Public Accounts Committee on Nov. 16th, 2010

[Ronnie Campbell]

Mr. Chair, I'll ask Mr. Stock to answer that question, please.

[The Chair, Liberal, Joe Volpe]

Mr. Stock.

[Gordon Stock, Principal, Public Safety and Emergency Preparedness Canada, Justice, Office of the Auditor General of Canada]

Out of the 410 we sampled, it ranged from program to program, as far as those that started late were concerned. What we looked at was a comparison of the date that was in the application as to when they were supposed to start versus the date of when they actually started. It ranged anywhere from 5% to 40%, depending on the projects, and those delays could be for a number of different reasons.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

That's a fairly large discrepancy compared to the numbers we just heard from the Department of Transport. They're saying between a 3% to 5% risk and you're indicating between a 5% to 40% risk. Can you explain why the difference is so big?

[Gordon Stock]

Because they're at two different points of time, Mr. Chair. Basically, ours was looking at it early in the process when the projects were just starting, and they started late, as opposed to the point in time the department is speaking of now, which is much more recent.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you.

My question now is for the Department of Finance. In the 2009 budget, the Minister of Finance said, “Measures to support the economy must begin within the next 120 days to be most effective”.

Yet we now see that the recently released performance report on Infrastructure Canada shows that the programs that were designed to provide stimulus did not meet the minister's own targets. For example, the government's own numbers show that in the first year only 25% of the infrastructure stimulus fund of $2 billion was spent and only 3% of the green infrastructure fund was accessed.

Did these programs not meet their objectives? Or was the minister wrong in his analysis in the budget?

[Paul Rochon]

First of all, in terms of the first year amounts, the $33 billion was actually spent on the economic action plan. That's a massive amount of money in 2009-10.

The government followed an expedited strategy, as you know, to get these programs in place, and the first pillar of that strategy was to ensure that all the authorities were in place by March 31 immediately following the January budget. That was achieved. By and large, although there have been some delays in start-ups, the infrastructure program has evolved more or less as planned.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Maybe I could get the Department of Transport to elaborate on that, because that didn't necessarily answer the question I was asking.

Thank you.

[Yaprak Baltacioglu]

Absolutely. First of all, on the actual money spent, the expenditures, as we say in our departmental performance report--I believe on page 23--we identify that this is probably not the best measure of economic activity in all infrastructure programs, either current programs or past programs, because in infrastructure, project activity, like economic activity, starts the moment the project is announced. So contracts are given out, supplies are given, and construction happens, and the federal government pays only after we get bills from our partners. When the provinces send us the bills, we pay them.

You will find this interesting. Right now, in the infrastructure stimulus fund alone, we're sitting with 1,300 projects that either have been completed or are under way in a significant way, and we have not even one bill from our partners. So it's a bit of a delay issue.

Now what is very important--and the Auditor General may want to comment on this--is that this was a very deliberate action for us: we will pay the bills once they come in, and we pay them within 30 days, but this was part of our risk management framework. The Auditor General said that we had balanced our accountabilities, because we want to make sure the payments go to projects that are actually on the ground, and where nothing went wrong with them, etc.

So there is always a delay. We can give you historical data of all our programs between the start to when the payments are. Economic activity happens in between.

[The Chair, Liberal, Joe Volpe]

I'm sure the committee will look forward to receiving that, Madam Baltacioglu.

I'm going to go to Madame Faille.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Thank you, Mr. Chairman.

My first question is for Mr. Forster.

Earlier, in response to a question from my colleague on deadlines, you said that you had received a document from the Quebec government. Would it be possible to table that document here, with the committee? Also, could you tell us where things stand with the various projects in terms of the deadline?

Under the infrastructure program, part of the program has a deadline of 2015. How many of those projects have begun and what is your evaluation of the progress made with those projects for Quebec?

[John Forster]

Sorry, could you repeat the last part of the question?

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Part of the infrastructure program—some of those projects are in my riding—has a 2015 deadline. I would like to know how many of those projects are actually underway.

[John Forster]

For the first part of your question, the documents we've just recently received from the minister in Quebec give us an update on the status of their projects, so we're in the process of analyzing that information. We'd be happy to talk to the Government of Quebec just to make sure they're okay that we share that information. We'll talk to them and get back to the committee as soon as possible.

For the second part, I assume you're referring to projects under Chantiers Canada, which ends in 2015?

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Actually, it's a sports facility development project that the Quebec government is involved in. The municipality and the federal government are also involved. The deadline is 2015. There are several of them across Canada. I would like to know how many of those projects are actually underway.

[John Forster]

I don't know right now. I don't have the detailed data for each project. However, there are two types of funds. There is the Infrastructure Stimulus Fund, with a deadline of March 2011, and there are regular programs, like the Building Canada Fund, which is a seven-year program, with a deadline of 2015.

I can check if you have any questions about specific projects. I can answer those questions.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Perhaps you could give us the list of projects that have been approved in Quebec in connection with that.

When I read the Auditor General's report, I was surprised that it didn't cover investments in information technology infrastructure.

In January 2009, the then Minister of Transport attended a cocktail party with major IT firms. In his speech, he said that the government had earmarked $12 billion for federal investment in information technology infrastructure projects. He also indicated in his speech that the government of Canada was spending around $5 billion per year on IT. He also gave a list of programs, including $225 million over three years for the development of a strategy around what is called

“extending broadband coverage”.

According to that list, there is $1 billion over five years for the Green Infrastructure Fund, $500 million over two years for infrastructure projects in small communities, another $750 million for research through the Canada Foundation for Innovation, and finally, $500 million for

Canada Health Infoway, “to encourage the greater use of electronic health records”.

In order to have the full picture of these initiatives, could you provide us with a table showing all of the various projects, how far along they are, and a rough idea of when they may be completed?

If the funds flow through more than one department, could you please indicate, if possible, which department is responsible for the project?

[Benoît Robidoux, Senior Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance]

Thank you.

Everything you mentioned—broadband, Green Infrastructure Fund, small communities and CFI—is in the economic action plan. It is all underway. You will find it in the “Sixth Report to Canadians”. You won't find all of the projects in the same place, but in the chapter entitled “Creating the Economy of Tomorrow” you will find a number of them. In the chapter on infrastructure, you will find others.

They are all listed there. There are the amounts spent for fiscal year 2009-2010 and the amounts committed for fiscal year 2010-2011. Several projects are spread over five years, like the Green Infrastructure Fund.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Do you have an idea of how far along these projects are?

[Benoît Robidoux]

As I said, in the report, you have the amounts spent for fiscal year 2009-2010. That gives you the starting point. You also have the amounts committed for the current year. There is no other information for the following years.

However, it is true that the amounts committed were spread over five years for some projects, like the Green Infrastructure Fund. So it was a bit slower getting started. The amounts spent and committed for this year are there as well as the funds committed over the entire five-year period.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

I understand that there are amounts committed for each year. That said, I would just like to have an idea in relation to the Auditor General's report and to know what our expectations are with respect to those projects. Will there be any cost overruns? Will the projects be completed on schedule? That's what I'm trying to find out, and it's not in your report.

You can get back to us in writing. Just take the time to analyze the information and get back to us.

I would just like to give the floor to the representative of the Office of the Auditor General for him to explain why these departments weren't targeted or why these initiatives weren't analyzed.

[The Chair, Liberal, Joe Volpe]

Mr. Campbell, a brief answer, please.

[Ronnie Campbell]

Merci.

Mr. Chairman, the economic action plan was a huge undertaking--$47 billion--and to conduct an audit such as this.... We can't audit everything. It's the same in all of our audits, and in particular in one of this size. On page 28 of our report, we list the programs that we did focus on.

In every audit we do, we have to scope things out, and so those were the ones that were in; we had a heavy focus already on infrastructure, and we thought that the approach we took was sufficient to give a broad conclusion on the whole economic action plan program.

Thank you.

[The Chair, Liberal, Joe Volpe]

Thank you, Mr. Campbell.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair.

Thanks to all of you for being here.

As I read through the Auditor General's report, a couple of things stood out for me as an ex-municipal councillor for a small municipality. One of the sections on page 10, section 1.18, talked about projects that needed to get under way and how the risk could be assumed by the municipality. Whoever happened to run that individual project could accept the risk, go ahead, and start, if the timeline warranted it. They were looking at a two year timeline plus a bit, if they needed it all. Because the assumption was that as of the 31st of 2011, the deal was done.

Knowing that at the time—not knowing what we hear now from the minister, which is that there may be flexibility—they obviously had a hard date to finish. I recognize that this is more of a comment, because I don't think you have an answer. If you have an answer, it would be wonderful. How many...? There had to have been innumerable projects out there for municipalities that couldn't accept the risk of financing without a signed contract from the federal and provincial governments to leverage the money, because as a past chair of corporate services for a small municipality, I can say that's how we operate most of the time, nine times out of ten, especially if the project is large.

Did you get any feedback at all or am I just making a comment?