Proceedings of the Standing Senate Committee on
National Finance
Issue No. 29 - Evidence - April 5, 2017
OTTAWA, Wednesday, April 5, 2017
The Standing Senate Committee on National Finance met this day at 6:45 p.m. to examine the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2017.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators, I welcome you to this meeting of the Standing Senate Committee on National Finance.
My name is Percy Mockler, senator from New Brunswick, and I chair the committee. I want to take this opportunity to welcome all of those who are with us in the room and viewers across the country who may be watching on television or online. As a reminder, honourable senators, to those watching, these committee hearings are open to the public and also available online on the Senate website, sencanada.ca. All other committee-related business can also be found online, including past reports, bills studied and a list of witnesses.
I would like to start by asking each senator to introduce themselves, starting with the deputy chair.
Senator Cools: Good evening to all of you. I thank you, chairman, and I tell you again from the bottom of my heart that I'm very pleased you are our new chairman, and you can count on my support in these endeavours.
In any event, my name is Anne Cools and I am a senator from Toronto; that is in the province of Ontario.
Senator Woo: Good afternoon, I'm Yuen Pau Woo from British Columbia.
Senator Mitchell: Grant Mitchell from Alberta.
Senator Raine: Nancy Greene Raine from B.C., substituting for Senator Andreychuk.
Senator Marshall: Beth Marshall from Newfoundland and Labrador.
Senator Eaton: Nicky Eaton from Ontario.
Senator Neufeld: Richard Neufeld from British Columbia.
[Translation]
Senator Pratte: André Pratte from Quebec.
Senator Moncion: Lucie Moncion from Ontario.
Senator Forest: Éric Forest from the Gulf region in Quebec.
The Chair: Before we hear from our witnesses, I would like to let the committee know that, after our meeting yesterday, the deputy chair, Senator Cools, and I agreed on the third member of the steering subcommittee. The position opened up when I became committee chair.
[English]
Honourable senators, I am pleased to inform you that Senator Marshall has accepted the request of the chair and deputy chair to fill the vacancy and to become the third member of the steering committee. I want to assure honourable senators that with her knowledge and expertise as a former Auditor General, she is a great asset to the steering committee, and Senator Marshall, thank you for accepting these new responsibilities.
Senator Marshall: Thank you.
The Chair: This evening, our committee is continuing its study of the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2018.
[Translation]
This evening, the witnesses will give us an overview of their funding requests, as set out in the 2017-18 Main Estimates. We have officials from three departments. From Indigenous and Northern Affairs, we have Paul Thoppil, Chief Finances, Results and Delivery Officer, and Stephen Van Dine, Assistant Deputy Minister, Northern Affairs Sector.
[English]
From Innovation, Science and Economic Development Canada, we welcome Ms. Colette Downie, Assistant Deputy Minister, Chief Financial Officer, Corporate Management Sector; and Mitch Davies, Assistant Deputy Minister, Strategic Policy Sector.
[Translation]
And from Transport Canada, we have André Lapointe, Assistant Deputy Minister and Chief Financial Officer, Corporate Services, and Laureen Kinney, Assistant Deputy Minister, Safety and Security.
[English]
Thank you to the witnesses for accepting our invitation so that you can share with us your knowledge and also explain your budgets.
I would now invite the witnesses to make their presentations. I would also like to remind them that, as per the instruction given by the clerk, your presentation should not go beyond eight minutes.
After your presentations, you will receive questions from the senators. During the question and answer period, I would ask senators to be succinct and to the point when asking their question, and I would ask that the witness do the same when answering questions.
[Translation]
The clerk informed me that we will begin with Mr. Thoppil's presentation, followed by Ms. Downie's, and last, but not least, we will hear from Mr. Lapointe. You may go ahead now, Mr. Thoppil.
[English]
Paul Thoppil, Chief Finances, Results and Delivery Officer, Finances, Results and Delivery Sector, Indigenous and Northern Affairs Canada: Thank you, Mr. Chair and honourable senators, for the invitation to appear here today on the 2017-18 Main Estimates for Indigenous and Northern Affairs Canada. This committee has an important role in reviewing the department's expenditures, and I welcome the opportunity, together with my colleagues, to discuss these estimates with you.
[Translation]
First, I would like to draw the members' attention to a presentation entitled 2017-18 Main Estimates, which I have tabled. The deck starts with an overview of how we deliver funding, followed by a progress update on 2016-17. It then provides an overview of the 2017-18 Main Estimates, and ends with expenditure information and trends for major program areas.
[English]
As you may know, INAC is a highly decentralized department with a presence in every region across the country. Its role is largely a support role, but it's a critical one in assisting our partners, the indigenous peoples, to achieve healthy, sustainable communities. In practical terms, this means working to ensure access to services and a quality of life comparable to those enjoyed by other Canadians, as well as establishing strong governments that operate in a transparent and accountable manner.
About 80 per cent of our resources are used to fund programs delivered by First Nations community governments and tribal councils.
As you will note on slide 2 —
[Translation]
In addition, northerners look to the department to work in partnership with them to build strong, effective and efficient governance structures and to develop and manage northern resources and partnerships consistent with the principles of sustainable development.
[English]
Before we look closer at the 2017-18 Main Estimates, I would like to start by providing an update on 2016 fiscal year, which you will find on slide 3. Budget 2016 provided historic investments for indigenous peoples, totalling $8.4 billion, of which INAC has received approximately $1.2 billion in additional funding in 2016-17. The investments of Budget 2016 funding are on track, and funding for this year has been fully committed to indigenous communities.
Some highlights on works that have been accomplished during 2016-17 fiscal year include 201 water and wastewater projects, as well as funding for operation and maintenance and First Nation training; about 965 housing projects, which will result in the construction and renovation and servicing of 3,220 units; 125 school projects, including new schools, renovations and expansion projects of existing schools and feasibility studies; and 167 recreational and cultural projects.
We have also signed for the first time ever in Canadian history an indigenous school board agreement in Manitoba. We have expanded the Nutrition North Canada program by 37 communities, and we have signed a memorandum of understanding on child and family services in British Columbia with the First Nations Health Council. All of that you will see in slides 3 and 4.
We're working together with the Assembly of First Nations in designing a new fiscal relationship that continues to move toward sufficient, predictable and sustained funding for First Nations communities. Much of the groundwork started in 2016-17, and the 2018 Main Estimates will allow INAC to further develop and implement these initiatives.
On slides 5 and 6, you will note the components of 2017-18 Main Estimates, which is about $10.1 billion, a net increase of approximately $2.6 billion, or 34 per cent, compared to last year's Main Estimates of $7.5 million, and that increase is driven by the investments provided by Budget 2016 to improve the socio-economic conditions of indigenous peoples and northerners. Those details of the major changes year over year can be found in those slides.
It should be noted that the 2017-18 Main Estimates is the first step in the fiscal cycle and does not include the announcements made for indigenous peoples from Budget 2017. That will come in future supplementary estimates. That being said, we've provided information on Budget 2017 estimates in our annex C on page 18 of our slides.
Expenditures in the 2017-18 Main Estimates are comprised of about $9 billion, or 98 per cent, in transfer payments, of which 17.8 per cent of it is grants and 72 per cent is in contributions, and about $954 million is in operating expenditures. Then the remaining funding is for loans for claimants involved in negotiations and for capital requirements, primarily for our Canadian High Arctic Research Station.
Of the $10.1 billion in departmental spending, $9.8 billion is captured by four strategic outcomes covering about 16 programs, with the remaining funding for internal services.
In addition, we have provided additional information, including an overview of the fiscal cycle, as well as trends in our major program areas so that you can track through education, social development, infrastructure and capacity and specific claims. They account for about $7.2 billion of our $10.1 billion in the Main Estimates. So you can see the trend lines over the years.
[Translation]
Mr. Chair, the Main Estimates reinforce this government's commitment to improve the quality of life of Indigenous peoples and northerners.
[English]
This funding will strengthen our department's ability to improve the social well-being and economic prosperity in indigenous and northern communities, and hopefully we will move towards their development of healthier, more sustainable communities and participate more fully in Canada's political, social and economic development.
[Translation]
Mr. Chair, I look forward to discussing any aspects of these estimates with you and, along with my colleagues, welcome your questions regarding my presentation.
[English]
Colette Downie, Assistant Deputy Minister, Chief Financial Officer, Corporate Management Sector, Innovation, Science and Economic Development Canada: Honourable committee members, I am very happy to be here this evening, together with my colleagues, to talk to you about Innovation, Science and Economic Development's Main Estimates for 2017-18.
ISED's role is to deliver on Canada's innovation agenda. It's a whole-of-government initiative to position Canada as a global centre for innovation where growth is clean and inclusive, create better jobs and opportunities for Canadians, and to drive growth across industries and support our companies to grow into global leaders.
The innovation agenda is built on a people-centered approach and it will deepen collaboration and partnerships among business, research institutions, communities, municipalities, governments and all Canadians.
[Translation]
The department is also focused on commercializing research; equipping Canadians with the skills to actively participate in a global and digital economy; helping small businesses grow through innovation, trade and access to capital; promoting increased tourism to Canada; as well as supporting scientific research and the incorporation of scientific considerations in our policy and investment choices.
The amounts set out in the Main Estimates reflect the department's spending authorities in support of an innovative Canadian economy.
[English]
As you can see, the Main Estimates propose spending authorities of $2.6 billion for the department. Transfer payments, including grants and contributions, represent about 80 per cent of that; 14 per cent is for operating and capital; and of course the remaining is for other statutory expenditures, like employee benefit plans.
You'll notice that in these Main Estimates there is an overall increase in grants and contributions authorities of about $1.3 billion compared to last year's Main Estimates, and the majority of that increase actually stems from Budget 2016.
Some of the elements of that are $1 billion for the Post-Secondary Institutions Strategic Investment Fund to accelerate the strategic construction, repair and maintenance activities at universities and colleges across Canada. This is the second of three years of this program, and the year in which we expect to see the greatest expenditures.
[Translation]
Also included is $69.6 million for the Connect to Innovate program to expand and enhance broadband service to rural and remote communities, and to provide access to anchor institutions within those underserved communities. This is the first year of a four-year program.
[English]
There is $102.3 million for Sustainable Development Technology Canada, SDTC, a not-for-profit foundation established in 2001 to fund the development and demonstration of new clean technologies to promote sustainable development.
There is $16 million for the Centre for Drug Research and Development, CDRD, a non-profit organization that works in partnership with academia, industry, government and foundations to support drug development and $6 million is for the Stem Cell Network, a national not-for-profit corporation dedicated to enabling the translation of stem cell research into clinical applications, commercial products and public policy.
[Translation]
Ongoing funding for three programs — Futurpreneur, Canadian Institute for Advanced Research and the Institute of Quantum Computing — was scheduled to end in 2016-17. As these programs were renewed two weeks ago in Budget 2017, ISED will access these new funds during the year, through the next Supplementary Estimates exercise.
[English]
You'll also note that funding for some other transfer payment programs differs from last year's Main Estimates, and these really are a function of the program's cash flow requirements. Some examples, and there are others, include increases of $36 million for the Automotive Innovation Fund and $7.9 million for the Automotive Supplier Information Program; increases of $27.6 million under Mitacs to support industrial and social innovation through research and training programs; and $2.1 million under the Technology Demonstration Program to support large-scale research and development programs. There is also an increase of $2.6 million under the Canada 150 Community Infrastructure Program in support of renovation, expansions and improvements to existing community infrastructure; and decreases of $10.4 million in funding under the Strategic Aerospace and Defence Initiative, of $8.9 million under the Canada Small Business Financing Program; and a decrease of $4.5 million under Genome Canada, an organization that invests in and manages large-scale genomic research projects.
In sum, the changes that you see between this year's Main Estimates and last year's for Innovation, Science and Economic Development Canada are largely due to new funding, as I said, in the form of grants and contributions stemming from Budget 2016, and the funding profiles of some of our programs. In all other respects, the department's funding is stable.
[Translation]
In addition, Budget 2017 created a number of new initiatives that ISED will be responsible for implementing, such as Innovation Canada, a one-stop shop to coordinate and simplify support for Canada's innovators.
[English]
This concludes my introductory remarks, and my colleague and I are happy to answer any questions that you might have.
André Lapointe, Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Transport Canada: Thank you for inviting us to discuss Transport Canada's Main Estimates for 2017-18.
Transport Canada has received a total of $1.3 billion in funding through these estimates, including $596.6 million for operating expenditures, $138.5 million for capital expenditures, $336.7 million for grants and contributions and $230.8 million in statutory authorities.
This represents an increase of $36.9 million, or 2.9 per cent, from the planned spending in last year's Main Estimates. The increase is largely due to new funding required to enhance the safety of railways and the transportation of dangerous goods, to do things like expand inspection capabilities, support training for more consistent oversight across the country, and improve systems for testing, classifying, registering and mapping dangerous goods.
Additional funds will also support the Ports Asset Transfer Program. Some of the programs Transport Canada has administered over the past several years are winding down, such as the Asia-Pacific Gateway and Corridor Initiative. Also, as projects are completed, in some cases the actual costs are less than estimated, so you will see a decrease in the grants and contributions funding required. We are also working to develop new programming that will build on the successes of the Asia-Pacific Gateway program.
With these Main Estimates, the department will be able to continue to implement its vision to have a transportation system in Canada that is recognized worldwide as safe and secure, efficient and environmentally responsible.
Transport Canada's major focus for the coming year remains the safety and security of our transportation system. In parallel, we continue to advance the department's agenda by taking measures to ensure that core services remain properly funded and aligned with departmental priorities.
Budget 2017 provides $2 billion over 11 years to support the National Trade Corridors Fund activities and an additional $5 billion through the Canada Infrastructure Bank to address trade and transportation priorities.
[Translation]
The budget includes $1.5 billion for the national Oceans Protection Plan to improve marine safety, support responsible shipping, protect Canada's marine environment and create stronger partnerships with Indigenous and coastal communities.
The budget also proposes funding to enable Transport Canada to develop regulations for the safe adoption of connected and autonomous vehicles and unmanned air vehicles; support clean technology and greenhouse gas reductions in the transportation sector; and support the operations of VIA Rail, and Marine Atlantic Incorporated's ferry services between Newfoundland and Nova Scotia. In addition, Transport Canada will receive funding to launch a trade and transportation information system.
As you know, these Main Estimates do not include any Budget 2017 funding the department received. This funding will be brought into the department as part of the Supplementary Estimates process in the coming year. Transport Canada remains committed to delivering on its mandate while also ensuring continued prudent and responsible management of resources.
My colleagues and I will be happy to answer any questions that the committee might have.
[English]
The Chair: Thank you for your presentations. We will now begin our questions.
Senator Mitchell: Thanks to each of you for your presentation.
My first question would be to Mr. Thoppil. I'm interested, as we all are, in the development of pipelines, Kinder Morgan, west to east. One of the concerns that probably stymied the development of pipelines earlier was negotiations with Aboriginal peoples for right-of-way and the various issues surrounding that. Could you give us some idea of what your department is doing now with respect to negotiating with Aboriginal people for the west to east pipeline, particularly through Quebec?
Mr. Thoppil: Senator Mitchell, there have been a number of challenges in terms of the private sector interfacing with indigenous peoples on issues such as pipelines. A lot of it is actually just based on the capacity issues that First Nation communities have in terms of engaging with the private sector. Budget 2016 provided increased core capacity for national indigenous organizations and regional organizations in order to have that capacity to engage.
There is also a program that exists horizontally with NRCan and us whereby we can provide some additional money that provides that technical capacity support to First Nations in order to engage with private sector in order to come to consent or an economic benefit agreement that can move those projects forward.
Those are just a couple of examples of working together between INAC and other departments with indigenous communities in order to help facilitate that necessary dialogue in order to make those economic projects move ahead.
Senator Mitchell: Thank you.
My next question is to the representatives here from Transport Canada, perhaps particularly Assistant Deputy Minister Kinney, who is responsible for safety and security. In the presentation, it says Transport Canada's major focus for the coming year remains the security and safety of the transportation system.
The Energy Committee — and the chair is here — several years ago did a study of call-before-you-dig legislation. I've actually developed out of that study legislation that would require all underground infrastructure under federal jurisdiction or on federal lands to be subject to a comprehensive, no-cost-to-government, reduction-of-risk-to-health-and-safety, reduction-of-business-costs, reduction-of-dangers program, and I can't seem to get the attention of the transportation department as to whether that's a good idea.
Could you'll tell me what kind of call-before-you-dig program you have for airports, ports, small airports in the middle of nowhere, railway facilities — all of those jurisdictions that come under Transport Canada?
Laureen Kinney, Assistant Deputy Minister, Safety and Security, Transport Canada: I don't have a great depth of knowledge about the programs that are in place. In the majority of cases where you're talking federal jurisdiction, the ports are operated by Canadian port authorities. The airports are operated by their various forms of ownership. In many cases, they have that responsibility to put that kind of community linkages in place and to look at how to educate people for the very good reasons that you raised.
In terms of the Transport Canada-owned and -operated ports and facilities such as airports, there are still some of those. I can find out what we have in place for that, but I don't know that offhand.
Senator Mitchell: I appreciate that very much, but it is true that those community links haven't been created. It would be very efficient and low-cost for the federal government; it wouldn't cost you or your staff any money. I wonder if I could ask to meet with you specifically to bring us up to date on that, because this is such an important feature, I would argue, of your area of responsibility of safety and security.
Ms. Kinney: Certainly I or my colleagues more directly related, whichever it might be, would be happy to meet. Go through the department, if you would, and get in contact.
Senator Mitchell: I'll get my staff to set something up.
Senator Marshall: My question is for Ms. Downie. Before I start my questions, I just want to say that I'm trying to bridge the Main Estimates to the budget that was just announced, because it's an innovation budget. So when I ask my questions, that's what I'm trying to do.
With the Post-Secondary Institutions Strategic Investment Fund, is that infrastructure money or innovation money?
Ms. Downie: It could be characterized as either. It's really intended to invest in infrastructure projects at post-secondary institutions and affiliated research institutions, so it's really infrastructure to promote or foster innovation, if you will.
Senator Marshall: The budget says there is going to be $1.2 billion for innovation. Is that $1.2 billion already in the Main Estimates, or are we going to see that money in supplementary estimates?
Ms. Downie: As a general answer to your question, anything that is in Budget 2017, which was just passed, will be seen in supplementary estimates.
There is another program with a very similar name, the Strategic Innovation Fund — same acronym — announced in Budget 2017. It's actually a different program. It was set up to foster innovation in a number of different areas. It consolidates some existing programs as well, but it's really got quite a different focus.
Senator Marshall: So is that the reference you made in your opening remarks to Innovation Canada?
Ms. Downie: Innovation Canada will administer the new Strategic Innovation Fund.
Senator Marshall: Okay. So the $1.2 billion that was mentioned in the budget for innovation, that's not in your department yet. Are you anticipating all of that will be in your department?
Ms. Downie: That's right.
Senator Marshall: How are you going to bridge the existing programs into your $1.2 billion?
Ms. Downie: I'll ask Mr. Davies to answer that question.
Mitch Davies, Assistant Deputy Minister, Strategic Policy Sector, Innovation, Science and Economic Development Canada: I appreciate trying to translate from Budget 2017. Also, the infrastructure program has a similar acronym, SIF, but one is the Strategic Investment Fund, which was the infrastructure at universities, and the Strategic Innovation Fund is the new fund that will bring together the four programs inside the department — $1.26 billion, as you said.
There is $200 million in new resources that will come forward in future estimates. That's what was mentioned in the budget, $200 million. That means that, of the $1.26 billion, the remaining $1.06 billion is money that was already in the estimates for department, either included here or in future years, because the $1.26 billion is over five years.
The Strategic Aerospace and Defence Initiative, the Automotive Innovation Fund, the Automotive Supplier Innovation Program and the Technology Demonstration Program are coming together to create the overall $1.26 billion.
Senator Marshall: So some of it is already there.
What do you use for performance indicators? Based on what we've seen so far in studies that have been done is that the performance indicators being used within the department aren't strong indicators. How do you bridge from what you've got there now into these new programs? I guess you're going to accelerate the programs.
Mr. Davies: The short answer is that there will be an entirely new performance framework for the Strategic Innovation Fund.
This is a matter we're always trying to improve upon. I'm not sure exactly what you're referencing in terms of past reviews or evaluations. We have evaluated the programs we offer now. All of them have shown good outcomes in terms of their evaluation, but I think the question of trying to measure the performance of these programs is something we have to continue to improve upon. That's something that will now become embedded into the new fund when it's created and launched.
Senator Marshall: I was referencing a study done by the Institute of Fiscal Studies and Democracy by Kevin Page, the former Parliamentary Budget Officer. There was a paper talking about performance indicators of the various programs.
When you look at the budget document, it keeps talking about the innovation plan. Is there actually an innovation plan?
Mr. Davies: The budget, essentially, is the innovation and skills plan. That is what's announced in the budget. There are four components to it, essentially. I'll make sure I get these right: skills; research, technology and commercialization; program simplification; and investment and scale-up. Those are the four components of the investment and skills plan that was announced in Budget 2017.
That is the policy anchor for everything we do. It's what anchors Innovation Canada being created to improve service delivery and bring together different programs and make them clearer for clients and make them easier for them to access. It's what's behind creating One Fund, which is part of simplifying it — to create One Fund for our innovation program in the department. A number of other new initiatives in Budget 2017 will come forward in future estimates as well over the course of the year.
Senator Marshall: So there is no other plan, other than what's here in the budget document?
Mr. Davies: In terms of documents?
Senator Marshall: When you read the budget document, it talks about Canada's innovation and skills plan, and then as you read the budget book, they keep saying "the plan.''
Mr. Davies: That is the budget. If you look in totality of the narrative, the framework that I mentioned, the four areas of focus and the program initiatives being set out in the budget, that is the plan.
Senator Marshall: That is the plan. For some of the performance indicators, what's indicated in the budget is not a lot. For example, one of your performance indicators is to grow Canada's goods and services exports from resources, advanced manufacturing and others by 30 per cent by 2025. Where do those numbers come from? There is that performance indicator, and then there is another one that says double the number of high-growth companies in Canada, particularly in the digital sectors, from 14,000 to 28,000 by 2025. Where do those numbers come from?
Mr. Davies: That, of course, is work undertaken in support of the preparation of the budget and announced in the budget. The government has had significant effort to work on results and delivery frameworks to create real focused targets that set out real milestones that we're going to measure our success and progress against. In some ways, that's the complete new area we're moving into. You see it there in the budget, right up front before all the spending. It is the sense that this is what we're aiming to achieve.
When you think about moving the numbers on goods and services exports, this is a whole-of-country effort. These are the initiatives that the federal budget is advancing, but this is also something we're now going to do and call to action the private sector, the provinces and other levels of government to achieve these outcomes.
Senator Marshall: If this is the plan, are all the performance indicators indicated in the plan, or are there more somewhere?
Mr. Davies: Those are the objectives that the budget has indicated for the innovation and skills plan. Those are the indicators that are made public — of course, very recently — and against which our efforts will be measured.
I think the question of performance metrics is more detailed in that every department will have a performance report itself for all its own expenditures. You will see cross references to those kinds of goals in these documents going forward. It's quite a significant effort to retool this and raise the bar, essentially, on ourselves and what we do in this regard.
Senator Pratte: For the officials from Indigenous and Northern Affairs Canada, about $540 million is added to the expenses for resolution of specific claims. The recent report from the Auditor General shows that the Auditor General found that the department's reforms to the process introduced barriers that hindered First Nations' access to the specific claims process. The Auditor General goes on to say that when First Nations cannot settle claims through the process, they might withdraw, go to the courts or to the Specific Claims Tribunal, which could eventually add to costs, and so on.
Are the problems that were found by the Auditor General — and the department accepted the recommendations, as is usual — solved and how, before these new amounts are put into the process to resolve the specific claims? Because $500 million in additional money is quite a lot of money.
Mr. Thoppil: The $540 million is actually a re-profile of funds allocated from earlier years to meet specific claims projected expenditures for this year. That is, monies from the past to meet obligations that we thought were going to happen in previous years and have now been re-profiled into this year.
To your question about the overall framework associated with specific claims, you're correct. We did agree with the findings of the Auditor General but, in a proactive way, we have launched a reform conversation with the AFN in terms of trying to assess how we work together to address the barriers associated with First Nations moving forward on their claims. That engagement is under way, so we expect findings later in the year in order to move forward on a revised framework.
Senator Pratte: I have another question concerning the additional expenditures for building and renovating schools on reserves, which is an additional $282 million. An internal audit was published in June 2015 that showed evidence suggesting that construction projects have sometimes failed to meet the provincial and federal building standards. Buildings may not be lasting their full expected life span, et cetera. There are maintenance gaps and weaknesses also, which are problems that we have often heard about on reserves. Again, I'm wondering whether these problems have been addressed before committing additional funds, in particular renovating and building new schools on reserves.
Mr. Thoppil: Those comments are true. Starting with Budget 2016 for investments across infrastructure — for example, in housing, as we've mentioned previously here in committee, and in my previous experience with Supplementary Estimates (B) and (C) for 2016-17 — a requirement of the funding agreement is that they have to be in compliance with national and provincial housing codes, as applicable. Further, we need to receive an inspection certificate of compliance as part of the completion of that funding agreement with First Nations. That's an example in the housing area of how we're moving forward and changing the way we do business.
Senator Pratte: At this time, do you have any indication as to how this process is going? Are you receiving inspection reports? Do you know that this process is functioning as it should?
Mr. Thoppil: It's our first year, but it is the basis for releasing, for example, typically the holdback in the funding agreement, which is contingent on getting that inspection certificate. I have not been apprised of any lack of compliance on that.
[Translation]
Senator Forest: Thank you for your presentations. My first question is for Innovation, Science and Economic Development Canada.
You have earmarked $1 billion for the Post-Secondary Institutions Strategic Investment Fund. What objectives have you set for the funding? Will it be delivered through merit-based grants? Do you have priority sectors where you want to encourage research and development? What criteria will you use to allocate the funding and to ensure follow-up?
[English]
Ms. Downie: The priorities for the fund were developed very much in partnership with the provinces and territories, as well as obviously with the post-secondary institutions that were involved. Ultimately, the proposals were ones that were identified and sort of ratified and approved, if you will, by provinces as a priority. Then, of course, the minister made a call in terms of which ones were the most relevant as well in terms of business interests, business priorities and Canada's strengths in innovation and that kind of thing.
[Translation]
Senator Forest: So the projects were chosen directly. They were not chosen by the provinces, but the priorities were set in cooperation with the provinces.
Ms. Downie: Precisely.
Senator Forest: Does that apply to the selection criteria as well?
Ms. Downie: As far as the selection criteria are concerned, I am not sure whether they saw the documentation or whether they signed off on that, but there was certainly genuine agreement with the provinces and territories when it came to the approved projects.
Senator Forest: One thing that interests me is your responsibility to maintain Transport Canada's infrastructure. If I recall correctly — and I don't want to throw out just any figures — approximately $170 million in votes had been allocated for that purpose in the estimates for 2016-17. However, only about $30 million or $38 million was invested.
Let's consider the port infrastructure in my region, where sections of the Rimouski port are constantly being closed. If the funding was allocated, why is more not being spent to keep up the infrastructure?
Mr. Lapointe: Our base capital budget is approximately $60 million annually, and various amounts get added to that. For instance, additional funding was received through a range of infrastructure programs between 2014 and 2016. That enhances our core funding.
Requests and internal requirements far outweigh our immediate funding, so the investments are staggered. Port infrastructure projects, for example, usually require two construction seasons, if not more. We have to spread out investments as port projects are often very costly. It is important to keep in mind that we have regular maintenance work to do, runways to repave from time to time, airport terminals that need upgrading, leaking roofs that need fixing and so forth. Consequently, we have to set priorities, and that is what we do every year. We try to make the most of what we have.
That said, if money is not spent, it does not mean that it will not be spent in the future. What can end up happening is that it becomes too late in the construction season to complete the work, and so, the project is postponed until the following year. In certain circumstances, we do have to put off investments until the following year. The work will get done, but the timeline will change.
Senator Forest: Mr. Lapointe, I was rather surprised to see the large difference between the funds allocated for the Transport Canada infrastructure program, specifically, and the amounts committed. Would you be able to provide us with an update on that? Perhaps funds were committed but not paid out.
The Chair: When these kinds of requests are made, we kindly ask that you send the information to the committee clerk, who will see to it that the members receive it.
I will have a few comments on the subject a bit later. Thank you, Senator Forest. It is now Senator Cools' turn.
[English]
Senator Cools: I'm looking at the estimates for the Office of the Auditor General, and I am looking at the description of the Office of the Auditor General. It says:
The Auditor General is an Officer of Parliament, who is independent from the government and reports directly to Parliament.
What is an "Officer of Parliament''? Does anybody know?
The Chair: Senator, you are addressing your question to whom?
Senator Cools: To anyone who wants to take a shot at answering. He has, this year, a total budget of $77,501,791. That's not much different from what the Senate has, the whole Senate, for a year.
I'm wondering what an Officer of Parliament is, and what does an officer of Parliament do?
The Chair: Senator Cools, if you permit me, I'm being informed by the analyst that the officials are not available to answer that.
Senator Cools: They are not?
The Chair: Not this evening, no.
Senator Cools: Then perhaps we should get someone who can answer about the Auditor General.
The Chair: I will ask the clerk to make a note.
Senator Cools: I would be very grateful if you did.
The Chair: I will ask the clerk to follow up going forward with the other witnesses.
Senator Cools: Absolutely. Thank you. Thank you for your interest.
Senator Eaton: Mr. Thoppil, I'm thrilled to hear INAC is now demanding national housing standards. It's much nicer for our First Nation brothers if they have proper houses. As you know, I ask you that question every year, so it was very nice to hear that they are now being built to standard.
In your presentation to us, you state:
INAC is also working in partnership with the Assembly of First Nations in designing a new fiscal relationship that continues to move towards sufficient, predictable and sustained funding for First Nations communities. A large amount of collaborative work, including research, analysis, and engagement is being planned for the coming months to advance this initiative.
I also notice in your budget of 2016-17 there is $319 million allocated to governance. Could you elaborate on that paragraph and perhaps some of the monies set aside for governance? What are the programs? How are you going about this? Will there be accountability? The way you now have housing organized, will there be some kind of accountability for the money and its programs?
Mr. Thoppil: With regard to the question on what's transpiring on the new fiscal relationship dialogue we're having with the Assembly of First Nations, it is essentially based currently on three pillars: sufficiency, predictability and mutual accountability.
Sufficiency is about ensuring that programs and services, which are quasi-statutory, that are akin to provincial equivalents, such as education, reflect the costs that are incurred by a First Nation community in order to deliver that. That is ensured that there is a costing framework that is agreed to by both parties and that essentially matches the cost drivers going forward, whether it's population, if you're a fly-in, fly-out reserve.
Senator Eaton: I understand. The real costs.
Mr. Thoppil: The real costs, yes. That's one pillar of the conversation.
The second pillar of the conversation is predictability, and that is because a lot of the agreements that transfer the funds are usually one year. But they're a community; fixed assets are multi-year. What is the assurance for a funding transfer that reflects some decisions that are multi-year? What is that certainty that they can get from the federal government related to examples like fixed infrastructure?
So the one year, year-over-year, and then it sometimes results in certain communities who have fixed agreements. They get money perhaps through the supplementary estimate cycle later in the year, and yet they only have a short window in order to spend it by March 31, which sometimes causes disincentives on appropriate levels of spending. So trying to figure out what is an appropriate mechanism under predictability.
Then, lastly, mutual accountability. That's very important. That addresses things such as performance outcomes that are transparent to chief and council and all community members. That would be the same as what would be reported to Parliament. So in order to deal with reporting burden, but also a degree of transparency, and what are the Government of Canada's obligations in terms of service standards and dealing with the reporting burden, because it is a two-way street.
Those are some of the issues that we are working through with them in terms of defining a new way forward on the new fiscal relationship.
In terms of the monies allocated to governance, those are primarily for existing agreements related to, for example, self-governing agreements that they get. For example, there's also money for management boards in the North related to governance accountability.
Senator Eaton: Thank you very much.
My next question is to Transport Canada. In your presentation to us, Budget 2017 provides $2 billion over 11 years to support the national trade corridors fund activities and an additional $5 billion through the Canada infrastructure bank to address trade and transportation priorities. Could you tell me what those priorities are?
Mr. Lapointe: At this stage, the bank is still in finalization of being set up, as is the $2 billion fund. The priority is certainly focused on trade, trade facilitation, improving —
Senator Eaton: Just a minute. You mean you go for the cash before you have determined your priorities?
Mr. Lapointe: The concepts are put forward.
Senator Eaton: What are the concepts? I think it's extraordinary. You have $2 billion and then more money. It's for things that are all in the future, and you can't tell me what your priorities are for the department, where that money would be directed towards.
Mr. Lapointe: The anticipation is it will be a contribution program to invest in a range of infrastructure projects.
Senator Eaton: But what are they? You are talking about a national trade corridors fund.
Mr. Lapointe: Yes.
Senator Eaton: What would a national trade corridor be, for instance?
Mr. Lapointe: Getting goods from Central Canada to either the east or west coast.
Senator Eaton: But you haven't determined that yet?
Mr. Lapointe: In what way?
Senator Eaton: Well, you can't tell me. Is it to the west coast? Is it to the east coast? Is it both coasts?
Mr. Lapointe: If you're asking for the identification of projects, we have not done that yet. The fund is going to be set up.
Senator Eaton: How do you know that will be the cost, then?
Mr. Lapointe: These are the funds available for an investment. These are investment funds in constructing new infrastructure.
Senator Eaton: So you will tailor your priorities to what you're going to get?
Mr. Lapointe: We will invest the funding depending on the quality of the projects that are presented.
We have done this in previous instances with, for instance, the Asia-Pacific Gateway and Corridor Transportation Infrastructure Fund and the Gateways and Border Crossings Fund as well. We have invested over $2 billion over almost 10 years, and in a range of projects, for instance in Lower Mainland British Columbia for the construction of ring roads and investments at the port, et cetera, to facilitate trade, facilitate access to trucks, et cetera. We can easily provide you with the details of what we have done previously.
Senator Eaton: Would you mind? I find it extraordinary that you have asked for the money in the budget but you haven't determined exactly what you're going to do with the money.
The Chair: So you will go on the second round?
Senator Eaton: Yes, absolutely.
[Translation]
Senator Moncion: My question is more straightforward. It has to do with the $6 million in funding for the Stem Cell Network, which you describe in your brief as a national not-for-profit corporation dedicated to enabling the translation of stem cell research. When you mentioned it, I thought the $6 million was for research, but you referred to translation. Is the funding really for language translation or stem cell research?
[English]
Ms. Downie: Sorry, I may have misspoken, then, if it came out that way. It is $6 million for the Stem Cell Network, which is a not-for-profit organization that enables the translation of stem cell research into clinical applications, commercial products, as well as public policy. I apologize if I misspoke.
Senator Moncion: So it's not for research?
Ms. Downie: It is, I think, in part for stem cell research, yes.
Senator Moncion: It's likely that $6 million might not be enough for research. Just for the SLA, just a clinical trial, is $5 million. I'm just wondering about the use of the fund.
Ms. Downie: The fund is not used for those large-scale kinds of projects. For example, my understanding is they do some public policy research themselves related to stem cells, so that would be an example of something that they would do. I'm not aware whether they do their own scientific research as well. They may. I can certainly find out for you.
Senator Moncion: Then are you aware if there are funds that are allocated for stem cell research? If it is not within your department, is it somewhere else?
Ms. Downie: I'm not specifically aware. There may be within our department and within the portfolio of research organizations associated with the stem cell research being funded, but I don't know off the top of my head specifically. I'm happy to try to find out.
The Chair: The chair will recognize Mr. Davies to answer that question also, or to bring additional information.
Mr. Davies: Yes, thank you for the question and the opportunity for clarification. I think the best way to find the information would be to ask the Canadian Institutes of Health Research, which is obviously a billion dollar research granting agency. I think they would probably be able to identify the research programs that are supported in stem cell, which you would find far exceed this.
This organization essentially brings together that community and organizes and plans the efforts. It's a very significant scientific community in Canada. We are, of course, pioneers in this area of research, so I wouldn't want to say that this is an exclusive, the only way that that research is funded, because in fact that would over-represent this. This organization has been created by that community to nurture and develop its work as a unified national priority.
However, CIHR would be where I think you would go to find what the heft of federal support for stem cell would be.
Senator Neufeld: My first question is for Transport Canada. I notice on one page it says the contribution to support clean transportation initiatives is just over $8 million. If I go a page back, there's a listing of a clean transportation system, which is $103 million. Maybe you can just explain a little bit about them. I don't know, but I'd guess they are not the same. Maybe you can tell me why they are in two different places and what it actually is. This is on page II-138.
Mr. Lapointe: I will go with what I have here. The clean transportation system is one of the objectives for the department. We have that separated into three line items for us. One is environmental stewardship of transportation. That has to do with ensuring that we take care of our own properties with regard to pollution, decontamination, properties we used to own that we have to decontaminate before we sell.
On clean air, we're looking at a range of programs there as well and regulation to improve air quality. We also do the same thing on the water side, control of ballast water from ships. That is sort of the overall program.
The $8 million I suspect you are referring to is a contribution; is that correct?
Senator Neufeld: Yes.
Mr. Lapointe: The $8 million is part of that broader package.
Senator Neufeld: It's part of the $103 million?
Mr. Lapointe: Correct.
Senator Neufeld: Okay, all right.
The second thing you have is a contribution program again for the Centre of Excellence for the Marine Transportation of Oil and Liquefied Natural Gas. Is that to start working on some of the commitments that the federal government has made on the west coast as a result of Kinder Morgan liquefied natural gas that may happen out of Prince Rupert?
Mr. Lapointe: This has been put in place. The funding is to set up the centre to do research and develop best practices and world-renowned practices for the transportation of oil and LNG.
Senator Neufeld: You may not have an answer for this, but the Alaska Highway, which is a federal responsibility, has a portion just north of Fort St. John, north and west, with heavy truck traffic because of the gas industry — not the oil industry, the gas industry — and an awful lot of traffic, and there are a lot of accidents. People are getting killed because it's a two-lane highway. I don't suppose you would have that with you, but maybe you could let the clerk know so I can find out if some anticipated spending will happen on that portion of the highway.
Mr. Lapointe: I will.
Senator Neufeld: I have another question, chair, if I could, to Innovation, Science and Economic Development Canada.
There are a number of grants and contributions. One is a grant to the Radio Advisory Board of Canada. That's for $4.8 million. Could you explain to me what that is?
There are also contributions under the Automotive Innovation Fund of $98 million. Could you help me a little bit there with both of those?
Ms. Downie: The Radio Advisory Board is an association of associations, if you will. It represents all of the different sectors, I guess most of the sectors of the radio communications business in Canada, so manufacturers, wireless companies, network operators, et cetera. The program essentially provides technical expert advice to the Government of Canada and to industry on all things related to the use and management of radio spectrum in Canada. This is the federal government's contribution to that association.
Senator Neufeld: From that association, you get information about what?
Ms. Downie: About radio spectrum in particular. Part of the department is responsible for the regulation and the management of spectrum, so we get technical advice and information from that organization.
Senator Neufeld: Okay.
Ms. Downie: You asked about the Automotive Innovation Fund as well, I think?
Senator Neufeld: Yes.
Ms. Downie: That fund was developed to support strategic large-scale R&D and other types of investments in the automotive sector in Canada. It has a $75 million threshold at the moment, so the projects have to be larger than $75 million. It tends to support very large investments in, say, green technologies to upgrade an automotive assembly plant as well as to do research and development.
Senator Neufeld: This would go to Ford and GM?
Ms. Downie: Toyota, yes, that's right.
Senator Neufeld: All the ones that need help?
Ms. Downie: And to suppliers as well.
Senator Neufeld: They are all actually doing relatively well. I know it's been going on for a while, and I'm sorry I never noticed it before, but it amazes me that we still have to — we were talking about Bombardier here a while ago, and here we are with another $98 million, almost $100 million, to help these guys innovate. My goodness. They have been around for a long time.
Ms. Downie: I'm not sure there's a question there, but the companies are profitable, it's true. The fund is really intended to incent innovation in Canada. We are competing with other jurisdictions for investment. In some cases, other jurisdictions are offering to cover more than the costs, say, of installing an assembly plant. The competition is fierce for those investments, and obviously it's a requirement of the program that the investment be incremental, so investment comes to Canada that wouldn't have come here otherwise. Obviously there is a focus on jobs too.
Senator Neufeld: Very quickly on that, and I don't imagine you have this, but can you tell me how much investment would have come to Canada with the investment by the federal government of $98 million in innovation? If you don't have the number now, I'm fine with that, but tell me what you expect for investment by the big three, the big four or five, what they're going to invest in Canada with the taxpayers of Canada investing $98 million.
Ms. Downie: The $98 million is made up of the sort of funding requirements of a number of different investments that have been announced, so I can certainly give you the breakdown.
Senator Neufeld: Thank you.
Senator Woo: Thank you, witnesses. I have a question for each of the three organizations, the first one to Indigenous and Northern Affairs.
I see your estimates for the coming year entail a very large increase from the previous year, and you have explained it well; it's due to historic investments, and it's consistent with what the Prime Minister has said in his mandate letters to all the ministers, the top priority and so on. But it's a whopping amount; it's $2.6 billion more than the previous year and a percentage increase of 34 per cent. How much of the increased expenditures are one-time or time-limited, and how much of it do you think is recurrent?
Mr. Thoppil: I think you start off with the context for indigenous peoples. I think the National Chief of the Assembly of First Nations uses a line that says that Canadians, if you use global human development indicators, generally rank sixth globally, and indigenous peoples in our country rank sixty-third, which is essentially developing country status. So the socio-economic gap is large, and the Prime Minister is committed to reducing that socio-economic gap for indigenous peoples.
Based on the lack of what I would call sustainable funding in the past to match cost increases for programs and services to deliver to indigenous peoples, the gap that has been accumulated over the years is huge. So there is a catch-up that is required, not just to deal with the past but also for the future. When you have to start from that legacy and move forward and you're going to start moving and trying to make a dent in that, the incremental funding will have to be large and sustainable.
It is a two-track process of, one, trying to get the incremental resources required to deal with the socio-economic gap, and at the same time, the launching of a number of program reforms to deal with things such as higher accountability and the fact that maybe programs and services haven't been delivered in a more effective way. That's why there are reform conversations happening on education, child and family services, housing, specific claims, and of course the overall framework on the new fiscal relationship and how transfers to funding go.
It is a very large task in order to deal with the percentage of our society that has been woefully underfunded.
Senator Woo: Could you address the specific question to the extent that you can address it? How much of the increase is one-time or time-limited and how much of it is recurrent? Is that a fair question?
Mr. Thoppil: It is a good question. The money has been granted in various components. There is one large component that is education, and that is five years and ongoing. There is infrastructure in different categories, water and wastewater, housing and so on, and those are, depending on the asset category, two to five years, with the ability to come back for more, depending upon how we're doing in terms of understanding the gap. We know, for example, the housing gap will take many years to deal with that gap in the North in particular but also across First Nation communities across the country. It is time-limited if we're certain about these things, but it is dependent upon how we're measuring and how we're doing vis-à-vis the gap. The government will have to come to a decision on how much more they need to do to kind of reduce that gap.
Senator Woo: Okay. Thank you. I'm not arguing with the need to bring up the standards of indigenous peoples to other Canadians.
Mr. Thoppil: No, I understand.
Senator Woo: I have a quick question for Innovation, Science and Economic Development Canada. With respect to the $69 million for broadband service to connect rural areas, what is the financial model for this program? Is there any PPP involved or partnerships with the private sector? Cost recovery? Can you just enlighten us a bit on that?
Mr. Davies: I would be pleased to answer. In fact, this is a public-private partnership.
Senator Woo: Okay.
Mr. Davies: And what we're trying to endeavour to do is try to get the public money that we invest go as far as possible, which means we have a competitive call for proposals from the private sector to present different alternatives to connect those that are not connected.
The Connect to Innovate objective is quite specific and somewhat of a new approach for this programming. We're trying to get high-speed Internet access to communities that at this point are not lit in that way. In most cases, high speed is delivered through a fibre line, which goes all the way up to one gigabit speed. All of us enjoy that; we go home, we interact on the Internet, we do business, and we interact with one another using this sort of technology, often in large urban centres. If you are in rural remote communities, this is not available.
We find that the private sector gets to about 80 per cent of those kinds of advanced networks being available to Canadians, and once we get to that remaining 20 per cent, it becomes less of a viable proposition. We are trying to buy down the cost and find the right price point where they will come in and offer the service, find a viable model to bring new customers on and then use our subsidy in a selective manner across a variety of different proposals across the country.
Senator Woo: Quickly, for Transport Canada, you referenced the success of the Asia-Pacific Gateway and Corridor Initiative and talked about building on the Asia-Pacific Gateway model to develop further programming. I'm not quite clear whether you mean you will develop further programming for and on the Asia-Pacific Gateway or develop a further program in the manner of the Asia-Pacific Gateway in other parts of Canada.
Mr. Lapointe: It's in the manner.
Senator Woo: Can you tell us where roughly? Any ideas?
Mr. Lapointe: The idea is this will be a national fund. The terms and conditions have not yet been finalized, which is why we can't necessarily elaborate on what the details are going to be and what sort of projects will be considered. However, the focus is very much on facilitating trade, removing bottlenecks and those sorts of investments.
Senator Woo: Thank you.
Senator Raine: I'm just substituting on this committee, so I hope my question makes sense. It's certainly a question that I have.
The estimates are so high-level. My question really will be to Mr. Davies, and it's about tourism. I'm very familiar with tourism. Because the estimates are so high-level, can you tell me if there is any money being allocated for consultations between your department and the tourism sector?
Mr. Davies: I'll ask my colleague if there is a specific figure for Destination Canada, but there is funding, I know, that was added for the budget of Destination Canada in the 2016 budget.
Just to explain Destination Canada, it's a Crown organization. It's headquartered in Vancouver, and its role is to work with the tourism sector and all the tourism associations and to provide a national marketing effort in particular. It's a marketing organization. It's trying to play an additive role because there are many players in the tourism promotion sector at the provincial level and also in the cities and municipalities. Their role is to brand Canada and to take on key markets particularly in the United States, but also working on markets in Asia.
There are very big growth opportunities. This is a huge export business for Canada and a big SME business across the country to bring in new visitors, particularly from China, where we've seen significant increases. They will work with the tourism associations and all the marketing organizations to figure out what it is we can do at the national level through their programming to support that.
There is also a consultative process led by our department with all federal departments and agencies that touch on matters related to tourism, including my colleagues at Transport but also colleagues related to immigration and borders — all matters that can touch on the tourism experience. That's another point where we bring together stakeholders, particularly as a whole-of-government, to help support tourism and tourism goals.
Senator Raine: I appreciate that, and I certainly appreciate finally giving Destination Canada some ongoing, sustainable and predictable funding, which is fantastic.
The reason I'm asking is because in Budget 2017, it just eliminated a long-standing program to rebate the GST or HST that was currently being paid by non-resident tour operators. This has come out of the blue, and the drop dead date on it, if you like, is January 1 next year. But in fact in the tourism industry, people are out negotiating and selling their products two years in advance. These are many small tourism operators all across Canada, especially ones who are outfitters and operating in the rural parts of Canada, that have now sold their product at a price where there was an expectation that the tour operator could apply and get a rebate of the GST/HST. Now they will not be able to, and this will cause all kinds of grief in the sales process. My understanding is there was no consultation on this at all; it just came out of the blue. Honestly, people are almost having heart attacks out there.
Could you ask Tourism Canada to provide this committee and me, Senator Raine, with a copy of their consultation framework for next year, 2017-18, and include in this package a detailed explanation on why the tourism industry was not consulted with the current change? And if possible, can that date not be moved back to accommodate the harm that's going to be done through no fault of their own? These are the people out there selling the product overseas, and people come in and earn all kinds of revenue for Canada, and all of a sudden this is happening. Is there any chance of fixing it?
The Chair: In that preamble, there is a question.
Senator Raine: Yes.
Mr. Davies: There were a number of questions. You went from high-level to very specific, and I appreciate the importance of support for tourism, tourism operators and so on in making a good marketing effort for Canada. We will certainly take away the request to ask Destination Canada to speak to its consultation.
Senator Raine: It's not Destination Canada.
Mr. Davies: Matters related to tax would be under the responsibility of the Minister of Finance, the Department of Finance, again, in terms of accountability for tax measures, changes to the GST, for example, which you've referenced. There is nothing directly in the matter involving our department. That requires a separate explanation that could be provided. Again, I would be happy to represent what Destination Canada does to interact, and I know they do intensively every day with the tourism sector across the country.
The Chair: Could you bring it to their attention, please?
Mr. Davies: Yes.
Senator Raine: I'm very familiar with this file. Destination Canada is the marketing arm. This is the operational arm. This is the Tourism Industry Association of Canada and all of their partners. If we have to go to the finance department, is there not somebody in your department that can help us?
Mr. Davies: We'll certainly take this question. I appreciate it. We'll take it back and ensure a response comes back to the clerk of the committee on the question.
Senator Raine: Thank you.
The Chair: Thank you, and we'll follow it up to Senator Raine.
Senator Marshall: I think I'm going to do a pre-emptive strike and let you know I have one short question for Transport Canada, but I have something for indigenous affairs. It's not a question but just to have them follow up at a later date.
Transport Canada, you reference Marine Atlantic, the ferry service between Newfoundland and Labrador. Is that the line item that's the Ferry Services Contribution Program, showing up on page 139 of the Main Estimates?
Mr. Lapointe: No.
Senator Marshall: So what is it? How much money are we talking about?
Mr. Lapointe: For Marine Atlantic or for the ferries program?
Senator Marshall: Yes.
Mr. Lapointe: For which one? I'm sorry.
Senator Marshall: For Marine Atlantic and service between Newfoundland and Nova Scotia. I just want to make sure we're getting enough money.
Mr. Lapointe: So Marine Atlantic, $76.5 million.
Senator Marshall: And how much last year? Do you know what the expenditure was for last year?
Mr. Lapointe: I've got the Main Estimates last year. To date, so the full estimates last year, $146 million.
Senator Marshall: So there will be more to come?
Mr. Lapointe: It has been announced in Budget 2017. That was announced for I believe three-year funding for Marine Atlantic.
Senator Marshall: It was. And the dollar amount?
Mr. Lapointe: I've got this right here handy.
Senator Marshall: I can check. That's fine.
Mr. Lapointe: Marine Atlantic is $445.3 million over three years to support continuing operations.
Senator Marshall: So it's about 150. Okay. Thank you.
For our witnesses from indigenous affairs, it's not a question, but when your minister appeared in Question Period in the Senate, I had asked some questions about the your infrastructure projects. I was making the point that there was nothing publicly disclosed, like some departments do. She said:
. . . I am very pleased to say that by the end of March, 100 per cent of the money has been identified and will be out the door.
Then I asked her if she would commit to make sure the information on individual projects is provided on your department's website. She said, "Absolutely.'' She said:
. . . I think you will be very happy that next week, particularly on the water projects, which we know are near the heart of all Canadians, we will be able to very quickly release a process so all Canadians can find those projects that have been approved . . .
That was on February 7, but there is nothing on your website yet. Could you just check into that and just let the clerk know what the status is?
Mr. Thoppil: Yes. We can provide you with the link. Through the NRCan open government platform, that information is there.
Senator Marshall: Is it there? I couldn't find it.
Mr. Thoppil: Most people will look on the INAC website, but to get it out faster, we used the NRCan open government platform, and that information is there.
Senator Marshall: Could somebody send me a link?
Mr. Thoppil: Yes, we would be pleased to provide you the link.
Senator Marshall: Thank you.
Senator Pratte: I have a question for Innovation about the billion dollars for the investment fund for post-secondary institutions. I would preface it by a short comment.
I know it has always been done this way. It's not only your department, Ms. Downie; it's for every department. I'm always a bit surprised when there is a bullet presentation like this and we find as much or as little information on a bullet point for a billion dollars as there is for something worth $6 million. When there is a big item like a billion dollars, I would like a bit more information.
This is a three-year program, this is the second year. There was quite a bit of money spent on projects in the first year, I suppose, so projects have been announced and have started. If I want to know which projects were financed and where we're at on those projects, can I go on your website or somewhere else to find that information?
Ms. Downie: You can, and I'm happy to send you the link. It lists all of the projects and it also lists by jurisdiction as well where all of the spending is. If you want to know a breakdown in terms of the funding that was spent last year, because different projects have different profiles, I can provide you with that as well. It's not listed by project profile on the website; it just gives you the total amount of the contribution being announced, essentially.
Senator Pratte: And that information is up to date?
Ms. Downie: It's up to date, yes, in terms of what's been announced. I think what's out there now is about $1.6 billion worth of projects announced, with more to come.
[Translation]
Senator Forest: In your opening remarks, Mr. Lapointe, you mentioned additional funding to support the Port Asset Transfer Program. In the estimates, that is additional funding, because last year, the estimates did not include anything for the Port Asset Program. Now there is $27 million. I want to make sure I understand; that involves contributions. On the grants side, last year, the Port Asset Transfer Program received a fairly sizable amount, $150,000, which is $46.987 million this year.
What is the difference between the two? Do the two programs involve the return of assets or facilities? What differentiates them?
Mr. Lapointe: They involve the return of shares to municipalities or others. The funding is split in two. The grants are earmarked for the transfer of responsibility stage, because the associated requirements are less stringent. As for the stage before the transfer, in other words, the preparatory stage, we are going to use —
Senator Forest: You are going to undertake a facility upgrade before the transfer?
Mr. Lapointe: It depends on the negotiations and the objective. However, as far as the preparation of business cases goes when dealing with municipalities, oftentimes, contributions are made available for that process.
Senator Forest: According to your planning, the total funding amount is $74 million, but Canada has hundreds of ports. How many ports does that involve?
Mr. Lapointe: It involves the ports that belong to the department. Some of them cannot be transferred. As far as those returns are concerned, the business cases will not be too complicated. When the program began, there were about 50, but now, there are 47.
Senator Forest: I have a question about Innovation, Science and Economic Development Canada. In your presentation, you discussed three not-for-profit organizations that are already funded, with $102 million going to Sustainable Development Technology Canada, $16 million going to CORD, and $6 million going to the Stem Cell Network. How did you arrive at those three organizations when you were allocating funding? Does the $102 million for Sustainable Development Technology Canada account for 100 per cent, 50 per cent or 20 per cent of the budget? What proportion is provided to these organizations as operating support?
[English]
Mr. Davies: I'll just start with the last part of the question. In the case of Sustainable Development Technology Canada, this is an organization created many years ago. My colleague might find in the notes when it was started. It is funded entirely by the federal government. It's very much responsible for having provided the seed capital for the 700 or so really interesting and innovative clean technology companies that have been started in Canada. Given the government's focus on clean growth, clean technology, which is unmistakable, recognizable in all that it's done, sustaining funding for this sort of organization is a priority. In fact, Budget 2017 has provided $400 million, which is the largest ever capitalization of SDTC in its history, that will now come forward in future estimates.
I think the key point is where the choices are made and the basis for the choices. There was a significant consultation, a pan-Canadian framework on support for clean technology jobs and innovation. The activities of SDTC were supported, affirmed, whether it was with the private sector or other levels of government. In fact, SDTC has gone on and engaged a number of partnerships with provincial governments to lever their funding to have more support to go into the clean technology sector. There is a whole story behind that, but it's sort of one example of how these choices are made.
[Translation]
Senator Forest: You are investing $102.3 million in Sustainable Development Technology Canada. You have been a long-time partner of the organization. Do you tell them what your expectations are? Do you conduct funding evaluations? Do you measure how that $102.3-million investment is performing? Having worked with a number of organizations, I find that to be a lot of money.
[English]
Mr. Davies: Of course, our agreements with organizations such as SDTC will require —
[Translation]
Senator Forest: You also set expectations?
[English]
Mr. Davies: Yes, full evaluation of their performance. They account for it in two ways. They account for it in environmental terms, which they evaluate in all the projects they support, even to the point of what greenhouse gas reductions are promised in the technologies they are supporting, in addition to the economic benefits in terms of jobs, follow-on investment, growth of companies, growth of the clean tech sector and the spread of clean growth. That evaluation work is done systematically. In fact, there has been a recent Auditor General work that will come out shortly that reviewed SDTC, and I can say they have a strong track record of performance in what they've done.
[Translation]
Senator Forest: You are therefore able to tell us what percentage goes to administration and what percentage goes to the work.
The Chair: Senator Forest, your determination will get you into the third round of questions.
Senator Forest: I want to add my name.
[English]
Senator Eaton: Mr. Thoppil, this is about water on reserves. As you know, Prime Minister Justin Trudeau vowed to end boil water advisories on reserves by 2021. I think in the 2016 budget, you allocated an additional $1.8 billion. Is that enough money to do what you have to do by 2021, and to maintain? I think you're also responsible for maintaining water on reserves as well as building them, or providing the funds for building them? Are you responsible for building them or only funding them and maintaining them?
Mr. Thoppil: To answer your last question, we're there to provide funding for building but also for operating and training of the operator.
Senator Eaton: So you fund them and you build them?
Mr. Thoppil: We transfer the money to the First Nations to build them.
Senator Eaton: And they build them?
Mr. Thoppil: They build them.
Senator Eaton: And you train them to operator them and maintain them?
Mr. Thoppil: Right. We provide operating and maintenance dollars to support the functioning of that plant or that system, as the case may be.
Senator Eaton: Is $1.8 billion additional enough to get this done by 2021?
Mr. Thoppil: That's a good question, senator. As I said in my opening remarks, we have spent this year $275.7 million of that monies for this year alone in order to work for 201 projects across the country.
Senator Eaton: And that includes ongoing maintenance, once you've built them?
Mr. Thoppil: The focus is on trying to get projects in order to lift the boil advisories. There is a focus on those boil advisories, on the long-term ones, which are advisories that have lasted beyond a year. Right now, that's where the focus of concentration of the monies is. The commitment as announced by the minister a few weeks ago is to ensure that, within the five years of the mandate, we eliminate all the long-term boil water advisories on reserve.
That's where the focus of the money is going to be, but there are monies beyond that for others as well.
Senator Eaton: And for maintenance, I guess, because it's no good if they're not maintained?
Mr. Thoppil: That is very true, senator. There is no point putting money into infrastructure if you don't provide the operating dollars as well for maintenance. Otherwise, you get this vicious cycle.
Senator Eaton: And training.
Mr. Thoppil: And training. There are challenges to maintain a technical capacity on reserve, particularly those that are remote, when they have those skill sets. When they've got those skill sets, sometimes they are scooped by non-indigenous communities nearby that can pay them more. Sometimes there is a vicious circle whereby we've trained them, they have the standards and they're now more marketable. It leaves a gap, and then the water quality on the reserve goes down. Then we're back. So it's a challenge.
Senator Eaton: Thank you.
Senator Mitchell: Senator Neufeld's question on automotive innovation piqued my interest. Maybe I'm of a slightly different perspective. I like the idea of supporting innovation in the automotive industry, particularly if it focuses on greenhouse gas reductions, hybrid technologies, battery technologies, electric cars, charging stations and so on. Could you tell me if any of that money would go into that kind of thing?
Ms. Downie: Absolutely. I would say almost every project. I have a list of projects here funded by the Automotive Innovation Fund. Almost every project that I'm familiar with in the automotive industry in Canada has some element of green technology or new technologies involved, just because of the nature of where the industry is being driven to.
Senator Mitchell: No pun intended.
Ms. Downie: That's true. Sorry. Bad pun.
There is an investment with Linamar to develop the components of much more advanced and energy-efficient powertrain or powertrain components, just as an example. We've had investments in the production of hybrid vehicles in our plants in Canada. At Toyota, we've got R&D investments going on that we've been funding with, say, General Motors, Honda or Ford — all in areas related to green technologies and, in some cases, hybrid vehicle-related technologies as well. The short answer to your question is "yes.''
Senator Mitchell: Great. I have a hybrid, and I love that car. I wonder if you can send me a list of those projects.
Ms. Downie: Sure.
Senator Mitchell: I also love this organization in Calgary, Alberta, called TECTERRA. I'd like to know whether you're aware of it. At least, I'd like to bring it to your attention. TECTERRA is a business-based non-profit model that provides, in a business way, a way to allocate government funding very effectively to technological enterprises that need certain marginal funds to progress or do new projects. I'm just wondering if you're aware of TECTERRA. If so, could you comment on it as a model for allocating in an efficient business-like way in this whole world of trying to promote technology without governments picking winners and losers?
Ms. Downie: I think I was here in November talking about supplementary estimates. You asked my colleague who was here with me, Lawrence Hanson, who is the assistant deputy minister for science through the Science and Innovation Sector. I always know the acronym, which is SIS. He actually testified at that stage that he visited the company and was very familiar with them. He agreed with you that they were really a model for what you prescribe. I'm not personally familiar with them, but I know Lawrence, who's probably the person most implicated, is familiar. I think he mentioned he visited the company as well.
Senator Mitchell: Thanks.
Senator Woo: Am I the last question? I want to thank all of you, first of all, for your stamina and your cooperation. I have a question to possibly to wrap up for Transport Canada. It's back to the issue of the Canadian infrastructure bank and the allocation of $5 billion for that bank. I believe the planned capitalization is $30 billion. I'm interested if you can tell us where the other funds will come from — which agencies and departments. I also appreciate that the design of the bank has yet to be confirmed, but I want to ask if Transport Canada is at the table in the design of the bank. If not, can you tell us who is at the table for the design of the bank's operations?
Mr. Lapointe: I think Infrastructure Canada is very much involved. We've been involved on the margins. The $5 billion, as noted in the budget, is reserved for trade and transportation projects over the course of 11 years, I think, or even more. So that's essentially high level that's what it is. I don't have the other details pertaining to the bank.
Senator Woo: These are project funds, then?
Mr. Lapointe: Correct. I think the objective is to get some private funding —
Senator Woo: Yes, I know.
Mr. Lapointe: — to contribute and develop opportunities for private investment in infrastructure investments. Beyond that, I don't have the specifics.
Senator Woo: It sounds like the $30 billion capitalization from the government does not include the $5 billion, then.
Mr. Lapointe: It would. The entire amount announced for the bank would include the $5 billion.
Senator Woo: Okay. Thank you.
The Chair: Honourable senators, since we're not going to a third round, I have two questions, but I'll ask the clerk to send it over to the two departments respectively, which will be Transport Canada and INAC, in writing, please.
I also have a comment to make as we close this evening. When we ask for information, please also provide the links to the clerk so we can facilitate when we table our report.
I have asked to be updated — and I don't intend to name any departments or agencies — but to the witnesses and senior officials of the government: As you know, this committee often asks for follow-up information. We saw it again tonight, asking you to follow up on information, which is very pertinent and reliable. I have been asked to be provided with a chart of information that this committee has requested since 2016. Without naming any departments or agencies tonight, as chair of this committee, there is no doubt that some are definitely outstanding.
I do not intend, at this time, to address my concerns to Privy Council, but I have that opportunity. I am not pointing to any one of you here this evening, but I want to share that and put it on record. Time is of the essence in order to report on the objective of transparency and accountability, because this committee, honourable senators, as you know, National Finance Committee, must report to the Senate the status of the Main Estimates.
On this, thank you, officials, for answering our questions, and thank you also for your professionalism. At this point, I declare the meeting adjourned.
(The committee adjourned.)