Finance Committee on May 25th, 2010

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

This is the 21st meeting of the Standing Committee on Finance. Our orders of the day, pursuant to Standing Order 81(4), are to deal with the main estimates 2010-11, votes 1 and 5 under the Canada Revenue Agency, and votes 1, 5, L10, 20, 25, 30, 35, and 40 under Finance, referred to the committee on Wednesday, March 3, 2010.

Colleagues, we have two one-hour sessions today. In the second panel, we will have the Canada Revenue Agency. In the first panel, we have the Department of Finance; the Financial Transactions and Reports Analysis Centre of Canada; OSFI, the Office of the Superintendent of Financial Institutions Canada; the Canadian International Trade Tribunal; and Public-Private Partnerships Canada.

Ms. Harrison, my understanding is that you will have an opening statement on behalf of the Department of Finance, and then we will take questions from members to any one of those five organizations.

Ms. Harrison, welcome to the committee. You may begin at any time.

[Sherry Harrison, Executive Director, Corporate Services Branch, Department of Finance]

Good afternoon, Mr. Chair.

My name is Sherry Harrison. I am the executive director responsible for the Financial Management Directorate at the Department of Finance. With me today are officials who are here to assist in responding to your questions on the main estimates 2010-2011 for the Department of Finance.

The department's responsibilities include preparing the federal budget, developing tax and tariff policy and legislation, managing federal borrowing on financial markets, administering major transfers of funds to provinces and territories, developing regulatory policy for the country's financial sector, and representing Canada in international financial institutions and forums.

The 2010-11 estimates that have been tabled in the House identify total budgetary requirements for the Department of Finance of $88.5 billion.

Over 99% of this amount, or $88.1 billion, relates to statutory votes for items that have already been approved by Parliament through enabling legislation. These include items such as the payment of public debt charges, Canada health and social transfers, and equalization payments. The statutory votes are displayed in the estimates document for information and will not be included in the appropriation bill.

Within the statutory votes, there is a net increase of $5.7 billion over last year's main estimates, with the major changes being a $3.6-billion increase in transfer payments to the provinces and territories, and a $1.8-billion increase in public debt costs.

The non-statutory votes of the Department of Finance show a decrease over last year's main estimates. This consists of a $32.8 million decrease in grants and contributions, mainly due to the transfer of the debt payments on behalf of poor countries to international organizations to a new statutory vote and a decrease of contributions related to the Toronto waterfront revitalization initiative. The decrease is partially offset by an increase in grant payments for bilateral debt relief.

Additionally, there's an increase of $16.7 million in the operating vote. This is mainly due to increases in funding for the Canadian securities regulator, the 2010 G8 summit, the task force on financial literacy, workload in support of the economic action plan, implementing tax harmonization, and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. These items are time-limited.

We would be pleased to address any questions that the committee may have on these main estimates.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will start with members' questions, beginning with Mr. McKay. You have seven minutes.

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

Thank you.

In another life, I was quite interested in public-private partnerships and have been quite supportive of public-private partnerships over the past, but it seems that under the life of this government, it's been slow on the uptake. I see that you now have a significant increase in the amount of funding requested. Can you tell me what projects have been funded and how much they're costing? What's the average cost of a project? Would these projects have happened without your participation?

[The Chair, Conservative, James Rajotte]

Please state your name for the record.

[Richard Botham, General Director, Economic Development and Corporate Finance, Department of Finance]

I am Richard Botham. I'm the general director of the economic development branch of Finance Canada.

PPP Canada is rolling out its activities. There was an announcement of two projects, about three weeks ago, I believe.

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

What were the projects?

[Richard Botham]

There was a project to construct an emergency communications network in Atlantic Canada. It involves participation from the federal government--

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

Emergency communications network? What's that?

[Richard Botham]

I probably could get more details for you from PPP Canada itself, but as I understand it, it's a network that links first responders. It involves the Atlantic provinces--provincial governments--the federal government, and the private sector.

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

And the second one?

[Richard Botham]

I don't have with me the details of the second project, sir.

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

There are two projects, and you've had a 233% increase in the amount requested for funding. On the face of it, they sound like awfully expensive projects.

[Richard Botham]

The operations of PPP Canada have recently started up, and so it's anticipated that the expenditures of the organization will ramp up over the next five years as they conclude projects.

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

Why is it housed in Finance? After all, Finance really doesn't do anything except move money from here to there. It's not really an operational department. Why is PPP there as opposed to Industry or somewhere else?

[Richard Botham]

Well, that's a machinery-of-government issue. It's not really for a Finance official to provide information as to why that decision was taken.

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

In a previous government, that was one of the major objections, that it shouldn't be housed under Finance; it should be housed somewhere else.

All right. So there are two projects under way, a 233% increase, and it's in Finance.

[Richard Botham]

Correct.

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

Thank you very much.

[Richard Botham]

You're welcome.

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

Turning to softwood lumber, there's an 11.7% increase. There's about a $50-million discrepancy between what was originally asked for and what's being paid out. Can somebody elucidate on that?

[Paul Rochon, Senior Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance]

Could you let us know what you're referring to, what line you're referring to? Softwood lumber?

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

Yes. I'm actually cheating. I'm looking at the analysis by the Library of Parliament and our very capable researchers here.

[The Chair, Conservative, James Rajotte]

That's a question for the CRA, on our second panel.

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

I'm sorry. I apologize.

You go ahead.