Senate Committee on National Finance met this day at 3:30 p.m. to study the
Supplementary Estimates (A) for the fiscal year ending March 31, 2020.
Mockler (Chair) in the chair.
My name is Percy Mockler, senator from New Brunswick and chair of the
committee. I wish to welcome all of those who are with us in the room and
viewers across the country who may be watching on television or online.
I would also like
to remind our viewers that committee hearings are public and available online on
the website at sencanada.ca.
senators, I would like to ask each senator to introduce themselves.
Forest: Éric Forest, senator representing the Gulf division, in Quebec.
Duncan: Welcome. Pat Duncan from Yukon.
Loffreda: Welcome. Tony Loffreda, from Montreal, Quebec.
M. Deacon: Hello. Marty Deacon, Ontario.
Good afternoon. Mike Duffy, Prince Edward Island.
Tannas: Scott Tannas from Alberta.
Peter Boehm, Ontario.
Larry Smith, Quebec.
Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Tkachuk: David Tkachuk, Saskatchewan.
Joseph Day, New Brunswick.
I’d now like to point out that with us today are committee clerk
Ms. Maxime Fortin and our two analysts, Alex Smith and Shaowei Pu.
Together, they support the business of the Standing Senate Committee on National
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, keeping in mind the acronym TAP: transparency, accountability and
continue our consideration of the expenditures set out in Supplementary
Estimates (A) for the fiscal year ending March 31, 2020, which were
referred to this committee by the Senate of Canada on December 5.
For the first
part of the meeting, we welcome officials from two departments. From Global
Affairs Canada, we welcome Mr. Arun Thangaraj, Assistant Deputy Minister
and Chief Financial Officer. Thank you for accepting our invitation.
He is accompanied
by Shirley Carruthers, Director General, Financial Resource Planning and
We also welcome,
from Veterans Affairs Canada, General (Ret’d) Walter Natynczyk, Deputy Minister.
He is accompanied by Sara Lantz, Acting Assistant Deputy Minister, Chief
Financial Officer and Corporate Services Branch; and Rick Christopher, Acting
Assistant Deputy Minister, Service Delivery.
Welcome to all of
you. You will make presentations. We will start by recognizing General
Natynczyk, to be followed by Mr. Thangaraj.
Natynczuk, you have the floor.
(Ret’d) W. J. Natynczyk, Deputy Minister, Veterans Affairs Canada: Thank
you, Mr. Chair.
senators, it is the role of Veterans Affairs Canada, or VAC, to serve all our
veterans. The department supports the well-being of veterans and members of the
Canadian Armed Forces and the Royal Canadian Mounted Police, and their families.
We also promote recognition and remembrance of the achievements and sacrifices
of all those who served Canada.
department provides well-being services and benefits to our 189,000 clients.
To meet the needs
of today’s veterans, our programming has evolved. We take a holistic approach to
maintaining the health and well-being of veterans over their lifetimes. We
define “well-being” as having purpose, financial security, safe housing, good
physical and mental health, suitable family support, integration into their
communities and ensuring veterans are proud of their identity and legacy.
Veterans Affairs Canada has seen a significant increase. We have seen more than
60 per cent in all of our disability applications, and that includes
an increase of more than 90 per cent in first applications. Those
applying for benefits could be new to the department or already receiving
support for other conditions.
veterans’ needs, more than 93 per cent of the department’s overall
budget goes directly or indirectly to veteran benefits. These expenditures
include core programs such as disability benefits, income replacement,
rehabilitation benefits, caregiver recognition benefits, support services and
key objective of the department’s Vancouver Principles contribution program is
to ensure that there are always sufficient funds in the budget to pay for its
benefits and services.
has also responded to the increase in applications by simplifying and
consolidating benefits, adding and training staff, integrating functions and
digitizing the decision-making process. With a continuing backlog, however, we
clearly still have a way to go.
To expand on the
notion of digitization, the department offers an easy-to-use web portal,
developed with input from veterans, to make it easier for veterans to get
information on their own files, benefits, services and all other interactions
with the department. It’s called My VAC Account, and we’ve recently surpassed
over 100,000 users on the system, including veterans, serving members of the
Armed Forces and RCMP, and family members.
To meet the
increasing demands for processing applications for benefits and front-line
staff, over the past four years the department has hired close to 500 additional
social workers, nurses, occupational therapists and administrators to provide
services directly to veterans and their families.
enduring financial security for the ill and injured, the government implemented
the Pension for Life program on April 1 of this year. These programs
recognize and compensate veterans for disabilities resulting from a
service-related illness or injury.
receiving the Income Replacement Benefit while on treatment or vocational
rehabilitation training may choose to earn some income. Veterans are encouraged
to earn up to $20,000, which they can keep as additional income. Veterans
releasing from the Canadian Armed Forces with at least six years of service may
also pursue education and training through a new benefit or seek civilian
employment leveraging Veterans Affairs Canada’s Career Transition Services
programming provides recognition to the caregivers of the most seriously
injured, and enables families of medically released veterans to have access to
the Military Family Resource Centres on all the Canadian Armed Forces bases.
is also key to the well-being of veterans. Our view is that one homeless veteran
is one too many. The Veterans Emergency Fund was created to assist veterans in
dire need. The department works with a number of partners to prevent
homelessness and to find, inform and assist veterans towards adequate shelter
and treatment, and allow them to find their new normal.
In addition to
providing these benefits, we have a duty to honour the service and the
sacrifices of the men and women who serve in the Canadian Armed Forces. This is
where our commemoration program plays an essential part of our mandate to
support veteran identity and well-being.
Over the past
year, the department commemorated the seventy-fifth anniversary of D-Day and the
Battle of the Scheldt, and the delegation from the seventy-fifth anniversary of
the Italian campaign just returned home on Friday. All of these activities serve
to strengthen the connection from our distinguished veterans to the youth of
Canada, reinforcing the tradition of service in our nation. With that context in
mind, I will turn to the supplementary estimates.
important to understand that the department’s budget fluctuates each year due to
the demand-driven nature of its programs and services. The client forecast is
updated each year to ensure that all veterans who come forward receive the
benefits to which they are entitled.
are only incurred for veterans who in fact qualify and utilize the programs and
services to support their illnesses and injuries. Program budgets may only be
used for the purpose for which they are intended and not reallocated.
total planned spending this fiscal year, including these supplementary
estimates, is approximately $5.3 billion. These supplementary estimates have
increased our current fiscal year budget by $857.6 million.
The increase in
the department’s budget through these supplementary estimates is a direct result
of the demand-driven nature of VAC’s programs, which is based on veterans’ needs
and entitlements. We have experienced a significant demand for Pension for Life
programs, which forms the largest portion of our supplementary estimates
has put a great deal of effort into informing veterans of the benefits offered
through the initiative My VAC Account. This initiative has been a significant
driver for the increase in applications, and we now recognize that veterans are
more aware of the benefits they are entitled to receive.
members of the Canadian Armed Forces dedicate themselves to the safety and
security of Canada. Our department is committed to honouring their sacrifice,
commemorating their service and supporting their well-being throughout their
life after service.
We’d be pleased
to answer any questions that you may wish. Thank you.
Thangaraj, Assistant Deputy Minister and Chief Financial Officer, Global Affairs
Canada: Thank you for the invitation to be here. It’s always a pleasure to
be before you. I will make a couple of brief opening remarks, after which I’ll
be pleased to answer your questions.
Over the past
year, Global Affairs Canada has advanced Canada’s foreign policy, trade and
development interests internationally to support a peaceful and open
international order and to secure for Canadians a strong economic future.
To ensure that
financial resources are well managed in the delivery of programs, the department
has internal controls and effective oversight mechanisms in place to safeguard
resources while maintaining flexibility, managing risk and ensuring resources
are allocated to the highest priorities.
Canada has a
unique role to play in addressing the most daunting global challenges. The
increase in funding requested in Supplementary Estimates (A) will ensure that
Canada continues to make a real and valuable contribution to a more peaceful and
has requested a funding increase of $566.6 million, bringing total proposed
authorities to $7.41 billion to date.
The main items in
these supplementary estimates include $296 million to support initiatives that
significantly reduce greenhouse gas emissions in line with developing countries’
needs and plans; their adaptation projects, particularly for the poorest and
most vulnerable, including women and girls; and mobilizing new private sector
capital for climate action in developing countries.
million will be allocated to our crisis pool resources, to help Canada provide
emergency food aid, health care, water supply and sanitation services, shelter
and protection to some of the most vulnerable peoples in the world.
From our crisis
pool resources over the past year, the department has been able to respond
quickly to provide services to the Rohingya refugee crisis in Myanmar and
Bangladesh; to help meet the needs of communities in Yemen; and provide urgent
humanitarian and development support to those impacted by the crisis in
Venezuela and the surrounding region.
responds to these complex emergencies through grants and contributions payments
to the United Nations agencies, the Red Cross movement and Canadian and
international non-governmental organizations.
uses a rigorous risk and threat assessment framework to ensure that new funds
are distributed to the missions and regions faced with the greatest and most
Canada is also requesting funding of $56.9 million to support our Feminist
International Assistance agenda through the establishment of innovative
Assistance Innovation Program will give Global Affairs Canada greater
flexibility with its development programming by enabling it to engage with and
mobilize the resources of the private sector in support of the Sustainable
Development Goals. It will allow the Government of Canada to make investments
that seek to expand the reach of markets to benefit the poor and most
vulnerable, and that have the potential to reduce inequalities and promote
women’s economic empowerment.
Loans Program will, on a bilateral basis, provide loans to governments of
countries eligible for official development assistance to spur economic
development and improve the lives of the poor.
will allow Canada to facilitate greater private and public investment in
sustainable development by increasing flexibility for new and existing
will also advance Canada’s Feminist International Assistance Policy by applying
a gender lens to all investment decision-making and ensure that Canada remains
at the leading edge of development financing.
The department is
also requesting funding of $21.3 million to support Canada’s participation at
Expo 2020 in Dubai. This event offers an important opportunity to showcase
Canada to the world, bringing together 192 countries and international
Expo 2020 will
allow Canada to promote itself as a destination of choice for trade, investment,
tourism and culture to millions of international business and leisure visitors.
It will serve as a platform to demonstrate Canadian innovation and increase
exposure to global markets, as well as establish and build on existing business
and cultural relationships, which can, in turn, open doors for Canadian
companies of all sizes so they can compete and succeed in thriving markets
Canada will continue to deliver integrated foreign affairs, trade and
development policy and programs to renew and strengthen the rules-based
international order and confront challenges facing our world today in a manner
that exemplifies Canadian leadership.
Mr. Chair. I look forward to your questions.
Marshall: Thank you. My first question is for Veterans Affairs Canada. In
your opening remarks, you talked about the increase in applications. How many of
those are successful? When I look at the increase in funding for the grants and
contributions, it’s quite a significant increase. How many more veterans would
there be on the rolls? Is the increase directly attributable to an increase in
the number of veterans? Weren’t the programs changed last year? Is some of the
increase attributable to changes in programs?
Natynczyk: Some of the applications are from folks who have already had a
previous claim with the department and some are new claims coming in through the
front door. That’s why I mentioned we had a 90 per cent increase in
first applications and an overall 60 per cent increase in all
I’ll ask my
colleague Rick Christopher to go into detail.
Christopher, Acting Assistant Deputy Minister, Service Delivery, Veterans
Affairs Canada: To be clear, the increase in first applications is somebody
coming to the department for the first time for that particular condition. It
doesn’t necessarily mean they’re not known to the department. It means it’s the
first time they’re coming to the department for this particular disability,
The other thing I
should point out is that the disability program, or the Pain and Suffering
Compensation program, is the gateway to other programs. It’s the main gateway to
treatment. Once somebody receives a positive decision for a particular
condition, they’re eligible to receive treatment for that particular condition.
Not only is it the pain and suffering compensation that’s the cost, but also the
associated treatment for that condition.
Marshall: If we’re looking at that $676 million, are you able to tell us how
many additional veterans are receiving assistance? It’s possible those veterans
are already in the system and they’re accessing additional programs or funding.
I’m just trying
to get a handle on this. I know you’ve said the applications have increased.
Natynczyk: More veterans are coming forward, and we actually know how many
new applicants there have been in the current year. Veterans are asking for more
services. But there is a new dimension. This Pension for Life, which we started
on April 1, allows the veteran the option between a monthly payment for the
rest of his or her life, or the lump sum.
When the costers
and the people from Finance did their estimates, they believed that, based on
the financial information — the financial benefit — most would choose
the monthly benefit; below 50 per cent would go for the lump sum.
We only have six
months’ of experience right now, and this last month we’re showing that
56 per cent are actually choosing the lump sum. So, again, a lot more
money is required up front as opposed to being profiled over the rest of their
life. This is a bit of learning with this new dimension. The costers believe
that folks would make the most rational financial decisions, but people want to
pay mortgages; they want to pay off whatever, and so they are asking for more
Marshall: In terms of the request for additional funding, for the Toth class
action settlement agreement, there is $100 million. Was funding asked in a
previous year or will there be additional funding requested in a future year? Or
is this one shot and that’s it?
Natynczyk: I’ll ask my colleague, Sara, to answer that.
Acting Assistant Deputy Minister, Chief Financial Officer and Corporate Services
Branch, Veterans Affairs Canada: It’s my understanding that this is the one
year for the $100 million settlement.
Marshall: How many veterans would have been impacted by that?
Mr. Christopher: I don’t have a number. We can provide
that. It’s a fairly large number of veterans. This was the class action that was
related to pension income being offset against other benefits, so there would be
a fairly large class there.
Marshall: Could you get us that number and provide it to the clerk?
Mr. Christopher: Absolutely.
Marshall: The funding to correct the indexation of the disability pension,
is that the issue that was in the news last year about veterans who were
incorrectly paid and the minister said these individuals would have to wait
until, I think, 2020 for the funding? Has everybody been paid? That’s it, $65
million? Or is there more to come?
Natynczyk: The total amount to correct the indexing error is $165 million.
So the $65 million is in-year, and payments have already started to roll out in
this regard. To remind folks, in about 2001 the tax act changed, and the pension
indexation is based upon the better of either the Consumer Price Index or a
calculation involving workers’ income in the country. The tax act changed in
2001, and that change was not applied for the pension indexation between 2003
and 2010. Sara, do you want to add anything there?
Marshall: When will the other $100 million be paid out? I think there was an
issue about the veterans having to wait. Some have been paid, but some are still
Ms. Lantz: This year we are tackling the living, and that
is about 88,000 of the 270,000 clients impacted; and 60,000 to date have been
paid automatically through the system. The other 28,000 will probably need some
manual intervention because of the complexity of their calculations. We’re
reserving $100 million next year for the estates, so estates will have to come
forward to apply.
Marshall: When do you think they’ll all be paid out?
Ms. Lantz: At this point we’re predicting March 31,
2021, but most of the living should be paid this year.
Marshall: So it’s a little over a year. Can you talk about the backlog?
That’s been a recurring issue. Are you making any progress with it? I notice you
said more staff have been hired, but what’s the progress on the backlog?
Natynczyk: We are pulling out the stops to deal with the backlog. I’ll ask
Rick Christopher to talk to it in a moment, but basically we’re changing the way
we’re making decisions, trying to streamline it by integrating functions; our
digital reach into the Canadian Armed Forces for medical records; working with
Library and Archives to expedite access to medical and service files that are in
their records; trying to decentralize and create additional capability in
Montreal. I’ll turn it over to Rick to fill in the blanks.
Marshall: I’d be interested to know the average wait time for an applicant
before a decision is made.
Mr. Christopher: The average wait time currently stands at
Marshall: Thirty-nine weeks? That’s high.
Mr. Christopher: As the deputy said, we’re pulling out all
the stops, attacking this from a number of fronts. We brought on a lot of
additional staff to deal with these files and we got a lot of additional
My VAC Account,
which the deputy mentioned in his opening remarks, is a way we can ensure that
the applications that come in are complete. One of the challenges we have is we
are happy to accept applications that don’t have all the information we need to
make the decision, so then we have to go back to the applicant and touch base
again with several calls to make sure we get what we need.
The other thing
is around integrating the teams and reducing the number of hand-offs. A lot of
expertise is required to adjudicate some of these applications. We found that
time is being wasted in hand-offs. We’re getting people together and making sure
we have the right amount of expertise on the team to make the decision then and
We’ve seen that
if we have a completed application that goes to one of these teams, the average
wait time is about 15 weeks, so it’s a significant gain. We’re moving that model
out across the country. We have five teams in place now and we’re reorganizing
the rest of the decision makers into that type of structure.
There is also a
lot we can do, and are doing, around the type of decision-making and the type of
evidence we require, so streamlining that whole process.
Thank you. Since General Natynczyk has heard enough from me over the years,
I’ll focus my questions on Global Affairs exclusively, and specifically the top
three items in terms of the number of requirements.
I attended the
Pacific Islands Forum in Tuvalu in the South Pacific in August. This was a
meeting of leaders of 18 governments, and Canada is a member of the partner
dialogue there. A lot of appreciation was expressed for our commitments to the
Global Environment Facility, to the Green Fund and the like. I’m assuming that
the $296 million is in fact another instalment in the $2.65 billion that was
announced in 2015 out of the Paris Agreement.
interested — and maybe the question is more in this area — in the burn
rate, how much of this is actually being used and whether we see the results
being taken up in both adaptation and mitigation measures on climate change.
That’s one. I know it’s a hefty commitment.
Secondly, on the
Crisis Pool Quick Release Mechanism, I think the past year, as you indicated in
your remarks, was difficult because of the Rohingya pressure as well; the
displaced people out of Venezuela, too; and, of course, the unpredictability of
natural disasters when the appeal comes from the UN and the other agencies.
I’d like to know
whether more is coming in terms of match funding. I know this has been tried in
the past to set up a goal and have Canadians match that, because all across the
country there are people who are very generous, from church basements to unions
My last point is
on the increased amount for the Feminist International Assistance Policy and
programming there, and whether more is going, as was the original intention, to
the bilateral and grassroots areas; and, as we look at sovereign loans and the
multiplier effect that development finance institutions can bring, including our
own, whether that in fact is coming into practice.
Mr. Thangaraj: Thank you, senator, for those questions. For
the first one on climate financing, this requested increase is indeed part of
our commitment against the $2.65 billion that was announced in Paris. That
commitment ends next year and we are well on the way to disbursing almost all of
that. I think there is a small amount left next fiscal year for that
investment or working with our partners in development banks is the first
element of this. We want to make sure that funding is actually deployed. We are
seeing initiatives being deployed, for example, to the fast-start program for
climate change for Asia; that is the second tranche of funding we did with the
Asian Development Bank. They have funded, for example, a floating solar panel
project in Vietnam. We are seeing climate adaptation projects in Indonesia and
other countries, so we are starting to see those things deployed.
What we are also
seeing with this specific tranche of funding is, as you said, the Small Island
Developing States for agriculture and sustainable forestry, so the $2.65 is
covering the elements of that initial commitment, and we are starting to see
results come in.
horizon tends to be about seven years. We are in year two or three of those
investments, and we are starting to see those come in.
With the Crisis
Pool Quick Release Mechanism, as you said, there has been a steady uptake or
demand for humanitarian resources. If I recall my figures correctly, last year
we spent $897 million of our overall budget on humanitarian, and we’re on track
to do the same this year.
A component of
that is, again, working through UN organizations. There are often appeals for
some of the protracted crises like we have in the Middle East and Yemen.
Venezuela is one that is emerging.
With respect to
the matching fund, the decision to use that instrument where we, as a
government, will match funds depends on the nature of the event or the crisis.
For example, the one in the Philippines for Typhoon Haiyan was the last one I
believe we did use, and it was successful. The decision to use that mechanism is
dependent on the circumstance, usually for natural disasters.
With respect to
the move to more grassroots or non-governmental organizations, the percentage of
our aid disbursement through those partners is holding steady around 20 to
21 per cent, depending on the year.
We have made
targeted investments, for example, for small- and medium-sized organizations, or
the $100 million initiative specifically for small- and medium-sized Canadian
organizations working in international development. As well, there was an
initiative of $150 million for women’s voice and leadership to support
grassroots women’s organizations in developing countries.
On top of that,
we are looking at our programming reflexes, so that the decision is not just the
usual suspects, but also whether we can use local non-governmental organizations
in-country, again, given the local knowledge of that. We do track and monitor
the percentage that we disbursed through various channels, including
non-governmental organizations. Part of the increase announced in Budget 2018
was to increase that percentage.
Tkachuk: I have two questions. One is on an existing program, and one is on
what I think is a new program, but I’m not sure. It’s just a follow-up on what I
asked the Treasury Board people on the $2.6 billion.
This is for
Global Affairs in developing countries tackling climate change over five years.
What have the results been of that initiative? Can you give me an example of
what initiatives are undertaken and how effective they have been in addressing
Mr. Thangaraj: Thank you very much, senator, for the
question. I’ll refer you to a couple of specific examples. The results for the
$2.65 billion commitment are reported on Environment and Climate Change Canada’s
website and published annually. As part of every investment that we make, we
have a results framework that goes into the agreement, and we require our
partners to report on that.
For example, if
we look at just phase one of our climate financing and the tracking that we have
done, we have abated about 138,000 tonnes of carbon dioxide through our
Tkachuk: Give me an example. I’m sure when you send a cheque it doesn’t
abate the emissions. You must give it for something.
Mr. Thangaraj: Absolutely. There is the example I used
previously with Senator Boehm of a floating solar panel farm in Vietnam. We are
doing, for example, a project in Sri Lanka. It is rooftop solar panels to enable
a supply chain within the agricultural supply chain, as well as supermarkets, to
reduce greenhouse gases.
We do a lot of
work with the agricultural sector in Indonesia. There is a hazelnut plant that
uses climate adaptation techniques to minimize the use of water. I have a couple
others, but I can provide you more specific examples with the equivalent
greenhouse gas reductions for those.
Tkachuk: These programs seem so nebulous. Where do they come from? How do
you find out about a grocery store in Indonesia, or whatever? Does someone make
an application? Do you get a sound alert? Gee whiz, you’re giving off too many
GHG emissions, so let’s jump in like Superman and solve their problem with a
solar panel, or what?
Mr. Thangaraj: We work through multilateral development
banks. We provide them a concessional financing facility for projects that would
be in Indonesia or Vietnam or any of those countries where a private sector
organization can come forward and secure funding for these initiatives. When the
multilateral development bank screens those initiatives, they look at whether
this project will actually spur climate change results that are measurable.
They’re loan programs or incentive-based financing programs. Will the partner
that they are working with be able to repay the loan or the financing that they
Tkachuk: I’m not happy with what was asked and answered, but I’m going to
try another one. I’m asking about the $175.6 million in the Department of
Foreign Affairs, and I already got an answer to that about why it’s called that
rather than Global Affairs Canada. I don’t know why it’s identified to address
political upheaval. It’s $175.6 million in the estimates. I’m not sure if that’s
to instigate it or placate it. What does that do? What is that about? What do
you mean by “political upheaval”?
Mr. Thangaraj: Many humanitarian crises are triggered by
natural disasters; for example, a typhoon or an earthquake where a humanitarian
response would be warranted.
There are others
that are triggered by political instability. For example, in Venezuela, there is
a significant refugee crisis in the surrounding region for which humanitarian
assistance is required, but the trigger of that was political instability. These
funds are to respond to events in a quick manner, and one of the triggers is
Tkachuk: Is any of that targeted towards Hong Kong?
Mr. Thangaraj: No. These funds are for official development
assistance eligible countries, so it would not be for that crisis.
Tkachuk: Thank you.
Forest: Thank you for the information. I have a question about Global
Affairs and the envelope for the crisis pool quick-release mechanism. First, how
were budgets and votes evaluated? Was it based on previous years? Also, this
amount is distributed almost at random. What criteria do you use to determine
where and the extent to which you intervene?
Mr. Thangaraj: The funds that are requested in these
supplementary estimates are allocated to Global Affairs to enable it to respond.
In our overall budget, we spend, on average, $800 million to $900 million per
year for humanitarian assistance and, again, on some of those crises that I
spoke of earlier.
What this amount
allows us to do is, in the event our resources are insufficient to respond, to
have access to these funds; we have requested an additional $176 million to
respond to those. The decision on allocation is based on humanitarian
principles: where the need is greatest and where we can respond. Those are
internationally agreed-upon standards. So our response is based — again, we
work through the United Nations system. They have a consolidated appeals process
where humanitarian needs are amalgamated and there is burden-sharing amongst the
initiatives for which the government has placed a priority for humanitarian
responses. For example, in the Middle East, the government in the last budget
committed funding for the next two years to respond to that protracted crisis in
that region, as well as the three-year commitment for the Rohingya.
By its nature,
humanitarian assistance is responsive, in contrast to regular long-term
development programming where you can plan for the next three to five years in
advance; whereas with this, this is largely a responsive mechanism.
Forest: As I understand it, there are two decision-making levels. There is
one decision founded on universally recognized criteria Canada uses to decide
whether or not to participate, but what was not clear to me was the extent to
which Canada participates. Is our participation tied to the security of NGOs on
site, or to the participation of other states in the crisis? Are there any more
specific factors against which you measure Canada’s degree of involvement?
Mr. Thangaraj: It is a mix of both. There is a burden share
where Canada will contribute its share based on the location of that crisis and
our ability to effectively respond. We do, in fact, look to see which of our
partners are on the ground, whom we can work through to ensure that aid is
delivered effectively. It is a combination of both of those factors.
Global Affairs, also known as the Department of Foreign Affairs, Trade and
Development, I wanted to ask you for a clarification of this Crisis Pool Quick
Release Mechanism that my colleague was asking you about. Have you already spent
the $175.6 million, and you’re asking to top up your special fund that you have
Mr. Thangaraj: It has not been spent. It is an amount that
we can access so that in the event, for example, we don’t have enough funds in
our regular budget to respond to a humanitarian crisis, these are funds that we
will have access to in the event we don’t have enough resources on our own.
It’s not just $175 million; it’s more than that, that you have.
Mr. Thangaraj: Again, in our regular humanitarian spending,
we spend from our regular budget anywhere around $700 million. In our reference
level, we have an amount that is set aside that we do not use unless our regular
budget is insufficient. This $176 million is a component of what is set aside
and reserved in the event we do not have —
It’s the component aspect I’m looking for. How much is it in total?
Mr. Thangaraj: How much total is set aside?
How much is set aside for quick release in a crisis?
Mr. Thangaraj: $375 million.
Thank you. We and Parliament have been involved in this in the past where we
have helped you develop rules as to when you can use and access those funds
without coming to Parliament first, and then you come. That’s what I was getting
to with respect to these particular funds.
Mr. Thangaraj: That’s exactly what these funds are. Instead
of using the supplementary estimates process, for example, if there is a crisis
when supply isn’t available, these funds are set aside in our reference levels
precisely for that purpose.
Okay. My other question goes to General Natynczyk and his team. First, to
set the stage for this, can you refresh our memories on the Toth class
action that has been settled for $100 million?
Natynczyk: Yes, sir, this is the settlement of the class action approved by
the Federal Court earlier this year. The class made the case that their pension
amounts should not have been offset by income provided from the department for
either the Earnings Loss Benefit or the Canadian Armed Forces SISIP Long Term
For a period of
time that actually dates back to 1983, there were certain portions in the past
where this was a gap where the funds had not been provided before. This class
came back and said that they were due that amount of money in terms of the
offsets. Rather than going through the full case, the government settled to the
tune of $100 million. But the bottom line is these were offsets from pension
benefits of Earnings Loss Benefit and Long Term Disability funds.
Thank you. We’re running down the time, but I did want to make this one
comment. I think your colleague mentioned $100 million with respect to the
application to Pension for Life.
Natynczyk: The Pension for Life program?
Yes. Let me congratulate you, first of all, for introducing the program. If
we had done that back when we brought in the Veterans Charter and gave them the
option, especially when you tell us over 60 per cent are opting for
the lump sum, it was just the fact that veterans didn’t have the option that
caused a lot of problems.
Natynczyk: It’s 56 per cent now, and we anticipate that it will
creep up to 60 per cent who will opt for the lump sum this year.
Again, the average age of release from the Canadian Armed Forces is about 37,
but the average age for people making an application to Veterans Affairs for
benefits is 60. So it is, again, that demographic and people doing their
Senator Tannas, did you have a supplementary question for Global
Tannas: Quickly, yes. Senator Day was asking about this number, and what I’m
hearing is that this number doesn’t really relate to anything yet, so how did
you come to $175,590,000? Did you pick it out of the air? How did you arrive at
that number? If you don’t know what you’re going to spend it on, how did you
come up with it?
Mr. Thangaraj: So the crisis pool has an up-to amount of
Mr. Thangaraj: $200 million sits in Global Affairs
reference levels and we can access up to $400 million.
What happens is
that any unused portion in the previous year gets added, so the $175.6 million
was unused last year and is added to our reference level so that we can access
it this year. So, a maximum amount of $200 million — if it’s unused —
can be carried forward or re-profiled into future fiscal years, which is what
you see here.
Tannas: It is refilling a pool, which is I think what Senator Day was
asking. Okay, thank you.
Mr. Thangaraj: Yes.
Thank you, Senator Tannas.
Thank you for that clarification.
Duncan: I will forego my question and submit it in writing, Mr. Chair,
in the interest of time.
Thank you. We’ll send it to the officials in writing and you will respond
before Christmas. On this, we will conclude with Senator Duffy.
For Foreign Affairs, my follows up on Senator Tkachuk’s earlier question
about funding to help developing countries address the impact of climate change.
We’re talking about serious money here: $296 million. Does any of that money go
Mr. Thangaraj: Not directly. We don’t provide official
development assistance directly to China. They may be eligible to apply to
certain of these funding windows — for example, the Green Climate
Fund — but funding does not go directly to China.
Tkachuk: Does it go indirectly? You made a point.
Mr. Thangaraj: They are eligible to apply to
programs — for example, the Global Environmental Facility or the Green
Climate Fund — but whether they have access to either of those two, I do
not have that information.
Can you provide us with that information, please?
Mr. Thangaraj: Yes.
Ms. Lantz, you were saying there is $100 million next year that’s set
aside, or will be asked for, to look after the estates of veterans. I just want
to make the point with you that, in a lot of cases, the estates of veterans will
be aging women. You indicated that you will wait for them to make the
suggest that you make best efforts to try to find them? This will not be
something that the surviving spouse of a veteran will have on the front of her
list of things to do.
Mr. Christopher: Thank you for that point. When we talked
about the 88,000, which includes the surviving spouses who are living, both male
and female, of this veteran group, we’re contacting them directly.
The estates that
Sara Lantz was referencing would be where there is no dependent who is currently
being paid by Veterans Affairs or should have been entitled to some of that
additional money. This might be a situation where you’d have three children, for
instance, who would be heirs to the estate.
Honourable senators, we must bring this to an end, but before I do, the
chair will be tolerant and ask Senator Loffreda to have the last question since
he’s brand new on the committee.
Loffreda: I don’t want to delay everybody.
First of all,
thank you for your presentation.
is very important to Canadians. You made the point that 56 per cent
are choosing a lump sum payment over the Pension for Life, which was started in
April, and there is an increasing demand for services.
What are the
increasing demands and what services are they for? More importantly, is one of
those services financial education for some of those veterans to give them
support? I’ve met a few over the years, and sometimes they don’t access that.
I’m wondering to what extent they are being educated financially to make sure
they’re making the right decisions so they won’t come back years later and say,
“Hey, nobody advised me on choosing a lump sum payment,” and paying for their
mortgages and then realizing 10 years later it was the wrong choice.
Natynczyk: Those are great questions. The first part is we provide funding
for financial counselling for veterans. It’s their option, but we provide
funding for financial counselling before they have to make their decision. We
want them to have ongoing, lifelong financial security.
One of the
challenges is that from our data, 80 per cent of the disability claims
are for conditions of 30 per cent or less disability. In fact, the
biggest cause for a disability claim is for hearing and tinnitus. Over
37 per cent is for hearing and tinnitus, which is generally in that 10
or 11 per cent.
People are doing
the math and saying, as opposed to having a monthly payment of $50, they would
rather go for a lump sum.
Maybe I’ll ask
Rick to flesh that out.
Mr. Christopher: As an example, if I have a low level of
hearing loss and I’m a veteran, the way that the monthly amount works out is
around $57 as it currently stands — it is escalated every year — or
$18,000 as a lump sum. The decision is usually towards the lump sum in those
types of cases.
You did ask about
other programs. There is an increased demand for other programs. We do things
like vocational rehabilitation. If someone is leaving the service and they have
some challenges reintegrating, we do vocational rehab and a number of other
programs, not just necessarily health-related, but to get them established and
National Defence and Global Affairs, thank you very much for sharing
information and answering questions.
senators, we now welcome, from Canadian Heritage, Mr. Jean-Stéphen Piché,
Senior Assistant Deputy Minister, Cultural Affairs Sector. Joining him is
Mr. Éric Doiron, Chief Financial Officer and Director General, Financial
Management Branch. Thank you for accepting our invitation.
Services Canada we welcome Denis Bombardier, Senior Assistant Deputy Minister,
Chief Financial Officer.
With him is
Mr. Louis-Paul Normand, Senior Assistant Deputy Minister, Project
Management and Delivery —
— and Director
General, Cloud Services, Chief Technology Officer Branch, Mr. Dinesh Mohan.
I have been informed by the clerk that —
Mr. Bombardier will make his presentation —
— to be followed
by Mr. Piché and questions from the senators.
Mr. Bombardier, the floor is yours.
Bombardier, Senior Assistant Deputy Minister, Chief Financial Officer, Shared
Services Canada: Thank you, Mr. Chair. I am pleased to appear before
this committee to discuss Shared Services Canada’s 2019-20 Supplementary
Estimates (A). As you mentioned, joining me is Louis-Paul Normand, Senior
Assistant Deputy Minister of Project Management and Delivery, and Dinesh Mohan,
Director General of Cloud Services.
As members of
this committee know, Shared Services Canada delivers a range of IT services to
departments that support the delivery of government programs and services,
including email services, network services and call centres. This in turn
supports the delivery of programs and services to Canadians.
I’m pleased to
say that Shared Services Canada has made important progress. Over the last
number of years, we have closed over 230 outdated legacy data centres and opened
four state-of-the-art enterprise data centres that are more efficient, reliable
and secure. These enterprise data centres provide our partners with modern IT
infrastructure that improves the services and programs they deliver to
We were also
excited to announce a renewed agreement with Microsoft Canada earlier this year.
This agreement will provide 410,000 users in over 100 departments with a suite
of Office 365 tools that will enable them to deliver services to Canadians that
are timely and citizen-centred.
cloud brokering services have become a central part of the department’s work. It
has evaluated more than 200 cloud service requests from more than 50
departments. Cloud computing is a proven option for hosting data and
applications, offering greater flexibility, mobility and efficiency.
Turning to the
supplementary estimates, I would point out that Shared Services Canada is
seeking a total of $197.8 million for the Workload Migration Program and the
Cloud Architecture Program. These programs support digital service delivery to
Canadians, help modernize the government’s IT infrastructure, and aid in moving
applications from at-risk data centres to modern hosting solutions.
migration program in particular brings a strategic and standardized approach to
workload migration with federal partners. It is a critical process for our
partners. We work with them to prioritize their applications, ascertain their
readiness to migrate their applications and determine the best hosting
solutions, whether those are cloud or enterprise data centres or a combination
of the two.
the department is also looking to reprofile a total of $38 million: first, $30
million to continue to refresh and sustain existing IT infrastructure managed by
SSC, and $8 million to support the implementation of security solutions to
achieve cybersecurity objectives.
In the coming
year, we are putting a renewed focus on strengthening our IT infrastructure to
ensure it is secure and reliable, and responds to the needs of Canadians. These
investments and our ongoing initiatives will help improve the services Shared
Services Canada provides to departments and to Canadians. They will also support
the next phase of our department: SSC 3.0.
With SSC 3.0, the
department is focusing on an enterprise-wide approach for all of government to
build a modern, reliable and secure digital platform that meets the needs of
today and tomorrow.
SSC is making
important progress as it continues to evolve a modern and secure digital
government service delivery model in an ever-changing IT landscape.
This completes my
opening statement, Mr. Chair. My colleagues and I will be happy to answer
Piché, Senior Assistant Deputy Minister, Cultural Affairs, Heritage Canada:
Honourable senators, good morning and thank you for inviting us to speak to
you today. We are pleased to provide you with more information on the additional
resources requested through the 2019-2020 supplementary estimates. For Canadian
Heritage, this represents an increase of $68 million.
Please let me
review the main items in this budget. The government announced additional
funding of $60 million over four years, with $15 million starting in 2019-2020,
to improve its support for education in the minority language by further
supporting the provinces and territories.
2018, the government announced funding of $50 million over five years, with $10
million starting in 2019-2020, to support the production of original civic
journalism materials for underserved communities.
2018, the government announced funding of $47.5 million over five years,
starting in fiscal year 2018-19, and $9.5 million per year ongoing to expand the
use of sport for social development in more than 300 Indigenous communities.
2018, the government announced funding of $19 million over three years, starting
in fiscal year 2018-19, to address the challenges faced by black Canadians, with
$5.1 million planned for 2019-20.
reprofile of funds of $2.5 million from 2018-19, resulting from changes to the
terms of the community support, multiculturalism and anti-racism initiatives
program, is included in the amounts mentioned. Both elements represent a total
funding of $7.5 million is for the Harbourfront Centre to realize significant
improvements to its infrastructure and to its operations.
There is also
$6,383,746 in funding resulting from a carry-over of funds, as a result of
changes to the scope and timeline of the Grants and Contributions Modernization
Project. Following the 2018 fall economic update, the Government of Canada
announced that it would invest $14.6 million over five years, starting in
2019-2020, to support the creation, development and launch of a French-language
digital platform with TV5MONDE public broadcasters.
An amount of
$6,115,214 is included in these supplementary estimates. Funding of $1,762,625
is included in 2019-2020 to cover the additional costs of our partners, the City
of Ottawa and the Parliamentary Protective Service, for the safety and security
of Canada Day celebrations in 2019 on Parliament Hill.
$250,000 will support an awareness initiative piloted by Pride Toronto as part
of the fiftieth anniversary of the decriminalization of homosexuality. Funding
of $3,970,465 is linked to the modernized Youth Employment Strategy and
strengthening support for learning, as announced by the government to implement
the modernized Youth Employment and Skills Strategy as a horizontal
Finally, I will
conclude with these two organizations of the Canadian Heritage portfolio.
Library and Archives Canada will receive $3,380,002 due to a reprofile of funds
from 2018-19 to administer the class action settlement agreement on the LGBT
Purge. LAC is extending these funds to complete the work of retrieving the
personnel files and administering the protection of personal information.
Also of note is
that LAC is transferring a total of $5.1 million from its capital vote to its
operating vote. The transfer is a technical adjustment required to finance the
preparation and move of LAC’s collections, an activity that falls under its
will receive $7.5 million in increased support for French-language feature film
productions. This one-time increase in funding will address the challenges the
organization faced after a key component of the Telefilm production fund was
oversubscribed in 2019-20.
Mr. Chairman, honourable senators, thank you for your attention.
My colleague and I are now ready to answer your questions.
Thank you very much.
Marshall: I only have one question for Canadian Heritage because I think my
colleagues will ask some other questions. Is the $10 million in funding to
support local journalism in addition to the $595 million that was approved in
Mr. Piché: Let me clarify. In Budget 2019, three tax
measures were identified for a value of $595,000. This is an announcement that
was made as part of Budget 2018, the $50 million —
Marshall: So it’s in addition.
Mr. Piché: — to support local journalism, and that’s
$10 million per year for five years.
Marshall: Now I’ve got to find Shared Services. Can you talk about the
programs like the one for $197 million in funding for the Workload Migration and
Cloud Architecture Programs? is that a multi-year program? It’s a lot of money.
Did it start last year, or is this the first year? And where is it going?
Mr. Bombardier: It is a multi-year program.
Marshall: It is?
Mr. Bombardier: Yes.
Marshall: When did it start?
Mr. Bombardier: It starts this year, 2019-20.
Marshall: So the $197 million is the first instalment?
Mr. Bombardier: Yes, it is.
Marshall: And how much into the future? Can you give me an idea as to the
total dollar amount and the number of years it’s going to take?
Mr. Bombardier: The total over three years is $331
Marshall: Who decides on the projects in Shared Services? You’ve got this
project, and then you’ve got investments to replace aging IT infrastructure,
which I think would be multiple items, right?
Mr. Bombardier: Yes.
Marshall: Who decides what has to be replaced and things you will not do
this year but will wait until next year?
Mr. Bombardier: In terms of the workload migration, as I
mentioned earlier in my opening remarks, it’s actually working with our partners
to determine where they’re most at risk and moving that workload to an
enterprise data centre, the cloud, or a combination of the two. I can turn to my
Marshall: I’d like to know about the partners too.
Normand, Senior Assistant Deputy Minister, Project Management and Delivery,
Shared Services Canada: In terms of workload migration, we have criteria.
By the way, the governance was concluded in the Treasury Board submission, so we
are governed by the Treasury Board OCIO and Shared Services. We decide based on
the applications that are at risk and on where they’re hosted right now, whether
they’re hosted in a legacy data centre that’s about to close.
Marshall: You decide that yourselves in Shared Services?
Mr. Normand: With the Treasury Board federal CIO. so it’s
governance with the partners. As part of our governance, there is an
architecture board and then there are two levels of partner governance
committees with partners at the ADM and deputy levels.
Marshall: Okay. For this one, you’re saying this is the first year and it’s
going to take three years. Why wouldn’t that have been identified in the budget
process? Is this something you didn’t know about before?
Mr. Bombardier: Those funds were all identified in the
budget; it’s just that this year we had to access those funds through
supplementary estimates. In future years it will be included in our Main
Marshall: What about the $30 million for the aging IT infrastructure? Who
decides where that money is going to be spent? Is that in consultation with
Mr. Bombardier: The $30 million is actually a reprofile of
funds we had from last year to this year. Yes, there is a prioritization
exercise that occurs through the governance that Louis-Paul described in order
for us to make sure we spend those —
Marshall: Not just with Shared Services but with OCIO?
Mr. Normand: In the case of IT refresh, the big priority
for this investment was that Microsoft Windows 2008 is no longer going to be
supported past the end of this year. As an enterprise, we requested the funds to
bring all the Windows platforms to the Windows 2016 version that is supported.
We went on behalf of all our partners, and we have over 21,000 servers that all
our partners identified across government that we’re bringing up to the right
Marshall: Thank you.
Forest: We have the same concerns. With regard to the transfer of your
existing data centres to integrated data centres, this initiative involves 12
centres, is that correct? How does all this work? Given what happened with
Desjardins, Equifax and Phoenix, we are a little afraid. What are the transfer
protocols? Do you deal mainly with the private sector? Are these centres really
under government management?
Mr. Normand: We are talking, among others, about enterprise
data centres. There are four of them ready to receive applications that are
currently in former centres.
ventilation and electrical systems in these older centres, these applications
sometimes have to be taken offline for a full weekend. In new data centres, we
can perform these upgrades without causing a failure. This improves application
For example, we
have already moved the Phoenix application as part of this year’s program.
Phoenix was previously located in a data centre in Ottawa and is now located in
an enterprise data centre in Barrie and another in Gatineau. This is the kind of
improvement that is undertaken to avoid unexpected failures.
Forest: Let us now talk about the development of Canada’s regions. There
used to be a very important Telus data centre in Rimouski. Do you make sure you
don’t concentrate all of them in the same radius? Yes, they can be in Barrie,
but they could also be in Saskatchewan or the Gaspé Peninsula.
Mr. Normand: We have five enterprise data centres, in
Montreal, Gatineau, Barrie, Borden and Vancouver. We distribute workloads.
distribution must be taken into account, which can lead to performance
difficulties. On the other hand, it gives us protection in the event of a
potential disaster. In most cases, these decisions are made in accordance with
the needs of the application itself rather than with a high level principle.
There are options.
Forest: Is the agreement you signed with Microsoft a long-term
Mr. Normand: Yes.
Forest: Who, ultimately, is generating savings over what existed before, or
is it, rather, a modernization of Microsoft 2012 technology?
Mr. Normand: We are going in the direction of cloud
technology, to Microsoft Office 365, which is a service offered in the cloud.
This changes the service model that the government offers. We are moving in this
direction in general and it is the main application that allows us to complete
the ETI project, or Email Transformation Initiative. These applications will all
be in the cloud within two to three years.
Forest: Thank you. I have one last quick question about the program to help
local newspapers that was announced in the February 2018 budget. I’m having
trouble understanding, as expert committees normally file their reports in
June of this year.
there local social media? We asked Treasury Board officials the question
earlier, but we did not get an answer. Are there, to date, any local media that
have really received money or a contribution to help them with their
Mr. Normand: The work of the expert panel was to implement
three tax measures that were announced; the first concerns donee status for
journalistic organizations, the second concerns a labour tax credit and the
third concerns digital subscriptions. The expert panel helped to finalize the
whole process and make the definitions clearer. That is the work they did. The
local journalism program is outside of that framework.
Just to clarify
two things, the program is delivered by third-party organizations to ensure the
complete independence of the press. These third-party organizations are in the
process of issuing calls for proposals for journalistic organizations, so that
news can be created in media desert areas. These are places where there is no
information available, or where, if there is coverage, it does not include local
Forest: In short, no one has received a penny so far?
Mr. Piché: Not yet.
Forest: In your opinion, who are these people who qualify for financial
Mr. Piché: We are working on it. It was necessary to create
a model that was independent of government. These organizations must have
contribution agreements with organizations that will deliver the program, and
then there will be calls for tenders. This will allow journalistic organizations
to hire freelance journalists to cover the news. We are confident that during
the year these funds will be available for distribution.
Forest: Why ask for $10 million in supplementary estimates (A) when there is
little hope that the money will be paid before the end of the fiscal year on
March 31, and this amount is not included in the main estimates that will
Mr. Piché: We hope to do so before March 31.
Forest: History often tends to repeat itself, you know.
Mr. Piché: I can give you some context for this. You know
the data on this issue. The state of newspapers in Canada is such that between
2008 and 2018, there was a decline of about 40 per cent in our daily
There was a
40 per cent reduction in the number of newspapers in Canada. We have
also lost 50 per cent of professional journalists. They have not been
replaced in other modes, et cetera; that’s not what they do.
revenues have declined by over $2 billion.
There is an
urgent need for action. We are very aware of this situation. This $50-million
measure will not save journalism, but it will at least allow us, as a first
step, to provide journalistic coverage in places where there is no longer any
local journalism. We believe that this is important for democracy and for
ensuring a rich citizen life.
Forest: We are exactly on the same page; I was talking strictly about the
budget process, but let us hope that this money will be paid before
I have two questions. The first question is for Shared Services Canada. Over
the last number of years, we have closed over 230 outdated legacy data centres
and opened four large, state-of-the-art enterprise data centres that are more
efficient, reliable and secure. Where are you with this massive change?
Obviously, it affects the whole culture of how government departments are run.
How would you evaluate your progress and your success rate to this point?
Mr. Normand: At the end of this investment cycle, we
forecast that we will be over 40 per cent of the mission-critical
applications to government: border or security applications that will be hosted
in a quality data centre space, whether it be in the cloud and managed by the
private sector in the public cloud context, or within our own enterprise data
centre or as legacy. We have a lot of mainframe applications, the big machines
running a lot of mission-critical applications, that will still be housed in our
enterprise data centre. Over 40 per cent of our mission-critical
applications at the end of this investment cycle is not a bad estimate.
It’s a long-term
journey. We will not have 100 per cent of our applications in the
cloud or an enterprise data centre at the end of three years, but it’s a very
credible penetration in that direction.
Is this being driven by existing workers in the departments, or is this
Mr. Normand: It’s a mix. We need the increased capacity
from the private sector, but a lot of it is driven from inside. Actually, I
would say most of it is driven from inside.
Mr. Piché, I read your report. Are these things you are going to do by
the end of the fiscal year? If so, is all this related to the objectives you
It looks like a
shopping list. I’m trying to understand where this shopping list came from.
Mr. Piché: To understand how the supplementary estimates
(A) work for us, there are funds carried forward from the 2018-2019 budgets, so
supplementary estimates include several. There are also investments that took
place during the year. I will give you the example of the digital platform. New
funding has been announced as part of the economic update, and this is an
investment in the French-language digital platform related to TV5MONDE. The
objective is to make Canadian content available, and we favour the digital
platforms of the francophonie.
For example, the
funds for Telefilm Canada are also additional funds that were approved during
the year. That is why they are part of the supplementary estimates (A).
Of course, we
have key objectives. There have been major investments, if we think of official
languages in the 2018 budget, and there are very significant adjustments to the
budgets for official languages, due to agreements with the provinces on second
language education. For us, it is really the financial cycle that dictates how
all this fits into supplementary estimates (A).
That said, we
have basic objectives such as indigenous languages, for example, which were
really added as part of the 2019 budget. There is also support for the creative
economy and culture. We are thinking in particular of music and festivals,
because there has really been an enrichment in this area.
I would simply
say that this contributes to the results, and I invite you to examine the
Statistics Canada data.
you to look at Statistics Canada data on the GDP for culture. We’ve had the
Cultural Satellite Account since 2012, which shows us that what we call culture
or creative industries in Newspeak constitute $50 billion in value. It’s 600,000
jobs. It’s very important.
has a very broad scope and the support it provides to various audiovisual,
music, film, cinema and television industries is an important economic lever. So
our strategy focuses on both economic and identity objectives to bring Canadians
together and to encourage social cohesion, for example.
We do not lose
sight of our overall objectives. During a fiscal year, with supplementary
estimates (A), we often determine when funds were approved, whether they are
part of the framework in the Budget Implementation Act or whether there is a
delay. At that time, there are the supplementary estimates (A). For us, the
logic lies more in the direction of our department and the strategic objectives
we have set for ourselves than in simply listing the elements in supplementary
M. Deacon: This question is for the Department of Canadian Heritage. On
that last comment, I’m going to be coming from the angle of how sport is an
economic lever in uniting Canadians to encourage social cohesion, so it’s a good
I see that $9.4
million has been dedicated to the Indigenous Sport Initiative. We’re all aware,
I think, that Heritage provides funding to Indigenous sport organizations, and
governments, et cetera. I’m trying to get a better sense of how much of
this money will be dedicated to building sports infrastructure, specific
sporting activities or events, or other things. First, could you perhaps help us
Mr. Piché: Yes. The funds that are identified in the
Supplementary Estimates (A) are for sports initiatives in the context of social
development. It’s a specific component, as you know. The sports program in
Budget 2018-19 has seen key initiatives developed: for example, gender equity
and ethics in sport, as we know and as we hear in the news about what is going
on in the world today, it’s very important that these investments have taken
In this context,
it’s really to use sport not so much for performance, but it’s very much the
social benefits of sports for Aboriginal people. The program is designed to
really help communities engage in sport and use sport as a means to encourage
pride, and so forth. So, it is really a special fund that is not necessarily
based on sporting performance.
It’s sports as a
social benefit, if you like. That’s really in that part.
In terms of
specific infrastructure, I can’t answer that question today — I don’t have
that information — but in terms of what was in the supplementary estimates,
it’s really around sports for social development for Indigenous communities.
M. Deacon: I did wonder about the event coming up next year around the
Arctic games. I wondered if, event-wise, there might be some going in that
With respect to
sport for development, just some thoughts, perhaps. I understand the difference
between a development and a performance piece, both being very important. Right
now in Canada we have 60 or 61 sports organizations, 20 multiple sports
organizations and we have seven sports institutes.
When asked in
September about the number one thing you would like to be focusing on with
funding, it would be how to increase our program to support sports development.
The first thing that comes across is Indigenous communities, minorities, new
Canadians and girls. So in the absence of a dedicated minister of sport, but
with respect to the Minister of Heritage, I would urge you, please, to use those
existing structures to help you, because the time is right. This is a sweet spot
right now for every single sport in the country and in redefining Canada.
Mr. Piché: Absolutely.
Good statement. On the question asked by Senator Deacon, you did not have
all the information, Mr. Piché. Can you provide that to the clerk?
Mr. Piché: I don’t have the specific information around
infrastructure with me right now. I will have to get that to you. It would be a
pleasure to send you that.
Duncan: Thank you for your presentations.
My question is
directed to Shared Services Canada. There are references in your presentation to
enterprise data centres, modern IT infrastructure and agreements with Microsoft.
I note that Canada is spending a significant amount of money in Budget 2019 with
respect to increasing the connectivity of Canadians with respect to
infrastructure and supplying broadband Internet connections to rural and
though, has to do with us technical Luddites who still pick up and use the
phone. The Auditor General’s report in the spring of 2019 concluded that Shared
Services Canada did not provide support to modernize federal government call
centre systems, and said that although Shared Services Canada was rolling out a
new system for eight call centres, the initiative was taking longer than
expected and the department had yet to finalize a plan to modernize the
remaining 213 call centres. This is from the Auditor General of Canada’s report
to Parliament in the spring of 2019.
I didn’t hear any
mention, and I don’t have any sense, of where the modernization of call centres
fits in with the presentation today. Have I missed it? Could you elaborate,
Mr. Bombardier: You did not miss it. Today we’re focusing
on Supplementary Estimates (A), and there was nothing per se for call centres in
Supplementary Estimates (A). We certainly have active funding to address the
call centre issue. I believe Louis-Paul will be in a very good position to
Mr. Normand: That’s on the way. We have delivered the
enterprise solution; now it’s a matter of on-boarding call centre after call
centre. We are open for business. Now the call centre is no longer a matter of a
project or new investment. It is a matter of replacing the old call centre with
the new service that we deployed a year ago.
Duncan: Could I perhaps, then, ask if you could just address the Auditor
General’s comments more comprehensively, if they are not in this
Mr. Normand: The Auditor General’s report is actually
dating back from 2017, if you look back. At that time that statement was true.
We deployed seven of the eight. There is one more being deployed in March. That
happened after the Auditor General’s report.
Since then, in
the engagement, we needed to go back to our governance and make sure that the
next wave of call centres to be on-boarded was prioritized and we now have a
road map of scheduled on-boarding for call centres.
The 213 refers to
the whole population of call centres. The enterprise call centre solution is
probably overkill for a lot of those, and so only a subset of the 213 will go to
the enterprise service. The other ones will be provided out of services that we
have currently available with the telephone companies.
Duncan: What are the numbers we’re looking at in both situations?
Mr. Normand: Of the 213, there are about 53 call centres
that we know for sure are of the size that would benefit from all of the
features of the enterprise call centres. There are about 138, I think, if my
math is right, that will make a call based on — sometimes it’s a smaller
call centre within the department that is on an enterprise solution already. It
wouldn’t make sense to on-board that call centre there.
just too small to have all of the overhead of the enterprise service. Sometimes
some call centres are two three agents answering the call on the eight-hour
basis. Those don’t require the full-blown enterprise service that we have, which
is highly secure, highly available and bilingual. That determination happens
downstream on a call-centre-per-call-centre basis.
Duncan: Are you confident that the services are being improved to Canadians
as per the recommendations from the Auditor General?
Mr. Normand: We provided the full call centre to the CRA
during the last tax season without any downtime or any disruption of service, so
we’re quite confident that the service is full-grade now and ready for
on-boarding the balance of whatever makes sense to on-board.
Duncan: Thank you.
Bellemare: Thank you for coming. I have a question for Canadian Heritage
about the transfer of funds from the Department of Employment and Social
Development for the Youth Employment Strategy. I understand that there is a
transfer of funds of $3.8 million for subsidies, and also $209,000 for operating
expenses. Which groups of young people do you target through this transfer? Does
this include young people who are neither working nor studying, known as NEET in
English? What percentage of the total Youth Employment Strategy does this amount
represent? And why transfer these amounts to Canadian Heritage?
Mr. Piché: The transfer is to Canadian Heritage employment
programs. We are talking about a transfer from the Department of Social
Development to specific Canadian Heritage programs for one year. These programs
include jobs for young people in official language communities; it is an already
defined and established program. The other specific program targeted by this
activity is in the heritage sector: these are museum and artistic jobs. These
are the two programs that already exist, and Social Development Canada is
contributing to some of these programs directly through a one-year transfer.
Bellemare: Are these full-time jobs or summer jobs?
Mr. Piché: I think they are mostly part-time jobs.
Bellemare: It is to gain experience?
Mr. Piché: Yes, and to expose young Canadians to the
creative industries, official languages, and so on.
Bellemare: Thank you.
Thank you all for being here today. There is a lot of interesting
I’ve been trying
to find the cloud on my machine here, under the CIO mandate. The cloud isn’t in
the cloud. The cloud is a server farm somewhere. Are there rules to ensure that
Canadians’ data that is in the cloud is stored on servers physically located in
Director General, Cloud Services, Chief Technology Officer Branch, Shared
Services Canada: Thank you for the question. Essentially for the CIOs, the
first requirement is really guided from the policy of management of the
information technology, where they are mandated to take a look at cloud first.
In terms of ensuring that those data centres or those server farms are actually
located in Canada, it is not for all data classification but for Protected B,
which is basically sensitive information. It is required through the direction
on the data residency that the contracts for which Shared Services has been
working on and has been letting out have to reside in Canada.
We have let out
now, to date, three different contracts for up to Protected B, and those require
that those data centres or those cloud providers need to have their data centres
in Canada. So for Protected B sensitivity, those data centres or services have
to be offered through data centres in Canada.
Is Protected B something where you would have your income tax returns,
passport applications or anything with identifying data?
Mr. Mohan: And social insurance; that’s right.
On call centres, do we have a requirement that the call centres employ
Canadians? Are they located in Canada?
Mr. Normand: Again, the enterprise data centre requirement
was to be Protected B as well, so it had to be in Canada. The hub for the call
centre is, in fact, in Toronto and Montreal.
The call centres
are owned by the departments. CRA, for example, has one in Shawinigan, and all
over the country. So they are in Canada, but the systems running those call
centres are in Toronto and Montreal. They had to be.
Are the employees in Canada?
Mr. Normand: Yes. It’s the department’s employees. We don’t
run the call centre. We provide the call centre service to the departments and
they have the agents who pick up the phone. They’re departmental agents, not
SSC, but they are all in Canada.
Mr. Bombardier: They’re departmental employees.
That’s good to know. Regarding the battle between Microsoft and
Google — I’m sorry, Amazon, did we have a competitive process there? We
have seen controversy in the United States.
Mr. Mohan: We have been using a competitive process. For
the most recent round, we have actually done that in three waves. In the first
wave, we were able to award two contracts.
The reason there
are different waves for these procurements is to make sure that there is a
security program offered by the Canadian Centre for Cyber Security, which vets
the industry certifications and some of the supply chain integrity aspects of
these providers before they are able to get the contracts. We have been doing
that in a phased manner because they need to go through that program.
In the first
round, we were able to issue two contracts. Wave two also has some of the
prequalified vendors putting in their submissions. Out of that, one of the
contracts was actually announced today. In fact, that is the first Canadian
provider that we were able to announce. We are expecting some more awards of
contracts through that process.
actually closed on Friday last week, and we had one of the prequalified vendors
come through that. It is a competitive process.
So contracts will not go to people who don’t have equipment, routers,
et cetera, that meet CSE standards.
Mr. Mohan: That is correct.
We won’t mention any company.
Loffreda: Thank you for your presentation. Breaches of confidentiality and
security remain topical issues. You are asking for an additional $197 million to
migrate to new architecture programs, and $38 million to replace existing
technology and infrastructure which is outdated.
Is some of our
equipment still obsolete? Does this cover 100 per cent of the costs?
How is the confidentiality of government information ensured in this new
structure? Has the investment in staff been made? Why ask for additional funds,
and why was this not included in the initial budget?
Mr. Bombardier: With respect to the amount of $37 million,
it is important to understand that this is an amount that was carried forward
from last year to this year. The program as a whole is much more important
because the infrastructure, as you say, is outdated and more funding is needed
to replace it over the years. We were granted a certain amount in the first few
years, and we must return to the Treasury Board with a statement of our
achievements to access the amount that had been granted to us on an ongoing
More funding is
indeed needed. These amounts had already been planned, but it is a project in
itself, and often, in projects, there are delays. As a result, $30 million had
to be carried forward from last year to this year.
Mr. Normand: In terms of investment, this was part of an
envelope that had been allocated from the 2018 budget. There was funding in the
2016 budget, and we are continuing in that direction.
inventory of the components of everything we have in government is currently
being compiled. This will provide a better overview of what needs to be replaced
in the coming years. The subject will be raised again here or in different
committees. This is one of the Treasury Board conditions for the 2018
Mr. Bombardier: As I was saying, we must go back to
Treasury Board with the results obtained in order to access the funds that were
already earmarked. In addition, in making the inventory, it is necessary to
arrive at an adequate amount of recapitalization to be able to finalize all
Loffreda: In terms of investment, who follows all this with regard to
personnel? Do you get the necessary expertise from outside? Is that part of the
budget you’re presenting to us?
Mr. Bombardier: Yes, indeed, it is. Shared Services Canada
had been funded to stabilize the base, if you will, but within each of the
programs, these specific funds will only be used to replace the equipment with
the staff we have in place.
Mr. Piché, from Canadian Heritage, I would like an explanation
regarding TV5. The government had already approved $2.9 million. You are now
requesting an additional $6 million, which is double the amount already
Mr. Piché: The budget announced in the November 2018
economic update identified $14.6 million over a five-year period. We are in the
first year and the breakdown of funds for the first five years will be $6
million in the first year and $2 million in subsequent years. The amount in
supplementary estimates (A) is the first $6 million. It’s as simple as that.
There are no additional amounts or amounts that have been withdrawn. These are
amounts that have been specifically identified to create a francophone digital
platform and enhance Canadian content.
Do the other countries also contribute to TV5?
Mr. Piché: Yes, they do. There is an annual contribution of
$9 million to the TV5MONDE program, which includes in part a contribution to
TV5MONDE in Europe, which is the international organization, and also an amount
resulting from the Canadian regulatory framework for TV5 Québec Canada. So, once
a year, there is a program that provides specific funding for the Canadian
contribution, at the initiative of TV5MONDE, with Belgium, Switzerland, Canada,
France and Quebec.
Thank you very much for that explanation.
My next question
is for Mr. Bombardier.
Who are CIO?
Mr. Bombardier: OCIO is the Office of the Chief Information
Officer, who is actually at the Treasury Board Secretariat. They’re the policy
arm in the IT domain.
I’m fascinated by the governance of this with quite a few of these CIOs in
all the different departments. Is one person identified?
Mr. Bombardier: In each of the departments, yes, there is a
CIO, a Chief Information Officer.
And does that person work for Shared Services —
Mr. Bombardier: No, they don’t.
— or does that person report to the deputy minister of the department?
Mr. Bombardier: They report to their own deputy
So if they were advocating for and wanting to lobby with you for cloud
facilities, would they have to go through their deputy minister and get that in
the information that comes before us through that department or would they come
Mr. Bombardier: It’s actually a combination of both. Each
department has to come up with their own IT plan. They submit those IT plans to
the OCIO at Treasury Board Secretariat and they actually prioritize those
projects. There is a priority exercise that occurs. The OCIO shares that
information with us so we can actually determine what projects we will actually
do through the governance that we explained earlier.
Representative from the House of Commons Murray has just been appointed to
something that didn’t exist before, I guess in name only; she’s the Minister of
Digital Government. Can you tell me how her group and her department will fit
into what you’re doing now at Shared Services? Will you be part of her
Mr. Bombardier: I cannot actually answer the question in
terms of how she will deliver on their mandate, but I can certainly say that,
yes, our minister is now Ms. Murray.
And as far as mandate is concerned, I’m not sure a mandate has been made
Mr. Bombardier: Not to my knowledge, no.
This committee typically looks at mandates to help us understand, but we
don’t have a mandate yet.
Mr. Bombardier: Not to my knowledge.
Do you anticipate you will be part of her group?
Mr. Bombardier: Yes.
Will all of the applications, then, continue to go department-to-department
through the Treasury Board process to get approval?
Mr. Bombardier: Yes, that’s the prioritization that needs
to happen at the government level to make sure we’re spending those funds
Before concluding our question period with officials, I have a question for
mentioned that, during the 2019-2020 period, it would modernize the Official
Languages Act. You don’t need to answer my question immediately. You can provide
the response in writing with the required document so that we can refer to it
when writing our report to the Senate. When we ask for a memorandum of
understanding with the provinces and territories to support official language
minority and second language education, whether for anglophones in Quebec or
francophones in Newfoundland, New Brunswick, St. Boniface or Vancouver,
which provinces and territories will receive the funds you are asking for? Is
this really in the spirit of modernizing the Official Languages Act?
question is this: How do you monitor how provinces and territories use these
funds to ensure that they accurately target the program objective?
Mr. Piché: This is an excellent question. We can send you
the answer in writing. However, I can tell you at the outset that the new
process of memoranda of understanding between the provinces and the federal
government for all matters related to education is also associated with an
accountability mechanism that ensures that funds are used for the purposes for
which they were established.
Then, as far as
who receives what, I will come back to you on this subject to be absolutely
certain, but I can tell you that agreements have been reached with all the
provinces and territories. The agreement with Quebec is worded differently, but
there is also one. I will come back to you on this subject, simply because I
don’t want to make a mistake by telling you who gets the money.
With respect to
the modernization of the Official Languages Act, consultations were held during
the summer and fall on this subject. Specific themes that will have an impact
have been identified; it has been several years since the law was improved.
These points will be very important, including the powers of the Commissioner,
and language of service; these are elements that were raised during the
consultations. We can therefore certainly send you a more complete answer in
Thank you very much, Mr. Piché.
Forest: This is not really a question, but rather a request that concerns
the crucial question of the shift that has been made with regard to cloud
computing and our choices. Would it be possible to have a one-page summary
of the efficiency and savings benefits of these choices as regards the decision
to go in that direction? Given everything that is currently happening at various
companies such as Desjardins — which is not a casual little business — and
Equifax Canada, we would appreciate it if you could send us a
one-page summary of the reasons for these choices. I am sure you made the
right choices, but I would like them to be on file so that we can refer to them
and then better understand these strategic choices. That is my request.
Could you provide us with this information?
Mr. Bombardier: I would just like to clarify the Senator’s
request. You asked us for details on the reasons that motivated our decision to
move to cloud computing with regard to data centres; is that right?
Forest: In fact, your strategic choices are based on reflection and analyses
you have carried out; I would like to know the key points of that analysis.
Mr. Bombardier: Very well.
Thank you very much. As always, you answered our questions in a very
professional manner and we will wait for the information we have asked you to
For this last
portion of our meeting on the study of Supplementary Estimates (A), we have
before us Travis Allan, Chair, National Government Relations Committee, Electric
Mobility Canada. Mr. Allan, thank you for accepting our invitation.
After you have
made your comments, questions will be directed to you by the senators.
the floor is yours.
Chair, National Government Relations Committee, Electric Mobility Canada:
Mr. Chairman, members of the Standing Senate Committee on National
Finance, thank you for welcoming me today and giving me the opportunity to speak
I am Travis
Allan. I chair the National Government Relations Committee of Electric Mobility
Canada. We are very grateful for the opportunity to share our views today on
measures to encourage the purchase of zero-emission vehicles.
members, I have the advantage of having some PowerPoint slides in front of me
that I don’t think are ready to be shared with you because they need to be
translated into French. So I will try not to describe graphs too much. I
understand that once they are translated, we’ll be able to share them with you
later, should you have any questions.
Before you continue, Mr. Allan, if I have a consensus around the table,
as chair, I will accept that they be distributed to all senators in one official
language, English. We have English copies. Do we have consensus around the
Mr. Allan: While those are being handed out, I will tell
you a little bit about Electric Mobility Canada. We are a non-profit with a
mission to strategically accelerate the transition to electric mobility across
Canada. Our members are electric vehicle manufacturers, charging networks,
electric vehicle charging station manufacturers, industry suppliers, energy
providers, government agencies, fleet managers and not-for-profit organizations
and academics, and we have over 190 members from coast to coast.
We are here today
to testify in support of the proposed supplementary estimate because it is
important to the achievement of Canada’s climate and environmental objectives;
because electrifying transportation reduces greenhouse gas emissions and
improves air quality for our communities; and because purchase incentives have a
strong positive impact for Canadian companies and Canadians, and they are
As the senators
are no doubt aware, Canada has made important commitments to reduce its
greenhouse gas emissions by 2030. Despite important progress that is already
being made, there is a gap, projected to be approximately 79 megatonnes, towards
achievement of the 2030 target.
One thing that
makes a lot of sense is to look at our sectoral emissions and try to figure out
where the biggest sources of greenhouse gas emissions are. We find that the
transportation sector provides 24 per cent of Canada’s greenhouse gas
emissions, which means it makes sense to look there for opportunities to reduce
our footprint even further.
If we break down
those transportation emissions, we see that light-duty vehicles, both pickups
and cars, are major contributors to those transportation emissions. Converting
to an electric vehicle can have a very beneficial effect on greenhouse gas
A recent study
found that 45 per cent of emissions can be reduced by a driver in
Alberta who converts, compared to a traditional internal combustion engine, and
that number can go as high as 98 per cent in British Columbia or
Quebec, provinces with very clean hydroelectric or nuclear power. That, of
course, is why Canada has set important targets for the promotion and adoption
of ZEVs, or zero-emission vehicles, as a percentage of new sales. The important
ones to note are 30 per cent by 2030 and 100 per cent by
The benefits are
also for local air quality. By converting to an electric vehicle, we can reduce
tailpipe emissions of particulate matter and other pollutants that can make poor
air quality for our communities.
But the arguments
in favour of converting to electric vehicles are not just environmental. Recent
analysis conducted by the economic firm Navius for Electric Mobility Canada
found that if we are to achieve those federal 2030 ZEV targets, we could add an
incremental $16.8 billion to Canada’s 2030 GDP and over 165,000 jobs for
In my other hat,
I work for a company that runs one of Canada’s largest EV charging networks and
manufactures charging stations in this country. I can tell you that we believe
this number is accurate and we and other members of Electric Mobility Canada are
here to win this transition. We want to make sure Canada is at the table in the
economics of reduced carbon transportation.
You can also see
that this policy and other complementary policies, including charging
infrastructure, investments, education and private sector activities, are
working. We are seeing an increase in the purchase of zero-emission vehicles
year over year. From May to September, we had a 3.5 per cent
market share and 25 per cent year-over-year ZEV sales growth versus
the third quarter of 2018. Those are significant improvements, and we believe
they are largely attributable to the purchase incentive and other complementary
But even with
this progress, there is still a gap. Projections that Navius conducted on
current policies announced by the federal government suggests we will have a
10 per cent gap against the 2030 target of 30 per cent ZEV
Then the question
arises: What is the best way to try to fill this gap? How do we get those
economic benefits and also the environmental benefits? Our organization feels
that probably some of the most important points are to make sure that the
purchase incentive is predictable and consistent.
I turn here to a
graph in my presentation that I think tells us a lot about how these purchase
incentives can work. We see two numbers in green and blue that are British
Columbia and Quebec. These provinces have fairly comprehensive policies to
support electrification of transportation. They have purchase incentive add-ons,
they have electric vehicle charging infrastructure programs and they also have
great education. We’ve seen a dramatic rise in ZEV sales in those provinces. In
fact, British Columbia actually exceeded 10 per cent, which makes it a
leader in North America, and Quebec has sustained excellent growth in that
You’ll see one
line, though, that was starting to show an upward trend and then fell
precipitously, and that is the province of Ontario. That fall occurred because
there was a cancellation of the provincial purchase incentive. After that point,
it hasn’t really recovered, although we’re encouraged to see some growth
recently, in the last quarter shown here.
impacts adoption and awareness. We believe supporting the supplementary estimate
in this case will help avoid an Ontario-like situation and keep us moving in the
right direction on ZEV purchases.
One question that
members of our organization are often asked — and it certainly comes up
with any kind of purchase incentive — is why do we need to do this and how
long do we need to do this for? Is it a permanent type of incentive?
The answer for
why we need to do this is twofold. One is that it helps create attention and
awareness about the opportunities to drive electric, which can end up saving
Canadians money over the lifetime of their vehicle. The other reason is because
a zero-emission vehicle tends to cost more than a comparable internal combustion
engine vehicle at this time. There is a purchase price differential, but that
purchase price differential is expected to decline over time, particularly as
battery prices drop as innovation in the manufacture of these vehicles
increases, and also as we get efficiencies of scale.
watchers — here I’ve included graphs from McKinsey and Bloomberg New Energy
Finance — predict there will be an inversion probably around the year 2025
or 2026, at which point the sticker price for a new ZEV is likely to be equal to
or even less than a comparable internal combustion engine vehicle. Of course,
our organization isn’t saying that the subsidies should be suspended at that
point, but it could certainly be evaluated to see if it needs to remain so high
or if there is a better level.
To wrap up, our
recommendation is to approve the current estimate because of how important it is
to the climate targets and ZEV adoption targets. We would, of course, love to
see it increased for provinces that don’t have provincial top-ups because we’re
seeing such great performance in Quebec and B.C.
We would like the
Government of Canada to consider a different cap. There is currently an MSRP
limit of $45,000 or $55,000, depending on how many seats the vehicle may have.
Unfortunately, that might not be high enough for SUVs and pickup trucks. Many
Canadians, of course, choose to use non-car alternatives, so we would like to
see a way for all Canadians to participate in this program. Our members would
love to see it expanded to medium- and heavy-duty vehicles, because they are
also important contributors to transportation emissions, and we would love to
see multi-year funding for this in the complementary policies I mentioned. Thank
Thank you, Mr. Allan.
Mr. Allan, you’re asking us to consider continuing the funding. Is that
the $165 million that appears as a line item in the Department of Transport?
Mr. Allan: Yes, senator.
Are there any other line items in any other departments that also support
zero-emission vehicle proliferation?
Mr. Allan: Yes. I’m sorry, senator, I should have clarified
at the beginning. I’m speaking about the request for the $165 million
supplementary estimate. That’s all I’m speaking to today.
Duncan: Thank you, Mr. Allan. It’s nice to have you back. I appreciate
the information that you have brought back to us in the committee.
I would like to
emphasize for my colleagues the point, again, regarding the purchase in Western
and rural Canada of larger vehicles. In vehicle registration, my little Honda is
classified as a truck, so I understand why it’s so important. I think part of
the reluctance of the Prairie provinces — Alberta and Saskatchewan —
to adopt an incentive is that people just don’t have the product that they
There was earlier
mention of the Tesla truck. There is also the — I’m not going to get the
Mr. Allan: Rivian.
Duncan: That’s it. I don’t want to belabour this point. I would just ask
that we have an update from the manufacturers as well. It would be useful in
terms of the continuation of this policy, which I do support and believe is very
important to our climate change initiatives.
I also would ask
if we could have an update. In our last round of discussions, Mr. Allan
spoke — from, I believe, your organization — about the charging
stations that are — and I don’t know what we are going to call them other
than that widget you plug your vehicle into — manufactured in Quebec with
tremendous sales to the United States. Could we have an update on how they are
doing, as well? Thank you.
Mr. Allan: Would you like me to respond now?
Mr. Allan: There is one exciting update, which is that Ford
has now announced plans to release an electric pickup. I think that is positive.
We also have a Toyota vehicle that is a plug-in hybrid, which is being
manufactured currently in Canada. It’s the Toyota RAV4 Prime.
I’m hopeful. The
automakers are projected to be announcing a fourfold increase in electric or
plug-in hybrid models in the next coming years, and so we expect that there will
be more model supply.
I can also update
you on the Quebec company because that’s actually my day job. We have expanded
to the United States and just announced 75 charging stations in the city of Los
Angeles using some technology that is modified from something we developed in
Montreal, which has an excellent deployment of curbside stations. We were able
to mount stations on light poles and use energy that the city of Los Angeles
saved from upgrading its street lights to help charge electric vehicles. Those
are all manufactured in Canada.
Duncan: Thank you.
Forest: In fact, we talked about rebates the last time you appeared before
the committee. It is a movement that is unavoidable.
When I look at
countries that are successful, such as Finland, there are advantages other than
purchase rebates. There, with an electric vehicle, I don’t pay registration
fees, I park for free and I drive on reserved lanes. There are a number of
For example, if
Montreal offers reserved lanes for electric vehicles, given the traffic problems
in that city, this is a real advantage that would encourage people, beyond the
financial aspect, to buy an electric vehicle.
Canada is a vast
country, with the Gaspé Peninsula, Newfoundland, New Brunswick or the western
provinces, where many users drive pick-up type vehicles, or pickup trucks. Have
you thought that, between 2020 and 2030, there could be a transition during
which rebates would be less important, but applicable to hybrid vehicles? Here
in Ottawa, we have an impressive fleet of hybrid taxi vehicles. Travelling in an
electric vehicle already means fewer emissions. Have you thought about a
transition period between now and the time when battery technology will be more
the network of charging stations which represents a challenge, another element
seems to me to be crucial in urban areas. At the risk of repeating myself, I
would say that, in addition to purchase rebates, in countries that have been
very successful, there are many advantages, including dedicated lanes, no
registration fees, and so on.
organization hold discussions or reflect along those lines?
Mr. Allan: Thank you for those questions. I should note
that one of the features we support of both the federal purchase incentive and
the provincial adders is that they have varying rates for vehicles depending on
battery size. This is designed, I believe, to recognize that many Canadians may,
as you say, adopt a plug-in hybrid for a period of time to help them if they
live rurally or expect to be driving longer. I fully agree, and we support that
aspect of the policy.
The other issue,
which is about what I would call complementary policies or the other types of
policies and regulatory changes that need to be in place to really allow for
this transition to work for Canadians, is very germane and certainly something
that a lot of people here in Ottawa and across Canada are working on.
provinces have adopted different strategies. Some provide special licence
plates. We have seen very strong and sustained funding from this federal
government for public charging station deployment, typically through NRCan,
which has been running various programs for corridors and also now is funding
more charging station deployment in the cities and curbsides and has plans to do
more on workplaces.
I would say that
those aspects are ongoing, but we certainly have more to do. We need to make
sure that Canadians feel comfortable adopting electric vehicles that they will
be able to charge. So there is a lot more work, both federally and also
provincially, because some of these matters are under provincial
Forest: Thank you.
Marshall: I am just looking at the document that you provided. You’re saying
transportation is Canada’s second-highest greenhouse gas-emitting sector.
Is it decreasing?
We have electric vehicles on the road. Who is monitoring to see that greenhouse
gases are really decreasing as a result of moving to electric vehicles?
Mr. Allan: I have two points to answer your question,
transportation emissions have actually been increasing since the 2005 base year
when Canada’s target was set. That is one of the things that has challenged many
advanced economies because we have seen increases in freight transportation,
package delivery and sprawl that leads to traffic jams. This is probably one of
the most challenging sectors to deal with.
Marshall: We’re going in the wrong direction.
Mr. Allan: Unfortunately. We have started seeing
stabilization over the last couple of years, which is encouraging, but we need
to actually get reductions, I think, in order to support the broader target.
Now your second
question is: Who is in charge of making sure the reductions actually occur? The
federal government collects greenhouse gas emissions data and provides it to its
international partners in support of its global climate commitments. I believe
that ECCC collects this data, possibly with other ministerial support, so the
document that I sourced the graph from on slide 6 is from our national inventory
report from 1990 to 2017, and that is a very helpful summary of our
Marshall: But it’s not very encouraging. Thank you.
Mr. Allan: We have work to do.
Just for the record, you were talking about what vehicles will be covered by
the existing plan, and which vehicles you would like to see covered, keeping in
mind different parts of Canada have different preferences and different
Mr. Allan: Certainly. Currently, the federal purchase
incentive has two elements. One element is the amount of the purchase incentive,
which is based on battery size. I just want to make sure I get you the exact
right numbers here.
What page are you on?
Mr. Allan: Unfortunately, I’m looking at my scrawled
No wonder I couldn’t see it.
Mr. Allan: I will include the Transport Canada overview.
The current federal program is a maximum of $5,000 for a battery electric
vehicle with a larger battery that you hopefully would be able to drive on all
the time if you don’t have a very long commute.
plug-in hybrid will get a subsidy of $2,500, and that’s for a smaller
But there is also
what we call an “MSRP cap,” or a minimum suggested retail price cap. If there
are six seats or fewer, then the MSRP cap is $45,000; the base model price is
$45,000. If there are seven seats, then the base MSRP is $55,000, so this would
allow you to have a higher cap if it’s a van, for example.
There are also
permissions for certain trims that can be added to the vehicle, so the cap for
six seats or fewer can go up to $55,000 with accepted trims, and that for seven
seats or greater can go up to $60,000 with suggested certain approved trims.
from our organization is we completely understand that the government is seeking
to target the incentives on Canadians for whom this will matter most
financially, and we support and understand that, but we are concerned it will
leave out a number of vehicle classes in pickup trucks and SUVs.
Shouldn’t the public concern be not the type of trim on the vehicle but for
some efficiency that we’re achieving something by having these programs in
Mr. Allan: We would certainly believe that this program
could be more efficient if it included more vehicles, senator. I think I would
agree with you.
Are two-wheeled vehicles or three-wheeled vehicles included?
Mr. Allan: I’m not sure, so rather than giving you an
answer that could be wrong, I’ll get back to you in writing. I haven’t heard of
If they are not, presumably you would be happy to see that happen too.
Mr. Allan: Yes, we support all forms of
A lot of us have had the opportunity to travel to other countries,
particularly in Asia. The number of electric vehicles that you see there now
that you didn’t see even five years ago is incredible. We haven’t recently done
a comparative, but it would be interesting to see why that has happened.
Can you provide us with that information, Mr. Allan?
Mr. Allan: Certainly.
To the clerk, please. Thank you.
M. Deacon: As our time unfolds, I’m not sure if this is a question or a
thought, but I’m going to try. We talk about incentives. We saw what happened
with the chart last spring — decline. We talk about a sweet spot, about
2025 or 2026, when costs might come down.
I’m kind of going
after behaviour change here, and I don’t know if there is insight or research
from your perspective on this, but where is it? When is it? How is it that we
have people in our society, which I think we have seen in other parts of the
world, as Senator Day is alluding to, whether it’s to see to believe or believe
to see, for whom the change in behaviour is becoming a bigger driver than the
That’s my wonder,
my want, my wish. How far do we have to go in the incentive land to be able to
get or see the behaviour of what is the right thing to do?
What should we be doing to change that behaviour?
M. Deacon: To me, that’s the critical piece, and I know we may have to
incentivize to a certain point, but that’s what you need to go after.
Mr. Allan: I think that’s right, and there is so much work
to do to make Canadians feel comfortable to do this.
We are really
encouraged by looking at Quebec and British Columbia and starting to see
jurisdictions that are getting closer. B.C. kind of rocketed up to
10 per cent new vehicle sales, which is pretty unheard of in North
America, to be honest. We look to Norway. Norway is a place that has exceeded
50 per cent. California is getting pretty close. I think they are
around 7.5 per cent last time I looked.
There is an
aspect of seeing your neighbours or someone on your block driving an EV that can
make a difference. Visible charging stations matter, because that’s one of the
things, and education.
But the purchase
incentives have a role. I was speaking with someone about this testimony
yesterday, and he said: You know, my brother doesn’t care at all about climate
change, but he bought an electric vehicle, and it was partially because of the
purchase incentive. He thought that was a great deal. He looked at the ownership
costs and the lower maintenance costs and that made sense to him. That is
Thank you, Mr. Allan, for coming and for your fascinating testimony.
This is very important to our future.
The fact of the
matter is, for some people, the incentive and the idea of getting a great deal
is a great motivator, even if it’s only a small deal.
I’ve been a
proponent of this for a long time, but I live in rural Prince Edward Island, so
my question is: Until we get all of the infrastructure in place, isn’t hybrid
the middle step or the transitional way? Why are there no incentives for
hybrids? You look across the manufacturers and they have large SUVs that are
hybrids. For people, as we heard earlier from Senator Duncan and others, hybrids
provide that kind of option as a middle step. Why wouldn’t we be incentivizing
people to buy hybrids until the industry is more mature and all-electric is more
easily possible, especially in rural Canada?
Mr. Allan: I think that hybrid vehicles have made a very
important contribution to slowing that decline in greenhouse gas emissions from
the transportation sector that I mentioned previously.
Slowing the decline?
Mr. Allan: Slowing the increase, sorry, thank you. We want
to encourage the decline. That’s right. They have made an important
contribution, but at this point hybrid technology is pretty advanced. It’s
there. It already leads to fuel cost savings. It’s widely commercially
available, and I think it stands on its own as a way of getting a more efficient
organization’s perspective is that we’re ready as Canadians for the next step,
which is to say, plug-in hybrids, which you can still drive with gas in the
tank, and certainly on longer trips that might be convenient for many Canadians.
And battery electrics are commercially available. They are great to drive. They
save money. And frankly, in most places in Canada, they are a suitable
alternative if you drive a car that there is an equivalent model for.
One of the things
you might be interested to hear is that we did a study on our users, and we
asked where they charge. It turns out that most of them charge 80 to
90 per cent of the time at home and at work. So on P.E.I. or where I’m
from, Pender Island on the West Coast, we’re certainly ready to drive plug-in
hybrids and even battery electrics. I think the focus is to try to get us on
that next step to reduce emissions.
Did you happen to see the CBC national news last night? They had David
Common comparing a previous iteration. I know only a quarter of a million
Canadians watch that anymore, which is sad, but the message there was about
going from Toronto to Windsor — hardly rural, underdeveloped Canada —
but the whole thing was about planning your next charging stop.
M. Deacon: Supplementary?
We’ll accept your supplementary.
M. Deacon: Just on that question, and that is looking at stations, who
is determining where these stations are put? Is it local? Is it national? Is it
strategic? Is it voice? What is it?
Mr. Allan: It depends on who is installing the station. So,
there have been some very important programs run by NRCan to try to get a
cross-national, trans-Canadian network of EV charging stations. Some have been
installed. Some are still in process. In that case, NRCan reviewed competitive
applications and made decisions based on various factors about driving
In the province
of Quebec, much of the public infrastructure has been installed by the Circuit
électrique, or the electric circuit, which is owned by Hydro-Québec. So it
really depends. There are also many private stations owned by our company, and
Tesla. Electrify Canada is starting to come in now, which is owned by the
Volkswagen Group. I would say there is a mix.
Loffreda: First of all, thank you for being here. I’m replacing Senator
Forest-Niesing, so we may have covered this previously in this committee, but
with respect to the incentives, who is your target market? Is the middle class
the majority of your customers? There is a lot of talk in the media — and I
don’t know if you have those statistics — that most of the people buying
the electric vehicles are those who could afford expensive vehicles. Therefore,
it’s great to have that incentive; I’m not contesting the incentive should be
there, because it is a matter of setting up a culture and a DNA of wanting to do
something in the country. But would you have a statistic for curiosity purposes
as to who is benefiting from that incentive? And how do we make it more
accessible to the middle class?
Mr. Allan: First, I would like to thank you, because your
question made me realize that I forgot to say one very important thing, which is
in the last federal Liberal election platform, there was a mention of an
incentive for used electric vehicles, and our organization strongly supports
We have seen a
used EV purchase incentive in Ontario run by a group called Plug’n Drive, which
started Canada’s first EV Discovery Centre, where you can try an electric
vehicle, and that seems to be working very well. What is so exciting about that
is we have had enough years now where there are EVs on the market that are ready
for resale, and so we believe that that policy will, at relatively low cost,
make EVs accessible to more Canadians.
I believe that
the MSRP purchase cap that I mentioned was intended specifically to get at
concerns over who is receiving the subsidy, so it was deliberately targeted at
the lower range of vehicles. I don’t have the income statistics on who received
the purchase incentives because, as a non-government organization, we
unfortunately don’t have that data, but I do think that was why the MSRP cap was
set in the first place.
Marshall: Just listening to the discussion, the entire objective is to
reduce greenhouse gas emissions from the transportation sector, right? And you
said it’s actually going in the opposite direction. The government seems to get
into and develops a program and puts it in place and then just keeps going with
that same program. So it would seem to me if we’re not achieving what we had
hoped to achieve, shouldn’t we do a rethink of the program? Especially now, when
I hear the higher-income people are the ones taking advantage of the rebate. So
why does the government keep doing the same thing when they are not getting the
results that they want? In fact, they are getting the opposite results.
Mr. Allan: Thank you for that question and for the
opportunity to clarify. When I said that the emissions from transportation are
increasing, I was referring to — the 2030 target is set based on a 2005
base year. So when I said they were increasing, I meant from that base year. The
federal purchase incentive was implemented starting in May of 2019, so it’s
relatively recent. And since it’s been implemented, there has been a very
satisfyingly large uptick in the sale of ZEVs, so it seems to be working fairly
well, and that’s why we are so hopeful that it will be continued.
Marshall: But the objective is not to sell the cars. The objective is to
decrease greenhouse gas emissions, right?
Mr. Allan: That’s absolutely correct, although each
electric vehicle can lead to a very significant savings compared to an internal
combustion engine vehicle.
Marshall: Thank you.
Thank you, honourable senators. Mr. Allan, we can entertain you if you
have ending comments.
Mr. Allan: I would just like to thank you so much for your
interest. I think many Canadians have exactly the questions that you have asked
me here today. Senator Duncan, I wanted to let you know that we have now
initialized stations in the Yukon, funded by NRCan, and they are being used and
we’re very excited about that.
As we conclude, I would like to bring to the attention of senators and
Mr. Allan that New Brunswick is covered on the Trans-Canada Highway with
Tesla and the Irving corporation from the border of Quebec to the border of Nova
Scotia with electric chargers.
And on this, we
received a brief, honourable senators, from the Canadian Vehicle Manufacturers’
Association this afternoon, and it will be translated and sent to you ASAP, so
this will also cover part of the mandate we got from the Senate of Canada.
senators, thank you very much for your participation. To Senator Loffreda, this
is your first meeting. I hope there will be many more meetings, too. And I wish
to remind senators that the next meeting of the committee will take place on
Wednesday morning at 11:30. We will be looking at the draft report for this
study to be tabled in the afternoon in the Senate of Canada.
do you have a question?
Marshall: We would usually get a copy of the transcript of our meeting today
fairly quickly, so when will we be getting a copy of that?
That’s a very good question; Mr. Smith, please?
Analyst, Library of Parliament: Very quickly. The transcript from the
earlier part of the meeting is already available.
Marshall: Good start.
So to adopt the report will be Wednesday morning at 11:30.
Bellemare: I would just like to ask you if the report could be ready
earlier. Many of us have meetings at that time on Wednesday.
Okay, if it can be made available earlier we will. Perhaps we can meet later
Bellemare: Or we could meet later. That would be ideal.
That’s a good observation.
M. Deacon: On that line, my question is: What is the latest we could
meet? For example, do we want this in the Senate on Wednesday or Thursday?
The preference is Wednesday.
M. Deacon: Right, so how much time do you need after we meet for it to
be ready to go into the Senate?
According to the analyst, the report could be ready for Wednesday afternoon.
Mr. Smith: Just to add to that, it depends on how many
changes are made to the report. If the changes to the report are relatively
simple and minor changes, it would be very quick to do. If there are some
substantive changes, extra sections or new phrasing, then it would take longer
and it would be challenging to turn over because there have to be changes made,
translated, then printed out and prepared; there is a bunch of steps that have
to take place.
M. Deacon: With that in mind, with total respect of the workload —
I don’t know yet, I’m trying to figure it out; I respect it but I don’t know
it — is there any way we can meet tomorrow or is that hard from your
I’m just throwing
it out there, folks.
Mr. Smith: The report has to be written and then
translated, so there is no way you’re going to get it tomorrow.
M. Deacon: That’s fine.
Mr. Smith: If all went well, you would get it tomorrow
evening but I don’t think that’s going to happen. It will probably be
distributed to you on Wednesday morning.
Bellemare: What if we didn’t meet at 11:30 a.m., but rather at
9 a.m. Wednesday?
If we could accommodate that.
Forest: But on Friday, there is the ISG meeting. It ends at
We are talking about Wednesday.
Bellemare: It’s not Friday.
Forest: I meant Wednesday. Our meeting takes place Wednesday.
Bellemare: It is at 11 a.m.
Forest: No, the ISG meeting is in the morning. It starts at 9 a.m. and
ends at 11:30 a.m.
So that’s why we were looking at 11:30 because there are other caucuses or
Or if we can get it late tomorrow.
We’ll bring to the attention of the clerk. The clerk has heard the comments.
If we can accommodate for tomorrow night, then this will precipitate, and if
not, the latest will be at 11:30 Wednesday morning.
Keep in mind that this report has to get into the Senate and be adopted
before the supply bill, and the supply bill is the whole reason we’re here.
They’re all tied together here.
Marshall: When will we do second reading of the supply bill? Wednesday? And
third reading Thursday?
With unanimous consent, with leave it could be Wednesday.
Marshall: We could do it all in one day.
Once the report is adopted then we could get it done.
Marshall: With unanimous consent, though.
So honourable senators, thank you very much for the information.