Proceedings of the Standing Senate Committee on
Issue 21 - Evidence - June 6, 2012 (evening meeting)
OTTAWA, Wednesday, June 6, 2012
The Standing Senate Committee on National Finance met this day at 6:45
p.m. to examine the expenditures set out in the Supplementary Estimates (A)
for the fiscal year ending March 31, 2013.
Senator Joseph A. Day (Chair) in the chair.
The Chair: I call this meeting of the Standing Senate Committee on
National Finance to order.
Honourable senators, this evening we will continue our examination of
Supplementary Estimates (A) for the fiscal year ending March 31, 2013.
Our committee began consideration of the Main Estimates of 2012-13 in
early March, consideration which is ongoing and will continue throughout the
year. This constitutes our second meeting on Supplementary Estimates (A).
This evening, we are pleased to welcome the following officials from Public
Works and Government Services Canada: Mr. Alex Lakroni, Chief Financial
Officer, Finance Branch,; and Pierre-Marc Mongeau, Assistant Deputy
Minister, Parliamentary Precinct Branch.
We are also pleased to welcome the following officials from Transport
Canada: André Morency, Assistant Deputy Minister, Corporate Management and
Crown Corporation Governance; and Claude Corbin, Senior Director, Financial
I would ask each department to briefly describe what is contained in your
section of the supplementary estimates. I think that you each have
introductory remarks, after which we will move to a question and answer and
I have speaking notes from Mr. Lakroni, so I will call on him first to
give his remarks.
Alex Lakroni, Chief Financial Officer, Finance Branch, Public Works
and Government Services Canada: Thank you, Mr. Chair and members of the
committee. I am here today in my capacity as CFO of Public Works and
Government Services Canada, and I am joined by my colleague, Mr. Pierre-Marc
Mongeau, the Assistant Deputy Minister of the Parliamentary Precinct Branch.
The department appeared before this Senate committee on March 13 regarding
the Main Estimates 2012-13. Today, we are pleased to discuss the
Supplementary Estimates (A) for PWGSC, which were tabled on May 17, 2012.
As you are aware, Public Works and Government Services Canada plays an
important role in the daily operations of the Government of Canada. As its
principal banker, accountant, central purchasing agent, linguistic
authority, and real property manager, we manage a diverse real estate
portfolio that accommodates 269,000 federal employees in 1,819 locations
across Canada, including the Parliament buildings. PWGSC contributes more
than $14 billion annually to the Canadian economy through government
procurement. We prepare the annual public accounts of Canada and manage a
cashflow of more than two trillion dollars a year; and, translate more than
one million pages of texts on behalf of federal organizations, and provide
translation and interpretation services for Parliament and its committees.
These Supplementary Estimates (A) request $237.2 million for PWGSC in net
new funding. Approval by Parliament will bring PWGSC's gross budget to $5.9
billion to be spent on the delivery of its mandate. The department is
heavily revenue dependent, with 56 per cent of our expenditures, or $3.3
billion, covered by revenue, primarily from client government departments,
to support their programs. This brings PWGSC's net appropriation to $2.6
Let me take this opportunity to break down PWGSC's budget. The department
has an operating vote with gross expenditures of $3.2 billion, which has two
basic components. First, $0.9 billion is needed to deliver on our core
programs, such as central purchasing and banking, public accounts, payroll
and pension services; and internal services. Second, $2.3 billion is
required to pay for rent, fit-up and utilities for government-wide
accommodation; the Receiver General and central compensation administration
functions, such as banking fees paid to financial institutions, cheques and
envelopes; and translation services to Parliament.
The department also delivers other services to departments on a full
cost-recovery basis. It provides $2.1 billion of other services, such as
real property, project management, expert advice and translation. PWGSC also
has a capital vote of $497 million, primarily to invest in Government of
Canada buildings and infrastructure.
Now that I have described the department's budget, let me turn to why we
are here today.
The first notable item in PWGSC's Supplementary Estimates (A) is the
Parliamentary Precinct Program. Public Works and Government Services Canada
is asking for $242.9 million for the rehabilitation of the Parliamentary
precinct buildings. This covers the funding for projects such as the West
Block Rehabilitation, the Wellington building, the recapitalization program,
as well as lease costs for interim relocation. These are major projects that
have already been approved and are part of the long-term vision and plans
for the Hill.
The total expenditure forecasted for the fiscal year 2012-13 to
rehabilitate the buildings of the Parliamentary precinct is $247.6 million.
The difference of $4.7 million was approved in the Main Estimates.
As you know, the spending for this program is project driven, and project
requirements have to be defined and approved by Treasury Board. Given the
magnitude and the complexity of these projects, coupled with the timing of
approvals, PWGSC is now including the amount of $242.9 million in
Supplementary Estimates (A).
I am pleased to share with you that the Auditor General's 2010 report
recognized PWGSC's strong results in project management and project
delivery. My colleague, Mr. Mongeau, is prepared to provide you today with
an overview of the program and its performance to date, should the committee
The second item is a transfer from PWGSC to Shared Services Canada of
nine million dollars relating to activities now within their mandate.
This current year adjustment related to two projects is over and above
the permanent transfer of $113.4 million in the main estimates. Finally,
PWGSC is receiving close to four million dollars from other government
departments in order to carry out the consolidation of pay services in
Miramichi, New Brunswick.
These three items constitute PWGSC's request in Supplementary Estimates
My colleague, Mr. Mongeau, and I would now be pleased to take your
The Chair: Mr. Mongeau, do you wish to make any comments?
Pierre-Marc Mongeau, Assistant Deputy Minister, Parliamentary Precinct
Branch, Public Works and Government Services Canada: Mr. Chair, if you
so wish, I would suggest that I immediately give the floor to our
colleagues. Then we can answer your questions.
André Morency, Assistant Deputy Minister, Corporate Management and
Crown Corporation Governance, Transport Canada: Thank you for inviting
us to this meeting this evening to assist the committee as it considers
Supplementary Estimates (A) for the year 2012-2013. I will limit my comments
to your question on what is being presented today regarding our
Transport Canada is requesting a net increase of $16.6 million to 2012-13
Main Estimates through the Supplementary Estimates (A). New funding is being
requested for five items, for a total of $20.9 million as follows: Funding
of $16.1 million to fund the Regional and Remote Passenger Rail Services
Class Contribution Program until March 2013, and $2.8 million for the
renewal of the major projects management office. Transport is also seeking
$1 million to support the sustainability and maintenance of the Port of
Churchill; $693,000 to provide essential services in the form of inspection,
enforcement and emergency planning activities in support of the 2015 Pan
America and Para Pan American Games announced by the government; and
$198,000 to cover Transport Canada's incremental costs for implementing
costs relating to the Evergreen Light Rail Transit Project in British
Funding transfers to and from other departments are also found in the
supplementary estimates, and they result in a net decrease of $4.3 million.
They involve a transfer into Transport Canada of $7.9 million from
Jacques-Cartier and Champlain Bridges Inc. for the planning of a new bridge
across the St. Lawrence; a transfer of $12.1 million out of Transport to
Shared Services Canada to complete Transport Canada's contribution in
consolidating and streamlining the delivery of email, data centre and
network services across government; and a transfer out of Transport Canada
of $30,000 to Industry Canada as part of Transport Canada's share to support
the federal coordination of global satellite navigation systems.
These supplementary estimates also involve two of our Crown corporations.
VIA Rail Canada is seeking through these supplementary estimates $68 million
to fund incremental pension funding requirements, and $21.5 million is also
being sought to be re-profiled from a 2011-12 frozen allotment into 2012-13
to complete capital projects that were delayed for a variety of reasons not
in the control of VIA Rail.
I mentioned earlier that Jacques Cartier and Champlain Bridges
Incorporated will be able to transfer $7.9 million to Transport Canada.
This completes my comments, Mr. Chair.
The Chair: Thank you, Mr. Morency. I am looking at page 95 of
supplementary estimates under Transport, and at the bottom is VIA Rail
Canada Inc. Do you have the Supplementary Estimates (A)? I want to ensure I
am following you. You gave two figures under VIA Rail, and they add up to
$89.5 million; is that correct?
Mr. Morency: That is correct.
The Chair: You gave us some of the figures earlier, as well. I did
not write them down; I was looking for specific figures but they may be part
of a larger figure that appears here, might they not?
Mr. Morency: VIA Rail in total is $68 million for the pension
requirements and $21.5 million for capital improvements.
The Chair: We do not see that breakdown. If you were not here, we
would not see that. Do we see it?
Mr. Mongeau: Page 96 of the supplementary estimates. You will see
them at the very bottom of the page.
The Chair: I was looking at page 95 at the bottom, which is a
summary. Thank you very much.
Senator Ringuette: My first question is for Public Works. The
renovation of Parliament Hill has been ongoing for years and will go on for
the next 20 years. Why was the amount of $247.6 million for the renovations
that will occur during this fiscal year not a part of the Main Estimates?
Mr. Lakroni: The Parliamentary Precincts Program is project-based.
It is a program, but it contains multiple projects. The requirements of
these projects are defined on an annual basis because the projects are
When these approvals are obtained from Treasury Board, sometimes the
timing of the Main Estimates has passed, and the next opportunity we have to
seek funding is from the supplementary estimates.
We try to have fulsome amounts. In this particular case, the majority of
the requirements were defined outside the timeline of the Main Estimates.
The requirements that were defined we can elaborate on, but it is just a
Senator Ringuette: I understand the timing issue, but I also think
that even on a project basis, you should have at least a five-year plan to
take us forward and a budget requirement to do so.
Nevertheless, I also think that with regard to your department — and I
grant you, it has not been so many days since I have asked your department a
series of questions with regard to your staffing, staff that you hire to
work on Parliament Hill through to placement agencies. It is the same staff
year after year after year, professional people that will be needed for
probably the next 20 years. I am looking at Heritage Masonry, for example.
We see the same faces, yet they are not employees.
That is certainly a question with regard to supposed temporary workers
and enforcement, at least within your department. Notwithstanding the MERX
process and the section of your department that tenders these contracts for
other departments, at least for your department, there is the enforcement of
the Treasury Board guidelines with regard to temporary staffing.
With regard to the amount of money that you are requesting from
Parliament, how much will be used to hire temporary workers or maintain
temporary workers on the projects to repair the parliamentary precinct?
Mr. Mongeau: With respect to Parliament Hill and temporary jobs,
the managers in our team focus primarily on the entire issue of contract
management and implementation. They also do cost assessments. Our teams are
already more or less complete.
For example, when we put out a bid to obtain contract employees for
project management, we have an advantage in that these people come for a
certain length of time but do not become permanent employees. This gives us
greater hiring flexibility. Our objective is to ensure that we have on our
teams the engineers, architects and good project managers who are going to
be able to manage all of this. However, we do turn to private companies that
provide project management services for the busy periods.
There is also a large transfer of knowledge because, if we want to hire
someone, it takes several years before they can be brought to a senior
level, when in fact we can strike a good balance between our senior
employees and the employees we hire on a contractual basis. And we take
advantage of their experience. For example, in the field of masonry, we have
a complete centre of expertise with specialists. This centre of expertise
will work with us and we will then hire project managers to implement the
decisions that we make together.
These companies will assist us in the area of project management.
Essentially, they will help us maintain a solid base within our teams, and
they will also help us get through the peak periods without having to hire
permanent employees for these projects.
Senator Runciman: In your opening statement, Mr. Lakroni, you
mentioned the Auditor General's 2000 report and the complimentary remarks
made. She also spoke to project management and governance structure,
referring to the rehabilitation of the Parliament Buildings. She felt that
it was too fragmented. What has been the response of Public Works to that
Mr. Mongeau: I will take that question.
There were two main aspects in the Auditor General's report of 2010.
First of all, the report dealt with project management in Public Works. We
were given high marks; we were told that management was good, that we had
developed a cost control process. In a nutshell, we heard very positive
things about our project management.
We did, however, receive more severe criticism in the area of governance.
The problems pertained primarily to the difficulties experienced in
achieving a consensus. For more or less the past two years, the teams have
worked hard to improve communications and consultation, to the point where
Senator Tkachuk, with whom I met this week, informed us that, in his view,
consultation had improved and team work was effective.
The first thing we did in Public Works was to ensure that we had better
relations and better coordination between the House of Commons, the Senate
and ourselves. We have obtained much better results, and this will become
apparent to you over the next few weeks when we develop our projects
In order to respond directly to the Auditor General's recommendations, we
went to see what was done in other countries. Every country has its own
style of governance. We visited England, the United States, Scotland and
Norway. We wanted to understand their type of governance and see what they
did to ensure that each party understood each other and knew who did what.
We have done this analysis and now we are seeing how the central agencies —
those responsible for the "machinery " — are reacting to it.
We have taken a two-pronged approach. First of all, we are ensuring that
communications within our teams are enhanced — as confirmed by the
Sergeant-at-Arms and Senator Tkachuk — and, from the technical perspective,
we are meeting the objective of understanding how things are done in other
countries and discussing those matters with the central agencies. We are now
waiting to hear how the central agencies will position themselves with
respect to this issue. As far as the machinery is concerned, unfortunately
the decision does not lie with Public Works but rather with the central
Senator Runciman: Do you keep a record over a 10-year period, or
whatever the appropriate timeline might be, with respect to your track
record in terms of on-time completion?
I am saying that, as a modest project, the sidewalk at the east perimeter
of Parliament Hill was started, I think, in April. My secretary phoned today
to see when it might be completed, and they said the end of August. The
heavy tourist season is pretty well shot.
Looking at municipal and other levels of government, when they are
putting in new sidewalks, for example, you are not talking about six months
to do it. I know that that sidewalk was out of service for about six months
last year because of faulty work, I guess, by the contractor.
Still, there does not seem to be any kind of pressure to have some of
these projects done in a timely way. That may be why the Auditor General
also expressed some skepticism about five years and $5 billion with respect
to the precinct rehabilitation. That is an example. Looking at it from my
window, I do not think anyone was working on its today, certainly not in my
line of sight anyway. It raises questions about deadlines and costs of not
meeting deadlines. Would you like to respond?
Mr. Mongeau: Thank you for that question. You always get killed by
details. I will look at that sidewalk tomorrow, and I am going to make sure
that it is done as fast as possible.
The Chair: Why not tonight?
Mr. Morency: Because I have a meeting right now.
Senator Eaton: It goes along the canal.
Mr. Morency: Yes, I know it is a close part.
I am not able to give you an answer about that specific timeline, but I
will look into it.
However, concerning the long-term vision, we work with five-year plans.
We assess the work that can be done within a five-year period. We seek the
necessary approvals from the government through memorandums to cabinet and
then we put in place all the projects through Treasury Board approvals. With
Treasury Board approval comes a set amount of money for us.
Over the past few years, we have benefited from a good roadmap. Of
course, the devil is in the details, as you showed us tonight. But if we
take as an example a project like the Promenade building that you probably
know, we had a budget of $83 or $84 million and, in the end, we were able to
reduce the costs to $77.5 million. So we reduced the costs.
For the building at 1 Wellington Street, we had a budget of $23 million
for the rooms used by the House of Commons and we did it in a year. It was
$23 million all at once. There are also the off-site food production
facilities, for which we had a $34 million budget; we were able to reduce
those costs in the end to $28 million.
We put a lot of care into our daily management. As you know, we are
currently doing work on the West Block. These are major renovations, and
they are being done on time and on budget.
There is also 180 Wellington Street, the big building. You cannot see it,
but the interior is completely demolished; the project will be completed in
2015-2016. We are on track for that deadline. All of these major projects
will be completed on time.
The Sir John A. MacDonald building, the former Bank of Montreal, will
also be completed for 2014. We started the work with a budget that we will
We always operate with five-year plans to have better monitoring and to
be able to report on a five-year basis. If you gave us a 25-year project, at
a certain point, monitoring would no longer be possible. With five-year
plans, we can properly monitor things.
Nevertheless, we can still have broken sidewalks and I will look into it.
Senator Runciman: As long as the sidewalk does not take five
The Chair: You have invested a lot of your time in that sidewalk.
Senator Runciman: Thank you.
Senator Callbeck: Thank you for coming here this evening.
I want to go back to what Senator Ringuette asked about to ensure I
understand it because I find it difficult to understand. This is a project
that has been going on for years. In the Main Estimates, we only had $4.7
million, and you will spend $247.6 million. I find it incredible that most
of that was not in the Main Estimates. I could see it if it were the other
Mr. Lakroni: As my colleague mentioned, this is a 25-year program,
with five-year slices.
In terms of plans, yes, we have plans. We know what work needs to be done
when, and the high level of division is well- established. When it comes to
funding the appropriation — printing the money and giving it to the project
— the project must be defined in much more precise parameters. You have to
go to Treasury Board and pass all of the checks and balances. It is not
planning; it is crystallizing the requirements. On a multi-year basis, it is
done for a given project, but, because many of these projects, as I
mentioned, are in the initial stages, we go to Treasury Board and ask for
approvals. When the approvals come — past the time to submit the costs to
the Main Estimates — that is the time when we come before Parliament.
The second thing is that we do not want to fragment the cost of a
project, putting some in Supplementary Estimates (A) and another slice in
Supplementary Estimates (B), et cetera. We do cash management, and we align
when we have the bulk of the requirements ready and approved by Treasury
Board. Then we come to Parliament to seek the funds. That is exactly what
Senator Callbeck: As I said, this project has been going on for
years. Here we are this year with only 4 per cent, roughly, in the main
budget. Is that the way it has been done in the past? I do not remember that
the Supplementary Estimates had such a huge amount.
Mr. Lakroni: I have the records in terms of what is happening in
the Main Estimates. Every year is different. It depends on the project in
For instance, in Supplementary Estimates (B) last year, we had $65
million for the parliamentary precinct.
Senator Callbeck: What was the total for the year?
Mr. Lakroni: The total was $146 million for the year so almost
half was in the supplementary estimates. However, the year before that, we
had almost everything in Main Estimates. That means that the projects for
that year were approved on time for the Main Estimates.
Again, on principle, in the Main Estimates, one would expect to see
ongoing programs that are predictable, not projects really. However, for
programs that are project based, it is normal that you see a difference in
terms of when the money is sought. That is when the projects requirements
are nailed down.
Senator Callbeck: I just find it to be unbelievable that we get 4
per cent in the Main Estimates.
What about all these programs for identifying savings? I think we have
had two strategic reviews; we have had a deficit reduction plan. Has it been
looked at under those programs? Were there any savings?
Mr. Mongeau: The work currently being done on Parliament Hill is
major work that we have to do quickly because of the state of the buildings.
Our main goal is still the Centre Block, the East Block and the West Block.
That is our priority.
The team is not huge, but we were lucky this year. Given that our role is
to deliver these services in order to accelerate work on the Hill as much as
possible, the branch was not affected by the cuts.
Senator Callbeck: The strategic reviews and the deficit reduction
plan have not applied to you?
Mr. Mongeau: It has not applied to us this year, "us " meaning
the parliamentary precinct.
Mr. Lakroni: I would like to add that, given that this project is
project based — and Mr. Mongeau can talk to the savings — savings that occur
in a given project are used within the program. Basically the savings are
recycled within the program, as opposed to returned to the fisc and taken
back from the fisc. They stay within the program on a multiyear basis.
Mr. Mongeau: I would like to give an example.
For example, completing 1 Wellington Street, where there are four
committee rooms, allowed us to empty the West Block all at once rather than
in two stages, as was initially planned. Vacating the West Block all at once
and sending it to Sparks Street allowed us to start work earlier, and we
saved three years of contracts. If you calculate the costs, those three
years represent a savings of about $83 million. But we are not reinvesting
the saving somewhere else. They are long-term savings for our program.
So our role is to achieve greater savings and find effective solutions,
but we are not facing the same reductions that are occurring in other
branches of Public Works.
Senator Buth: I am a relatively new senator. I have gone through
the Main Estimates and have asked some questions. I want to come back to
what we have been talking about.
I am from the West and I do not think a lot of westerners get the
opportunity to come to Ottawa. Frankly, every time I walk out of Centre
Block and see the Peace Tower and watch everything being done in terms of
the West Block, I think this is extremely important. This is a jewel for
Canada. It is very important for tourism and I am really happy that it is
happening, as a Canadian.
Under Main Estimates, I ask if this project is on time and on budget.
Mr. Mongeau: All of our current projects — and I will look into
the sidewalk project tomorrow morning when I get to work — that have been
approved by Treasury Board, namely 180 Wellington, once again, the West
Block, the Sir John A. Macdonald building and the other buildings I referred
to earlier, are on time and on budget or under budget.
This exercise is done internally, we have experts that audit the costs.
We also have private architects who look after the design, international
Canadian companies who do the cash accounting as well. And we hire what we
call an "outside third party " to examine construction costs when we
prepare our plans and specifications.
So we have a triangle of three separate areas of expertise, who review
our costs before we begin the tender process, in order to ensure that we
have the best costs and the best designs.
Our role is to ensure that we have the best costs on a daily basis. We
have good engineers and good architects monitoring the project. We obtain
expertise from the private sector to assist us. And I can confirm to you
that all of the long-term vision projects are on time and on budget.
Senator Buth: I am not too concerned about the sidewalk.
Mr. Mongeau: I am now.
Senator Buth: Maybe you should not be too concerned about the
If someone from Manitoba asked me how much it is costing to renew Centre
Block, East Block and West Block, where would we find that information? What
is the scope of the planning process? Main Estimates, Supplementary
Estimates (A), (B) and (C) are not easy to understand. Where do we find that
information about what Canada expects in terms of renewal of the
Mr. Mongeau: There was an article in this week's Hill Times
and we provided the reporter with all of our costs and timelines. Since it
is difficult for us to announce good news, we are always very pleased to be
able to provide all of this information when reporters ask us for it.
We do not really have a website indicating costs incurred to date. The
information is available internally because we are the ones monitoring the
costs. I cannot give you an address where you will be able to find all of
the costs, but I could refer you to the article in the Hill Times,
which is very good.
All of the budgets, however, are in the public domain. For example, if
you look at the West Block, we know that, according to our cost estimate, as
presented to the Treasury Board, the work will cost approximately $863
million. This amount includes consultant fees, Public Works salaries,
contingency funds — we have set aside money for a contingency fund because
we are dealing with old buildings — and the cost of construction, the
amounts that will be paid to the contractor.
This could give you the impression that this is an extremely expensive
project and, indeed it is. But these are projects that will move slowly.
Each rock and stone removed by the masons must be cleaned and replaced. If
the stone has rotted, a similar one has to be made to replace it. This takes
an extremely long time.
The overall budget for the Sir John A. Macdonald Building is $99 million;
again, that includes all of the costs.
The budget for 180 Wellington is $425 million. All of these figures are
available publicly. We are prepared to provide the figures and that is what
we do with the reporters.
Unfortunately, I do not have a website that shows how costs have evolved.
I apologize for that; it is something we might eventually do.
Senator Buth: Could you provide a two- to four-page briefing note
in terms of the entire scope of the project? You just finished doing an
interview for The Hill Times.
Mr. Mongeau: If you wish. A two-pager explaining where we are?
Senator Buth: With the parliamentary precinct renewal.
Mr. Mongeau: It could be a four-pager.
Senator Buth: You could do six.
The Chair: The overall plan and where you are within the plan.
Senator Buth: Just the highlights.
Mr. Mongeau: Maybe I am taking too much time, but we are working
on five-year plans. I cannot tell you everything that will be done over the
next 20 years because we are getting the approval on the basis of five
Senator Buth: The next five years would be great.
Mr. Mongeau: I could give you what we are doing right now, which
would be good.
Senator Buth: Thank you.
Senator Hervieux-Payette: This would not be a good meeting if I
did not talk about the Jacques Cartier and Champlain bridges, do you not
think? When you look at the cumulative amount at the end, and when you look
at it at the start, it is still $7,905,000.
I know how big both bridges are; one of them — actually, both of them — I
can see from my window, and I believe this is a very modest budget.
In terms of the critical path for building the Champlain Bridge — because
I think we will either build a bridge or a tunnel, regardless — how far
along are we in the process of finding a solution? Are we really talking
about building a new bridge? This says that we need to start planning for a
new bridge, even while the renovation of the current bridge is still going
Mr. Morency: The money was requested from the Jacques Cartier
Bridge Incorporated because the department was asked to plan for the
construction of a new bridge. At the beginning, the money had been given to
the Jacques Cartier and Champlain Bridges Incorporated, but the government
then decided that it wanted the Department of Transportation to take over
and look after the planning process. So this money was part of the amount
given to the incorporated entity, and it will now be transferred to
expenditures under the supplementary estimates to help with the planning for
Senator Hervieux-Payette: How are we doing in terms of planning,
specifications, the preliminary study and all of the other phases? I used to
be with SNC, so I know a little about how this works, and I would like to
know where things are standing. Are we still in the initial phase? Have we
defined anything? Because as it now stands, we are talking about $7.9
million. Will it be handled internally or by outside consultants?
Mr. Morency: We have put together a project team. We are paying
the department's expenses to start the preliminary work until authorization
is given to transfer that amount back to us, or until we are reimbursed. The
team will be made up of a combination of employees from Transport Canada and
consultants and experts, who will help us with the planning. We have not
built a bridge in many years, and this approach will enable us to count on
the right experts.
Senator Hervieux-Payette: Will it take you 10 years to think about
how to deal with the bridge, or is there a timeline for finishing the
specifications and proceeding to tender?
What are the phases of this project? I would like to know where we are
starting from and how we will proceed in the coming years to see this
project through to the end.
Mr. Morency: I believe that the department announced that the
intention was to have a new bridge built within 10 years. Of course, the
preliminary work will be very important, but we got onto it right away. A
project is already under way, and we need this money to keep our work going
Senator Hervieux-Payette: On another subject, you mentioned 1,819
buildings. I would like to know how many buildings we own and how many we
are leasing. What is the breakdown?
Then, when you refer to the $497 million for capital expenditures,
buildings and infrastructure, does that include construction or maintenance,
As well, 19,000 federal public servants are being laid off. That
represents 8 per cent of all employees. Will that result in vacant space
everywhere, or will new arrangements be made at that time? When you lay off
50 people, it seems to me that it has to make a difference somewhere. Will
we be stuck paying rent for years to come? How are you going to reorganize
leases and office space? Since there will be 19,000 fewer employees, surely
it will have to affect the use of space?
Mr. Lakroni: PWGSC's contribution to the government's deficit
reduction plan is about $177 million; 70 per cent of that amount, about $127
million, involves real estate, as laid out in the federal budget. For the
most part, we are undertaking two activities. First, over seven years, we
will consolidate the space made vacant because of employee cutbacks in the
federal government. We have communicated with departments and worked with
the Treasury Board Secretariat to estimate how much space we will be able to
Second, we will reduce the physical space per employee to match industry
standards. The reduction will be about 10 per cent; this will generate
ongoing savings of about $127 million to $130 million over seven years.
Senator Hervieux-Payette: What about ownership versus leasing?
When you are an owner, you have to do the maintenance; but when you lease,
you normally pay rent over a given term. When you are an owner, there is no
Mr. Lakroni: Our real estate strategy is about 50 per cent leasing
and 50 per cent ownership, depending on the region.
Generally speaking, when we need to find space for public servants, and
if it is for the short term, we prefer to lease. For long-term needs, we
either lease to own or build. Leases are taken into account in our
calculations. We will not renew leases as they expire, and we will do things
on a smaller scale. We have a plan to achieve the forecasted savings.
Senator Eaton: I have questions about the Port of Churchill. This
money has come into being since the legislation was passed to make the Wheat
Board no longer compulsory. Are steps being taken to help the Port of
Churchill be sustainable? Granted, there will be a continuance of shipping
of wheat, but are there other projects in mind that you know of to help the
Mr. Morency: In these supplementary estimates, we are asking for
$1 million this year to contribute to the Port of Churchill for the
undertaking of various repairs and maintenance at the port to ensure its
continued viability, given the fact of the decision with respect to the
Wheat Board. It is a program that we are only seeking $1 million for this
year, but it is a three-year, $4.1 million contribution program. We are
seeing what we can do in that regard.
Senator Eaton: Is that Transport's contribution?
Mr. Morency: Yes. There could be others that may have some
interest but ours are primarily around the port infrastructure.
Senator Eaton: What about the railway leading to the Port of
Mr. Morency: I would not be in a position to comment on that.
Senator Eaton: There is no money to increase, subtract or do
anything for tourism or shipping to the Arctic or anything of that kind.
Mr. Morency: No.
The Chair: Do we know who owns that?
Senator Eaton: It is private, but at the time of the Wheat Board
legislation, Mr. Chair, there was talk about making it a major port to ship
to the Arctic.
The Chair: I recall that.
Senator Eaton: There is nothing.
Mr. Morency: Not in our specific budgets.
I am informed by a colleague that there is a project with respect to rail
currently underway where Transport Canada is contributing $20 million
towards looking at the rail line into the Port of Churchill.
Senator Eaton: To make it more efficient.
Mr. Morency: Yes. We are working with the province in that regard.
The Chair: Are we likely to see that in another supplementary
Mr. Morency: If we say we already have a contribution agreement,
then it is in our Main Estimates already.
The Chair: It is hidden away. From our point of view, we would not
have seen it as a separate number but we will look for it, but it might be
Mr. Morency: Otherwise, I will provide the committee with the
specifics around that.
The Chair: That is the end of round one. We are now into short
Senator Ringuette: VIA Rail, $21.5 million for capital funding.
What was it in the past years? Was it approximately the same amount?
Mr. Morency: No, this is part of a larger amount of money that was
given to VIA Rail for major projects. Back in Budgets 2007-09, VIA Rail
Canada was provided with $903 million for capital funding. VIA Rail has been
spending up to now about $690 million but they had some projects last year
that were subject to delays. These supplementary estimates are taking 21.5
of that allocation into this year to complete those projects they were
Senator Ringuette: That is the capital but the operating funds
that you usually grant to VIA Rail, how much has it been cut? Now they are
threatening to cut services to Atlantic Canada and eastern Quebec.
Mr. Morency: They get on average about $166 million a year for
operations and they have not been cut to date on that. That was in their
appropriations at the start of year.
Senator Ringuette: Are you saying that VIA Rail has not been cut
in their appropriation?
Mr. Morency: VIA Rail, I could mention, was part of the portfolio
within Transport that was under the strategic and operating review exercise.
We had four Crown corporations and a department that were subject to that.
VIA Rail was asked to come up with efficiencies in terms of its operations,
and it is currently in the process of working out the details in the context
of how it will be able to meet its commitments that were announced in the
budget with respect to the efficiency cuts.
Senator Ringuette: You are saying that the cuts that VIA Rail are
saying publicly that they are looking into are cuts that have not yet been
announced in their operation funds from Transport Canada.
Mr. Morency: Yes.
Senator Runciman: The pension shortfall is $150 million, and the
government, through these estimates, is contributing $68 million to
partially address that situation. Based on a press clipping, there is one
pensioner for every one worker. That seems to be an unsustainable situation.
I was reading this as well. It says that the fund was in surplus before
2008, but existing regulations prohibited contributions, so I am assuming if
the fund is in surplus, no contributions are made to the fund.
What else is being done to get the pension plan back in balance other
than simply putting taxpayers' money into it? Are any changes being
Mr. Morency: VIA Rail itself has been undertaking work to reduce
its pension costs by $192 million over the last five year by looking at
early retirement provisions and such things. You will know that pension
solvency is a big issue with respect to not only private corporations but to
Crown corporations as well. They had an obligation to infuse $68 million
into their pension plan this year to make sure they were meeting their
solvency payments. Normally they would fund that from operations. Because
VIA is challenged in terms of the cost of operations, the government has
decided to help them with respect to the pension fund.
Senator Runciman: Nothing is being done with respect to the
regulations. I can see a cap with respect to surplus and at that point
contributions could be frozen for a period of time. Once you are in surplus,
is that how the regulations are worded? You are simply in surplus, no
Mr. Morency: I am not an expert in terms of the regulations per
se, but I know that in prior years when interest rates were very high,
companies were able to take what they called pension holidays in terms of
premium, which has not been the case over the last several year due to the
recession and the fact interest rates are so low. In fact, many both private
and public corporations are finding themselves now in situations where under
a solvency situation they have to amplify their payments. They usual take
those out of operations, which is a considerable cost to operations.
Senator Callbeck: Page 94 of Supplementary Estimates (A), the
second item down, capital expenditures including contributions to provinces
or municipalities, states that over $6 million is being transferred. What is
being cut? What is Transport cutting that they can transfer $6 million?
Mr. Morency: This is a capital component associated with our
transfer of money to Shared Services Canada, which was the new department
created. In our supplementary estimates you will see $12.1 million and that
we are completing our contribution to them. We had a $28 million levy, as
you can see, along with 42 other departments, to create this new
organization. Part of what we are transferring to them is capital funds and
operating funds. The $6.2 million represents capital funds, which is money
the department would have spent on an annual basis to do what Shared
Services Canada is now doing on our behalf.
Senator Callbeck: In other words, it is not cutting out money that
would be going to the provinces or municipalities.
Mr. Morency: No. This is more to internal government and the
provisioning of email, data centres and other likes that are being now
offered through one organization in government.
Senator Callbeck: I have one question with respect to Public
Works. In the budget there is a provision to repeal the Fair Wages and Hours
of Labour Act. I was told that that piece of legislation also sets a minimum
standard for work performed on federal sites. Is that right?
Mr. Lakroni: I am not aware of such provision so I cannot confirm.
It is something I could check and follow up on.
The Chair: Could you let us know as soon as you can?
Mr. Lakroni: Absolutely.
Senator Hervieux-Payette: As for the capital expenditures, I was
wondering how many projects they include. For every project, you only become
involved in planning and the relationship with outside contractors. Do we
not have any employees who do construction?
Mr. Mongeau: In fact, we do not have anything to do with
construction. We use general contractors or construction managers. For
example, when a project is being developed, we hire architects and work with
them to make sure that the work is being done well. We then put out a call
for submissions and a general contractor does the work. We have quality
control experts, but we are not in the construction business.
The only caveat to that is that we have small workshops in Ottawa, with
people who help us on Parliament Hill. They do small jobs, mostly within the
National Capital Region. Generally speaking, our role is not to do the
building ourselves, but to make sure that any construction is done well.
Senator Hervieux-Payette: Is Public Works responsible for
construction work involving National Defence?
Mr. Mongeau: For National Defence, actually, Defence Construction
Canada does the work. Defence Construction Canada reports to our minister, I
believe, but it is arm's-length, as they say, so it is independent. We do
not do construction work for National Defence.
The Chair: On behalf of the Standing Senate Committee on National
Finance, I would like to thank you very much for being here. You have helped
us with Supplementary Estimates (A) and we only kept you five minutes over
your time. We appreciate your help.
The next panel consists of witnesses from Natural Resources Canada and
Aboriginal Affairs and Northern Development Canada.
We are continuing our study of Supplementary Estimates (A) for the fiscal
year ending March 31, 2013. Our committee began consideration of the Main
Estimates 2012-13 in early March. The consideration is ongoing and will
continue throughout the year. However, this constitutes our second meeting
on Supplementary Estimates (A), which supplement the Main Estimates.
In our second session this evening, we are pleased to welcome from
Natural Resources Canada Mr. Serge Dupont, Deputy Minister; and Thérèse Roy,
Acting Chief Financial Officer. We are also pleased to welcome officials
from Aboriginal Affairs and Northern Development Canada: Michael Wernick,
Deputy Minister; and Susan MacGowan, Chief Financial Officer.
I understand each department will have a few introductory remarks. Then
we will go into a question and answer session, and I expect each senator
will have approximately six minutes for questions and answers.
Michael Wernick, Deputy Minister, Aboriginal Affairs and Northern
Development Canada: Thank you, Mr. Chair. It is a pleasure to be here. I
was with the committee not long ago, going through the Main Estimates, so
the opportunity to talk to you about Supplementary Estimates (A) is a
This is $159 million in investments. It comes on top of $7.8 billion
approved in the Main Estimates, bringing the total funding to the department
to approximately $8 billion so far, and we do anticipate there will be
further supplementary estimates in the fall because of the budget.
These estimates include some significant investments that will enable
progress towards an improved quality of life and economic prosperity for
Aboriginal peoples and northerners.
More than 90 per cent of the supplementary estimates, or $150 million,
will go to fund the settlement of specific claims. Negotiated settlements
resolve outstanding legal obligations of the Government of Canada and enable
First Nations to access the resources they need to realize their full
There are several other smaller items, as I am sure you have noticed.
Also included is $3.4 million, which supports the implementation of a number
of Yukon First Nation self-government agreements. The implementation of
these agreements will have a positive impact on the lives of these
communities and on all Yukon residents. Another $1.6 million is allocated
towards the implementation of the Sechelt Indian band self-government
agreement, which is a historic agreement concluded more than 25 years ago in
the Province of British Columbia. These supplementary estimates include $2.6
million for the First Nations and Inuit Youth Employment Strategy. This is a
program that helps provide work placement opportunities for youth living on
reserve, particularly focused on skills in the field of information and
There is a $2 million item that is for the design and build of a new
First Nations Child and Family Services information management system, which
is, as the title says, a system designed to track and manage very large
investments that are made in the funding of child and family services
The final amount I would draw your attention to, related to my
colleague's work, is the $1.4 million this department was allocated. It
supports our particular role in the review of large resource projects, part
of the larger frame of the Responsible Resource Development Initiative,
which was announced recently.
Those are the spending investments that are particularly indicated in
these supplementary estimates.
Briefly, I would like to touch on the important role that legislation has
also played, and I would want to note that much of this legislation was
initiated in the Senate of Canada. I will quickly cite Bill S-6 — which many
of you will be familiar with — on electoral reform. It is now awaiting
second reading in the House of Commons. Bill S-8 concerns drinking water
standards and Bill S-2 concerns matrimonial property. These and other
legislative initiatives are all part of a larger agenda aimed at removing
obstacles that prevent Aboriginal people from sharing equally in the
prosperity of our country.
I will stop there in the interests of time and to take as many questions
as possible on this or any matters that the committee has pertaining to
The Chair: Thank you. I will now go to Deputy Minister Dupont.
Serge Dupont, Deputy Minister, Natural Resources Canada:
Honourable senators, I had had the opportunity of appearing before you in
March on Natural Resources Canada's main estimates. I therefore welcome your
invitation to present Supplementary Estimates (A).
Let me take a moment to briefly describe the proposed supplementary
estimates for the Natural Resources Canada portfolio. Then I would be
pleased to take your questions.
Under its supplementary estimates for 2012-2013, it is proposed that
Natural Resources Canada increase its spending authorities by a net amount
of $8.7 million for this fiscal year. There are also a number of transfers
proposed under these estimates.
The estimates include $73.2 million for ongoing implementation of the
Port Hope Area Initiative to clean up historic low-level radioactive waste
sites in the municipalities of Port Hope and Clarington; $5 million for a
Government of Canada advertising campaign relating to the importance of
Canada's natural resource industries; $3.4 million to support and modernize
the regulatory system for major resource projects, essentially our renewed
funding for the Major Projects Management Office.
Turning to the transfers, the proposed adjustments include $9.8 million
from National Defence for the Canadian Forces Arctic Training Centre in
Resolute Bay to enhance efforts to make efficient use of infrastructure that
we share in Resolute in Canada's high Arctic; $30,000 to Industry Canada for
an initiative called Global Navigation Satellite System Coordination Office;
and $1 million to Public Works and Government Services Canada to support the
consolidation of pay administration services in Miramichi.
These amounts are largely offset by the re-profiling of $81.7 million of
previously authorized monies under the Clean Energy Fund. The net increase
in spending authority is therefore $8.7 million.
I should also touch briefly on the proposed estimates for Atomic Energy
of Canada, Ltd. as part of the Natural Resources portfolio. The estimates
show funding of $166.2 million, which is largely for the nuclear
laboratories division, to ensure continued supply of medical isotopes and to
meet regulatory requirements for health, safety and the environment.
Honourable senators, I can assure you that Natural Resources Canada
manages its financial responsibilities with a keen sense of discipline and
with the knowledge that our work contributes to Canada's economic growth and
prosperity. We will continue to support the government's key priorities
through our commitment and vying to improve the quality of life for
Canadians by creating a sustainable resource advantage for Canada.
The Chair: The voted appropriation of $160 million for Atomic
Energy of Canada is the Chalk River and isotopes? It has nothing to do with
the renewable projects?
Mr. Dupont: It is all to Chalk River and to the nuclear
laboratories division, except for $6 million, which were workforce
adjustment costs related to the divestiture of the reactor division to
The Chair: Nothing here with respect to outstanding liabilities
for repair jobs being done prior to the sale?
Mr. Dupont: No.
Senator Eaton: Mr. Wernick, can you tell me about the monies that
go out of your ministry? We have heard a lot of complaints about education
in Aboriginal communities, how we are not spending the same amount of money
per child as we are in the rest of Canada.
Do you direct that specifically to education? Is there a fund within the
monies you transfer that is specifically geared to education, or does that
largely depend on how each Aboriginal community chooses to spend the money?
Mr. Wernick: Briefly, there is a stream of money that flows to
First Nations for K to 12 education. It is about $1.4 billion. This is set
out in the Main Estimates in the report on plans and priorities. There is an
additional approximately $300 million that goes to fund post-secondary
Senator Eaton: It is focused, streamlined and directed towards
Mr. Wernick: Yes. In fact, there is additional money that goes to
the building of schools and physical infrastructure as well.
Senator Eaton: How far behind is an Aboriginal child compared to a
non-Aboriginal child now?
Mr. Wernick: In what respect?
Senator Eaton: We are told that we do not spend the same amount of
money per child.
Mr. Wernick: I am not sure that is accurate. There are lots of
ways to slice and dice the money. If you took the raw numbers and divided it
by the number of children enrolled in school, the numbers are extremely
The problem in First Nations education is not the lack of money; it is
the lack of structure, like school boards, and the lack of legislation.
Senator Eaton: It is governance?
Mr. Wernick: It is the structures around the education system that
would support the classroom teacher, which is why the government made the
commitment to pursue putting First Nations education on a firm legislative
base during this Parliament.
Senator Eaton: Thank you very much.
Senator Eaton: Mr. Dupont, can you tell me a little bit about the
$9.8 million that you are spending in the Far North?
Is it meant to enhance efforts to make efficient use of infrastructure?
Mr. Dupont: Essentially these are expenses for the construction of
a larger platform at Natural Resources Canada Resolute Bay. The Department
of National Defence is involved for two years essentially building a new
wing on the building and a new storage wing. It is an arrangement between
the two departments that is extremely successful because researchers are
mostly there in the summer.
DND wants to do its exercises in the winter. We share infrastructure and
that means better performance for this world-class facility in Resolute,
ensuring good logistics for all Government of Canada activities,
specifically science- based activities in the North.
Senator Eaton: How much more expensive is it to build in the
Arctic than it is here? Is it 10 per cent or 20 per cent?
Mr. Dupont: Public Works and Government Services Canada is
basically the authority that manages the project from that perspective.
Senator Eaton: I should have asked the last panel.
Mr. Dupont: I would be happy to get the answer for you. They would
be the knowledgeable parties.
Senator Eaton: Thank you very much.
The Chair: I wonder if you can help me. I am reading at page 81 of
the Department of Natural Resources Canada. It is the funds available under
the Clean Energy Fund. If you could explain that, it looks like you have
moved over $80 million from vote 10 to vote 1, about halfway down the page,
"Internal reallocation of resources . . . — To reduce the amount of new
appropriations required. " You are putting into operations $80 million that
was previously in vote 10. Is that correct?
Mr. Dupont: Correct. In a way, this is how the system works with
the Treasury Board. We have those monies earmarked for the Clean Energy
Fund. We have asked that these monies be re-profiled to future years because
they are monies that will be engaged in partnership with the private sector
on certain clean energy projects, including carbon capture and
It turns out we do not need the money this year. Rather than authorizing
us new gross amounts of money, they are indicating where it is we have new
authorities, and they are drawing from that amount that we do not need this
year to reduce the net new authorities, if you wish, to the $8.7 million
that I mentioned earlier.
The Chair: Then $80 million is moved over, correct?
Mr. Dupont: Correct. That is right.
The Chair: Then if you go down to the heading "Explanation of
Funds Available (dollars), " it looks like vote 10 still has $1.3 million
Mr. Dupont: The $1.3 million is necessary. That is related to the
Port Hope initiative. There is another piece that goes to that. That is
essentially a transfer program to households or to communities in Port Hope
related to the project.
The Chair: That was also under the Clean Energy Fund?
Mr. Dupont: No, it was not. It is the same mechanism whereby it is
a separate kind of authority for which we require funding. Rather than
giving us new funds, they are drawing from funds that were previously
authorized that are actually re-profiled now.
The Chair: You are taking both of those out of the Clean Energy
Fund that had been allocated, and now you are moving them into other —
Mr. Dupont: That is correct for this year technically, but the $80
million that is actually for the Clean Energy Fund is pushed out to future
The Chair: I think I understand that a bit more now. I appreciate
Senator Buth: I want to go back to the ecoENERGY fund, which I
asked questions about in the Main Estimates. I asked whether the $500
million that has been allocated for biodiesel was actually going to be
expended and whether or not there was a review of those projects.
I am continuing to hear from constituents that there are projects that
will not go ahead under those funds, and they are waiting for the
reallocation of those funds from projects that will not go ahead to projects
that are sitting in the queue. There is a lot of frustration within the
biodiesel industry in terms of ensuring they get the allocation that was set
when this project was essentially announced in the program.
Where is the review of projects at? Part of this port is for the
biodiesel industry in order to meet the 2 per cent renewable fuels
objective. Will we meet that? Where is the funding at?
Mr. Dupont: The 2 per cent, in terms of meeting the target, is
challenged at this time because of some economic conditions related to this
industry. There are a number of projects that we hope will still come to
fruition. They have until September 2012 to build.
We are not taking new applications to the program. The application
deadline was March 31, 2010. We will have to ascertain by September 2012
where we are vis-à-vis the program and how much of the target in terms of
capacity the program will have facilitated. We had contractual commitments
to bring into production capacity equivalent to 500 million litres of diesel
per year. That was the target. The question now is whether this production
will actually come on stream. Will the capacity actually be built by
September 2012 so that it is coming soon, and, where the capacity is built,
will production be closer to capacity?
I think there will be a gap, senator, and I guess the government will
have to reflect on the way forward and whether other kinds of measures are
required in order to get closer to the target. I do not have the definitive
numbers at this time.
Senator Buth: If a plant is not under construction now, it will
not be producing in September.
Mr. Dupont: That would be correct, yes.
Senator Buth: Are there projects like that right now?
Mr. Dupont: There are projects that, right now, we do not expect
will be built by September 2012. I do not have those definitive numbers with
Senator Buth: Is there a reason, then, why those funds cannot be
reallocated to projects that are ready to go?
Mr. Dupont: We are operating under the parameters and rules of the
program as set out by Treasury Board. In early fall of 2012, we will
basically have to take stock of where we are and then determine the way
Senator Buth: What happens to the dollars that are left over in
September of this year because there has been no build?
Mr. Dupont: Depending on the government's decision, the money
could be re-profiled to future years. If there is an allowance for
additional contracts to be signed, that may require policy and funding
decisions. Absent that, the monies simply lapse. They are not then allocated
to those endeavours. I guess what I am saying is that there are still
decisions, going forward, with regard to the utilization of monies that will
not go to the projects that were initially contracted and that were in line
with the target. We had provided a response to the committee further to my
appearance that shows that we have funded for capacity of 504 million litres
per year of biodiesel. Again, we will need to ascertain where we are within
a span of a few months.
As I said, even where we have capacity, a number of producers are not
producing to capacity. Therefore, there is under spending in the program.
Senator Buth: Are you supportive of re-profiling those dollars in
terms of new projects going forward?
Mr. Dupont: Those are decisions that the government has to make,
senator, and not so much a matter of my opinion.
Senator Buth: Thank you very much, Mr. Dupont.
Senator L. Smith: Mr. Wernick, I have a done a little reading —
and that is probably dangerous for me to do — on the Department of
Aboriginal Affairs. Can you give us a high-end summary of your department?
You have a powerful and important role as a deputy minister, but, concerning
the $8 billion, where does all the money go? Where are the major items?
Where are we with this particular animal because it is very important to our
country? Obviously, the role that you play and the powers that you have as a
deputy minister are fairly important.
Could you give us a rough overview of that $8 billion and your plan and
Mr. Wernick: I will throw myself on the mercy of the chair because
this is off the topic of the supplementary estimates, but I am willing to
take the question.
The Chair: If you can.
Mr. Wernick: It is a big topic and I appreciate the interest.
If you thought of our department as delivering the services that the
provinces deliver plus those that the municipalities deliver, except that we
do not really have any of the legislative underpinnings and governance, you
get an idea of what we are involved in. Most of the actual services to about
600 reserve communities are delivered by band governments. They run the
schools, the water plants and that sort of thing. Our principle role is a
funding one. The money flows from Parliament through us to recipients, and
we try to get some results out of that. It is a lot of contribution programs
and contribution funding.
The other large role that we have on the Aboriginal side of the
department is in negotiation and implementation of treaties and land claims
agreements. We have agreements that we have settled, and we have
implementation obligations. We have places where treaties have not been
reached, and we are trying to negotiate them. In many places, people are
trying to upgrade from basic land claims to self-government agreements. That
is a big part of it.
We have a third set of activities, the vestiges of the Indian Act, which
we are stuck with. We have to register people as Indians as they are born,
adopted, married and so on. We keep the legal underpinnings of the reserve
land system, land registries and lots and lots of land transactions require
the minister's approval. It is an archaic world, and we are trying to find
our way through into more modern structures there.
I think those are sort of some of the highlights. We have, temporarily,
quite a number of people working on the Indian residential schools
agreement, which the government reached in 2007. We are processing and
adjudicating individual claims under the settlement agreement, and we are a
little more than halfway through the implementation of that.
The northern part is quite important. A lot of the overall orchestra
leading of the government's relationships in the North are done by my
minister. Other departments have northern activities, but sort of the
backbone of the government's relationship with the three Northern
Territories flows through our department as well.
There is, on our website, a PowerPoint breakdown of where the $8 billion
goes, which we hope is a little clearer than the way some parliamentary
documents are drafted. We would certainly be happy to take any policy or
program questions that flow from that. The bulk of it is for province-like
Senator L. Smith: What is the most important priority that you
have in dealing with your department?
Mr. Wernick: I think that the theme that the government has
struck, which I am personally very supportive of, is to see what we can do
to get Aboriginal people, on or off-reserve, into the labour force and into
the economy to create real economic activity in or near their communities,
to get people into jobs to give them the revenues that come from earned
income, to create revenues for communities and so on. The biggest problem is
a dependence on transfer payments from other governments and a dependence on
income programs for individuals. We do our best with that sort of the thing,
as do other departments, but there is a massive opportunity because of the
growth of the resource sector and the fact that jobs will be all over the
country, from coast to coast to coast. This is the best opportunity we will
have ever, arguably, to get Aboriginal people into the labour force and into
the economy. That is kind of a hat for most of what we are doing. I could go
on at some length, but I will not.
Senator L. Smith: Senator Eaton asked about education and the
statistics, with the graduation rate around 57 per cent. I think these are
kids who, by the time they have turned 20, have graduated from high school.
This obviously has to improve. There have been complaints that there is not
enough money being invested in education. You mentioned earlier that there
is an issue of the system itself, the teachers and getting the equipment.
You have seen this for some time. What needs to be done to improve that
situation so that we can get these people into the workforce and so that
they can be major contributors to the development of the North and of
Mr. Wernick: It is another very big topic. K to 12 education and
getting people through high school would probably be the most important
thing we could do because, if people have high school diplomas, a lot of
doors open up. If they do not, a lot of doors close.
There is a pretty strong consensus on what needs to be done. I would draw
your attention to a report from the Standing Senate Committee on Aboriginal
Peoples, which has a fairly clear four pillar recipe or prescription. It is
very similar to the findings and recommendations of the National Panel on
Education that the government struck with the Assembly of First Nations.
They have landed on certain things. It will come down to teachers in front
of a group of kids and giving them all the support to be effective teachers.
That includes safe, clean schools and access to the Internet, teaching aids
and curriculum and all that sort of thing.
Funding is part of the answer, but funding without all of those other
pieces would not change the results very much.
Senator L. Smith: I know this probably involves a huge answer, but
where are we are our land claims? If we went from zero to 100 per cent of
where we have to go, where are we and how far do we have to go to complete
claims? There are claims that date back to 1740 in Montreal and Kahnawake.
The chief says that they have been here for 300 years waiting and they can
wait for another period of time. What is your sense of urgency and how will
Mr. Wernick: That is another big topic you have chosen. There are
two kinds of claims, one of which results from never having had a treaty.
Europeans arrived; indigenous people lived there; and the issue of lands and
resources and other things was never settled. Most of British Columbia is
unresolved and good chunks of Quebec are still unresolved, as you know.
Parts of Labrador are unresolved, as well as parts of the Northwest
Territories are unresolved. We are trying to get a land claims settlement,
that defines land and resources issues in particular.
There were treaties all across the Prairies from the Ontario border to
the Rocky Mountains. They are treaties 1 to 11. The issues that arise there
are: Were the treaty obligations honoured? Do we still have obligations to
meet? Those can be land entitlements, services and all kinds of things.
Specific claims, which I can link to the supplementary estimates, are
essentially assertions or allegations that the government broke one of its
legal obligations in the past, such as a band was coerced out of land or
cheated out of its monies. There was a breach of the lawful obligation.
There are about 800 of those in the system now that we are aware of. We are
chunking our way through those.
Senator L. Smith: The $150 million will cover approximately how
many of them?
Mr. Wernick: They can range from $100,000 per settlement on a
small issue to $350 million per settlement, which is one that we reached
last year. It is not a simple kind of math. We hope that in the coming
fiscal year, which is the one we are here to talk about, we could reach
between 60 and 80 settlements of various sizes.
Senator Callbeck: Thank you for coming here. I have a question
regarding Aboriginal Affairs and Northern Development Canada on the youth
initiative that you spoke about. Does that replace another program or is it
Mr. Wernick: It is a top-up. Youth employment funding was
allocated through various initiatives. We got a slice of it to use in the
North with indigenous communities. It is being used with northern partners
largely around internships and training opportunities around the use of the
Senator Callbeck: It is a top-up to the amount in the budget.
Mr. Wernick: Yes. It is an additional $2.6 million, senator. It is
roughly $100,000 in the Atlantic; about $300,000 in Quebec, and so on. A
piece of it is up north as well.
Senator Callbeck: The program exists and this is extra money.
Mr. Wernick: Yes. That is it my understanding.
Senator Callbeck: I notice on vote 10 money is changing from
contribution to grant. Why is that?
Mr. Wernick: Much of the funding that flows through
self-government agreements is in the form of a grant. It is a
straightforward grant for a specific purpose — most of the funding that goes
into our province, like programs or contributions. It is just the way it is
These are specific cases of communities that, if you would, graduated
from our regular programming to self- government funding. The funding that
used to take the form of a contribution is now in the form of a grant.
Senator Ringuette: My first question is to Mr. Dupont on the Port
Hope cleanup. Could you give us some detail about what is being cleaned up?
Mr. Dupont: This waste has accumulated in communities in Port
Hope. It goes back basically to the immediate post- war period and has
accumulated over a number of years. It is a 10-year cleanup program that
will cost $1.3 billion over this period. It is a massive cleanup of major
contamination. Now, it is low-level radioactive waste.
Senator Ringuette: What caused it?
Mr. Dupont: It was caused by the operations of the former Eldorado
Nuclear Limited in the treatment of uranium at the time.
Senator Ringuette: That waste was created by a Crown corporation.
Mr. Dupont: Yes. It is now Cameco. Those wastes accumulated, and
at the time they were essentially treated in a primitive manner and placed
into different kinds of waste sites that eroded over time. There were also
some traces of radioactivity in other parts of the community and in people's
backyards, ultimately. Studies have demonstrated that this is not a direct,
immediate kind of impact on the health of the people of Port Hope and Port
Granby. Nonetheless, it is a legacy liability that must be cleaned up. The
tonnes and tonnes of waste must be picked up in trucks and placed into
modern facilities. We have gone through environmental assessments for two
facilities. We are going through detailed design and actually building the
two facilities to modern standards to contain that waste. That will include
digging up a lot of soil and waste that had accumulated over decades.
Senator Ringuette: I understand that you are getting this year's
funding to do part of the necessary cleanup. What company is doing the
Mr. Dupont: The governance is assured essentially by a committee
that includes people from Natural Resources Canada, and we fund the effort.
Public Works and Government Services Canada is associated with this and
Atomic Energy of Canada's Low Level Radioactive Waste Management Office is
also working in the overall coordination of the effort. Much of the work
will be tendered to contracts on a competitive basis.
Senator Ringuette: Wait a minute. Have we not sold Atomic Energy
Canada to SNC-Lavalin?
Mr. Dupont: The reactor division was sold but there are still
3,300 people with Atomic Energy of Canada Ltd., the majority of whom are in
Chalk River, Ontario. They continue to serve as the foremost source of
knowledge on nuclear matters in Canada regarding things like waste
management and impacts of radioactivity.
Senator Ringuette: They are the management group.
Mr. Dupont: Exactly. They are in the management group to help us
to coordinate and ensure that this is done with proper technical standards.
Of course, it is all overseen as well by the Canadian Nuclear Safety
Commission and must meet provincial standards in terms of the actual
Senator Ringuette: This is a 10-year effort; and this is year one.
Mr. Dupont: This is year one, when we are really starting
construction. There has been a long preparatory phase in terms of going
through the environmental assessments and the planning and so forth. We are
starting to put the shovels in the ground and do some work. There are some
monies in the Main Estimates as well in the amount of $57 million.
Senator Ringuette: You are doing a proper tender process.
Mr. Dupont: There is a proper tender process through PWGSC. I
would add that they are working collaboratively with the municipalities, who
obviously have a huge interest in the matter.
Senator Ringuette: Absolutely. Thank you.
Mr. Wernick, at our last meeting I indicated my concerns to you with
regard to funding for post-secondary education. Have there been any
additional funds for our Aboriginal groups that want to pursue
Mr. Wernick: No.
Senator Ringuette: The people that were in the queue are still in
Mr. Wernick: If their First Nation puts them in a queue, yes.
To go back to the other question, these funds are managed by First
Senator Ringuette: I understand that, sir, but my question to you
at our earlier meeting was whether you were going to have additional funds.
Whether it is managed by the department or by the communities is not the
issue. The issue is that there are not enough funds in there to satisfy the
requests. If you are telling me that the unemployment rate in our native
communities is the lowest in Canada, then you might have an argument.
However, I do not think that we are in a position to say that the rate of
unemployment of Aboriginal people is the lowest in Canada.
Many of them are in a queue to get a post-secondary education in order to
get a decent job, so why are we not adding funds to that program?
Mr. Wernick: That is a policy matter for the government. I would
not advise them to add money to that program. It is extremely poorly
targeted and extremely poorly designed.
Senator Ringuette: Then design one and put some additional money
Mr. Wernick: We would not impose a program design on First
Nations. You would be the first to criticize us if we did that. There is no
consensus among First Nations on an alternative design for the program.
Senator Ringuette: I certainly remember that they have their own
university and funds were cut from it.
Mr. Wernick: If you mean First Nations University, we are
allocating them over $7 million this year.
Senator Ringuette: For how many people, sir? How many people are
in the queue?
Mr. Wernick: No one is in the queue at First Nations University.
That is funding that goes to the operation of an institution which is now
formally part of the University of Regina.
Senator Ringuette: Do you know what the unemployment rate is for
our native citizens?
Mr. Wernick: I do not know whether Statistics Canada counts that
Senator Ringuette: Do you also know that under Bill C-38 there
will be removal of employment equity, which includes employment
opportunities for our Aboriginal people with federal contracts, like the
contracts in Port Hope, for instance?
Mr. Wernick: I am not aware of that. I am not sure what this has
to do with the supplementary estimates.
Senator Ringuette: I understand the difficulty in the department.
The Chair: I thank Natural Resources Canada and Aboriginal Affairs
and Northern Development Canada.
Mr. Wernick, when will we be able to call it Aboriginal Affairs and
Mr. Wernick: It is certainly styled that way in all the signage.
It would require legislation to change the legal name, so you will see that
parliamentary documents, contracts and that sort of thing are still signed
by the Minister of Indian Affairs and Northern Development.
The Chair: And the estimates are still in the old name.
Mr. Wernick: For money organizations, their legal name and public
branding name would be different. We would hope to catch this up in a
miscellaneous cleanup bill one of these days.
The Chair: One of the budget implementation bills, no doubt.
Mr. Wernick: That is for the government to decide.
The Chair: We will look forward to that.
Thank you all for being here. We look forward to seeing you on
Supplementary Estimates (B)