Government Operations Committee on March 18th, 2019

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I think we'll commence the meeting now. Thank you, all, for being here. We will have a bit of an abbreviated meeting today because of the ministerial statements following question period.

With us today we have some officials from the Treasury Board Secretariat.

Without further ado, Mr. Purves, I understand you have a brief opening statement.

[Glenn Purves, Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat]

That's correct.

[The Chair, Conservative, Tom Lukiwski]

I would ask you to commence with that, sir, and then we'll go into our regular round of questioning. I also understand, sir, you and your officials will be here until 5 p.m.

[Glenn Purves]

That's correct.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. Please, sir, the floor is yours.

[Glenn Purves]

Great. Thank you very much, Chair, and thank you to the members for inviting us here today to speak about the estimates.

Today we have an estimates double-header. I'll be discussing both the final supplementary estimates for 2018-2019 as well as the first estimates for 2019-2020.

As a refresher, the first few pages of supplementary estimates (B) summarize the total amounts presented for Parliament's approval and give additional information on major items and horizontal initiatives.

The next section of supplementary estimates details requirements by department and agency. Each organization will display its requirements by vote and initiative. The tabled document ends with the proposed schedules to the appropriation bill, which are based on amounts presented in these estimates.

Additional details are available online, including forecasts of statutory spending, allocations from Treasury Board central votes, expenditures by program or purpose, and transfers.

Finally, I would remind the committee that the GC InfoBase is also available to provide you with more information on authorities and expenditures.

Turning just to 2018-19 supplementary estimates (B), these final supplementary estimates for 2018-19 present a total of $6.2 billion in planned budgetary expenditures.

Of this amount, the government is seeking parliamentary approval for $2.5 billion in new spending for 48 organizations.

Two organizations appear for the first time in the estimates. The Department for Women and Gender Equality replaces the Office of the Coordinator, Status of Women, and a brand new organization, the Leaders' Debates Commission, was created by order in council in December.

The $2.5 billion in these estimates brings the total voted amount for this fiscal year to $123.6 billion. The government is also reporting an increase of $3.7 billion in statutory authorities, primarily for an adjustment to the public service pension account and for additional financial assistance for students.

In supplementary estimates (B), there are nine major items totalling $1.6 billion, 65% of the amount to be voted.

As supplementary estimates (B) are the last estimates for 2018–2019, we can now see the full picture of planned expenditures.

Turning to the 2019-20 interim estimates, these support the first appropriation act for 2019-20. As you will have noticed, interim estimates is, compared to other estimates, a brief document.

lt includes a brief summary and shows spending requirements for the first three months of the fiscal year. The document also provides a listing of grants, so that departments can make payments as soon as they are required.

With that, we'd be very pleased to answer any questions you have.

Thank you.

The last section of the document is the proposed schedules for the first appropriation bill of 2019-20. Through the 2019-20 interim estimates, the government is requesting $37.7 billion in budgetary expenditures and $14.3 million in non-budgetary expenditures for 122 organizations to cover operations for the first three months of the fiscal year. These expenditures will be included in the first appropriation bill, which will be introduced and voted on before the end of March.

We expect that the 2019-20 main estimates will be tabled in the House of Commons in the second week of April. As usual, the supply bill for main estimates will be introduced in early June, with supply expected to be granted before the end of the session.

Finally, I'd like to congratulate the committee on their report “Improving Transparency and Parliamentary Oversight of the Government's Spending Plans”. The views of this committee and others, along with the Senate, are very important and certainly we continue to digest the advice and recommendations provided.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We will start with questions immediately, and we'll commence with Monsieur Drouin, for seven minutes, please.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you very much, Mr. Chair.

I sincerely thank the witnesses who are here as well. I am really sorry about the delay. There were some important speeches in the House.

I am a member of Parliament for the national capital region, and collective agreements are important to me. They affect several members.

Under vote 30b, you are asking for $200 million. Can you tell us which collective agreement was signed, or why you are requesting this $200 million?

[Glenn Purves]

Thank you very much for the question.

That comes under TBS vote 30, the paylist requirements. This is specifically for the government to address financial pressures if outstanding collective agreements are concluded.

In this case, this deals with the CRA, the Canada Revenue Agency, and Public Service Alliance of Canada, and this is for 25,000 employees.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Normally, when Treasury Board undertakes negotiations, does it prepare a budget based on what people are asking for? How do you make these forecasts? Do you come here asking for additional funds once the collective agreements have been signed, or do you prepare budgets before the fact?

[Glenn Purves]

Thank you very much for the question.

Your question kind of bleeds into how we do fiscal management in the country. With any competing priority, there tends to be a formalized process. For most items, you have policy approvals, which are done by cabinet; a source of funds approvals done by the finance minister along with the Prime Minister; then the implementation, of course, which is usually passed through Treasury Board.

Many of these steps and these concepts are very similar. You can't go ahead with any kind of mandate without a sense of funding approval, so a lot of these decisions are taken centrally. They are taken into account with respect to the fiscal planning for the year that is done by the Minister of Finance as well as the Prime Minister.

There's no independent process to that. Certainly when we talk about collective bargaining, everything is done.... It's a case-by-case basis. I won't get into specifics of how those are taken. A lot of times they are based on sensitivity because they are part of a negotiating mandate, and sometimes those negotiations are ongoing.

Certainly it's something that is taken into consideration centrally from a fiscal management standpoint as with other competing priorities.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Great. Thank you.

On the writeoff of unrecoverable Canada student loans, I see an amount of $163.5 million. That's an amount that we see coming up again and again, year over year.

So I can explain it to my constituents who might have an issue with the fact that we're writing off 163 million dollars' worth of student loans, how do we manage that debt? Do we sell part of that debt to try to recover that debt? How do we do that from a government perspective?

[Glenn Purves]

Typically, with respect to student loan writeoffs, they're based on an aggregate stock of debt for student loans. When you get to the writeoff portion, it means that efforts have been taken in order to collect. Efforts continue to be taken in certain instances to collect outstanding amounts, but certainly, when we look at $163.5 million, as you rightly point out, compared to other years, it's roughly in a similar ballpark.

Just for comparison, in 2017-18, we have a writeoff of $203 million. In 2016-17, it was $178 million. In 2015-16, it was $176 million. In 2014-15, it was $294 million. It depends on the year and the vintage of the loan, but often steps are taken to recover, and if it's not able to be recovered, then—

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Yes. Is that process managed within government only or is it managed with the help of a third party organization? For instance, in the private sector they'll sell x amount of debt to a company that will specialize in trying to recover as much as possible. Are you aware or not?

[Glenn Purves]

It's the CRA that has been active with respect to trying to recoup that debt. What the recipe is with respect to contracting out and so forth, I don't have the particulars of that, but certainly the CRA is charged with responsibility on that front.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Great. Thank you.

[The Chair, Conservative, Tom Lukiwski]

That's it?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

That's it.

[The Chair, Conservative, Tom Lukiwski]

Mr. McCauley, you have seven minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Welcome back, everyone.

There's not much in the supplementary estimates, as you know.

There's the sum of $90 million for LNG. I'm just wondering why it's in vote 10 and what exactly that $90 million is for.

The reason I'm asking about vote 10 is that, traditionally, vote 10 has always been about $3 million to $5 million. This year we've seen it reach a quarter of a billion dollars. I'm just curious why so much is going into vote 10, as opposed to, say, Natural Resources, and what that $90 million is being used for.

[Glenn Purves]

Thank you, Mr. McCauley.

Specifically, the $90 million has to do with supporting that $40-billion LNG project on—

[Kelly McCauley, Conservative, Edmonton West, AB]

That's not an answer, though.

Why is it in Treasury Board? Why is it not in Natural Resources? Why is it in vote 10, and what precisely is that $90 million for?

[Glenn Purves]

Vote 10 is typically a vote that's used for circumstances when there's an announcement that has been made to continue to work through the details in terms of the implementation of the items.

[Kelly McCauley, Conservative, Edmonton West, AB]

No, I understand it's cross-governmental, but vote 10 traditionally—apart from $3 million or $4 million—has never been used in the past. Now all of a sudden we have a huge spike in it. We have $90 million in Treasury Board vote 10. Why is it not in Natural Resources? What's the $90 million being used for?

Marcia, you can answer.

[Marcia Santiago, Executive Director, Expenditure Strategies and Estimates, Treasury Board Secretariat]

The $3 million—