Thank you very much, Mr. Chair.
Good morning to all the members of the committee.
We are pleased to be here with you today to discuss the supplementary estimates (B) 2014-2015. As usual, we have prepared a short presentation to give you an overview of the supplementary estimates (B). As you mentioned, Mr. Chair, I am accompanied by my colleague Marcia Santiago, who is well known to members of the committee.
I would also like to alert the committee members that I have changed jobs. I am now the Comptroller General of Canada, but I am here for the last time in my old role. Mr. Brian Pagan is with us this morning, and he is replacing me in my old role. He is on day four in the job, though, so he is just here to observe today. The next time around you will be very well served by Mr. Pagan, and Marcia Santiago will be here as well. I just thought I would highlight that for the committee members before we start.
I do hope all members have received a copy of the presentation. The goal here is to give you a quick summary of what's in the supplementary estimates (B), and hopefully give you some information to allow you to focus your questions.
I do note, Mr. Chairman, that we have two members I haven't seen here before. I do know that estimates are a little complicated, so if there are questions about how estimates work, we're happy to take those as well, or questions on any of the content we have here.
If I could start on slide 3, this is just a reminder on the organization of the estimates documents themselves. They start with an introduction. In that introduction, starting on page 10 of section 1, you'll get a sense of the current year authorities of each department, but you'll also get a sense of the previous year's authorities and what they spent in the previous year. If you're actually looking for a quick summary of the estimates, that's a very good place to start. You'll get a department-by-department list.
In that introduction section you will also find the largest items that will be voted on in the supplementary estimates—so that's a good place to look as well—and any structural changes that are in the estimates. In these supplementary estimates (B) we have some structural changes around the administrative tribunal support services.
Last, the thing I will highlight for you in that introductory section is a listing of the horizontal initiatives. Horizontal initiatives are any initiative where multiple departments are receiving money to jointly collaborate on delivery of something. Some of those you will have seen before, and some are new, but they are multiple department initiatives.
The second big section of the estimates document is the details by organization. That represents by far and away the largest section of the document. It is department by department, and outlines just what the new authorities are being granted for or being requested for. There are 63 organizations covered in these supplementary estimates (B). If you're wondering why it's not all departments, it's not like the main estimates where we do see all organizations. In the supplementary estimates we see only the organizations that are requesting new funds, so that's why we see only 63.
In the annex to the supplementary estimates (B) document you will actually find the proposed bill that will eventually be voted on to grant supply.
I'll remind you that online you can find additional information, including allocations of central votes, allocations by program, and other types of information that might be of interest to committee.
I'll note a quick reminder that on page 4 what we're looking at in these supplementary estimates (B) is $2.9 billion in voted spending for 63 organizations. We also have $327 million in statutory adjustments, which I will speak to in a few moments, for a total of $3.2 billion, all budgetary.
I will highlight for members that in non-budgetary, we do have two $1 items here where we're actually just changing vote wording or things like that.
I would remind members that non-budgetary items are things like loans, where if all goes as planned, there is no impact on the fiscal situation of the government. If you issue a loan and it is repaid, there is no impact. But all of the real dollars here are budgetary in nature.
On slide 5, we like to take a few moments to compare these supplementary estimates to previous ones in terms of totals, and to situate members in terms of where the spending is for the current fiscal year or where the authorities are at for the current fiscal year. Supplementary estimates (B) is always the biggest of the three supplementary estimates. You will notice that it is smaller than last year's supplementary estimates (B). If you're wondering why that is, last year's supplementary estimates (B) was unusually large. We had a few items in there concerning disaster financial assistance, as well as a Manuge settlement and another out-of-court settlement. This year we're returning back to a more normal level of supplementary estimates (B).
We've spoken about the overall trends at this committee before. The trend is that voted spending is going down. That's largely to do with some of the reductions that have been taking place. Statutory spending is going up and it is going up at a greater rate than voted spending.
If you're wondering what is driving the increases in statutory spending, it's the same story we have spoken about here before. Legislated increases to the Canada health transfer, as well as the old age security programs and the aging population are causing the statutory amounts to increase.
Again for new members, if you're looking for an explanation for voted versus statutory, we're happy to get into that.
I will just hit the highlights for you on the major voted items. They occur on slides 6 and 7. These 11 items listed here cover off roughly 60% of the voted spending in supplementary estimates (B), so it's the vast majority.
The two largest items belong to National Defence. The first item for $652.2 million relates to maintenance dollars for the Chinook, as well as for the frigates, submarines, and armoured vehicles, in addition to some money for some training exercises in the Arctic as well as live fire exercises. The second item on this list is National Defence as well. That's the final payment related to the Manuge settlement. There is $190 million in there. That represents $50 million as a cost of living adjustment, which is the final piece, as well as $140 million to replenish the reserve of the insurance company that had actually floated the funds.
Other things I should mention on this slide—I will not go through the whole list but I'm happy to take questions—are the Treasury Board Secretariat compensation adjustments. These are transfers to departments and agencies for salary adjustments based on the last round of negotiations of $151.7 million.
I'll highlight that for you because we haven't seen that large an amount here for quite some time because of the operating budget freeze that was in effect. Under the operating budget freeze, departments had to resource any salary increases out of their existing reference levels. The freeze was not in effect for the fiscal year 2013-14, so we are resourcing departments for any of the wage increases that were negotiated during that year. That comes into their reference levels for the current fiscal year.
There are a number of agreements in there, but basically $112 million is for the core public service, and $40 million is for separate agencies. The agreements there are everything from correctional officers to financial officers, ship repair—east and west—so there's quite a list in there.
I'll highlight VIA Rail for you, and the rebuilding and enhancing of passenger cars, tracks, and signalling systems.
On slide 7, I will highlight a couple of others for you.
At the top of the list is the Canadian Air Transport Security Authority. That's for implementation of enhanced non-passenger screening. This is for airport staff, airline staff, and baggage handlers, etc., to improve the screening of those types of people. There's money in there for that.
In the second item on this list we have nine organizations receiving funding for management and remediation of federal contaminated sites, which is an item we've talked about here before. There is $80.2 million there.
Canadian Heritage is receiving some funding related to the Pan American and Parapan American Games. There is funding of $65 million for three venues that are being constructed.
Parks Canada is receiving some funding for improvements to highways, bridges, and dams. I will highlight for you the Crowe Bay dam as well as the highway in Glacier National Park. There are other initiatives there as well.
On slides 8 and 9 are initiatives where multiple departments are receiving funding.
The first one, which we've already spoken about, is with regard to federal contaminated sites.
The second item on this list you have seen before, which is the first nations water and wastewater action plan. Both the Department of Health and the Department of Indian Affairs and Northern Development are receiving funds.
I'll skip down to Statistics Canada because there's a bit of a theme here. This is funding for Statistics Canada, which is the fourth one on the list, to develop and test the questions for the upcoming census in 2016. StatsCan is receiving money as is Shared Services Canada because it is receiving funds for the IT backbone that will go with the census.
You will see other items on this list where there are funds for Shared Services Canada for the IT component of something a department is delivering. On the next page, you will see funding for the CRA for tax measures. Shared Services Canada is getting some IT funding for that as well. Environment Canada is getting some funding for one of their computers. Shared Services Canada is getting some funding for that as well. That's a bit of an emerging theme.
On slide 9, I will highlight one horizontal item for you. Halfway down the page is the Canadian Food Inspection Agency's new preventive food safety program for fresh fruit and vegetables, as well as enhanced oversight of fish and seafood. This funding is largely because of the changing purchasing patterns of consumers—increased purchasing of packaged foods, new markets, more of a trend towards fresh fruit and vegetables, as well as some seafood products. So some new dollars have been added in here for a new program to oversee food safety.
Slide 10 is statutory expenditures. These are expenditures for which the finance department updates it's forecast periodically. These expenditures are not voted on by Parliament as part of the estimates process, but we do provide the changes for information purposes. I'll highlight a couple of them for you here.
The payment to the International Development Association of $441.6 million is a replacement for a program that we used to deliver through a demand note. Now we are providing funding up front with a cheque. These are loans to the poorest countries of the world that are given concessionary or low interest or zero interest terms. We are changing the way we deliver it. Rather than a demand note, we are flowing some funds directly.
The other two items I will highlight for you are the decreases on the bottom.
We've spoken about this before, the interest costs; this brings the forecast in line with the latest forecast from the Department of Finance. The decreased interest costs of $329.7 million, this largely relates to changes in the forecast for the long-term interest rates which are continuing to be low.
The second one is a reduction in the forecast for disbursements to provinces under the softwood lumber agreement: $80 million. That's worth noting because it brings the current year forecast down to zero. The forecast for those payments is very much tied to the health of the U.S. housing market. If the U.S. housing market is going well, lumber prices stay up, and payments here are reduced or nil. The forecast here based on the latest economic data is that there will be no payments required in the current fiscal year.
In summary, there are $2.9 billion in budgetary voted expenditures for 63 organizations. Eventually, Parliament will be asked to vote on the appropriation bill.
I have one final plea before we get to questions. If your question does pertain to a specific page in the estimates document, and you can give us the page number so we can find the equivalent version in English or French to allow all members to follow along, that would be very much appreciated.
With that, Mr. Chair, we're happy to take questions.
