Government Operations Committee on March 1st, 2011

[Alex Lakroni]

I will defer to my colleague, John McBain, who's aware of the infinite details. But we've done the analysis, both the engineering analysis and the financial analysis, and the findings are that this deal is an outstanding deal. I will let John McBain comment on the details.

[John McBain]

Thanks for the question.

After the RFI, which I referenced earlier, showed that the Nortel site was capable of meeting our consolidation requirements for DND, we then engaged a third-party engineering firm to assess the condition of the buildings, including their mechanical, electrical, and conveying systems—all of the elevators, etc.—in the complex. It's 186,000 square metres, 12 buildings. It's a very large undertaking. We had an engineering firm assess the condition of the buildings, which found them to be, and I quote, “in above average condition for buildings of their age“ and what they considered to be maintained in standards above the norm.

We then also hired a real estate appraisal firm to do a market value assessment of the property and its value. We engaged another engineering firm to do an environmental assessment of the lands and the surrounding property. Finally, we hired a real estate expert to assess our proposal for the purchase.

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

I'm sorry. You said it's 186,000 square metres. What's the actual land?

[John McBain]

It's 360 acres of property. It's very large.

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

I don't think I have any more time, so I'll leave it at that.

[The Vice-Chair, Conservative, Chris Warkentin]

Thank you, Mr. Calandra.

Mr. Martin, for five minutes.

Pardon me. Back to the Liberal Party, Siobhan Coady, for five minutes.

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

Wonderful, thank you. I didn't realize we were going to come back to me.

Mr. Smith, earlier today you talked about the $117 million. I'm wondering if you could provide this committee with a list of where that $117 million will come from. We're trying to compile this. We know that in supplementary estimates there are little cuts, like the one to the Office of the Information and Privacy Commissioner, $44,000. If you could provide a list of the departments and the cuts and where those cuts came from, that would be great.

These are some of the statutory declines we're seeing. There's a decrease in OAS under HRSDC. It equals about $356 million. Is this predominantly a reduction in benefits, or a reduction in individuals receiving benefits? It seems like an awfully large amount of money, $356 million for the OAS, old age security. By the way, there has been a suggestion from one of my constituents that we should rethink the name of that to maybe “senior security” rather than “old age security”. I'm sure everybody recognizes that it might be changed.

Is this kind of an in-and-out? Is it an “out this year, in next year” kind of flow? Is this just a budgetary flow?

[Alister Smith]

Let me address the OAS question. There is absolutely no reduction in benefits. The numbers that we provide to Parliament are based on forecasts done by the Department of Finance, HRSDC, and others. So when we adjust the forecast because of changes in the demographics, they're reflected here. It's really for information, but there's no change in the benefits of OAS. It's really more in the demographics. You're also right that over time you will see variations, depending on the demographics.

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

We see the increase in people coming to that senior age, and we know the baby boomers will be reaching 65 for the senior security benefit. We'll start using that, “senior security benefit”. I think we'll start to see that rise again.

We have the same effect in the decrease in guaranteed income supplement payments, $211 million. I guess what you're saying is that you allotted for more than you actually required this year.

I'm going to go the votable and talk about the pay direct card. It concerned me that it was $63.3 million. Is this an additional requirement, $63 million? What were the entire amounts spent on the pay direct card and the benefits? It seems like a tremendous amount of money spent on a card.

[Alister Smith]

Let me turn to Christine Walker, our chief financial officer.

[Christine Walker, Assistant Secretary and Chief Financial Officer, Corporate Services, Treasury Board Secretariat]

The pay direct card was supposed to be introduced on April 1, 2011, and it was moved up and introduced on November 1, 2010. In our original estimates, we did not anticipate that the pay direct card would be in place as early as November. So that's one thing.

The second thing is, when you have a pay direct card, what used to happen is you'd go to the pharmacy, get your drugs, fill out your claim, and send it. Now that claim is made almost at the point of sale. So the money you have to spend on the claim is coming out as soon as the purchase is made. So in fact, as a spending pattern, we're spending the money right away rather than one, two, three months later.

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

That's why you're appropriating more money, to spend up front?

[Christine Walker]

That's one of the reasons, yes.

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

Is there anything else that we need to be concerned about, with that $63 million?

[Christine Walker]

No.

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

Okay.

I'm going to turn it over to my colleague. He has a question.

[Geoff Regan, Liberal, Halifax West, NS]

We heard today that the funding for AECL is under five headings. There are five different categories this funding falls under. Could you provide the committee with a breakdown of how much is being spent under each of those headings?

[David Enns]

I can do that.

[Geoff Regan, Liberal, Halifax West, NS]

If not now, then provide it to the committee later.

[David Enns]

I have that information now, if you'd like.

There are five broad categories, the first being isotope production, and that's $16 million. That includes funding for the isotope supply reliability program as well as some upgrades required to relicense the reactor, the NRU reactor that produces the isotopes.

The second category is the shutdown of the MAPLEs, the dedicated isotope facilities for the MAPLEs. They had to be terminated owing to significant technical issues.

The third is the operational....

[Geoff Regan, Liberal, Halifax West, NS]

How much was that? I'm sorry. How much were the MAPLEs?

[David Enns]

That was $7 million, and there was another $16 million for operational infrastructure upgrades to the laboratories at Chalk River. These are primarily related to health and safety security issues for people working there—sewage, upgrades to fire safety, those kinds of things.

Then the fourth category is.... I'm sorry, actually there are six. Excuse me.

The fourth is new reactor technology development, $18 million. This is for supporting potential future sales of CANDU technology.

The fifth is commercial life extension refurbishment projects. This is the largest: this is $97 million. These are for the four commercial life extension projects that are under way at Point Lepreau, Bruce, Wolseong in South Korea, and JANTI. At JANTI, we know now that it is being postponed. Also, the projects in Ontario and South Korea are a bit further advanced, and we expect them to be completed soon, in 2011. The most challenging of those projects is Point Lepreau.

The final is operational pressures, at $21.4 million. This is workforce adjustment, ongoing operational costs, and things of that nature.

So that's the breakdown.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

[The Vice-Chair, Conservative, Chris Warkentin]

Thank you very much.

I appreciate the attendance of each one of you today. We do appreciate the fact that you waited for us. We get caught up in things like votes from time to time, and of course you have to wait here, so we appreciate your patience with us.

Colleagues, I think we're going to proceed to the votes on supplementary estimates (C). There seems to be consensus to move in that direction.

Witnesses, you're free to go, and again, thank you so much for being here.

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

Just a reminder that we are waiting for a couple of documents—