Government Operations Committee on March 24th, 2009

[Paul Dewar, NDP, Ottawa Centre, ON]

Okay.

[Richard Botham]

--because I'm not familiar with the operations of that particular crown corporation. If it is as you have described, I would suspect that--

[Paul Dewar, NDP, Ottawa Centre, ON]

I always say they do guns and butter. They make requirements for LAVs, etc., but they also do procurements for things like vitamin projects for overseas development. They get appropriations, but they're also a crown corporation.

Fair enough. I'll leave that.

I have just one last point--

[The Chair, Liberal, Derek Lee]

That's way over five minutes.

[Paul Dewar, NDP, Ottawa Centre, ON]

I was just going to say that Mr. Warkentin was making a point about government getting large. I simply wanted to observe that this is the biggest cabinet we've had, and maybe we should have a program review for the government's operations.

[The Chair, Liberal, Derek Lee]

The time is getting large too. Thank you, Mr. Dewar.

We'll have Mr. Calandra for five, and then I'll go to Mr. Rae for five, and then we'll wrap up and do some committee business.

Mr. Calandra.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Thank you, Mr. Chair. I won't be taking five minutes. I actually have just one specific question.

I thank you for coming, Mr. Smith. I know you've been spending a lot of time in front of the committee, so I'm very familiar with you. My question in particular is this.

There has been a lot of discussion about asset sales and different governments booking asset sales before the review has been completed. It is my understanding that this is not an unusual practice, but if you'll bear with me, I'd like to quote from budget 2004, presented by the old Liberal government:

The Government intends to sell its remaining shares in Petro-Canada in 2004-05. Based on an average of recent prices and the book value of this investment, it is expected to provide approximately $2 billion in net budgetary revenues.

I can appreciate that was some time ago, and you may not necessarily be familiar with that budget, but I was wondering if you might be able to confirm that was actually the case, and if the old Liberal government at that time did book the proceeds of the potential sale of the shares in Petro-Canada in its budget forecast.

[Richard Botham]

It was included in the revenue projections for the budget.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Again, this type of practice is not unusual or something that is unique to this government or to this circumstance, in your opinion?

[Richard Botham]

The case you point to also included a revenue projection from the sale of a government asset.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

In previous governments, are there any other instances when this was done, to the best of your knowledge? Is there anything—

[Richard Botham]

Sorry, my knowledge doesn't go back far enough to.... The examples would come from 1994 and around that period, regarding program review, and 1984. I haven't looked at the budgets from that period to be able to answer your question.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

All right. Thank you.

[The Chair, Liberal, Derek Lee]

Mr. Rae, for five minutes.

[Bob Rae, Liberal, Toronto Centre, ON]

Just to follow up on that point and not to put you in the middle of a political debate, but there is a difference between naming a specific asset and providing the public with a basis upon which you assess what the value of the sale of that asset is, and the process that is being provided for in this budget, which is not naming any assets; it is simply saying there is a general review of assets as well as the programs and the government intends to get to this number. So you would agree.... Well, you don't have to agree; I'll just make the statement. I'm not going to put you in the middle of this argument with Mr. Calandra, but there is a big difference between those two things.

I appreciate very much the comments that you had a chance to read coming in, Mr. Botham, where you said that the government will not engage in a fire sale of assets, which I suppose is a matter of definition. However, would you agree with me that it is a little strange to announce the number that you expect to arrive at before you've actually determined whether there are any assets that are worthy of sale or whether it's a good time to sell?

Do you see what I'm saying?

[Richard Botham]

The way you pose your question is whether I think it's strange or not. I think that the process for a corporate asset has some similarities to the process for a strategic review. There's an understanding that in the case of a strategic review, there's a program spending base. In the context of a corporate asset review, there's an understanding that there is an asset base associated with, in this case, the four departments that are being reviewed. It was taken into account for fiscal prudent planning that there would be a number associated with revenues for one of the outcomes of corporate asset review, which could be a sale. That was the procedure that was followed.

[Bob Rae, Liberal, Toronto Centre, ON]

Again, I don't want to put you in the middle of anything, but would you agree that it's possible that you will conduct a review of the assets and determine that this is not the time to be selling them, that we wouldn't get reasonable value for those assets on the basis of the condition of the market today, and therefore you're not going to reach this target?

[Richard Botham]

I think it's fair to say that after we go through the review process and identify specific assets that warrant more analysis, we will have estimates based on market conditions and we'll make recommendations as to whether this is a good time, in fact, for the government to realize revenues on a sale, and if it makes sense in terms of generating value, in terms of additional economic development benefit.

After those recommendations are looked at, there will be a number determined as to what the outcome will be. I think that right now our best guess, which was included in the economic update from the four departments, is that we could project a revenue gain of approximately $2 billion for 2009-10.

[The Chair, Liberal, Derek Lee]

That would be five minutes.

[Bob Rae, Liberal, Toronto Centre, ON]

That would be five minutes.

[The Chair, Liberal, Derek Lee]

Close to six. Time flies when you're having fun.

Okay, colleagues. We have about 15 minutes to go. We have, by my estimate, about 10 minutes of committee business, so if there are no other compelling last-minute 15-second questions, we'll allow—

[Martha Hall Findlay, Liberal, Willowdale, ON]

I've got a compelling one.

[The Chair, Liberal, Derek Lee]

It must be within 15 seconds. I will cut you off.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I know you will.

It's to Mr. Smith, who was kind enough to give a breakdown of the asset versus departmental review. Do you also have that breakdown for the subsequent four years?

[Alister Smith]

Yes, I do. Is that for 2008, or do you want to go back to 2007?