just a typo. Is that supposed to say north of 60 or south of 60?
When you go to the second box, "Outcome,'' first bullet, the last sentence: "First Nation communities south of sixty.''
Mr. Thoppil: That is a typo, sir. Thank you for flagging that. It is all focused on the North.
Senator Neufeld: Okay. Thank you.
The Chair: Country boys can do it all.
Senator Neufeld: I live close to 60, so I'm familiar with it.
My last question is a quick one. Your last slide, 24, "Oil and gas development.'' It talks about looking at royalties in informatics and those kinds of things. Tell me what is happening with oil and gas. Is there development of oil and gas? Should I check with you? Is this north of 60 or south of 60?
Mr. Thoppil: The oil and gas development money is associated with —
Senator Neufeld: It's all across Canada, is it?
Mr. Thoppil: It's an IT system in order to link in with the same IT system that the private sector uses to make sure that the data to calculate the royalties that First Nations are entitled to are the correct ones.
Senator Neufeld: And this would be north and south of 60?
Mr. Thoppil: It's on First Nations reserve lands.
Senator Neufeld: All First Nations reserve lands.
Could you give to the clerk what value that is in royalties that comes across Canada to First Nations reserves? Does it go to the reserve itself, or is it taken in by Canada and spent in other places? That would be my question. I know the chair is going to cut me off, so I'm going to ask you to answer those through the clerk so we can all get those answers.
Mr. Thoppil: I would be happy to provide that, senator.
Senator Cools: I would like to thank you, gentlemen, for joining us tonight. As always, I admire the skill and ability of keeping track of these massive numbers that are all in the millions and billions.
I'd like to inquire of Health Canada, which would be Mr. Larkin. I have an item here that says $88.2 million, and it's called funding for Jordan's Principle, interim reforms which will increase social and health services for First Nations children. This sounds like something named after a child, which would suggest a terrible tragedy. Could you tell me about that, please?
Mr. Perron: I will try to summarize. Maybe some of you are aware of it.
There was a motion in Parliament in 2007 related to the story of a young boy from Manitoba who was severely handicapped. He had multiple disabilities. As a result of jurisdictional tension between the provincial and federal governments for supporting this child and this family, the child finished his life in a hospital somewhere in Manitoba without being able to return to his home.
After that, Parliament was seized about that complex issue that involved some jurisdictional issues in the federal government, but also between the province and the federal government. It took a motion in the house and it was voted on by all members of the Parliament that a principle would be put in place called Jordan's Principle that will call the government to resolve the issue ahead of time and deal with jurisdictional disputes after.
I'm trying to summarize. We can provide you with a better description of that.
For 10 years, this principle has been in place, but last winter, the Human Rights Tribunal determined that the way the federal government had implemented Jordan's Principle was not consistent with the motion passed in the house and ordered some resolution of that.
In response, the federal government, mainly through Health Canada and INAC, has brought a response to apply a broad definition of Jordan's Principle to all First Nations children in all of Canada whereby we would take proactive measures to try to address issues related to social, health and other services to make sure that First Nations in this country will have services the same as other children and that a dispute will not come in the way of them accessing services.
The funding you see in Supplementary Estimates (B) is for supporting both Health Canada and INAC to deal with these cases, but also to take proactive measures. As part of the work to look at this response, a group of children was identified with more needs than the limited services. Those living on reserve with disabilities or short-term medical conditions will not able to access the same level of services as other children in the country.
So some proactive measures are built into the response to reach out to families with children and try to build services around them through service coordination and integration. We are pleased to report to this committee that so far, between Health Canada and INAC, almost 900 children have been identified, mostly in Western provinces, where more services — a type of respite care services — will be provided to them. A number of cases of families came to the department to get support for a diverse number of services.
We are progressing and putting in place a structure called case coordination. It will be in First Nations organizations in various regions of the country. It will be for the outreach and assessment of the needs of the children and we will try to organize a service around them.
It's called interim measures because we don't believe that this is necessarily a long-term approach. At one point when we have identified the needs and have a solid sense of where the needs are, we will try to organize a service and the proactive measures. You will probably know that in some remote locations in this country with regard to the accessibility of services, even if the government is willing to cover the cost for the level of service, the service providers are not there. For the long term it is to find a better way to serve children that might be underserved by an existing program.
Senator Cools: Could you tell me how that $88 million will be spent? Would that be providing social workers or counselling? What would that be? Case management?
Mr. Perron: It's case-based. I have the details here and maybe I can help to describe how the funding is organized on an annual basis.
Over three years, $38 million is allocated to service coordination, which is creating the institutions in First Nations organizations to do the outreach, assessment and the organization of service.
Then there is $324 million over three years for service resolution. This is to pay for services, whether it's respite care or a chiropractor, physiotherapist, speech therapist, the kind of service that might be needed for the children — transportation, the services to support them.
There is an internal administration cost to organize the service and be able to manage the case, around $20 million over three years; and a small amount of money, around $600,000, to create the data set so that we better understand the demand and the need.
This money is not necessarily equally divided over three years, but this is the proportion that you're getting. Most of the money is going to go to pay for actual services for the families. We have received cases that are to support transportation, to support access to respite care, to physiotherapists, this kind of thing, but it's really case by case.
We also have instances where families approach us because they are in a place where there is no support for them, and the system has not been geared to address these situations. So we are assessing how the departments can come together between the two departments and assist these families.
We expect that this is going to ramp up over the years. We are four or five months into the initiative. This started in July of this year. It's brand new, and we are at about 900 cases right now. This means that, before, these families were not receiving much attention.
Senator Cools: I wonder if you could tell me, then, about the $57.6 million that you describe as fulfilling Canada's obligation under the Indian Residential School Settlement Agreement.
Mr. Perron: There are two components of this program. The resolution of the cases for the claimants is with Indigenous and Northern Affairs Canada. Under Health Canada, what we are providing is cultural, spiritual and counselling services. All those former residents of residential schools and their families are eligible under the settlement to receive this kind of support during the time of the resolution process. So this has been prolonged for another two years.
Just to give you an idea, annually, since we started that, the demand for the service has been pretty steady. It accounts for around 630,000 emotional and cultural support interactions. This might be just a small consultation, but we are supporting the workers doing this work. There are around 47 professional mental health consulting service sessions per year that we are doing, around $60 million worth of expenditures. This also includes transportation because sometimes these former residents and family members do not necessarily live close to where there is service, so we will pay the transportation, whether for the provider or the clients or the family members. This program has been really successful in helping family and former residents of residential schools to go through this resolution initiative.
Senator Cools: These are very difficult questions for anyone who has, say, worked in social services, as I have. There are lots of problems with indigenous children. Sometimes the children are just left here with somebody for weeks on end. It's something I know a little bit about and have watched at very close quarters. It is a terrible thing when one of those children slips away and dies or is killed, and it's a huge tragedy.
I'm very pleased to know that the federal government is actually isolating and identifying these problems and calling them what they are and giving them the attention and the financial support that they really deserve. I commend you for that.
The Chair: There are some people from CMHC that are hiding from us because we are so excited to ask more questions.
We've trampled on Mr. Thoppil. You've done a heck of a job. I have to compliment you, which I do pretty well every year. There is a lot of work that goes into this.
Before we are overly hard on Mr. Thoppil, we should — we've talked about this in the past. If we were able to get this maybe a day before you come and meet us — and I'm not sure that's a realistic expectation — we could go through it and then ask solid questions that you could give quick answers to.
My experience is running businesses, which I know is very different from running public institutions. When you get 19 objectives in a report, chances are it's very difficult not only to communicate them but to give people the quick flash that they need in a meeting like this. In most businesses — and this is very different — no one can understand more than four. Even boards of directors have difficulty with the magnitude of the objectives.
When we look at the profile of key elements that are publicized on a consistent basis, one is clean water; two is housing; three is schools; four is education. You and I talk about this on a regular basis. I realize the size of these programs and the complexities, but if you look at the media, they always want "clean water, housing, schools, education.'' If we were able to get snapshots of those, even if we were able to get snapshots of your objectives. If you had "Objective,'' and then "Outcomes,'' or have one outcome. Maybe that's not a realistic expectation. And "Status,'' bullet form. Do it in bullet form, but multiple-bullet form.
Unless we can get that two or three days before, it is hard for us to comprehend. It is something to think about, and you and I have talked about that. You do a heck of a plan, but when I look at it, I can imagine multiplying by the hundreds and thousands of folks that would actually work with you and the difficulty they would have comprehending it. That's just a suggestion.
I have a question for CMHC on affordable housing. You mentioned $2 billion or $1.6 billion, whatever it was, in terms of reprofiled money; $1.07 billion through Supplementary Estimates (A). This is one of the platforms tied to infrastructure spending that the government talked about. Where are you with your social infrastructure fund, the actual execution and in which provinces? Can you give us an overview? Have you started and when are we going to get some results? It's great to talk about money that's positioned or reprofiled, but where are you? What are you doing and what can you give us as a flash in terms of that?
One of the points is: Does it actually generate jobs? If so, does it generate something that is going to be measurable, comparing that to other infrastructure programs?
Those are loaded questions. You were very keen, looking at everybody else, and both of you guys were listening intently, but I was wondering whether there was some flight behaviour in your eyes.
Mr. Zielonka: I'm going to ask my colleague Charlie MacArthur, who actually deals with that file. I'll ask him to come to the podium.
The Chair: Charlie, it's great to see you. He's got a great big smile on his face.
Charlie MacArthur, Senior Vice-President, Regional Operations and Assisted Housing, Canada Mortgage and Housing Corporation: Hi.
Mr. Zielonka: I think Charlie was the one who was hiding.
Mr. MacArthur: I was hiding. Thank you very much for the question.
With regard to execution and the work with the provinces, we've signed 12 of 13 agreements with the provinces, and we anticipate signing the last one imminently. So we're progressing well, working with our provincial partners, our primary partners. We've always — knock on wood — been able to make sure that the money is spent in a timely way on an annual basis.
The Chair: How much money was spent on the 12 deals? Have the deals started?
Mr. MacArthur: Yes. We've started to receive claims for some of the provinces that were early to sign.
Mr. Tremblay: It's $1.4 billion over two years.
The Chair: Do you have a status of where the projects are at and the completion dates?
Mr. MacArthur: They have up to two years to complete the projects in terms of the construction from the start until the end, but we get claims on a quarterly basis from them. We've just started to receive the first claims as we've been negotiating the new deals with them. We anticipate, based on history and good execution by our partners, the provinces and territories, that they will be able to spend the money.
For example, through Investment in Affordable Housing from 2011 to the present, that's resulted in some 287,000 folks who need help. That's a combination of affordability, which would be rent supplements, and new construction projects. So we anticipate a similar pattern of expenditures.
The Chair: I don't want to be rude, but what is the percentage in the indigenous population versus the north-south population. Can you divide that? You said $1.4 billion. How much is up North? How much is with the indigenous and northern folks? How much is in the major cities across the country?
Mr. MacArthur: There was specifically northern housing allocated. There was the Inuit funding that our colleagues at Indigenous and Northern Affairs Canada had. We had specifically northern funding, and this year that's $40 million. That's split across the three territories. Plus there's the doubling of Investment in Affordable Housing. I've got the numbers broken out too finely for you, but I can provide all of those numbers.
The Chair: Provide them, but if you can give us a quick capsule that would be very interesting. When you hear $40 million for indigenous and northern folks and you just talked about $1.4 billion, is that to assume that most of the activity is in the South and not the North?
Mr. MacArthur: I have the snapshot.
The Chair: Mr. Thoppil, if he says $40 million, is that different from your $40 million in construction projects?
Mr. MacArthur: Over two years the investment in Nunavut will be $84.2 million. That's a variety of things, a doubling of Investment in Affordable Housing, the northern housing portion that I spoke of. Investment in Affordable Housing requires matching funding. The rest do not.
There is northern funding, an increase in housing that's being made available for seniors; support for shelters for victims of family violence; and renovation and retrofit. In Nunavut, that totals $84.2 million over two years. In Yukon it's $13.6 million, with the same kind of breakdown in the same categories. In the Northwest Territories, the breakdown of the 2016 budget investment is $20.4 million. So that's the northern share.
The Chair: Fantastic.
What about the south, the major cities?
Mr. MacArthur: For the major cities, the provinces and territories design and deliver the programs. So they'll decide whether it's Toronto and Vancouver and how it best works. The way the programs are set is that our primary partner designs and decides whether it is St. John's or Baie Verte that needs the funding or whether it's Toronto or Sudbury. It depends on the local needs.
The Chair: Do you have their numbers?
Mr. MacArthur: They will provide that to us as they roll the program out.
The Chair: Whatever you can send the committee would be very helpful.
Senator Marshall: I want to talk about mortgage default insurance. I had about eight questions, so I think I'm going to go right to my last question and work backwards.
The corporation is so big. We're talking about billions and billions of dollars for mortgage insurance, and I would think there are billions of dollars involved in the projects.
What are the financial risks to the corporation? Is it just going to keep growing and keep going? You must do some sort of assessment as to what your risk is in different areas. We see in the media now that consumer debt is increasing. We know there's a risk if interest rates go up. What kind of assessment is done internally? How do you assess the risk to the financial stability at the corporation?
Mr. Zielonka: Thank you for the question, senator. In fact, our mortgage insurance business is actually shrinking. Outstanding at the end of September was approximately $510 billion in mortgage insurance.
We do stress testing on an annual basis. So we look at a variety of plausible but extreme scenarios so that we can understand the kind of impact those scenarios would have on the corporation. For example, we would look at things like if house prices across the country dropped by 30 per cent and the unemployment rate went up by 5 per cent and what impact that would have on the corporation.
We look at the scenarios on an annual basis and complement them on an ongoing basis; we expand the scenarios in consultation with our partners. We generally find that the corporation is well-capitalized to withstand those kinds of shocks. Some of them have a significant impact, but they are not so large that the corporation cannot withstand those.
Senator Marshall: Have you ever looked at options such as privatizing certain parts of the corporation like mortgage insurance? Because all mortgage insurance doesn't go through CMHC. There are other financial institutions. Do you look at those options?
Mr. Zielonka: There are two private mortgage insurers in the marketplace. They have a market share of close to 50 per cent. Our market share has fluctuated over time. In 2008 and 2009, when the financial crisis hit Canada, our market share actually grew close to 90 per cent. Part of that was because of a withdrawal of some of the private mortgage insurers in the marketplace.
One of the challenges is to make sure that we have an ability to ramp up if there is a crises and provide Canadians with mortgage insurance in a time of need, and at the same time to balance that and have a healthy marketplace and not have a situation where we crowd out private competition. That's something that we always endeavour to do, and we advise the government on that.
In terms of the question of privatization, it's ultimately a decision of the government. It is a topic that has been looked at and debated, and it really is a question for the government of the day.
Senator Marshall: So when you look at the corporation over the past 10 years, has it gotten much bigger, or is it pretty well the same as it was in terms of dollars? Do you anticipate growing and growing? Where are you headed?
Mr. Zielonka: The 10-year time horizon unfortunately does catch us right before the financial crisis. As a result of the financial crisis, in response CMHC grew significantly so we could ensure there was continued liquidity to the markets, to ensure the Canadian financial markets and lending markets worked well. We did grow significantly in that period.
Since then, though, we have continued to shrink. There is anticipation that that trend will continue. The overall housing market in Canada does continue to grow and our share of that market is decreasing.
One of the important things that we are always mindful of is that CMHC is in a position to step up if there is a need to provide that stability to the financial system.
Senator Marshall: A lot of departments and Crown corporations have embarked on different strategies since the current government took over in the last year. Has CMHC embarked on any strategies with regard to the corporation as a whole or any specific programs?
Mr. Tremblay: You would have heard about CMHC as Canada's housing policy adviser to the government. We are doing extensive consultation. We have completed an extensive consultation on a National Housing Strategy where we reached out to Canadians and experts. A lot of our focus has been on that.
Periodically over the years we revise our strategy across all our business lines. As my colleague has said, we also advise government on the housing finance file.
Senator Marshall: And the strategy —
Mr. Tremblay: We published it. It would be in our corporate plan summary on our website. As well, we report against it in our annual report. Our mandate and vision are on our website, in strategic directions.
The Chair: We have three senators left, and then I will ask each group to give us a one-minute summary of your biggest challenge in the next six months.
Senator Ataullahjan: My question is for the CMHC regarding the National Housing Strategy. Are you keeping the needs of women in mind in developing the strategy? For some women it means a matter of life and death. Is special attention being paid to that?
Mr. Tremblay: Absolutely. Thank you for the question, madam senator.
As part of our consultation, we met a number of people with lived experience, so focus groups. Also, as we consulted across the country with Canadians, we heard loud and clear that Canadians want us to look at the people who are the most vulnerable and who have distinct needs. There is gender also, but there are people with disabilities, seniors and across the board. Indigenous people were mentioned as people we should be mindful of. That is all being considered as part of the development of the National Housing Strategy.
Senator Mockler: One of the questions I had is about that $1.07 billion.
[Translation]
We are seeing, especially in Eastern Canada, an increase in service requests because of the aging population, which was not anticipated in the Canada Mortgage and Housing Corporation's regular programs. What kind of additional requests are you receiving so that we can better help the aging population in our regions? The requests are certainly not the same as those in Quebec, Ontario or Western Canada.
Mr. Tremblay: During our consultations, we found that seniors are part of a more vulnerable group as regards affordable housing. We fully understand that housing is essential for the well-being of seniors, but housing-related services are also very important. We often hear that the people in such housing need to be looked after. We are looking at approaches that could include offering services in the housing.
We have talked about horizontal consultations. We have a provincial and territorial group that includes eight federal departments.
[English]
We have eight federal departments helping us through the National Housing Strategy. They include Indigenous and Northern Affairs, Finance, Infrastructure and Communities, Environment and Climate Change, Health, Status of Women, Sport and Persons with Disabilities. So there is a lot of thinking going on around that.
[Translation]
Senator Mockler: Can you give us specific examples of requests from your clients?
[English]
Mr. Zielonka: I could try and help with some of our programs.
We have the assisted housing side, but we also have some of our commercial programs, which are very much geared towards ensuring there is funding for things like retirement homes and rental homes, which is part of ensuring that there is funding for the entire housing spectrum. It looks at trying to provide housing for all Canadians and their different housing needs.
In Quebec, we are very active on retirement homes, assisted living and those types of facilities. That is something that we do by providing mortgage insurance to ensure that there is adequate funding to help build those facilities in a cost-effective manner.
Senator Mockler: The chair alluded to trying to determine better outcomes and measurements. There is a question I would like to pose and maybe have the three of you answer.
If we were to decentralize your departments and send part of that up North, would we have better measurement of performance?
The Chair: Do you have feet on the ground up North in your departments?
Mr. Larkin, you mentioned that before you came in last year, and Mr. Perron described the construction of health centres and the number of health centres that were being built. Hopefully CMHC or someone was financing that, if not the local people.
How many people do you have on the ground that can execute some of your mandates?
Mr. Zielonka: I can speak on behalf of CMHC. We have about 1,800 Canadians across the country. Of that 1,800, approximately 800 are outside the National Capital Region, in the various provinces. We have points of service in different parts, so we can be very close to our clients, especially with social housing and being able to deliver services and understand how the delivery of our services impacts our clients, so very much focused around outcomes.
We also work quite broadly with different partners. My colleague Charlie MacArthur could probably expand on some of those partners and how we measure outcomes. It is something on which we are very much focused.
We have a CEO who has been with CMHC for almost three years. His focus has been very much on making sure that we are accountable and very much outcomes-driven. The questions of why, how and what are top of mind whenever we look at anything.
The Chair: How many of the 800 are up in the North?
Mr. Zielonka: We have two situated in the North full time.
The Chair: Two across the whole country?
Mr. Zielonka: In the North.
The Chair: Where in the North?
Mr. MacArthur: Yellowknife.
The Chair: Both in Yellowknife?
Mr. Zielonka: Both in Yellowknife, yes. Our staff, depending on the needs, will go to —
The Chair: Do you feel two in the North is enough?
Charlie, what do you think?
Mr. MacArthur: We offer the full complement of services out of all of our regional offices. We have people travelling to the North and working in the North quite often.
As I said, our primary partners are often the provinces and territories. The vast majority of our funding flows through the territorial governments. We have good, close relationships with them. They decide on the design, so what is required in Nunavut would be different than what is required in another place.
The Chair: Do you have an office in Nunavut?
Mr. MacArthur: No, we don't.
The Chair: Do you have an office in Yukon?
Mr. MacArthur: No, we don't.
The Chair: Do you have an office in the Northwest Territories?
Mr. MacArthur: Yes, we do.
The Chair: So it's one out of three?
Mr. MacArthur: Yes.
The Chair: A huge distance.
Senator Mockler: We hear from Indigenous and Northern Affairs Canada and also Health Canada. With regard to what I have heard from CMHC — around which I think we could do better — I remember when I used to have some portfolios that, when we moved and tried to have a one-stop shop and when we moved certain infrastructure —
[Translation]
— because the workings of government are cumbersome and taxpayers want more for their money.
[English]
I would like to know what the other two departments are doing about it. What do you reflect over there? I'm going to talk about New Brunswick. When we moved them up north, we had better performance, measurements and efficiency.
Mr. Thoppil: For Indigenous and Northern Affairs Canada, we have 300 people up North in three offices in Yukon, Nunavut and Northwest Territories. There has been a reduction as we have transferred federal responsibilities over as part of devolution. We are continuing that trend in order to give northerners their right to govern as they see fit, because we think the best way of accountability and measurement is to withdraw and to let northerners govern as they see fit, as well as First Nations in terms of advancing self-determination.
The Chair: What is your objective? What will the final outcome be as you see this unfolding and getting the equilibrium you're looking for?
Mr. Thoppil: We don't have a target. Some of it will depend upon how the Nunavut devolution unfolds in terms of the scope and responsibilities they want to take. Then, what is the scope of pace they want to take? Because they are coming off a low base and so on. There is no target.
Senator Mockler: In addition to what you just said, when we do that, do you have reductions in your offices here in Ottawa?
Mr. Thoppil: Yes. Obviously when there are reductions in responsibilities, it is commensurate. It's not just all in the regional offices but in our northern HQ as well.
Mr. Perron: We have had a long-standing office in Yukon, because in Yukon we are still managing some operations that have not been devolved or transferred to the territorial government or to First Nations.
As well, three years ago we opened a small office in the Northwest Territories as well — a small office. It is mostly liaison, working with First Nations and the Government of the Northwest Territories.
We don't have an office in Nunavut.
However, in the three territories we have what we call territorial tables — for example, in Nunavut with the Ministry of Health of the territorial government, the NTI, which is the Inuit land claim organization, and Health Canada. We make all decisions jointly.
We don't have much operation; it's rather regular planning sessions together and how we organize the resources we have to support public health in the region. We don't necessarily need an operation centre. We need a solid governance model with our partners, which are not only the government but also the Inuit land claims organization. This is the approach we have been taking.
The Chair: Senator Cools, you have the last question. Then we will ask for a one-minute wrap-up from three groups in terms of major challenges in the next six months.
Senator Cools: I'll pass. They have been so good and have advanced things so wonderfully that we can close it down now.
The Chair: Quick wrap-up folks, please; one minute each.
Mr. MacArthur: We understand at CMHC the awesome responsibility that we have been charged with. We understand the folks we are serving are really in need of our absolute best. We try our utmost to squeeze as much out of every dollar that we can find and to deliver the money that has been voted for us and ensure that it goes to the right places.
Mr. Thoppil: For Indigenous and Northern Affairs Canada, the Prime Minister has made it very clear there is no more important relationship to him than the relationship with indigenous peoples. That results in a very ambitious mandate to deal with our three strategic pillars: reconciliation between the 96 per cent of the population and 4 per cent of the population; elimination of the socio-economic gap that exists in terms of disparity between indigenous and non- indigenous peoples; and, lastly, advancing self-determination.
There are tremendous challenges under each of those three pillars, as you can quite imagine going forward, but that's what we're charged with and that's what we're going to accomplish.
The Chair: And the consistency that Mr. Thoppil has over the past four or five years in dealing with us is the messaging that it's critical that the indigenous folks are able to express themselves clearly in terms of what their needs are, which is a hell of a balancing act. Is that correct?
Mr. Thoppil: That is correct.
The Chair: Mr. Larkin?
Mr. Larkin: Our priorities reflect those of the government that have been somewhat elevated recently. As you know, we are negotiating and advancing negotiations on the health accord with the provinces and territories. We are also working to further implement the legislation around medical-assisted dying.
The Chair: What is the biggest thing that sticks out?
Mr. Larkin: Number one for me as a chief financial officer representing the department would be us working with the Department of Finance and Treasury Board to advance all our priorities toward Budget 2017, and ensuring that the department has the resources to move forward and support the minister.
The Chair: Budget 2017: Is there one thing that stands out in your mind, besides the budget implementation, that needs to be done pronto?
Mr. Larkin: There are a number of things in Budget 2017.
The Chair: Pick one.
Mr. Larkin: I can't really talk about Budget 2017, as they are subject to —
The Chair: As an operations guy, Mr. Perron, do you have one that you think needs to be front and centre?
Mr. Perron: As part of the health accord discussion, we have engaged for the first time in 10 years with Inuit, Metis and First Nation leaders at the table with the federal-provincial-territorial ministers. What will come out of that is probably the most important thing we have done in terms of health. It was a productive discussion for the first two meetings. I am hopeful that we will see a great outcome from these discussions.
The Chair: Listening to people and their priorities in health — consistency.
Great job. Thank you for your patience with us. We appreciate it.
(The committee adjourned.)