Thank you, Mr. Chair.
I am very pleased to meet with the members of the Standing Committee on Government Operations and Estimates.
With me today are Robert Hertzog, the Department's Chief Financial Officer, and René Bouchard, Executive Director of the Portfolio Affairs Secretariat.
Allow me to describe the work we do at Canadian Heritage and the portfolio. Our mandate is broad and covers a wide range of issues of importance to Canadians. We deliver policies and programs related to broadcasting and interactive media, arts and cultural industries, heritage objects and spaces, official languages, citizenship participation and identity, human rights, youth and sport initiatives, as well as national ceremonies and symbols.
I have been invited here to speak about the 2012-13 main estimates of the Department of Canadian Heritage and the portfolio's organization. While with you today, I would also like to refer briefly to the impact of Budget 2012 on our work and to provide the members of the committee with information about the long-term financial strategy the department has adopted to ensure its financial stability.
I'll start with the main estimates. In the 2012-13 main estimates, the total budget for the Department of Canadian Heritage is $1.28 billion. This consists of $202.8 million in operating expenditures and $1.078 billion in grants and contributions.
The 2011-12 main estimates totalled $1.14 billion last year. Of this amount, $209.7 million was for operating expenditures and $933.6 million for grants and contributions.
The 2012-13 funding level shows a net increase of $137.3 million over last year. This is made up of an increase of $144.2 million in grants and contributions, less a $6.9 million decrease in planned operating costs. The difference is largely due to the following increases that were made public through the 2011-12 supplementary estimates process.
First is $100 million for the Canada Media Fund. Funding for this program was previously approved on a yearly basis through the supplementary estimates process.
Second is a net increase of $29.9 million for the aboriginal peoples program related to the cultural connections for aboriginal youth program and the aboriginal languages initiative.
Third is $15 million for the Canada Periodical Fund. This helps publishers adapt to the changing digital environment by allowing their flexibility to spend funds on a variety of activities, including online publishing.
As well, it should be noted that as of 2012-13, $38.6 million was transferred from the Department of Canadian Heritage to Aboriginal Affairs and Northern Development Canada as part of a machinery of government transfer. This includes core funding for aboriginal friendship centres, and project funding for both cultural connections for aboriginal youth and young Canada works for aboriginal urban youth. This transfer was made to permit a better integration of certain aboriginal programs across the two departments. This is not reflected in the main estimates as it occurred in March 2012 after submission. I just wanted to tell you that, since some funding is provided in the main estimates.
There is also a net decrease of $12.1 million for the transfer of funds to Shared Services Canada to consolidate and transform some information technology infrastructure across the government. As you may be aware, we are one of the 44 departments and agencies that have taken part in the consolidation of those email, data centre and network services.
The 18 organizations that are part of the Canadian Heritage portfolio will be receiving $1.9 billion in appropriations in the 2012-13 main estimates. These organizations also plan to generate more than $700 million in revenues, which means that total resources of $2.6 billion will be available to them in 2012-2013.
I would like to remind the committee members that the figures in the 2012-2013 main estimates do not reflect the decisions announced in the budget for 2012 concerning the review of departmental and portfolio spending.
As you know, the Government of Canada's Budget 2012 was announced on March 29, 2012. Some of the reduction measures with regard to the Department of Canadian Heritage include elimination of the Katimavik program, the grants and contributions component of the human rights program, the cultural capitals of Canada component of the Canada Cultural Investment Fund, the Canada Interactive Fund, the arts, culture, and diversity program, and the creators' assistance component of the Canada Music Fund.
Portfolio organizations contributing to the Government of Canada's reduction deficit measures include CBC/Radio-Canada, Telefilm Canada, the National Film Board, Library and Archives Canada, the CRTC, the National Battlefields Commission, and the National Arts Centre. Each of these independent organizations will implement the measures they themselves have proposed.
While all portfolio organizations were asked to prepare deficit reduction plans, the government chose to protect funding for several Canadian cultural institutions and sport. For example, funding to the Canada Council for the Arts was not reduced. The government chose to maintain direct support for theatre, dance, music, publishing, and performing arts.
The national museums were also exempted from reductions. As well, Budget 2012 includes an increase in support to museums and galleries through the Canada travelling exhibitions indemnification program. The indemnification limit will also be increased from $1.5 billion to $3 billion, which is a positive development for Canadian museums and galleries in their ability to attract major exhibits.
The decisions announced in Budget 2012 that affect the Department of Canadian Heritage and the portfolio stem from recommendations made as part of the Government of Canada's deficit reduction action plan. These decisions made were based on criteria such as effectiveness, efficiency, affordability and relevance to Canadians.
The supplementary estimates process will be used to decrease the authorities of the Department of Canadian Heritage and the affected portfolio organizations in accordance with Budget 2012 decisions. Quarterly financial reports will be provided to Parliament on a regular basis and in a timely fashion with respect to the implementation of these measures.
For the 2012-13 fiscal year, we've set the following four priorities for the Department of Canadian Heritage.
First, celebrate Canada's heritage and history. For example, we're currently working on a wide range of events to commemorate the War of 1812 and to celebrate Queen Elizabeth's second Diamond Jubilee.
Second, take full advantage of digital technology. This includes the modernization of the Copyright Act currently before Parliament.
Third, invest in our communities. For example, work is ongoing to implement the road map for Canada's linguistic duality, to renew the Canadian sport policy, and to support several high-profile sports events, including the London 2012 Olympic and Paralympic Games.
Fourth, efficiently manage the department's finances and operations. We are in the process of modernizing the management and delivery of Canadian Heritage grants and contributions programs.
Work is also ongoing to deal with financial challenges the Department of Canadian Heritage has encountered in recent years. Two years ago, the department potentially faced an ongoing structural deficit in its operating budget of more than $60 million. The department no longer had the financial flexibility to manage the operating budget structural shortfall through reallocations within a given year. Restoring financial sustainability within the department became a key priority.
To achieve this goal, we adopted a series of measures effective fiscal year 2010-2011. To date, we have eliminated practically two thirds of this vote 1 operating budget structural deficit without significantly impacting any programs or services offered to Canadians.
We are addressing the remainder of this deficit through a long-term financial strategy, which will achieve further operating budget savings of approximately $26 million by fiscal year 2014-2015. The idea is still to apply cuts internally while trying to protect programs and services offered to citizens. Once again these efforts are aimed at transforming how we do business internally with a continued effort to protect our capacity to deliver programs to Canadians.
To conclude my remarks, the Canadian heritage department and portfolio organizations are aware of the need of ongoing operational and productivity improvements and efficiencies across the Government of Canada. We are doing our part to achieve the goals that have been established with cost-saving measures that focus on core functions. The measures that we have adopted support modernizing the department and portfolio organizations by maximizing investments, delivering on results, and increasing the impacts of our programs and services.
We would now be pleased to respond to any questions you may have.