Finance Committee on June 16th, 2020

[The Chair, Liberal, Wayne Easter]

Yes, Mr. Lemire.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

The interpreters have been telling us for some time that interpretation is difficult because the microphone is either too close or too far from the various witnesses. This interrupts the interpretation.

[The Chair, Liberal, Wayne Easter]

Okay, I'm not getting your translation either, Mr. Lemire.

Ms. Dancey, you may need to pull the mike away from your mouth a little bit as well.

Go ahead, Ms. Dancey.

[Evelyn Dancey]

I'm sorry. Thank you, Mr. Chair.

I'll just give it in short form.

What I was saying is that Infrastructure Canada is the best place to bring together and integrate the data on the federal infrastructure programs. It does release reports on its website, but this is continually an area of improvement that we are working on across the relevant departments involved in infrastructure spending. While it is not part of the Department of Finance's main estimates, we are collaborating with our INFC colleagues to improve disclosure around the infrastructure plan.

[The Chair, Liberal, Wayne Easter]

Mr. Cumming.

[James Cumming, Conservative, Edmonton Centre, AB]

It certainly needs some improvement because we can't seem to find out which projects the money was allocated to.

I want to move to FINTRAC.

The main estimates state that Canada will be paying over $20 million for compliance with anti-money laundering and anti-terrorist financing legislation and regulations. Can you give us an update on that money? What are the KPIs around that money, and what's the expected return or the expected results of that level of funding?

[Bruce Wallace, Manager, Strategic Policy and Reviews, Financial Transactions and Reports Analysis Centre of Canada]

In terms of our compliance efforts most recently we have received funding to ensure compliance, particularly with regard to the casino sector and the real estate sector, particularly in British Columbia. I don't think I need to remind people here of the Cullen commission. There's been a lot of attention paid to real estate and casinos in B.C., and we've been doubling down our efforts to ensure compliance in those sectors. At the same time, we are continuing to ensure compliance in the money services businesses, banks and other reporting entities.

In terms of performance, I'll say that it's an uneven playing field for compliance. Large financial institutions generally are quite compliant. As for real estate agents and money services businesses, we invest a fair bit in terms of outreach, guidance and training to ensure that they're aware of their obligations, and to conduct examinations to ensure that they are abiding by their obligations.

[The Chair, Liberal, Wayne Easter]

Mr. Cumming, we lost a little time there, so go ahead and ask another question.

[James Cumming, Conservative, Edmonton Centre, AB]

How do we determine whether we're getting value for the money? I didn't hear anything in your answer that would indicate how you will measure whether you've been successful or not. Can you give us some indication of how that would be determined?

[Bruce Wallace]

Absolutely.

When we go and conduct an examination in the sector, for example, we maintain statistics as to how the specific reporting entity is complying but also as to how the sector generally complies. Our expectation is that, over time, compliance would increase and non-compliance would decrease, and that has a direct effect on the quality of the information that we receive. It's generally tracked through the level of compliance in the reporting sectors that have obligations.

[The Chair, Liberal, Wayne Easter]

Okay.

We'll turn to Ms. Dzerowicz, followed by Mr. Ste-Marie.

Julie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

Thanks to everyone for being here today, and thank you for all your tremendous work.

My first questions are directed to the Canada Revenue Agency.

[The Chair, Liberal, Wayne Easter]

They're not on yet, Julie. They're on in the next hour.

[Julie Dzerowicz, Liberal, Davenport, ON]

Well then, I will not be directing any questions to them right now. I will be directing my questions to the Office of the Superintendent of Financial Institutions.

Thank you, Mr. Chair, for correcting me.

In the 2020-21 main estimates, OSFI has requested funding of $1.2 million for program expenditures under vote 1, a net increase of $35.6 million or 12.8% from the funding requested in the 2019-20 main estimates. What are the major factors that are contributing to the increase in the amount requested under vote 1?

[Marc Desautels, Chief Financial Officer, Office of the Superintendent of Financial Institutions]

That amount pertains mainly to actuarial advisory services provided by the office of the chief actuary, which is an independent section within the broader group. There's been an increase in staffing there, so it's mainly related to salaries. There was a bit of a catch-up in regard to staffing vacant positions. There was also an in increase in salaries as a result of the most recent collective agreement.

[Julie Dzerowicz, Liberal, Davenport, ON]

There's also been a request for $199.8 million in statutory expenditures, which is a 21.6% increase from the funding requested in 2019-20. What were the major factors contributing to that increase?

[Marc Desautels]

That's a good question. What happened in 2019-20 is that you would have seen the main estimates at a lower level than what you're seeing for the upcoming fiscal year. Post-submission of the main estimates last year, we put forward a new strategic plan to ensure that we built the OSFI of tomorrow so it would remain at the forefront of an increasingly complex financial sector.

Therefore, we put forward a strategic plan after the submission of the main estimates. It included a large set of initiatives that supported that strategic plan, whether on the non-financial risk side of things or building our technology infrastructure to better support front-line supervisors.

As I said, post-submission of the main estimates last year, we did revise our strategic plan, revised our financial envelope, which has led to the increase you see there. If you look at our spending for the past fiscal year, 2019-20, it would have been reasonably in line with the revised budget that we prepared post the main estimates.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

Maybe I could shift my questions to the Department of Finance.

With respect to the COVID-19 pandemic, to what extent have any additional costs borne by the Department of Finance been accounted for in the 2020-21 estimates, and does the department anticipate significantly greater operational costs as a result of the pandemic?

[The Chair, Liberal, Wayne Easter]

Who wants to take that?

[Darlene Bess]

I'll start. I'm the CFO at the Department of Finance.

I'll say that the main estimates right now don't really incorporate the COVID-19 response. Our supplementary estimates incorporate some of those costs right now. We're still looking, as a department, to understand what the implications will be from a staffing point of view to deal with some of the pressures on the department in responding to COVID-19.

In short, the main estimates really don't incorporate much of the COVID-19 costs, but more so the supplementary estimates, and we're still assessing things as we go.

[Julie Dzerowicz, Liberal, Davenport, ON]

Does anyone have anything to add?

Okay.

I'm trying to think if I have any other questions. I have one for—

[The Chair, Liberal, Wayne Easter]

We know you have some for the CRA.

[Julie Dzerowicz, Liberal, Davenport, ON]

I have many for them. Can I tell you?

[The Chair, Liberal, Wayne Easter]

You can hold them for now, Julie, and we can move along, unless you have an urgent one.

[Julie Dzerowicz, Liberal, Davenport, ON]

Actually, I'll ask a question quickly of FINTRAC then. It's similar to the one I just asked with respect to COVID-19.

To what extent have there been any additional costs borne by FINTRAC, as accounted for in the 2020-21 estimates?