THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, March 22, 2023
The Standing Senate Committee on National Finance met with video conference this day at 6:45 p.m. [ET] to study the Main Estimates for the fiscal year ending March 31, 2024.
Senator Éric Forest (Deputy Chair) in the chair.
[Translation]
The Deputy Chair: I wish to welcome all the senators as well as the viewers across the country who are watching us on sencanada.ca.
[English]
My name is Éric Forest. I am a senator from the province of Quebec, Gulf region, and deputy chair of the Standing Senate Committee on National Finance. I would now ask my colleagues to introduce themselves.
[Translation]
Senator Gignac: I am Clément Gignac from Quebec.
[English]
Senator Boehm: Peter Boehm, Ontario.
[Translation]
Senator Loffreda: I am Tony Loffreda from Quebec.
[English]
Senator Smith: Larry Smith, Quebec.
Senator Pate: Kim Pate, from here in the unceded, unsurrendered territory of the Algonquin Anishinaabeg.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Dagenais: I am Jean-Guy Dagenais from Quebec.
The Deputy Chair: Thank you. Also with us are Mireille Aubé, Clerk of the Committee, as well as our analysts, Sylvain Fleury and Shaowei Pu, who are supporting the committee in its study of the Main Estimates.
This evening, we are continuing our study of the Main Estimates for the fiscal year ending March 31, 2024, which was referred to this committee on March 7, 2023 by the Senate of Canada.
[English]
To assist with this study, we have with us senior officials from Infrastructure Canada.
[Translation]
Welcome to all of you and thank you for accepting our invitation to appear before the Senate National Finance Committee.
Since there are many of you and to save time, I will introduce the three people who will be making the statements, and I will ask the others to introduce themselves if they are asked to speak.
We will now hear opening remarks from Michelle Baron, Acting Assistant Deputy Minister and Chief Financial Officer, Corporate Services. Please go ahead, Ms. Baron.
[English]
Michelle Baron, Acting Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Infrastructure Canada: Honourable senators, thank you for the invitation.
I am pleased to join you today to discuss Infrastructure Canada’s Main Estimates for 2023-24. I am joined today by Alison O’Leary, Gerard Peets, Glenn Campbell and Janet Goulding. We appreciate this opportunity to discuss our work and our plans for the coming year.
Infrastructure Canada collaborates with all levels of government, Indigenous communities and other stakeholders to build strong communities. Our investments, including efforts to prevent and eliminate chronic homelessness, are helping to create more inclusive and sustainable communities across Canada. Our work means better transit, improved ventilation in public buildings and support for climate-ready infrastructure, sustainable water and wastewater and natural infrastructure. It also means investment in green and more resilient community buildings.
I am proud to be here to discuss Infrastructure Canada’s 2023-24 Main Estimates, as we prepare for another productive year. Infrastructure Canada is seeking $9.6 billion to support our commitment to investment in infrastructure that delivers results to Canadians. The majority of this funding will support projects delivered through 22 programs, including the Investing in Canada Infrastructure Program, the permanent public transit program, and the Canada Community-Building Fund.
[Translation]
The amount sought in the 2023-24 Main Estimates represents a net increase of $294.5 million compared with the department’s 2022-23 Main Estimates.
Specifically, the 2023-24 Main Estimates represent a net increase of $111 million for grants and contributions. This includes increased funding of $1.5 billion for the Investing in Canada Infrastructure Program and the Permanent Public Transit Program, offset by decreases in funding of $1.4 billion, mainly for the Public Transit Infrastructure Fund, the Clean Water and Wastewater Fund and the New Building Canada Fund.
In addition, our Main Estimates for 2023-24 reflect an increase of $80.1 million in capital expenditures related to the Samuel de Champlain Bridge Corridor project, as well as $98.6 million in statutory funding for the Canada Community-Building Fund.
The remaining increase includes $4.8 million in operating expenditures related to new programs announced in Budget 2022 to deliver ventilation projects, the Canada Healthy Communities Initiative, and support and oversight for the procurement process for the High-Frequency Rail project.
[English]
In the year ahead, our department will provide targeted investment in resilient infrastructure, green and inclusive community buildings, community assets, and water and wastewater. These investments will strengthen local economies and protect our communities and environment, enhancing Canadians’ quality of life while driving toward a net-zero-carbon, climate-resilient future.
We will continue to make significant investments in public transit, including funding for zero-emission buses and active transportation and the development and implementation of permanent public transit funding to ensure sustainable mobility, create jobs and establish more prosperous and accessible communities. In addition, we will support communities and organizations to prevent and reduce homelessness, including Indigenous and veteran homelessness.
[Translation]
That is a glance at some of the work we are doing at Infrastructure Canada. We are proud of all that we have accomplished for Canadians, and of the role we continue to play in building a greener, inclusive and sustainable future.
I look forward to answering any questions you may have about our work and our commitment to Canadians.
Thank you.
The Deputy Chair: Thank you very much.
Before I pass the floor over to the next speaker, I would like to have the three senators who just arrived introduce themselves, for the benefit of Canadians.
[English]
Senator Bovey: Patricia Bovey, a senator from Manitoba.
Senator Duncan: Pat Duncan, senator from Yukon.
[Translation]
Senator Galvez: I am Rosa Galvez, an independent senator from Quebec.
The Deputy Chair: Thank you.
Now, we will hear from Paul Mason, Senior Vice-President of Client Solutions at the Canada Mortgage and Housing Corporation, or CMHC.
[English]
Paul Mason, Senior Vice-President, Client Solutions, Canada Mortgage and Housing Corporation: Thank you for inviting us to be here today. It’s an honour to be here on the traditional, unceded territory of the Algonquin Anishinaabeg people.
We appreciate the opportunity to discuss CMHC’s work in administering federally funded housing initiatives — work that will be supported by the 2023-24 Main Estimates referred to this committee.
Suitable housing — a home we can afford and that meets our needs — is a prerequisite for each of us to participate in society.
[Translation]
It is the place from which we stand up and take part, and the place from which, ideally, we can give back. Yet too many struggle to meet that most basic of needs.
This is not a uniquely Canadian problem. Our partners in the G7 and across the developed world are struggling with the cost of housing, driven up by a range of factors — most recently by inflation, supply chain disruptions and more.
CMHC’s research and analysis have continually pointed to a basic fact: supply is failing to keep pace with demand, and this has been true for some time.
In response to this supply gap, the Government of Canada launched the National Housing Strategy in 2017, a 10-year plan currently backed by more than $82 billion in investments. These funds take the form of grants, loans, innovation support, research and more.
[English]
Spending on the strategy is broken down in the main estimates by program or initiative. These include, for example, funding for the new construction and repairs of lodging under the National Housing Co-Investment Fund; funding to support the First-Time Home Buyer Incentive, which gives would-be home owners help with their down payment; and funding for the Housing Supply Challenge, which encourages and supports innovative solutions to building new homes.
We are nearly halfway through the strategy’s timeline, and we are on track on a number of its measures. We have committed nearly 50% of the strategy’s funding. With that funding, we have reached or exceeded 50% of most of its targets. This includes supporting the creation of 120,000 new housing units out of the strategy’s total target of 160,000 and supporting the repair of more than 290,000 homes — nearly reaching the target of 300,000. But the housing need persists, and so we recognize that we must do more. We must go further. The spending outlined in these main estimates will help us do that.
In the years since the strategy was launched, we have continually expanded and adjusted it, reacting to changing circumstances and feedback and building on what works. For example, in response to feedback from partners, we have simplified our processes that we found to be too cumbersome and bureaucratic. In some cases, we have cut processing times in half. That feedback has also influenced new program design. This was the case for the Rapid Housing Initiative, which was created to get affordable homes built quickly. It has consistently exceeded its targets, and that success has led to the program being extended twice.
To date, with a budget of $2.5 billion, we have supported the creation of more than 10,000 new homes — well beyond the original target of 7,500. Round 3 of the initiative is now under way, with $950 million of the $1.5 billion approved for the program profiled in these main estimates. In total, the third round is expected to create at least 4,500 more affordable homes for Canadians in severe housing need.
These are big numbers, but to make it real, I’d like to talk about just one of those homes: Brenda Blanchard’s house. Brenda moved into her new home in Cambridge, Ontario, a year ago, after five years on a waitlist for seniors’ housing. Her new place is innovative — made from repurposed shipping containers — accessible and affordable. Most importantly for her, she says it’s enabled her to retain her independence. With funding under the Rapid Housing Initiative, the Region of Waterloo was able to provide this affordable and accessible housing solution to Brenda and five other seniors.
That housing project, the Rapid Housing Initiative, and indeed the entire National Housing Strategy, all depend on the strength of our partnerships in the housing sector. We work collaboratively to ensure that the expenditures outlined in these main estimates are spent wisely and effectively.
I thank you again for your attention today, and I’m happy to answer any questions you may have.
[Translation]
The Deputy Chair: Thank you very much.
Now, we will hear from Douglas McConnachie, Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector, Innovation, Science and Economic Development Canada, or ISED.
[English]
Douglas McConnachie, Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector, Innovation, Science and Economic Development Canada: Honourable senators and officials, thank you for the invitation to discuss the 2023-24 Main Estimates for Innovation, Science and Economic Development, ISED.
I would like to begin by acknowledging that I am delivering these remarks from the unceded traditional territory of the Algonquin Anishinabeg people.
[Translation]
Joining me today are Mark Schaan, Senior Assistant Deputy Minister of the Strategy and Innovation Policy Sector, and my two colleagues from the Strategic Innovation Fund, John Fox and Vien Huynh-Lee.
We are pleased to be here today to present an overview of the authorities that are being requested in the 2023-24 Main Estimates.
[English]
In the upcoming fiscal year, ISED will continue to foster economic conditions to support Canadians and Canadian businesses, to help them recover from the pandemic and to continue to grow and thrive on the global stage. ISED will also continue to work with its portfolio organizations and other federal partners to position Canada as a global innovation leader by fostering competitive, sustainable and inclusive growth through a variety of initiatives.
[Translation]
ISED has requested $5.9 billion in total authorities in the 2023-24 Main Estimates, which represents an increase of $67.3 million over 2022-23. This increase is primarily attributable to new priorities that were announced in previous federal budgets. With this funding, ISED will continue to prepare the Canadian economy for the future by creating jobs and attracting new investments, investing in the development of clean technologies, fostering digital adoption by businesses, supporting rural and remote communities, growing the tourism sector, and helping Canadian businesses to prosper in the knowledge-based economy.
[English]
The most notable increase to ISED’s authorities includes $641.1 million to support the Net Zero Accelerator Initiative. These investments will be delivered through the Strategic Innovation Fund to promote new technologies to meet Canada’s 2030 greenhouse gas emissions reduction targets and its 2050 net zero emissions goal. ISED will also work to build on Canada’s competitive advantage in the fields of critical minerals, batteries and electric vehicle manufacturing.
Furthermore, $160.3 million will support the further growth and development of Canada’s Global Innovation Clusters. Building on their success to date, the clusters are now entering a new phase as they look to position Canada in the future economy and global markets.
Additionally, $81.0 million is for the expansion of the Universal Broadband Fund. ISED will continue to fund projects to bring high-speed internet to all Canadians, including those in rural and remote communities. We continue to be on target to reach our goal of ensuring every Canadian has access to high-speed internet by 2030.
The $45.7 million to renew and expand Innovative Solutions Canada, ISC, has a single program window that can support both early- and late-stage research and development through an interdepartmental secretariat. ISC supports the government’s commitment to make Canada a global innovation leader and build a more resilient and inclusive economy through increased support for Canadian small businesses.
Finally, $24.7 million is for ElevateIP to help business accelerators and incubators provide Canadian start-ups with better access to professional intellectual property services.
[Translation]
In closing, I would like to reaffirm the commitment of ISED to maintaining strong internal controls and reporting mechanisms to ensure the sound stewardship of the funds that have been entrusted to our care. We will continue to work with Canadians in all areas of the economy and in all parts of the country to improve conditions for investment, to enhance Canada’s innovation performance, to increase Canada’s share of global trade, and to build a fair, efficient and competitive marketplace.
[English]
Mr. Chair, I thank the committee for giving us an opportunity to meet with you today. My colleagues and I will be very pleased to answer any questions you may have at this time. Thank you.
The Deputy Chair: Thank you very much for your statements.
[Translation]
Now we will proceed to questions. I would like to tell senators that you will have a maximum of five minutes each for the first round and a maximum of three minutes each for the second round. Therefore, senators, please be direct with your questions, and witnesses, please respond concisely. The clerk will inform me when your time is up. By the way, everyone stayed within their allotted time for opening remarks.
[English]
Senator Marshall: Thank you to all the witnesses for your opening remarks.
I want to start with Mr. Mason from CMHC. You mentioned in your opening remarks the Rapid Housing Initiative. I actually spoke about that in the Senate last June when we got our budget. In 2021, there was $1.5 billion being set aside for 4,500 new, affordable units. Last year, $1.5 was allocated for 6,000 new, affordable housing units. I think there was another program with $10 billion in 2022 for 100,000 new housing units. The departments provide departmental results reports on what they’ve achieved during the year, but I’ve never seen a report card or anything of that nature from CMHC. I am interested in knowing more. These are just projected numbers, so I am interested in what actually got built.
Then, in January, I saw there an article in the Canadian press about the majority of affordable homes approved under a federal program not yet built. It referred to the Rapid Housing Initiative, which is the one I was interested in.
Is there anything on your website, or do you issue a report to indicate how much money has been provided to you, what your commitment is in terms of units, how much have you actually spent and how many units have been built and occupied? The impression I get is that there are delays, but where is that information? How do we as parliamentarians follow the progress of all these programs that are building houses?
Mr. Mason: Thank you very much for the question.
We do publish our results on our website — it’s called PlaceToCallHome.ca — where we do publish the advancement of spending, as well as the completion of both buildings and repairs.
On the Rapid Housing Initiative specifically, the first two rounds of Rapid Housing allocated $2.5 billion with a target of 7,500 units. We have approved applications for over 10,000 units, so exceeding what the program originally intended to build. As of right now, we’ve completed building about 2,000 of those units.
Senator Marshall: So when were you supposed to have the 10,000 units built? I thought it was 12 months.
Mr. Mason: Thank you for the question.
Originally, the program was indeed intended to build within 12 to 18 months of the original approval date. That, of course, was right during the COVID period, so a lot of these builds did experience delays both in terms of labour and supply chain. We have been working closely and seeing completions starting to come. This is still rapid by most measures. When we talk about new housing developments, especially multi-unit housing developments, it can take up to 10 years in a lot of municipalities from start to finish to get new housing built.
Senator Marshall: How many houses are actually built and occupied? There is a shortage of housing, especially for people who have low incomes. They’re waiting years for their houses. It seems like it’s slow to be done. I’m more interested in getting the information on results to see how you’re progressing and whether the homes are being completed and whether people are actually living in them. Where are these houses built? Is that in your report card?
Mr. Mason: Thank you for the question.
We do publish all of our results in terms of the funding that we have committed. We publish that on our website as well. Out of total commitment of a little over 100,000 units, we’ve completed building about 42,000, so about half of the committed buildings have been completely built.
Senator Marshall: Do you indicate where the houses are built?
Mr. Mason: Thank you for the question.
Yes. On our website, we do show on a map of the country with the different locations. We do publish that.
Senator Marshall: I’m from Newfoundland and Labrador. I can see where those houses have been constructed?
Mr. Mason: We do break down the location by province, for sure.
Senator Marshall: But not by community? Because you gave the example of the lady in Cambridge. Just by province.
Mr. Mason: We can definitely provide information on where those are built.
Senator Marshall: Billions of dollars in funding have been provided to CMHC. Can you send the clerk a list of the funding that has been provided over each of the last three years, indicating the program, the dollar amount, the number of units to be built and the actual number that have been built to date? I am interested in how quickly you’re getting those homes constructed.
[Translation]
Senator Gignac: Welcome to the witnesses. I have two questions, and the first is for Ms. Baron. In your opening remarks, you mentioned the high-frequency rail project. I’m trying to understand how the project works. Who is the lead on the file? Transport Canada spoke about it to the committee. The Infrastructure Bank, VIA Rail and you all talked about it as well. I’m just trying to understand, here. Can you break it down for me in two minutes?
Ms. Baron: Thank you for your question. If I may, I’d like to have my colleague Glenn Campbell explain the role our department plays in this major project.
[English]
Glenn Campbell, Senior Assistant Deputy Minister, Investment, Partnerships and Innovation, Infrastructure Canada: Thank you, Mr. Chair and senator.
Infrastructure Canada is pleased to be able to provide technical and other planning assistance to Transport Canada in the delivery of the High Frequency Rail project. Last year’s budget provided funding largely for Transport Canada to support VIA Rail and the Canada Infrastructure Bank collaborating on developing the proposal. Infrastructure Canada has been given roughly $7 million over two years to use our major project experience and work on the procurement, particularly around the pre-development agreement for the private sector partner which we are pursuing to help design the project.
[Translation]
Senator Gignac: I gather that, if it were to go from a high-frequency rail project to a high-speed rail project, you would be involved.
[English]
Mr. Campbell: The project is le train à grande fréquence, so it’s a high-frequency rail project. I will let Transport Canada speak to that.
At Infrastructure Canada, what we’re trying to do is bring forward our expertise on the planning aspect of that project and on how it is financed and procured. Also, Public Services and Procurement Canada is cooperating with us. It is another example of ministries working together, along with Crown corporations, to deliver projects in the public interest.
[Translation]
Senator Gignac: All right. I’ll come back to that in the second round.
My second question is for the ISED officials. In last year’s budget, Ms. Freeland allocated $2.6 billion over four years to establish the Canada Innovation Corporation. I’m on another committee, and we are looking into why Canada struggles with innovation. We are good at R&D, but we lag behind on the innovation front.
Can you tell me how much of the $2.6 billion in funding over four years is earmarked for next year? How will the Canada Innovation Corporation help Canada close the innovation gap in relation to other countries?
Mr. McConnachie: Thank you for your question. To date, our department has received only a small portion of that funding, mainly to plan how the agency will be structured. A month ago, the minister announced that the agency will operate independently from government, which will give it more freedom to make high-risk investments and allow for the transfer of some existing government programs to the agency.
Most of the funding won’t be transferred in these estimates. That will happen next year. The corporation hasn’t been established yet, but its mandate will begin this year.
[English]
Senator Smith: For Infrastructure Canada, Ms. Baron, in your 2023-24 department plan, your organization notes it will continue to provide a total of $3.86 billion over a period of 12 years through the Disaster Mitigation and Adaptation Fund to support the development of infrastructure that withstands climate-related disasters. What I’m interested in is understanding the connection between monies given and results, so most of my questions are fairly direct.
What percentage of the $3.86 billion has been allocated to date? You probably have demonstrations and graphics that we can get access to that give us that information. Could you please provide a list of infrastructure projects that have been funded and in what areas? Do you have tangible data to share with our committee about projects being completed?
When we see large amounts being given to different departments, our interest is to see results, to see the timing of results and to see the success of what’s been accomplished by your department.
Ms. Baron: Thank you for the question, senator. I will turn it over to my colleague Alison O’Leary, who is responsible for this program.
Senator Smith: I have to ask. Were you in a fight, Alison? I didn’t realize that some of our civil servants were boxers.
Alison O’Leary, Senior Assistant Deputy Minister, Communities and Infrastructure Programs Branch, Infrastructure Canada: No, I was not in a fight. Thank you for the question.
With respect to the Disaster Adaptation and Mitigation Fund, you’re absolutely right that we have made good progress with that program. This program does date back to Budget 2018, which is when it was originally funded with $2 billion. Then it was topped up again in Budget 2021 with $1.3 billion and most recently in the National Adaptation Strategy in the fall of 2023 with an additional $490 million. Of those funds, we currently have an intake open right now, which is making available about $1 billion that is left, so doing the math, you can see that we have already committed just over $2.7 billion.
In terms of what the results are for that particular program, as you can imagine, infrastructure projects do take a long time to build, especially when you’re talking about resilience. Early on in the program stages, we look how many projects and what funding has been committed, and as those projects get built over time, that’s when we start to see the results in terms of resilience to communities and increased mitigation and adaptation to climate hazards down the road.
What I can tell you is that we have already announced 83 projects, a very large proportion of which is related to forest fires and flooding, which are certainly high risk for communities across the country.
Senator Smith: Would you be able to give us a one-page summary that you could send to the clerk so that we could see the specifics of the number of projects, location of the projects and who benefits in terms of our communities? Also, anything to do with the Indigenous population in some of our northern areas would really be helpful so we can see the benefits that are being developed and the continuity. When, where, how many, location and completion ratio, where you’re at versus your budget. If you had $3.86 billion, how much — and I realize it’s over time. I realize there were supply problems we had with COVID, but if you could give us a one-pager, that would be very helpful.
Ms. O’Leary: Thank you for the questions.
We can prepare a summary. If you go on our website, even today, you can see a project map that lists all of our projects, but we can certainly summarize that for you.
Senator Smith: Do you have the project map with the actual locations that the project is on?
Ms. O’Leary: We do, yes.
Senator Smith: If you could send us that plus a simple written summary, that would be very good.
Ms. O’Leary: We would be happy to do that.
Senator Smith: Thank you.
[Translation]
Do I have any time left?
The Deputy Chair: You have 30 seconds.
Senator Smith: Someone else can use that time to ask questions, then.
Senator Loffreda: I’ll take his 30 seconds.
[English]
Thank you to our panellists for being here this evening. Thank you, Senator Smith, for the 30 seconds.
My question is for Infrastructure Canada. You did mention, as an objective and a goal, that you want to reduce chronic homelessness. It would be even better if we could eliminate chronic homelessness. You have allotted $11 million in grants in the Main Estimates for Canada’s Homelessness Strategy, which provides funding to urban, Indigenous, rural and remote communities throughout the country. In your departmental plan, you particularly emphasize homelessness experienced amongst Indigenous communities, and this initiative will fund and support organizations that help address Indigenous homelessness through targeted programming. Since assistance is given through those organizations, is there transparency on how exactly these organizations are meeting the needs of First Nations and how funds and resources are being distributed to reduce homelessness rates?
And, also, I’m displeased when I go across Canada. I see that homelessness, even in the urban centres, is increasing, and in every city. I don’t want to mention one in particular. What is your strategy in urban centres? How will this $11 million reduce the chronic homelessness? Is there hope that we can eliminate it altogether?
Ms. Baron: Thank you for the question, senator.
You referenced the $11 million in the Main Estimates. I would also note there is $486 million in contribution that goes towards that program as well. With that, I’ll turn it over to my colleague Janet Goulding.
Senator Loffreda: So given all these funds, it should be eliminating — that’s a lot of funding for homelessness.
Janet Goulding, Assistant Deputy Minister, Community Policy and Programs Branch, Infrastructure Canada: Thank you for the question. I’m happy to speak to the program generally.
Reaching Home is a program that is community based, and we provide funding to over 64 communities across the country. We target our funding in urban areas and for urban homelessness. We have several streams in the program, which I can provide after. I can spend a few minutes doing that. There are six. There are four regional streams.
As I mentioned, we support 64 designated communities. We also have a territorial stream that supports the three capitals in the territory as well as some of the communities outside. We have an Indigenous homelessness stream which supports 30 communities across the country in urban centres, and then we also have a distinctions-based funding stream. The distinctions-based funding is allocated directly to the Métis Nation as well as Inuit and First Nations communities across the country.
There are a number of elements to the program, but I could say, in terms of transparency, all of our designated community entities across the country are required to have community homelessness reports. Those community homelessness reports are published on their websites, and we collect them at the federal level as well and analyze them to look at their results. We can provide more details if it’s helpful to the committee, but there is a lot happening in that space.
Maybe I could just mention briefly that in the coming year, we’ll be launching a new veterans homelessness program. In Budget 2022, together with funding from Budget 2021, we received $106 million over five years to launch a new veterans homelessness program, which we hope to launch this spring. As well, we’re doing some action research initiatives.
Getting to your question, honourable senator, about what we can do to end chronic homelessness, we intend to do some intensive research across the country in eight communities to really look at the systemic issues related to homelessness. As you can imagine, the complexity of this problem is not just around the housing situation, but it involves our mental health service providers, our correctional advisers and our social services system. There are a lot of players around that table to really dig in and unpack what we can do to end chronic homelessness.
Senator Loffreda: If I can add something, I think it’s execution, because if I go to other major cities — I was in the U.S. lately, and it’s not as apparent. We need people on the street to really get involved and get them in the homes and get them in the centres. I think there’s more to it than just working through organizations. Follow-up is so essential. I’d like to see some results on that, and I’ll follow up, especially with all the funding that’s coming through. I think it’s an essential, crucial issue in Canada more and more in all our major urban centres, in the Indigenous communities, and I think it’s essential that we correct those issues.
Ms. Goulding: Absolutely. Maybe I could just add that funding of outreach is key to our program, so the funding that flows through Reaching Home does fund outreach services in communities. It’s absolutely important to meet our most vulnerable Canadians where they are in the streets and offer them the services that they need. Thank you for that comment.
Senator Loffreda: Thank you.
[Translation]
Senator Dagenais: My first question is for Ms. Baron.
Ms. Baron, my ears perked up when you mentioned the Samuel de Champlain Bridge. I’m a Montrealer, and I take the bridge all the time. I have a question about the $80 million in funding, and you may know the answer.
Taking the bridge out of Montreal is quite easy, but getting on the Samuel de Champlain Bridge from the South Shore is anything but straightforward. Will the money be used to complete the on-ramps? The situation is a mess right now, if you ask me. Will the money instead be put towards the deconstruction of the original Champlain Bridge? I believe some of the structure is still there. How will the $80 million be allocated?
Ms. Baron: Thank you for your question, senator. The funding is for the new bridge, not the original bridge.
I’m going to ask my colleague Glenn Campbell to provide more information.
[English]
Mr. Campbell: Mr. Chair, senator, I’m happy to provide an update on the progress of Samuel De Champlain Bridge, which as you know, has been operating for two years, since 2019. We are now in the final completion stage where the money that’s being requested is to complete small works around the project, including landscaping and other aspects of the project, with our private partner.
There is more work to be done in the coming weeks for the opening of the REM to access the central corridor. That funding is separate, so nothing being asked here is for the REM funding. That’s all being paid for by the Caisse de dépôt in that respect.
Also, I’m pleased to say the deconstruction of the old Champlain Bridge is proceeding apace and is almost complete, and that funding is completely separate and covered under JCCBI, the Jacques Cartier and Champlain Bridges Incorporated. We are proceeding with environmentally sound deconstruction and will soon be completing that whole corridor.
[Translation]
Senator Dagenais: Hopefully, the South Shore on-ramps are going to be completed, because it’s rather complicated now.
This is for you again, Ms. Baron.
You talked about your involvement in the high-frequency rail project. You’re going to have to explain to me what high-frequency or high-speed rail is. Currently, in order to develop high-frequency rail, you need new tracks for the train to run on. You can’t use the existing tracks. Is it a worthwhile investment, in terms of saving passengers time if they’re going from Montreal to Toronto, say?
You can’t just add tracks that won’t allow for high-frequency use. I think I have to give up on the idea of high-speed rail. I asked around, and I was told that I wouldn’t see high-speed rail in my lifetime, so I’ll have to be content with high-frequency rail.
Can you tell me what the money is going to be used for? Will it fund the trains or the tracks? I would certainly think high-speed rail requires that tracks be added.
[English]
Mr. Campbell: Thank you, senator. I can speak to what Infrastructure Canada is doing in the support for the funding.
As you know, the government had set aside nearly $400 million for planning works in last year’s budget, of which Infrastructure Canada is a small part of that, as I mentioned, $7 million, or $3.5 million over two years. What we are doing is supporting Transport Canada in the collaborative contracting model that they’re using to engage a private partner, which they’re in the market for now, to basically develop a private partner to look at the planning of the project and to determine, working with the government, what the speed should be, what the access should be and what the overall service, and I think Transport Canada is better placed to speak to the nature of that project. We are very encouraged, though, by the opportunity to collaborate with our private sector in Canada and to work together with them as to what’s the art of the possible in terms of the overall project and come back to the government.
[Translation]
Senator Dagenais: You say that you’ll be working with partners in the private sector, but do you have a clear timetable for completing the studies? I’ve noticed that there are a lot of studies, but that they tend to deliver little in the way of results.
[English]
Mr. Campbell: I’ll let Transport Canada speak to the broader planning timelines and objective. Again, I would note that the project is in the market with a request for qualifications for private partnerships now to move forward with a partnership to work with both the government and Canada Infrastructure Bank on further planning of that project.
Senator Bovey: Thank you all for being here.
My first question is for Innovation, Science and Economic Development Canada. Mr. McConnachie, you spoke about the economy, jobs, rural and remote and knowledge-based. I contend that, in the last few weeks, every single one of these was negatively affected by the recent arrests in the world’s largest international art fraud here in Canada with regard to the work of Norval Morrisseau.
I’ve been doing considerable work across the country to see how this situation can be — I’m not sure you can prevent it, but what can be done. I’ve talked to a number of technical companies that have some really interesting ideas of digital implantation of chips on works at point of creation, whether it’s north, south, east, west. It’s happening all across the country. This is new technology, and it’s technology that artists who work alone at their own businesses, many of them in remote areas, may not have access to or don’t have the money for. They’ve lost millions of dollars’ worth in sales as a result of Canada being a very, alas, artistically-fraud-based country at the moment.
I’m wondering where this research and these technical possibilities would fit into the work of Innovation, Science and Economic Development, because I think it touches all three aspects of the ministry.
Mr. McConnachie: Thank you for the question.
It’s a provocative question, and certainly when it comes to fraud risk management, it’s something that I as a CFO take very seriously. It is an interesting case in that regard, probably unprecedented.
I will ask my colleague Mr. Schaan to speak to it, not because we necessarily have the expertise at ISED but because Mr. Schaan is a bit of an aficionado and is quite well connected in the community. I think he can actually provide some interesting insights.
Senator Bovey: We’ve connected before.
Mark Schaan, Senior Assistant Deputy Minister, Strategic and Innovation Policy Sector, Innovation, Science and Economic Development Canada: Thank you, senator, for the question.
I think there are some interesting linkages. Obviously, broadly speaking, we as a department are committed to the development of innovative technologies in a whole host of domains that potentially can come to bear on all the markets of the world, including the art market. There are a couple of linkages I would make, though, quite specific to the question you asked.
In the intellectual property strategy that the government launched, a number of those elements actually speak to education awareness and capacity building across the whole of the domain, and the specific piece that’s actually related quite uniquely to the question you raised is actually the Indigenous Intellectual Property Program that we launched as a function of that strategy, which is creating capacity-building opportunities with Indigenous organizations. That program was expanded to go beyond the distinctions-based organizations to allow for projects that actually emanate out of individual Indigenous communities and academics to further the possibilities for Indigenous protection of cultural, traditional expressions as well as intellectual property more generally. The broader strategy does speak to the notion of educational awareness and capacity building across the whole of the domain of those creating innovations. It’s not a specific fix in some regards in that there is not a funding stream necessarily that’s dedicated, but there is a funding stream related to IP legal clinics at universities working with a number of small- and medium-sized enterprises and creators and innovators to get that IP support, which may or not be formalized in the sense of actual protection of copyright, but actually potentially some of these technological solutions that might include things like IP management systems.
Senator Bovey: I think the technical side is appropriate. I’m working on the copyright side and intellectual property and Indigenous artists and other aspects of this, because it’s huge. I’m specifically thinking of two companies who have come to me with ideas of digital technologies that might be able to prevent this by involving themselves with the artist and their studios. To develop their projects, to test their projects, they need innovation support. I know that at least one of those companies has been in touch with Innovation Canada but has not had a response to their inquiry. My job is to connect Canadians and work on behalf of Canadians, so I’m saying, “Help me.”
Mr. Schaan: Absolutely, and I think there are a couple of potential avenues. The National Research Council’s industrial research and assistance program does fund projects related to development of innovations. Innovative Solutions Canada, which is more on the procurement side of things, does cultivate potential innovations that might come to bear in a particular zone. There are a couple of those that might be potentially useful.
Senator Bovey: I will ask if perhaps we can get together in a forum where I can be more specific and maybe we can suss this out.
Senator Pate: Thank you to all of you for being here.
This is not so much a question but a request. You mentioned the Cambridge situation, and that made me think of how much of the housing is affordable housing and the issue that, of course, has been in the media of late around housing that it is available but not meeting the housing stock to population ratio, in particular when it comes to affordable housing. In the information that others have asked for in terms of where the housing is across the country, where it is planned, could you include the affordability component in terms of how you are building in affordability? The example you gave in Cambridge is one of affordable housing, but there is also accelerator money going into not necessarily affordable housing.
Also, do you have a breakdown on how much is going into corporations who are engaged in profit making in the so-called affordable housing and rental markets? How much of that is going to those corporations? If you know right now and can respond, that is great.
Mr. Mason: Thank you for the question.
Each of our programs has criteria around affordability, and they target different depths of affordabilities. The Rapid Housing Initiative, which we talked about earlier, is the one that drives the deepest level of affordability of all of our programs. We define affordability as spending no more than 30% of your before-tax income on lodging, and everything under the rapid housing program would meet that criteria, at the very least. Each of our programs has those criteria, and we publish the number of units delivered under those programs. That would be the breakdown.
Senator Pate: But not the costing of accessing those, and 30% of $150,000 is a very different situation and not necessarily affordable for the majority of people looking for housing.
Mr. Mason: Thank you for the question.
We do, first of all, publish the criteria of affordability within each of or programs, and we’re able to actually, in lots of cases, exceed that affordability. To give you a real-life example, with the national housing co-investment fund, which is one of the largest programs we administer, the average rent delivered under that, and that’s not our most affordable program, is $650 a month average rent. That is maybe not the deepest level but is still quite an affordable rent. Those are the types of results we’re delivering at this point.
Senator Pate: Do you have any examples of that? I was looking in B.C. around Victoria at some of the issues, and it was very interesting. Some of the old apartment buildings that the requirements had CMHC guidelines that I think have evolved out. If you have any recommendations for the committee as to some of the mechanisms that might be brought in to enhance affordability, that would be great.
Mr. Mason: Thank you for the question.
I think one thing to add is that where we give grants as part of our programs, those mostly go to not-for-profit housing providers, and we work with other levels of governments — municipalities, provinces and territories. Some of our programs are designed to drive supply in general, which has a less affordable component, as there is always some, but those are repayable loans, so they have to be paid with interest to CMHC.
Senator Pate: Thank you.
Ms. Baron, in terms of access for First Nations communities, the infrastructure gap between services and in particular transportation services, how much of that allocation has happened and how much is going to capital versus ongoing expenditures in terms of operational? We’ve heard in other contexts of concerns about capital monies being provided but then no operational monies for upkeep and operational expenses. In particular, how much of what has been mandated, the allocation of funds, is being looked at for transportation options, in particular to deal with the issues arising from the National Inquiry into Missing and Murdered Indigenous Women and Girls and that the department has committed to in terms of the safety of Indigenous women, girls and two-spirited people?
Ms. Baron: Thank you for the question, senator. I will pass it on to Alison O’Leary.
Ms. O’Leary: Good evening, and thank you for the question.
At the Department of Infrastructure, we have a number of programs that do support infrastructure needs for Indigenous communities. I would point to our Investing in Canada Infrastructure Program which is administered through bilateral agreements with the provinces and territories. We have incentives in that program for higher cost shares for projects that are benefiting Indigenous communities.
I would also point to our more recently launched programs where we have specifically set aside a carve out specifically for distinctions-based infrastructure projects for those communities. For example, in the most recent funding for the Disaster Mitigation and Adaptation Fund, we have a carve out of 10% for Indigenous communities, similarly for the green inclusive buildings program as well as for our natural infrastructure fund and our active transportation fund and our rural transit solutions fund. Those last two are potentially getting at some of your questions in terms of transportation options and solutions for Indigenous communities.
When it comes to missing and murdered Indigenous women and girls, I think you’re talking more than about roads and potentially connectivity and broadband connectivity and cellular connectivity along those routes, so I would point to our rural and north infrastructure stream under the Investing in Canada Infrastructure Program where those projects are eligible if they are prioritized by provinces and territories, and certainly on our website, on the map mentioned earlier, you can see all of those projects published there.
[Translation]
Senator Galvez: Thank you for being here this evening. Sorry for being late. My apologies.
[English]
I am interested in the same question for Infrastructure Canada and for Innovation, Science and Economic Development. Can I ask the same question? I’m interested in eligibility, and I’m so happy that you mentioned that we need to care about the environment and we need to get to net zero and we need to reduce our greenhouse gases. That’s very fantastic. What are you using for eligibility? Is there any green public procurement? Are you using lifecycle analysis? How is it that you adapt the new infrastructure to climate change? Are you using the new taxonomy for the transition?
Mr. McConnachie: ISED has a number of programs that focus on climate change and greening, but the most significant is the Net-Zero Accelerator and aspects of the Strategic Innovation Fund. Perhaps Mr. Fox can elaborate on the criteria that we use to identify and classify those projects.
John Fox, Director General, Strategic Innovation Fund, Innovation, Science and Economic Development Canada: Sure. Thank you, Doug.
Two years ago, $8 million was announced in the budget for the Net-Zero Accelerator. It was an initiative trying to advance several objectives at the same time. First and probably primarily, there was a call to action looking to decarbonize large emitters. We have projects, for example, with Dofasco and Algoma looking to take the coal-fired emissions out of those big factories —
Senator Galvez: But what are the criteria you use to determine —
Mr. Fox: Under that stream, it’s largely just megatonnes of reduction on an annual basis, measured and verified through ECCC’s reporting. In both the Dofasco and Algoma cases, we are taking about three megatonnes annually out of the emissions for those companies.
For the other, we are also looking at industrial decarbonization. That is transformation or movement away. We’re supporting, for example, the electrification of the transportation system. We have been working with aerospace companies to develop new technologies to reduce GHG emissions for airplane manufacturers. We work with companies — they were announced in 2020-21 — like CAE, Pratt & Whitney and GM. We finished a round of negotiations with all of the major automobile manufacturers in Canada — Honda, General Motors, Ford, Stellantis — to convert their factories from traditional gas-powered vehicles to electric vehicles. We feel that the sale of those vehicles and getting those into the market will reduce —
Senator Galvez: You go sector by senator?
Mr. Fox: We’re sector-agnostic. We could do it in any emitting sector. We look where the industrial transformation needs to occur, and we work with companies that want to invest in technologies that take them to low emissions.
We did a callout for high emitters, and most of the new companies or companies’ next strategies they are trying to implement are in carbon capture and utilization. A lot of companies are looking at technologies that will take the carbon they emit and move it to another forum or store in some sort of form that is —
Senator Galvez: I have another question, but I would like — yes.
Gerard Peets, Assistant Deputy Minister, Policy and Results, Infrastructure Canada: I am very pleased to talk about how our programs intersect with climate change and some of the conditions and approaches we have to encourage proponents to lower carbon.
The first is the climate lens. The climate lens is a tool we have used in our programming to ensure, both from a GHG mitigation standpoint and a climate-change adaptation standpoint, that those climate considerations are taken into account. When we look at some of those criteria, those climate lenses are essential in order to receive funding. As part of that, for a project that does reduce carbon, an analysis has to be done in terms of what the GHG reduction is.
We are concerned, as we look more to the future, with embodied carbon as well as the carbon that results from the use of the asset, so our minister, Minister LeBlanc, has in his mandate letter to support the government’s pursuit of “buy clean” that involves the use of building materials that have a lower lifecycle cost in terms of carbon. That is an initiative we’re pursuing in conjunction with the Treasury Board Secretariat and with PSPC, the department that procures for the federal government, as well as other departments that fund infrastructure.
I will note that we have specific programs that are very much designed toward driving GHGs down. There is the Green Inclusive Buildings, a program that focuses on deep retrofits in part, and those deep retrofits are where the built environment, which is a significant component of Canada’s GHG emissions — that is where you can get the GHG savings there. With transit, all transit contributes to mode shift in terms of giving people an option to get out of their cars and into public transit, which in and of itself saves GHG emissions. As well, we have the Zero-Emission Transit Fund that is explicitly aimed at replacing diesel fleets with zero-emission fleets.
Senator Boehm: My question is for Innovation, Science and Economic Development.
I want to ask about the request for $5 million to contribute to the University of Waterloo for the purpose of the Institute for Quantum Computing. Those are in quotation marks. The same amount was requested in the Main Estimates last year and in 2021-22. I’m thinking about this because, on Monday, at a meeting of the Standing Senate Committee on National Security, Defence and Veterans Affairs, I had an exchange with one of the witnesses, Kristen Csenkey, who is an expert on, among other things, quantum computing and quantum threats. We discussed both the upside and the potential dangers as they relate to the ability of, for instance, malign actors to attack civil and defence infrastructure, even the braking systems in electric vehicles.
I will come back to that preamble in a moment, but how much money in total, and since when, has ISED contributed to the Institute of Quantum Computing? Is there a planned cutoff, or is this funding to be ongoing? Do you have specific goals and desired outcomes in contributing to the institute beyond encouraging research and the general mandate as identified in quantum technologies? Are there any specific technologies in which your department is interested?
Mr. McConnachie: Thank you for the excellent question.
The investments you referred to are part and parcel of a broader quantum strategy announced by the government as early as Budget 2021 and that is continuing to bear fruit in a number of investments. As the honourable senator rightly points out, this is a strategic technology and an area that Canada has identified as a key core competency for the future.
I’m not a quantum expert myself and, unfortunately, we don’t have the ADM responsible for that sector with us who could speak to the targeted investments and the specific capabilities. However, more generally, it is an area that we will continue to favour for investment. My understanding is that we fully committed the funding for the quantum strategy already, out the gate — it’s oversubscribed. It is something we will be looking to continue funding.
Perhaps Mr. Schaan has additional context.
Mr. Schaan: Very quickly, commercialization of quantum technologies is a key feature of the strategy. The research component is important. However, just as we have done on AI and some other strategic areas, the shift will continue in order to ensure it moves beyond the academic component into the actual development of technologies. That’s hardwired to some other aspects, such as through work on our cyber efforts to try to ensure critical infrastructure has the same cyber capacities, including in areas like quantum.
Senator Boehm: I’m not a quantum expert either, but I do sense that the concern is that the quantum side will advance more quickly than the algorithm side, and then there will be an “outsmarting” going on. That’s where it gets into the security issues, particularly with critical infrastructure.
Perhaps this is for the other ADM, or you can let us know in writing, but is your department, and how are you, working with the institute and with the Department of National Defence to mitigate any threats to research and development in those quantum technologies?
Mr. McConnachie: Thank you again for the question.
We could follow up with more specifics on the nature of the work being done with the university. I can say that it would be outside the remit of ISED to be working with DND. That would more likely be through Public Safety Canada and the Canada Cybersecurity Strategy, probably in connection with the Canadian Security Establishment. Perhaps directing questions to those organizations would be more in line with what you are requesting.
Senator Boehm: Thank you.
Senator Duncan: My question is for Infrastructure Canada. I would like to follow up. Senator Marshall asked for specific information. Could we also add to that list the regional breakdown, where the houses have been built? That was missing from the list.
I would like to follow up on Senator Smith’s question looking for information. When I look up Infrastructure Canada on the interactive listing on the Canada Plan Project website, there is a long list of projects taking place in the Yukon — which is where I am from — in a number of different streams of projects. I can locate the amount of money invested by Canada and the total amount of the project, but it doesn’t tell me if the other portion of the cost is carried out by the Yukon government, the Yukon self-governing First Nations or if it’s a blend of those. There is no ability to access the financial details beyond that, and there is a no progress report on the project. Some of them are under way, I would believe, but I’m looking for employment numbers and the partnerships with Yukon First Nations and if it has been completed on time or within budget.
The principles by which the National Finance Committee operates are accountability, transparency, reliability and predictability. I can pick up the phone and call the Yukon First Nation chief in Vuntut Gwitchin, Old Crow, and ask her how the project went, but I would like to be able to find that information on your website. If you could provide us with the information or if you could indicate where I have missed it on the website, that would be terrific. We could have that answer in writing, please.
Ms. Baron: Sure.
Senator Duncan: I would like to follow up with Innovation, Science and Economic Development on the issue of connectivity in Canada. In the list on your website of selected Universal Broadband Fund projects, there is none in the Yukon. They are everywhere else, but none in the Yukon. I’m optimistic that that is because there has been significant investment by the territory and we do have access and we are building a second line, the backup for when the line gets cut in Fort St. John. I would like confirmation. Is it because the Yukon has been proactive in linking the territory? Is that why we’re missing?
Mr. McConnachie: Thank you for the question.
I would imagine the territory is being quite proactive. Obviously, as the honourable senator is aware, the challenges of infrastructure projects in the North are considerable. When it comes to broadband internet, one of the difficulties is the geographical dispersion of the area, which generally makes it such that wireline broadband is not the most cost-effective format for delivering high-speed services.
A lot of the current investment being done in the industry right now is through low Earth orbit satellites — Starlink being an excellent example — is providing these services at a much more cost-effective rate. The Department of Innovation does have investments with LEO satellite providers that are seeking to build that at a much more economical rate for the consumer than we can actually lay out fibre line, and it’s at equivalent speeds.
Senator Duncan: My specific question is every other province and territory is listed but the Yukon on your website, with funding. Is it because we have already done this? We do have major issues with Starlink and the connectivity. If the Yukon is not receiving any funding under this Universal Broadband Fund, are we getting the funding from somewhere else, or why aren’t we there?
Mr. McConnachie: Thank you again for the question.
Unfortunately, I don’t have the breakdown of funding by province with me, but I would be pleased to come back to the committee with more details. If there have been project completions and funding allocated, we will specify that for the territory of Yukon.
Senator Duncan: One of the performance indicators on your website is the percentage of Canadian households with access to minimum internet speeds of 50/10 Mbps to be 98% by the end of the fiscal year 2026. Is that meant to be read that 98% of rural and northern Canadians will also have this access, or is it just 98% of southern Canada?
Mr. McConnachie: Thank you again for the question.
The target applies to all Canadians. The 2% recognizes that there are some remote regions that are extremely difficult to serve, even with non-wireline investments, but the target is 98% of Canadians by 2026, and we are clearly on track towards meeting it.
Senator Duncan: No matter where they live?
Mr. McConnachie: No matter where they live.
[Translation]
The Deputy Chair: I have a question for Mr. Mason about housing. The housing situation is critical in a tremendous number of cities and communities across Canada. In a balanced market, the vacancy rate is about 3%, but the vacancy rate in a lot of cities right now is less than 1%. The municipalities are partners in all this. Having been a mayor at one time, I know that CMHC played a huge role in supporting municipalities with the affordable housing supply.
With building costs skyrocketing as they are, are you doing anything to provide more support to municipalities, housing co-operatives or not-for-profit organizations looking to provide clients in precarious housing situations adequate and affordable housing?
[English]
Mr. Mason: Thank you very much for the question.
It is true that we do have a large supply gap in general in Canada. Our own research at CMHC has indicated that we need to build 3.5 million more homes over the next seven years than we were originally planning to build. At the same time, we have seen increases over the last year. The cost of borrowing money — the interest rates — has gone up, and the cost of construction has gone up as well.
At CMHC, we administer a number of programs that deal with some of the questions that you ask. In fact, on Friday of last week, our minister announced a new program called the Housing Accelerator Fund, which is targeted specifically at municipalities to help them remove barriers to growth and supply, and particularly affordable supply. It’s a problem we’re trying to tackle at both ends. There is a general supply gap at all levels of the market, and then there are issues of deeper affordability. As an example, we have a program called the Rental Construction Financing Initiative, which is generally focused on more supply with some affordability. Then, on the other spectrum, we have programs such as the Rapid Housing Initiative, which targets much deeper affordability.
For the government to incent deeper affordability requires an investment of grants and contributions. The more grants and contributions we can give, the deeper affordability we can get in our housing.
[Translation]
The Deputy Chair: I think that’s very important, because on top of the skyrocketing building costs, platforms like air Airbnb are taking housing away from the supply, exacerbating availability and affordability pressures. That’s a huge issue communities right across the country are facing right now.
We will now begin the second round.
[English]
Senator Marshall: My question is for Innovation, and it’s a follow-up to what Senator Duncan was asking about the 98%. How do you come up with the 98%? Who are you leaving out?
Mr. Schaan: On our website, you will be able to indicate from the mapping exercise that we have done the communities that have already received funding through various broadband programs to allow for household connectivity. In our overall mapping of household connectivity, as my colleague pointed out earlier, the vast majority of households can actually reach 50/10 speeds through relatively reasonable investments, partnered with private sector providers through a number of different means. There are some households that, even with those incentives provided for private sector investments, still face challenges in potentially being able to reach them. The 98% was a reasonable goal that we would be able to get to by 2026, recognizing the limitations of technology at the time.
Senator Marshall: I’m just wondering who you left out. Is it the Yukon? I represent Newfoundland and Labrador, so is it Labrador? You have a number there, so I’m just wondering who is left out. What are you going to do about the people who are left out?
Mr. Schaan: Our goals go beyond that. Our goal is, obviously, to get to 98% by 2026 and to ensure that we can make up that last mile over time by 2030. It varies because projects come as a function of the investment in the program, which then allows us to partner with communities, private sector providers and others to be able to map out what those projects will be.
Until we actually have the projects in the door and are able to assess, there are also a number of tools at our disposal. There is funding through the CRTC fund, which supported projects in the Yukon, through the Canada Infrastructure Bank, and then through our programs, most recently, the Universal Broadband Fund. Hopefully, they will all ultimately work together to get to those outcomes.
I can’t tell you with specificity today who the 2% are because it is defined by the projects we’re going to get in the door and the provinces’ and territories’ cooperation.
Senator Marshall: Where did you get the 98%? Is that something you pulled out of the air?
Mr. Schaan: No. There are a number of teams that work behind the mapping on the engineering side to imagine roughly our current state of backbone infrastructure, fibre to the home and satellite and where we are likely to be able to make investments in co-partnering ways to get to that. The 98% is based on our evidence, based on the current level of technology, the current level of projects accessibility and the projects we have had in the past.
Senator Marshall: Where do you get your targets? I think you have 66 performance indicators there. Where do some of those percentages and numbers come from? Is that something you brainstorm within the department, or does it come from somewhere else? There are some big dollar numbers there. I wonder where they’re coming from. For example, the competition law enforcement and promotion, there is a figure there of $17 billion, and your target is $18 billion. How do you come up with the targets?
Mr. McConnachie: Departments, as you’re aware, table departmental reports and results reports.
Senator Marshall: And I read them.
Mr. McConnachie: And the indicators you see in them are a small subset of the indicators that reflect all of our programming. We have departmental results frameworks, which are more extensive and require us to assign output- and outcome-based indicators for all of our key programs, and only the highest-level ones or, perhaps, the ones of greatest interest tend to get visibility through the departmental reports. However, all of that information is available on the GC InfoBase, and it is updated on an annual basis.
Senator Gignac: My question is for the representative from Infrastructure Canada. Last December, your department announced half a billion dollars, I think, for the Toronto megaproject on mass transit, so the City of Toronto, Government of Ontario and the federal government. What is your policy regarding any supplier from China? I ask the question because in 2019, the U.S. Senate adopted legislation called the Transit Infrastructure Vehicle Security Act that blocks any federal funds from being used to purchase subway railcars or buses manufactured by any company linked to China. Three weeks ago, I was with some of my colleagues in NATO Brussels, and it was clear they invite countries that are members of NATO to use national security as a top priority, not only for military infrastructure but also for civil and public infrastructure. What is your policy regarding China?
Ms. Baron: Thank you for the question, senator. I will ask my colleague Alison to answer the question.
[Translation]
Ms. O’Leary: Thank you for your question.
[English]
One thing that is important to clarify is that the department of infrastructure is a funder when it comes to infrastructure projects like the subway projects you mentioned in Toronto. We are not the manager or the owners of those projects.
What we do, however, is have contribution agreements with the city or the province or whoever the project proponents are, and in those contribution agreements, two things are required that I think are relevant in this conversation: one, that the project proponents follow all applicable laws and regulations of this country; and two, that procurement procedures are carried out in a fair and transparent manner. We don’t departmentally have a policy when it comes to China, but should the government decide to take actions like the ones that you are —
Senator Gignac: Who will call the shots here? I tried to figure that out. I asked the question to Transport Canada. It seems that, in the U.S., the economic advisor and National Security Advisor are side by side. They help each other. We are talking here about legislation in the U.S. that blocks federal funds to any state who has money for buses or railcars. At the end of the day, I am not talking about Toronto. I just want to know if a Chinese consortium will be allowed to bid on the contract. One third of the money comes from federal funds. Is it the Prime Minister’s Office that will call the shots regarding that?
Ms. O’Leary: That’s an excellent question.
I am not qualified to answer. I would suggest perhaps looking at Global Affairs Canada as potentially a department that might have a view. When it comes to federal procurement, I think that would be Public Services and Procurement Canada. I’m not qualified to speak beyond that.
Senator Gignac: Thank you for that.
[Translation]
The Deputy Chair: We will have an opportunity to dig deeper into that on Tuesday.
[English]
Senator Smith: I would like to go to the second question I wanted to ask Infrastructure Canada. In the 2023-24 departmental plan, Infrastructure Canada plans to continue the $2.4 billion in yearly funding to provinces and territories through the Canada Community-Building Fund. Is that the old gas tax?
Ms. O’Leary: Yes. Thank you for the question.
Senator Smith: I didn’t mean to be negative.
Ms. O’Leary: It was renamed a few years ago.
Senator Smith: It allows local communities to make investments in 19 categories. Could you explain the rationale? Are the 19 categories the same categories that existed in the old fund, or are they categories that were added to have a more inclusive list?
Ms. O’Leary: Thank you for the question.
Initially, there were 18 categories. Those are available on our website. I can give you a couple of examples: public transit, wastewater and community energy systems. There were 18 original ones. A couple of years ago, there was an additional category added with respect to fire halls.
Senator Smith: Regarding specific details about the progress of programs that have been funded, I know you probably have it on your checklist, but could you add to the list that you were going to give me for the other $3.8 billion plan? It would be really nice to see where these projects are located. You probably have mapping on that particular project list.
Ms. O’Leary: For the Canada Community-Building Fund?
Senator Smith: Yes.
Ms. O’Leary: This is a slightly different program in that it’s a transfer program. The federal government provides those funds to signatories who then provide those to municipalities. What we can tell you is that every year about 4,000 projects are funded by that particular program, and communities have the ability over the years to bank those funds and combine them in multiple years.
Senator Smith: So are the 4,000 projects committed geographically? Are they in all of the geographic regions of the country? Is there a predominant area where they go? Again, I always try to support what’s going on in the North. Between the northern territories in our country, do we have statistics on some of these projects? Of the 4,000, how much would be divided geographically? That would be really neat to know.
Ms. O’Leary: I can tell you that the funding itself is distributed on a per capita basis. With respect to smaller jurisdictions, there is a base amount to ensure that it is equitable. Then it is those particular communities that distribute that to projects in their particular —
Senator Smith: I realize it’s another party that gives out the money, but you’re the initial source of the funding. Am I surprised to hear that you wouldn’t have some form of ability to say exactly where all these projects are?
Ms. O’Leary: As of today, we do not have all of that information available on our map. However, right now, we are starting conversations with the signatories that receive those funds to renew those funding agreements. Those funding agreements expire in March 2024, so this year we’re starting a conversation to look at the possible renewal of those agreements. One of the things we are intending to speak about with those signatories is accountability and ensuring that we have greater consistency and timeliness of reporting as to how those funds are being spent.
Senator Smith: That would be really helpful for us as people trying to look at the scope and the overview of what’s going on, if you were able to assist us.
Senator Loffreda: My question is for the Canada Mortgage and Housing Corporation. I would like to discuss the corporation’s risks to your business and your risk management frameworks and practices, as stated on page 33 of your 2022-26 corporate plan. The top and emerging risks that CMHC are actively monitoring include increased household and government indebtedness, supply chain bottlenecks and unexpected inflation risks, among other things. Could you further elaborate on the corporation’s assessment of those risks? What mitigating activities have you adopted to address those challenges, should they materialize?
Mr. Mason: Thank you very much for the question.
As I’m sure you’re aware, we have a commercial side to our business where we do mortgage insurance. Therefore, monitoring economic factors is very important to us in terms of how we manage our insurance business, in terms of how we underwrite and how we risk-manage that.
Obviously, concerns with elevation of interest rates and mortgage indebtedness could potentially cause risk, but I can tell you that we have very prudent underwriting practices that look at both the borrower and property when we underwrite those mortgages. Then we monitor the environment. Early indicators — what we call arrears — when mortgage-holders start to not pay their mortgages is an early indicator of potential trouble and default. We have not seen any kind of meaningful change in our arrears rate at this point in time.
As part of our main business, we take that very seriously. That’s embedded in our day-to-day operations.
Senator Loffreda: So there are no early indicators at this point in time? It’s status quo. Defaults haven’t increased.
Mr. Mason: Not for what we insure, no We also monitor other metrics, such as unemployment rates, which is another leading indicator of potential issues. Again, we have not seen any meaningful change in those either.
Senator Loffreda: Thank you.
Senator Duncan: My point about the Yukon and connectivity is that we’ve already done this, as you noted, Mr. Schaan, through other funds. So if we’re not included in this fund, is there some other way to access? We’ve done this.
Second, when you’re building broadband and connectivity, there are not a lot of players in the field. Would you perhaps in writing provide to the committee which entities are the biggest recipients of this fund? I’m not looking so much at provincial or territorial governments, but which entities in the private sector you are working with most often in this project. You mentioned Starlink. That is certainly a major issue — satellite connectivity — for those who have signed on and are looking at the end of that project. Thank you.
Mr. Schaan: The Universal Broadband Fund was created with the purpose of serving all of Canada. We have had continued work with all provinces and territories with respect to potential applications to the Universal Broadband Fund, many of which have been announced through co-funding agreements or through various partnerships that have existed.
I’m happy to come back and indicate where things are vis-à-vis the Yukon. It is an indication that we work complementarily with other programs in place to try to ensure we’re not overbuilding, double-building or that we’re not working on the same projects. Obviously, the CRTC fund was dedicated, in many cases, to making early efforts in the North. That way necessitated that we be thoughtful about which programs and projects we would potentially look at in those geographies and jurisdictions.
With respect to proprietors and who the project proponent is in terms of the build, I’m happy to come back. There is information on our projects approved in terms of who the partners are in a number of these cases, recognizing, as you noted, that we have to balance the desire for increasing the vast number of households, recognizing that there are some big players out there that could make some very significant contributions to the number of households we’re connecting, and recognizing that we want to make sure the fund is also sensitive to the ecosystem of the number of players and provinces that we want to make sure we’re also supporting in terms of the overall reach.
Senator Duncan: If you could just supply that answer in writing from the global perspective, thank you. That was the question that was provided to us specifically, which entities.
Senator Galvez: My colleagues in academics, sciences and engineering tell me that the number of patents and the intellectual property that we claim here in Canada are very low, which actually impacts our competitiveness. We were talking about putting money into carbon capture and storage, but that technology has been there in development in Norway for the last 30 years. I think that explains why we are very low in protecting our intellectual property and patents. Can you please give me an idea of the ratio of funds or money put and the numbers of patents? We need to see that the money is used efficiently.
Mr. Schaan: Intellectual property disclosures are one metric among many that we think about when we look at the overall programming that we’re providing. More globally, intellectual property has been a fundamental priority for the government, increasing both the IP savviness of the players we support in the innovation ecosystem and the IP outcomes that we’re ultimately getting. The National Intellectual Property Strategy, which began in 2018, placed a number of investments in regard to supporting intellectual property. It’s sometimes challenging. This is not to resist the question but simply to suggest that, in particular, we need to recognize that IP filings are global in nature and are related to the markets in which people might be interested in potentially commoditizing and commercializing their outcomes.
Senator Galvez: How do we compare with other countries?
Mr. Schaan: If you look at filings at the Canadian Intellectual Property Office, those are not necessarily the metric one would use because we’re often what’s referred to as an office of second filing. We’re an office where businesses, particularly large multinationals, file in Canada for the purposes of commercializing their products in the Canadian market. Often, Canadian innovators are looking toward larger commercial markets for their place of filing, including the U.S. Patent Office and the European Intellectual Property Office where they are potentially continuing to work on that.
We have made a strong priority on increasing the total number of IP disclosures as part of our overall strategy, including through the global innovation clusters, which have made a very significant contribution toward increasing the number of IP filings, as well as the new priority we’ve placed in the Canadian Innovation and Investment Agency, where intellectual property was a fundamental criterion for some of its initial design.
In comparison, IP per capita and patents per capita, we continue to be low. It’s one of the areas and metrics of concern for us, but fundamental to the strategy we’ve employed, which is to try and ensure that we’re actually reaping the value out of the innovation investments we’re making, which is the traditional Canadian problem. We’re very good on the research and development side but often not necessarily good at reaping the rewards. That’s really at the heart of a number of our strategies, whether it’s the global innovation clusters, the IP strategy and then the new agency.
Senator Pate: This is what I was going to ask at the end of the last round. It looked as though the data set on the Infrastructure Canada website for the projects was not a full list. If it isn’t, could you provide that to us? If it is, I’ll go back and look, but it did not look like it was the full list.
Mr. Peets: Perhaps I could comment briefly on the information that’s available on the Infrastructure Canada website.
One of the functions we have at Infrastructure Canada is reporting on the Investing in Canada Plan, which is the cross-government effort — the horizontal effort — on infrastructure. The project map we currently have on our website reflects projects from a number of different departments. One of the things about that map is that because it is about the Investing in Canada Plan, those were the government’s programs that were announced in Budgets 2016 and Budget 2017. Some things that were announced in 2018, 2019 and 2021 are not included in the Investing in Canada Plan, so we do have a bit of discrepancy in terms of what we report on that map versus things that are approved projects that are not on the map.
Senator Pate: Is it possible to provide us with a list of those projects?
Mr. Peets: It is possible for Infrastructure Canada to provide information on our projects. There are a number other programs, like broadband and the National Trade Corridors Fund, that other departments would have to provide you that information for. However, certainly for our own approved projects, we can provide that information.
Senator Pate: That would be great.
Mr. Peets: Sorry if that was confusing.
Senator Pate: That’s great. Thank you.
To ISED, I’m interested in the amount of resources going into small and medium businesses, particularly for people with disabilities, women and Black-owned businesses. I ask this because it looks like some of the money has gone down. I’m curious as to why it’s been reduced and what the rationale is, given what most of the research shows about the return on investment in those areas in particular.
Mr. McConnachie: Thank you very much for the question.
As it pertains to the Women’s Entrepreneurship Strategy and the Black Entrepreneurship Program, there’s been no reductions to the funding. The estimates documents are perhaps a little bit disconcerting in the sense that they only show the allocations that we’re requesting for the current fiscal year. If it pleases the chair, we could certainly provide the overall funding profile and the amounts that have been expended since the inception of those envelopes, if it helps.
Senator Pate: If I look at, for instance, those with disabilities, it looks as though there has been a halving of the contribution. Is that not accurate?
Mr. McConnachie: Generally, these programs operate over a multi-year funding profile, and the profiles are often not flat. They can be lumpy, depending on demand and market conditions. Therefore, looking at it over the entire envelope to demonstrate what the funding is, how much is spent, how much is committed and how much is still available for allocation is probably the best way to tell the entire story on those. If it’s helpful, we could provide that.
Senator Pate: Please do. That would be great. Thank you very much.
Senator Bovey: My question is for Infrastructure Canada.
Your website definition of your Disaster Mitigation and Adaptation Fund talks about its goal being to strengthen the resilience of communities in the face of natural disaster triggered by climate change. You also have verbiage collectively advancing national, economic, social and environmental outcomes. Obviously, the climate change lens is absolutely critical.
I’d like to know how much of your funding has gone to or you’re planning for it to go to deal with the climate and environmental issues of Canada’s cultural buildings that protect our cultural heritage. I’d like to know how much has gone and where. How much has gone to protect them from flooding? We know there are many galleries and museums along river beds and in flooding territories. How much has gone to mitigating heritage sites that have been damaged by climate disasters, whether it’s fire, flood or drought? If you could get us those statistics, I think it’s really critical. The buildings are important, but what’s inside the buildings make Canada what it is. Is that possible to get for us?
Mr. Peets: Perhaps I could offer some reaction. It’s not a typical sort of distinction to make in terms of cultural versus other kinds of structures. Cultural buildings and cultural assets are things that we fund in the context of our programming that has been for community, culture and recreation, which is part of our integrated bilateral agreements with the provinces. That would include some cultural buildings as well as some other buildings like recreational facilities. We can certainly look at that.
As well, I think some of the investments made under our Disaster Mitigation and Adaptation Fund will have manifold benefits in the sense that if you are looking at protecting part of a community against flooding, you will have it. I think that’s where you get to the social and the economic — the multiple bottom lines. We’ll have to think about how well we can disaggregate the beneficial impact of some of those measures on cultural buildings.
Senator Bovey: I think it’s really important. I went to COP 27, along with my colleague here, and it was very clear that heritage and culture, until now, hadn’t played a role in the COP meetings. In fact, we weren’t allowed to meet on site until the last week, when we had done some pretty heavy petitioning. Culture was mentioned in the final document coming out of COP 27. It’s widely known that, globally, heritage sites have suffered huge damage as a result of climate and environmental issues, and it’s also widely thought that the cultural creative sector can do an awful lot constructively and positively to deal with some of these issues, but they have not been invited to the table.
My question is sort of knotty on one point, saying that we should help this sector — the third-largest employer in the country, if you like — get to the table. As my colleagues know, it’s also the employer that has the greatest percentage of workers living below the poverty line. There are real dichotomies on who is being hit and who is not allowed to offer information and ideas where they’re quite capable of offering it. I think we have to get out of some of the old boxes or grain elevators or whatever we have let ourselves be locked inside of.
If you can disaggregate some of this information, it would be really helpful, or if you would like to sit down and talk about how we might do that, that would be helpful. I would be happy to spend some time with you on that, too. Those are thoughts going forward.
The Deputy Chair: It’s not a question, but —
Senator Bovey: It started as a question but ended up as an offer. I didn’t give ten seconds away.
[Translation]
Senator Dagenais: I’m going to forget about high-speed rail, so I want to talk high-frequency rail again, Mr. Campbell, and obviously the infrastructure that goes along with high-frequency rail.
You said that Transport Canada has the responsibility and expertise required to find the right partner. I’d like to know what your department’s role in this project is and what the funding allocated to your department is for, if Transport Canada is the one with the responsibility and expertise to find the partner.
[English]
Mr. Campbell: Thank you, senator, for the question. I’m happy to clarify my earlier remarks.
The High Frequency Rail project is being delivered federally through a partnership that is led by Transport Canada. Infrastructure Canada is providing support, as requested, to Transport Canada in our areas of expertise. The area we’re focused on is in terms of developing the pre-development agreement, so the contractual terms to select a private partner to work with the government on developing the High Frequency Rail proposal.
Our department has experience in developing public-private partnerships in larger contract models. As I mentioned earlier, this is being approached as a collaborative model, which is a form of alternative financing. Rather than a traditional procurement of the government defining all the prerequisites in advance and going to procure a model, the government has decided to procure a private partner that will go forward and work with the government and all the agencies I mentioned earlier and then come back with a business case proposal on this very large project.
Transport Canada is the lead. Infrastructure Canada is proud to be contributing in our defined area and bringing the expertise that I mentioned earlier. We are also helping to facilitate the role of the Canada Infrastructure Bank in supporting the overall project and delivery of at least this phase that has been approved and that, as I mentioned earlier, is now in the procurement market for a private partner with a request for qualifications.
[Translation]
Senator Dagenais: Are you saying that the millions of dollars in funding are going towards finding a private partner? Does finding a private partner really cost that much? Does that analysis cost millions of dollars? I understand that the infrastructure, the trains and the tracks, are expensive, but is it consultations that are costing so much?
[English]
Mr. Campbell: I can speak to Infrastructure Canada’s component. In terms of the just under $3 million we’re spending this year and next year, for a total of $7 million in terms of our support, the majority of that is for skills and labour of the department. It covers our expert staff who are involved in working with, in certain cases, targeted consultants on a financial and commercial basis to develop the contract, as well as our legal advisers. The funding that Infrastructure Canada is using is to pay my team, which is working in support of the High Frequency Rail project, and only on a targeted basis, probably 20%, it is working with targeted consultants to help bring forward what we have been asked for by Transport Canada.
[Translation]
Senator Dagenais: That’s a little helpful, because legal advice isn’t cheap, obviously. Thank you anyways for your answer.
[English]
Senator Marshall: Senator Loffreda asked a question about risk assessment for CMHC. We have a figure from September 30, 2021, with regard to the amount of insurance in force, and also the guarantees. There is an overlap there. We have a figure of $609 billion. Do you have a more current figure of what the risk exposure is?
Mr. Mason: Thank you for the question. This allows me to offer our deputy CFO to answer this question. We do have a more recent number.
Senator Marshall: I’d be interested in hearing what the dollar amount is.
André Charbonneau, Deputy Chief Financial Officer, Canada Mortgage and Housing Corporation: Thank you for the question.
At December 31, our insurance in force for our mortgage insurance business is just under $400 billion, our guarantees in force for our mortgage funding business are $471 million, and our net exposure is $618 billion.
Senator Marshall: So you backed out the overlap. Thank you very much.
[Translation]
Senator Galvez: I, too, am interested in your risk vis-à-vis your mortgage business. With every extreme climate event, does your risk exposure increase in terms of mortgages and housing in Canada? In 2020, I believe, the Ottawa area was hit by seven tornadoes, which caused damage to a lot of homes.
[English]
Mr. Mason: Thank you very much for the question. It’s a great question.
As part of our risk management with our business — which I didn’t mention earlier — we do scenario planning where we come up with different potential scenarios that could cause harm in the housing market and how that would affect our insurance. We call it stress testing. We look for extreme events, and then we make sure that at CMHC we keep enough capital in case there was a large event like that and we had to pay out claims. That’s how we effectively manage our risk.
Mr. Charbonneau, do you have anything to add?
Mr. Charbonneau: Thank you for the question.
Ultimately, our mortgage insurance products don’t ensure against certain catastrophic losses. However, we are doing quite a bit of work with respect to climate scenarios and understanding the risks to our business. For example, flood risk is one area we’re studying quite a bit and trying to understand how that might impact our business — not in a direct sense, because we don’t insure directly for that risk, but indirectly. If there was a major flood, that could impact the value of properties, which could then indirectly lead to claims. We are currently studying that.
Senator Galvez: You are studying it. Do you have any results?
Mr. Charbonneau: We do have some results. We published in our most recent annual report some of the work we have been doing with respect to flood risk.
Senator Loffreda: My question is for the Canada Mortgage and Housing Corporation.
I came across a news release on your website dated December 21, 2022, in which the Minister of Housing announced the new temporary regulations that will be used to implement the Prohibition on the Purchase of Residential Property by Non-Canadians Act, commonly referred to as the foreign ownership ban. I understand that the objective of this policy is to address affordability issues and ensure that housing is owned by Canadians and not by foreign investors.
I’m told that the new regulations are rather broad and may have the unintended consequence of discouraging new builds and thus create additional challenges for land development for residential housing. Are you aware of any such challenge?
Recent media reports say that the foreign buyer ban regulations are a legislative disaster, according to some insiders. Many in the real estate industry have emailed me saying that they are concerned, for many different reasons too detailed to get into here. What role, if any, does CMHC play in assessing the success of this policy? Were you consulted during the development of the regulations that came into effect on January 1? Do you play a role in monitoring results moving forward, in other words, if there are effects on our economy, what everyone is concerned about?
Some are major players in the real estate industry, and there are concerns that I want to address. I understand why the policy is there. Housing affordability is a huge issue in Canada, and we want to improve accessibility for all. We all have the same objectives, but the concerns must be monitored. What role do you play? Do you see any of that developing at this point in time?
Mr. Mason: Thank you very much for the question.
You are correct. The foreign buyer ban is one tool in the tool kit to look at how we help to moderate the housing price escalation in Canada. Of course, in our role, we provide policy advice to the minister and the government around all housing matters. Specifically in relation to the foreign buyer plan and the development of residential real estate, through our programs, we work with developers, not-for-profits and other levels of government. We gain a lot of insight as to whether there are challenges and so forth, which, of course, would always feed into our advice. It is something that we’re constantly looking at and making sure that the results are as intended.
Senator Loffreda: You will flag the results going forward, obviously?
Mr. Mason: We would always provide our best advice in terms of things we are seeing in the environment, yes.
Senator Loffreda: Thank you.
The Deputy Chair: Now that we have reached the end of our time, we will conclude the meeting. I would like to thank all of our witnesses for appearing today. It is much appreciated.
[Translation]
Before we adjourn, I want to reiterate the principles that guide our committee, principles that our esteemed chair, Senator Mockler, often highlights. The committee’s work is truly guided by transparency, accountability, reliability and predictability. To ensure that we adhere to those principles, I would ask the witnesses to kindly get back to the clerk with their written answers by the end of the day on Wednesday, April 5. Your cooperation will ensure that we can do our work properly.
I also want to let the honourable senators know that our next meeting is scheduled for Tuesday, March 28, at nine o’clock in the morning. We will be continuing our study of the 2023-24 Main Estimates.
(The committee adjourned.)