Fisheries Committee on May 1st, 2008

[The Chair, Conservative, Fabian Manning]

I call the meeting to order, now that we have a full crew.

I'd like to welcome the representatives of the department. My understanding is that the deputy will begin the discussions this morning. I think we're quite familiar with everybody around the table. It's not your first time to appear; you're becoming regulars here. That's a good sign.

Deputy, I'll allow you to start the morning.

[Michelle d'Auray, Deputy Minister, Department of Fisheries and Oceans]

Thank you, Mr. Chair.

I'm delighted to be here again today.

As you indicated, I am accompanied today by several departmental officials who will be able to help me answer your questions.

I'll just spend a few minutes introducing the colleagues we have with us: the associate deputy minister, Claire Dansereau, whom you've had the opportunity to meet a number of times now; George Da Pont, the Commissioner of the Canadian Coast Guard; Cal Hegge, assistant deputy minister of human resources and corporate services; Mr. Barry Rashotte, who is the acting director general of resource management operations; Ms. Michaela Huard, who is the assistant deputy minister of policy; and Madame Mimi Breton, who is the assistant deputy minister of the oceans, habitat, and species at risk secretariat. This is Madame Breton's first appearance before the committee since she joined us in November of 2007.

Before I ask Mr. Hegge to walk you through the documents we have provided the committee as a brief snapshot of the crosswalk between the estimates and the report on plans and priorities, I would like again to offer assistance to the committee to support your activities as you tour small craft harbours in different parts of the country. I believe your trip has been quite successful to date. If there is anything we can do to support you in your fact-finding activities, do not hesitate to call on us.

Turning to the main estimates, overall this year we're asking Parliament for $143.4 million more than in the 2007-08 main estimates. That would bring our total projected expenditure for the 2008-09 fiscal year to $1.68 billion.

The top three elements that drive this increase are the following. There is $41 million for the integrated commercial fisheries initiatives on both coasts. You will recall that these initiatives are to increase the participation of first nations fish harvesters in integrated commercial fisheries. There is $40.6 million for mid-shore patrol vessels under the coast guard. The renewal of the fleet will, as you can imagine, strengthen our capacity to protect fisheries and enhance maritime security. There is $21.8 million for fisheries science research, directed towards stock assessment and ecosystem-based management.

There is just under $20 million for permanent annual funding to the small craft harbours program. As you know, this offsets what would have been a loss to the program of the same amount because of temporary funding that was about to expire.

We've also set out in our report on plans and priorities the program priorities we have, and we would be quite pleased to speak to those.

I will now ask Mr. Hegge to take us through the financial elements of the estimates and the RPP.

I believe you will have received the document and the presentation that we sent to the committee.

Thank you.

[Cal Hegge, Assistant Deputy Minister, Human Resources and Corporate Services, Department of Fisheries and Oceans]

Thanks, Deputy.

Good morning, Chair and members.

I'm going to be speaking fairly briefly to the overview of the 2008-09 estimates.

I'm on page 3. You can see what the deputy has already mentioned, the increase between last year's estimates and the current year's estimates. The chart basically shows the information broken down between the two years by the various codes.

On page 4 the same information is presented somewhat differently, showing the increases and decreases again by vote, which overall shows the increase of $143.4 million, main estimates over main estimates.

I'm not going to belabour page 5, because the deputy has already highlighted the areas of largest increase. It's with respect again to the various votes. All of this is basically the same information, just presented in a little different format.

Page 6 shows the decreases in main estimates. The net effect, of course, is the increase of $143 million, but there are some increases and there have been some decreases. Page 6 speaks to the decreases. Among the main ones, the first item, which we're calling “Budget 2007 Cost Efficiencies”, is basically code for the procurement reform initiative; all departments have to contribute from their reference levels to it.

Just as an aside, that number will go up progressively over the next three years, resulting in about $17 million in savings by fiscal year 2011-12.

The employee benefit plan is essentially an adjustment, which reflects the government's needs in the areas of employee benefits, including CPP, employment insurance, etc.

“International Fisheries and Governance” shows a decrease, but we're actually getting that money back through budget 2008, which I'll speak to a bit later.

The last one I would just highlight is the IMIT consolidation. That's a sunsetted project for which we receive money from Treasury Board. The bulk of that project has been implemented, and so, comparing last year with this year, there's a reduction in that area.

On page 7 we show the main estimates by program activity. I think the committee is familiar with the program activity architecture of the department, which essentially has three strategic outcomes and nine activities. This chart basically shows the distribution of the main estimates among the nine activities.

I would highlight that these figures include the enablers. We've discussed this from time to time, but the enablers, including corporate services, finance, executive services, etc., are apportioned out to the various activities. You have the enabler amounts reflected in those activities on this particular chart.

Page 8 again shows the same basic figure of $1,682.0 million. This chart shows the main estimates by sector and for the coast guard, and it shows the enablers separately. The enablers again, as I mentioned earlier, are communications, corporate services, executive direction, etc.

Small craft harbours directorate, which is of particular interest to this committee, is, as I think you're aware, organizationally under HRCS—Human Resources and Corporate Services—and we've shown the small craft harbours directorate separately on that chart.

Page 9 shows again the same basis, but distributed by region, including a fairly large amount for national programs. A big part of the national programs is the “major capital” segment, which basically over the year is allocated to the regions for the delivery of capital projects.

I'll dwell on page 10 for a couple of minutes. As the deputy indicated, it basically is the crosswalk between the main estimates and the report on plans and priorities and in that regard is a more accurate reflection of what we will likely be spending this year. If I take you to the bottom row, where we have the total planned spending, again you'll see the $1,682 million, which is the figure for main estimates.

Then there is a column of adjustments, the largest of which is for the fleet renewal, which takes us to planned spending for this year, 2008-09, of $1,738.4 million. Basically, these are expenditures that we have essentially negotiated with Treasury Board and that have come up after the main estimates were tabled.

So it's a bit of a moving feast in this regard, if you will, to try to get an accurate projection of what we're actually going to spend this year. This is a more realistic figure, adding the adjustments to the main estimates.

Then the third part of this, if you will, is the budget 2008 announcements, which are going to increase our planned spending again, but this is subject to our actually getting the appropriations from Parliament and the proper approvals. We've highlighted on page 11 the amounts we anticipate getting as a result of budget 2008 and over the three-year planning cycle.

If you would direct your attention to 2008-09, that figure of $1,767.9 million, again, all things being equal that we get the proper authorities, is actually a closer reflection of what we anticipate spending for this fiscal year.

On page 12 we take the report on plans and priorities planned spending, that figure of $1,738.4 million, and show that again by the activities within our program activity architecture. Again, in this chart the enablers have been distributed among the program activities. Then on page 13 we have again the planned spending by sector and the Canadian Coast Guard with the enablers shown separately.

Page 14 is a bit of an overview or a summary, if you will, where we take the main estimates figure, add in the adjustments that evolved after main estimates were tabled or in the course.... Anyway, the timing was out of sequence to be included in the main estimates. This gives us that total planned spending for 2008-09 of $1,738.4 million, which again, does not include the money we anticipate getting as a result of budget 2008.

Then, finally, on pages 15 and 16 we have the planned spending broken down by program activity over the three-year planning cycle, including this fiscal year right up to 2010 and 2011.

That concludes my presentation, Mr. Chair.

[The Chair, Conservative, Fabian Manning]

Thank you, Mr. Hegge.

We'll open the floor now for questions.

Mr. Simms.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Thank you, Mr. Chair.

Thank you to all our guests today. We appreciate you coming, familiar faces yet once again. Thank you.

I have a couple of quick questions off the top. It says here “the life cycle asset management services”. That was as recommended by the Auditor General, is that correct? Mr. Da Pont, this question is for you, I guess. Explain to me, was that a recommendation coming out of the Auditor General in 2007?

[George Da Pont, Commissioner, Canadian Coast Guard, Department of Fisheries and Oceans]

Yes, it's part of our response to the Auditor General's recommendation, where she raised issues regarding our maintenance functions and whether we had the appropriate accountability structures and so forth in there. So this change reflects putting in one place all the investments we are making in life cycle management and in our asset management. Previously, these figures were spread out and buried within all our other activities. We have simply now separated them out for clarity and accountability in the expenditure.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

The internal reallocation of $23 million, that's to establish a fleet refit capital budget. Is that correct?

[George Da Pont]

Yes, that is also one of the other adjustments we're making in response to the report. Previously, we were funding maintenance and refit activities from actually three different authorities, depending on what actual work was being done, some in major capital, some in minor capital, and some in operating. We've now secured a new authority from the board, and we've grouped and moved all those expenditures into one authority under major capital. That, again, will facilitate better planning and management.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I guess more accountability, more transparency, is that what...?

[George Da Pont]

Absolutely, so we don't have to juggle different authorities for different things and mix three pots of money for one project, where one part of it is funded from this, another part from that. So now it will all be in one bundle and with one clear authority.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

A new polar icebreaker for $720 million, and the Louis S. St-Laurent decommissioned by 2017--am I correct?

[George Da Pont]

Yes.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

It seems to me that the Louis S. St-Laurent would probably be expired well before that, would it not?

[George Da Pont]

No. The vessel is very dependable. We did a mid-life work and extension of the vessel. We're quite confident that it will be able to stay in service until that period of time. Like any vessel that gets older, it will need more maintenance over the next ten years than it has had in the last ten years. We obviously will be planning for that.

I think we're confident that if we can procure the new vessel in that timeframe then we will not have any negative impact on our operations.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

On the planned transfer from Nova Scotia to Newfoundland and Labrador, when is that to take place? What is the plan for that? How much will that cost, approximately?

[George Da Pont]

We are transferring, as I think the committee is aware from previous discussions, the Terry Fox and the Louis S. St-Laurent from our maritime region to the Newfoundland and Labrador region. The transfer of the Terry Fox took place effective as of April 1 of this year. The transfer of the Louis S. St-Laurent is scheduled to take place on April 1 of next year.

In terms of the actual cost, as I've explained to the committee, the primary reason we're transferring the vessels is that we would have to spend at least $10 million in additional upgrades to our facilities in Halifax to accommodate those vessels at the Bedford Institute of Oceanography, when we feel we can accommodate them in facilities in Newfoundland without that type of a cost.

The Terry Fox will operate out of our base in St. John's, so we are not expecting any additional costs there. We're planning to home-port the Louis S. St-Laurent out of Argentia. We've estimated about $100,000 or so as a cost for electrical hookups and minor work of that nature.

I think the other point I'd like to make in relation to the transfers is we have agreed to a five-year transition period, to facilitate the interests of the crew, so no one would be forced to move, and that would give us time to ensure that anyone who didn't want to move was placed in other vessels in the maritime region. We have a committee involving the bargaining agents that's doing that work, and we're making pretty good progress, given our demographics.

In a nutshell, I think that is the current situation.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I understand that. It takes five years for a transition; otherwise, the chair would have to open up a bed and breakfast.

I'd be remiss if I didn't ask you about the Acadien II tragedy. I know it's a sensitive issue. For you, I'm sure it weighs heavily. I just wondered if you could update the committee on how far the investigation has gone at this point.

[George Da Pont]

Thank you for giving me that opportunity.

The first thing I'd like to say is that my heart goes out to the people who were lost, to their families, their friends, to the community. It was truly a tragedy. It was also a tragedy for the coast guard. Our motto is “safety first, service always”, as you know. It's weighed very heavily on the crew.

Like everyone else, I'm anxious to know what happened, how it happened. Obviously we have to await the investigations. There are three investigations. One is by the RCMP, which is still under way. They are determining whether or not there's any cause to proceed with any criminal investigation. The Transportation Safety Board, as I'm sure the committee knows, is investigating. They have the primary responsibility to determine the causes and the underlying factors. I can't predict how long either of those investigations will take.

We have an internal investigation under way that is focusing on assessing whether our internal policies and procedures were followed. That has started, as Minister Hearn has indicated. He's engaged an outside investigator to lead that investigation. We are hoping this investigation will be finished in the early fall, but it obviously will depend on how comfortable the investigator feels that he has a full handle on everything that he thinks appropriate to look into.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I could ask more, but I think my colleague will probably get into that a little later, so I'll defer to him.

In the meantime, let me just update this again. Is the $20 million per year for small craft harbours now a permanent part of the A-base budget?

[Michelle d'Auray]

That's correct.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Okay. I know Parliament has passed $35 million, and the numbers have been higher, certainly, but obviously we have grave concerns about that.

With respect to the $10 million over two years in divestiture, I guess that also falls short of any need as well, at least in our opinion and in what we have seen.

At this point I guess I'm done for this round. How much time do I have?

[The Chair, Conservative, Fabian Manning]

One and a half minutes.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

A quick snapper.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Well, a quick snap on invasive species. The Commissioner of the Environment and Sustainable Development audited the federal government a year ago and then did another assessment and indicated quite clearly in fact that there has not been enough done.

We know the problem we have in Prince Edward Island, which is noted for the blue mussel. What has been done to protect the base species from these other types of species that come in? It is killing the industry. What is planned to be done to protect the mussel industry, which is so important for so many jobs?

[Michelle d'Auray]

I think the report of the auditor for environmental issues asked us to look at developing national frameworks and whether we had a rapid response plan. We have all of the core elements for that.

Our plan is to develop frameworks and to help people cope and deal with them; it's not a plan to actually implement eradication. We have the building blocks for that. We are working very closely with the province of P.E.I. on this front. In fact we have just announced, with ACOA, an additional source of funds in order to help the industry deal with the clubbed tunicate problem on the island.