Industry Committee on May 7th, 2014

[The Chair, Conservative, David Sweet]

Good afternoon, ladies and gentlemen, bonjour à tous. Welcome to the 21st meeting of the Standing Committee on Industry, Science, and Technology. With our delayed meeting today we'll end one hour from now and we'll also have another round of bells, I believe, right at the end of this.

Before us we have from the Atlantic Canada Opportunities Agency, Denise Frenette, vice-president, finance and corporate services.

I will read into the record a little bit of what our orders of the day are pursuant to Standing Order 108(2), study of subject matter of clauses 175 to 192, the Atlantic Canada Opportunities Agency, an Enterprise Cape Breton Corporation, etc.

So on that note, Ms. Frenette, we'll let you go ahead.

Mr. Cuzner.

Sorry, Madam.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Sorry, on a quick point of order, how do you see this evolving, Mr. Chair, as we were supposed to finish at 4:30?

[The Chair, Conservative, David Sweet]

I had advised all of the members of the committee when we left that due to the votes we would come back and return for one hour.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

So we'll just start the hour here?

[The Chair, Conservative, David Sweet]

Yes.

Mme Frenette, go ahead with your opening remarks.

[Denise Frenette, Vice-President, Finance and Corporate Services, Atlantic Canada Opportunities Agency]

Good afternoon. My name is Denise Frenette. I am the Vice-President of Finance and Corporate Services for the Atlantic Canada Opportunities Agency, or ACOA.

ACOA was created in 1987 with a mandate to enhance the growth of earned incomes and employment opportunities in Atlantic Canada.

We carry out our mandate by helping businesses to become more competitive, innovative, and productive; by working with diverse communities to develop and diversify local economies; and by being a champion for Atlantic Canada.

Today, I am here to provide you with a technical briefing on the legislative changes ACOA is proposing through the 2014 budget implementation bill. More specifically, I will talk to you about divisions 9 and 10 of part 6 of the bill. I will be happy to answer any questions you may have following this briefing.

I'll begin with division 9 of section 6 of the budget implementation act, which proposes two initiatives that would allow ACOA to achieve efficiencies. Those initiatives are the elimination of the ACOA board and the agency’s five-year report to Parliament. I will guide you through the legislation from clause 175 to 178.

Clause 175 provides for the repeal of the definition, “Board”, in section 3 of the Atlantic Canada Opportunities Agency Act as the bill proposes to dissolve the board, pursuant to subsection 178(1).

Clause 176 provides for the repeal of sections 18 and 19 of the Atlantic Canada Opportunities Agency Act. These sections establish and describe the board’s operations, such as its quorum and frequency of meetings.

Clause 177 provides for the repeal of subsections 21(2) and 21(2.1) of the Atlantic Canada Opportunities Agency Act. These subsections required ACOA to table a comprehensive report before Parliament every five years, providing an evaluation of all activities in which the agency is involved. This report is now considered redundant in light of the current reporting framework, which includes annual departmental reports.

Clause 178 terminates the appointment of board members to the Atlantic Canada Opportunities Agency board. Furthermore, subsection 178(2) provides that the members of the board are not entitled to claim compensation as a result of early termination of appointment.

Mr. Chair, I can stop and entertain questions on division 9 or continue on to division 10.

[The Chair, Conservative, David Sweet]

I think it would be the preference that you complete all your remarks, then we will go with our regular rounds of questions.

[Denise Frenette]

Thank you.

I will now go through the division of the budget implementation act that relates to the dissolution of the Enterprise Cape Breton Corporation. ECBC is a federal crown corporation responsible for economic development throughout Cape Breton Island and a portion of mainland Nova Scotia in and around the town of Mulgrave. In addition to its own programs, ECBC is responsible for the delivery of ACOA programs and certain obligations of the former Cape Breton Development Corporation, DEVCO.

Division 10 provides for the dissolution of ECBC and authorizes the transfer of assets and obligations to either ACOA or Public Works and Government Services Canada. ECBC’s economic development activities and associated budgets would transfer to ACOA, which would assume sole responsibility for the delivery of economic activities in Cape Breton, while ECBC’s real property holdings and obligations related to DEVCO would transfer to Public Works and Government Services Canada.

I will guide you through the legislation from clause 179 to clause 192. Clause 179 provides definitions for this division. Clause 180 dissolves the Enterprise Cape Breton Corporation.

Clause 181.(1) provides for the transfer of assets and obligations of ECBC and its subsidiaries to either the Atlantic Canada Opportunities Agency or to the Department of Public Works and Government Services.

Subclauses 181.(1) (a) and 181.(1) (b) provide for all ECBC’s assets and obligations, with the exception of real property holdings, to be transferred to ACOA. These assets and obligations include ECBC’s equity portfolio, loan portfolio, and economic development programming.

Under subclauses 181.(1)(c) and (d), ECBC’s real property holdings and any outstanding obligations to the former employees of the Cape Breton Development Corporation would be transferred to PWGSC. The obligations to DEVCO employees include pensions and other benefits.

Clause 181.(2) provides for the transfer to PWGSC of any unexpended ECBC appropriation, in other words, approved funding, relating to the real property and obligations that would be acquired by PWGSC under this legislation.

Similar to clause 181.(2), clause 181.(3) provides for the transfer of the remaining portion of the unexpended ECBC appropriation, so approved funding, to ACOA.

Clause 182.(1) provides that ECBC employees whose functions are associated with the assets and obligations being transferred to ACOA would be deemed appointed under the Public Service Employment Act to positions in ACOA. These employees would be part of the core public administration.

Clause 182.(2), similar to subsection 182.(1), provides that employees whose functions are associated with the real property or DEVCO obligations being transferred to PWGSC would be deemed appointed under the Public Service Employment Act to positions in PWGSC. These employees would be part of the core public administration.

Clause 182.(3) provides that employees being appointed under subclauses 182.(1) and 182.(2) would retain the rate of pay they were receiving as employees of ECBC, and would carry over unused vacation and sick leave credits accumulated while in their former positions. The clause further provides that employees’ accumulated years of service would be used in the calculation of vacation leave provided in their new positions.

No other entitlement would be carried forward, and the collective bargaining agreements or other employment terms and conditions associated with the employees' new position would apply to the employees in all other respects.

Clause 183 provides for the termination of part-time ECBC board members and that of the CEO. Furthermore, clause 183.(2) provides that, except for the CEO, members of the board of directors would not be entitled to compensation on termination.

Turning to clause 184 now. Normally the transfer of assets from a crown corporation would need to comply with rules of the Financial Administration Act. This clause confirms that requirements under this act relating to the transfer of the assets of a crown corporation do not apply in this case, because it is being done by operation of law.

Clause 185 empowers the minister to carry out whatever is required to close out the corporation's affairs after dissolution.

Clause 186 provides for the transfer to the federal crown of any legal action pending against ECBC or its subsidiaries.

Clause 187 amends the Atlantic Canada Opportunities Agency Act to, among other things, confer on ACOA the authority necessary for the administration, management, control, and disposal of the assets and obligations transferred to the Agency.

Clauses 188 to 191 are consequential amendments to other acts, required due to the elimination of ECBC, as they make reference to the corporation.

Clause 192 repeals the Enterprise Cape Breton Corporation Act.

Mr. Chair, this concludes my presentation to your committee. I would be happy to answer any questions the committee members may have.

[The Chair, Conservative, David Sweet]

Thank you, Ms. Frenette.

We will have five minutes each, that's all, so we'll go first to the Conservative side, Mr. Braid, for five minutes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you, Madame Frenette, for being here this afternoon and providing us with your opening remarks and presentation.

Could you describe, in two sentences or less, the mandate of the Atlantic Canada Opportunities Agency and the mandate of ECBC?

[Denise Frenette]

The mandates of ACOA and ECBC are very similar in that they're for the economic development of the region and they work with SMEs and communities to develop the Atlantic region and in the case of Enterprise Cape Breton, the region of Cape Breton.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

With the merging of these two organizations, the folding in of ECBC to ACOA, will that mandate change on the ground?

[Denise Frenette]

No, it will have the same objective: to further the economic development of the Cape Breton region. That will be the focus. The level and the quality of service should remain the same.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

That's very good.

Could you describe the rationale behind the merging of these two government agencies?

[Denise Frenette]

The government is proposing to have one federal organization providing economic development for both Cape Breton and the whole of the Atlantic region. It's being done at a time when the active mine remediation is winding down, so there is an opportunity to align the delivery of economic development in Atlantic Canada.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

What timeframe will apply to the bringing together of these two organizations?

[Denise Frenette]

ECBC will cease to exist and the division of employees will occur on royal assent. Employees delivering economic development will come over to ACOA and those responsible for real property and the former obligations of DEVCO will be deemed employees of Public Works so the transfer will be immediate. That being said, it will be very seamless in that employees residing in Sydney will not move. The next day they will become employees of our organization.

In terms of economic development, the employees of ECBC have been delivering the ACOA program for a number years so they are familiar with our programs. They will continue to deliver our programs. Economic development budgets associated with ECBC will be transferred to ACOA and rolled into ACOA programming.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

In a previous life, I worked in the private sector for a large organization that merged with another large organization. One of the most critically important things that we did, as part of that process, was pay attention to the importance of communications, both internal and external communications.

Could you touch on what the communication plans being developed may be like, both internally for employees of the two agencies and externally for stakeholders?

[Denise Frenette]

From that perspective, we certainly appreciate the importance of communication on several fronts, as you mentioned, both internal and external to stakeholders. We have a joint committee of ECBC, Public Works, and ACOA working on the transition. We have started to work on what the communication approach will be when the bill receives royal assent.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

All right.

Thank you very much.

[The Chair, Conservative, David Sweet]

Mr. Côté's turn for five minutes.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Thank you for being here, Ms. Frenette.

Obviously, I am not happy about the fact that we have only an hour to study a portion of the omnibus budget implementation bill, at the request of the Standing Committee on Finance, or that we are not authorized to propose a single amendment. That makes our efforts today more or less futile.

In your presentation, when you talked about clause 184—

[Mark Warawa, Conservative, Langley, BC]

Chair, the comments made around this table are to be factual, honest, and truthful. To say that we could only meet for one hour, when in fact it was members of the NDP who were delaying our getting back here.... We could have stayed here longer, if the NDP had shown respect in Parliament.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Warawa.

It's a point of debate, so we'll go back to Mr. Côté and we'll start the clock.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Precisely. Thank you, Mr. Chair.

My colleague—