Industry Committee on Nov. 30th, 2009

[Mike Wallace, Conservative, Burlington, ON]

Does anybody else want to answer?

[Pierre Bordeleau]

Yes. We're expecting some small items in supplementary estimates (C).

[Mike Wallace, Conservative, Burlington, ON]

Now I have my final question, which I ask absolutely everybody. If you had a magic wand, what would you do differently in terms of budgeting? Or would you do anything differently? Are you happy with the way the system works?

[Jim Saunderson, Executive Director, Finance and Corporate Management, Western Economic Diversification]

I'll take a stab at that. I think you're quite right that this year was a little exceptional, certainly in the case of Western Diversification. Roughly two-thirds of the amount in our supplementary estimates fee is there because of the economic action plan, and that's a very special circumstance.

The government recently has moved to actually having three supplementary estimates: (A), (B), and (C). Very recently, there were only two. From an administrative viewpoint there are some advantages to that, because that allows us to bring moneys--that the government and Parliament of course vote on--into play sooner, to manage our cash more effectively, and to put programs into place a little more quickly.

[Mike Wallace, Conservative, Burlington, ON]

So as a member of Parliament I shouldn't be worried that you're underestimating your mains, because you know you have three more shots at it.

[Voices]

Oh, oh!

[Jim Saunderson]

No, but I think this case is a good example for the timing. It was a year ago exactly that we were preparing our main estimates for the current fiscal year, and of course the budget was not read until January. So when we were doing the mains, we could not add in what became the economic action plan.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Wallace, for those good questions.

Next up is Mr. Rafferty.

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

Thank you, Chair.

Welcome, ladies and gentlemen. Thank you for being here.

Mike, as always, thank you for your very insightful questions. You did steal one of them from me, so I'm going to have an addendum to that.

I have just a quick question for the chair. I noticed that in the orders of the day that Northern Ontario's development agency is not listed here. Is that an oversight?

[The Chair, Conservative, Michael Chong]

No, Mr. Rafferty, it wasn't. The supplementary estimates (B) that were sent down to us from the House did not contain any appropriations for FedNor.

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

Oh, it's FedNor, not Northern Ontario's development agency. Sorry.

[The Chair, Conservative, Michael Chong]

Neither did they contain any supplementary estimates for FedDev Ontario, the agency for southern Ontario, so those two ministers and their functionaries weren't called in front of us today.

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

Thank you, Chair. I was just trying to make a joke.

I have a bunch of questions.

Mr. Watson, you talked about pine beetles. In early spring, I had a question for the Minister of Industry about a budget line in 2006 that continued, but the money had never been spent. It was $200 million that was set aside for the pine beetle problem. I'm just paraphrasing now, but his reply, when I asked where the money was and why it wasn't spent, was that this government keeps its promises and the money will flow.

So here's my question for you: is the money there and how much of that $200 million has flowed so far?

[Daniel Watson]

Thank you for the question.

I'll let my CFO speak a bit to the actual volumes of the money.

What I can say is that we're winding down to the back end of that program now. We did a couple of things that I think are very important in the context of this program. At the beginning, there were a number of questions.

Just as one example, a number of first nations groups in British Columbia wanted to make sure that they were engaged effectively in the work related to protection from the mountain pine beetle. So one of the things we did was to actually spend a fair bit of time working with those applicants to make sure that they had structured their applications in such a way that they met the criteria and in such a way that they would get a solid rating by the time they went through the process. At the end of the day, we ended up having in excess of 20% of the total volume of work go to first nations-led applications as a result of that.

This is one of the examples where I suppose there might have been a quicker way to do it, and maybe some of those applications would have gone to some other players in that process, but we took seriously what people said about the importance of community members actually doing a lot of that work and making sure they had an opportunity not only to do that work, but also to develop the skills for the future.

We're quite pleased with the outcome of a number of those application processes, because what's been proven to all concerned is that the people who were successful actually can compete with anybody now, I think it's fair that was not obvious to all concerned when we started out.

So there were some things like that, as well as others related to weather or to availability of labour and such things, that slowed things down. We're now towards the very back end of actually delivering on those projects and making sure they're completed.

My CFO here may be able to provide some more specific numbers, and if we don't have them right here today, we'll certainly get them to the committee clerk.

[Jim Saunderson]

Thank you, Daniel. I'll certainly try to add a little bit of detail.

There was a $200-million mountain pine beetle response, as you point out. About $150 million of that was administered by Natural Resources Canada; I can't really speak to that portion.

But with regard to the roughly $50 million that went to our department, there were two components. The first was the community economic diversification initiative, which I think my deputy described fairly well, and after the process that Daniel spoke to, we now have in place some 148 contribution agreements in communities throughout the interior of British Columbia that will fully utilize the funds that were originally part of that program. We're seeking about $12 million in order to complete that process through this supplementary estimates process.

The second part of the program that we were responsible for was something called the airport improvement initiative, which contributed just over $18 million towards improvements at the airports in Kelowna, Kamloops, and Prince George, three of the larger communities that were particularly affected by the pine beetle infestation. These projects were intended to enable larger passenger aircraft to land to take advantage of tourist potential, and also to take advantage of some air freight potential, particularly at Prince George, which we thought was quite attractive because it is on the great circle route from Asia to North America.

In fact, just recently we've had the first plane actually land at Prince George to take advantage of that new refuelling opportunity. There's a small amount, half a million dollars, in the supplementary estimates to complete that.

The airport improvements initiative is nearing completion, and all the projects on the community economic development initiative are approved. Those funds have started to flow now.

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

The money is all going to be spent, and I suppose I need to go to Natural Resources Canada to find out about the rest of it.

Is the agency in the business of advising the government as to what the line should be on how much money you need to continue projects? I'm thinking about that because the pine beetle continues its march east. Is that something your agency would advise the minister on?

[Daniel Watson]

Certainly one of our roles as a department--and it's true of all the regional development agencies--is to bring a focus from the region in which we're located to Government of Canada policy generally, so the things we learn, see, and hear when we're working with people are things we bring back to our discussions with our colleagues.

I talk to my colleague from Natural Resources Canada on a regular basis, as well as many others. We continue that discussion on programs like this. Earlier we had some discussions about the work we do with Infrastructure Canada; similarly, there we would work with Infrastructure Canada and advise them on things we have learned in the process of delivering on these programs.

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

Chair, l will have another opportunity, will I not?

[The Chair, Conservative, Michael Chong]

Yes, absolutely.

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

Okay. Then I don't need to try to squeeze in all my questions right now.

I was going to ask a question about writing off the debts of the Newfoundland and Labrador Development Corporation. Mike asked about part of it. For the other part of it, just for my own edification, what sorts of loans were these? Were they small business loans that you've never been able to collect on?

[Denise Frenette]

Yes. They were loans to companies and we were not able to collect on them. That's right.

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

Mr. McKenzie, in the supplementary estimates there's a line item, “Funding to supply the municipality of Shannon Québec with drinking water”, and you've mentioned it in your introduction. I'm a little confused. Why is your agency responsible for this initiative? It doesn't sound as though it would be your initiative.

[Guy McKenzie]

You're right. Usually it would be more likely that Infrastructure Canada would do it, but because of contamination and because of time to respond to the situation, it was decided that way. It is a project that is acceptable for us, This is fundamentally how we injected the money that we received.

By using our program instead of the Canada-Quebec infrastructure program, we were certainly faster. They did not have to prioritize it and we were able to treat the water faster for the population. The water was contaminated.

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

I have a question for each of you with regard to the futures development corporations. Some in northern Ontario have approached me and indicated their concern that, under this particular government, the futures development corporations are going to disappear as entities. Is that anything you have heard? Has it been a discussion item in your areas?

[The Chair, Conservative, Michael Chong]

I assume you're referring to the Community Futures Development Corporations.