Evidence of meeting #47 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A video is available from Parliament.
Senior Director, Costing and Program Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
And that is why we are following up on this.
Conservative
Alain Rayes Conservative Richmond—Arthabaska, QC
You are quite right to do so, and I congratulate you for that work. I think you have shed some light on certain things. The fact that this has to be done by a neutral group that is not partisan like us clearly points to a big problem. Billions of dollars have to be invested.
This leads me to my second question.
We were contacted by elected representatives from smaller and medium-sized municipalities. Your report indicates that the vast majority of the sums that will be invested will be in more populated areas. In fact, if we look at this from the political point of view, we can see clearly that Liberals are the members in those areas, in large centres like Montreal, Toronto and Vancouver particularly. The expenses you have set out are in these large centres for the most part.
Following your analysis, do you have the impression that that could change, or is this a firm trend at this time?
Parliamentary Budget Officer, Library of Parliament
My first neutral and indeed non-partisan answer is that the first phase focused on public transit and updating infrastructure such as sewer and water treatment systems. In that context of course the larger municipalities will be deriving the greatest benefit. In the longer term, we will see what develops. Of course, a municipality of 65,000 residents like Victoriaville or even Richmond, my city of origin, does not have the same public transport requirements. So there will be less spending in these places.
Conservative
The Vice-Chair Conservative Luc Berthold
Thank you very much, Mr. Fréchette.
Mr. Rayes, your speaking time has elapsed.
I now yield the floor to Mr. Hardie for six minutes.
February 21st, 2017 / 12:10 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Thank you, Mr. Chair.
First, I'd like to congratulate the PBO. Long before I entertained any thoughts about getting involved as I am now, I used to follow your work. It always “lifted the green curtain”, as they'd say in The Wizard of Oz, and shed light on what was going on. I could see from those earlier reports that there would be times that people who were sitting where I'm sitting would quite disagree with the way you analyzed things or with the results you came up with. They were always illuminating, and they certainly sparked some conversation and discussion, always with the idea of upping the game.
Now that I've been pleasant—
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
I think one of the questions that we've been putting to a variety of our guests here is that we're looking at an enormous outflow of money, eventually, into infrastructure. Certainly, in my background in the public sector with the transportation agency in metro Vancouver and other places, we were always struggling to come up with the right metrics, the right things to measure, to show that we were getting value for dollars. Based on the work you've done so far, which has been relatively limited in scope, do you have any advice that you'd give us, as a committee, if we were putting together recommendations as to the sorts of things that government should measure and monitor in order to try to at least demonstrate or aim for value for dollars in these investments?
Parliamentary Budget Officer, Library of Parliament
Thank you for the question, and thank you for the good words.
The PBO, as per its mandate, doesn't make recommendations per se, so it's sometimes difficult. In our reports, we just say that parliamentarians could ask this or that question, or could follow an issue more carefully.
I don't know if Mostafa wants to add something on this....
Mostafa Askari Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament
Sure.
The point you're raising is very important, and we raised it in our report. Typically, for any program, the government now has a performance measurement framework. Based on that framework and the targets they have identify, they follow the money to see whether it meets those targets. In this case, unfortunately, we haven't yet seen the performance framework for the infrastructure investment the government has proposed. That's something that delays our report. It is really the job of the government to decide what those targets are and how it's going to measure performance against those targets.
Once those are in place, then we can, as the PBO, look at those and provide an assessment as to whether the objectives have been achieved, and how the government assesses those things.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
It might be illuminating for government if you could also provide some advice as to the sorts of things that need to be measured, because it's all about public confidence and trying to demonstrate to the public that we're doing the right things in the right way.
It occurs to me that one of the key issues that needs to be in place for us to do our job and for you to do your job is the proper framework for data collection. What do you collect? How do you collect it? Should it be across the piece, through all departments and through all ministries? Can you comment on that?
Parliamentary Budget Officer, Library of Parliament
Yes, and Jason will want to add something.
For example, as Peter mentioned, we contacted the 31 departments and they provided the information. All the information was not on our Internet site or in the report, just because some departments said that they would provide a total, the aggregate number of the projects and the value of the projects, not the individual projects that were not yet to be published.
Jason.
Jason Jacques Director, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
The only other thing I would add to what Mostafa and Peter mentioned is that when it comes to the Infrastructure Canada programs, the government, within the MOUs it signs with the provincial governments, does have framework language with respect to tracking performance of the investments and outcomes. That notwithstanding, when one looks at the performance metrics tracked in detail across the country, by and large, when you look at larger municipalities and other municipalities across the country, they do a much better job at this. That's because those municipalities and provincial governments are responsible for actually administering and rolling out the spending. Roughly speaking, public sector spending on infrastructure across the country is around $80 billion a year, of which $70 billion is being spent or administered by the provincial or municipal governments.
You don't need to go any further than looking beyond the budgets of, say, Vancouver, Toronto, or Calgary to identify where they've linked up the dollars flowing through the system alongside the performance impacts and the results that are being achieved.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
If I may, I will interrupt you, because I have one more question.
There are clearly differences between, say, the first run of the infrastructure spending, which included state-of-good-repair upgrades to existing infrastructure, and the next run, which will focus on things that are going to take a while to build.
When we took office, pushing a year and a half ago now, we inherited over $800 million in programs that had been announced by the previous government but had not yet been approved. Depending on the nature of the project, such as building a new transit line, sometimes it's a very long-tailed project. Is it fair to say, “Here are the monies allocated and here's the money spent” and then try to even that up on a project with a very long tail, when traditionally the federal money is the last to go out the door?
Conservative
The Vice-Chair Conservative Luc Berthold
Thank you, Mr. Hardie. Since your time is up, I hope you will save the question so that the witnesses can answer it later.
Mr. Aubin, you have the floor for six minutes.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you, Mr. Chair.
Gentlemen, thank you for being here.
I must admit that I stopped rather quickly when I read your report, because I was surprised right from the first page. After the good news in the first paragraphs indicating that you were going to help us to follow this major investment program, I read this:
The government has provided no performance measurement framework with which to evaluate the NIP's performance [...]
The next paragraph says this:
However, except for Infrastructure Canada, none of the departments has published a list of funded projects.
I understand, following the question asked by Mr. Hardie, that you have received aggregate information that has not been broken down.
Is there a transparency problem with regard to monitoring this major infrastructure program?
Parliamentary Budget Officer, Library of Parliament
Thank you for the question.
It may not be a problem of transparency so much as a problem with action, I believe, on the part of certain departments. Mr. Weltman mentioned this. Certain departments are not used to reporting as efficiently as Infrastructure Canada, which has had a database since 2002 and reports on all projects as they proceed. In fact, I must commend them for putting in place this database.
We were told that certain departments were in the process of doing this and that is why we regularly continue to send these requests. For instance, Indigenous and Northern Affairs Canada can provide aggregate data, as you pointed out, but for the time being, it cannot necessarily provide data broken down by reserve and so on.
Is there a transparency problem? I feel it is more a problem with communication and information that will be disclosed subsequently. All of this is relatively recent. We will see later if there is really a transparency issue.
NDP
Robert Aubin NDP Trois-Rivières, QC
I still get the sense that we had exactly the same exchanges, with very few differences, with the previous government. It seems to me that the culture is not emerging very quickly on that side.
On page 4 of the report, you refer to the Canada Infrastructure Bank and two things drew my attention.
First, I still have some serious reservations on the very notion of this bank. In my opinion, it is going to make us pay more for infrastructures that could be funded directly by the government.
In addition, you say that “the federal government would eventually share some of the risk inherent in the bank's investments”. Not only will we mobilize $15 billion that could have been allocated directly to infrastructure, and transfer this money to the bank to create leverage so as to attract private capital, but we would also share part of the risk and pay higher interest, because we would have to pay 7% to 9% to those who will contribute to funding this.
Is this really the best way to finance updating our infrastructures?
Parliamentary Budget Officer, Library of Parliament
Since it was the government that decided to create this bank, I cannot comment.
There are risks. In this regard, you are quite right. The Muskrat Falls example was mentioned. The loan guarantees that were given were one of the risks. However, if you look carefully at the figure regarding loan guarantees, you will see that the government's risk regarding the $490 billion loan guarantees...
NDP
Robert Aubin NDP Trois-Rivières, QC
An amount of $312 million was provisioned for loan guarantees. That was my next question.
Parliamentary Budget Officer, Library of Parliament
You see, we try to see the questions coming.
Parliamentary Budget Officer, Library of Parliament
That is why we included that information in the report. The risk exists and there will always be some. That is true of any government loan. It is true when governments want to attract loans. The Montreal REM is a good illustration of the share of risk a provincial government can assume.
I don't know if I answered your question.
NDP
Robert Aubin NDP Trois-Rivières, QC
My question was more specific. We are looking at a $312-million provision for $490 billion in loan guarantees.
Is that a reasonable proportion?
Senior Director, Costing and Program Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
I can only answer one thing which is that the Auditor General is the person who approves this project. There are all sorts of regulations that govern that approval.
NDP
Robert Aubin NDP Trois-Rivières, QC
Very well.
On page 12 of the same report, you talk about the correlation or proportionality between the investment in infrastructure programs and the density of population in the provinces and territories, and this seemed entirely coherent to me. In fact, I already put the question to the minister. However, there is one element I have trouble understanding. The report refers to 12% for Quebec, and I have trouble seeing how it would obtain investments proportional to its population, since that represents approximately 23%. However, for other provinces the ratio between the funded projects and the part of the Canadian population they represent leads to an equivalency, if not a considerable surplus.