Public Accounts Committee on May 27th, 2008

[Douglas Timmins]

Yes.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Is it normal, in your opinion, that over the course of three years, about 98% of the fees have not increased? Would you call that normal?

[Douglas Timmins]

We noted in the report some problems in terms of the time it takes Parliament to approve changes to certain fees. The departments may not wish to change their fee structure.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Would it be fair to say that the reason why virtually all fees have remained the same since 2005 is that the new legislation now requires explanations and status reports? I'm asking your opinion.

[Douglas Timmins]

Certainly this is a factor that Parliament and the central agencies must consider. That is why we mentioned it in the report. It is difficult to do whatever you want. I'm thinking about Mr. Cullen's interpretation of the act. It's a valid question.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Indeed, and this brings me to my next question. If that's true, could it be that the process is too complex or that fees are too high and departments do not really want to be told to lower them?

I have another question on this subject, if you cannot answer my first one, because to be honest, I'm not expecting an answer from you. Do you have the authority to look at the 216 other fees that were not examined? Do you have that authority and are you planning on looking at these other fees?

[Douglas Timmins]

Yes, we have selected certain fees that bring in substantial revenues.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Do you plan on looking at these fees as part of an audit?

[The Chair, Liberal, Shawn Murphy]

We're going to move on.

Mr. Fitzpatrick, you have four minutes.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I want to focus on the consular fees and try to get some clarification on that point.

It just seems to me if we're really selling an insurance product or we're dealing with an insurance product, any professional in the insurance business says this is a game about anticipating the risk and assessing the risk, and things like September 11 or the Lebanon situation happen. They say these are just out-of-the-norm circumstances, but I think everybody in the insurance business knows that you have to make an allowance for those sorts of events, because they do happen.

Pick up a newspaper any day. There can be earthquakes. There can be calamities. There can be all sorts of disorders that happen in the world, and they may affect Canadian citizens and create quite a liability. So if we're really running an insurance service, I think we have to have a margin of safety or reserve built into that program to allow for these sorts of extraordinary events if they occur.

Do you disagree with that, Mr. Rigby?

[Stephen Rigby]

I have a couple observations, sir.

We don't run it like an insurance fund precisely. Conceptually we offer a service in response to a fee that is given. We don't have actuarial analysis in terms of the costs that are borne and the trends that are going on.

I think we do have to get a little bit better at anticipating the sorts of consular impacts that we're seeing right now. We've had 9/11. We've had the tsunami. We've had Lebanon. We had Canadian impacts arising from Katrina. All of these things have tended in the past to be viewed as extraordinary, but increasingly they are less extraordinary and more regular.

I think, going back to my earlier comment, there's a fundamental question we have to deal with as to whether or not those extraordinary events and their costs are properly included in our calculations, because if you look at the figures we've put in across the five years, there are some rising surpluses, but with the Lebanon situation taken into account, you have a cumulative deficit.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I accept the point you're raising there, but whether we classify it as a commercial insurance operation or not, the fact of the matter is if you don't have a margin of safety built into what you're charging, and one of these major events happens, it becomes a liability for somebody. Somebody might call this margin of safety a profit, but it can become a major deficit in a hurry if people who are managing the thing aren't on top of it. So it's something I think you have to be focused on.

Does the AG's office have any difficulty with the Department of Foreign Affairs making some sort of allowance for a margin of safety, or a reserve for extraordinary events or contingencies that could occur?

[Douglas Timmins]

I think the office does not have a position on what the calculation should be. We looked at whether the calculation was done in relation to what was approved in terms of the fee approval. So if it's approved in a way that would include that, then that would clearly be something that would be acceptable when we would review it.

I think the issue from our perspective would be how much that contingency would be. You cannot predict something unique that would cost an amount that would reflect in that fee calculation what actuals may be. You're not going to have a Lebanon situation every year, as history would prove, and I'm not sure how you would predict what it would be or whether it would be a tsunami instead of a Lebanon, but certainly, as I've said, once it's approved, that would be what we would audit against.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Fitzpatrick.

Mr. Lussier, quatre minutes.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Mr. Timmins, we've already spoken about the table on pages 37 and 38. The fees listed in this table total $661 million. I asked the following question. Which department, of all those included in the breakdown of the $1.9 billion in fees collected, but not mentioned in the chart of pages 37 and 38, collects the most in fees? You say you provided a breakdown, but the members of the committee have yet to see this list showing where the $1.9 billion in fees was collected.

[Douglas Timmins]

I'm not sure. I thought we had provided it to the committee.

[The Chair, Liberal, Shawn Murphy]

Let me get clarification, Mr. Timmins, for the benefit of the members.

Mr. Lussier asked this question at the lock-up, and it's really not technically a meeting of the public accounts committee. That information was provided to Mr. Lussier. We're going to provide it to the rest of the committee, but the rest of the committee doesn't have it now.

But the $1.9 million is the user fees.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

I see.

If revenues totalling $1.2 billion do not appear in the table on pages 37 and 38, which departments collects the highest percentage of the $1.9 billion in fees?

You can give me your answer later.

Getting back to the table on page 37, mention is made of Citizenship and Immigration Canada fees. A breakdown of these fees is provided on three separate lines. Could you tell me to which of these lines visa fees would be charged? Listed here are the right of permanent residence fee, the permanent residence application fee and the right of citizenship fee.

[Clyde MacLellan]

There are obviously a lot of different fees within the Department of Citizenship and Immigration, and the visa fee is not within that. The permanent residence fee is a particular fee for the right to become a citizen. Other types of visa fees, like the temporary visa fee, are not included in that list.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

So then, it's not included in the overall total revenues.

[Clyde MacLellan]

No.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Then this fee doesn't appear in this table. Correct?

[Douglas Timmins]

Not in this table, but it will appear in an upcoming list.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Fine then.

Earlier, Mr. Monette, my colleague asked a question. The study targets six departments, and in your presentation this afternoon, you mentioned that other departments will be engaged. You mentioned the CRTC and the Canadian Nuclear Safety Commission, which I don't think of as departments. What other departments will be targeted by your recommendations?

[Rodney Monette]

Thank you for your question, sir.

I think it's important to contact the largest departments and agencies. In terms of revenues collected, these would be the Canadian Grain Commission, the National Energy Board, Transport Canada, Indian and Northern Affairs, and the Canada Border Services Agency. They are the largest. We're talking about anywhere from 10 and 12 departments and agencies in total.