Foreign Affairs Committee on May 5th, 2016

[Raj Saini, Liberal, Kitchener Centre, ON]

Does it come out in the wash in the end, because with the currency fluctuations there are going to be some places where you have spent more and some places where you have spent less? How do you accommodate for that fluctuation?

[Arun Thangaraj]

What you see in these main estimates is a line that says, “compensation for currency fluctuations at missions abroad”. We work with our colleagues at the Treasury Board Secretariat and Finance Canada to look at the inflationary impacts and the currency impacts in all of those 100 currencies, and we look at what the operating costs are. Our main estimates are adjusted for both inflation and currency.

The way the formula worked when the currency dropped between September and January was you saw in supplementary estimates (C) an amount that was added to our reference level.

What you see in these main estimates are the known currency losses as of September 2015. We make adjustments on an ongoing basis throughout the fiscal year. It's a model we use. Finance, Treasury Board, and Statistics Canada help with the inflation adjustment, as well.

The way it works is when the currency decreases, you see funds flowing into our main estimates. When the currency appreciates, the funds flow out of our main estimates. Essentially, we're held harmless. We don't gain on currency gains, and we don't lose on currency losses.

[Raj Saini, Liberal, Kitchener Centre, ON]

What would happen if at the end of the year, for whatever reason, there were more currency losses? Who would backstop that? Does Treasury Board bring the money into the system to make sure the programming is done? Is that how it works?

[Arun Thangaraj]

We work closely with our colleagues at Treasury Board Secretariat. This issue was acute given what happened in January. Every individual mission has a good line of sight on their finances. We at headquarters work with our missions to balance those budgets where our first action is to look at how we manage within that using the supplementary estimates process to provide sufficient funding based on the projections at the time.

If in the event there's a major shock, we do work with our Treasury Board officials to determine what the best course of action is, so that we respect our parliamentary appropriations.

[Daniel Jean]

What Arun is describing is the bit of a lag time between the time we get the adjustment and then the impact. We always make sure we operate within an acceptable margin of risk, but if there were a sudden significant drop, then we would have to call on the—

[Raj Saini, Liberal, Kitchener Centre, ON]

What happens if the currency is stronger for that fiscal year? Where do the excess savings go?

[Arun Thangaraj]

What you'll see is that at the end of the fiscal year, we will have an amount left over in our budget. So if the opposite happened this year—if in January currency appreciated, and we had an excess amount—then that amount would be deducted from our reference levels in the following fiscal year. Again, we don't gain or lose from currency.

[Raj Saini, Liberal, Kitchener Centre, ON]

Okay. Thank you.

[The Chair, Liberal, Bob Nault]

We'll now go to Mr. Kent, please.

[Peter Kent, Conservative, Thornhill, ON]

Thank you very much.

I'd like to return to Haiti and the minister's commitment to ensure that Canadian aid and development dollars are well spent. I think Canadians were justifiably proud back in 2010 with Canada's whole-of-government response, along with other major participants in the disaster recovery operation. Since then, I think failure characterizes almost everything that's been done—other than, fortunately, keeping people alive, fed, and well-medicined.

Again, the military and policing commitment aside, I'm just wondering what the estimates specifically foresee for this year in Haiti. Other than basic survival, given that schooling has not achieved its targets, people are still living in slums...and all of this, admittedly, a result of political gridlock and no elections.

Can Canadians be any better assured that their aid and development dollars will be more effective this year than they have been for the last six?

[Daniel Jean]

Maybe I can start, and my colleagues will continue.

First of all, I think it was the spring of last year when under the former government the Minister for International Cooperation renewed the development engagement to Haiti. An accountability framework was part of it. It shows very clearly that we have the safeguards in place.

Secondly, as the minister has pointed out here today, in question period, and in other fora, we're not happy that there are the delays, and neither are our like-minded partners that are trying to help Haiti in terms of the electoral process. We're working together in encouraging the Haitian government and elected officials to make sure that the Haitian people can get the governance they deserve. We are working very closely with the like-minded United States, other countries in the Americas that have lots of interest in Haiti, and European countries as well.

On the specific numbers for Haiti, do you have the figure?

[Arun Thangaraj]

We don't have the budget figure for this year.

We're in the process; the fiscal year has just started. As the minister said, we're setting plans for the budget for this year—

[Peter Kent, Conservative, Thornhill, ON]

Are there any anticipated increases or decreases? Or is it too soon to say?

[Arun Thangaraj]

It's too soon in the process.

[Peter M. Boehm]

We have built a hospital in Gonaïves. We have built roads. We have put in various oversight mechanisms. We are working very closely with the UN and our other partners, as Daniel has said. It's a great topic of discussion among the donor communities, all of us together.

[Peter Kent, Conservative, Thornhill, ON]

Thanks.

Coming back now to the grants for the anti-crime capacity-building program, after the coup in Honduras, Canada invested substantially in programs to bolster the justice system, to address human rights abuses, to advocate for the rule of law and democracy. Does a portion of this year's allocation in the estimates provide for continued support in Honduras, where we've seen, unfortunately, a deterioration again of human rights?

[Daniel Jean]

I'll give Arun some time to come up with the numbers, but you're absolutely right that we wanted to support Honduras in moving in the right direction. We have expressed our dismay at some of the drawbacks, at the murders of Berta Cáceres and Nelson García. We've certainly told the Hondurans that we are concerned about these setbacks.

[Arun Thangaraj]

I don't have the breakdown by country, but we can find it.

[Peter Kent, Conservative, Thornhill, ON]

The committee would be interested in having it.

Finally, the 2014 report of the Auditor General recommended that the department, then Foreign Affairs, take steps to identify opportunities for improving the response time for global crises. I'm just wondering what has been achieved. In general, how does the department, or the sub-departments within the department, manage budget anticipation in standing ready but at a prudent level?

[Daniel Jean]

This is an area where the amalgamation has been helpful. When the OAG report came out, it was looking at two to three years ago. If you look at response time in the context of the Philippines with a typhoon, and in the context of Nepal in terms of announcing money, we were one of the first off the block.

Recently in Honduras our record on this has improved quite a bit, but we always have to aim to do better. Every time there's a response, we look at how well we've done and what we could have done differently.

[Peter Kent, Conservative, Thornhill, ON]

Is whole-of-government still a concept that is occasionally engaged? Departments before Haiti were notorious for being somewhat siloed.

[Peter M. Boehm]

Indeed, it is a concept. What happens when there is an international crisis is we strike a task force almost immediately, any time of the day or night, and all departments that would be implicated are on that task force. We have standard operating procedures, phone trees, email links, and that sort of thing. It's working quite well.

[The Chair, Liberal, Bob Nault]

Thank you.

We'll go to Mr. Oliver, please.

[John Oliver, Liberal, Oakville, ON]

Thank you very much, Chair, and thank you for making yourselves available today.

My questions are going to be around consular services and emergency management. It's a $52-million line item, which I believe is an increase over last year's forecast in 2014-15 expenditures. Could you outline quickly the factors that led to the increase in the consular service?

[Arun Thangaraj]

There are a couple of reasons for the increase. One is, as I said before, that we have a new program alignment architecture. What you saw in 2014-15 was right after amalgamation and our best estimate of where consular spending was happening across the organization.

Over the course of the year, we refined those estimates, and part of the increase is due to that. For the other part of the increase, which I think is almost $7 million, $6 million of that is for identifying what our spending is. The rest of it is due to currency fluctuations for the expenses we incur abroad.