Government Operations Committee on June 14th, 2011

[John McCallum, Liberal, Markham—Unionville, ON]

Okay.

I understand that, but to go back to my original point, it's still the case that in 2009-10 you ended up spending $1.2 billion less than you thought you would spend at the beginning of the year. I don't understand why it's so asymmetrical. If you base your estimates on when you think the equipment will be delivered, then some years it might come sooner than expected and other years it might come later, but in your case it seems to be always much later than you expect.

Why don't you adjust your expectations to match the reality and then you wouldn't have these huge lapses?

[Kevin Lindsey]

It's a fair question, Mr. McCallum, and I would defer to my colleague, the ADM for materiel, as to whether he has any anecdotes about equipment being delivered earlier than anticipated. But with regard to process, perhaps I could defer to Mr. Ross.

[Robert Fonberg]

If I could just make one quick point, the bet that's made when we finally go to Parliament for appropriating money is a bet that's supported by the Department of Finance and by Treasury Board, which actually believe that basically we have it right. As you can imagine and as I think you would know from your time, those are pretty rigorous challenge functions. We don't just put up our own estimates without them being unchallenged.

So in some ways there is an asymmetry here, but now I'll let Dan speak to that question.

[The Chair, NDP, Pat Martin]

Because we're way over time, could you wait until it is in the context of answering the next question?

Mike Wallace is next.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

Thank you to the officials for being here.

I have a number of questions and I'm going to try to go quickly, but I actually have a chart of what you've done in the last five years: main estimates over previous year, total supplementary estimates for the year, the As, Bs, and Cs, the actuals. There isn't a department I have found thus far that has busted its votes and is overbudget; they are all under budget, of course, because you want to spend less than what you ask for or you would be in real trouble if you didn't get appropriations for those.

But I want to ask you actual questions from the blue book, if you don't mind. This is my first opportunity to actually question this department. I have questioned many others, so they're used to me dealing with the blue books. Some are very basic explanations.

On page 244, for example, can you explain something to me? On the column that reads “Less: Revenues Credited to the Vote”, down near the bottom, for “Defence Team Personnel Support”, for example, where do those revenues come from and what do they mean? I was surprised to see so many line items with revenues generated. How does the defence department generate revenues?

[Kevin Lindsey]

First, on the authority issue, on the revenues credited to the vote, the department does in fact collect revenues from various sources. Normally, government revenues are, by law, deposited to the consolidated revenue fund.

[Mike Wallace, Conservative, Burlington, ON]

That's right.

[Kevin Lindsey]

However, many departments, DND included, have, by virtue of Parliament's approval of the Appropriation Act in these estimates, the authority to spend certain kinds of revenue up to certain amounts. The specific revenues that you've asked about on page 244 I believe are related to recoveries of advances from CF members who are on temporary duty or who, for other reasons, received temporary cash advances in the pursuit of their duties. So that money represents the members repaying those advances--

[Mike Wallace, Conservative, Burlington, ON]

Got it.

[Kevin Lindsey]

--and Parliament gives the department the authority to re-spend that revenue.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

On transfer payments, then, there are a lot of line items with transfer payments. Who is transferring money to you? Where are these transfers of payments coming from and what are they for? Give me some examples. I don't need specifics. Just give me some examples.

[Kevin Lindsey]

These transfer payments refer to transfers of money from DND to some other party and take the form of either grants or contributions. As you can see, there are a whole range of recipients of those.

[Mike Wallace, Conservative, Burlington, ON]

Okay. So all the things under transfer payments are grants and contributions, Gs and Cs?

[Kevin Lindsey]

Yes, grants or contributions.

[Mike Wallace, Conservative, Burlington, ON]

On page 245, I find it interesting that we have an allocation to give you an automatic acceleration of 2%, or whatever the number is, but then we decrease by $102 million because you did cost containment stuff. Can you give us one or two examples of the cost containment pieces that are in here?

[Kevin Lindsey]

Sure. In fact it's all the same phenomenon. You may recall that budget 2010 removed a provision whereby departments would be reimbursed for costs associated with increases coming out of the collective bargaining process.

[Mike Wallace, Conservative, Burlington, ON]

Right.

[Kevin Lindsey]

In other words, if a bargaining unit would negotiate an increase of 1.5% per year, where in the past Treasury Board would have given a department the money to cover that cost increase, going forward, departments would have to absorb that increase from existing reference levels. The truth is that in anticipation of future increases departments had already received the money in their budgets for these increases in the future years, so what this represents is that money being clawed back--

[Mike Wallace, Conservative, Burlington, ON]

Okay. It's clawed back.

[Kevin Lindsey]

--in 2011-12 pursuant to budget 2010.

[Mike Wallace, Conservative, Burlington, ON]

On page 246, one of the grants you give is to the Institute for Environmental Monitoring and Research. Why would DND give money to that organization? What are they doing for you?

[Kevin Lindsey]

We'll have to get back to you, Mr. Chair, on that one.

[Mike Wallace, Conservative, Burlington, ON]

I'm looking forward to that.

Thanks.

[The Chair, NDP, Pat Martin]

Thank you.

Jack Harris, go ahead for five minutes.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair.

I'm sorry I wasn't here for the two ministers.

Maybe someone can explain--Mr. Fonberg, perhaps. Is there a separate deputy minister for the associate minister for procurement? How does that work with regard to reporting within the department?

Mr. Fonberg, are you the deputy minister to both of these ministers? How does that work?