Evidence of meeting #2 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Nicholas Leswick  Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Andrew Marsland  Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Suzy McDonald  Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
Evelyn Dancey  Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance
Soren Halverson  Associate Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Ben Brunnen  Vice-President, Oil Sands, Fiscal and Economic Policy, Canadian Association of Petroleum Producers
Ed Holder  Mayor, City of London
Craig Stewart  Vice-President, Federal Affairs, Insurance Bureau of Canada
Philip Cross  Senior Fellow, Macdonald-Laurier Institute
Bruno Letendre  Chair, Les Producteurs de lait du Québec
Alain Bourbeau  Director General, Les Producteurs de lait du Québec
Barbara Zvan  Chief Risk & Strategy Officer, Canada’s Expert Panel on Sustainable Finance, Ontario Teachers' Pension Plan
Melanie Bechard  Executive Board Member, Canadian Doctors for Medicare
Catherine Cobden  President, Canadian Steel Producers Association
Toby Sanger  Executive Director, Canadians for Tax Fairness

4:25 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

Go ahead, Andrew.

4:25 p.m.

Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Andrew Marsland

We were required to carry out those strategic environmental assessments, but those form part of the overall advice that we provide to the government in the context of budget-making, and as usual we do not release the advice.

4:25 p.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

I see. If I understand correctly, then, that information can’t be released to the finance committee either.

4:25 p.m.

Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Andrew Marsland

That wouldn't be my decision to do that, though normally those are confidential documents.

4:25 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay. Thank you.

Mr. Julian, two and a half minutes go fast.

4:25 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Well, then, they do exist. That's interesting. Thank you for that.

I want to come back to TMX and the escalating construction costs, which of course put in peril its financial viability. Regardless of whether we're for or against it, the financial viability of the project is impacted by this.

As I understand it from my last questions, there has been no consultation at all with the finance ministry on the impact on public funds of a revised construction cost schedule that is twice what was originally put into place. The finance ministry has not been consulted and has not been asked to undertake any sort of study on this.

4:25 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

What I can offer is that the government as the owner of this project has indicated that it stands ready to see the project through to construction, so the costs would be something that the government has put itself behind in being willing to support through the appropriate instruments to obtain the cash required for the project.

I'd just like to put in a point of emphasis. There really is an emphasis on commercial decision-making in respect of that project, which is why these business details are within the purview of the Crown corporation. When there is a costing that is ready to be actioned, when there are calls for cash to be made upon the shareholder, to be made upon the government, the government would seek to obtain the funds necessary for construction.

4:25 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

That comes to my next question, which is of course on the actual purchase of TMX, which was evaluated by the Parliamentary Budget Officer as being a billion dollars more than should have been paid, even at market value.

In this case as I understand it—and I'm not trying to put words in your mouth—the government basically decided to throw massive amounts of money at this, but the finance ministry was not consulted consulted on the inflated purchase price of over a billion dollars over the value, and it hasn't been consulted on what the financial impacts will be of construction costs that are twice what was originally foreseen and that, of course, would require significant amounts of public funds. The finance ministry has not been involved in any way on that. It just responds to the government's saying, “We want to spend this money.”

4:25 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

What I'm trying to emphasize really is the division of labour and that this kind of delineation between who is responsible for what protects and preserves the commercial decision-making in respect of the project.

It is the case that the Department of Finance.... It's within our Minister of Finance's portfolio where you find these Crown corporations, and there is a responsible and accountable flow of information in respect of the activities of Crowns in the minister's purview, but decision-making in respect of the project rests with the Crown corporation. The information that it seems you're interested in, in terms of costs, is something to be provided and approved by the board of directors.

4:30 p.m.

Liberal

The Chair Liberal Wayne Easter

I'll have to end it there, Peter. I'm coming to Mr. Poilievre.

Just on that question, though, because I think it is hanging in the air, the Crown corporation looking after TMX—the Trans Mountain pipeline—certainly can't spend at their leisure and bill the Government of Canada. There must be some rules around keeping the spending in line, are there not?

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

Yes. The Crown corporations in any government minister's portfolio are responsible to provide corporate plans. As I mentioned in passing on the question of accountabilities, the overall planned activities and the cash or the capital requirements of Crowns run through an appropriate government decision-making. That respects the commercial orientation of the Crowns. When there is a requirement for cash, for example, that can only be a request put forward to the government. It's not something that the entities may do on their own. It's something that moves appropriately through government and Parliament if there's an appropriation.

4:30 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay. Thank you.

We are turning back to five-minute rounds. Mr. Poilievre is first and then Mr. Fraser.

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Does that appropriation come through EDC or BDC, or what agency of government transfers the appropriation to the Crown corporation?

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

There are different instruments for different Crown corporations, but if we're talking about the Trans Mountain Corporation, which I think we are—

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Yes.

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

—to date the financing has been untaken on the EDC Canada Account.

The Canada Account involves a statutory appropriation versus a voted appropriation. I think it would be premature for me to comment, going forward, on how future costs related to the projects would be financed, but that's been—

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

But “statutory appropriation” means that there is a law in place authorizing the expenditure, as distinct from the use of the estimates to authorize expenditures. Is this amount available to the corporation written in some legislation? Which statutory authority are you using for this purpose?

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

The Canada Account is a construct that exists through the legislation. The act is the Export Development Act, so it's—

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

So it is through EDC then.

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

It does create the statutory appropriation. On EDC's website there is a disclosure about the transactions that have been undertaken on the Canada Account.

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

I see. So then it's not as though every major transfer is approved by Parliament. There is just a statutory amount available to EDC, and then EDC is using that authority to transfer the money to the Crown and in this case to the Crown corporation.

Do I have that right?

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

From a historical perspective, that's how it has proceeded to date. There would be a number of other types of transfers that are statutory, and one of the statutory instruments that exist is this one.

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Who has to make the decision if, for example, the project does become more expensive than was foreseen? Who would give authorization for an increased amount? Who would say, “Yes, you can have more than we originally thought you were going to require?” Would it be Treasury Board or...?

4:30 p.m.

Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance

Evelyn Dancey

First and foremost, the government makes its decisions around the allocation of funding and resources, typically through a budget process but not always through a budget process, so that's a conversation between the Minister of Finance and the Prime Minister and cabinet.

I think there is a difference between the commitment to making funding available and the means through which the cash is appropriated or obtained. I think you get into different permutations, so I would be speculating on how the future discussions would go.

4:30 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Right.

I'm just trying to ascertain what would be in place to stop an overrun, for example, or to prevent an excess amount going to a project like this. It's not a normal, for example, infrastructure project for which a municipality would submit an invoice and the federal government would fulfill that invoice up to a set limit. It is an amount that flows through EDC to yet another body, so I'm just wondering what disciplines are in place to prevent cost overruns.