Government Operations Committee on Dec. 9th, 2010

[The Chair, Liberal, John McKay]

Ladies and gentlemen, let's bring this meeting to order. This is the 43rd meeting of the Standing Committee on Government Operations and Estimates.

We have with us Minister Cannon and Minister Strahl. They will, in turn, introduce their delegations.

Both of you have been before this committee and others before, and you may have an opening statement. I call on either minister to have an opening statement, in whatever order they wish.

[Chuck Strahl, Conservative, Minister of Transport]

Thank you, Mr. Chairman.

It's a delight to be here.

Thank you.

Thanks as well to committee members.

We're pleased to be here today to speak to the Government of Canada's G-8 legacy fund.

Joining me today from Infrastructure Canada are Yaprak Baltacioglu, deputy minister of Transport, Infrastructure and Communities, and John Forster, associate deputy minister of Infrastructure Canada.

I'll allow Minister Cannon to introduce his folks as well.

On June 25 and 26 Canada was proud to host the G-8 summit in the Muskoka region. This was Canada's fifth time hosting a summit since joining the original G-7 in 1976. The G-8 brings together the heads of state, senior dignitaries, and countless delegates from the world's leading nations, and for many this was their first chance to visit the beautiful Muskoka region.

In preparation for Canada's hosting role and to help set the stage for such a high-level event, the $50 million G-8 legacy fund was established in Budget 2009 for projects in the region.

The investments made, in view of the G8 infrastructure funds, made it possible to prepare for the summit to be held in the region, in addition to promoting it to the international media and visitors.

In total, 32 projects worth just over $45.7 million were funded throughout the region, including the G-8 centre in Huntsville, local road improvements, and upgrades to the North Bay airport. But the purpose of the fund was not only to support Canada's hosting role; it was, from the beginning, intended to leave a legacy to the people of the region, as is traditionally the case when Canada hosts such high-profile international events.

To ensure that they were ready to host the world, and as compensation for the inconvenience to the region, 16 municipalities received funding to help improve their local roads and tourist attractions and to beautify their streets and communities. These municipalities worked hard to ensure that these projects were completed within the very tight timelines required by the fund.

Every project was completed on time for the June summit. Our municipal partners in the region can be proud of the results of their efforts.

Our investments through the G-8 legacy fund are consistent with those made in advance of Canada's hosting of past international meetings, such as the 2002 G-8 summit in Kananaskis; the 1997 APEC summit in Vancouver, where $60 million was spent on infrastructure projects in a forest research centre and chair at the University of British Columbia; and the 1995 G-7 summit in Halifax, where over $8 million was invested in beautification projects throughout the city and to the iconic Halifax waterfront.

Projects were provided throughout the area to better showcase one of the most beautiful regions of Canada and to provide a legacy to the area for hosting the G-8 summit. And now residents across the region are benefiting from the improved recreational facilities, better roads, enhanced tourism opportunities, and so on.

Thank you. I will be pleased to answer your questions.

Mr. Cannon, perhaps you have a word for the committee as well.

[The Chair, Liberal, John McKay]

Thank you, Minister Strahl.

Minister Cannon.

[Lawrence Cannon, Conservative, Minister of Foreign Affairs]

Good morning, Chair. Thank you for inviting me here to discuss Canada's G-8 and G-20 summits that were held in June.

This will come as no surprise to you that we consider 2010 to be Canada's international year. Hosting a meeting of the world's top political leaders is a huge undertaking and an activity that is extraordinary to any regular government operations. The host must shepherd the process of setting an agenda, must ensure all delegates will be housed and fed when they arrive, that media will be able to cover the event, and, most importantly, that all who participate are safe and secure.

Every foreign leader comes with a large group of delegates. While they are responsible for their own accommodation expenses, we nonetheless must plan for this massive influx of people and ensure the seamless delivery of two important international events.

In the House I have repeatedly heard opposition members minimize the significance of G-8 and G-20 summits, calling them a two-day event. As Minister of Foreign Affairs, I take issue with that claim because it does not even begin to describe the full scope of what we accomplished.

Indeed, our work began as far back as 2008, when we began laying the groundwork for our highly successful events. To develop the final summits' agenda, from December 2009 to June 2010 the Department of Foreign Affairs summits management office organized 29 preparatory meetings across Canada for officials from G-8 and G-20 countries, including three ministerial meetings.

Our government spearheaded and hosted the ministerial preparatory conference on Haiti in Montreal, which was put together less than two weeks after Haiti's devastating earthquake in January.

I called upon our Summits Management Office to organize this meeting, and my officials rose to the challenge admirably and delivered a flawless meeting.

In addition to the G8 and G20 leaders' summits, Canada played host to two other major international events. As soon as the G8 Summit ended, Summits Management officials turned to supporting the B20 Business Leaders' Summit which was hosted by the Honourable John Manley of the Canadian Council of Chief Executives in Toronto in the hours before the G20 Summit began.

Meanwhile the official youth summit, known as My Summit 2010, started two days ahead of the G-8 summit and lasted through to the end of the G-20 summit, with activities in Muskoka as well as in Toronto. University-level delegates from around the world observed the summit process, engaged in their own summit on themes of global importance, and met senior officials, leaders, and other dignitaries. More than 150 future global leaders came to Canada for this youth summit, and we obviously fed them as well as housed them throughout their stay.

Canada also distinguished itself through spearheading the Maternal, Newborn, and Child Health Initiative with a $2.8 billion contribution over five years to make significant and tangible differences in the lives of the world's most vulnerable people.

In total, we hosted four summits. By hosting these summits the weekend of June 25, 26, and 27, the summit management office used the same airport and the same international media centre. Most notably, we used the same core planning staff of about 200 people in the lead-up, and around 600 joined the actual summits themselves.

We must also consider the scope of our outreach and leadership. Canada invited more than 30 delegations beyond those already in the G-8 and the G-20, welcoming new voices to the table. Close to 5,000 officials and over 3,700 media applied for accreditation.

In closing, colleagues, I would like to reiterate once again that hosting summits such as these is extraordinary to any government's daily operations, but Canada met the challenge and fulfilled the responsibility that comes with global leadership. We have been fully transparent in the disclosure of the costs of these duties to a degree never seen before, not in Canada, nor among any other international hosts of such summits.

Thank you.

[The Chair, Liberal, John McKay]

Thank you, Minister.

Mr. Valeriote will have the floor for the first eight minutes.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you, Ministers and staff, for attending this morning. It's appreciated.

Clearly, you're unapologetic, Minister Cannon, for the spending at this G-8/G-20 summit. Canadians understand that money needs to be spent for these summits. On behalf of Canadians, I would say, though, that we don't have the appetite for this kind of spending that clearly you do.

On May 31, 2010, the previous transport minister said, “...I can say very directly that at the Hokkaido summit held in Japan, the security costs were in excess of $1.5 billion.”

The day after, his colleague, the member from Brant, said, “The one example that I would point out to the hon. member is, in Japan, when it hosted the G8, the costs were $1.7 billion just to hold the G8 in Japan.”

Now, that's $200 million more than what Minister Baird said earlier.

If you look at the Munk institute report from the Munk School for Global Affairs, it recites the cost of the Japan G-8 conference at $559 million, far, far less, exponentially less, than what was said by either of your colleagues in the House.

I'm wondering, Minister, how you can explain the difference between what was actually spent and what was reported by your colleagues in the House as to what was spent in Japan and why they would engage in that kind of hyperbole.

[Lawrence Cannon, Conservative, Pontiac, QC]

Well, colleague, what I can say is that as a minister of the crown and responsible for the budgets that are assigned to my department, we indeed had $180-some-odd million that were set aside for the operations that DFAIT undertakes. You'll see in the numbers—and maybe we can go into that in a couple of minutes, if you wish to do so—that we believe we will probably end up somewhere in the vicinity of between $140 million and $150 million for hosting two summits in two different locations.

All in all, my responsibility is to be able to respond for the expenses that have been undertaken under that perspective.

Now, before cutting me off—

[Frank Valeriote, Liberal, Guelph, ON]

You can't explain the reason for the hyperbole in the House, then. I'll move on to my next question, Mr. Minister.

My next question is for the transport minister.

On July 5, 2010, Moneris Solutions, the biggest debt and credit card processor in the country, looked at three Toronto areas and compared same-store credit retail spending data to the previous weekend. Among its findings were: retail sales fell 28% within the security perimeter, restaurants suffered losses to the tune of 66.59% within the security perimeter, retail sales in the surrounding downtown core fell 10.78%, and restaurants alone saw losses of 32.7%. This is in the downtown core outside the security perimeter.

My question to the minister is this. Did you forecast these losses, and did you compare these losses to what they would have been had you located the G-20 at a location more isolated and secure, namely at, for instance, Exhibition Place, which had been recommended to you?

[Lawrence Cannon, Conservative, Pontiac, QC]

I'll take that question because it seems to me that you're talking about ex gratia payments, colleague. Let me summarize for you what has been received up to date.

Just over 400 claims for both summits have been received, totalling $11.6 million; 43 claims have been completed and another 54 are in the final stage of assessment. Of note, up to September, about 200 claims were received between mid-September and November 18, which is the deadline. Another 200 claims were received. As I have mentioned in the House, there is a compensation policy in place. It's exactly the same policy, colleague, that has been used by previous governments for past summits. The eligibility period of the security perimeter and of course the external affected areas was finalized in mid-August, following close consultations between the summit management office and the appropriate security authorities, as well as the Toronto city officials. And the information, of course, was posted on the G-8 and the G-20 websites.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Cannon, I'm curious, though, because this is after the fact. Did you forecast these kinds of losses being incurred? In anticipating these losses that would ultimately be claimed against the government, did you not say, maybe it might be a better idea to hold this summit at a different location, where these costs would be minimized?

[Lawrence Cannon, Conservative, Pontiac, QC]

No, we had budgeted for them, and I'll let my colleague respond on the security reasons, because he wants to add to that.

But in terms of the ex gratia payments—the basis for them—they were budgeted, colleague. It is in the numbers, and if you want to go into the numbers, we can give them to you later.

The reason the summit was held where it was held was for security purposes. My colleague can add to that.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

To address your earlier comments about the costs and/or benefits to Toronto, the CEO of the Greater Toronto Hotel Association said that it was probably the single largest event in a decade, in terms of booking. He actually stated, “This is our economic stimulus package.”

The University of Toronto, in its G-8 and G-20 research groups, studied the economic impact of the G-8 and G-20 summits on Toronto. Their conclusion was that the G-20 would generate about $100 million in economic activity for Toronto, and their official estimate on the G-8 side was that it would be about a $300 million benefit to the region. The other number I had was that according to Tourism Toronto, the summit was expected to generate some $53 million in direct spending by delegates in the area, on everything from food to entertainment, you name it. That's how the Tourism Toronto folks saw it. So overall, it was a net benefit to Toronto.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you, Minister.

[The Chair, Liberal, John McKay]

Ms. Coady.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you.

I really appreciate your being here this morning.

I have one quick question, and I only have a minute left, so you'll appreciate that it's going to have to be quick. Actually, it's half a minute left.

I'm curious why you bought so many zipper pulls and gift pens, and all the items you purchased. They added up to be hundreds of thousands of dollars. You've just come back, of course, from another summit. I'm sure you don't have any of those little zipper pulls, which might have been given out at that particular summit.

What was the decision-making authority for purchasing those small items, which added up to a very large cost, especially at a summit that was about austerity and fiscal management? I'm at a loss.

[The Chair, Liberal, John McKay]

Be very, very brief.

[Lawrence Cannon, Conservative, Pontiac, QC]

Well, very briefly, colleague, it's unfortunate that you missed my opening remarks, but in them I indicated to my colleagues who were here that we indeed did host the world and that we did indeed—contrary to opposition claims that this summit was only held for two days—host a number of events around that, whose preparations had been ongoing since 2008.

But above and beyond all of that, one of the events we held was the youth summit on the margins of the summit in Toronto, as well as the one in Muskoka. As is the custom wherever you go in the world to such gatherings, there are promotional events held and promotional things given. In this case, particularly for the youth summit, I understand that what you mentioned was one of the promotional things left with the delegates who had come.

[The Chair, Liberal, John McKay]

Thank you, Minister.

Ms. Bourgeois, you have the floor for eight minutes.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Mr. Chairman.

Good morning, ministers.

Good morning to you as well, ladies and gentlemen officials.

Ministers, I appreciate the fact that you have come here this morning. I nevertheless want to tell you that I am somewhat disappointed—it's not that I didn't want to see you—because the person who would have been in the best position to answer our specific questions is the Minister of Industry. The officials who have come to see us in previous weeks have told us that the Minister of Transport at the time and the current Minister of Industry, who was also Minister of Industry then, made the decision to favour one region over others to hold the G8. I'm nevertheless going to ask you these questions, knowing that you may have been briefed before coming here.

I will speak first to the Minister of Transport. When you decide to hold a summit in a specific region, such as the one you held in Huntsville, you two ministers decide. In this instance, you two ministers decided this time.

How was that location chosen? Don't you think that, since that place was located in the constituency of the Minister of Industry, the Minister of Industry was being put in a conflict of interest?

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Of course, the decision to hold the G-8 summit specifically--I think it's important to remember that these things, although they were sequential, were two different events, and the G-8 conference in the Muskoka area was chosen first. At that time it was thought that would be the big event.

The decision to move ahead with the G-8 in Muskoka was of course a government decision. A panel of public servants travelled to a variety of sites across Canada to see what would be the best of the sites. Huntsville was recommended as the number one site from several others that were also considered. But in the end it's a Government of Canada decision; it's not left to any one minister. The government, based on recommendations that came to it from public servants, decided to proceed with the Muskoka site. It turned out to be the right decision. It was a very successful summit. But no one minister makes decisions like that.

It's interesting to me that leading up to the summit, and well in advance, even the leader of the opposition was talking about how he also supported the site, he thought it should take place there, and he thought it would be very good. He was right. It did turn out to be a good summit in a good location.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Minister, I understand why a party leader might say that could be a good location. But I think there's still a problem: it was in the constituency of the Minister of Industry and nearly $50 million was spent there, $43.7 million more specifically, for a heritage moment. That's where I believe there's a problem.

Was the Minister of Industry of the time, who is still minister today, party to that decision? What hat was he wearing? The minister's hat or the member's hat?

[Lawrence Cannon, Conservative, Pontiac, QC]

With your permission, Madam, I'm going to try to answer your question. My colleague indicated how the process took place.

First, in 2008, a number of officials from several departments—the Department of Foreign Affairs, the Department of Public Safety, the Department of Public Works and Government Services, the Department of National Defence, and so on—met. After visiting a number of sites—I believe they visited five—they made a recommendation to the government. It was the same thing as, for example, when the constituency of our colleague, Mr. Laframboise, whose riding is adjacent to mine, was selected. The meeting of the heads of government and heads of state of North America was held in Montebello a few years ago. These are recommendations made by the government. That's how we come to these conclusions.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

In that region, $43.7 million was spent for a heritage moment. I have no objection to that heritage moment as such; I understand that you have to compensate the region and the people who live around there for the discomfort, insecurity, etc. However, $43.7 million is a lot of money, at a time when we're asking people to tighten their belts. Look at the context of 2008-2009, and you know that economic troubles were coming; money was invested in towns mostly located more than 35 km or 45 km away from Huntsville. Explain that to me.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Yes, certainly. It is true that the entire Muskoka area benefited from the event, but that was the objective going in. The parameters in terms and conditions that were put on the funds that were allocated, up to $50 million--not all of it was spent, but a good part of it was--were that it would be spent in the entire Muskoka area. So towns like Bracebridge and Gravenhurst, besides Huntsville itself, Parry Sound, all these towns in the entire Muskoka area had access to the fund. A committee was struck of all the mayors in all the towns in the greater Muskoka area. They met regularly and were invited to meetings regularly to set priorities and choose projects.

We made no bones about it. This was a once-in-a-lifetime chance to celebrate the Muskoka area and promote it to the world. It's a beautiful area on its own, but by putting this legacy fund together, people were able to choose projects. Every one of these projects is a public project approved by the mayor and council, selected as a priority, and then funded, admittedly, by the federal government. But we went in with our eyes open. We wanted to do this, and we wanted to do it not just for Huntsville but for all the areas, even if they weren't close by, because the entire area benefited.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, minister.

I have one final question for Minister Cannon.

So many things were done in that region, such as the installation of interlocking paving stones and toilets in the park. I would like to know, Mr. Cannon, whether you took the opportunity to go and conduct a grand tour with your counterparts to show them the result of the $47 million investment in the region?