Finance Committee on March 1st, 2018

[The Chair, Liberal, Wayne Easter]

All right.

Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

Thank you all for being here.

I'm going to start with the opening remarks, specifically the notes around alternative payments for standing programs. There's a $52-million decrease because of the increase in the estimated value of Quebec's basic federal tax. What is this? One, what's the alternative payment, and two, what's the increase in value for the basic federal tax? The same goes for the next bullet point, the $10.8 million that is, again, due to an increase in the value of basic federal tax in Quebec.

[Galen Countryman]

So your question is about the alternative payments for standing programs?

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

No, it's more about the increase in Quebec's basic federal tax. It's a significant increase that was not projected. What is this increase attributed to?

[Galen Countryman]

In terms of the basic federal tax, all that is, basically, is the amount of tax assessed at the federal level within the province of Quebec. The program is basically because in the 1960s there was an abatement. There was a transfer of tax points from the federal government to the Province of Quebec.

The purpose is that because the major transfers—for example, the Canada health transfer, the Canada social transfer—are calculated on a per capita basis for all provinces, we needed to take into account the fact that there was a transfer of tax points to Quebec. This is the recovery of that.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I see.

[Galen Countryman]

It's based on the federal tax points, so we're transferring the value of that. As the economy grows, the basic federal tax would go up in Quebec and therefore there would be a recovery that would be larger.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay, that makes more sense. The way you read it plainly as the average Canadian would, it would seem like you would unexpectedly receive more money in terms of federal taxes in one province, but I understand it's more of the transfer component, so, thank you.

In regard to the corporate asset review, my question on this is why the additional cost? Asset reviews, to my understanding and correct me if I'm wrong, are usually scheduled, you would do them once every three to five years, whatever; and I would assume you would have known from the last asset review how much they generally cost or what the reason is for the increase or the new projection really? What's the difference from the last time it was done or when was the last time it was done?

[Richard Botham, Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance]

I'm Richard Botham and I'm the assistant deputy minister of economic development and corporate finance, which includes activities related to review of corporate assets. The funding you see in supplementary estimates (C) is a continuation of temporary funding that has been provided to the department. In part, I think your question is about the periodicity of reviews.

Under this current government and under the previous government, there was temporary funding provided to the department to look at large corporate assets of the Government of Canada to provide analysis advice and recommendations, and this funding supports that. As directed by the government, it also supports execution of transactions related to corporate assets, which would be either crown corporations or assets that the government holds, and there are a variety of those.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

But when was the last corporate asset review done and how much did it cost? I understand what you're saying in terms of temporary funding. Is there anything that's mandated?

In the municipal sector in Ontario we were mandated to do asset reviews at a certain period of time. Is there any legislation that requires it and then for the government direction and if so, if it is just government direction, when was the last time this was done?

[Richard Botham]

It is not mandated by legislation. It is mandated by policy decision of the government and, as I say, this is a continuation. It's a continuation, not a last time issue; it's ongoing.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

It never stops. Will the additional money bring you up to what you think the cost will be, so moving forward, the budgeted amount or the amount needed will be budgeted for and not always kind of this kind of temporary additional funding?

[Richard Botham]

It certainly is an amount that has allowed the department to carry out the work that the mandate has governed our department to do in the current year. Should that mandate change, either to end or increase, then, yes, there would probably be a request for a different amount of resources.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay, thank you.

Do I have time?

[The Chair, Liberal, Wayne Easter]

You have time.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay.

In regard to the G7 summit, I understand from the comments that a lot of it is policy analysis to shape it in advance. Am I assuming correctly that that's why this work is being done and the money is being requested in this fiscal year and not 2018-2019 when the summit actually happens?

[Rick Stewart]

Mr. Chair, I'll respond to that question.

The answer to your question is, partially, yes. There will be a need for resources in the next fiscal year as well, and that resource request was included as part of the main estimates that were recently tabled.

Preparation for a summit, when you are the G7 president, requires a period of lead-up to support the leader's track in framing the policy agenda that Canada wants to lead in the G7 for the year ahead. But these moneys also include resources to support the operational preparations for summitry: the logistics support, venue, reservations, those sorts of things, and of course, the necessary travel.

G7 work is part of the kind of core responsibility of my branch on an ongoing basis as a participant in the G7 process. I think as you can appreciate, during a presidency year there's—I'll express it as a surge capacity requirement.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Would you say this is consistent with previous types of summits, or would you say this is significantly more? Is this consistent with this kind of work when Canada is in this kind of role?

[Rick Stewart]

For the Finance ministry, this is not significantly more. This is consistent with our experience in the past and what we've spent and these are “up to” figures. We will endeavour to deliver below these levels.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

If I could, I'll come back to Mr. Botham, or maybe you can answer, Ms. Laniel, on this temporary funding. Mr. Botham said it's basically to look at large corporate assets. One of the problems with temporary funding in government is that it eventually seems to become permanent and the bureaucracy grows. What's the benefit to Canadians from Finance looking at large corporate assets?

[Richard Botham]

I guess there are two parts. The one part was a statement around temporary moving to permanent, and I guess from our perspective there are two opportunities for the government to evaluate whether government feels it's getting value for money. There is an approval required for the resources before it comes to the committee. The government has assessed that there's a perception that there's value for money or there's a task that the government feels our department is uniquely able to fulfill.

On value to Canadians, again, it's a policy choice. The government has made a policy choice that there is an absence of sufficient analysis of large corporate assets in its holdings and has asked our department to undertake such analysis. I think the fact that there's a perceived absence is a reflection of a lack of capacity in the government to undertake that activity on a regular basis. It's for that reason that there are additional resources requested for the department to do that.

[The Chair, Liberal, Wayne Easter]

Okay, thank you for that.

Turning to a five minute round, Mr. Kelly.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you.

I'd like to get back to the payments for the Canadian Infrastructure Bank. You had mentioned in your remarks about an increase in payment for activities that it will undertake in the near term. Could you please tell me what is the schedule of disbursements, not just to set up the bank, but to capitalize it for loans and loan guarantees? Could you give us the year that these expenditures and capitalization payments will be booked and how much they will be?

[Adelle Laniel]

The payments from the Department of Finance to the Infrastructure Bank or are you talking about the cash flows out of the Infrastructure Bank?