Government Operations Committee on Oct. 5th, 2010

[Kevin Page]

It will put a lot of pressure on provincial jails. Again, some of the data we had to actually collect from the bottom up, so we have actually talked to the specific provinces to get a sense of the number of institutions and the level of occupancy. We were able to get public data, which was made available by Correctional Service Canada, through Statistics Canada, on the average occupancy rate for a federal government institution.

When you look at the data, sir, that we've generated bottom up from the provinces versus the federal level, it's clear that the provincial system is even more stretched in terms of occupancy pressures. Many of them are already double-bunking, in some cases even triple-bunking, which is not the standard practice at the federal level. So there are significant capacity constraints on the provincial and territorial levels.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

Let me turn to infrastructure. You've said, “I was pleased, in a way, to hear that Infrastructure Canada is one of the very few departments that actually has provided you with information, and has been open in providing it.” The problem, of course, is that the information, from what you're telling us, is not very reliable. In fact, when you look at their estimates about the percentage of completed projects, you say that

All PBO analysis is sourced from the datasets received from Infrastructure Canada, and the PBO continues to find inconsistencies in the datasets. The Percent Complete figure, for example, is based on the judgement of the reporting proponent and has no clear definition, standard or process to calculate its value.

Now, it seems to me that means the proponents, the people who are building things or doing construction of various kinds, can claim anything. They can say it's 80% complete, but there's no standard process for measuring that whatsoever. Is that right?

[Kevin Page]

Well, we've highlighted what we think are some problems in the definition of work, that it's complete. As Peter Weltman, the analyst, said, there are industry practices with respect to this.

I should probably highlight that this particular program in the context of a recession period was meant to get money to flow quickly. It's not even the standard practice, really, for federal infrastructure programs to pay as you go, so this is a slightly different practice. Again, it's more in keeping with.... We found ourselves in a worldwide recession type of environment.

Yes, there's no question there are some anomalies in the data. Yes, it's unfortunate. In a sense, we maybe missed an opportunity to provide better reporting to parliamentarians and Canadians on this type of program.

[Geoff Regan, Liberal, Halifax West, NS]

Of course, when you say that this program was designed to flow quickly, all the evidence is that it didn't flow quickly. You've reported in the past that it in fact took a long time to get a lot of these projects out the door, so to speak. It seems to be back-end-loaded, for some reason, which is contrary to what we were told by the government early on.

Over the last while, the last couple of years, you have repeatedly contradicted Mr. Flaherty's financial projections, and you've been proven right time and again.

Have you looked at the question of the cost of a 3% cut in the corporate tax rate and what that would cost per year to the Government of Canada?

[Kevin Page]

Sir, I don't have it here with me today, but it is available on our website. We have published what we call these sorts of rules of thumb; the Department of Finance tends to do this as well in their budget documents. We have published on our website what rate changes or bracket changes will have an impact. I just don't have that information in front of me.

I could guess, sir, but it's probably not a good thing for parliamentary budget officers to provide those kinds of guesses.

[Geoff Regan, Liberal, Halifax West, NS]

A good point. Thank you very much.

Over to my colleague, if there's still time, Mr. Chairman.

[The Chair, Liberal, John McKay]

She has 40 seconds.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Interesting. In your documentation, you mention the funding requirement and obviously the impact of the Truth in Sentencing Act. In your report you say that the latest CSC RPP, which is the report on planning and priorities, shows increased funding requirements for the department in the next three fiscal years when compared to the projections for the same fiscal years, but you're concerned that this still does not break down the cost into its components, and especially excludes any details regarding the impact of the Truth in Sentencing Act. You mentioned this earlier.

Are you concerned the government failed to budget for that impact? Is that what I can read into that? Are you concerned the government has not adequately budgeted or that it just excluded that from its projections?

[The Chair, Liberal, John McKay]

Mr. Page, very brief.

[Kevin Page]

Actually, there's nothing really in the document that would suggest, notwithstanding the fact that we see this almost 13% annual increase in planned reference levels, that the increase reflects Bill C-25. In fact I could read you this, but it would take time. It's basically covered under risks, that it may create additional cost.

We do not get the sense that it was costed, even though we see that Bill C-25 was built into the rapid growth in planned reference levels. I should highlight as well that there's nothing in budget 2010 that sets aside any additional resources for Bill C-25 or the Truth in Sentencing Act that we're aware of.

[The Chair, Liberal, John McKay]

Thank you, Mr. Page.

Mr. Calandra.

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

Thank you, Mr. Chair.

I'm not going to focus too much on the stimulus because obviously the report is just so dated and there's additional information that is going to be coming soon. We all understand it was a very busy construction season. I know in my riding the projects are almost done, and of course my riding represents more people than the entire island of P.E.I. So when projects are running well in my riding, it's a good thing.

On Bill C-25, the last time Stats Canada reported on the cost of crime--this could be some dated information, it may not be exactly correct--I think it reported that it cost Canadians and the economy about $70 billion a year, and this is some time ago. It's probably considerably more than that. I'm finding it difficult that somehow we can't analyze within the costing of this, how an investment in helping to keep the streets safe and keep people who have committed crimes off the streets, and can't somehow factor that into your analysis. We all know, in communities across the country, the impact of crime. I know you referenced Stats Canada earlier, but the last time it reported it was about $70 billion to the Canadian economy. Is there not a way that we can factor that into your analysis as well?

[Kevin Page]

I think, as you said and as I've said with Mr. Warkentin, there is the other side of the ledger. We look at fiscal costs. What would be the potential benefits to Canadians if the Truth in Sentencing Act was passed? As I said, we tend to focus just on the fiscal cost and we have avoided in all our costing so far to date in dealing with the other side of the ledger. If there's a willingness from this side for us to consider doing that type of analysis, we would certainly consider it. We would see that as an expansion of our mandate and some may be worried about us expanding our mandate.

But the analysis can be done, sir. You can do that analysis. There would be a lot of assumptions. As you said, there are numbers that are out there. I've not seen any analysis published by Correctional Service Canada or the Department of Public Safety to date. We would like to see their analysis as well, but we could have this conversation about whether you'd like us to look at benefits.

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

I've been somewhat concerned. I'm hearing the opposition talk about the costs, but there's very rarely talk about the benefits of keeping criminals off the streets.

I'm also a bit concerned about the notion--and I could be wrong on this--you seem to be suggesting that the public servants, who are in the department and who are assisting in the estimates of what Bill C-25 is going to cost, somehow don't measure up, and that they don't have the ability to plan and aren't providing the appropriate information with respect to the cost of this.

Is there something that you know that maybe parliamentarians should be made aware of with respect to the public service in the department? Are they not capable of giving us the appropriate costs of this? Are you or your department somehow superior to them with respect to costing of this? I'm not understanding the difference here. We have a competent public service in the department and we have you. Can you give me a reason why there might be a difference there?

[Kevin Page]

Well, I mean, we have an excellent public service. Again, having spent 27 to 28 years in the public service and having seen many different departments, I've really developed a strong appreciation of the public service.

I can't really answer your question as to why we're not getting this information in these documents, such as the RPP we're talking about today, and knowing that the legislation was pretty much final, why we would not have costed this particular one, the Truth in Sentencing Act, and why we would not have put it in the report on plans and priorities and costed it out just the way you said, sir: look at fiscal costs, look at benefits, provide analysis, build it into the baseline, and explain what percentage of the baseline growth, if it is in fact there, is related to Bill C-25. There are very strong, capable people at Correctional Service Canada. It is the same at Treasury Board Secretariat. I worked at Treasury Board Secretariat. They can do this type of analysis. I do not know why it's not getting out. We had the same frustration with some of the Department of Finance related issues when we were dealing with structural budget balances and long-term sustainability. We need to see more of this in the House, because I think that in most cases we know that the work is getting done. It's just not being released.

[The Chair, Liberal, John McKay]

Thank you, Mr. Page.

Thank you, Mr. Calandra.

We will go to Madame Coady.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

One thing I noted was this whole issue in your report of the annual expenditures and projected funding requirements due to the impact of the Truth in Sentencing Act. It again goes to that whole issue we were speaking about earlier, which is that provincial-territorial costs go from 49% in 2009-10 to a projected 56% in 2015-16. I'm concerned about that. I don't know if you've had representation. I certainly haven't as yet, but I'm sure that after this discussion, perhaps we will. Have you heard concerns from the provinces on this issue? And where do you think the federal government is on funding this? It's a huge change. It's going from 51% from federal government costings down to 44% from federal government costings. That's a huge change.

[Kevin Page]

Our office has heard concerns from various provinces. We've seen media reports involving, in some cases, premiers raising concerns about what these costs may be. So yes, we are concerned about it.

I will add one thing. With the federal government report on plans and priorities we were able to get a baseline for spending for the next three years. What we missed in terms of the provinces and territories, what we don't have, is a longer-term baseline for the Bill C-25 impact. We weren't able to put that information together.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

We're looking at a cost-benefit analysis of these types of bills and at the cost to this particular department. One of the concerns I would have now, noting the huge change for the provinces—going from having 51% borne by the federal government to having more borne by the provincial government—is the risk to reoffend. Some of the services that are provided at the federal level may not be provided at the provincial level, per se, so I think there's a risk to reoffend there.

Earlier I mentioned the risk to the whole justice process. I don't think that's been put into context here either when we're looking at these kinds of expenditures. When my colleagues talk about that risk-benefit analysis, I think some of those other things have to go into that mix as well.

Did you have any further questions?

[Geoff Regan, Liberal, Halifax West, NS]

Yes, I do, if I may, Mr. Chairman?

[The Chair, Liberal, John McKay]

You have two and a half minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chairman.

Mr. Page, what do you need from the government? We have a motion from our colleague, Madame Bourgeois, to have the committee ask Treasury Board to submit “a planned and approved fiscal framework, departmental annual spending reference levels and departmental strategies for savings, service level standards, and fully loaded costs for program activities for affected departments”. She goes on to list a variety of things. I think most of these come from your report, in fact. Have you seen this motion by any chance? Maybe you haven't had a chance to see it today, but is it your sense that this is what you need to do your job?

[Kevin Page]

I don't think I've seen that specific motion. I don't have that piece of paper in front of me, sir. But we were involved with this committee last April when we outlined, basically, the kinds of questions, from a legislative budget officer perspective, we think parliamentarians should be looking at in terms of fiscal risk and service-level risk. We provided an information framework along those lines to deal with those two issues. I'm reasonably certain that what you've highlighted will pick up those sorts of issues.

[Geoff Regan, Liberal, Halifax West, NS]

To put this in perspective, here we are as parliamentarians having the responsibility, on behalf of the public who elects us, to keep an eye on government spending. Then we hire you. We create your office, which is there to assist us, because we aren't accountants. We aren't experts in many of these areas. You are there to assess how government is spending money. You can't get access to the information from the departments, and you have to come to us to ask us to demand this information from Treasury Board.

[Kevin Page]

To be honest, sir, we can thank this committee. This committee did help us get some of the infrastructure stimulus fund progress reports. We were in front of this committee a number of months ago, and I think we found that the flow of information benefited from those appearances.

We've tried. We've knocked on the door a few times, as I've mentioned before, with respect to the Treasury Board Secretariat, to get this reference-level information. We failed twice. So I think at this point in time we need help, sir.