Government Operations Committee on Oct. 1st, 2024

[Jean-François Tremblay]

I would not use that as an excuse, to be honest with you. There are always section 33 and section 34, which we were talking about. The people who manage section 34 are the ones who make sure the documents are there. Under section 33, they never sign if there's no document. I think section 33 works well. That's what we see. When people see that the documents are not there, they send back the information and wait to get it. That's good.

With section 34, what we see is that, because of the number of different ways of managing programs.... In some places, they put documents. In other places, they don't put documents. In some places, they put more documents than in others or they wait until the end to put the documents. That's the part that actually worries me the most—the way we're not consistent on how we approach any Gs and Cs that we're managing across the full department.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

I read through the audit. It's certainly not the focus of the audit, but one of my concerns is accountability to the public, not just internally. There doesn't seem to be any focus on letting the public know about the work that's being done and the contributions that are coming through the grants and contributions agreements to the fight against climate change and to protection of the environment.

I wonder if there's been any thought about how to better focus the results part to let the public know about the work that's being done.

[Jean-François Tremblay]

There are a few things on this. All the Gs and Cs are public if they are above $25,000, so there's significant transparency on this. We do include a lot of those results in our report. We have to report on biodiversity. We have to report into the COP on biodiversity. We have to report, as you know, on an annual basis on where we are on the GHG emissions reductions.

Everything that comes from those programs and that touches those areas is actually included in those reports. I think there is reporting on this. The question is, is it easy for people to find it and to make those links?

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

What would be the answer to that?

[Jean-François Tremblay]

I think we can do a better job on this.

I would love to have one report that actually includes everything. At the same time, it could be quite long.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Okay.

In your opening remarks, and throughout the work, there's a nod to diversity, I guess I'll call it. I'll come back in another round to talk about the work with indigenous organizations.

I want to know whether the department has paid attention, because it's decentralized, to recruiting all the resources we have in Canada to fight climate change. In other words, are grants and contributions going to women-led organizations? Are they going to 2SLGBTQI organizations? Are they going to organizations led by racialized Canadians?

If we're going to defeat climate change, we have to enlist the skills and expertise and knowledge of everyone in the country. I don't see any reference, apart from indigenous people, to that broader diversity.

[Jean-François Tremblay]

For some of the programs I was looking at, more than 20% of the funding is going to indigenous organizations. If you look at the low-carbon economy fund, there is actually an envelope that is also directly for first nations, Inuit and Métis. That doesn't exclude them from the other envelope, in some cases. There is a constant effort to do that.

The audit raised it, because one issue that we haven't tackled very well is taking some of the flexibility that is provided by Treasury Board to have contribution agreements that could be different for indigenous people and allow more flexibility. That's something we are working on. In terms of partnerships, if you look at the guardian programs, for example, with indigenous groups, there's actually a significant partnership with first nations, Inuit and Métis in the department. It's actually increasing significantly.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

But my question right now—

[The Chair, Conservative, Kelly McCauley]

That is your time, Mr. Garrison.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Okay. I'll come back to this.

[The Chair, Conservative, Kelly McCauley]

Mrs. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

What would be the total amount in billions from grants and contributions at ECCC since 2015, please? I see in appendix B that the branch amount in fiscal year 2022-23 was $498.6 million. What would be the total amount since 2015, please?

[Jean-François Tremblay]

I can give it to you, if you'd like.

It really varies. For example, it's higher this year because there's the replenishment of the Green Municipal Fund, which you're probably aware is managed by the Federation of Canadian Municipalities and has been so managed for decades. You have $500 million coming that is transferred to the FCM, so it varies from year to year.

Just to give you a sense, it was $300 million in 2017-18, and it's $1.2 billion in 2023-24.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

If you could check back to 2015 and provide that document to the committee, it would be very much appreciated. It's so we can have an understanding of that.

Next, I'd like to talk about a list of companies that have been provided with these grants and contributions from ECCC.

Could you list some of them here, and then provide a complete list to the committee, please?

[Jean-François Tremblay]

Yes, we can produce the list.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Excellent.

Just in my overview, I'm seeing corporations such as Glencore for $10 million. I mean, this is a company that has a market cap of $38.237 billion, and yet we're giving them funding. I'm also seeing that Cornell University—a university that isn't even in Canada but in the United States—is receiving $9,000, at a time when we're really struggling to budget the books. Canadians are struggling, as well. The most difficult one I have to reconcile is the amount of $18,125,750 to iron ore and Rio Tinto, specifically, which has a market cap of $103.549 billion U.S. as of 2023.

The fact that these companies are receiving grants and contributions from the Canadian government, given our economic and fiscal situation at this time...not to mention the questionable conduct of some of these corporations, considering the objective of greening. For example, with Rio Tinto, there are concerns about them destroying cultural heritage sites and conducting business where droughts are occurring. Just this past September, I see they had to pay a $500,000 fine for violating the Fisheries Act. It raises some concerns for me when I see these on the preliminary list my team has put together, never mind a complete list.

If you could put together that complete list for the committee's review, I think it would be very useful for us.

My next question is, what percentage of the agreements were audited, please?

[Linda Drainville, Assistant Deputy Minister and Chief Financial Officer, Department of the Environment]

Thank you for your question.

In the first one we have done so far, the value of all the recipients' audits is roughly $150 million in Gs and Cs.

[Jean-François Tremblay]

I think she's thinking about the audit itself.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Yes, I'm seeing in the audit that a hundred agreements were tested, out of a total of 1,808. That would be about 5.5%. In the branch, and in only fiscal year 2022-23, this was an amount of $498.6 million. That would mean that only $27 million of the total amount was audited. That's not even upon the larger amount of the billions we don't know going back to 2015. Even in the sample size we see here today, only 27 million dollars' worth of these billions of dollars' worth of grants and contributions has been audited. It's very concerning—both from a numeric perspective and a total-dollar perspective—that even this small sample size has led to this amount of fault, as we've seen from the audit.

Thank you very much for your testimony today.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mrs. Kusie.

Mr. Bains, please go ahead, sir.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to the department officials for joining us today.

My first question is this: What are some of the merits and drawbacks of designing programs to operate primarily through a grants and contributions system, rather than other funding mechanisms?

[Jean-François Tremblay]

Oh, my God, that's a good question.

The advantage of contribution agreements and grants is that they bet on the expertise and innovations coming from partners, so they're not trying to build up a bureaucracy to do things internally.

For example, if you go with the Federation of Canadian Municipalities and you develop a green fund, you have an organization that has a direct relationship with municipalities, and you basically go with municipalities that know what to do on the ground to deliver adaptation, for example, rather than having somebody from Ottawa coming and saying, “This is what we're going to do.” That's the advantage of the contribution agreements.

The disadvantage is that you don't necessarily have a direct cause and effect, if you like. You're not the ones doing it, so you really have to choose a good recipient and make sure you agree on the nature of the partnership.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

The drawback may be that there's less oversight, or things of that nature. Is that correct?

Is there an overall savings component to that?

[Jean-François Tremblay]

It depends on what you're trying to do. In many cases, yes, there would be savings because you won't build the capacity internally. It sometimes costs more money to build that capacity within the federal government than it does, for example, in an NGO.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

From 2016 onward, could the department have developed programs with similar objectives through a funding mechanism other than grants and contributions? I think you explained that you can have a more hands-on approach, but are there other mechanisms in place where we do have a higher level of oversight? Is it just the audit?