Government Operations Committee on April 21st, 2009

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

That's why it's so important for me because I've always advocated quite strict planning and accountability. I imagine the departments can introduce the programs they've conceived, but that are not necessarily related to pressing needs. This agreement, this addition of $3 billion, for credit Vote 35, was done so quickly that I'm wondering whether you have a mechanism for determining whether the department really needs that money.

[Paul Rochon, Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance]

First, the vast majority of programs included in the budget meet an economic need. Many of those programs are already in existence; so we're adding to what is already in place. In those cases, I think it is clear that the departments have the necessary tools and mechanisms to deliver the programs.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I asked you the question because there are immediate infrastructure measures. Those measures include the National Recreation Trails. Can it be proved to us in black and white that there was an imperative need warranting that addition? I don't mean that the National Recreation Trails aren't important, but, for the purpose of putting people to work, are there any specific objectives in that initiative that prove to us it will be beneficial?

[Paul Rochon]

In this case, this is a program that was put in place not only, but mainly to respond to the decline in recreational infrastructure, partly because a lot of that infrastructure was built in the 1960s, in 1967 more specifically. It is now 40 years old. This includes arenas and other recreational infrastructure. So this program is being put in place, not solely, but partly, to renew that infrastructure.

To answer your question on the program criteria and mechanism, these are defined in the context of discussions held at the Treasury Board. The results of those programs and expenditures will be included in the reports submitted to Parliament every year on departmental programs, the Reports on Plans and Priorities.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, but you'll understand my surprise. When you know the state of the Canadian road system, for example, it's surprising that $25 million is being allocated to trails. It's not a large amount, but I'm surprised, on the one hand. On the other hand, it's under discussion, which means that there may not necessarily have been an already avowed need. I find that in the Status Report on Implementation of Commitments. I was a bit surprised to see that. It's not much, $25 million, but I'm surprised that such an amount is being allocated to trails, whereas it could perhaps have been allocated to roads.

My next question will be on the signing of agreements with the provinces and territories. Every time I checked the status report, enabling instruments were in effect starting in April or May, but always based on the signing of agreements with the provinces and territories. To date, can you tell me whether all the agreements with the provinces are complete on all matters, in the status report that we have?

[Tim Sargent, Assistant Secretary to the Cabinet, Liaison Secretariat for Macroeconomic Policy, Privy Council Office]

As you know, the government is engaged in a lot of negotiations and discussions with the provinces. All but one or two provinces have come out with their provincial budgets, and they're certainly ready to participate in negotiations with us. All I can tell you right now is that the government is working actively with the provinces to negotiate agreements in order to get money into the economy as quickly as possible.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

My last question concerns the acceleration of measures for contaminated federal sites. The next stage, we're told, will be the final project selection stage. There aren't 25,000 contaminated federal sites.

[An hon. member]

There are more than that.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

There are a lot. Regardless, the fact remains that not very many have been singled out by the municipalities and provinces. Are we to think that funding will immediately be released to enable the municipalities and provinces to accelerate the third stage of decontamination of these sites? That's a good question, isn't it?

[Alister Smith]

We would certainly have to go back to the departments to ask them that question because we wouldn't have that level of detail. But certainly there is a lot of effort under way in work with the provinces on this.

I don't know if my colleagues have seen any lists that would indicate which sites.

[The Chair, Liberal, Derek Lee]

That's time. Merci.

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chairman.

Thank you, again, gentlemen, for joining us this morning. We appreciate your candidness and your openness this morning.

We do have a number of questions with regard to stimulus spending. As a committee we believe there's an importance to be placed on two different objectives. One objective is that there be accountability with the money that is leaving so that we have assurances that the money going out be spent on the projects for which it was intended, and secondly, that it be done in a timely manner. So we appreciate your assurance on both of those fronts that this is happening.

Out of curiosity, I'm just seeking an additional assurance this morning. For the $3 billion, vote 35, will all of the allocation of that money to the different departments undergo the challenge function within the Treasury Board Secretariat?

[Alister Smith]

Absolutely.

[Chris Warkentin, Conservative, Peace River, AB]

Okay. So that assures me and members around this table that, number one, this is going to programs to which it was intended. It is programs that we as parliamentarians have voted on specifically within the budget document. We appreciate that.

I will move on, and outside of vote 35, because really what we are more concerned about is the entire breadth of the stimulus package. The $3 billion is a portion of it, but $20 billion, give or take, is the amount of the stimulus that's going into the economy. I just want to briefly discuss a number of things that I've identified, having had the opportunity to be part of the announcements in the last number of weeks.

Specifically on the allocation of $2 billion to municipalities across the country, I would like to ask about the expectation of your departments as to when the gas tax fund money will be flowing to municipalities. My understanding is that it's going to be arriving three months earlier than what was originally expected by the municipalities, but that it's also going to be doubled from what they were expecting.

Many of the municipalities that I spoke to in my own riding, which will receive over $8 million of this $2 billion, were pleased to hear that they were getting twice as much as they expected and that it's coming a lot sooner. Is that your understanding, that this is still on target to be issued and out into the municipalities' hands earlier than was expected?

[Alister Smith]

I'll let my colleague from the Department of Finance answer that.

[Paul Rochon]

I can't expressly speak to the acceleration; however, I can say that the gas tax funds have been transferred to municipalities under agreements that were signed in 2005 and 2006, and that those moneys are flowing on a regular basis in the sense that they don't require specific project approval.

[Chris Warkentin, Conservative, Peace River, AB]

Yes, and I appreciate that because I know there are many municipalities that will utilize those funds for this construction season. And they're pleased to know that's going to be available to do projects and that will actually give them the opportunity to leverage other dollars.

Secondly, like most members of Parliament, I actually had the opportunity to be back home these past two weeks. In the evenings I had an opportunity to work on some projects that needed to be done at home as well, so it gave me an opportunity to spend some time visiting constituents in the hardware store. In every hardware store I went to they were advertising the home renovation tax credit. Obviously, this is something that most of us are being bombarded with, through marketing and different things in our homes and in the hardware stores. Although it's a good marketing tool, we understand that it's also a stimulus. It's having a stimulus effect across this country and in every riding of our country.

As a matter of fact, I was in the tile store, Ideal, which is a local Grande Prairie business, and I was speaking to the owner, Ingo. I asked, “How are things going? Are you busy?” He said, “I'm busy and it's all your fault.” I said, “Well, what's the deal? I'm not purchasing a whole lot.” He said that because of our renovation tax credit he was actually having a better year than he has in the last two years. So obviously this is having a major stimulus effect.

I was speaking to another constituent who said he needed to replace the windows in his home and he says it's amazing what $1,300 will do. It's actually going to encourage him to spend another $20,000. So this is having a major effect.

Is there any research that's being undertaken in terms of what stimulus effect this currently is having? Obviously, I've talked about what I'm seeing on the ground. I guess in the budget documents there was probably a number identified. Maybe you'll give us that and then also tell us if we have any idea if we're on target.

[Paul Rochon]

Right. The number in the budget for that measure was included in a range of tax measures and tax reductions that were put in place. With respect to monitoring that specific measure, we don't have any data currently, although we would expect that at some point it would show up in indicators such as building permits and construction spending. At the end of the day, we will have definitive information once tax forms are filed for the 2009 tax year, so roughly in one year's time.

[Chris Warkentin, Conservative, Peace River, AB]

Well, I think we should make CRA aware that they're going to have additional work come next tax return season, because I know there are very few communities that aren't being affected positively by this tax credit.

We know there are other funds, and dollars that are continuing to flow. Obviously, there are huge numbers of dollars running through infrastructure projects. There are also dollars going towards the forest sector, through FPInnovations. There is affordable housing money, and municipalities and universities and colleges and other groups are currently applying for other dollars. We're going to start to see a number of announcements being made, and probably more frequently than we've seen in the past.

In terms of the Building Canada Fund, I know you people can tell us a little bit, give us an update. I know it's not in your purview, but there are a number of municipalities across the country that have applied for Building Canada funds and the assessments of those applications are being undertaken as we speak. Can you give us assurance that yes, indeed, this money is going to flow as soon as the scrutiny of these applications is finalized?

[Alister Smith]

That's my understanding. There are a number of framework agreements with provinces under the Building Canada Fund. I'm just looking at an announcement here for Saskatchewan, where there is $236 million from the Building Canada Fund available for 2009-10. Proposals opened March 16, and projects were to be submitted by April 17. The same story could be repeated in a number of other provinces, so indeed there is a considerable amount of activity in funding flowing from that initiative now.

Of course, that's ongoing, although it has been topped up by the budget.

[Chris Warkentin, Conservative, Peace River, AB]

Yes, we appreciate that, and we know that a number of these announcements can't be made yet. But I think all of us around this table are intimately aware of applications for projects in our constituencies that were going forward. We all had the opportunity to support those initiatives, and we're going to be waiting with baited breath for those announcements to be made.

I think it's important that Canadians know that this work is currently being done, that there is a real focus on ensuring that the money is going towards projects that we, as Canadians, can be proud of, and that due diligence is going on and people are working overtime to ensure that the money flows. So we appreciate your efforts. We promise we won't continue to haul you before our committee. We know you have other work that needs to be done, specifically on these issues, but we do appreciate your willingness to come today and your willingness to come when we do ask, to ensure accountability, that the money is going to the places that we, as Canadians and taxpayers and parliamentarians, would expect, and that it's being done in an expedient way. So thank you very much this morning.

[The Chair, Liberal, Derek Lee]

Thank you.

The last opening-round question is to Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair. Thank you, witnesses.

I'd like to start with one fairly straightforward question, call it a technical question.

Of the $43 billion total overall funding for new measures, $6 billion was included in the Budget Implementation Act and $3 billion was included in the budget implementation vote--of which you get eleven-twelfths, or whatever can be spent now. Will there be any way now or in the future for us to be able to tell which project drew from which of those streams of funding?

[Alister Smith]

Let me see if I can start with that question. My colleague, Mr. Rochon, may want to join in.

The Budget Implementation Act is actually a $10 billion package. I think the estimate of direct program spending from that package is about $7.6 billion. That doesn't include other tax measures in the ways and means motion and loans as well. In addition, there will be two other sources of funds, one being whatever is provided through the budget implementation vote, TB vote 35, and the large part of supplementary estimates (A), which will be devoted to the budget. Indeed, there may well be some late funding in supplementary estimates (B) in December. The overall $20-billion-plus package will have been funded this year and allocated this year. So that's part of it.

[Paul Rochon]

I think the short answer to your question is yes, you will, because those spending items that are being delivered under the authority of the Budget Implementation Act will be identified in both the public accounts and various departmental reports as statutory. Those items that are funded under vote 35 will be reported on separately, and everything else will have received authority from either the mains or the supplementary estimates. So I think at that level of detail, one should be able to identify the authority under which the funds were expensed.