Finance Committee on April 29th, 2010

[Thomas Mulcair, NDP, Outremont, QC]

We agree.

[Tom McGirr]

I have just said that the policy is that we take the remitted profits of the full corporation, and Hydro-Québec is one corporation.

[Thomas Mulcair, NDP, Outremont, QC]

Okay.

[Tom McGirr]

I do know they report their figures separately. I am aware of that. Other crown corporations that are engaged in both hydroelectric generation and in transmission and distribution do not have the same degree of detail as Hydro-Québec.

[Thomas Mulcair, NDP, Outremont, QC]

Again, I want to make sure I understood correctly, Mr. Chairman, because we are getting there.

You are telling us here and now that a company such as Hydro One in Ontario — I misheard you earlier, I heard EC One — operates strictly in the area of distribution and transmission, that it is a separate corporate entity and that all its profits are part of the business income base. Correct?

[Tom McGirr]

Any of the remitted profits from Hydro One will be part of the business income tax base.

[Thomas Mulcair, NDP, Outremont, QC]

Right. Fine so far.

You are telling us that since Hydro-Québec is one corporate entity only, it cannot, according to you, get the same differentiated treatment that is afforded to the profits remitted by the entities of other provinces. Is that a correct interpretation of what you said?

[Tom McGirr]

The policy is, the entire amount of remitted profits of a crown corporation engaged in hydroelectricity generation is taken into account on the natural resource basis, and Hydro-Québec is a corporation engaged in hydroelectricity generation.

[Thomas Mulcair, NDP, Outremont, QC]

Let me return to our discussion earlier this week. You raised the assumption that if distinct Crown corporations were set up, each engaged in one of the three businesses, the generation would remain in one base and distribution and transmission would be treated as business income. And under our equalization formula — this is your policy, as you say — these corporations would be treated exactly the same as BC Transmission Corporation and Hydro One. Is that right?

[Tom McGirr]

I said at the last meeting that if Hydro-Québec were split into separate companies, the policy says that the remitted profits, in their entirety, of a crown corporation, if it's engaged in hydroelectricity generation, is part of the natural resource basis. So if Hydro-Québec split itself in such a way that a new, separate company was engaged just in transmission and distribution, clearly, we'd have to revisit the equalization treatment.

[Thomas Mulcair, NDP, Outremont, QC]

Wonderful. Because they are indeed separate corporate entities. We will have an opportunity to discuss it again.

Thank you very much for your contribution, Mr. McGirr.

[The Chair, Conservative, James Rajotte]

Merci.

No further questions on part 6?

We'll move to part 7, then.

Thank you very much, Mr. McGirr. We appreciate that.

Now, part 7 amends the Expenditure Restraint Act to impose a freeze on the allowances and salaries to be paid to members of the Senate and the House of Commons for 2010-11, 2011-12, and 2012-13.

Any questions? Mr. McKay, please.

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

Maybe Mr. Wall could tell us how much, in dollars, this is actually going to account for.

[Ron Wall, Director, Parliamentary Affairs, Privy Council Office]

Thank you, Mr. Chair.

As members will know much better than I, there are about 413 members of the House and Senate, and the average salary is about $160,000 a year for those two groups, roughly. So each member will be having a freeze, a loss of 1.5% this year. That will be about a loss of $2,200 times 413. So it's about $1 million this year.

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

That's it, $1 million? Certainly I would support that for Conservative members of Parliament and senators.

And does the freeze apply to federally appointed judges?

[Ron Wall]

No. Judges are captured by the Judges Act provisions, which apply separately, so these changes simply reflect provisions for members of the House and the Senate and the Prime Minister and ministers.

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

At one point our salaries were tied to judges' and now no longer. Has there been any calculation, if this freeze were applied to those judges, as to what that would constitute in terms of “getting back the balance”, as it's so quaintly phrased?

[Ron Wall]

Perhaps, Mr. Chair, I could answer it in a slightly different way. In 2005 Parliament adopted a change to parliamentary compensation whereby, instead of having MPs' and senators' salaries linked to judges' salaries, they were tied to a formula of private sector wage increases. So members of the House and Senate would receive an increase every April 1, based on the previous year's wage increase for the private sector.

The legislative approach for judges is stipulated in the Judges Act and has a separate process.

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

You didn't do any calculation with respect to how much that would be if they were tied to the same process as we are.

[Ron Wall]

No, I haven't done that for the judges. I'm sorry.

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

Thank you.

[The Chair, Conservative, James Rajotte]

Are there any further questions?

Okay, thank you very much for being with us here today.

We'll move to part 8 and the amendments relating to certain governmental bodies. Are there any questions on this part?

Mr. McKay.

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

This apparently eliminates 245 positions. Were these positions filled and were salaries being drawn?

[Claudette Lévesque, Director, Appointments and Selection Processes, Senior Personnel, Privy Council Office]

The 245 are part-time positions, so there are no salaries as such. There are per diems or honorariums on board members.

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

But are these positions filled right now?