Industry Committee on Nov. 30th, 2009

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Yes.

It hasn't been a discussion item, then?

[Guy McKenzie]

Are you talking about the CFDCs?

[A voice]

Yes.

[Guy McKenzie.]

No. We know that the program is due for discussion in the sense that, as we said for other programs, the timing for the authority is due next March, if I'm not mistaken. So at the beginning of April, a new set of criteria for programming and what have you will have to be decided, but as for whether they are to cease or to keep going, I don't know about that. I just know that the program authority has to be renewed.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Does anybody else want to add anything?

[Daniel Watson]

I would just say that the program authority needs to be renewed, as has been the case every five years for 20 years. There's nothing particularly new in it; it's always up for renewal at this period of time.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Rafferty.

We'll now go to Monsieur D'Amours.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Chairman.

Thank you all for being here this afternoon. We are certainly very pleased to see you.

What is disappointing, however, is that we expected that the Ministers themselves would be appearing, and that we would have another opportunity to put questions to them.

I am sure I don't need to tell you that you mustn't take our comments and questions personally. It's regrettable because, basically, we have been sent the messengers, rather than the people who should have been answering the excellent questions we have been asking from the outset.

Ms. Collette, the few questions I have are addressed to you. Let's talk about the program associated with the Strategic Community Investment Fund—called the Innovative Communities Fund, or ICF. Is it fair to say that this program is now in its final year?

[Monique Collette]

Thank you, Mr. D'Amours. We met in Edmundston.

As regards ICF, or the Innovative Communities Fund, it's the same situation as for the Community Futures programs. They have to be renewed every five years.

The five years are, in fact, almost up. The end of March is when the five-year period will be up.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Traditionally, when programs expire… You may remember SCIF, the Strategic Community Investment Fund, which was the predecessor of ICF--

[Monique Collette]

—yes, that was replaced by ICF.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

—yes, exactly, that was replaced by ICF. Discussions on renewal of the program began, not in March, but months before—in September, October or November.

We are almost in December. What I would like to know, Ms. Collette, is whether discussions have begun on renewal of the ICF program.

[Monique Collette]

Yes, in anticipation of renewal, as officials, we are always required to carry out program evaluations to see whether we have achieved the expected outcomes. Those evaluations are ongoing at this time. We should soon be in a position to provide all the information. That is especially the case for renewals, because a lot of programs will be ending. The Privy Council is now looking at the best process for renewal.

At our end, we are doing the preparation. So, you're right, Mr. D'Amours: we have been working on this since September.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

As you pointed out, a lot of programs are coming up for renewal. Recently, in departments like Canadian Heritage, delays in funding were being attributed to the fact that many programs are coming up for renewal. I know that is not your responsibility. You are doing your job. We'll see how the government does its job when the time comes to discuss these things. However, it is worrying to hear that many programs are now being evaluated because, in some cases, it could be difficult to continue funding them. We'll see whether the government is willing to continue along the same lines.

Ms. Collette, the Seed Capital Program for young entrepreneurs was created by ACOA in 1997. I am very well acquainted with it, having managed that program in my own area. The program begins on April 1, but the funding was only announced on October 9. Therefore, between April 1 and October 9, CBDCs in New Brunswick and the three corporations in Moncton, Fredericton and Saint John were unable to glean any information as to the status of funding under the Seed Capital Program. As I understand it, any funds that have not been expended by March 31, 2010 might be available later in 2010.

The purpose of this program is to help entrepreneurs start up a new business. But the best time of the year to start up a new business is between the 1st of April and September or October. You don't start up a business in November, December, January or February. It's a lot more difficult then. So, I find the situation somewhat ironic. This is a very good program that helps young entrepreneurs get into business. It is even more important in the midst of an economic crisis, when entrepreneurs are being asked to help kick-start the economy.

At the same time, the organizations responsible for administering and managing the program are being told that, unfortunately, there will be a slight delay in terms of letting people know whether they will receive money or not. As a result, they are being asked not to implement any programs for entrepreneurs, because they don't know what the money is going to be used for.

The announcement was actually made on October 9 in New Brunswick. Prior to October 9, there was a total vacuum. That is unacceptable, because the government has said over and over again that SMEs will be vitally important in kick-starting the economy, and that this has got to happen immediately, not 10 years from now. But this is not a new program. As I was saying earlier, it was first implemented in 1997 to help young entrepreneurs start up a business and create jobs in their community.

[Monique Collette]

Yes, and the program has been renewed several times since then, precisely because the results speak for themselves.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

As you say, it is a very good program, but it is impossible to guarantee funding when the organizations need it and, even worse, when SMEs and young entrepreneurs need it.

[Monique Collette]

You will have to give me some time to get you an answer. I don't really like being blindsided, as they say. In this case, I have no explanation. I believe in this program. I have renewed it many times. Of course, we are not talking about the same type of renewal we discussed earlier. Under no circumstances would the Agency question this program because it has yielded unbelievable results.

Could I ask you to forward the information to Mr. D'Amours regarding this particular program? I take this very seriously.

Thank you very much.

[The Chair, Conservative, Michael Chong]

You can forward it to the clerk, who will then distribute it to all Committee members.

Thank you, Mr. D'Amours.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

Thank you to our guests for coming before us today.

Of course, I'm sure that even the Liberal member across the table knows you're more than just messengers and knows that you do important work for Canadians. We thank you for that.

Let me lead off with a question about process. Sometimes—just from time to time—things get a bit political around here and numbers may be manipulated a little. I want to clarify the difference between when dollars are committed and when dollars actually flow under the two main programs we're talking about right now.

Maybe you could use those two programs as an example, so that when people are talking about numbers, Canadians know what they're talking about. Let us start with the commitment of dollars and when it happens, rather than when the dollars actually flow.

[Daniel Watson]

I can talk a little bit about that, and my CFO might want to jump in with some specific numbers from a Western Diversification perspective.

The critical thing to launch work in the type of role that we have is the certainty of knowing that somebody is going to pay the bills at the end of the day. The member referred earlier to the question of the importance of the supplementary estimates.

For Western Diversification, one of the critical pieces for us back before the summer was to make sure that Parliament had voted the credits necessary so that as Western Diversification we could go out and tell people that we would in fact back up the contribution agreements we were planning to sign with them. Once we sign an agreement--for example, for $300,000 to renovate a facility--they know they can go and do that. They know they can hire an engineer to design it and a contractor to start pulling together the workers. They know they can order supplies, because they know that our credit is good.

The way the transfer payment policy is set up in the Government of Canada, though, we generally don't just give people money right up front. We can do that in some limited circumstances. Sometimes if you're dealing with a smaller organization, that's necessary.

But often with municipalities or universities or other larger players, they know the rules very well. They go out and spend the money and bring the receipts back to us. We compare the receipts to the contribution agreement and make sure that it was in fact what the taxpayers of Canada had expected to pay for and what Parliament had voted for. If that's the case, then we sign the cheque and give the money to them.

But the thing that actually creates the work is that we're able to sign on the dotted line that says, “If you go and do this work, we will reimburse you at the end of the day”. In Western Diversification now, we've approved just under $100 million on the RlnC fund, and we've approved something just over $220 million on the CAF fund. In both cases, it's in the rough neighbourhood of 80%, I guess, in the world of CAF, of the total moneys we had available, and RInC is in excess of... Well, it's at just about 90% in the case of the CAF moneys. Again, that's for the total two-year period going forward as far as March 31, 2011.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Does everybody else agree with that? I imagine the same rules apply in all three agencies, don't they?

[Voices]

Yes.

[Guy McKenzie]

If I may say so, that's exactly the principle. It basically goes back to the Financial Administration Act. Under section 32, we commit toward certain work, and under section 34, we have to receive confirmation that the work is done, by receipts and other proof. There, it is section 34 that applies. This is the Financial Administration Act, or the guts of it.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Generally, then, it's safe to say that, especially at this time when we're talking about getting Canadians working, the work has begun before the money actually flows. Commitments are made, but in terms of actual cheques being cut, those cheques tend to follow the beginning of the work.

[Monique Collette]

Yes, because it's payable, but you actually must have done the work in order for us to issue the cheque, and as Daniel was indicating, with a commitment, you're good to go to the bank.