Industry Committee on Nov. 30th, 2009

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

Okay.

[Guy McKenzie]

If you look at the genesis of section 34, you'll see that this is where we look at value for money. To be able to evaluate value for money, we need to have proof that the work took place. We need invoices and other different kinds of proof.

[Daniel Watson]

To use an analogy, it's not unlike getting your first job. They say you're hired, you work for two weeks, and then you get a paycheque. You don't get a paycheque on day one, unless you're really lucky.

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

My next question is specifically for ACOA, although it would apply to everybody. I've just been reading a CBC news article from today that says “Charlottetown grabs big chunk of stimulus cash”. It's comparing the spending in four ridings of P.E.I.

I guess the question that comes out of this, which probably relates to ridings across the country, is in relation to boundaries, be they political boundaries or whatever. Maybe you can comment on the statement that needs and benefits don't always follow political boundaries. Is that a fair assessment?

For example, I'm thinking about my going out and doing an announcement in Edmonton on a project on the Anthony Henday Drive. It's outside my riding, but is of tremendous benefit to the people in my riding who drive on that road every day.

I'll ask the ACOA folks to speak to the specific example of P.E.I. in terms of that statement that needs and benefits don't always follow political boundaries.

[Monique Collette]

No, exactly. This is a very good example.

It shows that CAF, RInC, and infrastructure are really application-driven programs. This is probably more true of CAF and RInC than the infrastructure program, but they are really application driven. When we do the evaluation, there's a full due diligence assessment done on each and every application. In there, you absolutely have to find the contribution of the municipal government, for example, or the provincial government.

There are certain criteria for the quality of the project, and is the project construction ready? That's why you see some communities moving forward. They've obtained the participation of all parties and they're ready to roll. That is in fact how the projects are approved.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Lake and Madame Collette.

Mr. Bouchard, please.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman.

I, too, would like to thank our witnesses for being here this afternoon.

I would have liked the Minister of State (Economic Development Agency of Canada for the Regions of Quebec) to be here today. Under the circumstances, I will address my questions to Mr. McKenzie.

My question relates to the Community Adjustment Fund. I believe this program is in its second year. Funding of $1 billion was announced for the country as a whole, including about $217 million for Quebec. It has been reported in the media that half of the funding went to ridings held by Conservative MPs—in other words, government members. I would like to know what the process is with respect to the companies and applications.

If a recommendation is negative, does the minister have the discretion to ignore that recommendation?

[Guy McKenzie]

Under the Economic Action Plan which you refer to, and which was announced approximately one year ago, my colleagues are able to deal directly with municipalities, school boards or other such entities; however, because of Bill M-30 which is in force in Quebec, the federal government and municipalities cannot work directly together. This is the only province where that is the case.

I am sure you understand, Mr. Bouchard, that under the circumstances, we had to meet with our Quebec colleagues. When the time came to implement the program now known as CAF-Forestry, we worked hand-in-hand with the Quebec Ministry of Natural Resources and Wildlife. Under RInC, the Recreational Infrastructure Canada program, we collaborated with the two ministries with responsibility in that area, the Ministry of Municipal Affairs and the Ministry of Education, Recreation and Sport, in terms of the school boards.

As to whether there is a connection between the funding that was provided and what I might call politically selected ridings, I can tell you that, in our case, we are not responsible for implementing the program. You are well acquainted with infrastructure programs in Quebec. The same logic applied to those negotiations. We basically just used the exact same agreements that were in place and adapted them to our needs. However, Quebec is overseeing the program and is therefore responsible for project selection. As long as they are consistent with the program framework… What we look at is compliance. It must be identical to what is required under the Infrastructure Canada Program.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

So, that means that the minister has no say. It's the Government of Quebec implementing the program through its own ministries. I would like to put the same question to you again, in terms of the process you follow for programs that fall directly within CED's purview. Can the minister overturn a negative recommendation?

[Guy McKenzie]

As my colleague from Atlantic Canada was explaining earlier, CED's programs operate primarily at the grassroots. The applications we receive come from non-profit organizations, SMEs and a variety of other non-profit agencies. The programs are analyzed based on the program framework, in accordance with the authority given us by cabinet and the Treasury Board. When the file is sent to the minister for his signature, it includes a recommendation. The minister has the option of following that recommendation or not. That is his privilege, given that we only have delegated powers. In terms of signing off on the files, we do not have delegated signing authority in that regard. We submit the files to the minister, and the minister makes the final decision.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

In 2008, the then Minister for the Economic Development Agency of Canada for the Regions of Quebec sent out letters—since you have referred to non-profit organizations—to a number of such organizations, saying that he was terminating their grant. In some cases, the termination date was 2010, and in others, it was 2011.

I would like to know whether the decisions made by the former minister have been reviewed.

[Guy McKenzie]

The minister gave instructions to establish a private company/NPO ratio that would be more consistent with what he wanted. Also, transition plans were also given to some types of NPOs, which then had three years to find funding.

That three-year period is ending for some organizations next year, whereas others that demonstrated, with supporting evidence, that they needed the funding, and did receive it.

There are different categories. Some organizations are coming to the end of their funding period, whereas others continue to receive funding.

[Manon Brassard]

I would just like to say that, under the circumstances, Minister Lebel did review the two-year process. So, organizations which received money and demonstrated that they are able to achieve the results they pledged to achieve, and which still require money, are likely to continue to receive assistance, as long as they can prove that their projects are relevant. A project must be of some utility in their community and the organizations themselves must demonstrate that they can achieve the desired results.

[The Chair, Conservative, Michael Chong]

Merci.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

I have one quick question.

[The Chair, Conservative, Michael Chong]

Go ahead.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

In my riding, we have an organization called the Société d'intervention urbaine. It received a letter stating that its funding would end in March of 2010.

I would like to know if all the Sociétés d'intervention urbaine received the same notice. In other words, are we to understand that no Société d'intervention urbaine will be receiving government funding or assistance?

[Manon Brassard]

We would have to look at that specific case.

[Guy McKenzie]

Would you like us to do the same thing we offered to do earlier? We do not know the answer off the top of our head. If you like, Mr. Bouchard—

[The Chair, Conservative, Michael Chong]

Please forward the answer to the clerk.

[Guy McKenzie]

Yes, we will send it to the clerk.

What is the name of the organization, Mr. Bouchard?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

It is the Société d'intervention urbaine Chicoutimi-Jonquière.

What I want to know is whether all the Sociétés d'intervention urbaine across Quebec are receiving the same treatment, meaning that all their funding will be withdrawn starting in March of 2010.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Bouchard.

Could you please send the answer on to the clerk, who will pass it on to committee members?

Mr. Warkentin, please.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chair. I appreciate the opportunity to ask questions.

Thank you for coming in this afternoon. We appreciate your testimony.

I wanted to catch up, Mr. Watson. You started giving a bit of feedback. It was my colleague, Mr. Sukh Dhaliwal, who had been asking some questions related to Community Futures. You started to tell a good story about Community Futures having to pay back additional amounts because the repayment from small businesses had been higher than what they'd expected.

My Community Futures in the community of Grand Prairie is an exceptional one. They've had some exceptional results. It's a good news story. I wonder if you could tell us a little about the repayment of Community Futures across the country. Is Community Futures only under WD?

[Daniel Watson]

Western Diversification works with the Community Futures organizations in western Canada. There are other organizations in other parts of the country that work with them. When I was talking about the repayment, I was referring to another of our partners that does a type of work similar to the CFDCs' work. It was a Women's Enterprise institute in two provinces that actually had hit the ceiling for their earnings based on their loan portfolios, so they are technically required to start repaying the Government of Canada on those fronts.

As with all organizations, there is some unevenness in the CFDCs. Some have done extraordinarily well. They have developed strong portfolios and have been a significant force in their communities in making good loans, getting repayment from those loans, and growing those funds.

It's not uniform, but the organizations that people know well in rural Canada have been around for almost 25 years, ever since the mid-1980s when they were created. They provide services to small and medium-sized businesses. In many cases, they find information that you might have to run all over the place to find. In rural settings, that can take up an awful lot of time that is better spent doing business.