Evidence of meeting #29 for Fisheries and Oceans in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was herring.
A recording is available from Parliament.
Conservative
The Chair Conservative Rodney Weston
I call this meeting to order.
I'd like to thank the officials for being with us here today.
Ms. Dansereau, I know this is not your first appearance before this committee. I want to take this opportunity before we start to thank you for appearing here today and bringing your associates with you. I'll ask you to introduce the officials.
You're quite familiar with how we proceed, so I'll just turn the floor right over to you, Ms. Dansereau.
Claire Dansereau Deputy Minister, Department of Fisheries and Oceans
Thank you, Mr. Chair, and thank you for the invitation to be here with you today.
As you know, we're here to discuss our main estimates. Our minister will be joining us shortly. In the meantime, we thought our chief financial officer would take a few minutes to walk you through the main estimates.
I have asked our Chief Financial Officer to present our main estimates and to explain key changes from last year. He will also describe how our spending estimates reflect our priorities.
Also with us are Associate Deputy Minister David Bevan, Deputy Commissioner Jody Thomas from the Canadian Coast Guard, David Balfour, Senior Assistant Deputy Minister, Ecosystems and Fisheries Management, Siddika Mithani, Assistant Deputy Minister, Ecosystems and Oceans Science, and Kevin Stringer, Assistant Deputy Minister, Program Policy. Finally, our Chief Financial Officer Roch Huppé is also joining us.
Mr. Chair, our departmental focus is always on three strategic outcomes: economically prosperous maritime sectors and fisheries, sustainable aquatic ecosystems, and safe and secure waters. Our targeted spending on key programs will continue to support these strategic outcomes and ensure that we create the conditions for our fishing and other maritime industries to generate value for Canadians. In times of restraint we strive to achieve these objectives by streamlining and increasing our efficiency in all areas.
The department, including the Coast Guard, is implementing modernization initiatives as defined in last year's strategic review.
Our department has made important contributions to Canadians from coast to coast to coast. We will continue to build on achievements of the past as we look to the future.
Thank you, Mr. Chair. I'm not going to take any more time with opening remarks. The minister will have some opening remarks, and I've asked our chief financial officer to walk through the estimates and the changes from last year, if that's agreeable to you.
Roch Huppé Chief Financial Officer, Department of Fisheries and Oceans
Thank you, Mr. Chair, for giving us the opportunity to go over the Main Estimates 2012-2013 for the Department of Fisheries and Oceans.
I think you have a small deck in front of you, which I will briefly walk you through. I will give you an update, an overview of the estimates, a breakdown of the estimates by program activity, and a quick explanation of the key changes from last year's main estimates.
Before I walk you through the deck, if you'll allow me I'll pause for a few minutes to talk about the main estimates process in general. As some of you may know, the main estimates process is fairly technical. It allows the department to put forward their proposed budget for the coming year for approval.
What we do when we prepare the main estimates, basically, is we update our budgets in reflection of the past funding decisions that have been made since the last main estimates. Most of the funding decisions actually stem through the federal budget process.
So point number one is that these main estimates for 2012-13 don't actually reflect the decisions, for example, that will be coming through the next federal budget, which is scheduled to be on March 29. By the same token, last year's main estimates did not include the funding decisions for our department that stemmed through the budget 2011. Therefore, a lot of the fluctuations that you see are actually a result of funding decisions that were taken last year, in budget 2011.
I'll walk you through some of these.
A misinterpretation I also want to point out is that when you take a look at the main estimates document itself, an increase or a decrease does not necessarily mean a direct increase or decrease in a funding source, a funding envelope. As an example, if we get $100 million for the construction of a ship over five years, our cashflow or spend will not be $20 million a year for five years. It will vary from year to year, probably starting for the initial stages at a couple of million dollars and working up.
You may see in the year three main estimates spending relating to that construction of $40 million, and then the following year $20 million. In the main estimates analysis you would see a decrease in our budget of $20 million, which is not necessarily a decrease to the funding envelope but simply a fluctuation in the cashflow.
Again, some of our fluctuations are obviously due to that this year. If I go to page three, you can see that overall for 2012-13 the department is seeking a little bit below $1.7 billion, compared to just over $1.8 billion in last year's main estimates. That's a decrease of approximately $157 million. As I said, later in the presentation I'll walk you through the main reasons for these changes.
Our budget is basically split into three key areas: what we call the vote 1, the vote 5, and vote 10. Under the operating expenditures, we have just over $1.1 billion. This includes the salary dollars for the personnel-type expenses. We have to note that DFO is an extremely operational department, which relies on its people and assets to deliver the programs.
Under vote 5, capital expenditures, we have $313 million—a slight reduction there. That's mainly due to fluctuations in the construction of ships and the cashflow aspects of it.
Under vote 10, which is our grants and contributions section, you will see a considerable decrease, of over 50% from the main estimates last year. These are mainly due to some of our key programs that are sunsetting in March of this fiscal year. I will go through the main ones a bit later.
The two last items are what we called statutory items or legislated items: basically the department's contribution to the employee benefit plans.
I'll move to page four. The three following pages are basically a breakdown of the main estimates by our three main strategic outcomes and the program activities that relate to them. Be assured that I'm not going to go through every number; I'm just going to talk about the highlights.
On page four, basically you will note the department has 26 program activities, including the internal services program activity. The first strategic outcome you see is the economically prosperous maritime sectors and fisheries, which includes the programs that support sustainable and effective use of Canada's water resources. Under there you will note we have a projected spend of $456 million.
Fifty percent of that, or close to, is linked to the two first program activities that you see. The first is integrated fisheries resource management, for $111 million, which largely includes the activities to manage the recreational and commercial fisheries.
Small craft harbours is the second one, with $106 million. Again, here you'll note that a considerable portion of our capital funding is linked to that particular activity, the construction and important repairs to the small craft harbours we have across Canada.
To finish off the page, you'll also note a column there called “revenue credited to the vote”. You see a number there in red. There are a couple more in the next couple of pages. This represents a revenue. We call it a revenue with respending authority--and it's under the Canadian Coast Guard--by which certain types of revenues that are collected we are entitled to respend back against that program activity.
We’ll move to page 5, under “Sustainable Aquatic Ecosystems Strategic Outcome”, which includes the programs that contribute to the conservation, protection, and sustainability of our aquatic ecosystems. You will note that out of $238 million, close to 70% is spent towards compliance and enforcement, which includes monitoring and surveillance-type activities, and our habitat management program.
Turning to page 6, we see our last strategic outcome is safe and secure waters, which includes the programs that contribute to maintaining and improving maritime safety. This is our largest spending area, $675 million, of which 80% is locked into the fleet operational readiness program, which ensures that our fleet and ships crews are ready to operate, and our shore-based asset readiness program. You will also note that 67% of our capital funding is dedicated to these two program activities. For example, the funding for the construction of ships is linked to that.
On that page, I’ll say one last word concerning internal services. You will note that we spend close to $296 million in internal services. Some may think that’s high. We have to take into consideration that our department is the second-largest asset-based department in government, and the replacement value of our assets is approximately $19 billion. Under internal services we have the funding in support of our real property activity, to support our real property footprint. As I said, not many departments have the footprint we have, from a real property perspective. Of the $296 million, $118 million is dedicated to real property.
Now I will move to page 7, to talk a bit about the main increases and decreases.
If we start off with the key increases to these main estimates, you will see an increase of $14.3 million that was given to us through the last budget, budget 2011. Actually, the department received $57 million over two years, starting this current fiscal year. So we had $43 million this fiscal year as a result of the last budget, which we accessed through what we called a supplementary estimates process. What you see now in the main estimates, because we've adjusted based on that funding decision in the previous budget, is the second-year planned spending relating to that. The money was given to us to repair the small craft harbours as a result of the storm damages of December 2010.
Item number two shows an increase of $8.2 million. This is again a budget 2011 decision. This is an extension to the government's program, the federal contaminated sites action plan. DFO received close to $26 million over five years for that program. The $8.2 million is actually the planned spending related to that activity for fiscal year 2012–13.
The last item you see there is a budget 2011 decision relating to help Canadians adapt to the impacts of climate change under Canada's clean air agenda. DFO received $16.4 million over five years, and the $5.1 million is a reflection of our planned spending for that particular activity in the coming year.
I’ll jump to the two last pages. On page 8 you’ll see the decreases to this budget. The $40.1 million that you see is for our most important program, the Pacific integrated commercial fisheries initiative, a program that is sunsetting. Through budget 2007, the department received $175 million over five years for that program, and basically the last year of the program is being completed now. The amount of money in the last main estimates for this fiscal year was $40 million. This is disappearing from the main estimates this year.
There's $23.4 million that is contributing to the creation of the Shared Services Canada agency. This is the agency that was created to better manage much of the IT type of spending. Approximately 44 departments contributed from a financial perspective for the creation of that new agency. Our share at DFO was $23.4 million.
The $19.9 million is related to the sunsetting of the divestiture of the non-core harbours program. Through budget 2008, we received close to $45 million over four years for that program.
Item 4 is a decrease of $18.9 million relating to the strategic review measures that were announced in budget 2011 for our department. The reductions announced in budget 2011 for our department are actually $56.8 million, so we're building up to a reduction of $56.8 million in year three. The first-year reduction was $9.1 million, which happened in this fiscal year, 2011-12, so money was taken away, again through the supplementary estimates process. The $18.9 million is the reduction to the DFO budget as it is related to that exercise. In next year's mains, the reduction will be $56.8 million.
The $14.3 million is a sunsetting program that also is coming to an end. It is a sunsetting program relating to the Atlantic integrated commercial fisheries initiative, so this is one of our other sunset programs that is being completed this March.
On page 9, among the three last items you see, is the key fluctuation explaining the key decrease of $13.1 million. That's in relation to the cashflow issue relating to the lobster sustainability program. In 2009, the department received close to $65 million over five years for the lobster program. That program is sunsetting in March 2014. The cashflow for 2011-12 was $21 million, and the projected spending for the completion of the program in 2012-13 is $8 million, so this is why you see a decrease of $13 million, and, in the final year, $5 million.
The $11.9 million is a decrease in funding to support science and sustainable fisheries. We received that back in 2007, with $104 million for five years. A portion of that program is sunsetting. We have an ongoing portion of approximately $10 million, but the sunsetting portion is actually ending this March and it is $11.9 million.
The last item on the sheet is a $10.2 million decrease. It relates to funding we received for the implementation of the Species at Risk Act. Again, in 2007 we received $73.4 million over five years. A portion of that funding is sunsetting and a portion is ongoing. The portion that's ongoing is approximately $8 million, and the portion that's actually sunsetting in March, because it's the last year for that money, is $10.2 million.
I'll close this off at the last page and not repeat myself. I'll close by saying that this presents an overall view of our main estimates for 2012-13. Again, I remind folks that any decisions relating to budget 2012, which is anticipated in a few weeks—which could reflect also the famous decisions around the strategic and operating review exercise—would be addressed in that budget, so they are not reflected in the mains that you have right now.
Merci, monsieur le président.
Conservative
The Chair Conservative Rodney Weston
Thank you very much, Mr. Huppé. I really appreciate that overview and really appreciate the speed with which you ran through it. Thank you very much.
We'll proceed right into questions at this point.
Mr. Kamp, we'll begin with you.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Thank you, Mr. Chair.
Thank you, Ms. Dansereau and team, for being here to help us understand the estimates. It's not always an easy job, so I appreciate the clarity you've brought to it so far.
Just to follow up on Roch's explanation of these significant decreases, when you're referring to sunsetting programs like PICFI, for example, the Pacific integrated commercial fisheries initiative, or ACFI, or the science funding of $11.9 million that's on there, for these programs that are five-year programs—so we would see them coming to an end this year—does that necessarily mean that they're coming to an end? Is it possible or likely that we might see an extension of these programs in the budget in a couple of weeks and that we'll then of course see them in subsequent main estimates? Can you just clarify that for the committee?
Deputy Minister, Department of Fisheries and Oceans
We shouldn't make any assumptions around future spending around these programs. As all sunsetter programs do, they undergo a review at the end of five years to determine their value to Canadians, and then there are further budget discussions about them. So there are no decisions at this point. Seeing them here does not mean that they will continue or that they will come to an end.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Okay. Thank you for that.
Ms. Dansereau, near the end of your comments you referred to the modernization initiatives that have been ongoing. In particular, you referred to the coast guard initiative as it was developed through the strategic review process. I just wonder if you could give us more information about that. Does that impact the main estimates? And if it does, what progress are you making? At the end of the day, what might the coast guard look like after its modernization initiative?
Deputy Minister, Department of Fisheries and Oceans
Thank you for the question. I will ask Jody to speak in greater depth to the question itself.
The technologies we use, particularly telecommunications but also any other of the tools we use, are moving and are rapidly changing and we need to take advantage of those. Wherever possible we need to be using the most modern technologies to provide the best coverage possible. So the changes you've heard us talk about for the past year are a result of that kind of modernization as a result of technological change.
Jody will speak to this in greater detail.
Jody Thomas Deputy Commissioner, Operations, Canadian Coast Guard, Department of Fisheries and Oceans
Certainly the modernization of the coast guard is technology-based. Whether it's the new vessels that are coming into operation—we have ten vessels under construction right now, midshore patrol vessels and a new hovercraft that will change our capacity on water, because they are newer and better vessels—or some of the work we're doing to ensure that we maintain the same level of service to Canadians and to mariners and maintain the same safety profile but are able to do it with fewer people, we are leveraging technology wherever possible.
You will see in future that the coast guard includes an equally or potentially more effective on-water presence and provides an equally effective response to mariners, albeit from fewer locations, as we have seen the closure of the marine rescue subcentres.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Do we see examples of these changes, or are they reflected in the main estimates?
Chief Financial Officer, Department of Fisheries and Oceans
Actually in the reduction for year two in the $18.9 million I was referring to, very little savings come from the coast guard at this point. The savings relating to the coast guard will appear mainly in year three. So actually around $150,000 of the $18.9 million is linked to coast guard initiatives at this point in year two.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Good. Thank you for that.
Let me just say as I move on here that I've done a number of events with the coast guard over the last year, and the morale seems to be quite high. So keep up the good work there.
Continuing on with the modernization theme, though it is not directly related to the main estimates here, we've been aware of the public consultation that's gone on throughout Canada, not just on the east coast. I'm just wondering, Ms. Dansereau or Mr. Stringer or Mr. Balfour, if you can tell us a little bit about that consultation. What motivated it? What are the issues that were brought to the forefront in the midst of it? What format did it take? And where is this leading in the future?
Deputy Minister, Department of Fisheries and Oceans
Those are good questions. I will let Mr. Balfour and Mr. Stringer give more detailed answers on this, but I can tell you where it came from.
The department has been looking at its suite of policies for a number of years now. You may all know that we are in constant consultation with our stakeholders to make sure that the policy suite we have is actually legitimate and suitable to their needs. So when we began—I think it was in 2007—there were 40 such meetings across the country, to start the discussion around various policies. Then we announced the modernization within the strategic review, which led to some changes and some concerns on the part of our fishers, because there hadn't been a lot of consultation.
Once the announcements were made around strategic review, we reignited the consultation process to really discuss how we can better support the future of the fishery through our policies. We all know it's very complicated, and there are myriad rules, and we need to see if there is any possibility of reaching a consensus on our way forward in a world that is very much changing.
So it stems from both an ongoing consultation system we have with our stakeholders and the implementation of strategic review. Mr. Stringer and Mr. Balfour led these consultations, and Ms. Mithani was also there to make sure we could provide science-based answers.
I don't know, Mr. Chair, if you would like some further details on that.
Kevin Stringer Assistant Deputy Minister, Program Policy, Department of Fisheries and Oceans
As the deputy said, we've had these discussions for years, and this is the next round of discussions. It was largely based on a request from many stakeholders who were asking about our strategic review announcements around stability, what that was about. We talked about putting the fishery on a firmer footing, longer-term plans, those types of things. We had a number of conservation policies as well, sustainability policies we wanted to go out and consult on. We were consulting on sustainability policies; there were three of them. We were informing on how we're moving ahead with stability and a predictable and transparent environment and we were asking about what other views fishers and others may have in terms of our rules in terms of supporting economic prosperity going forward.
NDP
Rosane Doré Lefebvre NDP Alfred-Pellan, QC
Thank you very much, Mr. Chair.
Thank you very much, ladies and gentlemen, for coming to explain the main estimates of Fisheries and Oceans Canada. We really appreciate that.
As I was reading the main estimates, I noticed that the budget for icebreaking services was being completely cut. In terms of icebreaking services, could you tell us specifically which services will be eliminated and how many jobs will be lost?
Chief Financial Officer, Department of Fisheries and Oceans
There are actually no cuts. There is a change in our program architecture. Icebreaking services are included under what we call marine navigation services. So two program activities have been merged into one.
NDP
Deputy Minister, Department of Fisheries and Oceans
There are no reductions either.
Chief Financial Officer, Department of Fisheries and Oceans
Yes, there are no reductions.
NDP
Jonathan Tremblay NDP Montmorency—Charlevoix—Haute-Côte-Nord, QC
Marine traffic is expected to increase. Perhaps the answer will be the same, but we can see in the budget that aids to navigation services are affected, eliminated. How will the department be able to fulfill its mandate if marine traffic increases?