Government Operations Committee on Nov. 29th, 2012

[The Chair, NDP, Pat Martin]

Good morning, ladies and gentlemen.

We'll convene our meeting of the Standing Committee on Government Operations and Estimates. Today we will continue our examination of the supplementary estimates (B) for 2012-13.

Today we've invited as witnesses representatives from the Department of Canadian Heritage. We're very pleased to have the deputy minister, Daniel Jean, here to make a presentation. He is joined by Robert Hertzog, the director general of the financial management branch.

Welcome, Mr. Hertzog.

We also have with us René Bouchard, the executive director of portfolio affairs.

Mr. Bouchard, welcome.

Monsieur Jean, maybe you have 10 or 15 minutes of opening remarks. The floor is yours.

[Daniel Jean, Deputy Minister, Department of Canadian Heritage]

Thank you, Mr. Chair.

I'm pleased to meet with the members of the Standing Committee on Government Operations and Estimates. With me today, as the chair has mentioned, is Robert Hertzog, who is the department's chief financial officer, and René Bouchard, who is the executive director of our portfolio affairs.

We appeared before the committee last May on the subject of the 2012-13 main estimates for the Department of Canadian Heritage and its portfolio organizations. At that time, I said that the total budget of the department was $1.28 billion. This figure consists of $202.8 million in operating expenditures and $1.078 billion in grants and contributions.

As well, the 18 Canadian Heritage portfolio organizations receive $1.9 billion in appropriations. As stipulated in budget 2012, Canadian Heritage and its portfolio organizations face planned reductions of approximately 6.9% by 2014-15. The total amount of these reductions, as well as their financial impact on our current year financial results, are explained in the department's quarterly financial reports. The first report was tabled in June 2012.

Let me now address the 2012-13 supplementary estimates (B) for the Department of Canadian Heritage and the portfolio organizations.

The supplementary estimates for 2012-13 were tabled in Parliament on November 8, 2012. Parliament is being asked to approve $7.5 million in additional resources for the Department of Canadian Heritage.

The new requirements are for the following initiatives.

$14,386,219 for Sport Canada's hosting program to support the construction of new facilities and the upgrade of existing facilities. This includes the related design and planning activities for the Toronto 2015 Pan American and Parapan American games. Funding announcements that have been made for these facilities include Markham, York, Welland, and others will be ongoing.

$3,000,000 for Sport Canada's sport support program to support activities of ParticipACTION and the Quebec-based fitness organization Le grand défi Pierre Lavoie. Both of these organizations promote more active lifestyles and healthier, stronger communities across Canada, with a particular emphasis on children and youth.

A $1,000,000 transfer from the sport support program to the athlete assistance program to provide increased living and training allowances to high-performance athletes.

$5,000,000 for the celebration and commemoration program to support the 100 ^th Grey Cup anniversary celebrations that took place in communities across Canada. Activities focused on the ten-week national train tour and week-long celebration in Toronto just prior to the Grey Cup game on November 25, 2012.

$2,500,000 for a grant to the Hnatyshyn Foundation. The foundation supports artistic and cultural development in Canada through a grant program that affirms the vital role of the arts and artists in strengthening the community and enriching the quality of life of Canadians.

$200,000 ofor government advertising programs related to the war of 1812. The Government of Canada has a series of activities to commemorate the 200 ^th anniversary of the war of 1812 over three years. Activities include a pan-Canadian public awareness campaign, learning materials for schools, funding for up to 100 events and historical re-enactments, a traveling War Museum exhibit, a permanent 1812 monument in Ottawa, and investments in national historic sites associated with the war of 1812.

Funds being provided to the department for these initiatives through supplementary estimates (B) are shown net of $17,541,000 in savings. These savings were identified in budget 2012 and are being achieved through efficiencies in operations and the reduction in 2012-13 of programs such as international expositions, for savings of $8,612,000, and the Canada interactive fund, for savings of $7,880,000.

Items in the supplementary estimates (B) for 2012-13 that affect the Canadian Heritage portfolio organizations include $32.2 million in funding for Canadian Broadcasting Corporation programming. Since 2001, CBC/Radio-Canada has received $60 million in annual funding to enhance and expand its Canadian radio and television programming. For 2012-13, the $60-million amount is reduced by $27.8 million, which reflects the reduction to the CBC's appropriations that were announced in budget 2012. As a result, the net amount to be provided to CBC in 2012-13 is, as I noted, $32.2 million.

There is $46,700,000 for the Canadian Museum for Human Rights. The museum will receive $21.7 million in operating funds for 2012-13, as well as a $25-million instalment on a $35-million advance on appropriations granted by the government. The latter is financial flexibility; this will provide the museum with the financial flexibility it needs to open in 2014.

Authority is also being sought for transfers to and from other federal government departments or organizations, for a net increase of $1 million. This comprises a decrease of $9.5 million in operating and an increase of $10.5 million in grants and contributions.

These are largely adjustments to ongoing initiatives with other Canadian Heritage portfolio organizations and government departments, and they include: the transfer of funds to Veterans Affairs Canada to support the Historica-Dominica Institute's memory project and help educate youth about the importance of remembrance; the transfer of funds from the Canada Council for the Arts to support a series of research reports on the arts in Canada, and the return of funding provided for the national translation program for book publishing that is not required

As I mentioned when I appeared before the committee last May, Canadian Heritage has long-standing financial targets and is continuing to meet these targets. We continue to do our part to achieve the government-wide productivity improvement and efficiency goals that have been established. The measures we have adopted support modernizing the department by maximizing investments, delivering results, and increasing the impact of our programs.

We would now be pleased to respond to any questions committee members may have.

Merci.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Jean.

We'll go to questions right away.

For the NDP, Denis Blanchette.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

My thanks to our guests for joining us this morning.

Mr. Jean, at the beginning of your presentation, you mentioned that you wanted to show in your quarterly reports how you were going to distribute your cuts.

There is one thing that we do not see there that would perhaps be good to see and that is the way in which your department's staff is affected. Could you talk to me about that for a few moments, please?

[Daniel Jean]

With pleasure, Mr. Blanchette.

If I remember correctly, when I appeared here in May, I explained to you that, about three years ago, our department was facing a structural deficit of more than $60 million. Actually, when salary increases were included, we realized that it was close to $67 million. Before Budget 2012, that is, before the deficit reduction exercise, we had already undertaken internal initiatives to reduce costs and cut some staff in order to reduce that deficit by $40 million.

At that point, we used that $40 million figure to adjust the budget and that led to a job losses numbering a little under 300. Some positions were lost in order to deal with the deficit and others were lost as fixed-term initiatives came to an end. When Budget 2012 came around, we had about $27 million to go. The effect of the budget itself in terms of cuts to programs and to the people who run them was that the staff cuts affected 38 people.

So if you are asking me very specifically how many people had their positions eliminated as a result of the measures in this budget, my answer will be 38 FTEs, full time equivalents. In terms of person-years that were cut in order to confront the additional cuts and our structural deficit of $27 million, it was 242 other positions, for a total of 280.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I appreciate the fact that you are precise. I love it when people come here and tell us things in a precise manner, as you are doing. Other people would perhaps do well to follow your example.

That said, it would be good to see how this affects your operations. Are people removed from your staff when specific programs are eliminated? Is it just attrition?

You know that part of the name of the committee mentions government operations. So I would like to know how your daily operations are affected and how you are coming to grips with all this. We ask questions like that to see if you have the means to fulfill the missions you have been entrusted with.

[Daniel Jean]

I have two comments about that. First, that is the reason that the cuts made in order to deal with the structural deficit have been made to the administration only. The minister has been clear on a number of occasions: he did not want programs affected and he wanted to see more efficiency in the department. That is the fundamental reason.

Two things informed the way in which we made the cuts. The first was to make sure that there was no impact on the service provided to our stakeholders. I think they recognize that we have put a lot of effort into that. The second was the desire to treat the staff affected by the cuts well. I have figures with me that show we have done a very good job in that respect.

[Denis Blanchette, NDP, Louis-Hébert, QC]

To change the subject, you announced $5 million for the Grey Cup. I am a football fan and I really liked the festivities. But I have one administrative question.

Could those $5 million not have been in the main estimates rather than in the supplementary estimates (B)?

[Daniel Jean]

It is a matter of timing, really. It is all about the appropriation cycle. It was announced in the main estimates last year. We had to put it in the supplementary estimates (B) so that we could access the money.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Could you be more specific about the appropriation cycle? When the budget was introduced, you knew that this was an activity you were going to fund. Why not do it then?

[Daniel Jean]

The thing is that, in each year’s budget cycle, when we show our main costs, amounts are always added in or taken out during the year. Those are spread out over the three supplementary estimates.

In this case, the $5 million amount was announced in the budget for 2012. So it could not be put into the main estimates before the authority needed to ask for it had been obtained.

[Denis Blanchette, NDP, Louis-Hébert, QC]

You are telling me that it was announced in Budget 2012, but that you had not received authority for it so you could not include it specifically in the main estimates. Isn’t that odd?

[Daniel Jean]

No. I have to correct one thing here. It was announced in Budget 2011. It is just a technical matter of timing, of the appropriation cycle.

Robert may be able to explain it better.

[Robert Hertzog, Director General, Financial Management Branch, Department of Canadian Heritage]

I do not think I really have anything to add. It is often just a question of making sure that we have gathered together everything we need to conclude a contribution agreement with a recipient before going to Treasury Board to ask for the money.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I ask the question because, last spring, we finished a study on the budget forecasts. Parliamentarians just wanted to get a better picture of the situation. We are looking for a specific picture of what is coming rather than a vague picture. I just find this way of doing things a little odd. I understand that you have followed the rules. I see no problem with it. I just wanted to understand.

[Daniel Jean]

Bob is probably right. What happened in this specific case is that we had to negotiate with the organizing committee to determine what revised form the contribution agreement was going to take. That takes a little time. That is why we had to put it through the supplementary estimates (B).

[The Chair, NDP, Pat Martin]

Thank you, Monsieur Jean.

Next, for the Conservatives, Jacques Gourde.

Five minutes, please, Jacques.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for being here today.

The supplementary estimates (B) 2012-2013 show that the Canadian Museum of Human Rights is asking for $46.7 million for building construction, exhibits, set-up and other operating costs for the museum. Since its creation, the museum has received $109.6 million from the Government of Canada. What will these additional funds be used for?

[Daniel Jean]

As you know, the Government of Canada's commitment for museum construction can go up to $100 million. It has also committed to provide operating funds which, at the moment, are at $21.7 million. The request made today involves both the operating funds of $21.7 million and some financial flexibility against future appropriations in order for the museum construction to be finished as quickly as possible.

In a word, we are not providing more than $100 million for the construction and $21.7 million for operating expenses. But we are providing some funding flexibility in advancing some future appropriations in order to get the construction done on time.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you.

CBC/Radio-Canada is asking for $32.2 million in order to strengthen programming and maintain English and French programming on television, radio and digital services.

Does the department ask for specific accounting from CBC/Radio-Canada about the use they make of that amount?

[Daniel Jean]

As you know, CBC/Radio-Canada is an independent organization in terms of its programming and its journalism. Of course, it will use the funds to create Canadian content and programming.

To some extent, they are accountable to CRTC under the Broadcasting Act. In terms of accountability, the role of the minister and the department is more to ensure that the administrative funds are used responsibly. That is the role of the minister with all independent organizations.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Is this the last year for the one-time vote that the corporation gets each year in order to strengthen Canadian programming?

[Daniel Jean]

Actually, in the past, CBC/Radio-Canada received recurring funds of about $1 billion; this $60 million amount had been renewed several times since 2001. Next year, this vote will be completely eliminated, and it will only be partial this year.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you.

The supplementary estimates (B) show that the sum of $200,000 is requested for government advertising programs. In which departmental programs will that additional money be invested?

[Daniel Jean]

That comes from the government envelope for advertising. The additional $200,000 come from that envelope.