Government Operations Committee on Feb. 10th, 2009

[Patrick Brown, Conservative, Barrie, ON]

It's a question. Electronic health records: the CEO at the Royal Victoria Hospital in Barrie mentioned to me she's never seen any of that trickle down. If it goes directly to the province, is there any mechanism whereby we can track this electronic health records funding to actual hospitals?

[Paul Rochon]

That program is managed by Canada Health Infoway, which is a federal-provincial organization. My understanding is that effectively, Ontario, in particular, has not had as large a take-up as other provinces, but I understand they are in the process of doing so.

Infoway publishes regular reports, annual reports. They have a board and they are accountable.

[The Chair, Liberal, Derek Lee]

Thank you, Mr. Brown.

The next round goes to the Liberal Party, Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you.

I appreciate my colleague's comments about how wonderful the infrastructure program is and the municipalities' enthusiasm for the loan program. Absolutely, that is our understanding as well. But the infrastructure money that has in fact been flowing over the last two and a half to three years has been the money that has been flowing through the gas tax fund and the GST rebate.

Of the $8.8 billion Building Canada Fund that was announced, unless the representatives from the Department of Finance can tell me differently, our understanding is that the amount of money that has in fact been spent of the $8.8 billion amounts to probably less than 5%. So far we've only had $80 million confirmed as having been spent, not of the gas tax fund that has flowed, not of the GST rebate that has flowed, but of the Building Canada Fund. And that shockingly low percentage is extremely important here, because virtually all of the infrastructure promises being made in this budget and in Bill C-10 are being done on the basis of a shared and matching process. It is not a question of too many municipalities lining up; it is a question of there have not been enough situations where that money has been in fact able to flow.

So the question to the finance department, based on history, is twofold. One, do you have a different number from what I have in terms of the $80 million that has been spent so far, a significant amount having in fact been allocated and then lapsed? If you have a different number from that, I'd really appreciate it. And two, could you answer based on the past experience of this process of matching admittedly up to 50%? That's been exactly the funding process that has failed so miserably in the last two and a half years.

If you can answer both of those, I'd really appreciate it. Thank you.

[Stephen Richardson]

I think there are a couple of things that are different. Going forward, I can't specifically verify the number, though. I must say it sounds a little on the low side to me, but we would have to refer that to Infrastructure Canada to see what the number is.

I would note about the new infrastructure funding being provided in budget 2009 that, as we mentioned, first of all up to 50% can be matched by the province in lieu of the municipalities, so we would have a 50% component from the federal government.

And secondly, I would make the point again that a lot of the major infrastructure in the past has focused on large and new projects. And as they change from that, a great deal of the funding for infrastructure being provided in budget 2009 is targeted at renovations and retrofits, so that these are things that in the normal course of events should be much easier to do on a shorter timeframe and to move the money therefore much faster than has been the situation in the past with large projects.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you for that.

Has there been any analysis of projections for renovations? Numbers that we have seen have shown a very high number of homes undergoing renovations in 2008, or at least planning already, before these tax measures were announced, to move ahead. And we're now hearing anecdotal evidence that even since.... I don't know anybody who's had to find a contractor to renovate recently. These are not the big construction projects. These are in fact projects where it's hard to find people to do the work. And since the budget has been announced, there's already some difficulty in terms of capacity.

So the construction industry is not the same through all types of projects, and I wonder if there has been some analysis of the capacity to absorb of the renovation industry to in fact be able to accommodate these plans.

[Paul Rochon]

We haven't done a detailed study, but we have looked at that question. And of course construction employment, along with other employment, has declined recently. Further, our expectation--

[Martha Hall Findlay, Liberal, Willowdale, ON]

Just to be clear, the construction industry has declined dramatically, but not in the small-scale house renovation business. It has been in the large-scale construction projects. I just wanted to say that.

[Paul Rochon]

You're right. And on that, there have been a lot of new homes started in the summer and late 2008 that we would expect to be nearing completion in the next month or two, and as a result of this we would think that in the specific market you refer to there will be sufficient capacity to absorb this spending.

As a share of total construction, this represents an increase in the order of 10% for total construction and renovation. So we expect that there would be sufficient capacity, but that's a difficult thing to measure, we accept.

[The Chair, Liberal, Derek Lee]

I'm just going to jump in here, as chair, with a question.

Most of us in the House are fairly dedicated now to getting stimulus money out the front door. But it puzzles me that if there was unspent infrastructure spending availability in the current fiscal year, 2008-09, running into the billions—at least a billion or billions—and if the Bill C-10 stimulus package isn't really going to hit the street until the next fiscal year, I'm kind of puzzled why there isn't a real initiative to get out the already-appropriated, approved spending in the current fiscal year.

The problem is actually now. In fact, the government has support in the House maybe only because of that need for stimulus spending. And if there's money unspent, ready to be spent, why isn't there a whip somewhere getting that money out yesterday? The fears expressed around here about the money not getting out quickly apply just as much to the unspent money from 2008-09.

Can somebody answer that?

[Paul Rochon]

There are a number of changes being made to accelerate the existing approval process. There are a number of proposals to change those processes, and they relate to the approval processes required to proceed with these projects. A number of those are—

[The Chair, Liberal, Derek Lee]

Are you talking about the new ones or the old ones?

[Paul Rochon]

I am talking about—

[The Chair, Liberal, Derek Lee]

The new.

[Paul Rochon]

No, I'm talking about the old ones.

For example, in the case of an environmental assessment, which often takes some time, there's a proposal that in cases where a provincial government has also done an environmental assessment, the federal government could use that one instead of doing a separate federal assessment, as is currently the requirement.

[The Chair, Liberal, Derek Lee]

Are you trying to tell us today that there are some really good administrative reasons why money otherwise available for stimulus in the current fiscal year is not being spent—there are good reasons for that, really good reasons?

[Paul Rochon]

Look, we're not experts in infrastructure, so if you want to dig down deep on that, I'd suggest that officials from Transport Canada would be the appropriate officials to speak to.

[The Chair, Liberal, Derek Lee]

Okay.

[Paul Rochon]

Our understanding is that there are a number of reasons for the current delays, all of them appropriate as far as we understand, and they relate to decision-making and approval processes. Again, I'd point out that these are largely projects that are greenfield in nature, as opposed to repairs and renovations.

[The Chair, Liberal, Derek Lee]

Mr. Kennedy, you'd like to add something?

[Simon Kennedy]

I'd like just to add to what my colleagues from the Department of Finance have said.

I think, Mr. Chair, one of the things that's important to look at, as well, is the purpose of the programs that have been set up. Clearly, the purpose of the measures set out in budget 2009 is stimulus; hence the focus on renovation and repair, rehabilitation, and hence the two years of money. But the Building Canada plan is actually a seven-year program, and it was designed, in large measure, for strategic investments—major highway interchanges, borders, major rapid transit systems in cities, those sorts of things—and those projects have a much longer time horizon and, as my colleagues noted, in many cases have significant regulatory and other hurdles to go through.

So it's not a perfect answer, but there are in some cases reasons why some of the money in Building Canada has not gone out yet. The purpose of the program is not immediate stimulus; it's actually strategic investment.

[The Chair, Liberal, Derek Lee]

You don't think we could change the focus on that at this eleventh hour? In the month of January or February we could sort of get the focus changed on that stuff?

[Simon Kennedy]

In fact, I think the budget does talk about accelerating to the extent possible—

[The Chair, Liberal, Derek Lee]

That's great.

[Simon Kennedy]

—spending under those programs.