Government Operations Committee on March 25th, 2014

[Jim Hillyer, Conservative, Lethbridge, AB]

I'm from southern Alberta and I meet with a lot of constituents before the budget. Every year I consult with constituents. After I meet with the constituents, I meet with the finance department to share my constituents' questions and concerns.

One of the questions I often get is a general one about transfer payments. While most southern Albertans I think are okay with the idea of living in a country where some provinces prosper at some times and others need a little bit of help, one of the questions that comes up is how come provinces that have very generous social programs and can't afford to cover the costs of those social programs, cover the costs of those programs with transfer payments.

One of the examples I get a lot is someone like Céline Dion who, if she was living in Quebec, could get her child care for $400. The people in Alberta don't get that benefit but they have a feeling that they're subsidizing that cost which they don't get a benefit from.

Can you comment on that? Is that just a misconception of how transfer payments are used, or is that actually the case?

[Bill Matthews]

It is a bit of a misconception. When you think of the transfer payments, and equalization is the best example, they're based on revenues. It's about keeping departments whole from a revenue perspective.

How they decide to spend that revenue is up to the province. Whether it's subsidized child care or something else, that's their jurisdiction. The amount of transfer payments is not based on what they want to spend. It's based on the actual income at their disposal. It isn't based on a certain province having more generous spending programs than another so they get more money. It is based on the revenues available to the province, which are a function of the economy. As you have highlighted, some provinces are better off than others due to the various economic resources they have.

All I would say is that it is revenue based and not expenditure based, and how a province decides to spend that money, whether it's by giving tax breaks or subsidizing child care, it's up to the province.

[Jim Hillyer, Conservative, Lethbridge, AB]

Okay.

On that same question, another concern that comes up, and not just on transfer payments, is sometimes cities will get the federal funding, spend it on sexy projects like new arenas or public art, and then when they run out of the money, they complain that they're not getting federal funding for roads and infrastructure. Is that a misconception as well, or do we need to be able to hold cities and provinces more accountable? Some of the money is earmarked and it's not just up to you how you spend it. Some of it is earmarked.

[Bill Matthews]

When you're into infrastructure programs, there are basically funding agreements in place that, depending on the complexity of the agreement, will require the province as well as the city to put in money. It is cost-shared. The federal contribution to a particular project is nailed down up front.

It's other levels of government that are doing the planning, but the federal contribution is capped on a percentage. Then there is an agreement that actually lays down what that will cost the federal government.

Depending on the nature of the infrastructure program, some are targeted to things like rinks and things like that. Others are targeted at roads. If you were to consult Infrastructure Canada's report on plans and priorities, you would see a delineation of basically the various programs and what they're targeted for.

The federal government is protected from a percentage perspective, but also the agreement caps the federal government's involvement, so cost control really then transfers to the other governments. Can you control any complaining about running out of money? I can't speak to that.

[Jim Hillyer, Conservative, Lethbridge, AB]

I know we can't control the complaining.

Another example is the training program that we wanted, of the last budget, for provinces to use this funding for jobs skills training. There has been a lot of talk about how provinces didn't want to use the money for that. Isn't there some way we can just put some teeth in it and say that if they want this money, then it's going to be used for the program for which it was earmarked?

[Bill Matthews]

That's the basis for the federal-provincial negotiations that will precede any sort of agreement, labour market development, or whatever its replacement is. There does have to be joint agreement. It's not just a case of saying, “Here's the money. do what you want.” There is an agreement nailed down up front. Sometimes those negotiations are complex and take a lot of time.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Hillyer.

We will now go to Mr. Ravignat for five minutes.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Mr. Chair.

In 2014, a press release was issued about Lac-Mégantic. Could you tell me whether the Lac-Mégantic situation requires funding for 2014-15? If so, how much?

[Bill Matthews]

In response to the question about the fiscal year 2014-15,

we're dealing with the ongoing investigation, Transportation Safety Board. They have indicated at this stage that they do not require additional money for that investigation. There is nothing in the 2014-15 estimates for additional funding for that organization. That being said, the investigation is ongoing. I can't guarantee that something won't come up in the future, but at current states we're not expecting anything.

[Mathieu Ravignat, NDP, Pontiac, QC]

If something happened, how would we be able to handle it?

[Bill Matthews]

You could see it in a couple of ways. If they get enough lead time, you could see it through a supplementary estimates item. It's possible you would see it there.

We covered this earlier in the presentation. If we were in between supplementary estimates, and a department is caught off guard by something, there is a government-wide vote.

I am just going to take you back to slide eight of my presentation earlier. We had the list of government-wide votes, Treasury Board central votes. The first one listed under Treasury Board central votes, vote 5, “Government Contingencies”, that's a vote that Treasury Board can utilize if there is effectively not enough time to wait for the next supplementary estimates. We can allocate funding out of that vote and then it gets reported back to Parliament through the next cycle. That's another option if they can't wait for supplementary estimates.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, that's very reassuring.

In terms of the public sector integrity commissioner, it seems that the number of cases has not necessarily gone up, but the commissioner estimates that his office might not have sufficient resources.

Could you tell me why there has been a decrease of $230,000 this year?

[Bill Matthews]

Well, there are a couple of reasons.

Is this the Public Service Commission we're speaking about?

[Mathieu Ravignat, NDP, Pontiac, QC]

Yes.

[Bill Matthews]

In the English version,

it's page 270 of the main estimates.

One moment, please.

[Mathieu Ravignat, NDP, Pontiac, QC]

According to the numbers I have, there is $230,406 less this year.

[Bill Matthews]

What page is that on?

[Marcia Santiago]

In the French version, it is on page 141.

[Bill Matthews]

If you're looking at program expenses, I'm curious as to where you're finding that figure.

Basically, main estimates 2014-15 are down from main estimates 2013-14. The reason described here is a decrease of $4.5 million from the last round of spending reviews, and then another decrease related to a reprofile around a relocation of headquarters.

If you wish an explanation of how those work, basically, if a department is going to incur a one-time cost, such as a moving of offices, which you have from time to time, we allow small organizations that can absorb it basically to move money from one year to the next to fund that sort of activity. That's what you're seeing here.

[Mathieu Ravignat, NDP, Pontiac, QC]

I'd like to talk to you about the Public Service Commission of Canada.

According to its 2012-13 departmental performance report, the commission employed 881 people. In 2012-13 it anticipated the number of full-time equivalents would be 846.

Has the time necessary to fill a public service position that falls vacant increased with the decrease in the number of employees of the Public Service Commission of Canada?

[Bill Matthews]

The only way I could respond is anecdotally. From my perspective, no, it has not. Unfortunately, Mr. Watson is no longer with us. He might have some statistics on that front, but anecdotally I can tell you it has not. That's really all I can offer on that front.

[Mathieu Ravignat, NDP, Pontiac, QC]

Does the reprofile mean that the relocation was less expensive than expected, perhaps?

[Bill Matthews]

No. It basically means that it's a one-time cost, and if a department can absorb that one-time cost, for building fit-up or something like that, we basically let them borrow money from a previous fiscal year or a future fiscal year to fund the one-time cost, and it's then basically on track.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Ravignat.

Mr. Trottier, you have the floor for five minutes.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Thank you, Mr. Chair, and thank you to the witness for remaining with us for some further questions.

I had a question about vote 30, the pay list requirements. I just want some clarification. Maybe you stated it in your presentation and I missed it, but there is an increase of $850 million from the 2013-14 main estimates. You say that it's in order to fund government-wide pay lists for eligible budget carry forward requests.

It's more than twice the amount that was requested last year. Could you explain what these pay list requirements are? What is their nature?