Canadian Heritage Committee on Nov. 30th, 2010

[The Chair, Conservative, Michael Chong]

Welcome to the 33rd meeting of the Standing Committee on Canadian Heritage, on this Tuesday, November 30, 2010.

Pursuant to Standing Order 81(5), we are here to study the supplementary estimates (B), 2010-2011.

The chair will be calling the votes on 5b, 15b, 40b, 45b, 50b, 55b, 65b, 80b, and 90b under Canadian Heritage.

To allow us to consider these votes and to study the estimates, we have in front of us three representatives from the Department of Canadian Heritage. We have Mr. Wallace, Monsieur Blais, and Monsieur Scrimger.

Welcome to all three of you.

We'll begin with an opening statement from Mr. Wallace.

[Stephen Wallace, Associate Deputy Minister, Department of Canadian Heritage]

Thank you very much, Mr. Chair.

Thank you to members of the committee for inviting us here today.

As you mentioned, Mr. Chair, I have with me Monsieur Jean-Pierre Blais, assistant deputy minister of cultural affairs—no stranger to the committee—and I'm flanked on my right by Tom Scrimger, assistant deputy minister of citizenship and heritage. He has also served as our chief financial officer, which is relevant to our discussions today.

Mr. Chair, as you mentioned, we are here to respond to questions on supplementary estimates (B). In this regard, I wanted to briefly run through the elements of our mandate and recent activities that touch upon our expenditures.

As you know, our mandate affects key aspects of Canadians' cultural and civic lives. Canadian Heritage works with Canada's major national cultural institutions to promote arts and culture, heritage, official languages, citizenship and participation, as well as aboriginal, youth and sport initiatives. Our programs are delivered in communities throughout Canada.

We've had a busy year, Mr. Chair.

It has been a busy year for us with the renewal of many programs, work on a digital strategy, Expo 2010 in Shanghai, the royal tour, the Commonwealth Games in India and, of course, the Vancouver 2010 Olympic and Paralympic Winter Games, where we were the lead department.

I think a high-water mark in the life of the Department of Canadian Heritage over the last several years.

We continue to provide in the range of 7,500 grants and contributions every year, and have for the first time published service standards for their delivery.

Let me turn quickly to Canada's economic action plan. We've been busy delivering on this over the course of the last year, and we do remain on target.

In 2009-10 we funded projects and programs worth more than $150 million on action plan initiatives.

This year, as of October 31, we've funded more than $106 million of initiatives developed through five programs: the Canada Cultural Spaces Fund, the Canada Arts Training Fund, the Canada Periodical Fund, the Canada Media Fund, and Special Olympics Canada.

As we are here, Mr. Chair, to respond to questions on supplementary estimates (B), I'd like to go through, if I may, some highlights with the committee.

Let me start with the bottom line. The net impact of the supplementary estimates will be an increase of $30.1 million to the spending authority of the department. This funding is being used for the following initiatives.

I will start with sport.

Budget 2010 renews funding of $5 million annually that was originally announced in Budget 2003. This supports the La Relève initiative for the identification and development of the next generation of high-performance athletes.

Additionally, $17 million annually has been added to continue to develop high-performance athletes participating in the Olympic and Paralympic Games. These funds will continue to 2014-2015.

Canadian Heritage currently provides $47 million annually towards enhanced excellence funding for targeted summer and winter sports as part of the own the podium (OTP) initiative. The new funds are expected to increase OTP-winter funding to $22 million and OTP-summer funding to $42 million per year.

To support persons with a disability, the Government of Canada is providing an additional $5 million to the Canadian Paralympic Committee and another $1 million to Special Olympics Canada annually for the next 5 years. These funds will enable these organizations to build on their participation activities and athlete-development initiatives, encouraging participation in sport.

In 2007, the Government of Canada announced the renewal of ParticipACTION. An additional investment of $3 million per year for 2 years, announced in Budget 2010, will help the organization promote healthy lifestyles through physical activity and sport participation, and generate more resources through the private sector.

I'll move now to the arts, Mr. Chair. Through the supplementary estimates (B) the Government of Canada is also supporting Prairie Scene 2011, which will be held in Ottawa from April 26 to May 7, and will showcase artists from the provinces of Manitoba and Saskatchewan. This is the fifth scene event produced by the NAC. Previous events showcased the Atlantic, Alberta, Quebec, and British Columbia. The department has made an investment in all four previous festivals, and we will contribute over the course of this year $250,000 to the NAC for costs associated with Prairie Scene 2011.

Turning now to cost containment measures, in the 2010 federal budget the government's plan was to bring the budget back to balance by putting in place targeted measures to reduce the rate of growth of spending that will build over the medium term. In order to achieve this plan, a number of cost-containment measures on our administrative budget have been implemented. For example, in 2010-11, Canadian Heritage budgets were not increased to fund the 1.5% increase in annual wages for the federal public administration. The department was also required to reallocate from the remainder of its operating budgets to fund this increase.

Two reductions of note are included in the estimates before you. Since funds were received in 2009-2010 for salary increases in 2010-11 and future years, these funds are to be removed from the department's budget, which amounts to $1.67 million. There's also a reduction of $490,000 to the budget of the offices of the minister and the minister of state.

Mr. Chair, I hope this information will be useful to the committee.

We would now be pleased to respond to any questions you may have.

I hope this information will be useful to the committee. We would now be pleased to respond to any questions you may have.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Wallace, for your opening statement.

We'll have about an hour for questions and comments from members of the committee, beginning with Mr. Simms.

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

Thank you, Chair.

Thank you to our guests.

Regarding the action plan, you say there's $150 million budgeted, and $106 million has been handed out thus far. Is that correct?

[Stephen Wallace]

That's correct, as of October 31.

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

As of October 31. Now, you're expecting to spend the full allotment by March 31. Is that correct?

[Stephen Wallace]

Yes. So far it's going well. We're on track.

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

Okay.

The thing is this: when this is done, what will be the impact on the budget, say, of CBC, or the department budget itself? This is what I want to know. When the action plan is done, in the case of the CBC are we going to see a reduction?

[Stephen Wallace]

The CBC has a mixed funding model.

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

That's right.

[Stephen Wallace]

It gets its annual appropriations. It gets a range of federal funding programs. It does so every year. It also earns its own commercial revenue, so it will continue to do that.

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

Okay.

When it comes to the savings, you talked about the efficiency created. The 2010 budget talked about....

In this particular case, you've included $13 million with the CBC, right? So there's $42 million allotted to them. With $13 million from the savings, it comes up to the $60 million appropriation that they've been getting every year since 2002.

Can you explain that to me?

[Stephen Wallace]

Yes, and I'll turn to Mr. Scrimger, in his chief financial officer role, if I need to drill down a bit here.

The CBC, like every other federal entity, has to participate—part and parcel of the budget 2010 announcement—in the freezing of the salary budget over the course of the next couple of years. Like the Department of Canadian Heritage, then, CBC, in the 2009-10 exercise, had received additional moneys to cover those salary increases—the normal increases in salary on a year-to-year basis.

Since that freeze was enacted, we across the government are going in and taking out the moneys that were previously given for the increases to be able to correspond to the budget 2010 announcement. CBC/Radio-Canada is no different from any of the others. And as I mentioned in my opening remarks, we have taken money out of the Canadian Heritage budget for the same purpose.

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

Okay.

I was asked a question the other day about the magazine industry. You talked about periodical publishing. Now, the amount is about $75 million usually. That's about $60 million for the actual program, I think, and PAP--I think that's the acronym—is normally $15 million.

Was that included in the economic action plan?

[Stephen Wallace]

I'm going to leave this to “Mr. Magazine”, ADM Blais.

[Jean-Pierre Blais, Assistant Deputy Minister, Cultural Affairs, Department of Canadian Heritage]

The program has always been at the $74-million or $75-million level. Prior to the economic action plan, a portion, the $15 million, was part of Canada Post's budget. In that budget it was renewed for two years but transferred to our budget in Canadian Heritage for two years.

I know that a lot of people have been on the Hill today, having a presence on the Hill. They've come to see me, and they've seen other people.

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

Apparently they've seen me, too.

[Jean-Pierre Blais]

That's fine, that's great. But what they're advocating is that the $15 million, which was covered in the economic action plan budget for two years, be renewed in the next budget.

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

So as far as we know, then, there's no renewal at this point.

[Jean-Pierre Blais]

There is no renewal at this point, but there is not “no” renewal, either.

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

I understand.

[Jean-Pierre Blais]

I mean, we'll know at the next budget.

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

All right. I just want to make sure I get this straight: before the next budget, then, nothing has been communicated to renew it. Okay. So that's $60 million.

I'm going to turn it over to my colleague.

Do you have a question?

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Absolutely. Thank you.

I walked in during the middle of your remarks, so I want to ask you about the impact the budget freeze has had on your department's programs and staffing. I note that staffing costs are being frozen, staff are being cut back.

What programs, if any, have had to be cut back? I note that the impact for the Department of Heritage is a net increase of $30 million and it's a spending authority. But doesn't the budget freeze require you to not increase your budget? Can you explain the impact the freeze has had on Heritage?

[Stephen Wallace]

I'd first start by saying that the impact of that measure has been on the administrative budget, not the program budget.

With respect to the administrative budget, we've been doing a series of measures in the department to take a look at cost efficiencies. We've done a number of things that I think have gone fairly well over the course of the last six months. There's still work to be done on that.

Essentially we've been looking at a series of measures that are cheaper, but they also are helping to reposition the department to be faster in terms of its response on programming, as well That's gone fairly well so far. We don't anticipate having any difficulty with respect to that measure in budget 2010.