Government Operations Committee on May 14th, 2009

[John Baird, Conservative, Ottawa West—Nepean, ON]

I can tell you that one of the best governments to work with in the country is Gary Doer's Government of Manitoba. They are phenomenal. It is a pleasure to work with Ron Lemieux and Gary Doer.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's because you guys have turned into socialists. Now that you're all a bunch of Keynesians, you get along well with my colleagues in Manitoba.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Gary Doer did tell me that he has a balanced budget. You're giving socialists a bad name, Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

He does, and you know what the small business tax is in the province of Manitoba, Mr. Minister? Zero, a big goose egg. It was 9% when we took over from those tax-and-spend Tories.

[John Baird, Conservative, Ottawa West—Nepean, ON]

If that a proposition? Are you proposing tax cuts here? Because I'll take that back to my cabinet colleagues, if you want me to.

[Pat Martin, NDP, Winnipeg Centre, MB]

Maybe it's just the reason you guys get along so well.

Even though you've been at eight other committees, I put it to you that this is the committee you should be coming to more frequently, more regularly. People should take note that the name of this committee is government operations and estimates. We don't want to wait until after the fact to study your spending of the public accounts to say whether or not it was fruitful, or useful, or whether or not the model was good, or that there's a yardstick to measure progress by.

Speaking of committees, the poor, much-beleaguered Parliamentary Budget Officer is sitting before a committee as we speak in another part of this building. Perhaps the only office that really has fulfilled its mandate coming out of the Federal Accountability Act is the Parliamentary Budget Officer. I argue that we need him more now than ever, when these billions of dollars are flying out the door at breakneck speed.

First of all, you haven't been abundantly clear about the model you've used or the expectations you expect to realize, or the yardstick for measuring progress by for the spending. But you also can't tell me that you can fast-track this amount of spending without sacrificing some due diligence, some oversight, some of the normal accountability associated with infrastructure spending. With the urgency that you've gone into this, with special vote 35, etc., how do you expect your bureaucrats, your team, your skilled and qualified people, to apply the same kind of oversight to this scattergun, free-for-all spending as they do to a normal spending cycle?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I noticed we had questions from the member for Willowdale saying we weren't getting out money fast enough. You're saying that billions of dollars are flying out the door. I wonder what the Bloc would say, because they probably would have a balanced approach in the middle.

[Pat Martin, NDP, Winnipeg Centre, MB]

Somewhere in there.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I would say this. We obviously did bring in a five-point action plan on issues like the navigable waters, issues like the changes we made to environmental assessments with Gary Doer's endorsement, and other changes. This has been absolutely essential, because you couldn't do what you were doing in the past with all the projects in the future. That's what our five-point action plan was about.

But at the end of the day, if it's a provincial project, we're a financial partner. At the end of the day, Gary Doer will be held accountable by the people of Manitoba and by the legislature of Manitoba, and by the Auditor General of Manitoba, or a given municipality.

[Pat Martin, NDP, Winnipeg Centre, MB]

We could take that reasoning even further, Minister.

I'm confused. If there was an urgency to get this money out there and get it working, why did you choose such a cumbersome model in order to work with the municipalities? The leader of our party, Jack Layton, has been up in the House asking why you didn't adopt a tried and true model such as the gas tax rebate to the municipalities, and simply give it to those municipalities and let them spend it on the list of priorities that they already have had established. We have about a 30-year deficit of infrastructure in most municipalities. There was no shortage of projects they could have got busy on right away. Why choose a model so cumbersome that it has led to real difficulties?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I'll say three things.

First, we doubled the infrastructure, the gas tax model. We doubled it as of April 1. We brought it forward from July to April. I think if you checked with a lot of cities, you'd find they didn't spend 100% of the money in the first month or two of the fiscal year in the past and they probably won't now, because it takes a significant amount of work to make things happen. That was the first reason.

The second reason was that we wanted to leverage partnerships. We wanted to get provinces and municipalities to have some skin in the game, to match our investments, so that instead of creating one job, we could create three. People said municipalities wouldn't have the money; well, we put the lie to that. There are plenty of municipalities in every corner of this country that do, so we've been able to leverage and create three times as much.

Third, I think there were some legitimate concerns. Our government had challenges, and the previous Liberal government had challenges. You'd allocate money in a budget; then you'd spend a year, or sometimes two or three, negotiating with the provinces for an agreement, and then you'd have to identify projects after that. I think my departmental officials have done an incredible amount of work in an incredibly short period of time. I'm not going to lie to you--things are happening faster in Manitoba because the governments have a good relationship, and that's good news, but I think it was for those three reasons that we wanted to do it.

I can speak about my own municipality. They got money for infrastructure that they spent on clearing snow. The Government of Ontario had to amend some of their financing rules, because the better part of the $200 million that was given to one municipality was used to pay off debt, not to build infrastructure.

It's a good model, but it's not without its downsides as well.

I think that you will see in Canada a demonstrably faster approach, certainly with the $4 billion stimulus and with the acceleration of Building Canada Fund. I dare say that if you were to pick up the phone and call Gary Doer now and say, “Is John Baird making things happen on infrastructure in Manitoba?”, he'd say, “You bet. You bet your boots.”

[Pat Martin, NDP, Winnipeg Centre, MB]

He'd also say, “Get him to send some more money”, because that's our job, to bring home the bacon.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I've never met an elected official who couldn't spend more money than they have.

[Pat Martin, NDP, Winnipeg Centre, MB]

Let me ask you something. You've come to this job by an interesting route. You were the President of the Treasury Board, then you were the Minister of the Environment, and now you're minister for infrastructure.

I'm interested in the environmental component. Something we're seeing with the stimulus package in the U.S. is that they're really using the money to implement some transformative change in energy and environmental issues. This Blue Green Alliance in the United States is very exciting. It's taking infrastructure stimulus money not just to patch up the existing generating stations or power plants, but to transform and steer the country in the direction it needs to go. The work that needs to be done to save the planet may be the work that we can do now to stimulate the economy and get through this downturn.

What portion of your infrastructure priority spending has gone towards the green component?

[John Baird, Conservative, Ottawa West—Nepean, ON]

It would be different on a province-by-province basis.

In my constituency, my hometown, clean water is an issue; secondary raw effluent going into the Ottawa River has been a huge problem. Water quality has been a big issue in Manitoba. A lot of significant investments are going into sewer and water projects. Smaller municipalities in particular are very agile and can move very quickly. If you've got a $1 million project as opposed to a $1 billion subway, you can move more quickly. A significant amount is going into sewer and waste water treatment.

We have had, and will continue to make, significant investments in public transit. We're making investments in Via Rail in central Canada.

We do have two green funds. Manitoba's Greg Salinger is pushing a project to get four northern Manitoba communities on the grid so that they're not using diesel to generate electricity. That would be good for air quality and be good for the fight against climate change, but it would also be cheaper, because the cost of flying in diesel is exorbitantly expensive.

[Pat Martin, NDP, Winnipeg Centre, MB]

All I'm saying is that with this massive rollout of dough we could be looking at transformative things. The east-west bridge, for instance.

[John Baird, Conservative, Ottawa West—Nepean, ON]

You couldn't do that as a stimulus project. It wouldn't happen in two years.

[The Chair, Liberal, Derek Lee]

Thank you, Mr. Martin.

Ms. Foote. And we're in five-minute rounds now.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Thank you, Mr. Chair.

I welcome Minister Baird and his team. I appreciate that you're here this morning. Congratulations as well for making the reference to “from coast to coast to coast”. That doesn't always happen. Usually references throughout this country are just “from coast to coast”.

I'm also pleased that several of our colleagues this morning have made reference to Newfoundland and Labrador. I'm going to take advantage of that and speak to what I think is a shortcoming with respect to the stimulus funding and the whole idea of matching funds.

I know you said communities are not having difficulty coming up with their one third, or whatever portion they have to come up with, but that certainly would not be the case in a fair number of rural communities, particularly in Newfoundland and Labrador and, I expect, in rural Canada. Have you given any thought to recognizing that this is a problem for a number of rural communities?

I'll give you an example, one that you and I have discussed before, and that is Fortune on the Burin Peninsula in Newfoundland and Labrador. The harbour is owned by Transport Canada, but they have a desperate need to have that harbour dredged; otherwise boats just aren't going to be able to get into that harbour. It's the economic engine of the community and the entire Burin Peninsula, to some degree, with the fish plant and the fact that it's the gateway to the French Islands of St. Pierre and Miquelon. I was disappointed that this wasn't part of the announcement that was made for Newfoundland and Labrador. I appreciate that you deal with provincial governments on the issue, but you and I know the community of Fortune has appealed to you directly. There is no way that Fortune will ever be able to come up with a percentage of matching dollars.

How do you expect a community like Fortune, which is dealing with a problem in terms of property owned by Transport Canada...? If the government doesn't move to do something about it, we're going to see the community die.

[John Baird, Conservative, Ottawa West—Nepean, ON]

You've mentioned a number of issues.

Would you have a $2 billion loan program under Minister Finley to provide support to municipalities? We're borrowing money too. We don't have it. So is the Province of Newfoundland and Labrador. The municipalities are in a similar boat to ours. We provide one third for municipal projects. I understand the Province of Newfoundland has a sliding scale that contributes depending on the size of the municipality. These are under provincial jurisdiction, and good for Newfoundland for doing that. Not all municipalities in Newfoundland have to come up with their third.

We are making announcements this morning that Newfoundland is the first province in the country where we have fully allocated all the stimulus money: all the Building Canada money, all the MRIF and CSIF money. They're the first province. Not only are we getting it done, we're getting it done first in the province of Newfoundland and Labrador.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Minister, I appreciate that, and I've heard you talk about the money that's been flowing. My question again goes back to matching funds, if you have a municipality where they don't have access to funds for the matching portion.

[John Baird, Conservative, Ottawa West—Nepean, ON]

In Fortune that is a federal asset. Of course, we can spend money on federal assets outside the Building Canada stimulus funds. You've certainly raised the issue with me, and it's certainly something that is under consideration.

I can tell you that municipalities, big or small, aren't in the habit of coming up with money for federal infrastructure anywhere in the country.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

They're desperate there. What I'm saying is that if you're not going to move on a piece of infrastructure that belongs to Transport Canada, then they have to look to other avenues and they don't have the matching funds. I'm imploring you to recognize that this needs to be done.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Municipalities aren't asked to come up with matching funds for a federally owned project. The odd one may, but generally speaking, federal assets aren't something that we're looking to. They can be, as I said to our friends from Quebec, but they're not generally the first priority.

I've taken note of the Fortune issue, but I'll tell you, when it comes to the stimulus, or Building Canada, we're working with Danny Williams. We're getting things done for the people of Newfoundland and Labrador and we're getting them done faster there, which is great news.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Congratulations on that.