THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, November 25, 2020
The Standing Senate Committee on National Finance met with videoconference this day at 1 p.m. [ET] to examine and report upon the expenditures set out in the Main Estimates and the Supplementary Estimates (B) for the fiscal year ending March 31, 2021.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Before we begin, I’d like to remind senators and witnesses to please keep your microphones muted at all times unless recognized by name by the chair.
[Translation]
Honourable senators, should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk and we’ll work to resolve the issue. If you experience other technical challenges, please contact the ISD service desk with the technical assistance number provided.
[English]
Honourable senators and participants, the use of online platforms does not guarantee speech privacy or prevent eavesdropping. Therefore, while conducting committee meetings, all participants should be aware of these limitations and restrict the possible disclosure of sensitive, private and privileged Senate information — participants should do so in a private area and be mindful of their surroundings.
We will now begin the official portion of our meeting. My name is Percy Mockler, a senator from New Brunswick and chair of the committee. I would like to introduce the members of the committee who are participating in this meeting: Senator Boehm, Senator Dagenais, Senator Deacon (Ontario), Senator Duncan, Senator Forest, Senator Galvez, Senator Klyne, Senator Loffreda, Senator Marshall, Senator Richards and Senator Smith.
I wish to welcome all of you and viewers across the country who may be watching the Finance Committee.
Honourable senators, this afternoon we begin our study of the expenditures set out in the Main Estimates and the Supplementary Estimates (B) for the fiscal year ending March 31, 2021, which was referred to us by the Senate.
For this first panel, we welcome representatives from the Public Health Agency of Canada: Carlo Beaudoin, Chief Financial Officer; accompanied by Karen McKinnon, Acting Vice-President, Health Promotion and Chronic Disease Prevention Branch; Peter Linkletter, Vice-President, National Emergency Strategic Stockpile; and Kimberly Elmslie, Vice-President, Infectious Disease Prevention and Control Branch.
We also welcome, honourable senators, from Health Canada: Edward de Sousa, Acting Assistant Deputy Minister and Chief Financial Officer; accompanied by Ed Morgan, Director General, Policy, Planning and International Affairs Directorate; Megan Bettle, Director General, COVID-19 Regulatory Response Team; Nancy Hamzawi, Assistant Deputy Minister, Policy and Strategic Integration, Testing, Contact Tracing and Data Strategies Secretariat; and Marcel Saulnier, Associate Assistant Deputy Minister, Strategic Policy Branch.
Finally, from Public Services and Procurement Canada, we welcome: Wojciech (Wojo) Zielonka, Chief Financial Officer, Finance and Administration Branch; accompanied by Michael Mills, Associate Assistant Deputy Minister, Procurement Branch; André Fillion, Assistant Deputy Minister, Defence and Marine Procurement, Acquisitions Programs; and Stephanie Kirkland, Assistant Deputy Minister, Pay Administration Branch.
Welcome to all of you, and thank you for accepting our invitation. We have been informed that there will be opening remarks. Being mindful of the five-minute rule, Mr. Zielonka, you have the floor.
[Translation]
Wojciech (Wojo) Zielonka, Chief Financial Officer, Finance and Administration Branch, Public Services and Procurement Canada: Good afternoon, Mr. Chair and committee members.
[English]
I appreciate the opportunity to appear before this Senate committee to discuss Public Services and Procurement Canada’s Main Estimates and Supplementary Estimates (B) for 2020-21. In our Main Estimates, PSPC is requesting $4.048 billion. More than $3 billion of that amount will be spent on property and infrastructure, including the Parliamentary Precinct.
Payments and accounting are $316.2 million; $170.8 million for government-wide support programs, including the Translation Bureau; $206.8 million for the purchase of goods and services; $4.1 million for the Procurement Ombudsman; and $281.7 million for internal services.
In the Supplementary Estimates (B), PSPC is asking for $817.8 million, which includes $720.8 million in voted appropriations and close to $100 million in statutory appropriations. The bulk of those funds will be used to support Canada’s ongoing response to COVID-19.
[Translation]
For the last several months, PSPC has been working to support Canada’s response to the evolving pandemic. Part of the department’s role is procuring personal protective equipment and other medical supplies for front-line health care workers. To date, more than two billion individual pieces of equipment have been secured for the immediate and long-term response.
[English]
PSPC remains focused on equipping health care providers, but there are also significant needs for PPE in other essential service sectors such as transportation, energy and food production. To help meet these needs, PSPC launched the Essential Services Contingency Reserve.
[Translation]
This reserve acts as an emergency backstop and gives temporary and urgent access to personal protective equipment as well as other supplies on a cost-recovery basis. Public Services and Procurement Canada is requesting $500 million in its Supplementary Estimates (B) to further support this important initiative.
[English]
I will also mention that PSPC maintains a supply hub to connect Canadian organizations from coast to coast to coast with federal, provincial, territorial and other resources and information on buying and selling PPE. The hub offers important guidance on what PPE is needed for specific occupations and work settings.
In addition to PPE, the department has been purchasing rapid test kits on behalf of the Public Health Agency of Canada.
[Translation]
The department is also continuing to aggressively pursue vaccine candidates on behalf of the agency. We’re also seeking out logistic solutions so that the government can start delivering doses as soon as Health Canada authorizes them to be used.
Mr. Chair, while Canada’s COVID-19 pandemic response is the department’s number one priority, our dedicated public servants are continuing to deliver other vital services during this challenging time.
[English]
For example, significant progress has been made in stabilizing the Phoenix pay system and eliminating the backlog of transactions. As of October 28, the backlog of transactions with financial implications has decreased by 71% since the peak in January 2018.
We are also continuing important work to purchase the supplies and equipment that are vital to the Canadian Armed Forces and the Canadian Coast Guard. For example, the competitive process to acquire advanced fighter jets is moving forward, and we anticipate a contract award by 2022, with the first replacement aircraft delivered as early as 2025. At the same time, work under the National Shipbuilding Strategy is happening across the country. On that front, we are responding to evolving federal shipbuilding requirements by carrying out a process to select a third partner shipyard under the NSS.
[Translation]
Another major file where work is continuing is in PSPC’s portfolio of Crown-owned real property. Building on the successful completion of the West Block and Senate of Canada Building in the Parliamentary Precinct, PSPC will continue to advance work on the Centre Block and the West Memorial Building, which will allow it to accommodate the Supreme Court of Canada during that building’s renovations.
[English]
Through the Supplementary Estimates (B), the department is requesting $285 million to maintain its existing Crown-owned office facilities and related real property levels of service to federal departments and agencies.
The Chair: Mr. Zielonka, your five minutes is up, so I will need to move on. Thank you very much. You will certainly be asked some questions.
Mr. de Sousa, the floor is yours.
Edward de Sousa, Acting Assistant Deputy Minister and Chief Financial Officer, Health Canada: Good afternoon, Mr. Chair and members of the Standing Senate Committee on National Finance.
Thank you for inviting me to discuss Health Canada’s 2020-21 Main Estimates and Supplementary Estimates (B). I welcome the opportunity to highlight some of the department’s priorities and to share with you some of the work the department is doing to support the health of Canadians. With me today are several colleagues in the event you have questions that require more detailed program responses.
I’ll jump ahead. For the Main Estimates, there is $2.7 billion in proposed spending, which represents an increase of approximately $206 million, or 8.2%, over 2019-20.
Through these estimates, Health Canada will continue to provide national leadership to support a health care system that offers appropriate and effective health care to Canadians. The department will remain focused on helping Canadians lead healthier lives by working to protect them from unsafe health, consumer and commercial products and substances and continue to take action to modernize regulations for food and health products.
I will begin by providing a summary of the $2.7 billion in proposed spending in the Main Estimates, followed by an overview of the Supplementary Estimates (B).
Some of the significant areas of investment in the Main Estimates are as follows: Health Canada will spend approximately $1.25 billion, an increase of $150 million from last year, to strengthen Canada’s home and community care and support improved access to home and community care, as well as mental health and addiction services for Canadians. Funding is provided to each province and territory through bilateral agreements, and this is a continuation of the work announced in Budget 2017.
The department will also spend $24.8 million for bringing innovation to regulations. This funding will be used to modernize the department’s regulatory frameworks by making them more agile and responsive to an innovative environment while ultimately ensuring the health and safety of Canadians.
These estimates also include an additional $21.2 million to continue to address the opioid crisis in Canada. With this funding, the department will continue to focus on reducing stigma, increasing access to evidence-based treatment services and identifying barriers and opportunities for expanding access to a safer drug supply.
Health Canada also has a $17.5 million increase compared to last year to continue to fulfill the government’s commitment to legalizing, strictly regulating and restricting access to cannabis by supporting community-based Indigenous organizations in leading public education awareness, harm reduction and prevention activities.
Finally, with regard to the 2020-21 Main Estimates, Health Canada has been provided $35.1 million for the settlement of collective bargaining agreements.
With regard to the 2020-21 Supplementary Estimates (B), Health Canada has a net increase of $968.8 million, bringing its total proposed authorities to date to $4 billion for the current fiscal year.
The majority of this funding is required to support the immediate health response to COVID-19 announced by the Government of Canada on March 11, 2020.
The COVID-19 pandemic has created unprecedented challenges for Canadian health systems. Health Canada is playing a key role in the development and implementation of the responses to the pandemic at the regulatory, operational and policy levels.
These supplementary estimates are comprised of voted appropriations of $737.6 million, statutory appropriations of $230.8 million and approximately $400,000 in net transfers to and from other government departments and agencies.
In voted appropriations, Health Canada will be receiving $318.9 million for COVID-19 medical research. This is to ensure Canadians have access to the drugs they need to treat symptoms of COVID-19 and to invest in regulatory capacity for clinical trials, authorizations, drug shortages, compliance and enforcement activities. Operational support is necessary to ensure that there is a coordinated and cohesive government response to the pandemic.
Health Canada will also be receiving $315.1 million for the Safe Restart Agreement, which covers federal investments in testing, contact tracing and data management.
Funding of $100 million is being realigned from the previously received statutory appropriations for drugs, medical devices and virtual care. This is to continue the development and launch of virtual care and mental health applications, facilitating access to drugs and medical devices and sustaining operations and coordination.
In addition, $3.7 million in funding is also being realigned from the previously received statutory appropriations to support Canada’s COVID-19 response. This is for specialized health services, facilitating access to drugs and medical devices as well as sustaining operations and coordination.
The statutory appropriation is a continuation of the provision for Health Canada to access $221.2 million through the Public Health Events of National Concern Payments Act. This amount provides increases to the first two priorities and adjustments to the last two where statutory funding is being transferred to Health Canada’s voted appropriations.
This year has been a remarkable and challenging year unlike any other. This proposed spending will ensure that the Government of Canada can respond to the COVID pandemic and continue to focus on important health priorities designed to result in better health outcomes for all Canadians.
Thank you once again for inviting me to appear before the committee today. I’m pleased to answer any questions you may have.
The Chair: To complete the presentations, Mr. Beaudoin, please.
Carlo Beaudoin, Chief Financial Officer, Public Health Agency of Canada: Mr. Chair, honourable senators, we would like to thank you for inviting us today to present the Public Health Agency of Canada’s Main Estimates for 2020-21 and Supplementary Estimates (B) for 2020-21. We are pleased to have the opportunity to discuss our resourcing plans with you.
PHAC’s 2020-21 Main Estimates and Supplementary Estimates (B) will capture the 2020-21 base budgets of the agency as well as any significant budgetary changes since Supplementary Estimates (A), on which we appeared earlier this year.
The Public Health Agency of Canada’s 2020-21 Main Estimates propose a net increase of $16.2 million from $625.6 million in 2019-20 to $641.8 million in 2020-21. This funding includes $341.3 million in operating, $6.8 million in capital, $250.8 million in grants and contributions, and statutory funding of $42.9 million.
The major funding increases in Main Estimates include funding to support the implementation of Canada’s first national dementia strategy, $9.3 million; community-based projects to address the challenges of dementia, $5.3 million; and addressing the drug overdose crisis in Canada, $4.9 million.
The Supplementary Estimates (B) for the Public Health Agency of Canada is seeking an increase of $18 billion to our funding levels. With the approved Main Estimates and Supplementary Estimates (A), this will bring agency total authorities to nearly $21 billion for the 2020-21 fiscal year.
Supplementary Estimates (B) increase PHAC’s voted spending authorities by nearly $9.26 billion in statutory spending and statutory spending forecast by $8.78 billion. The Supplementary Estimates (B) are seeking $9.07 billion in operating, $76.1 million in capital and $109 million in grants and contributions.
These increases to statutory spending authorities are mainly due to spending under the Public Health Events of National Concern Payments Act that was enacted in response to COVID-19. This funding is needed primarily to fund the bulk purchases of PPE, testing supplies, ventilators and vaccines to meet the urgent needs of federal partners, including provinces and territories. These bulk procurements are in support of large-scale efforts to combat COVID-19.
The most significant funding changes in these Supplementary Estimates (B) include funding for medical research and vaccine development to support effective negotiations for vaccine purchases and the procurement of key therapeutics, $9.2 billion; funding to acquire protective gear and medical equipment supplies to meet urgent needs of federal partners and P/Ts of $5.55 billion; funding for medical countermeasures to address biomanufacturing capacity limitations, particularly in fill and finish, the final stage of manufacturing, $1.3 billion; funding for the Safe Restart Agreement for federal investments in testing, contact tracing and data management, $942.4 million; and funding for border and travel measures and isolation sites of $508.8 million.
As the COVID-19 situation has evolved over the last several months, the agency continues to focus on ensuring appropriate measures remain in place to contain the virus, minimizing community transmission and to ensure our institutions and health systems have the capacity to continue to respond effectively.
The Public Health Agency of Canada is leading on the procurement of PPE, testing and preparing Canada for COVID-19 vaccines. Recent effectiveness testing of COVID-19 vaccines shows promising results. The Public Health Agency is actively working to ensure we are ready to deploy vaccines when they are approved for use in Canada.
As of November 18, we have signed agreements with seven different companies to secure tens of millions of vaccine doses for Canadians. Health Canada has received submissions for the authorization of three COVID-19 vaccines from AstraZeneca, Pfizer and BioNTech and from Moderna. Reviews of safety, efficacy and quality of these vaccines are being conducted as data becomes available. Other manufacturers are expected to provide submissions soon.
The government has also committed $220 million to the COVAX facility in order to secure options to purchase doses for 20% of Canada’s population and committed an additional $220 million to provide vaccines for the developing world through the facility.
We want to thank you for this opportunity to speak about our work. My colleagues and I will be pleased to answer questions from the members of this Senate committee. Thank you.
The Chair: Thank you, Mr. Beaudoin. To the presenters, thank you for your statements.
Honourable senators, being mindful of the five-minute rule, I would ask that questions be directed to the witnesses.
To the witnesses, please answer as concisely as you can.
Senator Marshall: Thank you to all the witnesses. I was especially interested in your comments on the COVID-19 vaccines because I watched the House of Commons Health Committee last Friday when the minister testified, and she was saying that we’ve acquired more vaccines per capita than any other country in the world.
In the last few months there have been quite a few articles on COVID-19 vaccines. Back in August, Minister Anand, the procurement minister, had indicated that Canada was at the front of the line to get millions of doses of four of the most promising COVID-19 vaccines, the Pfizer and Moderna vaccines that you referenced in your opening remarks. She said when one of these vaccines is approved, Canadians will be among the first in line to get it.
So I was kind of surprised yesterday when the Prime Minister indicated that Canadians are going to get the COVID-19 vaccine after other countries due to a lack of manufacturing capacity. I thought that wasn’t really an issue, because we were going to purchase millions of vaccines from these individual companies. But now I find we’re going to be behind the United Kingdom, Germany, Mexico and so on.
I’m thinking just of Moderna and Pfizer, those two deals. Can you tell me what date we are to receive the vaccines from Pfizer and what date we are to receive the vaccines from Moderna?
Mr. Beaudoin: I can’t give you an exact date. A large part of it depends on when these vaccines will be approved and get regulatory approval. We are expecting doses to start coming into the country likely in January and February. I’m wondering if my colleague Kim Elmslie on the line may have more details as well. She’s Vice-President, Infectious Disease Prevention and Control Branch.
Senator Marshall: The minister, when she testified, said there would be some vaccines available in the first quarter. She didn’t define what “some” was. I’m very interested and trying to reconcile what the minister said with what the Prime Minister said. They seem to be in conflict.
Mr. Beaudoin: Our understanding right now is that we are expecting several million doses in the first quarter. Part of it is due to regulatory approval, and part of it is due to when they will be shipped here. These companies have committed to providing Canada doses.
Senator Marshall: But is there a date? There must be one in the contract.
Mr. Beaudoin: The date is as soon as regulatory approval is received, and then they can start shipping vaccines to Canada. Obviously, as soon as they receive regulatory approval in both the States and in Canada, they will start shipping, my understanding is, to both countries. They may give priority to the U.S. and send fewer doses to Canada, but at this point I wouldn’t be able to tell you, other than we have contracts in place that guarantee us that they can start shipping as soon as they have regulatory approval. The quantities they will ship will have to be determined at that point.
I’m wondering, as I say, if my colleague Ms. Elmslie has more information, as she’s closer to the vaccine file than I am.
The Chair: Ms. Elmslie, do you have any comments, please?
Maxime Fortin, Clerk of the Committee: I’m sorry, senator, but Ms. Elmslie’s audio did not pass the test earlier. Her audio is not good enough for interpretation.
Senator Marshall: Could I follow up with one question?
The Chair: Yes, please.
Senator Marshall: What does the contract say? I can appreciate the fact that it’s not going to say “on March 15,” but there must be some definition of when we’re going to receive those vaccines. Initially we were told that we were at the front of the line. Yesterday we were told that we’re at the back of the line. So people are very concerned, which is going to lead to another problem because people who aren’t at the front of the line in Canada are going to go to countries where they can get the vaccine, so you’re going to end up with a split in your health care system. Can somebody not clarify exactly where we’re at in the lineup for the vaccines?
Mr. Beaudoin: So the contract defines the number of doses we’ll receive, and they can start shipping as soon as regulatory approval is received. The contract does not define priorities, like that they’ll be shipped after the U.S. My understanding is they were going to start shipping to Canada concurrently.
Senator Marshall: Do I have more time, Mr. Chair?
The Chair: No. Thank you, Senator Marshall.
Senator Marshall: Second round, please.
The Chair: Yes, absolutely.
To the clerk, if we can connect Ms. Elmslie, please let us know so that we can have her respond to Senator Marshall’s questions.
[Translation]
Senator Forest: The Prime Minister said that our country has ordered more vaccines than any other country and that we’ve made investments to increase production capacity in Canada in anticipation of future events. I have two questions. First, I gather that the contracts are secret for trade strategy reasons, that the contract sets out the number of doses and that we’re bound by these contracts. Do the contracts negotiated with the pharmaceutical companies contain provisions ensuring that Canada will have priority and, if so, what might these provisions look like? That’s my first question. I know that we may not be the first. However, do any provisions ensure that we have priority in the contracts established with the pharmaceutical companies, Mr. Linkletter?
[English]
Peter Linkletter, Vice-President, National Emergency Strategic Stockpile, Public Health Agency of Canada: Thank you, senator, for your question. Specifically the component of the request regarding personal protective equipment and medical equipment in relation to the ongoing work to support our front-line health care sector across the country is $2.2 billion. This funding is going to be used to support PPE, test kits, medical supplies and equipment for use in the health care sector.
Senator, was there a particular component of that you were looking for more clarity on?
[Translation]
Senator Forest: Given what the Prime Minister told us, do the agreements — where we specified a number of doses in exchange for a lump sum and determined that the deliveries would take place after the approval of the authorities involved — contain any provisions ensuring that we have some priority in terms of the delivery of these doses? The epidemic is global. It isn’t just in Canada or North America.
[English]
Mr. Linkletter: Excuse me, Mr. Chair and senator, I was having some difficulties hearing. I think the focus of your question, senator, is linked to the previous line of questioning regarding vaccines, to which I would certainly want to defer to my colleague Ms. Elmslie, who may be able to get on.
The Chair: I think it’s still very difficult for Ms. Elmslie. Mr. Beaudoin, can you add a few comments?
Mr. Beaudoin: Yes. The contracts don’t specify that a certain country will have priority over Canada. There is no order in which countries pass ahead, but some of that might be defined by the legislation in the U.S. itself as opposed to the contracts. The contracts really stipulate that the company will make every effort to guarantee and to deliver X number of doses once they receive regulatory approval. There is no order of priority in terms of countries within those contracts. That is a measure that another country, such as the U.S. or England, could put in place to keep the doses for their citizens prior to shipping them to other countries, but it’s certainly not defined in the contract.
[Translation]
Senator Forest: In addition, the Prime Minister said that we worked hard to increase our production capacity, because this constitutes a shortcoming in Canada. Do the agreements negotiated with the pharmaceutical companies contain provisions in which we asked them to partner with Canadian companies to ensure production in Canada and Canada’s supply of pharmaceuticals for the coming months and years?
Mr. Beaudoin: Part of our job involves working with Innovation, Science and Economic Development Canada. Our estimate includes $1.3 billion to strengthen our capacity in terms of vaccine development and vaccine manufacturing lines. We’ve invested in this area. We’re working hard with the department to increase Canada’s capacity to obtain vaccines, including syringes and bottles, and to support the distribution and assembly of the vaccines. We’re working on this and we’ve set aside funding for this as well.
The Chair: Thank you, Mr. Beaudoin.
[English]
Senator Klyne: Welcome to the guests on the panel. Thank you very much.
My question is for the Public Health Agency of Canada, a quick point going back to research and vaccine development. The forecasted statutory spending is $3.8 billion and the Supplementary Estimates (B) request is $5.4 billion, for a total of $9.2 billion. Of that total $9.2 billion, how much is on the R&D side and how much is being earmarked for procurement, distribution and inoculation?
Mr. Beaudoin: Thank you for the question, senator. Of the $9 billion, $8 billion is for purchase agreements for vaccine supplies. There is $1 billion for working with international partners on vaccines, and $200 million for treatments. The broad vaccine envelope provides funding for distribution of the vaccines and storing of the vaccines, which we’re working on. In terms of the biomanufacturing and development of capacity, you’re looking at the $1.3 billion that we called funding for medical countermeasures. That’s really to bolster that domestic biomanufacturing capacity. There is close to $650 million for that. That also includes funding for packaging, supplies as well as therapeutics and logistics.
The envelopes are broad, so they’re not locked in on certain amounts. We have flexibility with these envelopes. Also, a lot of this work is being done in partnerships, especially when you’re looking at developing industry capacity. A lot of that is being done in collaboration with Innovation, Science and Economic Development Canada and other federal government departments who lead on that front.
Senator Klyne: Thank you. In your answer you folded in medical countermeasures. In the Supplementary Estimates (B), there is $782 million in that regard. Are there any statutory authorities or forecasted statutory spending leading up to the Supplementary Estimates (B) for countermeasures of $782 million? How do we know what to put into inventory, and how do you include it in COVID-19?
Mr. Beaudoin: Thank you for the question. In terms of the envelopes, you need to understand how we divide the $1.3 billion. The portion we put on the $782 million is what we plan to spend between January 1 and March 31. That’s how the estimates were structured. As of this week, it was announced this morning that we purchased 26,000 doses of a product from Eli Lilly, which was developed in collaboration with a Vancouver company. That is one of the treatments we’ve purchased.
We also purchased treatment of remdesivir earlier. The envelope is also being kept for potential future purchases. But also within that envelope you will also see the packaging, the logistical support, shipping and storage of vaccines. This is all what we plan to spend in the new year. We expect to start to roll out our vaccine strategies starting in January. We expect to start receiving doses in the first quarter of next year, so we need to be ready for the distribution and deployment of vaccines across the country.
Senator Klyne: Including countermeasures?
Mr. Beaudoin: Including countermeasures, which we have now purchased and will be distributing to provinces.
Senator Richards: I wanted to follow up on what has been asked so far. I wonder why we gave up on research in our health care system and left it up to Pfizer and other places in the United States. We certainly brag about our health care system to other nations. I’m just wondering why we’re so far behind the eight ball with this research. Nothing [Technical difficulties] more than this crisis, and I wonder if someone could answer why we weren’t up to speed.
The Chair: Let’s start with Health Canada. Comments?
Mr. de Sousa: Thank you, Mr. Chair. I’ll turn the question over to Marcel Saulnier.
Marcel Saulnier, Associate Assistant Deputy Minister, Strategic Policy Branch, Health Canada: There has been significant investment in research since the beginning of the pandemic. Some of that has been done through the Canadian Institutes of Health Research, where there has been mobilization of the research community across the country to look at furthering research in areas that are critical, like mental health and substance use as well as in the area of therapeutic products.
This responsibility is with the CIHR, which is not Health Canada proper. However, I think the record will show that the government has made significant investments in supporting health services research linked to COVID-19.
Senator Richards: That may be well and true, and I’m not saying it’s not, but what we heard yesterday was pretty alarming about when we’re going to get these vials of vaccination to our population. We might have to wait in a long, long line. I’m wondering, having one of the foremost health care systems in the world, how we lost sight of that.
It’s fine to say that we’re doing this research after the fact, but I think our whole research ability should have been a little more formidable.
The Chair: Thank you for the comment, Senator Richards. Are there any witnesses who would like to comment? If not, then we will move on.
Senator M. Deacon: Thank you all for being here. I know we are having some technical challenges, but your profile and the work you’re doing make this an extremely important meeting for us today. I’m hoping we get through it all.
I have two questions, and the Public Health Agency or Health Canada may wish to respond to the first one. Looking at the supplementary estimates of $2.2 billion that was referred to earlier for PPE, testing and all health-related supplies, can you tighten up for us what happens to these once they are purchased? It’s our understanding that once they are procured, they would be given to the provinces to then distribute as they see fit. Is this the case? If it is, does the Public Health Agency keep tabs and reports on how this PPE is used? I’m trying to clearly understand fact from fiction and where the federal responsibility ends and the provincial responsibility begins in this work.
Mr. Linkletter: Thank you, senator, for the question. As I mentioned earlier, the Government of Canada is working to secure PPE, medical equipment and supplies to support gaps in provinces and territories. Maybe to give you an illustration, currently we have 2.9 billion pieces of PPE, medical equipment and supplies on order, of which we’ve received approximately 1.4 billion pieces — so about half — of which 12% has been shipped to provinces and territories.
So we receive this PPE, medical equipment and supplies at the Public Health Agency of Canada, into our National Emergency Strategic Stockpile. It is then allocated on a population-based formula, so that 80% of the overall allocation goes to provinces and territories, and then 20% is held in this emergency stockpile with a further portion of that to support Indigenous Services Canada.
In addition to that, should there be an extraordinary requirement for support, there is a formal request for assistance process that would be made by a province or territory to the National Emergency Strategic Stockpile. It would then be scrutinized to make sure we can support it and address the logistical requirements of shipping the PPE, medical equipment and supplies out to a province or territory.
So we do, in the background, have a very clear picture of that supply chain, supported by an IM/IT platform, a warehousing platform, a stockpile management system platform, to give us a very timely perspective of that overall supply chain and the overall portfolio. Does that help?
Senator M. Deacon: Thank you very much for that response; I do appreciate it.
I’m going to leave vaccines alone, although I am anxious to hear the numbers of the doses from the three companies. I believe that response would come from somebody who is unable to have audio support.
On procurement, my question concerns the $40 million to acquire and distribute supplies of key goods and services for a broad range of organizations that are involved in the COVID-19 response or provide non-medical essential services to Canadians.
Can you give me an idea of what these non-medical essential services might be? Will there be an application system based on need? Large chains, for instance, probably have no issues with getting their own equipment and having their own supply chain, but smaller and privately owned operations could use, I would imagine, some support with this.
Michael Mills, Associate Assistant Deputy Minister, Procurement Branch, Public Services and Procurement Canada: Senator, I believe your question is related to the Essential Services Contingency Reserve.
These would be essential sectors, such as food production and manufacturing, or non-medical services like dental services. There are 10 different sectors that have been identified through the public safety community in terms of what are deemed essential services. They can make an application, and it depends on what industry they are in. If they are transportation, for instance, we would consult with Transport Canada to determine the validity of the application and the need.
This is a backstop reserve, so we do have a test in terms of whether it is possible to acquire those privately, and, if not, we would provide the material on a cost-recovery basis.
Senator M. Deacon: Have you had non-medical essential services requests that have been a surprise or a shock to you?
Mr. Mills: I would not say that we’ve had applications that have been a surprise or a shock.
I think most of our requests have been from smaller businesses such as individual proprietors, dental shops and whatnot. I think the one surprise is we would have thought there would have been more industry association larger requests, but they’ve tended to be more from smaller applicants.
Senator Boehm: I would like to thank the witnesses for being here and for the excellent work they do as public servants in our country.
I am mindful of the time, so I’m going to launch all my questions at once and direct them first to the Public Health Agency of Canada. My question is about priorities. Who are the priority people who will receive the vaccine first? The National Advisory Committee on Immunization has released recommendations. Is there a consensus developing? Are you working with the provinces to look at that, and will there be a national campaign to ensure consistency regarding which groups will be prioritized for vaccination?
To Public Services and Procurement Canada, in other federal jurisdictions — I know a little bit about Germany — there has been a distributional plan already established with the 16 federal states in Germany. They are setting up vaccination centres as well on a county and regional basis. Is there work under way to look at that?
To Health Canada, as far as I know, there is not a national immunization registry. Some of us still have our little booklets from the 1970s and 1980s. Are there plans to do that, recognizing that many people will have to get a vaccine twice, that there will be a second vaccination? How would that be handled?
To Health Canada, we’re all aware of COVAX. What I find a little disturbing is that if you look at the countries that have signed up for Pfizer, about 85% of them are first-world countries. There has to be something left over for the rest of the world. As our own Prime Minister has said, this is a global crisis. If there are any leftovers, I’m wondering whether they would be donated to that global facility.
My last point is an important question for me because I’m originally from the foreign service of Canada. We have a lot of personnel, foreign service and military, serving abroad. Will their needs be looked after in terms of providing them with the vaccine? Thank you.
The Chair: The witnesses responsible for the agency or the ministry, please answer Senator Boehm’s questions. Mr. Beaudoin first, then Public Services and Procurement Canada and Health Canada.
Mr. Beaudoin: In terms of the first questions and in terms of prioritization of the vaccine, as my colleague Ms. Elmslie isn’t here and she’s working quite actively with the provinces on the distribution and prioritization, I submit we should respond in writing to the committee to make sure we give you the proper answer on that one.
The Chair: Is that acceptable, Senator Boehm? Thank you, Mr. Beaudoin.
Now we will go to Public Services and Procurement Canada to answer the question posed by Senator Boehm.
Mr. Zielonka: I believe the senator’s question was around distribution. I think that would be better answered by our colleagues in PHAC.
Mr. Beaudoin: We can add that answer to our written response in terms of the distribution. I know we’re actively working on it; we have a task team dedicated to the distribution of vaccines. I think that ties into the previous question on prioritization.
The Chair: Thank you, Mr. Beaudoin.
To Health Canada, please. The question posed by Senator Boehm.
Mr. de Sousa: Thank you. As I understood the questions, there were two: one with regard to the immunization registry and the other related to COVAX.
I believe those are probably better answered by the Public Health Agency as well.
The Chair: So Public Health Agency of Canada, Mr. Beaudoin.
Mr. Beaudoin: We’ll have to get back to you about immunization registries. I believe that was a Health Canada lead and not a Public Health Agency lead. I think we can sort it out between our two organizations and we’ll get back to you. We can put that in writing.
In terms of donations, we’re already working with COVAX and my understanding is any excess vaccines will be donated to other countries. We’re working through COVAX right now or one of the partners.
The Chair: Therefore, Mr. Beaudoin, before I move on to the next senator, when can we expect to have that in writing?
Mr. Beaudoin: I believe we should be able to give that to you within a week, if that’s acceptable.
The Chair: We have a time frame. I will ask the clerk to connect with you about our time frame so we are in a position to table our report in the Senate. Is that fair?
Mr. Beaudoin: I think that’s fair.
The Chair: Thank you.
Senator Boehm: Chair, if I may. I did not get a response to the last question I asked about Canadian personnel serving abroad. If there isn’t an answer now, maybe that could be included in the written submission.
The Chair: I see we are at the end of the five minutes.
Mr. Beaudoin, will you be answering that question also?
Mr. Beaudoin: I think we will because it’s part of the distribution.
The Chair: Thank you, sir.
Senator Duncan: A special thank you to my colleagues and all of the witnesses who are here before us today.
In the supplementary estimates, the Privy Council Office is requesting a transfer of $10 million to Health Canada for the marketing and advertising campaign for the Government of Canada’s COVID Alert app system.
Could I ask the witnesses to provide, in writing, an answer about the efficacy of the COVID Alert app? For example, it’s not in effect in all of Northern Canada, to the best of my knowledge. While I appreciate that it’s more effective in the greater populous and the more populous areas, a COVID Alert app that worked with our communication system in Northern Canada could safeguard a whole community.
Could I have a preliminary report on the efficacy of that system? How is it working? How is it reaching people? And what provinces and territories have not signed on? If I could have that answered in writing.
Also, about the immunization registry that Health Canada and our other witnesses have referenced, could I also have a snapshot of how effective the Canadian Institute for Health Information has been in this whole process? They were originally instituted in order that provincial health care cards could transfer information. Where are they in this process and in this whole pandemic? That’s the Canadian Institute for Health Information and the exchange of information between provinces and territories.
Finally, with regard to procurement, could I have the information provided about the Phoenix pay system? The audio quality was not very good. Could we have that presentation submitted in writing to us so that we could have a look at it and digest it?
What has been the impact of having public servants working from home while dealing with the Phoenix pay system and the backlog of claims? Have we been able to adjust and pivot to enable people to work from home in processing the backlog?
I appreciate the opportunity to ask those questions. I look forward to a response in written form. Thank you.
The Chair: Who will take the lead on those? Mr. Beaudoin or Procurement Canada.
Mr. Zielonka: Perhaps if we could address the questions around the Phoenix pay system. I have my colleague Stephanie Kirkland on the line. She would be able to provide some information.
The Chair: Thank you. Ms. Kirkland, please bring clarity to the question.
Stephanie Kirkland, Assistant Deputy Minister, Pay Administration Branch, Public Services and Procurement Canada: Thank you very much for the question, Senator Duncan. The entire pay operations made a successful shift to remote working in March. We have been exceptionally successful, in fact. We have continued to reduce the backlog of cases. At this point, we have reduced the backlog by over 56% since the peak in January 2018. We continue to meet our service standards to the rate of 73% overall — an improvement of 57% since the last fiscal year. And we’re tracking to over 99% on the high-priority areas for cases and service standard for maternity and disability transactions.
We have been exceptionally successful in supporting our personnel from a technology perspective. Senator, if I may just add that we have placed special emphasis on the wellness of our employees across the country as well, ensuring that the use of technology and communications remains stable and consistent to support the staff.
We have also continued our efforts in our three-year plan around pay stabilization, not only in supporting our staff but in the dedicated teams that tackle the backlog of pay transactions. We’re seeing great traction on those things.
We have continued, with our technology partners, to introduce automation, robotics and technology solutions that allow the system to do the work and allow our compensation advisers to focus on the high-value, more complex work with great and positive effect over the course of the last seven or eight months.
I hope that answers your question for now. Thank you.
The Chair: Thank you. The clerk will communicate with the Public Health Agency of Canada and Health Canada to make sure that you can provide a reply in writing within the time frame we have to table our report.
Senator Loffreda: Thank you to all our panellists and colleagues. My question is for Health Canada. There is a request for $100 million for drugs, medical devices and virtual care for COVID.
How has the medical industry adapted to this, if you can elaborate? What is the feedback from our patients and health care professionals? Everybody believes this is the future, so I assume there will be a larger investment going forward and that Health Canada will request more funds going forward, but can you elaborate on it? Is it helping with the backlog? We hear there’s a large backlog with respect to essential operations or interventions that need to be done in the medical field by hospitals, but because of COVID this is being delayed. If you can elaborate on that.
Yes, a large portion of medical care is provincial, but do you feel there will be savings going forward because of the virtual care that will take more and more room and space in the medical industry? Thank you.
Mr. de Sousa: Thank you, senator, for that question. I’ll turn it over to my colleague Marcel Saulnier in a minute. As you mentioned, there is $100 million in these voted appropriations for virtual care and medical devices, and that is actually offset by the $100 million reduction in statutory. This was previously approved in the Public Health Events of National Concern Payments Act.
That funding is really, as you mentioned, to develop and launch a virtual and mental health care application. This is part of the government’s commitment to invest $240.5 million to support those virtual care services so that Canadians can engage effectively with their health providers through telephone, text or video conferencing to have their needs met.
There are a number of initiatives underneath that, so perhaps I’ll turn it over to Marcel Saulnier for the balance of the question.
Mr. Saulnier: Thank you for the question. There has been a lot of work in this space over the last eight months. Provinces and territories very quickly changed their approaches to funding medical care in March to support virtual visits with doctors and other health care providers. We went from something in the range of fewer than 5% of visits being virtual before the pandemic to now in the range of over half of interactions with health care providers being done over the phone, video conferencing or other virtual means.
That is a major change. The federal government has invested funds in this space and is in the process of negotiating bilateral agreements with each of the provinces to help them accelerate this shift, put in place more platforms that support secure video conferencing and secure messaging that enable patients to access their test results online and that enable providers to monitor patients remotely from the hospital or from their clinics. That’s important work that is ongoing now with the support of Canada Health Infoway as well, which is the national agency for digital health.
With respect to the comment about the impact on supporting delays in surgery or removing backlogs, I would just say that the more you can free up hospitals and clinics from having patients come into those facilities physically, and instead being dealt with from home, the more capacity you are freeing up.
Sometimes even for surgeries, whether you have to have specialist consultations either before or after the surgery, those interactions can also be done virtually. Then the only in-person interaction is when you actually have to come in for the treatment or the surgery.
On the question of savings for the future, I think the jury is still out. That’s something that we will be evaluating very closely. We have some work going on now with the Centre for Digital Health Evaluation at the University of Toronto, and we’ll be working with provinces and territories to create a very robust evaluation framework to look at how all of this impacts patient care and the sustainability of funding for the health care system. Thank you.
Senator Loffreda: Thank you for the answer.
Senator Smith: I have an operational question I want to ask. I’m impressed with the feedback you are giving us. From a rollout perspective, an operational plan perspective, have the departments, like public health, procurement, have you folks sat down and created a national SWAT team or logistics program? It seems like we’re receiving segmented answers and different types of questions that the senators are asking. Is there a national program? Is there leadership? Who is the leader? What is going on with the provinces?
If you could give me some sense of where you’re at with the rollout. As Senator Marshall said, and Senator Boehm to a certain extent, we hear about getting access to all this medicine, and we seem to be at the back of the line. But the most important thing for me to understand is the operational side. Do you have a national plan? Who is in charge of the national plan? What’s the relationship with the provinces? How is it going to affect the population? What’s going to happen to Indigenous folks or people in minority positions who may not have that direct access to care? If you could give us a little of feedback, I’m not sure who could do that. We have about three minutes left. Don’t answer too quickly.
Mr. Beaudoin: I think I’m best positioned to give you an answer to that. We’re working very closely with PSPC, and they have a task team in terms of the procurement. In terms of the logistics, it’s clearly the Public Health Agency that’s in charge of that. We are working very closely with the provinces. The organization has created several VPs in charge of the coordination, working with NACI and other groups.
Senator Smith: Do you have the military involved, Mr. Beaudoin?
Mr. Beaudoin: Yes. We actually have a major-general who is on loan from the military for logistics and operations to help us coordinate with the military.
We also have a chief technology officer who is in place because not only do we have to distribute but we have to track, we have to locate where it is, we have to know who has been immunized. We have to coordinate all of that with the provinces.
My understanding as well is that there are discussions with Indigenous organizations in terms of the rollout in those communities as well. This is all being coordinated through the Public Health Agency, and there are key positions in the organization that have been set up to do that and coordinate with other federal partners and provinces.
Senator Smith: Mr. Beaudoin, what is your assessment of what you see so far? I’m not trying to put you on the spot, but I just want to make sure that there is a type of organizational structure in place that will be able to actually deliver with a minimum of conflict, a minimum of breakdowns and the maximum of success.
Mr. Beaudoin: From what I see, the organization has a plan to get this in place and to be ready effectively to roll out vaccines as of January 1. We’re on track to deliver on that plan at this point.
It is a monumental task. It is extremely challenging. My understanding, from what I can see, is we’re on track to get there.
Senator Smith: It all depends on getting product in your hands so you can get the product out to doctors and medical people who can take care of our population. Is that correct?
Mr. Beaudoin: Yes. What we want to do is be ready so that when the product gets into our hands, we’re ready for the distribution, the vaccination and coordination with provinces and territories.
Senator Smith: Thank you.
[Translation]
Senator Dagenais: My question is for Mr. Beaudoin.
Mr. Beaudoin, just last week, in response to one of my questions about the development of a plan to vaccinate Canadians, the Leader of the Government in the Senate, Senator Gold, told me that this issue fell under provincial jurisdiction. Can you tell us whether any formal plan has been established yet?
You just told us that you’re working with the provinces. I want to ask you about your responsibilities and about whether Quebec is part of the discussions. Premier Legault seems impatient with the slowness of the process.
Mr. Beaudoin: To my knowledge, all the provinces are involved, including Quebec. Of course, part of the issue falls under federal jurisdiction, and the other part, such as syringes, falls under provincial jurisdiction. The purchase, coordination and distribution of vaccines to the provinces fall under federal jurisdiction. To my knowledge, once in the hands of the provinces, vaccination becomes a provincial responsibility. From that perspective, the responsibility is shared with the provinces.
Senator Dagenais: I want to pick up on what my colleagues said about vaccine availability. Yesterday, I heard Prime Minister Trudeau say that perhaps we shouldn’t expect to have the vaccines immediately. I heard this morning on Montreal radio that, according to Minister Duclos, 400 million doses have been reserved. However, reserving, purchasing and distributing are different things. I’m wondering whether the situation is a total mess and whether more specific conditions for the delivery of the vaccines should have been established. Everyone is talking about delivery. That said, you and I both know that we can order a Tesla without having it delivered the next day. Pfizer is headquartered in the United States and has conducted research with Germany. I think that they’ll be the first to use the vaccines, which is only natural.
Why is Canada in a weak position, so to speak, from a distribution perspective? We’re talking about the United States. I gather that 300 million Americans will surely receive their vaccines before we do, along with the citizens of the United Kingdom and Germany. Why are we fourth in line?
Mr. Beaudoin: I think that there’s a negotiation component. If we look at mask distribution, successful negotiations with the United States enabled us to continue purchasing N95 masks. I’m sure that discussions will be held at the political level between the United States and Canada, and perhaps with other countries, regarding vaccine distribution. We don’t expect to receive the vaccines after the Americans have all received their vaccines. Instead, we believe that we’ll receive them at the same time.
The issue is how many vaccines will be delivered to Canada and how quickly, compared to the proportion delivered to the United States.
Senator Dagenais: I have a question for Mr. Fillion. In June, you received a special budget of $700 million, I believe, and $445 million was added to the budget for a total of $1.145 billion. I want you to tell us what the first $700 million was used for. Also, in terms of the subsequent $445 million, I believe that you’ll receive $188 million to cover expenses that aren’t necessarily related to COVID-19. Does this mean that the money will be used to pay for something else and that the pandemic is being treated as an opportunity to cover other expenses?
André Fillion, Assistant Deputy Minister, Defence and Marine Procurement, Acquisitions Programs, Public Services and Procurement Canada: I don’t think that this question is for me, because it doesn’t concern defence and marine issues.
Mr. Beaudoin: I’ll need to give you a written answer. I’m not sure whether the question is really for the agency. I want to take a closer look at the matter and give you a written answer.
The Chair: Is a written answer acceptable to you, Senator Dagenais? I’ll now turn the floor over to Senator Galvez.
[English]
Senator Galvez: I am glad to be the last to ask questions, but hopefully next time I’ll be the first.
My colleagues said it well with respect to our worries concerning COVID: the response, PPE and vaccines. I want to continue in that line, but I will have two specific questions and one general question.
In the supplementary estimates there is a request of $400 million to provide supplies to the health system in response to COVID-19. The funding will be used to acquire and distribute key goods and services, the PPE. Among all the PPE, which are the most important? From where are they coming? Initially, in the first wave, they were all coming from overseas. Have we changed that?
We know that we will probably require a couple of dosages of the vaccine; one won’t be enough. Chances are that COVID-19 remains endemic, so new waves will be coming.
My second question deals with the funds that have been allocated for the cleanup of orphan and inactive wells in the West. An amount of $1.72 billion was already given to the provinces to deal with this important pollution issue. In the supplementary estimates there is now a request for another $1 billion.
When will the funds be provided to Saskatchewan and British Columbia to clean up these inactive oil and gas wells? How many orphan and inactive oil and gas wells are in Alberta, and how many will be cleaned up with these funds?
My third question is a global one. What is the percentage difference compared to last year’s budget and estimates?
Mr. Beaudoin: Thank you for the questions, senator.
In terms of PPE, I will defer the question to my colleague Peter Linkletter to reply as to where they’re coming from.
To your question about requiring two doses of the vaccine and whether this is endemic, it’s something we’re looking at and have considered whether we will need to have — similar to annual flu campaigns — annual COVID campaigns. The science isn’t yet clear on that. Time will tell.
In terms of the budget difference between this year and last year, as you know, our total agency budget is about $650 million, and what we’re presenting this year is almost $21 billion in total. All of this growth is COVID related, so there is no way to compare the two budgets.
I will defer to my colleague Peter Linkletter in terms of where the PPE is coming from.
Mr. Linkletter: Thank you, senator, for the question.
In terms of the PPE and medical equipment, it depends on the specific commodity. I’ll give you an example.
In terms of gloves, they are largely from China and some from Malaysia. In the case of face shields, we have a considerable domestic capacity, thanks to the great work done in terms of mobilizing the industry in Canada. We have about 80% of face shields coming from Canada. In terms of respirators, we have considerable self-sufficiency within Canada.
It depends on the commodity, and we have a breakdown. We would receive PPE, for instance, from Canada, China, Dominican Republic, Malaysia, Mexico and Taiwan. We have a true global supply chain. We’re always trying to move toward domestic self-sufficiency with companies like 3M and Medicom, that are able to satisfy our needs more locally.
I hope that helps to answer the question, Mr. Chair.
The Chair: Thank you.
Does Health Canada have comments on any of the questions?
Mr. de Sousa: Thank you, senator, for the question.
In terms of the budget question, our Main Estimates for this year would have been $2.7 billion. Through the updates we’re talking about, the supplementary estimates, we are now at a $4-billion amount for this year. Like the Public Health Agency, I think these significant increases are all related to COVID. It doesn’t mean these are ongoing amounts; it’s to respond to the pandemic as we see it today. Thank you.
The Chair: Thank you.
Honourable senators, we have time for two more questions.
Senator Galvez: Chair, there was one missing question on the orphan wells. Can somebody reply in written form?
The Chair: Yes. I’ll direct the information to the clerk.
Clerk, please have the witnesses from each organization look at the last question posed by Senator Galvez so that we can have an answer in writing.
Senator Marshall: I will ask my question, and if we can get the answer in writing that would be fine.
How much in total has been spent so far on vaccine development? I’d like the dollar amount, but I’d also like to know what departments and agencies have been involved in spending that money. Is it just the Public Health Agency of Canada, or are there other organizations or departments?
[Translation]
Senator Forest: My question concerns the significant level of coordination that will be required when we receive certification and the doses for distribution across the country. You said that you’re working with the provinces. However, is there any consensus at this point? Will health care workers be among the first vaccinated? Do the distribution guidelines contain any findings made by the provinces and territories? Are the rollout and distribution well planned? We received a report following a study on the H1N1 pandemic a few years ago. Were any major lessons learned from this study?
The Chair: To whom is your question addressed, Senator Forest?
Senator Forest: To those who are comfortable responding. Health Canada, probably.
[English]
Mr. de Sousa: Thank you for the question. I believe that’s a question more appropriately directed to the Public Health Agency of Canada. Thank you.
[Translation]
Mr. Beaudoin: Senator Forest, I think that this question is very similar to the question asked earlier, which I wanted to pass on to Ms. Elmslie, regarding how vaccination will be prioritized by population. I think that we already committed to providing a written response to that part of the question.
In terms of the changes made in response to the H1N1 pandemic report, I believe that I can also include this information in the written response prepared by our infectious diseases department.
Senator Forest: I’m particularly interested in this aspect. There was a fairly effective rollout across Canada, including in Quebec. You prepared a report, but we couldn’t access these findings. They could help us avoid making the same mistakes twice in the case of COVID-19.
The Chair: Thank you, Mr. Beaudoin.
[English]
To all of the witnesses, on behalf of the committee, this was very informative and there is no doubt in my mind that we all want to thank you for your dedication and devotion to a challenge that our country has never seen before. On that, you have been very informative and very professional. Thank you very much.
Honourable senators, we will now move to the second panel. We welcome, from Employment and Social Development Canada, Mark Perlman, Chief Financial Officer; he is accompanied by Jason Won, Deputy Chief Financial Officer; Cliff Groen, Assistant Deputy Minister, Benefits Delivery Services; and Elisha Ram, Associate Assistant Deputy Minister, Skills and Employment Branch.
We also welcome, from Indigenous Services Canada, Philippe Thompson, Chief Finances, Results and Delivery Officer; who is accompanied by Keith Conn, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch; and Mary-Luisa Kapelus, Assistant Deputy Minister, Education and Social Development Programs and Partnerships Sector.
Finally, we welcome, from the Department of Finance Canada, Darlene Bess, Chief Financial Officer, Financial Management Directorate, Corporate Services Branch; she is accompanied by Miodrag Jovanovic, Associate Assistant Deputy Minister, Tax Policy Branch; Sam Millar, Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance Branch; and Galen Countryman, Director General, Federal-Provincial Relations, Federal-Provincial Relations and Social Policy Branch.
We have other officials with Ms. Bess who can be called upon to answer questions from senators.
Welcome to all of you, and thank you for accepting our invitation. Opening remarks will be first, being mindful of the five-minute rule. We will start with Mr. Perlman, followed by Mr. Thompson and Ms. Bess. Mr. Perlman, the floor is yours, please.
Mark Perlman, Chief Financial Officer, Employment and Social Development Canada: Thank you, Mr. Chair and members of the committee.
I am pleased to appear before you in my capacity as Chief Financial Officer of ESDC to provide an overview of the department’s 2020-21 Main Estimates and Supplementary Estimates (B).
Employment and Social Development Canada delivers a wide range of programs and services that affect Canadians throughout their lives. The department provides seniors with basic income security, supports unemployed workers and helps students finance their post-secondary education, especially during this difficult time for Canadians.
The department also has the mandate to maintain a strong, productive, healthy and competitive workplace within the federal jurisdiction through the Labour Program. Service Canada delivers ESDC’s programs to citizens, as well as other Government of Canada programs and services. I will begin with an overview of ESDC’s portion of the 2020-21 Main Estimates originally tabled on February 27, 2020.
The Main Estimates for ESDC amount to $68.6 billion — an increase of $3.8 billion when compared to the 2019-20 Main Estimates. Of this, $64.8 billion, or 94%, will directly benefit Canadians through the Old Age Security program and other statutory transfer payment programs.
In these Main Estimates, the department is showing an increase in statutory payments for Old Age Security pensions, the Guaranteed Income Supplement and allowance payments. Collectively these benefits increased by $3.3 billion, which is explained by the expected increases to the monthly average benefit amounts and changes to the number of beneficiaries.
Other statutory programs, such as the Canada Student Loans and Grants and Canada Disability Savings Grants and Bonds have also increased by $275.4 million and $112.2 million respectively.
Canada Student Loans and Grants are increasing primarily due to increased grant amounts for low-income, middle-income and part-time students provided through the Canada Student Grants. Canada Disability Savings Grants and Bonds increased due to the steady growth in total registered plans and participation in the program.
In addition to statutory items under Vote 1 operating expenditures, the department plans to spend $803.3 million in 2020-21 — an increase of $100.5 million from the 2019-20 Main Estimate of $702.8 million.
The net increase is mainly related to additional funding approved for the Old Age Security Service Improvement Strategy and workload, the Temporary Foreign Worker Program, including the Global Talent Stream, Canada Service Corps and the modernization of federal labour standards.
For Vote 5 grants and contributions, the 2020-21 Main Estimates request is $3 billion — an increase of $292.6 million from the 2010-20 Main Estimates. The increase of $292.6 million is mainly attributable to investments announced in Budget 2018 and Budget 2019 to the Student Work Placement Program, the Indigenous Early Learning and Child Care Transformation Initiative, the Workforce Development Agreements and the Canada Service Corps.
You will note that Employment Insurance, EI, benefits and Canada Pension Plan, CPP, benefits and administrative costs are excluded from the department’s Main Estimates. The EI operating account and the CPP are two specified-purpose accounts, which are reflected in the Departmental Plan tabled in March.
I will now move to an overview of ESDC’s portion of the 2020-21 Supplementary Estimates (B) tabled on October 22, 2020. As part of Supplementary Estimates (B), ESDC is seeking $48 million in voted appropriations, $34.3 million under Vote 1 operating expenditures and $13.7 million under Vote 5 grants and contributions. This includes funding of $23.4 million for retroactive compensation to enable the department to meet obligations from a long-standing grievance which resulted in a reclassification.
The COVID-19 pandemic has highlighted the acute need for additional workers in long-term care facilities, home care and assisted living services. ESDC is requesting $12.5 million for training of personal support workers and measures to address labour shortages in long-term and home care.
Additionally, $6.9 million to address the outbreak of COVID-19 among temporary foreign workers on farms is being requested. Since the very beginning of the pandemic, the Government of Canada has taken a number of important steps to ensure the safe arrival of farm workers, who play a vital role in preserving Canada’s food security.
Funding for investment in early learning and child care, Benefits Delivery Modernization, Canada’s Homelessness Strategy and horizontal initiatives across multiple federal departments, such as government advertising programs and funding to support business resumption for federally regulated employers due to the COVID-19 crisis is also requested.
You will note that in these supplementary estimates, the forecast for budgetary statutory items has increased by $31.3 billion. This is due to payments pursuant to the Public Health Events of National Concern Payments Act for COVID-19 response measures undertaken by ESDC, the largest component being the increase of $28.5 billion to the Canada Emergency Response Benefit. This was an increase to the $60 billion presented for CERB in Supplementary Estimates (A) and reflects extensions to the program announced in June 2020.
In addition, there is a $1.4-billion increase to the Canada Student Loans Program related to the temporary COVID-19 measure doubling the Canada Student Grants for 2020-21.
There is also a new statutory item of $848.6 million related to a one-time payment to persons with disabilities. This one-time, non-taxable and non-reportable payment of up to $600 to persons with disabilities is to address extraordinary expenses incurred as a result of the COVID-19 pandemic.
Finally, there is a net increase of $1.2 billion for the non-budgetary statutory items, which include the Canada Student Loans and the Canada Apprentice Loan. This increase reflects the impact of several Canada Student Loan Program COVID-19 response measures, including a temporary increase to the weekly loan limits, the waiving of student and spousal contributions and the six-month moratorium on loan repayments.
Philippe Thompson, Chief Finances, Results and Delivery Officer, Indigenous Services Canada: Thank you, Mr. Chair and honourable senators, for the invitation to discuss the 2020-21 Main Estimates and Supplementary Estimates (B) for Indigenous Services Canada. I would also like to acknowledge that Canada’s Parliament is located on the unceded traditional territory of the Algonquin people.
With me today are my colleagues Keith Conn from the First Nations and Inuit Health Branch and Mary-Luisa Kapelus from the Education and Social Development Programs and Partnerships Sector.
[Translation]
As the resurgence of COVID-19 activity continues in Canada, I’d like to take a brief moment to update you on the status of the disease in Indigenous communities. As of November 23, we’re aware of 1,338 active cases of COVID-19 in First Nations communities on reserves, for a total of 3,224 confirmed cases. There have been 1,858 recoveries and, sadly, 28 deaths.
The department is continuing to work closely with its partners to improve access to high-quality services for First Nations, Inuit and Métis. During this pandemic, our department’s role is becoming more critical than ever. We’re ensuring that the communities’ needs are identified and addressed.
[English]
I will now turn to the topic of today’s meeting. For 2020-21, ISC’s Main Estimates were at $12.8 billion. This reflects a net increase of approximately 4% compared to last year’s Main Estimates. The increase is primarily related to the transfer of individual affairs and lands and economic development programs from CIRNAC to ISC, as well as the related internal services.
About 95% of the department’s resources is dedicated to supporting or delivering services to Indigenous peoples. The Main Estimates include close to $10.8 billion in transfer payments for services delivered directly by First Nations, tribal councils, health authorities and more.
Additional operating funding is provided for health-related goods and services not insured by provinces and territories or other private insurance plans through the Non-Insured Health Benefits program.
[Translation]
In addition to the Main Estimates, ISC received $1.7 billion through the Supplementary Estimates (A), mainly for the COVID-19 response measures and for key programs, such as child and family services and Jordan’s Principle.
To continue responding to the pandemic and to support ongoing work, ISC’s 2020-21 Supplementary Estimates (B) are showing a net increase of $1.8 billion, which will bring the total authorities for 2020-21 to over $16 billion. This is the highest ever amount for the department. The $1.8 billion is primarily composed of $260.4 million in Vote 1 operating expenditures; $740 million in Vote 10 grants and contributions; and $783.6 million in statutory funding. Of the total amount, $1.1 billion is dedicated to various COVID-19 initiatives; and $0.7 billion is for other key initiatives, such as non-insured health benefits for First Nations and Inuit and child and family services.
[English]
Several of the COVID-19 initiatives are presented as both voted and statutory appropriations under an act relating to certain measures in response to COVID-19, which will be repealed on December 31, 2020. Amounts for payments to be made in support of initiatives covered by the act after the repeal on December 31 are included in these estimates as voted appropriations.
These supplementary estimates include the following COVID-19 initiatives: $305 million for the Indigenous Community Support Fund; $298.3 million to address the specific needs of Indigenous businesses, $245.4 million for a safe restart in communities, $105.9 million to support students and youth, $82.5 million for Indigenous mental wellness, $75 million to support businesses in the tourism sector as well as community and collective businesses and microbusinesses and $7.2 million for income assistance.
In the voted appropriations, ISC is requesting $255.8 million to improve health outcomes through the provision of supplementary health benefits to First Nations people and Inuit.
ISC is also requesting $240.9 million in voted appropriations to continue in its efforts to support children and families. These investments demonstrate the government’s ongoing commitment to fully implementing the orders of the Canadian Human Rights Tribunal prior to September 2019.
[Translation]
These Main Estimates and Supplementary Estimates (B) will enable us to keep taking concrete steps to address the needs of Indigenous peoples.
I’m ready to discuss these aspects with you and with my colleagues. Thank you.
Darlene Bess, Chief Financial Officer, Financial Management Directorate, Corporate Services Branch, Department of Finance Canada: Thank you for the opportunity to present the 2020-21 Main Estimates and Supplementary Estimates (B) on behalf of the Department of Finance. Joining me today are departmental officials. They’ll help me provide a more in-depth perspective on the rationale and policies supporting the numbers within our estimates.
[English]
As you know, the department supports the Deputy Prime Minister and Minister of Finance as well as the Minister of Middle Class Prosperity and Associate Minister of Finance by developing policies and providing advice to the government with the goal of creating a healthy and resilient economy for all Canadians.
In this regard, the department has been instrumental in Canada’s COVID-19 Economic Response Plan, which has helped to protect millions of jobs, provide emergency support to individuals and families and keep businesses afloat throughout the pandemic.
The 2020-21 Main Estimates reflect departmental budgetary spending of $99.5 billion and non-budgetary spending of $50.2 million. This is composed of $105.5 million in voted budgetary expenditures, $99.4 billion in statutory budgetary expenditures and $50.2 million in statutory non-budgetary expenditures. These Main Estimates reflect additional funding to increase the capacity to manage major government assets such as Trans Mountain Corporation and funding for collective bargaining as well as major transfers to other levels of government.
Statutory expenditures are not included in the appropriation bill, as they have already been approved by Parliament through enabling legislation. However, they are included in the estimates documents for information.
The 2020-21 Supplementary Estimates (B) reflect a departmental budgetary increase of $16.6 billion, stemming from a $3.2 billion increase in Vote 1 program expenditures, and a $13.4 billion increase in statutory spending. Given these increases, the department’s total proposed authorities to date are $117.7 billion.
The increase of $3.2 billion in Vote 1 program expenditures is mainly due to statutory measures, including the Safe Return to Class Fund, the funding to the Province of Alberta to clean up inactive oil and gas wells, the Safe Restart Agreement and the essential workers support fund. These program expenditures have increased because, although authorized pursuant to the COVID-19 Emergency Response Act, they were not disbursed before the legislative repeal date of September 30, 2020. The increased amount will ensure that funds remain available for additional planned transfers to provinces and territories to help them respond to the pandemic.
As noted earlier, the statutory expenditures reflect a net increase of $13.4 billion, which is mainly due to transfer payments to the provinces and territories for the COVID-19 measures.
Mr. Chair, this concludes my overview of these estimates for the Department of Finance. My colleagues and I would be pleased to answer any questions committee members may have.
The Chair: Thank you, Ms. Bess. Now we will proceed to questions from senators.
Senator Marshall: My question is for the Department of Finance, specifically the Safe Restart Agreement. There’s statutory funding there of just over $12 billion, but the agreement itself is for $19 billion. Where is the rest of the money? Has it gone out through another department or is it yet to come? Could you answer that question, and then I’ll follow up with the rest of my questions?
Ms. Bess: Thank you very much for your question, senator. Senator Marshall, we have already disbursed $12.3 billion of that to the provinces on September 30. There’s another $700 million to come out later. I will defer to my colleague Galen Countryman to respond to the rest of your questions.
Galen Countryman, Director General, Federal-Provincial Relations, Federal-Provincial Relations and Social Policy Branch, Department of Finance Canada: Thank you, and hello, senators. With respect to the Safe Restart Agreement, there was, as Ms. Bess mentioned, about $12.9 billion going out directly to provinces and territories; $12.3 billion was already spent on September 30. There is another $700 million in the Supplementary Estimates (B). The rest of the funding under the Safe Restart Agreement was for federal spending, so money that will support provinces and territories but will be done by the federal government.
Senator Marshall: Will the rest of it come from the Department of Finance? I saw some funding there under the Public Health Agency of Canada.
Mr. Countryman: Yes, exactly. Some of it will go to the Public Agency of Canada and Health Canada; some will support the sick leave benefits that ESDC is working on, for example.
Senator Marshall: This is a technical question. The Financial Administration Act was amended to provide for those payments, but the section that’s referenced, section 60.2(2)(b), that’s repealed now, so the payment was statutory. After September 30, are the payments then voted expenditures or are they still statutory?
Ms. Bess: Thanks for the question, senator. You’re exactly right; they are now voted expenses because of the repeal of section 60.2(2)(b) of the Financial Administration Act, which became effective on October 1.
Senator Marshall: That’s why the Public Health Agency has it as a voted item.
This is divided up into areas of spending. We’re looking at the money that is supposed to be spent for things like the increase in testing. How do you monitor to make sure that the provincial and territorial governments are spending where they’re supposed to be and whether they’re getting the impact that you would like them to have?
I read the letters from the various premiers. How is that monitored? Do you just leave it up to the provincial and territorial governments to monitor themselves?
Ms. Bess: I will ask Galen Countryman to respond to that.
Mr. Countryman: Yes, Senator Marshall, it is really up to the provinces and territories to deliver the funding as per the agreement they had with the federal government.
Senator Marshall: For extended testing, you wouldn’t be looking from province to province to see if they’ve actually improved their testing? You don’t do that? You give the money and just assume they will?
Mr. Countryman: The money has been provided to the provinces and territories based on the agreement, and it is our hope that they will honour that agreement.
Senator Marshall: I have a quick question for Employment and Social Development Canada. I follow your numbers for CERB, but CERB ended and the program is essentially being administered through Employment Insurance. It was transferred over to the EI program. Where is information on the EI program? When it was CERB, you provided all kinds of information. Now it has gone to the EI program, and I can’t find the same type of information.
Mr. Perlman: Thank you for the question, senator. The EI operating account is specified as a special account. Because it is not a voted appropriation, it’s made up of contributions and then expenditures out of that. This is what shows up in our departmental plan and our departmental report at the end of the year. It is also made up and itemized in our financial statements. You will not see it in the estimates because they are not voted appropriations.
Senator Marshall: Will I see it in your quarterly statements?
Jason Won, Deputy Chief Financial Officer, Employment and Social Development Canada: Let me just have a quick look, and I will provide an answer.
Senator Marshall: In the interests of time, if you could provide that information to the clerk that will be fine.
Mr. Perlman: We can do that, yes.
[Translation]
Senator Forest: Since my colleague must leave early, I’ll give my time to Senator Galvez.
Senator Galvez: Thank you, Senator Forest. I asked a question earlier about the orphan wells. Ms. Bess spoke earlier about the topic. If she could give us a written response, I’d be grateful. I now have two or three quick questions for the members of this panel.
[English]
In the supplementary estimates regarding the reduction of emissions in government operations, there is a list of institutional organizations receiving different amounts of money: RCMP, Parks Canada, CRA, Agriculture, Foreign Affairs, National Defence and Natural Resources.
I would like to know — later, maybe — what the conditions were for these transfers, and if there was any specific use intended for these funds. I would really appreciate it.
Also, there was a transfer of $120,000 from the Department of Natural Resources to the department of industry to support the zero-emission vehicle initiative. That’s on page 267. What is the role of the department of industry in these initiatives? I would like to know.
My last question concerns Indigenous peoples’ lands on reserves vis-à-vis water treatment and water quality. Has there been any increase in the money transfer to solve this acute problem that people on reserves are living?
Ms. Bess: I think the only question that relates to us is about the orphan wells, which we could respond to. My colleague Sam Millar could respond to that so we don’t have to bring it back in writing.
Sam Millar, Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance Branch, Department of Finance Canada: I did hear part of the question. I was listening in on the previous session. I’ll do my best to respond. I hope I heard the full question.
I can report to the committee that in terms of the number of orphan wells, the current estimate is that there are approximately 4,700 orphan wells in Alberta. In Saskatchewan, the equivalent would be 600; and in British Columbia, approximately 350 wells.
In terms of inactive wells — wells that were previously producing petroleum but have been suspended — there would be approximately 91,000 in Alberta, 36,000 in Saskatchewan and 12,000 in British Columbia.
I believe the other portion of Senator Galvez’s question related to the number of wells that could be expected to be cleaned up through the funding. The nature of the funding in this case is that there are transfers to the three provincial governments, and then also the Alberta Orphan Well Association. Each of those entities has its own program that they will operate pursuant to a federal-provincial agreement, and each of them requires different progress.
In order to be precise in responding to the senator’s question, we’ll undertake to connect with each of the provinces and the Orphan Well Association and reply in writing, if that’s acceptable.
Senator Galvez: If you could tell me what the liability is associated with both orphan and abandoned or inactive wells, I would appreciate it. Thank you.
Mr. Thompson: I can answer the question with regard to water, and thank you very much for the question. As you know, since Budget 2016 the government has made significant investments through all budgets to resolve that issue. As of June 30, we had invested over $1.65 billion to support 626 projects, including 348 that are completed. They serve 462,000 people in 581 communities.
To date, we have 96 long-term advisories that have been lifted and 168 short-term advisories that were prevented from becoming long-term. As you can imagine, this year the pandemic has created challenges in terms of being able to accelerate those projects. We have limited access to the communities; however, we are continuing to work closely with First Nations communities to ensure we continue to make progress with that. This year, the department has $737 million in authorities to continue to work on water.
Senator Klyne: Welcome to our panellists. I have two questions around the Safe Return to Class Fund. One is for Finance and the other is for ISC.
Supplementary Estimates (B) is $1 billion. I believe the original amount announced was $2 billion. My question to Finance is this: What is the forecasted statutory spending on this fund leading up to Supplementary Estimates (B)?
For ISC: Is there an additional amount in forecasted statutory spending and Supplementary Estimates (B) for First Nations communities? Thank you.
Ms. Bess: Thank you very much for your question, senator. Similar to the question that Senator Marshall asked earlier, $1 billion in statutory is the amount that was paid through the COVID-19 Emergency Response Act. Because it was repealed on September 30, any future payments to be made for the $2 billion have to be made through our voted appropriations. That’s what you see there. There’s $1 billion in voted appropriations and $1 billion in statutory appropriations that was already paid. The $1 billion will be following shortly.
Senator Klyne: I didn’t see the voted. Thank you. That clears it up.
Mr. Thompson: Thank you, senator, for the question. As part of Supplementary Estimates (B), we have $783 million in statutory authorities. They include part 2 of the Indigenous Community Support Fund, $305 million; Safe Restart, $237 million; the support to students and youth, $90 million; mental wellness support, $82.5 million; and $75 million for Indigenous businesses. All of these funds are expected to be expended before the end of the fiscal year.
Senator Klyne: I was referring specifically to whether there were any monies for the Safe Return to Class Fund.
Mr. Thompson: We have $237.3 million for Safe Restart, and that includes $100 million for education and $25.9 million for post-secondary institutions.
Senator Klyne: I want to go back to the cleanup of inactive oil and gas wells. Supplementary Estimates (B) is $1 billion and references Alberta in the cleanup of inactive wells. There was an announcement in April for a $1.7-billion fund aimed at the cleanup and reclamation of orphan wells in Saskatchewan, Alberta and B.C.
Is the $1 billion in Supplementary Estimates (B) exclusive of the $1.7-billion fund, or is it in addition to that?
Ms. Bess: I’ll let my colleague Sam Millar respond to that.
Mr. Millar: I’m sorry, Mr. Chair, I had a technical issue. I had to leave the room and I’ve just re-entered. I did not hear the question. I apologize.
Senator Klyne: For the sake of time, you can reply in writing.
Ms. Bess: I can answer part of it, Senator Klyne. It is part of the same bundle of payments to clean up orphan wells in Saskatchewan and Alberta. This was the last set of payments that didn’t get through in time before the legislative measures in the COVID-19 Emergency Response Act were repealed. This is the last payment that has to go out for the three provinces that were to be provided with this funding. Is that helpful?
Senator Klyne: It is. I’m confused because it was specific to Alberta.
Ms. Bess: This is the last one remaining. It was in statutory, and now it’s in our voted appropriations because the legislation has expired.
Senator Klyne: Very good. Thank you.
Senator M. Deacon: I want to ask about the $461 million to be spent topping up the salaries of workers who are deemed to be essential during the pandemic. It is part of a cooperative effort with the provinces and territories. We understand that.
I’m trying to narrow down what qualifies as “essential” under this payment. During the first wave, we thanked not only front-line workers but the students and the young Canadians working in grocery and retail — a variety of pieces.
I have seen much less of that in this second wave. These same folks are being asked to put their health at risk in an even more prevalent second wave in this country. Many can’t quit their jobs out of concern for their own and their families’ health because I don’t believe they would be able to qualify for the extended EI program. So they’re working, and I don’t think they would be deemed essential. I would like to understand more about this “essential” payment qualification. Who is qualified?
The Chair: Directed to whom, senator?
Senator M. Deacon: It is about the topping up of salaries of workers.
The Chair: So should Finance or Social Development answer?
Senator M. Deacon: I would ask Finance first. I would leave it open to Social Development also.
The Chair: Thank you. Ms. Bess, please. Do you have any comments for clarity?
Ms. Bess: Thank you very much for your question, senator. I’ll defer the question to Mr. Galen Countryman, who may have a bit more detail on the program and how it was set up in terms of what qualifies as essential workers and other details for you.
Mr. Countryman: Thank you, senator, for the question.
The essential workers top-up fund was created in the spring as part of the first wave. It was allocated to provinces and territories to develop their own essential worker wage-support programs. It is the provinces and territories that are responsible for the design and delivery of the programs and defining who is an essential worker. We left it to them because it varied in each jurisdiction.
What we see here is that there were $3 billion allocated. To date, $2.5 billion has been drawn down by the provinces and territories, and there remains $461 million. It’s there as voted, much like the Safe Restart Agreement and Safe Return to Class Fund, and the $2.5 billion was spent under the statutory appropriation, the COVID response act. Those provisions have expired, so now we are seeking supply through the estimates.
Senator M. Deacon: Thank you. I want to confirm that “essential” — the definition, the parameters — is differentiated across this country by each territory and province.
Mr. Countryman: It is for each jurisdiction to develop the eligibility for their programs. We gave discretion to the provinces and territories.
Senator M. Deacon: Thank you.
The Chair: Employment and Social Development Canada, do you have any comments on the question asked by Senator Deacon?
Mr. Perlman: As that one was run through the Department of Finance directly to the provinces, we were not engaged.
I can answer Senator Klyne’s question, however. We didn’t get to that. For Safe Restart and Indigenous communities, we have $63.9 million for Indigenous early learning and child care as a statutory item.
Senator Boehm: I would like to thank all our witnesses for being here and for the excellent work they are undertaking during these difficult times.
My question is for Mr. Philippe Thompson. The National Advisory Committee on Immunization pointed to Indigenous peoples as part of the key groups that should really receive priority for the vaccine when it comes. However, there has already been some provincial/federal confusion regarding the deployment of that distribution. Some senators have touched on this earlier and in the previous panel as well.
This is not to mention the incredible logistical challenges of transporting and distributing the vaccine while also maintaining temperature requirements. My understanding is that the Pfizer vaccine requires a storage temperature of -70 degrees. Our winters are cold, but not that cold. We’ve seen what has happened in Nunavut with the outbreak, and certainly in the North and the Arctic. I think of my colleague Senator Duncan, who is also a member of this committee, from the Yukon.
While the government already has a list of interested suppliers for vaccine logistics service providers, I did not seem to find anything in the estimates related to funds for vaccine distribution. You may have mentioned this in your remarks, but I’m afraid I missed it.
I’m wondering whether you can comment on that, that these vaccines will go to remote communities, especially Indigenous one, and that they will be a priority. Health care issues are, of course, paramount in these communities. Thank you.
Mr. Thompson: Thank you very much, senator, for the question. You are correct to say that in the supplementary estimates there’s no money that is specifically identified for vaccine distribution. That being said, the department is getting prepared.
It is absolutely extremely important for us to make sure that we are ready to respond as soon as the vaccine is available. I will defer to my colleague Keith Conn to answer the question on the level of preparedness that we have in the organization and what we’re doing in anticipation of the vaccine.
Keith Conn, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch, Indigenous Services Canada: Thank you, senator, for the question, and for the commentary as well. Yes, we are working closely with our Indigenous partners — First Nations, Inuit and Métis — on vaccine planning and deployment. We’re also working very closely with the Public Health Agency folks who are responsible for the planning and deployment with provinces and territories. We are privileged to see, of course, the public report of the National Advisory Committee on Immunization, which is a group of experts on immunization and vaccines. In that report, in terms of their initial recommendations, it is noted that prioritization groups are Indigenous populations, including rural and remote, knowing very well the pre-health conditions, housing conditions and a number of other factors, puts the population at risk.
A lot of discussion is happening as we speak in terms of national rollout. Of course, we have a very structured working group within our department, with many partners, and we’re working closely with PHAC on the work ahead.
That requires a lot of coordination with our territorial and provincial partners as well. There’s more to come in that regard, in terms of phase 1 of the vaccines and then the rollout of subsequent doses. A lot is happening in that regard, with more to come.
Senator Boehm: Thank you for your answers.
Chair, I yield the balance of my time.
Senator Duncan: Senator Boehm, I would like to thank you; you have led very well into my question. Thank you very much to our witnesses who have appeared.
I’m going to focus my question to Indigenous Services. Forgive me for drilling down on this, but I would just like to give you a little bit of background. I served for a time as premier of the Yukon when health care funding was number one on the table. Following my political career, I served for many years in health care administration, working on a day-to-day basis with non-insured health benefits. From that background, I just point out that Canada is the fourteenth province at the table when it comes to health care. They have a fiduciary responsibility for First Nations. They also maintain responsibility for the Armed Forces and the RCMP.
Health Canada has non-insured health benefits. The Finance Committee has asked before about Crown and Indigenous relations and these new departments being structured — where did the health care people go? We saw a marked decrease in non-insured health benefits staffing at the ground level.
My concern follows up on Senator Boehm’s introduction and with that background. I would really like elaboration — an answer — from Indigenous Services Canada as to how they’re working on the delivery of the vaccine and the drugs to deal with COVID-19 on the ground. How is it working on-reserve, off-reserve, with Métis and Inuit, and with the Armed Forces and RCMP who are covered under Health Canada?
The Chair: I will recognize Mr. Thompson, and if there are additional comments by other public servants in the department, please contribute.
Mr. Thompson: Thank you for the question, senator. The Supplementary Estimates (B) include $255.8 million for non-insured health benefits, bringing the total for the program this year to $1.8 billion. Again, I will refer to my colleague Keith Conn to provide more information on the question.
Mr. Conn: Thank you, senator, for the question.
First of all, in terms of points in history, the Government of Canada created the Indigenous Services Canada department, focused on services. The First Nations Inuit Health Branch in its totality was merged into this new department called Indigenous Services Canada, so we’ve left our lovely department called Health Canada, but we still have close relations, of course. We have taken with us the responsibility for the non-insured health benefits program and its administration nationally.
That program still continues with vigour. Obviously the non-insured health benefits program for dental, pharmacy and transportation applies to all eligible recipients, including Inuit and First Nations who are registered. That has been maintained.
It’s interesting, in terms of the pandemic’s arrival, that whole program has gone practically virtual. We have been seamless in terms of delivery. No backlogs or interruptions, so we’re pleased with that result.
I’m trying to remember part of the other questions. We don’t see a downward trend in terms of non-insured health benefits staff. We actually see an increase with continuous hiring. We grow and expand in terms of the program service delivery responsibilities, working with our Indigenous partners in terms of identifying gaps or needs if they exist.
Pardon me, senator, I’m not sure if I covered all aspects of your questions or commentary.
Senator Duncan: No. I appreciate that what you’re saying — and I understand — is that Crown-Indigenous Relations took this over, so now we have non-insured health benefits delivery in one area and Health Canada over here. My real question is: How will we ensure that everyone — Indigenous on-reserve, off-reserve, Métis, and Inuit — will receive the services they should? It seems like we have two areas working — not at cross purposes, but there are two different hands in the till, so to speak. So how will we ensure accountability on the ground? How will we follow this as parliamentarians? How do we ensure that Canadians are receiving these services?
Mr. Conn: The mandate and program service delivery of the First Nations and Inuit Health Branch rests with Indigenous Services Canada. We work closely with the Crown-Indigenous Relations organization in terms of our relationships with our First Nations, Inuit and Métis partners to ensure there is coordination. Again, the program service delivery of non-insured health benefits rests with Indigenous Services Canada, working with all our partners, First Nations, Inuit and Métis, to ensure those services are delivered.
The Chair: Senator Duncan also mentioned, Mr. Thompson, the impact on the RCMP and health. Could you bring clarity to that?
Mr. Thompson: I’m not sure I understand the question with regard to the RCMP, sir, I’m sorry.
The Chair: Senator Duncan, this was in view of services to the population?
Senator Duncan: That’s correct. The RCMP and the Armed Forces are not covered under provincial health care acts. My understanding is that Health Canada has responsibility for them. That’s certainly our provincial health act. Where do they fit in this money and in ensuring service delivery?
The Chair: Mr. Thompson, having a sense of the question vis-à-vis your department, the other department and the vote that you’re being asked for clarity on by senators and National Finance, could you take Senator Duncan’s questions into consideration with your officials, if need be? If you want to be more specific on the question posed and connect with another department, could you answer in writing? Please be mindful that we have a time frame in which to table our report in the Senate. Is that fair to ask?
Mr. Thompson: I can answer the question, senator. My department is not responsible for delivering services to the RCMP and the Armed Forces. We are solely responsible for First Nations and Inuit, so that would be another organization. That has not been transferred to our department.
The Chair: Senator Duncan, if you want to look at your clarification questions and submit another question before we table the report — in view of the many questions you have asked — it would be considered before the report is tabled.
Senator Loffreda: Thank you to our all our witnesses, panellists and colleagues.
My question is for the Department of Finance. There is a request for $1 billion related to the Safe Return to Class Fund. That is for adapted learning spaces, PPE, cleaning supplies and air ventilation. We don’t have supply shortages anymore — we all know that — but we’ve heard a lot lately in the news about air ventilation and how much of a concern that is. It’s a larger concern and a bigger challenge. We all know that the safe return to class is a large concern for all of us at this point in time. We all have COVID fatigue and we want to get everybody back to class safely and not lose a year.
What can you share? Can you give us a status update on the air ventilation? Are there any timing concerns on your side? What can you further share on that note? What is the breakdown between the federal government and the provinces and territories of that fund? Will it be sufficient? Thank you.
Ms. Bess: At this point I don’t have that information off the top of my head, but I will defer to my colleague Mr. Galen Countryman to see if he has any further information on the ventilation.
Mr. Countryman: Thank you, senator. Similar to other transfers, this is a return of costs when it’s a block transfer to the provinces and territories, and it’s up to the provinces and territories to allocate the funding among the different priorities. We anticipate that, as part of the agreements, the premiers will write to the Prime Minister to report on how they’ve spent the funds and how they intend to spend the second tranche of the $1 billion in the supplementary estimates. We will have a better sense then as to how they are allocating the money across the different priorities identified as part of the safe return to class agreement and where they intend to spend the additional $1 billion.
Senator Loffreda: I have a question for Employment and Social Development Canada. In advertising programs you have $1.2 million that you’re asking for. It’s not the amount that’s important, but you’re asking for operating expenditures to inform seniors and for available services to promote hiring persons with disabilities. Recently in the chamber I discussed the Opportunities Fund for Persons with Disabilities. We are approving $1.2 million for the advertising.
How is the Opportunities Fund for Persons with Disabilities coming along? If we are looking at advertising and having people acknowledge that there is such a fund and they need to apply for it, do you have any feedback at this point in time? Is it sufficient? Do we have enough in that fund going forward? Should we be looking at that as a major concern? It is a major concern. Should we be asking for more funding at that level? Training is important, and the vulnerable are very much in need, persons with disabilities require help when necessary, and seniors, too, for that matter. Could you elaborate or give us a status update on that?
Mr. Perlman: I can give you an update on the 2020-21 advertising campaign. The purpose is to increase knowledge and awareness of Government of Canada programs and services to benefit seniors and persons with disabilities. I’m just starting to do that on our various campaign pages. All of these, of course, have been worked through and negotiated with our central agency colleagues. Because you’re specifically asking about the opportunities fund, I will turn it over to my colleague Elisha Ram.
Elisha Ram, Associate Assistant Deputy Minister, Skills and Employment Branch, Employment and Social Development Canada: Thank you for the question. I couldn’t agree with you more that the opportunities fund is an important initiative. It’s an initiative that provides approximately $40 million a year in which we work with community-based organizations to increase employability and other supports for persons with disabilities. There has also been a temporary increase this year for that program in the context of COVID, recognizing that there are additional challenges that persons with disabilities face as a result of the pandemic. We think we’re doing pretty well with that program. Should you be interested, we can provide additional information offline.
Senator Loffreda: Yes, I would be very interested in receiving additional information offline, and I’d be very interested in promoting additional expenditures and investment in that area, which is so important for persons with disabilities and, of course, seniors. Thank you for your answer.
Senator Smith: My question is for the ESDC group. You’re seeking an additional $6.9 million in Supplementary Estimates (B) to address the outbreak of COVID-19 among temporary foreign workers on farms and to increase protection for these workers. During last week’s Seasonal Agricultural Worker Program meetings, Mexican officials called on Canada to maintain its COVID-19 protections for temporary foreign workers and re-evaluate other long-standing concerns, including the decades-old problem of housing standards, and providing access to grieving services for many of those workers.
Can you tell us about the talks that have taken place or a contingency plan addressing these pressing issues?
Mr. Perlman: I can tell you that the department absolutely takes this very seriously, which is why the investment is being made. It’s all about further investment to safeguard the health and safety of Canadians. Again, I will turn to my colleague Mr. Ram to take that question.
Mr. Ram: As Mr. Perlman has said, this is something we take extremely seriously. We are aware of some of the concerns that have been raised with respect to the safety of all workers, particularly migrant workers, especially in the agricultural sector because they often live on the farm. We have put in place a number of different initiatives, not just funding but also new regulations that have created obligations on the part of the employer to respect quarantine and self-isolation rules and ensure workers have access to information about what those provisions are. We have also provided funding to help employers address some of the issues on housing, as well as launching recent consultations on new national standards for accommodations for foreign workers in the agricultural sector.
This is something we continue to pay a lot of attention to. We seem to be making good progress. We also continue to have conversations with foreign governments — countries like Mexico — that provide those workers to Canada to ensure that they’re aware of the measures we’re taking. They then have an opportunity to provide any feedback about additional measures that may be required.
Senator Smith: Has your department taken a snapshot to provide actual feedback? You’ve talked about how important everything is, but is there an actual plan of execution? Do you have feedback you can share with us that shows the path you are on and some of the results you’re actually achieving?
Mr. Ram: I think we’re making progress, senator, in a number of different areas. As I said, we have put in place regulations that clearly protect the workers and ensure that employers are respecting them. We have increased the number of inspections being undertaken to ensure that those regulations are being followed. We’ve also increased our dialogue with organizations that represent the interests of the migrant workers to ensure that they have a voice and that they’re able to communicate to us whenever those concerns arise.
Of course we were heartbroken by some of the situations that emerged on a number of farms and that some workers were exposed to the virus. We have definitely taken lessons away from that, and we are in the process of engaging with employers, the workers themselves and the provinces and territories. Many of the authorities for things like housing inspection and health and safety actually reside in provincial jurisdiction. We are definitely making progress, and we’d be happy to come back at a later date and talk to you a bit more about that.
[Translation]
Senator Dagenais: My first question is for Mr. Thompson. Some 330,000 people live in First Nations communities on reserve in Canada. Your total authorities for this year have increased; you now have $16 billion to deliver services, which is slightly less than $50,000 for each of the 330,000 status members living on reserve in Canada. Many Canadian families do not make $50,000 a year. Despite the significant investments to support communities on reserve, that population still has the lowest standard of living. Some still do not have access to running water, and even fewer have access to the internet.
Can you tell us how the $16 billion is being spent and whether you track how the money is used? Also, to what extent will you be able to tell whether living conditions have improved?
Mr. Thompson: Thank you for your question, senator. It is indeed quite valid. As you know, the government has made considerable investments in the past few years. It’s hard to make a one-for-one comparison between First Nations members and the rest of Canadians. As you mentioned, the standard of living is often lower in First Nations communities, so much so, that there is a significant amount of catching up to do. Major investments are still needed to support housing, running water, health care and education. Those investments are all being made and tracked.
In addition, we have figured out in recent years that, when we hand over control to First Nations communities, they are much more effective at setting their own priorities. That is why we introduced the 10-year grant.
As for the contribution funding, it is delivered through contribution agreements. We have systems for tracking, monitoring and performance management, so we are accountable in terms of achieving program objectives and reporting on priorities and progress. Our departmental performance report is one way we do that.
Under the 10-year grant, communities establish financial administration laws, setting out a modern regime of transparency and accountability to the community. Accountability is provided on that end, as well.
Senator Dagenais: I have a second question for Ms. Bess. The support measures resulted in significant fraud. Surprisingly, the issue is not necessarily one that the authorities are consistently concerned about, even though many Canadians have had their identities stolen. I’m not sure whether you can give us an update today on the extent of the fraud that was committed, but if you can, that would be appreciated. Also, do you have a plan to help the people who were defrauded come tax time? That is something they are going to have to deal with. Do you have a plan? They will have to prove that they never received the benefits.
[English]
The Chair: Ms. Bess, you heard the question. Could you provide us with a graph? Can you address the question, or would you prefer to provide your answer in writing?
Ms. Bess: Thank you for the question, senator. I’m not sure if this is a question for the Department of Finance or more of a question for the Canada Revenue Agency. I don’t feel our department is best placed to answer that question.
The Chair: Could you look into it and share that information with the clerk, please?
Ms. Bess: I will.
The Chair: Thank you.
[Translation]
Senator Forest: My first question is about temporary foreign workers. It’s for the Employment and Social Development Canada officials. You are requesting $6.9 million to address the issue of temporary foreign workers infected with COVID-19. In late October, the agriculture and employment ministers launched consultations to fast-track the arrival of workers to make the process more effective and enhance worker safety. Ultimately, the idea is to review the Temporary Foreign Worker Program. Consulting stakeholders is a good idea, but farmers need to know where things stand in this unique context.
First, do you have a timetable for changing the Temporary Foreign Worker Program? Second, some of the rules for hiring temporary foreign workers were relaxed for the 2020 season, so will farmers be able to count on that same flexibility next year? As you know, the agricultural sector, especially market gardening, is on shaky ground.
[English]
The Chair: Mr. Perlman, please?
Mr. Perlman: Again, I would pass that on to Mr. Ram.
[Translation]
Mr. Ram: Thank you, senator, for that very important question. We understand how important foreign workers are to the agricultural sector. We are working closely with the sector and with workers to make sure everyone understands the rules so that employers are not faced with uncertainty next year.
Senator Forest: For next year, do you have an idea of when farm business owners can expect to see the changes to the program?
Mr. Ram: We don’t have any exact dates, but we are in the midst of developing policies for next year in close consultation with the sector.
Senator Forest: If it was before December 25, it would be a nice Christmas gift for farmers.
My second question is for the Department of Finance officials. There is an issue that concerns me, and I asked the minister about it. I am at a loss to explain certain things from an ethical and fairness standpoint. Take for example the case of a business that received major support through the wage subsidy program, as reported by the Journal de Montréal. One company received $63 million and paid out nearly $46 million in dividends to shareholders, which was an increase. When you design a program to help businesses survive a crisis and preserve jobs, should you not prohibit businesses from paying out dividends when they are receiving wage subsidies? That’s only ethical. Canadians are concerned that some businesses are showing no morality in the current situation.
Perhaps Ms. Bess could answer that question?
[English]
Ms. Bess: Thank you very much for your question. I’ll defer to my colleague Mr. Miodrag Jovanovic for that response.
[Translation]
Miodrag Jovanovic, Associate Assistant Deputy Minister, Tax Policy Branch, Department of Finance Canada: Thank you, Senator Forest, for your question. You’re right that the requirements for the wage subsidy program do not prohibit businesses from paying dividends or even increasing them. The eligibility criteria do, however, build some underlying rigour into the program. In order to access the subsidy, the business must first show that it was affected by the crisis and experienced a decline in revenue. Furthermore, the subsidy is based on the payment of wages, so the business cannot receive the subsidy if it has not paid its employees first.
In our view, the subsidy is designed in a way that provides effective support for employment, making it possible for businesses to keep their employees longer and to preserve that important relationship. When the economy rebounds, the employee-employer relationship will be intact.
Senator Forest: We share that objective. The labour challenge for designated individuals in every sector is huge. A critical mass of knowledge within our businesses has to be preserved. I am well aware of the fact that the public service does not determine the criteria. Even though the decision of whether or not to green-light a program is a political one, you still have to provide recommendations and advice to the politicians making the decisions. It is absolutely inconceivable to me that a company can receive $63 million in subsidy supports from the government, taxpayer money, and turn around and pay its shareholders $46 million in dividends. It’s a matter of fairness, solidarity, and right and wrong. It has nothing to do with the appropriateness of the program objectives. It’s about conscience, solidarity and social morality. I do, however, realize that you don’t make the decisions.
[English]
The Chair: That was a comment by the senator. I heard Finance respond to the previous question. Ms. Bess, would you to look into it with the comments that were made? If you can bring clarity to the previous question, we would appreciate that.
Ms. Bess: I will, Mr. Chair.
The Chair: Thank you.
Senator Richards: Thank you. This is a follow-up to Senator Smith and Senator Forest’s first question.
This is in regard to the losses in the agricultural sector. Mr. Ram, do we know what percentage of food security there will be and if the cost of food will rise exponentially over the next months because of food and commodity prices? Maybe you can give us some indication on that.
Mr. Ram: Thank you, senator. I think I can partly answer that question, in the sense that we are working as hard as we can to ensure that the agricultural sector and employers in that sector have access to the workers they normally depend on.
However, the specific questions around the production in the agricultural sector is not something that is within our responsibility. I would direct that question to officials from Agriculture and Agri-food Canada. I apologize for that.
Senator Richards: Thank you.
The Chair: Senators, we have time for a second round. Before we adjourn, we have time for at least two questions.
Senator Marshall: I have a very general question — not to put the officials on the spot — and I’ll be very careful with the way I word it. There is a Minister of Middle Class Prosperity, and a lot of money has been going out for COVID-19 programs. Is anything being published or generated by the department whereby parliamentarians can see the impact of COVID-19 on the middle class, as envisioned by the current government?
Ms. Bess: Thank you for your question, Senator Marshall. I’ll defer to my colleague Mr. Nicholas Leswick, who may be able to provide an update on what will be published.
Nicholas Leswick, Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance Canada: I would anticipate that this coming Monday’s publication should give you some more well-rounded discussion in terms of COVID-19 impacts on the labour market, how government supports have filled that gap and what kind of challenges and opportunities there are for the middle class in a post-COVID economy. Stay tuned for Monday.
Senator Marshall: Will there be a pre-briefing like there is for the budget? Will we just be getting the update cold, or will we get that lead-in like we do with the budget?
Mr. Leswick: Sarah Lawley is on the line, and I believe she’s coordinating our communications strategy with parliamentarians, senators and house officials, so I’ll let her take over.
Ms. Bess: Ms. Lawley is our communications expert, and she will be able to field this question.
Sarah Lawley, Assistant Deputy Minister, Consultations and Communications Branch, Department of Finance Canada: To your question, senator, given the public health environment we currently find ourselves in, we are not able to do our normal secure readings, as we call them, in advance of a release. There will be a very select few parliamentarians who are given access to the documents in advance, but we will not be able to open the doors to the numbers of people that we usually do. I hope you understand that.
Senator Marshall: Okay, so no Zoom briefing?
Ms. Lawley: No Zoom briefing.
The Chair: Ms. Lawley, before we go to Senator Forest, can you assure the Finance Committee that a senator or senators will be included on that link?
Ms. Lawley: There is no electronic link. There will be a very select few in-person readings. I can tell you that right now we are working with the Government House Leader’s office, on both the parliamentary side and the Senate side, to confirm our approach for Monday. But it is kind of à la minute right now.
The Chair: Including the Senate side?
Ms. Lawley: Yes, we are confirming that right now.
[Translation]
Senator Forest: Thank you. My question is for the finance officials.
Supplementary Estimates (B) includes $1 billion to clean up inactive oil and gas wells. The government clearly wants to help oil and gas workers affected by the COVID-19 crisis and the drop in oil prices, and we absolutely support that.
One thing worries me, though. A number of rural municipalities in Alberta recently revealed that they are owed a total of $173 million in unpaid property and municipal taxes. Before a company receives funding to clean up a site that it polluted for its own profit, will anyone check to make sure the company has paid any outstanding municipal taxes in full? After all, that tax revenue benefits the local government, which has to (a) cope first-hand with the limitations caused by that type of pollution on its territory and (b) deliver basic services such as safety and snow clearing.
Will you make sure that all municipalities have received the property and municipal taxes they are owed before companies obtain any funding under the program? I sure hope so.
Ms. Bess: Thank you for your question, senator.
[English]
I will defer to my colleague Mr. Sam Millar to speak about the orphan wells and taxes.
[Translation]
Mr. Millar: Thank you for your question.
The government signed an agreement with the Province of Alberta and became aware of the situation you described. One of the requirements in the agreement with Alberta is that Alberta must make sure the municipalities affected by the inactive wells approve the cleanup process before funding can be transferred.
Of course, funding amounts allocated under the program are posted on the Province of Alberta’s website. That tells the public and the federal government that the process is being implemented properly.
Senator Forest: Thank you. I gather, then, that there is no specific requirement whereby program funding is directly tied to a company’s payment in full of outstanding municipal taxes. There is, however, a co-operation agreement with the Province of Alberta.
Mr. Millar: Yes, that’s right. I would agree with that.
Senator Forest: Thank you.
[English]
The Chair: We have come to the end of the time frame for this panel. To the witnesses, I would like to thank you for your dedication. This was very informative. As you have seen by the questions posed to you, the motto of the Finance Committee — which has a common denominator to yours — is transparency, accountability, predictability and reliability. Thank you for your dedication. You’ve been very professional.
Honourable senators, our next meeting will be tomorrow, Thursday, November 26, at 3:30 p.m. ET. Before I officially adjourn the meeting, I want to share with you that we have been informed that Minister Duclos, the President of the Treasury Board, has accepted our invitation and should appear next Tuesday, December 1, at 12:30 p.m. ET.
Senator Duncan, did you have a question or a comment?
Senator Duncan: If there is time, Mr. Chair, I was going to request a written response to the question I put in the chat room and ask it verbally of the Finance officials.
The Chair: You can ask your question immediately.
Senator Duncan: How much is Canada paying for immunization and therapeutics for Canadians for whom they have responsibility for health care, including First Nations — on- and off-reserve — Métis and Inuit not covered by provincial health care plans; Canadians serving overseas, if not covered by the health care plans; the Armed Forces; and the RCMP? How does Canada intend to ensure that these Canadians receive the services, immunization and drugs that are not covered under provincial health care plans? How much is Canada paying for the people they have responsibility for, and could Finance get that number for us? Could we also have some assurance that there is a commitment to ensure these individuals receive services? This expenditure crosses many departments.
The Chair: Ms. Bess, would you comment in writing and submit the answer?
Ms. Bess: Thank you very much for the question, senator. Yes, I see the question in the chat. We’ll work with the departments to see what we can get on that.
The Chair: Please be mindful, Ms. Bess, in communicating with our clerk, that we have a time frame for tabling our report in the Senate.
Ms. Bess: Will do. Thank you.
The Chair: On this, honourable senators, thank you very much.
(The committee adjourned.)