THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Thursday, December 9, 2021
The Standing Senate Committee on National Finance met with videoconference this day at 2:03 p.m. [ET] to study the Supplementary Estimates (B) for the fiscal year ending March 31, 2022.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: I would like to remind senators and witnesses to keep your microphones muted at all times unless recognized by name by the chair.
[Translation]
Should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk, and we will work to resolve the issue. If you experience other technical challenges, please contact the ISD Service Desk with the technical assistance number provided.
[English]
The use of online platforms, honourable senators and witnesses, does not guarantee speech privacy or that eavesdropping won’t be conducted. As such, while conducting committee meetings, all participants should be aware of such limitations and restrict the possible disclosure of sensitive, private and privileged Senate information. Participants should know to be in a private area and to be mindful of their surroundings.
[Translation]
We will now begin with the official portion of our meeting as per the order of reference we received from the Senate of Canada.
[English]
My name is Percy Mockler, a senator from New Brunswick, Chair of the Standing Senate Committee on National Finance. I would now introduce the official members of the National Finance Committee who are participating in this meeting. We have Senator Boehm, Senator Dagenais, Senator Duncan, Senator Forest, Senator Galvez, Senator Gerba, Senator Gignac, Senator Loffreda, Senator Marshall, Senator Pate and Senator Richards.
I wish to welcome all of the viewers across the country who may be watching on sencanada.ca.
Honourable senators, I will need your undivided attention and cooperation, as always. Because of the high number of witnesses present on Zoom today, I will only recognize the spokesperson of each department. When a question is asked of a department, the two people I have determined to be the team leaders will answer and then ask other witnesses to please introduce themselves by name and title.
We have the pleasure of welcoming officials from Crown-Indigenous Relations and Northern Affairs Canada and also Indigenous Services Canada. We will hear from Ms. Darlene Bess from Crown-Indigenous Relations and Northern Affairs Canada, and from Indigenous Services Canada, the spokesperson is Mr. Philippe Thompson. Ms. Bess will make her comments to be followed by Mr. Thompson. We will then proceed directly to the questions of honourable senators.
We thank all witnesses very much for being here. If Ms. Bess or Mr. Thompson direct the questions to one of the officials, please introduce yourself with your name and title in the ministry. Ms. Bess, you have the floor.
[Translation]
Darlene Bess, Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs Canada: Thank you, Mr. Chair and honourable senators, for the invitation to discuss the 2021-22 Supplementary Estimates (B) for Crown-Indigenous Relations and Northern Affairs Canada.
I would like to start off by acknowledging that I am coming to you today from the traditional territory of the Algonquin people. I am accompanied today by senior officials from my organization who will help responding to your comments or questions as required.
[English]
Crown-Indigenous Relations and Northern Affairs Canada’s Supplementary Estimates (B) include initiatives totalling just over just $1 billion, which will bring total budgetary funding for the department to approximately $6.8 billion for fiscal year 2021-22.
The supplementary estimates include various items approved by Treasury Board, with $807.3 million in vote 10 grants and contributions, $225.6 million in vote 1 operating expenditures, and $1.9 million in statutory vote 4 employee benefits.
I will now briefly describe some of the key initiatives included in the Supplementary Estimates (B).
The largest item in these supplementary estimates, $412.2 million, is funding for the specific claims settlement fund that is being brought forward from the previous fiscal year to 2021-22. This funding will enable the department to continue to ensure that Canada’s outstanding legal obligations to First Nations are discharged fairly and promptly through negotiated specific claim settlements as a means of resolution whenever possible.
The next item that I will discuss is the $231.4 million towards infrastructure investments in Indigenous communities this fiscal year. In collaboration with Indigenous Services Canada, this Budget 2021 initiative will renew sunsetting funding for First Nation community infrastructure on reserve, support shovel-ready infrastructure projects for Indigenous communities on and off reserve and contribute to the government’s commitment to close the infrastructure gap by 2030. To that end, Crown-Indigenous Relations and Northern Affairs will establish a distinctions-based Indigenous community infrastructure fund that will support Indigenous-led infrastructure development for Inuit, Métis, self-governing and modern treaty communities and northern Indigenous communities.
Funding to settle, in part, the Gottfriedson class action litigation is also part of these estimates. An amount of $212.2 million is being requested to partially settle this litigation. It is an important step toward the journey of reconciliation and healing with Indigenous peoples by providing compensation to each eligible survivor of Indian residential day schools as well as funding to establish the Day Scholars Revitalization Society, which will help support healing, wellness, education, language, culture, heritage and commemoration for survivors and descendants.
Supplementary Estimates (B) also provides $33.4 million for the First Nations Finance Authority to support First Nation borrowers during the lingering impact of COVID-19. It will ensure access to low interest rate financing for First Nation infrastructure and economic development needs.
The department is also requesting $32.7 million to support Canada’s commitments to responding to recommendations of the National Inquiry into Missing and Murdered Indigenous Women and Girls. These funds will contribute to the development of a national action plan to eliminate violence against Indigenous women, girls and 2SLGBTQQIA+ people; enhancing support for Indigenous women and the 2SLGBTQQIA+ organizations; and support the creation of the Cultural Spaces in Indigenous Communities Program to promote Indigenous ways of living for Indigenous communities.
These estimates also include items that will promote resiliency in the North, including initiatives dealing with combating climate change, protecting the environment and food security. The largest of these items is $25 million to further Yukon’s climate change priorities. That amount will support the Yukon government in reducing the territory’s greenhouse gas emissions by 30% by 2030 and ensure that Yukoners have access to reliable, affordable and renewable energy.
This covers the highlights I wish to share with you today. The items that I have not covered specifically are important initiatives nonetheless. I would be happy to discuss any of these items.
The Chair: Thank you, Ms. Bess. Ms. Bess, your title is Darlene Bess, Chief Finances, Results and Delivery Officer. Thank you for your comments, Ms. Bess, and also your team that you have presented on Zoom.
Now I will recognize, from Indigenous Services Canada, Philippe Thompson, Chief Finances, Results and Delivery Officer. Mr. Thompson, the floor is yours.
[Translation]
Philippe Thompson, Chief Finances, Results and Delivery Officer, Indigenous Services Canada: Thank you, Mr. Chair and honourable senators, for the invitation to discuss 2021-22 Supplementary Estimates (B) for Indigenous Services Canada. I would like to begin by acknowledging that we come together on the unceded traditional territory of the Algonquin people.
[English]
With me today are Catherine Lappe, Assistant Deputy Minister, Child and Family Services Reform Sector; David Peckham, Assistant Deputy Minister, Education and Social Development Programs and Partnerships; Christopher Duschenes, Director General, Lands and Economic Development; Julien Castonguay, Executive Director, First Nations and Inuit Health Branch; and Nelson Barbosa, Senior Director, Regional Operations.
Before going further, as you are all aware, extreme flooding in British Columbia has impacted numerous communities and has forced hundreds of First Nations residents to flee their homes. Indigenous Services Canada is working in close partnership with impacted First Nations in British Columbia, provincial partners and other federal departments to ensure that First Nations affected are safe and secure and receive all the support they require as they recover from these difficult events.
I would also like to take a brief moment to provide you with an update on the status of the COVID-19 pandemic activity across Indigenous communities.
[Translation]
The rate of active cases has fortunately been decreasing again since mid–September after a short increase during August/mid–September. As of December 7, there are still 906 active cases of COVID-19, for a total of 50,966 confirmed cases, of which 49,516 have recovered and, sadly, 544 have lost their lives. A total of 916,796 COVID-19 vaccine doses have been administered to individuals living in First Nations, Inuit and territorial communities. Over 99% of individuals 12 years and over have received at least one dose. Over 81% have received two doses. For children 5 to 11 years of age living in First Nations communities, over 10% have received at least one dose. The department continues to work closely with the Public Health Agency of Canada, other Government of Canada departments, and provincial and territorial governments, as well as Indigenous partners to protect the health and safety of Indigenous peoples. I will now turn to the topic of today’s meeting, the presentation of Indigenous Services Canada’s Supplementary Estimates (B), 2021-22.
[English]
Indigenous Services Canada’s 2021-22 Supplementary Estimates (B) are showing a net increase of $2.1 billion, which will bring the total authorities for 2021-22 to over $21 billion. The $2.1 billion is composed of $336.8 million in vote 1 operating expenditures; $40,000 in vote 5 capital; and $1.7 billion in vote 10 grants and contributions.
Through Budget 2021, the federal government proposed investments to improve the quality of life and create new opportunities for people living in Indigenous communities.
Of the $2.1 billion, $1.4 billion is dedicated to those investments such as the following: $497.9 million for infrastructure in Indigenous communities; $332.4 million for non-insured health benefits for First Nations and Inuit; $309.0 million for income assistance, case management and pre-employment supports to individuals and families living on reserve; $107.9 million for the core funding refinements of elementary and secondary education; $89.1 million to improve health outcomes in Indigenous communities; and $15.4 million to support Indigenous-led businesses.
The remaining $727.5 million is key initiatives for 2021-22 of which the major ones are $361.3 million to support the ongoing delivery of the First Nations Child and Family Services Program, and more specifically, this funding is needed to support the implementation of Canadian Human Rights Tribunal rulings received prior to September 2019; $148.2 million for the continued implementation of Jordan’s Principle; and $101.5 million to continue to provide COVID-19 support to address the gaps and needs in supportive care for Indigenous communities, support a safe restart in Indigenous communities and support the Indigenous Community Support Fund. As well, there is $54.5 million to support the implementation of An Act respecting First Nations, Inuit and Métis children, youth and families and the ongoing reform of the Indigenous Child and Family Services.
[Translation]
Mr. Chair, Indigenous communities have recently been impacted by a variety of emergencies and disasters including COVID-19, floods, wildfires, among others, which have highlighted the vulnerabilities Indigenous peoples face. The department is strongly committed to providing continuous support during these dramatic events while advancing other initiatives across a number of priority areas. I look forward to discussing any aspect of these estimates with you and welcome your questions regarding my presentation. Thank you very much.
The Chair: I thank Mr. Thompson and Ms. Bess. You have made two good presentations; we will immediately go to questions.
[English]
We’ll have a maximum of five minutes each for the first round. Therefore, please ask your questions directly to the witnesses. Please respond concisely. The clerk will make a hand signal to show that the time is over.
Senator Marshall: My first question is for Ms. Bess. You had mentioned the two amounts for settlement funds, the $412 million and the $212 million. The $412 million is for grants. Who would that be payable to? Would that be organizations? The $212 million is operating expenditures, so I’m just trying to make the distinction as to who will be the recipient of those funds.
Ms. Bess: Thank you very much for your question, Senator Marshall. I’d like to pass that question over to Martin Reiher, the Assistant Deputy Minister for Resolution and Individual Affairs Sector. He can speak to you about the specific claims amounts for $412 million.
Martin Reiher, Assistant Deputy Minister, Resolution and Individual Affairs Sector, Crown-Indigenous Relations and Northern Affairs Canada: Thank you for the question.
The $412 million for the Specific Claims Settlements Fund is money that is reprofiled from a previous year. This fund allows the government to pay First Nations pursuant to settlement agreements that are reached under the specific claims policy. This fund is designed to allow for the reprofiling from year to year of funds that are not expended in any given year. This is because the fund allows payments to settlement agreements that are reached pursuant to negotiations, and negotiations have unpredictable time lines. Therefore, we forecast the best we can the settlement that will be reached in any given year, but at the end of the year, there are surpluses from time to time. In 2020-21, there was a $412 million surplus that we reprofiled to the following year —
Senator Marshall: I remember asking that same question.
Who is the recipient of the money? Does it go to individuals or does it go to organizations? Because it’s listed under “grants.”
Mr. Reiher: It’s a grant, and the money is paid to the First Nation collective, the band.
Senator Marshall: And then for the Indian residential day scholars litigation, there is $212 million. Does that go to individuals? That shows as an operating expenditure, so what would that be?
Mr. Reiher: This is for the payment of a litigation settlement agreement. Therefore, the money will be paid to class counsel who will use this money to pay the class members. This will allow for the payment of —
Senator Marshall: They will disperse to individuals. Okay.
Mr. Reiher: Just to complement that — plus $50 million to the foundation. The name of the foundation would be the Day Scholars Revitalization Fund.
Senator Marshall: You said that the funding was reprofiled from a previous year. Do you think that this money is going to be paid out in this fiscal year, or is it there just in case?
Mr. Reiher: A large portion of the fund is used every year, so we anticipate it will be used, but it depends on how many settlements we’ll reach this year.
Senator Marshall: Okay. I got it.
This is a question for both departments, for both Ms. Bess and Mr. Thompson. I notice that there is funding provided for the same thing in both departments. There is funding for infrastructure in Crown Indigenous Relations, and then when you look at Indigenous Services, there is also funding there for infrastructure. Why is that, and how do you coordinate? What criteria determine what department pays what? I’m just trying to get a handle on who pays for what.
The Chair: First, Ms. Bess and then Mr. Thompson. Ms. Bess, please, answer the question.
Ms. Bess: Thank you for your question, Senator Marshall. That is a very great question.
I’m going to hand over to my colleague Mr. Philippe Thompson because this is an Indigenous Services Canada-led infrastructure. We share that with them. Then we can parcel it out to the other senior officials in our departments, respectively.
Mr. Thompson: Thank you very much for the question.
That is correct. This is a Budget 2021 item for Indigenous infrastructure. It is a horizontal item shared between the two organizations. It really depends on the nature of the relationship. In general, Indigenous Services Canada is responsible for communities that are south of the 60, while Indigenous Relations works with north of 60, but it also depends on the relationships that are being established with self-governing nations as well.
To give more details and more information, I would ask Nelson Barbosa, my colleague, who is from Regional Operations.
Senator Marshall: Perhaps you could follow up in writing. You have gotten me off to a good start.
I have another question that’s very similar. I would like some more information on the infrastructure in writing, but I notice there is also similar funding to implement An Act Respecting First Nations, Inuit and Métis children, youth and families. There is funding provided in both departments, so I have the same question: How do you distinguish them, and who determines who pays for what?
Mr. Thompson: The general rule is that south of 60, the responsibility is with Indigenous Services Canada. For communities in the territories and north of the sixtieth parallel, it’s Crown-Indigenous Relations and Northern Affairs. We can provide you the exact details in writing so that the distinction between the two organizations is precise and clear.
Senator Marshall: That would be excellent. Thank you.
The Chair: Mr. Thompson and Ms. Bess, in providing written answers, we have a date that we’re asking you to provide them by, due to our tabling of the report in the Senate. We ought to receive it on or before the Monday, December 13. Do we agree that you could provide that in that time?
Mr. Thompson: Yes, Mr. Chair.
Ms. Bess: Yes, Mr. Chair.
The Chair: Thank you.
[Translation]
Senator Forest: I thank the many witnesses who travelled to answer our questions and inform our thinking. The Parliamentary Budget Officer’s latest report recognizes that the government made a laudable and significant effort in terms of capital expenditures to support drinking water treatment on reserves, which is a fundamental issue and meets basic needs. However, he calculated that it costs about $450 million a year to operate and maintain that drinking water treatment equipment. Yet only $200 million is set aside in the budget, which leaves an annual shortfall of $138 million. The communities must account for the difference or let the facilities degrade, which would be catastrophic. What is the plan to address the operating and maintenance deficit for that vital drinking water treatment infrastructure?
Mr. Thompson: I think the question is for me. In Supplementary Estimates (B), some money is set aside for infrastructure, but I want to clarify that this money is not intended for drinking water. However, in our budget for this year, we have $1.2 billion earmarked for drinking water. To give you more details in the answer to your question, I will ask Nelson Barbosa to take the floor.
Nelson Barbosa, Acting Director General, Community Infrastructure Branch, Regional Operations, Indigenous Services Canada: Thank you for the question.
[English]
In response, I would acknowledge your comments that the Parliamentary Budget Officer did note that there were sufficient resources in capital. Also, as you noted, by the calculations of the Parliamentary Budget Officer, there is a delta in terms of operation and maintenance funding.
As Mr. Philippe Thompson mentioned, those are not resources that are secured through Budget 2021, but I would underscore that over subsequent years — since Budget 2016 — there has been a fourfold increase in operations and maintenance funding specifically dedicated to support water. That money was increased as part of the Fall Economic Statement of last year, which included an escalator that will take funding up until 2025 at just shy of $370 million annually. To your point, that is slightly less than has been illustrated by the Parliamentary Budget Officer. So in response, we are working with the Parliamentary Budget Officer to understand how that calculation was determined.
In addition to the fourfold increase, we have also indicated to communities that if they are indeed experiencing a funding deficit on operations and maintenance, they can come to the department to seek a top-up, and those top-ups will be supported. To your point, those are not costs that have to be borne by the First Nations themselves. Thank you for your question.
[Translation]
Senator Forest: So what you are telling me today is that federal government’s financial support covers all the maintenance and operating costs for drinking water infrastructure?
[English]
Mr. Barbosa: Thank you for the question. The funding is predicated on a funding formula, which was updated in the last calendar year. The previous funding formula saw a funding distribution where Indigenous Services Canada would account for 80% of the formula, where First Nations would have to absorb the remaining 20%. That funding formula has been revised, and Indigenous Services Canada now pays for 100% of the costs associated with the formula. This is the calculation by which the PBO calculated not only current spending but projected spending moving forward. The cost increase is both in terms of funding formula but also the percentage by which Indigenous Services pays for this formula, which is now at a 100% threshold.
[Translation]
Senator Forest: Indigenous Services Canada pays for 100% of maintenance and operating costs. That is my understanding.
Second question, if I have the time. How are needs prioritized in the infrastructure funding? How are decisions made regarding various regions and various needs?
Here is an example. When I was mayor, the gasoline tax refund program contained a criterion whereby municipalities could not use the money from the gasoline tax refund to fund anything else, as long as water treatment infrastructure had not been upgraded. Can that kind of prioritization or criteria be implemented to be able to arbitrate between distribution at the territorial level and at the level of project prioritization, knowing that water treatment infrastructure is a major issue on those Indigenous territories?
Mr. Thompson: Thank you for your question. When it comes to infrastructure, the relationship with First Nations is clearly very important for determining the state of the infrastructure. The infrastructure program also has a lot of information on the state and age of the infrastructure, and all the data is used to determine investment priorities. Once again, I can turn to Mr. Barbosa to give you further clarifications.
[English]
Mr. Barbosa: Thank you for the question. In relation to the estimates provided today, Supplementary Estimates (B), funding is dedicated directly to support health facilities, schools and housing. Those funds are determined largely through interactions between our regional offices and communities to determine funding prioritization. As you noted, health and safety is a huge concern for communities. Health facilities, schools or homes that are deemed to be at high risk typically receive the largest notional allotment of funds, but grosso modo, the relationship is between the community and regional offices. There is a prioritization approach for all infrastructure. In the water context, there is paramount funding provided to long-term drinking water advisories, which are considered part of the first set of health and safety criteria.
[Translation]
Senator Gignac: I want to thank Ms. Bess and Mr. Thompson for joining us and applaud their team’s good work to support and develop economic development in Indigenous communities.
My understanding is also that there is an entrepreneurship and business development program for Indigenous businesses, and I see that an additional $15 million will be provided to support Indigenous-led businesses. I applaud that initiative.
When I consulted the documentation last night, I looked at your department’s report for the previous fiscal year, 2019-20. I think it includes performance targets and I noted — with some disappointment — that you have a target in terms of dollars for federal procurement contracts set aside for Indigenous businesses.
I think the objective is for 5% of federal contracts to be awarded to Indigenous businesses, and the result is actually 0.8%. We are not talking about 8%, but about 0.8%, compared to a 5% objective. Has that since changed? This performance report was published more than two years ago, after all.
Another thing I would like to know is what the reason for that is. Is it due to a lack of entrepreneurship or expertise among Indigenous communities or to bad faith by the federal government? We know that the federal government gives a lot of orders. I am trying to understand what is happening.
Mr. Thompson: I think the question is for us. Thank you for the question. It is quite right to say that $15.4 million was set aside for Indigenous entrepreneurship in Supplementary Estimates (B), and that amount was targeting Indigenous entrepreneurship, businesses led by Indigenous women, as well as the tourism industry. Concerning the 5% target, you are correct, but we will soon update the target in the new report on departmental results.
Tremendous efforts have been made. I will ask my colleague Christopher Duschenes to give you more details on this.
Christopher Duschenes, Director General, Economic Policy Branch, Lands and Economic Development, Indigenous Services Canada: I am Christopher Duschenes, Director General, Lands and Economic Development.
[English]
Thank you very much for the question. As Mr. Thompson said, the process to reach the 5% has been recently ramped up considerably and there are ongoing efforts to ensure that target is reached. Engagement across the federal government and federally directed agencies has increased enormously over the last year, and we anticipate that in the next little while the commitment to 5% will be reached. So there is good progress but, indeed, as you noted, we’re not there yet.
If I can comment on the money that’s been allocated to Indigenous entrepreneurs, we are very proud at Indigenous Services Canada that the Aboriginal Entrepreneurship Program was transferred and devolved to the National Aboriginal Capital Corporations Association in 2015 and to the Métis Capital Corporations in 2019. We rely heavily on them for data and for working in partnership in terms of how the $42 million presented in the Supplementary Estimates (B) will be spent. As Mr. Thompson said, this is dedicated to Indigenous entrepreneurs generally but, more specifically, to women Indigenous entrepreneurs and to the Indigenous tourism industry. Thank you.
[Translation]
Senator Gignac: I think this is very important because, if the federal government itself is failing, it becomes difficult for our Indigenous businesses to develop and make progress on Canadian and international markets.
I will have another question in the second round for Ms. Bess.
[English]
Senator Richards: Thank you to the witnesses. Senator Marshall voiced my concerns about what I thought was a bit of duplicate funding. Do you believe measures are in place to ensure that the outcomes that we all want are achieved? Will you be tabling a performance report in the next while so that people can look at that? That’s the question I have, and I will yield the rest of my time to Senator Duncan.
Mr. Thompson: I can start the answer and maybe my colleagues from CIRNAC can complete the answer. This is a good question.
This is very much a team effort. We and our colleagues from CIRNAC are working together to make sure we are maximizing the outcomes for Indigenous people. When we are doing policy development work with regard to the interventions we do, and in the economy specifically on infrastructure, we make sure that we are doing the right needs assessment and that we’re assessing the right interventions we have to make so we can complement our efforts. We are also working together in order to make sure the funding is flowing well and that we’re having the greatest impact.
To answer your question, we also collaborate in terms of performance measurement to ensure we identify the right indicators. With respect to performance measurement, we have an obligation for co-development as well. So it’s not only in isolation, the federal government looking at performance indicators. This is something we do in collaboration with Indigenous communities to make sure that what we measure makes sense for them and that it has an impact on them. With regard to tabling of the reports — I believe the reports should be tabled in the next few weeks, according to the timelines right now. It is a government decision. I can’t speak on behalf of my colleagues from the Treasury Board. However, we are expecting those reports to be tabled in the upcoming weeks.
Does my colleague from CIRNAC want to add to the answer?
Ms. Bess: Yes, that’s a great question. The only thing I wanted to add is that when we do typically secure funding through Treasury Board, there are specific outcomes and indicators that we need to provide to show the results that we intend to achieve with this funding. That is something that we typically report back on in our departmental results report. As Mr. Thompson indicated, it will be tabled shortly. Thank you.
Senator Richards: Thank you. I will yield the rest of my time to Senator Duncan.
Senator Duncan: Thank you so much, chair, and to my colleagues for the generous donation of this portion of their time. Thank you.
I do acknowledge and respect and appreciate that I’m speaking to you from the traditional territory of the Kwanlin Dün First Nation and the Ta’an Kwäch’än Council, self-governing First Nations in the Yukon.
My colleagues have asked some very good questions, and I appreciate the responses regarding the infrastructure funding and the operation and maintenance concerns raised by the Parliamentary Budget Officer. I have one question in follow-up, and I would just appreciate the response in writing. Is there a green lens or a climate-change perspective applied to the infrastructure projects? For example, we have seen what are termed “green buildings” constructed. I would appreciate that response in writing. I see Mr. Thompson nodding, so perhaps we could have that by December 13, if possible.
I would like to follow up regarding some of the other items in Indigenous Services, such as the funding that is in the supplementary budget to implement the federal pathway response to Missing and Murdered Indigenous Women and Girls. The Yukon was the first of the provinces and territories to table our strategy in response to recommendations to the Missing and Murdered Indigenous Women and Girls inquiry. Would the officials please respond in writing as to how this additional funding identified in the supplementary budget is allocated regionally? I would appreciate that information or any additional information they are able to provide on that particular subject, quickly.
Ms. Bess: Yes, we will respond, Senator Duncan, thank you.
Senator Duncan: Okay, thank you very much. I appreciate that.
There is also funding identified in response to the litigation and also the support for children and families. Would the departments also provide information as to which provinces and territories the Government of Canada has reached agreement with in preparation to spend this money?
Just one final question regarding the additional money for the non-insured health benefits: how much of that additional $339 million — I believe it is — is related to increased costs as a result of the pandemic, and should it not have been identified as pandemic-related spending?
The Chair: Ms. Bess and Mr. Thompson, do you want to answer some of the questions now or do you want to proceed in writing?
Mr. Thompson: Mr. Chair, with regard to the question on the child and family services agreements, we can most definitely provide that information with all the details in writing by the due date.
With regard to non-insured health benefits, this is a program-driven demand, and it’s program-integrity funding that has been provided in Budget 2021. There was also funding provided for COVID-19. Julien Castonguay, if you have the answer right away, you may want to provide it. With regard to non-insured health benefits, or NIHB, was there any money that was COVID-related?
The Chair: Mr. Castonguay please.
Julien Castonguay, Director General, Strategic Policy, Planning and Information, First Nations and Inuit Health Branch, Indigenous Services Canada: Thank you. In essence, the COVID expenditures have had fluctuations because of reductions in the different transportation, so it is not a simple fact of increased costs for COVID. However, it is, as Mr. Thompson indicated, program-integrity funding plus the addition of a [Technical difficulties] medicine and that program integrity. That’s the explanation.
The Chair: Any comments from Ms. Bess on the questions from Senator Duncan?
Ms. Bess: No.
The Chair: Any other comments, Mr. Thompson?
Mr. Thompson: No, thank you very much.
Senator Loffreda: Thank you to Mr. Thompson, Ms. Bess and their colleagues for being here with us today.
This question is for CIRNAC. I would like to explore the $13.3 million being used for hydroelectricity and grid interconnection projects in the North. According to Budget 2021, $40 million over three years will be spent to support feasibility and planning of hydroelectricity and grid interconnection projects in the North. As a senator from Quebec, I’m proud of our clean hydroelectricity. However, I do recognize that communities in the North are heavily reliant on diesel fuel. I know small, modular reactors are one such option, which Senator Patterson from Nunavut has publicly advocated for as recently as this week.
It is no secret to anyone that building major infrastructure, even clean energy projects, can be met with opposition and many regulatory hurdles. However, we need to greenify our country’s energy portfolio, which includes getting northerners and remote communities off of diesel fuel and onto cleaner alternatives. Can you elaborate on what options are currently being explored for these hydroelectricity projects? Have any formal proposals been submitted for regulatory approval and environmental assessment? Would these projects be funded through the Northern REACHE Program? I also note there is an additional $6 million in these estimates to transition diesel-reliant Indigenous communities to cleaner energy. Any information on these two spending items would be appreciated. Thank you.
Ms. Bess: Thank you very much for your question, Senator Loffreda. I’m going to just turn it over to Serge Beaudoin, our Assistant Deputy Minister for Northern Affairs, who can provide you with a bit more information on these endeavours.
Serge Beaudoin, Assistant Deputy Minister, Northern Affairs: Thank you for the question, senator.
Indeed, there are about 200 communities in Canada that are reliant almost entirely on diesel for their power and their heat. Most of those communities are northern or Indigenous communities, so the issue is very real. The Northern REACHE Program that you have mentioned, senator, is indeed one of the programs that we use to work with communities on planning and feasibility. It’s a smaller program, so it really limits itself to the planning and feasibility elements of that. We funded solar projects and wind projects, for instance, in the past.
The budget funding that you are mentioning — the $13.4 million for this year; $40 million over three years — was mentioned in the budget, but there was also mention of examples of projects. Some of the examples that were stated in the budget were the Kivalliq Hydro-Fibre Link project as well as the Atlin project in B.C. to the Yukon. Those are examples of programs.
What I will mention, senator — because this is a comment we’ve gotten back from First Nations and northern communities — that sometimes these programs are difficult to access. Therefore, we’re working very closely with our colleagues in Natural Resources Canada and Indigenous Services Canada so that we can also help pathway or find funding for when they become shovel-ready. That is the plan. We work with them in planning and feasibility and try to build it up to actual construction on the ground. We’re looking to take a “no wrong door” approach here. We’re working with partners to simplify things as much as possible.
Senator Loffreda: So how are you facilitating access to these programs? You’ve said that you are working closely with them on numerous initiatives; maybe you can elaborate on that. Will we see results in the near-term, mid-term or long-term on that?
Mr. Beaudoin: Yes, thank you, senator. Northern REACHE has been ongoing since about 2016. We’ve built relationships on the ground, and with the existing budget of about $5.3 million, we fund on average 30 to 35 projects per year. There are small amounts that go out for seed funding for planning and feasibility. Our approach to the funding that you mention is to build on those relationships and to work with our colleagues in other departments to grow the projects towards shovel-ready and help them to be launched.
Senator Loffreda: So there is hope for near-term success in some of those programs to facilitate that access and to have success, if I understand correctly?
Mr. Beaudoin: Yes.
Senator Loffreda: Thank you.
Mr. Beaudoin: And we would be happy to share with the committee some examples of projects that have been funded in the past and what they have led to.
Senator Loffreda: That would be interesting.
On the entrepreneur side, I wanted to elaborate and have a deeper dive into it if I have some time. If not, perhaps in the second round. But thank you for your response. It is encouraging to see that we have made progress on that front, because when I was looking into it, I felt that we could have used some improvement there. Thank you.
[Translation]
Senator Gerba: Thank you very much for all the answers we have received from witnesses. Ladies and gentlemen, Ms. Bess and Mr. Thompson, I am new to the Senate and also to this committee. I may put questions to you that you feel are natural or obvious.
I am seeing a lot of figures and I’m wondering how those figures were determined in supplementary estimates, and how projects are allocated and selected. What criteria do you use to decide what projects are presented to us today?
Mr. Thompson: Thank you for your question. Budgets are set based on the federal government’s estimates cycle. At the beginning of the year, we are provided with a budget allocation. Then, based on announcements in the government’s budgets, or in our case, for instance, in this budget, some funds are not spent, as Mr. Reiher explained in the beginning.
Every fiscal year, we must have access to the funding announced by the government that is provided as part of the government’s financial framework, or permission must be sought to redistribute unspent funds from previous years.
These amounts are truly determined based on decisions made by the government in terms of estimates. By using the estimates cycle, we will have access to that funding. There are a few specific periods during the year, with the Main Estimates tabled at the beginning of the year, followed by three supplementary estimates during the year — Supplementary Estimates (A), (B) and (C). Today, we are discussing Supplementary Estimates (B).
As far as funding amounts go, in our case, as we are mainly a services department, the vast majority of our programs are determined based on the demand and needs. Many of our programs, for instance, are determined through provincial formulas. So we will want to provide communities with the same level of services as what they would receive from provincial governments.
Every year, formulas determine the amounts that should be allocated to each program. It is based on those formulas that needs are determined and requests to access budgets are made. That’s often what happens. There are requests, provincial formulas or risk criteria. Some programs are really focused on the demand.
For example, there is the Jordan's Principle, or the family and childhood assistance program based on the demand. Costs to communities are reimbursed. That’s just a reimbursement formula.
That is how our budget works and how amounts are determined.
Senator Gerba: I understand that those budgets are not recurrent and that they vary based on the demand. How do you select your projects?
Mr. Thompson: In some cases, projects are based on contexts related to infrastructure where it is the relationship with communities, the degree of risk and the needs that determine which projects will go ahead. In some cases, it is really about formulas. For instance, we talked about infrastructure earlier. What is taken into account is the state of the infrastructure, the state of information. In the case of request-based programs, the requests we receive are the true determining factor.
The Jordan's Principle is a good example. Program recipients put in requests, and if they meet the program eligibility criteria, they are given access to funding. So some programs are based on eligibility criteria, and others on provincial formulas and others still on applications. It varies across our service offering.
Senator Gerba: Thank you.
Senator Dagenais: My question is for Mr. Thompson. Many of my colleagues have talked about infrastructure budgets, and I will stay on that topic. We know that government budgets outline investments in infrastructure for Indigenous communities. Access to drinking water is often brought up. This situation is unacceptable in 2021, especially since time frames to resolve the situation are entirely unacceptable.
What portion of the millions of dollars allocated to resolve the situation is truly dedicated to infrastructure, as opposed to the cost of political tinkering? So far, how many millions of dollars have been reserved for concrete and how many millions to account for the fact that promises sometimes cannot be kept?
Mr. Thompson: Thank you for your question. As for infrastructure budgets, this year, supplementary estimates earmarked $497.9 million for infrastructure. If we look at the entirety of the department’s infrastructure program, this year, $1.2 billion is set aside for drinking water, $338 million is earmarked for housing, $231 million is set aside for health infrastructure and $432 million for education infrastructure. For other types of infrastructure, including the operation and maintenance of infrastructure, we are talking about $916 million.
In the department’s budget, money is transferred to communities through grants and contribution payments. If you are referring to the surplus concerning the department, it is very, very low when it comes to Indigenous Services Canada.
The surplus is less than 5%, so the department is very efficient in that regard. Most of the time, we spend all the money. However, as you know, over the past couple of years, with COVID, challenges have arisen in terms of infrastructure, when it comes to delivering materials for contracts and in terms of access to funding for communities. Access was not possible in certain communities. I can assure you that any unspent funding will be reinvested. We don’t leave money on the table. The money is always reallocated for upcoming years and will always end up getting to the communities.
Senator Dagenais: My next question is for Mr. Castonguay. The real issue is that Indigenous people are increasingly leaving reserves for the big cities. They often become homeless and, as they no longer live in their respective communities, I feel that they no longer have access to services.
Would it be possible and logical to split the money provided to communities for health and to create envelopes and budgets to help the cities, which have to absorb the costs related to Indigenous healthcare? Even in the cities, Indigenous people deserve to have access to the millions of dollars you provide for them.
Mr. Castonguay: Thank you for your question. Funding for communities on reserves is intended to provide services that would otherwise be provided by the provinces and territories. In this case, where people are living outside the communities, some programs, such as the non-insured health benefits program, provide registered First Nations and Inuit with benefits, regardless of where they live. The same goes for the Jordan's Principle, which was not based on a residence-related eligibility criterion. However, funding intended for communities is provided so that the communities themselves can make the services available where provinces and territories do not cover the costs related to those services.
[English]
The Chair: Senator Yussuff, you are basically sitting in on behalf of Senator Galvez. Do you have a question, senator?
Senator Yussuff: Yes, I do. On the question around infrastructure, maybe you could provide this: How many boil water advisories do we still have in the North? Then I will have a supplementary question.
[Translation]
Mr. Thompson: Thank you very much. I have information about the 119 long-term advisories that have been raised, but I will turn to Mr. Barbosa to provide you with the correct figures. I would not want to mislead the committee. Mr. Barbosa, do you have exact figures for today?
[English]
Mr. Barbosa: I do. Thank you for your question. There are currently 40 long-term drinking water advisories in place in 30 communities. I would note that one was lifted in the community of Wabaseemoong two days ago to reduce that number from 41 to 40. Thank you for the question.
Senator Yussuff: In regard to the numbers that are still remaining, does the department have a time frame in regard to budget allocation that hopefully will see the lifting of some of these communities’ water advisories in the 2022 budget year?
Mr. Barbosa: Thank you for the question. I would note that all of the 30 communities that I referenced currently have a plan in place to lift their boil water advisories. That is done in partnership with Indigenous Services Canada, Indigenous leaders and also community members in order to ensure a safe and timely lift. There are action plans in place for each of these communities, and our hope is to work in partnership with the communities in order to lift them. Thank you.
The Chair: Senator Yussuff, any other questions?
Senator Yussuff: I yield my time to my colleagues.
The Chair: Thank you, senator, and welcome to the Finance Committee.
Senator Pate: Thank you to the witnesses for being with us.
I want to follow up on a question raised by Senator Duncan. In addition to providing us with additional information about how the funding to implement the Federal Pathway to Address Missing and Murdered Indigenous Women, Girls and 2SLGBTQQIA+ People is allocated per region, would it be possible, please, to see the plan as to which parts of the Calls for Justice from the National Inquiry into Missing and Murdered Indigenous Women and Girls will be implemented and in which regions? Can we see the budgetary allocations for each of those? In particular, given the recommendation for financial support in the Calls for Justice, what part of that will be allocated to develop a guaranteed livable income for and with First Nations and Indigenous communities?
In addition, in terms of the funding that’s provided for income assistance and case management in the supplementary estimates, one of my questions is how much of that money goes towards administration in terms of the overall allocation? In addition, what are the criteria imposed for access to the income assistance and the pre-employment supports? Are there pre-employability criteria? As well, how much is received? Again, separate out the administration, but how much is received by folks? And how does that conform with the poverty line or the poverty index within the various regions where the money is being allocated?
Mr. Thompson: Thank you very much for the question. With regard to the first question, we at CIRNAC will be pleased to provide that information in writing. In regard to the income assistance program, it is a Budget 2021 item that has been announced in Supplementary Estimates (B) of $309 million. This is program integrity funding. I will ask my colleague David Peckham to provide you with more information with regard to the administration of the program and the question from the senator.
David Peckham, Assistant Deputy Minister, Education and Social Development Programs Sector and Partnerships Sector, Indigenous Services Canada: Thank you for the question, senator, around case management supports and employability. I will start there.
Individuals who have no other access to employment nor any other sources of income would receive funds from the income assistance program. So we’re talking about people who would be receiving social assistance from a province or territory if they were living off-reserve. Case management supports are for individuals who work with case workers who can either help them get into pre-employment services or training. Some of that can be around life skills as well, such as preparing for interviews, budgeting and motivation. So the objective is to get people into employment or training to help them find those things.
With regard to your question on how much goes to administration, we will follow up in writing with you. The administration includes both administration within the department for the program but also within the First Nations themselves as they administer the program on reserve. The funding goes to First Nations who then have workers within their band offices who administer that funding for income assistance and case management.
Senator Pate: If you could also provide, Mr. Peckham, the allocation of income assistance under those guidelines, if possible, with as much particularity as possible, certainly by region, that would be much appreciated.
Mr. Peckham: Very happy to do so, senator. Thank you.
Senator Boehm: The advantage of being last in a long line of senators is that all of the good questions have already been asked, and, of course, we have received good answers today, so I want to throw out a more general and maybe strategic question, initially for CIRNAC but anyone can respond.
In the past few years, there have been quite a few changes. One department has been divided into two. We are on a path of reconciliation across the country. We are atoning for tragedies that have taken place in the past, and we’re trying to make the future good.
With all of that comes a tremendous amount of responsibility and a tremendous amount of money. I’m just looking at the Specific Claims Settlement Fund, for example; that is a huge amount. It also brings more scrutiny, and I refer to the Auditor General’s fall reports of 2016. It may also bring — and I say this as a veteran of the bureaucracy — more bureaucracy and more people working on issues and a greater need for systems that work.
So I would ask you to reflect a little bit. Are there lessons learned from this? Have measures been taken to make the claims process simpler to the satisfaction of our Indigenous claimants of all kinds, and how do you see the path going forward? Do you need more resources? Do you need more staff? I know this is a little bit speculative and it might put you on the spot, but I would be really interested in your response.
Ms. Bess: That’s a great question, senator. As you have made note here of the Auditor General’s report, we have growing contingent liabilities for our organization, and it’s growing more. I’m going to turn it over to our Assistant Deputy Minister for Resolution and Partnerships, Martin Reiher, to talk about the strategy and what he thinks and envisions for the future.
Mr. Reiher: Thank you for the question. It’s extremely important indeed.
I’d like to start by saying that we have been working hard in the last few years to accelerate the pace of the settlements that we reach with First Nations and to make the process simpler. In the last three years, we have achieved a record-setting number of settlements. In 2020-21, for example, we resolved 36 specific claims, and this resulted in the injection of $1.7 billion into communities.
The way we try to make the process more efficient is to be at work more collaboratively earlier in the process with First Nations. For example, when they present a claim and there is missing information, we go to them as soon as possible to obtain more information. We work directly where possible to obtain expert research, et cetera. Also, when we can, we bundle claims with the First Nation in order to settle more than one claim at once. These are examples.
At the same time, there are demands for broader reform of the specific claims policies and processes, and we are working with the Assembly of First Nations on that. They conducted an engagement and proposal that is posted on their website for some more independent processes, more independent from the department. We will continue to work with them to see whether that may be implemented and that might continue to improve the process.
I hope this is the beginning of an answer to the question. Thank you.
Senator Boehm: Thank you very much.
The Chair: Thank you, honourable senators. Now we will go on the second round.
[Translation]
Senator Gignac: I have been given an answer to my question, which was for Ms. Bess and concerned the same topic. So I yield the floor to my colleagues, Mr. Chair.
The Chair: Thank you, Senator Gignac. Senator Loffreda, go ahead.
[English]
Senator Loffreda: This question is for Indigenous Services Canada and touches once again on the $15 million being sought to support Indigenous-led businesses. This is something I strongly support, as I recognize the significant role Indigenous entrepreneurs play in their communities by creating jobs and stimulating the local economy.
[Translation]
I know that Senator Gignac asked a really good question about this.
[English]
I do know, unless I’m mistaken, that this fund is distributed through the Aboriginal Entrepreneurship Program, and you have specified that it is a great program. I would like to take a deeper dive.
Can you provide our committee with an update? You did mention amounts and what have you. But if we look at numbers, how many Indigenous entrepreneurs or business owners have benefited from this funding or some funding? Are there any reporting mechanisms in place to evaluate how successful these investments are? Maybe you could elaborate on that. I always say that what you measure improves. If you manage results, you get results. If you manage activities, you get activities. I’d like us to manage results on this.
I’d like to know how successful these investments actually are but also share some success stories about how these funds have helped businesses flourish, expand and generate revenues. Maybe we can build on these success stories and share best practices and some of these success stories. Maybe you could send us something in writing to that effect or elaborate as much as you can. I do believe in entrepreneurs and the entrepreneur fund being a great initiative. Thank you.
Mr. Thompson: Thank you very much for the question. I’m very pleased we have an opportunity to discuss Indigenous entrepreneurship because it’s going to be so important as we go to a post-COVID environment. I would not want to deprive the committee the opportunity to hear from Mr. Duschenes on the great results that the program is achieving. If time permits, I would like to give the mike to Mr. Duschenes.
Mr. Duschenes: Thank you for the very interesting question. We really have to give credit to the 59 Aboriginal Financial Institutions across the country. Those are small lending institutions from coast to coast to coast, which include five Métis Capital Corporations, because they are the ones issuing loans. The critical issue here that you raise is that the Aboriginal Entrepreneurship Program provides a grant through the AFIs, the Aboriginal Financial Institutions, to allow entrepreneurs to obtain a loan. Our relatively small amount of money in the program is leveraged over the years and over the last 30 years through the AFIs for billions of dollars’ worth in loans.
We would be very happy to provide you with the statistics as to how that money has been leveraged, and we will refer you to the annual report from the National Aboriginal Capital Corporations Association which is very impressive. It shows you in terms of dollars leveraged, businesses created, jobs created and the overall impact on the economy.
Senator Loffreda: It would be very interesting to see that. Thank you for that.
Mr. Duschenes: My pleasure.
Senator Duncan: Senator Loffreda and Mr. Duschenes talked about Indigenous-owned businesses, and the Prosperity Action Group identified that Indigenous-owned businesses contribute $32 billion to Canada’s GDP, and the goal by 2030 is to have Indigenous-owned businesses to contribute more than $100 billion to the Canadian economy. In his written response, could Mr. Duschenes elaborate on how the Indigenous lending organizations might meet that goal earlier than perhaps 2030?
Mr. Duschenes: Thank you for the question. Absolutely.
One of the things I would like to point out is that the Indigenous Growth Fund was just launched, which is a partnership between the BDC, the Business Development Bank of Canada; EDC, Export Development Canada; and probably most importantly, the National Aboriginal Capital Corporations Association, which is making available over $150 million for low-interest loans, which will help very much, Senator Duncan, the issue that you just raised to increase the amount of loans, increase the number of businesses and increase the overall contribution of the Indigenous businesses to the economy. We certainly can provide you with a written answer to that. Thank you.
The Chair: Ms. Bess and to Mr. Thompson, do you have any one-minute closing remarks?
Ms. Bess: No, thank you. It’s been a pleasure to be here with you all again. Thank you.
Mr. Thompson: I would like to thank the committee again.
[Translation]
It is a pleasure to appear before your committee. You always ask excellent questions, and I thank you for giving us an opportunity to answer them. Thank you for the invitation.
[English]
The Chair: To both of you, thank you for your leadership and also to your team for being here and answering our questions.
Honourable senators, to continue our study of the Supplementary Estimates (B), in our second panel, we have the pleasure of welcoming officials from Global Affairs Canada, the Department of National Defence and the Canadian Armed Forces, and the Department of Finance Canada.
From Global Affairs Canada, we welcome Anick Ouellette, Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology Branch; Annie Boyer, Director General, Financial Planning and Management, and Deputy Chief Financial Officer; Joshua Tabah, Director General, Health and Nutrition; Gillian Frost, Executive Director, South Asia Division; Andrew Smith, Director General, International Assistance Policy; and Stephen Salewicz, Director General, International Humanitarian Assistance.
From the Department of National Defence and the Canadian Armed Forces, we welcome Lieutenant-General Frances Allen, Vice Chief of the Defence Staff; Troy Crosby, Assistant Deputy Minister (Materiel); and Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer.
From the Department of Finance Canada, we welcome John Daley, Chief Financial Officer; Miodrag Jovanovic, Assistant Deputy Minister, Tax Policy Branch; Alison McDermott, Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch; Alison McDermott, Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch; Sam Millar, Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch; Bradley Recker, Director, Fiscal Policy Division, Economic and Fiscal Policy Branch; Martin Tabi, Director General, International Finance and Development Division, International Trade and Finance; James Wu, Senior Director, Debt Management, Funds Management Division, Financial Sector Policy Branch; and Anne David, Director, Corporate Finance and Asset Management.
I would like to take this opportunity to say thank you for accepting our invitation and for being here with the Finance Committee to answer questions from senators. The procedure will be that Ms. Anick Ouellette will give comments, followed by Lieutenant-General Frances Allen and John Daley.
[Translation]
Ms. Ouellette, go ahead.
Anick Ouellette, Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology, Global Affairs Canada: Thank you very much, Mr. Chair. It is an honour to appear again before this committee to discuss my department’s Supplementary Estimates (B).
I would first like to acknowledge that I am speaking from the traditional unceded territory of the Algonquin Anishinaabe people and I am grateful to have the opportunity to be present in this territory.
[English]
I’m joined today by Annie Boyer, Joshua Tabah, Gillian Frost, Andrew Smith and Stephen Salewicz.
Let me begin by acknowledging the scope of our mandate. Served by three ministers, Global Affairs Canada is responsible for advancing Canada’s international relations, developing and implementing foreign policy, promoting international trade while supporting Canadian business interests, being a leader in providing humanitarian assistance around the world and providing consular assistants to the many Canadians who work, live and travel abroad.
The COVID-19 pandemic has been devastating at home and abroad, influencing every facet of our work, including Canada’s foreign policy, consular services, trade and development work. From leading Canada’s largest and most complex consular operation of Canadians returning home to mobilizing more than $2.6 billion in international assistance, Global Affairs Canada has been at the centre of Canada’s response to the pandemic.
The majority of the additional funding sought through these estimates will support Canada’s continued international COVID-19 response. The 2021-22 Supplementary Estimates (B) comprise the following items stemming from Budget 2021:
[Translation]
There is $375 million to continue Canada’s international COVID-19 response via the Access to COVID-19 Tools (ACT) Accelerator, as fifth-largest sovereign donor. This funding is to support access by developing countries to vaccines, therapeutics and diagnostics in response to challenges brought on by the pandemic. There is also $165 million to help address the heightened levels of humanitarian needs around the world that had already reached unprecedented levels prior to the pandemic.
These funds could provide, for example, emergency food and nutrition services, emergency assistance to refugees including shelter, or life-saving treatment for children suffering from acute malnutrition.
[English]
There is $68.8 million to further Canada’s response to the Rohingya crisis in Myanmar and Bangladesh. The funding will support Canada’s strategy to improve physical and social well-being, peace and security, and equal enjoyment of human rights for vulnerable populations, in particular Rohingya people in Bangladesh and Myanmar.
In addition, $75 million for international assistance programming has been requested from the fiscal framework to replenish the Strategic Priorities Fund. Programming will be guided by country needs and implemented by trusted partners. Resources will be targeted where they will have the greatest impact while reinforcing Canadian leadership and interests.
All of these initiatives are shaped by Canada’s Feminist International Assistance Policy, which has refocused our global development and humanitarian effort on advancing gender equality, and the rights and empowerment of women and girls.
[Translation]
The department evaluates proposals from a variety of angles to ensure funding will be used for intended purposes. We continue to measure our performance and communicate our results to Parliament and Canadians as we emphasize responsible financial management to deliver against our mandate, and ensure the highest standards of service to Canadians, particularly those requiring consular assistance abroad.
Thank you, Mr. Chair. I look forward to your questions about these supplementary estimates.
The Chair: Thank you, Ms. Ouellette. Lieutenant-General Frances Allen now has the floor.
[English]
Lieutenant-General Frances Allen, Vice Chief of the Defence Staff, Department of National Defence and the Canadian Armed Forces: Thank you, Mr. Chair. The opening comments for DND will actually be provided by our Chief Financial Officer, Ms. Crosby.
Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer, Department of National Defence and the Canadian Armed Forces: Thank you very much, Mr. Chair, and good afternoon, senators. It’s good to see you all again.
[Translation]
I would like to thank you, Mr. Chair and honourable senators for inviting me to present our views on the 2021-22 Supplementary Estimates (B) on behalf of the Department of National Defence. My colleagues and I are pleased to discuss this important information before the committee.
[English]
Today, as mentioned, I am joined by my colleagues, Troy Crosby, Assistant Deputy Minister (Materiel), and Lieutenant-General Frances Allen, Vice Chief of the Defence Staff.
[Translation]
I will start with a summary, and then I’ll take your questions. Today, the Department of National Defence and the Canadian Armed Forces are requesting $769.5 million through the Supplementary Estimates (B) process. These Supplementary Estimates (B) are in line with planned defence spending and will provide the necessary funds to continue the implementation [Technical difficulties].
The supplementary estimates represent Canada’s contribution to NATO as part of the Department of National Defence’s mission to defend Canada and Canadian interests and values while contributing to international peace and security.
[English]
In February 2021, the Treasury Board Secretariat approved military rates of pay to be aligned with salary improvements reached through the collective bargaining process for employees of the federal public service. In accordance with section 35 of the National Defence Act, the economic increases apply to the rates of pay of regular and reserve force general service officers and pilots of the ranks of lieutenant-colonel and below, medical and dental officers and non-commissioned members of the Canadian Armed Forces. The pay increase is effective over three fiscal years beginning in 2018 through to 2021.
In these estimates, National Defence is also requesting funding for the Heyder Beattie class action final settlement agreement. These funds will be used to provide financial compensation payments to claimants and to cover administration costs associated with the settlement claims process. On December 13, the deputy minister, the Chief of Defence Staff and the Minister of National Defence will offer a public apology to all current and former members of the defence team who have been affected by sexual misconduct, including harassment and discrimination. This is part of our efforts to restore relationships with those who have been harmed. With this settlement and apology, National Defence hopes to bring healing and acknowledgment to members who have experienced sexual misconduct.
As announced in Budget 2021, funding is also being accessed for NATO. This funding is required for payments associated with increased NATO common funding budgets and Canada having rejoined certain NATO programs. This funding demonstrates Canada’s unwavering commitment to NATO and will strengthen this country’s capacity to respond to evolving global security challenges.
These estimates represent an increase of 3.1% of DND’s current allocation for fiscal year 2021-22. As a result, DND’s budget will increase from $25.1 billion to $25.9 billion. This net change reflects increases in vote 1 operating, vote 5 capital and vote 10 grants and contributions. Specifically, the changes include an increase in vote 1 of $327.7 million for the general pay increase for the Canadian Armed Forces members. It includes as well an increase in vote 1 of $250.2 million for funding for the Heyder Beattie class action final settlement agreement; as well, an increase in vote 5 of $2.5 million to pay for IT and IM equipment related to the Heyder Beattie class action final settlement agreement; and finally, increases in vote 10 of $63.9 million composed of the following: $32.6 million for the North Atlantic Treaty Organization Military Budget; and $31.3 million for the NATO Security Investment Program.
Mr. Chair, the Department of National Defence and the Canadian Armed Forces continue to deliver our essential national mandate while embracing fiscal responsibility and effective stewardship of our resources.
[Translation]
To conclude, my colleagues and I will be pleased to answer any questions you may have. Thank you.
The Chair: Thank you, Ms. Crosby.
[English]
Now the chair will recognize Mr. Daley for his comments.
[Translation]
John Daley, Chief Financial Officer, Department of Finance Canada: Thank you for the opportunity to present the 2021-22 Supplementary Estimates (B) on behalf of the Department of Finance. Joining me today are departmental officials to assist in providing a more in-depth perspective on the rationale and policies supporting the numbers within these estimates.
[English]
As you know, the department supports the Deputy Prime Minister and Minister of Finance, as well as the Minister of Tourism 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. We do fully appreciate that this committee has attended and invited a number of departments, and we fully appreciate the extension of the invitation to the Department of Finance as well.
The 2021-22 Supplementary Estimates (B) reflect a departmental budgetary and non-budgetary increase of $2.9 billion, stemming from a $14.7 million increase in vote 1 program expenditures; $143.1 million increase in statutory spending; and $2.7 billion increase in non-budgetary expenditures. Given these increases, the department’s total proposed authorities to date are $112.3 billion.
The increase of $14.7 million in vote 1 program expenditures primarily relates to funding for the Indigenous engagement on the Trans Mountain Expansion Project and for government advertising programs.
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 estimate documentation for information and review. As noted earlier, the statutory expenditures reflect a net increase of $143.1 million, which is mainly a result of the Additional Fiscal Equalization Offset Payment to Nova Scotia. The non-budgetary increase of $2.7 billion is a result of $2.4 billion in payments to the Canada Enterprise Emergency Funding Corporation to purchase shares to provide a source of funds for the Large Employer Emergency Financing Facility. It also includes $361.7 million for financial assistance to the International Development Association.
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 the committee members may have.
The Chair: Thank you, Mr. Daley. To all the witnesses and the departments, thank you for accepting our invitation and being here to answer the questions from the senators.
In replacement of Senator Marshall, I welcome Senator Larry Smith. The floor is yours.
Senator Smith: The first question is for the Department of National Defence. Budget 2021 set aside $267 million, I believe, over the next five years for modernizing the Department of National Defence’s information system. Could you talk about where the plans are at this point in time, where they’re going and when the department expects to start using the funds to develop a more modern information system?
Ms. Crosby: Thank you for the question. You’re right. Budget 2021 provided the Department of National Defence with some new funding to support some of our back office backbone IT infrastructure. Specifically, we received $44.6 million in operating and another $16.7 million in capital to work on what we called “DRMISMOD,” which is actually our foundational financial system. We are moving that system into a future SAP application. That in itself will probably take us four or five years, but other government departments are on the same journey, some faster than us and some slower. That’s a large part of where this money will go.
We also benefited from almost $60 million for the civilian human resource system upgrade, which enables us to simply modernize somewhat to a newer version on the HR system. I’m not sure what the timelines are on that, but we are seeking access to funding to begin this project very shortly.
Finally, we also received $163 million to modernize the defence supply chain, which is a project we have been working on for some time, and I’m happy to ask my colleague to provide additional information on that particular initiative if you’re interested.
Senator Smith: Thank you very much. Maybe I can move on because we only have a short period of time.
If we look at the Global Affairs area, in the supplementary estimates, there are voted appropriations of $165 million to support the recovery and resilience of developing countries. This request is part of what was announced in Budget 2021. Could you please elaborate on how this program is designed to help developing countries recover from the pandemic? How will the funding be distributed and on what conditions? Do you have metrics, and what metrics is Global Affairs using to measure the success of the program? Is anyone from Global Affairs there who can answer the question?
Stephen Salewicz, Director General, International Humanitarian Assistance, Global Affairs Canada: I believe my colleague Anick is having technical challenges and is frozen out. I will take the question.
Thank you very much, chair, for the question. The $165 million that was included in the budget request was focused on supporting and continuing to support our humanitarian assistance programming that is being delivered globally.
As the committee probably know, humanitarian needs continue to increase on an ongoing basis. In 2022, it’s projected to be 274 million people in need. Last year, there were 235 million people in need. The $165 million that we received is to support ongoing programming that the department is doing to respond to the needs of individuals. We’re delivering this programming through experienced humanitarian partners within the UN, within the Red Cross movement and among NGOs. We’re working with these funds in over 30 countries.
More to your point about some of the metrics we use to look at how we’re responding when using these funds, we work with a multitude of partners, but I’ll give you an example of results we have. With UNICEF, we’ve used the monies over the past year to treat up to 140,000 children suffering from severe, acute malnutrition using ready-to-eat therapeutic food. So this is a concrete example of how this funding, part of the $165 million, is responding to the needs on the ground.
Senator Smith: Could you give us an update on your international COVID response and what progress you’ve made and where are you with that particular program?
Mr. Salewicz: I’ll turn that question over to my colleague Joshua Tabah, who is focused on the COVID response. On the humanitarian response, the part we do is focusing on the secondary impacts of COVID. As many know, food insecurity rose tremendously because of the economic slowdown associated with COVID lockdowns, and our support was instrumental in responding to that food insecurity. I can turn the mike over to my colleague Joshua Tabah.
[Translation]
Senator Gignac: It’s my turn to welcome the officials of the various departments. My first question is for the Department of Finance, a department I know better than the others since I had the privilege of working there during the 2008-09 financial crisis and when the current Governor of the Bank of Canada was Associate Deputy Minister of Finance. I also want to acknowledge and congratulate you on your excellent work of dedication and innovation to some extent. You have shown pragmatism, and we can see that Canada has done well.
In my new role as senator, I’m going to ask questions that are a little more pointed, if I may. We are looking at how the $2.3 billion in non-budgetary statutory spending will work. That is quite a bit of money that is being paid to the finance corporation.
At the time, in 2008 and 2009, the Canada Account was managed more with Export Development Canada, or EDC. I’m wondering about the operation and the number of applications that have been submitted to date under that program.
My question is for either of the Department of Finance officials.
[English]
The Chair: Who from the Department of Finance can answer that question? I know that we’re having some trouble with the system.
Bradley Recker, Director, Fiscal Policy Division, Economic and Fiscal Policy Branch, Department of Finance Canada: I do believe the Department of Finance official who could answer that question has been disconnected from the system, unfortunately.
The Chair: And who would that be?
Mr. Recker: I think it would be Sam Millar. I don’t think he is on at this time. He was on.
The Chair: We will continue. Senator Gignac, continue your question, and when Sam is reconnected, we will ask him to comment.
[Translation]
Senator Gignac: If not, they can send the answer in writing. My second question to the Department of Finance is the following: What is the exit strategy and when will the program end? Yes, there are new variants, but at some point, this emergency credit should end if we want to have a plan for returning to balance and aim for a sustainable trajectory for our public finances. The government cannot constantly come to the aid of companies.
During a financial crisis, you have to do it, as we did in 2008-09. I remember because I was there. There is the pandemic, but in reality, when we see that the level of employment has returned to what it was and even exceeds the rate before the pandemic… I’m trying to figure out if there’s an end date for the program that allows access to this emergency funding.
That was my second question, Mr. Chair.
The Chair: Also for the Department of Finance?
Senator Gignac: Yes.
[English]
The Chair: Is there anyone from the Department of Finance who could answer Senator Gignac’s question?
Miodrag Jovanovic, Assistant Deputy Minister, Tax Policy Branch, Department of Finance Canada: I had been disconnected and just rejoined the call. I am sorry, but I just got the last part of the question and the reference to the emergency support. Is it in reference to the wage and rent subsidy?
Senator Gignac: No. My question was more precise. In this new program, the $2.3 billion special emergency help to companies, what is the exit strategy? Do we have a date, a final deadline that a company could apply to that program, or will they go on without any exit strategy?
The Chair: Can you answer that question, Mr. Jovanovic?
[Translation]
Mr. Jovanovic: We’re talking about the Canada emergency wage subsidy, right?
Senator Gignac: No, we’re talking about the financing credit, the $2.3 billion. The emergency financing of companies, companies like Air Canada and other airlines; that’s what I was referring to.
Mr. Jovanovic: I just wanted to confirm that, because the $2.3 billion is more or less the same as other figures. Unfortunately, I can’t give you an answer on that. If it had been about wage subsidies, I could have given you an answer, but not about this program.
[English]
The Chair: Mr. Daley, are you back on?
Mr. Daley: Yes. Please accept my apologies. I believe we’re having a VPN connection issue within the department. My apologies to the group.
The Chair: Can you answer Senator Gignac’s question?
Mr. Daley: I misheard the question due to connectivity issues. Again, my apologies to the chair and the committee.
[Translation]
The Chair: Senator Gignac, please ask Mr. Daley your question again.
Senator Gignac: Apologies to my colleagues. The question is about emergency programs. The $2.3 billion in non-budgetary spending to help large employers, as we have seen in the airline industry, will be administered in a slightly different way than in 2008 and 2009, when Export Development Canada was handling the Canada Account.
My question is: When will this program end?
[English]
Mr. Daley: Thank you, senator, for the question. It is appreciated.
The Large Employer Emergency Financing Facility, or LEEFF, is being administered by the Canada Enterprise Emergency Funding Corporation, or CEEFC, and is enacted through legislation at 60.2(b) of the Financial Administration Act.
In terms of the senator’s specific question, I want to pass it to Anne David from the Department of Finance to take on that question, specifically to speak to the strategy and the policy side of that question.
The Chair: Who are you sending it to, please?
Mr. Daley: Ms. Anne David.
The Chair: Is Ms. Anne David on? Ms. David, could you answer the question, please, so we can move on?
Anne David, Director, Corporate Finance and Asset Management, Department of Finance Canada: I’m sorry. I’ve had trouble connecting, Mr. Chair. Could I please ask that the question be repeated?
[Translation]
Senator Gignac: Mr. Chair, to save time, I propose that the answer to my question be sent in writing in the next few days.
[English]
The Chair: As chair, I will accept Senator Gignac’s recommendation. I will ask you, Mr. Daley, to provide a written answer to Senator Gignac’s question. We have a time frame for written answers, and they should be delivered to the committee through our clerk no later than Monday, December 13. Could you give us that answer in writing?
Mr. Daley: I appreciate the work of the committee. I want to ensure that December 13 is a feasible date for us as a department to reply to that question.
The Chair: Who will reply to the question?
Mr. Daley: It would be Ms. Anne David.
The Chair: Ms. David, do we have an agreement?
Ms. David: We agree to provide the response by Monday, December 13, Mr. Chair.
The Chair: Thank you very much. That is in the context of the report that we need to table to the Senate of Canada.
Senator Richards: Senator Smith asked the question I was going to ask, so I will ask National Defence a different question.
I know this is a supplemental bill, and I’m not trying to put anyone on the spot, but you did mention our commitment to the North Atlantic Treaty Organization, or NATO. Our helicopters are grounded, our planes are 35 years out-of-date, our North is far from protected, we don’t have enough ships to protect them and our navy is understaffed. What are our plans to beef up our security forces in order to meet our NATO responsibilities? Are there any plans in the work to do that? Thank you.
Ms. Crosby: Canada’s contribution to NATO is an important part of our mission to defend Canada. As you mentioned, we are accessing some funding to support our contribution, which is the sixth-largest contribution to NATO’s common services. We contribute 6.9% of the common service bill.
I would like to turn it over to Lieutenant-General Allen to further describe our plans there.
LGen. Allen: Thank you, senator, for your question.
Certainly, as the broader program through which the Canadian Forces assesses its capability requirements, it does take into account our contributions and our commitments to our NATO allies, as well as to the concurrent missions and activities that the Government of Canada has tasked the Canadian Forces to execute through the defence policy Strong, Secure, Engaged.
Our continuous work to do the capability assessment, which is done to determine what people, equipment and training is needed to execute those missions, is an ongoing activity. It sometimes results in capital equipment projects, and other times results in people initiative activities to make sure that we are prepared to execute those missions over time.
As we deliver new equipment, existing equipment continues to be maintained and sustained. As issues or difficulties may come up with that equipment, continuing maintenance and support is executed at the same time that the continuous long-term process for capability delivery is happening.
I hope that answers your question.
Senator Richards: Well, it does in part. Thank you very much for that, and I’ll yield the rest of my time.
Senator Loffreda: Thank you to all our panellists for being here today.
My first question is for Global Affairs Canada. Like many of my colleagues, I am quite interested in Canada’s efforts to help developing countries access vaccines, therapeutics and diagnostics for COVID-19. Your 2021-22 departmental plan states that to fight the pandemic, Canada will prioritize research, development, manufacturing, procurement and distribution for equitable global access to safe and secure vaccines, tests and treatments through Access to COVID-19 Tools (ACT) Accelerator.
Can you explain to our committee how the department tracks or assesses how access to these vaccines is equitable? I understand the COVAX facility is co-led by the Coalition for Epidemic Preparedness Innovations, Gavi and the World Health Organization. Does Canada have a role in monitoring or participating in the decision-making process or distribution of vaccines to other countries through this COVAX initiative, and if we don’t have a formal role to play, are there any reporting mechanisms in place to ensure transparency and accountability?
Joshua Tabah, Director General, Health and Nutrition, Global Affairs Canada: Ms. Ouellette is having trouble logging back in, but I can take this question.
I’m the director general of Health and Nutrition, so I manage our partnerships with COVAX and the ACT Accelerator. The government has made it a priority to ensure more equitable access for developing countries to key countermeasures to help end the acute phase of the pandemic — including, in particular, vaccines, therapies and tests. They are also strengthening health systems to deliver those countermeasures effectively to populations in need.
Senator, those are excellent questions. Particularly, in terms of monitoring and decision-making regarding the allocation of vaccines to developing countries, we play a formal role in Gavi as a board member. My team manages a formal representation role with Gavi. In that board structure, we approved the use of an allocation framework that is managed by the World Health Organization and a scientific committee.
Canada, along with other key stakeholders inside Gavi, approved delegating the allocation responsibility to the World Health Organization to ensure that it was driven by equity and by evidence. As such, whenever doses become available to the COVAX mechanism, the World Health Organization runs the allocation framework, modelling the different countries that require vaccines and allocating vaccines to where they will most effectively close equity gaps. Those countries are then contacted. The vaccines are offered to the countries, and when the countries have the capacity and interest in receiving the vaccines, they are then allocated. The distribution is monitored and followed through by Gavi and other members of the COVAX family.
There is a high level of transparency with this process. Each shipment that is allocated is clearly reflected on a real-time website managed by the COVAX partnership. Each individual shipment is recorded and is visible to all people publicly. We’re happy to share the links for that information if that is of interest.
Canada has great confidence that the financing it provides to COVAX leads to procurement that directly addresses equity gaps according to the WHO allocation framework.
I hope that that was clear.
Senator Loffreda: Thank you. It was clear. If you can share the links, it would be appreciated.
Do you feel there is an opportunity for Canada, at this point in the pandemic, to accelerate its vaccine donation to the COVAX facility? I recognize that this is a global threat, and higher income countries like Canada have a moral obligation to help other nations access vaccines and overcome this pandemic. As we say, we’re all in this together, and we’re not going to solve this problem unless we do it globally.
I’m not a scientist, I’m a CPA and a banker, but is there any concern that some of these vaccines will expire or become obsolete because of the variants that are coming in? Therefore, maybe we can accelerate donating these vaccines before they do become obsolete, as we fabricate vaccines in Canada or purchase them as we are faced with the variants. Thank you.
[Translation]
Ms. Ouellette: Thank you very much for the question, Senator. I apologize for the technical problems we’ve had.
I don’t know if anyone has already mentioned the 200 million vaccine doses that we have committed to give to the COVAX program by the end of 2022.
On the distribution and acceleration of that distribution, I will turn to my colleague Mr. Tabah to answer the question.
[English]
Mr. Tabah: Thank you. There are a few elements in your question, senator. The first concerned the surplusing of doses from Canada’s bilateral procurement deals for donation. Those are discussions that are undertaken under the responsibility of the Minister of Health, along with NACI, the arm’s-length immunization body that provides advice to the Government of Canada.
All vaccine deals that are a part of Canada’s supply portfolio are continually being assessed for their relevance for Canada’s immunization plans. When the Minister of Health decides that vaccines are surplus, we work in partnership with Global Affairs and the Ministry of Health to ensure that those vaccine doses do not sit idle, do not go to waste and are deployed to countries that need them so that they can quickly be translated into effective immunization and protection for people. We do that in close partnership with COVAX.
The pace of those donations has accelerated as increasing supply becomes available, senator, and we are making good progress in implementing the government’s commitment to donate the equivalent of 200 million doses of vaccine by the end of 2022.
[Translation]
Senator Gerba: I will address the representative of Global Affairs Canada about the requested budgets.
I understand that they are mainly focused on the fight against COVID-19 in developing countries and on humanitarian aid.
I’m going to focus on Canada-Africa relations, which I’m more familiar with. Until the 2000s, Canada had a very, very significant and tangible presence in Africa. Missionaries were there, as were development workers and peacekeepers, diplomacy was active, and investors followed. This presence has declined in recent years, as Canada has fostered relations with Latin America and the Indo-Pacific region.
Today, everyone realizes that the situation has changed. Indeed, Africa has become the centre of interest for most western countries and major powers. A few days ago, the U.S. Secretary of State went on a tour and said that the United States would return to Africa in force. I won’t talk about the summits that were organized by all the other countries, including Japan, Russia, France, of course, and China, obviously.
My question to our witnesses from Global Affairs Canada is this: Given that the situation has changed and that Africa is now an important market, is any part of the budget devoted to developing opportunities for Canadian companies in this territory, which is very popular and where business opportunities are very important for our companies here?
Ms. Ouellette: Thank you for the question, Senator Gerba.
Africa is indeed a continent we’re paying a lot of attention to. In addition, the total budget for African countries for 2021-22 is $630 million and, as part of Canada’s Feminist International Assistance Policy, there is a target of 50% of our funds to be devoted to sub-Saharan Africa.
In terms of opportunities for Canadian companies, and to give you a little more detail, I will ask my colleague Mr. Smith to round out my answer.
[English]
Andrew Smith, Director General, International Assistance Policy, Global Affairs Canada: On the question of Africa, as Anick has noted, and just to underscore the fact, my responsibilities at Global Affairs revolve around international assistance policy, so overseeing the implementation of the policy, and noting the fact that we do have the policy target of providing 50% of our international bilateral development assistance to Africa really drives a lot of our development assistance programming into Africa.
We are seeing the emergence of commercial opportunities. I can’t speak directly to how we engage our Trade Commissioner services and work with Canadian commercial entities in supporting investment and business opportunities in Africa. That would be within our Trade Commissioner Service. I certainly can say that we do a lot of programming through the Africa branch to support the enabling environment for investment and private sector development, and certainly building on efforts of African countries, such as the African Continental Free Trade Agreement, to expand the engagement of Canadians but also to ensure that there are sustainable investment opportunities to drive the broader poverty reduction efforts that Canada is committed to in Africa.
[Translation]
Senator Dagenais: My two questions are for Lieutenant-General Allen.
I see in the supplementary estimates $363 million to cover salary increases for Canadian Forces members. I have to tell you that this wasn’t in the government’s Main Estimates. . . I find that a somewhat worrying oversight. What will be the future conditions of Canadian Forces members who will be affected by these supplementary estimates?
[English]
LGen. Allen: Thank you. I will certainly turn to my financial colleague if there are some specific numbers that are requested as part of that. The allocation that is in the Supplementary Estimate relates to the pay increases for general service officers of the level of lieutenant colonel and below. It is retrospective of past years — of pay increases from 2018 through to 2021. That is the time period through which those pay increases apply. There is an ongoing process that takes us into those allocations on a routine basis that will apply in the future to all the different ranks within the Canadian Armed Forces. I can certainly turn my colleague, Ms. Crosby, to provide greater amplifying details, if you would like, sir.
Ms. Crosby: Thank you. The request through Supplementary Estimates (B) that we are proposing is to achieve access to funding and the economic increase that was approved last February. As the general described, it is meant for a targeted audience. It is also something that is done fairly routinely, and it is very much aligned with what happens on the civilian side of the government. As collective bargaining concludes and contracts are put in place, the Canadian Armed Forces follows suit. In total, it is a 6.1 [Technical difficulties] compounded increase.
[Translation]
Senator Dagenais: My next question is for Lieutenant-General Allen. I was reading this morning that the government has just committed an additional $10 million to UN peacekeeping missions without committing Canadian troops. Amazingly, the government is promising to provide medical personnel and drones. This is a far cry from the peace missions of the past, and it will still cost Canadians nearly $85 million over three years.
I would like to know this: Do you consider that the reason why Canada does not commit the armed forces to peacekeeping missions is because of a lack of equipment or insufficient troops? Do you believe that with the current budget, the funding needed to take part in missions does not require a physical presence?
[English]
LGen. Allen: Thank you very much. The Canadian Armed Forces has been and continues to be present in both various United Nations and Canadian Forces activities from a peacekeeping perspective. As the government assesses how it wishes to make contributions internationally, be it through financial aid, humanitarian assistance or assistance provided by the Canadian Armed Forces in a peacekeeping function, we propose options to government for what they are looking at and can provide them the impacts and the effects that could be delivered as they may desire from a policy perspective.
Senator Pate: Thank you to the witnesses for appearing today.
As you know, families with low incomes experienced a considerable increase in their cost of living during 2020, due in particular to the closure of things like low-cost or free services that were no longer available or accessible because of the COVID-19 pandemic in 2020. I’m curious as to how government is evaluating the slogan that economic recovery will be for all and what measures are actually being taken to ensure that the individuals most in need are actually gaining assistance, particularly given the gap that we know exists since even with the laudable emergency benefit, those who didn’t qualify were left in deeper poverty than they were before the pandemic. That means that between 34% and 63% of their social assistance income was below the poverty line. This actually harms not just those individuals, their families and the communities from which they come, but it harms the economy as a whole. What measures are being taken to actually address the issues for those most in need in this country, which, depending upon which poverty index is used or which market basket measure, amounts to anywhere from 3.5 to 5 million Canadians?
Mr. Daley: I think that I would like to pass that question to my colleague, Brad Recker. Is that a good question for you to answer?
Mr. Recker: Sorry, John, I don’t have the answer to that one. I was considering that perhaps Allison McDermott may have an answer.
Mr. Daley: Thank you.
Alison McDermott, Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance Canada: Thank you. It is a very broad question, and as you are probably well aware, there were a lot of things done as a part of the COVID response itself. I think that you were looking for some of the things that were beyond the COVID response. My tax policy colleagues and I would be happy to talk in detail, if that is helpful, about the things that came under the COVID response — things like the CERB, the Canada Recovery Benefit, the sickness and caregiver benefits that were provided, the top-up to the Canada child tax benefit and the GST tax credit, all of which we expect to benefit low-income Canadians.
If you were to go beyond the COVID benefits and pandemic-related expenditures and looked at some of the broader things that the government has done, you could look back in time to the middle-class tax cut and the original CCB. But if you wanted to move to Budget 2021, I think that one of the big highlights that we think will benefit low-income individuals, along with others, is this $30 billion allocation for early learning and child care, which is being negotiated right now, with agreements reached with many provinces already. We expect that to have material impacts on the well-being of low-income Canadians. There is an increase to the GIS in Budget 2021. The National Housing Strategy is another investment that should help make life affordable and includes significant investments in affordable housing. Those are just a few things. In some ways, looking at Budget 2021 would be a good way to get at some of those priorities that the government has funded. If you have more specific questions, we would be happy to follow up and tell you a little bit more.
Senator Pate: Well, actually, do I still have time, Mr. Chair?
The Chair: Senator Pate, one fast question.
Senator Pate: Okay.
The Chair: And maybe they could answer it in writing, if that is the case, because from what I’ve heard, we need to look at a few other questions on that matter.
Senator Pate: If we could have the costing and how you’ve allocated and indicated that each of those measures that you have outlined will actually benefit the poorest of the poor, the people who are now in deep poverty, that the Canadian Centre for Policy Alternatives, the Maytree Foundation, and many other organizations have costed out — and the fact that the child benefit is actually assisting fewer people during this process and is not generating the type of economic development or growth or stimulation that it was anticipated that it would — if you can cost that out, demonstrate the numbers and show how the policies are directly linked to alleviating poverty, that would be helpful.
Senator Boehm: Thank you to all of the witnesses who are here. It will not surprise anyone that all of my questions will be for Global Affairs Canada. It is good to see some former colleagues on the screen, if not in person. I will ask the questions in quick order and request, chair, that you already put me down for the second round, please.
My first question is one of coordination. Since Canada is contributing to the Access to COVID-19 Tools (ACT) Accelerator and, I think, chairing some of the groups related to that, is there a decided coordination activity looking at policy among the donor community in the context of the Development Assistance Committee of the OECD?
Second, how much of the work in this hemisphere is being channelled through the Pan American Health Organization, which is the operating arm of the WHO here in the hemisphere?
Third, what sort of impact is all of this having in terms of the roll-out of the Feminist International Assistance Policy, in particular work that is being done at the ground level? Are there implications for the Canada fund for local initiatives where there could be quick work done to help in certain pockets?
Thanks.
Ms. Ouellette: Thank you, Senator Boehm.
We are trying to do all of our responses for the pandemic recognizing that it does not recognize borders and that it should be a concerted and coordinated global action.
In terms of the Feminist International Assistance Policy, we are trying at the same time to fulfill the targets and the objectives that we have identified, among other things, at the 50% in Africa and the gender equality at 95%. In education, we know that education is so important, given the pandemic. There’s a bit less traction — a decrease, basically — in education.
To go back to the coordination, I will go back to my friend, Mr. Tabah, to complete my answer. Thank you.
Mr. Tabah: Thank you, Senator Boehm. Those are excellent questions.
On coordination, let me point to two mechanisms in particular. Inside the ACT Accelerator, there is a financing working group, which I participate in along with six or seven colleagues at my level — the key donors to the ACT Accelerator — to ensure that our financing is happening in complementary ways and ensuring we are hitting priority sectors and organizations. We also work with the operational partners through other working groups, but there is donor-directed coordination in that sense. We work very closely in particular with Norway, the United States, the EU, France and Germany in that coordination group.
At the OECD DAC, we have had some very focused conversations regarding the valuation of in-kind contributions, in particular vaccine donations. It is less about operational coordination and more that policy-level coordination to ensure that we are all approaching this crisis with the same understanding and expectations with regard to the resources that we’re mobilizing.
The Pan American Health Organization, PAHO, has been a critical partner of the Government of Canada throughout the response. We have a direct contribution of $50 million so that they can work with developing countries in the hemisphere to help prepare and address bottlenecks for the effective deployment of vaccines, therapies and diagnostics.
Finally, yes, we have made good use of top-ups to the Canada fund for local initiatives, frankly, across different regions. We recognize this as an early area where we could have quick wins in supporting local priorities, and so those top-ups happened very early last year. Thank you.
Senator Yussuff: My question is mostly to the Department of Finance Canada. In regard to the Trans Mountain Pipeline construction and allocations regarding the purchasing of this pipeline, I know there were additional requests for resources to complete the pipeline. Could anyone in the department indicate where we are in the completion of the pipeline and, based upon the allocation of new resources, are we going to complete this project on time?
Mr. Daley: Thank you for the question. I would like to pass that question to Ms. David.
Ms. David: I think this question is best directed to Sam Millar.
Sam Millar, Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance Canada: Yes, I can certainly take the senator’s question.
For clarity, the funding that is in the Supplementary Estimates (B) relates to the Department of Finances’ work to engage with Indigenous communities along the pipeline system and the marine shipping routes in relation to potential economic participation in the company. It doesn’t relate to the expenditure or capital investment in the construction of the expanded pipeline system. That’s just to clarify that point.
I believe the senator’s question related to where things stand in terms of that capital investment and generally how things are going. Just for the committee’s background, the capital expenditure in both the acquisition of the company in 2018 and the ongoing construction of the expanded pipeline system are being supported via Export Development Canada’s Canada Account. There are loans being extended by EDC from the Canada Account to the Canada Development Investment Corporation subsidiary. That’s really the source of the funding. It doesn’t show up in the supplementary estimates.
In terms of the status of the construction of the pipeline, I would refer the committee to the third-quarter financial statements of the Trans Mountain Corporation. Those were posted very recently — I believe last week — publicly on the corporation’s website. The report in those financial statements was that, as of September 30, the pipeline is approximately 37% complete, with approximately $9 billion in capital spending incurred to date.
The Chair: Thank you.
Senator Duncan: Thank you to the witnesses who are appearing before us today.
My questions are directed toward the Department of National Defence. We have seen increased commitment to NATO, and you’ve discussed that briefly. There is also an increased presence we’re seeing in Canada’s Arctic from China and Russia. Will any of this increased funding to NATO assist Canada’s presence and national security in the High Arctic?
Related to that — I understand it is not part of NATO — we have Canada’s North Warning System, NORAD. The three Northern senators wrote to the department in May 2020 regarding the operation and maintenance contract for the North Warning System and, to the best of my knowledge, we’ve never received a response. Perhaps I could ask at the same time as my question — and I may be receiving a written response to my initial question — if I could receive a written response to my second question about the operation and maintenance of the North Warning System.
The Chair: Mr. Daley, how would you respond to that?
Mr. Daley: I’m sorry, I thought that that question was directed toward Global Affairs.
Senator Duncan: No, National Defence.
Mr. Daley: I’m Department of Finance, sorry.
Senator Duncan: Sorry.
The Chair: Senator Duncan, was the operations side of your question directed to Finance or directly to Global Affairs?
Senator Duncan: No, chair. It’s the Department of National Defence. We’re discussing their increased financial commitment to NATO, and my question is this: Will any of that financial commitment assist Canada’s presence in the High Arctic, as we’re seeing increased presence from other countries?
The Chair: Therefore, it would be a written answer.
Senator Duncan: Please.
The Chair: Plus you want to know what the status is of the three senators that wrote the letter to the — did you write to the minister or to the department?
Senator Duncan: We wrote to the Minister of National Defence regarding Canada’s North Warning System. While it’s not part of NATO, I’m wondering if there is funding allocated somewhere for it.
The Chair: Lieutenant-General Allen, do you have comments on that?
LGen. Allen: I’ll ask the CFO to elaborate on the NATO contribution as well as other details that she can perhaps provide to the senator in that regard.
Ms. Crosby: I’ll try to be very brief. The senator is absolutely right. The funding that we are requesting through Supplementary Estimates (B) will not fund the initiatives she’s referring to. It’s simply directed to the common service back office.
What I would say, though, is that Budget 2021 did announce $252.2 million worth of new funding to sustain the North Warning System. That was announced in the budget of this year, and we are in the process of working out our plans to move forward on that operation. With that, I may turn back to the lieutenant-general to elaborate a little further on our initiatives there.
LGen. Allen: As was just highlighted there, certainly the North and the Arctic are important to Canada and Canada’s security. The North Warning System, as part of our contribution to NORAD, is an important part of that. As the CFO just identified, some interim funding through budget letter 23 has been provided for that ongoing maintenance and support. The North Warning System has been there for quite some time. You may have heard engagements in the past between the Prime Minister and President Biden and between the Secretary of Defense and at the time Minister Sajjan about wanting to ensure that we are modernizing the NORAD systems so that we can continue to have effective protections in North America.
The Chair: Thank you very much.
On this, honourable senators, to Ms. Ouellette, Lieutenant-General Allen and Mr. Daley and your teams, thank you very much for having answered our questions and for following up on some of the questions by Monday, December 13. We would appreciate that.
Honourable senators, we have completed our agenda, but before I adjourn the meeting, I would like to inform the honourable senators that our next meeting will be on Wednesday, December 15, at 1:30 p.m. EST. This will be an in camera meeting to discuss the report to be tabled in the Senate of Canada.
Thank you very much to the witnesses. You’ve shown professionalism. Also to the senators, we will be looking to discuss the report that will be tabled in the Senate.
With this, I declare the meeting adjourned.
(The committee adjourned.)