Government Operations Committee on Oct. 5th, 2010

[Peter Weltman]

Again I'll be brief. Very quickly, regarding the methodology, we've calculated what we call a delay factor based on changes from planned start and end dates to reported start and end dates. We've outlined the methodology in excruciating detail on page 12, so I won't step you through it. Effectively, we took two different approaches to come up with a base case and worst case.

The concerns that Infrastructure Canada had were fourfold. One was that projects that hadn't started had no obligation to report, so why were we using information to that degree? We noted that many projects that hadn't started had also reported, so that's fine.

Secondly, on the Quebec projects, something we weren't aware of at the time but understood at the meeting was that, under the PRECO agreement, projects did not have to report or submit claims until the program was finished, and the proviso was that the projects had to be terminated by December 31, 2010, as opposed to March 31, 2011.

The third issue that was brought up involved our worst-case scenario and some of the assumptions we made for using certain start and end dates versus others in the database. We agreed that when we got a new set of data we would maybe run a fourth scenario somewhere in the middle to see what came up. I'm not sure it's going to make a big difference.

[Chris Warkentin, Conservative, Peace River, AB]

We're moving along quite steadily here now, and we're hearing back from provinces, from municipalities. Obviously the department has an opportunity to contact many of these municipalities directly. The provinces are in contact with these proponents in many cases. They're reporting back to the federal government, and that's where a lot of this information is being derived from. Did you contact any of the proponents of the projects?

[Kevin Page]

We have been in contact with municipalities, and as I said, it is always our intention to update this analysis.

[Chris Warkentin, Conservative, Peace River, AB]

So this is an out-of-date analysis, then?

[Kevin Page]

Our analysis is based on data as of March 31. We understand that there is data for June 31. We understand that the recent progress report released by the Government of Canada on the stimulus in general used more up-to-date data. We will be reporting to Parliament, based on the data they give us this week, in the next number of days.

[Chris Warkentin, Conservative, Peace River, AB]

We'll move from that, because clearly we're talking about March data, and a lot of time has passed—an entire construction season has passed since then—so I think this morning we're probably barking up a tree that isn't going to yield us a significant amount of information on that.

In terms of the Truth in Sentencing Act, I sense and feel that a significant portion of the analysis hasn't been done regarding the cost to the taxpayer and the general population, given the possibility that many criminals are being released before their sentences have been fully served. I'm wondering if you've done any analysis, because I know the RCMP and many victims' groups have done a significant amount of analysis on the cost to the population when people who are likely to commit crimes or who haven't been rehabilitated are out committing these crimes. So I'm wondering whether you have done any analysis of the cost to Canadians of people being released from prison too early.

[Kevin Page]

No, we haven't, sir, in this study. Our focus is limited to the fiscal impact of the bill: could there be additional cost changes or benefit changes?

[Chris Warkentin, Conservative, Peace River, AB]

I appreciate that, and I think there's a cost benefit to the bill, which is that if it is not analysed and not brought into the discussion, it's a lopsided argument. Yes, certainly it's going to cost something to protect Canadians. I don't think anybody in this room is going to argue about that. But what is the cost of not protecting Canadians? I believe parliamentarians would be well served to know the answer to that question. We're hearing that answer from victims' groups. We're hearing that information, those analyses from chiefs of police. We're just not hearing it from you, Mr. Page. I wonder if you would be willing to undertake a study so that there would be a counter and a realization of the true cost benefit of legislation like this.

[Kevin Page]

It's a very good question. I think I'd preface my remarks by saying it's incumbent upon the government, when they are spending taxpayers' dollars, to provide appropriate information to parliamentarians on what the fiscal cost is—

[Chris Warkentin, Conservative, Peace River, AB]

And I think they have.

[Kevin Page]

—and if they see analysis with respect to the benefits, they should do that. We would be very happy to undertake scrutiny of their assumptions for parliamentarians.

[Chris Warkentin, Conservative, Peace River, AB]

You're saying that it's incumbent upon the government to make an argument on one side, but you're fully exploring the other side of the issue, so I'm just seeing an imbalance here, Mr. Page.

[Kevin Page]

To this day we have not undertaken any type of analysis, whether as in the costing of Afghanistan, and we did work on the costing of aboriginal infrastructure, to look at the benefits side. We felt that once you look at the benefits side you get into some of the policy-related issues. It doesn't mean to say we couldn't do that, but we have not been requested to do that.

[Chris Warkentin, Conservative, Peace River, AB]

I think there is a policy issue here: it's to protect Canadians or not protect Canadians. You're taking one side, that it's going to cost something to put criminals into prison. I understand there's a cost to that, but what's the cost benefit? We're seeing a whole part of this, a discussion, that's not being even analyzed. So in terms of your office, I know that Mark Holland asked you to look at one side, and I'd now ask you to do the other. If one member of Parliament can ask for you to analyze one side of a bill, as a member of Parliament I would like you to see what the benefit to Canadians might be on the other side.

[Kevin Page]

Well, sir, I'd be open to considering that type of venue, both in terms of this sort of measure or potentially other measures in terms of looking at the benefit, but when we look at our legislative mandate, section 79 of the Parliament of Canada Act, it's pretty clear that it talks about analysis on the economy and the nation's finances; it talks about the costing of bills and legislation, the costing of bills--

[Chris Warkentin, Conservative, Peace River, AB]

Right.

[Kevin Page]

So the question is, should we undertake to look at the other side of the ledger, the benefits? We have not done that yet. That an would be an expansion, I think, in terms of what we think is our mandate right now. We'd be prepared to have that conversation with you, sir.

[The Chair, Liberal, John McKay]

Thank you, Mr. Warkentin.

Let the record note there is no June 31, which may be the same time as you'll get your additional information.

Mr. Martin, eight minutes, please.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair.

It's actually a shame that we have three such interesting topics and such very little time to deal with them. I appreciate you trying to truncate them within our timeframe here, but I'm really tempted to get lured into the points that Chris was making, because if I can say one thing, if anybody could demonstrate that more time in prison equalled less crime, we might want to go for that. But if you look at the United States, with the highest rate of incarceration in the world, you would think all of their streets would be crime-free.

From a public policy point of view, I think we very much need to know the real cost of some of these tough-on-crime bills, and this is the first time we're getting to it. I think if the public knew the whole cost, the real cost of stacking up even more people in prison, they might be more inclined to dedicate some of those billions of dollars to the other end of crime prevention policies, etc. They may decide that it would be money better spent. Virtually all of these crime bills have a mandatory minimum sentence built into them, and we'll be stacking up prisoners like cord wood, unless they want to start building a lot more prisons.

One of the things that's crossed our minds, and I say this to share this with you, is that they seem to be laying the foundation for dealing with some of their fiscal problems through ideological lines, privatization. They could call in Onex or Haliburton to start building private prisons, like they do in the United States. If it costs $147,000 to keep a prisoner in prison here, what if Onex or Haliburton came up and said they could house a prisoner for $120,000 a year? I think they'd be tempted to go that route.

It's one of our concerns that's in a number of the areas you've mentioned, the looming fiscal crunch that's on the horizon that you cited for us. We've squandered the fiscal capacity to be able to cope with some of those very real demographic problems of aging baby boomers, etc., through some of the corporate tax cuts and things that still remain on the books.

I know I'm wandering a little bit here.

[The Chair, Liberal, John McKay]

Relevance, Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

Well, I think it's all bang on in terms of successive crime bills, you know, with these mandatory minimum sentences.

We deserve to know the real cost of some of these that we think are ideologically driven points of view, and I personally have a lot more faith in the estimates that you bring to the table than the notions of the minister standing up saying it's going to cost x, y, z. The value of the PBO is that we're the government operations and estimates committee, and we do very little work actually on estimating what's going to be the actual cost of government programs that are brought to us.

Let me deal for a minute, Mr. Page, with the first topic here, the operating budget freeze. You ask some questions that you think parliamentarians should dwell on here. The second bullet point that you've got as a consideration is “Are the savings realizable or cashable?” Are we going to be able to bring down the deficit by freezing operational spending? Could that in fact trigger other costs in other areas? Is there a measurable benefit to the course of action they've taken?

[Kevin Page]

Yes. On our use of the term “realizable” versus “cashable”, in our view, cashable means if the government chooses to reduce a specific vote, an appropriation of a specific department, then we know that the cash will be in hand. We tend to use those words because departments also face significant operational needs. Those needs can go up or down, depending upon any number of conditions.

If the needs go up they may need to spend more. So at the end of the day, actions from a fiscal savings perspective may not be realizable to get some of the savings they've highlighted.

Again, we use those terms conceptually. We're not here to make a comment on whether there's too much fiscal restraint or not enough fiscal restraint relative to what the government's saying. If parliamentarians can get the analysis in a structured way, if we can get this information in a structured way, we could provide you with a risk analysis on both the fiscal side and the service-level side.

[Pat Martin, NDP, Winnipeg Centre, MB]

Do you feel, by and large, you get that cooperation? If you were getting the information, you could pass it on to us--that's the way you phrased it. What level of cooperation are you getting when you ask for the type of information you need to help us do our job?

[Kevin Page]

We're not in a position today to provide you with a fiscal risk analysis based on budget 2010, or a service-level analysis. We have had different communications with the Treasury Board Secretariat on information exchange, where we tried to get reference-level information broken out in a certain way--operations, capital transfers, etc.--so we could start to do this. In fact, we've tried to get information to understand better what's in budget 2010. They highlight a specific number on page 180 in the budget of what operational amount of money will be frozen. We don't even know what's in that number.

We've heard subsequently, since budget 2010, that there will be additional expenditures. We think Correctional Service Canada will need additional expenditures to deal with Bill C-25. We have heard off-budget announcements related to veterans benefits. There have been potential EI-related adjustments.

We know the fiscal framework is being adjusted as we speak, so we would need to bring this type of analysis into play. We're looking forward to Minister Flaherty's update later in the month, and maybe some of this information will be updated. But we have not been able to get the information from the Treasury Board Secretariat.

[Pat Martin, NDP, Winnipeg Centre, MB]

This speaks to the whole source. We have a right to know what the government is planning to do, and certainly the public has a right to know as well, in advance of that spending, at least some realistic projections based on fact.

For far too long we've relied on the Auditor General--the other person Canadians trust after you, Mr. Page--to tell us if the money was wisely spent or not. But that's 18 months after the fact. We desperately need to be able to make informed decisions at the front end, with reliable numbers, that if we adopt this policy it's going to cost you this much. Do we still want to do that, or do we want to hive off some of that money you think we're going to have to spend to build prisons, and put it at the front end to try to have a prime reduction strategy at the other end?

Canadians may want that information. They want to make that choice. Thankfully we're getting bits and pieces of it, at least, through the Parliamentary Budget Office.

Thank you.