Proceedings of the Standing Senate Committee on
National Finance
Issue 16 - Evidence - October 7, 2003
OTTAWA, Tuesday, October 7, 2003
The Standing Senate Committee on National Finance met this day at 9:32 a.m. to examine the expenditures set out in the Supplementary Estimates (A) for the fiscal year ending March 31, 2004.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Colleagues, we are here again to consider Supplementary Estimates (A) for the fiscal year ending March 31, 2004.
The Senate referred these Supplementary Estimates to the committee on September 24, and the committee held an initial meeting a week ago today.
Before I forget, colleagues, this committee will meet two weeks from today, in camera, to consider a draft report on these Supplementary Estimates (A). You will receive notices of that meeting, but you may now circle the date in your agendas.
Our witnesses today are Mike Joyce, Assistant Secretary, Expenditure and Management Strategies Sector of the Treasury Board Secretariat, and Marc Monette, Acting Director, Expenditure Operations Division, Expenditure and Management Strategies Sector of the Treasury Board Secretariat.
Colleagues, as you know, we left a number of matters hanging last week, on the basis that our witnesses would obtain responses to questions that were not answered, or only partially answered.
The witnesses tell me that they have come equipped to deal with most, if not all, of those questions. While I would not try to restrict senators in their questions, or from bringing up entirely new material, I think the sensible, logical thing to do, and the best use of your time, will be to take the witnesses through the questions on which we require further information. After that, I will open the floor to the senators who posed the questions originally to see whether they have any follow-up questions.
Let's start with Senator Doody's question on the International Financial Institutions Fund account. Senator Doody wanted to know, first, what is this account. Second, he was interested in knowing about the allocation to the Department of National Defence of $388 million. He wanted to know whether this was the total amount for Afghanistan, and the committee would like to know the total amount of funding earmarked for Afghanistan from all departments. Finally, Senator Doody wanted to know how much the churches are contributing to the total settlement forecast by the Office of Indian Residential Schools Resolution.
Do you have the answers in that order, and can you take us through them?
Mr. Mike Joyce, Assistant Secretary, Expenditure and Management Strategies Sector, Treasury Board of Canada Secretariat: Yes, Mr. Chairman.
Let me start with the financial institution fund account. These international financial institutions are also known as regional development banks. They are all listed in the International Development Assistance Act; specific examples are the African Development Bank and Fund and the Asian Development Bank and Fund.
To get into the specifics of Senator Doody's question of what is at issue in these Supplementary Estimates, there are actually two financing windows provided by these institutions. One is known as the bank, which provides loans at preferred market rates; and the second category, which is known as the fund, makes money available to low-income members at concessional rates with long repayment periods. In this particular instance, Canada is supporting the second type of financing window — the fund — which is concessional. More specifically, the $97 million in note issuances that are referred to in these Supplementary Estimates will be used as follows — and there are four: the African Development Fund is getting $67.2 million; the International Fund for Agriculture Development, $14.5 million; the Caribbean Development Bank and the Special Development Fund, $9.1 million; and the Multilateral Fund for the Implementation of the Montreal Protocol on Substances that Deplete the Ozone Layer, $6.2 million. That is the breakdown in the further information I have obtained.
Would you like me to proceed?
The Chairman: Yes, proceed to the Department of National Defence and the Afghanistan issue.
Mr. Joyce: Mr. Chairman, on this question, I am not yet satisfied with the amount of detail that we have been able to obtain from the department, particularly on the total amount of money earmarked for Afghanistan. I have some interim information, but I would rather respond to this question later in writing, when I actually have more specifics from DND and am satisfied that I have a complete answer.
I would prefer to defer that one, although if you wish, I could give you the interim information that I have.
The Chairman: Fine. What about residential schools?
Mr. Joyce: There are a couple of elements to this question, which relate to addressing the claims for redress from former pupils; and, specifically, how much the churches are contributing toward the total settlement.
The government has reached agreement with two out of the four churches involved — Anglicans and Presbyterians — on how the cost would be apportioned. Under these agreements, Canada will pay 70 per cent of the compensation for claims prior to April 1 1969, with the churches contributing the balance of 30 per cent up to a fixed maximum contribution.
For example, the Anglican Church and the Presbyterian Church will pay a maximum of $25 million and $2.1 million respectively, after which Canada will pay 100 per cent of any further settlement beyond those ceilings. Again, consistent with these agreements, Canada will pay 100 per cent of compensation in claims arising after April 1 1969, since the churches were not involved after this date.
For the Catholic Church and the United Church, with whom agreements have not yet been reached, the Office of Indian Residential Schools Resolution will contribute 70 per cent of compensation to settlements of individual claims and the claimants retain the option of pursuing the church for the balance. The involved church organizations are invited to settle the claim, and I am told that to date, 65 per cent of these claims have been settled out of court with the Catholic and United churches.
The Chairman: Thank you. Senator Mahovlich asked about Industry Canada grants: a $3.5-million grant to the Toronto Waterfront Revitalization Corporation and a $10-million grant to TorontO3 Tourism Recovery Alliance. Senator Mahovlich wanted to know what these grants are for and to whom the funding will go. Do you have answers to those questions?
Mr. Joyce: This, in some respects, is a matter of clarifying the answer that I gave last time, on which Senator Day gave me some assistance.
The total amount in the Supplementary Estimates is $27.5 million to assist in offsetting the economic impact of SARS. It is split between three organizations: Industry Canada, which gets $13.5 million; the Canadian Tourism Commission, which gets $12.5 million; and Human Resources Development Canada, which gets $1.5 million.
In the case of Industry Canada, the total is divided between two items: a $10-million grant to Toront03 Tourism Recovery Alliance, which is promoting the Greater Toronto Area and the Ontario Tourism Corridor as a tourist destination; and $3.5 million, which is a grant to the Toronto Waterfront Revitalization Corporation and was used to fund the Rolling Stones concert.
The Canadian Tourism Commission is getting $12.5 million to develop a marketing campaign promoting tourism in Canada, so that represents the second organization.
The third and last organization, Human Resources Development Canada, is receiving $1.5 million to establish a new class of grant to provide income relief to health care workers who were isolated or quarantined or contracted SARS and who are either ineligible or do not qualify for EI benefits.
The Chairman: Thank you, Mr. Joyce.
Senator Comeau was focused on the Canadian Firearms Centre, and my notes indicate that he had four particular questions.
First, he asked how the registry functioned with $23 million less in the budget. You will recall that the budget was cut by $23 million. He asked for an explanation of the $10-million carry forward amount.
Second, there is, under ``Objects of Expenditure,'' $22.6 million for salaries. Senator Comeau asked about the occupational categories of persons working at the registry and whether they are under contract or permanent staff.
Third, what is the $58.9 million listed under ``Professional and Special Services'' being used for, what are the names of the principal contractors, how many are there, and what are the amounts?
Fourth, on page 14 of the Supplementary Estimates, he wants to know why there is a positive number in the transfer column. This seemed a little unusual to him. Last year, for example, when CMHC and Transport Canada had transfers, they netted out to zero. Why is it different for the transfer of the firearms program?
Mr. Joyce: The specific answer I have as to why the Canadian Firearms Centre was able to carry forward $10 million is that they are essentially transferring $10 million that they had planned to spend in the previous year to the current year, and that has now been moved over to the new home of the Canadian Firearms Centre. They did not spend $10 million as they had planned in the previous year because the new licensing and registration system did not proceed as quickly as anticipated, primarily because of the delays in the passage of Bill C-10A and delays in making planned changes to the regulations. This is an issue of the structure that is set by the new regulations that are foreseen by that bill, which I understand is still before Parliament. It was a delay in planned expenditures necessitated by the fact that the legislation to which it was responding has not proceeded as quickly as they had foreseen. That was the reason that particular $10 million expenditure did not occur last year, and they are planning now to spend that this year. Again, I assume it is contingent on passage of the legislation.
The staff complement of the firearms centre as at the end of August 2003 was a total of 279, of which 100 are indeterminate staff, 161 are casual and term employees and 18 are secondment or interchange arrangements with other organizations. ``Indeterminate,'' forgive me if you do know, is a term for full-time, regular employees. They are the regular public servants. It is just a label we use. I believe the terms ``casual'' and ``term'' are self-explanatory. It is people who are brought in using one or other of those arrangements for a limited period of time.
The allocation of the $22.6 million for personnel represents the forecasted salary costs of the above workforce in 2003-04, less the staff transferred to the RCMP. You will recall that some of the activities under the Department of Justice were also transferred to the Royal Canadian Mounted Police.
As for the breakdown of the groups by position, there is one deputy head, 10 senior managers, 22 administrative services category, 93 professional services category and 153 clerical support staff. I literally just received it this morning, so I have not looked at this, a further, detailed breakdown by actual classification. I can follow up and provide that supplementary information if it is of interest.
The third question from Senator Comeau related to the total of $58.9 million for professional and special services, which is for hiring consultants. In general terms, before I get into specifics, approximately $46 million has been earmarked for development and certification of a new licensing and registration system. This is, again, pursuant to Bill C-10A, to which I referred previously. The balance of the allocation is to maintain the current registration system until the new system is implemented, specifically for connectivity to the RCMP CPIC system and payment of software licences and for maintenance and support services.
In terms of the principal contractors, I have a list of six contractors and an indication of what they are contracted to do. A company called DLS, St.-Joseph is looking at warehousing and distribution of forms and publications for the firearms centre, and that is $2.1 million. St. Joseph Print Group, for printing and mailing services, which is basically to license firearm owners of the certificates, is $3.2 million. EDS is looking at hardware and software maintenance support for the current registry system, and that is $8.8 million. Hewlett Packard, for maintenance and support for the HP service, which I understand is part of the current system, is $2.3 million. Nex Innovation is looking at hardware maintenance and support services generally for $2.1 million. The largest item that is part of the $46 million earmarked for development of the new system is to CGI Information Systems, which is developing the system to support the regulations that are foreseen in the new legislation being proposed, and that is a total of $32.4 million.
The Chairman: Thank you.
Mr. Joyce: To confirm the response I gave last week, Mr. Chairman, the treatment of the transfer from the Department of Justice to the Solicitor General is not consistent with our previous practice.
It was done with good intentions because we wanted to ensure it was visible. I believe we achieved that objective.
However, it is inconsistent with previous practices. You have my assurance that the next time we do this we will ensure a consistent treatment of transfers.
The Chairman: Senator Ringuette had questions on two or three matters. One was on assistance to the softwood lumber sector in the amount of $105.9 million. She asked for a breakdown of how these funds are being disbursed to the regional agencies, and in particular, whether any of this funding is going to Eastern Canada.
Her second question was about the Canadian Firearms Centre and the $16.5-million item listed as contributions to the provinces and territories for the Canadian Firearms Program. Senator Ringuette asked whether we could have a listing of the provinces, and how much each is to receive. Is this a total amount, or are there some funds in the Main Estimates?
Finally, on funding for health research, Senator Ringuette asked for a list of health research centres, how much they are receiving from the federal government and what they do with these funds.
Mr. Joyce: Mr. Chairman, I have information on the breakdown by regional agency for the softwood industry and community economic assistance initiative.
As I think I mentioned last week, it is being delivered by the regional economic development agencies on behalf of Industry Canada. That department has the overall accountability for this particular initiative. It is effectively using the regional development agencies as delivery arms.
The breakdown, which is notional at this time because it is based on forecast job losses and therefore could change as evidence becomes more specific, is as follows: The Atlantic Canada Opportunities Agency is receiving $1 million. The Economic Development Agency of Canada for the Regions of Quebec is receiving $38 million. The Federal Economic Development Initiative for Northern Ontario is receiving $7 million. Western Economic Diversification Canada is receiving $59 million.
I underscore that is a notional distribution at the moment based on the current forecast of job losses due to the softwood issue. Mr. Chairman, to ensure that I have the questions in the same order as you, could you remind me of the next question?
The Chairman: It has to do with the Canadian Firearms Centre and contributions to provinces and territories.
Mr. Joyce: These are transfer payments administered by the Canadian Firearms Centre where the provinces are engaged in the delivery or administration of the firearms program.
The breakout of the $16.5 million in transfer payments is as follows: Nova Scotia, $0.8 million; New Brunswick, $0.9 million; Prince Edward Island, $0.2 million; Quebec, $8.6 million; Ontario, $4.9 million; and Aboriginal communities and not-for-profit organizations $1.1 million.
Essentially, there is an arrangement with those provinces and organizations whereby they have agreed to be part of the administration of the firearms program. The provinces not listed have currently elected not to be part of the arrangements. Therefore the Canadian Firearms Centre is dealing directly with that through the federal organization.
The Chairman: Mr. Joyce, there are two matters remaining from Senator Ringuette's questions. I mentioned one, which is funding for health research. The second question, which I did not mention, had to do with $38 million to $40 million that is going from Treasury Board to the Public Service Commission to acquire additional tools to remove barriers to entry in the public service. This is human resource modernization. I think I got into that subject myself during the questions.
Would you mind answering that question as well?
Mr. Joyce: In terms of Senator Ringuette's question, I can confirm essentially what I indicated last week. However, I believe that the office of the President of the Treasury Board may want to confirm my response because it clearly relates to the statement that the president herself made.
The information I have, which will be confirmed in the formal response, is that the $40 million to support the action plan of the Public Service Commission to put the right tools in place will come from funding that is earmarked for the preparatory and transition work and the necessary work related to the implementation of reforms following Royal Assent on Bill C-25.
As you know, the President of the Treasury Board indicated her full support for this action plan and the need to provide the financial support necessary to put the right tools in place to expand opportunities for all Canadians.
No decisions have been taken yet, primarily because we do not know the status of the bill. The funding is there. It is currently waiting for the passage of the bill before it is implemented according to current plans.
As I think I indicated last week, even when legislation does not pass, as long as you do not need legislative authority to initiate something, it would still be a priority for the secretariat to look at ways in which funding could be given to the Public Service Commission to achieve the same objectives.
The money is there. Its implementation, according to current plans, is pending the Royal Assent to the legislation. If for any reason that Royal Assent does not occur, then we will look at ways of achieving the same objectives and responding to the same priority without the framework that that legislation would have provided.
The Chairman: Thank you. Can you now respond to the health research question?
Mr. Joyce: Yes, what was asked for was a list of the health research centres. Again, in some respects, this is a partial answer, and if necessary, I will follow up when I have the full detail that I was seeking from the department.
The Canadian Institutes of Health Research encompasses 13 virtual institutes. That term is used because these are not, if you like, formal federal organizations, nor are they formally incorporated. However, each is headed by a scientific director who is housed in an existing university or research hospital.
The host institution receives a grant of $1 million annually to support the operations of the institute. Institute staff members are actually employed by the host institution.
The 13 institutes are: Aboriginal People's Health; Aging; Cancer Research; Circulatory and Respiratory Health; Gender and Health; Genetics; Health Services and Policy Research; Human Development, Child and Youth Health; Infection and Immunity; Musculoskeletal Health and Arthritis; Neurosciences, Mental Health and Addiction; Nutrition, Metabolism and Diabetes; Population and Public Health. Collectively, these institutes administer over $633 million in transfer payments allocated through peer-reviewed competitions to what amounts to thousands of winning research proposals.
I was hoping to get something a little more specific. However, that is the information I have been able to obtain in the last week.
The Chairman: Senator Banks asked a question about the Supplementary Estimates of Heritage Canada, and in particular the grant to the National Aboriginal Achievement Foundation of $12 million.
Senator Banks asked whether these funds are being given to individuals or are they sinking funds for the foundations. Is this an endowment? Are these funds already spent? If so, are they being distributed? What can you tell us?
Mr. Joyce: Mr. Chairman, I can confirm, and give a few more details, the answer that I gave last week. The proposed grant to the National Aboriginal Achievement Foundation — this is just for your information; I do not think it was part of the specific question — will be consistent with the accountability and transparency requirements that were identified by the Minister of Finance in the February 2003 budget. That was a framework that gave some greater transparency and greater rigour to the way the federal government uses foundations as an instrument of achieving its policy objectives in delivering programs.
Prior to the payment of the grant — and this is consistent with that framework — a fund agreement will be struck between the Minister of Canadian Heritage and the achievement foundation to clearly identify the purpose of the grant and also to commit the foundation to meeting certain reporting and accountability obligations.
For example, the agreement will require the foundation to establish an endowment found and only the revenues generated by the fund will be used for the intended purpose of providing scholarships to Aboriginal students for post- secondary studies. The agreement will also provide the minister with a mechanism to ensure the foundation is meeting its obligations. For example, the foundation will be required to produce annual reports, including audited financial statements, and to undertake independent evaluations every five years.
In terms of the way it will utilize the grant, it will be held as an endowment in perpetuity, and only the revenues generated by the endowment fund will be used. That is the answer I gave last week, but I said I would check that my answer was correct.
The last part of the question from Senator Banks was what happens if the foundation ceases operations. In that case, as part of the agreement with the foundation, the Minister of Canadian Heritage will have the power to require that the foundation return both the capital and any unspent interest to the government.
The Chairman: Senator Banks also asked a question about the items under CIDA. Why does it say in the backgrounder $376.8 million for international assistance and the page proof has $368.7 million?
Mr. Joyce: I have both a general and a specific answer to this one. When we put the backgrounder together, we have a rule of thumb for establishing what we call ``major items,'' which is anything over $50 million. For the purposes of clarity, and to avoid just having what amounts to a list of items, we try to collect these items together for the departments concerned. The backgrounder essentially just adds up the items over $50 million.
Clearly, what we should have done is gone a step further, so that the backgrounder referred to all the items that were in this particular Supplementary Estimate. The difference between the total that is reflected in the backgrounder and the total that you quite correctly identified on the actual page of the Supplementary Estimate is the items that were not over $50 million.
Again, this was a useful question because it made us look at the way we actually put the background together, which was an attempt to condense and simplify, but in doing so we lost a few items along the way. We will make sure that the next time we do the backgrounder, it does not happen.
The specific items, just so you know, that reflect the difference between the total in the backgrounder and what is actually on the Supplementary Estimate page are the Canadian Land Mine Fund and the grant to the United Nations Development Program Fund. The first is $0.5 million and the second is $14.2 million. They were both under $50 million so were not captured in the way we put those items together.
The Chairman: Finally, Senator Lynch-Staunton raised a number of issues. I do not have a note of all of them, but I recall softwood lumber and the land acquisitions of the National Capital Commission, and he had some more general comments to make about the presentation of information on transfers. Do you have answers?
Mr. Joyce: I do not have a specific answer to that question. To be candid, it was not one that we identified for a specific follow-up. If I have misunderstood, Mr. Chairman, I am prepared to take the specifics under advisement and come back to you.
We acknowledge that some of the information provided in the Supplementary Estimates was cryptic. As part of trying to improve the quality and clarity of the information provided, we will look at how we could move beyond cryptic, one-line statements to give, either in the Supplementary Estimates or the document that accompanies it, something that is a little more explanatory, rather than, quite frankly, me having to sit here and read from a briefing book. Clearly, there is scope for moving some information into the documents. This is something I will take on as part of the ongoing discussions in the secretariat on how we can improve the transparency and quality of reporting to Parliament generally. This subject is a priority within the secretariat. As I indicated last week, it was flagged in the budget statement as something we would take on.
If in fact we missed a specific question, as I said, I will certainly take the specifics now and undertake to come back.
Senator Lynch-Staunton: I am encouraged by your last remarks, Mr. Joyce, and I want to reinforce them by quoting to colleagues — I am sure you are aware of it — from a report of the Subcommittee on the Estimates Process of the House Standing Committee on Government Operations and Estimates that came out only last month, entitled, ``Meaningful Scrutiny: Practical Improvements to the Estimates Process.'' The flavour of the report can be summarized as follows: The present format — meaning the format of the Estimates — provides sets of numbers accompanied by ``explanations'' that do not enable parliamentarians to understand why the requests are being made. This deficiency impedes the performance of the central function of these documents, which in the committee's view is not to provide all available detail, but simply to provide parliamentary readers with enough information to support decisions about where further investigation, including specific attention by a standing committee, is required. For this purpose, an enhancement of the explanatory content of these documents is required.
I believe that the views expressed here over the years cannot be better reinforced than by those responsible for the power over the purse, as are our colleagues in the House.
On the question of softwood lumber, I stand to be corrected on the figure so I will give an approximate one. It has been calculated that between November 2001 and September 2003 — meaning in the current Estimates — some $350 million have been dedicated to the Canadian softwood lumber sector through at least three departments, HRDC, Industry Canada and Natural Resources Canada. That is $350 million in less than two years.
If I were to ask you to give us a summary of how those funds are being spent, would you be able to do so, or would you have to go back to each department and ask them for their individual reports? What I am getting at, obviously, is whether there is any coordination between departments when it comes to dedicating funds to what appears to be the same objective.
Mr. Joyce: I do have some of the detailed history that underlies this so I can give you an idea of the events since the government announced, in 2002 —
Senator Lynch-Staunton: Time is short today and I do not need it now, but perhaps we could have the information later along with the balance of your briefing book.
The Chairman: Senator Lynch-Staunton was asking you to assure us that these various amounts that he has identified in various departments form part of an overall, coherent government strategy on the softwood lumber industry. I am certain that you will want to give us that assurance on behalf of your minister. Is most of this money for adjustment in one form or another?
Mr. Joyce: Yes, it is.
The Chairman: That would be human resource adjustment and community adjustment, et cetera.
Mr. Joyce: That is correct. I will come back with a complete response to the senator's question. In the October 2002 document, there is $110 million for a national Softwood Industry and Community Adjustment Fund to support community development. Some money has been used in B.C. to address the mountain pine beetle epidemic, and in Trois-Rivières, Quebec, there is an amount for the creation of a centre for excellence in pulp and paper.
The Chairman: Senator Lynch-Staunton gave another example last week.
Senator Lynch-Staunton: It was $110 million in the current Estimates on pages 61 and 62. I will give the background on the amount and ask what will appear to be the obvious question.
The minister announced the $110 million in October 2002. In December of that year, the Minister of Natural Resources announced that it had been implemented, which means, to me, that the department had received the go- ahead to spend the money. At the same time, the minister also announced how it would be administered in Western Canada, which is where he was at the time of the announcement. He said that Western Economic Diversification Canada, WD, would deliver the program and that the position of secretary would be created within WD to facilitate program implementation coordination. Thus, the minister announced the program, another minister reconfirmed how it would be implemented, it was announced as implemented and was to be administered without any funds being approved by Treasury Board or by Parliament.
Despite these announcements, there was nothing in the Main Estimates a few months before to cover the amount of $110 million. In the meantime, Western Economic Diversification issued a statement in May 2003 that outlined the program, including how to apply and which communities would be eligible. According to the press release, 135 communities would be eligible. This was not done spontaneously; it took weeks to put together. As far as I know, perhaps between March and May 2003, Treasury Board did advance funds, but no one is aware of that.
By the way, Western Economic Diversification gave a deadline of June 2, 2003, for the processing of what they call ``first-round applications.''
On August 1, 2003, there was a report that the Cowichan Valley Outdoor Recreation Park had survived the first round of grant applications. It had requested $800,000 and was hoping that it would be approved. It was announced at the same time that it was one of 11 Cowichan region proposals to survive the initial cut. It had to be reviewed by three more committees before being passed on to the Minister of Industry, Allan Rock.
Again, Parliament certainly has not voted the funds. Perhaps by this time, Treasury Board has voted the funds. However, I recall your telling us last week, Mr. Joyce, that if these amounts were not in the Main Estimates in March it would be because Treasury Board did not have enough information to release the funds.
In respect of your comments, Mr. Chairman, I mentioned last week in Quebec that there were three announcements of three different grants for activities that I will not go into. I question whether they will truly help the softwood lumber sector. Today, my point is that there was nothing in the Main Estimates, the program was already being implemented, applications were being asked for and that the funds only appear in the Supplementary Estimates that are before us.
What is Treasury Board's role in this? Does it simply read these announcements and not advise the department that certain guidelines or directives need to be followed, that certain information must be supplied to Treasury Board to ensure that these funds will be advanced? Perhaps, as in this instance, or so it appears, the department just made the assumption that they would receive the funding because the program was so far advanced that Treasury Board would have no alternative.
Mr. Joyce: Mr. Chairman, a number of issues were raised in that series of questions and the most fundamental is the last point that you made about the process by which a new policy initiative is implemented and the role that the Treasury Board and the secretariat play in that process.
Clearly a department is able to shift, and should shift, its priorities if there is a change in the environment in which it is working and some aspects of that environment require immediate action. The issue for the department in question in such will be: Can it shift its priorities in respect of the way in which it had planned to spend, allocate or transfer money? Is the action that it needs to take in that situation within both its mandate and the expenditure authorities that Parliament has granted to it? If a department is just responding to an urgent change in its environment, is within its mandate and can shift its priorities to do that, then we would expect that there would be no reason why the department would even have to go before Treasury Board.
It would have to go before Treasury Board if it required specific authorities pursuant to the policies that Treasury Board administers with respect to responding to urgent situations. One example might be a change in a transfer payment program where new terms and conditions apply. In that case, the department would be required to come to Treasury Board because formal involvement would be triggered.
In the case of a new policy initiative, where the government wishes to allocate new money, that same situation pertains. If the department were able to respond to the new priority of the government within its existing mandate and authorities and by managing within its existing funding approvals, then, because it is a priority of the government, we would expect them to do so. The issue becomes, in respect of the first action, whether the department needs to go before TB for any specific authority in order to respond to that new priority of the government. In some cases, it is true, it is a question of whether it is appropriate to go before Treasury Board, but sometimes, it is a matter of judgment.
As to the issue of Parliament, in a situation like that you are quite correct. As you have pointed out, the facts are that a department is spending money on a new policy initiative that is a priority of the government without Parliament having appropriated the additional funds. A department therefore has to be able to manage in such a situation. There is always the possibility that Parliament will not appropriate these new funds, in which the case the department will have shifted from lower priorities to the higher priority that the government announced within its existing authorities.
That is the general situation when a new policy is announced in response to an unforeseen event, either in the budget or after the budget, and a department is required to act before the request for the new spending authority is put before Parliament.
Senator Lynch-Staunton: What is the role of the Treasury Board Secretariat in all of this? I agree with everything you said, that priorities can change and departments must have the flexibility to meet those new priorities. I believe that was behind the reallocations that Treasury Board announced last week, but those were reallocations within departments. No new funds were requested. They were shifting money around to deal with unexpected or unforeseen events, which is fine. In this case, the program is announced, implementation begins, requests for applications are requested and I do not believe even Treasury Board had given approval in advance when all this was being done. What does Treasury Board Secretariat do when it sees a department going ahead not only without parliamentary approval, which happens more often than it should, but without, as far as I can see, even Treasury Board approval?
Mr. Joyce: The officials in the secretariat who are responsible for the oversight of a particular department would in fact be talking to the department about the action that it needs to take. That is part of a normal dialogue that goes on between the Treasury Board analysts and the department. Part of that dialogue is to determine whether or not, in order for the department to take immediate action, it needs any specific approvals from the Treasury Board. That is a particular dialogue between the Treasury Board Secretariat, the analyst responsible and his or her superiors, and the department to determine whether it is appropriate for the department in question to make a submission to both notify the Treasury Board and seek specific authorities that it needs to take the action it is proposing.
It is a question of looking at both the appropriateness and the specific need in accordance with Treasury Board policies and the need for specific approvals. In this case, we would not have stumbled across it in press announcements. There would have been a dialogue between the secretariat and the department, and then a judgment would have been made on whether the minister needed to come to the Treasury Board to get specific authorities before it could proceed.
The Chairman: Let's leave it at that.
Senator Lynch-Staunton: If I may add, in this case a minister proceeded without Treasury Board authority. That is my point. He might have got verbal approval, but not the additional funds required to carry on with the program. He assumed he would get them in good time. This is not the first example, just the most recent one. There have been hundreds of others over the years that I could cite. I wonder whether Treasury Board is not being firm enough in all this. Perhaps it just assumes that any program that comes before it will eventually get approval, or the departments that come before it assume they will eventually get what they are asking for.
Mr. Joyce: I cannot comment on the actions taken by ministers collectively or individually. I can only reinforce what I have said. Whatever an announcement of specific departmental action may say, they clearly cannot and should not proceed to implementation if they do not have the authority to do so. They would have to look at whether or not they need authorities under the Treasury Board policies that apply and whether or not they can manage within the existing authorities for expenditures that they have from Parliament.
The Chairman: We will leave it at that for the moment. Senator Bolduc used to remind us that this area of grants and contributions requires much more attention from Parliament. The issue that Senator Lynch-Staunton delicately refrained from raising again today is the apparent discretion for ministers and others to disburse these monies, and the use to which these monies are put under the general rubric of softwood lumber is rather dubious in itself and requires much more attention.
[Translation]
Senator Gauthier: Continuing on in the same vein as Senator Lynch-Staunton, it has become commonplace for agencies and departments to announce their projects or acquisitions before receiving parliamentary authorization. For example, the National Capital Commission had a $5-million item in its Main Estimates, which were duly examined and approved, for the acquisition of property in Gatineau belonging to Scott Paper Ltd. There is a request on page 76 for $31.12 million for the acquisition of property in Gatineau. This is a reference to the same project.
As Minister Robillard recently observed, as parliamentarians we regularly embark on a quest for information. Therefore, I have tried to learn more about this matter.
According to the newspapers, the transaction has been completed. The October 3, 2003 edition of Le Droit reports that Weston, the current owner of the land, will however, maintain some rights to the property site until 2028 and will be required to remit to the NCC the sum of $29 million over 25 years for the use of the site. The same facts were reported in the English papers the Ottawa Sun and the Ottawa Citizen.
The additional budgetary expenditure of $31 million has not yet been approved by Parliament. Nevertheless, the NCC has announced that the transaction has been completed and the acquisition of the property finalized.
How is it possible to jump ahead of the parliamentary approval process? It may not be that important an issue, but it is perplexing nonetheless. What kind of control do you have over project announcements? Does Treasury Board have any control over the announcement of or news surrounding acquisitions or ministerial programs, or is it merely free to act at the opportune moment?
Mr. Joyce: You have raised some relevant questions. I cannot comment on ministerial actions. However, if a government member wants to make an announcement, the responsibility for doing so rests with the government.
[English]
All I can say is that the facts as you have stated them are correct and similar to the points made by Senator Lynch- Staunton. Within the framework in which we operate at the secretariat, this clearly points to the issue of what I would call the timeliness of the information provided to Parliament. I believe that issue was referred to in the report that Senator Lynch-Staunton mentioned, which was prepared for the Committee on Government Operations and Estimates.
One way of dealing with this is to look at how information on government actions that are within the current framework of authorities can be put before Parliament sooner than they are now. The issue is one we can look at as part of improving the transparency and clarity of the Estimates and is not just a question of ensuring that the specific information itself is clear.
[Translation]
It is also a question of receiving information sooner.
Senator Gauthier: According to newspaper reports, the transaction was concluded recently, that is in early October. Does the sum of $29 million over 25 years represent an annual lease or will the money go into an interest-bearing NCC fund? How will the $29 million in lease payments made by Weston be used? I would like to know, because you have posted an expenditure of $31 million. How will any revenues earned be shared?
Mr. Joyce: Like all Crown Corporations, the NCC has the right to earn revenues as a private corporation. That falls within its mandate.
A lease has been negotiated between the NCC and Weston Ltd. You can put more detailed questions to the NCC. Quite possibly, parts of the lease agreement were negotiated by the government.
[English]
Senator Gauthier: I tried to phone the NCC yesterday three times; they were not available. I could not get the information, which is why I come to you. You are with the Treasury Board, which is supposed to be overseeing all these expenditures. I am concerned about the $29 million. Will it be paid on a monthly basis or will it be paid over 25 years? How will we recoup it?
Mr. Joyce: Senator, I would have to go to the commission to get that information. I do not have it, although I am sure it would have been made available to the Treasury Board. I would have to get specific information from the National Capital Commission in order to respond to that question.
Senator Gauthier: Would you do that for me? I cannot get the information; I am only a parliamentarian. Maybe you can get it and send it to the committee.
Mr. Joyce: I will endeavour to do that, senator.
Senator Lynch-Staunton: I completely share Senator Gauthier's concerns and frustrations about this. My office also tried to contact the NCC to get information, and we were told there was a confidentiality clause in the lease. What troubles me is how this was announced, but I will not go over what Senator Gauthier said.
I would like to know whether you have seen the lease between NCC and Weston, since it is not NCC money per se but money that is being advanced by the federal government? We should have a certain authority over how it is being spent.
Mr. Joyce: Personally?
Senator Lynch-Staunton: Not you, the Treasury Board.
Mr. Joyce: They would have had details of the lease.
Senator Lynch-Staunton: Can you find out if NCC will pay the same amount of municipal taxes to Gatineau under the lease arrangement as Scott Paper is paying now?
Mr. Joyce: I can try to find out.
Senator Lynch-Staunton: Also whether the City of Gatineau is being penalized by this transaction. I am not suggesting anything, but when a Crown corporation or the federal government steps in, suddenly, ``in lieu of taxes'' rears its ugly head and that does not usually favour municipalities.
The Chairman: As I think we all know, the NCC not only buys land, it sells land. They are able to keep the proceeds from the sale of public lands to use in other purchases.
This was the subject matter of a report by this very committee not too long ago. We made recommendations on how they should proceed. I trust that somebody will dust off that report and take another look.
Senator Doody, did you want to pursue any matters arising from the responses of the officials on international financial institutions accounts?
Senator Doody: Only one, Mr. Chairman. I do not expect the officials to satisfy my curiosity now. When I was trying to find out about this fund last week, I mentioned the IMF and the World Bank. I was wondering if they were funded from this, but obviously not.
Could you tell me how the IMF and the World Bank get their money? Every now and again you see in the newspapers that they bailed out Argentina with so many billions of dollars, or Brazil. Canada presumably pays part of that somehow, somewhere. If you get a chance some time, you could look it up and let me know, and explain how it works generally in terms of funding, disbursements and repayments, et cetera.
Mr. Joyce: Okay, senator.
[Translation]
The Chairman: Senator Ringuette, are you satisfied with the answers you received regarding softwood lumber? Do you have any further questions?
[English]
Senator Ringuette: I see that your answer is that these are forecasts. Senator Lynch-Staunton has indicated that in the West there are already programs in place and applications being processed and so forth, based on forecasts of lost jobs. I suppose that we would need additional information about the guidelines for the different programs that will be put in place.
How does one area qualify? Are there standard qualifications for the softwood community adjustment programs? Are they national standards or is the program slightly different from one region to the other insofar as the softwood issue is concerned?
Mr. Joyce: Because this is a program for which Industry Canada is responsible and the regional development agencies deliver it, the framework would be determined by Industry Canada. I am fairly confident that they would have a consistent set of standards and criteria that are applied across the country.
There may be some elements of discretion for individual regions to deal with particular regional differences in terms of the way the program is administered and applied. However, I would be confident, because it is a centrally administered program of the Department of Industry, that the basic criteria would be consistent.
Senator Ringuette: Are you saying that if we want more information on program specifics, we should ask Industry Canada?
Mr. Joyce: Yes. That would be the place to go for that level of detail.
The Chairman: They have an ice cream facility under the rubric of softwood lumber; bring it forward, senator. This is looking more and more like a slush fund, it really is.
Senator Ringuette: Senator Lynch-Staunton also indicated that for this year and last year, total program funding was $350 million. This year we have about $125 million in the Supplementary Estimates.
Senator Lynch-Staunton: That is included in the $350 million.
Senator Ringuette: Therefore the bulk of the money, $225 million, was spent last year.
That is a lot of money. In my neck of the woods, which is New Brunswick, many small communities and small lumber mills have been severely affected. Out of the $125 million for this budget year, I only see $1 million for all four Atlantic provinces. It sounds an alarm bell for me, as an Atlantic Canadian.
Should I go on to the other questions?
The Chairman: Please do, senator. The matter you just raised is one for ministers, as you know.
Senator Ringuette: You mentioned that the distribution of the $16.5 million is for provincial delivery of the firearms program. Is that for registration within the program, or is that part of the judicial administration of the program?
The Chairman: Enforcement.
Senator Ringuette: Enforcement of the legislation.
The Chairman: Some of those very provinces have announced they will not enforce it.
Senator Ringuette: Seven of the provinces have announced that they will not enforce it.
The Chairman: I do not know whether that is the number, but I have heard attorneys general saying they will not enforce this; it is up to the federal government to enforce it. What is the relationship between these amounts of money and that situation?
Senator Ringuette: Is this the purely administrative delivery of the registration part of the program, or are these funds for the judicial part?
Mr. Joyce: Your first statement is correct, senator. This is where provinces have agreed to opt in and share in the administration of the program, which is a cost-effective way of doing it. Other provinces have decided not to opt in. It is a federal program; clearly, we cannot force them to do it. Therefore, the federal government and its organizations will undertake the entire administration in those cases.
Senator Ringuette: Okay.
We have health research centres, $633 million — it is almost $1 billion for health research, of which I certainly approve. I will go on to my major question, and the lack of an answer, in regard to the $38 million or $40 million from the Treasury Board for preparation or transition work for implementation of Bill C-25. Your answer was that the funding is there. I ask again: Where is ``there''?
Mr. Joyce: There is always money held in what we call the ``fiscal framework,'' a term that the Department of Finance uses. The planned spending in the budget reflects the total planned spending of the government. There is some small portion of that that remains unallocated for a number of reasons. One is that an initiative is not completely developed. Another is that the funds are held in reserve to deal with unforeseen events. In some cases, it is held there because it is intended for implementation of a new policy that requires legislation. You do not see it in the Estimates because there is a rule that we have to follow that you cannot have funds included in the Estimates that foresee legislation that has not been passed by Parliament.
This is actually a constraint such that we cannot show the money in the Estimates, but that money has been set aside in the overall spending plans of the government. As soon as the legislation is passed, if it is passed, that money will then be put before Parliament for authorization through the Estimates in whatever year the money needs to be spent.
That is why we can say the money is there, because it is part of the government's spending plans; but we cannot show it in the Estimates because of that clear principle by which we have to abide.
Senator Ringuette: Well, I suppose that ``there'' is still to be seen.
The Chairman: You think there is no ``there'' there?
Senator Day: There you have it.
Senator Ringuette: I can certainly understand what you are saying. You cannot ask to spend money under a piece of legislation that has not yet been enacted. However, I suppose that a certain amount of money has to be included in the planning process. For the time being, I will accept your ``there'' not being clear.
Senator Comeau: Mr. Chairman, I have two questions on the Estimates, and two that are slightly different. Would it be okay to ask them?
The Chairman: So long as we can do it expeditiously.
Senator Comeau: It will be done quickly.
The first question is on the salary costs for the firearms registry, which amount to approximately $22.6 million for a staff of 279. A quick calculation indicates that this would average about $81,000 per employee, or cost per employee. Are my calculations completely wrong, or is that the average salary?
Mr. Joyce: That would be the average salary; but I believe it would also include what we call the ``benefit portion'' — for instance, the contributions that have to be made to the pension plan and to the —
Senator Comeau: Even at around 15 per cent, which is the rule of thumb, it is still a rather large average salary when about 153 out of these 279 people are clerical workers. I may have been in the dark for a while, but I thought this was a rather large average salary.
Anyway, I pass that comment on.
Mr. Joyce: I can undertake to check into that.
Senator Comeau: If that is now the average salary for those kinds of services, I think it is rather high.
Mr. Joyce: It certainly is worth checking, senator; I would agree with that.
Senator Comeau: I asked a question when you were last here, and I promised I would send a copy of the access-to- information date. I still have not had a chance to do that, but it will be done soon.
My second question on the Supplementary Estimates: On page 26, under Transport Canada, there is $10 million for increased payments to the Old Port of Montreal Corporation. Then it appears on page 91 — I assume it is a transfer — under ``New Appropriations.'' I think we have worked out this means a transfer from somewhere else. There is another amount of $18.4 million, which would add up to $28.4 million in total. Could you provide an explanation for that?
Mr. Joyce: The $18.4 million, which you correctly identified as a payment to the Old Port of Montreal Corporation, is actually one-time funding that was provided for in the 2003 budget. It is there to recognize that this corporation is running both an operating and a capital deficit. Therefore, as it is a government-owned corporation, it is necessary to cover those losses. I assume you know what the Old Port of Montreal does; the revenues do not cover their expenses.
Senator Comeau: I see — and the $10 million on page 26?
Senator Day: That is a contingency.
Senator Comeau: That is increased payments to the Old Port of Montreal.
Senator Day: You can see that on page 91 — funds of $10 million — the note at the very bottom.
Senator Doody: Is that included in the $18 million?
Mr. Joyce: In a situation like that, the $18 million will be used to repay the $10 million that was advanced under the authority of Treasury Board Vote 5.
Senator Comeau: We are not looking at $28.4 million.
Mr. Joyce: No, $18.4 million is the amount of money they are getting this fiscal year.
Senator Comeau: They are operating at a deficit, and we are covering it.
Mr. Joyce: Correct.
Senator Comeau: On another issue, aside from what is happening here, if a directive were to be sent to employees of a department requesting that any meetings or discussions with members of Parliament or senators be reported back to supervisors, would that come from Treasury Board or the Public Service Commission? I was told it was Treasury Board.
Mr. Joyce: I am not aware that Treasury Board has issued any such directive.
Senator Comeau: If the Department of Fisheries and Oceans, for example, were to send a directive to its employees and staff that, to use the exact word, all ``contact'' with members of Parliament, senators or their representatives must be reported to their supervisors, would that fall under your jurisdiction?
Mr. Joyce: No. That would be an initiative taken within the department.
Senator Comeau: To whom would the department report this kind of initiative?
Mr. Joyce: If they took it, I think that they — I am not aware of —
Senator Comeau: I will get you a copy.
Mr. Joyce: I am not aware of that. If the department in question decides that it wants to issue that directive to its employees, it would be a departmental initiative. There would be no requirement to either report the initiative to the Treasury Board or in fact to seek the Treasury Board's permission.
Senator Comeau: They can do it on their own?
Mr. Joyce: That would be my understanding, senator.
The Chairman: A branch of the Privy Council Office called the Communications Secretariat is supposed to oversee and coordinate communications policies and initiatives of the various departments and agencies of government. I would think that this kind of directive would have to have been brought, either before or after the fact, to the attention of the Privy Council.
Senator Comeau: I wanted to confirm it, and I appreciate the response, because in the Radwanski reign of terror —
The Chairman: I am not responding; that was not a response, senator.
Senator Comeau: Legislation was brought before Parliament a few years ago, the Oceans Act, and there has been absolutely no action on it ever since, either under the act or the oceans strategy. You do not need to look it up; this will be a general question. If nothing has happened under an act after a number of years and it is just sitting there on the shelf, would Treasury Board at some point go to the department and say, ``Look, what do you plan to do with this legislation that was brought in all these years ago? Do you ever plan to spend any money on it? If not, what is your intention?''
Mr. Joyce: I think the simple answer would be: Yes, we would. We would be concerned about whether it forms part of the department's plans, because we would need to know that when looking at the amount of money that we put into Main Estimates. We would need to understand, both for the current year and for future years, what they intend to do and how they intend to fund it, if they do. Those issues would be of interest to the Treasury Board Secretariat in the general dealings with the department on its overall plans.
Senator Comeau: You might take it as notice of future intent, because the act has been sitting on the shelf for a number of years, with people saying how well we as Canadians are tending our oceans, yet nothing has happened. What set me off on this was that last week, the Prime Minister announced a$65-million initiative to create an oceans park that is basically for people to visit and enjoy, while at the same time we have this Oceans Act that deals with the question of marine conservation areas to protect the fish and resources and nothing has happened at all. On the one hand, we find money for parks under the oceans, but no money for protecting our fish. Take it under advisement. It will be coming up again.
Mr. Joyce: Thank you, senator.
The Chairman: Senators, as you heard earlier, I have convened the committee for October 21 to consider a draft report. Let me say that I think the draft report that will be placed before you for your consideration at that time should contain not only the usual narrative of questions and answers here, but should articulate very clearly the various concerns that have been expressed on all sides of the table. We have heard them. I think they should be stated forcefully. The committee can decide how forcefully or in what language it wants to express them, but I think it is important that the concerns expressed here be very well explained and articulated by way of adding to the debate in the Senate.
[Translation]
Senator Ferretti Barth: I note that the homeless program will receive additional funding. A request for $103 million has been made by the department in charge of the program. Have you received any feedback on the initial efforts made under the homeless program? Do we know what the plans are for these funds? There are few programs in place for the homeless. In Montreal, there are no programs whatsoever. Buildings have been converted into homeless shelters, but there is nothing at all in the way of education or prevention programs, and so forth.
Mr. Joyce: The evaluation showed that this approach has had positive results.
[English]
This is based on the fact that the previous initiatives of this program put a solid emergency need network in place. It was a community-based approach that allowed communities to select the delivery model best suited to their situation.
I do not have specific details on the situation in Montreal, but the information I have is that the delivery approach was community based, where the communities themselves influenced the way the moneys were disbursed.
The evaluation showed positive results of that approach. Again, I do not have specifics for Montreal, but the overall approach was considered to be positive.
This $103.2 million is to renew and extend the initiative, based on the positive evaluation of the previous approach.
[Translation]
Senator Ferretti Barth: No new education or prevention programs have been developed or measures taken to alleviate the problem of homelessness. Action on this front is urgently needed.
What programs has the department set up in the hope of getting some results? Personally, I am unaware of any such programs. I think the situation in Montreal is mirrored in other provinces.
Mr. Marc Monette, Acting Director, Expenditure Operations Division, Expenditure and Management Strategies Sector, Treasury Board of Canada Secretariat: I can tell you that we are planning to spend in excess of $405 million over the next three years. The following organizations will received funding: Supporting Communities Partnership Initiative (SCPI) will receive $258 million over the next three years; Urban Aboriginal Homelessness (UAH) will get $45 million; Regional Homelessness Fund (RHF), $13 million; National Research Program (NPR), $7 million; Homeless Individuals and Families Information System (HIFIS), $6 million; Operating Resources for the Initiative, $67 million; and Surplus Property Homelessness Initiative (SFR), $9 million. As you can see, the government is planning to spend a total of $405 million over the next three years.
Details are currently available for each program, but not for each municipality.
Mr. Joyce: As my colleague indicated, most of the funds are being allocated through the Supporting Communities Partnership Initiative. The city of Montreal has some concerns and it is possible for these communities to update their plan and in the process, perhaps influence the way in which these funds will be spent.
[English]
The Chairman: Thank you, senator. Thank you, colleagues. It remains for me to thank Mr. Joyce and Mr. Monette for coming back today and for doing so much work so quickly to obtain responses to the earlier questions.
The committee adjourned.