Government Operations Committee on June 20th, 2011

[Nycole Turmel, NDP, Hull—Aylmer, QC]

So you are telling us that you know you will cut $4 billion, but you still don't know where, and that you will ask those workers to do this for you. That's what you are telling us. What I'm seeing is a bit like what happened in Ontario, with Walkerton and the scandal about water. I'm worried that what you are doing without direction, without vision, will have an impact on employees, and that the impact will be even greater on Canadians and the services they are getting.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I respect your previous role as a public sector union leader, but I wish to stress that you're putting words in my mouth right now.

We're at the start of a process. I think you would be more critical of us if I came to this committee saying that we were going to cut $4 billion without consulting with anybody, and that all we could do is show you where the $4 billion is going to be cut. That would be irresponsible and reckless. That is not how our government does things.

We're going through a collaborative exercise. We are asking departments to give us their best advice, within the bounds of our commitment to Canadians. That means not cutting transfer payments to individual Canadians, or to provinces and territories when it comes to health care and other social services. We made that clear during the election campaign. Out of an $80-billion program spending budget, we think we can find $4 billion, 5%, and we think we can do this without recklessly cutting services and programs that Canadians value.

[The Chair, NDP, Pat Martin]

Thanks, Minister.

Andrew Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair, and congratulations on your recent election to the chair of this committee. It's my honour to be here today to join you. I'd also like to thank our witnesses for being here today.

Minister, our government was elected in 2006, and since then FedNor has played a big role in expanding economic development opportunities in northern Ontario and in delivering on Canada's economic action plan.

Can you outline for the committee the significant contributions that FedNor has made to development in northern Ontario? Could you tell us how this year's budget and estimates further our economic development goals in northern Ontario?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you for the question. It's always nice to talk about another aspect of my responsibilities in the Government of Canada.

As the minister responsible for FedNor, I'm particularly proud that since 2006 there have been over 1,240 projects that benefit northern Ontario's economy. Northern Ontario is no different from other constituencies that are represented in Parliament. With the great recession there were job losses. Northern Ontario relies on forestry, mining, tourism, and certain amounts of manufacturing. All of those areas were hit by the great recession as it wended its way through the world economy.

I've tried to focus FedNor's responsibilities on helping to complete the economic recovery. We want to make sure that we help hard-working Canadian families and businesses in northern Ontario, and that every investment decision we make has a positive impact on the economy of northern Ontario. I was pleased to see that in budget 2011 we were able to add $4 million to the FedNor budget—that's over a three-year period—to establish a cyclotron laboratory in Thunder Bay. That's a great research project. It will help create medical isotopes. We know how important medical isotopes are and how we've had some difficulty in that regard. This cyclotron will be able to create medical isotopes for early detection of cancer cells, which will be helpful to our constituents across the country.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Minister.

Would you explain how the capital fund deferral account helps departments save money so that we can further respect taxpayers' money?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

This particular deferral account is really dedicated to the proper management of capital assets and public funds. Over the last number of years, we have been obviously committed to infrastructure projects across the country and focusing those infrastructure projects in a way that is beneficial for the economy.

In the first place, over half a million jobs have been created. We know that through the economic action plan. We know that businesses have grown. We know that investment in our country has increased, and certainly we are now considered a primary positive economic force worldwide.

I think the higher mandate is also to make sure that we make smart decisions with taxpayer money. Obviously taxpayers value infrastructure projects that we have invested in. They have created jobs. But they want us to ensure that there are proper controls in place so that we can get the most value for the dollars that are spent. It certainly makes sense to us, especially in terms of infrastructure projects, to allow funds for capital projects to be carried over to the next fiscal year. It allows for projects to be completed over the course of a number of years, and it provides certainty of funding.

The Auditor General referred to this need for certainty in infrastructure funding way back in a 2006 report discussing the federal government expenditures management system, and we feel that this capital carry-over fund addresses that need for certainty and streamlines how government funds are used as well. I think that goes to a larger story about how we are looking at our strategic and operating review and what we're trying to do to eliminate the deficit.

[Andrew Saxton, Conservative, North Vancouver, BC]

Could you explain how the improvements in the main estimates have helped make those estimates more transparent for Canadians? Perhaps your officials could expand on that as well.

[The Chair, NDP, Pat Martin]

In about 30 seconds, I'm afraid.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I can refer to my notes on that. Certainly we have added to the transparency in the reporting. We're always looking for ways to do so to a greater degree, and I'll certainly be reviewing that over the next little while as President of the Treasury Board.

That's all I can say in 30 seconds.

[The Chair, NDP, Pat Martin]

Thank you.

John, with the Liberals, has been waiting for a turn.

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

Thank you, Mr. Chair, and thank you to our witnesses for being here.

I want to first try to review the facts briefly with regard to this legacy fund in a way that I hope is fair.

It's my understanding that in terms of the expenditure of money hundreds of kilometres from the borders it was designed for, this was not done maliciously, but in hindsight you think it was probably inappropriate and won't happen again.

With regard to the way in which the projects were chosen, it was basically a group of mayors and yourself, with little or no oversight at the bureaucratic level. All the money was accounted for, but with hindsight I think you agree that perhaps there should be more paperwork and oversight.

Is that a fair summary?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Let me give you my iteration, which in some ways conforms.

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

Not too long, if you may, because I've questions arising from that. Is that basically fair, or in what way is it not fair?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I'd put it in slightly different terms. Do you want to hear my different terms, or do you want to go on to your next question?

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

No, because I think we'll run out of time. You're perhaps not too far from me but slightly different. Okay.

I think you would understand that for many Canadians, given this past record, which I think you agree in hindsight you would not repeat, and now you are moving from that situation to become essentially the commander in chief of appropriate spending actions and accountability and all those good things, it's hardly surprising that some have likened you to the fox guarding the chicken coop or Dracula guarding the blood bank.

Given this sort of questionable background experience and coming to your new major role, would you at least say to Canadians that given these previous experiences of spending money designed for borders on something totally different, you will never do that again, and that if it were to happen again under your watch, you would resign? Would you commit to that?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Let me say a couple of things.

First of all, I think we've acknowledged that the Auditor General in this particular chapter made one and only one recommendation. Her recommendation was that in circumstances where you roll up funds into a larger fund and that decreases the transparency, don't do that. She has a very good point. I would say again for the record that this was a procedure that had been used by Liberal governments and by Conservative governments for 99 years in dealing with rolling up expenditures in certain larger funds, but I think in 2011 we have to do better than that. Just because it was done in 1912 doesn't mean we do it in 2011.

So, yes, I think we do have to change those things.

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

You are committing that you won't do it like that in the future.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

That's right.

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

And that's an unequivocal commitment on your part.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

In like situations, we would do something that is more transparent, absolutely.

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

Let me change the subject.

You have spoken about your commitment to greater accountability and, in the throne speech, to greater openness. I'm talking about this hacking into the Treasury Board and finance department computer systems. I understand this happened five months ago, or for five months many of your employees have not been able to access their computers.

This strikes me as a very serious matter, and CBC reported that the cost of fixing it could be as much as a billion dollars. I have no idea whether that's true, but it seems to me you have said very little or nothing about this situation. The parliamentary secretary to the Prime Minister was on a TV show with me recently, and he could not commit to Canadians that their data was secure, whether it's health information, tax information, or whatever their private data. I think that's an extremely important matter for a government in 2011, and I think we have heard very little from you.

What can you tell Canadians about the safety of their private data, what you are doing to fix the situation, and how long this will take? We're out here knowing nothing about what is going on, and I do not think that is acceptable.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I'm going to pass this over to the secretary, if you don't mind. I do take this very seriously; I want to state that for the record. But she obviously has a little bit more depth in this, because she was here before I got here.

[The Chair, NDP, Pat Martin]

You have less than one minute, Madame d'Auray.

[Michelle d'Auray, Secretary of the Treasury Board of Canada, Treasury Board Secretariat]

Thank you, Mr. Chair.

On the issue of cyber security, we have in fact strengthened our networks across the government. There have been some funds allocated by the government to enhance our capacity and our security posture.

With regard to the secretariat, we have in fact had a fairly significant data migration plan, and I think we can ensure the security of data that is held by the Government of Canada for Canadians. We take this extremely seriously and we take all the steps necessary in order to ensure that the data is held and held securely.