Proceedings of the Standing Senate Committee on
National Finance

Issue No. 20 - Evidence - November 29, 2016

OTTAWA, Tuesday, November 29, 2016

The Standing Senate Committee on National Finance met this day at 9:32 a.m. to examine the expenditures set out in Supplementary Estimates (B) for the fiscal year ending March 31, 2017; and to study the federal government's multi- billion dollar infrastructure funding program (consideration of a draft budget).

Senator Larry W. Smith (Chair) in the chair.


The Chair: Good morning, everyone. Welcome to the Standing Senate Committee on National Finance. Colleagues and members of the viewing public, the mandate of this committee is to examine matters relating to federal estimates generally, as well as government finance.

My name is Larry Smith, senator from Quebec. I chair the committee. Let me briefly introduce the other members of our committee.


To my left, Senator André Pratte from Montreal.


To my right, from British Columbia, in the north end, Senator Richard Neufeld. To his right, from Toronto, province of Ontario, Senator Nicole Eaton. To her right, from Newfoundland, former Auditor General, Senator Beth Marshall.

Senators, welcome.


Today we'll continue our study of Supplementary Estimates (B) for the year ending March 31, 2017.


Today, to give us an overview of their funding request in the Supplementary Estimates (B), we have four departments and one crown corporation appearing.

During the first hour of our meeting, the panel is comprised of three departments. We welcome. from Global Affairs Canada, Arun Thangaraj, Assistant Deputy Minister and Chief Financial Officer.


We also welcome Sean Boyd, Director, Middle East Development Division, Global Affairs Canada.


We also have colleagues in the audience who can help answer questions, and we have quite the group. Good morning, everyone.

From National Defence and Canadian Armed Forces, Claude Rochette, Assistant Deputy Minister (Finance) and Chief Financial Officer; and Major-General John Madower, Chief of Programme.

From Veterans Affairs, we have Maureen Sinnott, Director General Finance. From Charlottetown, home of the 2009 Canada Games, Faith McIntyre, Director General, Policy and Research Division; and Elizabeth Douglas, Director General, Service Delivery Program. Ladies, welcome.

The two other organizations mentioned on the agenda will appear as a panel during the second hour of our meeting.

Ladies and gentlemen, thank you for being with us. We are ready to hear a short presentation of opening statements in turn.

Arun Thangaraj, Assistant Deputy Minister and Chief Financial Officer, Global Affairs Canada: Thank you for the invitation to appear before you today. As you said, I am here with Sean Boyd, the Director of Middle East Development. In the back, we have Caroline Delaney, who is the Director of Peace and Stabilization Planning and Denise Boutros from our financial planning area.

I'll make a couple of short opening remarks, and then I'll be pleased to answer your questions.


Global Affairs Canada has continued to advance democracy, inclusive and accountable governance, and respect for human rights through a revitalized engagement with the United Nations. We have increased our support for peace operations and contributed to multilateral efforts to fight terrorism and extremism.

Global Affairs has enhanced the ability of Canadian businesses to conduct activities in priority markets, an objective further supported by the recent signature of the Canada-European Union Comprehensive Economic and Trade Agreement.


In early 2016, we began a comprehensive review of our development assistance, informed by consultations with key stakeholders, including other donors, recipient countries, humanitarian organizations and Canadian and international organizations, to refocus our support on the poorest and most vulnerable, including fragile states.

In light of the ongoing crisis in Syria and Iraq, Global Affairs launched a comprehensive three-year strategy to provide assistance to conflict-affected communities. Together with other government departments, we supported Operation Syrian Refugee, welcoming over 25,000 Syrians to Canada.

The department also responded to humanitarian emergencies in 57 countries and helped to reach over 76 million people with quality and timely assistance.

Global Affairs has supported inclusive economic growth and development outcomes around the world, mobilizing expertise to deliver development results in more than 100 countries.


The breadth, scope and international reach of Global Affairs Canada's mandate makes it one of the most complex departments in the Government of Canada.

This international reach is demonstrated by Global Affairs Canada's management of Canada's international platform, a network of 177 missions in 109 countries that provides a range of services to Canadians and Canadian businesses, while also supporting the international work of 34 departments and agencies, Crown corporations and provincial governments.

As is typical for an organization of this size and international reach, the department faces a wide range of challenges arising from uncertainty and volatility in the global environment in which it operates, such as natural disasters, conflicts and security threats.


Against this backdrop of complexity and volatility, Global Affairs continues to place unwavering emphasis on prudent and careful financial management to deliver its mandate in a sustainable and efficient manner.

With respect to the Supplementary Estimates (B), the department has requested funding of $573.5 million, which will bring the department's total authorities to date to $6.28 billion.

This funding includes $233.4 million to increase Canada's diplomatic security and humanitarian and development assistance engagement in the Middle East. Through this initiative, Canada will expand its presence and diplomacy in the region and expand programming, particularly via humanitarian assistance, development programming and counterterrorism capacity building. This funding provides a multi-year flexible and integrated response given the fast- evolving circumstances in the region, which generate unpredictability and risk.


In addition, $207.3 million is requested for the Peace and Stabilization Operations Program, or PSOPs, which will enable efforts to prevent and respond to conflicts abroad and support United Nations peace operations.


Through all the initiatives that you will find in the supplementary estimates, Global Affairs will continue to ensure the high standards of service to Canadians, particularly those requiring consular assistance abroad. We'll continue to deliver integrated foreign affairs, trade and development policy and programs in a manner that exemplifies the benefits of an amalgamated Global Affairs department.

Thank you, Mr. Chairman. I look forward to your questions.

The Chair: Who will speak on behalf of Defence? Please proceed.

Claude Rochette, Assistant Deputy Minister (Finance) and Chief Financial Officer, National Defence and the Canadian Armed Forces: Thank you very much, Mr. Chair and senators, for the invitation to present the Supplementary Estimates (B) for the 2016-17 fiscal year on behalf of Department of National Defence. It is always an honour to meet with distinguished members and colleagues before committee.

Today, I am joined at the table by Major-General Madower, the Chief of Programme. We also have in the room the Deputy Minister of Infrastructure and Environment, Mr. Jaime Pitfield, as well as the Chief of Staff, the Deputy Minister of Materiel, Mr. André Fillion.


The focus of National Defence and the Canadian Armed Forces remains on our three enduring roles, which are protecting Canada's interests at home and abroad, defending North America, and contributing to international peace and security. National Defence continues to conduct missions as part of a whole-of-government approach to defending Canada's interests and keeping Canadians safe and secure.

As I said in March this year, when speaking about the Main Estimates 2016-17, the Department of National Defence and the Canadian Armed Forces are focused on maintaining a strong sense of fiscal responsibility and a careful stewardship of resources in recognition of the fiscal environment in which we're operating. The magnitude, complexity and visibility of the Department of National Defence's budget demand a cohesive, comprehensive and strategic approach to maximizing the efficacy of our expenditures and investments.


As a consequence, the department continues to monitor and manage our fiscal requirements to ensure value for taxpayer dollars and support for government priorities. The department is committed to reducing lapses in funding so the amounts requested today are less than the approved budget estimates for some of the programs we will discuss. These estimates reflect that focus and put defence dollars where they are needed most.

Turning to the Supplementary Estimates (B), Mr. Chair, I would like to highlight key points to the committee on page 2-46 in the English version and page 2-41 in the French version.

The bottom line for National Defence resulting from these supplementary estimates is a request for $239.1 million in funding. This comprises $257.8 million of new funding and a decrease of $18.7 million for net transfers to other government organizations. These transfers are requested in Supplementary Estimates (B) because they were either not sufficiently developed in time to be included in the Mains Estimate or have been subsequently refined to reflect developments in particular programs and services.

The bulk of this supplementary request relates to funding for Operation IMPACT, the fight against Daesh in the Republic of Iraq and Syria. While the original cost estimate approved for fiscal year 2016-17 was $263.9 million, the department's request is only for $147.1 million. This reduction is a result of the department's commitment to closely monitor and manage the efficacy of our fiscal requirements. If additional funding is required, we will ask for it in Supplementary Estimates (C).


The second largest category of additional funding we're seeking today is infrastructure. The Department of National Defence has the largest and most complex real property portfolio in the federal government. It's responsible for more than 10,000 buildings; 12,000 residential housing units; 14,000 works, such as sewers, pipelines and electrical circuits; and more than 2.0 million hectares of land.

We're requesting an additional $36.4 million to help maintain and upgrade infrastructure assets and to address contamination issues at some of our sites. More specifically, the department will invest in defence infrastructure in the North and in repairing air-field hangars, jetties and other infrastructure at our wings and bases in the rest of Canada.


The department has also requested $22.1 million from Phase III of the Federal Contaminated Sites Action Plan. This funding will help reduce the department's contaminated sites, liability and minimize environmental and human health risks.

The last infrastructure request is for approval to reinvest $19.5 million from the sale of defence properties. These real estate properties were sold because they are no longer of strategic value and we need to reinvest the funding in the new demands at other properties.

Our third component relates to the Royal Canadian Navy and the need for an at-sea supply capability. A contract to develop an interim auxiliary oiler replenishment ship will fill the gap until the most robust joint support ships enter service in late 2021. DND is requesting $22 million for pre-delivery service payments related to that contract. This request supports DND's mandate, and we are committed to working with Public Service and Procurement Canada to deliver on this contract to strengthen the Navy.

Finally, Mr. Chair, the department's estimates include additional funding for several lower cost items. These include the improvement of security for military operations and personnel, smaller projects on bases and defence properties, and reinvestment of intellectual property royalties.


In closing, honourable senators, I hope that I have confirmed the department's commitment to monitoring and managing our fiscal requirements. That way, we'll ensure value for taxpayer dollars and continue our efforts to spend responsibly.


My colleagues and I would be pleased to address any questions you or your colleagues may have.

The Chair: Thank you. Ms. Sinott?

Maureen Sinnott, Director General, Finance, Veterans Affairs Canada: Good morning, and it is a pleasure to be here. I look forward to discussing Veteran Affairs' 2016-17 Supplementary Estimates (B) submission.

My name is Maureen Sinnott, and I am the Director of General Finance Division at Veteran Affairs, Chief Financial Officer and Corporate Service Branch. I am here today with my colleagues by videoconference, Elizabeth Douglas and Faith McIntyre. Elizabeth is the Director General, Service Delivery Program, Management Division. Faith McIntyre is the Director General, Policy and Research Division, within the Strategic Policy and Research Branch.

Honourable senators, the department is responsible for providing benefits and programs to veterans, Canadian Armed Forces personnel and their families in recognition of their service to Canada, and ensuring that their achievements and sacrifices are honoured and remembered through commemorative activities.

Mr. Chair, committee members, the department is proud of its dual mandate just as it is proud to continue to do everything in its power to enhance the programs and services that are important to Canada's veterans and their families.

Our minister has an ambitious mandate to give back to veterans by restoring critical access to services and ensuring the long-term financial security and independence of disabled veterans and their families. In so doing, the department is taking historic steps to ensure Canadian veterans and their families receive the care, compassion and respect they deserve.

I will now outline what is contained within our 2016-17 Supplementary Estimates (B) submission.

Veteran Affairs' overall total planned spending this fiscal year, including these supplementary estimates, is almost $3.77 billion. That's close to $130 million or an increase of 3.6 per cent over our current budget of $3.64 billion.

As these supplementary estimates show, our first priority is to make sure veterans and their families have the support they need, when they need it and for as long as need it. For the younger veterans, this often means ensuring that they are able to successfully transition to civilian life.

That's why the largest chunk of this new funding relates to initiatives announced through Budget 2016. This includes $65.7 million to enhance the delivery of services and benefits to Canadian Armed Forces personnel, veterans and their families by increasing the disability award amount to more fairly compensate for pain and suffering, expanding access to the permanent impairment allowance to compensate for lost career progression, and increasing the earnings loss benefit to increase the financial security of veterans while they are undergoing rehabilitation.

Some of these changes will not take place until April 1, 2017. However, on October 1, 2016, the department increased the earnings lost benefit from 75 per cent to 90 per cent of an eligible veteran's military salary. These funds flow directly to Canadian Armed Forces veterans through the New Veterans Charter.

Veteran Affairs also received $6.3 million to enhance service delivery to veterans, which is being used to re-open and staff offices in Charlottetown, Prince Edward Island; Sydney, Nova Scotia; Corner Brook, Newfoundland; Windsor, Ontario; Thunder Bay, Ontario; Saskatoon, Saskatchewan; Brandon, Manitoba; Prince George, British Columbia; and Kelowna, British Columbia; opening a new office in Surrey, B.C., and to expand outreach to veterans in Northern communities by working with our local partners there.

In addition to reopening offices, Veteran Affairs is also hiring additional case managers to reduce the client-to-case- manager ratio to 25-to-1.

These enhancements not only deliver on mandate commitments but also respond to recommendations from key stakeholders, including the Veterans Ombudsman.

In addition, $400,000 of new funding is for the Last Post Fund to expand program eligibility so that more families of lower income veterans can receive this benefit by increasing the estate exemption from $12,000 to approximately $35,000 and applying an annual cost of living adjustment on a go-forward basis.

Also included in these supplementary estimates is $6 million in funding to support the organization of the 2017 Invictus Games, an international sporting event that promotes the well-being and rehabilitation of the veteran population.

With these funds, we continue to ensure that Canada is there for the men and women and families who have dedicated their lives to the defence of their country.

Veteran Affairs' Supplementary Estimates (B) submission contains $42.9 million related to the transfer of Ste. Anne's Hospital to fund financial obligations to former employees of the hospital.

There is also a further $7.2 million to commemorate major milestones of the First and Second World Wars: Vimy, Passchendaele and the raid on Dieppe, this year.

And finally, $1.5 million relates to increased employee benefits plan costs. This is statutory funding for new personnel in our re-opened offices and new case managers across the country.

It's important to understand that Veteran Affairs' budget fluctuates each year due to the demand-driven nature of our programs and services. Veteran Affairs updates its client and expenditure forecast each year to ensure that all veterans who come forward receive the benefits to which they are entitled. However, expenses are only incurred for the veterans who actually come forward qualifying for our programs and services. As Veteran Affairs' program budgets can only be used for the purpose for which they were intended, excess funds cannot be redirected for other purposes without explicit consent from Treasury Board.

In closing, I would like to point out that in 2016-17, as in previous years, approximately 90 per cent of Veteran Affairs' budget, or $3.4 billion, will flow directly to veterans, their families and the other Canadians served by Veteran Affairs.

Thank you, Mr. Chair. Faith, Libby and I would be happy to answer any questions that you or other committee members have on any part of these supplementary estimates.

The Chair: Thank you very much. I'd like to welcome Senator Mitchell, Senator Cools and Senator Andreychuk here to round out our panel. In terms of senators' questions, we have a full list, starting with Senator Marshall.

Senator Marshall: Thank you very much. I have questions for all three departments, but I'm going to start off with Foreign Affairs. You commented in your opening remarks on the $233 million for the crises in Iraq and Syria. Is this full $233 million for humanitarian purposes?

Mr. Thangaraj: The vast majority of it is for humanitarian purposes. There's also a portion of funding for counterterrorism and another portion for our mission platform abroad. I'll ask Sean to give more details on the humanitarian aspect.

Senator Marshall: I'd like a breakdown. Thank you.

Sean Boyd, Director, Middle East Development Division, Global Affairs Canada: Yes, the vast majority. The anticipation is that we would be spending, in total, upwards of $280 million in terms of humanitarian. The $233 million would be part of the new funding that would supplement that. That funding is short-term humanitarian assistance funding allocated across the four countries that are part of our strategy: Iraq, Syria, Lebanon and Jordan.

Senator Marshall: That is humanitarian. Is this all for bringing refugees to Canada, or is this to provide assistance to camps? What is it being used for?

Mr. Boyd: It's principally used for working through international organizations like the UN to provide support in situ. It's to provide support for displaced persons either in refugee camps, or many of the displaced persons who are actually in normal communities as opposed to dedicated camps. It's reaching those vulnerable populations in the countries in situ.

Senator Marshall: How much of the $233 million is for humanitarian? Just focus on the $233 million that's in Supplementary Estimates (B).

Mr. Thangaraj: $165 million.

Senator Marshall: How much is for counter-terrorism?

Mr. Thangaraj: About $9 million.

Senator Marshall: You mentioned something about our missions abroad. That's the balance of it?

Mr. Thangaraj: There's the balance of it, and then there are other types of development assistance that we're providing. That's around $15 million, and then the rest would be for the platform costs of the missions abroad.

Senator Marshall: How much of the $233 million would be for administration and salaries of public servants?

Mr. Thangaraj: The salary costs out of that $233 million are about $3 million.

Senator Marshall: Thank you.

For National Defence, you also have $142 million in increased funding for the crises in Iraq and Syria. Can you give me an overview of what that money is used for?

Mr. Rochette: Yes. The total amount is $142 million, plus we have $5 million for statutory payments for employee benefits. The total we're asking for Operation IMPACT is $147.1 million.

The basic breakdown is for operations, capital investment and also some funding under vote 10 that is for a memorandum of understanding that we have for lethal aids. We are receiving some funding for allowances that we pay for our military in theatre. We received $25.2 million. We also received funding for temporary duty and military vehicles, when our members travel.

Senator Marshall: Is that in the $142 million?

Mr. Rochette: It's all in, yes. I'm giving you the full breakdown now. If it's too detailed, please let me know.

The temporary duty and military vehicle costs are $90.4 million. For rental of commercial vehicles, we have estimated $4.1 million. Real life support means things like setting up and maintaining a camp for our military, and that amount is $1.3 million.

We have some administration fees for the MOU that we have for the purchase lethal aids for $1.2 million, as well as $9.5 million for lethal aids. After that, we have some equipment for our special forces, $10 million.

Senator Marshall: We have the two departments, National Defence and Foreign Affairs, spending money on the crises in Iraq and Syria. Who is the controlling department? Some department must be overseeing all of it so that it's coordinated and brought together. Which department would it be?

Mr. Thangaraj: On the humanitarian and diplomacy side, we are the lead. We work very closely with National Defence to make sure that all of the efforts are coordinated between the two of us. It's a joint working group between our organizations to do that. Claude and I work on the financial side to make sure that the asks are aligned and we are not duplicating. It is a joint effort.

Senator Marshall: Like a co-chairmanship?

Mr. Thangaraj: Yes.

Mr. Rochette: If I may add, senator, on the operation side, it's the same thing. National Defence takes the lead for the mission, but we do work very closely, again, like Arun mentioned, with Foreign Affairs. For example, when we went to cabinet with our memorandum to ask for funding, we asked for $24 million of non-lethal aids that was for and managed by Foreign Affairs, but we asked for the funding on their behalf. We had a joint memorandum to Cabinet.

Senator Marshall: My question is more focused. This is a multi-year program involving a number of departments, so who is bringing it altogether? I would think that there would be one department in charge, so it sounds kind of odd that it's co-chaired. I would have thought that there would have been somebody, ultimately, to make sure all of the pieces fit together.

Mr. Boyd: Thank you, senator. I can perhaps take a stab at answering that. We do have a Coordination Secretariat that is housed within Global Affairs that is responsible for the oversight of the programming and for supporting the ministers. We have three ministers that have ultimate accountability for the delivery on this strategy.

Senator Marshall: Who chairs that committee or that group?

Mr. Boyd: That committee, at the director general level, is chaired by the Director General for programs in the Middle East region, my boss.

Senator Marshall: Okay, thank you; that's good. Do I have time to ask another?

The Chair: We need to have everyone else, Senator Marshall, because we have a full list.

Senator Marshall: Okay. I have a question on Veterans Affairs when we get into supplementaries.

Senator Eaton: I will start with Mr. Rochette. In your speech, Mr. Rochette, you are talking about 22 million for pre-delivery service payments related to joint support ships to find an auxiliary oiler replenishment ship. Is that correct? You say you hope to have the joint support ships under service in 2021. With our history of procurement successes in this country, have they actually been procured? Are they actually being built, or is it still the design stage? Where is it at now?

Mr. Rochette: Currently, they are not being built. We have been working on the definition. We are working with Vancouver Shipyards, so they are currently finishing doing the work for the ships for Fisheries. When they finish that, they will start building our joint support ship.

Senator Eaton: So you expect that perhaps next year?

Mr. Rochette: If I may, I will ask my colleagues on the materiel side. They are more informed than me on that.

The Chair: Could you come down to the table so that we can record this properly, please? Thank you, sir. Identify yourself, please.

André Fillion, Chief of Staff (Materiel), National Defence and the Canadian Armed Forces: Good morning, Mr. Chair. André Fillion, Chief of Staff, Materiel. The joint support ship is part of the overall National Shipbuilding Strategy that is ongoing, with a noncombat package being handled by Vancouver Shipyards on the West Coast and a combat package being handled by Irving Shipbuilding on the East Coast.


Senator Eaton: We hear the same answer every year. I want to know whether the construction will start next year.


Mr. Fillion: In 2018, we predict the start of the construction. Currently, we are doing the design work with Vancouver Shipyards and the purchase of long-lead items in preparation for it. The construction will be sequenced as part of the broader National Shipbuilding Strategy, with the Coast Guard vessels also being fit into it. The program is on track and moving forward toward construction and delivery in the early 2020s, 2021 and 2022 for the two ships that will be delivered.


Senator Eaton: I have a follow-up question.


Mr. Rochette, how much money do you have in your department that has been reprofiled for the long-term Navy procurement?

Mr. Rochette: Overall, I would have to take that question on notice because we do have numerous programs. We can talk about some programs that we will provide. For example, for the interim AOR, we don't have any reprofiles so far, but, for some other programs, we do have some reprofiles.

Senator Eaton: That would be very useful.

Mr. Rochette: Yes, we can provide that.

Senator Eaton: Thank you. Now that Canada is purchasing the Super Hornets, do we have money reprofiled for that, and when do you expect that will we see that budget item in our sups? Will it be in Supplementary Estimates (B) or Sups (C) that we will see that reprofiled item coming through?

Mr. Rochette: As part of our investment plan, we had funding already earmarked in the fiscal framework for the purchase of a replacement for the CF-18. So now that it has been announced that we will have interim jets and then the procurement of future jets later on, that funding that is earmarked is going to be used. At this point, the announcement was to go to the market and to industry to get information and to determine exactly the cost estimate for the purchase. When we have that information, we will be able to come up with the cost estimate for both the interim and then to know how much we will need for the competition.

Senator Eaton: So we might see that this year, then?

Mr. Rochette: Not this year, no. It's a long process.

Senator Eaton: I'm sure, but they announced the purchase. They were going to buy these interim aircraft, so I thought perhaps they had a price tag with them.

Mr. Rochette: Now that we have announced that, the first step is to go to industry and to have, in this case, a secure lease with Boeing and to get specific information about all of the service on what it will cost, requisition and the in- service support, the maintenance of the jets.

Senator Eaton: That doesn't put us in a great negotiating position, does it, if we've already said we're going to buy them. You can't give me the number, and I understand you are in a terrible position.

May I ask one question of Global Affairs?

The Chair: That would be great.

Senator Eaton: In your speech, you said, "We began a comprehensive review of our development assistance, informed by consultations with key stakeholders, including other donors, recipient countries, et cetera, to refocus our support on the poorest and most vulnerable, including fragile states.'' Have you finished that review, and is it reflected in the sups?

Mr. Thangaraj: That consultation, I believe, wound up toward the end of summer. We are in the process right now of compiling all of the feedback that we've received and looking at how that is going to shape our development policy going forward. That process hasn't concluded, so you won't see any impact on the estimates at this time.

Senator Eaton: When you look at that, deciding who you are going to give money to, will you put in some kind of accountability so that, when you next appear before us, we can say, "Yes, these are the countries that are going to get the money,'' and you can track the money all the way to the final destination?

Mr. Thangaraj: Under our current framework, for all of the countries that we work with, on our website, we will list all of the countries that receive funding. We also publish that information through the OECD statistical report, but every project that we have is publicized on our website. You can track, all the way through, which projects get money. Internally, as part of our due diligence, we go through every project line by line.

Senator Eaton: I'm sure you do internally, but do you make sure that, if you give X money to X country, that the thing is actually being built or actually used for that purpose?

Mr. Thangaraj: Yes, we do. At the end of every project, whether we use a multilateral partner, for example, the United Nations Development Program, an NGO such as CARE Canada or even a bilateral partner like a government, we do an evaluation. We have an audit to make sure that the funds are used for their intended purposes and that we receive what we had funded.

The Chair: We have quite a few senators still on the list to ask question, so I would ask all of our colleagues to please make sure that you frame your questions so that we can get as much information as quickly as possible.

Senator Ataullahjan: I have two questions, one for Defence and one for Foreign Affairs. Can you explain to us the government's new approach to the crises in Syria and Iraq? How is it different from the old one? Also, the government has committed an additional 150 million to Afghanistan with respect to aid projects and security. Are you able to expand on DND's involvement currently in Afghanistan?

Mr. Rochette: With reference to Op IMPACT, basically, the new government has approved the new mandate for National Defence. It was announced during the election. The Canadian Armed Forces have ceased the air strike operation. That was to be ceased by February 2016. As a result of that, we have repatriated the CF-18s at home. The military mission has been extended until March 2017. We have increased the complement of military personnel from 650 members to 830.

We are also providing some military members to headquarters to provide specific support on leadership. Now, the mandate mainly is training the forces, so we are providing medical training and small arms training to our colleagues during the mission. Basically, the main mandate is training.

For the last part on Afghanistan, I'm afraid I cannot provide the information at this point. We are working on it, but I don't have the details that have been finalized yet.

Senator Ataullahjan: Thank you. The Global Affairs department is seeking an additional $82 million for capital expenditures in Supplementary Estimates (B). Can you explain the 62 per cent increase from the Main Estimates? Why is there such a big increase? Is that normal compared to the previous year?

Mr. Thangaraj: For a capital vote, the bulk of the increase is due to the re-investment of real property abroad. That's a process where we draw on proceeds of sale to fund the purchase of our staff quarters or embassies or chanceries or undertake major upgrades.

In this case, it is the purchase of staff quarters in London. We analyzed our current inventory of staff quarters in London to look at their condition. We want to ensure that the cost of owning is sustainable, and so sometimes it's best to sell and purchase a new one and have it size-appropriate as well. The bulk of the expenditure for capital is that.

The smaller portion in the capital increase is related to the new Paris chancery, and this is where we had consolidated our properties in Paris into one single building that, again, is much more efficient and meets modern workplace standards, Workplace 2.0.

You will see them in Supplementary Estimates (B) because it's planned in terms of when we require those capital funds for expenditures and when there is sufficient proceeds of sale to draw on those to make the investments.

Senator Mitchell: Thanks, everyone. My first question is to Mr. Rochette, and it's very specific. We know that there is a problem with sexual assault and sexual harassment in the military. General Vance and General Whitecross have done an excellent job in owning it and taking some steps. Could you give us a summary of what kind of money is being put into what kind of programs to deal with that?

Mr. Rochette: I will check. We are basically spending $2.2 million.

Senator Mitchell: That will include the hotline, the contact line. Are you now setting up specific measures, both educational and medical, to deal with the after-effects? There has been a huge problem with PTSD related to harassment in the RCMP. I'm not convinced that is being fixed there, and I think there is a better model in the Armed Forces. I'm not asking you to put down the RCMP, but I am asking you to clarify what you are doing. I just wanted to get that in there.

Mr. Rochette: The Chief of the Defence Staff has issued a very specific directive to his military, and General Madower is well placed to speak specifically about the guidance from the Chief of the Defence Staff.

Major-General John Madower, Chief of Programme, National Defence and the Canadian Armed Forces: Thank you for the opportunity to speak on this issue that is obviously very concerning for the Canadian Armed Forces. As you are aware, we worked with Statistics Canada to do a survey within the Canadian Armed Forces to quantify the magnitude of the significant problem. We were very heartened by the amount of responses that StatsCanada received, and obviously we were incredibly disappointed by the content and the commentary associated with this terrible issue.

It essentially, as you are alluding to, confirms the findings of the Deschamps report. It confirms that there is a significant problem in the Canadian Armed Forces. It confirms the requirement for Op HONOUR. It confirms that Op HONOUR has not gone far enough and that we have to continue to work at this. It confirms that we require a culture change within the Canadian Armed Forces, so there is much work to be done. As Mr. Rochette indicates, we've dedicated $2.2 million to the sexual misconduct response centre to support victims.

One of the things that we are heartened about with the results of the survey is that there is confidence in the chain of command to deal with these issues, so that is a first good step. It provides a benchmark as we go forward as we continue to work on this issue, but it gives us an opportunity, given the vast array of questions that were asked in the survey, which we are currently analyzing, to refocus and reorient Op HONOUR to get at the root of this problem. We need to get to a point where my daughter can be comfortable to join the Canadian Forces. That's what the leadership is dedicated and committed to drive towards.

Senator Mitchell: Thank you very much; that's very reassuring.

I know that there is a reference here in the presentation to the Counter-Terrorism Capacity Building Program, which is obviously extremely important. Could you give us some indication of how you're coordinating Global Affairs' efforts with the 16 or 17 other agencies that have responsibility in this area? Can you give us some insight in the structure?

Mr. Thangaraj: Absolutely. I will ask Caroline Delany to come down. She is our Director of Planning for Peace and Stabilization and also works on the counterterrorism program.

Caroline Delany, Director, Planning and Deployment Division, Peace and Stabilization Operations Program (PSOP), Global Affairs Canada: I'm Caroline Delany. I'm the Director for Planning and Deployment in the Peace and Stabilization Operations Program at Global Affairs. I'm covering the Counter-Terrorism Capacity Building Program for this committee appearance as well.

The funds for the counterterrorism program come from the international assistance envelope, so unlike other agencies, the objective is in relation to the capacity of outside organizations and governments in terms of addressing counterterrorism problems. The program itself works extremely closely with other government departments, both in terms of an advisory fashion, participating in the identification, approval and selection of projects, but also sometimes as implementers. The program sometimes works with RCMP or Corrections Canada, for example, in terms of delivering programs and capacity building to other governments and organizations overseas.

Senator Pratte: My questions are for the Department of National Defence.


Mr. Rochette, in two places, you referred to spending to address contamination issues at your sites and on certain land. Is the decontamination work part of long-term decontamination programs, or is it a project launched this year only? Is there really a long-term decontamination program for sites and land at National Defence?

Mr. Rochette: Mr. Pitfield can provide the details of his multi-year action plan. We plan to assess each of the hundreds of sites identified. Some sites have already been assessed. We conducted an assessment and determined that we needed to carry out the decontamination work. We have a fund to cover the decontamination work this year and in future years.

For example, take the Goose Bay site in Labrador. When I was a military member, I was posted there, in 2003. We carried out decontamination work, which continues today.

The funding for the decontamination work may be spread out over a number of years for certain sites depending on the infrastructure and decontamination needs.

Senator Pratte: The work will be carried out over a number of years?

Mr. Rochette: Yes, exactly.


Senator Pratte: There is also reinvestment of revenues from the sale or transfer of real properties. I understand what you do is sell property, and with the funds from the sales you buy other properties. Is that correct?


Mr. Rochette: Yes, exactly. It can be infrastructure or land that we sell. In this case, the $19.5 million comes from the sale of our Stanley Greene, Downsview, Chilliwack, Shannon Park, Lansdowne and Moncton sites, and from other things.

Senator Pratte: Is there a clear policy that tells National Defence what happens following the sale of land and the use of the money? Does the money need to be systematically invested in the purchase of other land? Can the money be reinvested in the bond market?

Mr. Rochette: Yes. The Treasury Board has a clear policy that determines the exact revenue, and depending on the type of revenue, the amounts we can reinvest. In this case, the policy is specific about reinvestments. For example, we can't take revenues from the sale of buildings and use them for an operation.

Senator Pratte: For expenses related to operations?

Mr. Rochette: For expenses related to operations.

Senator Pratte: Do you ever invest the money instead of buying land?

Mr. Rochette: If we have needs, Mr. Pittfield will identify them. After a sale, when we need funds, we submit the request and dip into the central fund where the proceeds from the sale are deposited. If we don't need funds, the money stays in the central fund.


The Chair: Ms. Sinnott, you seem to be anxious that we ask you something.

Ms. Sinnott: Not at all anxious. I'm quite interested in the others.

The Chair: One of the issues with the closure of the Ste. Anne's veterans hospital was the capacity that that hospital had to treat post-traumatic syndrome. I had the opportunity to visit the facility and meet with patients, former members of the Armed Forces. With the transfer of that hospital, what is the status of that facility? These folks were coming for a period of two, three or four weeks to physically stay in that unit. What is the status of the unit and what implication does that have for your treatment centres across the country?

One of the complaints was when they went to other facilities, they had to travel long distances and they couldn't stay there. Basically, they were seeing a doctor, the doctor gives them the verdict or your status, and then they have to leave. It appears that was some form of interruption in the type of treatment they were getting. What is the status of that particular situation?

Ms. Sinnott: I have my colleagues from Policy and Service Delivery on the videoconference, so I would turn that to the experts in the programs.

Faith McIntyre, Director General, Policy and Research Division, Veterans Affairs Canada: Mr. Chair, I believe you are referring to the Operational Stress Injury Clinic?

The Chair: Yes.

Ms. McIntyre: Indeed, at the time of the transfer on April 1, 2016, the Province of Quebec also took over, if you will, the authority for the management of the outpatient and in-patient. There are two Operational Stress Injury Clinics at Ste. Anne's Hospital. One is outpatient and one is a residential program, which is an in-patient program for X number of weeks, depending on the complexity and the needs of the individual.

This is consistent with all of the other Operational Stress Injury Clinics that are run across the country. They are managed by a provincial entity, a regional health authority, through funding provided by Veterans Affairs Canada; and certainly we ensure that services are provided and that there is accountability that we undertake. It is a similar model, but that was indeed transferred at the same time as the hospital itself.

The Chair: What implication does that have on staff? Have you lost any of the expertise that existed? People felt that once it was transferred from Veterans Affairs to the provinces, what interest would be left for people to stick around?

Ms. McIntyre: That is a very important question. I was directly engaged in the negotiations of the transfer itself.

I have the total percentage of staff for the full transfer. I don't know specifically for the Operational Stress Injury Clinic, but 41 per cent of the employees did not transfer with the overall transfer gain. That includes the long-term care component as well as the Occupational Stress Injury Clinic.

However, the Province of Quebec, working jointly with us prior to the transfer, focussed on recruitment activities, which have been ongoing. They are now staffed to capacity in terms of full-time equivalents but are still trying to bring in individuals on a call list. All of their positions at this point in time from a full-time equivalent perspective — Government of Canada, if you will, vocabulary — are filled.

The Chair: It would be helpful if you have some form of check system or interim report so we can see the quality of the care. That is one the concerns that the veterans themselves have, the quality of the care, not just putting FTEs into place. What type of reporting structure do you have with the hospital so that you know that the money that you are giving it is being properly utilized by quality people who can deliver the service to our veterans?

Ms. McIntyre: That is a very pertinent question. It has been close to six months that the hospital has been transferred. There is a transition committee that was negotiated as part of the agreement that will be in place for three years; I co-chair that with a counterpart in the Province of Quebec. We have met twice now and are meeting again before the Christmas holidays. As part of that role, there are ongoing reports provided to us by the facility, as well as we engage the residents committee and families to have information to be able to ask the important questions at that level.

At the end of the year, there will be a report produced by the committee, and certainly there are ongoing reports that are provided by the province, which is also accountable under the provincial system, as any other long-term care facility. In terms of accreditation and evaluations, there is also a system within the province that the hospital now falls under. All of that is being monitored as part of that transition committee, but it is still early days in the sense that it has been a few months since the transfer itself has occurred.

Senator Andreychuk: Mr. Rochette, you say that you have included money for improvement of security for military operations. I'm trying to figure out what those operations are and what improvements you're talking about. The chief thing is we're not quite sure where the military personnel are that may be at risk, what theatre of operation, or is it something else?

Mr. Rochette: In fact, that funding was part of a Budget 2015 announcement where National Defence was getting $23 million for the security mainly located in Canada, and it was to increase the security — for example, fencing around the base and things like that. For security reasons, I cannot provide the details, because if we broadcast that, we would provide information where we have witnesses on security in some locations. We are careful about that.

Senator Andreychuk: It is operations within Canada for your establishment?

Mr. Rochette: Our establishment, exactly.

Senator Andreychuk: It is not for any operations?

Mr. Rochette: It is not military or international operations. It is in Canada, our facilities, to ensure that we have the proper fencing around the airfields or have commissionaires.

Senator Andreychuk: Some of the controversy of the new building on Byward; right? We've seen some comment about the security in your main building here in Ottawa, in the newspaper, so you say it's confidential. I'm just challenging that.

Mr. Rochette: I mean the overall plan we have. In fact, this is a decision we had to see what we can talk, such as fencing.

Maj.-Gen. Madower: Just to add to and reinforce what Mr. Rochette has said, essentially it's for fencing, barriers, security systems and other physical improvements of our domestic facilities as a result of the new concerns about our domestic situation. We're conscious of that. It goes back to the force protection of our service men and women, ensuring that they are protected and that their facilities are secure. That is essentially what this money is for.

Senator Andreychuk: I have a similar question to the Department of Global Affairs. Millions of dollars is for changing the situation in London and Paris. There is $7.7 million being asked to improve security at missions abroad.

It's baffled me; I can study the Vatican easier than I can Global Affairs. Is there a policy for how you sell and keep properties? Often it is a comment made about an incoming administration politically, but having seen it from the inside, I'm always baffled as to why we sell certain things and reap the benefit of, say, $3 million, and then we go into renting and leasing, which costs us in short order much more. Is there a policy somewhere? What particularly is in security? I'm concerned that we marry what we do in upgrading, but more particularly with personnel in missions that are now in hot spots and may not have been before.

Mr. Thangaraj: I'll take both of those parts. The first part is the policy that we have surrounding selling and repurchasing and whether we lease or buy.

We do have a policy. It's part of our real property abroad framework, where we will look at the condition of a specific asset. Does it meet our current needs? Our representational requirements change over time, partly because we have other partners. So if Immigration Refugees Citizenship Canada's requirements increase, we have to find a way to occupy them.

We constantly assess if our buildings meet our representational and service requirements to Canadians abroad. We will also look at the condition of the building. There are certain buildings are beyond their useful life. If we were to undertake a capital repair of that building, it would be very expensive.

The first decision is do we repair, do we buy, or do we lease? In certain markets, it often makes the most sense to lease those buildings. We would be required to do the fit-up and then have a lease obligation. Usually our leases are long term. But that type of analysis is done before we make a decision on what to do with those assets.

If you look at our staff quarters in London, the capital upgrades would be very significant. There was a decision not to sell and lease but to sell and purchase. The permutations and combinations will always depend on the market within which you're operating.

With respect to mission security and the amount that we have in the estimates, there's a combination of things. There are a number of capital improvements that we have to harden security — for example, security systems, making sure there are entrance systems into our embassies. There are double gates. You go in, it seals, and then you go into another one. There are a number of capital requirements that are there.

Over the last number of years, given the evolving security situations for our missions, we've really looked at our risk model internationally. We've looked at where to deploy security program managers to constantly re-evaluate the threat that our Canadians abroad are under.

Based on that information, we will either make capital repair changes or change our operating protocols. Our staff abroad will say: "Here is where you can travel, when. Here is where you may use an armoured vehicle, and here is where you will not go. Here is the red zone.''

So that security operation is an ongoing, evolving dynamic we have over time. Again, there's a dedicated program we have just to our mission security and our personnel abroad.

Senator Cools: I'd like to welcome the gentlemen and ladies to our committee. Some years back, I served as deputy chair of the Veteran Affairs Committee. The then chairman was a former veteran named Orville Phillips who had served in Bomber Command. Between Senator Phillips and Senator Jack Marshall, who later replaced Phillips on that committee, the veterans were well looked after and felt it too and said so.

Most of us have a special place in our heart for those who have served in the Armed Forces. Those of us who have read a lot, we know that conditions for veterans are far better in contemporary society than they were 100 years ago, even World War I. There are about 60,000 Canadian boys buried in Flanders and Passchendaele, it really is an overwhelming thing.

I was invited out west to a particular famous university to discuss with them the work that they're doing for veterans. I see you're using the same language here. Ms. Sinnott's presentation states that overall expenditures are $3.7 billion, but then you go over on the next page to say that the largest chunk of this new funding relates to initiatives announced for Budget 2016 that includes $65.7 million to enhance the delivery of services and benefits to Canadian Armed Forces personnel, veterans and their families. You make reference in the sentence above that for the younger veterans, this often means ensuring that they're able to successfully transition to civilian life.

We've come a long way in accepting and understanding that men in active combat are performing abnormal acts that sometimes may cause great psychological injury. There was a time not that long ago where these men could have been shot summarily for showing cowardice. That's not that long back in the history of these events.

We've come a long way. It was mostly men. I don't know that there are many women in active combat. I would like to get the last man out of combat. I'm not so eager to be putting women in. I would like to get everybody out.

How much of that $65.7 million is dealing with veterans who are suffering terrible problems from operational stress and the consequences of battle-weariness?

Ms. Sinnott: That $65.7 million is made up of two parts; $5.6 million has gone to implement the new earnings loss benefit changes as well as the retirement income security benefit, and the increase in the disability award and the permanent impairment allowance, and $60.07 million has gone to the direct program costs. The money would be paid out to veterans who are receiving a disability award for an injury incurred during service. I can't tell you whether it's for PTSD or mental illness or for a physical illness that one can easily see. However, that $60 million would include increasing the earnings loss benefit to individuals from 75 to 90 percent of their pre-release salary as well as the retirement income security benefit. The earnings loss benefit went into effect last month, in October.

Senator Cools: How much of that will go, say, to counselling services for these young men?

Ms. Sinnott: I spoke to an amount of money — I think $6.2 million — that goes to reopening offices and hiring additional case managers, which would bring our ratio of case managers to 25-to-1. That $6.2 million would hire additional case managers, which would go to providing case management services and ensuring more ready transition and so on. If you would like any additional information on exact programs, I could provide it.

Senator Cools: I would love to know. There are all kinds of universities now who have taken an interest in veterans and courses for them to go back to school and to go to university. Never mind going back; some have never been to university. It's an exciting time in these developments, I think. If they can explain it, I would be quite happy to hear that.

Ms. Sinnott: We do have rehabilitation and vocational rehabilitation programs that allow veterans to return to trade school or university and so on, so that is part and parcel of the programs.

Senator Cools: Maybe she doesn't have to answer. I am aware that time is pressing. You don't have to put me at the end. You could put me at the front, sometimes.

Senator Neufeld: Ms. Sinnott, on page three, you talk about $6.3 million to enhance service delivery to veterans which will be used to re-open some of the offices and create a new one, but you also say it's to enhance delivery. Is the $6.3 million just for reopening the offices? What is that inclusive of? Later on you say there's another $1.5 million for case managers, and you also reference case managers on page three. Just give me some sense of what it is for case managers and what is for re-opening the offices.

Ms. Sinnott: The $6.27 million that I spoke of is both to re-open the offices and hire new case managers. We are reopening the offices across country and hiring new case managers there, which will enhance the delivery of case management services.

Senator Neufeld: How much is for case managers and how much is for opening the offices? That's the question I want answered. Are we spending more money on opening new offices or more money on looking at case managers? You reference it later on. There's $6.3 and $1.5 million. If you don't have the answer, you could get back to us.

Ms. Sinnott: I will get back to you with the answer.

Senator Neufeld: I would also like to you move Prince George back to British Columbia.

Ms. Sinnott: I did in my speaking notes, and I apologize that it was written that way.

Senator Neufeld: I'm sure they were tremendously surprised when they ended up in Alberta.

Anyhow, on to the Armed Forces and the purchase of the new fighter jets, or the 18 you may purchase. How much input would the Armed Forces have had in the decision to do that? If you had some input, you must know a bit what the Super Hornets can do. The second question is: How long would it be before we see something in the budget relating to the purchase of those airplanes?

The third question is: Does it make sense for the Armed Forces to have maybe two or three different kinds of fighter jets? If you're still looking at the F-35, it seems to me you would want to stay with one type of aircraft rather than having a F-35, a Super Hornet and CF-18s still being run to the end.

What kind of input did you have? Did you have lots of input? When we see the ships, once you tell Vancouver that you're going to build ships there, it takes a number of years to finalize what you really want in that ship. Maybe you could help us here a little bit.

Maj.-Gen. Madower: You're asking me for some insight that I can't fully provide. You're also asking me for insight into government policy.

What I can tell you is that with an original purchase of 138 F-18 fighter aircraft back 30-some years ago, this interim capability will go a long way to improving the fighter capability in Canada. As I said, from the original purchase of 138 aircraft, we currently are now down to 76 capable aircraft to perform both the NORAD and NATO roles. If you just think about the contextual defence situation that we have today compared to 30-some years ago, this interim capability will go a long way to satisfying that.

Although the Super Hornet shares the same name and designation of the current F-18s, it's a completely different aircraft. It's about a third bigger and it's a significantly upgraded model of the current F-18. My understanding is that the government's intent is to utilize this as an interim capability and that eventually there will be one fighter aircraft for Canadian fighter capabilities. That's my understanding of the program, sir.

Senator Neufeld: How long would the Super Hornets be in service if they were purchased?

Maj.-Gen. Madower: I can't answer that question.

Senator Marshall: My question was initially on Ste. Anne's Hospital, but that was already asked.

My recollection is one of our witnesses referenced the Treasury Board policy regarding the reinvestment of revenues from the sale or transfer of real property. If there is a policy on that, could we get a copy? That issue comes up quite often, as we go from department to department.

The other item is relating to the contaminated sites that Senator Pratte asked about. Perhaps we could find out if there's a Treasury Board policy on contaminated sites, because as we move from department to department, it keeps coming up.

Those are my two items.

The Chair: Mr. Rochette, will you be able to take care of that?

Mr. Rochette: We will provide that, certainly.

Senator Marshall: I believe it was you. Yes.

The Chair: Thank you, Senator Marshall.

Just before we end, what would be helpful from an information perspective, Mr. Rochette, is if you could give us an update on the new Carling facility in Ottawa. It was topical in our last discussion. Where are you with your project? When will it be completed? We would appreciate if you could give us a one-pager on that, but not today, because we have to move forward.

The other issue is for Global Affairs: It would be nice if you could give us a status update on the 25,000 refugees that we brought in. Where are we at? How much money have we spent? What's been accomplished? What are the shortcomings that need to be addressed so these people can be integrated smoothly into our country? That would be helpful.

Thirdly, for Veteran Affairs, we would like to be able to understand your roll-out program of re-establishing the centres. One of the questions that would probably come up is from a technology perspective, regarding the ability of the veterans to be able to communicate effectively, especially bridging between the older and younger veterans. It's great to have the facilities back for the older veterans who are not technologically oriented or inclined, but to be able to move forward at some point, veterans will have to understand how to use technology to get to the service centres. I don't think we're debating the value of the service centres. We're asking you how you can improve the communications element between the veterans and the service centres so that we can maximize the utilization of the service centres. It would be great if could you get that information to our clerk as soon as possible.

We thank you very much. We could have kept you for three hours but unfortunately we don't have the time.

Colleagues, we now have before us officials from Innovation, Science and Economic Development Canada. We welcome Lawrence Hanson, Assistant Deputy Minister, Science and Innovation Sector; and Colette Downie, Chief Financial Officer, Corporate Management Sector.

From CBC Radio-Canada, we welcome Mr. Michael Mooney, Executive Director, Corporate Finance and Administration; and Shaun Poulter, Executive Director, Public Affairs.

Each organization has about five minutes to give us an opening statement about their funding requests in the Supplementary Estimates (B). It will be followed by a question period. Please proceed.

Colette Downie, Chief Financial Officer, Corporate Management Sector, Innovation, Science and Economic Development Canada: I'm very happy to be here with. Lawrence Hanson to give you an overview of Innovation, Science and Economic Development's Supplementary Estimates (B) for 2016-17.

The department is requesting a total of $278.3 million in Supplementary Estimates (B). As with Supplementary Estimates (A), the majority of this funding relates to infrastructure funding announced in Budget 2016, and for the remaining part of it, I'll just highlight a few key elements in my remarks but am happy to answer questions on that.

To begin with, the infrastructure funding, the single largest item, about 90 per cent of the ask being requested through the Supplementary Estimates (B), is $249.3 million for the Post-Secondary Institutions Strategic Investment Fund. This fund will provide up to $2 billion over three years to accelerate infrastructure projects at post-secondary institutions. It's intended to really modernize research and commercialization facilities, as well as industry-relevant training facilities at post-secondary institutions, universities, colleges and polytechnic institutions.

The department received about a half a billion dollars in Supplementary Estimates (A) based on our best estimate of the funding profile for this new program. The program has been quite successful; the take-up has been significant.

Our original funding profile provided for a half a billion dollars this year, $1.2 billion next year, and $250 million in the final year, 2018-19. That was really established through the budget process before we had a real final sense of how many projects would be shovel ready this year.

The additional funding is to transfer $249 million that was originally earmarked for next year through to this year through these supplementary estimates to meet the funding requirements of the program and ensure, as well, or help these projects to final completion by April 30, 2018, which is the deadline under the program.

As I mentioned, the program has been quite successful so far, and 111 announcements have been held to date at various institutions, with more to come through winter 2016.


The department is also requesting a total of $10.1 million for youth internships under the umbrella of the Youth Employment Strategy run by Employment and Social Development Canada. There is $9.6 million to help create internships to capitalize on the social, educational and economic benefits associated with the expanded use of digital technologies. This program provides internships to approximately 1,300 young Canadians per year.

The $1.1 million is part of the $165.4 million announced in Budget 2016 as a one-year extension of the Youth Employment Strategy, to create new green jobs for youth. The funding will support the creation of 60 internship positions at refurbishment centres for the Computers for Schools program, as well as 20 additional internships at not- for-profit organizations that will focus on the green economy in areas such as renewable energy and green technology.


The department is also requesting a re-profile of funds from fiscal year 2015-16 to 2016-17 for two programs, the Connecting Canadians program and the Automotive Supplier Innovation Program.

The Connecting Canadians program was announced in Budget 2014. It committed $305 million over five years to enhance and extend broadband Internet coverage in rural and northern communities. The program lapsed funds last year due to the election, some delays in partner government approvals for some projects and delays in getting other provincial or private sector funding. The $8.3 million represents a significant re-profile to meet the anticipated needs of the program this year.

The Automotive Supplier Innovation Program was announced in Budget 2015. It's $100 million over three years. It's really to help automotive suppliers in Canada bridge the value of debt and commercialize their innovative products and processes. That program lapsed $3.6 million last year, and that's being requested through Supplementary Estimates (B) here today to also meet the anticipated requirements of the projects for this year.

Also related to the automotive sector, the department is requesting $1.2 million in operating funds for the Automotive Innovation Fund program, which was extended through 2021 in Budget 2015. The $1.2 million is going to allow the program to be more proactive in its work to attract automotive investment to Canada. It's meant to be complementary to the government's Invest in Canada Hub. The idea is to work closely with other federal, provincial and municipal organizations as well as those outside of government to provide a common and coordinated interface for potential automotive investors.


Finally, the department is requesting about $900,000 for Improving Support for Entrepreneurs. Budget 2015 provided $5 million in new funding over four years to help reduce the administrative burden faced by small- and medium-sized businesses. Building on previous efforts undertaken by the Paper Burden Reduction Initiative, this funding will be used to establish a private sector advisory committee that will provide advice to the government on how to improve the SME environment in Canada; on how to do preparatory work so all departments can adopt the Canada Revenue Agency's single business number; and finally, on how to continue the survey to measure compliance costs for SMEs.

The Supplementary Estimates (B) also includes some transfers to and from other organizations and other funds for which I would be pleased to provide additional information if required.

That said, we would be pleased to answer your questions.

Shaun Poulter, Executive Director, Public Affairs, Canadian Broadcasting Corporation: Good morning, senators. Thank you for the invitation to meet with you this morning to talk about the Supplementary Estimates (B) and the government's reinvestment in public broadcasting.

As you know, in Budget 2016, the Government of Canada proposed to invest an additional $75 million in CBC/ Radio-Canada for 2016-17, and $150 million in the following years.


This is the first new investment in CBC/Radio-Canada in over a decade. It represents an important vote of confidence in public broadcasting, in the value of our programs and our vision for the future, and I can tell you that CBC/Radio-Canada is very grateful for the support.

As the government stated in its budget document:

Reversing past cuts will enable the CBC/Radio-Canada to invest in its Strategy 2020: A space for us all priorities, leading to the creation of Canadian content which will be more digital, local and ambitious in scope.

The government also asked the Minister of Canadian Heritage to work with the public broadcaster to develop an accountability plan. That plan should be completed soon and we will be able to share more specifics around the reinvestment once it is available. It will also form part of our corporate plan in annual reports going forward.

But I would like to share with you some of the things we started doing this year.


First, as you know, our Strategy 2020 has been guiding the transformation of the public broadcaster to one that is more digital, local and distinctive. We're doing this to increase our value to Canadians. That transformation is showing results.

Over 16 million Canadians now use our digital platforms each month. That's three million more in the last year alone. Our goal is to reach 18 million people by the year 2020. This will help us build closer connections with Canadians.

When we began Strategy 2020, more than half of Canadians told us that CBC/Radio-Canada was very important to them personally. By 2020, we want three out of every four Canadians to feel that way.


The majority of the reinvestment will go to support the creation of Canadian content. With the reinvestment, we created a new national radio show this summer, "Out in the Open'' with Piya Chattopadhyay. We started filming a six- part television drama "Alias Grace'' based on the book by Margaret Atwood, in partnership with Netflix, which is a first for us. We were able to protect funding for the one-hour indigenous radio program "Unreserved'' with Rosanna Deerchild. We created a new one-hour Canadian youth soccer drama "21 Thunder'' which will air next summer. We started work on a new radio station in London, Ontario, previously suspended because of budget cuts.


We launched a new project called Next Generation, which is a space to experiment with new ways of enriching and sharing news and current affairs content. It's created and managed by millennials, for millennials.

We created five additional one-hour episodes of the popular maritime television talk-show "Méchante soirée,'' which is produced in Moncton. We've added 15 hours of new weekday evening content on ICI Radio-Canada Première, to replace reruns.

We're also creating new programs around Canada's one hundred and fiftieth anniversary. These include "Becoming Canadian,'' a digital-first project celebrating the people who choose Canada as their new home, and "La grande traversée,'' which tells the story of 10 people who will recreate the 1745 voyage from France to Quebec in a sailing replica.


That's just a sample. We will be reporting more fully on what we have been able to accomplish in our annual report and corporate plan. All of this, of course, is in addition to the regular work we do, like helping 12 million Canadians celebrate the last concert of the Tragically Hip this summer and bringing together 32 million people, more than 91 per cent of the country, in celebration of their athletes during the Olympics and Paralympics in Rio de Janeiro.

We believe that bringing Canadians together like this is an important role for the public broadcaster. We look forward to showing Canadians what we can do with this reinvestment in public broadcasting. Thank you.

Senator Mitchell: Thanks to each of you. I don't have a question for CBC, but I want to say I appreciate what you do very much. You are a part of our family, actually.

My question is to Innovation. I'm aware that Innovation supports a non-profit but business-structured organization in Calgary called TECTERRA. TECTERRA is a unique model of how federal funding and provincial funding can be allocated to high-tech, forward-thinking, frontier-pushing kinds of entrepreneurial innovation enterprises. It is not the biggest part of your portfolio, I know, but are you aware of it? If not, maybe you could get back to me and the committee on whether that kind of model could be used in ways other than it is right now in Alberta with great success to promote geometrics as an advanced technology.

At the base of my question is the fact that I think clearly we have to create a new kind of economy, and clearly that requires flexibility, innovation and creativity that sometimes isn't driven as well, if I could put it politely, by government as it is by entrepreneurs; but to get government money to those entrepreneurs, we have to be careful and make sure it's done in a way that is prudent but not restrictive, and I think TECTERRA is a remarkable model for how that is done.

Lawrence Hanson, Assistant Deputy Minister, Science and Innovation Sector, Innovation, Science and Economic Development Canada: I have had occasion to meet with representatives from TECTERRA on two or three occasions and absolutely share your view about the value of their work and the contribution they can make to the innovation ecosystem. I am not in a position to talk about any kind of additional support or work with TECTERRA beyond the current context. I am aware of their efforts and the work they do.

Senator Mitchell: Thank you. If you could keep in mind the possibility of using that in a number other areas, there might be something to that.

The second question concerns Ms. Downie's presentation drawing attention to the fact that you are committed to attract automotive investment to Canada. Are you considering the possibility of American protectionism with respect to exports of automotive parts and other manufactured widgets with respect to that industry to the States which could be thwarted by an American government that might be protectionist?

Ms. Downie: It's hard to speculate on what might happen in the U.S. in terms of its position.

Senator Mitchell: Very hard.

Ms. Downie: The government is absolutely conscious of the situation in the U.S., and lots of policy thinking is being done within the government about the new government and what it means for Canada, including automotive investment here.

Senator Mitchell: I'm very interested in your Youth Employment Strategy and your internships and so on. In your presentation, you mentioned that you put $1.1 million to create new green jobs for youth, and then it sounds like, although it may just be that I'm reading it wrong, the funding will support the creation of 60 internship positions at refurbishment centres for computers for school programs. Will those be green jobs?

Ms. Downie: It is a bit confusing because there are 60 internship positions at these refurbishment centres, which are indeed green jobs in the sense that they're about recycling computer equipment, putting components together and putting it to reuse. There are another additional 20 so-called green jobs, which are internships at not-for-profit organizations focussed on the green economy. Those would be things like creating a digital strategy for a not-for- profit, maybe with an environmental purpose, just to give you an example.

Senator Mitchell: Thank you.

Senator Marshall: I have a question for Ms. Downie, and it's a general question. You referenced a few minutes ago the digital strategy. Is your department the one overseeing the innovation strategy?

Ms. Downie: Yes, the government's innovation agenda.

Senator Marshall: Could you give us an update on what the terms of reference are, when you expect to be finished and how the consultations are going?

Ms. Downie: It has been a main plank of this government's agenda for quite some time that it introduced an innovation agenda. Over the summer, the government consulted broadly with Canadians and held a number of round tables in Canada, and I think even one in the U.S. As a result of that, I've heard the minister talk about the fact that there are at least 1,500 good ideas from Canadians about how we can better use innovation as a driver of growth in our economy.

In terms of your question about the process and where it is, I believe there is still some consideration being given to what the full and complete elements of the innovation agenda will be.

Senator Marshall: Are the consultations done?

Ms. Downie: The consultations are done, yes.

Senator Marshall: I just interrupted you. Is it that it looks to be broader than initially thought?

Ms. Downie: I don't think it's broader than initially thought. We used this process to come up with a number of ideas from government and from the Canadians who participated in the consultations, of which there were many. Now the government is in the process of considering which of those ideas to bring forward to be the main planks of its innovation agenda.

In the meantime, the budget last year had a number of elements related to innovation in it, such as $800 million for networks and clusters as well as the strategic infrastructure program. I believe there will be more to come soon.

Senator Marshall: Is this all being done internally? I know there have been consultations, but is it being done through departmental resources internally, or have there been consultants hired? How is it being carried out?

Mr. Hanson: Maybe I will add a few things. As part of the round table process, individuals were identified with significant experience who led the round tables on behalf of the government. A series of people did that.

Just to note a couple of other things that might be worth noting on the agenda, the minister has identified some of the key themes that have emerged from those consultations. I would say probably the three we hear the most about are, first and foremost, that the need for talent development, attraction and retention is a key element of the innovation agenda, and certainly some of the proposed changes related to attracting talent by the immigration system were reflected in the recent fall economic update.

There is also the issue of scaling up firms in Canada. Canada is a strong start-up culture. The challenge is to grow those into medium and larger enterprises and link them more closely into global value chains because that's how you move towards greater numbers of jobs.

Finally, and Colette has referenced this, there is the issue of networks and clusters and strengthening the existing areas where Canada has demonstrated research in industrial capacity in key areas.

Senator Marshall: When do you think we'll see something? The Minister responsible for the Status of Women gave us a presentation on her strategy. Is there a deadline or due date by which we could expect to see something?

Ms. Downie: I heard the minister say yesterday to the industry committee that it would be in time for the next budget and that we would hear more publicly.

Senator Marshall: Thank you very much.

Senator Eaton: My question is to the gentleman from the CBC. I go to bed at night with the CBC and I get up in the morning with CBC. I also watch Fox News, which is interesting — because the CBC advertises on Fox News. Oh, yes, very interesting.

I'm lucky. I live in Toronto and I have access to the Toronto symphony and the national ballet, but if I lived in Whitehorse, why wouldn't the CBC bring me the Nutcracker at Christmas for children? Why wouldn't the CBC, if I lived in Newfoundland, bring me the Montreal symphony orchestra? Why wouldn't the CBC go through the playbill at Stratford and Niagara-on-the-Lake? Instead of coming up with all this programming, and if you are not in the ratings business, why wouldn't you show Canada the best of Canadian culture, which is being looked at by other countries? The national ballet goes to London, Paris and New York, but it's not shown on the CBC unless we pay for it, and we can't afford to pay for it. Do you think your new policies and new directions will begin to think about including the best of what we have to offer? It doesn't have to be all highbrow; there are book clubs and all kinds of things that the CBC kind of ignores.

Mr. Poulter: I certainly understand your interest, and it is something that is of interest to us as well. We've certainly, over the years, tried to offer a sampling of that kind of programming.

Senator Eaton: But not on a regular basis.

Mr. Poulter: Not on a regular basis. It's difficult to do. Part of the reinvestment has been dedicated to restoring some of the live music recordings that we used to offer on CBC radio that we had to cut back on. So we are aware of that, and it is an important part of our culture, and it's part of the mix we'd like to have.

Senator Eaton: It seems that if you don't live in Montreal, Toronto, Vancouver, Calgary or Winnipeg, you don't get an opportunity to see the best of what we have in this country in terms of live culture. I can't see the Edmonton symphony. Why can't I turn on Tuesday nights and watch the Edmonton symphony or the Vancouver symphony or a great jazz band from Calgary? I mean, I can't. Anyway, thank you.

The Chair: Maybe as a supplementary question to Senator Eaton's question, your project 2020, in terms of your strategy, could you give us a few highlight points? Does your strategy for 2020 involve enhancing your programming toward Canadian culture and, if so, what Canadian culture?

Mr. Poulter: It does. The 2020 plan largely is to ensure that we can make the transition to digital, to focus on content that is reaching people more often on the platforms that they are using. Commensurate with that is we want to increase the amount of Canadian content we offer and make sure that that Canadian content is of the highest quality.

We certainly believe that in a digital environment now it is increasingly difficult to try to protect culture in the ways that countries used to do by blocking outside culture. We really believe that there is an opportunity here for Canada to really focus on high-quality Canadian content that will benefit Canadians here but also ensure it survives in an international digital world.

Senator Neufeld: Ms. Downie, regarding the Connecting Canada Program, which I think is a great program, so you understand that, can you tell me where I could go to find out where those dollars are being spent on a yearly basis? Without having to search hundreds of files and whatnot to find something that says this is happening maybe in northern Saskatchewan or northern Alberta or British Columbia, is there some place I can go to find that?

Ms. Downie: I'm happy to send you a web link to show where the agreements under the Connecting Canadians program are all listed under proactive disclosure, and we do that quarterly. I can certainly send a web link through the clerk of the committee.

Senator Neufeld: That would be great.

The other program is to attract automotive investment to Canada. Are there parameters around what kind of automotive investment you would be trying to get into Canada? Are we just talking about straight building automotive cars, trucks, with their fossil fuelled engines, or are we talking about hybrids or electric vehicles, those kind of things with what we are looking to in the future? Is there a designation or do we just have it wide open?

Ms. Downie: Generally we're wide open to any company that's interested in investing in Canada. We're not going to turn that down; we will take that very seriously. The strategy is to focus on Canada's automotive strengths, so what investors see as our strengths. Many of those relate to the areas that you mentioned. We have a highly trained, expert workforce that the existing companies, the five companies that make cars in Canada, already recognize. They are very good at innovation and very good at the complex assembly of advanced vehicles, so the types of vehicles that you're talking about — green vehicles, electric vehicles, maybe ultimately autonomous vehicles but certainly highly technical, advanced vehicles — are all the things that would suit our labour force and would also suit the R&D infrastructure that we have in Canada around automotive. We're already seeing companies like General Motors really focusing on that. They've committed to hiring 1,000 engineers in Ontario in recognition of that capacity.

Senator Neufeld: My last question concerns the $900,000 for improving support for entrepreneurs, which I think is a good program too. The largest hurdle — at least that I've always experienced — for new entrepreneurs is getting from having an idea and proving that it works to commercialization. Is some of this money going into that or is this just about how we reduce red tape? I'm a little confused. Could you explain it more fully, please?

Ms. Downie: I think you're talking about the commercialization gap, that R&D gap that Canadian firms often face. This may be indirectly related to that in the sense that it will help to promote programs to Canadian small businesses that are suited to their needs, including related to the commercialization gap. A good example would be for a supplier, let's say an auto supplier, and this program could help refer them to the automotive supplier innovation program. But more broadly, the Business Development Bank of Canada is focused on the problem you're talking about as well. It has significant resources at its disposal to both fund entrepreneurs to try to get through that gap but also to help coach them and advise them. I hope that answers your question and clarifies what this funding is for.

Senator Neufeld: When I read it, it says the administrative burden faced by medium- and small-sized businesses, so you're saying it does include other things like we just spoke about?

Ms. Downie: That's right.

Senator Neufeld: That assurance is good for me. Thank you.

The Chair: For the CBC folks, have you done an audit on the post-Olympic performance by CBC in terms of your ratings and in terms of your financial considerations? Did you make money on the Olympics? Were you able to monetize it? It would be helpful if you could you give us a bit of background on that.

Obviously there has been an increase in funding, but at the same time you're talking about a digital strategy and making modifications. From a financial perspective, how do you see that unfolding in terms of monetizing CBC's position so that hopefully over time the amount of investment into CBC can be balanced against a revenue increase?

Mr. Poulter: In terms of the Olympics, we do know that this past Olympics was the most watched summer Olympics in Canada in history, which was great. As well, the viewing to our digital platforms was the highest it has been, so we are quite pleased about that.

In terms of the financials, we don't have the final numbers on those yet. We have partners who we work with as well in delivering the games, and we'll have those numbers and will be reporting on those in our next quarterly report.

In terms of the Olympics in our broader sort of revenue strategy, there are two things to it. One part is we feel that doing the Olympics is an important part of our mandate primarily because there really is no one else out there now who will cover amateur sports on a yearly basis. From our view, the Olympics is a big event, but it is really the pinnacle of what these athletes are doing all year. Therefore, our goal and our strategy is that by the time the Olympics come around, these athletes are household names and people know who they are because they've been watching them in amateur competitions throughout the year. That's the mandate part, and we think we're uniquely positioned to do that.

The other part is, in having the large number of viewers to the Olympics, an event like the Olympics gives us an opportunity to promote some of the other shows we have on our schedule. In particular with television, one of the greatest challenges broadcasters have is in order to advertise other shows you have, you need to have people watching your shows. When there's a large audience for programs like the Olympics, it gives you an opportunity to promote your other programs, and we have seen a corresponding response in audience to those.

The Chair: Ms. Downie, you're talking about infrastructure to enhance and modernize research commercialization facilities in colleges, universities, et cetera. Now, to get research money, the universities have a process they go through throughout Canada, and there is a list or a food chain, if you like, in terms of who gets the most research money. Are you talking about research and development money and infrastructure money? Is it the combination of the two that you're talking about?

The second thing is I guess I was lucky enough to be involved in the past government's giving money out. One of the things that that was very interesting, especially in the Montreal universities where I was involved with McGill and Concordia, was that for the R&D people and the young students coming up and developing ideas, it was really tough. This goes back to the point brought up earlier of trying to commercialize these ideas, and it always came down to venture capital. I'm not sure I saw anything in terms of your strategy where you're tying yourself into venture capital.

The BDC now is advertising itself as the venture capital player in Canada, but to develop the clusters and the funding and the incubation, we need some connection between research grants and the ultimate of commercialization, and there is the weakness that appears to exist.

Maybe Mr. Hanson has done research on that particular issue. I know it's not government's mandate to actually be successful entrepreneurs, but if you're going to give all this money out in research, the research folks have to be focused on developing young folks and students and people who are going to be able to take these ideas and bring them to fruition. However, part of that is interconnection with the whole idea of venture capital, and I'm not sure where you folks are with that.

Mr. Hanson: You have raised a lot of important points and I will take them in turn as best I can.

You're right. There's a distinction between the kinds of research funding provided by the Government of Canada largely through the federal granting councils, so NSERC, SSHRC and CIHR in the social sciences, natural sciences and health respectively, and then other organizations that purchase equipment, like the Canada Foundation for Innovation. There is a significant funding stream for those activities.

The infrastructure program is not an ongoing, regular type of investment by the Government of Canada. This is designed as part of an overall focus on infrastructure spending that drives innovation particularly in a period when interest rates are lower. This is analogous to a program that was run back in 2009. The idea here is to have dedicated infrastructure funding at research institutions as opposed to some of the other more traditional infrastructure funding in things like physical assets like bridges or roads, et cetera.

The program was designed to improve the scale and quality of research and innovation spaces. That actually did include incubators. This does get to your point about this issue of having opportunities for students and faculty who are developing new technologies to actually have incubation space to do that. That is included under the ambit of the program.

You're also quite right about the importance of finding, especially in this kind of context, even just seed capital. In fact, some universities have actually independently started, in addition to their incubation efforts, to have some early seed capital to assist people with ideas that they're seeking to develop.

This ongoing commercialization issue, which we've now discussed a few times, is definitely right, and we have these really strong research skills that aren't always translating into the economic value that I think we would seek. While there's still room to certainly improve significantly, it is something that you're starting to see campuses really seize upon, as I say, through programs like this infrastructure program, which does include funding for incubation spaces as well as for industry meeting needs at colleges. It can help drive some of that commercialization even as it is investing in more traditional lab-based research facilities.

Senator Eaton: I remember sitting in the Standing Senate Committee on Agricultural and Forestry and very often Guelph University would come, because, as you know, they have quite an innovative campus that surrounds the university, especially in food processing and the like. They used to often talk about the death zone, the death valley, where things come out of university and they look great, but it never really proceeds to the next step because they can't get financing to take it to the marketplace.

Mr. Hanson: I think that's right. This is part and parcel of some of the things that the government is looking at in the context of the innovation agenda, including these networks and clusters, of which research institutions can and should be part of, so that trying to build that network that drives from ideas and insights into technology and then application and deployment.

Senator Eaton: To the marketplace?

Senator Neufeld: You mentioned improving support for entrepreneurs and that a private sector advisory committee is created. Has that been done? Is that private sector advisory committee there? Is that the advisory committee that would make decisions on the 900K going for what we've just talked about, the valley of death? There will be all kinds of ideas, but how are the decisions made about where the money actually goes? Is that done someplace else, or is that done through this private sector advisory committee?

Ms. Downie: The advisory committee is just an advisory committee to the government on all of the issues that relate to entrepreneurs and small- and medium-sized enterprises.

Senator Neufeld: Has it been appointed?

Ms. Downie: It has not been appointed yet, is my understanding. It is quite separate from a number of these other initiatives that are going on around all of these commercialization challenges that we've been discussing.

Senator Neufeld: How are those decisions made?

Ms. Downie: It depends. There are a number of programs that are aimed at this issue. It would go through the sort of normal program process where companies apply, there's an assessment made about whether the proposal fits the program, and then decisions are usually made by ministers, ultimately, on funding.

Senator Neufeld: I want to clarify that. Who makes the decisions on who gets the money? You have some idea coming out of the university, it's a good idea, and there will be thousands of them. Who makes the decision? Is the minister making the decision on who gets that funding?

Ms. Downie: Sorry, I thought you were asking who makes the decision on funding under a program.

Mr. Hanson: In terms of universities, obviously, most of the funding that's provided to universities is going towards research and so forth. That's done under the auspices of traditional academic peer review processes. When there are programs that are driven a little bit more on the commercialization space, and I'll give you an example of that, the three granting councils operate a program called the Centres of Excellence for Commercialization and Research. In those instances, again it is a review process not conducted by ministers but rather by a private sector advisory board that brings together people with private sector expertise who have a sense of whether these centres are driving towards effective commercialization outcomes and their own eventual financial self-sustainability.

The Chair: Thank you very much. We thank you very much for your input. We wish you the best in the coming weeks or months.

Colleagues, those who have stayed until the end of the meeting attended a well-received presentation by a database consultant who proposes to help the committee in its study on infrastructure. If you remember at the beginning, we were talking about having a war room where we could see projects on a map literally from the date of inception at 2006 to present and moving forward into the future.

We need to hire a consultant to develop the program. A draft was circulated ahead of this meeting, and copies are available. The cost hasn't changed since the start, which is the good news, and looking at the draft budget, we're asking for $14,000.

We have alerted Senator Tannas, who heads the subcommittee on budgets, and we brought him down and he saw the actual presentation over in Room 160 about two weeks ago, so that we could try to entice him in terms of his interest. He was very impressed with the opportunity and options that we have with this.

The rest of the funds over the $14,000 is about a $3,000 to $3,500 buffer. That is for communications. The only reason we put that in is if the communications department, once we get this thing set up, is unable to help us deliver messaging, then we may have to use or have a supplementary amount of money that would bring the total up to about $18,000.

The $14,000 for the consultant is a firm price based on an hourly rate and how he is utilized during the period of time to develop, conceive, implement and post follow-up.

Understand that this budget would be for the fiscal year ending March 31, 2017. We would ask that it would be approved for submission to the Standing Committee on Internal Economy, Budgets and Administration.

For those of us who have actually seen an example of the software and what it can produce in terms of the mapping, it is very impressive software that is available on any basic computer. The software isn't unique. What is unique is the person we have developing the program so that we can do the tracking.

We want to make sure that we can track this over a long period of time, because the government has announced that this could be up to $180 billion of spending. It's not going to take place today; it's going to take place, today, tomorrow and into the future. I think part of our role is to make sure that we can follow and track what's going on as effectively as possible.

As we move forward in time, we may have government departments that would come to us and say, "Hey, we would like to take this over and even develop it to a larger extent.'' But I think us taking the initiative would be helpful to accomplish what we're trying to do with infrastructure.

Senator Marshall: How does this sheet relate to this sheet here?

The Chair: The sheet that says "project estimate'' was prepared by the actual consultant. It was given to us. He was met with, reviewed it and then we took that sheet to the actual —

Senator Marshall: But the numbers don't line up. You're saying the consultant services for Mr. Sanders, that $14,000, is fixed; right?

The Chair: It's fixed until the end of the fiscal year.

Senator Marshall: Is the $3,500 fixed?

The Chair: The $3,500 would be a fixed amount that we put into the budget, but we don't necessarily forecast at this particular time spending it until the rollout actually takes place. That amount of money would be for the actual communications element of what we're trying to achieve. We would only actually spend the money on communications if the communications department in-house, which Internal Economy has re-aligned and redefined, is unable to help us with communicating the messages we want to get out.

Senator Marshall: Is the $14,000 in our budget part of the $16,400 in the project estimate? I'm trying to get a handle on it.

The Chair: Any monies over and above what's been requested will be if he did request it after the fiscal year ends.

Senator Eaton: It ends at Christmas or in April?

The Chair: No, hold on. This would go to March 31, 2017, when the fiscal year ends. We want to make sure that we're upfront in making sure people understand there could be requests for additional funds. They are not going to be material to the extent of being exorbitant, but there could be that extra request that we would submit in the new fiscal year. So we'd have to go back to the subcommittee and make a pitch to see if they would support that ask.

Senator Marshall: I'm trying to get a handle on what our exposure is for increased costs. It wouldn't look very good if the Finance Committee estimated $14,000 for a project and we ended up paying $30,000.

The Chair: You're absolutely right, Senator Marshall, and that message was given directly to the consultant in very clear terms.

Senator Eaton: It will also be very interesting to see how user-friendly it is and whether we want to keep on with it — how useful it is to us long term.

The Chair: This is why we would like to make sure we get it set up and analyze it. Two things are then going to happen: We're going to be happy with what we get as we go forward and/or we may have opportunities with other departments, because one of the easy things to say is, "Why don't we let some other government department develop the system?'' I don't think that's necessarily the wisest thing to do. But you're right: We have to track it, and we're going to stay very close to it.

I have confidence between our clerk and policy adviser that we're very stringent in how we manage costs. I need to ask for your support to approve the project so that we can move forward with the request.

It's moved by Senator Neufeld, seconded by Senator Eaton.

Senator Cools: The fiscal year ends March 31; yet your proposal of two weeks ago might bring the committee's report in months after that. Is there any way we could reduce that discrepancy?

The Chair: We have asked for an extension on our committee report for infrastructure —

Senator Cools: I'm aware of that. That's what I'm talking about. But that is still June 30, 2018.

The Chair: We're going to have an interim report, Senator Cools, in February. We're probably going to have multiple reports as we go forward. The first one would be February 2017.

Senator Cools: I'm aware of that, but your funding ends on March 31. It would be nice if we could get the study completed by then.

The Chair: We're not going to get the study completed by then.

Senator Cools: You're going to run into some kind of difficulty with that. But that's another story for another day.

The Chair: The software will be set up. We'll be adding updates to it, so there will be a logistical update program set up. That update program is partially included in this number. But as we move forward in time, we would say that, every two months, we want updates done. It's going to cost X number of dollars in terms of the time. It's not going to be something that's going to be exorbitant, but if we need more money, we would go back, set up a budget and we'd ask for it from the subcommittee.

Senator Cools: You will run into difficulties with that because that new date for completion of the study is way into the future. You've got a date to June 30, 2018.

The Chair: But it has been adopted.

Senator Cools: You're still going to run into difficulty with it, sooner or later, because fiscal years work from —

The Chair: We're going to manage it.

Can we have your approval? All for?

Hon. Senators: Agreed.

The Chair: On that note, thank you very much.

(The committee adjourned.)