Finance Committee on March 29th, 2007

[Pierre Gosselin]

Those are two different actions.

[Pierre Paquette, Bloc, Joliette, QC]

They are two different things, yes.

I also wanted to bring up something else, since you are here. I have introduced a bill that would also allow unions to file complaints with the Canadian International Trade Tribunal. Currently, only industry or employers may lodge complaints, whereas now, there are large industrial groups, even Canadian ones... Take for example Gildan, which yesterday announced the closure of two Montreal factories and the opening of a new one in Central America. It is quite possible that this company—and I'm not saying that it is the case—is not interested in lodging a complaint, regarding either safeguard measures, anti-dumping measures, or subsidies, because generally speaking, the group is benefiting from the situation.

Haven't we reached the point where we should allow workers, or their union representatives, to file complaints in order to protect jobs that may be threatened not by their inability to compete, but by the fact that the interests of their industrial group are better served by unfair competition?

[Pierre Gosselin]

Mr. Paquette, you are asking me questions that I am unable to answer. We rule on matters that are put forward to us in compliance with the current legislation. We do not engage in politics.

[Pierre Paquette, Bloc, Joliette, QC]

Can you not make any recommendations?

[Pierre Gosselin]

No.

[Pierre Paquette, Bloc, Joliette, QC]

In your role as an advisory board, were you never consulted to determine what types of changes should be made to make the Canadian International Trade Tribunal more effective?

[Pierre Gosselin]

Yes, if we are asked the question—since our mandate is to address matters put to us—but the question was not put to us.

[Pierre Paquette, Bloc, Joliette, QC]

Very well. I understand.

I have one last question, out of curiosity. I see that your program expenditures have increased by 8.1%. You explained that this was due to the installation of a new audio system. I also see that the contributions you make to your employees' benefit plan have dropped by $20,000. This is a not a huge amount, but it seems a bit bizarre since, at the moment, many industrial sectors are going to be appealing to the Canadian International Trade Tribunal. There has not been any increase in hiring, as I've gathered, and in addition, there has been a decrease in contributions to social benefits. One would presume then that the tribunal is going to have fewer staff members than before. I would like to know why the contributions made to the social benefits plan are dropping at this precise moment. Is it because there are fewer employees, or have changes been made?

Mr. Chairman, will you allow Ms. Mercier to answer?

[The Chair, Conservative, Brian Pallister]

Certainly.

[Sylvie Mercier, Chief, Financial Services, Canadian International Trade Tribunal]

To answer your question, the percentage was set by Treasury Board. The contribution to social benefits for employees changes from year to year. It can be 21% one year, and 18% another year. We are not the ones who set the rate.

[Pierre Paquette, Bloc, Joliette, QC]

Does it correspond to an actuarial calculation?

[Sylvie Mercier]

Exactly. Treasury Board provides us with this information, and we adjust our budgets according to the rate established by Treasury Board.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much.

We continue now with Madam Ablonczy.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you, Mr. Chair, and thank you to all of you for being here.

I want to turn first to Mr. Potter. I'm sure you're expecting this question. Your estimates from the last fiscal year to this fiscal year have gone up over 44%, nearly by half, and of course we're curious as to why there would be such a big increase. Could you break it down a little bit for us so we could understand it better?

[Mark Potter]

I'll start briefly by recalling the three broad areas, both for this next fiscal year and as we go forward. The three broad areas are: general increases in workload, the number of reports we've been receiving, the number of cases we've been disclosing, and so on.

The second is the implementation of Bill C-25. As you well know, there are a number of measures there, some fairly big ticket items like an administrative monetary penalty system and an MSB registry, along with a number of others that we'll be in the process of implementing over the next two or three years.

The final one is the contribution to the Egmont Group.

We can certainly give you more detail on those areas, if that's helpful, either now or later.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

I have a couple of questions following from that.

Is this increase because you're expanding your employee base or what?

[Mark Potter]

Precisely. We are certainly expanding our employee base from about 230 to about 270, and staff costs are about 50% of our budget in general, so that's a big driver. We're constantly strengthening our technological base and investing in new information technology. And we also, for example, pay for our own accommodation, unlike a number of other departments and agencies. So that's another cost driver.

But it's primarily the three reasons I mentioned--workload, Bill C-25, and Egmont--that are driving the growth in our budget.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

With respect to Egmont, are other participating countries paying an equal amount, either equal or equal per capita? Can you explain that a little bit?

[Mark Potter]

Yes, I sure can.

First, I should distinguish between the initial contribution by Canada only toward the establishment of the secretariat--and that's $5 million over five years and it's $1.8 million next year. This was a proposal brought forward by the Minister of Finance to the Egmont Group. Other jurisdictions brought forward proposals to host the secretariat, and part of ours included that level of financial support. We, in effect, won the competition to have the permanent secretariat located in Canada--not just for that reason. There were a number of other considerations that the committee reviewed and took into account.

So there's cost to establish the secretariat, and Canada only is paying for that.

Starting next year, in July 2008, the secretariat of the Egmont will collect member dues from its 100 members, and those 100 members will pay based on their GDP and GDP per capita. So a formula has been developed. Clearly, G7 and G8 countries like us will pay proportionally more than countries that are still developing. We can certainly provide those figures to you to give you a sense of the specific numbers.

Overall, the annual operating budget of the secretariat is expected to be in the range of a little over $1 million Canadian each year. So you have a little over $1 million divided by 100 members.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

I would suggest that's not unreasonable in this day and age.

I know you addressed this a little bit with Mr. Thibault, but what's the advantage to Canada of having the Egmont secretariat here?

[Mark Potter]

I think there are, first and foremost, a number of advantages to having a well-functioning Egmont Group. Egmont Group has been around for about 12 years now. It complements the work of the international Financial Action Task Force, which focuses more on the policy- and standards-setting level. The Egmont Group focuses on operational cooperation among agencies like ours.

When I say “operational”, I point to two or three key areas. The first is facilitating the exchange of information--the information on cases, the intelligence that we produce--and putting in place the frameworks and the technology. A key cost for the Egmont Group is a secure IT system that allows for the exchange of cases in a very secure manner. That's one key attribute of the organization.

The other is promoting joint work on training. As we evolve as organizations, as we deal with increasingly sophisticated criminals and terrorists, financiers, we need to improve our training. We need to do work on typologies and methods--the research we do--and share information about what we're learning about the vulnerabilities of our systems and how to strengthen them.

So there are a number of areas like this. As well, it ensures that there is a strong global network of agencies like ours. We contribute to technical assistance. We help these other agencies develop. Canada has one of the leading such agencies in the world. We've learned a great deal in the six years we've been in existence, so we contribute through technical assistance to the development of other FIUs in other jurisdictions. As you can appreciate, the system is really as strong as some of its weakest links. The goal is to have a very robust system worldwide. Egmont certainly contributes to that.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you.

Mr. Gosselin, your increases in estimates are not nearly as exciting as 44%. They're just under 7%. Nevertheless, they do exceed the rate of inflation. So again, could you give me the explanation as to why there is an increase?

[Pierre Gosselin]

The vast majority of that is to pay for a new audio system in our hearing rooms. In fact, $650,000 or so goes to that. Then there are small amounts for a number of other things.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

There is quite a big increase--although certainly monetarily not that big-- in your estimates for general economic inquiries and references from last year to this year. I'm just wondering why that would be.