THE STANDING SENATE COMMITTEE ON NATIONAL
OTTAWA, Tuesday, May 27, 2014
The Standing Senate Committee on National Finance met this day at
9:30 a.m. to study the Supplementary Estimates (A) for the fiscal year ending
March 31, 2015.
Senator Joseph A. Day (Chair) in the chair.
The Chair: Honourable senators, this morning we will begin
our study of supplementary estimates (A) for the fiscal year ending March 31,
2015, which were referred to our committee.
Our committee began consideration of the Main Estimates earlier
this year, which is ongoing and will continue throughout the year, but this
session today constitutes the beginning of our examination of the Supplementary
In our first panel this morning, we're pleased to welcome
officials from Natural Resources Canada and Atomic Energy of Canada Limited.
From Natural Resources Canada we welcome Jean-Frédéric Lafaille, Director
General, AECL Restructuring. There has been a lot of restructuring going on, so
it will keep you busy this morning. We also have Mr. David McCauley, Director,
Uranium and Radioactive Waste Division, Electricity Resources Branch, Energy
Sector. It must be a big business card that you have.
From Atomic Energy of Canada Limited, we welcome Robert Walker,
President and Chief Executive Officer; and Steve Halpenny, Vice President,
Finance and Chief Financial Officer.
We welcome all of you here this morning and look forward to your
We have set side one hour to deal with matters, colleagues, so we
will hear from our witnesses and engage in a question and answer period.
Jean-Frédéric Lafaille, Director General, AECL Restructuring,
Natural Resources Canada: Mr. Chair, honourable senators, thank you for the
opportunity to be here today to discuss appropriations to Atomic Energy Canada
Limited, or AECL, in supplementary estimates (A) and other funding provided to
AECL through Budget 2014.
I will begin by providing the committee with some background on
AECL is Canada's largest nuclear science technology and
radioactive waste management organization. AECL has unique nuclear expertise in
facilities under licence from the federal regulator, the Canadian Nuclear Safety
Commission, CNSC, and has applications in fields important to public policy and
the nuclear sector domestically and internationally.
Today, AECL consists of Nuclear Laboratories comprised primarily
of two main sites, the Chalk River Laboratories in Ontario and the Whiteshell
Laboratories in Manitoba currently undergoing decommissioning.
As announced by the Minister of Natural Resources in 2013, the
Nuclear Laboratories work in the areas of management of radioactive waste and
decommissioning obligations; nuclear science and technology programs to fulfill
public policy responsibilities; and scientific, technical and testing services
to support the nuclear industry's need. They also produce medical isotopes up to
With respect to the ongoing restructuring of AECL, the Minister
of Natural Resources announced in 2013 that the Government of Canada would
engage in a competitive procurement process with industry for the management and
operation of AECL's Nuclear Laboratories. The government is seeking to implement
a government-owned contractor-operated model as is done in other jurisdictions,
such as the United States and the United Kingdom.
The goal of the restructuring process is to put in place the
conditions for Canada's nuclear industry to succeed in the future while reducing
cost and risk exposure for Canadian taxpayers.
In March of this year, the government launched the qualification
and consultation phase of the procurement, known as the Request for Response
Evaluation. Interested suppliers will be assessed based on mandatory technical
and financial requirements, as well as national security considerations. Those
that have qualified will be invited to engage in detailed discussions on the
requirement of the procurement.
During the restructuring process, the government will take all
steps necessary to protect national security. The Canadian Nuclear Safety
Commission will also continue its role in maintaining safety, security and
environmental stewardship in all aspects of the nuclear industry, including the
Mr. Chair, it is in this context that the government is funding
the activities of AECL.
Since the 1990s, AECL has received base funding of
about $102 million annually to support basic laboratory operations. This funding
was provided in the 2014-15 Main Estimates.
As in past years, AECL's annual base funding level has been
recognized as insufficient to cover core costs at the Nuclear Laboratories. As
such, you will note that Budget 2014 announced supplemental funding for AECL in
the amount of $195 million on a cash basis. This funding is included in the
Supplementary Estimates (A). This funding will allow AECL to continue medical
isotope production, complete infrastructure and operational upgrades related to
health, safety, security and environmental priorities, meet regulatory
requirements, and prepare for the expected transition of the laboratories to a
government-owned contractor-operated model. I'm sure Dr. Walker and Steve
Halpenny can talk about specifics around the funding.
I will pass the floor to my colleague, David McCauley, who can
speak to the Nuclear Legacy Liabilities Program.
David McCauley, Director, Uranium and Radioactive Waste
Division, Electricity Resources Branch, Energy Sector, Natural Resources Canada:
Thank you, Mr. Lafaille. The Government of Canada is committed to the safe and
secure management of nuclear decommissioning and waste activities at Atomic
Energy of Canada Limited’s Nuclear Laboratories.
In 2006, the government established the Nuclear Legacy
Liabilities Program, NLLP for short, to decommission outdated and disused
research facilities and associated infrastructure, remediate lands affected by
past practices, and implement long-term solutions for managing the legacy waste
at AECL's sites.
The government provided an initial five-year funding commitment
in 2006 totalling $520 million and extended the program in 2011 with a further
$439 million in funding over three years, ending March 31, 2014.
Under the NLLP, over the past eight years the government has
reduced liabilities and risks through decommissioning and site remediation
projects, and has established new facilities to characterize, handle and store
In addition, pursuant to the Prime Minister's commitments at the
Nuclear Security Summits of 2010 and 2012, we are making good progress on the
repatriation of highly enriched uranium, currently stored in Canada, to the
United States as a safe, secure, timely and permanent solution for the long-term
management of these materials.
In the context of the restructuring of AECL, the decommissioning
and waste management work currently being carried out by AECL under the Nuclear
Legacy Liabilities Program will be fully integrated into the private sector
management of the contract and the program will formally cease once the contract
is in place.
In the meantime, the government is seeking $195 million in
additional funding to extend the program until March 31, 2015, to continue to
manage and reduce risks and liabilities at AECL sites.
These funds will be used to make further progress on highly
enriched uranium repatriation initiatives, continue decommissioning activities
at AECL's Chalk River and Whiteshell Laboratories, and implement initiatives and
activities to prepare for the transition to the government-owned
contractor-operated management model that will advance strategies and planning
for future work.
Thank you, Mr. Chair. We would be pleased to take any questions
you may have.
Robert Walker, President and Chief Executive Officer, Atomic
Energy of Canada Limited: Thank you, Mr. Chair. It is a pleasure to be here
before the committee. I am joined today by Mr. Steve Halpenny, Chief Financial
Officer for AECL.
Honourable senators, I am pleased to report that AECL has just
concluded a very good year. We continue to develop the innovative science and
technologies needed to drive our industry confidently into the future, serving
government departments, industry customers and our many stakeholders.
More importantly, we are doing this more efficiently and
The Nuclear Laboratories delivered against AECL's core programs
in order to realize a strategic outcome that offers significant economic, social
and environmental benefits to our country. AECL's world-class workforce and our
powerful nuclear research facilities help to ensure the success of the entire
Canadian nuclear sector. We do this by delivering the vitally important
products, services and expertise required for Canada's global nuclear industry
As I have highlighted during past appearances before the
committee, my management team and the board of AECL have been for some time
systemically changing the way AECL operates. Our focus is on improved
productivity, business growth, meeting customer and regulatory commitments, and
reducing costs to taxpayers. Accordingly, I'm very pleased to inform you that,
thanks to productivity gains, efficiency improvements and growth in commercial
revenues, AECL was in the position to return to the Government of Canada
$26 million in supplementary funding received during the past fiscal year.
If I may, I would also like to bring to your attention a few
other AECL performance highlights for the past fiscal year.
We have just completed the three-year, $439-million nuclear
legacy liabilities programs — the second phase just referenced by my colleagues
from NRCan — delivering the program under budget while achieving 93 per cent of
We grew our commercial revenues by 33 per cent to $154 million,
and we increased our margins. We delivered 95 per cent of the demand from
Nordion for medical isotopes with the NRU reactor operating at 97 per cent of
We achieved an 8 per cent ongoing reduction in our operating
budget compared to 2011-12, and that will ramp up to a 12 per cent reduction by
end of this fiscal year.
We also executed an $82 million capital program at our
laboratories within 93 per cent of budget.
Mr. Chair, the AECL today is a respected international leader in
the development of leading-edge applications in nuclear science and technology
that benefits all Canadians. We are continuing to work hard to up our game in a
very competitive marketplace.
In this connection, AECL launched 10 new centres of excellence.
These centres of excellence will provide the means by which AECL will sustain
the unique competitive advantage of Canada's nuclear technology. The centres
will strategically develop core science and technology expertise, mission-ready
facilities and our valuable intellectual property. They will also focus on
industry collaborations with supply-chain partners to address changing customer
Finally, I'm proud to say that the many strategic improvements
made over the past few years are now leveraging the incredible strengths of AECL
as Canada's premier nuclear science and technology organization. In my view, we
are well-prepared to undertake the process of transitioning to a new and
exciting management model for Canada's Nuclear Laboratories.
Thank you. I and my colleagues would be happy to take your
The Chair: Thank you very much, Dr. Walker. A number of
senators have indicated an interest in points of clarification, so we will
Senator Bellemare: I listened very carefully to what has
just been said. We know that Atomic Energy of Canada Limited is a crown
corporation which was created in the 1950s. Now we are headed toward a different
Could you comment on this new business model, which will be
developed in the private sector? I see that Atomic Energy of Canada Limited, as
a crown corporation, has provided the government with dividends. How will this
work in the context of the new business model?
If I understand correctly, this will be a for-profit enterprise.
How will that for-profit enterprise ensure the safe disposal of all of the
radioactive waste? All of this is related to society in general. The private
sector is not the only one concerned; there are a lot of public elements.
How can you ensure that this new business model will allow for
the work to be done correctly, to ensure the complete safety of Canadians?
Mr. Lafaille: Your question has two parts, Senator
Bellemare. There is the matter of the business model and the issue of safety.
Insofar as the business model is concerned, if we look at what
has been done over the past decades in the United States and more recently in
the United Kingdom, according to the model, the state retains property of
nuclear installations as such and keeps the responsibility as well. You were
talking about nuclear waste; managing it remains the responsibility of the
The private sector will be called on to manage operations on a
daily basis at the nuclear laboratories; both science and technology and the
management of radioactive waste in both cases.
The business model allows us to obtain certain indicators that
are not possible with the crown corporation model; certain indicators that will
allow the private sector to realize savings or present innovative ideas
involving new technologies; it will also allow it to form certain partnerships
which would not necessarily be possible now, in order to aim for the best
possible performance and the best value for taxpayers’ money. This is what the
model has demonstrated in the United States and in the United Kingdom as being
possible. Those are my comments on the business model.
As for the issue of national security, if the private sector is
responsible for it there could be certain concerns, for instance, will as much
careful attention be focused on matters of security and environment? It must be
said that the nuclear laboratories will be subject to the regulations of the
Canadian Nuclear Safety Commission. That will not change, that is to say that
the regulatory agency will be responsible for ensuring that the laboratories are
managed in a safe and secure manner.
Thus, no matter what company deals with nuclear issues in Canada,
be it AECL or electric power companies such as Ontario Power Generation or Bruce
Power, it is subject to the commission’s regulations, and this will be the case
with the business model we have been discussing, the government-owned
contractor-operated model, and this will continue to be the case.
Senator Bellemare: Is SNC-Lavallin, from the private
sector, the company that will manage AECL?
Mr. Lafaille: There were two phases to the restructuring.
The first phase was the sale of the assets of AECL’s commercial division, the
one that dealt with nuclear reactors, the CANDU. That division was purchased by
a subsidiary of SNC-Lavallin called Candu Énergie. That transaction was
concluded in 2011.
We are currently in the second phase of the restructuring, which
involves asking the private sector to manage the laboratories. At the present
time, we have put out calls for tenders and the process was launched in 2013. We
are currently at the stage we call “Request for Response Evaluation”. This is
procurement jargon, but in short, it is a qualification stage. We ask certain
companies to qualify, to show us that they are competent to manage nuclear
laboratories. Once they have qualified, we go into a detailed consultation
process about our needs. What does it mean for the government to want to give
the private sector the management of the laboratories, what are our
expectations? At the end of this detailed consultation period, a formal call for
tenders will be issued, and we expect that to take place this autumn.
So, to answer your question, a competitive process is currently
going on to choose the entrepreneur who will manage the laboratories. We have no
preconceived assumption about who will win the competition in the end.
Senator Bellemare: Will the government be making profits
from the sale of isotopes, so as to generate income to prevent eventual
catastrophes or production problems?
Mr. Lafaille: Regarding the isotopes specifically?
Senator Bellemare: No, on all the activities.
Mr. Lafaille: AECL has several income sources. I am going
to ask the chief executive officer of AECL to reply, because there are several
isotope-related sources of income, but they are also connected to other science
and technology services.
Mr. Walker: I could add two points, first of all regarding
the strength of this model and also concerning nuclear safety.
Building on Dr. Lafaille's comments, the enormous force of this
model is that it creates a strong customer-supplier relationship between AECL
and the Government of Canada. The Government of Canada has needs of the Nuclear
Laboratories. One is to address the decommissioning and waste-management
liabilities that need to be addressed efficiently and safely over the decades to
The second is to provide science and technology insight to allow
federal government departments to exercise their mandates appropriately,
including regulation, regulatory oversight of the nuclear sector, matters of
border security, counter proliferation and environmental protection.
The first enormous strength of this model is that the
relationship between AECL and the Government of Canada will no longer be a
shareholder-Crown corporation relationship; it will be a customer-supplier
relationship with strong performance measures. We know the private sector is
much better positioned to be able to deliver customer value on schedule at the
right price point.
The second strength is that we also have a mandate to service the
nuclear sector and other industries in Canada that are able to take our science
and technology to address their needs and, frankly, to turn our technology into
Again, we recognize that the private sector is much better at
being able to commercialize technology and create wealth. So we have two
advantages addressed at one time with this move to the GoCo model.
A core principle is that regardless of who is operating the
laboratories, the oversight of the laboratories will remain with the Canadian
Nuclear Safety Commission. It is the regulator for all nuclear activities in
Canada, public sector or private. It has an international reputation for knowing
how to do this and doing it well. It holds the industry to a high standard.
There are other nuclear facilities in Canada that are privately operated. In
fact, the largest nuclear power facility in the world is at Bruce Power, which
is a private sector operator. So that oversight will continue to be exercised by
Senator Callbeck: Thank you all for being here this
You spoke of the business model. You say that in the U.S. and
U.K., waste management is still a responsibility of the government. Is this new
model that we're going into — government-owned contractor-operated — found
anywhere else in the world?
Mr. Lafaille: Thank you for the question.
Yes, as you indicated, the U.S. has always had this model whereby
the responsibility of making sure that the waste is taken care of —
Senator Callbeck: No, I guess I misunderstood, then.
Mr. Lafaille: It is the responsibility of the country, of
the government, to ensure that the waste and decommissioning responsibilities
are discharged properly. The question is how you do it? Is it done through a
model whereby you would hire a private sector company or consortium to discharge
the responsibilities to manage that or, as is the current case, will it be a
Crown corporation? The decision was made that through this government-owned
contractor-operated model, it would be the private sector company in charge of
managing the waste.
Senator Callbeck: Is that what happens in the U.S. and
Mr. Lafaille: This is correct, yes.
Senator Callbeck: Fine. I misunderstood that.
Now, to Natural Resources, you are looking for $195 million the
Supplementary Estimates (A). You mentioned that in 2006 the Nuclear Legacy
Liabilities Program was set up; $520 million went in then and later, $430
million. Now you are asking for $195 million. So then that program ends; is that
Mr. McCauley: That's correct. The intent of the
additional $195 million is to extend the program until such time as the new
model can be put in place. We have asked for an additional $195 million to the
end of March 2015. The GoCo model is unlikely to be in place until later that
year, and so it is quite plausible that we would be returning to seek additional
monies until such time as the GoCo model is in place.
Senator Callbeck: How is the contractor going to be
selected? Is that in the works now?
Mr. Lafaille: Yes, it is. It is important to note that
AECL has a 70-year waste plan to discharge its responsibilities. So this yearly
funding is based on the much longer plan to discharge out the liability. What
will happen with this new model is that during the period of the contract for
the private sector consortium, we will seek from the private sector to discharge
a portion of the plan. This is why it will be no longer a program of NRCan, if
you will. It will be folded into the GoCo contract whereby we will seek that the
private sector company actually manages the program for AECL.
Senator Callbeck: But are you in the process now of
selecting that contract?
Mr. Lafaille: Yes, that's right.
Senator Callbeck: When will that be finalized?
Mr. Lafaille: For the procurement process that started in
2013, we are currently in the phase of qualification of interested bidders and
moving to the detailed consultations on what the requirements are. The
procurement is expected to be completed in 2015.
Senator Callbeck: So you are certainly going to be back
here for more money, then, no question.
Mr. Lafaille: That's right.
Senator Eaton: Thank you, gentlemen. It’s fascinating. I
wish we had you here for hours.
To follow up on Senator Bellemare's question, for this
government-owned contractor-operated model, does the contractor have to be
Mr. Lafaille: There's no requirement that they be
Canadian, no. It could be international companies. I would point out that
national security requirements have to be met, so the bidders are screen-based
on national security.
Senator Eaton: Right. So that will limit who can —
Mr. Lafaille: This is correct.
Senator Eaton: I have another question along those lines.
I think Mr. Lafaille said something about moving our nuclear-enriched uranium to
the U.S. Why is the U.S. safer than we are?
Mr. Lafaille: Maybe I will let David McCauley answer that.
Mr. McCauley: Thank you.
The United States has a program of repatriating enriched uranium
that it has provided to a number of countries for nuclear research, et cetera.
Currently, we have inventories of highly enriched uranium in Canada, which are
being safely managed.
Senator Eaton: They are U.S. origin?
Mr. McCauley: Yes.
Senator Eaton: I see. This is not our stuff we are sending
Mr. McCauley: Exactly. It is material that we received
from the United States over the course of the years, and it is now safely and
securely managed at Chalk River Laboratories, the majority of it. Under this
program, however, the intent is to repatriate all highly enriched uranium around
the world such that it is safely and securely consolidated in one location or
fewer locations, and where it might be reprocessed into material that could not
be abused by those who shouldn't be getting ahold of this material.
Senator Eaton: Do we have any enriched uranium ourselves
that we hold safely or what do we do with ours?
Mr. McCauley: The enriched uranium that we have has come
from the United States.
Senator Eaton: We don't make our own?
Mr. McCauley: No, we don't. We have no enrichment plants
in Canada. The CANDU process uses unenriched uranium to fuel our reactors.
Senator Eaton: Thank you for clarifying that for me.
Mr. Walker, we do this by delivering vitally important products,
services and expertise required for Canada's global nuclear industry to thrive.
Could you give me examples of products and services?
Mr. Walker: Surely I could do that.
Approximately a year ago, the Ontario Power Generation went to
the Canadian Nuclear Safety Commission to indicate that it believed it could
safely operate the Pickering nuclear power plant until 2020. That decision was
based on fundamental work done at AECL to validate the remaining lifetime in the
core workings within the nuclear vault of those reactors.
Senator Eaton: So the Pickering Nuclear Generating Station
will be good until 2020?
Mr. Walker: That's correct. The scientific evidence to
give OPG the basis for making that submission was generated at Chalk River
through our science to be able to look at the remaining life left in what are
called the pressure tubes, the infrastructure inside the reactor vault that
actually holds the fuel bundles. They are critical to the operating life of
We are currently also producing a number of innovative products
that make CANDU plants around the world safe. As an example, we have the unique
technology that allows us to turn hydrogen into water and to do so passively.
Since hydrogen is a by-product that gets produced from time to time in nuclear
reactions, it can be a hazard in the environment. In fact, the explosions that
occurred at Fukushima plants were hydrogen explosions. Well, there has been an
up-swing in the purchase of AECL technology to install in the reactors around
the world, because we're able to absorb the hydrogen and turn it into water
without the need for electricity.
Those are but a few examples of where our technology is able to
increase the life cycle, the safety and the economies of nuclear power plants —
not only the CANDU fleet but reactors around the world.
Senator Eaton: And that will continue?
Mr. Walker: That will absolutely continue. In fact, the
intent with this new business model is to create greater opportunities to
commercialize our wealth of intellectual property to create economic
opportunities for Canadian companies.
The Chair: Next is the deputy chair of the committee,
Senator L. Smith: It's a fascinating area. I'm not sure if
any of my colleagues are confused, but listening to the report — changing the
way that AECL operates, restructuring the organization, your unique competitive
advantage — your new operating model will only be implemented by 2015. That's my
understanding. There is a lot of work going on now. Is it for the old model or
the new model?
From a structural perspective, how does it work today and how
will it work tomorrow?
My question comes down to measurements, which I think Senator
Bellemare was looking at. Do you have a profit measure? Is that realistic in
this business? When you talk about $195 million here, $450 million there, and
the money is coming from the government, it gets confusing as to how all these
pieces fit together. Where is the accountability?
There is a three-year $450-million liability program achieving 93
per cent of the milestones. What are the milestones? Commercial customer
revenues grew 33 per cent. A lot of good things are happening, but I haven't
seen anything about the bottom line. Is there a bottom line in this industry so
that there is ultimately accountability in terms of whether this thing is
profitable? Obviously there is a huge potential for growth.
Mr. Walker: I will attempt to give you a sense of this. It
is fair to say that we are in transition from an appropriated Crown corporation
model into a private-sector model where we service the needs of customers.
Senator L. Smith: And the Crown corporation model is
exactly what right now?
Mr. Walker: The Crown corporation model has us serving
third-party customers but looking back into the Government of Canada with a less
rigorous process by which we are accountable to the government for the results
we deliver to government. The new model will turn all the relationships between
the Government of Canada and this new restructured entity into an accountable
Senator L. Smith: In the future, the model will have the
Government of Canada —
Mr. Walker: And third parties. Those are the two big
Senator L. Smith: And where does AECL fit?
Mr. Walker: Nuclear Laboratories' future business model is
to keep those customers happy with the right results at the right price at the
right schedule. We are now in the process of changing the way we operate to
bring that rigorous customer focus to both the way we work for the government
and for the private sector, and to look at the multiplier effect as we work for
both — to allow companies we work with to turn the results of this work into
Senator L. Smith: Is there a profit concept in that new
Mr. Walker: Yes, there will be. The key point here is that
the incoming selected government-owned contractor-operator, or GoCo, will be
incentivized to deliver results back to the Government of Canada at lower cost,
to better schedule and at greater value. As the incentives are met, there will
be a fee paid for realizing more.
In terms of the world of the third party, a formula will be set
up through the negotiation of the contract by which the profit realized by
creating wealth in the private sector will be shared with the Government of
That will all be sorted out as the contract gets negotiated.
Senator L. Smith: When new money is needed for facilities,
development, upgrades, et cetera, will that be dealt with through the private
entity or as the government serving as the banker for the group? How does that
You're talking $195 million; that's a lot of money. How is that
tied into that operating model, accountability? How is it repaid and how is it
tied into the profit issue? It seems a little unclear at this time, especially
if you're only going to implement this in 2015. If you're working on this now
for 2015, what is it going to be?
Mr. Lafaille: Let us try it another way.
Right now, the Crown corporation model is such that AECL reports
to Parliament through the Minister of Natural Resources. Everything goes as a
relationship between AECL and the portfolio ministry, so any requests for the
195 or others come to us and then go through the system.
In the new model, there will be a small oversight body that would
have a contractual relationship with the private sector. So everything will be
contractual as opposed to the Crown corporation model.
To your question about new funding and new activities
required and how that will work, it will work through the clauses of the
contract. If the private sector operating the labs says, “There is a need for a
new building because this one is decaying, and we need a new building to do the
science and technology from which we will have revenues,” all of that will be
specified in the contract.
The role of the small government agency overseeing the contract
will be to say, “Does it make sense? Is their value for taxpayers? What is the
private and public sector contribution? What model makes sense for that specific
To build on Dr. Walker's comment, the value for taxpayers — well,
we want to do this at the best price for taxpayers, so we will incentivize the
contractor to come up with the best plan possible. We will hold the contractor
accountable to specific performance measurements, schedules and budgets. The
contractor will be paid based on performance. If they underperform, they will
not get a fee for this work. If they over-perform and the government saves
money, we can share some of the savings there.
This is what is different from the Crown corporation model. We
cannot incentivize Crown corporations in the same way. Incentivizing contractors
is at the heart of the GoCo model, with performance measurements to be able to
specifically incentivize. If they are met, we know we are getting value for
money. If they exceed expectations, we can share some of the savings and give
incentive to the private sector to do better for the government.
Senator L. Smith: In the write-up on the second page, you
talk about your “unique competitive advantage.” Is your unique competitive
advantage in the existing structure, or will it be in the new structure? What is
your unique competitive advantage?
Mr. Lafaille: It will be in the new structure. It's about
what I just said about being able, through the contract, to turn to the private
sector contractor and say, “We have this need. Come up with the best plan
possible for the taxpayers to deliver on this plan.”
Senator L. Smith: If I understand this, you're saying the
unique competitive advantage is basically the new structure that will be
implemented in 2015.
Mr. Lafaille: That's right.
Senator L. Smith: So it's a work-in-progress?
Mr. Lafaille: Yes.
Senator L. Smith: To say you have a unique competitive
advantage, you need proof of the unique competitive advantage in terms of the
actual operational efficiencies. I'm trying to understand. When you make a
statement like that, it's a far-reaching statement that needs to have a track
record and results.
I wasn't trying to put you in a corner, but was trying to
understand how it fits together because there are some fairly important
statements being made.
Mr. Lafaille: It is, you're right, a work-in-progress
because it's a model that does not exist in Canada, so we are implementing an
unprecedented model. We're learning from the experiences in the U.S. and the
U.K., in terms of lessons learned, what works and what has not. We are building
this model right now. We see the advantages of what will not be possible now
with the Crown corporation model. The challenges and the opportunity are to make
sure we implement the right model that will bring value for money for Canadians.
The Chair: Could I ask for a point of clarification to
Senator L. Smith's question? Once you have this new model in place with
contracts on the ground in Chalk River, what will be going on? You stopped the
MAPLE. You're not going to start up that new type of reactor. This other is
almost at the end of its life. Will the new contractor have an obligation with
respect to the NRU, the National Research Universal reactor? Will the contractor
have the obligation or the right to operate that?
Mr. Lafaille: The work of the contractor will be specified
in a statement of work of the contract.
Basically there are three main missions. There is the waste and
decommissioning mission, so there is a long-term plan, as we said. They will
need to deliver on that.
The contractor will need to deliver science and technology
services both to government to meet our own responsibilities to the public
policy and third parties, as Dr. Walker said. Currently, laboratories are
selling services to utilities and other third party customers. All that will be
specified in the contract.
With respect to specific facilities, whether it is the NRU
reactor or others, it will be based on the business case of operating these
facilities to provide services both to government and third parties. Right now
the NRU is licensed until 2016, so there is a case to be made in terms of the
future business case for the NRU post the current licensing cycle.
It depends on the needs of both the government and third parties
for specific facilities at Chalk River.
The Chair: You do have a need for research. You do have a
need for decommissioning. If you don't get it from Chalk River, you will get it
from somewhere else. That hasn't been decided as to where that particular
activity will take place?
Mr. Lafaille: It depends on the needs of government and
The Chair: You know the needs of government.
Mr. Lafaille: We know the needs of government. So there
will be what we will call a science and technology federal program where, with a
specific funding envelope and requirements, we will turn to the private sector
contractor and say, “These are our needs; please provide us with the services
for the best value-for-money proposals or plans.”
The Chair: And we'll let you use our reactor in Chalk
River to do that.
Mr. Lafaille: The private sector contractor will be in
charge of operating all the facilities and the laboratories.
The Chair: That's what the contract would say. You will
say, “These are the needs; please provide the service and, by the way, you can
use our reactor in Chalk River to do that.”
Mr. Lafaille: Yes, if there’s a need and if the federal
government has needs that would include using the reactor, there will be a
discussion about using the reactor. If there is no need for it, then the private
sector contractor will need to seek other customers for the reactor and will
come back to the government in terms of the entire proposal for managing the
labs, which facilities will be required and not required in the future.
The Chair: We're trying to clarify what's going on and I
appreciate your comments.
Senator Gerstein: Dr. Walker, am I correct that AECL is
one of a few major suppliers of medical isotopes in the world today? Is that a
correct assumption on my part?
Mr. Walker: That's a correct assumption.
Senator Gerstein: My recollection is that several years
ago — I can't remember exactly how many — there was a major problem that happen
left Canada scrambling for medical isotopes. Is that also correct?
Mr. Walker: That's also correct.
Senator Gerstein: With that said, I noted in your
performance highlights that you indicate, “We delivered 95 per cent of the
demand from Nordion for medical isotopes . . . .” My question to you is:
Percentages aren't a number. How does the number of deliveries of medical
isotopes compare to what it was before the problem, and how has AECL maintained
its position of what I understood was a relatively few people that manufactured
these? When the problem arose, there was great difficulty in supplying Canadian
needs, never mind anyone else. Can you take us through that?
Mr. Walker: I will attempt to do this. This is a complex
We're all aware and the first to recognize that the concept of
medical isotopes was invented in Canada. The whole idea of how one can get
isotopes out of a nuclear reactor and into patients in hospitals, that whole
supply chain concept was pioneered in Canada. It is true that AECL, through
partnership with Nordion, a company spun out of the AECL, is one of the major
suppliers of a very specific medical isotope. We talk about the word “isotopes,”
but there are many tens of isotopes used in various medical diagnostics and
The one that is the workhorse is known as molybdenum-99, or
moly-99, and that is the isotope that comes out of the reactor. NRU is shipped
to Nordion and then in a FedEx like system, it is delivered through other
suppliers to hospitals around the world where it is subsequently transformed
into another very short lived isotope called technetium. That is the product
that would be injected in patients for medical diagnostics. In that whole
process, one has to recognize that time is of the essence. The half-life of the
moly-99 isotope is 66 hours. The half-life of technetium is six hours. You have
to get the isotopes produced and out of the reactor, to the distributor and
around the world and into the hospital. Every time you do it, the inventory is
decaying. One typically talks about how many. There is a unit of radioactivity
called a curie and how many moly curies are we delivering around the world, and
the measure is six days after the reactor.
Senator Gerstein: I appreciate your answer, but mine is
not a scientific question. It is a financial question. What was AECL delivering
— that's a dollar amount — prior to the problem and what is AECL now delivering
after the problem?
Mr. Walker: In that process, today AECL supplies between
15 and 20 per cent of the global weekly demand for moly-99 around the world. In
2007, we were about 40 per cent. I would highlight for you, senator, that the
lesson learned around the world when we had the forced outage of the NRU in 2009
is the vulnerability of such a high priority supply chain to a single point of
When the NRU went down and you lost 40 per cent of the world
supply, the world was in crisis because there wasn't alternative supply. One of
the initiatives taken on, in fact led by Canada, was to diversify the supply
chain to create other suppliers around the world that together can contribute,
and with that also coordinate the scheduling of reactor maintenance outages so
we don't end up with periods where multiple reactors are down.
Senator Gerstein: What I understand is we dropped from 40
per cent of the world's supply to 15 per cent of the world's supply.
Mr. Walker: That's correct.
Senator Gerstein: How does the 15 per cent we are
supplying compare in actual dollars to the 40 per cent? In other words, the
market may have increased; 15 per cent of the market today may be more than what
40 per cent was five or six years ago. How does the actual production compare in
Canada today after the fixes had been put into the system? What is the actual
Mr. Walker: Senator, there are reasons that I cannot get
into the actual dollars because of the commercial relationship with Nordion. I
can tell you, however, that the price of the moly-99 isotope on the global
market is a very competitive capitalist system, and the price of moly today is
about the same as it was in 2007.
Senator Gerstein: Is there a shortage in the world today?
Mr. Walker: There is not.
Senator Gerstein: Thank you.
The Chair: Colleagues will recall we are dealing with Bill
C-31, the budget implementation bill, which deals with Nordion and releases, if
it's passed, the requirement in relation to shareholdings being Canadian. The
same day the bill was filed, a U.S. company announced it would be most pleased
to bid on becoming the majority shareholder of Nordion. That is all in the
knowledge of this committee because we studied that particular situation.
Nordion has a contract with Atomic Energy of Canada Limited for the supply
We're all aware that there was a court case on that, which has
been settled in your new model, and we would like to know where you're looking
on that. In your model, will there be radioactive isotopes produced? Is there an
ongoing contract with Nordion that the new contractor who will be running things
for AECL will be required to meet?
Mr. Walker: We currently have a supply arrangement with
Nordion that goes until 2016 for moly-99. I would highlight that we produce
other medical isotopes with Nordion and for other suppliers, and those contracts
are not sunsetted in 2016. When it comes specifically to moly-99, the contract
terms end in that year.
The Chair: Will it be up to the new contractor to
determine whether it wishes to continue the relationship with Nordion? Or is the
decision that that's just off the board, and once this contract is over, you're
not interested in continuing it? It will be a revenue source for AECL in the
future, unless you discontinue it. It's a question of whether you've decided to
put that into the mix or not.
Mr. Lafaille: Maybe I can answer that question. I think
what Dr. Walker said, there is a specific moly-99 question and other revenues.
As a general rule, all existing contracts will be continued by the private
sector company, and it will have to make a case that they are still bringing
value to the government.
In terms of your specific question on moly-99, coming back to the
question of what happened in 2009-10, the government has taken a number of
actions. At the time of the decision, the government said it intended to cease
the production of moly-99 by 2016.
The Chair: I recall that.
Mr. Lafaille: That's part of the current policy. There has
been an investment in alternative technologies so that it could pick up and
provide the alternative supply of technetium-99, which is really the end product
used by doctors. The government has acted on that. That is the current policy of
the Government of Canada.
Any future business in terms of isotopes, be it moly-99 or
others, will need to have a business case brought to government to see if it
makes sense or not.
The Chair: It will be part of the negotiations with
respect to the private sector operated, government-owned relationship that
Senator Smith was asking about. Is that correct?
Mr. Lafaille: That's correct.
Senator Chaput: I would like to obtain some clarifications
on some of the questions other senators have asked. If I understand correctly,
you are currently in transition, that is to say that the business model has yet
to be developed. Will the government be retaining responsibility for the
facilities, and for safety and security?
Mr. Lafaille: The government will retain ownership of the
facilities, but the private sector will be responsible for ensuring that the
regulatory licenses are respected, and will be responsible for management. It
will be accountable to the regulatory agency.
Senator Chaput: Since the government will be retaining
ownership of the facilities, if there are problems, if renovations have to be
done and costs are incurred, will this be the government’s responsibility, and
it will have to ensure that the facilities are maintained properly?
Mr. Lafaille: To the extent that these facilities meet
specific needs such as the management of nuclear waste or the provision of
science and technology services, yes, this will be the government’s
responsibility. The private sector will manage the sites and will have to submit
a business plan to the government proposing conditions regarding the renovations
of these facilities or the construction of new ones in order to continue to
provide service to clients.
Senator Chaput: But if renovations have to be done, the
costs related to the facilities will remain the responsibility of the
Mr. Lafaille: It depends on the clients. If the client is
an electricity company such as Bruce Power or others, it will have to pay its
fair share if the facility is used to meet its needs. If it meets the needs of
the Government of Canada, then, yes, the Government of Canada will pay for that
Senator Chaput: Concerning the division purchased by
SNC-Lavalin, what are the responsibilities of the SNC-Lavalin company at this
time? Who does it report to?
Mr. Lafaille: It is a private entity that is accountable
to its shareholders. There are now commercial links between CANDU Energy, for
instance, and the laboratories, but these are purely contractual relations.
Senator Chaput: Excuse me, but what did SNC-Lavalin
Mr. Lafaille: The commercial division of AECL that dealt
with development, construction and servicing the nuclear reactors to produce
electricity, including the CANDU reactors. The government kept the nuclear
Senator Chaput: Will the appropriations requested in the
supplementary estimates be allocated to maintaining activities such as those of
the laboratories, or will they be used to facilitate the transition to the
business model, or both?
Mr. Lafaille: Both. With your permission I will ask my
colleague from AECL to provide you with more details.
Mr. Walker: Most of the funds will be allocated to the
continuation of programs and to investment in infrastructure. A small part of
the funds will be used to create the surveillance entity mentioned by
Mr. Lafaille; this will amount to approximately $15 million. The rest will be
used for daily operations.
Senator Chaput: Daily operations mean everything involving
the current personnel and everything that is being done currently?
Mr. Walker: Absolutely.
Senator Chaput: Very well, thank you.
I have a final question for Mr. Lafaille. In your presentation
you mentioned that AECL had created 10 new centres of excellence. Where are
these centres located, and what are they exactly?
Mr. Lafaille: Mr. Walker would be in a better position to
Mr. Walker: This is one aspect of our transition which
aims to focus the centres of excellence we have in the laboratories, which have
a certain value to the clients, be they industry or government. In each of these
centres, we have to consider the expertise, infrastructure, intellectual
property, and partnerships. They contain a certain value.
Coupled with the new business model, this is the concept of
competitive advantage. When customers come to the Nuclear Laboratories, it is
because we're recognized as having certain expertise, and certain unique
facilities that are appropriately priced and efficiently managed to meet
However, one has to have clear precision on what one's value
proposition is to ensure that one is renewing, investing and advancing the
capabilities that will be critical for your customer base into the future.
So through those 10 centres of excellence, we are establishing
the starting point. We expect the incoming GOCO will look at that, look at where
it wants to take the business and decide whether these 10 will grow, sustain or
perhaps some diminish, and go forward from that.
With that we think we are providing a strong foundation by which
we will transition to the new business model.
Senator Chaput: What are they, exactly, and where are
Mr. Walker: Within the Nuclear Laboratories, these are
virtual centres. You will not see a building. For example, we have world-class
capabilities in irradiation services. A prime example of that is for production
of medical isotopes. However, we offer a number of unique capabilities in
Canada — in fact, the only place in Canada where one can irradiate materials to
understand the effects of radiation on materials — and with that to generate
commercial value or to address public policy needs.
There are very unique capabilities in modelling and simulation
related to nuclear processes — what goes on inside power reactors — and
critically those modelling and simulation capabilities are at the foundation of
power utilities being able to demonstrate to the regulator that the way their
reactors are operating will be safe when changes are made to the systems in
We also have strengths in decommissioning technologies. How do
you deal with the decommissioning of contaminated buildings safely and
economically, going forward?
So we have 10 such centres. We have scientists, engineers and
technologists associated with these centres. Each has a combination of unique
scientific facilities and equipment. Each generates the unique intellectual
property, and from that, we are able to offer to a customer set a menu of
capabilities by which we attract business from the private sector or meet the
needs of the Government of Canada.
Senator Chaput: Are all of those scientists, people and
researchers in the same building, and are the 10 centres virtual?
Mr. Walker: Not quite. Oftentimes, they're associated with
unique facilities, and around those facilities, there are times when buildings
would contribute to more than one centre. But if you go to Chalk River, you can
say, “This area over here is this centre of excellence, and this area over here
is that centre of excellence.” It's just hard to draw it on a map.
Senator Chaput: I'm trying to understand here; I'm sorry.
Are there quite a few of those facilities, and are they across Canada or out of
Mr. Walker: This is largely the Chalk River site. There
are still a few facilities at the Whiteshell site in Manitoba, but Chalk River
is the largest science and technology facility in Canada. Some 3,000 people work
there, and it has an impressive gamut of scientific facilities that are very
special in the sense that they are able to operate with radioactive materials.
Senator Chaput: Chalk River is the largest one in Canada.
Are there others in Canada besides Chalk River?
Mr. Walker: When it comes to the nuclear sector, no; it is
the largest. There are other science facilities like TRIUMF that play into
Canada's foundational capability in nuclear physics, but when it comes to
nuclear power, AECL is the hub.
Senator Rivard: I have two brief questions. AECL was sold
to SNC-Lavalin in 2011, but we retained the management of nuclear waste and
Can you tell me what the yearly estimate would be for the
responsibility of managing nuclear waste?
Mr. McCauley: The management of radioactive waste and the
clean-up of contaminated sites are the responsibility of the Government of
Canada. Most of this responsibility derives from the Cold War era, which
preceded the creation of AECL, and the government decided to retain that
Senator Rivard: What is the annual cost of managing the
Mr. McCauley: For the current year, it is $195 million.
Senator Rivard: We remember that nuclear power was popular
at a certain point. However, the accident at Chernobyl more than 25 years ago
was a first shock. It was said that the Russians had managed that situation
poorly and that it could have been avoided.
Subsequently the tsunami in Japan created such a shock that a lot
of countries are questioning nuclear energy and reconsidering coal or
SNC-Lavalin purchased the CANDU reactor department in 2011. Do
you remember whether SNC-Lavalin purchased it before or after the Japanese
M. Lafaille: Afterwards.
Senator Rivard: We know that selling CANDU reactors is not
like selling cars. Do you remember if SNC-Lavalin has sold any CANDU reactors to
other countries since 2011? Do you think that the accident in Japan will
discourage some countries from choosing nuclear energy and open up markets for
Mr. Lafaille: Generally speaking, there are many
conditions that are considered in a decision as important as purchasing a
nuclear reactor. There is no doubt that the Fukushima issue affected a number of
But there are also economic conditions to consider. There is the
cost of natural gas, the cost of coal. There are many factors to be considered.
As for your more specific question regarding Candu Energy or
SNC-Lavalin, since 2011, they have been very active internationally and have
seized opportunities in the United Kingdom, Romania, China and Argentina. They
work actively to promote their technology and to try to sell it. To my
knowledge, they have not yet concluded any contracts in that regard.
In certain niche markets where countries still wish to purchase
nuclear reactors, they are active. The Government of Canada is no longer
responsible, now; this is really their undertaking.
Senator Rivard: I agree with you, but on the other hand,
when SNC-Lavalin produces these CANDU reactors, with Canadian labour, there will
be important economic spinoffs for Canada. So it is to be hoped for that other
countries will continue to purchase nuclear reactors and that we will not go
back to the stone age, with coal.
Mr. Lafaille: I would like to add something. In the
contract between AECL and Candu Energy, royalties were supposed to be paid to
the federal government. So we have a vested interest in the success of this
The Chair: Two other senators would have some questions.
If you could answer briefly, that would be appreciated. But if a written answer
is necessary, you may do that also.
Senator Hervieux-Payette: There was a problem regarding
insurance coverage which was not sufficient for damages in the case of
incidents. Has that issue been resolved?
Mr. McCauley: A bill is currently being studied in
Parliament with respect to that.
Senator Hervieux-Payette: Will this increase the coverage?
Mr. McCauley: Yes, from $75 million to $1 billion.
Senator Hervieux-Payette: Mr. Walker, the École
Polytechnique de Montréal told us that it has a world-class research centre. Is
this one of your centres of excellence?
M. Walker: Yes, absolutely, it is one of our key partners
in Montreal. We cooperate with 35 universities throughout Canada.
Senator Hervieux-Payette: I asked you if it was a centre
M. Walker: It is one of our many centres, in fact.
We have dealings with the École Polytechnique in the area of nuclear
engineering and nuclear chemistry, among others.
Senator Hervieux-Payette: Has the conflict with Argentina
regarding maintenance been resolved? There was an issue in Argentina with regard
to the maintenance of the CANDU reactor; I know that the Argentinians were not
very pleased with the service Canada provided.
Mr. Lafaille: You are probably referring to the renovation
of the CANDU reactor in Argentina. There is contract between Candu Energy and
the Argentinian government to rebuild that reactor.
To my knowledge, this is proceeding in a satisfactory manner. I
think that some time went by before the contract was signed; it was signed in
2011 and Candu Energy is now responsible for completing this project to rebuild
Senator Bellemare: The answer to my question could be
long, and you may send it to us in writing.
The private sector is going to manage operations; the government
will retain ownership, but the operations will be carried out by the private
sector and will be remunerated in keeping with performance. I wondered if there
were links with performance; at a given point, people want to perform well, but
how will you separate the risks from that?
Are you going to have a provision for risk management in the
contract? Sometimes short-term performance can increase medium and long-term
risk, and the government could be held responsible. I just want to ensure that
there will be some management of risk sharing.
Mr. Lafaille: That is an excellent question. That is a
risk we observed in the United States and in Great Britain, when we visited the
sites and spoke to the government people who dealt with the contracts. There can
be a specific incentive to deliver a project on time to make a profit, but a
project that is not subject to the same kind of incentive could be put on the
back burner, and on balance, the government could be the loser.
That is one of the real risks we are very much aware of. In order
to ensure that we will not be subject to this kind of game, there have to be
performance indicators in the contract linked to the overall management of all
of the research activities, so as to respect some minimal performance standards.
Then we can look for specific projects where additional savings
could be realized and allow for more innovation. The point is to try to find a
balance between overall management and the management of certain specific
Senator Bellemare: Will the employees be staying there?
Mr. Lafaille: The employees will be transferred to the
private sector, but their expertise will still be required. These employees are
generally highly qualified to manage and operate the nuclear facility, and the
new operator will need them.
The Chair: Are they unionized?
Mr. Lafaille: Yes, there are several unions at AECL.
Senator Bellemare: And all of that is going to be
Mr. Lafaille: Yes, and Dr. Walker is in charge of the
The Chair: Thank you very much for being here. We have
gone 15 minutes over the designated time, but you can see there's a lot of
interest in what you're doing. We know you are in a transition mode, and we look
forward to talking to you again as that becomes more definite.
I apologize for the delay, Treasury Board; we kept you waiting.
However, we're better informed now than we would have been if we hadn't.
In this second hour, we're pleased to welcome officials from
Expenditure Management Sector of the Treasury Board of Canada Secretariat,
officials with whom we have met before and we will look forward to continuing to
meet with: Bill Matthews, Assistant Secretary; Marcia Santiago, Executive
Director; and George Samiotis, Director.
Mr. Matthews, you have introductory remarks. We have been
provided with a deck of your slides.
Bill Matthews, Assistant Secretary, Expenditure Management
Sector, Treasury Board of Canada Secretariat: Good morning everyone, and
thank you. As you have already mentioned, I am joined by two colleagues to reply
to your questions. We will begin with a fairly brief presentation to give you an
overview of supplementary estimates (A) for 2014-2015.
We will go through our usual presentation. At the end of it, if
you are agreeable, there are a lot of items in the Supplementary Estimates (A)
relating to different bridges. I thought I would turn it to Marcia to walk
through the various places, because they show up in different organizations,
depending on the bridge we're talking about.
I will give you the run-through of where it all shows up, if
The Chair: That is agreeable.
Mr. Matthews: I will start on slide 3. It's the usual
structure in terms of the document. Supplementary Estimates (A) has the major
items, and I will be spending time going through each of those on subsequent
slides. Also, at the front of the Supplementary Estimates (A) document, you will
see the largest changes to individual votes by percentage to give you a sense of
what is happening.
There is a section on new votes and authorities. I will highlight
for you there that we have a new organization appearing for the first time in
the estimates documents: The Windsor-Detroit Bridge Authority is receiving funds
for the first time, so that is in there.
Then we get into the details by organization. I will remind you
that only the organizations requesting funds show up in the supplementary
estimates. There are 16 of those. If you don't see a particular department in
here, it means there are no funds for that organization in Supplementary
The Chair: Sixteen out of how many?
Mr. Matthews: Sixteen out of 130.
The Chair: Thank you.
Mr. Matthews: I will also reminder senators that on the
Treasury Board of Canada Secretariat website, there is additional information on
statutory forecasts and information on planned spending by both strategic
outcome and program. We also have the budgetary expenditures by standard objects
and then transfers between organizations. That continues to be online on the
Treasury Board of Canada Secretariat website, if it's of interest to you.
Slide number 4 is our usual explanation of budgetary,
non-budgetary, voted and statutory items. We do have a non-budgetary amount of
$44.4 million in Supplementary Estimates (A) on the far right of that slide. A
reminder that non-budgetary are things like loans that will get paid back to the
fiscal framework, so there's really no long-term impact on the fiscal framework
if things go as planned. The $44.4 million in question here are loans to
Aboriginal claims groups to allow them to participate in existing negotiations
that are already under way for settlement. Again, those are loans.
On the voted side, we have $2.4 billion in budgetary spending,
and I will go through the major items related to that spending. We have a small
amount of $11.4 million related to statutory, and that is contributions to
employee benefits. It is just $11.4 million, so unless there are questions,
that's all I will say about that this morning and we will focus on the big
With slide 5, my usual warning is it's too early in the year to
compare to previous years and then we do it anyway.
Then you will see Supplementary Estimates (A). I will flag for
senators that Supplementary Estimates (A) is $2.4 billion in voted. That is
higher than Supplementary Estimates (A) was last year, which was $1.1 billion.
In fact, if you go back in history, this $2.4 billion is really a return to more
normal levels. Supplementary Estimates (A) in 2013-14 was unusually low, so
you're seeing more of a return to previous levels. It was $2.1 million in
2012-13, and that's kind of the normal level.
The trend here, as we have discussed many times, is that
statutory spending is increasing. That relates mostly to the Health Transfer as
well as increases in our programs related to elderly benefits. The trend on
voted amounts is downward, and we will see if that trend continues as the year
Slide 6 is largely a pictorial representation of the same thing.
What we're showing on the far left of this slide is the 2013-14 total estimates
in billions, so that would include the mains, Supplementary Estimates (A), (B)
and (C), and we're comparing those to the Main Estimates and Supplementary
Estimates (A) for the current fiscal year, 2014-15.
You will see, like I mentioned on the previous slides, that
government transfers are up over last year's total. Public debt is basically the
same amount as it was for last year, and operating and capital is lower at this
point, but a reminder that we do have Supplementary Estimates (B) and (C) still
to come at a later date. We will see what that brings us.
On slides 7 and 8, we have the major voted items. I will walk you
through these. I suspect most of your questions will relate to these items.
The first item on this list is Employment and Social Development
Canada, $500 million. That is an annual amount that goes out to 2019-20 of
$500 million. It replaces the Labour Market Development Agreements, so that's
new funding there.
The second item on this list is the Jacques Cartier and Champlain
Bridges. As I mentioned, Marcia will walk us through the various places that
bridge funding shows up in this document, but this is money for repairs and
maintenance of the federal structures in Montreal, at $253.7 million. That ties
back to a Budget 2014 announcement of $378 million over two years. This is the
first piece of that.
The third item on this list is PPP Canada, so that's the P3
Canada Investment Fund of $200 million. That relates to the sixth round of
applications for P3 Canada. Those are merit-based applications, and we're happy
to take questions on how that fund works, but it relates to a Budget 2013
The next two items on this list, Atomic Energy of Canada
Limited — I understand they were here just before us — $195 million related to
the lab operations for medical isotopes as well as some infrastructure upgrades
for Chalk River, which are to meet ongoing safety requirements.
That's $195 million, as is the next item on this list, and that's
not a mistake. It is the same amount of $195 million but for different things.
This one is the Natural Resources Canada Nuclear Legacy Liabilities Program.
That's planned spending related to environmental liabilities. The vast majority
of nuclear cleanup costs relate to Chalk River, but there is some for labs in
Manitoba as well. That's $195 million.
Then you will see the Office of Infrastructure Canada, the new
Building Canada Fund, of $142.2 million.
Lastly on this slide, there is an item that you have seen before
here: Indian Affairs and Northern Development Canada: First Nations Water and
Wastewater Action Plan, $136.3 million. That relates to funding to develop
protocols and standards related to water and waste water, as well as some
projects to install indoor plumbing in some communities in northern Manitoba.
Flipping over to slide 8, just to continue this list, again an
item you have seen before, senators, with Foreign Affairs, Trade and
Development. This is the Canadian High Commission consolidation. This funding
of $133.6 million relates to the renovations for the high commission and
leasehold extensions. Again, you will remember that we sold McDonald House for
roughly $565 million some time ago. This work to consolidate and prepare the
high commission and official residence is really funded out of the proceeds from
the sale of McDonald House, but the way parliamentary authorities work, the
money from the sale goes into the Consolidated Revenue Fund, and then to spend
it, we actually have to vote the department some money.
Second on this list is another item for Indian Affairs and
Northern Development. This relates to the remediation of federal contaminated
sites, $127.7 million. Indian Affairs is responsible for 112 contaminated sites,
but this funding actually relates primarily to two sites, the Faro and the Giant
mine sites in the northern part of the country. That funding relates
specifically to those two.
Then we have the Office of Infrastructure Canada, another bridge
item, the new bridge for the St. Lawrence, $119.8 million.
VIA Rail funding for incremental pension requirements is an item
you have seen before, so it is another top-up to the pension fund. We can speak
about why that is necessary, if that's of interest.
Lastly, there is the Government of Canada's final contribution to
the decontamination costs related to the Lac-Mégantic disaster, which is
$95 million on that front.
Those are the major voted items. I suspect many of your questions
will relate to them, so I thought I would give you a bit of background.
Changing gears, on slide 9, we have spoken at this committee
before about something called the expenditure database, which is a database on
the TBS website where you can go and find spending history and projected
spending. It is searchable by department. It still exists, but we have renamed
it. We have added human resources data to that database, so if you actually went
there, you would see people management information from 2010-11 going forward,
employment by province, age of employees and average length of tenure. Because
we have gone beyond just spending data, we thought we needed to rename it. It is
now called the Treasury Board Secretariat InfoBase. If you happen to be
searching for it, we thought we should flag for you that we have renamed it.
We will continue to add data to this database. You will see
information related to public accounts for the year most recently closed once it
is available, as well as information from the quarterly reports of departments
as they become available. In addition, we are still always searching for ways to
make it more usable and more searchable, so you may see some changes on that
front as well.
Lastly, just to wrap up on slide 10 before I turn it over to
Marcia, we have $2.4 billion in budgetary voted expenditures related to 16
departments and agencies. As mentioned in previous appearances, these documents
support the appropriation bill you will be asked to vote on related to
With that, I will turn it over to Marcia to give us a
walk-through of where you find the various items on bridges.
Marcia Santiago, Executive Director, Expenditure Management
Sector, Treasury Board of Canada Secretariat: Mr. Chair, members of the
committee, with your permission I would like to go over the main items regarding
the federal bridges in this budget.
More specifically, three organizations are requesting
supplementary votes totalling more than $379 million, as the government
announced in Budget 2014.
Most of these funds will be allocated to the Société Les Ponts
Jacques Cartier et Champlain Incorporée and to the Office of Infrastructure of
Canada for bridges and other federal structures in Montreal.
As has been widely reported, several of these structures are
aging rapidly and are in an advanced state of deterioration, especially the
First, Infrastructure Canada is requesting close to $120 million
in these supplementary estimates to begin work on the planned replacement of the
Champlain Bridge, specifically land acquisition, planning and procurement for
the project. Eventually, this work will include a new Nuns' Island Bridge as
well as reconstruction and widening of the highway, but the $120 million being
requested is only for the portion of the funding that the department intends to
spend this fiscal year.
In addition, Jacques Cartier and Champlain Bridges Incorporated,
the Crown corporation, is requesting $254 million for operating costs, repair
and maintenance of existing structures. This includes urgently required safety
repairs on the Champlain Bridge and the construction of a temporary bridge
causeway to replace the Nuns' Island Bridge. There are also other funds going
toward structures maintained by the same Crown corporation, but the majority of
this funding is intended for Champlain and the Nun's Island replacement.
Finally, an item for $5.6 million is included in these estimates
for activities to be undertaken in this fiscal year to establish the
Windsor-Detroit Bridge Authority, which is the new organization that Mr.
Matthews mentioned earlier. The transition of responsibilities from Transport
Canada is expected to take 12 to 18 months, following which time the bridge
authority will conclude planning activities and move on to overseeing a
public-private partnership, or P3, procurement process.
To sum up, these three items supporting federal bridges make up a
horizontal theme not normally captured in either the publication or in our
horizontal initiatives database posted online. However, as they represent about
15 per cent of the authority sought in these estimates, we thought this short
summary could help in your study.
The Chair: Do you have a list of all the bridges that are
exclusively in Canada, not the ones at border crossings, which are federal
Mr. Matthews: I do not have an exclusive list. There are
about 500 bridges, but the organizations that would maintain those are Parks
Canada, the National Capital Commission. Public Works is involved, as is
Transport Canada and its related Crown corporations. The major bridges receiving
funding that are not international in nature are the Montreal bridges we're
speaking about today, but there are many other small bridges.
The Chair: I'm familiar with the bridge across the harbour
in Saint John, New Brunswick, and I know how much the federal government wanted
to get out of that. Can I assume all the bridges here in Ottawa-Hull are all
federal government bridges?
Mr. Matthews: I'm not sure. I haven't got the exclusive
The Chair: Can I assume the bridge in Kelowna, British
Columbia — really like a floating bridge — is the federal government?
Mr. Matthews: Generally speaking, anything that's
interprovincial you can sort of assume is federal in nature.
The Chair: Like these bridges in Montreal.
Mr. Matthews: They're unique. Can I get you a list of all
The Chair: That would be helpful.
Mr. Matthews: I don't think I can get all 500, but the
major ones I'm sure we can get for you.
The Chair: That would be helpful. See if you can include
in that why we're building a bridge to Nuns' Island. It seems most peculiar to
Mr. Matthews: You have to look back; it's historical. I'll
generalize. Some of the bridges relate to the Port of Montreal, a federally
owned property. Other works there are related to the construction of the St.
Lawrence Seaway, which was a federal project as well. You have to look to
history to understand why we own them.
The Chair: I'll get it from you later, not as a witness.
Senator Hervieux-Payette: It's being built now, but to
have access to the new bridge they have to —
The Chair: This is Nuns' Island?
Senator Hervieux-Payette: Yes, that's what you asked. They
have to deviate. They cannot use the old one.
Senator Bellemare: My first question is about Employment
and Social Development Canada and the $500 million labour market development
agreement, funds which, according to you, are included in supplementary
estimates (A). This is not new money as such, since that agreement expired in
2014. Were these $500 million statutory previously? Because now, since the
agreement has expired and was renewed, the funds are in the supplementary
Mr. Matthews: Thank you for your question, senator.
The labour market development agreements were in place from 2007
to 2014. You're right. These agreements are now over and have been replaced by
the Canada Job Fund. The Canada Job Fund funding is voted in nature.
Do you remember if it was statutory or voted?
Ms. Santiago: I can't.
Mr. Matthews: I can't recall if the predecessor was voted
In the funding you've got $500 million; $490 million is grants
and contributions and will flow to the provinces, and roughly $9 million is for
the department for operations of these funds. This new arrangement is six years
in length, so you will see them out like this for each of the next six years,
$500 million a year.
Senator Bellemare: My second question is about the
percentages. On page 1 of 7 of supplementary estimates (A), we can see, as you
said, the increase which is now in percentage form of the spending authorities
proposed to date. I note that, in several cases, these percentages are quite
When we look at the real expenditures, we know that the
government has made a lot of efforts to reduce its expenses, and in the budget,
when it is tabled, it is clear that budgetary expenditures are still inferior to
the real expenses in total. Here, a few organizations have asked for additional
My question is the following: when we analyze budgetary
expenditures over time, do we see a real decrease in budgetary expenditures or,
through the supplements, do the departments increase the authorized votes so
that budgetary expenditures have changed little? Here we have figures for
2012-2013 and 2013-2014, but that is not a sufficiently long horizon to get a
better grasp of the evolution of budgetary expenditures.
Mr. Matthews: I thank you for the question. The figures in
supplementary estimates (A) are going to increase the figures in the main
The supplementary estimates certainly increase spending
authorities over what is in the Main Estimates. You'll see in many of these new
items there is a link back to which budget the funding was announced in. So
you'll see PPP Canada was Budget 2013. What we're dealing with here is a timing
issue. The vast majority of spending here was previously announced in budgets.
The odd time we hit urgent spending that was not foreseen in a budget, but
generally speaking it relates to a previous budget, so we're not increasing
spending over a budget.
Budget 2014-15, on an accrual basis, was forecasting government
spending of roughly $280 billion.
I know estimates are on a cash basis so it's different, but we
are now including Supplementary Estimates (A) at about $240 million or just
under. Last year, 2013-14, for total authorities I believe we were at about
$260 million, so we're still under that. The spending in here is not spending
that was foreseen in the budget. It's spending plans that were included in
previous budgets and in fact the department is now ready to spend some money.
Senator Bellemare: Why was this not included in the main
Mr. Matthews: It is the role of Treasury Board to include
that in the main estimates or the supplementary estimates. We have to convince
the minister responsible for Treasury Board that the department has already done
all of the planning to determine exactly how the money will be spent.
You can have an idea in a budget. We're going to spend X. That's
fine. Before it hits the estimates documents, you have to be able to come into
Treasury Board and say, “Here is in detail what we're going to spend; here are
our performance measures and how we will measure them.” That sometimes takes two
or three years — not always, but it can.
Senator Hervieux-Payette: Does the second item, on page 4,
regarding the Jacques-Cartier and Champlain Bridges, not concern new bridges at
all, but current structures?
Mr. Matthews: Yes, it concerns existing bridges.
Marcia also mentions there are funds in another spot in the
estimates for the new bridge, but the funds I referred to on slide 7 are for the
maintenance of the infrastructure maintained by Jacques Cartier and Champlain
Senator Herview-Payette: This morning on the news they
said that the Mercier Bridge was dangerous and that it will require a lot of
work. We have a certain responsibility regarding the Mercier Bridge in Montreal
as well. Does that mean that those repairs will be in a supplementary estimate
during the year, if there is an agreement on repairs? You do not even need to be
an engineer to see it, when you see the bridge, you can see the rust. You have
to say your prayers before crossing it.
I would like to know if we are going to revisit this file with a
supplementary estimate. I would like to know how the file evolves; what is the
Mr. Matthews: For the senators who may be less familiar
with the Jacques Cartier and Champlain Bridges Incorporated, that corporation is
responsible for numerous pieces of infrastructure. I will run through the list
of what they're responsible for.
That corporation has responsibility for the Jacques Cartier
Bridge, the Champlain Bridge and the related ice control structure; the Nun's
Island bridge, the existing one, not the temporary one; the Honoré-Mercier
Bridge, the Bonaventure Expressway; Highway 15; and Melocheville Tunnel. Those
are the main pieces of infrastructure that that corporation maintains.
As for the maintenance dollars that are being voted on here, the
vast majority is for the Champlain Bridge, but those maintenance dollars can be
used for any one of those infrastructure pieces. So if the bridge corporation
decides they need additional funding beyond what's here to do maintenance work
this year, they could come back on a future supplementary estimates, but the
breakdown of how this $253.6 million will be spent could be across the various
pieces of infrastructure.
You mentioned the Honoré-Mercier Bridge. I know there has been
re-decking work going on for a number of years, and that work is continuing.
Let's not forget this corporation has base funding in the Main Estimates,
additional funding in Supplementary Estimates (A); if more is needed, they could
conceivably come back in a future supplementary estimates, but I'm not aware of
any plans to do that.
Their Main Estimates funding in 2014-15 was $146.1 million. That
is their base, and we're topping that up through Supplementary Estimates (A)
with an additional $253.6 million.
That brings your year-to-date total up to around $400 million for
On the next page, page 8, you can see the following: Office of
Infrastructure of Canada, new bridge for the St. Lawrence. Are they talking
about the new Champlain Bridge? Given the wording in the document, one cannot
tell whether this concerns the new Champlain Bridge: $119 million.
Mr. Matthews: It's a replacement for the Champlain Bridge.
It's the new bridge for the St. Lawrence, so it will be a replacement for the
I'm sure senators are aware that the initial intent was to bring
that bridge into service in 2021. That has been advanced to 2018 because of the
condition of the Champlain Bridge. That bridge also includes the new permanent
structure for Nun's Island, so when we talk about the Champlain Bridge, it's the
big bridge to replace the Champlain as well as the replacement of the existing
Nun's Island Bridge.
The temporary Nun's Island Bridge, the causeway, is supposed to
be in service by 2015. That's not included in this part, so it's confusing.
Senator Hervieux-Payette: The Office of Infrastructure
Canada just made a calculation, but are they the ones that will be supervising?
Will the realization of the bridge be done by a private enterprise?
Mr. Matthews: The intent is to explore a private-public
partnership to construct it. That has been discussed. The Office of
Infrastructure Canada is getting the funding for this work. At a later date, one
could decide something different. If you think about the Windsor-Detroit bridge,
there has been a decision made to create a new authority for that bridge. One
could imagine the same thing happening for this one, but at this stage, the
Office of Infrastructure Canada is receiving the funding.
Senator Hervieux-Payette: You cannot confirm to us whether
there will be a request for proposal and interest in the qualification of firms
that will build that bridge. I was told it was going to happen within a few
Mr. Matthews: Regarding the actual proposal, I can't speak
in terms of time. I know they're well advanced in their work. The funding for
Infrastructure Canada this year relates to acquiring land because they will need
the buy land to put the new bridge on, moving some utilities around, and the
The Chair: We will have Infrastructure Canada here
Mr. Matthews: The funding supports the procurement
process, but in terms of timelines, I can't speak to later on.
Senator Eaton: I guess I feel very frustrated because I
see three items in your supplements, 44.4, all Aboriginal Affairs — 44.4 to
repay $136.3 million for waste water and $127.7 million for contaminated places.
It's always hard because we don't know what other departments are
spending. We get no overall feeling. It seems to be a little amount here and
there, out of Indian and Northern Affairs, out of Natural Resources, out of you.
How could we finally get a graph where we can see everything, all
the money that goes? Because this country is under constant scrutiny from places
like the United Nations and First Nations peoples themselves. We're not spending
enough money or giving enough money. There is too much oversight.
How does one gather, as a senator, whether they have a case or
not? We have these three wonderful estimates here that amount to close to
$250 million or $300 million, but what do we put it against?
Mr. Matthews: In the Supplementary Estimates (A), those
three items you flagged all go to the same department. If you're looking for the
document page number in Supplementary Estimates (A), it's 2-7 in the English
version, and I'll make sure it's the same in the French version.
Senator Eaton: Is that the total amount that goes to First
Nations in a year?
Mr. Matthews: No, that's the total amount to that
In Supplementary Estimates (A), the funds that you have
mentioned, the three projects, are all going to one department.
In the French version, it is on page 2-3.
That gives you the profile for one department.
However, Mr. Chair, the senator has raised a point that she would
like to see the total funding for First Nations, and that does cross multiple
departments, Health Canada being the obvious one. We are trying to improve our
horizontal reporting to get at these things. I believe since the last time we
were here, we provided senators with a breakdown of First Nations spending that
crosses all departments, so it's something we're trying to do better on.
Senator Eaton: I'm sorry. I didn't get that.
The Chair: This is information reflected in our report,
and it is there. We haven't adopted the report yet, but there is some
information in the report, which we appreciate your help on.
Mr. Matthews: It's a valid question.
Senator Callbeck: Thank you for being here and for your
I want to ask about the Office of Infrastructure Canada on 2-13.
Down at the bottom, it says “Small Communities Fund” and the amount is
$12 million. It says “Provincial-Territorial Infrastructure Component — Small
Communities Fund.” Is that $12 million all going to small communities, in other
words, with populations less than 100,000?
Mr. Matthews: Under this fund there's a distinct carve-out
for communities with populations of less than 100,000, and that $12.7 million is
that piece, yes.
Senator Callbeck: That's in Supplementary Estimates (A).
What is the total amount in this New Building Canada Fund that will go to small
Mr. Matthews: The New Building Canada Fund promised about
$53 billion over 10 years.
George Samiotis, Director, Treasury Board of Canada
Secretariat: The amount of $964 million is earmarked.
Senator Callbeck: For small communities?
The Chair: Over ten years, did you say?
Mr. Samiotis: Correct.
Senator Callbeck: There is a lot of concern being
expressed in the press about this program, certainly in the Atlantic area, that
municipalities still really don't know the details of all the criteria for these
projects. It is a big concern because we're into the construction season right
now, and they still haven't got all the details. That is what I'm reading in the
Are there any agreements that have been signed in any of the
provinces with the feds?
Mr. Matthews: I believe there is one in Alberta. I'm
recollecting a project in Edmonton. I will turn to George.
So there is one signed in Alberta.
Mr. Samiotis: It's a light rail transit project in
Mr. Matthews: That being said, these agreements are
difficult to work out. It is federal-provincial-municipal. The questions on
details and how you apply are probably better asked to the department than to
Senator Callbeck: There are three here. There are national
and regional projects, and then there is the national infrastructure component.
Do there have to be three agreements with the provinces on this?
Mr. Matthews: There is more than one. There are three
flavours of funding.
First, there is the national infrastructure component, and that
is not allocated by province. Those are projects of national significance.
The second component is the provincial-territorial
infrastructure. That one is an allocation based by province, and the projects in
that case are jointly selected between the various levels of government. The
criteria are economic growth, clean environment and strong communities. Those
are the ones where you have to get agreement between the various levels of
government on what will be funded. I expect the comments you have seen in the
press relate to how to access the funds.
Then you have the small communities, which is another component
Senator Callbeck: The other area I wanted to ask about is
Employment and Social Development, which is on page 2-3. The $500 million is
going to the Canada job Fund. Part of that is for the Canada Job Grant. Where
does that stand right now? I know there was a lot of concern expressed about
that by the provinces; they didn't have the authority to contribute and they
weren't consulted. Has there been an agreement with the provinces?
Mr. Matthews: There are three components. The first is the
Canada Job Grant, and that is cost shared between the governments. There is an
agreement in principle, or an MOU, with all provinces and territories. Some
agreements have been finalized.
Ms. Santiago: As of the first week of May, four agreements
have been signed with Ontario, Manitoba, Alberta and B.C.
Senator Callbeck: That's a six-year.
The other question I should have asked was on Infrastructure as
well. With respect to the gas tax, is there money for gas tax in that?
Mr. Matthews: I'll have to get back to you on that one.
Can we come back to that later?
Senator Callbeck: Sure.
Senator Rivard: I would have a few questions concerning
the additional funds needed for pension funds at VIA Rail. I suppose that if we
have to add $101.6 million to the pension fund, the last actuarial forecast must
be over a billion. I suppose the answer is probably that the expected deficit is
going to be more than a billion dollars.
Mr. Matthews: A bit of background on VIA Rail before I get
to that specific question. VIA Rail is a Crown corporation and must follow the
private sector regulations in legislation for funding its pension plan. The way
that works, under the Pension Benefits Standards Act, is where you have a
deficit, you have five years to fund the deficit. We have seen an amount for VIA
Rail before and we will likely see a bit in the future, but going down.
If you look at VIA Rail's annual report and financial statements,
they show a liability of $43.7 million for their pension plan. That's down
significantly from the previous year.
We're expecting the contribution this year to be around
$100 million for the employer. Basically over the five years, two or three years
back and a couple of years forward, you will see the deficit made up. It's
expected the annual contribution from the federal government to make up that
deficit will be decreasing in future years because VIA's pension assets are
performing better since the recession. So payments are still required but they
are going down.
Senator Rivard: Is the current plan a defined benefit
Mr. Matthews: The current system is defined contribution,
pre-determined benefits. There have been changes made to the plan to make it
more affordable. They have moved to a greater employee share of cost-sharing in
terms of premiums, but the actual arrangement in question here is defined
Senator Rivard: Currently, is the employer-employee
contribution rate approximately 50-50?
Mr. Matthews: It has moved towards 50 per cent
employer-employee as most Crowns have moved to a new cost-sharing arrangement.
Senator Rivard: They are not there yet. They are tending
toward 50-50. As in most public pension funds, whether at the municipal,
provincial or federal levels, there are deficits caused by the old defined
Barring a miracle, unless the stock market yields about ten
per cent per year for the next ten years, all public organizations are heading
toward a deficit that will have to be paid. We are also going to have to change
the defined benefit plans and especially the employer-employee percentage,
otherwise we are going to hit a wall. That was just a comment.
Mr. Matthews: Not all pension plans are the same in terms
of how they perform, so VIA is the only Crown corporation plan that required
funding from the federal government in terms of their pension plan.
The pressure on pension plan liabilities was around two things.
The big one was the drop in the stock market. Plans have recovered, but that
takes time to work its way through the system.
The second piece is the longevity of employees. Employees are
living longer, and that will have an impact over time.
These are long-term liabilities, so the stock market eventually
does correct itself. The gains or losses that were incurred during the recession
have worked their way through, and you'll see better performance.
Marcia has an answer on the gas tax.
Ms. Santiago: The short answer is no, there is nothing
directly for the gas tax in the supplementary estimates.
The Gas Tax Fund is a statutory payment of close to $2 billion
that was listed in our online annex on statutory forecasts in the Main
However, Infrastructure Canada, in these supplementary estimates,
is getting something in the order of $44 million in operating costs. That
includes a small portion to administer the Gas Tax Fund.
Senator Chaput: I would like to refer you to page 2-10,
regarding the Indian Residential Schools Truth and Reconciliation Commission. We
see there were two transfers from Aboriginal Affairs and Northern Development
Canada allocated to the operational needs of the commission and to the
expenditures related to the production of reports.
These are additional requirements, and I presume the commission
does not spend all of these funds in the same year.
Mr. Matthews: You are correct. These represent transfers
from other organizations. The Indian Residential Schools Truth and
Reconciliation Commission — do you want to look at their base funding from the
These are transfers. It is not new money in terms of things
requiring voting by Parliament, because the amounts are new but Parliament does
have to approve transfers. These are transfers coming in from other
organizations which in effect supplement the Main Estimates of the organization.
I have just realized I'm staring right at their Main Estimates number in front
To start the year, “Indian Residential Schools” at the top of the
page, if you look down to “Total Budgetary Expenditures,” the first column says
“Previous Estimates to Date.” That would be the Main Estimates amount, and now
we're supplementing that with these transfers.
On the far right you get the “Proposed Authorities to Date,”
which is the Main Estimates plus adjustments in supplementary estimates.
Senator Chaput: That is the total?
Mr. Matthews: That is the total, yes.
Senator Chaput: Is that for one year? Or for five years?
Does it recur year after year?
Mr. Matthews: In terms of the transfers?
Ms. Santiago: The mandate was extended. It was originally
expected to expire this June. That's why they started with only a partial amount
of money in mains, but it has been extended by one year until June 2015 to allow
time for the finalization and the translation of the report.
Senator Chaput: I now refer you to page 2-7, Indian
Affairs and Northern Development.
Every year, there are additional requirements for the management
of the First Nations Water and Wastewater Action Plan. Does someone, somewhere,
ensure that the file is progressing and that there are results? Every year I ask
the same question, but I should really put it to the Department of Indian
When I see this amount coming back every year for the renewal of
the action plan, I always wonder if there is someone who is checking the amounts
allocated to treatment and maintenance. Is someone examining the results? At a
certain point, will all of the First Nations have access to clean drinking
Mr. Matthews: Thank you for the question. You are correct,
the First Nations Water and Wastewater Action Plan was launched in 2008 and
In Budget 2014, the decision was made to extend the program for
another two years, so an additional $323.4 million over two years. You are
seeing part of that this fiscal year. The efforts are very much around not only
infrastructure but also capacity building, setting protocols and standards and
training. So it is not just building infrastructure.
If you are looking for performance information on how the program
is performing, I would say two things. The first is that the decision to
continue the program is a signal that they're getting results. You can look to
the department's Report on Plans and Priorities and Departmental Performance
Report; that's exactly what that is for is, to get information on the progress
The Chair: We have gone over our time, but we have gained
some time. We want to thank you very much.
I want honourable senators to understand the point that was made
by Mr. Matthews that the previous two witnesses, AECL and Public Works; it
was $195 million each. It is unfortunate it was the same number; some of the
questions sounded like people were assuming it is the same amount.
Mr. Matthews: You are right. It is the same dollar figure
but two different $195 million figures for two different purposes.
The Chair: We want to thank you. Senator Eaton was asking
a question with respect to total expenditures for Northern Development and
Aboriginal Affairs. We have that in our report that we will be reviewing, but it
is based on the information you were able to provide us.
We continue to have interest in these horizontal items so we can
see how much is going to various departments on a subject matter. We would
encourage you to continue to update that. It is $10.8 billion through various
We will be meeting this afternoon at 2:30 in room 160S, and we're
starting Bill C-31 and the reports from other committees. We have two committees
coming: Legal and National Defence. What I would like to do is look at the
report that came up through Senator Eaton's question. It is the second interim
report, and it is the basis for main supply.
We have to get this report in. It's been circulated to everybody,
and so if you are happy with it, subject to any small typographical errors and
those changes, then we can adopt and file that one.
Senator Chaput: This afternoon?
The Chair: This afternoon. So bring that one with you. We
can deal with our report with respect to C-31 tomorrow evening.
That is all for now.
(The committee adjourned.)