Okay, that's for Finance staff, right?
Evidence of meeting #2 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
A recording is available from Parliament.
Evidence of meeting #2 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
A recording is available from Parliament.
4:40 p.m.
Conservative
4:40 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
About 75% of that amount is staff and the rest is the expenses related to the staff in the department.
4:40 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Is that something that has been increasing over the last number of years? Is it staying steady? I have no idea.
4:40 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
It's very, very stable. There have been, maybe, moderate increases, but it's quite stable.
4:40 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Okay. So when I see the increase, it's marginal. These adjustments of $272,000 are not for staff; they're for computer stuff? Does operating expenditures include capital, too?
4:40 p.m.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
Well, we wouldn't have much in the way of capital. The $272,000 is a very small amount, and that's just related to a government-wide program that provided all departments with certain allocations of funds to evaluate the grants and contributions program. So this was an allocation to us from the centre to augment our evaluation capacity in that regard.
4:40 p.m.
Conservative
The Chair Conservative Rob Merrifield
Thank you, Mr. Wallace.
Now, Mr. Bouchard, you have the rest of the time, and you'll be the last one of this segment.
4:40 p.m.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Thank you, Mr. Chairman. I, too, want to thank you for being with us this afternoon.
I have two questions. The Department of Finance effects transfers—and I am not talking about equalization—destined for provincial and territorial programs. I would like to know how these transfers work. Do you write a cheque for the entire year, at the beginning of the year? Is that done once every three months? Do you ask that there be audits or reports filed before sending the payments? If not, do you deal directly from department to department? Do other federal departments give you instructions to proceed?
4:40 p.m.
Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
For equalization, we calculate how much each province gets just prior to the beginning of the year. The new formula has a moving average, but in December of every year we will tell the provinces what they are getting in total for the next year for equalization.
That money is then dispersed on a monthly basis—one-twelfth every month—and it is a completely unconditional grant that goes to each government.
4:40 p.m.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
My question had more to do with other provincial transfers, but I would like to come back to equalization now. At the present time, the federal government, when calculating equalization, excludes 50% of non-renewable natural resources. If the federal government were to exclude 100% of energy resources, that would change the outcome for the provinces. Why was one formula chosen over the other? Does that depend on technical data or policy issues? I would like to know why we are moving in that direction.
4:45 p.m.
Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
The easiest answer to that is that the previous government established an expert panel to look at the equalization program, with particular emphasis on the treatment of natural resources, because that has always been an extremely difficult issue in measuring fiscal capacity. That panel reported, and its recommendation was that 50% of non-renewable resources be included in the new formula.
At the same time, it recommended moving to a 10-province standard and other simplification factors. The government accepted the recommendations of that panel almost exclusively.
4:45 p.m.
Conservative
The Chair Conservative Rob Merrifield
Thank you very much.
I want to thank you for coming in and answering the questions of the committee, and I thank the committee for the questions.
Now we'll invite the Canada Revenue Agency individuals to come forward.
Mr. Ralston, I believe you're doing the presentation. We thank you for coming. We'll entertain your testimony. The floor is yours.
4:45 p.m.
James Ralston Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Thank you, Mr. Chairman.
My name is Jim Ralston, and I'm the chief financial officer. With me is Richard Case, a director in our resource management directorate.
The CRA welcomes the opportunity to appear once again before this committee, this time in consideration of supplementary estimates (A) for 2007-08.
For the CRA, supplementary estimates (A) comprise a number of separate adjustments to the agency's spending authorities, totalling just over $311.6 million. The largest single adjustment represents the transfer from Public Works and Government Services of $257.1 million to permit the CRA to manage its accommodation and real property services. The Treasury Board minister has approved this transfer of resources, putting into effect a quasi-market-based reimbursing regime designed in cooperation with PWGSC.
Other funding increases are being sought for a number of legislative, policy, and operational initiatives announced in the 2006 and 2007 federal budgets. Also included in these estimates, funding is being sought to implement and administer the 2006 Canada-U.S. softwood lumber agreement and to implement a national initiative to address interprovincial tax avoidance by corporations.
Certain items were previously also dealt with in supplementary estimates (B) of 2006-07.
The $311 million represents an 8.7% increase in the authorities granted through the main estimates. With the inclusion of supplementary estimates (A), the agency's total estimates to date will amount to $3.859 billion.
I'd now be happy to respond to any questions.
4:45 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chairman.
So in English, the $257 million means you've taken on some of Public Works' services or their real estate? What is that? Can you explain that?
4:50 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
As is the case with most government departments, PWGSC provides accommodation free of charge. So there's no reflection in an individual department's budget for those amounts. Formerly it was never voted within the CRA, but it would have been voted to PWGSC, and they would provide us the services free of charge. The cost would be reflected in our financial statements, but it wouldn't be reflected in our budget.
So this transfer basically moves the budget element from PWGSC to the Canada Revenue Agency. In a sense, now our budget reflects the full spending.
4:50 p.m.
Liberal
4:50 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
The service here is simply the provision of space. So it's space in crown-owned buildings or space in leased buildings where PWGSC would still negotiate the leases and everything.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Is it negotiated, or is it what PWGSC decides?
4:50 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
When I say “negotiated”, I mean negotiated with the vendors or the landlords of that space. It's the normal contracting process. They would issue tenders or requests for proposals. Potential landlords would bid and a selection would be made.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
So all that's happening is PWGSC, Public Works, is providing the service for you. It's not simply a fair market value. Or is there a duplication of effort where Public Works is conducting the service and then CRA has to verify that you're paying appropriate amounts for these services?
4:50 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
The way we like to portray it ourselves is that we wish to manage the demand but we continue to have PWGSC be our supplier. So we view ourselves as either a tenant where PWGSC is the landlord, in the case of crown-owned properties, or a tenant of a private sector landlord. PWGSC is our agent, if you will, when it comes to dealing with the landlords.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
What happens when it's a property that belongs to the crown?
4:50 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
I mentioned the quasi-market-based regime. PWGSC will do an analysis to determine what the market value of equivalent accommodation is in the local market to which a particular building would apply and a price will be determined—it's an administered price—and we will be financed an amount that will be sufficient to pay PWGSC that administered price.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Whether you're renting from the private sector or from the crown, are the terms the same or similar? Can you get out of leases? I would assume most of them are leases. Can you get out of them? How does that work? You can say it changes from place to place and that would be an acceptable answer.