Government Operations Committee on April 19th, 2010

[John McKay, Liberal, Scarborough—Guildwood, ON]

Yes, I read it.

[David Moloney]

--which indicated how CIDA was living up to the legislation.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We now go to madame Bourgeois pour huit minutes, s'il vous plaît.

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

Thank you, Madam Chair.

Good afternoon, gentlemen; good afternoon, madam.

The envelope for international assistance is used to fund CIDA programs as well as other international assistance activities. A number of departments have to share the envelope. I believe that CIDA, the Department of Finance, the Department of Foreign Affairs and International Trade, as well as the International Development Research Centre, receive money from that envelope.

How do you divide up this $5 billion envelope?

[David Moloney]

At the end of the day, that is a cabinet decision, made by all ministers together. Each year, including this year, the budget has provided for an increase of $364 million. So ministers prepare proposals and present them to their colleagues. The increase in the envelope is distributed according to government priorities.

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

At the moment, the government has no development policy for foreign affairs, if memory serves. If the Minister of Foreign Affairs and International Trade decides to put the priority in such and such a place, CIDA, which partners with all those departments, has to hand over the money and make do with less, because the priority will go to the Department of Foreign Affairs and International Trade.

Is that really what you are telling me? It depends on government priorities?

[David Moloney]

No and yes. It means that, in the last few years, ministers had about $350 million on the table. Departments and ministers had, and still have, the opportunity to put forward their ideas and their projects. The Prime Minister and the other ministers make the final decisions.

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

Okay. I understood that completely.

I just wanted to come back to the goal of 0.7% of GDP that we have to reach in order to match the countries of the G8 and the G20. We know about the millennium goals and that Canada has committed to reach that goal of 0.7% for international assistance.

Given the freezing of expenditures, how is CIDA going to go about making sure that we can reach that goal? At the moment, we are not reaching it. We are now at 0.3% of GDP. That means that there is a decrease from year to year. How are we going to turn that around in order to keep heading towards the goal of 0.7%?

[David Moloney]

CIDA's role is to be a good manager, to be as effective and efficient as possible with the sums of money that the government and Parliament provide to us. We cannot talk about percentages; we can only talk about using money well.

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

I have another question related to that. In the last paragraph of your introductory text, you said that you would “shift...operating budget dollars to the areas that require immediate support.“

I have sat on this committee for 10 years and I know that you have done an excellent job in certain countries where you have planted the seed for future development. This means that you are no longer going to do that, but you will be dealing with emergencies in the immediate term.

Do you not believe that moving forward with medium and long-term projects is changing CIDA's primary mission, the mission in which it once excelled? How can you live with that, you who have been with CIDA for all these years? It is going to detract from what you have been putting in place for a number of years.

[David Moloney]

As I mentioned, more than half the CIDA budget is identified for bilateral programs that, for the most part, are aimed at long-term sustainable development. But the CIDA budget also contains a significant percentage earmarked for emergency humanitarian assistance. Earthquakes happen sometimes. In 2008-2009, there was a earthquake in China, a cyclone in Burma; already this year, there have been a number of earthquakes and storms. So there are sometimes urgent, immediate, humanitarian needs at the same time as the long-term needs. Everything always has to be balanced, according to what is happening around the world.

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

Basically, if I am not mistaken, your budget, the one you operate with normally, will be chopped by more than half if you are absorbing a bunch of other expenses, say, in the next few years. Is that correct?

[David Moloney]

There are no cuts in our—

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

There are no cuts in your budget, but it is going to be chopped, because you are going to have to absorb salary increases for the employees and a bunch of other things. How many billion dollars are you going to lose over the long term? Am I wrong?

[David Moloney]

Our operational budget—

[The Chair, Liberal, Yasmin Ratansi]

This is your last question.

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

Yes.

[David Moloney]

Salary increases account for 1% of our operational budget each year. That has absolutely nothing to do with our program budget, which is the other 93%. Those $2.2 million refer to an operational budget which is in excess of $200 million.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We'll now move to Mr. Warkentin for eight minutes.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Madam Chair.

Mr. Moloney, welcome to our committee. This isn't the first time you've been here, but it's the first time in this capacity. Thank you for coming. We appreciate your testimony whenever you come.

I was sharing with you before the committee started that I spent some time in Kenya last summer and had an opportunity to see the folks on the ground. I was there in a private capacity with a local organizing group from my community to alleviate some of the poverty that had developed as a result of a two-year famine that has stretched over a good portion of Kenya and some of the surrounding countries. We saw folks on the ground and the effect of services they were providing.

It was interesting, when I had an opportunity to meet with some of the CIDA officials at the high commission there. At that point I think they were negotiating a partnership with other countries to alleviate some of the hunger that had been developing. We heard the announcement shortly after we returned to Canada that an allocation of about $30 million was going toward immediate alleviation of hunger by feeding those people. I can't express to you enough my thanks for those dollars.

We actually witnessed young kids who were starving to death. We were working to do our part, but when CIDA was able to come forward with those funds and the partnership that was developed with other countries, it truly made the difference. I heard from the folks on the ground, who were still there after we left, that the food came at the right time and many lives were saved. So we salute the folks in CIDA for their foresight and ability to manoeuvre when the time presents itself.

I think one of the most important things I gained from your testimony was when I heard there was going to be a reduction in the time CIDA was going to take to facilitate some of these agreements and different things. I wonder if you could speak specifically to the effort being made to sharply cut down on the time allocated to make the decisions to get this aid out, and exactly how that will affect the service CIDA is able to provide for people on the ground.

[David Moloney]

Thank you. It's an excellent question. We're glad to talk about it. Jim and I especially spend a lot of every week on this.

I think the very last part of your question is important. We're trying to ensure that we're able to move in a more timely way to respond to needs.

For the past two or three years, the part of CIDA that works specifically with Canadian NGOs and civil society organizations has undertaken a major review of its business processes--literally, who does what, steps one, two, three, and four. It has gone through and cut down very sharply the number of steps, the number of approvals, and the amount of paperwork. It has reduced the time by somewhere between 50% and 60%, measuring from when a proposal is received. This is responsive programming, so an NGO applies for funding, and the time to get a yes or no answer has been reduced by over half. That allows our partner organizations to be able to move in something closer to real time.

We've now taken that same approach and moved it over to the larger program areas. We're working more country to country, which takes up more than half of our budget. We have just officially launched four pilot projects, after a year and a half of work. We've gone through what we call directive programming, where CIDA comes up with a project and works it up. We put out requests for proposals for bids from NGOs, private sector organizations, or international organizations to implement a specific project. A current example, which Minister Oda recently spoke to in Port-au-Prince, is to build a hospital in Gonaïves to replace one that was destroyed two years ago.

With this kind of programming we think we can take out 60% of the time and 65% of the signatures of the approvals of the documentation required. This allows us to be more responsive to needs, more timely, and to take out some overhead costs at the same time.

[Chris Warkentin, Conservative, Peace River, AB]

In terms of the priorities of CIDA, I know there have been some questions surrounding them today, but I certainly want to commend CIDA for the focus on the three points, the increased assurances of food security, the issue of going after protecting the futures of youth and children.... Certainly, that's foundational to a lot of these countries turning around and the survival of their communities. Then, of course, there's the sustained work to provide a sustainable economic future for these areas as well. I certainly want to commend you on those.

In terms of the current budget, it was referenced across the way that it was $4 billion. My understanding is that it's closer to $5 billion. Is that accurate?

[David Moloney]

Just to review the numbers again, the government has proposed in its budget that it would increase the international assistance envelope to $5 billion. As I mentioned, CIDA counts specifically for about two-thirds of that. So yes, in the main estimates before Parliament, CIDA's proposed budget would be $3.2 billion. There are some portions of that envelope not yet allocated. In most years, CIDA ends up with two-thirds, 70%, of that total amount. As other members were saying, there are several other departments that draw from that envelope.

[Chris Warkentin, Conservative, Peace River, AB]

Right.

In terms of the issue of partnerships and moving forward with those, I know there are the 20 countries of focus we are working towards helping. Only 80% of the money is going towards those 20 countries of focus. Is that correct? I know that Kenya actually isn't one of the countries of focus, but I continue to see the work, even last summer.

I think there are some questions surrounding these countries of focus and how other countries may or may not be left out. My understanding is, that's for 80% of the budget; 20% continues to go out to priorities in other countries. Is that correct?

[David Moloney]

Right. It is. If I could offer a little more detail, it is complicated and there are a lot of numbers here.

I spoke to how a little over half of our budget is focused on specific country programs; 80% of that amount is going now to 20 particular countries of focus, chosen for aid effectiveness and alignment with government priorities. The balance of that, the other 20%.... About 10% of our total budget is going to some other countries in smaller amounts.

In addition to that, where we work with Canadian NGOs in a responsive way, some of those funds are not as closely aligned or as closely restricted, so you could have a Canadian NGO coming in through a partnership branch working in Kenya or another country. Then, of course, with that one-third to 40% of our budget that's going through the multilateral organizations, significant amounts would be helping any of the poorest countries through, in that case, the African Development Bank, the global fund for AIDS and malaria...quite a variety.