Proceedings of the Standing Senate Committee on
National Finance
Issue 5 - Evidence - February 4, 2014
OTTAWA, Tuesday, February 4, 2014
The Standing Senate Committee on National Finance met this day at 9:30 a.m. to study the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2014.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: This morning, we are continuing our study of the Main Estimates for the fiscal year ending March 31, 2014.
[English]
In our first hour this morning, we are pleased to welcome Mary Dawson, who is the Conflict of Interest and Ethics Commissioner.
The commissioner is joined by officials from her office. Lyne Robinson-Dalpé is the Assistant Commissioner, Advisory and Compliance, and Denise Benoit is Director, Corporate Management.
Ms. Dawson, I understand you have brief introductory remarks, and then we will get into a discussion. Thank you very much for being here.
[Translation]
Mary Dawson, Conflict of Interest and Ethics Commissioner, Office of the Conflict of Interest and Ethics Commissioner: Mr. Chair, thank you for inviting me to appear before you today. With me this morning is Denise Benoit and Lyne Robinson-Dalpé, whom you already introduced.
I will begin by briefly outlining my mandate and how my office is organized and resourced in support of it. Then, I will review our spending for the current fiscal year in the context of my broader management approach.
[English]
I administer the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons. These two regimes seek to prevent conflicts between the public duties of elected and appointed officials and private interests.
The act applies to over 2,500 public office-holders. All of them are subject to the act's core set of conflict of interest and post-employment rules. Over 1,100 public office-holders, including ministers, ministers of state, parliamentary secretaries, ministerial staff and full-time Governor-in-Council appointees are called reporting public office-holders and, unlike the non-reporting public office-holders, are subject to reporting and public disclosure provisions, as well as some additional rules of conduct.
The members' code applies to all 308 members of the House of Commons. It includes rules similar to those found in the act and indeed to the Senate ethics code but does not include some of the more onerous rules that apply to reporting public office-holders. Ministers and parliamentary secretaries are subject to both the act and the code.
I report annually to Parliament on my activities under the act and under the members' code and prepare for tabling in the House of Commons a list of sponsored travel by members each year.
To fulfill my mandate as effectively and efficiently as possible, I have organized my office into five divisions.
The first one, advisory and compliance, is the largest division, accounting for about one third of my staff. This group provides confidential advice to public office-holders and members about their obligations under the act and under the code. It reviews their confidential reports, maintains internal records of this information and administers a system of public disclosure.
Our policy, research and communications division coordinates a range of education and outreach activities that are important in helping public office-holders and members meet their obligations. It also contributes to policy development, compiles research, conducts external communications and media relations and coordinates our dealings with Parliament.
While the major focus of my office is on prevention, we also investigate possible contraventions of the act and the code. Our reports and investigations division leads our investigations and coordinates the preparation of my annual reports.
Our legal services unit provides strategic legal advice on all facets of our work, including, in particular, investigations.
Our corporate management division, which Ms. Benoit is the head of, oversees the development and implementation of internal management policies and service delivery in the areas of human resources, finance, information technology and management and the management of office facilities. It also manages our shared services agreements with the House of Commons, the Library of Parliament and Public Works and Government Services Canada.
Finally, my own small team within my own individual office provides general administrative and logistical support for the office.
My office performs all of these activities with a maximum staff complement of 49 full-time employees.
I understand the committee is meeting with all agents and officers of Parliament. Unlike most other agents, the commissioner is appointed under the Parliament of Canada Act, and the commissioner's office is an entity of Parliament.
For this reason, my office is not subject to most Treasury Board policies and guidelines, and most legislation governing the administration of the public service does not apply to it. However, in the interests of good governance and in recognition of the importance of responsible stewardship of public funds, we follow many of the management practices used in the public service.
For example, we have established an internal management framework based on the principles followed in the public service. We have a strong human resource policy framework in place. We publicly disclose our travel and hospitality expenses in the interests of transparency. We document our internal practices and have our annual financial statements audited, and we are in the process of developing a performance measurement strategy to demonstrate the effectiveness of my office in fulfilling its mandate.
We also augment our resources by taking advantage of external capacity where practical. For example, we have in place a number of agreements with the House of Commons, the Library of Parliament and the Department of Public Works and Government Services to provide shared services in the areas of information technology, finance and compensation. These arrangements provide for greater efficiencies, as well as an additional level of security.
For the first five years after my office was created in July 2007, we maintained expenditures well within an unchanged operating budget of $7.1 million. Last year, in recognition of the climate of fiscal restraint, we conducted a spending review to identify opportunities for efficiencies and also reduced the amount set aside as a reserve. As a result, we reduced the non-salary portion of our budget by an amount equivalent to 3 per cent of our operating budget, and, next year, we expect to reduce it further, amounting to a 4 per cent cut overall. Although that reduction was partially offset by an increase in our salary envelope to cover the economic increases that came into effect on April 1, we were able to proactively offer a budget reduction of 1.4 per cent for 2013-14. This lowered our total spending authorities to $7.035 million.
[Translation]
I hope these remarks have been helpful. Again, I thank the committee for inviting me to appear. I look forward to answering your questions.
[English]
The Chair: Ms. Dawson, thank you very much. You touched on two of the points we like to start out with, the number of employees and the full amount of your budget, so you anticipated that — 49 employees and a $7-million budget.
Ms. Dawson: We have 46 right now.
The Chair: Do you anticipate that that will stay at roughly 49 — 46 plus looking for three?
Ms. Dawson: Yes, we've always had pretty well the same complement.
The Chair: You don't have new initiatives that will require additional employees?
Ms. Dawson: No.
The Chair: You indicate that your total operating budget will be going down slightly, in spite of some salary increases that are mandated?
Ms. Dawson: Yes, that's correct.
Denise Benoit, Director, Corporate Management, Office of the Conflict of Interest and Ethics Commissioner: Exactly. It will go down to $6.9 million next year, so that's the additional 1 per cent that we had committed to.
The Chair: Before I go to my list, you indicated that you're audited each year, but not by the Auditor General?
Ms. Benoit: No, we're not.
The Chair: Is it an outside auditor that you bring in?
Ms. Dawson: Yes, it is. We started that a few years back.
The Chair: That audit is part of your annual report to Parliament?
Ms. Dawson: Yes.
The Chair: Thank you. That clarifies some of the points that —
Ms. Dawson: I should correct one thing. I have no idea what will come out of the five-year review of the act, and I made one or two recommendations there that might have a slight impact; for example, additional post-employment reporting or more reporting from part-time public service holders. It wouldn't be super appreciable, but there might be some slight increases.
The Chair: To help all honourable senators understand, who is conducting that five-year review?
Ms. Dawson: The Committee on Access to Information, Privacy and Ethics. I'm hoping that it will be released this week, as a matter of fact. It was begun over a year ago. I'm also waiting for the results of my five-year review of the members' code as well. That was started in May 2012 and I'm still waiting.
The Chair: Thank you.
Senator Buth: Thank you very much for being here today. I'm looking at the comments that you made about whom the act covers. You have listed over 25 public office-holders. Maybe you could clarify in a little more detail how that is split between reporting and non-reporting.
Ms. Dawson: The reporting are generally full-time people and the non-reporting are generally part-time people, but, basically, all ministers and parliamentary secretaries are reporting. It's the Governor-in-Council appointees that are split between the two groups. The Governor-in-Council appointees and the ministerial staff are the two largest groups. Each of them is in the vicinity of 500 or 600. That's it, I think. Yes.
Senator Buth: That's in the reporting group?
Ms. Dawson: The reporting group has a significant portion of Governor-in-Council appointees and all of the ministerial staff, because there are very few part-time people there, and it has all ministers and all parliamentary secretaries.
Senator Buth: I'm curious: Why the distinction between full time versus part time in terms of reporting?
Ms. Dawson: The rules are more stringent for the full-time people. It's not exactly as described there, but that's the main distinction.
It's because the feeling is that, for example, the act does not impose significant — or any — reporting obligations on just the plain old public office-holders. The reporting obligations are on the reporting public office-holders, so if you are a part-time Governor-in-Council appointee, there are not a lot of obligations. There are values and ethics rules that you have to meet, but there aren't reporting rules. I've made some recommendations along those lines in my report as well.
Senator Buth: Thank you. In the estimates — I'm looking at the tables — what specifically are the statutory items in terms of your expenses?
Ms. Dawson: Ms. Benoit, why don't you take that?
The Chair: We're at page II-257?
Senator Buth: I'm in the Library of Parliament documents.
The Chair: Are you in plans and priorities or the Main Estimates?
Senator Buth: It's from the estimates. Yes, 257. That's the reference.
Ms. Benoit: The only statutory items we have at the office are for the employee benefits and plans. Every department in the public service in Parliament has to pay that. It's a percentage of our salary envelope. Last year, I think it was 17.4 per cent of our salary envelope. As I said, it's to cover employee benefits.
Senator Buth: Then on page II-258, you have two items, the administration of the Conflict of Interest Act and the Conflict of Interest Code and internal services. You show an increase in the administration of the act from 2011 to 2012 from $4.1 million to $4.9 million. What was that from?
Ms. Benoit: There's a decrease in the internal services, and it's more because we're trying to decrease the overhead and focus the spending on actual program delivery.
Senator Buth: In that table, then, internal services are actually part of the administration?
Ms. Benoit: Exactly. Again, every department has to identify how much they spend on overhead, that is, all corporate services, including communications, finance and part of legal services. This is what we have estimated that amount to be.
Senator Buth: Where have those savings come from for internal services?
Ms. Benoit: We cut one position from my team, and we've also implemented some measures internally, such as using emails instead of regular mail to communicate with our stakeholders. That has had an impact on how much we've spent. We've centralized some of our services — it may not look like much — for example, for the purchases of supplies. We've removed all individual printers. We've put in initiatives to reduce spending on those types of things.
The Chair: Just as a point of clarification, does that include any savings that might exist for shared services with respect to information technology?
Ms. Benoit: For shared services, we've been paying pretty much the same amount every year to the House of Commons. We have not been using shared services that have been implemented in the public service because we're an entity of Parliament. We use the infrastructure of the House of Commons through a memorandum of understanding.
The Chair: Even though you use the term ``shared services,'' it's not the legislated Shared Services Canada?
Ms. Benoit: Exactly. No, it's not the same one.
The Chair: Do you maintain your own information technology personnel within your office?
Ms. Benoit: No. We actually use the resources of the House of Commons; we use their servers and expertise. The only function we keep internally is purchases of equipment like desktop computers. When we develop new applications, we determine business requirements. For expertise and technology, we use the expertise of the House of Commons.
The Chair: Are you charged back from the House of Commons?
Ms. Benoit: Oh, yes, we are. There is a fixed amount every year.
The Chair: There is an annual debate on how much they should charge you?
Ms. Benoit: Yes.
Senator Eaton: Thank you, Ms. Dawson and Ms. Benoit.
The bars of standards of accountability and transparency have certainly gone up in the last Parliament. Does that change the parameters of your job?
Ms. Dawson: No. I think we've always tried to be transparent. The whole thing my office is about is transparency, really. We have an auditor looking at our figures, which we have had for several years. I've released many fulsome reports. I voluntarily disclose travel expenses and that sort of thing, so nothing has really changed for me.
Senator Eaton: What I meant is towards educating MPs and ministerial staff in what they have to report and how they are expected to behave.
Ms. Dawson: The reporting requirements are clearly laid out in the act and the code, so they are set; they're not changing.
Senator Eaton: So nothing has changed?
Ms. Dawson: Nothing has changed, no.
Senator Eaton: In the last piece of testimony, you said something about values and ethics rules. Could you explain to me what you mean by ``values''?
Ms. Dawson: I was talking about the act. The first part of that act has rules such as don't give preferential treatment, don't accept gifts that could reasonably be seen to have been given to influence you, that sort of thing. There are about 10 or 12 of those rules.
Senator Eaton: Hard and fast rules?
Ms. Dawson: Yes, and that's under the heading ``values and ethics'' and applies to all public office-holders, whether they're just plain old ones or reporting ones.
But then the other rules are in separate parts of the act, and those are the reporting requirements that apply only to the reporting public office-holders. When I refer to the values and ethics rules, I mean the general rules that apply to everyone.
Senator Eaton: Where does the largest portion of your budget go?
Ms. Dawson: It goes to salaries, basically.
Senator Eaton: So labour within your department.
Ms. Dawson: Yes.
The Chair: I wasn't going to get into this, but you sort of led us into it through Senator Eaton's question. Public office-holders can accept gifts, even if those gifts could reasonably be taken to influence a decision of the public office- holders, as long as it is a gift is from a friend. Is that not correct under the current legislation?
Ms. Dawson: The nuance is that if a friend gives you a gift, normally you would not expect it to have been given to influence you. If you got a gift from your grandmother, you wouldn't think she was trying to get something from you. We actually have looked on occasion. There is a question of what a friend is, and I have interpreted ``friend'' fairly strictly. That works both ways. It works for accepting gifts. It means you can't accept a gift from a constituent and say, ``That's a friend of mine.''
By the same token, if you're assisting a constituent, some of the other rules prevent preferential treatment. There are special considerations if it's a friend, and, again, I interpret ``friend'' the same way — quite narrowly — so that it works both ways. I could mention that I have issued a number of reports that make reference to that interpretation of gifts. The first one, early in my tenure, was called The Watson Report, and I described it. I can't quote exactly what I say there, but it's a close personal friend. I do restrict the meaning of ``friend'' because I think it's important.
The Chair: You will recall that the term ``close personal friend'' was in the code and in the legislation prior to the Federal Accountability Act of 2006.
Ms. Dawson: I wasn't administering that, but I believe it was.
The Chair: But it isn't any longer.
Ms. Dawson: No.
The Chair: But you've worked it in through —
Ms. Dawson: That's my interpretation of what a friend is. It's somebody with a close relationship, more than just a constituent or an office colleague or something.
Senator Callbeck: Thank you all for coming this morning. Page 16 of the 2012-13 annual report, with respect to the Conflict of Interest Act, says that in 2012-13, 17 penalties were imposed and that this is a significant increase over the previous two reporting periods. I understood you to say that there has been no change in the reporting requirements over that time. So how do you explain the increase?
Ms. Dawson: My act came into force in 2007, and I took a year or two to warn people that they were going to be penalized for this and that. There were no penalties, let's say, for the first two years, but then I started to apply the penalties. Basically, as I have gotten experience and whatnot, it has gone up each year.
Senator Callbeck: It says here that 17 is a significant increase. So what was it the past two years?
Ms. Dawson: Can you answer that, Ms. Robinson-Dalpé?
Lyne Robinson-Dalpé, Assistant Commissioner, Advisory and Compliance, Office of the Conflict of Interest and Ethics Commissioner: In the last couple of years, in the context of annual reviews of public office-holders' disclosures, we added one section in our letter asking for financial statements because reporting public office-holders cannot invest in publicly traded securities. Therefore, we wanted to ensure that that was the case, so, in the context of the annual review, we started asking for regular financial statements, just to confirm that that was the measure that was being applied and that people were observing that obligation. Through the course of those exercises, we found some cases where there were material changes in the context of acquiring publicly traded securities that were not reported within 30 days. We imposed a penalty.
Ms. Dawson: The important thing to understand here is that the penalties in our acts are for failures to meet deadlines. It's quite frustrating. There is no penalty for a substantive offence, so a lot of these penalties are for failures to report that they have acquired controlled assets, which they shouldn't have. We cannot penalize them for acquiring the controlled assets; we can only penalize them for failing to meet their deadline. So that's why, when we had that question in the annual review, it pulled out a lot of information about things that they had failed to report to us, let alone failed to do properly.
It's a little bit odd the way our penalties are applied. It's because we generally tend to apply the penalties when there is also a substantive aspect to what they have done, but we can only do it when they have missed a deadline. That's another set of my recommendations in the five-year review.
Senator Callbeck: What kind of penalties are we talking about?
Ms. Dawson: Up to $500. It's not huge. Generally, it's $100 per infraction. Sometimes two or three are done at the same time. If there's a second one, we might put it up to $200, but it can only go to $500.
Senator Callbeck: Have you recommended that that be increased?
Ms. Dawson: No, I have not recommended that the $500 be increased. I've just recommended that there be penalties directly for the infractions because that makes more sense to me than a penalty for failing to meet a deadline, which is also fine.
Senator Callbeck: I have another question. On your office website, you talk about examination reports. You had four in 2013 and one inquiry. What is the difference?
Ms. Dawson: For reasons that I can't explain, the code and the act use different terminology. Another one of my recommendations is to bring some of that terminology into line.
Basically, if you are being investigated under the members' code, it's called an inquiry. If you're being investigated under the Conflict of Interest Act, it's called an examination.
Senator Callbeck: It says here that 48 cases related to possible contraventions were worked on 2012-13. How many of those were actual contraventions?
Ms. Dawson: I can't say exactly, but, if we came up with five instances where we found that they had contravened, those are the ones we were able to complete in that year. There may be a few more that go over into the next year.
We have two ways of doing investigations under the act or the code.
They can be requested by a member of Parliament or a senator, and, in those cases, if there are reasonable grounds to think that there might have been an infraction, we have to proceed and to issue a report.
But the majority of the investigations that I undertake are not at the instigation of a member or a senator. They are in the media, or private individuals bring things to my attention. I always look into things that are brought to my attention, however they come to my attention.
We open a number of files, look into them and then make a decision as to whether to institute an examination or an inquiry. Quite often we close files because there's no point in destroying somebody's reputation if there's nothing there. Quite often we find there's nothing there. That's why there are much larger numbers for the files opened.
Senator L. Smith: Commissioner, I have two general questions. What is the biggest challenge in your job?
Ms. Dawson: The biggest challenge is probably countenancing the misinformation that goes out in the media. I'm restricted on how much I can respond to those sorts of things. When I'm doing an examination or an inquiry, I can't divulge anything, except the fact that I have instituted it. Sometimes I get people saying, ``Oh, I've sought advice from the commissioner,'' and they haven't. There are all sorts of things, and it's quite frustrating sometimes. On occasion, if it's blatant enough, I'll counter it. So that's a challenge.
I think another challenge is getting my investigations — which is the generic term I'm using for examinations and inquiries — done in a timely way, and there are many reasons for delay there. Most people have lawyers, and that takes extra time. There are statutory delays because you have to give people time to give responses. Sometimes it's frustrating that that goes as slowly as it does. I would say that's another challenge.
Senator L. Smith: Through the management and enforcement of the code, can you share with us trends that you see? Are these trends changing?
Ms. Dawson: You're talking about the members' code rather than the act? There are two vehicles.
I'm finding that fewer inquiries are being asked for under the code than under the act, but then there are 2,500 people under the act and 308 MPs, and there's a fairly heavy focus on the ministers and parliamentary secretaries because they're the ones with the power.
I think I have diverged from your question. What was your question?
Senator L. Smith: Are there trends in the types of cases you are seeing? Are they changing or are they consistent?
Ms. Dawson: I think there's consistency. I don't see huge changes in the subject matter of what we look at. Something will come to the attention of the public and a little bit more attention may be given to that. For example, there's quite a bit of interest in fundraising these days.
But I think there's a standard set of obligations under the act and the code, and they're pretty steady.
Senator L. Smith: Thank you.
Senator Seth: Thank you, Ms. Dawson. On average, how many cases does your office handle per year? How many people work on these cases? How many cases are they assigned to? Do you find there are enough people to work on these cases? Are you falling behind? Maybe you're missing a possible contravention of the Conflict of Interest Act.
Ms. Dawson: I would say we average about six or eight investigations per year, ones that we actually initiate, but we would average maybe 25 or 30 files that we've opened. My figures may be a little off. I think we have adequate staff.
I've noticed that we actually had more complaints and investigations last year than this past year, so they may have peaked a little bit. It took a few years for them to get built up, as a matter of fact, and I wouldn't be surprised if 2012- 13 was a peak year, but I don't know. The thing is, we never quite know what's coming. Does that answer your question?
Senator Seth: Yes. From $7 million in the budget, the Office of the Conflict of Interest and Ethics Commissioner conducted a spending review, and there was a savings of $96,887 as a result.
What exactly was cut? How can the office save more money in the future? What is required to do so?
Ms. Dawson: I'm not sure how we can save more money in the future. We've done a pretty good job this last year. We cut one significant thing. Ms. Benoit said it wasn't a huge amount of money, but we stopped buying postage and used emails whenever we could.
There's a lot of focus on investigations, inquiries and examinations, but the bulk of our work is in the compliance and advisory unit because there's an ongoing relationship with both the public office-holders and the members of Parliament out of that office. Every year, we do annual letters to everybody asking them whether anything has changed.
Each person under the act or the code has a designated adviser whom they can call and request advice from. That's where most of our work occurs, and that is demand-driven. There's nothing much we do that isn't demand-driven, except for perhaps some communications.
Senator Seth: What is your priority for the coming years? What is the most important thing you will be looking for?
Ms. Dawson: I just think continuing as we have. I think we're doing our job, and I'm not sure what I would add to that. I have identified a lot of changes that I think could be made to the act and the code, and I don't know what will happen to those recommendations.
Senator Seth: But there is nothing strategically planned as a priority for the coming years?
Ms. Dawson: No, because basically we're captive of the contraventions that appear to have occurred and of the systems for reporting. I try to make fulsome reports and sometimes observations annually, but there's not a lot of room for entrepreneurial activity out of my office.
Ms. Benoit: If I may add one thing, not on the operations but on the administrative side of the office, we want to modernize our public registry. The commissioner has an obligation to make public those declarations made by our stakeholders. We've been using aging technology, so one priority right now is to modernize that. Our priority is looking at business requirements right now, but eventually, in the new fiscal year, that will be an expenditure for the office. That's why the commissioner has a reserve for that type of expenditure.
Senator Seth: That answers my question. Thank you.
Ms. Dawson: Thank you, Ms. Benoit. I forgot about that.
The Chair: Senator Seth's question goes to a point you have in your comments that you are in the process of developing a performance measurement strategy. You've been around for seven years; is somebody saying, ``Hey, you should do this''?
Ms. Dawson: No. We think we've kind of got a grip on what we're doing, and it's time to take the extra step to look at how we're doing, basically.
The Chair: This is not a result of the inquiry and the review that is taking place?
Ms. Dawson: Which inquiry?
The Chair: Your inquiry; the review of the legislation.
Ms. Dawson: No. It was actually two years ago that I did most of the work for that.
The Chair: It was two years ago you did most of the work?
Ms. Dawson: In preparation for the five-year annual reviews.
Each year, we look at what we can focus on. We have strategic meetings once a year to look at what it is we'd like to focus on the following year. I'm sorry, I forgot about the Internet business. That is indeed one, plus the review of performance measures.
[Translation]
Senator Bellemare: Thank you for being here. My question is along the same lines as those of Senator L. Smith and Senator Seth. You have been on the job for seven years now.
Ms. Dawson: Almost, six and a half.
Senator Bellemare: Could you give us an assessment of your time at the commissioner's office? Have you done an analysis and made recommendations for the future?
Ms. Dawson: As I always say, my recommendations are in my reports. They contain many observations, some of which are quite detailed, as in the case of the report on public office holders.
Senator Bellemare: On a different topic, I would like to hear your assessment of the obligations we have in the Senate as compared with those of members of the House of Commons?
Ms. Dawson: Things have changed a bit of late. Amendments to the senators' code have brought it more in line with that of the House of Commons, but there are still differences. I can't list them specifically, but I would say that now, the requirements are probably a bit more stringent for members of the House of Commons.
Senator Bellemare: So the obligations are more demanding for the House of Commons?
Ms. Dawson: I believe so. I believe the changes resulted in bringing the senators' code more in line with that of the House.
Senator Chaput: Most of my questions have been answered, but I just have a very quick one.
[English]
Ms. Dawson, you talked about the files and said that many files were opened and that many of them you closed because there was really nothing there. What's the percentage of the files that you have closed, let's say in a year, because there was nothing to them?
Ms. Dawson: I'd say probably two thirds of them.
Senator Chaput: Two thirds, so the amount would be about —
Ms. Dawson: Thirty-three were closed in one year, but some of those had been carried over from previous years.
Senator Chaput: Oh, yes. So, as a rule, it takes how many years from the beginning of a file until you either close it or proceed?
Ms. Dawson: There's no standard. Quite often, I can close something within a month if it obviously has no grounds at all. A complicated inquiry or examination could take over a year, but I keep striving to get it under a year.
Senator Chaput: And there's no backlog?
Ms. Dawson: No. It's not too bad. We currently have four or five inquiries. Actually, they're all examinations. We don't get that many inquiries these days. I think five files are active. Those are not the ones we're looking into. Those are the ones that are actually investigations.
[Translation]
Senator Mockler: Commissioner, you said that you had 49 full-time equivalent employees, or FTEs. Of those, how many are accountants and lawyers?
Ms. Dawson: We have no accountants at all, but three lawyers.
Senator Mockler: Is that enough?
Ms. Dawson: Yes, I would say so.
[English]
Senator Mockler: I am looking at what you're proposing for 2013-14. What are your main priorities for this coming year?
Ms. Dawson: I think Ms. Benoit just reminded me recently that one of them is making our information systems better, so that's a good priority. The rest of what we're doing is more of the same, basically.
I'm waiting with interest, as I keep saying, to see whether any of our recommendations are picked up for changes. If that's the case, our priority would be any changes to the legislation.
Senator Mockler: How do you prioritize your office activities?
Ms. Dawson: How do I prioritize my office activities? I don't know; I'm not sure how to answer that.
[Translation]
Ms. Benoit: As Ms. Dawson mentioned, the management team meets once a year. They meet for a whole day to examine the context we operate in. That is when the priorities for the next year are set.
Owing to the office's mandate, the reason I think the commissioner is hesitating a bit is that we respond to demand. Although our investigations are a bit higher profile, the advice we provide daily to the people who call us is really our priority. Our priority is to administer the code and the act. Our other activities are more administrative in nature, and that is discussed at the strategic meeting.
As for the accountants who work for us, we use the Library of Parliament's services in that area.
Senator Mockler: How many times do you consult people outside your office when you look into a complaint?
Ms. Dawson: The only people I can think of are official court reporters; everything else we do internally.
Ms. Benoit: You are referring to contract workers, are you not?
Senator Mockler: Yes.
Ms. Benoit: Yes. For obvious reasons, we have our own lawyers. So the services are really there internally, except for those of official court reporters.
[English]
Senator Mockler: Do you need time to consult outside of the box when doing a study on a particular activity?
Ms. Dawson: No. The investigations that we do, if that's what we're talking about, are confidential. They're not done publicly, so we have to be very careful about what we disclose about them until the report is issued.
We interview witnesses, and we caution them to keep quiet about what it is we're telling them. Sometimes we have to disclose a little bit about what we've learned from one witness, particularly to the person who is said to have contravened the act, but we don't go outside anywhere except for those court reporters.
[Translation]
Senator Mockler: You talked about the attitude, if you will, of the media in general. Is there anything you could recommend to us to help the media better understand how the process works?
Ms. Dawson: Our Web site provides a lot of guidance and information. It is the best and, I believe, only resource. We frequently respond to media inquiries. We get many calls and we answer them carefully.
[English]
Senator Gerstein: Ms. Dawson, under the code and the act, some of the requirements are numbers, and some of the requirements are words.
The numbers are very precise. For example, if you have to file a compliance within 120 days and it's 121 days, you're offside. If it's 120 days, you're onside.
Numbers are very clear, but words are very much open to interpretation — for example, if you have to disclose a gift from a friend. My interpretation and your interpretation of what a friend is might be different.
I'd be interested to know, in terms of how you lead the department, how much of your time is spent in what might be termed very clear issues — either you're onside or you're offside — and how much of it would you describe as being discretionary interpretation on your part?
Ms. Dawson: Well, it depends on whom you're talking about in my office.
Senator Gerstein: I'm talking about you.
Ms. Dawson: If you're talking about me, most of my attention is on the difficult cases. My attention would be on the decision making.
Senator Gerstein: And on discretionary?
Ms. Dawson: I wouldn't exactly call it discretionary. I would call it interpretive.
Gradually, I build up precedence, and I'm very careful whenever I do make a decision to make it public. In my annual reports, I go out of my way to make sure that I indicate some of the important things I've done.
In my investigation reports, I quite often have a section at the end with observations. I put guidelines up. I do lots to make public my decisions. Sometimes I've stretched the meaning of something a little bit, and I've thought, ``Well, I'll just put that out in my annual report and see if anyone objects,'' because you do have to interpret things sometimes. I think the only way to handle that is to tell people that's what you've done.
Senator Gerstein: Thank you very much.
Senator Eaton: Do you encourage people to put investment portfolios in blind trusts?
Ms. Dawson: We don't encourage them; we tell them they have to or else they have to sell them. Basically, you have to divest if they are controlled assets, not all assets. That is another area, incidentally, where I've made some recommendations. I think some of those rules are a little too broad. They catch people who could never have a conflict with respect to their holdings, but that's another issue.
The Chair: When you say you've made recommendations, is that to the House of Commons committee that will be reporting —
Ms. Dawson: In the five-year review.
The Chair: So we may or may not see that in their report, which might or might not result in legislation?
Ms. Dawson: That's right.
Senator Buth: Are the recommendations in your five-year review public?
Ms. Dawson: Yes.
Senator Buth: Where would we find those?
Ms. Dawson: You can find them as the annex to my last year's annual report, or you can find it in the annual review, which is also public.
Senator Buth: Thank you. You commented in your last paragraph that you also reduced the amount set aside as a reserve. Can you explain that?
Ms. Dawson: Yes. We've always had a reserve. When I started in this office, I didn't know how many investigations there would be. That's kind of the unknown, so we had a significant reserve.
After a number of years have gone by, we see we've never used the whole of our reserve. It's not to say that all of a sudden we're going to have to. We decided this year, because we were in that exercise, as everybody else was, to cut back on the budget, and we decided to take something off the reserve.
Senator Buth: And how large would that reserve be?
Ms. Benoit: It's actually half a million dollars.
Senator Buth: What have you used on average over the last maybe three years?
Ms. Dawson: Of the reserve?
Senator Buth: Of the reserve.
Ms. Dawson: We haven't dipped into the reserve at all, I don't think.
Ms. Benoit: Exactly. We actually lapse it at the end of the year.
The Chair: Could you explain to us a bit about your estimate process? We do a lot with Treasury Board in relation to estimates, but your direction for the estimates is a little different.
Ms. Dawson: Yes. We submit our estimates to the Speaker of the House of Commons, who then sends them on to the Treasury Board, and then they come back with the other estimates. We do appear before the Access to Information, Privacy and Ethics Committee once a year to respond to their questions.
The Chair: Do you have any informal relationship with the Senate ethics regime that has been put in place?
Ms. Dawson: Relatively minimal, but we have an organization across the country of the federal and provincial ethics commissioners who meet once a year. I happened to host it this past year here in Ottawa, and the Senate Ethics Commissioner is a member of that as well.
Sometimes, we informally consult across the country with our colleagues, and that would include the Senate Ethics Commissioner and me. My office is the repository of a network that keeps information together in one spot for this network across the country.
I'd say from time to time I have occasion to speak to the Ethics Commissioner here in the Senate, but not frequently.
The Chair: In terms of trends, as Senator Smith was talking about, or how the rules and guidelines in relation to the Senate and the House of Commons have gotten closer together, is that just by happenstance?
Ms. Dawson: It wasn't a planned initiative or anything; I just noticed that. I'm sure that the Senate Ethics Officer, at the time those were put forward, looked at the House of Commons ones.
[Translation]
Senator Hervieux-Payette: You no doubt recall that, in the last budget, the government removed a provision prohibiting senior public servants from sitting on the boards of directors of public companies. What that means is that, from now on, deputy ministers, assistant deputy ministers and probably directors will be able to sit on the boards of banks, insurance companies, pharmaceutical companies and the like. I was wondering whether the Department of Finance consulted you about the conflict threshold you could accept. Regardless, it is very difficult, in my view, to serve both the public interest and that of shareholders at the same time.
Ms. Dawson: There is a rule requiring reporting public office holders to declare that they are taking on a leadership role in a company.
[English]
Senator Hervieux-Payette: You were not consulted?
Ms. Dawson: No.
[Translation]
I was invited to appear one time but there was no discussion on the subject.
[English]
Senator Hervieux-Payette: So there was no consultation to remove this former wise decision not to allow our highest civil servant to sit on the boards of companies? You were not consulted?
Ms. Dawson: No, except for when I came once to — which committee was it? Anyway, it was another committee of the Senate. I was called. I then read what was happening in the act and made some comments, but I was never consulted on it.
My office was consulted once in advance, just to find out how our act worked, but they never discussed with us what they were doing.
Senator Hervieux-Payette: But if somebody at a high level in the Department of Finance was sitting on the board of a bank, what would be your conduct?
Ms. Dawson: They probably shouldn't have been. Well, it depends. If they were the deputy minister or the associate minister, they would be covered by my act. If they were anything lower than that, they would not be covered by my act. I don't look after the public service at all, except at that senior level. There is a prohibition against becoming a director or officer in any corporation if you are a reporting public office-holder.
Senator Hervieux-Payette: Mr. Chair, I think we'll have to look into this because it seems like in that bill they're not allowed, and in the budget bill, the elimination of that —
The Chair: Prohibition.
Senator Hervieux-Payette: — prohibition has been removed. One act says to do so and the other act says not to.
The Chair: Perhaps, Ms. Dawson, you may wish to look into that. Is your code offside now that legislation has passed allowing senior public servants to participate on boards?
Ms. Dawson: I would say my code would apply regardless of what they did elsewhere. Quite often, there are separate rules. There are more stringent rules, for example, say for the Bank of Canada or various entities, than I have in my code, but my code operates totally independently of the rules anywhere else. This rule would apply, whatever they did with the other rules.
The Chair: It's an interesting question of statutory priority. This piece of legislation just passed.
Ms. Dawson: I wondered, yes.
The Chair: So it's clearly Parliament expressing its desire to change the rules that existed in the past.
Ms. Dawson: But my understanding was that they were trying to get rid of some of the rules and were relying on this act to cover the situation. It probably would not cover it as extensively as the other rules that were removed. I don't know.
The Chair: Could you look into that for us and give us your position on it?
Ms. Dawson: I'll do what I can, but I did appear before a committee some months back and I gave a position. If somebody could articulate what you'd like to hear, it would be a lot easier.
Senator Hervieux-Payette: We would like to know if there is a discrepancy. If one is allowing it and the other one is not allowing it, can we reconcile both? For the budget, it was very difficult for us to know because it was just one section with three lines for each section — the Bank Act or other different acts. They were saying, ``We are removing article such and such.'' You had to go into each bill to see which section was being removed. Once it's removed, that means that they were allowed. So you say that right now the deputy minister and assistant deputy minister are not allowed to sit on boards of public sector companies.
Ms. Dawson: I can confirm that, and I can also confirm that, if those other provisions were repealed, my act stands.
Senator Hervieux-Payette: I think it's important for us to clarify that.
The Chair: It would be helpful to know your position.
Ms. Dawson: But it's already passed.
The Chair: Yes, it passed.
Ms. Dawson: It was the Standing Senate Committee on Banking, Trade and Commerce that I appeared before.
Senator Hervieux-Payette: I am on that committee.
Ms. Dawson: You were there; I remember.
Senator Hervieux-Payette: But the way you talk today reminds me that now I'm more confused than well informed.
Ms. Dawson: We'll send you something.
Senator Buth: Just a comment to say it was made clear to us that removing it was essentially removing a requirement that was a duplication. It would be very good to have you clarify that because that was the explanation.
Ms. Dawson: I'm not sure that it was only a duplication. My suspicion is that the rules in the individual legislation may have been a little more stringent. That's another matter, but my rules will stand. I think that was the intention.
Senator Buth: Yes, your rules would stand, but your clarification would be important for us.
The Chair: We have run out of time. This has been helpful. I thank Senator Hervieux-Payette and Senator Buth for bringing some clarity to this, but the final clarity will come from Ms. Dawson. We look forward to hearing from you.
Thank you very much for visiting with us today, Ms. Benoit, Ms. Dawson and Ms. Robinson-Dalpé.
[Translation]
We are continuing our study of the Main Estimates for the fiscal year ending March 31, 2014.
[English]
In our second hour this morning, we are pleased to welcome officials from the Canada Border Services Agency. Claude Rochette is Vice President, Comptrollership Branch, and Caroline Xavier is the Associate Vice President, Operations Branch.
Mr. Rochette, I understand you have a brief opening statement, and then we'll get into a little discussion.
Claude Rochette, Vice President, Comptrollership Branch, Canada Border Services Agency: Good morning. I would like to thank the chair and members of the committee for giving the Canada Border Services Agency the opportunity to discuss with you its 2013-14 Main Estimates.
I am pleased to be here with my colleague Ms. Caroline Xavier, recently appointed as the associate vice-president of our Operations Branch. Ms. Xavier was previously responsible for the Beyond the Border initiatives for the agency.
Mr. Chair, in the agency's submission for this fiscal year's Main Estimates, the agency sought funding in the amount of $1.68 billion, representing a decrease of $95.9 million or, if you prefer, 5.4 per cent over the previous fiscal year.
[Translation]
The total funding submission comprised $1,397 million in operating expenditures, $104 million in capital and $179 million for employee benefit plans. This submission reflects some of the key investments made by the Government of Canada in the past few years to keep borders open to the free flow of legitimate trade and travel.
I would like to pause here to outline some of these investments for the committee.
[English]
In the 2013-14 Main Estimates submission, the agency sought an increase of $124.2 million in order to continue providing integrated border services that meet Government of Canada objectives; invest in building a smarter, more secure and trade-efficient border that relies on advance information, innovations, science and technology; and finally, meet key business and administrative priorities, including those outlined in the Beyond the Border Action Plan.
The $124 million increase in funding was sought for eight main areas of activity: to improve the integrity of the agency's front-line operations; to increase the funding for a shared infrastructure platform, which ensures the agency has a sound information management and information technology infrastructure that houses and protects information technology assets; to arm the agency's border services officers and eliminate work-alone situations; to enhance activities relating to the cessation and vacation of refugee claims pursuant to the Protecting Canada's Immigration System Act.
[Translation]
To implement the Postal Modernization Initiative, which aims to update the infrastructure and systems used to process domestic and international mail; to re-engineer, streamline and modernize revenue and trade processes through the CBSA's assessment and revenue management, or CARM, project.
To develop, in support of the Beyond the Border Action Plan, electronic applications for our trusted travellers and trusted traders programs, and expand NEXUS by nine lanes.
And finally, to invest in the procurement of high-valued equipment that will be used to detect illegal goods for seizure.
Mr. Chair, these increases will allow the CBSA to continue to support ongoing public safety and trade priorities, as well as those outlined in the Speech from the Throne.
[English]
In these Main Estimates, the agency also sought a decrease of $220.1 million primarily due to a reduction in its operating expenditures, vote 10, by $72.8 million for the Deficit Reduction Action Plan measures announced in Budget 2012; the re-profiling of funding for certain program initiatives; and finally, initiatives that have sunset or that were fully operational.
In summary, Mr. Chair, the agency's utmost priority is to assist our officers on the front line and abroad to deliver effectively on both their enforcement and their facilitation mandates, while doing so in the most efficient and effective manner possible. To this end, the 2013-14 Main Estimates contain the investments necessary to enhance the agency's capacity to provide effective border protection and border services.
We would be pleased to take your questions.
The Chair: Before I go to honourable senators, you mentioned several different times the Beyond the Border Action Plan, and you indicated that Ms. Xavier was in charge of oversight of that. Maybe we could have a brief description of what that was and what you were overseeing.
Caroline Xavier, Associate Vice President, Operations Branch, Canada Border Services Agency: The Beyond the Border Action Plan is an initiative that was signed by both President Obama and our Prime Minister here in Canada, and of the 32 initiatives that are part of the action plan, the CBSA leads on 10 of them.
In my role as the Beyond the Border Action Plan coordinator, if you want, for the agency, I provided oversight for the management and implementation of those 10 initiatives, working along with other director general colleagues who were leading those specific implementations and working in conjunction with other government departments, including our U.S. counterpart's central agencies, in the development of the necessary policies and necessary standard operating procedures or in the necessary cabinet submissions in order to ensure that we have the necessary funding to implement the action plan items.
In summary, we were leading on 10 initiatives, all of which were towards advancing addressing threats early, facilitating trade, addressing infrastructure issues primarily and anything to do with pushing our borders out and ensuring we have a more integrated border between ourselves and our U.S. counterparts.
The Chair: That's helpful. Did you work yourself out of a job?
Ms. Xavier: Well, into a promotion.
The Chair: That's good. Is there someone in your old position still?
Ms. Xavier: There is someone in my old position. Right now they are in the process of finalizing that process, but there is somebody doing it on an interim basis right now.
[Translation]
Senator Hervieux-Payette: You monitor cars, trucks, trains, boats and aircraft at border crossings.
Mr. Rochette: Yes.
Senator Hervieux-Payette: You talked about smart equipment. Where is the equipment, what type of equipment do you have and who pays for it? Do you use that high-tech equipment at ports and airports of entry to check for drugs that are being smuggled or luxury car exports that are on their way to Saudi Arabia after being stolen in Canada? Do you pay for that high-tech equipment, or do the airports and ports have to foot the bill?
Mr. Rochette: Any equipment reflecting investments that we have in property or vehicles, for instance, is purchased with CBSA money. The current estimates mention detection technology, and the money is coming out of our regular funding of $6.6 million, which we have every year and which we reinvest in X-ray equipment and scanners, both portable and stationary. We pay for that. The only expenditures that airports and ports are responsible for appear in section 6, the accommodations. That is paid for by investors, airports and ports, and we pay only the information technology costs or the office space costs.
Senator Hervieux-Payette: Do you pay for the body scanners and luggage scanners in airports?
Mr. Rochette: No, that is security. The airport has a contract with a security agency so it can go inside the airport. Our X-ray equipment is used only to detect drugs or illegal goods.
Senator Hervieux-Payette: Is it possible to draw a parallel between what customs collects every year and what we pay for goods bought in the U.S.? We looked at that in our report. When you buy goods online from the U.S., you have to pay a minimum customs charge of $25, even if the item costs just $10. Our committee found that to be very high. Given the boom in online shopping, especially in terms of American products, is that consideration being taken into account at the moment? At customs, you are seeing a growing number of packages. Someone is paying those fees. When I fork out $25 for an item that costs $15, I am paying a service charge. Is there a link? We are collecting $2 billion a year and it is costing you $1.6 billion. Is there any offsetting in that regard, in terms of customs charges that are directly tied to imports?
Mr. Rochette: In all, we take in $25 billion a year. That is the twelfth largest source of revenue for the Government of Canada, so it is not a trivial amount.
Senator Hervieux-Payette: In your case, I would not have made any budget cuts; in fact, I think you should be given more resources. You talked about expanding NEXUS by nine lanes, but where are you going to put them? Certainly, you do not have any in Nunavut, do you?
Mr. Rochette: We have various NEXUS services, but the nine lanes in question affect Sarnia, Kingston, Fort Erie and Windsor in Ontario; Douglas, Abbotsford, Pacific Highway and Aldergrove in British Columbia; and Saint- Bernard de Lacolle in Quebec, not far from Montreal.
As far as eight of the ports go, the NEXUS lane has been set up. But in Aldergrove's case, the port will be undergoing renovations in 2015-16, so it was decided that it would be more economical to wait and include the NEXUS lane in the design of the new port.
Senator Hervieux-Payette: Is it your agency or other government departments that decide whether I am a trusted person? Who decides whether a person is trusted or not?
Mr. Rochette: The NEXUS system is run in collaboration with the U.S. Canada, through our officers and the U.S.'s officers, does the research on the individual. When a person applies for a NEXUS card to enter and exit the country using NEXUS lanes, an investigation is carried out to make sure the person does not have a criminal record or other issues that could negatively affect a person's ``trusted'' designation.
Senator Hervieux-Payette: I was wondering whether the RCMP played a role, because they do have a pretty sizeable database; there are 34 million Canadians and they must have 900 million pieces of information in their database. Bear in mind that whenever someone is arrested, even if they are not found guilty, it goes into the database and stays there.
That is why I ask the question. Do you consult with the RCMP to determine whether so and so is a person who can be trusted? If I was caught speeding between Montreal and Ottawa — well, I guess in that case, it would not be the RCMP getting involved, so I would have to think of another offence.
Mr. Rochette: On a national highway.
Senator Hervieux-Payette: In the past few days, some questions have been raised about the security agency doing the little investigations in the airports. So do you work with CSIS, the RCMP or some other organization? Who do you work with to determine whether someone is a trusted person or not?
Mr. Rochette: We have agreements with our security agencies. Of course, when doing a check, we use systems, including FOSS, which is currently in need of an upgrade. We also use the RCMP's system. A number of systems are checked to ensure that the person can be deemed a trusted traveller who is allowed to access NEXUS lanes.
Senator Hervieux-Payette: Is the new system at the airport where you scan your passport at a computerized terminal part of equipment that your agency installed?
Mr. Rochette: The NEXUS device is one of the biometric machines we can use. We also have the ABC machine, where you insert your completed card upon your return to the country. You scan your passport and insert the declaration card, and the machine will read the information. It automatically prints out a receipt with a code that a border security officer will verify before allowing you to exit or not.
Senator Hervieux-Payette: Will you cut staff in airports because of that technology, or does it simply enhance the level of security verification?
Mr. Rochette: Our staff has been reduced somewhat in the primary sector, but given the operational costs, it is not really a matter of saving money by reducing our staff. However, that does help us with the needs at airports that have an ABC system, since the volume is constantly increasing. New airports are opening their doors to international flights. Using the systems helps us meet the needs without having to request additional funding from the government.
[English]
Senator Eaton: To follow up on Senator Hervieux-Payette's question, I came through Vancouver from Hawaii. I'm a NEXUS holder, no NEXUS line, but I thought this new automated thing was wonderful — it was early in the morning and I hadn't slept — because there was no one looking at me in a subjective way.
I guess what I'm saying to you is, hasn't something been lost when you don't have an agent making a subjective decision as to whether you're bona fide or not?
Mr. Rochette: In fact, it's not that we lose everything. We still have the human interaction. We try through automation to facilitate the entry for our trusted travellers. When you put your passport in the ABC machine, there is already a check being done about you for any criminality. The information is in the system, and when you go out, it's not that you just go to the machine and it's over. You should have met a Border Services officer to look at your piece of paper that you get from the ABC to thank you and direct you to the exit in that case, because you are a NEXUS member and trusted and the code. So there is still this interaction, and there is also an interaction within the terminal after that when you look for your luggage. We have Border Services officers walking around and ensuring, and sometimes it's just a question to ensure.
Senator Eaton: Last year we passed an immigration bill that dealt with refugees. I think it was really in response to the number of boats that have brought hundreds of unfortunate people to the West Coast.
Has it been easy for you? If they arrive by boat, they're incarcerated until their appeal is heard. They get one appeal. How has that affected your service, and has it worked well?
Mr. Rochette: Basically, it works well with the new legislation and regulations that have been received. First, we have received additional funding to automate our system, so we can accelerate the review of refugee claims because we had quite a backlog.
Also, there is a part of the law — it's Bill C-11, if I recall correctly — that also deals with boat people and actions that can be taken, so it has facilitated our work.
Ms. Xavier: Building on what Mr. Rochette said, the program still continues to afford the rights necessary to those coming in claiming refugee status. It's important for you to know that the system is still there and they still have rights to a process, so that has not changed from that perspective.
It has permitted us to work within a framework that will permit us to fast-track as much as possible within that framework so we can ensure that those who are legitimate refugees can end up having the necessary rights afforded to them while we will be able to identify sooner those who are less legitimate, which is sometimes the case, and detain them, as you are saying, if they are a risk to our safety, and look at potentially removing them. There is still a process they are allowed to go through.
Senator Eaton: I know. I was the sponsor of the bill in the Senate. I wanted to see how it was working, from your perspective.
Are you responsible for removing the people once their claim has been turned down?
Ms. Xavier: Correct.
Mr. Rochette: Yes, we are.
Senator Eaton: Are you slow in removing people, or do you not have enough people to help people back to their own countries? One reads horror stories that the person has been loose for 10 years. We hear quite a bit of that in the press, so I was just wondering.
Mr. Rochette: First, the refugee has to go through the IRB, the Immigration and Refugee Board, and then we have to get the indication that we have to remove the individuals. Normally, for the individual, if we have access to them, we have different processes depending on the order that is received from the IRB. Some are voluntary. We have a contract with the company who will assist the individual to move outside of Canada to their home, which is not too expensive.
We have some cases where an individual doesn't want to move, and we have to send Border Services officers to escort them or even sometimes charter an airplane if they are high-risk.
Senator Eaton: Do you have deadlines for the removal of an individual? Do you have timelines?
Ms. Xavier: It's not that we have timelines per se because, as Mr. Rochette was explaining, there is due process they have to go through. We have to respect the process.
Senator Eaton: But once the due process has been gone through.
Ms. Xavier: Once the due process has been gone through and all the lights are green, if you will. Sometimes there is a challenge with regard to ensuring that the country they're going to is actually prepared to receive them. In some cases, there are concerns around their documentation and proof of citizenship from where they came from. You have to work in cooperation with other countries. Assuming that that country is cooperative and willing to take back the individual who left in an illegal manner, then, yes, it can be quite expedient. Our goal is to remove people as quickly as possible, assuming that all of the lights are green in the process.
Senator Eaton: If the country doesn't want that individual back, are they still your responsibility, or do they just disappear into the system?
Ms. Xavier: No, they're still our responsibility, and depending on the type of individual — if it's one of grave concern from a perspective of national security, for example — then they're detained or released on terms and conditions. These are all the things that you negotiate within the law.
We work actively with other countries to negotiate the return of individuals in terms of the removal. That's part of our mandate, and we work on that with other colleagues, such as Foreign Affairs and Citizenship and Immigration. It's an activity we do on an ongoing basis. There are some agreements we have signed with other countries where the removal is quite simple because there's a recognition of the fact that they want to welcome them back.
The Chair: Mr. Rochette, before I go on, do you have a comment?
Mr. Rochette: I just wanted to provide some statistics on the removals over the past year. If you look at 2010-11, for example, we had 15,200 removals. Last year, we had a record of 18, 950. So our removals are increasing more and more now.
The Chair: Thank you. How many employees are there in the agency?
Mr. Rochette: Just over 14,000.
The Chair: In your opening remarks, you indicated that in the Main Estimates you sought funding of $1.68 billion, but you're up to $2.1 billion now when you consider supplementary estimates, I believe. Is that correct?
Mr. Rochette: It's not the supplementary estimates. What you have currently is the $1.68 million that we received from the Main Estimates, plus our carry-forward from last year of $379 million. The agency, contrary to other departments and agencies, has a two-year rolling appropriation. So when we complete the fiscal year, any surpluses that we have are carried over for a second year if we need them.
The Chair: And you don't need parliamentary approval for the carry-forward for the second year.
Mr. Rochette: No.
The Chair: That's right. I pointed that out.
Can you tell us the total amount you anticipate spending this year so far?
Mr. Rochette: We currently have $2.59 billion, plus we have just received approval for our supplementary estimate of $82 million.
The Chair: We will be looking at Supplementary Estimates (C) fairly soon. Should we anticipate that the agency will be in there?
Mr. Rochette: There will be a decrease in our appropriation.
The Chair: We look forward to that.
Senator Callbeck: I assume that the act you were talking about with Senator Eaton was C-11, An Act to amend the Immigration and Refugee Protection Act and the Federal Courts Act. You say it's working well. You mentioned that you got an increase in your budget for that, but I see here, under the Main Estimates, that there's a decrease of $28.8 million to the funding to implement Bill C-11. How is that going to affect the implementation of that legislation?
Mr. Rochette: In fact, the reduction is a comparison of last year's Main Estimates to this year's Main Estimates, and the $27.1-million reduction is for two main reasons.
The first thing, $14.4 million, is money that sunset the Removals Backlog Reduction Strategy, and the second one is a $12.7-million ramping down of the pre-implementation of IT activities.
For example, last year we received funding for the development of IT systems to help us. We have done that development. This year we don't need that money, so we just sunset.
Senator Callbeck: Okay. There's another figure I want to ask you about in this list in the estimates, II-15.You mention a lot of increases and say they're offset by the following decreases. The first one is $72.8 million for savings identified as part of the Budget 2012 Spending Review. Could you outline what that $72.8 million includes, please, and give the figures for each?
Mr. Rochette: This is part of Budget 2012 — the reduction action plan that we had — so all the departments had to look at between 5 per cent and 10 per cent reductions. At CBSA, our total reduction was $143.4 million over 3 years. In the first year, last year, it was $31.3 million. This year, it was $72.8 million, and next year we'll see an overall $143.4- million reduction in Main Estimates.
Basically, we are doing four main things for reductions. The first one is to streamline our internal services. That is looking at things like administrative services, to bring automation, like travel automation to do claims when people travel, to have procurement to pay, to have an automated system to procure goods and services.
The second thing is to optimize the efficiency of programs, and this is basically looking at different programs like cruise ship operations, for example, to look at how we can do a clearance faster and to be more effective. For example, if a cruise ship comes Canada, they can come to the first port of entry in Canada. They would be cleared, and if they don't go into international waters, they don't have to be cleared each time they stop at another port in Canada.
The third thing is the transportation program. We are looking at the commercial release, cargo warehouse and things like that and how we operate and can automate or provide better service more efficiently.
The last one is to adjust the service delivery level, and it's mainly in how we do the enforcement.
Senator Callbeck: I'm wondering if you could send the committee more explanation. You've given us four things, but I'd like to know exactly what you're zeroing in on. For example, you say ``streamline services.'' What services are you talking about, and how much money is allocated to those four? We could have a better understanding.
Mr. Rochette: Sure.
Senator Callbeck: We come across this all the time in the estimates, namely, that they've saved so much from the spending review, which doesn't tell us anything. We would like to have details.
Mr. Rochette: Details, sure.
Senator Callbeck: We'd very much appreciate that, if it could be done.
In this list, it says an increase of $24.1 million to improve the integrity of front-line operations. What exactly do you mean by that?
Mr. Rochette: This is a program integrity exercise that was added in 2011-12. It is to look at the requirement for our front-line officers. The $24.1 million covers four main categories.
The first one is $5.5 million that is allocated to peak-period strategy. It is when we made the decision to arm our Border Services officers in 2006. We had at that time 800 students that we were using — seasonal students — for the peak period, like during the summer, the holidays and things like that. Unfortunately, when we arm an officer, we could not use students at that time. So we received funding to replace the 800 students with 400 Border Services officers full time.
When this was done, there was also the supervision aspect that was not covered — 45 FTEs. As part of the program integrity, we asked for the funding for 45 additional full-time equivalent persons for that.
The second amount is $8.1 million, and it was for the doubling-up initiative. During that period, we looked at especially the small ports where we had only one Border Services officer. For their security, it was determined that we had to double up and we would not have to work alone; we would have an addition individual, so the officers would work in pairs.
When they did that, they received the funding for the Border Services officers for the doubling up, but again they did not have the supervision for these individuals. They had to make sure they had supervisors going to the small ports to make sure that everything was going well and the work was being performed as it should be.
We received $8.1 million to hire three chiefs and 32 superintendents across Canada for that.
The third amount is $10.1 million, and that was for the conversion. Before being Border Services officers, they were under a classification called P. They created a new classification called FB — ``frontière border.'' When they did that, they did a classification, and the rate of pay has changed for them. They needed to have some funding to compensate for that.
Finally, the last amount is $1.3 million, and it was for the integrity of professional standards strategy. It was mainly to do inspections and supervision in the smaller ports of entry. That accounts for the amount.
Senator Callbeck: You say $10.1 million was for the rate-of-pay increase?
Mr. Rochette: Yes.
Senator Callbeck: So they must have gotten substantial increases.
Mr. Rochette: For the Border Services officers, we have 10,000 members. When they did the reclassification for the 10,000 members, when their rate of pay was adjusted under the new classification, $9.1 million was allocated for the salary budget and $1 million for the overtime pay.
Senator Seth: Thank you for that really interesting information.
I see here that Canada Border Services Agency has increased the amount of money in order to introduce eight main activities in order to make a more efficient border workable and safe.
Has the Canada Border Services Agency taken any measures to decrease the amount? This year it is 27-odd per cent. Have you taken any measure to decrease it? Do we expect it will keep on going every year — 25 per cent or more — or have you taken measures to improve and not to ask for more budget?
Mr. Rochette: Yes, we do. If we look at the projections for the next five years — we always do projections — as I mentioned, our budget is composed of a salary budget, operation and maintenance budget, capital budget and statutory for the employee benefit plan. Of that amount, we have some funding that comes for special projects, and some of the increases you have there are for specific projects for the Beyond the Border Action Plan.
When we look at the projections for the operational budget over the years, we see a slight decrease going year over year.
Part of the deficit action plan and part of the draft — we call it — and part of the border organization, we are always looking for new ways of doing business: how we can automate and provide better services to spend less time, how we can look for trusted traders or travellers, and how we can invest our energy and our resources more in places where there are criminal activities. We're always looking for that.
We have a long list of different projects we are working on that will reduce our operating costs.
Senator Seth: Explain to me the Beyond the Border Action Plan — like trusted travellers and trade programs. What do you mean by trusted travellers and trade programs?
Ms. Xavier: Before the Beyond the Border Action Plan, the CBSA already had a series of trusted-trader programs. One is the custom self-assessment; another is called Partners in Protection.
As part of the Beyond the Border Action Plan, we with our U.S. counterparts committed to doing more harmonization between our two programs, because some of these programs are run jointly with the U.S. For example, we have the Partners in Protection program that is an equivalent to the U.S. program. There are various tiered trusted- trader programs. It is an ability to allow that traders are doing business in their respective countries and end up being trusted.
It is similar to the NEXUS program and how we determine a trusted traveller. A similar exercise happens with the trader side. We do investigations. We work with them. They do self-assessments of their accounting. We do verification. We do on-site compliance checks. We do security checks to see if these individuals deemed to be trusted truly can be, so they can have better facilitation at the border.
Being part of a trusted-trader program, you end up getting benefits, which include being able to seamlessly cross the border because we trust you, the ability to be able to do things, providing us with advanced information, et cetera.
There is a harmonization of some of these programs that is happening between us and the U.S. so that the trade perspective between the U.S. and Canada continues to be pretty much a seamless border so that trade can happen and the economic aspect can be improved. That is part of the Beyond the Border Action Plan objective.
Senator Seth: Is it the list of names in there when they reach there? Then you go and see to match the list and say, ``Yes, these are the trusted people''?
Ms. Xavier: With regard to the Partners in Protection, it's similar to what you're describing. They are recognized as a partner, and when they come to the border, they have a special indicator that demonstrates they're part of that. We know a lot about their background, for example. There are different ones.
[Translation]
Senator Bellemare: Mr. Rochette, Ms. Xavier, you said something in your presentation that caught my attention. You said that you were generating $25 billion in revenue. It seems to me that all the import duties, excise taxes and so on would amount to less than that. In the 2013-14 budget, the customs duties amount to $4 billion, and other taxes amount to $10.9 billion.
What does that $25 billion amount consist of and where does it come from?
Mr. Rochette: Most of the income comes from the commercial side — for example, tobacco companies, the exporting and importing of vehicles.
Senator Bellemare: So that is not always part of customs duties.
Mr. Rochette: No, exactly. It depends on the tariffs. To see the total amount, you can go to public accounts, and you will see a breakdown of the $25 billion.
Senator Bellemare: Do you know how much money you make off individuals crossing the border? By the way, I want to congratulate you because, when we get to an airport now, it is easier to cross the border. What are the earnings through that service, with officers who are there to receive Canadians entering the country and check whether they respected the limits? Do you make any money through that compared with what you spend on human resources? Do you have some idea of how that works out?
Mr. Rochette: No. We do not make any money. The work done in primary and secondary sectors is really meant to ensure that people are paying their excise duties if they exceed their limits. The goal is also to ensure control, of course, in terms of drugs, alcohol and other dangerous products people could try to bring into Canada — especially exotic plants and animals that should not be brought back to Canada.
So the work done at the primary level is really related to security. Of course, in the case of individuals who exceed the authorized limits, we have officers who are there to collect their taxes. However, that represents a very minimal amount.
Senator Bellemare: Very well. Have you noticed a difference since you changed the practices? I am not talking about the security, but rather about declarations of people's purchases, and so on. Have you noted a difference in people's behavior that would result in tax income for you?
Mr. Rochette: Not really. Perhaps Ms. Xavier could tell you more about that. When it comes to income, we have seen a decrease because the exemptions have increased — up to 48 hours or over 48 hours. Once again, as I said, the revenue collected in Canada through taxes really comes from the commercial side and not so much from travellers. We rarely see regular travellers come back from a trip with $1 million in purchases.
[English]
Senator L. Smith: Ms. Xavier, you mentioned that 10 of the 32 initiatives in the agreement signed by President Obama and Prime Minister Harper were controlled by Canada. Give us examples of the 10, and have you actually implemented all 10?
My second question is on the sharing of services. Is there a sharing of services between Canada and the U.S., your relationship with our border services and theirs, and is there duplication that exists where there is a chance for — I'm not saying eliminate — more effective management to occur?
Ms. Xavier: Regarding the initiatives I was speaking of, there are 32 initiatives and 10 are led by the CBSA. Several are led by other government departments, not just the CBSA. Of the 10 that the CBSA is leading on, an example is some of the discussion we had earlier about the NEXUS lane. One of the implementations is the nine lanes being implemented to enhance NEXUS. So there's infrastructure.
Other initiatives include our Interactive Advance Passenger Information. It is one of the projects that will permit us to push our borders out and allow us, prior to boarding an individual destined for Canada, to determine whether or not they should be boarded on the plane and to make a recommendation to an airline if they were previously removed from the country, for example.
Other initiatives include our Entry/Exit Initiative, in its second phase of implementation. We are doing an exchange of information — because you spoke about information sharing — with our U.S. colleagues where the entry of their information, when you're entering into the U.S., becomes our exit. We're doing an exchange of that information in our land borders right now as of Phase II. This was implemented last June.
There's a series of other initiatives of that nature. There is another initiative called Single Window. There is a low- value shipment initiative. We can provide you with that list to let you know exactly the 10.
Having said that, in terms of information exchange with regard to the Beyond the Border Action Plan, a privacy principles agreement was signed between us and the U.S. It speaks to the fact that we're respecting each other's sovereign nation with respect to privacy principles and laws. The exchanges we do with the U.S. and any other counterparts are done within legal and legislative boundaries and where the authorities exist.
There are memorandums of understanding signed with our U.S. colleagues specific to each of the initiatives depending on the information that's being exchanged. As well, we've put in place that where necessary, Canadians — the traveller or person for whom the information is being exchanged — have an access right to be able to see the information that's been exchanged about them and have recourse depending on the program we're talking about.
Senator L. Smith: Would it be safe to say that we have an infrastructure, they have an infrastructure and we share data information between our infrastructures that advances the performance of the border service function? Is that what we're saying?
Ms. Xavier: I think that's fair to say, but it depends on the initiative. Let's talk about Entry/Exit Imitative in the example I gave you earlier. In our current phase where the entry becomes the exit of another, when you're crossing at the land border you're providing information to the U.S. It is practically the second page of your passport, and you're providing it back to the Canada Border Services on your return. That's information we already know about you. That exchange is happening simply because it's more efficient to collect that information from the U.S. than setting up kiosks on exit to ask you for that information.
The benefits of an entry-exit program are helping strengthen our border and immigration integrity ultimately. So in saying what you're saying, it's trying to ensure that the borders are more secure but also more efficient.
Senator L. Smith: In the news from past years when we've talked about the border services, there's this issue of Americans taking over Canadian responsibilities, for instance on the Great Lakes in terms of patrols. There was some concern that if we have this relationship with the U.S., it is great to have the exchange of information, but it appears we each have an infrastructure. Has some percentage of activities changed hands in terms of responsibilities between Canada and the U.S.?
Ms. Xavier: As I mentioned earlier, we are looking to harmonize our processes where possible. For example, when we're talking about the trusted-trader space, we are making it so that when a commercial entity is applying for a trusted trader or NEXUS application, it can be done in as seamless a way as possible. But we're not replacing each other in that manner. We may be looking at submitting one application that would be going to both countries, for example, but the U.S. is not taking the resources of Canada away or taking away my duties. As a border service, we have a mandate to fulfill, and that mandate is still fulfilled within those duties.
We share best practices. We may share the manner or the way we do things to be more efficient, but we're respecting our separate mandates and have the ability to do that.
One initiative of Beyond the Border is called the Integrated Cargo Security Strategy. One of the things we're doing is looking to ensure that we can facilitate commercial. We're clearing it once and preventing it from getting inspected twice, where possible. This is not to say that should I have a need I can't choose to re-inspect that cargo because my intelligence has given me a reason to do so. The right remains for me to perform that duty, and they're not taking that mandate away from me.
[Translation]
The Chair: Senator Mockler, you can ask two or three short questions. We have two minutes left.
Senator Mockler: Thank you, Mr. Chair. If our witnesses are unable to answer right away, perhaps they can send their responses to the committee.
You talked about $104 million in capital costs. Can you provide us with details on that and tell us where the projects will be?
My second question, regarding Nexus, is the following:
[English]
Your statement was about nine new lanes, except Lacolle in Quebec if we go east. There is one I remember vividly, and that's St. Stephen and Calais in New Brunswick. That's a major port of entry. I would like to know if we are looking to add lanes or if you are looking to add lanes in other parts of Atlantic Canada.
My the last question, which is supplementary to the question of my colleague Senator Smith, when we talk about sharing facilities, are there any discussions now on sharing facilities, meaning our customs officers working in the U.S. because their building is more appropriate on both sides of the border? I'm thinking a bit of my experience when I was a customs officer.
[Translation]
Mr. Rochette: We can provide you with a breakdown of the $104 million in capital costs. That will be faster. As for the NEXUS lanes, we have 19 ports of entry across Canada, for a total of 31 lanes and 9 airports with 45 NEXUS kiosks.
If you would like a list of all the locations, we can provide that for you. As for the NEXUS program, we continue to work very hard to encourage people to participate in that program, which is doing very well. People who have access to a NEXUS card love the service provided. We are trying to increase the number of members. We now have close to a million members with a NEXUS card, so things are going very well, and the more members we have, the more lanes we will implement.
The Chair: Lanes in New Brunswick are very important to our colleague.
Senator Hervieux-Payette: I do not need an answer right away, but can we have the statistics on the first three months regarding the increase from 200 to 800? Are more people declaring? When I take the plane and 300 people arrive at the same time, it would seem that no one is shopping or many of them are lying. By increasing your limits, have you increased the number of declarations?
Mr. Rochette: Okay.
[English]
The Chair: I have a question as well, and we don't have time, but could you give us a reply as to whether you have done any analysis of the amount of resources, percentage of employees, or the cost of collecting tariffs at the border versus the amount that you actually collect? We became involved in tariffs when we did a study on the price differences, and we had some comments to make with respect to tariffs and the reduction. If you could give us any analysis that you have done in that regard it would be helpful to this committee.
On behalf of the Standing Senate Committee on National Finance, Mr. Rochette and Ms. Xavier, I'd like to thank you for being here. Thank you for the good work. You're the first impression that many visitors get when they come to Canada. We appreciate the good work that you and the 14,000 people who work for the agency do.
(The committee adjourned.)