Finance Committee on May 5th, 2009

[Sherry Harrison]

That's correct. The decrease of $1.815 billion, or 5.4%, is due to a revision of forecasted interest rates on the public debt.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Okay. What seems difficult for me to understand is that this could reasonably have been anticipated when the main estimates were presented. Why is it that we're now receiving a note that your interest costs are down roughly $2 billion?

[Paul Rochon]

This is a comparison between the 2008-09 and 2009-10 main estimates, right? They were the main estimates presented in February 2008. This represents changes between February 2008 and February 2009.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So the swing is $2 billion.

[Paul Rochon]

Yes, it's $2 billion, because market interest rates over that period declined.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Okay, thank you.

The final question has to do with that almost $43 million. You said something about the Toronto waterfront, and I didn't quite pick it up.

[Sherry Harrison]

The Toronto waterfront revitalization initiative at Harbourfront Centre is a transfer of contribution programming from Environment Canada.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I'm sorry, I still don't understand that. What do you mean by “a transfer of contribution programming”?

[Sherry Harrison]

In the 2008-09 main estimates, the funding for those initiatives was reported under the Department of the Environment, and in 2009-10 the responsibility for that programming has been transferred to the Department of Finance.

[John McKay, Liberal, Scarborough—Guildwood, ON]

What was the rationale behind that?

[Paul Rochon]

Our understanding is that the specific transfer is a change related to responsibilities and issues related to machinery of government.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Is this because the finance minister is the minister responsible for the GTA and so it comes under his purview?

[Paul Rochon]

I can't speak to the specific initiative in this case.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McKay.

Can we get a more formal answer either within the two hours or to the committee?

[Paul Rochon]

We can get a more formal response to the committee, absolutely.

[The Chair, Conservative, James Rajotte]

Thank you.

Monsieur Laforest s'il vous plaît.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Good morning to our witnesses.

My first question is for Mr. Baker. You are the Commissioner and Chief Executive Officer of the Canada Revenue Agency. Two years ago, in 2007, the Canada Revenue Agency decided to centralize its payroll centres for CRA employees, among others the Shawinigan and Jonquière centres. I assume there was a rationale behind this decision.

Could you tell us, citing figures, if indeed, there was a rationale? Financially speaking, is there a reason underpinning the relevance of such a move?

You are undoubtedly aware that there were significant problems, inadmissible problems that occurred concerning employees' payroll services, ever since the decision came into effect. Part-time workers especially, and seasonal workers, are receiving late payments. Some have been working for the last 10 weeks and have not yet drawn any salary following a maximum delay of 1 month—and this already occurred this past winter and the problem is reoccurring. They are forced to wait up to 10 weeks. This is unacceptable, and we raised this in the House of Commons. We spoke to the minister. I'm far from certain that this problem has been resolved.

Are you able to tell us that this won't happen again? Can you provide me with a plan, if you have one, proving that this incident will not recur?

[William Baker]

Thank you. I will begin by answering your second question. Indeed, since these compensation centres were established, there have been a few operational problems. I am pleased to tell you that today, we have resolved these problems. Yesterday, or the day before yesterday, there was even an article published in the Public Service Alliance of Canada newsletter on the resolution of this problem. Therefore, I hope that we have found ways to meet these requirements.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Baker, there are never any problems during the month of May. These problems always happen in November, December, and January, when people return to work because they are seasonal workers. It seems as though the Canada Revenue Agency is unable to manage the situation. There didn't seem to be any problem for regular employees, but the problems affect those who work during tax season, starting from December. They are the ones bearing the brunt of the problem.

Therefore, if you tell me that the problems have been resolved, they probably are now; however, peak season has come and gone. The same situation occurred last year, and the problems started up again in the fall.

[William Baker]

Mr. Chair, we are tracking the situation closely and right now, there is no serious problem. We have found ways to resolve these problems. I am convinced that they have been resolved. When somebody doesn't receive his or her salary, it is very serious. We have adopted measures to resolve the problems. We are monitoring the issue very closely because these are our employees.

Your second question deals with the rationale behind the creation of two payroll centres. In the past, each office within the Canada Revenue Agency was responsible for compensating its own employees. Quite frankly, this model was totally inefficient. Therefore, before my return to the agency three years ago, the decision was made to create two compensation centres: one in Shawinigan, and another in Winnipeg. We had decided on two centres, to make sure that there could always be a "support" centre. This way, if one of the two centres had a problem, it would still be possible to run smoothly. To date, everything has been working fine. This has generated savings, but I do not have the figures justifying this change with me. They are, however, available.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

Ms. Harrison, you work at the Department of Finance. You are most certainly aware of what is happening, the financial situation, and the current recession. The government tabled a budget, a so-called financial plan, to face the recession. Yet, since the budget was tabled in January, the situation has deteriorated enormously. The recession is three times worse than what was originally forecast by the Department of Finance.

Don't you believe that it would be time for the government to launch a new financial plan to make up for the difference between the January forecast and current data, given the difficult financial conditions Canada and Quebec are weathering?

[Sherry Harrison]

Yes, I'll let Paul respond to that.

[Paul Rochon]

One must remember that in January, when the budget was tabled, the government decided to rely on forecasts that were far and way lower than the average of private sector forecasts. It is clear that despite this adjustment, economic risks were worsening. In that context, one can say that the government's economic stimulus plan was still rather considerable, and the most ambitious among OECD and G7 countries. One must also keep in mind that in Canada, the federal government occupies about 50% of the government landscape. Since the budget, provincial governments have tabled similar budgets. If we look at all of the economic programs that tie into Canada's stimulus plan, ours is among the largest in the world.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

You say it is one of the largest, but if you compare it to the budgets of other OECD countries, it remains below the average.

[Paul Rochon]

I do not think so. In fact, the OECD has published its own figures, based on data different from ours, that indicate that Canada has one of the most significant economic plans in the world.