Evidence of meeting #3 for Government Operations and Estimates in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was loans.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jean-Yves Duclos  President of the Treasury Board
Glenn Purves  Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
Karen Cahill  Assistant Secretary and Chief Financial Officer, Treasury Board Secretariat
Marcia Santiago  Executive Director, Expenditure Strategies and Estimates, Treasury Board Secretariat
Baxter Williams  Executive Director, Employment Conditions and Labour Relations, Treasury Board Secretariat

8:50 a.m.

Conservative

The Chair Conservative Tom Lukiwski

I will call this meeting to order.

Thank you all for being here, particularly in such inclement weather.

Thank you, Minister. This is your first time appearing before this committee. I'm sure it won't be the last. Welcome.

Colleagues, originally I thought we could ask the minister if he could dispense with his opening remarks and go straight to questions.

However, my understanding is, Minister, that you don't have any prepared remarks but you do have an opening statement. In that case, we'll go forward with the traditional 10-minute opening statement, followed by questions.

With that, Minister, I'm sure you know the drill at committees by now. If you would care to open the meeting with your opening statement, perhaps right after you introduce your officials at the head table with you, then you may proceed.

8:50 a.m.

Jean-Yves Duclos President of the Treasury Board

Thank you, Mr. Chair.

I'm very pleased to begin, since I have many good things to tell you, especially on issues of concern to you.

First, I would like to thank the committee for inviting me today to discuss supplementary estimates (B) 2019-20. As you said, this is the first time I have had an opportunity to appear before your committee. I am very honoured to be here.

I am lucky to be joined by very good officials, who are supported by equally good teams from the Treasury Board Secretariat. On my left is Glenn Purves, assistant secretary of the expenditure management sector. On my right is Karen Cahill, assistant secretary and chief financial officer. A bit further to my left is Marcia Santiago, executive director, expenditure strategies and estimates. As you may have suspected, the three of them will make it their duty to answer any questions you consider relevant to this highly important issue. I am talking about the rigorous and effective financial management of the Canadian government's expenditures and investments.

In all, Mr. Chair, these estimates we are about to speak on describe a total of $5.6 billion in planned budgetary spending. Of this amount, I would remind you that $1.8 billion is already authorized to what we call existing legislation. Thus, with these supplementary estimates, the government seeks authority for $3.8 billion in additional voted spending.

These new expenditure spending plans will ensure the government continues to deliver on its commitments to Canadians in a number of important areas. These include significant investments in advancing reconciliation with indigenous peoples; in supporting the dedicated men and women of the Canadian Armed Forces; and in working with our partners across Canada to address climate change.

In keeping with the commitment we made in budget 2019, total funding of $919 million, which was allocated to Crown-Indigenous Relations and Northern Affairs Canada, will be used to write off the loans disbursed to first nations and Inuit communities, as well as to the Métis nation, for negotiations of comprehensive land claims. Those loans were disbursed to ensure that Canada's indigenous peoples would have the resources they need to participate in land claim negotiations in a meaningful and equitable way.

In many cases, however, the negotiation of those modern treaties, which is so important in today's context, has taken much longer and been much more difficult than expected. In addition, those loans have become a heavy burden for too many communities. In some cases, those loans came up to tens of millions of dollars. For small communities, that was a considerable obstacle to economic and social development.

So those debts will be remitted, and the communities that have paid back loans in the past will be reimbursed.

A further $588.3 million will be allocated to Indigenous Services Canada. These funds are required to support ongoing efforts to meet the critical need to improve indigenous child and family services, which is absolutely essential, including expanding prevention and early intervention programs. As I am certain this committee will agree, the transformation of these services is absolutely crucial to reconciliation and self-determination, to righting past wrongs and moving in the right way. It is even more critical to a new generation of indigenous children, when we remember that fewer than 8% of Canadian children under 14 are indigenous, yet these indigenous children account for more than 52% of children in foster care in private homes.

An additional $232 million to Indigenous Services Canada will provide for the ongoing implementation of Jordan's principle. These funds will help ensure that indigenous children across Canada have access to the same specialized health, education and social service supports as any other child in this country.

Regarding expectations, Canadians have clearly indicated numerous times that they expect all levels of government to take strong action in the fight against climate change.

The expenditure plans set out in these estimates include a continued $109-million investment in Canada's climate action incentive fund to help small and medium-sized businesses, municipalities, universities, hospitals and schools implement their carbon and pollution reduction projects, as well as their energy efficiency enhancement projects.

As all committee members probably know, the climate action incentive fund is funded through the products and royalties of the federal carbon pollution pricing system. Moreover, as per the commitment made in budget 2019, the estimates include a $950-million contribution by the Federation of Canadian Municipalities, which is more than double the capitalization of its green municipal fund to foster local green innovation across the country. Since its creation in 2000, that fund has contributed $862 million in support of more than 1,300 sustainable development initiatives in municipalities across Canada, and I specify, while preserving every dollar of capital provided by the Canadian government.

Therefore, this new investment will help launch a certain number of new funding streams, from the affordable housing innovation fund—we know how critical of an issue housing in Canada is in terms of affordability, economic development and the fight against pollution and greenhouse gas emissions—to the community ecoefficiency acceleration fund.

Mr. Chair, Canadians also expect that Canada's armed forces will be there when they are needed to protect the safety and security of Canadians here at home and abroad and to contribute to global security as partners in joint missions abroad.

That is the aim of the Government of Canada's defence policy, “Strong, Secure, Engaged”. To ensure that our armed forces are equipped to meet these expectations and these needs, the estimates that we have in front of us include a planned allocation of almost $500 million to the Department of National Defence. These funds will be an investment in the equipment, infrastructure and information technology systems that are absolutely essential to the operation and maintenance of a modern armed service.

A further $128.5 million will support current overseas operations. To be more precise, that will include the ongoing land force deployment in Latvia as part of NATO's deterrence mission in central and eastern Europe, and in Africa where members of the Royal Canadian Air Force are currently providing tactical airlift support to UN peacekeeping operations from their base in Uganda.

In terms of highlights of these estimates, I would also mention one other substantial item: $138 million to the Office of Infrastructure of Canada. The largest part of this amount, $106 million, relates to the completion of the Champlain Bridge Corridor project in Montreal that many of us know is a vital transportation link for more than 60 million vehicles each year.

In closing, I can only provide the highlights of the estimates in the time I have. The estimates and the relevant documents you have access to give all parliamentarians—and all Canadians—the possibility to help the Canadian government act responsibly by allocating public funding to important issues that matter to all Canadians across the country.

In keeping with our government's commitment to increase transparency to a level that enables me to meet the expectations of both Canadians and parliamentarians, I would like to point out that a substantial amount of additional information is also available online. In fact, it is not only available online, but is also presented in an increasingly accessible format to Canadians. That way, parliamentarians and Canadians could understand the impacts of our investments in our families, our children, our seniors, our armed forces, our infrastructure, as well as in indigenous peoples.

I look forward to a thorough examination of these estimates by parliamentarians of whom you are distinguished representatives today and to any questions they may have or you may have as we work together to invest in meeting the priorities, needs and expectations of Canadians.

Thank you, Mr. Chair.

I will now be happy to take any questions the committee may have.

9 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you very much.

We'll go to Mr. McCauley for six minutes.

9 a.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Minister, thanks very much for joining us today. Mr. Purves, Ms. Santiago and Ms. Cahill, welcome back.

I hope you have a good reign as president of Treasury Board. We look forward to you working with us to bring much better transparency and oversight to our spending process.

Speaking of transparency, I want to chat with you about vote 10. Traditionally, Treasury Board vote 10 has been about $3 million a year, up until the last two years where it jumped to well over a third of a billion per year—$368 million and I think $371 million. Of course, that's on top of the $7 billion vote 40 slush fund and the extra $5 billion in the table A2.11 slush fund from last year.

I want to read right from your web page. It says that vote 10 is “subject to the approval of the Treasury Board, to supplement other appropriations in support of the implementation of strategic”—and I want to emphasize that word “strategic”—“management initiatives in the public service of Canada.”

I want to grasp how we have this need go from $3 million, $3 million, $3 million, up to well over a third of a billion dollars. The example I'm going to use is in the estimates this year, we have $3.5 million for CRA under vote 10. Now CRA is on a two-year cycle. Last year they lapsed $180 million, so I'm trying to figure out, for a short-term project, why there's a need for $3.5 million out of vote 10 for something that's not strategic, for a department that is lapsing the money. They can't even spend the money that they have approved, and yet we have to fall back on money that's pushed in there under vote 10 .

9 a.m.

President of the Treasury Board

Jean-Yves Duclos

Thank you so much for this opportunity to provide a—

9 a.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Feel free to blame Minister Brison for that as well.

9 a.m.

President of the Treasury Board

Jean-Yves Duclos

No, I would never blame Minister Brison because first, he is such a nice person and a professional member of Parliament that you have had the opportunity to know far better and for longer than I did. Unfortunately I only came here in 2015, so I missed much of his career—

9 a.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

I know, I know.

But go on to the vote 10, please.

9 a.m.

President of the Treasury Board

Jean-Yves Duclos

As you will know as an experienced member of Parliament, these votes are central votes and vote 10 is particular, it's for whole-of-government initiatives, which are of course a challenge for the efficiency and the equity of government expenditures because they involve many departments. They are there to facilitate and coordinate the important investments that these separate agencies and departments need to implement.

They vary from year to year because of course they—

9 a.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

I'm going to interrupt you for two seconds. It doesn't vary from year to year. It sits at around $3 million. I'll tell you it was $3 million, $3 million, $2 million, $3 million, $3 million and $2 million. Then it goes up to $368 million.

It doesn't vary from year to year. It sits at around $3 million. In the last couple of years it has gone way out. We have had an issue in the past with a vote 40 and the money from the A2.11 in the budget lacking oversight. The PBO has been critical of this, as well as the previous PBO and the PBO before that. It takes away transparency from Canadians and the ability of parliamentarians to do their job of oversight of spending.

All of a sudden we have $370 million in vote 10 and it's used for a non-strategic purpose.

Why? Will we see an end to this practice with you as the president of the Treasury Board?

9:05 a.m.

President of the Treasury Board

Jean-Yves Duclos

There are three different things. First, as we were saying, these central votes exist to make sure Canadians get the best impact out of the investments made by the government. As I said, vote 10 in particular is there to facilitate that in the situation of a complex environment. Second, it is certainly the case that we—

9:05 a.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

You're not using vote 10 for that. In this specific example, you're using it for money for CRA, as it lapses hundreds of millions of dollars. I understand what you're trying to say and what the purpose is, but it's not being used for that purpose.

Will we see you as president go back to what has been traditionally, over the last 10 to 15 years, used for a specific purpose and not a balloon amount used as a slush fund or to cover other departments that cannot get their act together, for lack of better words?

I, and I'm sure my colleagues around the table, have been very vocal. We want to see transparency and we want to see the proper plans for this money before it goes out the door. Three and a half million dollars was for a department that cannot get its act together and lapsed hundreds of millions. It doesn't need money from a strategic cross-government fund.

I'll ask again, will we see a reduction to traditional levels and an increase in transparency for this?

9:05 a.m.

President of the Treasury Board

Jean-Yves Duclos

What we certainly will see—and need to see, as you are correctly stating—is as much transparency as parliamentarians need and deserve. In that context, parliamentarians will want and need to understand the evolution of these expenditures from year to year. We all understand that they can vary according to the specific challenges our country is facing.

In that context, however, I want to highlight again that the Parliamentary Budget Officer, other institutions and agencies across the government and you, as important parliamentarians, will want to provide your own input and formulate your own questions.

9:05 a.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Just very quickly, I'll advise you that one of the problems with vote 10 is that there is no legally binding control over that. Once the money is approved, it can be spent anywhere. That's one of the problems we have.

I think what we express to you is probably of concern to the opposition. We would like to see an end to vote 10 being used as a slush fund. I would probably expect that, if it's presented as the main estimates with $200 million, $300 million or $400 million, as the government has tried to do in the last two years, this committee will vote it down and reduce it as we are able to.

9:05 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Unfortunately, you'll have to wait for your answer, if there is one, Minister, because we're completely out of time.

We're going to go now to six minutes for Mr. Drouin.

9:05 a.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Thank you very much, Mr. Chair.

Minister, welcome to our committee.

We wish you only success going forward. We really look forward to working with you, regardless of how this committee can inform the decisions you will have to make.

One of the things the committee has previously done has been to look into the issue of estimates reform and the alignment with the annual budget. As you know, there was a two-year pilot project.

Why has the pilot projet sunsetted this year?

9:05 a.m.

President of the Treasury Board

Jean-Yves Duclos

Thank you very much, Mr. Drouin.

By the way, I would like to acknowledge your important work once again.

Here, the key words are “effectiveness” and “transparency”. As we know very well, there is a problem that goes back to the beginning of Confederation, I believe. It is a problem of alignment between the budget process and the estimates process. That leads to a disconnect between the information you have access to when it is time to consider estimates and the tabling of an annual budget, such as that of the Department of Finance.

That disconnect has been explored over the past few years, including through the pilot project you mentioned. We have learned important lessons from that pilot project. In parallel to those lessons learned, we have also implemented significant measures to increase both effectiveness and transparency.

By the way, I want to mention the directive on results that was submitted not even two years ago, in 2017, which increases transparency, so it makes is easier for you to understand those two work methods. We call it the exercise method for the Minister of Finance, and the accountability method for the estimates process.

In English, this is called “accrual and cash”.

It cleary creates difficulties in the work you wish to do as parliamentarians.

As you know, we have implemented a database, GC InfoBase. It is an extraordinary database that I invite you to use fully. It gives increasingly transparent and accessible details, not only on expenditures, but also on implications in terms of the Canadian government's resource management. We also have executives who are working both on departmental planning and results. I actually submitted the departmental results for 87 departments and agencies yesterday.

So there is a lot of information that supports the lessons we have learned from the pilot project.

9:10 a.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Yes, one of the lessons we have learned has to do with vote 40. Opinions are not unanimous on that, even among academics who specialize in the area.

What has been done to ensure the transparency and accountability of parliamentarians and departments in terms of vote 40?

We did not use it in 2019. Is that because we learned a lesson?

9:10 a.m.

President of the Treasury Board

Jean-Yves Duclos

Mr. Drouin, thank you for these relevant and well-informed questions.

As everyone knows, in the first year of the pilot project, vote 40 was used to enable committee members and parliamentarians to find out the results of the reconciliation between the budget process and the estimates more quickly.

Parallel to that, there is now a reconciliation table every time a budget is tabled, which increases parliamentarians' ability to obtain transparent information.

In the second year, following recommendations from parliamentarians, vote 40 disappeared. That was an excellent development that led to a subdivision of much more useful data in the reconciliation table between the Finance Minister's budget and the estimates.

Now, parliamentarians have the responsibility to guide us through the next steps. A number of projects have been implemented over the past few years, and we are very proud of that, especially GC InfoBase and the reconciliation table. An increasing amount of information is available in an accessible format to all Canadians.

We want to and have to do more, and we are counting on you to help us.

9:10 a.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Thank you very much, Mr. Duclos.

The mandate letter from the Prime Minister set you the task of modernizing the federal regulatory framework to improve transparency and lighten the administrative burden.

Can you explain to us what is happening with that? How far along are you on that point of your mandate letter?

9:10 a.m.

President of the Treasury Board

Jean-Yves Duclos

Thank you, that is a very relevant question.

9:10 a.m.

Conservative

The Chair Conservative Tom Lukiwski

I'm sorry, Minister, but we have only a limited amount of time for questions.

9:10 a.m.

President of the Treasury Board

Jean-Yves Duclos

How much time do I have?

9:10 a.m.

Conservative

The Chair Conservative Tom Lukiwski

You have about 20 seconds.

9:10 a.m.

President of the Treasury Board

Jean-Yves Duclos

I will say two things quickly.

Yesterday, I met with representatives of the Canadian Chamber of Commerce to explain to them what we are currently doing in that area and what we will continue to do with them. There is an external committee and a new policy on regulations. We have stronger exchanges with the provinces, with the United States and with Europe.

We have targeted a series of regulatory reviews and have implemented plans with the support of the Chamber of Commerce and other key partners across the country. There is also a regulatory innovation centre that will be established very soon.

I could add a number of other things, but there is unfortunately not enough time.