Thank you.
We've circulated a short deck, a presentation that I'll refer to.
If you wish to follow along, I'm going to begin on slide 3. Most of you will recall that we were here about two and a half or three weeks ago on our supplementary estimates (C) from the previous supply cycle, so I won't dwell on this slide.
If we jump to slide 4, I'll spend a moment, and I'll link a number of numbers that are going to come up as I roll along through the presentation. This particular presentation that we face every year is an interesting one to try to follow the supply cycle and how it affects us. If we look at where we are on the time chart on slide four, we're smack in the middle of having tabled and received royal assent on the main estimates, and the interim supply for those main estimates. That was all occurring during the months of February and March.
As well, the government tabled budget 2016. We're ahead of that as we roll into what these main estimates include for today's discussion. I'll be trying to figure out how to answer questions where they may be relevant to the budget 2016, but those items will all come in future supplementary estimate exercises that are to the right on this particular chart.
With regard to a couple of numbers to follow along—if I can take you all the way to last year—in the top left corner, one is $1.889 billion. That number I'm going to show you again shortly. You'll see in each of the successive quarters that we increased our estimates to operate with, ending the year with $2.39 billion. Now we're asking you to consider our main estimates for 2016-17. The “you are here” arrow points down at $2.241 billion, just a slight drop from last year's ending position, but a rather marked increase from last year's starting position of $1.889 billion. I'll explain that in a minute. The primary driver, of course, will be no surprise.
Let's move to the next slide. It was already covered in the minister's remarks, and, again, I've just highlighted that we're smack in between opening with our main estimates but not yet able to portray the increases that will come in year. That's the essence of this slide.
Let's move to slide 6 and take a minute here. I've just bored you with a couple of interesting numbers. Let's see them again here, and then I'll explain a little about how the estimates are working for the organization.
The minister highlighted that we are proposing for your consideration, $2.2 billion in main estimates. The increase over last year's starting point, or the $1.889-billion number that I showed you, is a $352-million increase. This table is a replication right out of the printed main estimates. You would remember that from seeing part II in the bigger books that you have access to.
The top three numbers in this table are the numbers that the committee will be asked to support. The next two, in the row with the S beside them, are called “statutory” and they're not actually a voted item. They're a number that is provided to us under the various acts. So the “employee benefit plans” has a number that is provided directly to us.
You'll notice the final item, “Minister of Fisheries and Oceans – Salary and motor car allowance”. By the very structure of the way that the ministers' offices work in a departmental setting, this very small number—and it is small; there are no extra thousands—comes from two portions of the parliamentary process. There is a Salaries Act for the minister's augmented salary, being a minister, and there is the Parliament of Canada Act, which allows for the small item here for a motor car allowance.
You see this year that we have a statutory increase of $1,400, which is a very small increase. Those amounts, again, are provided to us. They go through the main estimates, but they're not part of the voting structure.
The minister already gave you the summary at the bottom. The big player here—and I'm going to go through a few of them—is the federal infrastructure initiative funding from budget 2014. This is year two of that. As well, often before this committee, we are talking about the ebbs and flows of the national shipbuilding strategy, so I'm going to talk about how that is moving along.
Every year, we need a top-up. I was just here, as you'll remember, on the supplementary estimates (C), talking about the fuel for the Coast Guard. It's about $15 million to $20 million every year, which we need on top of the base funding that we have for fuel for Coast Guard icebreaking and other services.
If I could ask you to join me on slide 7, here are the actual numbers behind that $351 million. I'll just take a couple of minutes on a few of them that are most notable. Number one on the list, federal infrastructure, is $291 million.
Fisheries and Oceans was a recipient of an approval of $551 million over two years. This is year two, so it's that number plus the third number down of $25.4 million for the lifeboats for the Canadian Coast Guard. Those two numbers combined are year two of FII.
If you'll quickly do the math in your head, that's $316 million. I'm already over the $315 million increase because that increase is a net number. I'm going to take away a little here in a minute.
It's $181.8 million for the Coast Guard's offshore fisheries science vessels. This is turning out to be a very good story. Those of you who are members of the committee from the last few years, you'd know I've been here numerous times saying we're moving money out to future years because the shipbuilding isn't keeping pace. I mentioned with the supps (C) that in fact it has turned the corner.
We have three of these vessels, three copies of this particular vessel, that are going to come off the production line of the Vancouver Shipyards. This is the next installment. When I was here three weeks ago we were bringing in $116 million of the expenditures for 2015-16. Now you see we're up to $181 million for this particular year, and we'll start to see those vessels, that production, reaching its conclusion shortly.
In the fourth down, there's that incremental funding. It was just in the supps (C) and it's again here. As a reminder, this is an “up to” funding limit for us. If we spend it burning fuel in those vessels serving Canadians, we can access this funding. If we don't, it stays in the fiscal framework.
Before I move to the bottom of the page, I want to re-enunciate. This federal infrastructure money that's on this page is only for all infrastructure funding not announced just recently in budget 2016. We'll likely be back to see you very shortly in supps (A) to bring in whatever funding was allocated to us. You'll recall that one of the big chunks was $149 million for the small craft harbour program and a further $49 million for the Canadian Coast Guard for specific greening initiatives at some of its facilities where we're going to look at solar power as an alternative source of energy.
At the bottom, I mentioned in my remarks we've got a lot of money coming in. That adds up to well over $351 million. Some of our funding profile at the bottom of this page—and I'm going to move to the next slide—is funding that's leaving our organization.
On this particular page, we notice what's called a decrease in the funding profile. This is not a take-away. What's happening here is we've had an extremely successful procurement with Bell for the light-lift and medium-lift helicopters. I think I regaled you last time we were together that we've now taken delivery of the first 15 of the light-lift. Those are coined the Bell 429s, and we're now in this year starting to ramp up toward the Bell 412s, which is our medium-lift platform.
In addition, with this new money after this particular year, we're going to buy the flight simulator for the training.
The $66.8 million leaving our organization is a signal the program of acquisition for the first 15 is complete. We have to reduce our approvals in our main estimates to the new lower expenditures that will occur in 2016-17 as we move forward. Again, it's a good story. These have been delivered on time and on budget.
There are a few more here on slide 8. Pre the budget announcement, which the minister just noted on Pacific and Atlantic integrated commercial fisheries, we had not had a renewal for this particular $33-million program. From a main estimates process, I had no choice but to seek the reduction of our main estimates authorities by that amount until that program was renewed.
In supplementary estimates (A) or (B), in the coming term, we'll come back and seek the renewal of this from this committee support.
Next on the list is the reduction of offshore oceanographic science vessel funding. This is not a reduction to the program. This is, as you'll remember I just mentioned on the previous page, three copies of the fisheries science vessel. This one, as I would call it for short, the OOSV, is due to come off the line after those first three. That particular production line, and the sequencing of when those will arrive to us, is more clearly known. We're now taking this funding of $23.3 million, and we're pushing it out to the future years where we know we'll need it when this particular vessel goes into production.
Next is small craft harbours, just below. If you were following along with what I was saying about the federal infrastructure, there is a tremendous amount of investment being made from federal infrastructure in the small craft harbours program, in this particular instance, $22.2 million. I think it was in budget 2014 there was a $40-million incremental investment made in small craft harbours over two years. The end of that two years was 2015-16, and so I have to reduce the authorities available to us by this $22.2 million. We successfully delivered on the initiatives for that funding, but we're just reducing how much we're allowed to spend. What we have in 2016-17 and beyond ties itself to the base program, plus the two rounds of federal infrastructure funding that I spoke of in my remarks.
Last, vessel life extensions and mid-life modernizations. These are the two major service investments that we use to keep existing Coast Guard fleets in service and operating. Again, tied to the timing of when our fleet replacements occur, we move the vessel life money forward when know that vessels will be available for their refit work and/or when we know that a new vessel is coming in to replace the ones we have in service. This is not a take-away, it's just simply a timing issue, moving to the right.
Now the last slide, slide 9. As I mentioned on the timeline slide, we received on March 24 the royal assent for interim supply. We have three-twelfths of our operating funding from the main estimates. As a result of the process here today, and ultimately the decision of government, we'll hope that the rest of the main estimates are released to us, and that would represent the other nine-twelfths of the year.
Just before I sign off, Mr. Chair, and thank the committee for this opportunity, I'll only just reference that there is a series of slides that follow in the annex section. What they are is another way for this committee to look at how our funding is divided. There are very complicated budgets in the main estimates, but what this does is it breaks it down for you by strategic outcome and shows you how the $2.2 billion that we're referring to in the main estimates is partitioned by the four big strategic outcomes the organization has set out to achieve. It breaks it down even more granularly in the pie charts by the types of programming so you can see how much goes into, say, economic prosperity, and how much does the Coast Guard contribute to that, for an example. So I'll leave you with those.
We're pleased to answer any questions, and look forward to the dialogue over the remainder of our time in this appearance.
Thank you, Mr. Chair.
