Proceedings of the Standing Senate Committee on
National Finance
Issue 13 - Evidence - March 6, 2012
OTTAWA, Tuesday, March 6, 2012
The Standing Senate Committee on National Finance met this day at 9:30 a.m. to examine the expenditures set out in Supplementary Estimates (C) for the fiscal year ending March 31, 2012.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: I call this meeting of the Standing Senate Committee on National Finance to order.
[Translation]
Honourable senators, this morning we begin our study of Supplementary Estimates (C) for the 2011-12 fiscal year, which have been referred to our committee.
[English]
Our committee began consideration of Main Estimates 2011-12 in the last parliament, and this constitutes the beginning of our examination of what I expect to be the final supplementary estimates, Supplementary Estimates (C), for this particular year. As honourable senators will know, this is the final month of this fiscal year. At the end of this month we start a new fiscal year, and Supplementary Estimates (C) ends out the estimate of government spending for fiscal year 2011-12. We had hoped to begin this analysis of Supplementary Estimates (C) last week. We were unable to do so, and therefore we are proceeding today.
Treasury Board is with us for the first panel, and then we will proceed directly into another panel with a number of the government agencies and departments that are seeking funding under Supplementary Estimates (C). It is our intention to begin Main Estimates tomorrow. Most of our concentration will be on the Main Estimates leading up to the end of this fiscal year because, as you know, we need a report done with respect to Supplementary Estimates (C) and our preliminary report on Main Estimates to form the basis for interim supply for next fiscal year, and supply to close out this fiscal year. We have lots to do over the next little while and we will have to meet a little bit out of our normal time so that we can have these reports in the chamber — and hopefully advise our colleagues in the Senate Chamber — as to what is in the supplementary estimates so they will be able to vote on the supply bills knowledgably when they come down.
We are pleased to welcome back officials from the Treasury Board of Canada Secretariat. Appearing this morning are Bill Matthews, Assistant Secretary, Expenditure Management Sector; Sally Thornton, Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector — you have not changed your titles; Marcia Santiago, Senior Director, Expenditure Information Division; and Darryl Sprecher, Director, Expenditure Management Portfolio.
Mr. Matthews, you know our manner of functioning here. You will be the spokesperson and then we will get into questions and discussions following your introductory remarks. You have the floor.
[Translation]
Bill Matthews, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: I am pleased to be here this morning to discuss Supplementary Estimates (C) for the 2011-12 fiscal year.
[English]
I have a presentation to walk you through this morning, and it will be our pleasure to answer questions after that presentation. However, we thought it would be wise to give you an overview of what is in Supplementary Estimates (C). I do hope you all have a copy of the presentation. If we could start on slide 2, just a reminder about how supplementary estimates are organized. What we have for you today is a walk-through of Supplementary Estimates (C) — some highlights on the totals just for Supplementary Estimates (C) — but we will also give you some information on what the supply looks like for the whole fiscal year; that is Main Estimates, plus Supplementary Estimates (A), Supplementary Estimates (B) and Supplementary Estimates (C). We will then highlight the major changes to voted amounts, what translates into the appropriation bills. For information purposes, we will highlight the major changes to the statutory forecasts, which are not voted on, but they are a significant part of the government spending package.
On slide 3, in terms of how these are actually organized, you will find an introduction that gives totals for estimates to date, which is mains plus Supplementary Estimates (A), Supplementary Estimates (B) and Supplementary Estimates (C). We highlight for you upfront the major changes in terms of dollar and voted initiatives, largest changes both positive and negative on the statutory front. You will see negative adjustments to statutory items. You will also see some changes to the structure of government. To give you some examples, there is a new entity, Shared Services Canada, which is highlighted on page 12 of Supplementary Estimates (C). We flagged that for you. It is a change in how the government is organized, as well as a change in reporting relationships. You will see in these estimates that the Canadian Northern Economic Development Agency has changed in terms of which minister it reports to. It now reports to the Minister of Health. You will see that in the upfront section in change of organization.
Then you get into department by department, and what the actual Supplementary Estimates (C) request is for each department.
[Translation]
At the end of the document you see the following items: the years proposed in the appropriations budget based on the amounts submitted in the current estimates.
[English]
You will also see a summary of the changes to statutory items. You will see allocations from central votes, TB central votes, and finally a list of the horizontal initiatives. Horizontal initiatives are those for which multiple departments are receiving funding and they tend to show up in multiple estimates documents. In this Supplementary Estimates (C) document, we have highlighted several horizontal initiatives for you. The Commission of Inquiry into the Decline of Sockeye Salmon in the Fraser River is one of them. We have one for the international climate change as well as for government advertising. You will see some horizontal items toward the back.
The other thing that is often highlighted here is the famous $1 items in the supplementary estimates. You will see that at the back of the estimates documents. If we are changing wording to a vote or something like that, we need to put a dollar amount in there so we have a $1 item. You will see many of them in Supplementary Estimates (C) this time, largely for the same reason. You may recall there was a change to the Financial Administration Act in the last year that now allows departments to provide internal services to each other, for example, financial services. Agriculture Canada could provide financial services to another department. That change in law allowed that arrangement to happen. Before that, you needed explicit legal authority to actually provide those types of things. Because of that change in the law, we had to change the vote wording for all departments to allow them to actually furnish internal services to each other.
If you see a very repetitive list of changes to $1 items all on the votes for each department, it is all about the legal right to provide internal services to another department. That is not to say they are doing that. This just establishes the right for them to do it. If they choose to make those arrangements that is fantastic, but it is not saying they are doing it. It sets them up to do it if they wish.
On slide 4, we get into some numbers of what is in Supplementary Estimates (C). I will highlight a couple of things for you here. The voted items, $1.2 billion, are more than offset by a negative or downward adjustment to our statutory forecasts, and I will give you some detail later about just what those are. The net total here is actually a decrease of $0.4 billion on the budgetary front. On the non-budgetary front we are expecting an increase, statutory, for roughly $0.2 billion, largely to do with the forecast for student loans in terms of issuing loans.
A reminder about the difference between budgetary and non-budgetary: Budgetary, if things go as planned, is an amount that will actually hit the bottom line of the Government of Canada. It eventually affects the expenses of the Government of Canada. It results in a permanent cash outflow. Non-budgetary is for things that would affect the balance sheet of government; the student loans in this case. That is why we call those non-budgetary. If things go as planned, we recover the amounts. There is no impact on the bottom line of the government. It is just a loan.
On slide 5 we provide a summary of estimates to date. This is where you see the whole fiscal year, mains, Supplementary Estimates (A), Supplementary Estimates (B) and Supplementary Estimates (C), compared to the two previous fiscal years. What you can see here is 2011-12 versus 2010-11. We are at $259 billion for the year, versus 2010- 11 where we were at $266.6 billion.
You will see both statutory and voted are down over the previous year. There are a couple of reasons I will highlight for you. One is that we are winding down economic action plan activity during the fiscal year, so that is a drop. You will also have seen in the 2010-11 year payments related to the implementation of the harmonized sales tax. That is not in 2011-12, so that is a decrease. Those are partially offset by the increases in 2011-12 to the Canada Health Transfer; 6 per cent increases is one I will highlight for you that goes the other way. There are also other investments towards security, Aboriginal people, international assistance and veterans, but that is the summary total of what has changed here.
You will see versus 2009-10 — both for statutory and voted — we are still slightly above the 2009-10 levels.
On slide 6, we highlight for you our major changes to voted items, and there are large dollar amounts here. I will touch briefly on most of these. The CIDA amounts — it starts with CIDA but it is related to Copenhagen — CIDA; Environment Canada, one is a horizontal item; Department of Foreign Affairs and International Trade; and IDRC related to the Copenhagen accord: $354 million.
Senators may recall that figure existed back in Budget 2011; there was three years' worth of funding allocated there, which is $1.2 billion in total. With this allocation from Supplementary Estimates (C), roughly 85 per cent of that allocation has been allocated out from the initial Budget 2011 money.
Infrastructure gas tax is $353 million, a large amount. That is a re-profile from fiscal year 2010-11. This concept of re-profiling gets some attention. When we say "re-profile, " it means that Parliament has already approved money to be spent for this in a previous fiscal year, but our appropriations are annual. Therefore, if the money does not get spent, it has to come back in the next fiscal year for approval yet again if it is to be spent.
Infrastructure deals with provinces, as you know, in terms of making funding arrangements. The provinces were a little slow in getting the reports in, so Infrastructure has re-profiled money from 2010-11 into 2011-12.
Under HRSD, the writeoff of unrecoverable Canada Student Loans is $162 million. I believe you will recall we see this on an almost annual basis as they clean up their accounts and write off amounts that are unrecoverable either because the statute of limitations has kicked in or due to bankruptcies.
Under National Defence, we have $152 million in here for the training mission in Afghanistan.
For CIDA, I will highlight the $100 million for you simply because we see this type of item fairly often. I believe we saw one in Supplementary Estimates (B), as well. This is not additional money; CIDA is moving money here from contributions over to grants. There is no net additional cost, but grant authorities are separate from contribution authorities, so they actually have to get permission here to do this. Depending on the nature of the arrangement CIDA was pursuing, they will decide whether a grant or a contribution is more appropriate. Grants are frequently used for other governments or entities with whom they have a great deal of experience. Contributions are more restrictive. In this case, this money is around food aid, human assistance for food aid, and non-food aid, as well. They are moving money from contributions to grants, but it is a net zero.
AECL we have seen before. We have $95 million in here. I will flag this for you simply because I mentioned Treasury Board central votes. Now $60 million of this was already allocated through central votes, which is the government contingency. The full $95 million shows up here, but if you looked at AECL in the estimates document, you will see that $60 million was allocated previously and there is an additional $35 million here. That is around the wind-down of isotope facilities, Chalk River safety environmental issues, as well as establishing the remaining laboratories as stand-alone entities.
CIDA shows up again here for $70 million. That is a bit of a special item in that you may recall the government had committed to match donations from Canadians around food aid. This is the matching figure; the $70 million there is the matching of the amounts.
Regarding the HRSDC amounts and review of Employment Insurance administration cost, HRSDC has authority to charge the amounts applicable to the administration of the Employment Insurance account directly to that account. They can, on an annual or periodic basis, review the formula they use to determine what percentage of their costs should be charged to the EI account. This is a result of that formula being adjusted, so that is $60 million there.
Those are the ones I will highlight for you for major changes to voted items this morning.
On slide 7, we have the statutory changes; these are for information purposes only. They will not show up in the appropriation bill. Just a reminder: Of the government's total spending, roughly two-thirds is statutory and roughly one-third is voted.
You will see some large changes here. There is a change from the Department of Finance Canada in the forecast for public debt interest. That is a result of both the short-term and long-term interest rates being forecasted to be slightly less than anticipated, so that is driving that decrease there. The Natural Resources Newfoundland Offshore Petroleum $416-million decrease is a formula-driven statutory item based on the price of oil, so they have adjusted downward the amount there.
HRSDC revised forecasts for Old Age Security. That is a straight function of an estimate of the number of recipients, and it has also been adjusted for the inflation rate that will be applied to their payments, so that is going downward, as well.
We have the Chief Electoral Officer election expenses for the past year. Then we have two amounts from HRSDC that are going upwards, based on statutory forecast, as well: one for the Income Supplement and one for grant payments.
We did mention already the non-budgetary item, which is the student financial assistance of $157 million. That is a non-budgetary item that is being increased.
Those are the major changes to the statutory forecast.
To conclude, we have $1.2 billion on slide 8 as the total. That is a combination of $1.6 in statutory decrease and a forecasted increase of $0.2 billion in non-budgetary expenses. There are 54 departments and agencies included in Supplementary Estimates (C), four horizontal initiatives, which I mentioned already, and the appropriation bill that will then follow to support the voted items here will be introduced sometime in March.
Before we wrap up, Mr. Chair, I would like with your permission to spend two minutes on Agriculture and Agri- Food Canada, just as an example, to highlight a few additional items — maybe as a bit of a reminder of what actually shows up on a by-department basis. May I spend two minutes doing so?
The Chair: Absolutely. Where should we go in the supplementary estimates?
Mr. Matthews: I will refer you to page 21.
[Translation]
In the French version, it is page 37.
[English]
On page 20 in the English version, we will give you a quick walk-through of what appears in a typical ministry. To start with, on page 20, you see vote 1c. The "c " here signifies that there is a change in Supplementary Estimates (C). You will see the "c " beside it there because there is a change to the amounts for the operating expenditures. You will see the underlying text in the middle of that section for vote 1c.
The underlined portion in the provision of "internal support services to other organizations " is that change to vote wording I mentioned earlier that is happening to many organizations. Due to a change in the Financial Administration Act, departments now have the authority to provide internal services to one another.
The Chair: Should we expect to see that wording without the small "c " hereafter?
Mr. Matthews: You will. That is a permanent change to the vote wording, correct. You will see that change there.
You will see capital expenditures vote 5. No change there, so there is no "c " beside it. Vote 10c, which is the grants listed, shows a change, which is highlighted by the significance of the "c. " Those are the voted items.
You then move into the statutory items, which are indicated because there is an "(S) " beside them; they are not voted on as part of the appropriation act but are there for information purposes. There are no changes here to the statutory items for Agriculture and Agri-Food Canada.
The Chair: 10c?
Mr. Matthews: There is nothing underlined, but the "c " indicates there is a change in amount. You are quite correct, Mr. Chair: There is no change in the vote wording, but there is a change in the amount. If you look across under transfers, you will see $24,821,078. Under adjustments is $725,033. Since we are changing the amount, we put the "c " beside it because there is a change in Supplementary Estimates (C) that impacts that vote.
Wording changes get underlined. If there is a change in amount, we put a "c " beside the vote because it is Supplementary Estimates (C) in this case.
If you look on page 21, under Canadian Food Inspection Agency, I will maybe highlight one of the transfers there. Under vote 25c, which is their capital expenditures, you see a transfer of $5,232,788. That is a transfer that actually comes from Agriculture and Agri-Food Canada. It is an IMIT initiative that will actually allow for cattle and hog livestock tracing. When we see a transfer, that means that funding comes from another department. It is not net new money; it is a transfer in. Those two departments have determined that the Canadian Food Inspection Agency is better positioned to deliver on that system. It is actually part of a broader $1.3-billion initiative called Growing Forward. The expected launch date for this new system that will allow for tracing of cattle and hog livestock is November 2012. Therefore, the Canadian Food Inspection Agency is delivering on that but getting some of its funding from Agriculture and Agri-Food Canada.
I thought I would highlight for you what a transfer looks like.
Senator Neufeld: Where did it come from?
Mr. Matthews: It comes from Agriculture Canada as part of a previous budget.
Senator Neufeld: It comes from Agriculture Canada to CFIA, vote 1.
Sally Thornton, Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board of Canada Secretariat: If you look at page 20, 1c under transfers, you will see a bolded amount in brackets for $32 million. That is an aggregate of a series of transfers out of that vote. One of those transfers is immediately below; it is from vote 1 to vote 10 within agriculture for the $24 million. The other transfers are to CFIA on the next page, so those total $32 million.
Senator Neufeld: Okay. Thank you.
Mr. Matthews: They could go to any number of departments, but it is an aggregate total of the transfers. We have highlighted one for you in the discussion.
Finally, before wrapping up, I will highlight page 22 for you. You go through the explanation of requirements, and this is for a typical department. You have the amounts requested, but they then get offset by other amounts that are available. When we actually turn this into an appropriation act we net off other amounts available. About two thirds down the page you will see an underlined title, "Explanation of Funds Available. " From vote 1 there are $6 million in total authorities within the vote because of re-profiling. There is another amount for vote 10 of $26 million.
Those amounts are netted off of any new requirements because they are already available in the vote and the appropriation act becomes effectively the net amount. That shows you how those amounts get netted off. You will see similar netting for many other departments as well. When a department requests new money it shows up in here, but then before the appropriation act is prepared we would net off any available funding they are re-profiling or do not need to come up with a net amount.
The Chair: That is re-profiling within the year?
Mr. Matthews: It could be within the year, it could also be to another year. It could be from a previous year.
The Chair: If it is from a previous year and is money they it did not spend, they have to get permission again?
Mr. Matthews: Re-profiling works two ways: There is the operating budget carry forward and a capital budget carry forward, 5 per cent for operating and 20 per cent for capital. That is automatic. Anything they want to re-profile outside of that, they have to get permission, and that permission is twofold. First, you want to make sure our colleagues in the Department of Finance are on side and can adapt to the changing fiscal pattern. Second, because the money actually expires — our appropriations are annual — you have to go back to Parliament and include the money as part of an appropriation act if you are going to spend it in a different fiscal year.
You will notice I did not talk about any sort of automatic re-profiling for grants and contributions. We have one for operating budget carry forward and capital budget carry forward. There is no automatic re-profiling for grants and contributions, which is why Infrastructure Canada — which I highlighted earlier — had re-profiled some amounts from a previous fiscal year based on plans and agreements they had reached with the provinces. Those re-profiles for grants and contributions have to receive permission on a one-off basis. We have no automatic rollover for grants and contributions.
Senator Callbeck: Welcome to all of you. On page 10, you mentioned the EI figure. You mentioned in your remarks, it says Human Resources and Skills Development, $59.7 million:
Funding to realign operating resources following the review of Employment Insurance administrative cost allocation.
Would you explain that, please?
Mr. Matthews: Yes. There is a similar situation for the Canada Pension Plan account. HRSDC gets money to deliver its programs. The EI accounts and CPP, I will make the same comments for, are essentially self-funding. We recover the costs to operate EI from the EI account itself.
HRSDC does an allocation; because they are running systems and they have buildings and facilities and people who are delivering multiple programs, you have to actually figure out and allocate, based on a formula, what percentage of their costs are chargeable to the EI account.
I will make a similar comment about CPP. It is a formula to figure out how much of the funding HRSDC consumed is actually appropriate to charge to the EI account. It is a formula-based approach, so the amount in here is a result of the application of that formula.
Senator Callbeck: Is that formula used every year?
Mr. Matthews: That formula is used every year, but the allocation is reviewed periodically to make sure it actually makes sense. If they are investing heavily in IT systems that are of greater benefit to the EI program than to other systems you may have to rejig it. They have, in the past, used outsiders to help validate that formula, but they come back periodically to update it.
Senator Callbeck: How long since it has been updated?
Mr. Matthews: I recall roughly three years ago they did bring in some external folks to help them look at the allocation, but I think it is every three years or so as a matter of course. They come fairly regularly with updated amounts, but I think it is about three years since the last.
I believe, senator, you have HRSDC following us at 10:30. That might be a good question to ask them.
Senator Callbeck: I notice that in 2009-10 in Supplementary Estimates (A) the same figure was used. I believe the same figure was used last year. I am wondering why we are using the same figure all the time.
Mr. Matthews: The same figure in terms of an adjustment?
Senator Callbeck: The $59.7 million.
Mr. Matthews: If their cost structure has not changed it would make some sense, but I am not certain as to why it has been the same number.
The Chair: We have them here in the next panel.
Senator Callbeck: I will wait and ask them.
You mentioned Shared Services Canada, which is on page 12. This is a new department. You referred to transferring "the control and supervision of certain portions of the federal public administration related to information technology infrastructure services. " What portions and what departments are involved there?
Mr. Matthews: I will start with what portions. It is actually quite specific for what services Shared Services Canada covers. It covers email, data centres and networks. That is the mandate of Shared Services Canada right now. When we say certain portions are not all IT, it is those three things: data centres, email and the networks.
In terms of departments, there are 44. Did you want us to run through a list?
Senator Callbeck: No.
Mr. Matthews: It is most of the major departments, or all of the major departments I should say.
Senator Callbeck: What major departments are not involved?
Ms. Thornton: Are not involved?
Mr. Matthews: I think it is all.
Senator Callbeck: They are all in there?
Ms. Thornton: Most are, yes.
Senator Callbeck: Are there any major departments that are not part of this?
Ms. Thornton: No, the biggest ones, DND, Public Works, Canada Revenue Agency and Human Resources and Skills Development are all part of it, as are 40 others.
Senator Callbeck: Those departments then pay money to this department; is that where they get their funding from?
Mr. Matthews: Those departments will have resources that they had been appropriated in the past. Their resources will actually be transferred into Shared Services Canada. It is a new department so it will get its own funding.
When it is all said and done you will see a reduction in departments' IT costs and you will see that funding transferred over to Shared Services Canada. The wrinkle is Shared Services Canada did not start April 1; it started partway through a fiscal year, so it is challenging to get it up and running during the current fiscal year, but eventually you will see reference levels for other departments drop and Shared Services Canada replaced.
Ms. Thornton: For this year there was an amendment to the Financial Administration Act last June that provides a deemed provision. If an organization is established pursuant to an order-in-council, those functions that are transferred to that organization, the related appropriations, are deemed transferred. That is why you are not seeing monies in Supplementary Estimates (C). The first order-in-council was on August 4 for a portion of Public Works, and the remaining 43 were deemed transferred November 15.
The actual resources associated with this year will be approximately a third of that total, but we do not have those final numbers and will not have them until after the year end and reflected in public accounts.
What you will have, though, for April 1 for the new fiscal year is the full amount for Shared Services Canada, which will be about $1.4 billion, and then you will see the reflective reductions in appropriations from the other 44 organizations.
Senator Callbeck: Why was this department set up? Was it to be more effective or to cost less money?
Mr. Matthews: The idea is that if you are running 47 or 57 different data centres and email systems, there are bound to be some efficiencies if you can actually do that on a more corporate basis. If you look at the number of data centres that the federal government had, I believe it was in excess of 300. The theory is that eventually, when you consolidate those, there will be some savings. The idea is to provide common-type approaches to those three specific IT services, which will eventually result in savings.
Senator Callbeck: Have you projected what the savings will be?
Mr. Matthews: I have not, but SSC is part of the strategic and operating review. You will see, at some point, projected savings from those things. They have inherited those services as they exist now. If you think about data centres, they may be in buildings that have three- and five-year leases. It may take time for that consolidation to take place, but there is the anticipation of savings, yes.
Senator Marshall: Mr. Matthews, going through the items, as you said earlier many are repetitive, but it is now March 5 and none of this has been spent. Is that correct? These expenditures have not been made; it is pending approval?
Mr. Matthews: What is pending approval is increase to departments' votes. If you recall, the way Parliament controls departments is by vote, and those votes are operating capital and grants and contributions; small departments have what is called a program vote, which is all things together. Departments may have made plans to start spending money once they receive Treasury Board approval.
Senator Marshall: They would not have spent it, though?
Mr. Matthews: They would not have spent — they cannot exceed their voted appropriations; that is correct.
Senator Marshall: That is all I wanted to know.
Some of the item writeoffs could be done in almost one transaction. However, some of the items, like the new loans under Canada student financial assistance, I think there is some new money there for disability savings grants. There is ample time between now and the end of the year to disburse those.
Are you looking for approval for something for expenditures that might not get made before the end of the fiscal year?
Mr. Matthews: It is possible that they will not get made, but appropriations are an "up to " amount. Departments cannot legally spend more than they are appropriated. It is prudent to not spend right up to the very last cent. These represent an "up to " amount. When departments are doing their planning, because of the way the Financial Administration Act is built — that is, where it is against the law to overspend — they have to plan for the most they will spend.
Senator Marshall: It is possible that some will get approved but not utilized?
Mr. Matthews: That is entirely possible.
Senator Marshall: Can you talk about the revised forecast of public debt charges? I am asking because we are doing Supplementary Estimates (C) now, but in Supplementary Estimates (B) we had the same issue — and we might have had it in Supplementary Estimates (A), too. If it had not been for this revised forecast of public debt charges, we would have had about $1 billion net new expenditures.
Tell us the story on the public debt charges. Why is it something that continues on in each of the supplementary estimates, that is, Supplementary Estimates (A), Supplementary Estimates (B) and Supplementary Estimates (C)?
Mr. Matthews: Every time that we produce any estimates document, we update the statutory forecast for our most current information. With public debt, obviously, interest is a very big amount. The Department of Finance estimates those things. They have their debt management strategy on their website. I am not an expert, but it is a mix of short- term and long-term interest rates. As private sector economists change their forecasts for interest rates, and as interest rates change, they update their forecast for interest expense. Interest rates, both short-term and long-term, are decreasing based on what was originally planned, so they revised their numbers here.
The interest expense here is on a couple of things. There is the actual market debt, as well as the interest on government pension plans. Both are in there.
Senator Marshall: What has been the total reduction in the public debt charges as a percentage? Is it significant?
Mr. Matthews: I am not certain. We would have to go back and check that one. If you bear with me for one second, if I do have it here I will let you know.
Senator Marshall: Can you get that information for us?
Mr. Matthews: Sure.
Senator Marshall: I also have a question about the way the information is presented in the document. These are amounts by program, but obviously the money is broken down for purposes of the accounts, like into salary cost, professional services; I guess into different categories. Could you talk about the increase in personnel costs? Could you explain why there has been an increase in that?
Mr. Matthews: If I can go back to your question on interest expense first, 2011-12 interest expense for the federal government was $33 billion. That is to give you an order of magnitude. That was Budget 2011-12; 2010-11 actual was $30.9 billion. That is what they actually spent in fiscal year 2010-11.
To talk about your question on personnel, you may recall that in earlier supplementary estimates we included the amount for $1.3 billion related to the elimination of severance. The background there is the existing collective agreements provided for public servants to accumulate basically one week of severance leave for every year they worked. When they left the public service — that is, if they took retirement or left to take another job, or whatever — they were paid that amount.
Senator Marshall: Yes; I remember that.
Mr. Matthews: Severance was negotiated away as part of the collective bargaining process. As a result, the agreement that was reached was that public servants were allowed to cash out what they had accumulated to date, even though they were still in the public service. They had the option to be paid either now or later. The $1.3 billion was with an estimate around what was going to be paid now. That $1.3 billion is part of the personnel increase. Personnel went up by, I think, $2.4 billion or $2.6 billion. The heavy part was $1.3 billion related to severance. The balance relates to some new program initiatives that were approved.
[Translation]
Senator Hervieux-Payette: I would first like to welcome our witnesses, and also note that I am new to the Finance Committee.
Are the supplementary estimates available on line? Do the people listening to us today have access to this information? It is not enough to listen and to be on television. They also have to know what we are talking about. So it is important to know whether the document is available on your site.
Mr. Matthews: Yes, it can be found on line.
Senator Hervieux-Payette: My first question is this: does the Food Inspection Agency charge enough to recover all its costs? Are its estimates, whether that be $100 million or $75 million, transferred to the people whose products are inspected? This could be for prescription drugs, because the agency does the inspection and handles all sorts of clients. Do the clients pay for that inspection?
[English]
Mr. Matthews: In the Appropriation Act, you will see the net requirement of a department. If a department is allowed to charge for its services and recover costs, we factor that into the net ask. The Canadian Food Inspection Agency does not recover all the costs.
Ms. Thornton: My understanding is that they offer certain services where they recover, but not all at all. They rely on appropriations.
[Translation]
Senator Hervieux-Payette: Can we get the information, whether the agency recovers 10 per cent or 50 per cent or 80 per cent? What are the services that users pay for? This is an important question.
At present, it may be that not enough inspections are being done. We might have to consider having more inspectors, but also transferring the costs to the people who use the services.
My second question concerns students. In your summary document, you tell us about a $162 million write-off. A little later, we see $174 million for student grants and $157 million in student financial assistance, for a total of $231 million. And you used the terms "budgetary " and "non-budgetary. "
Can you explain the difference between these two terms? Is something "non-budgetary " because a big surprise happens and more money is given? What is the technical explanation of these two terms?
Mr. Matthews: I am going to try to answer.
[English]
If you are thinking about loans, they are meant to be repaid. When the government issues a loan and expects to be repaid it is non-budgetary because it does not impact the deficits or the surplus of the government. We issue a loan and expect to be repaid. That is what we call non-budgetary. It becomes budgetary when we realize we cannot collect the loan.
[Translation]
Senator Hervieux-Payette: So the grants are budgetary, because they are given?
Mr. Matthews: Yes, exactly.
Senator Hervieux-Payette: And the loans are advances. But when I look at the amounts, $162 million has been written off on one side and additional student financial assistance of $157 million has been granted on the other side. Can you tell us the total initial amount out of which $162 million has been written off? It seems to me that the amount of the write-offs is higher than the amount of the financial assistance that was granted.
I want to be able to understand the whole thing, given that in Quebec at present, students are making a little noise. It seems to me that if I understood it I might be able to have a more positive dialogue with them.
[English]
Mr. Matthews: The reason it shows that way is that the loans are repaid over a number of years. The writeoff relates to about seven years of loans. The new money going out the door is money being given in the current year, so the actual writeoff relates to quite a large amount of loans that were issued in the past. Roughly 88 or 89 per cent of the loans are repaid. If you look to the government's financial statements, there is about $14 billion of receivables for student loans on the books. That writeoff relates to the loans that are on receivable, not the new loans. That is why you see two different amounts. The amounts going out the door are new loans, and this writeoff relates to loans we already issued. As I said, there was roughly $14 billion of loans receivable on our books as of March.
[Translation]
Senator Hervieux-Payette: Do you do this every year? You say seven years. Are you going to do it each year or is this a one-shot deal?
[English]
Mr. Matthews: Each department goes through their outstanding loans and decides what they can no longer collect — because legal authorities are passed, people are decreased or bankrupt — and they come in with the writeoff amount. It is an actual cycle.
The Chair: We have HRSDC here for the next panel.
[Translation]
Senator Hervieux-Payette: But the $162 million, that is on advances or loans totalling $14 billion, is that right? The total amount of student loans, at present, is $14 billion?
[English]
Mr. Matthews: That is the total amount being written off this year, and there will be another amount next year.
Senator Finley: I have a lot of questions for subsequent departments, so I just want to address a couple of remaining points.
Could you remind me of the payback requirements, or recovery requirements, and the difference between a contribution and a grant within the CIDA dynasty?
Mr. Matthews: Grants are typically not recovered. Contribution agreements can be recoverable, but typically not as well. You can have recoverable contributions. The difference between a grant and contribution is largely around the reporting requirements. Grants do not require a lot back in terms of reporting; it is money given and in respect of an agreement. In contribution agreements you typically have a much heavier cycle of reporting where the organization that receives it has to report back on what they have done with the funding.
Ms. Thornton: In both instances you are transferring money to an individual or organization. You are not purchasing or getting something tangible back, but something is being done with it. With your contributions, you have performance conditions specified in the funding agreement. They have to be accounted for and are always subject to audit. With a grant usually you pre-establish criteria or things that must exist in that organization or that individual before they can access or be given that. It is not normally accounted for by the recipient or subject to audit, although they may be asked to report on the results achieved.
Senator Finley: I understand that, but what we have here again — and this is not the first period we have looked at this — is money being virtually arbitrarily moved from where there is absolutely no control, or very little control, to one where there is absolutely no control or accountability. Do you think that is a fair characterization?
Mr. Matthews: CIDA will look at what aid requirements they plan on delivering on and which organizations will receive that money. That will drive them as to what should get grant funding and what should get contribution funding. It is typically driven by the nature of the organization receiving the funds.
Senator Finley: I will discuss that with CIDA when we talk to them next.
[Translation]
Senator Hervieux-Payette: I have a supplementary question. In the case of CIDA, were these grants or contributions?
[English]
Marcia Santiago, Senior Director, Expenditure Information Division, Treasury Board of Canada Secretariat: It is not so much what the payment is for as to whom it is made. If we made a payment to the Government of Haiti or to a World Bank agency it would almost certainly be made as a grant, as opposed to if we were matching contributions, or funding something like Doctors Without Borders. That would be a contribution.
Senator Finley: The second last question I have has come up before, and it is to refresh my aging memory. On page 6 of your presentation, you went through a number of major voted items. In fact you went through them all, Mr. Matthews, but omitted to talk about the last one: Public Works. As I recall, we have been through this circle before when at a time of restraint and government trying to cut back presumably there will be fewer human resources around. We continually come up with this increased Crown-owned building and leased space. If I recall, during the last discussion we had on this, you mentioned this was done in a per capita basis. Is this still the same?
Mr. Matthews: Some of Public Works' funding is done on a per capita basis. This is the 13 per cent, so it is the per capita allocation based on number of people.
Senator Finley: Who determines what that percentage will be? Has it ever decreased?
Ms. Santiago: It is slightly higher for northern facilities, and that is the only exception I can think of. I think it is 16 or 16.5 per cent.
Senator Finley: When this started —
Ms. Santiago: It has always been 13 per cent. It is a 13 per cent that is applied the same way that the 20 per cent for employee benefits and pensions is applied. It is applied to new salary funding decisions that come from cabinet.
Senator Finley: Does anyone ever go back and review? Okay, so it is 13 per cent, fine. You say it has been 13 per cent since dirt was new. What accountability is there on that, and does someone go back and say, "Was it really 13 per cent or perhaps it was only 5 per cent? " Who is keeping watch on the public purse here?
Mr. Matthews: There are a couple of ways to look at that. One is the office accommodation standards that the government has. There is a standard for accommodation, and there is a link between the amount that is spent and that standard for accommodation. If departments are living within the standard for accommodation, Public Works pays for it. That is where the 13 per cent goes. If a department decides they would like accommodation that goes above and beyond the standard for whatever reason, it comes out of the department's reference level. That is the motivation to have a department respect the norm in terms of what accommodation looks like.
As to when the last time that amount was reviewed, I am not certain. I do not recall a review in recent memory.
The Chair: As we are low on time, please wind down your line of questioning.
Senator Finley: I would like to see what reviews have been done, please. Please ask the department on behalf of the committee if we could have a summary at least of the reviews that have been done against the percentages allocated to Public Works in this particular regard. Thank you.
The Chair: If you could help us with that, it would be appreciated. We will put Senator Finley down for the second round, if we can.
Senator Nancy Ruth: On page 27, under Canadian Heritage is the Michaëlle Jean Foundation. It is a small amount — a grant of $210,000 and change to her foundation. The grant was funded by under-expended monies for the Youth Take Charge program.
I was always under the impression — and I guess I am wrong — that when foundations were established for a Governor General, it was a one-time-only funding. Therefore, I want to know how it is that this $210,000 has gone over, what the criteria and the process are for awarding grants to a Governor General's foundation, why the funds in the youth program were not expended, and why they did not go back into Treasury. How did she get access to them?
Mr. Matthews: Once an amount is approved, it goes through budget, cabinet, and Treasury Board. Before we put it into an appropriation act, we do look at —
Senator Nancy Ruth: Are you talking about the capital endowment of her foundation?
Mr. Matthews: I am talking generally. We would look to unused funding in the department to offset it. I cannot answer your questions on the rules around a Governor General's foundation. We will have to get back to you on what the rules are; I am sorry.
The Chair: If you could, that would be appreciated.
Senator Nancy Ruth: Regarding CIDA, I need your help to understand something. I could not figure out if there was anything on the appropriation for maternal health. It is on page 50.
I got the impression that under vote 30, there is something for maternal health, but I cannot find it when I am looking at it. Just so you know, the Internet numbers for pages are different than the print numbers for pages, so if you do your research online, it is a little maddening.
Mr. Matthews: I knew about the French and English variations; I did not know about the Internet version. Was your question whether there is any new money for maternal health?
Senator Nancy Ruth: Yes, is there anything here for maternal health?
Mr. Matthews: We do not think so, but CIDA is up next, I believe.
Senator Nancy Ruth: Thank you.
Senator Runciman: Most of my questions have been covered. The Newfoundland Offshore Petroleum Resource Revenue Fund was mentioned due to lower forecasted oil prices in the note, and I found that curious. I thought it would be with higher forecasted prices that you would see a reduction. It seemed counterintuitive.
Mr. Matthews: It is a formula-based approach, and oil prices are the primary driver, as well as volume; therefore, the higher the price, the higher the payment to Newfoundland.
Senator Runciman: Okay.
Senator Ringuette: I have two short questions. Why are we reducing the RCMP on First Nations? There is a reduction on page 94. Second, in regards to non-budgetary items, where are there billions to General Motors?
Mr. Matthews: Maybe I will answer the second question while my colleagues try to find an answer to your first one.
The money that went to General Motors and Chrysler — it was actually the two that received money — was in a previous fiscal year, so there is no new money going there.
Senator Ringuette: I mean in regards to repayment. General Motors has announced in the last month record profits, so are they . . . ?
Mr. Matthews: To my recollection, General Motors has repaid the loan amounts. The government still holds shares in General Motors, but to my knowledge both General Motors and Chrysler have repaid the amounts owed. The remainder was turned into shares, and the government has sold some of its shares in General Motors but is still holding some.
Senator Ringuette: Where is it accountable? When it was first done, there was zero in the books, so where is it?
Mr. Matthews: You would see in public accounts the remaining investments that the government holds in GM and Chrysler; you would see it there as an asset, because we are holding shares. Estimates would only show you what is coming in and out in terms of money going out the door, and there is no money going out.
On the first question, are we able to find an answer?
Ms. Thornton: Were you focusing on the reductions to the RCMP?
Senator Ringuette: Yes, on First Nations.
Ms. Santiago: If you are referring to the $6 million reduction on page 94, that is funding that is being transferred from Public Safety to RCMP. RCMP is getting an addition $6 million.
Senator Ringuette: Is it not in brackets?
Ms. Santiago: Yes. The number in brackets is in Public Safety itself — the department. That is on page 94. That is the negative. The positive that is being received by RCMP is on page 96.
Senator Ringuette: In reality, we are increasing by $6 million —
Ms. Santiago: In total, we are not increasing — we are transferring it from Public Safety to RCMP because RCMP has responsibility for the contract policing arrangements.
Senator Ringuette: I know that.
Ms. Santiago: Therefore, we are increasing RCMP. However, in total, there is no net increase because the money is coming from funds that have already been appropriated to the department.
Senator Ringuette: Internally. Okay. Thank you.
The Chair: I had one question that I would like you to comment on, and that is the proposed allocation to Treasury Board with respect to the litigation management unit. Is this a decision to do away with Justice Canada, or will you create a parallel litigation team at Treasury Board?
Mr. Matthews: No, it is not parallel. The legal services are still provided by Justice, but Justice actually charges departments for its services. Due to a number of legal challenges launched by unions related to the Public Sector Equitable Compensation Act and Expenditure Restraint Act, there is a need for more spending than anticipated in that area.
Treasury Board will be charged by Justice for those services. TBS is the employer for the Government of Canada, so it has responsibility for leading the defence against those suits. It will be using Justice lawyers.
The Chair: Should I read into this that Treasury Board believes that they can manage the litigation for less than they would be charged if it was done by Justice?
Mr. Matthews: No. The fact is that if Justice charges Treasury Board for their services, Treasury Board needs to be resourced for that money. Therefore, it will be provided by Justice, but the resources will actually be consumed by TBS, if I can put it that way.
The Chair: Will you have people physically doing things in Treasury Board with respect to litigation management as a result of this appropriation?
Mr. Matthews: I am speculating here, but I would imagine it would be more than just lawyers who were involved in this, so there would likely be people in Treasury Board of Canada Secretariat doing things, but we —
The Chair: Is this something new? Would this have been done by Justice Canada previously?
Mr. Matthews: No, we have always had Justice lawyers on site at TBS, but the issue here is the number of challenges that have been launched, and building a team. There are similar themes to the challenges, so it is just building a team to centrally manage those.
The Chair: My issue is this: Why is this highlighted and why is it different from anything we have seen before in terms of management of litigation?
Mr. Matthews: It is highlighted because the expense being planned on this front is more than could be handled through the existing reference levels, so there was a need for additional money. That is why it has been highlighted. It is not a change in approach to defence against litigation; it is a volume issue in that money will be expended that could not be absorbed through existing reference levels.
The Chair: Through operating?
Mr. Matthews: That is right.
The Chair: We are out of time. We have three senators on the second round — Senators Callbeck, Marshall and Finley. You know we have another panel comprised of HRSDC, CIDA, National Defence and Service Canada. If your questions can wait until the next round, please hold off. If you have a question that should go to Treasury Board, now is your chance. If it is a long one, we will ask them to reply in writing.
Senator Callbeck: I am fine.
Senator Marshall: I was going to ask about the Public Works amount for $54 million. I was wondering why Public Works could not just absorb that. Is it possible for Treasury Board officials to tell us, after March 31, whether the $54 million was spent?
Mr. Matthews: Probably not right after March 31, but when public accounts are produced, which will be in October, you will actually see total spending by Public Works. You will see total authorities, which would include the $54 million, so you will see what the lapse was in public accounts.
Senator Marshall: You will not know in April?
Mr. Matthews: The books do not get finalized until mid to late summer, and then they get audited, so it is quite a process.
Senator Finley: I have one question that can be answered in writing, if you wish. On page 77 of Supplementary Estimates (C), under the Department of Justice, because I do not know if we are getting Justice here, bottom of the page, transfer from Justice to support exceptional operational requirements through a one-time transfer, $778,000 to the Canadian Human Rights Tribunal.
I wonder if that could be explained to us. As I said, in writing would be fine.
Mr. Matthews: I can take a shot now, if you prefer.
The Chair: We are out of time. Can you answer it quickly?
Mr. Matthews: Yes, I can.
The Chair: Do you want to answer tomorrow when you are back with us? You go ahead.
Mr. Matthews: It is very quick. The tribunal operates and does not necessarily control the volume of cases it must hear or how long the cases run. You will see the same thing with something like Transportation Safety Board. When there is an inquiry you deal with inquiries or cases that come your way and they run until they are finished. Therefore, the amount spent by the tribunal was more than they had anticipated and, rather than getting net new money, we are transferring from Justice to the tribunal to offset that.
Senator Finley: That begs all kinds of follow-up questions, chair, but I realize we do not have time. Therefore I will wait until we get Department of Justice or we do not.
The Chair: Let me tell you as well that we have the same panel back tomorrow on Main Estimates, if you can couch your question in terms of Main Estimates.
I hope you will all be back again tomorrow evening to deal with Main Estimates for the next fiscal year.
That concludes this particular panel on Supplementary Estimates (C) for this fiscal year. Mr. Sprecher, Ms. Thornton, Mr. Matthews and Ms. Santiago, thank you for being here. We look forward to seeing you again tomorrow evening.
[Translation]
The Chair: We will now continue our study of Supplementary Estimates (C) for the 2011-12 fiscal year, which have been referred to our committee.
[English]
We are pleased to welcome an extensive panel: Major-General Robert Bertrand, Director General, Financial Management, National Defence; Sue Stimpson, Chief Financial Officer, and Diane Jacovella, Vice-President, Multilateral and Global Programs Branch, from the Canadian International Development Agency, sometimes referred to as CIDA; and from the Human Resources and Skills Development, sometimes referred to as HRSDC, Alfred Tsang, Chief Financial Officer; Jacques Paquette, Senior Assistant Deputy Minister, Income Security and Social Development Branch; and Marc LeBrun, Director General, Canada Student Loans, Learning Branch. We also have Mr. Paul Thompson, Assistant Deputy Minister, Processing and Payment Services Branch, Service Canada. We were able to work you into the table here. You become a senator once you go around the corner, you know.
Mr. Tsang, I understand you have a few introductory remarks, and if anyone else has remarks to begin, signal to me and we will call on you next.
[Translation]
Alfred Tsang, Chief Financial Officer, Human Resources and Skills Development Canada: Senators, I am pleased to appear before you this morning as the Chief Financial Officer for Human Resources and Skills Development Canada. You have already introduced my colleagues, Mr. Thompson, Mr. Paquette and Mr. LeBrun.
Allow me to offer the Committee an overview of HRSDC's portion of the Supplementary estimates (C), tabled on February 28, 2012.
Through these estimates, we provide Parliament an update on various statutory programs.
Statutory items are included in the estimates for information only because Parliament has already approved the purpose of the expenditures and the terms and conditions under which they may be made through other legislation.
[English]
You will note that the only decrease in the forecasted adjustments to the statutory items is for the Old Age Security benefit, with an adjustment of $410 million. The decrease impacts the forecast and not the actual benefits paid to individuals. In fiscal year 2010-11 the federal government paid $27.2 billion in Old Age Security payments, while it is estimated that $28.8 billion will be paid in 2011-12.
The adjustment of $410 million is explained by changes in the forecasted average monthly benefit rate as well as changes in the number of beneficiaries and the total amount recovered from higher-income seniors through the OAS recovery tax.
All the other statutory adjustments show increases. For example, the increase of $74 million for the Canada Student Grants Program reflects the revised take-up expected in 2011-12 and takes into consideration current disbursement trends. The Canada Student Grants Program provides upfront grants to students from low- and middle-income families, students with dependents, part-time students and those with permanent disabilities.
In addition to the statutory items, HRSDC is asking for an additional $218 million in voted appropriations. This includes $162 million related to a request for the writeoff of debts owed to the Crown for unrecoverable Canada student loans under vote 7. As general practice, a separate vote is established for authority to write off debts. A loan to an outside body is considered a non-budgetary item since the loan is expected to be repaid. Student loans are an asset for the Government of Canada and such writeoffs require Parliament's approval.
Mr. Chair, this student loans writeoff item is incremental to the one approved in 2011-12 Supplementary Estimates (B). Given that last year's Supplementary Estimates (C) did not receive Royal Assent, we reintroduced this item in Supplementary Estimates (B) this fiscal year. The $162 million included in Supplementary Estimates (C) is for writeoff of debts identified as uncollectible in 2011-12.
According to the Debt Write-off Regulations, debts should be written off in the year in which they are determined to be uncollectible. Our request under vote 7 is consistent with such regulations as we have determined these debts to be uncollectible this fiscal year.
[Translation]
Allow me to provide a little context. A large percentage of students respect and repay their loans. Some borrowers have difficulties with repayment, and we have measures to support them through the repayment process. Nevertheless, some loans go into default. We have a vigorous recovery process, including working with our partners at Canada Revenue Agency.
[English]
However, the Canada Student Financial Assistance Act establishes a limitation period of six years between the time the borrowers last acknowledged their Canada student loan and any legal activity the Crown can undertake to recover that debt.
Once this period has expired, the Crown no longer has the authority to take action to collect on the debt. Over 98 per cent of our writeoff requests under vote 7 have been deemed unrecoverable for this reason.
The Office of the Superintendent of Financial Institutions is tasked with producing an actuarial report, as stipulated in the Canada Student Financial Assistance Act. The Chief Actuary's most recent report, which was tabled in Parliament on October 7, 2011, forecasts direct loan writeoffs over the next 10 years. For next year, 2012-13, the expected writeoff is $164 million.
Also included in the voted appropriations is $56 million under vote 1, operating expenditures. This is for funding to realign operating resources following the review of our department's administrative costs allocation. This request reinstates a corresponding reduction reflected in vote 1 of our Main Estimates. Timing of the approval process is the reason for the reduction and this request for reinstatement. It represents no net increase of funding for the department.
[Translation]
I hope this overview has given you a more precise idea of the content of the Supplementary Estimates (C) for our department.
[English]
I hope this overview has given you a more precise idea of the content of the Supplementary Estimates (C) for HRSDC. My colleagues and I would be happy to answer your questions.
The Chair: Should we expect, in the Main Estimates for next fiscal year, to see the $164 million writeoff, or will you wait until one of the supplementary estimates to include that?
Mr. Tsang: Mr. Chair, we will wait for one of the supplementary estimates to do that, and one of the reasons is that for the writeoff you should have a precise amount rather than an estimated amount. We have not determined the precise amount for the fiscal year 2012-13, but we intend to do that. We do that every year, as you know, and we will come in with a request under the future supplementary estimates.
The Chair: Thank you. Do any of the others have any introductory remarks before we go into a question and answer?
Senator Ringuette: I have two small questions for Mr. Tsang. I am quite intrigued with the operation cost in regard to servicing EI, first, because there has been a drastic reduction in the level of service, at least in the Atlantic region. Regarding this form of transfer or costing to the EI fund, do you exercise the same kind of operating cost to CPP? Is it on the same standard that you charge CPP for the service you deliver?
Mr. Tsang: For the Department of Human Resources and Skills Development, we have what we call three sources of fund for operating. One is the EI account, number two is the CPP account and then there is the appropriated that you see before you under supplementary estimates or Main Estimates, and so on. Periodically, we undertake and review to see what the appropriate charges are between the three accounts. We did that for fiscal year 2009-10, and we are about to undertake another review to ensure that our charges between the three sources of funds are appropriate.
Senator Ringuette: Could you provide this committee for the last three years the different review and the different costing that you have forwarded to the delivery of EI and to the delivery of CPP?
Mr. Tsang: I think —
Senator Ringuette: Just forward it to the clerk and we will look into it.
Mr. Chair, I have quite a lot of questions for DND.
The Chair: General Bertrand is here to serve you.
Senator Ringuette: Yes; very interesting.
On November 15, I asked your department the cost related to the purchase and refurbishing, to your standards, of the Nortel building. The answer was that the purchase, the refurbishing, the move, et cetera, was going to cost $998 million, compared to the construction of a new building that would have cost $800 million. That was a difference of almost $200 million. Two weeks after, I read in the Ottawa Citizen a report that says that the purchase and the refurbishing of the Nortel building will cost $808 million, which is $190 million different than this committee was told two weeks prior.
Also in this article, there is a quote that states:
Such concerns were solved when Deputy Minister Robert Fonberg stepped in. Fonberg's assistant wrote that the deputy minister was concerned about telling the public about the cost.
As a member of this committee looking at government expenses, it certainly raises a lot of flags when the deputy minister of a department says that he does not want the general public to be informed about costs. Furthermore, at one instance in front of this committee, you gave a set of numbers and then there was another set of numbers given two weeks afterwards. I cannot believe that, in two weeks, a review of costs has generated a reduction of $200 million.
Then there is another issue of DND not telling Parliament and buying $477 million worth of U.S. military satellites.
I know you may not have all the answers and you are the only person here from your department, but, sir, a lot of explaining is to be done about the differentiation of cost in regard to buying almost half a billion dollars' worth of equipment without informing Parliament, including us.
The Chair: General Bertrand, do you have any comment you would like to make on either of those points?
Major-General Robert Bertrand, Director General, Financial Management, National Defence: Unfortunately, I am prepared to discuss items in Supplementary Estimates (C). I do not have any material to discuss on Nortel at this point or the satellites, but I am sure we could take the question and get back to the senator.
The Chair: Any information you can provide us to help solve the issue would be appreciated. We did ask each of you to be here to deal with Supplementary Estimates (C), and you are absolutely right. That is what you are prepared to deal with.
Senator Gerstein: Mr. Tsang, it will not come as any surprise that my question will be with regard to the Canada Student Grants Program. If I might refer you to page 58 where you have the request, I think I understood what you said, but I note that we approved $149.5 million as a writeoff in Supplementary Estimates (B), and you are now asking for $162.2 million in this request. However, the $149.5 million covered 61,791 student debts, and now we have increased by $12 million the amount of the writeoff, and the number of loans being written off is 36,657.
We have an increase of $12.7 million in the writeoff, and we have a decrease in the number of loans being written off of 25,134. Is that a result of new trends that we should be made aware of? Is it the weather? Is it the recession, people staying in school longer, going for more sophisticated courses? There must be an answer somewhere.
Marc LeBrun, Director General, Canada Student Loans, Human Resources and Skills Development Canada: The Government of Canada has been providing direct loans since the year 2000, and you heard through Mr. Tsang's opening remarks that there is a statute of limitations of six years. As the loan portfolio matures, we are seeing an increase in the value of the loans being written off. You are right that the $149.5 million represented over 60,000 accounts. The average value is a little over $2,400, whereas the 162 fewer accounts, but the value, on average, of each of those loans is over $4,200.
Senator Gerstein: I understand that completely. The question is why six months later. This is a program that has been ongoing.
Mr. LeBrun: It is six months later, but it is representing loans for a number of years. It is going back to seven years' worth of loans. As the loans mature, we are getting students that may have entered into direct payment prior to 2000, so the average that we are writing off in the early years represented only a small portion of their overall loan balance, whereas as we progress, we are getting students that only have direct lending loans from the Government of Canada, so it represents a higher portion of their outstanding debt.
Senator Gerstein: I understand what you said, but I do not understand it. Now that I have said that, you might want to take a look. I would like to understand clearly: If there is some trend, what is it? We are talking six months later as to why it is we would be writing off half the number of loans for twice the amount.
That leads me to page 63, to the statutory request that you have of $157 million. I am fascinated by the explanation you have here. It says, "Increase of net loans disbursed under the Canada Student Financial Assistance Act as a result of higher new loan projections made by the Chief Actuary offset by higher than anticipated loan repayments. " That seems to be the complete opposite of what you were just discussing. Could I have your comment, please?
Mr. LeBrun: Can I go back to the question regarding default? The one point I would like to make is that the default rate is not getting worse. It is actually improving. If we go back to 2003-04, as a reference here, the overall default rate for student loans was hovering around 28 to 30 per cent. Based on a number of measures that the government put in place in 2008-09, that default rate has decreased to 14 per cent.
We work with our collections partners, if you will, at Canada Revenue Agency. They undertake a number of measures to increase our repayment rates, or minimizing the amounts that are unrecoverable and subsequently get presented for writeoff. We have skip tracing; we do income tax set-offs from income tax returns; we take legal actions against those borrowers in default. However, we also have significant measures in place that we have introduced recently, as Mr. Tsang mentioned, the Canada Student Grants Program. We introduced that in 2009, so close to 300,000 students actually benefited from this program in the 2009-10 loan year. Effectively, by offering more grants, we are reducing their annual loan amounts, so they are actually borrowing less on an annual basis.
Senator Gerstein: I thank you for that answer. I do not want to take up more of your time. I was looking for a trend; I heard you use the "trend " word. The trend, you said, is that the default rate was improving, in other words, declining. Would you be good enough to provide the committee, through the clerk, the default rate over the last seven or eight years, on an annual basis, so we can see the trend — the favourable trend? I thank you very much.
The Chair: If you can do that, we thank you very much.
Senator Nancy Ruth: General, if I may, I refer you to page 81, and the appropriation of $151.9 million for funding in support of Canada's new training mission in Afghanistan. Does this amount represent the total amount that DND will spend on its training mission in 2011-12? If not, what would the total amount be?
Maj.-Gen. Bertrand: This is the first of four years of funding for the mission in Afghanistan.
Senator Nancy Ruth: Therefore, it is the $500 million.
Senator Gerstein: The total estimate for the four years is approximately $520 million.
Senator Nancy Ruth: At the beginning of the estimates, on page 9, it says that the funding is for the new training mission. The elements are humanitarian aid and development as well as the preparation of Afghans to assume responsibility for Afghanistan's security.
In 2010, about the same time as our engagement in Afghanistan was reconsidered, the federal government committed to an action plan for the implementation of UN Security Council Resolutions on women, peace and security. DND has obligations in respect to this action plan in Afghanistan, which requires that mechanisms be put in place to promote department accountability for promoting it.
I would like to know precisely what DND is spending on the implementation of the action plan and what they are doing. I would like to know what has changed in DND to ensure the department's accountability, and what of that $520 million is being spent on that portion of United Nations Security Council resolution on women, peace and security.
Maj.-Gen. Bertrand: I have no details that we are providing funding in that area. Our mission is primarily composed of training ANSF forces. I would have to defer to CIDA if they are part of the whole-of-government spending on this.
Senator Nancy Ruth: It is ordered through DFAIT. It is a whole-of-government approach. DND has a responsibility for it. You are supposed to train all personnel going on issues around all of the five Security Council resolutions on women, peace and security. You are to engage Afghan policing and the military to let them know what the international obligations are. Canadian Forces, the RCMP, policing and teaching folk are supposed to make people aware of what Afghan law is around violence against women and so on.
You could dig up some information and send it to the clerk, with dollars behind it.
Maj.-Gen. Bertrand: I can advise you that our troops receive sensitivity training.
Senator Nancy Ruth: I want to know how much money and how much time. I have heard things like half-hour sessions. I have heard the program has been developed between Canada and the U.K., is an online program, and there is no way to track who is online. Who is monitoring it and what impact does it have? How much money is it costing us to follow through and monitor this? Those are the kinds of things I am interested in, and if someone in the military could tell the clerk, I would be very happy.
Now, CIDA: You also have an obligation in the whole-of-government approach that DFAIT has ordered. I do not see anything in the supplementary estimates that relate to it, but I would like to know what obligations CIDA has in respect of the action plan and what mechanisms CIDA has put in place. How much money is there? How much of CIDA's money to Afghanistan is related to these projects that support women, peace and security, and how are you pushing women's involvement in peace making, peacekeeping and so on? I want dollars attached as well, if I may.
Diane Jacovella, Vice-President, Multilateral and Global Programs Branch, Canadian International Development Agency: I would suggest that we provide something in writing as well so we can be very concrete in terms of dollar amounts.
Senator Marshall: My questions are primarily for CIDA. I know under page 47 of Supplementary Estimates (C) there is a category — and it is non-budgetary — which means there is an anticipation that we will get the money back. However, with payments to international financial institutions, what international financial institutions would they be?
Ms. Jacovella: Organizations that we consider the international financial institutions include organizations like the World Bank, the IMF, African Development Bank, Inter-American Development Bank and the Caribbean Development Bank.
Senator Marshall: Right. Those financial institutions in turn lend the money out. Does Canada have input into who the money is being loaned to, or the terms and conditions? Is that left entirely to the financial institution?
Ms. Jacovella: The financial institution makes the decision, but Canada usually has an executive director that sits on the board of directors of these organizations. Sometimes it is as part of a constituency. Sometimes we are the only member of that constituency. The board of directors reviews their loaning policies, and all the policies regulating their financial systems.
Senator Marshall: CIDA must have loans owing on their balance sheet, because the Supplementary Estimates (A) showed there was $84 million already provided for this year — authorities to date — and now there is another $28 million. In your records, you must be accumulating amounts owing from these financial institutions?
Ms. Jacovella: In terms of the financial institution, most of the time we contribute to their general capital increase, which we did recently with all the G20 countries. We give them through the L vote, so we are not actually managing the loans ourselves. We give them money and they manage the loans.
Senator Marshall: These are non-budgetary, so you are anticipating it will be collected back. My question is how much is on the books of the Government of Canada to be collected, and what historically has been the collection rate? Do we usually get the money back or is it like student loans, where there is a default rate of 30 per cent? Those financial institutions are obviously lending to, I would say, countries that do not have a very good credit rating. I would like to know where we are as we go down the road. Are we getting the money back?
Sue Stimpson, Chief Financial Officer, Canadian International Development Agency: Many of these capital investments are for five-year periods, so I do not have the total of the offset of the portfolio, but I can get that for you, senator.
Senator Marshall: I would like to know what the portfolio is, and I would also like to know the default rate.
I want to comment on the Canada Student Grants Program and HRSDC. I found it confusing with regard to the writeoffs because there have been previous writeoffs and now more writeoffs. In the opening remarks, the indication was the expected writeoff for next year will be $164 million. This year it is quite high, and then it will drop back significantly. I also found that confusing. I would like to see that follow-up information.
Finally, I want to talk about the Canada Student Grants Program and the disability grants. Are those open-ended programs, or are they programs where so much is provided and when the money is gone it is gone?
Mr. Tsang: They are both statutory programs. As long as the terms and conditions are met, payments will be made. Our obligation is to give Parliament the best forecast and the information that we have on hand. That is what we presented in Supplementary Estimates (C). There is no limit because they are statutory. Does that answer your question?
Senator Marshall: Yes. My last question is, every time we get the supplementary estimates, there is additional money being provided for the grant programs. Historically, does the demand for the program outstrip what was originally budgeted? I have never seen you not coming back, so I am wondering, do we underestimate the demand? I know there are actuaries. Can you comment on that?
Mr. LeBrun: I will answer the Canada Student Grants Program. As I mentioned earlier, it was introduced in 2009 so the forecast and numbers we have only have one or maybe two years' worth of data. As our forecasting methodology improves we should be able to forecast much more accurately and not necessarily have to come in with additional estimates.
Over last two years we did not forecast the increase in the number of students that were participating in this program, so it is really a take-up question.
Senator Marshall: It is always higher.
Jacques Paquette, Senior Assistant Deputy Minister, Income Security and Social Development Branch, Human Resources and Skills Development Canada: For the disability grants program, it is the same thing. It is a fairly new program that was established through Budget 2007. We were surprised by the popularity of the program, so even the forecasts were underestimating the take-up. However, this time in the Supplementary Estimates (C) for the bonds, the forecast was right but we were underestimating the grants. There is slightly additional money requested, but in the past we were much more off the forecast compared to the reality.
Senator Marshall: There was an increase for the grants in Supplementary Estimates (B).
Mr. Paquette: That is right. In the past they increased. If I look at last year, for example, the increase requested in Supplementary Estimates (C) for both grants and bonds was much higher. We are getting closer to better forecasts.
The Chair: When you are providing the information to Senator Gerstein and Senator Marshall with respect to default rate in regard to student loans, could you also tell us whether it is the policy of the government to set the interest rate on the student loans to cover for the default, and therefore the interest rate goes down as the default rate goes down? That would be appreciated.
Senator Finley: My questions are brief and for CIDA. When you do your annual budget, do you have a program tied to every single dollar that you ask for? For example in the Main Estimates and then the Supplementary Estimates (A), Supplementary Estimates (B) and Supplementary Estimates (C), do you have a program already tied to every single dollar that you request?
Ms. Stimpson: We have fairly certain plans for our geographic programs. We also do not receive all of our money early in the year the way most departments do. For example, we have a 5 per cent holdback where a certain percentage of our budget is available for decisions and crises, and that does not come back to us until October, November, or December. We have plans. We have a number of commitments by country, and many government commitments. On the humanitarian side we also have commitments. However, we watch for issues, emerging crises, ongoing needs, and other requirements that come up during the year, so we have the flexibility to adjust to what is happening in the world.
Senator Finley: Are you telling me that, apart from the 5 per cent holdback of this — I do not know what the total is for the year, whether $4 billion or $5 billion or whatever — there is no contingency; it is all committed except for the 5 per cent holdback that you will get later in the year anyway and you know you will spend? There is no contingency; is that what you are telling me?
Ms. Stimpson: No, we do set plans, of course, senator, but until those payments are made or agreements are signed, we have the flexibility to move funds from one program to another if there is an emergency, emerging issue in another country, or if there is an international crisis — a call, for example, or a requirement elsewhere.
Therefore, the funds are not tied that firmly at the beginning of the year. We have plans, as any other department would.
Senator Finley: I will go to page 50 of Supplementary Estimates (C) here. This is just a question; I am not trying to be aggressive on this. It says at the bottom of the page that you have a total of $165,740,000 in total authorities available to you within the vote, yet you are here asking, for example, for $70 million for — I would assume because you had not planned for it — an unplanned humanitarian crisis.
Why would you need an extra $70 million when you are already sitting with $178 million?
Ms. Jacovella: In our humanitarian assistance budget, we do not know what crisis will happen but we know crises do happen. We know there is hurricane season, for instance, so there is always money set aside to cover those ones. We know there will be some crises around the world. When a crisis is what we call "catastrophic, " like the earthquake in Haiti and the East Africa drought, our budget does not have the flexibility to address it. However, the Government of Canada has set aside what we call the crisis pool, which is an amount of money available every year if there are some crises that meet those criteria. If not, that money is returned to the fiscal framework.
That is insurance, if you like, so that people can plan accordingly. That $70 million you are referring to is what we are looking for in terms of matching the generosity of Canadians. As you know, the government launched a matching program.
Senator Finley: I understand that. But the point is that any sort of savvy manager or whatever will plan for some kind of disaster; it will be part of the fund. It will be there, accountable if not used, and immediately available to you as opposed to coming back to ask for money for specific programs to respond to a specific issue.
It does not make sense to me. It really does not. Anyway, I will not process this any further. I have only one further question.
Why would you, CIDA, transfer to the Economic Development Agency of Canada for the regions of Quebec $150,000 to support the hosting of the 2012 International Economic Forum of the Americas and the global economy? What does "Americas and the global economy " have to do with CIDA?
Ms. Stimpson: We have supported this conference with our partners at DFAIT for a couple of years now. I am not sure of the details of the agreement or when it started, but I can get that for you.
Senator Finley: Would you please? Thank you.
The Chair: That is shown at page 50. Ms. Jacovella, could you tell us what the amount of the crisis pool is?
Ms. Jacovella: It is $200 million.
The Chair: If it is not used, we should see that reverting back or just not being dipped into, with the result that not all of your budget is used in a particular year. Then it will be back in the next year; is that the way it is handled?
Ms. Stimpson: The $200 million is managed as part of the International Assistance Envelope. CIDA has $50 million of the crisis pool in our reference levels on a pilot basis as a quick-release mechanism. The balance of it is part of the IAE and would be distributed across the departments, depending on the need.
For example, we now need $70 million for the East Africa drought, so we would see a draw on that. We come here and request parliamentary authority to draw $70 million into our reference level from the $200 million.
The Chair: But is it —
Ms. Stimpson: Yes, you would, senator.
The Chair: Each year, $200 million is approved.
Ms. Stimpson: Yes.
The Chair: Then you draw on that, but you do not have to come back and get parliamentary approval. You can draw on it during the year when you need it. Then you come back to us and at the end of the year to supplement that $200 million and make sure it is back up again to ensure you get approval for $70 million; is that right?
Ms. Stimpson: The authority for the International Assistance Envelope is approved through Main Estimates.
The Chair: Yes, $200 million.
Ms. Stimpson: Correct.
The Chair: We will see and deal with that tomorrow. How does your $70 million fit in? We have $200 million approved for this year. You want to draw $70 million of that.
Ms. Stimpson: Yes. The $70 million for the East Africa drought is over and above CIDA's authority, so we need parliamentary authority to increase our reference levels.
The Chair: From $50 million to $70 million?
Ms. Stimpson: Yes, senator. The quick release mechanism — the $50 million —is in our reference levels, but we still need authority; there is still a process to draw down on that.
The Chair: You told us earlier that of the $200 million, $50 million is with CIDA, but you need $70 million.
Ms. Stimpson: Correct; for the East Africa drought.
The Chair: If you can provide us with any written explanation of that, we would be appreciative. This is the first time I have heard of this crisis pool.
Ms. Stimpson: I think that would be helpful to us both, senator.
Senator Ringuette: Regarding this crisis pool, which department and/or unit is responsible for that $200 million?
Ms. Stimpson: The International Assistance Envelope is —
Senator Ringuette: No, which department or unit is responsible for the $200 million?
Ms. Stimpson: I am —
Senator Ringuette: Well, when you ask for $70 million or $50 million, where do you send your memo?
Ms. Stimpson: It is multi-departmental; in other words, it is led by the Minister for International Cooperation, along with her colleagues, the Minister of Finance and the Minister of Foreign Affairs and International Trade; they co- manage this fund. However, let me get you the details on the crisis pool, senator.
The $50 million is the responsibility of the Minister of International Cooperation. It is in the reference levels of CIDA on a pilot basis to provide a quick response to emergencies. However, it still requires the sign-off of colleague ministers before we can use those funds.
The balance of the crisis pool requires parliamentary approval to move it into our reference levels. Regardless, let me get you the details on that. My apologies for not being clear.
The Chair: Okay. Senator Ringuette, I will put you down for the next round.
Senator Ringuette: Let me have just one short question in relation to this.
You indicated that, in next year's estimates, you will have another $200 million. Therefore, you are saying to us that, on a yearly basis, this crisis pool spends $200 million. Is that in the crisis or not?
The Chair: She said she would give us a written understanding of the whole thing, and that is what I think we should have.
Ms. Stimpson: There are a number of pools in the International Assistance Envelope, so we will provide more detail on how the pool is managed.
Senator Callbeck: Mr. Tsang, I think you and some of your colleagues were here when I asked the question regarding EI. On page 61, you have approximately $60 million that is charged by Human Resources to EI. I understand that is worked out by a formula. However, that figure has been the same for the last three years. Would your costs not have changed?
Mr. Tsang: I did hear your previous line of questioning, senator, so I will take you back to your question, if I may, which I think started in 2009-10. Your information was absolutely correct: We did have that same item for same amount in a Supplementary Estimate of 2009-10.
Not shown in the same supplementary estimates of 2009-10 was a corresponding reduction to charge the EI account so that, for HRSDC, the total authority remained exactly the same.
The origin of that was we did an administrative cost allocation study that says some of your costs should move from here to there. We reduced our authority to charge the EI account by exactly the corresponding amount.
If we fast forward to 2011-12, the approval for the $59.7 million that you see for 2009-10 was only for two years at that time. What happened in the Main Estimates of 2011-12 is it got dropped off, and subsequently approval was obtained to reinstate the same amount. That is kind of the roller coaster ride.
We dropped off, so this Supplementary Estimates (C) request reinstates the amount that was reduced. I am doing it from memory, but I believe it was outlined on page 177 of the Main Estimates, so you can make the connection. It is one third of the way down the page, senator.
Senator Callbeck: It seems strange to me that the figure remains the same when we all know costs are going up.
Mr. Tsang: Yes, and this figure represents only the authority to charge the EI account or the authority to vote, but, yes, the costs have gone up. There have been other adjustments to the authority since, absolutely.
There have been other adjustments, for example, for us to charge the EI account for workload, for increased salaries because of collective agreements, et cetera.
Senator Callbeck: There are other amounts besides this $60 million?
Mr. Tsang: Absolutely, very much so.
Senator Callbeck: Where are they? Where do we see these?
Mr. Tsang: As my colleague Mr. Matthews indicated, we see the information in the public accounts when we present those in the fall.
Senator Callbeck: Okay. On the old age pension there is a deduction here, a decrease of $410 million. Do you have an analysis as to why we have that deduction?
Mr. Paquette: For the Old Age Security, it is a statutory program, therefore what you have in Supplementary Estimates (C) is an adjustment, compared to the forecast that we had at the beginning of the year. If you compared, for example, the numbers in Supplementary Estimates (C) now and what was there a year ago, you would have an increase for the three elements: the Old Age Security pension, the Guaranteed Income Supplement and the allowances.
What you have in Supplementary Estimates (C) is just an adjustment of the forecast that was provided at the beginning of the year, basically.
Senator Callbeck: I realize that, but I am trying to figure out why it is so difficult to figure out the old age pension. If I am right, at the beginning of last year in the estimates we increased by $1.1 billion. Now here we are taking out $410 million, and the new estimates that came out the other day were going to add $1.7 billion. I am at a loss to figure out why we are adding and then subtracting and then adding again.
Mr. Paquette: We are dealing with a significant population. For the Old Age Security, for example, we are talking about 4.9 million people, so at the beginning of the year, with the help of the chief actuary, basically the Department of Finance is trying to predict not only how many people will reach age 65 but also we are talking about the entire population of seniors who will live during that year, people who will remain in Canada, because some might leave, and some might decide not to collect their pension.
Regarding the adjustment, if we look at the decrease, if I am talking only about the pension, the OAS, part of it is that the number of beneficiaries was slightly lower than expected. Instead of 4.933 million, as was planned at the beginning of the year, we have 4.911 million people.
Senator Finley: You are talking about a budget of $35 billion, $40 billion and a gap, if you like, of about 420. What is that as a percentage of forecasts? About one and a tiny little bit?
Mr. Tsang: Yes.
Senator Finley: That would be regarded as a pretty high degree of accuracy in most areas, would it not? Thank you.
The Chair: Thank you for that clarification. That is helpful.
Senator Callbeck: On the student loans, you talked about the six-year period and once that goes by you have no way of collecting the loans. You said that 98 per cent of what we are writing off here is because of that. What about the other 2 per cent that we are writing off?
Mr. LeBrun: The other 2 per cent comes from several factors. It could be something related to bankruptcy, undue hardship — students that really cannot afford to make those payments given their personal circumstances — a small percentage of deceased students or permanently disabled. The balance, if you will, comes from that, and a small balance we write off, anything under $20 that is left outstanding we will usually, at the service provider, write that off because the cost of collecting is too great, given the low value. The balance is made up of that.
Senator Callbeck: You mentioned working with Revenue Canada on this, and I assume you mean there that you can recoup an income tax refund. How many times is that done? Do you have any figures to give us?
Mr. LeBrun: I do not, but I can provide that.
Senator Callbeck: Could you get those figures for the last five years? Also, how many times has there been legal action in the past five years?
The Chair: Thank you Senator Callbeck. I will put you on round two.
[Translation]
Senator Hervieux-Payette: I was on the banking committee when we studied this six-year limitation. Do you think that is the right limitation period? Today, would you suggest a longer limitation period, 10 years, for example?
I know that would mean keeping a debt on the books longer, but given the current employment situation, among other things, it might perhaps take longer than six years to recover the money.
It seems to me that all these loans are made by the banks, which get paid fees so they can administer this program. Do they play a role in recovering this money?
Can you tell us specifically when the government steps in to recover the debt? Is it immediately upon default in payment or does the bank have to make an effort and the government steps in after that?
Mr. LeBrun: The $162 million to be written off from the debt is loans made directly by the federal government. It does not include the loans made by the banks.
In Quebec, things are not the same as at the federal level, where the government does the financing directly, because they work with the financial institutions. You are asking whether there are measures taken before the six-year period has expired. Certainly, for these loans, we look at all options over several years. We work with a services supplier; we have programs available for students to help them repay their loans. So it is only in cases where the students have not made any payments for a nine-month period, for 270 days. After trying numerous times to contact them, by letter or by telephone — we really try to work on these cases. And if there is no action taken after 270 days, that is when the file is transferred to the Canada Revenue Agency, which will institute proceedings. The limitation period you are talking about is when there has been no contact at all for six years, when we consider the loan to be statute barred and we cannot do anything with it — there has been no contact — so we submit it to this committee or to Treasury Board to be written off.
Senator Hervieux-Payette: We might mention in the review that the period might be extended to 10 years, because it is an arbitrary decision made at that point based on the information given. You are telling me that in the rest of Canada it is public servants who administer the program, while in Quebec it is the private sector. The student goes to their bank, they get a loan based on certain criteria, and they have to repay it, and it is the bank that administers the loan.
Mr. LeBrun: That is correct.
Senator Hervieux-Payette: Since I am in Quebec, I did not have the impression that the federal government was so involved in loans.
My next question is about Haiti. I am to go there in about 10 days with a parliamentary mission. I would like to know when we will be able to see the effect of the money advanced by the government. Does that money all go through CIDA or is it done by department?
We know a prison is being built; there are 500,000 people in tents, but now we are going to have prisoners who will have a lovely prison. I am wondering who authorized that. Was it CIDA? And the other programs administered, and the other money? It would seem that this is one of the main beneficiaries of CIDA's money in Haiti. Where have the rest of the funds gone, and under what measures or what programs?
Ms. Jacovella: We can give you more details for Haiti in writing, if you like. Yes, we have been able to see results. As you know, the humanitarian needs were glaring. A lot has been done to alleviate the immediate needs. A lot of work is also being done for long-term development. We are working very closely with the Haitian government and the other donors to make sure there is a coordinated approach. CIDA's programs are very involved in maternal and child health, and in education. With respect to the construction of the prison, personally I am not familiar with this, so we can perhaps send you something in writing to answer your question.
Senator Hervieux-Payette: I think it is important to know about all of the money the federal government is spending to get that country on its feet. If we are going to do an evaluation there, we will need this data. The meeting with the various people who were to provide us with information has now been postponed three times, but my colleagues and I would like to know what Canada has done since the disaster.
Ms. Jacovella: I am sure my colleagues would be prepared to come and meet with the committee to talk about what we are doing in Haiti. It is a very important country.
Senator Hervieux-Payette: I would prefer to have it in writing, to be able to share the information, because the mission will be composed of members of Parliament and senators. We all need the same basic information and it will be useful for everyone.
Ms. Jacovella: Absolutely; that is no problem.
The Chair: This is a subject of importance for this committee as well, not just for the committee that will be travelling there.
Senator Hervieux-Payette: No, no. We will share the information, Mr. Chair.
[English]
Senator Runciman: Maybe I can just pose my question and then they can respond.
The Chair: That would be great. Thank you.
Senator Runciman: I am assuming, with respect to the Copenhagen accord, that the countries that would be recipients of that were part of the accord. With respect to the clean energy project, I would like to know how they are assessed. Is a cost-benefit analysis undertaken with respect to the Canadian dollars that will be invested, and who determines this fund? Are any CIDA funds provided to third parties for work or activities related to China? If yes, we would like the details.
The Chair: Are you able to help us with that, either Ms. Jacovella or Ms. Stimpson?
Ms. Jacovella: Given the time, maybe we could provide more detailed information in writing.
Senator Runciman: That is what I am asking for.
The Chair: That would be very helpful. We are under pressures with timing. This hearing and our report have to be dealt with before we deal with the supply bill that comes at the end of the month; all of this has to be done. If you could work on all of these undertakings and give them priority, it would be very much appreciated.
Senator Nancy Ruth: This question is for HRSDC. If you could send the answer to the clerk, that would be great.
This is about OAS and the GIS. I would like to see a gender-based analysis of these changes in these forecasts with respect to the beneficiaries. You have used phrases like "the forecasted average monthly rate and benefit repayments. " What do the changes in these forecasts tell us about the income of those over age 65 and, in particular, about low- income seniors? I want to know how many are men and how many are women and who is in what category and how much money is there.
The Chair: Do you understand the question? We will look forward to your answer. That was for HRSDC.
Colleagues, we will be having some of our witnesses back again. We have asked HRSDC and they have confirmed that they will be back on Main Estimates. We will be dealing with Main Estimates tomorrow evening for two hours, so you will have more time to deal with the Treasury Board. Tuesday afternoon is HRSDC, and Thursday afternoon we will also have some different government departments. We have asked for National Defence to come back to talk to us on the Main Estimates. If you could pass that along, General Bertrand, that would be appreciated. We will ask for Public Works as well, since there were a number of questions on Public Works and Government Services Canada.
We will be meeting tomorrow evening, Thursday afternoon and Tuesday next, and then we will see where we are in relation to this. It will be from 2:15 to 4:15.
Thank you, each of you, for being here, CIDA, HRSDC, Mr. Tsang and team.
(The committee adjourned.)