Transport Committee on Oct. 28th, 2010

[John Forster]

It depends on the nature of the—

[Bryce Conrad]

It would depend on the nature of the project and whether or not it triggered the requirement for federal permits.

[Dennis Bevington, NDP, Western Arctic, NT]

The Auditor General said that in many cases federal officials did not even conduct a walk-through in these projects. How did you determine whether there was sufficient work done to determine whether there were environmental issues attached to the project? In many cases, it's public concern that triggers environmental assessment. How did you determine that without some preliminary work, as the Auditor General suggests that you didn't even conduct walk-throughs in many cases?

[Bryce Conrad]

I don't believe the Auditor General referenced the fact that we didn't do site visits to projects. I think that is an interpretation that has since been added.

The entire infrastructure stimulus fund and much of the economic action plan was based upon a trust, a relationship: a partnership between ourselves, the provinces, and municipalities. There is no real need for us to visit Steeles Avenue in downtown Toronto to understand that Steeles Avenue needs to be repaved or resurfaced.

We did environmental assessments of the projects under Canada's economic action plan. I believe we did 69 of them.

[Dennis Bevington, NDP, Western Arctic, NT]

That's out of 6,000.

[Bryce Conrad]

It's out of 4,000 under the infrastructure stimulus fund. Those are the big projects. The port of Nanaimo, for instance, underwent a fairly extensive environmental assessment.

But we did ask questions. The criticism in the Auditor General's report, I believe, has to do with the amount of information we secured as part of the application process, in that we did not ask its proximity to a provincial or municipal or local or regional environmentally sensitive area. Our view at the time was and remains today that if a province or a municipality is submitting a project for our consideration, presumably they are doing so recognizing that they have set aside specific parks and areas and would not submit a project that is in some way inconsistent with the reason for setting that park aside.

That is the criticism the Auditor General levelled at us.

[John Forster]

Could I just add one quick point to Bryce's answer?

Also remember that under the stimulus fund, if we got an application that required a significant federal environmental assessment, we wouldn't approve it under the program because it would take too long and would not be construction-ready. If it was going to take us eight months to do an EA, we tended to exclude and reject—

[The Chair, Conservative, Merv Tweed]

I have to stop it there. I'm sorry.

Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair. I will be splitting my time with my colleague, Mr. Mayes.

I'm very interested in what Mr. Watson said earlier: that not only was everything performing around 94% to 96%, but that in comparison to the way other programming has been done.... You handled, I think you said, ten times the volume of applicants you normally would and yet you appear to be achieving considerably better results.

I want to know why you think that's possible, what we can learn, and how we can apply it. I'm assuming you're doing this already, but I would specifically encourage that whatever lessons we learn from this we apply to the functioning of the bureaucracy and programming in the future.

So what was it? Was it a change in regulations? Was it a matter of personnel? Was it the way you did your contracts? What are the things that have made this, by the Auditor General's and everyone else's count, one of the most successful roll-outs ever? What did you do different?

[Daniel Watson]

There were a couple of things. First, it is a very specific program with a very specific set of objectives. That specific set of objectives was to get a very defined range of programs up and running in a defined timeframe.

A number of things came together. There was the size of the department: we had more staff that were able to deal with this. Those staff were brought in on a temporary basis and will go away in a short period of time as the program disappears on March 31.

The dedication of staff, I think, is an important part of it. Public servants, in my experience, join the public service because they want to make a difference at a point in time that matters. One thing that's important to remember is that at that period of time when the economic action plan came out, not just Canadians but people around the world were very concerned about what was going on. Major financial institutions that had been around for generations had disappeared.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I get that. But public servants, I would say, are dedicated to their whole career, not just specifically for two years. There have to be other things that you've done.

[Daniel Watson]

No, and I think the dedication to getting the thing done, as the public policy direction of the government—namely, to get people working in a short period of time, to see projects up and running.... The clarity of the selection criteria was actually very important; things such as what my colleague from Infrastructure Canada said about making sure you could do these things in very short order. That was built in.

Also, I think the partnerships with the municipalities and other players involved were critical. They had critical parts to play with this. If it hadn't been for them, we wouldn't be where we are today; I think that's true. Also, there's the dedication to making sure that the agreements were in place in very short order, making sure that we were clear about what the expectations were. There was also the experience of having worked with these people in the past. They were able to tell us, and we trusted them when they said, that they simply could not do this, that, or the other thing in a particular timeframe, but could do these other things.

I think those flexibilities were all important.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I'll turn my time over to Mr. Mayes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Thank you.

I'm a member from the Okanagan—Shuswap in British Columbia, and the staff in Vancouver who work for WED were always just great to work with. They responded in a timely fashion to the questions forwarded by my staff, and that just moved those applications along. I wanted to convey to your staff in Vancouver that they did a great job.

One of the best jobs is in my community. It's a small amount of money, but it was for new seats in the local arena. Now I can sit in comfort to watch my four grandsons and one granddaughter play hockey, and I think of you every time I sit down—not quite.

Concerning the allocation of moneys for the program, was money allocated on a per capita basis? Or was it on a regional basis, considering some of the priorities, as far as economic impact was concerned, that a region had with regard to the downturn in the economy? Or was it just on the order of the applications as they came in? How did you set the priorities to get that money out?

[Daniel Watson]

Nationally, the money was divided on a per capita basis. Western Diversification as a whole got the amount on a per capita basis. Within that, we set a base amount of $10 million per region. Then, additionally, between the two different programs, CAF and RInC, there was an additional $410 million approximately. That was divided on a per capita basis.

Then, within the region, the Vancouver office that you talked about, the B.C. office of WD, talked to just about every municipality there was, talked to all the proponents that there might be, had it up on the website, took in applications, and judged those applications on the criteria that were published.

Those were the criteria, critical things such as whether you would create jobs now, whether you would be done by March 31, whether you needed such things as environmental assessments that would actually put you outside the window or were ready to go, whether you had your financing in place. Those were all criteria, and all those pieces had to come together.

We had $2 billion in requests for CAF funding alone. We had roughly $450 million, I think it was, in requests under the RInC funding, and we used those criteria to pare it down to those places. As I say, on CAF we came up with 440 communities across western Canada that were able to pull projects together.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Are the 3% to 4% that are not completed getting close to completion? Are they going to be 90% completed by the cut-off date, or 80%, or is it more serious than that?

[Daniel Watson]

In fact, if we look at the ones that we think might not complete at all, they are less than one percent. If you look at those projects that might have some issues around the deadline, even those will probably spend 85% of the proposed money. In the other cases, what it is, quite frankly, is that in cases, for example, in which people said it was going to cost them $100 to do the project, they've come to say that they're done but it only cost them $96. That's where a lot of that slippage will arise.

And then, of course, you can always have those moments in which, despite somebody's best efforts, for whatever set of reasons, something happens. It could be a municipal election, an issue in the community, any number of other things that simply change priorities, for whatever set of reasons. It's pretty rare, but it does happen.

But even with all those things factored in, we're estimating somewhere between 94% and 96% expenditure.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Malhi.

[Gurbax Malhi, Liberal, Bramalea—Gore—Malton, ON]

Thank you.

How many projects are identified that are not meeting the deadline, and are they considering giving an extension to them?

[John Forster]

I'm sorry, could you just repeat the question?

[Gurbax Malhi, Liberal, Bramalea—Gore—Malton, ON]

How many projects are identified as not meeting the deadline?

[John Forster]

At this stage what we do is a risk analysis of projects. So as they report quarterly to us, we kind of rate them as low, medium, and high risk.

Our high-risk projects are running pretty similar to Daniel's experience, less than 5% of the ones where we have information on them. And it doesn't mean for us, when we do a risk rating, that they won't finish on time or that none of it gets done. Some of them will be very close to finishing, and, as Daniel said, they might spend 80% or 90% of their money.

Others we rate as high risk just because they were large projects to begin with, like a large port project, so we knew going in that they were.... It doesn't mean they won't finish; it's just that we flagged them as high risk, so we do extra monitoring with them and have a lot closer contact with the provinces and the proponent on them. But the percentage is about--

[Gurbax Malhi, Liberal, Bramalea—Gore—Malton, ON]

You don't have the number?

[John Forster]

The number of projects? No, not with me, but the percentage is around 4% to 5%. It also changes regularly as we get reports in. We're constantly re-evaluating and assessing and doing our risk rating differently.

[Gurbax Malhi, Liberal, Bramalea—Gore—Malton, ON]

They are going to get the extension in case they're not finished?