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THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE

EVIDENCE


OTTAWA, Monday, December 9, 2019

The Standing Senate Committee on National Finance met this day at 1 p.m. to examine the Supplementary Estimates (A) tabled in the Parliament of Canada for the fiscal year ending March 31, 2020.

Senator Percy Mockler (Chair) in the chair.

[Translation]

The Chair: Honourable senators, welcome to the Standing Senate Committee on National Finance. I’m Percy Mockler from New Brunswick. I’m the chair of the committee.

[English]

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. Also as a reminder to those watching, the committee hearings are open to the public and also available online at sencanada.ca. Now, honourable senators, I would like to ask the senators to introduce themselves.

Senator Day: Joseph Day, New Brunswick.

Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.

Senator Smith: Larry Smith, Quebec.

Senator Boehm: Peter Boehm, Ontario.

Senator Duffy: Michael Duffy, Prince Edward Island.

Senator M. Deacon: Marty Deacon, Ontario.

[Translation]

Senator Loffreda: Senator Tony Loffreda, Montreal, Quebec.

[English]

Senator Duncan: Pat Duncan from the Yukon.

[Translation]

Senator Forest: Good afternoon. Senator Éric Forest from the Gulf region of Quebec.

The Chair: Thank you, honourable senators. I want to take this opportunity to welcome Senator Tony Loffreda, who was appointed to the Senate last week. Senator Loffreda is attending his first meeting of the Senate Standing Committee on National Finance today.

Senator Loffreda, you’ve chosen a good committee for your debut as a senator. You’ll certainly make your mark, and you’ll be part of a great team. I’m sure that you’ll benefit greatly from the experience of the committee members around the table, and I have no doubt that all Canadians can also benefit from your extensive experience. Welcome, and thank you for choosing our committee.

Honourable senators, I now want to introduce the clerk of the committee, Maxime Fortin, who is also joining us for the first time. She has replaced Gaëtane Lemay.

Maxime, like Gaëtane, I have no doubt that you’ll be pleased with our committee.

[English]

I would like to recognize and thank our two analysts, Mr. Alex Smith and Mr. Shaowei Pu, who team up with the clerk to support the work of the Standing Senate Committee on National Finance.

Honourable senators and members of the viewing public, the mandate of this committee is to examine matters relating to federal estimates generally as well as government finance. Today, we begin our consideration of the expenditures set out in the Supplementary Estimates (A) for the fiscal year ending March 31, 2020, which were referred to us by the Senate of Canada. Please permit me to highlight the mandate that we got from the Senate of Canada last week, moved by Honourable Senator Grant Mitchell, Acting Legislative Deputy to the Government Representative in the Senate, saying:

Honourable senators, with leave of the Senate and notwithstanding rules 5-5(a), 5-5(j), I move:

That the Standing Senate Committee on National Finance be authorized to examine and report to the expenditures set out in the Supplementary Estimates (A) for the fiscal year ending March 31, 2020.

[Translation]

Honourable senators, for the first hour of our meeting this afternoon, we’ll be joined by officials from the Treasury Board of Canada Secretariat. They’ll introduce the content of the Supplementary Estimates (A) and provide an overview of the funding requests.

[English]

As we often say in this committee, it is all about TAP. The acronym TAP is about transparency, accountability and predictability.

We have from Treasury Board of Canada Secretariat, Karen Cahill, Assistant Secretary and Chief Financial Officer.

[Translation]

Ms. Cahill is joined by Glenn Purves, Assistant Secretary, Expenditure Management Sector.

[English]

And we have Senior Director, Expenditure Strategies and Estimates, Darryl Sprecher. I have been informed that, Mr. Purves, you will make comments and then we will proceed to questions.

[Translation]

Mr. Purves, the floor is yours.

[English]

Glenn Purves, Assistant Secretary Designate, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you, Mr. Chair.

[Translation]

Good afternoon, everyone.

[English]

Thank you for inviting me to speak on short notice about the supplementary estimates, the first for 2019-20.

I will remind honourable senators that in addition to the information in the tabled documents, further details are available online, including forecasts of statutory spending, allocations from Treasury Board central votes, expenditures by program or purpose, and transfers.

I would also remind the committee that the GC InfoBase is available to provide you with more information on authorities and expenditures as you wish.

[Translation]

The Supplementary Estimates (A) for 2019-20 provide information to support the voted budgetary expenditures of $4.9 billion, for a total of $131.4 billion in 2019 and 2020.

This constitutes a 3.8 per cent increase in relation to the authorities to date. The Supplementary Estimates (A) for 2019-20 seek parliamentary approval for new voted expenditures of $4.9 billion. Most of these new expenditures are allocated to the following eight items:

[English]

First, there is $677 million for demand-driven programs and services which provide support to eligible veterans and their families; $467 million to compensate departments, agencies and appropriation-dependent Crown corporations for the impact of collective bargaining agreements and other related adjustments to terms and conditions of service or employment. The costs arise from agreements concluded between April 1 and October 18, 2019; $296 million to help developing countries address the impact of climate change; $197 million to support the migration from 12 legacy data centres to enterprise data centres, as well as activities to support the establishment and adoption of cloud services; $177 million to support and upgrade the armoured combat support vehicle fleet for the Canadian Armed Forces; $176 million for the International Assistance Envelope Crisis Pool Quick Release Mechanism, which will be used to provide humanitarian assistance in response to major international crises such as natural disasters, food crises, conflict, political upheaval, sudden intensification of low-level crises or other unforeseen events; $171 million to advance reconciliation on Indigenous rights and fisheries issues; and $166 million for consumer incentives to buy or lease battery-electric or hydrogen fuel cell vehicles.

Mr. Chair, there is also one organization appearing in these estimates for the first time, the Canadian Accessibility Standards Development Organization. This organization will be responsible for developing and revising accessibility standards for federally regulated organizations, including Government of Canada departments and agencies. These estimates include $10 million for this new organization.

Mr. Chair, as mentioned earlier, these are the first supplementary estimates for 2019-20. We expect to table the final supplementary estimates for 2019-20 in February, as in previous years, with the appropriation bill to follow in March. We also expect to table the 2020-21 Main Estimates in February, in the same time frame as in the years prior to the two-year change to the standing orders.

At this point, Mr. Chair, I would be happy to take any questions you or other senators may have. And it’s a pleasure to be here.

The Chair: Thank you very much, Mr. Purves.

Senator Marshall: Thank you very much for your presentation.

Can you give an overview of the status of estimates reform? In your opening remarks, I got the impression that Supplementary Estimates (B) were going to be the final supplementary estimates for this fiscal year. Is my understanding correct?

Mr. Purves: That’s correct. For this fiscal year, that would be the last supplementary estimates, yes.

Senator Marshall: My understanding is the last two years were effectively “pilot projects,” which is my term for them, but that on April 1 we will revert to the old way. Could you bring us up to speed on that?

Mr. Purves: I will back up and give a broader sense of where we are with respect to estimates reform.

If you think about it, there were three broad areas. There was about reporting, about timing and alignment with the budget, as well as scope and basis of accounting. On the first part, on the reporting part, in terms of departmental plans and departmental results reports, those have been tabled over the last two years. We expect to continue to table departmental plans alongside Main Estimates, as well as departmental results reports after a fiscal year is concluded to be able to align and check in with those departmental plans.

We’ve also provided, as I said at the outset, a lot of information online as to how TB central votes work, what has been allocated to date, including the purpose of spending and aligning spending by core responsibilities. In terms of reporting, we expect to continue on that path.

In terms of timing and alignment with the budget, as you know well, there was a decision to do a two-year pilot. Therefore the standing orders were changed temporarily for two years to change the date upon which you have to table the Main Estimates on or before March 1 and to move it to April 16. This was intended to allow the Main Estimates to be tabled after the budget was tabled and for the Main Estimates to be able to reflect spending items in the budget.

Unless there is a change by the parties, an all-party decision to continue with the change, the standing orders now revert back to where they were before. In my opening remarks, I mentioned we are getting ready to table the Main Estimates before March 1 and that is how we have to proceed, unless there is a change to the standing orders. I gather this is something the government would consider, but it’s not just a government decision, it’s really a parliamentary decision.

In terms of scope and basis for accounting, you’ll recognize that in the last two Main Estimates we’ve included an alignment of these Main Estimates with the budget. It starts with the Main Estimates number and it walks through all the different stages, and then you end up with the budget number. In the budget, it did the same thing. It started with the budget number, moved along, and then identified the Main Estimates amount coming out of the budget.

Unless we’re continuing down the path of aligning the timing of the Main Estimates after the budget, it would probably be difficult to do because we won’t know what’s in the budget because we’ll be tabling Main Estimates before. It depends on when the budget is tabled.

Senator Marshall: Who does the evaluation? We’ve gone through the two-year pilot. I know it wasn’t perfect, but it seems like two good years where there was a lot of effort put into the changes and now it’s going to revert back to the old way. Who makes that decision? Is that the Treasury Board minister?

Mr. Purves: OGGO actually put out a report last year on the experience of the estimates reform. It was an all-party report that came out and gave specific views by party as well as specific views of the OGGO committee. Ultimately, it would be the government but in consideration of the views of the other parties to determine whether the standing orders are something that should be changed.

As an official, we have to plan assuming the default where we’re tabling before March 1. It’s up to the government, but Parliament, to think about that.

[Translation]

Senator Forest: With regard to the question from my colleague, Senator Marshall, this experience has enabled us to monitor expenditures a little more efficiently for the past two years. The monitoring is quite a challenge, given the amounts involved. It would be unfortunate to revert to the old system.

I have two questions. The first concerns the $50 million over five years to support local journalists. The funding includes $10 million. This provision was announced in the February 2018 budget. Has any money been distributed in the past two years? As we know, the issue is now becoming increasingly thorny and sensitive. People say that information is power. However, for the regions of Canada, this issue is about the ability to support local media. Funding was approved in February 2018. To date, has any money been distributed to some, if not all, these media?

Mr. Purves: Thank you for your question. I’ll respond in English.

[English]

In terms of the $10 million, I should point out that you will have Heritage appearing later. Again, this is an item that is part of their page proof for supplementary estimates. I can only speak broadly on how the system works, in the sense that this funding is provided to not-for-profit organizations representing different segments of the news industry. Again, the idea is to find gaps in local media and local coverage, and use and direct these funds through not-for-profit organizations to be able to address these gaps, where in fact this coverage isn’t being provided.

From a mechanical standpoint I can speak to how the funds are flowing, but I don’t know if I’m able to answer the question. I think what you’re asking is a more substantive policy question.

[Translation]

Senator Forest: Not at the moment. I want to know whether a mechanism has been established. Can money be used to provide tangible support to local media across Canada in order to help these media survive and carry out their mission to keep people informed in their communities?

[English]

The intention of this fund is to provide support to local media. I can’t comment about whether the amount is sufficient or whether it’s being targeted in the right way. I know that it’s being dispersed to not-for-profit organizations who are identifying the gaps that exist in local media in order to ensure that the coverage is being provided.

[Translation]

Senator Forest: This funding has been approved for two years. I’m wondering whether any cheques have been written and sent to any local media in Canada. Is the system running, or are we still at the intentions stage?

[English]

Mr. Purves: I know for a fact, in terms of these supplementary estimates, the expectation of the department is that they need to make a disbursement of actual cash to these not-for-profit organizations. Having said that, I don’t know the schedule of when these payments are being made from the not-for-profit organizations to these local media agencies and whether the cheque has been sent.

I believe this is a question that you can touch base with Heritage on because they are closer to this issue.

[Translation]

Senator Forest: Or read our local media. Maybe they’ll make an announcement if they receive the cheque.

[English]

Senator Duncan: It may be that the witnesses redirect me to the website. In going through the supplementary and looking at many of the contributions and so on, I was looking for a line item breakdown. For example, in Indigenous Affairs: Funding to renew 25 self-governing Indigenous fiscal transfer arrangements. My query, in looking at items like this, is can I have a breakdown by province and territory?

What I think I heard in your initial presentation was that this is available on the website. If I were to go online and do a word search by “Yukon,” could I get that information?

Related to that, if I might, under your own particular area, Treasury Board Secretariat, the funding for compensation adjustments, the other related adjustments, I wondered if any of that was related to the Phoenix pay system, which has appeared before us before.

It’s two questions in one. A detailed breakdown of line items is what I’m looking for.

Mr. Purves: Sure. In terms of your first question, certainly GC InfoBase has further breakdown on many of these items. To answer your question, what you have picked out as an example is fiscal financing agreements related to comprehensive land claims and self-government agreements. These are what we call horizontal initiatives.

You’ll see some initiatives in these supplementary estimates that touch on multiple departments. In the beginning of the supplementary estimates document, there is a section on horizontal items, and it breaks down the total amount, which is $18.6 million, according to which department is receiving that funding, and provides a sense of where it’s going.

Broadly, it’s going to First Nations and Inuit in British Columbia, Yukon, Quebec and Labrador. If you’re looking for more granularity, that is something that could be touched on with — I believe you’re seeing CIRNAC this afternoon. CIRNAC might be able to give you additional context. GC InfoBase does quite a good job of giving additional breakdowns.

Senator Duncan: Contaminated sites is another situation of horizontal funding. I understand that part of it.

Mr. Purves: Exactly.

Senator Duncan: What I’m hearing you say is yes, the breakdown by province would be available on the database, or am I duplicating efforts by asking the question of CIRNAC?

Mr. Purves: There is further information with respect to what is provided to these in GC InfoBase. Certainly it would be useful to speak to CIRNAC on these fronts.

We don’t do specific earmarks for every dollar on a regional basis.

Senator Duncan: Okay. That was my question.

Mr. Purves: There are many programs where it would be virtually impossible to do that. The Passenger Protect Program, for instance, is one of them. Gun and Gang Violence, I believe, is another horizontal initiative. We don’t have the capacity to actually do that specific earmark by region or area.

Senator Duncan: I have to ask the department then?

Mr. Purves: Yes, exactly.

Senator Duncan: And on horizontal — the Northern Contaminated Sites Program?

Mr. Purves: On contaminated sites it would be the same thing. I believe that on the contaminated sites side, it speaks to certain scopes, such as the North, north of the sixtieth parallel. In terms of specifically which territory we’re speaking about, it’s not detailed, no.

Senator Duncan: And the other?

Mr. Purves: The other question you had: When we speak about collective bargaining, in the additional information — I believe your first question was about the $467 million that is identified in vote 15 for collective bargaining. We have online a detailed breakdown by department of where that funding is going.

In terms of your second question related to that, which was about Phoenix and Phoenix damages, there is an item listed for $44 million in vote 10 that is specifically to address that issue.

Senator Duncan: Thank you.

Senator Duffy: Mr. Purves, going back to Senator Forest’s question about the media fund, we get lots of questions from people we know in the media saying, “When is the cash coming?” My rudimentary understanding of the estimates process tells me that supplementary estimates are for programs or expenditures that were added after the last Main Estimates were written.

Following from that, in the supplementary estimates, there is $10 million for media. Has any of that money flowed or is it simply a notional expenditure at this stage? If it’s simply a notional expenditure, why would you not have waited until the Main Estimates, which will come in a couple of months? If the cash hasn’t flowed to this point, what is the rush to do it as a supplementary estimate?

Mr. Purves: Thank you for the great question, senator.

In terms of orienting senators, when it’s an item in a budget, it’s in the planning framework. It’s created in the fiscal framework, but it may not have been sent to Treasury Board.

In this case, when we’re coming forward in supplementary estimates, these are items where Treasury Board submissions have been developed, they have been submitted, and Treasury Board ministers have approved these items.

They are in the supplementary estimates because they have been approved by Treasury Board. They need to be briefed in the reference levels more broadly.

Typically, we wait for spending items that once approved by Treasury Board, they go on to the next supplementary estimates, then they are briefed in the reference levels accordingly. But because there is another supplementary estimates this year, it could be that in this one in particular there may be payments that are required to be made by Heritage to these not-for-profits before the next supplementary estimates are tabled and receive Royal Assent at the end of March.

Senator Duffy: So I understand what you’ve just told me, the money for the media can’t go until these Estimates are approved by the Senate and the House of Commons?

Mr. Purves: This $10 million will be available to departments for its programs, payments and activities upon Royal Assent by the Governor General.

Senator Duffy: Thank you. That’s very helpful.

Senator M. Deacon: Thank you for being here today as a team, and, of course, thanks to the team behind the team. I see many of them. It’s important.

I want to acknowledge something that seems so simple. On page 4 is a chart. I’ve been looking for that for a long time. Although we kind of know it, the results of machinery and your budget reflect it. Thank you for that simple page that says, “Here is what we were, and here is what we are now.” That’s helpful for organizing our thinking.

Senator Duncan started bringing up a little piece of the Phoenix pay system. I think we all have different touch points.

That’s one I continue to monitor and wonder about. You talked about the $44 million. I think we’re all looking forward to the day that it’s not on the page and it’s not a conversation. What I’m trying to appreciate is with that money, with the request for $44 million, where it’s putting us on claims and having a sense of the number of claims that have been made, what we might anticipate in this chunk of time and if you see this as a continued possible supplementary request. I’m trying to see if we’re getting near and around the curve or near the end.

Karen Cahill, Assistant Secretary and Chief Financial Officer, Treasury Board of Canada Secretariat: With respect to damage, it’s a subset of the old claims process. Agreement for damages was signed on June 12 with a number of bargaining agents. It was to compensate current public service employees for damages incurred through the Phoenix implementation. Current employees were receiving five days of leave. They have been given their four days since 2016 to this fiscal year. They will be credited an additional day for a total of five days in the new fiscal year.

For former employees, on November 28, we launched a website where they can apply for damages equivalent in money, cash payments of five days if they are eligible. We have received a number of claims to date. As of this morning, close to 2,000 claims were received from former public servants. We have assessed about 550 claims to date.

This fund will help reimburse departments for what they have been paying employees strictly for damages.

Senator M. Deacon: Thank you. I was trying to get a sense of the number of folks who have come forward for claims thus far on that two-tiered process and a sense of what percentage of the workforce that is. I’m trying to see what we might anticipate as we move forward in time. You have mentioned 2,000.

Ms. Cahill: Yes. Current public servants who are currently included in the damages, our estimate is 146,000 employees. Those are employees of the bargaining agents who have signed the agreement for damages.

For former public servants who were part of the bargaining agents who have agreed to the damages, our data sets estimate at 16,500 public servants to date. That’s the data set we have, but it can go up to 25,000 to 28,000 former public servants as time goes by.

The damages for former public servants also applies to the estate of deceased employees who were eligible for those payments.

Senator M. Deacon: Thank you.

[Translation]

Senator Bellemare: Thank you for being here. I apologize for being a little late. Perhaps you’ve already answered my question, but I’ll ask it anyway.

The Supplementary Estimates (A), on page 1-6 — I think you referred to this in the slides — include the major changes to the structure of government and the authorities since the Main Estimates for 2019-20. My question may seem a little naive, but I’ll ask it anyway. Do the changes in the structure of government entail any costs? If so, are these costs accounted for, or do they have a completely insignificant impact on the budget?

Mr. Purves: Thank you for the question.

[English]

At this stage, any costs that are related to these changes, there are many statutory changes, so they would already be captured on the statutory side.

As you know, when we put out a supplementary estimates document, we will give a projection of statutory spending going forward, but it’s not a voted item for members of the house and the Senate. Effectively it’s the voted items that matter.

You’ll see, for instance, that there is an area where we’ve created a new organization, the Canadian Accessibility Standards Development Organization. That organization is receiving about $10 million in funding. As a consequence, you’ll see that there is a page in the supplementary estimates that identifies that organization, including the $10 million.

That’s an example of a situation where there is a structural change in the document that we’re capturing and where there is a cost attributed.

I can’t say just by looking at it that there is another one. I think that’s the only one, that new organization, where it would be $10 million.

[Translation]

Senator Bellemare: In other words, I gather that changes to business cards or email addresses may sometimes entail certain costs. However, these costs are not identified and they instead constitute general administration costs. Is that correct?

[English]

Mr. Purves: No, they are not costs that are beyond the authorities that have been provided to departments and agencies by Parliament.

[Translation]

Senator Bellemare: Thank you.

[English]

Senator Day: Thank you all for being here. First, you talked about the two-year experiment. Are we going to get a report that we can review as to outcomes and how that worked? We were very interested in supporting that initiative back when it was first introduced or thought about.

Mr. Purves: Thank you, senator. As I mentioned to Senator Marshall, there has been a report put out by the house about their experience and what they thought of many of the actions that have been taken with respect to the two-year pilot up to that point.

In terms of whether the government will be putting out a report is not my understanding at this juncture. I think it’s still early in a sense that we haven’t completed the pilot. We’re about three quarters of the way through. There are ramifications of not changing the standing orders, as I said.

There are many elements of the pilots and the estimates alignment exercise and estimates reform that is beyond just the changing of the standing orders. There is reporting. There is looking at the accounting basis and trying to do a better job of the reconciliation of the accrual and the cash and so forth.

I guess it’s a question for this body as to whether you were planning on looking at the experience as well. We hadn’t heard that a report was forthcoming.

Senator Day: If this committee decided to look into this, would that be helpful to you?

Mr. Purves: I think that having the input of all parliamentarians on these issues is very helpful. In terms of the house committee, I would recommend people pick up the house committee report and identify whether there is anything in there that has not been shared and that the Senate may have a different view on. That would probably be the best start.

Senator Day: Thank you. Now, your comment with respect to the standing orders and what happens with respect to this initiative will depend on the standing orders, that’s a House of Commons standing order that you’re talking about?

Mr. Purves: That’s right.

Senator Day: We tend to follow whatever decisions are made. If there are some decisions that are to be made that will impact us, then we should be looking into that.

Mr. Purves: I think, again, we’re planning on tabling Main Estimates — as an official, my job is to make sure that we follow the standing orders as they are and we’re back to factory default settings. The standing orders are asking for us to table the Main Estimates by March 1.

I guess the one thing I will say is that there have been a lot of innovations and improvements through the estimates reform process that has seen terrific improvements over the last few years, to the latest two. The kind of information we’re able to provide, both online and through InfoBase, to help parliamentarians and Canadians understand the spending that is going on is incredibly important. A lot of that doesn’t go away; it continues. I think that’s important to keep in mind.

Senator Day: I have a comment and then one more question, if the chair will permit me. My comment is with respect to some of your answers, you’re referring to abbreviations of departments. We are pleased that this committee and a number of committees in the Senate are televised. The people watching may not know what OGGO is, or CIRNAC, another one that you mentioned. I might put myself into that group.

Mr. Purves: I apologize. That’s a habitual thing as a bureaucrat, I believe. OGGO is the Government Operations House Committee. CIRNAC is the Crown-Indigenous Relations and Northern Affairs department. I’m trying to think if there was another one I may have mentioned. Certainly keep me honest on that, please.

Senator Day: That’s very helpful to us, to have you use the full department name when you’re talking about these, especially when we see that departments are changing names rather rapidly. We thank you for providing us with a copy of the list of change of names of different departments — new organization, previous organization.

The funds that were in the previous organization that were appropriated for the previous organization, how is that dealt with in an accounting sense? We used to see a $1 figure in there.

Mr. Purves: That’s right. One dollar is a placeholder to be able to list it, but when it transfers over, there is no change in the amounts. The amounts effectively transfer from one department under one name into the new department and the new name.

Senator Day: It’s a full amount that happens to still be there, not a prorated amount?

Mr. Purves: It’s sort of a convention that we do in the estimates in order to ensure that operations may continue for that department, despite the fact that there is a change in the legal name.

Senator Day: Thank you. My final point is that your horizontal estimates that you’ve given us in the horizontal explanation, various departments involved, was something you introduced several years ago. I encourage you to continue to do that. It makes it a lot easier for us to follow your estimates when you have these horizontal items.

One of the horizontal items is planned International Education Strategy — and it looks like it’s in at least two departments — for Canadians working outside of Canada. We wouldn’t want a duplicate effort. The more money you can save administratively to give to workers to travel abroad and gain experience I would think we’d want to encourage.

Mr. Purves: You’re correct, senator, that the International Education Strategy does touch on three different departments with three different focuses. It’s useful for us to spell that out in that way. That’s why there is a short description under each one, to nuance the difference in spending and scope between one and the other.

Senator Day: Sometimes you’re using the same wording, “Canadians working abroad.” Students are Canadians, and they’re working abroad as well. Two different departments, two different funds.

Mr. Purves: Some target students; some target low-income Canadians. There is a different scope of targeting.

Senator Day: Okay. Thank you.

[Translation]

Senator Loffreda: Thank you for your introduction and welcome. I’m pleased to be here with you. I’ll ask my question in English.

[English]

I’m looking at the estimates page 1-9. Although every dollar counts, if we look at the National Security and Intelligence Review Agency, it’s a topic of concern to many. In 2017-18 expenditures, we don’t have any amounts. 2018-19 estimates to date we didn’t have any. Now we’re looking at $19,523,508 with the supplementary estimates. I’m just wondering: Is that simply a reclassification or is there anything we should be made aware of regarding that expense?

Mr. Purves: The reason for that is it’s a new organization with a new name that’s been created. Some organizations are just created; they weren’t an existing organization with a different name. In this case, this is an organization that has come out of — I’m trying to remember what the name of it is. If you bear with me for a second, I will get it for you. SIRC, Security Intelligence Review Committee.

Senator Loffreda: It was working under a different name previously; it’s not an additional expense?

Mr. Purves: It was the Security Intelligence Review Committee. It’s been changed to this new organization.

Senator Loffreda: I’m just curious if there is anything on national security we have to spend more on because of certain issues. But if it is a new committee, that’s fine. Thank you.

Mr. Purves: You’re welcome.

Senator Marshall: The $4.8 million for the Government of Canada financial and material management solution project, is that multi-year? Is that just for this year or did that project start sometime in the past and will go into the future? How big is the project?

Ms. Cahill: It’s a multi-year project. This funding was identified a number of years ago in our TB submission. We’re just accessing the $4.9 million this fiscal year to continue the project. This is mainly to bring in 18 departments that are currently using the FreeBalance system, which, at the end of 2021, will become obsolete.

We want to bring 18 departments on board ASAP. This fiscal year, by April 1, 2020, we will bring in three of those departments, with the remainder to be brought on board by April 1, 2021. This is an ongoing project. FreeBalance will no longer be supported by the vendor. We have to help those small departments move to a new financial system.

Senator Marshall: Okay. For the departments that are impacted, the cost to those departments, are those costs in the departments or are they reflected in the Treasury Board numbers?

Ms. Cahill: The cost of the impacted departments will be reflected in the departmental budgets. This is simply the cost to the Treasury Board Secretariat to stand up —

Senator Marshall: For this year.

Ms. Cahill:  — the SAP applications. We’re the centre of excellence to bring the application up to date for those departments to be using it. Once we have delivered the applications to the departments, they will pay a licence fee, just like any other departments using SAP.

Senator Marshall: Would you be able to provide to the clerk of the committee the cost to date for each of the past fiscal years and then how much you’re projecting it to cost in future years? I always find these multi-year, multi-organizational projects span several years but also go across several organizations.

When you look at the $4.8 million in relation to the overall numbers, it looks immaterial. But if you look at the past and what’s going to be spent in the future — could you provide that so we can get a handle on the actual cost of that project?

Ms. Cahill: I’d be happy to follow up with the full cost. The cost is divided in two. We have the cost from the Consolidated Revenue Fund, through a TB submission such as the $4.9 million you’re seeing today. But we also have — and we’ve been to this committee because it has to go through the supplementary estimates — contributions from other government departments.

The total overall cost since the project has started — of course, this is an estimate — it’s estimated to be $138.7 million —

Senator Marshall: Yes. It’s a big project.

Ms. Cahill: — since 2015-16, yes. I’d be happy to provide more detailed table to the committee if you wish.

Senator Marshall: That would be very much appreciated. Yes. Thank you.

[Translation]

Senator Forest: In terms of Fisheries and Oceans Canada, various budget initiatives are being presented with a view to restructuring the fleet. Is the $125 million in funding part of the National Shipbuilding Strategy?

[English]

Mr. Purves: The amounts for $125 million, there is one for $72 million, which is part of the National Shipbuilding Strategy as part of the Canadian Coast Guard’s fleet recapitalization plan. Much of this was announced in Budget 2018, including prior budgets, directing funds for the Canadian Coast Guard to undertake studies.

The idea is there was a study and there was a concept design that went forward. This funding is to enhance the capacity and goes toward further recapitalization projects linked to the fleet. There is a linkage to the National Shipbuilding Strategy, senator, as you mentioned. I’m just wondering if that’s the specific one you were talking about or is there a different one you were looking at?

[Translation]

Senator Forest: For example, does the $72 million for the Coast Guard’s fleet recapitalization projects cover the construction of new vessels or the renovations and upgrades? What projects are included in the $72 million?

[English]

Mr. Purves: I’m looking at some details to help the committee.

The plan is to include the acquisition of up to 26 new large ships in four separate classes: 18 multipurpose vessels, six program icebreakers, one additional polar icebreaker and one additional offshore oceanographic science vessel, as well as the acquisition of 58 small ships and boats. I can’t identify within this amount which of those vessels it’s going to be targeting. It is effectively going towards the modernization of the fleet.

[Translation]

Senator Forest: With this budget, if you consider the example of a polar icebreaker, you can purchase only one piece of the icebreaker. You need a budget larger than $72 million.

[English]

Mr. Purves: I think it’s important to note that these are supplementary estimates. These are additional funds that are needed and that go on top of funds that have already been provided.

What we’re talking about here is not just the planning and what’s the fiscal horizon of this initiative over, say, four or five years. It’s about briefing into the reference levels of DFO to be able to make payments of $72 million, of which $55 million is capital. It’s going towards actual initiatives, recapitalization, revitalization of these fleets.

[Translation]

Senator Forest: Thank you.

Senator Bellemare: Since you’re here, I want to ask you a follow-up question. I can see here that there are indeed funds allocated to the Employee Wellness Support Program.

In recent years, we’ve had extensive discussions on health and disability insurance programs along with wellness programs for public service employees. At the Treasury Board Secretariat, there was talk of reviewing the insurance approach for sick leave cases. I want to know where things stand on this issue.

With regard to the funding for the Employee Wellness Support Program, is there a link to the approach that we want to review?

Mr. Purves: Thank you, Senator Bellemare. My colleague Karen Cahill will answer your question.

Ms. Cahill: Indeed, employee wellness and sick leave are very hot topics. With respect to the $300,000 in our supplementary estimates, the amount constitutes a reprofiling of funds from last year to this year. We want access to these funds so that we can continue the work currently being done.

When negotiating collective agreements with bargaining agents, we took a step back. That’s why we must reinvest to recover the $300,000. The work is ongoing, and a great deal of negotiating is being done with each insurance company. We’ll certainly be able to provide more information on this subject in the coming year.

Senator Bellemare: So far, nothing has been decided?

Ms. Cahill: So far, nothing has been decided. However, I can assure you that the work is ongoing. The goal is to review the employee sick leave policy in the coming year.

Senator Bellemare: We’ll follow up later.

Ms. Cahill: Absolutely.

Senator Bellemare: Thank you.

[English]

The Chair: I have a question, if you permit me, honourable senators, for Mr. Purves, but I think it will go to Ms. Cahill.

Ms. Cahill, we know the public servants in Canada are hard-working people. I heard you say a few minutes ago that 2,000 former public servants have made claims for compensation due to the Phoenix pay system.

How many current public servants across Canada have made applications?

Ms. Cahill: Definitely we understand that everybody works hard, and Phoenix is on top of our list in terms of priorities. I’ll just go back a little bit.

When the issues started with Phoenix in 2016, the Treasury Board of Canada Secretariat created a claims office.

This was an office where public servants, through their department, could submit claims for loss of money, loss of investment, or the interest paid on a line of credit because they were not paid their normal salary on time, or even some went for months without receiving a pay cheque. Since 2016, I will have to follow up and come back to this committee with the total number of public servants who have submitted claims.

The 2,000 claims that were received, as I answered Senator Deacon, were for former public servants. They were specifically related to the damage agreement where the government committed to compensate former public servants for the damage incurred by Phoenix. Whether they were impacted directly or indirectly, if they were eligible, they would be paid the equivalent of five days at the rate they were paid when they left the public service.

The damage agreement also has two other portions which have not yet been launched. There is a damage part 2, which is for current and former public servants who have encountered severe financial issues. Again, loss of investment, paying interest on a line of credit, et cetera. This one has a threshold of $1,500. The minimum amount to be claimed under Part 2, or Tier 2, of the damage is $1,500.

Then the third part of the damage agreement is for public servants or former public servants who have encountered serious damages, whether it’s psychological damage, they lost their house, it’s way more complex than “I’m paying interest on my line of credit.” This Tier 3 will be launched later in 2020. We are currently developing the processes and making the agreements to be able to launch that.

The Chair: Thank you.

Senator Marshall: Last year, when we were studying Phoenix, it took us a long time to get the total cost of the Phoenix implementation. I think the Comptroller General eventually prepared something and gave us the costs. We looked at the cost and then we saw the $44 million, but you’re saying there is going to be more, right?

Ms. Cahill: The $44 million is specific to the damage agreement. It’s aside from the rest of the costs that were stated.

Senator Marshall: Who is tracking the cost? Are we going to have to wait? Where are we now? Christmas. In April, when you come back and we want to know how much is Phoenix costing to date, is somebody calculating that on an ongoing basis or will it take a long time like it did last year? Does somebody track the costs of Phoenix on an ongoing basis?

Ms. Cahill: We do track the cost of Phoenix on an ongoing basis. Departments are required to report on how much Phoenix is costing them. I can assure you, senator, we will be able to provide accounting for the $44 million. We are tracking how much we are compensating public servants through the damage or any other claims that were submitted in relation to Phoenix.

Senator Tkachuk: I want to ask about the climate change ask of $2.65 billion for contributions to the International Fund for Agricultural Development and the World Bank. Can you tell us what the results of this initiative have been and an example of what initiatives were undertaken? Do you have any evidence of how effective they’ve been in addressing climate change?

Mr. Purves: I understand that one is for Global Affairs Canada, and that amount is towards meeting the commitments of the Paris Agreement on climate change. A lot of that funding is going towards supporting the commitment to have other countries able to make adjustments in order to support the broader effort on climate change.

At this point, the funding is being made available. It’s here in order for Global Affairs Canada to be able to disburse. Because it’s a fairly new initiative, you’re meeting with colleagues from Global Affairs Canada this afternoon and they would probably have a better line of sight as to the specific results they will be targeting and how they want to action —

Senator Tkachuk: But you’re the Treasury Board. This program has been going since 2015. Would you not have asked these questions of them?

Mr. Purves: In terms of this tranche and this specific tranche of funding, and what is the objective of this specific tranche, once Global Affairs receives that funding they disburse it and then are able to monitor the results they want to achieve from those disbursements.

Senator Tkachuk: Help me out here: This was in 2015, so has any money been disbursed?

Mr. Purves: I’m suggesting is at this point Global Affairs might be better to speak to that. I can’t talk to you about how much has been disbursed at this point from that program since 2015.

Senator Tkachuk: There is just one little question because it is somewhat odd. It’s on the Department of Foreign Affairs, Trade and Development, $175.6 million. We haven’t been called Foreign Affairs, Trade and Development since 2015. It has been called Global Affairs. Why is it Foreign Affairs, Trade and Development?

Mr. Purves: It’s a legal name, effectively, until such a time as there is a legal change to the act. We have to maintain it as its legal name. If we put “Global Affairs Canada” as the title of an Estimates document, the department would not be able to disburse on that funding.

Senator Tkachuk: All Global Affairs is Foreign Affairs?

Mr. Purves: Well, as you can see, Public Works and Government Services it is listed here. It’s called PSPC.

Senator Tkachuk: Okay. Thank you.

The Chair: To the officials of Treasury Board, thank you very much for your professionalism.

On our next panel will be officials from Transport Canada, National Defence and also Crown-Indigenous Relations and Northern Affairs Canada.

We now have before us representatives from three departments.

[Translation]

We’re joined by Annie Boudreau, Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs Canada. She is accompanied by Martin Reiher, Assistant Deputy Minister, Resolution and Individual Affairs Sector. We’re also joined by Ryan Pilgrim, Chief Financial Officer and Assistant Deputy Minister, Corporate Services, Transport Canada.

[English]

He is accompanied by Anuradha Marisetti, Assistant Deputy Minister, Programs, Transport Canada. Thank you.

[Translation]

Lastly, we’re joined by Lieutenant-General Jean-Marc Lanthier, Vice Chief of the Defence Staff, Department of National Defence. He is accompanied by Cheri Crosby, Assistant Deputy Minister of Finance and Chief Financial Officer, and Troy Crosby, Assistant Deputy Minister of Material.

[English]

Welcome to all of you who represent those departments. I have been informed by the clerk that Ms. Boudreau will be first to speak. Ms. Boudreau, you have the floor.

[Translation]

Annie Boudreau, Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs Canada: Thank you, Mr. Chair and honourable senators for the invitation to discuss the 2019-20 Supplementary Estimates (A) for Crown-Indigenous Relations and Northern Affairs Canada. I acknowledge that we come together on the traditional territory of the Algonquin people.

[English]

Crown-Indigenous Relations and Northern Affairs Canada Supplementary Estimates (A) include initiatives totalling $274.1 million, which will bring total budgetary funding for the department to approximately $6.1 billion for 2019-20.

The directed supplementary estimates include urgent items that have been approved by Treasury Board, with $87.5 million flowing through vote 1 operating expenditures; $839,000 in vote 5 capital expenditures; and $185.8 million in vote 10, grants and contributions. The $30,000 in statutory funding is for the employee benefit plans.

I will now briefly describe the major initiatives items included in Supplementary Estimates (A).

The largest item in these supplementary estimates, $94.9 million, is funding to renew 25 self-governing Indigenous fiscal transfer arrangements.

Canada’s collaborative self-government fiscal policy was developed in a joint effort between Canada and self-governing Indigenous governments. This funding is to implement elements of this policy. This initiative is in line with the Budget 2019 commitment to ensure Indigenous governments have the fiscal capacity to govern their people, communities, lands and resources effectively through investments co-developed with self-governing Indigenous governments.

The next initiative is to advance reconciliation on Aboriginal rights and fisheries issues, for $37 million. Through a three-year reconciliation agreement with the Heiltsuk First Nation in British Columbia, the community will be able to begin to address their priorities in self-government, housing and infrastructure, economic development and language revitalization and preservation.

[Translation]

A total of $17.9 million is being provided to honour fiscal transfer arrangements for comprehensive land claims and self-government agreements with the Labrador Inuit; the First Nations of Tsawwassen, Maa-Nulth and Nisga’a; the Yukon Environmental and Socio-Economic Board; and the Cree-Naskapi Commission.

The remaining initiatives covered in the document concern the reprofiling of the previous year’s funding into fiscal year 2019-20 so that the important work on these initiatives can continue. For instance, you’ll see items such as the funding to assess, manage and remediate federal contaminated sites, reprofiling $34.9 million. Crown-Indigenous Relations and Northern Affairs Canada is responsible for the management and remediation of a number of contaminated sites in the challenging environment north of the 60th parallel, where weather can routinely delay these projects. Reprofiling this targeted funding ensures that the work to protect the health and environment of Canadians can continue.

[English]

The funding for the Indian Residential Schools Settlement Agreement of $53.2 million has been re-profiled in order to complete Canada’s legal obligations under the settlement agreement, which is anticipated by March 31, 2021.

[Translation]

Mr. Chair, these Supplementary Estimates will allow the department to make significant progress on its priorities. I look forward to discussing any aspects of these estimates with you, and I’ll be pleased to answer your questions on my presentation. Thank you.

Ryan Pilgrim, Chief Financial Officer and Assistant Deputy Minister, Corporate Services, Transport Canada: Mr. Chair and honourable senators, I’m pleased to be here today to discuss Transport Canada’s Supplementary Estimates for 2019-20. These Supplementary Estimates represent items within the Minister of Transport’s portfolio, which includes Transport Canada, the Canadian Air Transport Security Authority and Marine Atlantic Inc.

[English]

Transport Canada is seeking a total of $227.1 million in funding from the estimates, including $4.6 million for operating expenditures, $223.3 million for grants and contributions, and $234,000 in statutory authorities, bringing the total authorities for 2019-2020 to $2.2 billion.

The funding requested covers a variety of initiatives, including $165.5 million for the Zero-Emission Vehicles Program; $31.5 million to address Indigenous priorities and marine safety regarding the Trans Mountain Expansion Project; and $10.5 million for the Rail Safety Improvement Program. Also, an amount is included for a transfer of $3 million from CATSA to Transport Canada related to negotiations for the transfer of aviation security screening to a designated screening authority.

With these supplementary estimates, the department will continue to offer Canadians a trustworthy and dependable transportation system that allows them to safely and efficiently reach their destinations and receive goods for their daily lives in a sustainable manner.

[Translation]

The Government of Canada’s incentive program for zero-emission vehicles helps reduce greenhouse gas emissions and contributes to a clean transportation system by increasing the adoption of low-emission vehicles through purchase incentives. Over 30,000 Canadians and Canadian businesses have benefited from this incentive since the program’s launch on May 1, 2019. Transport Canada has had to advance funding from future years to meet the demand for this incentive.

[English]

The Trans Mountain Pipeline Expansion Project has the potential to create thousands of jobs and generate billions of dollars. To help fund clean energy solutions, Transport Canada is leading three measures that will address marine safety environmental concerns raised by Indigenous groups. These measures include the provision of access to maritime information to Indigenous coastal communities, funding for marine safety equipment and training, and support of a program to advance low-noise and low-emission crude oil tankers serving the Trans Mountain expansion.

The Rail Safety Improvement Program has been integral in ensuring Canada has one of the safest rail transportation systems in the world. This program provides funding to improve rail safety and reduce injuries and fatalities related to rail transportation. Activities supported by the program includes roadways and intersection improvements, innovative safety technology and research to further enhance rail safety.

Through the initiatives supported by the supplementary estimates, Transport Canada continues to ensure the integration and sustainability of Canada’s roads, railways, ports, ferries and airports.

My colleague Anuradha and I will be pleased to answer any questions you have regarding our supplementary estimates.

Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer, Department of National Defence and the Canadian Armed Forces: Thank you, Mr. Chair and senators, for the invitation to present on behalf of the Department of National Defence our insight into the department’s Supplementary Estimates (A) for the 2019-2020 fiscal year. My colleagues and I look forward to discussing this important information with you.

Today I am joined by my colleagues Lieutenant-General Jean-Marc Lanthier, Vice Chief of the Defence Staff; and Mr. Troy Crosby, Assistant Deputy Minister (Materiel). Let the record show that Mr. Troy Crosby is not my long-lost brother-in-law. However, when we check our roots, we tend to end up in the same small town.

I have prepared a brief statement. After that, of course, we are at your disposal to answer questions.

Today, National Defence is requesting $463.6 million through the supplementary estimates process. These estimates represent an increase of 2 per cent of DND’s current allocation for fiscal year 2019-20. The changes and additions are summarized as follows:

[Translation]

$176.9 million in funding to support and modernize the armoured combat support vehicle fleet. The project, identified in the Strong, Secured, Engaged policy, will acquire a new fleet of 360 combat support vehicles for the Canadian Army to replace the aging fleets of light armoured vehicles and —

[English]

— $94.1 million to address competitive compensation for our people and provide specific funding to create a special pay differential for pharmacy, medical and dental officers, update the rates of pay for officer cadets and chief warrant officers, align pay relativity between the Regular and Reserve Force, and adjust the environment allowance for search and rescue technicians; $47.8 million to fund the expansion of the defence team. As set out in Strong, Secure, Engaged, the Canadian Armed Forces will increase its ranks by 3,500 Regular Force and by 1,500 Reserve Force members. National Defence will also hire an additional 1,150 civilians to support the military in areas such as intelligence, procurement and health and wellness —

[Translation]

— and also $42.1 million to fund the Canadian Armed Forces participation in the United Nations peacekeeping operation in Mali in response to a United Nations request, and $27.7 million to fund the project to recapitalize docking facilities at the Canadian Forces Base in Esquimalt, British Columbia —

[English]

— $26.4 million to fund the definition phase of the Hornet Extension Project for the Canadian Armed Forces. The funding will enable definition of work associated with the acquisition of avionics and mission support systems for aircraft of Canada’s fighter fleet necessary to comply with regulator and interoperability requirements to 2032; $8.3 million to fund a remotely piloted aircraft system for the Canadian Armed forces. This project will acquire up to 14 drones and the associated ground control stations, initial integrated logistics support, initial weapons, stock and infrastructure.

[Translation]

$3.2 million to fund the definition phase of the surface combatant project for the Canadian Armed Forces. The funding is required to finalize the Canadian surface combatant design and prepare for the project implementation phase.

[English]

And there is $700,000 to support military members who are injured or ill, transition out of the Canadian Armed Forces or rehabilitate and transition back to work.

Finally, we are requesting the internal reallocation of resources for the Northern Atlantic Treaty Organization, NATO, and the Vancouver Principles contribution program. With respect to NATO, the $41 million will support Canada’s contribution to the NATO Airborne Early Warning System, AWACS, the adaptation of the NATO Command Structure, the new requirements associated with the Allied Ground Surveillance system and the expansion of NATO Security Investment Programme.

[Translation]

$225,500 for the Vancouver Principles Contribution Program to provide funding for the Romeo Dallaire Child Soldiers Initiative to prevent the recruitment and use of child soldiers.

[English]

Mr. Chair, the Department of National Defence and the Canadian Armed Forces continue to deliver our essential national mandate while embracing fiscal responsibility and effective stewardship of resources.

In closing, Mr. Chair, my colleagues and I would be very happy to answer at this time any questions that you might have.

The Chair: Thank you. Senator Marshall.

Senator Marshall: Thank you. My first question is for Ms. Crosby. Thank you for your very interesting presentation.

My first question relates to the armoured combat support vehicle fleet and the $176 million. Can you give us a little bit more information on that project? Specifically, I’d like to know the total value of the contract and how the payment schedule is determined. I’ll leave you with those two items first.

Ms. Crosby: Thank you very much for the question. It’s my pleasure to answer that.

As was announced last August, the total project value is a $3 billion project. This particular funding will go towards progressing the project to deliver the 360 combat vehicles to the Canadian Armed Forces. We, of course, structure all our contracts based on deliverables of goods and services in milestones. If you’re interested in how that will proceed and the cash flow, I would suggest my colleague Mr. Crosby could speak to that.

Senator Marshall: Could you provide that to the clerk? You’re saying it’s $3 billion. Somewhere I had seen it might be $2 billion. Could we get a schedule that shows when the payments are due and what the deliverables are so it would be like a little two-column chart? Could we get that? I’d be very interested in that.

The other question I had related to the policy Strong, Secure, Engaged that was released, I don’t know, maybe three or four years ago. It indicated at the time — these are just estimates now — but $6 billion in capital funding for each year approximately. I think this year it’s maybe $5.9 billion. If we look at the estimates document we have now, you’re up to $4 billion, so you still have $1.9 billion to go. I know you did fall short by about $2 billion in each of the two preceding years.

Could you discuss whether you think you’re going to meet the $5.9 billion this year and how you will play catch-up for the years you haven’t met the targets?

Ms. Crosby: As you know, as was introduced three years ago with Strong, Secure, Engaged, National Defence has the opportunity to have a new funding model that enables us to plan for our funding over a 20-year period. One thing I know for sure is the plans we make in year one and two are going to change. It’s virtually impossible to plan with certainty and expect things not to change.

What we do internally in terms of managing our Capital Investment Fund is we continuously refresh our capital forecast. We do this in many ways and we’re continuing to improve. We move the money in our Capital Investment Fund to the time when it’s required. That could be in the year or in future years.

The new Capital Investment Fund gives us that flexibility. As senators may know from previous appearances, when we plan, for example, to have $5.8 billion available for us in this fiscal year, we take a number of steps to make sure that we only request the money that we think we’re going to need.

For example, as a project is evolving, in the Main Estimates this year we asked for $3.7 billion of that $5.8 billion knowing what we had to start with and then we waited until Supplementary Estimates (A) until projects unfolded and we have a much clearer line of sight of what we need. That’s why we’re back now to request more.

At the end of the day, if we don’t use that money, the $5.8 billion, if there are funds left there, we do not lose that funding. That funding stays and will shift to where we need it, to various projects. That’s why whether we take the cash now or not may be a poor indicator of whether we’re actually making progress because we are not losing that money that we don’t use. It gets shifted to when we need it.

Senator Marshall: Based on what you’re saying — and I don’t know what number is in Strong, Secure, Engaged — but the next year capital funding, have the capital funding numbers been revised? I’m still working with the old numbers in Strong, Secure, Engaged. Have they been revised?

Ms. Crosby: We are constantly revising and updating. It’s a bit of a moving target. As projects move to the point of implementation where we are actually signing contracts, that’s when we have the most clarity. You know when we begin projects we’re always operating with a very rough order of magnitude in terms of our costing estimates. As we progress through the planning cycle and options are analyzed and so forth, when we finally get to definition at that point and we’re signing contracts, we then have a lot more clarity.

In that sense, there are 333 projects that are planned over the next 20 years. All of the pieces are moving or many are moving at the same time. We constantly adjust and amend. That’s how we manage.

Senator Marshall: Can I get the revised numbers? I’m still working with the old numbers that are four years old. Can you give me capital funding requirements for future years that are more current, I would very much appreciate that. Do I have time for another question?

The Chair: On the second round.

Senator Marshall: Okay.

Senator Forest: You are ready for French section of the meeting.

[Translation]

Senator Forest: I have a question about the armoured vehicles. The $3 billion contract awarded without a call for tenders raises many questions for me. According to your estimates, this order of over $3 billion is for 360 armoured vehicles. If I apply the rule of three, we’re talking about over $8 million per unit. You said that we didn’t issue a call for tenders because the new vehicles will be similar to the old ones. How can we explain this choice to award a contract for $3 billion in public funds without a call for tenders? In addition, it appears that the contract includes a $650 million loan to the company in question. This is a major concern for me as a manager of public funds.

[English]

Troy Crosby, Assistant Deputy Minister (Materiel), Department of National Defence and the Canadian Armed Forces: The contract value is in the order of $2 billion for the provision of the 360 vehicles as well as the initial spares and the things that it will take us to set up an actual capability. The values for the project include other costs such as those for infrastructure, project management and other things not associated directly with the contract.

The opportunity for us to be able to work with General Dynamics Land Systems-Canada in this case will also make the LAV 6 platform, which is the backbone of the Canadian Army’s capabilities, provides us a real efficiency in terms of training in spare parts. There is an opportunity there to leverage this both from a fiscal perspective but also importantly from an operational output perspective.

In negotiating the contract with the company, given our history with them, their understanding of the Canadian Army’s needs, and our understanding of the LAV 6 as a platform, allowed us to negotiate a contract with great advantage for the army in terms of what we’ll be able to deliver, the various configurations of the vehicle.

The contract includes the development work, the specific design requirements to meet the Canadian Army’s requirements in about eight variants of the vehicle — some of them less complex, like ambulances; others more complex, like militarized tow trucks, I’ll say — to work with the other LAV 6s. That relationship and our ability to work with the company has allowed us to leverage this to great advantage to acquire the 360 vehicles.

[Translation]

Senator Forest: When you analyzed the advantages and disadvantages, given the amounts involved, if we’re talking about an order of magnitude — even though we can’t make an exact comparison—were you able to say that you made this choice because, ultimately, it’s the best choice in terms of the value for money of the equipment in relation to the investment? Another major concern for me is the $650 million loan to a company that has just been awarded a contract worth almost $3 billion. Why did you grant this $650 million loan?

[English]

Mr. Crosby: The amounts don’t involve a loan. There is no loan involvement. There are milestone payments associated with the delivery of the vehicles, both as we work through the engineering process and on delivery of the vehicles through the course of the contract.

We, through our options analysis, always look at the various opportunities, different ways of solving the problem. In this case, the opportunity to leverage the fact that the army currently operates a fleet of 550 LAV 6 platforms provided a great advantage in terms of efficiencies, operationally in terms of training, spare parts and other considerations.

[Translation]

Senator Forest: At the end of the contract, for the 360 units, by applying the rule of three, I calculated $8,333,333 per unit. I rounded this amount down to $8,330,000. Do you know the value of each individual unit at the end of the contract?

[English]

Mr. Crosby: The value of each individual unit will depend on its actual configuration. Some, as I mentioned earlier, such as an ambulance, will be less expensive than the more complex variants, which may include electronic systems or the ability to recover other damaged vehicles in the battlefield. It’s important to recognize that the contract value, again, includes not just the 360 vehicles but also the investments in spare parts, training and other elements of support to the vehicles.

[Translation]

Senator Forest: What is the proportion in relation to the different items such as the other vehicles and the other commitments, training or spare parts?

[English]

Mr. Crosby: The majority of the contract value will be associated with the vehicle cost.

[Translation]

Senator Forest: So the proportion would be 80-20?

[English]

Mr. Crosby: I would need to verify that.

The Chair: Mr. Crosby, can you provide through the clerk the answer to that question, please?

Mr. Crosby: Yes.

Senator Tkachuk: My question is for the Department of Transport, Mr. Pilgrim. On the incentives for purchase of zero-emission vehicles, can you elaborate on exactly what this is? What is the purpose of the program, and how much is it per individual consumer?

Mr. Pilgrim: I’ll let my colleague take this one.

Anuradha Marisetti, Assistant Deputy Minister, Programs, Transport Canada: Senator, the way the program is structured is to give an incentive to individual Canadians who are interested in buying either a battery-operated vehicle or a plug-in hybrid. The idea is to encourage acceptance and adoption of zero-emission vehicles in the market.

The way the program works is that if an individual purchases a battery-operated vehicle that is a fully long-range hybrid vehicle, the incentive provided is $5,000 per vehicle. If it’s a plug-in hybrid with a shorter range, it’s $2,500 per vehicle. At the point of sale of the vehicle, the individual would get the rebate; the dealer would then come back to Transport Canada and we would reimburse them the amount of rebate they offered the Canadian, the consumer.

Senator Tkachuk: What about commercial-use vehicles? Is that part of the program? Or a person buying a car for business, is that part of the program as well?

Ms. Marisetti: As of today, people buying it for business get a business writeoff. A certain number of fleet vehicles are also included in the incentive program. It has not yet been extended to commercial vehicles.

Senator Tkachuk: If all the money was used up, how many vehicles would that entail? Does it depend on the price? Does the person buy a $50,000 vehicle to get the same amount of money, $5,000? I know some provinces have provincial rebates, like Ontario. I think theirs is $8,000, but I’m not sure. So it’s like $13,000 off for a $40,000 vehicle?

Ms. Marisetti: In some provinces, this is over and above the provincial rebates that are offered. In the two provinces where it exists today, British Columbia and Quebec, it is added to the rebate that is already offered.

Senator Tkachuk: How many vehicles would that be?

Ms. Marisetti: As of today, we have processed close to 31,000 claims. That gives you a sense of the number of vehicles that have been purchased and eligible to receive a rebate.

Senator Tkachuk: You don’t really care whether the person drives 2,000 miles or 100,000 miles; you just give them the money, right? So it doesn’t really matter? If I buy a vehicle and I drive only 3,000 or 4,000 miles a year, or 10,000 kilometres, is there any difference between me doing that and someone driving 50,000 kilometres?

Ms. Marisetti: No. The incentive is for the purchase of the vehicle.

Senator Tkachuk: What contribution will that make to CO2 emissions in Canada per year?

Ms. Marisetti: As it is right now, light-duty vehicles contribute about 50 per cent of greenhouse gas emissions. With the incentive program, the total number of vehicles sold in the country has gone up by 32 per cent compared to last year.

Senator Tkachuk: What was the last point?

Ms. Marisetti: Sales of zero-emission vehicles have gone up by 32 per cent compared to last year, which we believe can be attributed to the incentive program.

Senator Tkachuk: How many would that be?

Ms. Marisetti: Between May and now, which is the last week of November, we’ve processed about 31,000 claims.

Senator Tkachuk: How many people would have bought vehicles in Canada last year?

Ms. Marisetti: I don’t have those figures.

Senator Tkachuk: Millions? What would the contribution be of those 31,000 vehicles to CO2 emissions in Canada? There must be some research done on this, on how many emissions you save, or else why would you be doing it?

Ms. Marisetti: Yes. What I can tell you is these vehicles that we’ve sold — like you have said, we have sold millions of vehicles in the country. The sale of the zero-emission vehicles contributes to 3 per cent of the total number of vehicles sold in the country. At this time last year we were at 2 per cent, so we have increased in terms of percentage of vehicles sold, which contributes to the reduction of emissions in the country. The goal is that by encouraging acceptance and adoption of the vehicle, it will contribute to the overall reduction of greenhouse gases.

Senator Tkachuk: Thank you.

Senator Duncan: I thank all of the panel for your presentations. It’s very helpful. My question spans all three presentations. Then I’d like to focus on transportation in particular.

My question is where. For example, in Crown-Indigenous Relations, there is funding for the management of federal contaminated sites across the North. I’m looking for a breakdown, if I could, through the clerk, of where, which contaminated sites we’re talking about, and also, of course, a progress report related to that on the expenditures.

In terms of the Department of National Defence, there are additional funds for a remotely piloted aircraft system, and you mentioned drones and long endurance associated ground control stations, initial integrity. Where is it intended that these drones would be and where would the infrastructure be?

In terms of transportation, following up on the funding incentives for low-emissions EVs, electric vehicles, for many of the comments referenced by my colleague, Senator Tkachuk, the answers are found in our Standing Senate Committee on National Finance hearing with the electric vehicle folks and representatives on May 30, which is when I believe that committee meeting was held.

In that committee meeting, Senator Klyne, Senator Neufeld and I, all mentioned the applicability of electric vehicles to Western Canada. The desire there for purchase is not a car. It’s the dream of every 17-to-whatever-year-old to own a truck, not a car. In that regard, may I again, falling on the where, you’ve indicated there has been an uptake in the funds and 31,000 vehicles have been purchased. Where? If it’s all southern Canada, I would suggest it would be more helpful to Canada as a whole if we were able to expand the availability of funds to encourage the vehicle manufacturers to meet the demand that is out there and is growing fast, as was evidenced by our previous committee meetings and discussions on this same subject.

Again, I would emphasize, as Senator Klyne put it in that meeting, the light truck is the family vehicle, it’s the office of the small business owner and the mode of transportation for the family. In order to get from Regina to Meadow Lake or to Flin Flon for a hockey game, you have to have the charging stations and you have to have the vehicle capable of doing that. If I could have the breakdown.

Senator Smith: I have three questions, one for each department. Defence is going to look at hiring 3,500 regular forces and 1,500 reserve force members. This goes back a couple of years when we used to ask those questions regarding delay when I was active on the committee. Especially in the reverse forces, young men or women who want to join, the problem was it would take 8 to 12 to 16 or 18 months before anything happens and you actually get engaged. I’m wondering about the type of tracking you’re doing. Is there an issue with not only reserves but also the regular forces in terms of the time lapse before someone can get involved and participate? I’m looking specifically at what sort of tracking you’re doing. That’s the first question.

Going back to Transport Canada, over 30,000 Canadians have used and benefited from the incentive for this program. Are you looking at what you want to accomplish and then what the industry has accomplished? Where I read or heard, the industry had an objective of selling 500,000 electric vehicles or hybrid cars in the last year or two years and they’ve only sold something like 100,000 or 150,000. What type of tracking are you doing to balance between what your department is doing and what industry is doing so you actually know what’s going on and you can measure the effectiveness of your report, as opposed to just having numbers and saying we’re going to do this or put money here, but how are you tracking the actual execution?

For Indigenous affairs, there are approximately 640 Nations and everyone wants their own self-government, as I understand. There may be amalgamations and mergers of different bands and nations together. Do you have a tracking device in terms of following the actual implementation and the success of the implementation in terms of what’s being delivered to the local Indigenous people who are, to my mind, shareholders to their leaders who are executing this.

Ms. Crosby: Mr. Chair, I’d be happy to answer the question about growing the defence team. I will pass the floor over to the Vice Chief of Defence Staff.

Lieutenant-General Jean-Marc Lanthier, Vice Chief of the Defence Staff, Department of National Defence and the Canadian Armed Forces: Mr. Chair, I’m pleased to report that last year 10,118 Canadians joined the Canadian Armed Forces, both the regular forces and the reserve forces. In terms of recruiting, we have been authorized to an effective strength of 68,000 in the regular force. We’re currently standing at 67,600 and some, so we have made a significant dent in the numbers that we were short.

In terms of reserves, the big changes over the last three years has been the delegation of recruiting authorities to the services. Having been the previous army commander, I can tell you that last year the reserve group netted over 2,000 people in the Canadian Army alone. The numbers are increasing. That delegation has allowed us to significantly increase the speed at which we recruit further reserves.

The target remains to try to recruit a new member into 30 days. At this point, about 20 per cent or so of the files meet that standard. That’s a clean file. There is no medical issue. There is no problem contacting the references. You need three references to be able to enroll in the Canadian Armed Forces.

Other files will take longer and some will take multiple months, as we try to reach a reference or require a more detailed medical before we can enroll the person. I think we’re making significant progress.

Mr. Pilgrim: In terms of tracking results and how we’re doing, if 30,000 is good or bad or indifferent, we were given $300 million over three years for this incentive program. We’ve asked for $165 million in extra funding in our supplementary estimates because our sales are higher than what we expected. Things are going well. It seems low volume, but it’s higher than what the numbers have been in the past and higher than what we expected. From our perspective, things have been good. There is take-up and there is definitely more take-up in provinces where there is the additional incentive. Sales in British Columbia and Quebec are quite a bit higher than the rest of the country.

There are more cars coming online all the time. Pickup trucks were just announced from Tesla and other manufacturers. That should help our cause. We’ll keep evaluating the types of vehicles that are permitted in this program. They have to meet certain criteria. As more vehicles come available we’ll keep assessing those and adding to the pool of available vehicles, making the incentive program even more attractive to a wider group of Canadians.

From our perspective things are good. We’re ahead of schedule in terms of sales that we have forecasted at this point.

Senator Smith: What type of communication do you have with industry to see the actual results of what they’ve accomplished so you can measure your results against theirs and for all Canadians?

Ms. Marisetti: We are in regular contact with all the OEMs in this field, as well as the dealers themselves. With the OEMs the conversation is about ensuring that the vehicles are there and they are meeting the demand. What we’ve heard so far is that they are meeting the demand and they are responding to the request for vehicles.

Now, are we tracking their target? I don’t have information about what the industry was tracking. I will go back and if that’s something we have we can come back to you. We are tracking the assumption that we would spend $300 million in three years.

Senator Smith: It would help if you tracked so you would also have the relevant information. That’s just a suggestion.

Ms. Boudreau: Thank you very much for the question. With respect to those 25 self-governing funds that we are receiving from the Supplementary Estimates (A), on the amount that was to be received, the methodology was co-developed with Indigenous partners, which is a great step towards reconciliation. In my department, we have also created a sector called “Implementation Sector.” Once those agreements are completed, we’re going to pass that to the Implementation Sector and they will be able to provide us with information about the outcomes.

However, I have something here that’s quite interesting. We’re seeing that self-governing Indigenous peoples have better socio-economic outcomes. More of their children finish high school. Fewer of their people are unemployed and health outcomes are better. That is some of the information we are getting right now with respect to those self-governments.

Senator Boehm: Just to add one point to the very interesting discussion on zero-emission vehicles. It’s like we’re repeating what we had done earlier with the Budget Implementation Act, but it’s very valid nonetheless. Just a comment: I would be hard pressed to see a Tesla truck rolling through wintery Canadian roads, but that’s just a personal view. Secondly, the related portion in terms of being in touch with the industry that Senator Smith made, I think that’s very important, because we would have to look as well — and I’m sure you’re doing this — at infrastructure and charging stations, particularly if you are looking for pick up in rural areas or more remote areas of Canada.

My two questions are for National Defence, and specifically about the participation in the UN peacekeeping operation in Mali, the additional $42.1 million. Is this attributable to mission extension, or is it attributable to changing conditions on the ground? It’s a very dangerous mission. We know that. There have recently been French casualties.

Second, in a similar vein, does the $41 million to support Canada’s contribution to NATO include the announcement that the Prime Minister made at the tail end of the NATO summit with respect to increased activity for Canada in Latvia?

Ms. Crosby: I’ll start and I’ll be supported by my colleagues, of course. The funding for the operation in Mali, as you might be aware, for all of our operations that we conduct on an annual basis, we always come around this time of year, Supplementary Estimates (A), Supplementary Estimates (B), because we have a better line of sight in how much our different operations have cost. This falls into that bailiwick. In fact, the money we are asking for in Mali is covering the first five months, from April to August, to fulfill the one-year commitment that we made. The funding will also contribute to the small flexible footprint that we are leaving as we ramp down, as we redeploy people back to Canada. Again, the vice can speak to that.

Very quickly on NATO, the funds that we’re requesting in Supplementary Estimates (A) do not take into account that particular pressure in terms of what the U.S. has done. We have accounted for that in other ways. This funding is specifically directed to other common services and activities, including AWACS, that have arisen, and we expect to continue to be there in upcoming years.

Lt.-Gen. Lanthier: What I would add about the Mali mission is compared to the initial plan, we stayed a little longer to facilitate the transition of the Romanian air task force. We provided strategic airlifts for C-17s to assist in ferrying their equipment to Mali, so those two factors changed the initial plan, but as the CFO indicated, we are cost-capturing and cash-measuring and asking at Supplementary Estimates (A) for the difference.

[Translation]

Senator Bellemare: I also have a few questions for the officials from the Department of Transport regarding zero-emission vehicles. We can see that the subject generates a great deal of interest. I did not attend the Senate debate at this committee. However, since there’s considerable interest, you should focus on the effectiveness of the program.

A program that offers an incentive to purchase a vehicle may not necessarily make a difference. Perhaps the people who are currently purchasing this type of vehicle already have a good income and a greater propensity to fight climate change.

My question more specifically relates to the infrastructure of charging stations. Does your program fund charging infrastructure that I believe would have a major impact on the electrification of cars? This infrastructure may have an even greater impact than the vehicle purchase incentives. I was wondering whether you’ve considered this, and whether the program includes anything in terms of charging infrastructure.

Mr. Pilgrim: Yes, it’s part of the plan. The approved program has $700 million at its disposal, of which $300 million has been allocated to Transport Canada for car purchase incentives. A total of $400 million has been allocated to other departments for the charging station infrastructure that will be implemented across the country, to ensure that people have the facilities that they need to be —

[English]

— more appealing, the purchase of the vehicle. It’s not just our portion, it is a government-wide initiative.

[Translation]

Senator Bellemare: Who receives the infrastructure grant? How does the program work and is it running?

Mr. Pilgrim: This doesn’t concern our department, so I don’t know. However, I assume that the grant program is also available to the provinces and municipalities.

[English]

Senator Day: My first question is a point of clarification. We just had the Treasury Board people before us. They were helpful in pointing out that the reason why, when we look in these estimates, a particular name of the department is used. It’s the legal name for the department even though you are starting to use another name. In your presentation to us, you’re using the current name that isn’t a legal name, but is a successor to the legal name. Department of Crown-Indigenous Relations and Northern Affairs legally changed its name from the Department of Indian Affairs and Northern Development. There is also another department of Indigenous Services.

Can you tell me if all the money from Indian Affairs and Northern Development was moved over to the new department of Crown-Indigenous relations? What about the other department of Indigenous services and that appropriation?

Ms. Boudreau: Thank you for the question. You are right. There was a split of the two departments back in November 2017. The former department, Indian Affairs, was split into two: Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada. Everything that has to do with services to the First Nation was kept in Indigenous Services Canada. For all the original operations, education and social assistance, all the money we got was transferred to Indigenous Services Canada.

The amount of money that we kept pertains to the reconciliation we undertake with the Indigenous peoples, including the First Nation, the Metis and the Inuit.

Senator Day: Thank you. Those two departments continue to exist separately.

Ms. Boudreau: That is correct.

Senator Day: You’re here representing one of the departments.

Ms. Boudreau: That is correct. I’m representing Crown-Indigenous Relations and Northern Affairs Canada.

Senator Day: National Defence, if you could help us in this internal NATO transfer. It’s going from a vote 1a, $41 million, which I understand to be operating in salaries, to a vote 10a. Why is it going to the different vote, and just explain to us a little bit about that?

Ms. Crosby: For as long as I have known, at least, it is really a mechanism to pay our share of the common services to NATO, the mechanism being a granting contribution. Of course we have different colours of money and different votes. You’re right that vote 1 is the operating money. We go into that bank account, we transfer it into vote 10, which is grants and contributions, so that we can pay, and that’s the way we pay our contribution to the common services. In supplementary estimates, it’s not a request for a new fund, just to change the colour of the money.

Senator Day: You’re moving it out of operating to a grant or contribution, which is our share to the common fund for NATO. But that comes every year, and why would you put it in operating and then take it out? Why wouldn’t you have a line item for that on an annual basis? We know it’s going to be there.

Ms. Crosby: Yes. We have seen some evolution of what we are paying. We are still the sixth-largest contributor in terms of the common services contribution, but the actual amount that we pay varies for a variety of reasons. We have talked about other things going on on the political side, but we were also out of AWACS and back in.

As things change, we tend to wait until we have a clear line of sight as to our contribution and then we adjust accordingly.

Senator Day: Just a comment that you’ll tuck away and bring up at the next meeting when you’re sitting there talking about what amounts should go in each line item.

It looks to me like there is funding available for members of the Armed Forces transitioning out of the Armed Forces to veterans. There is a significant amount for that line item in Veterans Affairs and an equally significant amount from National Defence. Are you getting together on this? Are you duplicating? Can you reassure me that this money is going where we want it to go — to the veterans and their families?

Ms. Crosby: I will clarify that this particular request in Supplementary Estimates (A) is specifically meant to go to the team of folks at Defence who are supporting current CAF members as they are rehabilitating and transitioning one way or the other. The vice can explain more broadly how we do collaborate with VAC and others to make sure that there is a seamless gap in terms of transition.

Lt.-Gen. Lanthier: On average, there are about 8,000 to 9,000 people who transition out of the Canadian Armed Forces every year. Some are regular force, some are reserves and some are the cadet organization known as the “COATS.”

The transition group administers and takes care of making that transition smooth. Some are easy to transition and others will be released under medical releases because of a medical condition caused by service or not by service.

When this happens, in the CAF transition groups, there are a series of units across the country that administer and take care of those people working very closely and, in many places, co-located with the VAC services office to ensure a very smooth transition between the service life and the transition to civilian life.

Senator Day: Thank you.

Senator Tannas: Ms. Boudreau, following on what another senator asked, my understanding is that CIRNAC and Indigenous Services were formed out of the old Indian Affairs and Northern Development; so it was split in two. But as part that reorganization, the expenditures in Health Canada found their way into one or both of your departments; is that right? That’s why we see that it looks like Health Canada’s budget shrunk. It wasn’t because they were doing a great job of saving money; it just got sent somewhere else. It’s all now in those two departments; is that right?

Ms. Boudreau: A sector of Health Canada was transferred to Indigenous Services Canada, and that portion is called FNIHB — First Nations and Inuit Health Branch.

Senator Tannas: I was doing some math and saying that the amount of the budget shrinkage year over year, when I’m looking at the amount of money being spent by both departments, if you add them together, it’s $18 billion. When I look at taking the total reduction of the budget of Health Canada plus the two old departments, 17-18, it looks like that was about $14 billion. We have ramped up spending in the Indigenous section significantly over the last while. As a member of the committee, I’m pleased about that.

That’s a lot of extra money, and I want to make sure — and I think Canadians want to make sure — that gets into the hands of Indigenous people and doesn’t support a bloated bureaucracy in Ottawa.

Can you give us any figures you have with respect to a head count in your own department from the day that you came into existence as CIRNAC until now?

Ms. Boudreau: I have an employee head count by department, November 2019; so for CIRNAC, the amount is 1,959; and for Indigenous Services Canada, we have 6,356. The total amount in November 2017, prior to the split, was 5,160.

Senator Tannas: That didn’t include the Health Canada people?

Ms. Boudreau: You are correct. Unfortunately, I do not have the information here for Health Canada, but I will be —

Senator Tannas: Would you be able to? That would be a nice baseline for us to work from is what is the combined 5,160 plus the Health Canada FTEs that were transferred over, and then we can compare that with what is now over 8,000 people.

Ms. Boudreau: I will get back to you.

[Translation]

The Chair: Ms. Boudreau, could you send that information to our clerk? Thank you.

[English]

Senator Loffreda: Thank you for your presentation. A question for National Defence, and to follow up on Senator Day and Senator Smith’s question. You need $47 million for an expanded team for National Defence. There is a lot of talk about that at the NATO meetings. Demographics is more and more of a challenge for corporations across Canada with respect to succession, recruitment and retention.

Does that pose a problem for the Canadian Armed Forces? The $47 million requested, is that to solve some of those issues or additional national and international deployments?

The EV incentive program, which is clearly popular with Canadians — there are 31,000 claims in six months, which is obviously why you are asking for more funds — as it stands now, is this fund unlimited? Is there a limit of claims the government will accept before it ends the program? Or is there no end in sight? With this subsidy, is there a way of evaluating the cost per tonne of GHG eliminated? This was in line with what Senator Tkachuk was trying to get at, right?

I have a note that on the Canadian website, out of 14,000 claims, it is anticipated that we will reduce emissions by 36,000 tonnes, or 429,000 tonnes over the expected life span of these vehicles.

Lt.-Gen. Lanthier: On average about 40,000 to 50,000 Canadians apply to join the Canadian Armed Forces a year. We recruited 10,118 last year. Out of those numbers, our effective strength will be growing. The Canada Defence Policy published in June 2017 will grow the regular force from 68,000 to 71,500. It will grow the reserve from 28,500 to 30,000, and we will grow the public service sector by 1,050. That growth will take place over a number of years.

We have been asking for this year to grow the regular force by 350, the reserve by 150 and the public service — I don’t have the exact number — I think it was also 150. I would have to come back to you.

Those funds aim to do two things. The first is that planned growth of the Canadian Armed Forces and the public service is also related to the O&M to train and retrain. When you add a soldier to the Canadian Armed Forces, it comes with a training and education bill. That’s what the money will be for.

The Chair: E-vehicles?

Mr. Pilgrim: As of today, the Government of Canada will continue to operate the ISEF program until the existing funding is exhausted.

For Transport Canada we have $300 million, of which we have asked for this year it will be $236 million of the $300 million we will have asked for in this fiscal year, leaving $65 million for next year. When that is exhausted, the government will review the strategy going forward. Should it be renewed in a different form? Is it working? Emission savings for the country versus cost and so on and so forth. Unfortunately, we don’t have the data with us on costs versus tonne, what it is costing us to implement this program versus the savings and emissions.

The Chair: Are you can you provide us with the data, Mr. Pilgrim? Thank you.

Senator Tkachuk: Can I ask a supplementary?

When you talk about the number of vehicles this would affect, I think we talked about a number of 3 per cent. Was that 3 per cent of new vehicles purchased?

Ms. Marisetti: Yes.

Senator Tkachuk: What would the percentage be of total vehicles on the road?

Ms. Marisetti: I would have to come back to you. I don’t have that.

Senator Tkachuk: That’s an important question.

The Chair: Thank you. You can provide the information, please? Looking at the clock and the other witnesses, honourable senators, I would ask the following senators to ask only one question. Senators Deacon, Duffy and we’ll close with Senator Duncan.

Senator M. Deacon: Thank you and your team supporting you this afternoon for being here. It’s greatly appreciated. Very quickly, I hope, I’ll just ask one of the questions. When we talk about the 31 — transport, is where I’m going, talk about $31 million for the Green and Innovative Transportation system as listed to address the Indigenous priorities in the Trans Mountain Expansion Project. Certainly it’s one of the bigger-ticket items, and what I’m wondering about is what you have learned or are learning in the consultation process and what might be taking up the big chunk of that amount of money, so we can have a sense. We hear bits and pieces, but perhaps if you could let us know that. I’ll leave my other question.

Ms. Marisetti: As you are probably aware, to implement the Trans Mountain expansion, a number of departments were funded. The main departments being transport, National Resources Canada, and Department of Fisheries and Oceans and Environment Canada. Through the consultation process that you had with Indigenous groups, a number of issues were raised around what was important to them, and where we were with the project would infringe on some of their rights. As a result, what came up was what — the plan was to implement a certain number of accommodation measures which would address the issues raised by mainly Indigenous communities in the area, as well as other issues that were identified.

They were in the area of marine. In the area of marine, one of the things we heard was the impacts on the southern resident killer whales. A big investment or the accommodation measures is about initiatives to reduce the noise, underwater noise, in the Salish Sea, which is one of the big determining factors for the survivability and recovering of the southern resident killer whales.

Senator M. Deacon: Anything else?

Ms. Marisetti: Another big-ticket item we heard from industry groups was their own safety on the water. So along with that, to respond to that, there are initiatives like the Enhanced Maritime Situational Awareness, marine safety equipment. The Coast Guard has a similar program. The third thing we heard from the Indigenous groups was they wanted to be involved in co-developing some of the responses towards marine safety and any incidents that may occur. To that end, the Coast Guard is also implementing some of the initiatives around co-developing a community response to incidents. But this —

Senator M. Deacon: I think we’re out of time. Thank you.

To the chair, I’m wondering if I could ask to be added to Senator Duncan’s list about the where theme, where the $813 million for Northern Transportation Adaptation, where is the focus on that? If I could add that to her list earlier, I would greatly appreciate that. Thank you.

The Chair: You could provide the clerk, please, with the information? Thank you.

Senator Duffy: Thank you, Mr. Chairman. My question is for the Department of National Defence relating to the funding for the definition phase of the Hornet Extension Project. When you look further down the page, you see funding for the definition phase of the Canadian Surface Combatant project, which is ships. The ships are $3.1 million and the definition phase of the Hornet Extension is $26 million. If we’re defining as opposed to buying hardware — well, please explain to me the difference, and why is there such a variation between the amount of money it takes to define our combatant ships, compared to the Hornet Extension?

Mr. Crosby: Thank you for the question. One is a matter of timing. In the case of Canadian Surface Combatant, this is incremental funding over funding that was already provided for the definition phase, whereas for the Hornet Extension Project or the Remotely Piloted Aircraft System projects, also in definition, they were approved during the year. This is new money. During the definition phase, we’re really focused on clearly defining the requirements in a way that can be brought into a request for proposals. In the case of the Canadian Surface Combatant, we have a contract. It’s for the design of the ships which will go on for some period of time yet. But in a competitive process, like the Remotely Piloted Aircraft System, we are really developing the request for proposals.

Senator Duffy: I look at the Hornet, $26 million, surely we know what the mission is and so on. We have been flying Hornets for too many years. I don’t understand why a redefinition would be so expensive and take so long.

Mr. Crosby: During the definition phase, the costs that we’re incurring are generally associated with salaries for the staff involved in the work, as well as travel and other costs, such as that.

In the case of the Hornet Extension Project, the teams are looking at the requirement as well as the procurement methodologies that will be followed. We’ll be working with the United States government in some cases for foreign military sales cases. Those have to be developed so we can submit them. There may be some other elements that will be competitively acquired, and the request for proposals will have to be developed for that.

Senator Duffy: Are we doing something similar to the F-35? My final question. Just yes or no. Or is the F-35 now off the board?

Mr. Crosby: Our contributions toward the F-35 memorandum of understanding right now are simply to remain in the MOU.

The Chair: Thank you very much for sharing and answering the questions to the committee.

(The committee adjourned.)