Government Operations Committee on April 19th, 2016

[Renée LaFontaine]

Right. It was a combination an assessment, as Brian said—this was done in close consultation with all departments—so an estimate of the funding that departments were building into their own training budgets for certain common courses that were high priority, and that funding was actually, I'd say maybe two years ago, transferred from departmental budgets into the Canada school, and then through these main estimates—

[Kelly McCauley, Conservative, Edmonton West, AB]

So it's no longer getting transferred over.

[Renée LaFontaine]

No longer. That was sort of a catch-up, one-time thing, and now they're being appropriated through the estimates on a regular basis.

Does that answer your question?

[Kelly McCauley, Conservative, Edmonton West, AB]

No. It doesn't.

[The Chair, Conservative, Tom Lukiwski]

But you're quite right about one thing, that you were out of time.

We'll go now to Mr. Grewal for five minutes.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you to our witnesses for coming today.

My question is going to be around the Canada Revenue Agency. There are a lot of people in the news, and I guess we've all been paying attention to the Panama papers and the recent KPMG and CRA issues. The government's made a commitment to increase the effectiveness of the CRA by giving it more money to hire more compliance officers and auditors. And just yesterday, or two days ago, it was in the news that there's about $38 billion outstanding that still has to be collected. We're estimating an increase of $280 million this year, which is about 7.4%. Are there any studies you know of regarding the CRA's budget having been increased or decreased and the corresponding revenue that comes into treasury?

[Brian Pagan]

The funding provided in budget 2016 to the Canada Revenue Agency to enhance compliance is a result of what I believe is a proven track record at the agency to utilize investments made by the government to enhance compliance and ensure stronger compliance with Canada's tax laws.

Budget 2016 makes specific investments. This has been occurring over the last number of years. The CRA has been able to demonstrate to the Department of Finance how through incremental investments in different types of audits that they do—medium and small enterprise, large international, offshore, GST compliance, personal income tax, the whole range of their tax suite—they've been able to provide information that supports how adding capacity, adding auditors, enhancing the compliance process has generated incremental revenues from a baseline.

Finance takes that information and does the calculations about whether that return on investment is reasonable. Generally it is. If you can invest a dollar and get two back it's a good deal, and they continue to work closely with the CRA to make sure those incremental revenues are realized.

These are discretionary investments that the government makes. The government makes these investments because they're satisfied they are getting a return in this area.

[Raj Grewal, Liberal, Brampton East, ON]

It would be interesting to know if there's a return on investment there. Of the $280 million we're going to invest in the CRA, how much are we going to collect in additional tax? For every dollar invested you get a $1.05 back is what I'm saying.

[Brian Pagan]

It varies by their business line. Of course, there can be diminishing returns as we make more and more investments in these areas, but the short answer to the simple question is there evidence to support this: there is. It's part of every budget ask from every department. They need to be able to demonstrate a result or some value to the government.

[Raj Grewal, Liberal, Brampton East, ON]

On the infrastructure projects, the minister said the other day that we're open to adopting the formula, but we're still open to P3 projects. What's the accountability and the tracking on the P3 system? It has been inherently flawed in previous years. Can you comment on the current P3 program, and where we could leverage by changing it to ensure that money gets invested and there's a return on that investment?

[Brian Pagan]

That's a very complex question. In response to an earlier question, I think a starting point would be to get a listing of the P3 investments that have been made. Then with that listing the committee, myself included, would be in a better position to speak to the value of that tool in each case.

Again, what the minister made clear is that we're lifting the mandatory screen, but the experience to date suggests that we have been able to move forward with a number of important infrastructure projects using the P3 model that have saved us money over time.

The idea going forward is to make sure that we continue to avail ourselves of that tool, but not make it mandatory. That we use it when it makes sense and when the conditions exist to support that project, whatever the winning conditions are for P3 investments.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Mr. Blaney, you have five minutes.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Thank you, Mr. Chair. I am going to share my time with my colleague.

I would just like to point out to my honourable colleague Mr. Grewal that some excellent public-private partnership projects were carried out in the last decade, especially in public transportation. These are major projects that allow communities to enjoy the benefits of mass transit.

You will have your chance to talk about them. I waited my turn.

[Raj Grewal, Liberal, Brampton East, ON]

Did you consider that low-hanging fruit, Mr. Blaney?

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Yes. I do.

Can you tell us a little bit about a budget increase we made not so long ago, actually in the last budget of our government, for the RCMP? They have an annual budget of $2.8 billion. They are expecting an increase.

I understand there's been a change between vote 1 and vote 5. Can you tell us exactly how they changed the calculation, the presentation of their expenditure, the operating versus capital? Could we have an overview of the budget of the RCMP, please?

[Brian Pagan]

Thank you, Mr. Blaney. There are two parts there.

First of all, with respect to requirements from RCMP in vote 1, their operating, versus vote 5, their capital expenditures, every organization that has capital requirements above $5 million has a separate capital vote, and that is a starting point.

Secondly, what we have done over the last couple of years is worked with departments to ensure that they are using that capital vote in a consistent way, in accordance with our TB policies and accounting rules, so this is really a question of taking some money that had previously been under their operating vote. It was quite properly part of their capital expenditures and should be recorded in the capital vote.

That reflects the increase for the RCMP.

As we know, budgets of successive governments will make investments in the area of security and the well-being of Canadians, so there have been announcements in recent budgets with respect to RCMP programming. With respect to federal costs for contract policing—this is our policing obligations in the provinces—there is an increase of $37.4 million in vote 1 this year for the RCMP to respect those federal obligations for contract policing.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Okay. I believe there is also some investment in British Columbia.

Thank you.

[Kelly McCauley, Conservative, Edmonton West, AB]

On vote 1, back to the school of public service, did we look at instead of doing it in-house, so to speak, sending it private to analyze the cost? Just quickly, for the $83 million, how many people will we train in a year for that investment?

[Renée LaFontaine]

Unfortunately, I don't have that information with me.

[Kelly McCauley, Conservative, Edmonton West, AB]

Just under Parliament as well?

[Renée LaFontaine]

No, it's not. But we could follow up on that exactly and get back to you on that, because that should be very clearly mentioned in their RPP.

[Kelly McCauley, Conservative, Edmonton West, AB]

What about the analyzing, sending it out for training rather than doing it internally?

[Brian Pagan]

That's a terrific question, and that analysis was part of the study going forward.

There are simply some aspects of public service work that are unique to the public service and it is hard to find training at universities or external third parties, but where that training does exist, the public service does avail itself of that. Language training is an example.

[Kelly McCauley, Conservative, Edmonton West, AB]

So the $83 million is solely government focused, not done outside.

[Brian Pagan]

Right. Primarily it is about our values, our competencies as executives, the technical requirements around controller general, financial policies, the staffing process for the government. It is that sort of training, very unique to functional communities within the government.