Fisheries Committee on April 10th, 2008

[Patricia Kell]

I'll start by answering the last question.

The $65 million amount does not include the structures. If the structures were included, we would be talking about several millions of dollars more.

As regards ownership, the bill does not state that there will be a change of owner after a designation. So the lighthouse belongs to the Department of Fisheries and Oceans, and it will still own it after it designated. That's the department that will be responsible for maintenance and for decisions concerning that lighthouse. If a lighthouse were sold to a community group, that group would be responsible for the lighthouse and structures, as well as their maintenance.

Does that answer your question?

[The Chair, Conservative, Fabian Manning]

Thank you, Mr. Lévesque.

Mr. Matthews.

[Bill Matthews, Liberal, Random—Burin—St. George's, NL]

Thank you very much, Mr. Chairman.

I want to welcome our witnesses.

To continue, if it stays with DFO we're not saying there's not a problem, but they continue to maintain the heritage structures plus the related infrastructure for access.

The problem, as I see it, or a couple of problems.... If there's one designation or a hundred designations, it seems obvious to me that it's going to put added pressure on your existing budget, which is going to be watered down. You're going to have that many more heritage structures to try to assist from your present budget, which won't be increased, it doesn't seem, by this legislation. So that seems to be a fundamental problem. I don't know how you respond to that. If you don't have enough money now, if you have one or a hundred designations, there are going to be requests for money for that. So that's the first one.

The bigger one is if a community group petitions and a lighthouse or light station is designated, and if they are successful in getting money from you and other sources to maintain the heritage structure, the integrity of the place, then access, to me, seems the obvious biggest problem. How are they going to maintain access to it? If it is not DFO's, it's a community group's, and they can only get some money from you for keeping the heritage integrity or whatever. So to me that seems to be perhaps the biggest problem we're facing here. And of course if they can't access the place, then....

I don't know how you respond to that, but I think access is probably going to be one of the more serious issues of all this once it flushes out.

[David Burden]

I guess I'll respond to the back end of the question first.

I think the committee heard from the stakeholders in the last couple of meetings that they did not feel that all lighthouses across the country were going to be designated under the legislation. I think that's fundamental to this.

We have a number of lighthouses across the country that are in remote, desolate areas. There are some in the Bay of Fundy that come to mind that are 50 miles from the closest community on an isolated island. I don't see a community group coming forward with a petition for that.

Under those circumstances, the access or the designation may not be an issue. In those instances when there is a requirement for an ongoing program operation for a lighthouse, we'll need to have access for health and safety issues for employees, whether it's a staffed lighthouse or our technicians are just going out to maintain the aid to navigation as part of the program. We as a department will be required to continue to do that.

In the time that I've been running the divestiture program in the Department of Fisheries and Oceans, we have not had a community group fail. When we look at their business case, we look at all aspects of it. Yes, we will have to put funds into bringing lighthouses up to a reasonable level of maintenance before a community group can take them over, and that is money we do not have in our budget.

If Parliament deems that this is a bill they want to move forward, then we will have to come forward with a request. I believe my colleagues and I said a year or so ago before committees and this committee when we were discussing this that there would be an ask, because our departmental budget could not absorb the cost. But the community groups are all volunteers, for the most part, and they've been very good at doing a lot of the things that need to be done, with minimal resources.

[The Chair, Conservative, Fabian Manning]

Mr. Tapley.

[Doug Tapley]

Perhaps I can add a little bit of information.

Parks Canada has had a long history of dealing with volunteer organizations--community groups, if you will. We see the same sort of situation occurring here that we are used to.

If a community group were interested in taking over a lighthouse for a continuing public purpose, they would come forward with a business case. If they foresaw a requirement for some government financial assistance, they would outline it in that business case. That is not to say they would not have recourse to their own sources of funds.

In Parks Canada's experience, we've had some volunteer groups that actually operate some of our facilities, and they have been remarkably successful. They have implemented user fees, as Parks Canada implements user fees. They have done very well in undertaking major fundraising campaigns, for example, to develop major exhibits on site that explain the heritage value of the property.

There are also economic development programs that can be targeted for purposes such as heritage tourism, and they exist at the federal, provincial, and municipal levels.

All that is to say that community groups have different means of finding money to support the operation of heritage lighthouses.

[The Chair, Conservative, Fabian Manning]

Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

I have a couple of things. First of all, Mr. Chairman, we've already voted on this amendment, and the discussion on this amendment should really have finished at the vote. But since we are discussing it, I think we have to understand that we're putting in place a process that will probably take four years before it's in place. We're not talking about a major expenditure coming out of DFO or Parks Canada this year or next year. The petition process will take two years to get up and going.

The whole point here is that out of the maximum of 246 lighthouses out there, there are differing numbers in terms of how many will actually end up with heritage designations. But it certainly won't be the 246.

In the short term, DFO has a responsibility to maintain those lights in working order. So it's not as if they're free; there is a cost to these lights, as we speak.

What we will be doing in the long term is transferring the annual maintenance cost of the majority of these lights over to the province in some cases, but the divestiture will go to the province, to the municipality or town, to a public organization, or to a private entity. So these lights will come out of DFO's budget; there will not be an increased cost to DFO's budget.

I think at this time, until we actually know the number.... That's the difficulty of coming up with a real number, but we're putting a process in place for this divestiture to happen and for some of these lights to receive heritage status—and they will probably stay under the Department of Fisheries and Oceans. Some will move into Parks Canada, and some are within Parks Canada's domain now—I think there are 12 altogether. But the vast majority will probably move to community groups, rather than a province or municipality or town taking them over. Among these community groups, as was just explained by Mr. Tapley, there will be partnerships, there will be economic development and tourism opportunities, and they will fund-raise and take over these costs.

So at the end of the day, I see a net gain for DFO—although, without question, as Mr. Matthews has said, DFO will have to scramble throughout the process for the dollars to make this happen. But at the end of the day, in the long term, there will be more money in DFO's hands for small craft harbours and other issues.

[The Chair, Conservative, Fabian Manning]

Thank you, Mr. Keddy.

Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Chair, I think the scramble for dollars is what most members of the committee seem to be seized with.

Mr. Burden, as manager of the divestiture program within DFO, how have you...? You're fully aware that this committee is currently engaged in a study on small craft harbours, and that to support the minister requesting funds for this in budget 2008, prior to the budget being tabled, this committee provided an interim report on the status of the small craft harbour program, and specifically included a request or suggestion, if not an expectation, that the government allocate upwards of $700 million over an extended period of time to resolve longstanding issues related to the small craft harbour program. As you're aware, the result or effect of our interim report was that the government decided to allocate just $10 million for a small craft harbour divestiture program.

Should this proceed, and in the scramble for dollars in the interim or short term, DFO will obviously have to allocate funds for this from somewhere within it. Under the system of parliamentary appropriations, we have various votes, and the money will obviously come from the same pot of funds the small craft harbour program comes from—for operations, maintenance, and capital. There is no funding that is.... Parliament does not necessarily approve direct or targeted funding for small craft harbours; what we approve, if I understand this correctly, is specific funding for the Department of Fisheries and Oceans to engage in operations, maintenance, and capital projects for capital assets.

So in terms of the lighthouse program, you would actually be using the same pot of money that the department uses, allocates, or references for the small craft harbour program. You would actually draw upon that same pot of money that would be available.

Would you be able to comment on that? Is my understanding and interpretation correct?

[David Burden]

First off, let me say that I am separate from the small craft harbours program. I think my colleague who runs that program would be a little averse to my speaking of it, but I can say that the department has a block of money, as you've said, which goes into investments. I'm not certain what kinds of strings were attached to the money from the last budget related to the divestiture of recreational harbours for small craft harbours. I would assume there could have been some hook to it saying it must be used for divestiture of recreational harbours. So that money would not be able to be used for divestiture of lighthouses. That would be my assumption. I would really have to go back and talk to the financial officials in the small craft harbours program within the department to give you a completely accurate answer to that.

Suffice it to say, as a manager running a program in DFO for divestiture, I have an annual budget approved through our long-term capital plan, and I have $2.5 million I can devote towards divestiture of surplus DFO assets. The majority of that would have to be used for lighthouses, if this bill goes through. That's the obvious money the department has at its disposal right now for this bill. It would logically come out of my budget.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Ms. Kell, would you be able to provide the committee with any insight into the parliamentary appropriation process, and the budgetary process within departments related to operations maintenance and capital assets and whether or not that money slides between various program stovepipes?

[Patricia Kell]

Doug is the more appropriate person to speak to that.

[Doug Tapley]

Is this specific to Parks Canada?

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

It could be.

[Doug Tapley]

Okay.

We have an annual budget that is approved, and that includes investments in capital funds for our $10 billion worth of assets, including assets within national historical sites and assets within national parks. So there are some historic and some contemporary assets. We have the flexibility to decide how to invest those funds. Similarly, for the operations of our heritage places across the country, we have annual ongoing operating budgets. We can make adjustments to the levels of investments from place to place.

If there is a new policy requirement, we may be directed to develop a proposal to be considered by cabinet. If additional supplementary funds are eventually approved through the annual federal budgetary process, those typically will be targeted funds, with very clear specifications as to how they can be used. We cannot use them for an unrelated purpose.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

That answers the question.

So, in the interim, without a supplementary parliamentary budgetary appropriation, you'd basically use existing program priorities?

[Doug Tapley]

Exactly, and for which we have some flexibility in deciding how we would make allocations.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

One would assume, or I would assume, it would be the same for the Department of Fisheries and Oceans. If a new statutory requirement were brought forward for the department and its minister—subject, obviously, to an audit by the Auditor General as to whether or not they are fulfilling their statutory responsibilities and obligations, as voted on by Parliament—they would have an obligation to do so. It being a brand-new program, currently unbudgeted within the department, they'd have to take funds from another program priority and put them into this new program priority—and, obviously, a big part of that would be coast guard capital maintenance and small craft harbours capital maintenance.

Thank you.

[The Chair, Conservative, Fabian Manning]

Okay, Mr. Byrne.

Mr. Keddy, do you have a comment?

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

The only comment I would add to what Mr. Byrne has said is there's nothing that prevents cabinet and government from finding new funds as well for this divestiture process, so we can't overlook that. Even if the new funds aren't found, first of all, we don't know the amount clearly at this time; we've only speculated at the amount. There is some built-in flexibility within the department to divest itself of capital assets.

Finally, again this is probably a minimum--a four-year process--before we really have to come up with any funds. At the end of the day, after the divestiture process is through, small craft harbours would actually have more money because they will have fewer capital assets. I think those points have to be recognized.

[The Chair, Conservative, Fabian Manning]

Mr. Calkins.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Mr. Chair.

I guess I was just going to follow up on what Mr. Keddy has been pointing out here.

While there is quite a bit of discussion and legitimate concern, I think, around appropriations for funding for this, if you take a look at the statutory timelines that are outlined in this particular act, should it come to pass, there is a significant amount of time for future governments to prepare, through a budgetary process, the funds that they're going to need.

I'm just wondering if anybody from the departments here could enlighten the committee as to what those timelines might be or when we might actually have to realistically see a budget appropriation for this act.

[Patricia Kell]

I'll start.

The act is scheduled to come into force two years after royal assent. From a Parks Canada perspective, there is actually work that will need to be done during that period to prepare for the act coming into force: development of requirements for a petition, for example, what would be required; development of criteria.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Would it be realistic to assume that those kinds of tasks could be absorbed with the baseline in-house budget that's already provided? Would it be too much extraneous work?