Government Operations Committee on May 27th, 2014

[Bill Matthews]

I can't speak to what system they'll put in for the tolls. You're quite right that the government hasn't indicated they expect this to be a toll bridge. I will say that from an internal control perspective, cash is the easiest thing to steal. With the advent of things like smart passes and credit card payments, the capability for fraud falls greatly. It's too early for me to say what the toll system will be.

[Gordon O'Connor]

Okay thanks.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you.

I will now give the floor to Mr. Simms, who has five minutes as well.

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

Thank you.

Thank you to the guests. I'm the last minute replacement here, so forgive me if I ask something that's a little off track. Feel free to coin the phrase, “I think Mr. Simms what you're trying to ask is...”.

[Voices]

Oh, oh!

[Simms]

A quick question though, by way of information: why is supplementary (B) the largest?

[Bill Matthews]

It relates to the expenditure management cycle of the government. That's actually a very good question, so I'm not going to change it one bit.

[Voices]

Oh, oh!

[Bill Matthews]

If you think of the supplementary estimates (A), which are our spring supplementaries, they didn't use to exist. They only exist for items that are basically in the budget but for which a department can't wait for the fall supplementary estimates. So you really have to prove to us that you need the money and that you can't wait until the fall to get into the supplementary estimates (A).

Supplementary estimates (B) follow a normal timeline. When you have something in the budget, departments have a few months to put together their Treasury Board submissions and explain how they're going to spend the money. We have a challenge function, and then it makes its way into supplementary estimates (B), which come here in the fall timeframe. That's just a more normal time cycle. So it's really by default: if you can't prove to us, you have to wait, you get into supplementary estimates (B).

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

So it's just the time that it falls in more than anything else. I get it.

I want to ask about VIA Rail. It's not really about VIA Rail per se, but the concept of solvency issues when it comes to the pension plan. This is a grave concern in many provinces right now. Are we talking about the ability to fund our pension liabilities in this particular case? Does it pertain to that?

[Bill Matthews]

It pertains to VIA Rail being a crown corporation, so it must follow the same legislation as the private sector does in funding pension plans. You can't just have an unfunded pension plan liability. So when you have a funding deficit, I believe, according to law, you have about five years to make that up. This, if I recall correctly, is about the third year of five years of payments to make up a funding deficit. It's not a case of the liabilities can't be met. There are legal requirements to fund the deficit, and you have a certain timeframe to do so, and the government is effectively resourcing VIA Rail to make those legally required payments. So it's not about the individual pensions going out the door; it's actually the funding requirements of the pension liability.

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

All right, so even at $101 million, this is an adjustment, really. Is that what you're saying?

[Bill Matthews]

It's an adjustment, and we'll expect it again in future years, but to be going down, because at the same time the VIA Rail pension fund has investments. As you would know, the economic recession caused pension plan assets to drop. They're now performing better again, so this amount will continue for the next year or two, but be going down.

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

What other crown corporations are in that same scenario as VIA Rail?

[Bill Matthews]

I'm trying to remember.... Do we have one other one? I can't recall one off the top of my head.

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

So not the CBC or anything like that?

[Bill Matthews]

No, no.

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

And these are defined benefit plans you're talking about.

[Bill Matthews]

These are defined benefit plans that have had some adjustments much like the other plans to change the cost-sharing ratios, but they're still defined benefit plans.

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

Okay, that's very interesting because I didn't realize we'd dealt with that in that sense.

What would be a round number of what we've saved from the strategic review since 2007 up until now? I know it's a broad question, and I apologize, but....

[Bill Matthews]

Maybe my colleagues can add as we go, because there were four rounds of strategic reviews. The first round generated about $604 million; the second round about $400 million; the third round about $1.6 billion; and the fourth round about $290 million. So if someone can do some quick math...? Do you need those numbers again?

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

That's fine, I get the idea.

[Marcia Santiago, Executive Director, Expenditure Management Sector, Treasury Board Secretariat]

It's just under $3 billion.

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

Okay. And this strategic review was primarily with the reductions in the workforce?

[Bill Matthews]

No, you're moving to the strategic and operating review, which some people call the deficit reduction action plan. The strategic review started in 2007. We brought in departments over a four-year period to look at which of their programs were performing and which weren't, and that was very much targeted at government programs. The strategic and operating review brought in the operating costs, and I think that might be the one you're talking about, which was—