THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, December 6, 2023
The Standing Senate Committee on National Finance met with videoconference this day at 6:47 p.m. [ET] for the consideration of Supplementary Estimates (B) for the fiscal year ending March 31, 2024.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators, I wish to welcome all of you as well as the viewers across the country who are watching us on sencanada.ca.
[Translation]
My name is Percy Mockler, senator from New Brunswick and Chair of the Standing Senate Committee on National Finance. Now, I would like to ask my colleagues to introduce themselves, starting on my left.
Senator Forest: Éric Forest, Gulf division, Quebec. Welcome, everyone.
Senator Gignac: Good evening. Senator Gignac, independent senator from the Kennebec division, Quebec. Welcome.
[English]
Senator MacAdam: Jane MacAdam, Prince Edward Island.
[Translation]
Senator Loffreda: Good evening. Tony Loffreda from Quebec. Welcome.
[English]
Senator Pate: Kim Pate. I live here in the unceded, unsurrendered territory of the Algonquin Anishinaabeg. Welcome.
Senator Smith: Larry Smith, Montreal.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Dagenais: Jean-Guy Dagenais from Montreal, Quebec.
[English]
The Chair: Honourable senators, today we resume our study on the expenditures set out in the Supplementary Estimates (B) for the fiscal year ending March 31, 2024, which were referred to this committee on November 21, 2023, by the Senate of Canada.
This evening, we have the pleasure of welcoming senior officials from Global Affairs Canada; Immigration, Refugees and Citizenship Canada; Transport Canada; Fisheries and Oceans Canada; the Canadian Coast Guard; and National Defence. Since there are many of you here, I will introduce the officials who will be delivering opening remarks. I ask the other officials to please introduce yourself if you are called to the table to answer a question.
From Global Affairs Canada, we welcome Shirley Carruthers, Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology. From Fisheries and Oceans Canada, we have Richard Goodyear, Assistant Deputy Minister and Chief Financial Officer. From Transport Canada, we have Ryan Pilgrim, Assistant Deputy Minister, Corporate Services, and Chief Financial Officer. From the Department of National Defence, we have Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer. And from Immigration, Refugees and Citizenship Canada, we have Nathalie Manseau, Assistant Deputy Minister and Chief Financial Officer.
We welcome all of you, officials, to basically defend your budgets. Thank you again for accepting our invitation to appear at this National Finance Committee.
Ms. Carruthers, the floor is yours, please.
Shirley Carruthers, Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology, Global Affairs Canada: Good evening, Mr. Chairman. Thank you for the opportunity to be here to discuss Global Affairs Canada’s Supplementary Estimates (B).
To begin, I acknowledge that I am speaking from the traditional unceded territory of the Algonquin Anishinaabe people. I am grateful to have the opportunity to be present in this territory.
Today, I am joined by Peter MacDougall, Assistant Deputy Minister, Global Issues and Development; Amanda Strohan, Director General, Indo-Pacific Strategic Planning, Policy and Operations Bureau; Karim Morcos, Director, Israel, West Bank and Gaza; and Kati Csaba, Executive Director, Ukraine Bureau.
Mr. Chairman, I will begin by outlining the scope of our mandate. Under the leadership of three ministers, Global Affairs Canada is responsible for advancing Canada’s values and interests internationally through its diplomacy; developing and implementing foreign policy; promoting international trade while supporting Canadian business interests; being a leader in delivering international development assistance, including humanitarian assistance around the world; and providing consular assistance to many Canadians who work, live and travel abroad.
To deliver this mandate and to position Canada as a global leader, Global Affairs Canada operates in 182 diplomatic missions in 112 countries around the world, sometimes in the most difficult and high-risk environments. We do so in an evolving and challenging global, political and economic climate.
The additional funding sought through these estimates will allow Canada to lead in demonstrating to Canadians and the world that our actions can make a real contribution to addressing the interconnected crises of climate change and biodiversity loss, strengthening Canada’s partnership and influence abroad, and responding to the needs of the most vulnerable people in the world through the nexus of humanitarian work, development, peace and security.
Through the Supplementary Estimates (B), Global Affairs Canada is seeking an increase of $816 million to its current authorities of $7.6 billion, bringing total authorities to $8.4 billion.
Much of the additional funding sought through these supplementary estimates will support global climate change and advance the priorities of the government and Canadians. More specifically, it relates to the following activities.
We seek $430 million to deliver on a portion of Canada’s climate finance commitment to help developing countries fight climate change through climate resilience and greenhouse gas emission reduction. The funding will advance climate change mitigation and adaptation action with the focus on clean energy, nature-based solutions and green financing.
We request $100 million to advance global health investments and to ensure Global Affairs Canada can deliver on Canada’s 10‑year commitment to global health and rights. The funding will directly support improved health services and health systems for women and girls in developing countries.
We ask for $74 million to support the Global Fund to Fight AIDS, Tuberculosis and Malaria and increase access to quality HIV/AIDS, TB and malaria health services for women and girls.
The $65.9 million sought to support the Middle East strategy will allow for programming of Global Affairs Canada’s continued implementation of the strategy to address instability in Iraq, Jordan, Lebanon and Syria.
We request $63.6 million to support Global Affairs Canada’s implementation of Canada’s Indo-Pacific Strategy through increased engagement in the Indo-Pacific region and enhanced economic links and trade and investment ties with the Indo-Pacific partners.
Finally, $25 million is requested to replenish the Crisis Pool Quick Release Mechanism to address various international humanitarian crises.
The funding requested through these supplementary estimates will support Canada’s role in addressing major global issues and will continue to enhance political and economic cooperation and engagement, particularly in the Eastern Europe and Indo-Pacific regions, while also reinforcing Canada’s leadership.
The department continues to measure performance and communicate results to parliamentarians and Canadians. We emphasize responsible financial management to deliver against our mandate and ensure the highest standard of service to Canadians, particularly those requiring consular assistance abroad.
Thank you, Mr. Chairman. My colleagues and I would be pleased to address any questions that you may have about these supplementary estimates.
The Chair: Thank you. Mr. Goodyear, please, the floor is yours.
Richard Goodyear, Assistant Deputy Minister and Chief Financial Officer, Fisheries and Oceans Canada: Good evening, Mr. Chair. I’d like to begin by recognizing that we are gathered on the unceded traditional territory of the Algonquin Anishinaabe people and are grateful for the opportunity to do so.
[Translation]
I am pleased to be with you today with my colleagues: Chris Henderson, Deputy Commissioner, Operations, Canadian Coast Guard; Jennifer Buie, Director General, Fisheries Resource Management; Bernard Vigneault, Director General, Ecosystems Science; Chad Ziai, Senior Director, Fisheries Protection and Major Projects, Fisheries and Oceans Canada.
[English]
Following my remarks, we’d be happy to answer any questions you have regarding our department’s Supplementary Estimates (B) for the fiscal year 2023-24.
Mr. Chair, Fisheries and Oceans Canada, including the Canadian Coast Guard, is seeking $356.4 million through Supplementary Estimates (B) for fiscal year 2023-24. This consists of $340.5 million in voted appropriations as well as $15.9 million in statutory appropriations. Taken together, this represents an 8% increase to our planned budget spending this fiscal year.
The $340.5 million increase in voted authorities can be mainly attributed to the following areas: $133.3 million to advance reconciliation on Indigenous rights and fisheries issues, $49.4 million to continue implementing the fish and fish habitat protection provisions of the Fisheries Act, $42.1 million for the Canadian Coast Guard multi-purpose vessel project and $24.7 million to continue protecting species at risk.
[Translation]
An additional amount of $91 million is requested for 20 additional elements with lower funding requirements, and for technical adjustments such as interdepartmental transfers.
[English]
In terms of the $15.9 million in statutory appropriations, this amount is required for updated compensation and benefit forecasts for our employees.
[Translation]
The funding requested under Supplementary Estimates (B) 2023-24, will help Fisheries and Oceans Canada and the Canadian Coast Guard fulfill their mandate, while continuing to deliver essential services to Canadians.
[English]
Mr. Chair, I’d like to take this opportunity to provide members of the committee with an update on recent spending reductions that have been identified across our department.
[Translation]
When Budget 2023 was tabled last April, it included plans to reduce government spending. At that time, we expected to save more than $15.4 billion with the initiative to refocus government spending, in addition to more than $4.5 billion in continued reductions.
[English]
On November 9, the President of the Treasury Board tabled Supplementary Estimates (B) 2023-24 in the House of Commons. These estimates include the first update related to how the Government of Canada is reducing its planned spending. More specifically, it detailed how $500 million in travel, consulting and professional services funding has been refocused and removed from the 2023-24 budgets of 68 departments.
[Translation]
Fisheries and Oceans Canada, along with the Canadian Coast Guard, contributed to this exercise. I can therefore announce a freeze on $27.5 million in spending across the department.
[English]
Given that this is the first tranche of a multi-year effort to reduce government spending, we are already looking to the future to determine where additional savings can be found across our department over subsequent years.
Ultimately, this work will help refocus our spending so it’s going to the priorities that matter most to Canadians. In the meantime, we remain committed to the efficient and prudent spending of taxpayer dollars and being accountable and transparent in our ongoing reporting to Canadians and parliamentarians.
Before closing, I wanted to briefly touch on the Government of Canada’s recent Fall Economic Statement and how it impacts our department. I want to highlight that four additional weeks of Employment Insurance, or EI, will be added to regular benefits that will be available to eligible seasonal workers. Claims established between September 2023 and September 2024 will be eligible for this coverage, which will cost approximately $69.8 million over three years. Fisheries workers are the primary beneficiary of the seasonal EI regime.
[Translation]
Mr. Chair, thank you for this opportunity to present our department’s Supplementary Estimates (B) 2023-24. My colleagues and I are ready for your questions. Thank you.
[English]
Ryan Pilgrim, Assistant Deputy Minister, Corporate Services and Chief Financial Officer, Transport Canada: Good evening, everyone. I’m joined today by the following Transport Canada officials: Serge Bijimine, Assistant Deputy Minister, Policy; Stephanie Hébert, Assistant Deputy Minister, Programs; Lisa Setlakwe, Assistant Deputy Minister, Safety and Security; and Luis Miguel Izquierdo Martin, Acting Director General, Commercial and Procurement, High Frequency Rail.
We are pleased to be here today to discuss Transport Canada’s Supplementary Estimates (B) for the year 2023-24.
Transport Canada’s mandate is to ensure that our transportation system is safe and secure, efficient, green and innovative. To support these goals, Supplementary Estimates (B) will increase the department’s budget by $495.4 million for items not previously included in our Main Estimates, resulting in a total 2023-24 departmental budget of $4.2 billion.
The majority of the funding included in these Supplementary Estimates (B) is for the renewal of core sunsetting programs from the 2023 federal budget and does not represent growth for the department.
As our domestic and international transportation systems stabilize and resume their pre-pandemic growth trajectories, Transport Canada remains dedicated to ensuring the safety and security of all modes of transportation across the country.
The funding included in these Supplementary Estimates (B) will ensure the continuation of key programs, including rail safety and transportation of dangerous goods, connected and automated vehicles, and the administration of the Canadian Navigable Waters Act.
These programs are integral components of transportation safety across the country. They ensure the continuous development and improvement of safety regulations and standards adapted to meet today’s complex needs. They provide oversight through inspections and other enforcement activities, and they support education, outreach and awareness activities across the country.
Given the significant impact that transportation systems have on the environment, Transport Canada is dedicated to pursuing strong measures to prevent pollution and reduce emissions in support of Canada’s climate change and sustainable development goals.
For example, the department is seeking to advance $207.8 million into these estimates to continue meeting the demand for the zero-emission vehicles, or ZEV, program. With this funding, Transport Canada will continue to provide incentives for the purchase of eligible vehicles that reduce air pollution and greenhouse gas emissions and support a greener transportation system for Canada. As a result of these incentives, we are increasing the number of zero-emission vehicles on the road by making them more affordable to Canadians.
[Translation]
Transportation also plays a vital role in the daily lives of Canadians and Canada’s economy. It links people to jobs, delivers products to consumers and connects regions and communities to each other. These Supplementary Estimates (B) also include funding for three interprovincial ferry services in Atlantic Canada and eastern Quebec, ensuring that those essential services are delivered in a reliable and environmentally conscious manner.
The vessel service between Prince Edward Island and Nova Scotia is also crucial to Canadians and the economy. Funding for the procurement of the NM Fanafjord will provide an interim solution to meet service needs in these provinces until the permanent replacement vessel is available for service.
Funding is also included in these Supplementary Estimates (B) for Crown corporations and agencies within the transport portfolio. For example, the increased funding for Marine Atlantic Incorporated will support ferry services to Newfoundland and Labrador.
Finally, increased funding for VIA Rail Canada will support their operations and continued investment in several capital projects, beyond the High Frequency Rail program and the operations of its arm’s-length subsidiary, VIA HFR.
The aforementioned initiatives represent a sample of the diverse activities Transport Canada is undertaking to achieve its mandate and for which funding is included in these Supplementary Estimates (B) 2023-24. This funding will enable Transport Canada to continue offering Canadians a trustworthy and dependable transportation system.
My colleagues and I are happy to answer any questions that the committee might have.
Thank you.
Cheri Crosby, Assistant Deputy Minister (Finance) and Chief Financial Officer, Department of National Defence and the Canadian Armed Forces: Mr. Chair, ladies and gentlemen of the committee, thank you for inviting me to present the Supplementary Estimates (B) 2023-24 on behalf of the Department of National Defence.
[English]
I would also like to acknowledge that we are gathered here tonight on the unceded territory of the Anishinaabe people, and I am very honoured to be here.
I am joined by my colleague Lieutenant-General Frances Allen, Vice Chief of the Defence Staff. Together, we are prepared to answer your questions as you see fit.
This year, the Department of National Defence is requesting $1.5 billion through the Supplementary Estimates (B). This request represents an increase of 5.6% in the authorities to date for the 2023-24 fiscal year.
To start, let me emphasize that National Defence’s highest concern continues to be our people. This commitment is evident in the estimates today, where you will see more than a third of the requested funds, $584 million, is for compensation and benefits for military members through the implementation of economic increases and the creation of the Canadian Forces housing differential.
The economic pay increase aligns with the adjustments secured earlier this year through collective bargaining negotiations for public servants.
[Translation]
In addition, we are seeking $151 million of the funding allocated for the final settlement agreement for the Heyder-Beattie class action lawsuit and the LGBT purge agreement. This funding will serve to address the grievances of members affected by sexual misconduct and discrimination. We hope to offer those people resolution and promote healing.
[English]
In these estimates, National Defence is requesting $500 million to fund an increase in military aid, which is aligned with the government’s previous announcements in June 2023 to provide a third tranche of $500 million in military assistance to Ukraine.
To continue supporting overseas missions, National Defence is also requesting an additional $49.9 million for Operation UNIFIER, Canada’s military training mission to Ukraine which provides military training and capacity building to the security forces of Ukraine and to support sovereignty, security and regional stability.
[Translation]
As announced in Budget 2023, National Defence is seeking $119 million to support increased financial contributions to the NATO Contributions Program, in accordance with the decisions made at the NATO leaders’ summits in 2021 and 2022 and the establishment of NATO’s Defense Innovation Accelerator for the North Atlantic, DIANA. The results will meet our national policy requirements as a NATO member and will also demonstrate Canada’s ongoing commitment to the alliance and to multilateralism, international security and defence.
[English]
As well, these estimates include $30 million in transfers to other government organizations in support of national defence-related matters and priorities.
These supplementary estimates also include an increase in statutory authorities of $172 million for legislative items, including employee benefit plans.
[Translation]
In closing, Mr. Chair, the Department of National Defence and the Canadian Armed Forces will continue to deliver their national and social mandate, with financial accountability and effective resource management.
[English]
My colleagues and I would be pleased to answer your questions.
The Chair: Thank you. Ms. Manseau, please go ahead.
Nathalie Manseau, Assistant Deputy Minister and Chief Financial Officer, Immigration, Refugees and Citizenship Canada: Thank you and good evening, chair and members of the committee. I want to start by acknowledging that we are meeting today on the traditional and unceded territories of the Algonquin Anishinaabe people.
[Translation]
I am pleased to be here to present the Supplementary Estimates (B) for the fiscal year ending March 31, 2024. With me is my colleague Marie-Josée Dorion, Acting Senior Assistant Deputy Minister, Service Delivery.
[English]
I am here to discuss the important work that Immigration, Refugees and Citizenship Canada, or IRCC, is doing to improve the immigration system, reduce backlogs, manage the increased demand to come to Canada and appraise the need for skilled workers. In support of these commitments, IRCC is appearing today to discuss its 2023-24 Supplementary Estimates (B), totalling $671 million.
Taking into account the spending authorities reflected in the 2023-24 Main Estimates, Supplementary Estimates (A) and Supplementary Estimates (B), as well as Treasury Board central vote allocations, IRCC’s financial authorities for 2023-24 to date will total $5.8 billion. The 2023-24 Supplementary Estimates (B) are comprised of the following key elements.
To ensure Canada has the workers it needs to grow its economy and address its labour shortage, IRCC is seeking $302.6 million for the implementation of the 2023-25 Immigration Levels Plan, which was tabled in November 2022. This funding will be used to process additional volumes of permanent resident applications and to provide settlement services in 2023-24. This Immigration Levels Plan includes an increase of permanent resident admissions for a new total of 465,000 in 2023, 485,000 in 2024 and 500,000 in 2025.
In addition, IRCC is seeking $212 million for the Interim Housing Assistance Program to allow the Government of Canada to continue addressing extraordinary interim housing pressures resulting from continuous, sustained regular and irregular volumes of asylum claimants. This funding will support affected jurisdictions for calendar year 2023: interim housing costs, including nearly $100 million specifically for the Greater Toronto Area, where demand is highest; and $7 million toward opening a new reception centre in the Peel region.
IRCC is also seeking $88 million to support the immigration approach in response to the situation in Ukraine. This funding is to continue to deliver the suite of additional measures accompanying the Canada-Ukraine authorization for emergency travel policy until March 2024 to make it easier for Ukrainians fleeing war to come to Canada. The program provides financial assistance to Ukrainians and their family members to help them meet their basic needs upon arrival in Canada.
[Translation]
Further, this funding will serve to improve the processing of temporary resident applications and help us process the growing number of visitors, workers and students. IRCC is therefore seeking $77.2 million to strengthen Canada’s ability to process and facilitate the entry of temporary residents through the review and assessment of applications and the issuance of relevant documents.
Finally, the Government of Canada continues to build a modern immigration system that will position Canada internationally to attract the best talent. IRCC is therefore seeking $19.1 million to continue to modernize the digital platform. The new digital platform will help us manage the growing volume of applications and help IRCC improve its immigration programs by using improved data.
[English]
This has been a brief summary of the key investments we are seeking in the 2023-24 Supplementary Estimates (B). Overall, these measures align with the Government of Canada’s plan to stabilize immigration while helping businesses find the workers they need quickly and efficiently.
Thank you. We will be happy to take your questions.
The Chair: Thank you, Ms. Manseau.
Honourable senators, for the first round, you will have five minutes each.
Senator Marshall: Thank you to all the witnesses for being here. Ms. Crosby, my first question is for you again.
I was expecting to see some funding requests in Supplementary Estimates (B) for the F-35s. In total, it’s a $19-billion program. Will we be seeing something? I’m trying to get an idea as to when the money will start to flow.
Ms. Crosby: Thank you for your question.
As we know, the F-35 has now been announced, and we are at the very beginning stages of moving into what we call implementation. In the Main Estimates, we did ask for a very small amount of money, and you’ll notice that in Supplementary Estimates (B) we are not asking for —
Senator Marshall: It was in the millions, not billions.
Ms. Crosby: Yes. For us, that seems somewhat tiny, but it’s because we are really at the beginning. The money will start flowing next year, once we have all our commitments in place and we start spending money. In total, it is a $19-billion project. To date, we’ve spent about $140 million, I think.
Senator Marshall: Okay, so we won’t see anything in Supplementary Estimates (C)?
Ms. Crosby: I wouldn’t say never. We might, but my expectation is that the largest part will begin next year.
Senator Marshall: Okay. Is the liability set up in the Public Accounts? Because that’s different.
Ms. Crosby: Liability?
Senator Marshall: For payment for any of the $19 billion.
Ms. Crosby: I’m not an expert on this part in terms of contracting, but the way we work, it will be an agreement that we have in place that we will be invoiced for. We will pay regularly.
Senator Marshall: Okay.
What about the announcement that has just been made for the 14 new aircraft from Bombardier, with the first delivery in 2026 — that $10 billion? Will we see any requests for funding for that this year?
Ms. Crosby: As to this year, I can’t confirm. Again, this is fresh news for us, so we are just beginning, but I can confirm that the project is a —
Senator Marshall: Would you know whether the funding for the 14 new aircraft is in the fiscal update? Would that have been included in the numbers? Would you know that?
Ms. Crosby: Thank you for the question. The funding for the multi-mission aircraft has actually been part of Strong, Secure, Engaged, or SSE, since the beginning. What we are doing here is accelerating the project; we’re bringing it forward a number of years, but the money was already put aside for this project.
Senator Marshall: Okay.
What’s in the $6 billion? Under the old SSE — and I know that you’re working on an update — we thought there would be $11 billion. We’ve only seen $6 billion so far.
What’s in the $6 billion? What would be the largest project?
Ms. Crosby: The largest project that we have —
Senator Marshall: — in the $6 billion for the funding that’s requested for this year. It was in Main Estimates.
Ms. Crosby: We have several very large projects on the go. The Canadian Surface Combatant, or CSC, is our largest project.
Senator Marshall: Okay. So there would be funding in the $6 billion for that, yes?
Ms. Crosby: Absolutely. You’re referring to the $6 billion that we brought in in Main Estimates for all our capital investment projects?
Senator Marshall: Yes.
Ms. Crosby: That’s right. Yes, there will be funding for CSC in there, there will be funding for fixed-wing search and rescue aircraft, and there will be funding for joint support ships and so forth.
Senator Marshall: Thank you.
There are three amounts of money there for NATO. Would any of that be used to reach the 2% target? Would that contribute toward the 2%?
Ms. Crosby: Thank you for your question. Actually, every penny that Canada spends on defence — not just national defence spending but also spending that’s done in Fisheries and Oceans and, to some extent, Global Affairs — all of that funding that’s related to national defence is included in our calculation for our drive to 2%. As you know, last year, based on actual expenditures for Canada, we achieved 1.22%.
Senator Marshall: Yes.
Ms. Crosby: This year, though, we are on target to spend almost $39 billion as a country. I think that speaks to the possibility of 1.38%.
Senator Marshall: How close will the department be to 2%?
Ms. Crosby: For this year, I’m forecasting 1.38%.
Senator Marshall: Okay. Thank you very much, Ms. Crosby.
Mr. Pilgrim, I’m picking up on a question that I asked when you were here in March. I had asked about what was happening at the major airports because there were quite a few problems. I was told there were a couple of almost like committees — that there was an airport recovery operation committee and another committee that was trying to resolve some of the issues. However, there are still issues. We discussed four airports: Toronto, Montreal, Vancouver and Calgary. I don’t travel through Vancouver, but I go through Toronto a lot. I stopped going through Montreal, but, of course, I go through Calgary. There are still a lot of problems at those airports. Could you give us an update as to what’s being rectified and what still has to be addressed, just to reassure us that some progress is being made?
Mr. Pilgrim: Yes. Thanks for the great question. We are working closely with our partners at the different agencies, CTA, the Canadian Transportation Agency; CATSA, the Canadian Air Transport Security Agency; the airports, the airlines and, continuously, with the AROC, Aviation Recovery Operations Committee, which you referred to.
There has been significant progress since the summer of 2022, which was not great. Last Christmas, it was not fantastic either.
Senator Marshall: It was not good.
Mr. Pilgrim: Not good. A large volume of discussion and planning has been done for this Christmas holiday season, with our minister meeting with airlines and airports. A large number of investments have been made for the Vancouver, Montreal and Toronto airports to be ready for the winter season and all that brings, such as the weather issues and so on. CATSA and NAV CANADA have planned to bring more people on to the field for the holiday season.
Things are improving. They are not perfect by any stretch, but they’re continuously improving. We are giving a significant amount of money through our different programs, such as the Airports Capital Assistance Program. About $1.2 billion has been given in the last number of years to invest and improve. It’s a focus.
Senator Marshall: Do I have time for a follow-up?
The Chair: Second round, please.
Senator Marshall: Okay. On the second round, I’ll follow up on that answer. Thank you, Mr. Pilgrim.
[Translation]
Senator Forest: Thank you for your presentations.
Mr. Pilgrim, Minister Bibeau announced last October that she was responding to long-standing requests from municipalities and giving them more power to manage waterways. Some municipalities are dealing with a major problem involving a great deal of erosion and degradation of waterways.
We commend that initiative. Once again, however, the municipalities will end up being responsible for this. Is there provision for financial assistance to help them carry out this new responsibility?
Mr. Pilgrim: Thank you for your question. I will ask my colleague Lisa Setlakwe to answer.
Lisa Setlakwe, Assistant Deputy Minister, Safety and Security, Transport Canada: Yes, Transport Canada is working with the communities and municipalities because in some cases they do not like traffic in their region.
You mentioned erosion; that is indeed a problem. We are currently consulting the communities who may submit proposals to us to regulate their waterways the way they would like, and we approve their requests.
Right now, we are consulting to find the most effective and quickest way to address their needs. Thus far, we have responded to all the requests we have received from across the country. For the time being, I would say things are running smoothly. We had some catching up to do because there was a backlog of requests.
Senator Forest: You say you are responding to the requests, do you mean from municipalities? There are a lot of problematic waterways within small municipalities and they need to prepare in order to be able to comply with their regulations.
Are the requests that you respond to requests for financial assistance or technical support, or are you merely in the consultation process right now?
Ms. Setlakwe: I would say that we provide primarily technical support.
Senator Forest: Moral support?
Ms. Setlakwe: Not just moral support. We help them understand the criteria. We help them with the process.
Senator Forest: You help them understand the criteria of a grant program?
Ms. Setlakwe: We help them understand the criteria for developing a proposal pertaining to regulating traffic on the Richelieu River or a given lake.
Senator Forest: So you help them develop their regulations?
Ms. Setlakwe: Yes. The communities have to explain their problems to us because we are not there on the ground. We support them, saying we understand the problem and are there to help.
Senator Forest: You are saying that you are not there, but you are responsible for managing those waterways?
Ms. Setlakwe: Yes, regulating them.
Senator Forest: That is your responsibility?
Ms. Setlakwe: Yes, it is.
Senator Forest: So you are in the consultation process and no financial support for the municipalities is planned at this time?
Ms. Setlakwe: No.
Senator Forest: Thank you. Regarding the Lac-Mégantic project, what steps have been taken to involve the Canadian Pacific Kansas City railroad company in relocating that line? Is there a chance the company might contribute financially to rebuilding that line?
Mr. Pilgrim: That’s a very good question.
[English]
The Lac-Mégantic project has advanced recently with the signing of two essential agreements. I don’t have the details to which you refer, but there have been good news stories as of late. With the October 6 agreement with Lac-Mégantic, the land is now in the possession of the federal government for the construction, and an agreement with Canadian Pacific Kansas City was signed as well. We can now enter into the request-for-proposal process for construction to begin once the CTA has approved the work. It’s a good news story of late. There has been a lot of good, positive movement on the file, and we’re hoping for some significant progress on all elements, including the one you mentioned.
[Translation]
Senator Forest: My question is now for the Global Affairs Canada officials. It’s about the $23 million for managing the softwood lumber file. Could you explain the objective to us and what you plan to do with the $23 million?
[English]
Ms. Carruthers: Thank you very much for your question. In terms of what we’re expecting in terms of results with that funding, we are expecting that access to renewed funding will allow Global Affairs Canada to continue to defend Canadian interests and to secure predictable access to U.S. markets for Canadian softwood lumber companies. Funding will also enable Global Affairs Canada to fulfill its legislative requirements to administer export permits for softwood lumber and logs to the Export and Import Permits Act.
[Translation]
Senator Forest: You’re allocating this amount when the conflict with the United States has been going on for a very long time. In your opinion, is there any prospect of a settlement? Will allocating $23 million help our softwood lumber producers gain access to the market? Actually, let’s not beat around the bush, or should I say tree? What’s driving this decision?
[English]
Ms. Carruthers: It’s a good question. Thank you very much. Unfortunately, I don’t have information in terms of where we are on our negotiations, but I can refer your question back to the department.
[Translation]
Senator Forest: All right.
I’m curious, because you’re asking for $430 million, which is actually quite a lot of money. The funds will go to helping developing nations cope with climate change.
To fully understand the budget process this fall, is this a new objective the department has set for itself? Why wasn’t this included last March’s Main Estimates? Was the decision to allocate such a large amount of money midstream motivated by global economic conditions? How was the decision made to request $430 million in Supplementary Estimates (B) to help developing nations?
[English]
Ms. Carruthers: That’s a great question. Thank you very much. In terms of the funding that we’re requesting in these supplementary estimates for climate finance, this funding is actually a double of our commitment that we had previously of $2.65 billion over 2015-21. We’re now committed to double, as I said, that commitment, to up to $5.3 billion.
When this funding was allocated to our department, it was actually frozen within the fiscal framework, so our department goes back — not annually but sometimes during the fiscal year — in order to access those funds once we come further along in terms of where we are in our negotiations and once we determine where it is that we’re going to allocate these resources.
[Translation]
Senator Forest: Is this becoming more of a political command than an analysis of how things are developing?
[English]
Ms. Carruthers: No, I wouldn’t say it’s more political. I would say it’s more based on what the requirements are and also dependent on the needs of the various countries that we’re working in. Also, it would depend largely on where we’re actually able to use these funds.
For instance, with the funding that we’re requesting for climate change, we’re using very innovative techniques to disburse this funding, so in general we tend to go with countries that are not necessarily in the lowest economic position, so some middle-income countries.
[Translation]
Senator Forest: Thank you.
Senator Gignac: My first questions are for the Department of National Defence and Canadian Armed Forces officials, whom I salute by the way and whom we thank for their service to protect Canadians.
I’ll take my respected and esteemed colleague Senator Marshall’s questions a step further.
First, I’d like to make a correction, because you talked about $10 billion in contracts awarded to Bombardier. From what I understand, I believe you meant to say Boeing, unless there’s been a change recently. You didn’t correct that.
My question is about the timeline. You said we would go from 1.2% to 1.38% of the GDP, if I understood correctly. However, given all the purchases and all the contracts that will soon be signed, whether it’s for the F-35s or the surveillance aircraft, are we finally going to hit the 2% of GDP mark in the next 10 years? I’m trying to get an idea of how things look five years down the road. With the projections and orders, will we get closer in the next five years to 2% of GDP, which is a target for the member states in the alliance?
Ms. Crosby: Thank you for the question.
[English]
Calculating the 2% can be a little bit complicated, so I don’t mind explaining it at all. In terms of our journey toward 2% in Canada, it can go up and down, primarily based on two things. One is how much the country is spending at any given time, and I will say, for example, moving up the expenditures related to the multi-mission aircraft will increase our expenditures in the short term, so that’s a good thing.
The second thing that impacts our journey up to 2% is the denominator. World economic conditions can change and greatly impact our GDP. As much as we may increase spending, sometimes that’s offset when economic conditions are poor. We currently are experiencing an inflation rate of up to 17% in the defence sector, so that does impact it.
As I mentioned earlier, last year we did complete our actuals, and I can tell you we achieved 1.22%, and that’s destined to rise this year.
Senator Gignac: My concern is that when I go with the projection of the Finance Department, Ms. Freeland and the budget and the extrapolation, it seems that it will be around 1.3% or 1.4% five years from now, so I was just curious if I missed something.
[Translation]
My second question is for the National Defence and Canadian Armed Forces officials, given that Lieutenant-General Frances Allen is here with us. Perhaps you could reassure us because at the end of September, General Wayne Eyre said that the $1 billion in cutbacks would have an impact on the economy. He stated unequivocally that it’s impossible to cut $1 billion without having an impact on the effectiveness of the Canadian Armed Forces.
I’d like some reassurance, because we were talking about $1 billion in cutbacks by the Treasury Board. For the thousands of people following this meeting tonight, either live on the Internet or in recorded mode, we’re talking about increasing supplementary expenditures by $1.4 billion. It’s getting a bit harder for those watching us to understand.
Will there really be $1 billion in cutbacks? Will an additional $1.4 billion be requested in the supplementary estimates? I’d like to confirm the statement General Eyre made to a House of Commons committee in late September to the effect that this would have an impact on armed forces operations. Otherwise, will the additional $1.4 billion in supplementary estimates cancel out the cutbacks being considered? If possible, could you confirm all those figures for me?
Ms. Crosby: Thank you for the question.
[English]
As was mentioned earlier in the opening remarks, of course, the government spending reductions apply to many departments, and we are not excluded from that, although what was excluded specifically was CAF itself, the Canadian Armed Forces. So in the calculations of our contribution to the government reductions, we removed CAF salary and CAF non-salary, which was about $10 billion out of my $26 billion. I put that aside.
The remaining $15 billion or $16 billion, then, is where we are looking to achieve efficiencies, and it is challenging. There is no doubt that it is challenging, but our share was started, like at every other department, this year. During the Supplementary Estimates (B), we have contributed just over $200 million. Ultimately, when it ramps up to its full level, we will be contributing just a little more than $900 million annually. This will be challenging, but I will say that we are currently considering all the possibilities.
We are looking for efficiencies, ways to do things differently. We’re focusing on travel, for example, discretionary travel, perhaps related to governance or planning that we could do in another format. We are trying to focus on those things that do not directly impact CAF operations and CAF readiness. We haven’t finalized the plan yet, but that’s what we’re doing.
Senator Gignac: Thank you.
[Translation]
I have a question for the Transport Canada officials.
You’re asking for an additional $207 million for the Zero Emission Vehicle Infrastructure Program. I’d like to know how this program is doing. At the moment, what percentage of vehicle sales in Canada are classified as zero emission vehicle sales? If I understand correctly, the definition includes electric vehicles and plug-in hybrids. What percentage of vehicles meet these types of markets in sales in Canada? What’s your assessment of the program right now? Is it a successful program?
Mr. Pilgrim: Thank you very much for that question.
[English]
It has been a strong year for ZEV sales. The sales numbers have grown quite significantly since the implementation of the program. We started in 2020, when 3.8% of all vehicle sales in Canada were ZEV. In 2021, it was 5.6%; in 2022, 8.9%; and as of September, we’re at 11.1%. But for the months of September and October, we were at about 14.8%, so that’s significant growth. We’re about 50% higher in ZEV sales this year than last year.
It shows that the process and the initiative is working as an incentive for people to start purchasing ZEVs and to meet our environmental target.
Senator Gignac: Could you maybe provide a written answer, but do you have province by province?
Mr. Pilgrim: Yes.
Senator Gignac: Is it fair to say that Quebec is one of the lead provinces in terms of a regional breakdown?
Mr. Pilgrim: Yes, the provinces that have their additional incentives as well, Quebec and British Columbia, are significantly higher than the other regions. Ontario is doing well. Yukon has a new incentive program. Provinces with additional incentives are doing better than the others that do not at this point.
Senator Gignac: Can you share that?
Mr. Pilgrim: Yes, we have data by province.
Senator Gignac: Thank you.
The Chair: Mr. Pilgrim, can you share the document you have with the committee?
Mr. Pilgrim: Immediately?
The Chair: No. Well, if you have it immediately, I will say yes.
Mr. Pilgrim: Of course, we can share it, yes.
The Chair: Through the clerk, please.
Mr. Pilgrim: Yes, of course.
Senator Smith: My question is for Ms. Carruthers from Global Affairs. The estimates include approximately $11.5 million to strengthen Canada’s diplomatic presence in Central and Eastern Europe and the Caucasus region. Can you explain how the funding will be spent? Is it related to upgrading consulates and embassies in these regions, or are there other reasons for this funding?
Ms. Carruthers: Thank you for the question. The funding included in the supplementary estimates is to increase our presence abroad. Canada will establish a new embassy in Armenia, and then we will convert some of our other offices, such as in Estonia, Lithuania and Slovakia, to embassies and bolster our presence in the embassy in Latvia.
Senator Smith: What is the real reason for this? I read some articles in the last six months about how Canada has lost its presence internationally. I’m not being critical. I read this information, and I’m wondering if there is a strategic move being made by Global Affairs as to the reason why.
Ms. Carruthers: Thank you very much for the question. Generally speaking, it is to strengthen our diplomatic capacity and to provide political and economic cooperation to support our European allies and to further counter Russia’s destabilization activities within the region.
Senator Smith: If I can ask a simple question, why did it take so long to get back into the game? It seems we were in the game as leaders, and then we lost a bit of our leadership position. Could you give us some background as to the reasoning behind getting back into the game so late?
Ms. Carruthers: Thank you for the question. I think that Canada has always been able to direct its funding to different areas of priority. As an example, I’m thinking about our feminist and international assistance policy, where we’ve made great strides in terms of women’s voice in leadership, climate finance, gender equality and other areas. And I think the focus now is with the evolving crisis around the world and looking to where we may have some impact and can increase our engagement and influence around the world.
Senator Smith: These moves that are being made now, they came through, hopefully, a strategic study that realigned priorities. Is that possibly how it happened?
Ms. Carruthers: Absolutely.
Senator Smith: Your Departmental Plan 2023-24 makes note of the creation of a new dedicated unit within the Rapid Response Mechanism Canada that is intended to counter Russian disinformation in the region. Could you explain further the scope and mandate of this unit? Will this unit undertake any activities beyond monitoring Russian-sponsored disinformation?
Ms. Carruthers: Thank you very much for your question. Unfortunately, I don’t have the details regarding the activities of that particular unit, but I would be happy to go back to the department and ask.
Senator Smith: Maybe go back and give us something in writing because I think it is a pretty important issue. I guess the other part of that is whether this new unit will contribute more broadly to the G7 Rapid Response Mechanism mandate. If you could give us some information on that, that would be helpful, if that’s okay with you.
Ms. Carruthers: Yes, absolutely.
Senator Smith: Thank you. I didn’t mean to say “speak louder” when you came in. You have a soft voice, and I’ve been hit on the head so many times that sometimes it’s harder to hear as I get older.
Immigration — Ms. Manseau, you’re hidden in the corner — your department seeks $212 million for the Interim Housing Assistance Program. Could you first provide us a breakdown of how the funding is distributed across the country? How many asylum claims have been processed this year?
Ms. Manseau: Thank you for the question. The funding is for fiscal year 2023, and the way the program works is that different municipalities will submit a request for reimbursement, and the department will assess the request and provide reimbursement up to $212 million.
Senator Smith: Where are you putting these people? What kinds of accommodations are the asylum claimants staying in as part of the program? Are we talking hotels, apartments? Could you give us some feedback?
Ms. Manseau: It’s to help municipalities to provide interim accommodations for asylum seekers. A portion of the funding will go, as announced, to the Toronto area — $100 million for temporary accommodations — and $7 million has been dedicated to the Peel Region for a reception centre.
Senator Smith: I was lucky enough to participate in an activity up in Hamilton during the month of September. We were not housed downtown in the Sheraton because apparently it had been potentially a place where some of the new people coming into our country were housed on a temporary basis, but there was quite a bit of damage done.
When you set up these facilities for people and you contract with the people who own the facility, do you have conditions set up to protect yourselves? If people come over here, they may be of different cultures, and they may live differently. Not to be critical, but if they trash or create some damage within these facilities, how are you protected?
Ms. Manseau: The interim housing that is funded by the federal government, the hotels, is through leases with the different hotels. As part of the lease agreement, the hotels can claim damages that the asylum claimants may have done.
Senator Smith: How long do people stay in these facilities?
Ms. Manseau: It varies.
Senator Smith: Do you have an average kind of number that you can use as a template?
Ms. Manseau: It varies from a few weeks to a few months.
Senator Smith: Thank you very much.
[Translation]
Senator Dagenais: My question is for Mr. Goodyear. First, I’d like to thank you. A few days after you last appeared before our committee, I received a response to my questions about the elver fishery from your minister, Ms. Lebouthillier. I read the letter; the answer wasn’t quite sufficient, but it’s a good start, let’s say.
I’d like to come back to that, as I see $133 million in the supplementary estimates to advance reconciliation in matters related to ancestral rights and the fisheries. However, does that amount include anything set aside to compensate the elver fishing enterprises, from whom the government arbitrarily and without compensation took away 14% of fishing rights and gave them to First Nations? Where will the money go? How much does the department spend in total on reconciliation through fishing rights?
Mr. Goodyear: Thank you for the question, Mr. Chair.
[English]
As I mentioned the last time I was before your committee, as a department, we are not mandated to provide programs that would reimburse for economic downturns or any of that nature. So our mandate, of course, is fish habitat, conservation and so on.
But if you are referring to the $133 million, the program is aimed at advancing reconciliation with Indigenous peoples, improving our relationships with First Nations and increasing the number of comprehensive land claims and self-government agreements. It is basically to continue the good work we’re doing with Indigenous peoples across the nation.
The funding is program-related, and there isn’t funding related to reimbursement, again, because it’s not part of our departmental mandate. We would work with our other ministerial colleagues to address those things, but, ultimately, it would be another department that would address those concerns.
[Translation]
Senator Dagenais: So I understand that there’s no envelope being considered for the millions of dollars that elver fishers have lost. I can tell you that they are following the matter closely and watching the committee’s deliberations tonight.
Now that the fishing rights have been taken away from elver and lobster harvesters, can you tell us how much it costs annually to monitor these fisheries, to ensure that fishing is done in compliance with those entities? How do you ensure that quotas are upheld? As a matter of fact, who polices the fisheries? Have you had to adjust your workforce in recent years? I imagine that when the lobster and elver harvesters arrive at the docks, there must be someone to check that the quotas have been upheld, to make sure that there’s nothing hidden in the bottom of the hold. Who makes sure that quotas are upheld?
Mr. Goodyear: Thank you for the question. I will ask my colleague Jennifer Buie to take this one.
We’re making a lot of advancements in terms of data gathering so we can make informed decisions about quotas.
[English]
Jennifer Buie, Director General, Fisheries Resource Management, Fisheries and Oceans Canada: Thank you for the question.
We have a variety of tools that we use to oversee our fisheries. First of all, we have conservation protection officers, who are in the field on the wharves and on the water, who monitor the fisheries, ensure that harvesters are respecting the conditions of licence, as well as enforce any regulatory requirements under the Fisheries Act.
We also have things like logbooks. That’s an essential tool for us in order to gather data in terms of what’s being taken out of the water. This helps us to ensure that our fisheries are sustainable for future generations. We’re also using technology right now to advance some of our logbooks in terms of making them electronic so that we get reliable, timely and accessible information in real time.
So we’re making a lot of advancements in terms of data gathering so we can make informed decisions about things like quotas.
[Translation]
Senator Dagenais: I’ll stay with fisheries. I see a budget envelope of $12 million for what’s called the Indo-Pacific Strategy. Can you provide some information on the overall spending and your department’s direct involvement in that strategy in relation to Global Affairs Canada?
Mr. Goodyear: Thank you for your question.
[English]
Canada’s Indo-Pacific Strategy is a multi-departmental strategy. We are part of the larger strategy, and we have responsibilities to assist with monitoring on the West Coast. Our Coast Guard also has a role to play.
At this point, maybe I’ll ask my colleague from the Coast Guard to speak to some of the aspects of the role that the Coast Guard has to play.
Chris Henderson, Deputy Commissioner, Operations, Canadian Coast Guard: Thank you very much for the question. Unfortunately, it’s not specifically a Coast Guard activity, but I do understand a fair amount about it.
The main focus of Canada’s Indo-Pacific Strategy in terms of the Department of Fisheries and Oceans’ contribution to this strategy is what we refer to as the Dark Vessel Detection program. Effectively, we’re providing satellite surveillance and monitoring for illegal, unregulated, unreported fishing in the Pacific Ocean. In particular, as an example, this past summer, we chartered a ship that spent a couple of months on the high seas, hailing and boarding fishing vessels that were suspected of fishing illegally. They discovered quite a lot of that happening.
The other thing that’s going to be happening with that is that there will be additional contributions to the Philippines to help their efforts to counter illegal fishing in their maritime domain.
That’s the bulk of Canada’s Indo-Pacific Strategy at Fisheries and Oceans.
Senator Pate: Thank you to all the witnesses. My first question is for Global Affairs Canada.
As you’re no doubt aware, yesterday, the Standing Senate Committee on Foreign Affairs and International Trade released a report on Canada’s need for a 21st century foreign service. The committee made 29 recommendations. I was struck by one of their conclusions, which was that:
. . . a lack of recruitment and investment in Canada’s diplomatic capacities and capabilities over much of the past two decades has undermined Canada’s ability to influence and shape global issues and effect change. The committee believes that the Government of Canada needs to reinvest in Canadian diplomacy to ensure that GAC and the Canadian foreign service are fit for purpose and prepared to meet the complex global challenges of the decades to come.
They mention places where funding could be reallocated.
Have you had a chance to look at it? If so, how does that fit with the plans you have that you’re outlining for us in the Supplementary Estimates (B)?
Ms. Carruthers: Thank you very much for the question. This report was tabled very recently. I got a chance to see a copy of it this morning to quickly go through the recommendations. I know the department is very seized with this report. Right now, we’re taking stock to see how it aligns with our current transformation implementation plan.
At first glance, it looks like the majority of the recommendations actually line up, but we will be doing some extensive consultations within the department to come up with a response to the overall plan.
Senator Pate: As you know, you’ll likely have to respond within a few months with respect to their recommendations.
I’m particularly interested in their recommendations about restructuring some of the financing. Is there any possibility of getting a response to that in the coming weeks?
Ms. Carruthers: Yes. Thank you for the question.
Absolutely. Within Global Affairs Canada right now, we are trying to instill a culture of resource reallocation. As you know, our priorities do change quite rapidly throughout the organization. This is something the department is quite seized with.
Senator Pate: Thank you.
I have a few questions for IRCC. In Budget 2023, there was a proposed $530 million for 2023-24 for temporary lodgings for asylum seekers in need of shelter. What is the total spending on temporary lodgings for asylum seekers? What has it been this year? What criteria do you use to allocate this funding between provinces, territories and municipalities? What types of accommodation — and we’ve heard a bit about the hotel options — do asylum seekers receive as a result of the funding? You’ve mentioned they can stay a few weeks to several months. How much funding is provided to them directly, or is it all through contracts? What are your plans in terms of housing after people leave those short-term accommodations?
Ms. Manseau: There are two mechanisms of funding. The first one is the interim lodging sites, which are the hotels. The anticipated expenditure for this fiscal year is $557 million. We still have a few months in the year, so it’s anticipated spending. The other is the Interim Housing Assistance Program, the $212 million that we’re currently seeing in the Supplementary Estimates (B). That would be the total spending for that program in the current fiscal year.
Senator Pate: How much is provided to individuals versus contracts with hotels and the like?
Ms. Manseau: The interim lodging sites, the $557 million, is all with hotels, not with individuals. The Interim Housing Assistance Program is a program where the municipalities will submit their requests for reimbursement toward the end of the fiscal year. We’ve already announced that $100 million would be allocated to Toronto and $7 million to the Peel Region for their reception centre. For the remainder of the $212 million, we’ll be receiving the requests for reimbursements from the municipalities, and decisions will be made by the end of the fiscal year.
Senator Pate: Thank you very much.
Senator Loffreda: I thank all our expert witnesses for being here late this Wednesday night.
My question is for the Department of National Defence. Thank you for your service. It is much appreciated by all Canadians. The current geopolitical environment is a major concern. I’m sure many would agree. Beyond procuring equipment for National Defence, it is critical for the responsibilities of the department that our defence infrastructure is in suitable condition for use.
In National Defence’s 2023-24 Departmental Plan, the target set was to have a minimum of 80% of our defence infrastructure in suitable condition. The department has reported a figure of no higher than 65% in the last three years. I do understand it is unrealistic to have a near-perfect infrastructure usability, especially given the number of buildings and systems within the department that are coming to the end of their life expectancy. However, having a third of our infrastructure in not suitable condition is an issue the department must face.
How important is that in terms of meeting National Defence objectives? How does the department plan on achieving its goals for the suitability of its own infrastructure to ensure operational readiness given the budget cuts and constraints contemplated in the future, although you are requesting at this point $1.5 billion in Supplementary Estimates (B), which is an increase of 5.6% in authorities for the fiscal year?
Ms. Crosby: Thank you for the question. It’s a big one. I may invite the general to join me.
Let me start by saying that the state of our infrastructure in National Defence is a concern. We need infrastructure not only to house our people but also to house our equipment. We also need infrastructure to conduct our business. Infrastructure is very important. In fact, National Defence is the biggest custodian of infrastructure in the federal government. That also comes with a big price tag. With this type of custodial holding, it’s not unusual to have some of that infrastructure in critical condition — and we do — but we have an alarming amount that’s in critical condition now.
How are we dealing with this? First, we are prioritizing any in-year investments that we can do. If I have any flexibility in my budget, I’m pushing that money toward maintaining our fleet and sustaining our infrastructure as well.
Second, we’re ensuring that every time we bring in new fleet, like the multi-mission aircraft or the F-35s, we also bring in new money. This new equipment inevitably does not fit in the hangars and buildings that we have. We make sure that every new acquisition comes with sufficient funding for the infrastructure associated with it.
Third, we are prioritizing within our custodial holdings. For example, we spend anywhere from $40 million to $60 million on our current holdings of housing for our CAF members, but we have a plan to invest a total of almost $360 million over the next four years not only to build new stock but also to renovate up to 12,000 units. We’re prioritizing the sort of things that support our people and the sort of infrastructure that supports our new equipment. We’re using every penny that we can to maintain the rest of the inventory.
Senator Loffreda: I would like to hear from the general as to how important that is in terms of meeting National Defence objectives. Thank you.
Lieutenant-General Frances Allen, Vice Chief of the Defence Staff, Department of National Defence and the Canadian Armed Forces: Good afternoon, Mr. Chair. In answer to the question, I would echo my colleague’s statements with respect to the importance and criticality of infrastructure for us to be able to deliver on our missions and to meet the readiness state that we need to be able to deliver on the missions that we have going forward.
As the chief financial officer stated, as we are identifying new capabilities, we are also trying to identify what the new infrastructure is or whether the existing infrastructure meets the requirements to take it forward. It’s also infrastructure for training, for people — infrastructure for everything that we need.
The current state of our infrastructure is not great. It’s also not necessarily designed for the new systems and the new capabilities that we need today and going forward. It doesn’t necessarily have all of the same infrastructure and services that are needed for the people that we have or for the functions that we want going forward. To be able to turn that toward meeting the requirements going forward really does take an investment.
Our Assistant Deputy Minister of Infrastructure and Environment has a good understanding of what it would take from the investment perspective to manage a portfolio in a way that is in line with established standards, but the funding to be able to do that is not there. We’re in a prioritization approach for those things that are most important. It’s not just buildings, of course; it’s runways, jetties and all sorts of other infrastructure that are equally important. It’s not just buildings. That is certainly important to us.
There are a number of areas that we need to address to be able to go forward. One area is the prioritization that I spoke about; the second area is rationalization and divestment, as needed; the third is the new structures that are required for the new capabilities that we have going forward. A focus on that is needed for us to be able to have the level of readiness that we need for the operational effectiveness that is required.
Senator Loffreda: Could you elaborate on the rationalization and divestment?
LGen. Allen: Much of our infrastructure is quite old and was designed potentially for activities at different scales and at different sizes. Workshops were different and had requirements for supporting different types of equipment than we do now. There is a need to modernize and adjust the infrastructure. To a large degree, there is a wide variety of things that you can do to modify it, but there comes a point when the reasonable life of infrastructure is no longer there. Our infrastructure and environment teams make recommendations to us on the priority for what they need to do.
It doesn’t just stop at buildings, ships, jetties and runways. There are also the subsystems and the subinfrastructure that support the base. That is, the electrical systems, the water and the sewer systems, all of those types of things. It’s a big job and it takes a keen focus on what infrastructure is required to support the capabilities that we have moving forward.
Maybe the importance of this can be seen in our most recent activity with respect to NORAD modernization. We have the arrival of the F-35 fighters; we also have a project that’s called DCCF. I’m good with acronyms, but not with the words that make up those acronyms. It is all about creating the infrastructure that you need to be able to host, both at the main operating bases and at forward operating locations, and to support that moving forward. Significant work has been done within the department to tightly align and work on the prioritization and the sequencing of this in time so that we’re able to support the aircraft and the missions when they actually arrive. But it is a big job, and there comes a point at which divestment of certain types of buildings and facilities needs to happen to allow you to build new.
Senator Loffreda: Do we have a dollar amount in order to meet your target?
Ms. Crosby: We have billions of dollars of deferred maintenance. We do have a dollar amount of what would be required to bring them all up to a certain level. I don’t have that at my fingertips, but I would be happy to supply that.
Senator Loffreda: Can you put it in writing? Thank you.
The Chair: On the question that was posed by Senator Loffreda to Ms. Crosby, can you provide the complete answer to the last part of his question, which you started to answer, in writing to the clerk, please? Okay. Thank you.
Senator MacAdam: Thank you to the witnesses for being here. My question is for Immigration, Refugees and Citizenship Canada.
The supplementary estimates indicate that IRCC is seeking additional funds for operating expenses to support the 2023-25 Immigration Levels Plan, which aims to welcome 465,000 new permanent residents in 2023, 485,000 in 2024 and 500,000 in 2025.
How does IRCC take into consideration the lack of affordable housing in Canada in welcoming new immigrants, and what is its housing strategy for them in the medium to long term?
Ms. Manseau: The funding that you’re referring to is for permanent residents, yes?
Senator MacAdam: For permanent residents.
Ms. Manseau: Right. But your question is on affordable housing.
Senator MacAdam: Right. What’s the plan for housing the new immigrants included in the plans?
Ms. Manseau: As part of our levels, we do focus on areas such as construction workers. It plays a complementary role in helping to address Canada’s labour market needs in construction and trades. As an example, in 2023 we’ve issued 29,000 work permits under the Temporary Foreign Worker Program in the construction area. This summer we did an Express Entry round of 1,500 applications, and the three top categories invited were in the construction industry.
Senator MacAdam: Okay. But what’s the plan for housing new immigrants coming in when we have a housing crisis in our country?
Ms. Manseau: In the Supplementary Estimates (B), we’re seeking funding for the Interim Housing Assistance Program of $212 million, so that funding is provided to municipalities for interim housing programs. Also, the IRCC provides funding for interim housing at the federal hotels, and the anticipated spending for this fiscal year is $557 million.
Senator MacAdam: Getting back to the Immigration Levels Plan, I’m just wondering what criteria were used to set the 2023-25 Immigration Levels Plan.
Ms. Manseau: The immigration levels are based on Employment and Social Development Canada’s anticipated areas of skilled workers that are required. That’s one of the factors that are considered as far as establishing the levels for the three-year plan.
Senator MacAdam: Thank you.
This question is for Transport Canada. I noticed the supplementary estimates included $75 million for a ferry as an interim solution between Prince Edward Island and Nova Scotia. I’m wondering why it is interim. What’s the permanent plan for a ferry between Nova Scotia and P.E.I.?
Mr. Pilgrim: Thank you very much for the question.
What happened is there is a plan to replace two ferries on the East Coast. They’re supposed to come into service in 2028-29. Unfortunately, one of the ferries, the MV Holiday Island, had a fire and was decommissioned due to being unsafe, so we had to find a replacement. We rented or leased the MV Saaremaa from the Société des Traversiers du Québec for this past summer, but we were lucky to find this new vessel, the MV Fanafjord, at a good price to hold the fort until the new vessel comes out of the Chantier Davie in 2028. This is a temporary solution, but a nice, safe, strong vessel.
Senator MacAdam: Thank you.
Senator Marshall: Mr. Pilgrim, I’ll carry on where we left off. The Airport Operations Recovery Committee that you were speaking about — I wasn’t so much interested in CATSA — did it look at the specific issues or is it more general? Because there are specific issues which seem to be recurring at the larger airports. One would be aircraft parked on the runway, on the tarmac, with people sitting on board for three, four, five, six hours. So is it specific issues that are being looked at, or is it more of a general nature?
Mr. Pilgrim: Thank you very much for the question. Protecting the rights of air passengers is a priority for the Government of Canada. The government will continue to ensure that travellers’ rights are respected when air travel does not go according to plan. A series of legislative amendments have been made to the Canada Transportation Act to strengthen air passengers’ rights in the regime, putting the onus on air carriers.
Senator Marshall: Do they follow up? If it’s a recurring problem that aircraft loaded with passengers are parked on the tarmac, and this is something that’s happening practically every day, is that an issue that concerns the Department of Transport, or is that something that’s just left to Air Canada and WestJet and the airlines to resolve? Is that something that would be —
Mr. Pilgrim: Yes.
Senator Marshall: Yes, I think you responded to me in March, so I can see you are moving —
Serge Bijimine, Assistant Deputy Minister, Policy, Transport Canada: I remember responding to you in March.
I’m Serge Bijimine, Assistant Deputy Minister, Policy.
Senator Marshall: Do you have a couple of specific examples? That’s what I’m interested in. What exactly is happening in those committees?
Mr. Bijimine: In the AROC, the Aviation Recovery Operations Committee, we do talk about very specific issues and we do talk about the issues as you’ve mentioned. A couple of things are essentially being done there. I don’t have the specific issues you mentioned, but when something like that happens, what we do is we actually do almost a “hot wash” figuring out who did what, what went wrong, was it the airport that did not have the gates ready on time, was it —
Senator Marshall: A post-mortem.
Mr. Bijimine: A post-mortem. Was it the airline that came in late? And it’s about figuring out who did what and how and where, and figuring out a way to make sure that does not repeat itself.
Senator Marshall: But it’s very common, and because it’s so common and now winter is coming on, the concern I would have is that we’re going to have a tragedy or something on one of those aircraft one of these days. This is why I raised these specific issues. It’s quite alarming when someone has to sit on a plane out on the runway in winter with two or three small children. It’s quite concerning.
Mr. Bijimine: What we’ve done as well is we’ve tabled Bill C-52, basically increasing accountability in the air sector. We’ve asked the industry to not wait for the bill to pass, but to actually start putting together service standards for all operators in the air sector. If and when they start doing this — and we strongly recommend they do — we will know it will take X amount for the airport to have the tarmac ready; it will take X amount for the airlines to have their refuelling services ready; it will take X amount to have the de-icing ready.
All of these things are currently being put in place by the industry to avoid a situation like the one you’ve laid out. It will take a bit of time.
Senator Marshall: Next time you appear, I’ll let you know if there is progress being made.
[Translation]
Senator Forest: I’ll stick with aviation; my question is for Ms. Crosby.
I’d like to understand what prompted the government — with no call for tenders, no less — to grant Boeing a $6-billion contract for P-8A Poseidon aircraft, even though these are public funds and we have an internationally renowned company like Bombardier that had submitted a proposal. What led the government to skip the bidding process and give a $6-billion contract to a U.S. company by mutual agreement?
Ms. Crosby: Thank you for the question.
[English]
Once again, I might ask for my colleague General Allen to join me.
To start off, I would say, as the minister announced recently, we have decided to purchase up to 16 of the P-8A multi-mission aircraft, which is a Boeing product. From my understanding of it, this product is meeting the needs of the Canadian Armed Forces, and there is no other product available now, in the timeline that we need, that will meet our requirements. For this reason, that particular product was chosen.
It is, in fact, a $10.6-billion project in total. The acquisition is a little bit smaller than that, but these are the main reasons why we’re going forward.
I don’t know if General Allen wants to add to that.
[Translation]
Senator Forest: We invested $3 billion to extend the life of our CP-140s, which are doing the job right now. Some say that these investments have extended the life of these planes and could easily keep them going into the mid-2030s. Bombardier, even if it wasn’t mandatory... I wonder, because Bombardier wasn’t demanding a private contract, it was simply asking for the opportunity to bid on a contract.
Both Quebec and Ontario, and particularly Montreal, which is an international hub in the aerospace sector... I don’t understand the logic of not having these two companies compete. Yes, the P-8A is ready to use as an aircraft now, but it’s already dated. By the time it’s delivered to us, it will probably have flown more hours than it has left. I can’t understand the logic behind this decision, which is probably political. I can’t understand the logic of this choice, when you look at the impact of all this on the future of aerospace in Canada.
Ms. Crosby: Thank you for the question.
[English]
Maybe General Allen would like to start us off.
LGen. Allen: Thank you very much. Certainly, I think I would want to go back to first principles in how we take a look at any procurement that we have and any requirement that we have when it comes to a military capability. It’s based upon what we see as the need in the current and the future operating environment and the assessment of the types of threats that exist, thus the capabilities that we need various assets to be able to have, to be able to operate not just today but in the circumstances of the future as well.
In the lead-up, as you said, we have been making investments in the old CP-140 platform. There have been some investments made in trying to upgrade and keep the system current, but there are probably two parts to every piece. There is the aircraft itself and making sure that it still supports all of the flying capabilities that are required, and then there are systems and sensors that are part of that system as well. Both of those things need to be able to be continuously upgraded and be able to meet the threat environment that we see ourselves in today and tomorrow.
In knowing that we were going to need this, the replacement for the CP-140, as Ms. Crosby identified earlier, has been in Strong, Secure, Engaged in our capital investment plan for some time.
The Chair: To General Allen and to Ms. Crosby, if you want to complete that question in writing, we would appreciate it because of the time frame that we have. I’ll give you a date to send it through the clerk, please.
[Translation]
Would that be all right with you, Senator Forest?
Senator Forest: I’m missing my flight, but we will wait for the response.
[English]
Senator Smith: I thank Ms. Crosby. You sent me an answer to one of my questions a few months ago. I just wanted to follow up. In your written response to my question asking for a breakdown of your expenditures on professional and special services, I note that the bulk of it is geared toward engineering services that support your capital projects.
Could you give us an idea of some of the barriers in attracting these types of professionals to work for the department in the sense of being not only consultants but internal employees? Given these professionals are critical to the operations of your department, is there a long-term plan to recruit some of the consultants that you hire?
Ms. Crosby: Thank you for your question. It’s a complex one. As you know, National Defence spends about $5 billion annually on professional services, external contracting. We do it for many reasons. About half of it is in direct support of fleet maintenance and sustainment, so the engineering services and so on.
Now, we have CAF members who do that as well on the ground and from coast to coast. As you’ve heard and as you know, we are losing CAF faster than we can recruit them, so that is putting additional pressure on finding external contractors.
On top of that, we are reviewing all of our contracting with an eye to reducing our contracting, as per the government’s spending reductions.
Senator Smith: To my next question, which is on recruiting, we know recruiting young women and men to be soldiers is a major challenge, and there is a huge shortfall in terms of replacements. But when you’re looking at trying to bring people in from the outside, it seems to be difficult in certain areas. Is it difficult to try to convert some of these consultants into employees at a high level or at a reasonably high level?
Ms. Crosby: I can’t really comment. Again, I hate to make General Allen walk back and forth. In terms of converting contractors to become CAF members — that is what you’re asking — or maybe to become public servants, I’m not sure I have a sense of how easy that is. But I do know in general that our recruitment efforts are beginning to pay off. We are getting a lot of applications, but we still are somewhat struggling with moving from application volume to actually recruiting. However, we have a reconstitution plan in place.
Senator Smith: When you talk about recruiting, are you talking about soldiers?
Ms. Crosby: I am. Maybe you’re thinking more broadly than that.
Senator Smith: Right.
Ms. Crosby: Again, from a financial point of view, it’s a balancing act between hiring external consultants for a beginning and an end, which many of our projects do have. You’ll see that we favour engineering on projects that are going to end. It doesn’t make sense financially to bring them in for the 35-year career in the public service. We try to balance that.
Senator Smith: My president is coughing right now.
The Chair: Thank you, Ms. Crosby.
[Translation]
Senator Dagenais: Before I get to my question for Ms. Crosby, I heard an interview with the CEO of Bombardier, who said he was disappointed that he wasn’t given the opportunity to bid. I don’t know what budget you’re going to take the money from, but I think Bombardier intends to sue the government. There will surely be legal fees.
Ms. Crosby, I’d like to follow up on questions Senator Marshall and Senator Gignac asked about the fabled 2% that hasn’t been reached for some time now.
We know that a lot of funding goes to the Canadian Armed Forces, but the funds aren’t necessarily spent immediately for reasons that may be debatable. I’d like to know more about how you calculated the 1.4% figure for the current year. Do you only include disbursed expenses, or do you use political promises made for three, five or 10 years?
Ms. Crosby: Thank you for the question.
[English]
Just a clarification: When you say “per cent,” are you talking about the NATO 2%, in particular, sir? Okay. Yes, when we’re calculating the NATO 2%, when we look back at previous years, we look at the actual expenditures. That’s what we use to calculate how much we spent as a country with respect to our GDP.
But when we look forward to future years, at that point we include planned, forecasted expenditures; we don’t have actual expenses, so we use planned expenses. You’ll see that all our calculations are based on what we think we will spend on SSE, NORAD modernization and all our operations we’re aware of. We update that two or three times a year with NATO, and they, in turn, update the GDP denominator.
[Translation]
Senator Dagenais: I will now return to Mr. Goodyear or Mr. Pilgrim. In Fisheries and Oceans Canada’s Supplementary Estimates (B), I see there are $10 million to renew the marine spatial planning program. Transport Canada’s budget includes $412,000 for the same program. Can someone explain this program to us? Why are these expenses being included today in the Supplementary Estimates (B) when we’re talking about a program renewal that was surely foreseeable?
If we don’t have time, they can send the response in writing.
[English]
The Chair: Mr. Pilgrim, could you respond in writing to the question posed by Senator Dagenais?
Mr. Pilgrim: It’s a Coast Guard-led program; we’re part of it, but —
Mr. Goodyear: Marine spatial planning is not necessarily just Coast Guard; it’s a Fisheries and Oceans Canada program that enables continued work with our partners, Indigenous participation, and ensures that we have a solid evidence base of the marine environment. The $10 million allows us to continue the good work that has gone on to date, helping us to develop that map of the marine environment so that we know where our species are, what the various risks that exist are, and what the various challenges are, so that whenever we have plans for the use of that marine space, we are able to help other governmental department partners, industry or whomever it may be with plans to access and use that space.
We have $10.1 million in the current estimates to help continue that work.
Senator Pate: My first question in this round is for Global Affairs. You mentioned the Middle East strategy, humanitarian support for Syria and consular assistance. As you may know, I was in Syria this past summer, and we heard a lot from the Autonomous Administration about the need for these kinds of services, so I’m interested in how much is actually allocated to Syria and where it’s going.
I’ll also ask Immigration. In a Statistics Canada report — it was the record-high population growth report for 2022 — they talk about the fact that unlike for permanent immigration, the federal government does not publicly release planned annual admission targets for non-permanent residents. I’m curious what the rationale for that is, what kinds of services and supports are provided, and how much of the budget goes to those areas. It may require that we get responses in writing, if that’s possible.
Ms. Carruthers: Would you like me to start? Yes, thank you very much for the question. Just in terms of the specific allocation to Syria, I don’t have that breakdown. I just have the breakdown for the overall Middle East strategy, but we would be happy to come back and provide that in writing to the committee.
Ms. Manseau: We’ll also be happy to come back and provide you with the information. Thank you.
Senator Pate: Thank you very much.
Senator Loffreda: I’m glad to conclude this session.
My question is for Global Affairs Canada. One of the many responsibilities that Global Affairs takes on is helping Canadian exporters and innovators be successful in their international business efforts. This responsibility not only helps the Canadian economy but also improves our standing on the international stage. The department set a goal in its 2023-24 Departmental Plan of $292 billion for the value of exports to overseas markets. I understand that this is a fairly ambitious target — a 50% increase from the 2017 figure. We’ve been falling short of this target since 2019, although there are very encouraging signs, so that’s positive. The target date of December 2025 is not far away, and the reported export value is nearly $80 billion shy of your objective.
How does Global Affairs plan on achieving its target and growing Canada’s presence in the global economy? As part of your assessment of this performance indicator, you do include the results from the Creative Export Strategy, which is referred to in the Supplementary Estimates (B) in funds for creative and artistic projects that forecast generating export revenues.
Ms. Carruthers: Thank you very much for the question. In terms of the funding that you just mentioned in these supplementary estimates, that funding is actually to renew eight FTEs that we currently have. Of those eight FTEs, presently, only four have as their main focus things including trade promotion. So what we found is that by actually having these FTEs fully focused on trade, we’re able to get better results. So that’s part of the funding included in these Main Estimates, and those individuals would be located in New York, Los Angeles, London, Paris, Mumbai, Mexico and Shanghai.
In terms of those goals that you referenced from the Departmental Plan, I don’t have the data with me in terms of where we are, but we would be happy to get back to you with that information.
Senator Loffreda: Thank you.
The Chair: Thank you.
To the officials, thank you very much, you have been very informative, and it is much appreciated. As you know, we have a common denominator, which is transparency, accountability, reliability and predictability. I would like to remind the witnesses to please submit your written responses to the clerk by the end of the day on Wednesday, December 20, 2023.
Before we adjourn, on behalf of the senators of the National Finance Committee, as chair, I would like to take this opportunity to thank you, the Armed Forces, for your hard work, dedication and service to the country.
In the spirit of Christmas, happy holidays to you all.
Honourable senators, our next meeting will be Tuesday, December 12, 2023, at 9 a.m. Information will be shared with you. With that, to the staff, thank you for your hard work, enabling us as parliamentarians to do our job.
(The committee adjourned.)