Proceedings of the Standing Senate Committee on
National Finance
Issue No. 64 - Evidence - April 25, 2018
OTTAWA, Wednesday, April 25, 2018
The Standing Senate Committee on National Finance met this day at 6:52 p.m. to continue its study on the federal government’s multi-billion dollar infrastructure funding program, and to consider the government response to the twelfth report of the Standing Senate Committee on National Finance, entitled Smarter Planning, Smarter Spending: Achieving infrastructure success, deposited with the Clerk of the Senate on February, 28, 2017.
Senator Percy Mockler (Chair) in the chair.
[Translation]
The Chair: Welcome to this meeting of the Standing Senate Committee on National Finance.
[English]
My name is Percy Mockler, senator from New Brunswick and chair of the committee.
I wish 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.
I would like to ask the senators to please introduce themselves.
[Translation]
Senator Pratte: André Pratte from Quebec.
Senator Moncion: Lucie Moncion from Ontario.
[English]
Senator D. Black: Doug Black, Alberta.
Senator Andreychuk: Raynell Andreychuk, Saskatchewan.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Eaton: Nicky Eaton, Ontario.
Senator Neufeld: Richard Neufeld, British Columbia.
The Chair: I would also like the recognize the clerk of the committee, Gaëtane Lemay; and our two analysts, Sylvain Fleury and Alex Smith, who team up to support the work of the committee.
This evening we continue, honourable senators, our study on the infrastructure funding program. We are pleased to welcome the Minister of Infrastructure and Communities, Amarjeet Sohi.
Thank you, minister, for accepting our invitation.
I would like to bring to the attention of the senators that we have the following staff accompanying the minister: Kelly Gillis, Deputy Minister. Thank you for being here.
[Translation]
From Infrastructure Canada, we now welcome Ms. Darlene Boileau, Assistant Deputy Minister, Corporate Services and Chief Financial Officer, and Ms. Laura Di Paolo, Director General, Program Integration.
[English]
We also have Sean Keenan, Director General, Strategic and Horizontal Policy.
Later, to accompany them, we will also have the presence of Glenn Campbell, Assistant Deputy Minister, Investment, Partnerships and Innovation.
I know that we have limited time with you, minister, of approximately one hour. Thank you very much.
I know that you have some comments and remarks to make. Please make your remarks, and then we ask senators to pose questions to you for answers.
[Translation]
Minister, you have the floor.
[English]
Hon. Amarjeet Sohi, P.C., M.P., Minister of Infrastructure and Communities: Good evening. Thank you so much to all of you, honourable senators, for having me here today and giving us the opportunity to talk about the Government of Canada’s investing in Canada’s long-term infrastructure plan.
I am pleased to be here, along with my staff, to talk about the important work my department, and the Government of Canada as a whole, is doing to invest in infrastructure.
I thank the committee for their study and ongoing work, as well as the Parliamentary Budget Officer for his work and input.
First of all, we respect and appreciate the important work of the PBO, as we do that of your committee.
Our infrastructure plan was designed in close collaboration with our provincial, territorial, municipal and Indigenous partners. It is designed to help grow the economy, build inclusive communities and support a low-carbon green economy.
In total, there are 14 federal departments responsible for delivering the infrastructure plan. Your committee and others have questioned why this is the case. I want to be clear that there’s sound reasoning for it. It makes sense that Minister Duclos lead the delivery of housing. It makes sense that Minister Philpott lead the delivery of infrastructure in Indigenous communities. The same for Ministers Bains, Carr, McKenna, and others.
We do not want to duplicate the capacity and expertise of these departments. We want to leverage it, and that is what we are doing.
My department is the lead for reporting on the progress, results and outcomes of the plan. In line with the recommendations in your committee’s report, we are regularly publishing details of the projects from all departments on an interactive map on my department’s website.
We also publish data on the projects my department is funding through the Open Data portal on the canada.ca website. Each of the implementing departments will be reporting the results of our investments to Parliament and Canadians through their departmental results reports.
Also in line with your committee’s recommendation, last week I shared our long-term plan publication. I understand all of you have a copy of it. It is another tool the Government of Canada is using to be transparent and communicate to Canadians the work we are doing to invest in infrastructure.
The first phase of the plan is providing $14.4 billion in funding to improve existing critical infrastructure across Canada. It includes 34 programs, all of which are under way. To date we have approved $11.8 billion in federal funding across these programs, which represents over 80 per cent of the funding available. Over 28,000 projects have been approved, and more than 20,000 of those projects are under way or completed.
For example, we are rehabilitating transit services in London, Ontario. We’re building a new water reservoir in Prince Albert. Across the river in Gatineau, federal investments through the Canada Mortgage and Housing Corporation are supporting the creation of 31 long-awaited transitional housing units for women facing homelessness and single mothers fleeing family violence.
These investments are aimed at improving existing public transit, clean drinking water and waste water systems, affordable housing, as well as the design and planning of new large scale light rail projects in British Columbia, Ontario, Alberta and Quebec.
I want to specifically highlight the inclusion of rural and northern communities as one of the key funding streams. We recognize that our rural and northern communities have unique needs that require a more targeted approach.
Issues such as road access, Internet connectivity and reducing a community’s dependence on diesel can make a real difference in people’s lives and contribute to Canada’s overall success.
We have made an important change whereby we now pay 60 per cent of the eligible project costs in communities under 5,000 people. This is a small change that will make a big difference for those communities.
For projects located in Northwest Territories, Yukon and Nunavut, we are providing up to 75 per cent of the funding of total eligible costs in recognition of the local fiscal challenges faced by the territories. Some $400 million from the Arctic Energy Fund will also specifically be allocated to the territories to help those jurisdictions improve energy security.
Across our country, Infrastructure Canada has been working closely with our partners to sign bilateral agreements that will flow $33 billion in funding under the next phase of our plan. We have signed seven of these agreements to date. That funding is ready and available now, as we speak.
Employment and Social Development Canada has signed almost all of its bilateral agreements with provinces and territories under the $7 billion Early Learning and Child Care Program. Transport Canada has launched its $2 billion National Trade Corridors Fund and is reviewing more than 100 project applications from across Canada.
Our partners asked that we design programs that are flexible and responsive to their needs. We have done that, extending the deadlines under some of our programs and adjusting our forecasts under new programs to ensure that funding is available to their projects when they need it.
Let me be clear, though. All of the federal funding under our plan is available to our partners. Once projects are approved, our partners can start to spend money immediately. The federal flow of funds takes place when we receive claims. We will continue to make that funding value to our partners to meet their project schedules.
Our programs are designed in this way to provide our partners with that flexibility and to ensure that federal funds are properly accounted for.
In conclusion, we are proud of what we have accomplished over the last two years.
One of the main reasons I ran for federal office was to make sure that municipalities have long-term sustainable and predictable funding to plan for the long term, something that has been lacking. With that, I am open to any questions.
The Chair: Senators, so that we can permit all the senators to ask questions of the ministery and given the time limit that we have with the minister, which is approximately 45 minutes, I would ask each of you to ask two questions on the first round and the minister to answer them.
We could consider a second round if time permits with the minister. I have also been made aware by the minister that the officials will stay here for the second hour.
Senator Marshall: I’ve done quite a bit of reading on the infrastructure programs. I am looking for something that I wasn’t been able to find. It’s with regard to actual expenditures on the programs.
All the information being provided is on what’s being planned or what the budgets are. I’ve done a bit of research and it seems like everything that’s available is on planned projects, estimated costs, and not actual expenditures or actual results.
If you look at the overall program, the $186 billion, there is no information on the actual expenditures. The Parliamentary Budget Officer reported on phase one. A lot of the information he provided, I tried to match up with what’s in Budget 2018 financial information. I had trouble reconciling it.
I went through this report. Thank you very much for providing it. It talks about plans and estimates, but there is nothing there on actual expenditures or actual results.
There is a section in there on transparency. It commits to full transparency. You have said in the report is that you will work to improve the quality of data and reporting and that the government will report annually to Canadians on the plans, progress and results. That would be on actual progress and actual expenditure results. It also references an annual report, but there is no annual report.
I haven’t been able to find the financial information that I have been looking for, so I am starting to get quite concerned about whether it actually exists. You may have it within government and we’re not seeing it.
The program has been under way now for 2.5 years. Where is the annual report? Where is the accountability information?
Mr. Sohi: Let me tackle the issue of expenditures first. Our programs are designed as a partnership between the provinces and the municipalities. Whenever we approve a project, we commit funding to that project. With a commitment to funding the project, construction, design or project procurement can start in the case of buying buses or ordering equipment necessary for the particular project. Our expenditures always happen at the end of the project, in most cases when the projects are completed. I’ll give you one example.
In 2014, Infrastructure Canada approved an LRT project in my city of Edmonton. The total project value is $1.8 billion and the federal government is contributing $400 million to that project. Construction started in 2014 after the approval. It is under way. It will be completed in 2020.
The work is happening. Jobs are being created. Infrastructure is being built, but we have only paid $35 million of the total commitment so far because we only have received invoices for $35 million. Even though we have committed $400 million and that $400 million stays with the project, until we receive the invoices we reprofile their money from one year to the other. It then carries over to the next year.
That is the challenge we are facing. We are so much dependent on our partners to send the invoices before we can pay out the expenditures; but that doesn’t mean the work is not happening. That doesn’t mean that results are not being achieved. Work is being done and all the intended purposes of the projects are being delivered.
Senator Marshall: I did look at Budget 2018 and I saw how funding was being reprofiled to future years; but there are expenditures being incurred by the federal government.
Just to double-check, I went back to the public accounts for last year. There’s quite a significant amount of money being spent, but all it shows are totals. There is no breakdown in the accountability information. You might look at a number and see that it’s $186 million, but there is nothing there that indicates what projects it was spent on or the status of the project.
I was more interested in seeing what is actually happening at a certain point in time. That information should be available, but it’s not.
Mr. Sohi: I will ask DM Kelly Gillis to give more details on that.
Kelly Gillis, Deputy Minister, Infrastructure Canada: In the $186 billion program, there are 14 departments involved. In Budget 2016 and Budget 2017, there are 58 programs involved and then thousands of projects involved.
We have put out, as the minister has outlined, a geospatial map on which we have the project start date and the project funding available. It’s something we began in December. We’re evolving to have more information available. Right now, by project, with thousands and thousands of projects, they have rolled into the public accounts because that’s where you would get the most transparency. At the end of the year it is audited.
It has it by program right now. If you do it by project, with the thousands and thousands of projects, I think that would be a lot for public accounts.
Senator Marshall: With the information being provided, the emphasis is on what is planned. There is very little information on actuals. To find the actuals, I would have expected an accountability report.
To give an example of looking for actual information, our committee has issued two reports. I’ve looked at your report. I looked at the PBO reports. I am going onto the government website and into Open Portal. I am going into public accounts.
I would have expected, for such a big program, that there would be an accountability report to provide the information in one place as opposed to people having to search a variety of sources.
Ms. Gillis: As the minister pointed out, I think that’s what we are beginning to do right now with the plan that we’re publishing right now. It’s the first time we put together the overall view of all the different departments and programs within the plan. We have begun the geospatial map. It will evolve and more information will be available. It shows nine departments and 26 programs on there.
We will provide more for a consolidated view. Also, as the minister outlined, we will put out an annual report which will put the overall program together again. This is an evolving process where more and more information will become available as the program continues.
Senator Marshall: A lot of the projects are earmarked as confidential, so we don’t know as a committee what they are. Also, when I go to the map where you can go to your province, sometimes the project and estimated costs will come up, but in other cases there’s a message that the information is not available. Again, the information is being restricted.
Senator Pratte: I am interested in the targets that are used, the outputs, which is the new approach of the infrastructure program. We find these targets in the agreements that are now being signed with the provinces. You have detailed targets for GHG emissions, share of public transport and so on.
My impression at first was that these targets had to be met, that infrastructure projects had to deliver these targets. When I read the report that you just published, I was reading about these targets. The targets are aspirational and will be challenging to achieve. These are long-term targets that will be measured using expected results. Results will likely only be available after project completion, beyond the timeline of the IBAs, that is, the agreements signed with the provinces.
I am starting wonder how these targets are related to projects. What is the use of these targets since they will only be reached after completion of the projects and after the IBAs have expired?
Mr. Sohi: That is a very important question.
We are shifting how we measure the success of all our programs. In the past, the measurement tool was just output: how many projects we have funded and how many projects we have completed.
We are focused on outcomes. The challenge we have faced since I took responsibility for this department is that there is no baseline to measure. No data is available that tells us this is where we are on these targets and this is where we want to be. We’re working with Stats Canada to collect that base level data from which we will measure success.
The other point I want to make is that infrastructure investments act as a catalyst for economic growth or building inclusive communities or moving toward greener communities. It’s very difficult to measure the short-term success of those investments. That’s why we need to look at the long term.
I’ll give you an example. When we are investing in affordable housing, the immediate investment we are making allows someone to stay in their place and build a life together by having that safe place to live in. The success of that is measured by having that person be part of the economy, part of the community and contributing to society. It’s very difficult to measure in the short term.
I can give you another example. We are supporting a very exciting project in the City of Montreal, the REM project. It will transform how people will move in the city of Montreal. You cannot measure the success of that project in one year, five years or ten years. It will be a 30, 40, 50 or 100-year investment.
How do you measure that long-term investment in the short term? That’s why we need to be inspirational in that sense. We just can’t focus on the short term. We need to have the long-term view of how infrastructure investments actually make a difference in the community.
Senator Pratte: Let’s look at the Province of Ontario, for instance, where Canada and Ontario have set targets for themselves within the agreement that you’ve signed. Let’s say 10 years from now you realize that three of the targets have not been met or are not even in the way of being met. What happens?
Mr. Sohi: We will be measuring those, absolutely. That’s why we have built in a review of the program in five years to take stock of where things will be in five years. There will be things we can measure.
For example, we can measure how many people will be using the LRT system when it gets into service, which means fewer cars on the street. We can measure that. We can also measure, once the LRT is completed, how many people are living within 1,000 metres or 400 metres to the closest LRT station. We will be able to measure those things.
We will not be able to measure the full impact of that infrastructure investment in the short term. We will be able to measure the immediate returns or results we can see because of those projects.
Senator Eaton: We heard from mayors representing various jurisdictions in Canada: Vancouver, B.C.; London, Ontario; and an association of municipalities from New Brunswick. They used somewhat the same terms as you did of long-term sustainability of their funding. I think my colleagues would agree with me that they wanted to share much of the same goals you have shared; in other words, transportation, environmental and housing. The trouble is, and you’ve said it yourself, you’re dependent on your other political partners, your two other governments.
Why wouldn’t you just give them more of the gas tax? I mean, you have to trust them. They would know. They’re accountable to their voters. I think it was the mayor of Vancouver who said what they really needed was not the sexy stuff. It’s fixing the pavement, fixing the potholes in the road, and replacing the sewage lines.
Why wouldn’t you raise the gas tax so they would have a bit of dependable, sustainable funding they could count on every year?
Mr. Sohi: As you know and since you have done the study, gas tax is available and is growing at the rate of inflation. It is permanent legislated funding available to our partners.
Senator Eaton: But is it enough?
Mr. Sohi: It’s not enough.
Senator Eaton: Could you grow it more?
Mr. Sohi: That’s why the new investments we are making by doubling the investments into infrastructure will leverage more money.
The challenge with the gas tax is that the gas tax cannot be leveraged with matching funds. It’s a 100 per cent federal program. The provinces are not required to contribute. Under the other programs we have launched, provinces are required to contribute at least one-third. We can contribute either 40 per cent or in small communities we can go up to 50 or 60 per cent, depending on their size. The rest of the funding needs to come from other partners.
It stretches the dollars further by leveraging federal dollars to the provincial and municipal dollars.
Senator Eaton: You’re giving me a very reasonable answer, but Minister Morneau sat there last year and said, “because we don’t want to lose control,” when I asked him the same question. Your answer is much more reasonable.
Senator Pratte, or perhaps it was Senator Marshall, mentioned that many projects were considered controversial. There was money next to them. I think there were 19 in all but the ones that really struck me were Parks Canada and INAC.
I guess I can see, if it was Homeland Security or Defence, why they would be secret; but when it’s Parks Canada you wonder why it is not more transparent. When there are sums of dollars next to them, why aren’t we seeing the projects?
Mr. Sohi: I can assure you that all the Infrastructure Canada programs and projects are 100 per cent available. All the information is available.
Senator Eaton: But the PBO couldn’t give them to us.
Mr. Sohi: We’re finding that out. We will have a conversation with the PBO to understand better. We will also talk with the departments if there are confidentiality issues because of private sector involvement.
Senator Eaton: What about Parks Canada?
Mr. Sohi: I would be surprised why that would be. We will find out.
Senator Eaton: That would be lovely, so that next year we don’t see 19 confidential projects with Parks Canada and INAC.
Ms. Gillis: As the minister said, we have asked. I have spoken with the PBO about asking that particular question. As the minister said, in the information we’ve been publishing there isn’t anything that is confidential.
What the PBO explained to me is that when information is transmitted to them and it’s marked confidential, they do not share information after that point. They don’t question the why but they don’t share it. They wouldn’t share it with us and they won’t share it otherwise because the department has given it to them confidentially.
They have suggested that you could certainly ask the department why if a particular department has done that. We have been working with them on a whole new process. They are getting information and we will get information at the same time. In that way we’re aware of what’s being provided, and then we can be transparent together.
Senator Eaton: Yes, exactly. It would be fun for us to know what criteria are being used to mark them confidential.
Senator Moncion: My question is about the infrastructure bank. Where is it at? How is it going?
Mr. Sohi: The infrastructure bank is established. It’s located in Toronto. The board of directors are appointed. They have hired the chief financial officer. We will be making the announcement of the CEO very shortly. The staff is being hired.
I am hopeful that, in a short amount of time, the infrastructure bank will be able to undertake and review projects. There’s a mechanism established now where our partners can go and talk to someone at the infrastructure bank to explore possibilities.
I want to stress that the reason we have created the Canada Infrastructure Bank is for the long-term gain, in a way. We want to engage private sector and pension funds to undertake large infrastructure projects that may otherwise not happen.
There are a lot of proposals or a lot of ideas by our partners that they think about, but they are too expensive for the public sector to undertake or too risky for the private sector to undertake. We want to bring them together to explore the possibility of building that infrastructure, but infrastructure has to be in the public interest first. It has to serve a public purpose.
I am very optimistic and excited about the kinds of projects the infrastructure bank can undertake and help us build that otherwise may never materialize in our country.
Senator Neufeld: I want to go back to some of the cities we’ve heard from that have come here and testified, as Senator Eaton talked about, and to my conversations with some northern communities.
For instance, Vancouver said their programs were aligned with the federal government to start with. I understand that because I can understand politics. I know why Vancouver would be totally aligned with what the present federal government was doing.
However, that wasn’t true for all the communities. When the smaller communities talked to us, they said they were having trouble actually meeting the goals the federal government had set in place so that they could access funding.
I am sure you understand that some of their needs are so diverse and so different that they need many different things compared to the five pockets they have to meet.
I want to ask you about whether there is a way you could reduce the requirement that this is what you need to do and this is what you need to do, so that these rural communities can have a little better chance of actually accessing some of the money.
It’s darn difficult for a small community of 3,000 people in the northern part of British Columbia to access some of this funding because of the strict rules that are put in place. It might be easier for a population of 10,000, but when you get down to the small ones, it gets much more difficult. That came out very true from the small New Brunswick communities that talked to us.
Is there a view to say, “Look, we didn’t realize we were going to hamstring you that bad; we’re going to change things to make it more available?”
Mr. Sohi: You have identified something that has been a real challenge for small communities. We are working with them, and we have made some changes.
In terms of the first change we made was under the Building Canada Fund, a vast majority of rural communities did not qualify for funding to build roads because the vehicle threshold was much higher. In order to qualify, a road must be used by 10,000 vehicles a day. Not many rural roads have that much traffic. We reduced that number from 10,000 to 1,500. That made it easier for them to access funding.
Another change we have made is to streamline our application process. I am personally very excited about the creation of a $2 billion dedicated fund solely for rural and northern communities. It is available to them, with no competition from mid-sized cities or big urban centres.
Another thing we heard was that when they were going through the application process, major urban centres have the capacity to fill out their application, analyze the program, and get an advantage over rural and small communities. We created the $2 billion dedicated funding.
In addition, rural and northern communities are still able to access funding through other programs. We have done that.
We’re also working with FCM to give FCM resources to build the capacity of smaller communities to better understand the programs, as well as build their asset management plans so that they know what their needs are and then they can apply for those programs. We’re taking steps to make it easier for smaller communities to access federal funding.
In my mind, the strength of our country is in being unique. We want to sustain and strengthen the richness of our cultural, geographical and linguistic diversities, as well as the sustainability of smaller communities and quality of life they offer. That’s why we’re creating this dedicated funding for them to access.
Senator Neufeld: I would like you to provide to the clerk, for all of us, those changes that are actually in place, that are happening now and that are actually helping people.
Mr. Sohi: Will do.
Senator Neufeld: Second, they all told us, and more so the small communities, that they would like to have a program like the Gas Tax Fund. You give them the money and they know where they want to spend it.
Interestingly enough, you don’t get elected in Ottawa when you live in Fort Nelson, British Columbia. You don’t. You actually get elected in that community or in any small rural community across Canada.
The larger cities at first talked about being fine with all the goals, but at the end of the day they all said, “We make the best headway if we get the money and we can decide because we have all our priorities.” All of a sudden, one government comes along. Then another one comes along and says, “These are our priorities, and you have to adapt to them.”
That is difficult. That would be just like the small communities saying to you, “You adapt to ours.” You wouldn’t be able to do that. I would really like to see if we can’t move a bit more to letting responsibility happen where those people get elected.
The other thing, as just one little part to that, is that I’d like to know how far along you are in spending on the responsibilities of the federal government alone. The federal government has lots of responsibilities for infrastructure like roads. I know they do because I know in the community where I live that they do.
There are other places where there are federal government responsibilities. How are you doing in spending money on your own responsibilities as a Government of Canada? Where do I find all of that information?
Mr. Sohi: Infrastructure Canada, as well as the $186 billion infrastructure plan that my department oversees, is not being used to build federal infrastructure. It is solely for municipal and provincial infrastructure. A different department is responsible for federal buildings and federal highways.
The only two projects my department manages are the Gordie Howe International Bridge that we will be procuring this fall and the new Champlain Bridge being built in Montreal. We can definitely convey what we hear from you to our PSPC department that is responsible.
I want to stress one point that is very important for all of us to understand. We do not select projects as a federal government. We allow local communities to decide which projects they want us to fund. We look at: Is that project helping us achieve the outcomes that we were talking about earlier?
Senator Neufeld: You are telling them. Please don’t tell me that. I am sorry, sir.
Mr. Sohi: No, we are not, actually.
Senator Andreychuk: Really, accounting for money is one of the responsibilities of parliamentarians, and they don’t come with all the accounting skills and backgrounds for which we hire fine officials.
When you say you’re putting in targets, outcomes and long-term outcomes, you’re layering and layering expectations. Senator Neufeld and some of my colleagues have pointed out that you’re adding layers of complexity. It’s very hard to find out what actually is happening.
On the one hand, you say you want greater accountability, so they have to produce a lot of paper. We want to see it somewhere. On the other hand, you have these long-term targets.
I was a councillor. It’s very hard sitting in a small city worrying about long-term targets because you’re generally on the ground with people with immediate needs. The road has potholes. The water system has collapsed in some of my communities. We want to get the water system fixed.
We really don’t want to talk about whether the person who might be profiting from the water system will be more economically viable 20 years from now that, or about all the other long-term social benefits.
Are we not laying too much on a program that started out as infrastructure? We’ve added enough social concepts and outcomes into it that it has become so complex I can’t figure out what accountability is or how I can account back to a community.
Mr. Sohi: When we developed these targets and outcomes, we did not do it in isolation from discussions with the provinces and extensively engaging with the municipalities through FCM. It was also through direct engagement with small- and mid-sized communities and big urban centres. We have done that in collaboration with them. They’re very streamlined. They’re not as complicated as one may believe them to be.
The targets differ depending on the program. For simple road projects, the target is very simple: how much of the road has been built. In the case of wastewater, we need to know when the construction is to start, when the construction is to be completed, when you will send us the invoices, and the progress of the completion. We don’t ask them to demonstrate how many people are accessing clean water. It differs.
When I am talking about long term, I am talking more about the large, transformative projects such as LRT and subways where the measures of the effectiveness of those investments are multi-year, not just a couple of years.
We consulted extensively in order to develop these. I don’t know if the DM wants to add something to that.
Ms. Gillis: Certainly. In our new program, we’ve tried to create a portal where small communities or larger communities can give us certain data points when they’re starting off their projects.
It does get to some of the points that you raised, certainly for clean water. Tell us when it’s going to start, when it’s going to end and how much money. It has to meet the effluent standards that are out there and understand what that means.
We used to ask for business cases and then do larger agreements. It was quite a heavy process. I believe that also gets to the point that Senator Neufeld raised as to how much capacity to actually work with us.
We are trying to look at simpler ways to do it: more automation and technology, working a lot with FCM and working with the communities overall. I speak with my counterparts every two weeks to see what’s going on within the provincial and territorial jurisdictions, to understand what the issues are, not to try to make it more complex than it needs to be but to understand what difference the investments are making, and to try to find that balance.
Senator Andreychuk: The targets that you have set, whether for the small or the large, are they national targets that you have created, or are they targets where the communities have come and said: This is what we need and this is our target?
What I hear from FCM and communities is that, every time the government changes, they say, “Where is this government going? How do I apply? How do I get my fair share?” Then the question to me is, “Did we get our fair share?” It’s very hard to explain it.
Mr. Sohi: We have done one thing differently under our new programs. Under previous programs there was no requirement for fair allocation to municipalities and then, further, fair allocation among municipalities. Under our new bilateral agreements, we have added the language that there has to be fair allocation.
We measure outcomes, so that there is flexibility in targets, like what targets and how those are measured. If they help us to demonstrate the outcomes, provinces can use their own targets as well. There is a flexibility in that as well.
Ms. Gillis: In the integrated bilateral agreements each province and territory discussed with us what the baseline was. We do have a data issue of understanding, of kind of having consistency, as the minister already spoke about earlier. We’re trying to understand where is each jurisdiction, and then discuss with us what the appropriate kind of target would be in the longer term.
It wasn’t a national one size fits all. It was very much looking at the context of each jurisdiction and trying to do something that made sense. It was still ambitious and would make a transformative difference in the long term.
Senator Cools: I apologize for my being a bit late. I spend my life running from one committee meeting to the other, so I am sure you will be patient with me.
I have been looking at your notes for your address as you explained all of these wonderful things to the committee. Something that I am very interested in has captured my attention. I think it is at page 7 of your statement.
You say here:
Across our country, Infrastructure Canada is working closely with our partners to sign bilateral agreements that will flow $33 billion in funding under the next phase of our plan.
Then you say proudly, with great pride:
We have signed seven of these agreements to date — that is funding money that our partners can spend right away.
Then the next paragraph is what captures my attention because I have served on this committee off and on for many, many years before the last two years. There was the episode of a native child, Jordan, where some very tragic and sad things happened, apparently. The literature of a year or two ago was referring to it as the Jordan principle because it had something to do with different jurisdictions. He was a native child and the jurisdictions were having arguments and fighting out who should pay for what. In the meantime, this child died in a very tragic way.
I read the particular paragraph in your statement. It is the third one on page 7. It says:
Employment and Social Development Canada has signed almost all —
That’s a good sign.
— of its bilateral agreements with provinces and territories under the $7 billion Early Learning and Child Care Program.
I mean that is something to be proud of. This is good work. The federal government should plaster notices all over, everywhere, to inform us of your good work because there is nothing more important than the welfare, happiness and well-being of children. They can’t protect themselves. They can’t provide for themselves. They need us to do that for them.
Could you tell us a bit more about that program? It seems to me to be very exciting, very interesting, very necessary and relevant.
Mr. Sohi: Let me actually share a story with you. I don’t know if I shared the story with you when I was here last time.
Senator Cools: You can share it again. I don’t mind.
Mr. Sohi: It’s a story of hardship as well as hope.
I came to know a mother of three children when I was serving on city council about a year and a half prior to the last federal election. That mother of three children was on the verge of becoming homeless because of mental health and addiction issues. She had other problems as well. She was desperate for help, and she called my office because she was my constituent. Luckily, we were able to connect her to affordable housing.
I ran into that mother about a year later, and within the one year she was able to put her life together because she had a safe and decent place to live with her children. They could feel safe and secure.
Just imagine the loss of potential if we were not able to connect her to that affordable place to live. It would be a loss for her, a loss for her children and a loss for society. Imagine the heartache she would have gone through.
Social infrastructure is very important to our government. It is important to communities because that’s what we heard during the campaign. The $7 billion of early learning and child care investment is making a difference.
I was in my home province of Alberta to announce this bilateral agreement last month. That investment will help the Province of Alberta to reduce the cost of early learning and child care. They will offer $25 a day daycare facilities in Alberta with this funding.
Housing, as well, is a joint investment of provincial and federal governments of close to $40 billion over the next 10 years. It will transform our communities, unlock potential for people to actually contribute to the community, and avoid the kind of tragedy that you have talked about, senator.
This investment is very, very important to Canadians. I am proud of transit as well. I am a former bus driver. I would like more public transportation, but I am also very excited about housing, early learning and child care facilities.
Senator Cools: I laud you for that and thank you very much. It’s very important. Some of these children are damaged.
Senator Moncion: Again, on the infrastructure bank, I went to look at your board of directors. It’s very impressive. You have lawyers. You have people coming from financial institutions. You have former mayors. You have quite a nice, good slate of people. It is fantastic that you have six women and four men on your board and that a woman is chair of that board.
There seems to be no one on that board who has infrastructure lending qualifications. I might not know all of them, but that’s a very different field from accounting. I am just wondering if that was an oversight.
Mr. Sohi: I will ask DM Gillis to answer.
Ms. Gillis: For that particular board there was an open and transparent process that we followed in looking at the mixture of skills.
If you look at some of the people in there like Bruno Guilmette, who is right now acting CIO, he has significant experience.
Senator Moncion: He’s not here.
Ms. Gillis: He is on the board, but he’s acting as the chief investment officer right now. He will return to the board once we have the CEO in place.
Senator Moncion: He’s the interim.
Ms. Gillis: He’s the interim, yes. It is a nice complement of skill sets who understand the industry and infrastructure across the country and of regional representation as well.
Senator Moncion: You reassure me.
Mr. Sohi: Quickly, I am actually very proud that we were able to find well-qualified Canadians from all parts of the country to serve on this board. On the number of women, we were very deliberate about it. We were very conscious about it and the regional diversity of all the regions. We have been able to find it. There was a large pool of candidates.
If someone says that you can’t find diversity and the right people to serve on these boards, we have proven them wrong.
Senator Moncion: You reassure me because of the fact that you do have someone. I was wondering why there wasn’t at least one. When you look at the boards of BDC and EDC, they are all very well put together. That was my concern.
Senator Marshall: I wanted to ask a question on the audit committees. My understanding is that every government department has an audit committee.
Would your audit committee have conducted any audits on the infrastructure program? Do you have an internal audit group?
Ms. Gillis: Yes, we have an internal audit group that looks at all of our spending and all of our programs. All of our programs must be evaluated every five years. There are regular audits on a risk-based process that are reviewed.
We do have an independent departmental audit committee. Our chair of the audit committee is actually Kent Kirkpatrick. He used to be the city manager of Ottawa. He understands infrastructure very, very well.
Senator Marshall: Have there been any audits of the infrastructure program?
Ms. Gillis: Of our programs themselves, yes. Not of Budget 2017 just yet because we are just launching them. Yes, they are on the audit plan.
Senator Marshall: Is that Budget 2016?
Ms. Gillis: For Budget 2016, I would have to see which programs. We were doing continuous audits of the intake. I am not sure if my chief financial officer knows offhand, but I can get you that information.
Senator Marshall: Could you provide us with a copy of that?
Ms. Gillis: Yes.
Senator Marshall: My other question is: Are there any audits ongoing right now by either your internal auditors, external auditors or the Auditor General of Canada?
Ms. Gillis: There has been an audit of the Champlain Bridge which the Auditor General will be releasing later in May.
Senator Marshall: The May 29 report.
Ms. Gillis: Correct.
Senator Marshall: Is that the only one?
Ms. Gillis: That’s the only one the Auditor General is reviewing right now that I am aware of. They do come in on an annual basis to review our financial information for public accounts.
Our spending, as you’re aware, is quite large, so they do spend several weeks going over all of our financial information as it goes into the Government of Canada’s financial statements.
Senator Marshall: Could you provide copies of the internal audit reports to the clerk? I would be interested in those.
Ms. Gillis: Certainly.
The Chair: Do you have any closing remarks, minister?
Mr. Sohi: I want to take a moment to thank all of you again for the contribution that you have made in the past by making recommendations to Infrastructure to look at some of the things we can improve upon. I hope we have lived up to some of your expectations in relation to that.
Again, this conversation will be helpful to us as we make further programs more relevant to Canadians in different parts of the country. Thank you for giving my staff and me the opportunity to be here with you.
The Chair: Thank you, minister.
I will now recognize the first questioner of the officials from the Department of Infrastructure.
Senator Eaton: I was reading the backgrounder put out by your department. It refers to $28.7 billion in public transit projects, including $5 billion that will be available for investment through the Canada Infrastructure Bank. I noticed you have some for green infrastructure, trade and transportation.
Could you explain how that works? Is that to leverage other money? Is that just to top up the investment put in by other people? How will that work?
Ms. Gillis: Is that the $5 billion for the Canada Infrastructure Bank?
Senator Eaton: Why don’t we take the public transit project as an example, including the $5 billion that will be available for investment through the Canada Infrastructure Bank?
Ms. Gillis: In the Canada Infrastructure Bank there is $35 billion overall, and $15 billion is set aside to be able to invest in different types of infrastructure.
Senator Eaton: They have a pot of $35 billion.
Ms. Gillis: Correct, and $15 billion of that is used to invest in transformative types of infrastructure projects.
Senator Eaton: What would be a transformative project?
Ms. Gillis: It could be a light rail project or that type of thing. It would look at it and try to leverage because the objective of the Canada Infrastructure Bank is to crowd in private sector investment.
Senator Eaton: They would invest $15 million in Toronto’s light rail system, and they would hope that the other investment would come from pensions, banks or other investors. The other investors and pensions would demand a return, but the Canada Infrastructure Bank does not demand a return. Is it sort of a straight gift?
Ms. Gillis: No. There would be different types of financial arrangements, depending on the case and depending on the situation. There could be a return. It could be a different return in the private sector.
Senator Eaton: Could it be in the form of a loan?
Ms. Gillis: It could be in the form of a loan. It could be in the form of equity. It will vary, depending on the situation and depending on the structure of the financial arrangement.
That’s why we created an independent bank with the right expertise to be able to determine the bankability and help shape what those transformative types of investments could be. Their objective is to crowd in as much private sector investment and to de-risk it just enough with whatever the federal contribution would be.
Senator Eaton: Would the federal contribution be topped up every year? They’re starting with $25 billion.
Ms. Gillis: No, that’s it. For the next 10 years that is their funding.
Senator Eaton: They will have to look for revenues, obviously.
Ms. Gillis: They will get a return sometimes because they are looking at riskier types of investments. The whole thing is to look at transformative greenfield types of investments that have a revenue stream coming in.
Senator Pratte: You’re going to think I am obsessed with these targets. I am, so I am sorry.
I want to understand further. Is there any link between the targets and the selection of projects? When a municipality comes along and applies for a project, do you look at the project in relationship to the targets in the IBA that was signed with the province? To what extent do you look at the relationship? Is there an evaluation if it’s an LRT, for instance? Do you look at the potential to reduce GHG emissions?
Ms. Gillis: Yes, there is a relationship between the two, so thank you very much. If we look at our green stream, for example, where overall nationally about $9 billion has been allocated by province, 45 per cent of that must go into mitigation or reductions of GHG emissions. For that, we’ve worked closely with Environment Canada to understand, as a guide, how we understand and assess GHG reduction emissions. For larger types of projects over a certain threshold, they do an assessment to understand what kinds of GHG reductions they anticipate from that project. They do that at the front end, so that when they are putting the project application to us through the portal we’ll know what they anticipate from GHG reductions. At the end, we’ll know what the assessment is again and see the difference between the two.
There is very much a relationship in each of the streams on what different indicators we would look for. We’ve tried to keep them light and non-burdensome. For GHG mitigation, for example, that would be the way we do it. We have the same thing for the other streams, which would be resiliency and adaptation to climate change. We have tools for assessment to understand what differences the projects will make on climate change and then to understand whether we are actually realizing those differences for those investments.
Senator Pratte: This would apply for larger projects, but is there any way of working it out for smaller projects?
Ms. Gillis: Certainly. You can use these tools for all projects. We were trying to balance. In the green stream we are asking them to use it for them all, but in the other streams they don’t have to use it for over $10 million.
A municipality could always use these tools to understand what value proposition is being put forward by these particular projects.
Senator Marshall: In our earlier report on the infrastructure program, we talked about there not being a lead department. I am sort of getting the impression now that Infrastructure Canada is the lead department. When the minister responded to our report, he referred to the plans being delivered by the 13 federal departments with overall implementation and reporting coordinated by Infrastructure Canada.
Did it change after we issued our report, or is it still the same reporting structure? Can you just clarify that?
Ms. Gillis: We are trying to take accountability to be a central area to gather the state of the programs.
Senator Marshall: From the other departments and agencies.
Ms. Gillis: Yes, from the other 13 departments. It is working horizontally and gathering data from 13 other departments and 58 programs. It is new to the government, but we have started. Last December, we started with our geospatial map in trying to put up information. I know it’s not perfect yet, but every month we are putting up more and more information.
We have a process where we get from the departments, at a certain juncture in the month, all the projects approved that month. Then we augment the information on the portal and website from our open data to provide information to communities so that you can look in your community to see all the ongoing projects. Right now, we have over 9,000 projects on that site.
Senator Marshall: You’re being advised of all the projects.
Ms. Gillis: Correct.
Senator Marshall: You mentioned something when the minister was here that I was going to ask you to clarify. You were saying that departments would update you on their projects when they updated the PBO.
Ms. Gillis: I will clarify. The PBO, in its processes, is an independent body of Parliament that will access information.
We have asked to work with them since we will be collecting information from the 13 other departments as well on these programs. If they are to do another report, we want to understand what report they’re doing. They do their call. We are coordinating to ensure we have the same kinds of data, that there’s no difference between the data we’re collecting and the data they’re collecting.
Senator Marshall: When other organizations are providing the data, they’re saying that these projects are confidential, but your department is not saying any of yours are confidential. That’s an issue you can resolve for us or for the PBO.
Ms. Gillis: I certainly think it would be important, when we are getting information, that there’s no shadow between us, that the data is the data and there’s no difference.
Senator Marshall: There’s transparency.
Ms. Gillis: There’s complete transparency between us. I am an accountant by background.
Senator Marshall: Me too.
Ms. Gillis: There are important things that are cut off.
Senator Marshall: Right, we talk the same language.
The Chair: Should we leave the room?
Ms. Gillis: We work together to make sure we have the same nomenclature, the same definition of what’s going in and the same cutoff. Every day, more projects get approved. Depending on what time frame you’re looking at, you will have different numbers.
Senator Marshall: Right. That’s a problem. Do I have time for one more question, seeing she’s an accountant?
The Chair: Yes, one more.
Senator Marshall: This is sort of Senator Pratte’s question and mine combined. When the minister was responding to Senator Pratte’s first question, he talked about the 10-year project. If you have a big project like a 10-year project, I would have thought that every year the department should be able to report on it. If you have a 10-year project that costs $1 billion, in year one you could see that you spent $100 million, that the project was five per cent completed, that the estimate is still that it will be completed nine years down the road, and that it’s still on budget.
That’s what I thought we would be seeing, but that information is not available.
Ms. Gillis: No.
Senator Marshall: Isn’t that the right way to do it? That’s what my expectation would be.
Ms. Gillis: We often roll information up, and that’s what you’re seeing in the public accounts program.
Senator Marshall: Yes, it’s too high level.
Ms. Gillis: We have thousands and thousands of projects because we have legacy programs as well.
We can certainly take a look. In the last number of months, we have been looking at how we can be more transparent and how we can make sure Canadians have all the information on the investments.
This is an evolving process. We will take into consideration what more we can put out to make sure everyone has all the information and that we’re being as transparent as possible, at the same time as trying to balance the administrative burden.
Senator Marshall: I know, but my concern is that I don’t see the information. In some cases I don’t even see it at a high level. I am thinking to myself that it’s not publicly available to me. I hope that you’re generating it internally. If you’re not, then that’s really concerning.
I would like to see more information on actuals as opposed to everything being about plans. More information needs to be on actuals.
Senator Andreychuk: You said you’re inputting as you go because you have all this information and all these projects. You’re putting it in as and when you get it, if I understand. How do we compare it to other years, on a year by year or month by month basis, if you’re inputting? You will be inputting different information at different times, so how do we get a year you can look at and compare it to next year, or is it month by month?
What will we do? That is part of the problem in other systems the government is into. If you don’t have the same consistent input, it’s apples and oranges you’re comparing.
Ms. Gillis: Perhaps I’ll expand a bit on the government’s overall expenditure management process, which hasn’t changed at all. Each department of the 14 departments involved in this will continue to have the same expenditure management process, financial audits, public accounts, departmental reports and departmental plans. All of that continues. We’re augmenting and trying to provide some horizontal reporting for the 14 departments and 58 programs involved.
You will be able to compare. We’re trying to have a consistent cutoffs every month in understanding what projects have been approved and announced last month. Those should go onto our geospatial map. Right now on the geospatial map we’re showing the project name, a little description of what the project is, the federal contribution and the estimated start date. We can maybe augment further information. It’s just that we’re building as we go. We want to make sure every month as projects get approved that we’re providing more information to Canadians on what those projects are. That’s the input that goes on.
All of the other financial due diligence and financial stewardship are still ongoing where you can compare financial records from one organization to those of another organization. As we look at actuals, to go back to that, all the organizations do have actuals. We publish in the public accounts the actuals by program. It’s more granular project details that I believe you’re looking for.
Senator Moncion: Again on funding, I was always of the belief that funding was done at the end by either the federal or provincial governments. Once the project was completed, the amounts that were promised would be given at that time. It seems that’s not the way it is done right now. You do progressive funding as the projects evolve. That’s what I understood from the minister.
Ms. Gillis: On our legacy programs we did have a longer lag time in how we reimbursed. We would have a particular funding allocation from a budget. We would launch a particular program. We would have projects approved. For the project proponents to be reimbursed, the municipal would submit an invoice to the province. The province would submit an invoice to us, but they had to prove that it was paid. That’s a long lag time between that happening. They could submit it at any particular juncture in the project. There wasn’t a set time of when we would expect an invoice. It would be for the proponents to determine when they would be submitting that invoice and be paid.
The example the minister gave is that we have quite a lot in value of ongoing contract work, but the actual amount that we’ve paid is not representative of that value. We’re looking at that issue right now. With the IBA OR integrated bilateral agreements in phase two of Budget 2017, we have changed the language and called it “cost incurred.” We’re working right now with all jurisdictions across the country, as well as the comptroller generals, on the accounting rules. What are the rules of the game for that? What is the definition? How do we audit it? What substantive information do we need to pay that bill?
We’re hoping to have a closer understanding of the value of the ongoing contract work and what’s recognized in our financial statements from the actual cost paid. Right now you can do a project and wait until the end. There could be a lot of ongoing work that won’t be represented in the actuals. We’re trying to close that gap. There will always be a lag, but we would like it to be closer together.
Senator Moncion: I have a question related to that. How does someone like a senator look at these projects to see where they’re at? Are they 35 per cent completed? How do we see that when you do your reporting? I understand the accounting part, but how can we see how far along a project is?
Ms. Gillis: We don’t report on the project state whether or not it’s 35 per cent complete, other than on the Champlain Bridge. We have just reported that it’s 70 per cent complete because it’s a larger project. It would be within the communities themselves and the project proponents. If you go on our map, there is more information. You can see a particular project is being done in your community. You can go to that community to find out more about the particular project, because they’re the ones actually doing the construction and building whatever the infrastructure investment is.
Senator Moncion: We can’t necessarily see the completion. Right now we see what was approved, the money that has been disbursed, and what’s left to be disbursed. That’s what we get for information right now.
Ms. Gillis: On our geospatial map you get the federal investment and the estimated start date. We don’t put the actuals or the disbursements there by project.
Senator Eaton: To follow up, I think I know what you want. You pay at the beginning and at the end. Do you ever pay periodically for a quarter finished to half finished? Do you disburse funds along the way? Is that how we find out how far you are along?
Ms. Gillis: Because invoices can be submitted at any time, we do pay along the way. They haven’t been at particular junctures like progress payments or milestone payments, other than the Champlain Bridge, which is a P3. We have certain contractual payments that are made at certain junctures.
Within the thousands of projects we do with provinces and municipalities, the reimbursement framework used has been on claims, with the proponents determining whenever they want to submit a bill. What we’re doing with our new $33 billion is that we are using costs incurred. We are asking them to submit twice during the year and once at year-end. We would make payments three times during the year, have a closer alignment, and be able to better forecast what the anticipated costs would be.
Senator Eaton: I know what you’re thinking. When I submit the payment you’ll pay it, but you don’t know how far along I am. I am sending you bills, but it’s not as if I am sending you photos or we have completed half the track. I just wanted to know if there was somewhere this project was tracked.
Ms. Gillis: It isn’t public, but we do have oversight committees. Our teams actually work with all of the provinces and territories to go through all of the projects. Our teams do know at what state those projects are at. It’s not just a bill and not substantiated. There’s a significant relationship with all of these jurisdictions in understanding where are the projects, the value, and how things are going and working together from that perspective.
Senator Moncion: For us, all the information received is what’s been disbursed as a whole.
Ms. Gillis: As a whole. We roll it up to the program.
Senator Moncion: My other question goes back to what Senator Pratte was asking about emissions. You’re talking about targets, and I want to talk about what is mandatory.
If you get projects built that use better materials and have fewer emissions, what is mandatory and how will you monitor it?
Ms. Gillis: For particular projects in the green stream, when they’re submitting their project to us they will be going through what we call a climate lens. It’s a tool we developed with Environment Canada that helps them assess the different opportunities for GHG reduction emissions.
Senator Neufeld: I have some questions in regard to the green fund. First, maybe there is a firm number, but has there ever been an estimate of the administration cost when you talk about federal, provincial and communities? What is the administration cost to get some of this out?
I listened to this report and that report. Somebody has to read all that. Somebody has to develop it. Somebody has to write it someplace down the line. Do we know, consistently across the whole country, what the administration is every year? Probably the whole department you represent would be one part of it, but when we think about combining cities with that and combining communities with that, it has to be horrendous.
Ms. Gillis: Certainly our team in Infrastructure Canada are dedicated to all of the programs we provide. In our programming we provide 1 per cent to the provinces for administration. That’s the administration cost that they get to be able to administer these particular projects within their jurisdictions. We don’t provide any funding to municipals for administration.
Senator Neufeld: I am not asking that you do. I hope you didn’t misunderstand me. The 1 per cent provided to the municipalities doesn’t even begin to pay what the real cost is for administration. We all know that. It’s great that you do that. I mean 1 per cent is better than nothing. That’s for sure.
What is the whole cost? Your department would be one. Then there would be the cities and the communities to adapt to change every time there’s a change in government to some other direction that the federal government wants to go. It would be interesting to know that administration cost. Maybe we wouldn’t want to know, but it may be interesting to know what that cost is. I don’t know if you have ever looked at that or not.
Ms. Gillis: No, I am not aware of us looking at it, but thank you.
Senator Neufeld: I can understand why. Most people would be absolutely flabbergasted at how much it costs to get a dollar bill out of the federal government onto the actual ground so it actually does something.
On the green fund, the clean energy for rural and remote communities is $220 million over six years. What is that? Environment Canada does a lot of work. Natural Resources does a lot of work. What would happen with the $220 million?
Ms. Gillis: It is not Infrastructure Canada. I am just looking at Environment Canada.
Senator Neufeld: Is it just transferred to Environment Canada? Maybe I am not understanding. Don’t you put this out the door?
Ms. Gillis: Of the programs in place there are 14 departments, and 13 of them are not us. We’re one of many within here. There are 58 programs and many of them are given by the other 13 departments.
Natural Resource Canada is involved. The same with Environment Canada. I am looking to see. This is given by Natural Resources Canada.
Senator Neufeld: This is on your document right here.
Ms. Gillis: Yes, because we’re consolidating for the 14 departments in all 58 programs. That one is in Natural Resources Canada. If you give me a second, I can give you a bit of a description of that program.
I don’t have the description in here. I will get you the description of the particular program.
Senator Neufeld: For energy efficient buildings there is another $182 million. That money is just transferred to another department. Is that correct?
Ms. Gillis: It’s not transferred to another department. It’s given directly to them through the budget process. It doesn’t come to Infrastructure Canada. Of the $186 billion, $114.7 billion relates to Infrastructure Canada. The rest is divided up between the other departments. It is allocated directly from the fiscal framework and financed to them.
That’s why Minister Sohi, in his opening remarks, was talking about the other ministers. They’re accountable to deliver their programs. We’re assisting by consolidating, reporting, trying to provide transparency, and showing what the whole looks like and the difference it’s making. Each minister is responsible. In this case Minister Carr is responsible for the particular programs you’re mentioning.
Senator Neufeld: Then the Arctic Energy Fund of $400 million is yours.
Ms. Gillis: That is us.
Senator Neufeld: What’s that for?
Ms. Gillis: That is to help the three territories reduce their diesel dependency. They have a lot of diesel dependent equipment at the end of lifecycle. It helps them to bring it up to speed so that they have more energy security. It’s divided up as $150 million to Nunavut, $150 million to the Northwest Territories, and the rest to Yukon.
Senator Neufeld: The Senate Energy Committee did a study of energy development in all three territories. We found that they were not nearing the end of their life. Some of those generation projects are way past the end of their life, like up to 50 years old.
That will be delivered directly by this department with no matching funds. Is that correct?
Ms. Gillis: No, there are matching funds. It’s 75 per cent that we will pay up to, and the other 25 per cent will be by the territories or other proponents.
Senator Neufeld: By the territories or the communities.
Ms. Gillis: Or the communities, yes.
Senator Neufeld: How in the world does a community of 150 people actually participate in renewing a generation project that’s over 50 years old? Those communities are small and 150 people is probably large for a lot of them. Where would Nunavut or the Northwest Territories get the revenue from, even if it was the territory that had the share of the other 25 per cent?
Ms. Gillis: We’re working very closely with the three territories in understanding what their plan is for their integrated bilateral agreements, which have been signed with the Northwest Territories and Nunavut. They are advancing in their own planning framework on what projects are of a priority to them to be able to work with us to have that money approved and spent on projects meeting their needs.
Senator Neufeld: I am on the Energy Committee, so that’s important to me. I would like you, if you could, provide to the clerk for all of us what projects have been funded so far. Where are you in that process? Are we actually doing something on the ground, or is everybody sitting in their offices looking at how to do this and all those kinds of things?
In fact, last winter there was one community where their diesel generation system went down. I live in the North, so I realize it, but people living in the South don’t realize that when it’s 50 below it’s a little chilly when your unit goes down for a week or two.
Ms. Gillis: For the integrated bilateral agreements where this $400 million is part of that process, the umbrella agreements were signed with both Nunavut and the Northwest Territories in March, so just last month.
Senator Neufeld: I am aware of that.
Ms. Gillis: Right now they’re in the process of determining what types of projects they want to be funded under these umbrella agreements and will be working with us.
Our anticipated timelines are for all jurisdictions to give us, once they signed the agreements, their three-year plans by September. Some are working with us on an earlier time frame, which would be Northwest Territories, for example. They’re working within their own governance processes. They need their own cabinet approvals to submit different projects to make sure they’re working within and understanding the priorities in their jurisdictions for projects themselves.
Senator Neufeld: I assume from that, that none of the $400 million has been spent then.
Ms. Gillis: No, it was just signed last month under the umbrella agreement. They will be submitting projects to us for approval in the near term.
Senator Moncion: On the same subject, just to understand, when you don’t do project matching you’ll provide the money but the projects definitely have to come from the communities. You don’t know beforehand. You’re just putting in so much money on a first come, first served basis. If we look at the infrastructure, in the case of the territories you’ve put some money aside just for them.
They have to get the projects, so you don’t know before you put in the $400 million what projects they will be working on. It’s just a number that has put out there. They are going to come up with projects up to $400 million that you will be able to match.
Ms. Gillis: Correct. Within the process for the overall money there has been an allocation for jurisdictions achieving certain outcomes and targets within the various streams. It os up to them in the jurisdictions. It is important to look at the priorities within their jurisdictions that they are wanting to move forward to meet the outcomes we’re trying to achieve, to work with us to understand the value and priority of the achievement, and to submit to us what we’re calling three-year plans. Then we will have an outlook going forward of what difference that grouping of projects will make.
Senator Moncion: What if they were to come up with a three-year program before you get the budget and say, “We need $500 million”? Then you get the budget ready because you have matching projects. The way it’s being done right now is that you come up with a number and they come up with the projects, instead of their coming up with the projects and then your funding the projects?
Ms. Gillis: Correct. There has been a determination through the last two budgets on investments in infrastructure to meet certain outcomes that have been allocated through a funding mechanism based on the census and the populations of which jurisdictions were getting which funding. Now they’re looking at their priorities, their capital plans and their investment plans to see how we come to an alignment.
This process has been going on for a number of months. It has been quite a successful discussion with several bilateral agreements signed and providing certainty to certain communities on how to move forward with transit projects, et cetera.
The Chair: The objectives of the Finance Committee of the Senate are basically transparency, accountability, predictability and reliability. You have demonstrated a lot of professionalism this evening for which we thank the officials very much. There is no doubt we could ask you to come back. Nevertheless, some questions were asked and information requested to follow. Hopefully, deputy minister, you could look into them and send them ASAP.
Senator Marshall: The audit reports.
Ms. Gillis: Yes.
The Chair: Thank you, honourable senators.
(The committee adjourned.)