Government Operations Committee on Feb. 10th, 2011

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

I commend you, and was very happy with the outline—

[The Chair, Liberal, John McKay]

Thank you, Mr. Calandra, for those observations.

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

—of the great things we're doing in justice in this country.

[The Chair, Liberal, John McKay]

Thank you, Mr. Calandra.

Thank you, Mr. Head, and your team for their observations.

On behalf of the analyst, before I suspend, I'd just like to ask something with respect to your analysis of offender increases or decreases. The way I understood your answer to I'm not sure whose question, when a bill is a bill, the estimate of the impact is, in your view, a cabinet confidence, or what your minister says is a cabinet confidence. But when a bill is the law, you certainly are at liberty to estimate the impact on your system.

Have you done that with respect to the Truth in Sentencing Act? Is that public?

[Don Head]

If you're referring to Bill C-25, the credit for time served bill, yes. I think the minister has put a number out there of $2 billion over five years, which includes the capital costs associated with building the units we're putting in place.

[The Chair, Liberal, John McKay]

Is that helpful? It's for the purposes of our analyst.

[Édison Roy-César, Committee Researcher]

During a previous meeting, the Parliamentary Budget Officer said the Correctional Service had informed him that the cost of Bill C-25, Truth in Sentencing Act was a cabinet secret. You mentioned that as soon as a bill is adopted and the legislation is in force, we can get the information. Therefore, could you...

[Don Head]

I think the minister has done that. At the time the Parliamentary Budget Officer was talking about that, it was still a cabinet confidence. It's the minister's right to decide how to announce that, and we were respecting his right.

[The Chair, Liberal, John McKay]

It received royal assent.

Thank you.

Ms. Coady, is it on this point?

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

Yes. It's on a similar point.

[The Chair, Liberal, John McKay]

It is a similar point.

[Chris Warkentin, Conservative, Peace River, AB]

Are we going to get another round?

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

We asked the witness to provide to this committee information, and I'm asking him to do so. The witness agreed to provide this committee with information. I'm just reminding him of that.

[The Chair, Liberal, John McKay]

Thank you.

I'm sure that being the fine witnesses Mr. Head and his colleagues are, they'll do that.

I'm going to suspend for a couple of minutes while these witnesses leave.

Thank you, on behalf of the committee, Mr. Head.

[The Chair, Liberal, John McKay]

Colleagues, let's resume.

We are already under time pressure. As you know, someone will want this room precisely at one o'clock.

We have a motion, which I propose to use the last five minutes of the meeting to deal with, so effectively, we have 50 minutes.

On behalf of the committee, I'd like to welcome Mr. Dicerni, Madame Gillis, and Madame McDonald to the committee. I assume that one or all of you have an opening statement. You're more than welcome to start with that, and then we'll go to a round of questioning.

[Richard Dicerni, Deputy Minister, Department of Industry]

Thank you, Mr. Chair.

I have a very brief statement. I think all members have a copy, so you can follow along with me.

Good afternoon.

As you mentioned, I'm Deputy Minister of Industry. I'm accompanied by the chief financial officer of the Department of Industry, Kelly Gillis, and Helen McDonald, who is the ADM of the spectrum, information technologies, and telecommunications branch.

We are here today to discuss how Industry Canada is responding to the freeze in departmental operating budgets announced in the 2010 budget. The statement will be brief so that you may have more opportunity for questions and discussion.

Overall, there are two broad sections to my remarks. First, I just want to set the context in terms of what Industry Canada does. It has a broad and diverse mandate. The department delivers a wide range of programs and services to Canadian businesses, communities, and individuals.

Our activities include, first of all, the development and enforcement of framework policies regarding subjects such as the bill on copyright which is currently before the House, patents, the Competition Act and the Investment Canada Act. The mandate consists in developing bills and in applying them. This is what we call framework policies in English.

Secondly, law enforcement and inspection programs must be conducted. Once again, this means a diversity of interventions. This could go from the review of mergers by the Competition Bureau to the inspection of gas pumps done by Measures Canada, including the work done by spectrum officers as they monitor the use of spectrum licences. This is my colleague Ms. McDonald's area.

Third, we also manage a certain number of subsidy and contribution programs to sustain economic development in some leading-edge areas and in certain regions. For instance, we have a program that is called the strategic initiative for aerospace and defence which, as you can see, concerns aeronautics. We have a fund for innovation in the automobile sector, we also have a northern Ontario development program that is managed by FedNor.

In addition to these ongoing program activities, the department is often called upon to undertake exceptional initiatives during difficult economic times. For example, in the last few years the department led the negotiations with General Motors and Chrysler in facilitating their restructuring plans. The department, during the economic crisis, also developed and implemented, in partnership with provincial governments, the knowledge infrastructure program to enhance the quality of infrastructure in our post-secondary education institutions.

So having presented this brief overview of what the department does, I'd like to turn to the issue at hand, which is how the department is addressing constraint measures announced in budget 2010.

For Industry Canada, the impact of the constraint measures for the current fiscal year is estimated at about $3 million, and for next year at $4.6 million.

I would like to make two brief comments with respect to these objectives.

First, over the last few years the department has spent a great deal of time and some money to put in place appropriate processes to enhance our financial governance model. It is important to us to ensure integrity in the financial information we report, and to do so we undertook improvements to our internal controls that will allow for the department financial statements to be audited. This work has been recognized by the Auditor General with us reaching a significant milestone in our journey to strengthen controls.

This strong financial management and oversight capacity was also recognized by the Certified Management Accounts Award of Excellence for Comptrollership, who listed Industry Canada as a finalist last year.

Overall, these investments improve our capacity to manage the department.

Second, in order to address the constraint targets in the next year--as well as, for that matter, what we've done this year--we'll use a variety of tools. These tools include tighter management oversight over staffing activities, travel reduction, and reduction in external consultants.

Managing in this environment is about making choices that respond in an optimal way to achieve results with the resources that the government and Parliament place at our disposition. Let me give you an example. During the auto crisis of a couple of years ago we had to move quickly. We had to ensure that we had the necessary capacity to do the appropriate degree of due diligence on the restructuring proposals that the companies were presenting. We therefore retained KPMG and Ernst and Young to assist us in doing our due diligence. We paid for these non-ordinary contractual expenditures by reducing expenses in other parts of our portfolio. We made a choice as to how we were going to manage the department. We made a choice in terms of how we were going to spend the resources given to us.

Going forward, the management team at Industry Canada will continue with the approach of deploying resources awarded to us in an optimal way. We plan based on the best information available at a given moment in time, and we adjust as circumstances change.

That concludes my opening remarks. Kelly, Helen, and I are available to answer your questions to the best of our ability.

[The Chair, Liberal, John McKay]

Thank you, Mr. Dicerni.

For eight minutes, Mr. Regan, please.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman.

Thank you very much for appearing before us today.

Let me ask you first about your report on plans and priorities for 2010-11, in which you forecast a reduction of $1.39 billion. This is, of course, the report that came out last year after the budget. This is a reduction of $1.39 billion in your planned spending by 2012-13. How will your department achieve these savings? What is the breakdown of savings among the different expenditure items, for instance personnel, transport, communications, and professional and special services? Can you give us that?

[Richard Dicerni]

To a very large degree these relate to expenditures that were initiated in the context of the economic action plan. For example, we've had $2 billion in the knowledge infrastructure program, $1 billion for each year. Those are winding down this year as projects get completed; therefore, the expenditure is no longer carried in our books.

We have a number of one-time initiatives, such as $25 million for the Canada Foundation for Innovation. We also had the marquee tourism program that has wound down. Those programs, for all intents and purposes, are winding down as a result of the end of the economic action plan or they are one-time initiatives that were just targeted for that reason.

[Geoff Regan, Liberal, Halifax West, NS]

Have you forecast any savings under the heading of “personnel”, and if so, how much?

[Richard Dicerni]

For personnel, we had some small additions in personnel to manage these programs. Kelly may have the specifics, but they were under...a single-digit percentage of additional staff.

[Geoff Regan, Liberal, Halifax West, NS]

Sorry, if you don't mind, what I'm looking for is numbers.

[Kelly Gillis, Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry]

For the economic action plan we received in our operating base approximately $25 million, and we hired approximately 100 people to achieve those temporary initiatives to undertake the economic action plan. That is the only staffing that we anticipate having.

[Geoff Regan, Liberal, Halifax West, NS]

You're talking about $1.4 billion. It sounds to me like a tiny segment of that, so far as I've heard, and I'm looking for these different headings--personnel, etc. How much of that $1.4 billion comes from each of those headings?

[Kelly Gillis]

There is $1.35 billion that comes from grants and contributions.