Public Accounts Committee on May 11th, 2021

[Kody Blois, Liberal, Kings—Hants, NS]

Okay. Perhaps they should be looking for even tighter, more measurable results is what I am hearing from you.

As quickly as you can, when we look at investing in Canada infrastructure—and I'll get to delayed spending—what analysis did you have in terms of the fiscal capacity of provinces and territories to actually put in their component share?

[Karen Hogan]

We didn't really focus in on that. However, we often heard that it was perhaps a reason for the delay in spending. There were provinces and municipalities that were likely slow in requesting reimbursement, and that might be a reason.

It was really difficult for us to nail down why spending was delayed.

[Kody Blois, Liberal, Kings—Hants, NS]

Ms. Gillis, I'll go to you. I have about a minute and 20 seconds left, according to my watch.

When I look, for example, at the infrastructure bilaterals with the province, they lay out spending per year. When I talk to provincial officials, at least here in Nova Scotia, they deem that as just a guide.

Is that something we can talk about in terms of delayed spending? Even the Government of Canada was perhaps a bit ambitious regarding what the provinces and territories had the ability to match in terms of their own fiscal process, or even just the fact that they see this as, “We have 10 years to spend it. It doesn't have to all go according to the plan.”

[Kelly Gillis]

When we look at the integrated bilateral agreements, there are allocations across each of the provinces and territories. Once agreements are signed, the speed at which provinces and territories determine to prioritize, do intakes and send applications to us is very much within the control of the provinces and territories.

That said, at this point in time, we have $13 billion committed, and we have another about $7 billion under review within that particular program.

[Kody Blois, Liberal, Kings—Hants, NS]

Madam Chair, could I table a question? I know I won't have time for it to be answered in my round.

What percentage of the investing in infrastructure Canada plan includes provinces and territories that have to match funds? I would be interested in having that answer, as a committee member, to better understand the delayed spending aspect of the AG's report.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Blois.

We will now move on to our two-and-a-half-minute round, starting with Mr. Blanchette-Joncas.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

My question is for Ms. Bowers from the Canada Mortgage and Housing Corporation, or CMHC.

Ms. Bowers, could you talk to us about the national housing strategy, which was announced in 2017. It's an ambitious federal government program, a nearly $40 billion plan to address housing needs, including social housing.

I saw that CMHC was managing various programs, including the rapid housing initiative. We are talking about a $1 billion program. Last fall, the program was aimed at projects in certain regions of Quebec. The federal government and the Government of Quebec reached an agreement, and the federal government granted $116 million to Quebec.

However, we don't know if, out of the $500 million to support projects from the provinces, there will be funds for other projects in Quebec. We've had no news about that.

Can you tell us more about this?

[Romy Bowers]

I would like to speak for a few moments about the national housing strategy.

The member is quite correct, in that it is a very significant investment by the Government of Canada in housing. With respect to the investing in Canada plan, there are aspects of the national housing program that are included in the program.

With respect to the national housing program, because we're not bound by some of the reporting requirements that were set in past agreements, we are able to provide a very high degree of granularity and good reporting to support the Auditor General's recommendations.

With respect to investments in the province of Quebec, we are able to provide granular reporting of our investments and funding by province.

I think the last part of Monsieur Blanchette-Joncas' question was with respect to the rapid housing strategy. Again, with respect to that particular program, there was a special agreement with the Province of Quebec to provide funding under that program, which was intended to support housing needs that were very linked to the COVID pandemic. The funds for that were forwarded to the province very quickly.

[The Chair, Conservative, Kelly Block]

Thank you very much. I'm sorry; we are over time.

I will now move on to Mr. Green for two and a half minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you.

Within the report, paragraph 9.48 states:

We found that in the first 3 years of the plan, federal organizations consistently spent less than they had initially planned. This led to funding reallocations that increased expected spending levels for later years.... As a result, for Phase 1, Phase 2, and legacy programs, approximately $9 billion was moved to later years, representing 20% of initially planned spending.

It also lays out how, in the fourth year of the plan, “$3 billion of Phase 1 and Phase 2...was not spent as planned and would have to be reallocated to future years.”

It has been a critique of this plan that it is being used for big funding announcements, which are great for playing politics but don't mean anything if the money isn't actually being spent and the programs aren't completed. Aside from important projects being delayed, what risk does loading this funding pose?

Through you Madam Chair, to Ms. Gillis, is there a risk that this funding lapses or just doesn't get invested?

[Kelly Gillis]

First, infrastructure funding does not lapse. It gets re-profiled. When we look at the funds that are set aside for particular projects, when we have an obligation, that money is set in reserve for the bills that come in for that particular project.

With Infrastructure Canada funding, the economic activity actually begins when we make the commitment for funds. That's when the proponents can contract; they can hire and they can undertake the work to actually get the project done. Then they send the bill, often to the province, and the province sends a bill to us. The actual flow of funds is a lagging indicator. There is a huge timing difference when the economic activity is actually happening within communities.

We've been working with provinces and territories to close that gap. We have a working group to do that. Our profiles are actually based on the forecast from provinces and territories once we have signed agreements with them.

When we look at what happens within communities, it is very much when we make that commitment for that particular project for the economic activity.

[Matthew Green, NDP, Hamilton Centre, ON]

How are you able to calculate the impacts that delays have on building housing and improving infrastructure or better public transit?

[Kelly Gillis]

For us, the real impetus is actually getting the projects approved. This past year, we've accelerated project approvals. We've had almost 3,000 projects approved for almost $4 billion. That is when a proponent knows they have the funding to move forward with their project. They can hire; they can design and they can build.

That is the key driver.

[Matthew Green, NDP, Hamilton Centre, ON]

Just to be clear for the record, this is about the announcement and not the actual outcome of the finished project, in conclusion to my questions?

[The Chair, Conservative, Kelly Block]

Give a very short answer, Ms. Gillis.

[Kelly Gillis]

No. This is about a binding agreement for them to have the funds and the financial surety to move forward with the project.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Green.

We will now go to our next round of questioning for five minutes with Mr. Berthold.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

Now I'd like to turn to the Auditor General.

Ms. Hogan, I was very proud to see that one of the first motions adopted by the minority government in the House of Commons was to give you the mandate to analyze the Investing in Canada Plan.

I just want to reiterate that the purpose of the motion was to ask the Auditor General to determine whether the goals and promises of the plan had been fulfilled. We understand that because of the pandemic, there has been a bit of a delay in tabling your report, but we now have it.

I'm on the Infrastructure Canada website right now. Some of the goals you mentioned in your audit report include employment, resilience, inclusiveness and accessibility.

With respect to jobs and growth, we were told that the plan would create 100,000 good paying jobs each year.

I would remind you that when the government announced this plan, it was to justify exceptional expenses of $10 billion. This exceptional $10 billion deficit, during the government's first years in office, was to be eliminated in order to return to a balanced budget at the end of the first term.

However, we've seen what has happened. Spending has been much higher than that, and deficits ballooned dramatically throughout the years of that first term.

We could have agreed on investments to create jobs.

Has your analysis allowed you to determine whether the plan has created 100,000 good paying jobs each year?

[Karen Hogan]

As we noted in our report, it was very difficult to get a complete picture of progress toward the goals. We were unable to target this goal. We had difficulty determining progress in general.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

So you were unable to determine whether 100,000 jobs had been created per year because you didn't have access to enough data. Is that right?

[Karen Hogan]

Actually, the lack of data has affected our analyses. We didn't target this data, so I can't answer your question.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Have you studied the credibility of such goals? Was it based on anything?

You weren't able to estimate how many jobs were created by a plan, but you had to rely on data.

Did you have access to any information on this?

[Karen Hogan]

I don't know if I understand the question. You're asking if we had access to information. Is that correct?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

In other words, when you analyzed the Investing in Canada Plan, which called for 100,000 good jobs a year, did you have access to any data? The government had to base it on something. Putting a goal in place requires information.

Did you find that information?

[Karen Hogan]

We did not look at how the government set the goals of the plan. That was already specified. For us, according to the motion, it was to see whether Infrastructure Canada was able to demonstrate that the plan was on track to meet the plan’s targets and goals.

We weren't able to demonstrate that the quality of the information was good enough to lead to a positive conclusion.