Industry Committee on Nov. 30th, 2009

[Voices]

Oh, oh!

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

I want to go back to a conversation to clarify some facts. From time to time, a Liberal MP will stand up in the House of Commons in question period and say that the stimulus plan has not created one single job in Canada. I would argue that it has actually created several jobs right in the Liberal leader's office.

But what I do want to talk about here is effectiveness. I'll turn to my friends from western Canada, if I may, and again ask them to talk about the impacts they're seeing in communities where the government is making an investment. Are there specific examples from the CAF program or the RInC program, particularly in terms of employment? I know there's the long-term benefit of the work being done, which is going to have an impact on the infrastructure that Canadians are going to be able to use, but I want to talk about job creation and the work being created, the work being done on these projects.

Could you point to some specific examples of where you're seeing government investment make an impact?

[Daniel Watson]

Yes, certainly. Thank you very much for the question.

So far in the projects we've approved under the CAF program, 51,000 person-months of employment have been created, which we think is a significant volume. Those are the numbers reported to us by the proponents of these projects. We've obviously gone through them with a fine-tooth comb to see whether we think that's the case.

Under the CAF, which is a smaller program, again, it's a number that we think is substantial. Just about 24,000 person-months of employment have been created under that program, for a total under the two programs, in the last five months when we've been putting out approvals on these things, of just under 75,000 person-months of employment.

While those things are important, I would provide a couple of pieces of colour commentary. One of the things we're finding in these two programs is that we're sometimes dealing with a whole clientele that we haven't dealt with before. What's interesting is the number of arenas and facilities we're fixing up that are called centennial facilities, things that were built to celebrate Canada's centennial in 1967. A lot of those things haven't had a lot of attention since then.

We look at the fact that we're doing a lot of this work in rural Canada. The impact it has on these communities is significant. Not only does it mean that people can actually live and work near their families and their homes, it also means those communities, in a bunch of cases, reduce the amount of energy it takes to actually run those arenas. When your annual budget is next to nothing and 90% of it is spent on fixing up roads and picking up garbage, the decision on an extra couple of hundred dollars or a thousand dollars a month for an arena can sometimes be the difference between continuing to make it functional and it not being functional.

It's one of the things we found that is very different in this program. While the employment numbers are certainly very important, one of the things we're getting comments on from people is the impact it's having on their day-to-day lives.

It's a different story from what we get with our normal projects, and I think it's something that all of the staff who have had the opportunity to deal with these things have found. We normally chase after CFOs, business managers, and so on, for information. We have these really fascinating stories, like staff being told by a president of a local curling association who has a $12,000 project to replace the curling rink, “I have to feed my children now, so you'll simply have to wait until next week”. It talks about where we're having an impact. It's a different place from where we normally go.

We know that these projects, when you get into these small communities, have an impact that's completely disproportionate to even some of the larger projects we do in cities.

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

You talked about leverage. I think that's one of the important things too. We talk about the numbers behind the program, the dollar amounts the federal government is committing to these programs.

I'll turn to the other two agencies. Maybe they can speak to the issue of how, when we look at government spending, we're talking about the dollar amounts the federal government is investing when we look at these estimates. Of course, when we're talking about the federal government investing, we're talking about the Canadian taxpayer investing.

Could you talk to the issue of leverage? How much money is being leveraged, particularly in the two programs we're talking about, or in other programs? Can you give some examples in terms of how that works?

[Monique Collette]

I can take a shot at that. For example, in the case of RInC, the program is organized so that a project must be funded one third, one third, and one third. This means that for every third the federal government puts in, two-thirds gets added to the project.

On CAF, it depends. We administer CAF in ACOA according to the terms and conditions of our program. All the programs require participation and that participation can be anywhere from 50% to... I'd say it's probably averaging 50%.

So there's a lot of leverage involved in the projects. Even in the case of one third, one third, and one third, some people put in more. Some communities put in more money.

[The Chair, Conservative, Michael Chong]

Thank you very much, Madame Collette.

Briefly, Mr. McKenzie.

[Guy McKenzie]

I have just received those numbers. Do I have time?

[The Chair, Conservative, Michael Chong]

Oui.

[Guy McKenzie]

For CAF, with the Quebec-Canada agreement, we put in $115 million and they put in $115 million, so it's one for one. On RInC we put in $113.2 million, the province put in $111.2 million, the municipal government $166.8 million, and the native community $2 million. It's much bigger for RInC if we ever do it....

[The Chair, Conservative, Michael Chong]

Okay.

Thank you.

Ms. Mendes, please.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

I would like to begin by thanking you for being here today, and would just repeat what my colleague, Mr. D'Amours, was saying earlier. We very much appreciate your being here and the information you are able to provide. However, we would have liked to meet with the minister responsible for the portfolio.

I would like to start with an observation. My question is not addressed to any one of you in particular; it is more of a general question. In the estimates tabled at the beginning of the year, your three agencies had pretty similar budgets. CED was somewhat different in that regard, because it was given additional moneys for NGOs.

Now you are requesting supplementary funding. ACOA is requesting an additional $6 million, compared to what was originally budgeted, CED is requesting an additional $9 million and Western Economic Diversification Canada is requesting an additional $60 million. Can someone explain the difference for me?

[Daniel Watson]

Yes, I can explain that. In estimating additional expenditures, we are seeking to be given the funding we need to comply with contribution agreements that we expect to sign between now and the end of the year.

When the budget was first passed in the spring, the budget funds were not yet in our accounts.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Yes, I fully understand that, Mr. Watson. That is not my question. The three agencies had approximately the same budget, with relatively minor variations. However, the additional funding you are requesting is very significant.

Why do the other two agencies not have the same requirements? The economic recovery plan was not in place for them either, when the estimates were developed. That intrigues me. Why is there such a large amount here for you, compared to the other two agencies?

[Daniel Watson]

It's because of the number of projects to be funded. The total amounts for the department were basically calculated on a per capita basis for Canada as a whole—

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Yes, exactly, it was on a per-capita basis. Why is that? The per-capita calculation did not change; there has been no sudden population increase in Western Canada in the last five months.

[Daniel Watson]

The total amounts have not changed at all. The question is really how much money we will need between now and March 31. If we had a lot more money available, we would not necessarily need the amounts you see in the Supplementary Estimates. However, we don't have that money. As a result, we have to come before Parliament to request that these funds be made available to us, because otherwise, we will not be able to meet our commitments under contribution agreements between now and the end of the year.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

That still does not answer my question. At the beginning of the year, you had set aside $423 million for economic development.

[Daniel Watson]

Yes, but that did not include all the funds under the Economic Action Plan.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Could I ask one of the other agencies to answer my question?

In your case, did that include—

[Pierre Bordeleau]

Under the Supplementary Estimates (A), we recommended funding for CAF.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Yes, $105 million.

[Pierre Bordeleau]

But that did not necessarily happen at the same time. They do not appear at the same time. We knew we would have certain requirements related to CAF in the Supplementary Estimates (A). We requested our funding—

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

I am going to interrupt you, if you don't mind. We are talking about the initial budgets—the Main Estimates. I am talking about the estimated figures that appeared in the Main Estimates, right at the beginning. The amounts for the three agencies were similar, with some minor differences—$10 or so million here and there. However, in the Supplementary Estimates (B), there is a significant difference for WED, which is asking for an additional $60 million. Yes, CED received $101 million—initially, it was $105 million according to the Supplementary Estimates (A). It's that $60 million amount which I find strange.

How did we go from relatively similar initial budgets to such a major discrepancy? If this is approved, Western Economic Diversification Canada will have a final budget of $485,810,000, compared to $446,300,000 for CED and $415,434,000 for ACOA. There are major differences between the budgets. That is my question.

[Daniel Watson]

That is the amount of money we expect to use this year. The proportions are still exactly the same overall—the same as they were in the spring. The question is when that funding will be used. The proportions presented at the beginning of the year have not changed at all; the amounts allocated for each region of Canada remain the same. The real issue relates to timing—in other words, when those monies will actually be spent.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

I am sorry—