Government Operations Committee on March 10th, 2015

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

This is a constant challenge for anyone who is the President of the Treasury Board, to draw the distinction between the estimates process and the budget process. Ultimately they align, but it does take some months for that to occur. Because I'm statutorily required to table the estimates to the House of Commons prior to March 1, and frequently the budget is either around the same time, or in this case just after that, they don't align perfectly at the start of the year but they certainly align perfectly at the end of the year. So parliamentarians have the estimates process and they obviously pass or not. We have the budget, and then we have the public accounts for the previous year, which are a topic of examination and debate by this committee and by the parliamentary process.

Finally, I would say that one of the things I have instituted since being named the President of the Treasury Board in 2011 is to try to get us away from paper-based estimates and public accounts, and toward the more online versions, where through hypertext and other links it will be easier for you and your colleagues to examine each program year by year, each department year by year, and that way you can compare and contrast, rather than going through three sets of books of the past three years that are a metre high.

I think it is working better, and there is certainly more that can be done, but technology is our friend and it's making it easier for the government to be accountable to parliamentarians.

[Chris Warkentin, Conservative, Peace River, AB]

The estimates process doesn't really outline reductions and spending, only additional asks. It seems to me that it would take some work to find a reduction in spending simply by...addition of numbers of the estimates of previous years—

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

The estimates are a baseline, and then through supplementary estimates (A), (B), and (C) you get additions to the baseline based on the budget for that particular year. So it is part of the picture. I think it would be unwise to say the main estimates are the whole picture, because quite frankly, they are subservient to the budget, and of course there's a lot of debate in the House of Commons on the budget.

[Chris Warkentin, Conservative, Peace River, AB]

In terms of issues such as the sunsetting of programs or the reprofiling or winding down of money, how is that reflected in the estimates process, and are there things that people could be informed of to better understand those processes in relation to the estimates process?

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

Yes, and there's a good case in point with Marine Atlantic, which is a good example. I know the member, Mr. Byrne, would like me to mention that. When there might be a sunset based on a budget commitment that was made in previous years—and that was certainly the case in Marine Atlantic—then there is...a sunset, that is to say, the funding stops at a certain year. In this case it would be this year. But of course, the government can always decide to renew a program so that it does not sunset and be not funded anymore. That frequently is the case with programs that have shown their value and worth.

So some of these are regularized into the main budgets of the department, and others are continued for another period of time until they are reviewed again.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Warkentin. You're all but out of time.

Next, for the NDP is Mr. Tarik Brahmi.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you, Mr. Chair.

Minister, I would like to talk about the funding for National Defence. However, I would first like to take this opportunity to extend my sincere condolences to the family of Sergeant Andrew Doiron, who lost his life in the Iraq theatre of operations.

The Department of National Defence is asking for $138 million for the two operations Canadian Forces are involved in at this time, that is to say Operation Impact in Iraq, and Operation Reassurance, which is taking place mostly in Europe and Ukraine.

Can you confirm that these amounts are included in supplementary estimates (C)?

Do you plan an increase or a decrease in the funds that will be allocated to operations abroad?

Will there be an adjustment following this tragedy, for instance a change in the number of military members affected to the theatre in Iraq?

I am not talking about those who are currently on duty in Kuwait with aviation services, but about Canadian troops who are serving in Iraq in field operations.

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

Thank you, Mr. Brahmi.

I can say that the additional expenditures for this operation and the other operations are included in the main estimates and in the supplementary estimates.

Mr. Pagan may be able to provide a more specific answer to your question.

[Brian Pagan, Assistant Secretary, Expenditure Management, Treasury Board Secretariat]

Thank you.

I can confirm that this is contained in supplementary estimates (C):

an incremental amount, in the total of $138.1 million, for National Defence for their projected incremental costs of operations in Iraq and the Ukraine for the present mandate. I cannot comment on the structure of the operation, the policy decisions about force structure and deployment, but I'm certain that National Defence will be adjusting their plans as a result of day-to-day operations.

The current mission includes an air task force with six CF-18 strike fighters, one Polaris refueller, two search planes—

[Tarik Brahmi, NDP, Saint-Jean, QC]

I apologize, but I am going to have to interrupt you because I think we are aware of these details, which have already been provided by the Department of National Defence. I know this because I also sit on the Standing Committee on National Defence.

However, the Parliamentary Budget Officer published a report estimating that the cost of Operation Impact could reach $166 million. Since there is some uncertainty regarding the future, that is to say what will be happening to the Canadian Forces after March 31, and what will be in the budget for fiscal year 2015-2016, have you taken the recommendations of the Parliamentary Budget Officer into account to adjust expenditure forecasts? If that is the case, can you comment on the amount cited by the Parliamentary Budget Officer for Operation Impact?

[Bill Matthews]

Thank you for the question.

As the member has already said, the Office of the Parliamentary Budget Officer has done a certain amount of research on the missions.

I believe the Department of National Defence released their own estimates of what the mission would cost.

Understand that when the PBO does work in this area, they are basing their estimates on industry standards. They are not basing the estimates on specific planes. The National Defence costing is actually based on the planes and equipment they have in theatre, whereas PBO's estimates would be based on standards.

A credible estimate, a credible way to do things...but it's much more high level. It is an estimate. It's an “up to” amount. The key drivers in those costs are the number and types of equipment they have over there and the number of missions they are flying. As those change, the costs will change. National Defence would basically have better data at their fingertips in terms of the cost per flight, whereas PBO would be using a generic estimate. That's why you'll see a difference.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you, Mr. Chair.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Brahmi.

For the Conservatives, we have Mr. Greg Kerr.

[Greg Kerr, Conservative, West Nova, NS]

Thank you, Mr. Chair.

Minister and staff, it's good to have you here today.

I'm glad you started off in transportation in the Atlantic area, because that certainly is a matter of great interest to all of us who live on the Atlantic coast, given our watercourses. We've had what they call an old-fashioned winter, so we've had lots of time to reflect on many things down in the east.

I would like to ask specifically about the main estimates, the $90 million planned for expenditures for Marine Atlantic. Why is this figure so much lower than the $127 million listed in 2014-15? I know you alluded to it, but I wonder if you could give us a bit more detail on what's going on in this area, if you would.

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

Thank you, Mr. Kerr.

As I started to explain, in the main estimates Marine Atlantic had received about five years of funding that started in budget 2010. That five years of funding ends in the 2014-15 fiscal year. When we have a sunset issue like that, it's typically found—yea or nay—in the budget, not in the estimates.

One would expect that this issue would be addressed one way or the other. I'm not trying to pre-empt the budget, but one way or the other, it will be certainly found; if it's not found in the main estimates—which it isn't—it will be found in budget 2015. That's why you perceive a decline in the estimates, because the funding has not been allocated according to the budget.

So this is quite typical. This is not an unusual situation. Departmental reference levels are regularly updated through the budget and the supplementary estimates that of course will come before the House. One would expect that the next opportunity to see whether Marine Atlantic has additional funding would be in supplementary estimates (A).

[Greg Kerr, Conservative, West Nova, NS]

I appreciate that, and I know that because people look at it, if they don't understand, they'll make certain judgmental calls.

You're basically saying “stay tuned” because certainly it's a very important service, and we know government is behind it.

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

Let me say stay tuned, and for newcomers to this process, this is the same thing that happens every year. I'm not casting any aspersions on current members or any of our colleagues, but if somebody lights their hair on fire somewhere because it's not found in the main estimates, then, of course, by budget time the issue is a non-issue because it's funded at budget time.

[Greg Kerr, Conservative, West Nova, NS]

Thank you very much.

I have a little time left. I know the parliamentary secretary is all pumped up and ready to go today, so I'll give him the rest of my time.

[The Chair, NDP, Pat Martin]

He's loaded for bear, and he has about two and half minutes.

[Chris Warkentin, Conservative, Peace River, AB]

This gets back to the concern—and actually bridging from Mr. Kerr—that the issue of winding down or sunsetting programs sometimes reflects differently than what the government policy or intention might be in the longer term.

Obviously I think you clarified this reality, but in terms of reprofiled money, how would it be reflected in the estimates process, if in fact a department was going to reprofile funds?

[Brian Pagan]

Thank you for the question.

Circling back to a previous comment from the minister about the positioning of the estimates versus the budget in the fiscal year, as mentioned, the reality is that by the Standing Orders of the House of Commons we have to table the main estimates on or before March 1 every year. By convention, the last several budgets have been in February, March, and April of other years.

It is quite common, if your budget is the pre-eminent policy statement of the document, aspirational in nature, setting out what they want to do, that it will take some time from that budget to work with departments to stand up a program. It will take some time to develop the terms and conditions, work with their partners, be it provinces, NGOs, international stakeholders, so that program will stand up to the scrutiny of the President and his Treasury Board colleagues.

At that point, when we have the Treasury Board approval, we bring the item forward in supplementary estimates for parliamentary approval. Depending on when that happens in the year, there can be as little as just a few weeks left in the fiscal year for a department to spend the money. I'll use supplementary estimates (C) as an example, which were just tabled on February 19.

We don't anticipate parliamentary approval of those amounts, the $1.8 billion in voted programming, until something like the third week in March. Therefore, there are instances where departments simply run out of runway, time and space, to be able to implement the initiative. Then there are some options available to them to carry forward the funds.

There is a process, which I'd be glad to speak to in the second hour to explain the carry forward process, or to have that funding reprofiled by the Department of Finance. That is a dual role. We will work with the department to see if there's a valid reason why they couldn't stand the program up. If the Department of Finance agrees, they will reprofile the money in their fiscal framework, and that will be subsequently presented to Parliament in future supplementary estimates for their approval at that point.

It's not automatic. It requires a dual role by TBS and by Finance, and it is presented to Parliament. In fact, in the main estimates we have a couple of examples. Aboriginal Affairs is—

[The Chair, NDP, Pat Martin]

Thank you, Mr. Pagan; I'm going to have to cut you off. It was a very concise answer to a very complicated question, so thank you for that.

Next is the Liberal Party and Mr. Gerry Byrne, for five minutes, please.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thanks, Minister, and thanks to your officials for appearing before us.

I appreciate that I was able to provide you with advance notice of my line of questioning so you came prepared. Let's see how prepared you came.

The most recent version.... I'll start where I should begin. Every federal crown corporation is required by Treasury Board to submit a five-year corporate plan. The current corporate plan for Marine Atlantic, just one of many federal crown corporations, would at this point be the corporate plan for 2015-16 to 2019-20, I believe.

Every federal crown corporation is also required to table a corporate plan summary. The last corporate plan summary that I can find on Marine Atlantic is for 2012. Has a more recent corporate plan been approved by Treasury Board and cabinet?

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

I am told by my secretary that we have yet to approve the corporate plan.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

You've yet to approve the corporate plan. So if you have not approved the corporate plan, how can you be so confident that Marine Atlantic's budgetary allocation will be ready in time for budget day?