Proceedings of the Standing Senate Committee on
National Finance
Issue No. 77 - Evidence - October 23, 2018
OTTAWA, Tuesday, October 23, 2018
The Standing Senate Committee on National Finance met this day at 9:30 a.m. to study the federal government’s multi-billion dollar infrastructure funding program.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Welcome to this meeting of the Standing Senate Committee on National Finance. My name is Percy Mockler, senator from New Brunswick and chair of the committee.
I wish to welcome all those who are with us in the room and viewers across the country who may be watching on television or online. As a reminder to those watching, the committee hearings are open to the public and also available online at sencanada.ca.
[Translation]
Now I would like to ask the senators to introduce themselves, starting on my left.
Senator Forest: I am Éric Forest from the Gulf region in Quebec.
Senator Pratte: I am André Pratte from Quebec.
[English]
Senator C. Deacon: Colin Deacon, Nova Scotia.
[Translation]
Senator Moncion: I am Lucie Moncion from Ontario.
[English]
Senator M. Deacon: Marty Deacon, Ontario.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Neufeld: Richard Neufeld, British Columbia.
The Chair: Thank you.
[Translation]
I would also like to introduce the clerk of the committee, Gaëtane Lemay, and our two analysts, Alex Smith and Shaowei Pu, who team up to support the work of the Standing Senate Committee on National Finance.
[English]
Today, honourable senators and the viewing public, we continue the committee’s special study on the federal funding of infrastructure funding programs. This morning, three departments are appearing to give us an update on their current and projected infrastructure projects.
[Translation]
First, from Indigenous Services Canada, we have Paul Thoppil, Chief Finances, Results and Delivery Officer, and Keith Conn, Assistant Deputy Minister, Regional Operations, First Nations and Inuit Health Branch.
[English]
With Mr. Thoppil is Claudia Ferland, Director General, Regional Infrastructure Delivery Branch.
Then, from Crown-Indigenous Relations and Northern Affairs Canada, we welcome Alex Lakroni, Chief Finances, Results and Delivery Officer; Mark Hopkins, Director General, Natural Resources and Environment Branch; and Susan Waters, Director General, Lands and Environmental Management Branch.
I have been informed as chair that Mr. Thoppil will speak first, to be followed by Mr. Lakroni, and then we will have Ms. Ferland present to the committee an online interactive map.
Mr. Thoppil and Mr. Lakroni, thank you very much to you and your teams for having accepted our invitation so we can have additional information on budgets and on your vision for the said departments.
Mr. Thoppil, the floor is yours, to be followed by Mr. Lakroni.
[Translation]
Paul Thoppil, Chief Finances, Results and Delivery Officer, Indigenous Services Canada: Mr. Chair and honourable senators, thank you for the invitation to discuss the infrastructure investments being made by Indigenous Services Canada, or ISC for short, as part of the Invest in Canada Plan, Phase 1.
[English]
Before I begin, I would like to acknowledge that we come together on unceded traditional Algonquin territory.
I am pleased to join you with my colleagues to provide the committee with an overview of the progress made and the results delivered through the targeted investments provided by Indigenous Services Canada to support First Nations infrastructure on reserve.
Reliable infrastructure is something all Canadians deserve. Investing in infrastructure is about investing in people and communities. It’s about improving the quality of life in communities by ensuring people have quality housing, safe drinking water, better schools and health facilities, as well as cultural and recreational spaces that bring people together as a community.
The Government of Canada has committed to making unprecedented investments to directly support Indigenous community infrastructure and is working in partnerships with Indigenous peoples to improve their well-being. Approximately $8 billion of these investments are managed by Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada over a 12-year period.
Indigenous Services Canada is supporting First Nations in the delivery of 3,385 infrastructure-related projects in the areas of water and waste water, housing, education, health and other community infrastructure, including cultural and recreational facilities, roads and bridges, telecommunications, energy, sustainability and connectivity infrastructure, as well as waste management on reserves.
I’m happy to report that since 2016, more than 55 per cent of Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada targeted infrastructure investment projects for First Nations communities on reserve have been completed. These include building 919 homes and renovating another 2,359 so First Nations people can provide safe, secure spaces for their families.
More children have access to local education, with 14 new schools completed. Clean, safe water is now available in more communities as 72 long-term drinking water advisories have been lifted between November 2015 and October 15, 2018. First Nations communities across Canada are seeing a real difference.
[Translation]
Given the size of the portfolio, it is imperative that we provide transparency into investments to ensure greater accountability and move from reporting on financial allocations to reporting on outcomes. This is our commitment to managing public funds well.
[English]
With these historic investments, the department has implemented a number of tools to ensure Canadians are aware of where their tax dollars are being invested. There is a robust reporting process that has been implemented, allowing the department to provide quarterly updates on its overall portfolio of infrastructure projects. The results are showcased through a variety of channels, including the First Nations targeted infrastructure investment interactive map launched on the departmental website in June 2018. Canadians, including First Nation community members across this country, can view online the descriptions, locations and the status of over 3,300 projects.
It is important to note that although the department shares aggregated estimated costs of projects at a high level, project-based financial information cannot be made public before projects are finalized as it could adversely impact their procurement process or create bid inflation. As you are aware, projects must go through a competitive procurement process to get the best value while enhancing access, competition and fairness. Releasing project-based financial information in the early stages of project development could compromise the integrity of this process. This was reflected in our filing of the information provided to the Parliamentary Budget Officer.
[Translation]
The main goal of Indigenous Services Canada is to support First Nations in the delivery of infrastructure projects that are built on partnership and trust and that help build a stronger Canada.
[English]
First Nations and Indigenous Services Canada work in partnership to ensure funding for essential community infrastructure projects through a national priority framework. Each year, First Nations collaborate with ISC regional offices in the development of their infrastructure plan and in the delivery of their respective infrastructure projects.
As part of this process, the department also monitors infrastructure investments and programming to ensure that compliance programs are in place and building codes and standards are met.
Finally, we are working on a new iteration of this map that we will show you later that will provide additional transparency on federal spending from ISC and CIRNAC for completed projects supported by targeted funds.
[Translation]
After the remarks of my counterpart from Crown-Indigenous Relations and Northern Affairs Canada, I will invite my colleague Claudia Ferland to introduce the infrastructure interactive map, both in content and functionality.
Alex Lakroni, Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs Canada: Mr. Chair and honourable senators, thank you for the opportunity to discuss the important infrastructure investments that are being delivered by Crown-Indigenous Relations and Northern Affairs Canada, or CIRNAC, as part of the Invest in Canada Plan, Phase 1.
I am the new Chief Finances, Results and Delivery Officer at CIRNAC. Accompanying me today is Susan Waters, Director General, Lands and Environmental Management Branch, as well as Mark Hopkins, Director General, Natural Resources and Environment Branch.
Let us first recognize that we assemble today on unceded traditional Algonquin territory.
[English]
In addition to what my colleague Paul Thoppil from Indigenous Services Canada has presented, the department of Crown-Indigenous Relations and Northern Affairs Canada also firmly supports improvements in quality housing and basic infrastructure, as well as investments to support environmental sustainability. Specifically, CIRNAC is delivering on infrastructure investments in three key areas: Inuit housing, solid waste management and addressing climate change.
Significant results have been achieved so far with the unprecedented investment that the government has made to support Indigenous community infrastructure. The Inuit housing investments are premised on a self-determination approach that gives the Inuit recipients the responsibility, decision-making powers and capacity to address the most critical housing needs in their communities. To date, the $80 million provided through Budget 2016 has been used to construct 183 new housing units and support numerous energy efficiency and home renovation projects in Inuvialuit, Nunavik and Nunatsiavut.
Examples of specific projects include 144 new units that have been constructed and delivered to Nunavik families and, in Inuvialuit, 24 social housing units are being constructed, which all include design features and materials that ensure they meet the cultural needs of the occupants and withstand the demanding conditions of the Arctic.
With respect to solid waste management, Budget 2016 allocated $409 million over five years to support efforts to improve how garbage and waste are managed on reserve. Improperly managed and treated waste can lead to the contamination of reserve lands, hence posing health and safety risks.
Since 2016, the department has invested $189.2 million to support over 600 projects in more than 400 First Nations across Canada. Examples of these projects include proper decommissioning and closure of 32 solid waste disposal sites; removal and disposal of hazardous and recyclable materials from 132 communities; 62 new or enhanced municipal-type service agreements to dispose of hazardous and solid waste off reserve at regulated landfill sites; over 100 public education and community awareness sessions; and 19 training events for 83 waste site operators.
[Translation]
Finally, climate change is having a profound impact on Canada’s northern and Indigenous peoples and communities, including on the efficiency, safety and reliability of northern infrastructure such as buildings, roads, airports and utilities. Budgets 2016 and 2017 both made considerable investments in climate change, and to date, $51.3 million has been invested in 349 projects in northern and Indigenous communities across the country for a range of infrastructure and related projects in clean energy. Here are some examples of those projects: the implementation of a coastal erosion mitigation plan for the community of Tuktoyaktuk; three solar/battery micro-grid projects to offset diesel use in First Nations in Yukon; and the construction of a 300-kilowatt wind farm with battery storage in Kluane First Nation.
[English]
CIRNAC is making real progress towards addressing the needs of Indigenous peoples and northerners. These sustained investments over multiple budgets confirm the government’s ongoing commitment to reconciliation and to renewing Canada’s relationship with Indigenous peoples.
I look forward to discussing these issues in greater detail with you and welcome your questions. I will now turn to my colleagues, Paul Thoppil and Claudia Ferland, to introduce an interactive tool that has been developed to illustrate tangible results on various programs delivered.
The Chair: Thank you, Mr. Lakroni. Ms. Ferland, please make your presentation.
Claudia Ferland, Director General, Regional Infrastructure Delivery Branch, Indigenous Services Canada: Thank you, senators, for allowing me the opportunity to showcase First Nations community infrastructure interactive map.
This map shows ongoing and completed infrastructure projects in First Nations communities across Canada, except for the Northwest Territories and Nunavut, as of June 30, 2018. These projects are supported by Budget 2016 targeted funds of more than $4.2 billion, as well as Budget 2013 and Budget 2014 commitments totalling about $4.9 billion until 2021, to improve the quality of life in First Nations communities. The projects include feasibility studies, new constructions and renovations, as well as capacity development projects to support First Nations communities’ efforts towards self-governance.
It is an external tool that is available on the departmental website that invites Canadians to explore infrastructure projects in First Nations communities across the country.
The map is updated on a quarterly basis to show the progress of First Nations targeted infrastructure investment projects across the country.
[Translation]
The interactive map allows users to track the progress of infrastructure projects being delivered in First Nations communities, both by geographic location and by infrastructure category. For instance, it shows that, as of June 30, 2018, the department had provided support for 468 drinking water and wastewater projects, 1,260 housing projects, 1,167 school infrastructure projects and 213 health-related projects. Although the map shows a total of 3,385 projects, we can see 6,790 red markers or entries. The reason is that some projects benefit more than one community. For instance, a connectivity project can benefit multiple communities. That is the case with engineering work to support broadband service for five Mattawa First Nations.
[English]
The map has a number of functionalities, allowing users to search using key words to isolate specific projects. For example, a user can search for water projects or housing, or a specific First Nation. Narrowing down to specific First Nation communities allows users to view all infrastructure projects, ongoing and completed, within the community.
Let’s look at Miawpukek First Nation, which is located in Newfoundland, as an example. There are 13 projects in Miawpukek and they include feasibility studies, new constructions and renovations, as well as capacity development initiatives, consisting of physical structures, facilities, systems, trainings and services. One of them is a new school. Let’s click on this project to find out more.
In this case, members of the Miawpukek First Nation are replacing a 100-year-old school, making it possible for students from pre-kindergarten to Grade 12 to get an education in their own community. The First Nation built the school that gives students more than class time; it also includes an on-site dental clinic.
Another project consists of repairs to leaks in the water system. Miawpukek First Nation had a long-term drinking water advisory since 2014. The community recently made repairs to their water distribution system, enabling them to enjoy clean, safe drinking water as a result. As one of the two fastest-growing communities in the province, the ongoing construction of a project of a new water treatment system will help strengthen the First Nation by providing better health and care for its members.
The interactive map is evergreen. As such, we are working on adding few functionalities. As Paul mentioned, we will be adding additional transparency by adding ISC and CIRNAC federal spending for completed projects supported by targeted funds. We will also be looking at adding more project-specific information, such as completion dates and expected outcomes. Finally, we will add photos to give a better sense of realization.
Once again, thank you for the opportunity to showcase the First Nations community infrastructure interactive map.
The Chair: Thank you. We will go now to questions.
Senator Marshall: Thank you very much for being here, and thank you for the demonstration. I’ve used the interactive map, both the one on Infrastructure Canada and your map. Why are the dollar amounts — the federal contributions — not in? When you use Infrastructure Canada, and you’re looking at other departments, they provide the federal contribution, but for yours — I’m glad I can see the projects — why isn’t the federal contribution in there?
Mr. Thoppil: Thank you very much, senator, for the question. As Claudia said, we’re going through a journey of improvements. This was our first attempt in terms of just getting project-based non-financial data in. Our next phase, which we’re working on as we speak, is putting expenditure-based information in to provide transparency to Canadians on the dollars being invested in each project. That’s coming.
Senator Marshall: When will we see that information? It’s noticeably absent from your projects. Is there a date?
Ms. Ferland: We’re working to complete this before the next quarter finishes, so the update will be by December.
Senator Marshall: When we look at your map, and then we look at the Infrastructure Canada map, is it just the legacy projects — the 2008? What’s there? It’s not all infrastructure, is it? Is it just the $14.4 billion? Because they separated the infrastructure money into different programs, so is this the first program — part of the $14.4 billion?
Ms. Ferland: The projects reflected include both the infrastructure under the ICP program as well as ongoing projects from Budget 2016. That would be the difference with the Infrastructure Canada map, where we include education as well as other energy programs.
Senator Marshall: Okay.
When you report on results — I know in your opening remarks, several of you talked about the results — you were talking about results rolled up — so many thousand housing units. How are you going to do it? Are you going to report on results by project, or is it going to be at the higher level? When I was looking at it, there are some projects there for six housing units. Will there be a reporting on that individual project, or will it be rolled up?
Mr. Thoppil: We can do it a number of ways. We can report by region, we can report by asset class, and we can also report by community outcome.
Senator Marshall: What will you be reporting by? I’d just like to know, because right now, you look and say, “Okay, this is for six duplexes.” Then you see another one for eight housing units. What’s the long-term plan? Is it by individual project, or is it going to be rolled up?
Mr. Thoppil: It’s based on what is designed for the audience. Right now, we have the capability to do all three. It’s whatever the user would like it to be. We can roll up, as I said, all three categories.
Senator Marshall: Okay. Are you finishing at the end of December? I’m just trying to get a handle on when I can expect to see the information. As you know, I’ve been asking for it for about two years. Is that information part of the December deadline also?
Ms. Ferland: For the end of December, we will be adding federal investment on completed projects.
Senator Marshall: The dollars?
Ms. Ferland: The dollars.
Senator Marshall: Okay, but not the results by individual projects?
Mr. Thoppil: Senator, if you can help me understand, those are the projects that are done right now. When you mention results, may I ask what you mean by that? Is it what’s completed?
Senator Marshall: What’s completed. When you click on the individual project, it brings up a little box, and it says “to construct six housing units.” Do you report on that, or are you reporting on the 20,000 you estimate you’re going to complete in total?
Mr. Thoppil: Right now, internally, we are reporting to the minister and to the Prime Minister in terms of works in progress and those that are completed. For the purposes of the map, I think Claudia had mentioned we are working on the next iteration that will show that as well.
Senator Marshall: Thank you.
Senator Pratte: I have a question regarding the map and then another question.
Regarding the map, I’m just wondering why all departments did not work collectively on the Infrastructure Canada map rather than your department working on its own map and Infrastructure Canada working on its map. Since I understand your projects are also included in the Infrastructure Canada, isn’t there some duplication here?
Mr. Thoppil: That’s a question you may want to pose to Infrastructure Canada. They took a horizontal kind of coordinator role on behalf of all departments, and we were each individually asked to contribute. I know my minister wanted her own map, as well, to demonstrate progress on her results in terms of spending on infrastructure on reserve. There are a number of reasons for today’s environment.
Senator Pratte: Is there any kind of technical cooperation between the two, at least?
Ms. Ferland: Thank you, senator. The Infrastructure Canada map uses our data sets to feed their map, so they are horizontal. The uniqueness of our map, because it goes beyond the infrastructure IICP project, is that it also includes education, energy and other infrastructure projects. There are projects reflected in ours that do not fall under the IICP.
Mr. Thoppil: That is because Budget 2016 provided an additional $1.2 billion beyond the Investing in Canada plan for about $1 billion in education for the school facilities and $255 million in energy, sustainability and connectivity. That was beyond the Investing in Canada plan. Ours is a little bit more comprehensive.
Senator Pratte: Thank you.
Second, I’m wondering how you decided, when the department was split into two different parts, which categories of infrastructure projects would go under Indigenous Services Canada and the other under CIRNAC.
In a way, I’m a bit surprised that CIRNAC even has jurisdiction over infrastructure projects, because that’s not your role in my view of what the department was supposed to be like. Why are some projects under CIRNAC and others under Indigenous Services Canada?
Mr. Thoppil: The transition toward Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada is still ongoing. There was an initial decision made in terms of initial allocations of programs between the two departments, but it was also recognized that it was an interim state and that both ministers, primarily Minister Bennett, would be doing consultations with Indigenous peoples to land on the finality of the two.
What we have as a current state is not our end state yet. We are still in transition mode, and the Prime Minister is going to be receiving advice after reflecting on the consultations that Minister Bennett has in terms of what should be the end states for both departments, culminating in departmental legislation to stand up the two departments.
Senator Pratte: I understand you are still in transition. What’s the explanation or rationale behind some projects being under CIRNAC and others under Indigenous Services?
Mr. Lakroni: Thank you for the question. For instance, when one looks at Inuit housing investment, it’s key and directly aligned to the mandate of the minister in terms of self-determination with communities in the North. As my colleague mentioned, at a time of transition, decisions were made and the transition still continues, but there is rationale for now that is aligned to mandate either department.
Senator Pratte: I understand, but looking at what you both said this morning, some housing projects are under CIRNAC and others are under Indigenous Services. Or is there something that I’m not seeing?
Mr. Thoppil: Thank you, senator, for the question. The interactive map is essentially about housing on First Nations communities, on-reserve. So that excludes Inuit housing because that is distinct based group and it is properly in the remit of Crown-Indigenous Relations and Northern Affairs Canada.
That being said, senator, there is very close collaboration between the two ministries. An example is solid waste management and waste water management, which is legally in CIRNAC and therefore organized at a HQ level, but is delivered by the regional office network of Indigenous Services Canada in working with First Nations in this transitory environment. That is one example of the close collaboration between the two.
Senator Pratte: Thank you.
Senator Eaton: How does CanNor fit into the puzzle? Has your minister, Dominic LeBlanc, become head of something called CanNor? Has he taken that on?
Mr. Lakroni: I’m not sure.
Mark Hopkins, Director General, Natural Resources and Environment Branch, Crown-Indigenous Relations and Northern Affairs Canada: I will address that as I work in Northern Affairs, which is the “NA” part of CIRNAC.
Senator Eaton: So you have now three ministries dealing with Indigenous and Northern communities?
Mr. Hopkins: To first answer about CanNor, it resides under Minister Bains’ portfolio, along with the other regional development associations.
Senator Eaton: What does Dominic LeBlanc do?
Mr. Hopkins: In addition to intergovernmental affairs and internal trade, he is responsible for Northern Affairs.
Senator Eaton: Is that called NorCan? That is what they were calling it in Iqaluit.
Mr. Hopkins: I think that is a private sector firm. Minister LeBlanc is not responsible for CanNor; he is responsible for Northern Affairs. It’s those responsibilities that have been established as part of CIRNAC. It supports Minister LeBlanc, and those responsibilities include a range of things, including Nutrition North, and regulatory and operational responsibilities in the North.
Senator Eaton: How do we break down who is responsible for what between CanNor, Minister LeBlanc, Minister Bennett, and Minister Bains? How do we separate that all out? Who is accountable ultimately? Canada Mortgage and Housing Corporation, relating to your question, I think is also responsible for some Indigenous housing, is it not?
Mr. Hopkins: The answer is yes. Northern Affairs does transfer money through to the three land claim agreement-holding organizations — three Inuit land claim agreement holders — Inuvialuit, northern Quebec and northern Labrador. We do not operate or fund projects the way that ISC does, but on the housing, we transfer funds through to these organizations to then administer the housing money.
Senator Eaton: I see.
Mr. Hopkins: Does that help a bit?
Senator Eaton: It’s kind of interesting, but I can see why things get siloed and lost. If I was a member of an Inuit community and I wanted to apply for housing, who would I go to?
Mr. Hopkins: You would go to either your territorial government, who are responsible, or you would go to the land claim agreement, the Inuvialuit region as a case in point, which is that northern piece of Northwest Territories. They are responsible for managing the federal funding that goes through the housing.
Senator Eaton: Maybe at some point we should have a graph showing us the decision gates — it would be very useful — between Canada Mortgage and Housing, Mr. Thoppil and you, Mr. Hopkins, to show us how all these projects work their way through the government. It would make it easier for us.
Mr. Lakroni, in Inuit housing, one of the big concerns the Arctic Committee heard while we were in the Arctic is the melting of the permafrost and what that was doing to further building and Arctic housing. Have you heard anything about that? Have they come up with solutions to build? I know there are several supports, things that hold up the houses. Have these all been written into some kind of a code for Inuit housing?
Mr. Lakroni: As my colleague mentioned earlier, the way we work with the communities is that they have the flexibility and the decision-making in terms of the planning, the design, the project management, et cetera. We collaborate with them in terms of governance, but the money flows to these communities.
Senator Eaton: They are the ones devising their own designs and codes for that community.
Mr. Lakroni: That is correct. It’s not on a project base; it based on a funding profile. Right now, there is discussion in terms of the long-term strategy moving forward in collaboration with the department and the Inuit communities.
Senator Eaton: We heard last night at the Arctic Committee about a hydro grid and fibre optic line, 900 kilometres, in the western Hudson’s Bay region, which the Kivalliq Inuit Association is very keen to build. They need equity from the federal government. Which one of you will decide? Which ministry will that go to?
Mr. Hopkins: That’s under consideration by CanNor, which is responsible for economic development.
Senator Eaton: Okay. Thank you.
[Translation]
Senator Moncion: My question has to do with the new infrastructure funding. Is it to build new infrastructure or maintain existing infrastructure in need of upkeep?
Mr. Lakroni: I would say it’s a mix of the two. For instance, some of the funding goes to build new housing because of the lack of housing in certain communities. In other communities, the funding is for renovation and planning work to remedy existing issues. To answer your question, I would say it’s a combination of both.
Senator Moncion: When you grant funding, the money always flows to the reserves, who, in turn, decide on the projects. Of course, they have to have projects, but they are the ones who oversee the investment and building of the infrastructure.
Mr. Lakroni: I wouldn’t say always. It all depends on the type of project. Some projects are grant-based, in which case, what you said is true. For contribution-based projects, however, in order for the communities to receive the money, they have to meet certain terms and conditions.
Senator Moncion: What kind of reporting do you require to make sure the funding was used for the designated project?
Mr. Lakroni: Reporting takes numerous forms. I’ll start with grants. Inuit housing, for instance, doesn’t necessarily involve any reporting because the decision-making authority and flexibility is in the hands of the community.
For other projects, like waste management, objectives are in place, and when the government provides funding, we ensure follow-up, depending on the level of risk and type of project.
Senator Moncion: Now for my next question: I don’t know whether you’re looking into replacing diesel fuel. I saw that you had wind turbines, but that it was also possible to choose nuclear energy solutions. Are those things the government is examining, or do those decisions have to be made at the reserve level?
Mr. Lakroni: The idea is to address the gap between the critical state of the current environment and new energy technologies.
[English]
Mr. Hopkins: As far as the North goes, at CIRNAC we do not deliver services on the reserve. That would be the responsibility of ISC, and so Mr. Thoppil may add to this. Just briefly, as far as the North goes, we do have a clean energy program. It supports the diffusion, the putting in place of proven technologies, on a small scale. Proven technologies would include hydro, but primarily wind and solar. Those are the project installations which we support.
In terms of have we done studies in the northern context on nuclear, the answer would be no.
Mr. Thoppil: There are 58 First Nation communities that rely on diesel in this country. Forty are actually financed by Indigenous Services Canada and 18 aren’t. Eighteen are independent through contracts with provincial utilities or their own sources, for which we don’t finance. Of the 40, there’s no one-size-fits-all solution.
For example, in British Columbia, with one First Nation we have taken them off diesel, or almost off. It was an investment around $20 million for a hydroelectricity dam in order to move them off diesel to clean energy. In northern Ontario, for Pikangikum, it was extension of the northern Ontario electrical grid to connect them. Federal Budget 2018 has committed $1.6 billion in order to connect another 15 communities by further extending the grid.
Those are some examples of how we are reducing the 40 that are on diesel down to what will be 23 after these investments. There is no one-size-fits-all. It depends on the proximity to the existing grid, whether there is clean energy resource access available, and so on.
Senator Moncion: What’s the time frame to get rid of all the diesel-powered infrastructures in the North?
Mr. Thoppil: For the remaining 23, those are still being examined through studies, and so no time frame as of yet has been established.
Senator C. Deacon: I’d like to follow up on a point that Senator Eaton made. Is it possible for us to ask for a report from the various groups to say that here is where they are responsible, here is where this other group is responsible? Let’s be really clear about it. I come from small business, and I have noticed in life that when there is risk of duplication, there are a lot of things that get missed often, that fall between the chairs and get duplicated. When there is a problem, you ask who is to blame, and they go, “It’s there.” Clarity, I think, is really key.
If we could ask for something from the various groups, to be clear, this is where they are responsible and this is where others take over. I think you hit on a very important point, Senator Eaton, and I would love to see something.
I love the titles I saw here. Chief Finances, Results and Delivery Officer is a great title. Again, I come from a world where I don’t work in billions or tens of millions; it’s a lot smaller than that.
I’m not hearing, around the results side, the human effect, how this is changing and improving lives. How much of the money going into the top of the funnel in Ottawa is making it into changing lives in a community? How was it before and what is it like after? How do the future costs and benefits unfold? The results seem to be that the money was spent, the project was done, but it’s not the human side.
For me, there is a phrase “asset-based community development.” It’s a really important concept — ABCD. That’s where you are looking at how you are fitting in with the lives of those that you are intending to help. I see it a lot in the small business world that I come from in tech start-ups. People talk about the technology, but they don’t talk about how they are going to make money, change lives and how they are going to deal with problems that they are there to solve.
Respectfully, I heard a lot of reporting of money being spent, but not of lives being changed in a constructive, positive way, and the per-community effects of this very important effort. That’s important for Canadians, and certainly it’s important for me, to understand in terms of human and communities.
Could you speak to that? Also, think about it when you are reporting to us in future. When your title says “Results and Delivery,” I think it’s important the results you speak of are not just the spending of money, but the results that are achieved as a result of that, including the big administrative burden of doing this properly. That’s a massive chunk of monies used up before it even gets to the community.
If you can speak to that point really clearly. How are you reporting on that? Because it’s not part of your map at this point. It’s part of your title, but it’s something that we really need to hear about.
Mr. Thoppil: Senator, thank you very much for the question, and you are totally correct. Our title is really about outcomes. Of course, it’s about the money to invest to get the outcomes. That is the question that your colleague Senator Marshall asked about, where is the money? The money is not on the map yet, because we are focusing on the outcomes, which are making a tangible difference in the case of 72 long-term drinking water advisories across this country that don’t exist anymore. It now means that those First Nations communities don’t have to take for granted, as we do every day, which is to open up a tap in their house and get clean drinking water. That’s one example.
To study well, as a First Nation community kid, you need to be in a school that is an enabler, not a detractor. There are 14 new schools that have been completed and 121 as part of 167 projects that include renovations and upgrades. Those are going to improve, down the road, educational outcomes.
That being said, this government inherited a significant gap in housing. Based on our report, as of 2016, there is an 85,000-unit housing gap. With the money available, they have now, together, between Indigenous Services and CMHC, we have, as of June 30, dealt with 14,000 of that 85,000. But it just shows you the enormity of the problem and the gap that we’re dealing with, but those are making a real difference.
As another example, the Minister of Indigenous Services has been focused on reducing TB in the North, but she also realizes a basis for TB is overcrowding. In the North it’s the biggest overcrowding in the country, which is why, as part of collaboration with Minister Bennett, she led an exercise for a federal budget submission last year to get the Inuit housing money to be delivered by CIRNAC, because she felt it correlated with her policy on eliminating TB in the North.
Those are just a few examples of how the money is developing real life impacts in First Nation communities.
Senator C. Deacon: Thank you. That’s wonderful to hear. I didn’t hear that in the presentation, and I think that’s something that systematically needs to be included when you are reporting and systematically needs to be included in your presentations. I believe you have to talk about the effects you are having on lives, how that’s changing lives.
Then I think we need to look at how we can most cost efficiently over time make sure we are delivering those effects and sustainably in the community that it’s being delivered in. I feel that’s something that quite often gets missed. We come in, we are from the government, we’re here to help you and we deliver a solution that has temporary benefit not lasting benefit. I’m hearing a focus on lasting benefit in that answer, but I think you need to systematically report it and show how we are going in and having an effect, and then demonstrate its cost efficiently delivered.
Mr. Thoppil: Thank you.
The Chair: Following the question from Senator Eaton and Senator Deacon, it’s a process that we want for transparency and for accountability. So if you could be mindful when you come back, and there is no doubt we will be asking you to come back.
Senator Andreychuk: Thank you for coming today. My concerns are a little different from Senator Deacon’s.
I thought the long-term project was to enable the Aboriginal communities to make their own decisions about their own needs. What I don’t see in these projects is how much is spent on administration within the federal government, and how much is transferred for administration within the Aboriginal First Nations.
If we are going to talk about their needs, are you still in a position that you are identifying what their needs are, perhaps with some consultation with the Aboriginal community? But you are still driving the issue, and therefore it is not a transfer of authority yet or anywhere near to the community, because it isn’t just two years. It has been a 52-year process, with me hearing we didn’t need that school, or we needed a different kind of school, or who gets the housing. Who makes the decision as to who gets the housing on reserve: “I have been waiting 15 years for a house, but somebody has been waiting two years.”
I need to know financially how much the federal government is utilizing the budgets, how much is being transferred for the Aboriginal communities for administration, and how much actually gets to the project. This has been a long-term goal.
I haven’t been looking at you, Mr. Thoppil, that long, but certainly many other officials. We’re still not getting what we need, which is accountability. If the goal is to have the reserves be responsible for their own membership, we are a long way away. What troubles me is the question I asked before. We say we are responsible, and what we do is create at least two more departments and three more ministers responsible. That’s all cost, so the financial money is going into administering, well-intentioned ideas, perhaps, but it isn’t hitting the ground.
When will we be able to track the money and track who is responsible and accountable for that money at each stage? Otherwise, the dots are interesting. We have a lot of projects, but I’m not sure what it means.
Mr. Thoppil: A very good question. The creation of the two departments was to reflect the fact that the two departments are responsible — or it was embedded in the former INAC — and now that they are created have two different paths.
For example, Indigenous Services’ strategic vision is to put itself out of business. What we are doing through the prime minister’s desire to establish a new fiscal relationship is to devolve where capacity has been demonstrated, to essentially transfer control over to First Nations to close their socioeconomic gaps and advance their self-determination. That is part of what is transpiring now through the desire for targeting 100 First Nations by April 1, 2019, to go onto grants.
It is one example of changing the way Indigenous Services does its business, whereby we are empowering and they decide and we are letting go, and eventually over time we will get smaller and close. Through grants, school boards, First Nation health authorities and the creation of new Indigenous institutions, whereby that is the pathway we are moving towards. That is a path that would not have happened previously as part of the creation of this department. That very clear mission, as the minister espouses, is called “strategic obsolescence.” As we go through policy reform, those are the underpinnings of our criteria of how we are going to move on that.
In terms of the costs of administration, you should be able to get that through the Main Estimates. Under vote 10, we do list the cost of band support funding, as one example of the cost of administration on reserve. Parliamentarians do get that now. We provided under our vote 1 the costs of our administration.
Senator Andreychuk: It’s there, but it’s very difficult for someone who isn’t an expert and isn’t familiar with your department to track and follow. Having a piece here and a piece there makes it very hard to explain to constituents as to what’s going on.
With respect, you’re embarking on a new way to devolve your responsibilities and, you say, lessen the use of financial resources. With respect, I have heard this before — different models — and it hasn’t occurred. So I’m a little skeptical. That’s why I think we need the tracking systems to determine and to judge if we are going to play any oversight role in responsibility to the communities.
Mr. Thoppil: This first time ever for ten-year grants is an example of a complete, wholesale change.
Senator Andreychuk: My point is there have been changes before, with great optimism from the department — with goodwill, I’m sure — and it didn’t occur.
I think we are now at a point where we need a proper tracking system rather than just seeing figures. I think that was Senator Deacon’s point. I want to know what we spent, who gained the benefit of it, and where was the responsibility and the accountability.
Mr. Lakroni: Thank you, Mr. Chair and senator, for the question.
I go back to the goal we are trying to achieve. It’s improving the lives of the Indigenous peoples and communities, advancing the agenda of self-determination, rights recognition and all of this done in collaboration, with respect and partnership. That’s, I think, the essence between the creation of two departments.
When we create two departments — and I take your point seriously and I take it to heart, because I work in finance and I report on results — we go through tremendous challenge functions with central agencies in terms of benchmarks, of costs, et cetera. I don’t want you to take my word for it. We have examples that we can give you.
In terms of reporting, maybe, Susan, you can talk about an example in your area, for instance.
Susan Waters, Director General, Lands and Environmental Management Branch, Crown-Indigenous Relations and Northern Affairs Canada: Thank you for the question. I’m going to speak to the First Nation Waste Management Initiative. It was first funded in Budget 2016 and, prior to that time, there was very little investment in waste management in communities, which resulted in a great legacy of over 1,400 dump sites on reserve. We’ve had great success in investing in over 400 communities to date.
In terms of speaking to the dollars, because it was a new program, it was built on a very lean model, with the objective to transfer out as quickly as we could. The program right now is delivering with one person for $8 million worth of funding. We are trying to transform and empower Indigenous organizations.
The First Nation Waste Management Initiative is nationally run, but it’s a very regionally based delivery mechanism. Working with tribal councils and provinces and at the regional level has been quite successful.We also encourage First Nations to move waste off reserve into municipally regulated and provincially regulated landfill sites.
We’ve had great success with the initiative. Landfills are not the highest and best use of reserve land and often leave a legacy of contamination. Health and safety have been paramount, as has been increased collaboration with neighbouring municipalities. We’re seeing, not only with waste projects, but general collaboration has expanded to look at other opportunities for economic development and opportunities for small towns to collaborate and cooperate with neighbouring First Nations.
Third, if a First Nation has a properly regulated place to dispose of waste and have diversion programs in place, it’s a lot easier to track economic development activity. Companies want to come on reserve if they have an appropriate place to put their waste.
The Chair: Thank you.
Honourable senators, looking at the time and the importance of ISC and CIRNAC, we have five senators left. If we could have short questions and short answers. I might ask the officials if they could look at the questions asked and if they want to add additional information through the clerk, please do.
[Translation]
Senator Forest: I see that you are quite keen to be more transparent. There are plenty of opportunities for greater transparency in both departments. It’s all very complex.
I have a simple question. Under Phase 1, Indigenous Services Canada has $6.2 billion in voted appropriations, while CIRNAC has $644 million. For infrastructure, then, $7.244 billion was allocated under Phase 1, out of the total budget of $120 billion over 10 years. How much of that $7.244 billion have you invested as of today?
[English]
Mr. Thoppil: Under the Investing in Canada Plan Phase 1 for Budget 2016, we have $3.06 billion that was allocated to us beyond the additional $1.2 billion. Of that, about 55 per cent, about $1.56 billion, has been invested in.
[Translation]
Senator Forest: That means you’ve invested roughly 25 per cent of the funding.
[English]
Mr. Thoppil: Yes, but those are multi-year, as you may know. Each asset category that was embedded in that amount has different time frames. For homes and another asset class, we have spent everything allocated to that.
The percentages vary in terms of the spending related to each of the asset classes.
[Translation]
Senator Forest: All the funding has been spent. Of the $120 billion, Phase 1 spending represented $14.4 billion for 11 departments. For the next phases, then, you’ll receive additional funding. Is that correct?
Mr. Lakroni: You’re correct. Let’s look at the three programs we are responsible for. For waste management, we have $87 million for 2018-19, but we plan to spend $110 million. The difference is due to deferred spending from previous years.
For Inuit housing, we expect to spend $40 million this year, as planned. All the money will be spent. For energy management, we have $38.4 million for 2019 and we plan to spend $37.9 million by the end of the year. Almost all of the funding will be spent, as planned.
Senator Forest: I think your interactive map is a great idea. I don’t understand, though, why you can’t indicate the costs after the project is completed. It doesn’t matter anymore. I can appreciate that when a call for tenders is on, you don’t want to disclose any budget information that could benefit suppliers. Once the contract has been awarded, however, I don’t see why you wouldn’t disclose the costs. Oftentimes, the federal contribution or commitment isn’t available. In some cases, the community makes a contribution as well. When that happens, do you indicate that?
Ms. Ferland: Thank you for your question, senator. That’s the next step; we are going to show how much the federal government invested in projects that were completed. As far as third-party investments go, First Nations can decide to put their own funding or funding from the province towards the project. Consequently, that information can belong to the band council, so we don’t always have access to it. Our commitment revolves around the federal funding we invest. It’s something that might be possible if the entire investment were to come from the federal government.
Senator Forest: Once the contract is awarded, you know what the project financing will look like. If it’s a $50-million project and you are providing $45 million, I can infer that the remaining $5 million is coming from somewhere else. When the total cost of the project is indicated, at least it’s possible to apply the rule of three, if you will.
The Chair: That’s clear. Thank you.
[English]
Senator M. Deacon: Thank you for being here today. There is a lot here; there is no question of that. The interactive map was very helpful. Part of me wished it was integrated, and part of me is thrilled to see the education, sustainability and other areas you indicated. I appreciated that when I was clicking through all the areas, and I know you’re on a path to get the information there.
Examples like the 72 water advisories are really important parts of the story. I think Senator Deacon started talking about this, but there are some pieces in here that I would challenge you to layer with some richer, anecdotal pieces, because they are significant and could get lost.
I am interested in the goals and inclusion of self-determination and knowing more about — and it could be through an example — how the different Indigenous communities are engaged, how they go really beyond “we consult” and “we’re important.” That real piece is one of these high goals , so it’s being able to understand that and the stories a bit more.
Embedded in these comments would be the wonder of this being Phase 1, and there are things learned. You’ve talked about some gaps earlier, but let’s just say there is going to be a Phase 2. This is going to carry on. You still have large gaps and things you’ve acknowledged this morning. What does this look like for you moving forward? What are some lessons learned — maybe just one or two — that refine, perhaps, your filter, the decision-making and how you go about business moving forward?
Mr. Thoppil: Thank you for the question, senator. One of the benefits we do have through so many projects is the opportunity for lessons learned and identification of best practices across the country for First Nations on reserve. That work is actually being done now in the department in order to identify those best practices and disseminate out elsewhere.
But we also know that we don’t have, even through all those projects, all the best ideas. That’s why the minister is looking at the creation of an innovation practice, a housing challenge, given that it is the biggest gap on reserve, in terms of an innovation initiative that she intends to roll out, trying to figure out new ways of identifying how we can close that gap even faster in a way that respects First Nations control as well.
Mr. Lakroni: I think by the creation of the two departments, the message is clear that the path forward is improving the lives of Indigenous peoples via collaboration and learning together — not one, not another — and learning to work together as departments as well. The collaboration is evolving and we’re going to learn throughout.
The Chair: There are three senators left, exactly four minutes left and the next department will be 45 minutes. With these four minutes, maybe we could ask the questions and have the officials respond through the clerk, please.
Senator Marshall: My question is on the climate change projects, which Mr. Lakroni mentioned in his opening remarks. What criteria are going to be used to measure the impact of the climate change projects?
I’d also like to say thank you to the officials; it was an excellent presentation. But we’re just getting into infrastructure, and I think that we should continue the study. This is just the first phase, $14 billion.
Senator C. Deacon: I really enjoyed the questions and answers. Thank you very much.
I’m intrigued by the strategic obsolescence point that I was not aware of. Is there a clear timeline and process for getting out of business? I’d love to see that reported and that clarity being relayed in a way that communities can understand it and see how they can participate in that process; the devolution of authority and responsibility over time, what needs to be in place so that the community can start to be responsible.
I would love for you to look at the administrative burden associated with running these projects and report that separately, because how many more families could be helped as we reduce that administrative burden is an important way for us to start looking at how we run projects. I think it’s an important part of incentivizing communities to take on management and build the capacity to take on effective management of these projects. Those are some things to think about.
Senator Eaton: I see by your map that you have energy, sustainability and connectivity. One of the things we found out in the North on the Arctic Committee is that the most important thing to them for education and medical services, which are very modest, would be to have fibre optic connectivity everywhere. You don’t detail it, so could you tell me if you have a strategic plan and the number of fibre optic projects you’re going to have? I think that’s almost as important as waste water management, honestly.
The Chair: Mr. Thoppil and Mr. Lakroni, thank you very much for providing us these two books of additional information. There is no doubt that our officials, analysts and staff will be looking into them and there will be additional questions.
Before we conclude, would you please provide further information — I want to put emphasis on this — regarding the responsibilities of ISC, CIRNAC and Canada Mortgage and Housing Corporation, please, and where CanNor fits in. Mr. Thoppil and Mr. Lakroni, you can provide details on that?
Mr. Thoppil: Yes.
Mr. Lakroni: Yes.
The Chair: Thank you very much to the officials.
[Translation]
Now joining us from Fisheries and Oceans Canada are Jen O’Donoughue, Chief Financial Officer; Bill Varvaris, Director General, Real Property and Environmental Management; and Denise Frenette, Director General, Small Craft Harbours.
[English]
We also have Hinesh Chauhan, Director, Project Delivery and Capital Management, Real Property and Environmental Management.
The clerk has informed me that Ms. O’Donoughue will make her presentation first, to be followed by Mr. Varvaris. Ms. O’Donoughue, the floor is yours.
Jen O’Donoughue, Chief Financial Officer, Fisheries and Oceans Canada: Thank you and good morning, Mr. Chair and committee members. I’m the Chief Financial Officer at Fisheries and Oceans Canada and the Canadian Coast Guard. We are pleased to be here this morning to talk to you about Canada’s Budget 2016 infrastructure investments. I have prepared brief remarks that should allow time to address questions the committee may have.
I would like to introduce my colleagues, Bill Varvaris and Hinesh Chauhan from Real Property and Environmental Management function, and Denise Frenette from Small Craft Harbours.
As part of the 2016 budget for infrastructure initiatives, our department received approximately $433 million to undertake much-needed projects that would have otherwise not been affordable. This work was a continuation of $551 million announced as part of the 2014 federal infrastructure initiative. Specifically, the $433 million was allocated to fund work as follows: $230.5 million for our real property portfolio to undertake improvements and repairs to DFO buildings and facilities, and accelerate action on federal contaminated sites; $148.6 million for Small Craft Harbours to accelerate the upgrade and repair at core fishing harbours across the country; $45.9 million for the Canadian Coast Guard to replace aging infrastructure with greener and more efficient technologies; and $8 million for Ecosystems and Oceans Science.
At the time of the Parliamentary Budget Officer’s request to release the project list in January 2018, not all of our projects had been publicly announced. As part of the 2016 federal budget, only Small Craft Harbours and science projects were included in the announcement. After the approval of funding, the Real Property program experienced some minor procurement delays, which resulted in the extension of timeline for a number of key projects. In particular, many projects had not yet gone to tender. As a result, the project list was treated as confidential as the department assessed the risk of the list including information that could threaten the fairness of our tendering processes. The department is now confident that these risks are low and acceptable, and this makes making the list in its entirety appropriate for public release.
To date, DFO has expended $335 million and completed 85 per cent of the total project base.
This funding has enabled the completion of the following results: Real Property has completed 220 much-needed improvements to DFO-owned buildings and facilities, which has allowed us to meet regulatory requirements for health and safety. The 805 outstanding projects will be completed by March 31, 2019, with only five remaining to be completed in 2019-20. Federal contaminated sites remediation activities were completed at 178 sites. We can say 118 of these sites are closed, as all the necessary work is completed and no further action is required.
Small Craft Harbours completed important work at 75 core harbours across the country. Work at the remaining 10 harbours will be completed by the end of this fiscal year. These harbours contribute to economic prosperity in their local communities.
Science continues to develop a solution to the sea lamprey issue to influence control of parasitic sea lamprey populations in the Great Lakes.
Thank you for giving us the opportunity to be here. I’ll pass things to Bill, who will continue with some of the key results on the Real Property file.
[Translation]
Bill Varvaris, Director General, Real Property and Environmental Management, Fisheries and Oceans Canada: Good morning and thank you, Mr. Chair. It’s a pleasure to be here today. My name is Bill Varvaris, and I am the Director General of Real Property and Environmental Management at Fisheries and Oceans Canada.
[English]
The Fisheries and Oceans Canada Real Property portfolio consists of over 11,000 assets, which assists the programs and delivery of the departmental mandates across the country, serving sectors such as the Canadian Coast Guard and other science-based programs. Of these departmental assets, I am responsible for overseeing the investment of approximately 6,200 assets.
We have a very diverse portfolio: It consists of lighthouses and science labs, both wet labs and chemical labs — dry labs. We have engineering assets such as the Canso Canal, dams, fisheries and fish hatcheries. It’s a very diverse set of assets, including office towers and office buildings, as well.
Budget 2016 announced $230.5 million in funding for Real Property under the federal infrastructure initiative for DFO to invest in our Real Property portfolio to address deferred maintenance and recapitalization from years of chronic underfunding prior to that. Following the announcement of the federal infrastructure initiative, DFO made a concerted effort to initiate as many projects as possible to address the widespread deficiencies in the portfolio. The submission included a total of 401 projects under DFO Real Property and 180 projects under the Federal Contaminated Sites Action Plan, which was a stimulus package for FCSA plan.
The projects chosen to go forward were already being considered as required investments by the department prior to the federal infrastructure initiatives.
DFO is on track to complete 99 per cent of its projects this year. It is expected that approximately $66 million will be spent by the end of this fiscal year, and the remaining five projects for real property, totalling $12 million, are expected to be completed by March 2020.
These investments align with the government’s evolving priorities, such as improved marine safety and ocean protection, a cleaner sustainable environment, investments that support scientific research, and working in collaboration with Indigenous peoples.
The investments have also supported small- and medium-sized businesses, created job opportunities for Canadians, and increased investments in local communities across Canada.
In short, the funding in the program has enabled the department to meet its financial and fiduciary obligations to manage assets efficiently over the life cycle of the portfolio. It has helped to reduce workplace risks to employees and address environmental obligations, and has provided safe and reliable environments from which to deliver DFO programs for Canadians, such as improving search and rescue capabilities.
These assets also include some of Canada’s largest marine institutes and facilities where oceanography, fisheries and oceans research, environmental research, search and rescue, and hydrography work is carried out. DFO is also implementing about 42 greening infrastructure projects, totalling $19 million. Works to be concluded include the refurbishment of storage tank systems, energy-efficient lighting generator upgrades, and solar energy initiatives at various Coast Guard sites.
Thank you for the opportunity to speak on behalf of the department about this ongoing success of this initiative for us.
Senator Eaton: This might be a very quick question. Ms. O’Donoughue, in your presentation, there is a paragraph that begins “After the approval of funding the Real Property program experienced procurement delays. . . .” Does that have anything to do with the new Coast Guard ships presently being built by Seaspan?
Ms. O’Donoughue: No. The procurement delays were related more to the real property area. If you want specific information, I’m sure Bill could provide more.
Mr. Varvaris: Procurement delays were realized due to the definition of the projects not really being ready when the announcement was made for Budget 2016. Since then, we have defined the projects further and scoped them down further. That’s the reason we had some procurement delays at the onset of the program.
Senator Eaton: Does that include the Coast Guard ships?
Mr. Varvaris: No.
Senator Eaton: None of you have anything to do with the Coast Guard ships?
Mr. Varvaris: No.
Senator Eaton: Doesn’t the Coast Guard fall under Fisheries?
Ms. O’Donoughue: The Coast Guard falls under Fisheries. The investments made related to the Canadian Coast Guard were 56 marine communications and traffic services areas, as well as 219 aids to navigation.
Senator Eaton: Who is accountable for the procurement of new coast guard ships?
Ms. O’Donoughue: The procurement of the coast guard ships is a joint initiative with the Canadian Coast Guard and the NPSPC.
Senator Eaton: But they don’t report to you. In other words, you have nothing to do with them?
Ms. O’Donoughue: I am the CFO for the Canadian Coast Guard. Yes, I’m involved in the ship procurement. The funding that we’re talking about today isn’t related to that procurement.
Senator Eaton: I see; so you don’t count that as infrastructure. Thank you.
Senator Pratte: I’m looking at the list we were provided of different projects. I’m trying to understand how the list was put together.
For instance, I noticed that approved date for the projects is practically always the same. That is, April 14, 2016. Start date of the project, I suppose, is practically always for all the 400 projects — 400 or so projects — April 15. The end date varies, but generally is the March 31, 2018, or sometimes 2019.
What is the real meaning of these dates? If they were all approved on the same date, starting on the same date and ending on the same date, then these dates do not really have any significance, do they?
Ms. O’Donoughue: Those are the major milestone dates. Each of the projects would have other dates that were tracked as part of the implementation of the projects. The list of projects was put forward as part of the budget process, so that would reflect the budget approval. Most of the projects were intended to be finished within two years — the March 31, 2018 date. Some, as a result of procurement delays and shorter construction seasons in some communities, would have been pushed to the end of this fiscal year. Then we have five remaining into the next fiscal year.
Senator Pratte: These are pro forma dates.
Ms. O’Donoughue: Those are the end milestone dates. There is a series of dates for the projects within that though. We have centres of expertise for each of our areas that manage those dates very carefully.
Senator Pratte: All right. I’m looking at the amounts that were spent for most projects and, not surprisingly, the amounts fit or somewhat, but there are a few cases where the amounts spent for the 2016-17 and the first six months of 2017-18 are over and above the federal contribution. There are a few cases like that. Does that mean that the project real cost was higher than the estimated cost? And what happens then, in these cases?
Ms. O’Donoughue: There were some cases where project costs came in a little higher. I think there are some examples in Small Craft Harbours. We have a standard A-based budget within Small Craft Harbours and some of the funding would have been put towards those initiatives as they were seen as priority projects for the department.
Senator Pratte: If a project costs $1 million more than expected, and if you have a few projects like that, will other projects suffer from that? Will they get less money than what was expected?
Ms. O’Donoughue: The projects stayed within the infrastructure investment from Budget 2016. In order to complete these high-priority projects, if additional funding was required and it was still seen as a high priority investment, then we would have allocated some of our A-base funding towards that.
Senator Pratte: Okay. Thank you very much.
Senator Marshall: Just before you appeared at the committee, we had Indigenous Services Canada and Crown-Indigenous Relations here and they did a presentation on a map for their projects. When will put your data on an interactive map so all Canadians can see it?
Ms. O’Donoughue: We are looking at the feasibility of that and looking at the feasibility of incorporating our data into other maps. I don’t think we would create our own map, but we can come back to you with that information.
Senator Marshall: Do you have any timelines? I’m looking at one from Infrastructure Canada and they’ve set the bar high. They provide the project, the description, the federal contribution, estimated total cost and estimated start date. Indigenous Services Canada and Crown-Indigenous Relations are not that far advanced, but at least we can get on and see the projects. However, we didn’t get the projects until yesterday. I think someone might have given it to me on Thursday. So you are much further behind than other government departments in reporting on your infrastructure projects.
Ms. O’Donoughue: We don’t have a timeline at this point. By the time this fiscal year is done, most of our projects are complete. As I said, we only have five left to do. So we will look at making sure that all of that data is reported.
Senator Marshall: I notice in the list of projects that you had provided to me that there were probably about 10 pages of funding for contaminated sites. We are presently studying Bill C-64, an act respecting wrecks, abandoned, dilapidated or hazardous vessels and salvage operations. When we had the briefing on that piece of legislation, I had asked about the cost. So, the contaminated sites that are in the list that you provided, does that include any of the funding for these dilapidated vessels?
Ms. O’Donoughue: No, it does not.
Senator Marshall: It’s a separate program?
Ms. O’Donoughue: Yes.
[Translation]
Senator Forest: Thank you for being here today. My first question is about the Small Craft Harbours Program. Nothing was budgeted for 2017-18, $150 million was planned for 2018-19, $100 million was allocated for 2019-20 and, then, nothing after that. Will the entire small craft harbour network be upgraded between 2018 and 2020?
Denise Frenette, Director General, Small Craft Harbours, Fisheries and Oceans Canada: You’re referring to the new 2018 budget, which sets out an additional $250 million for small craft harbours. Today, we are discussing federal infrastructure initiatives. The second initiative represented $148.6 million.
The program operates on $192 million a year, and about $75 million of that goes directly to projects and $20 million goes to program administration. Since 2008-09, we have been receiving temporary funding on a gradual basis, and the $250 million you are referring to is the last chunk of temporary funding we received. That additional funding is helping us to deliver on program objectives. However, we are still in need of funding to upgrade our commercial fishing harbours.
Senator Forest: Given what you know about the state of the small craft harbour inventory, do you think, with that additional $250 million, you’ll be able to undertake the necessary upgrades to bring the entire network up to standard and ensure that it is safe?
Ms. Frenette: We are still short on program funding. It’s a constant challenge. We’ve made significant strides over the past decade, however. In 2010-11, harbours deemed unsafe or in poor condition made up 27 per cent of the inventory, but that number had dropped to 13 per cent by 2017-18. Clearly, we have made a fair bit of progress, but we estimate that we would need an additional $75 million annually, on an ongoing basis, for harbour enhancements. That would mean bringing them up to an acceptable standard or better.
We have a number of inadequate harbours in need of rehabilitation. Every bit of additional funding helps, to be sure, but I can’t tell the committee that we’ll be able to address all the deficiencies in our infrastructure. That’s why, when we make decisions, we really focus on the facilities in critical condition.
Senator Forest: Has funding been allocated countrywide for the divestiture of small craft harbours? How do you pick the facilities you want to divest of, in other words, the sites where you will undertake repairs to bring the harbour up to an acceptable standard in order to transfer ownership to the community?
Ms. Frenette: The first thing we do is identify core harbours, those essential to commercial fishing. Then, we single out recreational harbours and those with low levels of commercial activity for divestiture. We maintain the harbours in that inventory and we reach out to the communities to find a third party willing to take over ownership. We also need funding for divestiture because, before we can transfer ownership of a harbour to a recipient, it must be in good repair. Two issues come into play. Do we have an interested party for transfer of ownership and do we have the funding to cover the costs associated with transferring the facility?
Senator Forest: The program isn’t funded, if I go by your numbers. No money has been allocated for divestiture.
Ms. Frenette: It’s not funded, but, as part of our ongoing funding, we put money towards the program every year. It’s not much, of course, but further to Budget 2018, the department will focus on the divestiture of harbours.
Senator Forest: I thought I saw that $1 million had been allocated for divestiture. That’s not a lot when you spread it over the entire country.
Ms. Frenette: It’s somewhere between $1.5 million and $3 million a year. We have a bit of flexibility. Every year, our regular funding dictates our activities. Budget 2018 sets out a lot more money for divestiture.
Senator Forest: I see.
I’ll have some questions in the second round to make sure we get back to safe harbours.
Senator Moncion: I’m going to follow in your wake, senator.
Senator Forest: Don’t stir the waters too much.
Senator Moncion: Indeed. I’m going to continue along the same lines as Senator Forest. You make huge investments to upgrade your infrastructure, and then, once the work is complete, you forget about it until the next upgrade.
Could you talk about the maintenance programs that are put in place once the infrastructure has been upgraded? Without a funded program to ensure annual maintenance and keep infrastructure in good repair, you end up spending money on upgrades over and over again and nothing on upkeep. That means 10 years can go by without any work being done, and, then, all of a sudden, you have to spend a huge amount of money to bring infrastructure assets up to standard, after which, you let them go for another 10 years and the cycle continues.
Conversely, with yearly investments, you could keep infrastructure in good working order all the time. That would make the divestiture process easier because interested parties would be willing to take ownership of harbour facilities right away.
Essentially, could you elaborate on that approach? How do you work that aspect into your budget, and how will you handle it in the years to come?
Ms. Frenette: You’re right to say that we need to balance our investments to ensure we’re managing our assets soundly. The program includes an oversight component to monitor the condition of the assets. Under the minor capital investment program, we have a certain degree of flexibility, which we use to support infrastructure maintenance. Then, we can make larger investments to address end-of-life-cycle or safety issues. That balance is something that constantly has to be reassessed. When we do our analysis, our focus has to be on creating programs that help us manage resources as effectively as possible, so that we aren’t letting assets fall in such disrepair that massive investments are needed, when a bit more maintenance would have done the trick.
I can’t give you an optimal answer because we don’t have optimal funding, but we strive to manage assets soundly with the budget we have.
Senator Moncion: When you do your budget, isn’t that something you look at? For instance, at one point, I inherited a building that was in need of a major investment. After that was taken care of, however, we would do a yearly assessment of what needed doing in order to keep the building in good condition. We might spend $50,000 to $100,000 a year in order to keep the building in good repair. It was built into our annual budget. Of course that’s not on the same scale as federal investments, but the fact remains that every building has a life cycle as does every infrastructure asset. It seems to me, then, that you should build that into your budget, should you not?
Ms. Frenette: Yes. We’ve examined the cost of maintaining our assets. In 2008-09, we received $820 million and another $250 million in 2018. Despite that, we lack the capacity to ensure all of our assets are managed soundly. We would need roughly $75 million in additional annual funding. We would need $600 million over 10 years in order to bring some of our assets up to standard. We can only do as much as our funding allows.
[English]
Senator C. Deacon: Thank you very much for your presentations and for being here.
I come from small business where you cannot ignore maintenance, and this is the tie with maintenance and infrastructure. It’s part of your basic accounting practices. I can’t ignore it because my auditors will not allow me to. So I think it’s crucial that you start to report on the backlog and that you give a sense of the need. Because these are people, and it’s the health, safety and livelihood of our fishers in remote and rural communities across this country. It’s crucial to them. This isn’t a “nice to have.” This is a “must have.” I think that backlog is really crucial.
I want to build on that, because I think you hit on a really important point. I’d be interested to know the community fishers’ involvement in the project definition and project selection process and how they are involved in making sure that the right thing is being fixed in their community, that it has the biggest effect. How do you manage that process?
Ms. Frenette: When we look at where we are going to invest, it’s always in collaboration with the people on the ground. As some of you may know and some others may not be aware, Small Craft Harbours works with harbour authorities. They are volunteers that help manage and maintain the properties for us. When we get into a planning cycle, there is regular communication with the harbour authorities and harbour users. That ongoing communication allows us to clearly identify priorities and ensure that we make the most sound investment.
Senator C. Deacon: Great. So it is community-based, bottom up; I am glad to hear that.
Ms. Frenette: Definitely. I would like to mention that we work with a group of 5,000 volunteers across the country. The harbour authorities are essential to the success of the program and this ongoing communication is critical.
Senator C. Deacon: My next question is about the administrative burden associated with funding these projects: defining, selecting, researching, definition of the project, the procuring and the execution. On the administrative burden side, your oversight, is there a way you report that at any point? How much money is spent in these harbours versus how much is spent spending the money or investing the money, more appropriately stated?
Ms. Frenette: I mentioned initially that the program is a $92 million program a year for just the regular A-base. Some $75 million goes directly towards the project and another $20 million is for the management of the program.
I will mention that when we have an influx of temporary funding, such as the federal infrastructure initiative program, at that point it’s primarily directed towards the project. So, the $20 million is not just to deliver the regular programming; it’s also to help deliver this temporary funding as well.
Senator C. Deacon: Lastly, I think there is a great opportunity for you to lever off of technology that already exists in the federal government in terms of displaying the work you are already doing. I’m sure it could be populated from your database. Reading a PDF that can’t be sorted to look for individual projects and that seems to be in random order is not very easy for us. It would be great for me to be able to answer very specific questions I get from people that I know whose livelihoods depend on these small harbours. It would be nice for me to be able to sort very quickly off an Excel sheet or something, but ultimately it would be great to direct them. There is technology that we saw earlier that could help you.
[Translation]
Senator Forest: I have some good news for you. I just found your $600 million to bring the entire network up to standard.
Ms. O’Donoughue, you mentioned, in your opening remarks, that Fisheries and Oceans Canada had received $433 million to undertake much-needed projects that would have otherwise been unaffordable. That is in addition to the $551 million you already had. That brings the total to $984 million, and of that, you’ve spent $335 million. Consequently, you have $649 million leftover that you could use to bring your entire network of small craft harbours up to standard.
[English]
Ms. O’Donoughue: But to clarify, the $551 million was the funding we already expended; it was received in 2014. That money has already been invested in infrastructure related to the department’s mandate.
[Translation]
Senator Forest: According to your table, you allocated funding — I’m referring to the phase before Phase 1, which is extremely important. Having been on the other end of things, in a former life, I know that, in addition to the amounts shown here, investments can come from the community. There is a leverage effect that happens, but it’s not always easy to go after.
I would’ve tried. Thank you.
The Chair: If there are no further questions, I’d like to thank the officials from Fisheries and Oceans Canada for their input, which has been very informative.
Should we require any additional information, we’ll send our questions directly to you, and the committee clerk will follow up.
On that note, do you have any questions for us?
[English]
Senator Marshall: I’d like to make the point that with all these projects, it’s all good news. You should have something more on your website, and there should be an interactive map. I represent Newfoundland and Labrador, and I like to go in and see what’s happening in the various communities. I would encourage you to make that information publicly available.
The Chair: There is no doubt if you want to peruse the blues or the Hansard on the questions and answers that you have received this morning, and if you would like to add additional information, please don’t hesitate to do so through the clerk.
(The committee adjourned.)