Thank you, Mr. Chair.
Good afternoon. I'm pleased to be here in my new capacity in the organization and to have this opportunity to provide you with a very brief overview of DFO's proposed main estimates. We did provide the committee with this, as the chair was just noting, and I will speak to that, beginning on page 4. I know your time is valuable.
As the minister just noted, our estimates total some $1.6 billion.
Under vote 1, operating expenditures, we're seeking just over $1.1 billion. I would note that $724 million of that is for salaries. Under vote 5, capital expenditures, we're seeking $325 million, of which 73% is in relation to the Canadian Coast Guard fleet and shore-based asset readiness. Under vote 10, grants and contributions, it's a fairly steady story here, at $57.9 million.
The last two items, statutory in nature, are the contributions for the department as a whole for employee benefits and the statutory increase for the salary and motor car allowance of some $80,300. It's rounded to $0.1 million, as you see in the table.
Altogether, it's at $1.605 billion, compared to $1.669 billion last year. That represents a $63.6-million year-over-year decrease in the main estimates for this institution.
Page 6 is where I'll spend the bulk of my time. I'll be pretty much wrapping up right after that. I just want to take a moment to walk through the key changes in variance between the two years of the main estimates. These items are taken directly out of the part II main estimates at pages 139 and 140.
The first item is a $32-million increase for procurement for the Canadian Coast Guard offshore science vessel program. We're bringing in funding this year for this program in order to carry out the engineering phases and what we call the “long lead procurement items”, the items we will procure or begin the procurement process for well in advance of their arrival in time for the shipbuilding phase. These are for the propulsion systems and navigation systems, so here this is simply the staging of the cash profile. It's not a new item. This stems from the $5.2-billion renewal announcement from the fleet readiness approvals in budget 2012.
I'll just make the point that there are a few more following on this same page that are all around timing. They're not really around the issue of a new incremental ask. It's busy work trying to synchronize the estimates to when shipbuilding actually occurs.
The next item on the list is $24.3 million to strengthen “the prevention, preparedness and response regime to oil spills from ships”. Budget 2012 provided funding for this initiative, the focus being on spill response capacity on the west coast of Canada and developing spill trajectory models. Last year, we brought in the funding for this important initiative through supplementary estimates. This is our first year to be able to actually book them in and regularize them through the main estimates.
The next item is pretty similar to that. It's the $10.5 million in sustainable aquaculture that the minister just referred to. This program was sunsetting in 2012-13 and was renewed in budget 2013. The department received its five-year renewal. The first year of the funding we brought in through supplementaries, and now we're at the stage of being able to permanently reference-level that five-year project through the 2014-15 main estimates.
There's a couple of notable increases that aren't on the list and made it into the main estimates. I'll just quickly cover those. There is $6.4 million for the continuation of the recreational fisheries conservation partnerships program, and then, as the minister noted, that's a two-year extension to the original approval, so we'll see that again in next year's main estimates as we go through the next year. The second item I would draw your attention to is the $3.3-million increase for the Asian carp issue in the Great Lakes.
Now, switching to the red ink and dealing with the decreases, the first item you see on the list is $45.2 million for the strategic and operating review. I'm sure we're familiar with the fact that stems from budget 2012 announcements. This, for us, marks the final year of what we had otherwise called the SOR reductions. Having this reduction, we have now fully addressed both the strategic review, its predecessor from the previous budget, and now SOR. We have one more year of reductions left with what's known as targeted review. We'll see that again next year in the main estimates.
The follow-on item is another one of those timing issues that I talked about. In terms of the marine fleet, this is $36.8 million relative to the midshore patrol vessels. This one has a different sort of layout to it. The department had $212.5 million approved for this important initiative. We were to build and put into service nine midshore patrol vessels. We've completed and received seven of those vessels, and two more will come in this year, in 2014-15.
The reason for the reduction is that we had $69.4 million in authorities last year and in this coming year we only need $32.6 million. The difference is $36.8 million, so we need to reduce our authorities to match the outflow of that project requirement.
We're on to the next one of $30.2 million for what's called the vessel life extension and mid-life modernization program for the Canadian Coast Guard.
These two tangential programs either ensure that our vessel fleet reaches its intended useful purpose, or when it's necessary—as we're going to see coming up now on the icebreaker program for instance—if we need to continue a vessel well past its normal expected life, we have to put an extension program in place.
In this instance, this is part of the $5.2 billion program for the fleet renewal. A total of $360 million was approved for this activity.
We're getting down to the bottom two. I mentioned a moment ago a targeted review of $5.4 million. This is year two of the three-year plan and next year we will be in the final year.
The last item is $5 million related to the sunset and completion of the initiative to support the Quebec and Atlantic Canada lobster harvesters and lobster fishery in those regions.
In 2009, Fisheries received $64.8 million over a five-year window. This program will sunset as it was intended to, today basically, so the mains reflect the removal of the $5 million in authority that rested in our final reference levels, and that program is now effectively, successfully concluded.
There's another form of a change which we made depending on where we go in the discussions. It may pop up. We just went through a fairly low-key but important restructuring. A number of areas in the department moved from one side of program activity to another. We needed to make a number of changes in the main estimates to reflect those consequential budget movements. It's basically a minus here becomes a plus somewhere else. I'll have an example in just a second.
I'll wrap up very quickly by moving through the last few slides just as reference points. I'm on slide 6.
In summary, the department has 25 programs. We see the first number of them under this area called safe and secure waters. We plan to spend something in the order of $676 million. I would point out that about 81% of this whole area is going to be spent in the coast guard on the two big areas you see on the pie chart: fleet operational readiness that ensures our fleet and our ships crews are ready to go; and shore-based assets which provide the essential ground support to them.
On the next page we move into what's called economically prosperous maritimes sectors and fisheries program activities and strategic outcome. Here, $401 million, and of that about 57%, is spent on fisheries management, which is both commercial and recreational as well as small craft harbours.
On the last summary page by strategic outcome area we have sustainable aquatic ecosystems, $238 million. The point here is to notice that 69% of that program is being spent on the compliance and enforcement side which includes monitoring and surveillance as well as the fisheries protection program.
Our last program area summed up on slide 9 is internal services. This area is going to be $290.6 million this year. That's up a small increase of $4 million. This is the example I gave a moment ago of some internal restructuring, so it's not really getting new money. Some of the IT services that were located in some areas, pockets of programs, have now been reconsolidated with the CIO branch which falls under internal services. It's a net increase of about $4 million. On this page it is a bit interesting that about $111 million out of the total spend is for our real property program.
I'll close off by saying that subject to the approval of these main estimates, as the minister noted, we would be in the area of about $1.605 billion. From there we would see, over the year, the opportunity to increase that amount with those budget 2014 items as noted. Then also, of course, there is the in-year opportunity to bring in our operating and capital carry-forwards. These aren't reflected in the mains due to timing issues.
So at the end of the year, I'm expecting we'll be somewhere in the order of about $1.75 billion in total estimate authority level.
Thank you again, Mr. Chair, for this opportunity.