Proceedings of the Standing Senate Committee on
National Finance
Issue No. 67 - Evidence - May 22, 2018 (afternoon meeting)
OTTAWA, Tuesday, May 22, 2018
The Standing Senate Committee on National Finance met this day at 1:30 p.m. to continue its study on the Main Estimates laid before the Parliament of Canada for the fiscal year ending March 31, 2019.
Senator Percy Mockler (Chair) in the chair.
The Chair: Let me introduce myself. I am Senator Percy Mockler from New Brunswick and chair of the committee.
[English]
I wish to welcome all of those who are in the room and viewers across the country who may be watching on television or online.
As a reminder to those watching, the committee hearings are open to the public and available online at sencanada.ca.
At this time I would like to ask senators to please introduce themselves, starting on my left.
Senator Eaton: Nicole Eaton, Ontario.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Massicotte: Paul Massicotte from Quebec.
Senator Pratte: André Pratte from Quebec.
The Chair: I would also like to introduce our clerk, Gaëtane Lemay, and our two analysts, Alex Smith and Shaowei Pu.
[English]
Thank you for being here.
Colleagues and members of the viewing public, the mandate of this committee is to examine matters relating generally to federal estimates as well as government finance for 2018-19.
Today we continue our consideration of the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2019.
This afternoon, honourable senators, we will hear from four different organizations that we invited to talk about their requests for funding for the current fiscal year 2018-19.
[Translation]
For the first part of our meeting, we welcome representatives from two organizations. First, from Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada, we have Paul Thoppil, Chief Financial Officer, Results and Delivery Officer.
[English]
Catherine Blanchard, Director General, Planning and Resource Management, Chief Finances Results and Delivery Officer Sector.
Also at the table are witnesses from Canada Mortgage and Housing Corporation, Kathleen Devenny, Vice-President, Financial Planning and Analysis, Canada Mortgage and Housing Corporation; and Debbie Stewart, Vice-President, Affordable Housing, Client Solutions Management, Canada Mortgage and Housing Corporation.
I have been informed by the clerk that the first presenter will be Mr. Thoppil for his statement and information, followed by Ms. Devenny for her presentation.
Following your comments and your presentations, the senators will ask questions.
[Translation]
Paul Thoppil, Chief Financial Officer, Results and Delivery Officer, Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada: Mr. Chair and honourable senators, thank you for the invitation to appear here today on the 2018-19 Main Estimates. This committee plays an important role in reviewing the departments’ expenditures and I welcome the opportunity to discuss these estimates.
[English]
I am appearing today as the Chief Finances Officer and Results and Delivery Officer on behalf of two departments, both the Department of Indian Affairs and Northern Development, DIAND, which is its legal name, now called Crown-Indigenous Relations and Northern Affairs, or CIRNA, and the department of Indigenous Services Canada, or ISC.
As you are aware, the Prime Minister announced his decision to dissolve DIAND in August 2017 and create two new departments, Crown-Indigenous Relations and Northern Affairs and Indigenous Services Canada.
A November 2017 order-in-council officially created the department of Indigenous Services Canada and transferred DIAND programming, namely education and social development programs and partnerships and regional operations, as well as Health Canada’s First Nations and Inuit Health Branch, to this new department.
[Translation]
Crown-Indigenous Relations and Northern Affairs Canada has not yet been officially created. Until then, Indigenous and Northern Affairs Canada, or INAC, will continue to operate.
First, I would like to draw the members’ attention to the two presentations I have submitted, entitled 2018-19 Main Estimates. There is one for each department. I will walk you through the INAC presentation first and then ISC.
[English]
On slide 3 of the DIAND presentation, you will see that it is about $3.1 billion for its Main Estimates for 2018-2019, or a net decrease of approximately $6.9 billion or 69 per cent compared to last year’s Main Estimates which were $10.1 billion.
As explained on slide 4, the decrease reflects primarily the transfer of funding to Indigenous Services Canada, totalling $6.2 billion, as well as the sunset of approximately $700 million in Budget 2016 infrastructure investments.
Renewal of these initiatives will be reflected later this year in future estimates for both DIAND for waste management and Indigenous Services Canada for water, wastewater and housing.
The department is also anticipating additional funding from Budget 2018 investments. As per the new estimates process, these investments are reflected in the Treasury Board Secretariat’s Main Estimates pending approval of Treasury Board submissions. As submissions are approved, the related funding will be transferred to DIAND’s reference levels. There is a listing of the Budget 2018 investments in annex A to the DIAND deck.
On slide 5 of that deck, you will see that the expenditures in 2018-2019 Main Estimates for DIAND are composed of approximately $2.4 billion or 77 per cent in transfer payments, of which 47 per cent of those are in grants and 30 per cent in contributions. There’s approximately $653 million or 21 per cent in operating expenditures, $56 million in loan funding for claimants involved in negotiations, and about $15 million for capital improvements.
[Translation]
I would like to mention that the department is working to move the loans funding to non-repayable contributions as per the Budget 2018 announcement. Starting in 2018-19, the indigenous participation in modern treaty negotiations will be funded through non-repayable contributions.
[English]
Slide 6 displays the Main Estimates according to the departmental results framework. Of the $3.1 billion in departmental spending, $2.9 billion is captured by two core responsibilities covering about 23 programs, with the remaining funding of about $205 million for the internal services program which supports all the core responsibilities.
I would like to note that DIAND internal services still includes funding for the majority of Indigenous Services Canada’s internal support services. This funding will eventually be transferred to Indigenous Services Canada once the structure and funding levels are finalized.
[Translation]
Finally, slides 7 and 8 provide additional information on expenditure trends for specific and special claims, as well as the residential schools settlement allotment.
I would now ask that you turn your attention to the second presentation on Indigenous Services Canada’s Main Estimates.
[English]
On slide 3 of the Indigenous Services Canada deck, you will see that the 2018-2019 Main Estimates for Indigenous Services Canada will be approximately $9.3 billion as a result of the transfer of $6.2 billion from DIAND and $3.1 billion from Health Canada.
Indigenous Services Canada is also anticipating additional funding from Budget 2018 investments. A listing of those is included in annex A to that deck.
You will see on slide 4 that there are expenditures in the 2018-2019 Main Estimates for Indigenous Services Canada that are comprised of approximately $7.8 billion in transfer payments, about $1.6 billion in operating expenditures and about 5 million for capital requirements.
Slide 5 displays the Main Estimates according to the departmental results framework. Of the $9.3 billion in departmental spending, $9.26 billion is captured by three core responsibilities covering about 26 programs, with the remaining funding of $64 million for the internal services which support all the core responsibilities.
[Translation]
I would like to mention that ISC is using a transitional departmental results framework for 2018-19. For 2019-20, the department will develop a revised departmental results framework that is more reflective of its vision and priorities.
Finally, starting on slide 9, you will find information on expenditure trends in major program areas. These major program area — namely education, social development, infrastructure and First Nations and Inuit health — account for about $8.8 billion or 95 per cent of the overall $9.3 billion in the Main Estimates.
[English]
Mr. Chair, the Main Estimates for the two departments reinforce the government’s commitment to improve the quality of life of Indigenous peoples, to renew and build relationships between Canada and Indigenous peoples, and to lead the Government of Canada’s work in the North.
This funding will strengthen the government’s ability to address the broad socio-economic gaps between Indigenous and non-Indigenous Canadians and to support advancements in Indigenous self-determination.
I look forward to discussing any aspects of these estimates with you, together with my colleague Catherine Blanchard, and welcome your suggestions or comments regarding my presentation. Thank you.
Kathleen Devenny, Vice-President, Financial Planning and Analysis, Canada Mortgage and Housing Corporation: It’s a pleasure today to be here on behalf of CMHC. I am joined by my colleague Debbie Stewart, Vice-President, Affordable Housing, Client Solutions Management.
As honourable senators will appreciate, CMHC’s legislative mandate is to contribute to Canada’s financial stability and to facilitate access to housing. Fulfilling this dual mandate means we play multiple roles in Canada’s housing system by conducting commercial operations, providing the federal investment in housing assistance, undertaking housing market analysis and research, and advising the government on housing policy.
As the committee will know from previous appearances, CMHC’s housing finance activities do not require appropriations from Parliament. In fact, they are expected to generate returns for the federal government, our sole shareholder.
CMHC receives appropriated funds for three core responsibilities under our departmental results framework, which is being used for reporting purposes for the first time this year. I would like to quickly outline our funding requests under each of these responsibilities.
In each case, our appropriations have been significantly impacted by the launch last November of Canada’s first-ever National Housing Strategy. CMHC developed and is proud to be leading this ambitious plan to remove 530,000 households from housing need and to reduce homelessness by 50 per cent over the next decade.
Under the assistance for housing needs core responsibility, CMHC provides funding to improve access to affordable housing for Canadians in housing need, including Indigenous peoples, people with special or distinct needs, and certain vulnerable groups.
As the Main Estimates show, CMHC is estimating budgetary expenditures of just over $2 billion for this work in 2018-2019.
We recognize fully the importance of this work and the need to deliver for Canadians. In fact it is the passion to deliver, and deliver well, that fuels us and fuels our colleagues. We are committed to helping Canadians meet their housing needs.
The estimates include new funding for a number of National Housing Strategy initiatives: $30 million for the first year of the northern housing initiative, $17 million for the federal community housing initiative and $20 million for the federal lands initiative. We are also reprofiling more than $3 million in funding from a previous fiscal year for the Shelter Enhancement Program.
Our second core responsibility is financing for housing. CMHC makes financing available for housing-related initiatives including lending activities to encourage new supply of affordable housing, to support repair and renewal of existing rental housing, and to promote mixed income affordable rental housing for low and moderate income households.
Funding for this activity will increase by more than 380 per cent this fiscal year, to $241 million. This increase is due primarily to the introduction of the two significant new lending initiatives.
The rental construction financing initiative was launched a year ago, with the goal of increasing the supply of rental housing in Canada. It works by offering low-cost loans to municipalities and housing developers to address some of the most pressing and prevalent issues in developing the housing supply. The Main Estimates include $47 million for this initiative in 2018-2019.
Just last month, our minister, the Honourable Jean-Yves Duclos, launched the National Housing Co-Investment Fund, a key element of the National Housing Strategy. The fund will make loans and grants available to other levels of government and the private and not-for-profit sectors, with the goal of creating 60,000 new affordable homes and repairing and renovating up to 240,000 existing ones over the next decade. Total funding for the year of the co-investment fund is $186 million.
Under our third core responsibility, housing expertise and capacity development, we are seeking $119.6 million through these Main Estimates, or an increase of 62 per cent over the previous fiscal year. This funding will enable CMHC to expand our data analysis, research, policy development, and capacity and skills development activities.
In 2018-2019, we will be launching three new National Housing Strategy initiatives that fall under this core responsibility. Specifically, we are seeking $4.1 million to support the development of a human rights based approach to housing, $10.7 million for the creation of a technical resource centre and sector transformation fund, and $27 million for CMHC’s housing research and data initiative. We will also increase funding for the Housing Internship Initiative for First Nations and Inuit Youth by close to $5 million.
The Main Estimates also provide details on non-budgetary expenditures for each of our three core responsibilities. I won’t go into detail on these measures, but my colleague and I would be pleased to answer the committee’s questions and provide more detail on any aspect of the Main Estimates. Thank you.
Senator Marshall: My first question relates to the Department of Indian Affairs and Northern Development and Indigenous Services Canada.
In your opening remarks, you mentioned that Crown-Indigenous Relations and Northern Affairs Canada has not been officially created.
What else has to be done? What is left to be done in order to officially create it?
Mr. Thoppil: There is departmental legislation to enable or create Crown-Indigenous Relations and Northern Affairs. That will be part of the rights and recognitions framework engagement and discussions the Prime Minister announced a month or two ago in the other place.
The results of those engagements with Indigenous peoples will inform what is the departmental legislation Indigenous peoples would like to see.
Senator Marshall: When is that expected to be done?
Mr. Thoppil: Hopefully in the fall we will see the potential tabling of departmental legislation for both departments.
Senator Marshall: In the meantime the two departments will operate separately.
What is the intention from the administrative side? Are you looking after both departments now, from a financial perspective?
Mr. Thoppil: Currently, the internal or corporate services, if I may say, for both departments are legally within CIRNA or DIAND. Once the organizational structure and the funding related to that are finalized, then there will be a split and a transfer over to Indigenous Services.
Currently, we are on the CIRNA side providing services to both entities.
Senator Marshall: Are the two departments set up separately for the purposes of internal processing of payroll, supplies, procurement, et cetera?
Mr. Thoppil: The back office, in terms of systems, has not yet been done. There are obviously long lead times in order to create, for example, an SAP financial system dedicated to the new department that has been created, Indigenous Services.
We are in the midst of starting the configuration of a new financial system dedicated to Indigenous Services, but right now the financials are commingled into one SAP financial system.
Senator Marshall: You are to separate them out at some point in time. Good luck.
Mr. Thoppil: Thank you for understanding my financial reporting integrity challenge.
Senator Marshall: I now have a question on the budget. I am trying to get a handle on the numbers and to reconcile the numbers from last year with the two new departments.
It’s not just the old department that the numbers are coming from. There is some money there from Health Canada, also, is there not? That’s my understanding.
Mr. Thoppil: That is correct, senator.
Senator Marshall: For example, under Indigenous Services Canada, I see First Nations and Inuit health for $3 billion. Is that from Health?
Mr. Thoppil: That is correct. That comes from the First Nations and Inuit Health Branch.
Senator Marshall: If you look at the numbers, when you back out the Health Canada numbers and just look at Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs, it looks like the budget has actually gone down. It’s less funding than what the old department received last year.
Mr. Thoppil: If you recall my opening remarks, senator, I said there is about $700 million worth of sunset items.
Senator Marshall: I remember that.
Mr. Thoppil: In future supplementary estimates we’ll see those being renewed through Treasury Board submissions, which are currently under way, that will seek approval from the Treasury Board to include in future Supplementary Estimates (A) and (B).
Senator Marshall: If you look at the $3 billion now under Indian Affairs and Northern Development and Indigenous Services Canada, and if you back out the $3 billion that came from Health, then that’s $6 billion. That’s $9 billion altogether for the two departments. However, last year, the old department actually had $10 billion. It was $11 billion when you add in the supplementary estimates.
Where is the missing $1 billion or $2 billion? Where did that come from?
Mr. Thoppil: There are more sunsetters than the $700 million I just talked about related to infrastructure. There’s another $400 million. The list of sunsetters is about $1.1 billion.
Senator Marshall: Where will I find that? Would that be on your website, or is it not?
Mr. Thoppil: A number of them were announced and listed in Budget 2018.
I may be able to provide you a dedicated list of the sunsetters so that you would see that. I’d be pleased to do that.
Senator Marshall: I’d like that, because I think you will have problems when you start separating the one department into the two departments. Also, as a committee, I would like to try to at least follow the high-level amounts of money.
Mr. Thoppil: Sure.
Senator Marshall: I have a couple of questions on the estimates per se. The first one is regarding contaminated sites. I’ve always been interested in that area.
The contribution to First Nations management of contaminated sites has gone down. Last year, it was $63 million. Now it has gone down to $29 million.
Why would there be a decrease? Are they making progress?
Mr. Thoppil: Some of that may be due to a number of elements. Some of it is just around long lead times on contracting and consultations to get buy-in, in terms of Indigenous peoples and the surrounding committees, on how you move forward.
Sometimes there are lags. As you may know, senator, some of those contaminated sites in the North are probably generational in terms of the number of years required to eventually remediate them.
Senator Marshall: It was $50 million the previous year. Then it went to $63 million, and now it has gone down to $29 million.
Could you get back to us on whether there has been a faltering of a commitment to service those contaminated sites?
The next question I have is around the contributions to support the construction and maintenance of community infrastructure. It was $2 billion last year, and now it has gone down to $21 million in Indian Affairs. Is it somewhere else? Is it in Indigenous Services?
Mr. Thoppil: Yes. The infrastructure is moved over to Indigenous Services, so you should see it over on that side.
Senator Marshall: What about oral health? The Auditor General issued a report on it last year. We had met with the head of the National Dental Association, who spoke about the need to improve oral health for Indigenous children.
Could you give us an update on whether there has been any progress on that?
Mr. Thoppil: There continues to be work to look at issues such as the one that came out in the press some time ago in the Shriners case. There continues to be discussions within the government on how to move forward on that.
Senator Marshall: At the time we met with the National Dental Association, I think it was, they indicated an additional $10 million was needed to provide an adequate level of service. Given the budget of the department, I felt that $10 million was not significant in relation to the entire budget.
Is there any intent to put more funding into that program? I can’t tell from the notes.
Mr. Thoppil: One of the challenges the two departments have is the perception, given the magnitude of the funding across several programs, that it would be sufficient to deal with rising financial pressures that come in, in a year.
One of the challenges the two departments have is to deal with what is, in a sense, some degree of historic underfunding for Indigenous programs, in part through a cap that has been in place on the annual growth of increases to keep lockstep with inflation, cost drivers and population growth.
As we move forward in terms of funding programs on a sufficient basis, the issue is the go-forward in terms of dealing with the present reality, the historic legacy that has occurred in a number of areas, and how we catch up.
The government has tried to deal with both at the same time. That’s why three federal budgets under this government have committed $17 billion to the Indigenous base as part of both the historic as well as the go-forward.
Senator Marshall: That funding would be under Indigenous Services, would it not?
Mr. Thoppil: You will see it in both, depending on what the initiative is. For infrastructure, child and family services, education and health, you will see that on the Indigenous side. For what would I call childhood litigation and treaties, both modern and self-governing, you’ll see it on the CIRNA side?
Senator Pratte: I am interested in the new fiscal relationship with Indigenous peoples.
In Budget 2018, funds are allocated under the heading “New Fiscal Relationship.” These are relatively small amounts. I suppose they are simply for the continuation of the negotiating process.
There are two amounts actually: $189 million and another $71 million. Could you briefly explain what these amounts are for?
Mr. Thoppil: I’ll start off with the overall context that there are probably about four new fiscal relationships with Indigenous peoples: one with the Inuit, one with the Metis, one with First Nations that are self-governing, and then one with those who are First Nations under the Indian Act. I lead the negotiations for the First Nations under the Indian Act.
Budget 2018 committed to monies that were in a sense, as you noted correctly, down payments as part of what is essentially a journey of negotiations to deal with a whole number of issues that have not really been dealt with over past decades or years. Now we’re kind of moving forward on both.
The $70 million is for a number of elements in the new fiscal relationship for First Nations under the Indian Act. There is an amount of money for First Nations who sometimes fall under the default prevention and management policy of the department, whereby they have triggered some degree of default related to their funding agreement either due to the lack of an appropriate service level, or they haven’t provided a report, or there is some degree of issue at the community level.
The department puts them on some level of default. There are a number of levels. The most interventionist is the third party whereby we bring in a receiver to manage the community’s affairs until there is restoration of normal.
The issue with that policy is the fact third party manager’s fees come out of the band support funding, which is already meager. There is a view that First Nations who are already the lowest capacity among the profile of First Nations across the country are double-whammied in the sense that it’s hard for them to get out from under. There is some money for that.
There is another amount of money for community planning to provide a comprehensive community-approved plan across all their areas of governance in terms of how they move forward and what are their targets.
There is also money for further research going forward to deal with other issues. One thing that is not a monetary element but is under this initiative is to move those who are financially capable from contributions to grants for those who are financially sophisticated. The government’s target is to provide grants to at least 100 First Nations who have met that element.
They have to meet a number of minimum provisions, including a financial administration law and a community-based approved plan that sets up their targets and their outcomes for where they are to spend their money.
Senator Pratte: Those are the 10-year grants. Is that it?
Mr. Thoppil: That is correct. That is to give them the predictability, as well as the flexibility, to plan multi-year assets and goals and go beyond essentially the one-year stricture of the eligibility expenditures of a one-year agreement.
Under the new self-governing fiscal, that is much more comprehensive because those are First Nations that have committed to move out of the Indian Act. They have drawn down some level of jurisdiction and therefore their governance needs are much greater.
As well, there has been some degree of historic catch-up on the historic negligence of their funding as a government. There is funding for that but, again, these are both initiatives that are continuing negotiations to deal with the issues of the past. Therefore they are journeys that keep going.
Senator Pratte: Just give us a very brief example, for instance, of the timelines for the government providing 10-year grants to some of those nations.
Mr. Thoppil: Last week, I issued letters to all 634 First Nation communities across the country with the eligibility criteria. We gave until June 30 for communities to decide whether they met it and whether they are willing to take up on it.
Over the course of the summer, the First Nations Financial Management Board will do an assessment of their financial ratios and whether they have met the eligibility requirements that are non-financial. Then we will move toward a Treasury Board submission in the fall that converts monies and programs from contributions to grants to meet a timeline of April 1, 2019.
Senator Eaton: My question is for Ms. Devenny. Dr. Tom Kovesi, a pediatric respirologist at the Children’s Hospital of Eastern Ontario, has done interesting work on First Nations housing.
A concern is that houses, even when built to code, aren’t being designed and built appropriately. A building code that is relevant in Ottawa doesn’t necessarily mean it’s good in Nunavut, as you all know. He says that a child in Nunavut is 20 times more likely to be hospitalized with serious respiratory problems than one in Ottawa, and housing is to blame.
As you roll out the $600 million for on-reserve housing, you are seeking $119.6 million through the Main Estimates and, as you certainly said in your speech:
This funding will enable CMHC to expand our data analysis, research, policy development, and capacity and skills development activities.
Is that the kind of money that will be put toward figuring out what is a good building code for places that have to build on tundra, in the very cold north or in other difficult geographical locations in Canada?
Ms. Devenny: Thank you for your question, senator. It’s a good one.
I can’t answer exactly what that $119 million is made up of specifically. I would have to get back to you on that question.
Senator Eaton: I have heard on other committees that certain Inuit groups are planning a housing seminar this summer to look into specific problems.
Would you get back to me to explain to me how that money will be spent? This is a question I’ve been asking for many years now.
You’re also seeking $4.1 million to support the development of human rights based research. Could you explain what that is?
Ms. Devenny: I believe my colleague will be able to answer in a little more detail on the exact nature of the programs.
Debbie Stewart, Vice-President, Affordable Housing, Client Solutions Management, Canada Mortgage and Housing Corporation: In terms of the human rights based approach to housing, it really is the belief that housing is foundational or fundamental to people’s well-being when looking at how Canada can strengthen its commitment to ensuring that Canadians have access to housing which meets their needs and that they can afford.
In this year, on behalf of the Government of Canada, CMHC is undertaking consultations to inform the development of this rights-based approach to housing. We are looking at things like legislation and getting input and feedback in terms of whether or not a legislative approach to strengthening a right to housing in Canada is the right approach. If it is the right approach, what should be included in that legislation?
Also, in the consultation —
Senator Eaton: Back up a bit. In other words, I should be able to go to you as a single mother, as a married couple or as a new immigrant and say, “I can’t find housing. Provide me with housing.”
How would the legislation work? What kinds of things are you looking at?
Ms. Stewart: It’s about promoting fairness, equity and non-discrimination in terms of accessing housing. It’s also about encouraging participation.
Senator Eaton: Those are lovely abstract words, but do we have data showing that there is a lot of abuse?
Ms. Stewart: With do have anecdotal evidence that there is.
Senator Eaton: You have anecdotal evidence.
Ms. Stewart: Yes.
Senator Eaton: I see. The $4.1 million is to pursue that, to see that you have real evidence.
Ms. Stewart: The $4.1 million is not about research. It’s about, initially, consultations and supporting that process; but it’s also about putting in place governance mechanisms.
Senator Eaton: I am sorry to be difficult, but it seems to me that this will be very difficult to account for.
In other words, next year will you be able to come back to the committee and say, “This is what we found. These are the programs we’ve got in place?” Will there be actual accountable things?
Ms. Stewart: Yes, it’s about enhancing the accountability framework. In terms of governance, there are two elements that are to be put in place to strengthen the governance and to ensure that there is, I guess, third party input into the process of developing policies and reporting on them.
The National Housing Council is to have representation from all orders of government, the private sector and academia in terms of providing advice on how we can strengthen housing policy. As well, a federal housing advocate is really looking at housing barriers and challenges from the perspective of those who are facing particular challenges.
Senator Eaton: I didn’t realize that was a federal thing. I always thought provinces looked after things like that.
Mr. Thoppil, there is some money in here for additional health. I was wondering how you’re working with First Nations. You have $498 million in new funding allocated in Budget 2018. Could you tell us how that will be spent?
Mr. Thoppil: Budget 2018 proposes to invest $1.5 billion over five years, starting in 2018-19, and $149 million per year ongoing. There is a number of elements. To your question on the $498 million, that is for $97.6 million per year ongoing to sustain access to critical medical care and services, including 24-7 nursing services in 79 remote and isolated First Nation communities.
Senator Eaton: Will any of that money be used for renovating and upgrading remote health care facilities?
Mr. Thoppil: There is money for that, but that is a separate fund. It is not part of the $498 million that you referred to.
Currently there are about 213 projects dedicated to health facilities being built or updated, of which 46 are community health facilities. Of those 213 projects, about 71 per cent has been completed so far; but that is not part of the $498 million.
Senator Eaton: I heard on the Arctic Committee that one of the reasons they have trouble keeping nurse practitioners and doctors in remote locations is that there is often no place for them to live.
Have you found that in any of your research or your bills?
Mr. Thoppil: That is true. The dynamics in the North are obviously very different from those in the South. There are a number of issues whereby the recruitment and retention of qualified doctors and nurses is a challenge. Adequate and appropriate residence is an issue. Pay or isolated post allowances is just one of many factors. The degree of being alone in an Indigenous community is another factor.
There is a continuum of issues, which makes it a challenge to ensure that there is always care available.
There are monies in the budget to look at transformative care, to look at those times whereby we can take advantage of telemedicine and other innovative technological means to kind of deal with care where there are gaps in physical presence.
Senator Eaton: A lot of times we’ve heard that they lack broadband and Wi-Fi, so it’s very difficult to have telemedicine. This wouldn’t fall under your ministry, would it, to set up broadband and Wi-Fi?
Mr. Thoppil: There are a number of discrete funding envelopes to deal with broadband gaps in the North and in the remote communities.
As part of our infrastructure funds in Indigenous Services from Budget 2017, we will roll out this year a small amount of money to deal with remote and northern bandwidth.
Obviously, the CRTC has some and ISED has some as well. We are working with like-minded partners. It could be those other departments, or what I would call provinces, particularly provincial telephone companies and utilities, whereby we can tap into their right of access and whereby we can hit both non-Indigenous and Indigenous communities.
There is a successful example of that in Manitoba, whereby both a number of federal and provincial parties have come together, pooled money and are rolling out band access to northern Manitoba First Nation communities.
Senator Eaton: Just as a comment, I am glad you’re doing that because we heard some very compelling witnesses from the Inuk committee in northern Labrador, who really would like broadband and Wi-Fi for education and health.
[Translation]
Senator Massicotte: Thank you very much for being here this afternoon. Since I am not a permanent member of the Standing Senate Committee on National Finance, my questions will be less detailed.
My question is first for Mr. Thoppil. I would like to know whether we are comparing apples to apples. If we are comparing the 2017-18 fiscal year with this one, including the $1.3 billion in planned programs, what are the total expenditures for the two years? There was one department, now there are two. Is it similar or has there been an increase?
Mr. Thoppil: I understand the difficulty of comparing the figures from the two departments each year, given the changes related to the movement of programs. I think it would be better to clearly explain this on a form.
Senator Massicotte: Give me the figures for last year and this year, with the same assumptions, including the $1.3 billion. What are the actual numbers?
Mr. Thoppil: Your question is connected to the previous question about temporary programs.
Senator Massicotte: The $1.3 billion includes the temporary programs, I believe. You think you’ll obtain the authority to spend. This includes the temporary programs.
Mr. Thoppil: If you exclude programs that are ending, it’s almost the same thing, maybe with an increase.
Senator Massicotte: Does the term “temporary” refer to programs in place that are coming to an end and that you are hoping to renew?
Mr. Thoppil: Exactly.
Senator Massicotte: Those programs must be renewed, otherwise there is an error. No?
Mr. Thoppil: No. It is important to understand that some temporary programs come to an end and others are subject to only one condition.
Senator Massicotte: If you want to exclude them, the amounts are practically the same.
Mr. Thoppil: Yes.
Senator Massicotte: Yes, any temporary program that is renewed represents an increase in absolute terms. Am I wrong about that?
Mr. Thoppil: If you include the temporary programs, it’s an increase.
Senator Massicotte: Basically $1.3 billion.
Mr. Thoppil: To give an exact figure —
Senator Massicotte: An approximate figure —
Mr. Thoppil: I think the challenge for both departments and the impact on indigenous peoples is that most of the funding is for programs that are ending. There is always the risk of the program ending or being renewed. It’s really difficult for us to give you an exact number.
Senator Massicotte: If I understand correctly, if we exclude the programs planned for the 2016-17 fiscal year and those for next year, we end up with the same figure. The total increase in expenditures will be equal to temporary programs that will be renewed or put in place. That is at least $1 billion or $2 billion. Total spending last year was about $10 billion. Therefore, a 10 to 20 per cent increase in total expenditures is expected when the two are combined. Is that correct?
Catherine Blanchard, Director General, Planning and Resource Management, Chief Finances Results and Delivery Officer Sector, Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada: A small table is needed to assess increases and sunsetting programs, because there are a lot of changes in the numbers. We have sunsetters, transfers from Crown-Indigenous Relations and Northern Affairs Canada to Indigenous Services Canada, as well as new investments in Budget 2018. So it is very difficult to do it here, but it is possible to prepare a table.
Senator Massicotte: I understand that it is difficult, but it is your duty to ensure that the information is clearly understood so that we don’t get lost in the details. We want to know how much taxpayers’ money is being spent. From my own business experience, I see that, when there’s extra money to spend, it’s like a fire hydrant: you open it a little and it all comes out. I am afraid that, in three or four years, there will be mismanagement and the money will be misspent. Are my concerns valid? It worries me to think that, in three years, the budgets will increase by 10 to 20 per cent and that we will say, “We have the money, party time, let’s go.” The indigenous community has huge needs, but will the money be well spent? Is there cause for concern?
Mr. Thoppil: I completely understand your concerns about this major investment in indigenous communities.
[English]
As I said before, $17 billion is committed through three federal budgets so far in the Indigenous space. Not all of that is ongoing. Some of that is unsettled. Then the question becomes, as you have indicated, senator, “How is that money being managed?”
When Budget 2016 money came out, that was a stimulus budget for shovel-ready projects. That went to those First Nations who were high performing, had shovel-ready projects and were willing to invest. They usually have the capacity to manage well.
The problem is that some of the housing deficits or other infrastructure deficits are primarily in the low capacity; but we did take some that have money from Budget 2016 to do some seed capacity and develop the design so that when Budget 2017 investments came out we would be able to then allocate it to the low capacity knowing that they were ready to take the money.
[Translation]
It is also an example of our measures to manage funds properly.
Senator Massicotte: My next question is about the Canada Mortgage and Housing Corporation. To my knowledge, you have two major divisions or sectors: mortgage insurance and social housing programs. What is the net profit from the insurance compared to the spending on social programs?
Ms. Devenny: Thank you for the question. I would like to answer in English.
[English]
The net profit for the last year.
[Translation]
Senator Massicotte: How much is that in insurance? How many mortgages have been insured?
[English]
Ms. Devenny: I’m trying to remember. It is just over $1 billion, I think, if I recall correctly.
[Translation]
Senator Massicotte: In income?
[English]
Ms. Devenny: Not income, but revenue. Just over $1 billion.
[Translation]
Senator Massicotte: What is the profit from the insurance programs?
[English]
Ms. Devenny: Profit is $2 billion.
[Translation]
Senator Massicotte: That is not so bad. A $2 billion profit on revenue of $1 billion is pretty good.
[English]
Ms. Devenny: For the cost of the assisted housing mandate, the appropriations are just over $2 billion, and that’s equal to our costs.
Senator Massicotte: It’s equal to your costs. I understand that. I think what you meant to say is maybe it’s equal to the profits from the insurance program.
Ms. Devenny: No, it’s two very separate programs.
[Translation]
Senator Massicotte: What is the profit from the insured mortgages?
[English]
Ms. Devenny: I don’t recall exactly what the profit was. It’s just over $1 billion.
Senator Massicotte: Is that the profit?
Ms. Devenny: I can’t remember how much it is.
Senator Massicotte: How much money do you have insured? How many mortgages? What is the insurance level?
The Chair: If you want to answer the question, please come to the table so we’re on record. Would you please come forward?
Senator Massicotte: Just put your head on the guillotine; it is right there.
David D’Amour, Director, Housing Finance, Canada Mortgage and Housing Corporation: CMHC’s insurance policy in force right now is probably about $450 billion.
Senator Massicotte: It has gone down, I gather.
Mr. D’Amour: It keeps going down consistently.
Senator Massicotte: From what level?
Mr. D’Amour: We have a statutory limit of $600 billion. We were approaching that limit several years ago, and it has been trending down ever since.
Senator Massicotte: You have $1 billion in profit from the insurance and $2 billion in costs for social programs.
Mr. D’Amour: Yes.
Senator Moncion: I am sorry for being late, and I am leaving in about five minutes.
[Translation]
I have some questions for both organizations. First, in order to provide more financial flexibility to First Nations, you will be developing 10-year grants for First Nations, with the goal of providing some of the amounts to 100 First Nations by April 2019. How will First Nations be required to be accountable for using the grants and for the results obtained, and what type of reporting will be established to inform the general public of the results achieved through those grants?
[English]
Mr. Thoppil: Thank you for the question. One of the things most people need to understand is that in the 634 First Nations they are of different capacities. They can’t be generalized in terms of a certain level. We need to understand, recognize and commend those First Nations who have demonstrated through five years of strong financial records, as an example, that there is actually a recognition to treat them on a government-to-government respectful basis.
Therefore, if we are to treat them as such, they should have a fiscal relationship with the federal government that respects that strong financial track record.
I alluded to a number of financial ratios earlier in response to another question from the senator. We have co-developed with the Assembly of First Nations and the First Nations Financial Management Board that First Nations should provide evidence of demonstrating that strong financial history through a review of those audited financial statements.
There needs to be governance beyond their financial track record to determine how they demonstrate the financial review and challenge function as First Nations chiefs and council. That is done through a financial administration law that would be passed by the community. There would be certain minimum provisions under that law which would need to be enforced in time to be eligible for the grant.
Some of those are conflicts of interest acknowledgment, a dedicated finance and audit committee, and the issuance of a community-approved plan.
Coming to your next question about the results, we are working as part of the new fiscal relationship on a mutual accountability framework whereby that community plan is reported on once a year through their annual report. This goes beyond just finances and also takes into account the results related to the community-approved targets and outcomes across a number of indicators framed under the United Nations sustainable development goals. Then we can track, over time, how that community is faring under the government’s commitment under the UN SDGs to performance.
We are moving toward a national outcomes-based framework so that we are confident those First Nations will be able to demonstrate strong financial governance and to reduce the socio-economic gap through a community-approved plan.
Senator Moncion: Will the money be allocated to well-organized First Nations reserves?
Mr. Thoppil: That is correct.
Senator Moncion: What happens to the others?
Mr. Thoppil: As another senator asked, that’s what part of that $71 million under federal Budget 2018 is dedicated to. A number of First Nations will respond to or aspire to the offer but won’t have met a financial track record or have demonstrated financial governance to be eligible for the grants.
We have dedicated funds allocated to our Professional Institutional Development Program that will be targeted toward those First Nations who need to invest in IT systems and a financial policy suite, so that they can get to a financial standing that is requisite of a government-to-government level and get the grants.
[Translation]
Senator Moncion: In terms of the four cannabis plants in homes, it was suggested that no CMHC insurance would be available for properties where people grow cannabis. Could you quickly tell us about that? Is that the case or is it made up? Have you looked at that? There was one example of a property where cannabis was grown. The interior of the house has since been completely renovated, but the CMHC has refused financing, despite the renovation and inspection of the house. This has an impact on the legalization of cannabis and the plants that people will be able to grow in their homes.
Ms. Stewart: Thank you for the question. We’ll get back to you with an answer. There are many factors to consider when applying for insurance. We want to check whether there is a specific policy related to cannabis.
Senator Massicotte: In a week or a few days?
Ms. Stewart: Yes.
The Chair: When you answer Senator Moncion’s question, please send a copy to the clerk.
[English]
Senator Marshall: Ms. Blanchard, you mentioned something about a schedule where you could reconcile the budget to two departments from last year with this year. I backed out Health Canada, and it looks like it’s less.
If you could do the schedule when you respond, that would be great.
[Translation]
Senator Massicotte: Mr. Thoppil, in your response to Senator Moncion, you said that discussions between the indigenous communities and the federal government are nation to nation. What does that mean? Are the discussions with a province, a municipality or another state? What does that mean?
Mr. Thoppil: It’s a little complicated to answer that question.
[English]
I think nation to nation means something different to many people. If you start with the Royal Commission on Aboriginal Peoples, they defined nations as those nations that existed in Canada before the settlers arrived. They said there were about 60 to 70 nations at that time.
When the Indian Act was implemented, it essentially destroyed those nations. Through the Indian Act we actually created bands that in a sense fragmented those nations. There is a desire to help those First Nations across the country who aspire to going back to the pre-RCAP days. I don’t think we’ll ever get to 60, 70.
[Translation]
Senator Massicotte: But what does that mean in concrete terms? Is it like the distinct nation of Quebec, like francophones? What do you mean by negotiations? I understand the history, but I would like to know what that means in concrete terms.
[English]
Mr. Thoppil: Under reconciliation, we are not in a world whereby we will dictate the path toward self-determination anymore. I think that definition of nation will vary across the country, based on their history, the treaties that may or may not exist with Canada, and what a community defines as itself. There will be many different pathways toward a rising recognition of what is nationhood.
The Chair: Mr. Thoppil, you can come back, through the clerk, with a definition and more clarity on the question asked by Senator Massicotte.
For our next panel, we will hear from Mark Perlman, Chief Financial Officer, Chief Financial Officer Branch, Employment and Social Development Canada.
Senator Marshall: Do we have a quorum?
The Chair: Senator Marshall, on your question, the chair will recognize that we do not have a quorum. I will suspend until we do.
Senator Massicotte: I have two things. First, it was my understanding that if we had a quorum at a committee meeting we didn’t have to maintain the quorum.
Second, if there is no quorum, nothing stops us from taking evidence. We just can’t arrive at any resolution. Is that accurate?
The Chair: Is there any other information?
Senator Massicotte: I just want the right answer.
Gaëtane Lemay, Clerk of the Committee: Usually, if no one raises the fact that we have lost quorum, the meeting continues. However, we are in a position where someone has raised the lack of quorum, so we cannot proceed.
Senator Marshall: The concern I have is that Senator Massicotte said he was going to leave at three o’clock.
I was looking around the table, and it’s a dream come true to be the only senator to ask questions of the witnesses. I was preparing myself psychologically for that hour.
The Chair: For our second panel, from Employment and Skills Development Canada we welcome Mr. Mark Perlman, Chief Financial Officer, Chief Financial Officer Branch, Employment and Social Development Canada, and Jason Won, Deputy Chief Financial Officer, Chief Financial Officer Branch.
I want to take this opportunity as chair and on behalf of all the senators of the Standing Senate Committee on National Finance, to congratulate you, Commissioner Lucki, on your recent appointment. There is no doubt in our minds that you will have the opportunity to come to the Finance Committee going forward.
[Translation]
Thank you for your leadership.
[English]
We have, from the Royal Canadian Mounted Police, Brenda Lucki, Commissioner.
[Translation]
She is accompanied by Denise Nesrallah, Acting Chief Financial and Administrative Officer.
[English]
We also have Stephen White, Assistant Commissioner and Acting Chief Human Resources Officer.
I have been informed that Mr. Perlman will present a short brief and make comments, to be followed by the Commissioner.
[Translation]
On that note, Mr. Perlman, the floor is yours.
[English]
Mark Perlman, Chief Financial Officer, Chief Financial Officer Branch, Employment and Social Development Canada: Thank you, Mr. Chair and honourable members of the committee. I am pleased to appear before you in my capacity as Chief Financial Officer for Employment and Social Development Canada, ESDC.
[Translation]
Senior executives from key areas of ESDC are also in attendance and may be coming forward to help me answer some of your questions.
[English]
First of all, I would like to quickly explain the process changes that impact this year’s Main Estimates.
For years, parliamentarians have expressed concerns around the Main Estimates and the fact that they did not include budget measures as a result of timing, therefore presenting an incomplete picture of government-planned spending overall.
To address this issue, the 2018-19 Main Estimates include 100 per cent of the Budget 2018 measures in the budget implementation vote managed by the Treasury Board.
ESDC has 15 Budget 2018 measures totalling $308 million in 2018-19. All of these measures are fully aligned with ESDC’s departmental results framework, and the majority of these initiatives are described in ESDC’s departmental plan.
[Translation]
We have plans and expected results for each measure that will be refined over the next few months prior to seeking Treasury Board approval, at which point these funds would be allocated to the department. The funding amounts and implementation details are not included in the departmental plan as that would presuppose Treasury Board approval.
[English]
The 2018-19 Main Estimates for ESDC amount to $60.9 billion, an increase of $3.5 billion when compared to the 2017-18 Main Estimates. Of this, $57.8 billion or 94 per cent will directly benefit Canadians through the Old Age Security program and other statutory transfer payment programs.
In these Main Estimates, the department is showing an increase in statutory payments, mainly explained by an increase to Old Age Security and Guaranteed Income Supplement payments resulting from the aging population, the expected increase of the number of beneficiaries and the average monthly benefit amount.
Other statutory programs such as the Canada disability savings grants and bonds and the Canada student loans and grants have also increased by $96.6 million and $118 million respectively.
Under vote 1, Operating Expenditures, the department plans to spend $676.8 million in 2018-19, an increase of $100 million from the 2017-18 Main Estimates of $576.8 million. The net increase of $100 million is mainly related to the funding renewal in Budget 2017 for the Temporary Foreign Worker Program and new funding for the Old Age Security program workload to support the demographically-driven increase.
As for vote 5, Grants and Contributions, the 2018-19 Main Estimates level is $2.4 billion, an increase of $593.3 million from the 2017-2018 Main Estimates. The increase of $593.3 million is mainly attributable to investments announced in Budget 2016 and Budget 2017 for early learning and child care to support the establishment of a federal-provincial-territorial early learning and child care framework.
The framework will be seeking to increase the quality, accessibility, affordability, flexibility and inclusivity in early learning and child care, in particular for families that need child care the most.
A separate Indigenous framework on early learning and child care is being co-developed with Indigenous partners to reflect the unique cultures and needs of First Nations, Inuit and Metis children and families.
It is also due to increased funding to the new Workforce Development Agreement that consolidates the Canada Job Fund Agreement, the Labour Market Agreement for Persons with Disabilities and the Targeted Initiative for Older Workers.
The funding for the Workforce Development Agreement was enhanced through Budget 2017, with an additional $900 million over six years from 2017-18 to 2022-23.
ESDC works to rationalize and expand the labour market transfer agreements to improve workers’ access to quality job training and good careers. It was specified that this work should support the efforts of provinces, territories and employers; reduce barriers to access the labour market; avoid duplication of services between programs; and promote better outcomes for workers who need help.
An increase of $62.2 million is attributable to investments announced in Budget 2017 for the Youth Employment Strategy. The funding will increase the number of youths who access the Skills Link program, thus helping more young Canadians, including among others Indigenous and disabled youth, make a more successful transition to the workforce, as well as create new green jobs for youth under the Career Focus Program. There is also an increase in the Canada Summer Jobs program under the Summer Work Experience stream of the Youth Employment Strategy to expand employment opportunities for young Canadians.
[Translation]
Additional funding is included in these Main Estimates for the Homelessness Partnering Strategy to enhance communities’ efforts to tackle homelessness and support innovative approaches to preventing and reducing homelessness. This money will honour the public commitment to support projects that test innovative approaches to prevent and reduce homelessness and potentially support capacity building projects in communities looking ahead. This will maintain the Homelessness Partnering Strategy’s 2017-18 funding levels in 2018-19, before a renewed strategy is implemented starting April 1, 2019.
[English]
Finally, as part of Budget 2016, the government committed to investing $105 million over five years in a youth service program to help young Canadians gain valuable work and life experiences while providing support for communities.
Budget 2017 announced the launch of a youth service initiative starting in the fall of 2017 for which $30 million was allocated in the Main Estimates.
In January 2018, the Prime Minister announced the launch of the Canada Service Corps that will promote civic engagement and facilitate access to service experiences for all youth, particularly for those who are not already engaged in community service.
You will note that Employment Insurance benefits and the Canada Pension Plan benefits are excluded from the department’s Main Estimates. The EI operating account and the CPP account are two specified purpose accounts. The EI operating account is included in the consolidated data of the Government of Canada. The CPP is not incorporated into the government’s financial statements since it is under joint control of the federal government and the participating provinces and territories. EI and CPP benefits are reflected in the departmental plan, which was also tabled in April.
[Translation]
I hope this overview has given you a better understanding of the Main Estimates for our department.
[English]
My colleagues and I will be pleased to answer your questions.
The Chair: Now we will ask the Commissioner of the RCMP to make her presentation, to be followed by questions.
Brenda Lucki, Commissioner, Royal Canadian Mounted Police: Thank you, Mr. Chair and honourable senators, for inviting me to this committee to speak today.
[Translation]
With over a month under my belt as the new commissioner, I’ve been struck first and foremost by the tireless efforts and dedication shown by employees of this organization. I’ve never been more proud to be part of the RCMP.
[English]
Guided by the mandate letter provided by Minister Goodale, I plan to steer this organization through a period of modernization and innovation. We’re focusing on bolstering diversity in our ranks and being more representative of the communities we police. We’re standing up to bullying and harassment, with a zero-tolerance policy. We’re supporting the mental health and wellness of all our employees. We’re building strong relationships with Indigenous communities, and we’re looking forward to working with our new bargaining agents who will be active advocates for our members and employees as we negotiate through issues such as fair compensation.
[Translation]
I’ve seen so much good work being done across the country. But to do that good work, we need resources. We must address vacancies and grow our numbers to meet the needs of our communities and address the pressures on our employees.
[English]
The Main Estimates for 2018-19 reflect key investments to keep the RCMP operating effectively, to look after our employees and to keep Canadians safe. Compared to my colleague at ESDC, we’re just a smaller fish in that pond, maybe even a minnow compared to what he is asking for.
Members will note that the total funding sought by the RCMP is $3.5 billion. This is a net increase of $658.1 million, a 22.8 per cent increase over the 2017-18 Main Estimates.
The major items affecting our funding levels are as follows: $517.9 million for the contract policing program, most of which is to support a new funding model approved by the Treasury Board and the balance represents incremental program funding, which is consistent with previous years.
The new contracting funding model is essentially a one-time adjustment which is cost neutral to the fiscal framework. There is also an increase of $132.6 million for security costs associated with the upcoming G7 summit in the Charlevoix region of Quebec; an increase of $81.3 million for negotiated salary adjustments for employees; $30.1 million for the disability grant to compensate members injured on duty; increases to support the new cannabis act; funding to address drug-impaired driving, including member training; more investigative resources to combat terrorism; resources to support Metis rights and relationships; and funding to implement a new gender-based violence prevention strategy.
[Translation]
These funds will ensure that the RCMP is well-placed to keep Canadians safe, while safeguarding our relationship with employees.
Thank you again for inviting me to speak today.
[English]
I look forward to working with the committee in the future, and I would be pleased to take your questions.
Senator Marshall: My first question is for the commissioner. Congratulations on your appointment.
In your opening statement, you mentioned that we must address vacancies and grow our numbers. Could you give us some background as to the extent of the vacancies?
I notice that there is a new $105 million initiative in Budget 2018 for supporting RCMP front-line operations. I am wondering if the two are related.
Ms. Lucki: On vacancies, we run between 5 and 7 per cent vacancies due mostly to attrition, but the $100 million that is part of the $517 million is in line with previous years. That’s approximately a 3 per cent increase of full-time equivalents and all that goes with those equivalents.
Also, we have a radio project and one-year integrity funding to maintain current operations to reinforce the RCMP policing operations. It’s to support recruitment and training of new RCMP cadets to help meet the demands of the new front-line federal officers in Canada. That’s the $80 million for one year.
For front-line operations the RCMP has received the full amount requested to acquire a new digital radio system that has mandated voice encryption. That’s the $60.2 million over five years and the $9.5 million ongoing.
Senator Marshall: You talked about the 5 per cent and the 3 per cent. What is the staff complement of the RCMP in fixed numbers?
Ms. Lucki: The total complement is approximately 30,000: 18,200 regular or uniform member and another 12,800 members that support the front-line members.
Senator Marshall: Are they what we call the civilians?
Ms. Lucki: We have civilian members and public service employees. That’s the civilian component.
Senator Marshall: There are other new initiatives in the budget, such as $9 million for regular migration, managing the border.
We had some discussions in our committee meeting this morning. How much was spent in the past fiscal year for managing the border for irregular migration?
Ms. Lucki: As far as our resources, we used our existing resources and redeployed. Any of the money we used was for overtime, which was absorbed within our own budget. This is $9.9 million for one year to keep our existing capacity. There are no extra resources. It’s mostly travel and overtime. We’re in the midst of creating an MC for sustainable resourcing over the next two years.
Senator Marshall: If the government was looking to determine the total cost of managing the irregular migration for last year, are you able to break out those numbers from your expenditures last year? Could you break them out separately if you need to?
Ms. Lucki: It’s approximately $7 million.
Senator Marshall: There are a couple of other new initiatives there. One is renewing and enhancing the federal tobacco-controlled strategy, but the next one was RCMP cannabis labs repurposing. It’s a negative amount. What would that be?
Ms. Lucki: I’ll pass that Denise Nesrallah.
Denise Nesrallah, Acting Chief Financial and Administrative Officer, Royal Canadian Mounted Police: When the Treasury Board submission on cannabis went forward there was a repurposing of the approach that we would be using for the labs related to processing evidence through.
There was a repurposing of the DID component of the actual lab approach. The direction was for us to use private labs. There was research to see whether or not that capacity existed in the private sector. It does not.
Now it will be something that the RCMP is taking on. This shifting of money is required for us to then take that on in house.
Senator Marshall: So they reduced your allocation.
Ms. Nesrallah: They shifted is it one year to the next, so it created a bit of a shift.
Senator Marshall: Commissioner, I am an accountant so you will have to forgive me. My next question is kind of technical. It relates to the $517 million where it says that the increase in appropriations will be offset by an equal increase in non-respendable, non-taxable revenue to be deposited to the Consolidated Revenue Fund.
How much money are we talking about there? Where is that money coming from? Is that coming from the provinces? That is the money from the provinces, is it?
Ms. Lucki: Out of the $517 million, $417 million of it is the cost-neutral technical adjustment to support the new funding model approved by Treasury Board. The balance represents the incremental program funding which is consistent with previous years.
The new contract policing models are essentially just a one-time technical adjustment which is cost neutral.
Senator Marshall: How much is the non-respendable, non-taxable revenue that is to be deposited to the Consolidated Revenue Fund? How much are we talking about?
Ms. Lucki: About $410 million.
Senator Marshall: Oh, it is that much? Those are all the questions I have for the RCMP.
I will continue with Mr. Perlman. You mentioned a couple of items in your opening remarks.
First, on the Canada disability savings grants and bonds you referenced that there has been an increase. There was a bit of controversy with regard to the Canada Revenue Agency and some people who had lost their disability tax credit.
This question was raised in the Senate, and it was not my question. How did this affect the Canada disability savings grants and bonds?
Mr. Perlman: I understand. I am just wondering if I have an expert in the room that can maybe help me out on that one. I don’t think I do.
I can get back to you on that one.
Senator Marshall: Would you, please? I would be interested in knowing that.
Mr. Perlman: I do not believe I have that, so I can give you that as a follow up.
Senator Marshall: Second, you talked about $62 million for the 2017 Youth Employment Strategy, and you talked about the Skills Link program.
Have performance indicators been established for all those programs like the homelessness partnering strategy? You mentioned a number of programs, so I was wondering if there were performance indicators established for them.
Mr. Perlman: Yes, the performance indicators are actually established in our departmental plan. They are reported on in our departmental results report.
Senator Marshall: I have a meeting after this meeting to go over your departmental plan so I should be able to find it there.
Mr. Perlman: You should be able to find it all.
Senator Marshall: They are actually numbers, are they? It’s quantitative as opposed to qualitative.
Mr. Perlman: I believe it is.
Jason Won, Deputy Chief Financial Officer, Chief Financial OfficerBranch, Economic and Social Development Canada: Yes, I would say the actual achievements only go to 2016-17, which is part of the departmental results report released in the fall.
The departmental plan will lay out all of the indicators, and then they will be measured. We’re always year or so behind on reporting.
Senator Marshall: They are numbers, though.
Mr. Won: Yes, there are numbers.
Senator Marshall: When I look at the Main Estimates, non-budgetary statutory, the $734 million, what is that?
Mr. Won: That’s a combination of the loans. The non-budgetary is a combination of the apprenticeship loans as well as the student loans. There is a net increase of $400 or so million, which is the combination of an increase for the student loans and a decrease relating to the apprenticeship loans.
Senator Marshall: Are they usually recovered? What is the recovery rate on those loans?
Mr. Won: That’s a great question. I think the apprenticeship loan program is quite new. I don’t know if we have a lot of data on it yet, but for the Canada student loans the default rate I believe is certainly going down. I believe it’s in the 10 to 12 per cent area. We can certainly get that for you.
Senator Marshall: Could you? The $734 million is not Canada student loans. This is a different kind of loan, right?
Mr. Won: It’s the Canada student loans net.
Senator Marshall: It is, is it? The write-offs are another line item.
Mr. Won: Yes, that’s right. The loans are non-budgetary. Then, when you actually do the write-off, they become budgetary and go up into the expenditures.
As you see each year when we come to the Senate for the supplementary estimates, we do the loan write-off item.
Mr. Perlman: The default rate is around 10 per cent on the Canada student loans, which is actually one of the lowest compared to the U.S.A. at 11.5 per cent, and it has been going down over the last six or seven years.
Senator Marshall: I think we were told that before.
Mr. Perlman: Yes, I knew I had it.
Senator Marshall: I knew I heard it before.
My last question is about the grants and contributions in budgetary vote and not the statutory. Is it broken out separately?
The statutory grants and assistance are there. If you look at the last two pages, it shows total statutory for grants and the total statutory for contributions. What about the voted?
Mr. Perlman: The voted is the $2.4 billion I was mentioning, and those are broken down.
Senator Marshall: Where are they broken down to?
Mr. Won: You are referring to those two pages. The line items that would say statutory are not in fact broken out. If you look at the grants, it lists the grants and then it lists the contributions.
Senator Marshall: They are the voted. It’s the way it was presented that confused me.
Mr. Perlman: Everything you are seeing here for the $2.4 billion is the voted grants and contributions.
[Translation]
Senator Massicotte: Thank you for joining us. Ms. Lucki, congratulations on your appointment. You have our support and we wish you the best of luck, because expectations are quite high, as you know.
You mentioned a figure of $7 million for the additional costs associated with irregular migration. That amount does not include the $22 million or amounts paid directly to the provinces, such as Quebec. What is the $22 million for, if not for security spending?
Ms. Lucki: For us, it’s $9.9 million for one year. The $7 million was for last year, and that is what it cost. We did not add resources, we redistributed them.
Senator Massicotte: As for the $22 million promised to Quebec to manage the irregular migration, where is it? In which department is it spent?
Ms. Lucki: I don’t know. Some of those funds may go to customs and excise. I have no idea.
Senator Massicotte: Thank you.
[English]
The Chair: I have a few questions for the RCMP. Commissioner, the RCMP 2018-19 Main Estimates include the $132.6 million to support costs associated with hosting the 2018 G7 summit at Charlevoix, Quebec.
I have three questions on that. First, how many RCMP officers will be providing security to the G7 summit?
Second, how will the RCMP continue to provide policing services in the rest of the country, from coast to coast to coast, so that it will not impact on the quality of police services?
Third, what is the RCMP’s total costs associated with the G7 summit that is coming to Canada?
Ms. Lucki: First of all, there are 4,000 from the RCMP which is supplemented by La Sûreté du Québec commissioners and Ville de Québec and Charlevoix police, for a total of around 9,000, I believe.
The beauty of the RCMP is the fact that we can go 10 per cent off our mandate. We take 10 per cent. We consult with the provinces, and we take no more than 10 per cent from those provinces and supplement to make a team.
A majority of those resources are federal resources, so that’s why we don’t need to grab more than 10 per cent.
As far as the costs of the G7, we have just started, so I don’t have the numbers of the actual costs. That was an estimate based on the time that we needed. Specialized resources come in earlier than general duty resources. We try to minimize the time of members being absent from their provinces, so the front-line members come when they are absolutely needed. Specialty resources, VIP resources are all incremental. They have blocked off a two or three-week period. They come in spurts to minimize the costs and the absenteeism from their divisions.
The Chair: The total costs to the RCMP would be in the vicinity of what?
Ms. Lucki: We have the funding for $132.6 million, and that’s what our estimate is.
The Chair: In your statement you were looking at increases to support the new cannabis act.
First, is it possible to be more explicit?
Second, how much is being allocated to implement the new cannabis act, and what types of activities will the RCMP be supporting?
Ms. Lucki: A big chunk of the money that we are getting is for training, which includes actual training on the legislation to ensure our members know the legislation before it goes into enactment so that they can deal with it.
Another chunk of the training is the drug recognition experts, whereby we have 22 actual training sessions planned for this fiscal year. We currently have approximately 200 RCMP drug recognition experts. There are another 500-plus for all the other police departments across the country.
We want to increase those numbers so that we have those types of resources from coast to coast to coast to deal with drug-impaired driving, which isn’t new for the legislation, but we believe it may increase upon legislation.
The Chair: Do you have in your possession the right instrument to measure?
Ms. Lucki: There are various different instruments that are being used in Europe that we have not procured yet. We’re still in the testing phases of saliva. Mostly it’s based on saliva, but we are not at that point.
The other thing I forgot to mention is that a lot of the money for the cannabis is also to do the law enforcement records checks for the various other government agencies, such as Health Canada, the inspectors and various other agencies that will be involved with that legislation as well.
The Chair: In your time frame, when do you expect to have such an instrument at the disposition of police officers and the RCMP?
Ms. Lucki: I have no idea, honestly. Even if we did get the instruments, it would require legislation and changes to the Criminal Code. Just like we have a .08 in the Criminal Code, we’d have to have a lot of legislation.
That’s a great question.
The Chair: Commissioner, thank you very much for being here and providing your vision and your leadership to our RCMP.
[Translation]
I also want to thank the witnesses from Employment and Social Development Canada for being here and for their testimony.
(The committee adjourned.)