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Speech in Senate Chamber: Standing Senate Committee on National Finance Thirteenth Report- Supplementary Estimates (C) 2016-2017

Speech Standing Senate National Finance Committee Thirteenth Report

Honourable senators I rise to speak to the Thirteenth Report of our Standing Senate Committee on National Finance on our study and consideration of the Treasury Board’s Supplementary Estimates (C) 2016-2107.  These are the final estimates for our fiscal year and annual supply cycle that began April 1, 2016 and will end on March 31, 2017.  These Estimates when adopted are the signal to the Senate to bring on the debate and vote on the Supply Bill which is founded on these estimates, in this instance it would be C-40, Appropriation Act No.5, An Act for granting to Her Majesty certain sums of money for the federal public administration for the year ending March 31, 2017.  By these supplementary estimates and their related appropriation act, Bill C-40, Treasury Board is asking for a total of $2.5 billion.Colleagues, I shall share with senators some examples of sums of monies, and their purposes, as requested by the departments.

Infrastructure Canada

  • The Office of Infrastructure of Canada is requesting $600,000, Vote 1c, in voted appropriations to support the Gordie Howe International Bridge project team and a transfer of $2,607,000, Vote 5b, to the Windsor–Detroit Bridge Authority, which represents a net reduction of roughly $2 million from its voted appropriations for this fiscal year.  These supplementary estimates also identify nearly $829 million in frozen allotments for the Office of Infrastructure of Canada.  Since November 2015, the Office of Infrastructure of Canada has approved over $6 billion in investments for more than 1,300 projects, of which 840 projects are already underway.  Some projects are the result of budget commitments from previous fiscal years.  The transfer of $2,607,000 to the Windsor–Detroit Bridge Authority would be used to rehabilitate land that was previously owned by Hydro One.  Most of the $829 million in frozen allotments would be reprofiled to be spent in a future fiscal year.  The performance of these projects will not necessarily be affected, and these reports will not necessarily result in additional delays.  According to the representatives of the Office of Infrastructure of Canada, this is a common practice for the organization, giving it the opportunity to provide the funding at the time its partners are making a request for it.  By the end of fiscal year 2016–2017, the Office of Infrastructure of Canada anticipates that it will have transferred over $30 million in unallocated legacy funding to the Gas Tax Fund.

Royal Canadian Mounted Police

  • The Royal Canadian Mounted Police (RCMP) is requesting $92.8 million in voted appropriations.  Of this amount, $70 million, Vote 1c, would go to maintaining RCMP operations pending a comprehensive resourcing review.  The review was launched in 2016 to assess the financial integrity issues facing the RCMP.  Its final report is expected to be completed by the end of March 2017.  The RCMP would reassess its needs before the end of the fiscal year to make sure it would use only the amount it needs, in order to guarantee its spending authorities do not expire.

Agriculture and Agri-Food

  • The Department of Agriculture and Agri-Food is requesting $352.1 million in voted appropriations.  Of this amount, $350 million, Vote 1c, will go to fund the transfer of federal water infrastructure, being 20 dams and 19 reservoirs, to the provincial Saskatchewan’s Water Security Agency.  The Government of Canada will no longer have any obligations respecting the ownership and operation of these structures.  The reason for this transfer is to give Saskatchewan control over the infrastructure it needs to meet its provincial water management objectives.  The dams in Saskatchewan are the last ones owned by the federal Agriculture and Agri-Food Department.  Like the other structures that had previously been transferred to Alberta and Manitoba, they are legacy infrastructure from the former Prairie Farm Rehabilitation Administration.  Returning the dams and reservoirs to the three Prairie provinces was part of a departmental policy, the purpose of which was to give control of these structures to the appropriate level of government to manage them efficiently.  The sum of $350 million is an increase of 15% over the voted appropriations of the Department of Agriculture and Agri-Food to date.  It is a one-time expenditure that was not planned for at the beginning of the fiscal year, because it is the result of measures taken in the 2016 federal budget, which was tabled after the Main Estimates 2016–17.  The Department of Agriculture and Agri-Food is also requesting $1.7 million in funding to support genomics and the digitization and data mobilization of its biological collections, as well as $0.4 million to reinvest revenues in scientific infrastructure from the sale of a property located in Kent County in New Brunswick.

Employment and Social Development

  • The Department of Employment and Social Development is requesting $193.7 million in voted appropriations.  Of this amount, $178.4 million, Vote 7c, is funding off unrecoverable student loans, $5.8 million is for the Aboriginal Skills and Employment Training Strategy pilots and $5.8 million is for the Student Work-Integrated Learning Program.  Our committee paid particular attention to the funding item to write off unrecoverable debts and the $178.4 million that would serve to write off 32,554 debts related to unrecoverable student loans, equating to an average of $5,480 per loan.  The Canada Student Loans Program had $18 billion in outstanding loans to Canadian students as of 31 March 2016.  According to the Debt Write-off Regulations, debts must be written off in the year in which they are determined to be unrecoverable.  The regulations set out the criteria under which accounts can be submitted for write-off.  Our committee wished to learn more about the steps the Department of Employment and Social Development takes to collect the amounts owed to the Government under the Canada Student Loans program and the performance indicators for its collections program.  The departmental officials were unable to answer all our committee’s questions, but agreed to provide a written response.

National Defence

  • The Department of National Defence is seeking $29.5 million in voted appropriations.  This figure includes $28.5 million, Vote 1c, in funding related to Operation Reassurance for Canada’s contribution to the North Atlantic Treaty Organization’s (NATO) assurance measures and deterrence posture in Central and Eastern Europe.  Canada provides 6.6% of NATO’s common budget, or about $140 million per year, making it the sixth-largest contributor to NATO.   In 2016–2017, the Department is planning to spend a total of $91.9 million on Operation Reassurance.  The Department is also proposing an internal transfer of $48.2 million into the operating expenditures vote.  It is attempting to avoid needless requests for additional voted appropriations and to meet its target for planned lapses.  Under the Defence Renewal initiative, the Department has reinvested between $400 million and $500 million internally to date.  The goal of the initiative was to generate a reinvestment opportunity of between $750 million and $1.2 billion annually, starting in fiscal year 2017–2018.

Foreign Affairs, Trade and Development

  • The Department of Foreign Affairs, Trade and Development is requesting $342.2 million in voted appropriations.  Most of this amount, exactly $174 million, Vote 10c, would go towards addressing humanitarian assistance requirements and antimicrobial resistance. The amount of $174 million requested would be allocated as follows: $45 million would serve for the humanitarian assistance to populations affected by the impacts of El Niño, $120 million to address the needs of people affected by conflict or disaster, and to maintain Canada’s humanitarian assistance responses, and $9 million to support international action on antimicrobial resistance. Another $130 million, Vote 10c, would serve to help developing countries address the impact of climate change. To that effect, the Department is working with multilateral development banks that conduct risk analyses to ensure the funds disbursed serve the established objectives.  In November 2015, the Government of Canada committed to spending $2.65 billion over the next five years to help developing countries address the impact of climate change.  Our committee wanted to know how the Department guarantees that the Government’s investments meet its stated goals.  The Department explained that it uses a results framework for every investment that enables it to track how the funds were used and what results were achieved. Our committee requested additional information on the Department’s results framework.

Veterans Affairs

  • The Department of Veterans Affairs is requesting $134.8 million in voted appropriations to fund two items.  Most of this amount, some $132.3 million, would fund demand-driven programs and services that provide support to eligible veterans and their families under the New Veterans Charter.  The remaining $2.5 million, Vote 1c, would go toward the Department’s advertising programs, which are intended to highlight commemoration activities.

Honourable senators, I will remind senators of the words of Canadian scholar Norman Ward in his 1962 book The Public Purse: A Study in Canadian Democracy. He says, on page 6:

Parliamentary control of finance assumes a close liaison between the legislative and executive branches of government, and like any chain of command is no stronger than its weakest link.  As the foregoing outline suggests, the Canadian system of control (which in its operation has been so unlike the British of which it is theoretically modelled that many apparently useful comparisons are in reality irrelevant) relies on a series of documents and practices, all of which have had to be developed, starting from an initial acceptance of the principles involved, and ending pragmatically with the invention of something satisfactory to Parliament.  There are several points at which the process could break down if the required devices disappeared or were suddenly modified.  The preparation of the original estimates in the departments, for instance is now systematized, and closely watched by officers of the Treasury Board; the House of Commons, for most of its history, appears to have had a profound faith in the preparation of the estimates.  Yet, if the Department of Finance were to become inefficient or corrupt, or merely to return to the happy-go-lucky outlook which characterized public spending down to at least the 1920’s, that part of parliamentary control which depends on the estimating process would be dangerously weakened, if not destroyed.1

Honourable senators, I encourage all senators to vote for the 13th Report on the Supplementary Estimates (C). I thank colleagues for their attention.