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NFFN - Standing Committee

National Finance

 

Proceedings of the Standing Senate Committee on
National Finance

Issue No. 94 - Evidence - May 8, 2019


OTTAWA, Wednesday, May 8, 2019

The Standing Senate Committee on National Finance met this day at 6:45 p.m. to examine the Main Estimates for the fiscal year ending March 31, 2020.

Senator Percy Mockler (Chair) in the chair.

[English]

The Chair: My name is Percy Mockler, senator from New Brunswick and chair of the Senate Committee on National Finance.

[Translation]

Welcome to everyone who is here this evening and to Canadians watching the proceedings on television or online.

[English]

Honourable senators, I would like to ask each senator to introduce themselves starting on my left.

Senator Klyne: Good evening. Marty Klyne, Saskatchewan.

[Translation]

Senator Dalphond: Good evening. My name is Pierre Dalphond, and I’m from Montreal, Quebec.

The Chair: I am André Pratte from Quebec.

[English]

Senator Duncan: Pat Duncan, Yukon.

Senator Boehm: Peter Boehm, Ontario.

Senator C. Deacon: Colin Deacon, Nova Scotia.

[Translation]

Senator Forest-Niesing: I’m Josée Forest-Niesing from Ontario.

[English]

Senator Eaton: Nicky Eaton, Ontario.

Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.

The Chair: Today, honourable senators and members of the viewing public, we continue our consideration of the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2020.

To discuss the matter, we welcome the Honourable Joyce Murray, P.C., M.P., President of the Treasury Board and Minister of Digital Government.

Minister, we know you have a busy schedule. We also appreciate your flexibility when we ask you to visit our committee. Thank you for that.

We also welcome the officials from the Treasury Board Secretariat who are accompanying the minister: Karen Cahill, Assistant Secretary and Chief Financial Officer and Glenn Purves, Assistant Secretary, Expenditure Management Sector.

[Translation]

With us, as well, is Marcia Santiago, Executive Director, Expenditure Strategies and Estimates, Treasury Board of Canada Secretariat.

[English]

Minister, following your presentation, senators will be asking you questions.

Again, thank you for accepting our invitation.

[Translation]

Minister, the floor is yours.

Hon. Joyce Murray, P.C., M.P., President of the Treasury Board and Minister of Digital Government: Thank you very much, Mr. Chair. I’d also like to thank the committee for inviting me today to discuss the Main Estimates for the fiscal year ending March 31, 2020.

[English]

It’s a great honour to be here. This is my first appearance before any committee as President of the Treasury Board and Minister of Digital Government. I appreciate your patience. I’ve kept you waiting. The vote schedule is a little longer than we expected. Thank you for accommodating my schedule.

Thank you also, chair, for introducing the officials who are here with me from Treasury Board. Parliamentary secretary Greg Fergus is also supporting us today at this committee meeting.

After my remarks, my officials and I are happy to answer your questions. I understand that you’ve already begun some of that dialogue.

Mr. Chair, on April 11, I tabled the 2019-20 Main Estimates which provide information on $300 billion in spending to deliver programs and services this fiscal year. This includes new measures announced in the federal budget.

These Main Estimates are made up $126 billion in planned voted expenditures and $174 billion in statutory expenditures.

They detail the government’s plan to support the middle class as presented in Budget 2019, including historic investments in housing, skills training and our most vulnerable seniors.

Mr. Chair, this is the second year in a row that the Main Estimates include measures announced in the budget. We have been able to do this, in part, by tabling the Main Estimates in mid-April after the budget.

This sequencing is part of a new two-year pilot initiative to make it easier for Canadians and parliamentarians to track government spending.

[Translation]

We launched the initiative with the tabling of last year’s Main Estimates, which presented all Budget 2018 spending measures for all departments in a single central budget implementation vote, vote 40.

The practice has resulted in greater transparency and full alignment between the Main Estimates and the budget.

However, parliamentarians, including the members of this committee, indicated that they wanted greater oversight by having new spending on budget initiatives referred to the relevant parliamentary committees.

[English]

They asked for a better alignment between the Main Estimates and the departmental plans.

In this year’s Main Estimates, we have responded to those concerns and other feedback from the Parliamentary Budget Officer.

What we have provided parliamentarians and what you’re considering today is the result of our ongoing work to better align the budget, the Main Estimates and departmental plans.

This year’s Main Estimates include all of the $6 billion in new voted measures announced in Budget 2019. They are presented in measure-specific votes listed under individual departments this year.

These votes will be referred to appropriate parliamentary committees, that is, committees that normally review a department’s work. Because they are presented as individual votes, this new mechanism provides more granularity for tracking and oversight than ever before.

In his April 29 report to Parliament on the Main Estimates, the PBO described these new measures as “important improvements to the process.”

In addition, committee review of these measure-specific votes is being supported by supplementary information provided to Parliament at the end of April. This information could not be included in the departmental plans, which were well advanced when the budget was announced and were also tabled on the same day as the Main Estimates.

[Translation]

The government will continue to provide online reports detailing funding allocated to these individual votes, as well as progress reports in the 2019-20 Main Estimates.

[English]

In summary, the use of the 194 measure-specific votes provides clear linkages from table A2.11 in the budget plan to the Main Estimates and to the departmental plans, taking into account the supplementary information provided at the end of April.

Mr. Chair and senators, this is about the ongoing and continuous improvement of the estimates process. We have come a long way from two years ago when there was no alignment between the budget and Main Estimates.

I will remind this committee that we are working to improve on an inherited system that the Globe and Mail, prior to our reforms, said was: “bad to the point of absurdity” and “virtually meaningless” due to the incompatibility between Main Estimates and the budget.

As the PBO noted in his report:

In summary, it is clear the Government has taken steps to improve the Estimates process from the previous year; however, there are still changes which could be made to further improve parliamentarians’ oversight role in scrutinizing government spending.

[Translation]

We have always said that Canadians and the parliamentarians who represent them have the right not just to know how public funds are spent, but also to hold the government to account for that spending. These ongoing reforms will help them do just that.

By making these linkages, the government is making it easier than ever for parliamentarians and Canadians to know where the money is going.

[English]

Those are my general comments. I want to turn now to that portion of the Main Estimates that apply to my department. As the employer and expenditure manager for the government, the Treasury Board Secretariat is seeking Parliament’s authority for $7 billion in planned spending.

[Translation]

The main spending authorities being sought by TBS are as follows: $259 million for vote 1 of the department, program expenditures, and $370 million for three budget implementation votes — 45, 50 and 55 — to advance gender equality, ensure proper payments to public servants and to implement federal public service dental plan amendments.

[English]

The remaining votes relate to the role of Treasury Board ministers as the employer and financial manager for the government: $750 million in TB vote 5, government contingencies for urgent or unforeseen expenditures that cannot be covered by other departmental votes; and $327 million in TB vote 10, government-wide initiatives. This supports horizontal initiatives such as the early learning and child care initiative; the liquefied natural gas investment in Kitimat, B.C.; the implementation of the new Accessible Canada act; and the implementation and administration of the proactive pay equity legislation.

Another is $2.7 billion in TB vote 20 for public service insurance; $2.2 billion in TB votes 25 and 35 for the operating and capital budget carry forward; and $600 million in TB vote 30 for pay list requirements, such as maternity and paternal allowances, and severance pay.

Mr. Chair and senators, in our system of government, the ability of parliamentarians to hold the government to account is of the utmost importance. To that end, we’ve made important improvements to the Main Estimates over the past two years to do just that. The effect is to highlight new government spending so that parliamentarians and Canadians can scrutinize the expenditure of tax dollars in real time and in greater detail.

I thank you again for the invitation to appear before you today. I would be pleased to take questions from the committee.

The Chair: Honourable senators, before I recognize questions from senators, I would like to bring to your attention that if we are succinct with our questions and answers, and work within the first round with five minutes, this will enable all senators to have questions.

Senator Marshall: Welcome, minister and officials. I want to talk about the new budget initiatives. This year they are, as you indicated, in the individual departments, but the programs aren’t really developed yet. The amounts that are in there would be estimates, really.

If the programs actually cost less than what’s provided in the estimates document, what happens to the difference?

Ms. Murray: Treasury Board has the function of working with the other departments to ensure that the plan for the spending of money that has been budgeted is a robust one so that it has clear accountability and alignment with the objectives of that ministry and ways for ensuring that the success of the program can be measured and tracked.

If all of the funds are not expended, then they will be lapsed. When they’re lapsed, then there are certain next steps. In some cases, they can be carried forward for the next year for the ministry. In other circumstances, they would go back into the general piggy bank.

I’ll ask Mr. Glenn Purves to elaborate on that, if you’d like more detail.

Senator Marshall: Yes.

Would they be able to use it for other purposes? I’m asking the question in relation to this year’s budget. I’m also interested in what happened to the funding that was left in vote 40 last year. I would think the Treasury Board would freeze it and that departments wouldn’t be able to use it as they see fit — or transfer it into another account. That’s the purpose of my question. I want to know how tightly you’re controlling the money. Are they able to use it for something else?

Ms. Murray: No, they’re not able to use it for something else. The wording for the funds that are dedicated through the budget announcements are very clearly worded as to the uses of funds. They cannot be used for something else.

Senator Marshall: The money that was there last year — the $7 billion that was in vote 40 — there was $2 billion withheld by Treasury Board. Then there was $72 million that was left. What happens to that money? Is that something that Treasury Board now has claim to and they’re not giving it out for other programs? Does that lapse?

Ms. Murray: That will depend on the category of the lapse. I’ll leave it to the assistant secretary to explain in more detail.

Glenn Purves, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Of the $2 billion, typically when an item goes to Treasury Board, there’s an amount allocated to the department for the initiative. Then there’s an amount withheld for employee benefit plans or for Shared Services Canada. It could be a reprofile, or it could be just that the item actually was an item that will not be carrying forward.

Ultimately, there are funds that are dedicated to those initiatives that are going to be implemented along with the initiative, but they don’t go to that department. There are situations, however, where funds are withheld, and they don’t go anywhere else. They effectively lapse.

Senator Marshall: We talked last year about vote 40. We talked this year how the initiatives are in the respective departments. What can we look forward to next year?

Ms. Murray: Probably you’ll be looking forward to a new Parliament. It will be Parliament’s decision as to how to proceed.

I say that because this is a two-year trial in changing. We changed the order and the date at which the estimates had to be tabled to provide the opportunity to have budget items in the estimates. It’s now a later tabling than before. But that is in place for only two years.

The next Parliament will need to decide whether to renew that standing order, ensuring that the estimates are later and give time for the budget to be put into the estimates. This has been an initiative of parliamentarians through the committees that have recommended that we move forward and better align the budget and the estimates. It will be a sensible thing for committees to take a look at what’s been done to date and see what steps they would recommend government take to further this objective of making it easier and faster to follow the money.

Senator Marshall: There are no plans to take so many departments and have their new initiatives go through the Treasury Board challenge process before they end up in the estimates?

Ms. Murray: At this point, we’ve implemented the planned improvements to better track and follow the money.

Senator Marshall: We’ll look next year. Thank you.

Senator Pratte: Minister, I’d like to briefly discuss call centres. Part of the Auditor General’s report yesterday was with regards to call centres. Treasury Board apparently had something to do with call centres — I’m not sure what exactly — but if I understand the Auditor General’s report, they are sort of saying that Treasury Board developed a strategy instructing all departments to develop their own online services. Somehow, that appears to have had as an effect that call centres were neglected, yet we know that millions of people still rely on call centres. They need to speak with someone.

Would you care to comment on the conclusions of the Auditor General regarding the call centres, as far as Treasury Board is concerned?

Ms. Murray: Treasury Board has a role in setting policy that affects all departments. We hold general standards and set a service standard policy.

The implementation of the actual service to Canadians is the responsibility of the departments. The Auditor General has commented on the need for more modernization of the tools and data approach to delivering services more quickly and effectively. There are a number of ministries that are working to make those improvements in different parts of their service to Canadians.

I think to get into the specifics of the Auditor General’s report, the best way to do that would be at a committee that is dedicated to that ministry’s activities.

Senator Pratte: I understand that, of course. Since you are setting the general policies, the Auditor General mentions that out of 240 call centres, only eight have been modernized. The rest still count on outdated technology.

Would Treasury Board consider issuing new policies or modified policies so that this becomes a priority? It’s really a matter of service to Canadians.

Ms. Murray: It is a really important to service and very frustrating to Canadians when they can’t get through to get answers and the service they need; I understand that. Treasury Board will include call centres in our general standards. I’ll ask Mr. Purves if he has any more specifics about how that may affect the speed, timeliness and extent of the modernization program.

Mr. Purves: To re-emphasize the point the minister made, from Treasury Board’s standpoint, it’s more about the general standards, but the implementation of the call centres is very much Service Canada. There are a number of departments who are involved in that. What you’re questioning, senator, is in terms of how things are going to improve and so forth. It’s probably best directed to deal with those departments specifically.

Senator Pratte: I’d like to follow up briefly, before closing my questions, with Senator Marshall. After the two-year pilot program, will Treasury Board make recommendations, have conclusions? Obviously, we see from year one and year two that there have already been changes. There were lessons learned.

Will Treasury Board perhaps issue something about the lessons learned so that maybe the future Parliament has guidance as to what they should do?

Ms. Murray: The committee published a report of their study. There’s a study from 2012 that this current Parliament has been drawing lessons from. My commitment is to always continue to look at ways we can improve the transparency and the links so that parliamentarians can discharge their responsibilities to Canadians. We continue to make improvements.

In terms of the specific budget estimates alignment project, I think it is something that parliamentarians and the next Parliament will likely want to look at, and take a look at the recommendations from previous committees’ work and at the progress that’s been made to date. This is enormous progress. I have to say, from having been a member of Parliament myself and thinking I’ve got a pretty good head for numbers, I’ve got training in that, and yet I don’t have a clue what’s happening.

With the best will in the world, putting in a lot of time, it was not easy to be able to know just what was happening with various budgets by working with the estimates. I think we’ve come a long way from that.

Of course, once one thing is improved and essentially put aside as the big concern, then something else emerges as a concern. I think last year was an example of that with the budget 40, when parliamentarians had that line of sight between the budget and the estimates. They could see that everything in the budget was planned for how it would be spent, in which department it would be spent, as well as monthly reporting as that money began to flow. But it was all in one budget implementation vote.

This year we’ve made a vast improvement. I know we’ll continue to find ways to better help parliamentarians in doing their work. I’m not going to anticipate that now because, of course, we’re coming towards the end of a four-year mandate. I’m interested in what members of Parliament would be asking me to do as next steps.

Senator Pratte: Thank you.

Senator Boehm: Minister, thank you very much for joining us this evening. I want to ask you about Ensuring Proper Payments for Public Servants, which is a wonderful alliteration but really is another way to ask about what is happening with the Phoenix pay system. You’ve asked for $25 million in Budget 2019. This is higher than the $16 million from the last budget.

Some of this, I gather, is for a new system, and perhaps some is for shoring up the old system. I’m wondering if you could elucidate us on that, given that it’s still a system in a bit of stress. Public servants are concerned about the damage deals they’re getting, they’re concerned about being overpaid, underpaid. All the problems that have been there appear to be still there.

Ms. Murray: Thank you for that question. This has been an extremely difficult challenge, as you know, for public servants, who we value and who are so key to providing services to Canadians. It has been difficult to see the gap between what we intend, which is that they are paid accurately and on time, and what has been happening after the pay transformation initiative that started quite a number of years ago.

There are two aspects to this. One is to sort out improving the accurate and on-time pay, as well as dealing with backlogs. That has been the responsibility of Minister Qualtrough. PSPC is the ministry that has taken that on as their responsibility. We have regular updates as to how the queues are coming down and weekly updates as to the metrics. Things are going in the right direction, but there’s still a long way to go.

Treasury Board’s task at this point is to explore how to replace Phoenix, and how to do it in a different way. We want to learn from the mistakes that were made that led to the unacceptable pay system that we have right now. We’re working closely with the digital government ministry and our CIO. The $25 million is to continue on the path of pilot projects to ensure that before we bring in a new system, we’ve done it differently.

Doing it differently has meant working with the users; working with employees who would be applying the system; working with employees who would be affected by it, who are being paid by the system; working with the private sector, with other departments and in a very collaborative way, starting step by step with small experiments, if you will. It’s a whole different way of going about it.

We have had what’s called three gates.

Each of the chunks of this work is to begin by identifying all of the complexity in the federal government pay and human resource-to-pay system, and enable suppliers to take a look at that and work with civil servants and decide whether their solution can be applied to the complexity of our situation.

After gate 1, with a lot of consultation across the country with suppliers and others, we went into gate 2, which was narrowing down the number of entrusted suppliers and starting to get more specific about the pilot or the exercises they were being asked to take on that would actually implement pieces of a complex pay system.

After gate 2, we went into gate 3, which was to narrow it further to one or more potential proponents to go into a real pilot project.

That work has been done very transparently. Everything is quite open and our open government principles are being applied. The first $16 million was for the first stage. We’re now into the next stage. We’re approaching the end of gate 3. I hope, not too long from now we will be identifying a primary candidate to go into a potentially two-year experiment.

Still, the pay would be going through Phoenix, because we want to really trial this before any decisions are made, which would be after that pilot project that I’m describing. This $25 million gets us a good chunk of the way to having a successful pilot. We’re planning to have several pilots running at once, some with HR-to-pay as a solution and some looking at the potential of just a pay solution. Is that too much jargon, or does it kind of make sense?

Senator Boehm: I love it, minister. Thank you.

The Chair: Thank you. It’s good information.

Senator Eaton: Minister, about that interesting explanation you gave to Senator Boehm, is that the $25 million in the budget for Ensuring Proper Payments for Public Servants?

Ms. Murray: Yes.

Senator Eaton: There is also $351 million for this in the Public Service and Procurement Canada estimates.

Ms. Murray: As I mentioned, PSPC has the job of stabilizing the current system.

Senator Eaton: That’s what that $351 million is for?

Ms. Murray: Yes. It’s adding the civil servants needed to deal with the queues, the pay —

Senator Eaton: We know all about the Phoenix system. We did a report on it. Thank you.

Ms. Murray: It’s putting money where it needs to go to do a better job as we wrestle with this difficult system.

Senator Eaton: Perfect. And the $25 million, as you explained to Senator Boehm?

Ms. Murray: That’s right.

Senator Eaton: There’s $11 million for federal public service dental plan amendments. Can you explain that to us?

Ms. Murray: I think I’ll ask officials to explain.

Karen Cahill, Assistant Secretary and Chief Financial Officer, Treasury Board of Canada Secretariat: As a result of adjudication, we were asked to increase our dental plan. This fiscal year, there is $11 million in the Main Estimates of the department for the dental plan. This is a top-up that was announced in Budget 2019 of $71 million over five years and $11 million this fiscal year, but with more money to come.

Senator Eaton: Is that because there are many more people in the public service, or is that because you want to give the same number of people more or greater coverage?

Ms. Cahill: It’s gradually more coverage for the employees and the pensioners. The coverage currently is $1,700 per year in the public service. That includes the members as well as the non-represented and excluded employees. We have 371,000 members. Currently, the coverage is $1,700. Over the year, the coverage will increase to $2,000 on January 1, 2019; going to $2,250 on January 1, 2020; and finally to $2,500 in 2021. That’s an increase in the coverage to be equal to the market price of other private sector coverage.

Senator Eaton: Thank you very much. That means our public service will have wonderful smiles.

Senator Klyne: Thank you, minister, for being here with us this evening, and to your colleagues.

I want to go back to the Phoenix system for a moment. I seek clarity on your terminology. The stabilizing effort that you referred to, as I recall, the system was broken up into pods and it now rides on version 4 of the Phoenix system, if you will. Is that what they’re trying to stabilize — that new pod system, plus the version 4?

Ms. Murray: We are still adding pods and there are still more to go. We see how the departments that are being served by a pod have their problem numbers going down. That’s one aspect of stabilization.

I’m not sure whether anyone else at the table has more information. This is really a PSPC level of detail.

Senator Klyne: They have their own tranche of money? it wasn’t part of the $25 million?

Ms. Murray: No.

Senator Klyne: The other reference you made was to a pilot project. Is that the two contractors that were awarded a six-month contract to automate solutions?

Ms. Murray: The successful potential suppliers, and we’re hoping for several, have not been concluded. That’s part of what’s called gate 3, which is still a few weeks from completion.

At first, there were dozens of interested parties. Then we were down to under 10. We are aiming to have, hopefully, between one and four that are all qualified and capable, from the testing they’ve been involved with to date, to consider being part of a pilot project. Depending on which suppliers make it out of gate 3, we’ll design the pilot projects with them.

Senator Klyne: I was under the understanding there were two. For a lot of manual solutions they continue to do those by pod or department. I thought there was a contract to contractors to test their solutions for automating those and then the successful one would get an extension.

Ms. Murray: I have to say that if that work is being done within PSPC, then I don’t have the details. We’re really separating these two things out. Even though we work closely together, my work is on bringing a new approach to the development of a replacement for Phoenix, whereas Minister Qualtrough is doing what we need to serve our public servants now much better than we have been. That’s why there’s that $300 million plus in funds. I’m sure there are a number of ways they’re working on that.

[Translation]

Senator Dalphond: I’ll be asking my question in French. With respect to gender-based analysis plus, known as GBA+, my understanding is that all departments and agencies now have to build it into their planned spending. However, what will still be lacking is GBA consistency across departments.

I gather that Treasury Board will be allocated funding to develop standardized criteria. Can you tell us when we can expect Treasury Board to implement that standardized framework and whether it will be shared with both houses of Parliament?

Ms. Murray: Thank you for the question. Including this kind of analysis is very important. It’s tricky to explain because I don’t have my notes in French. My understanding is that one type of analysis is undertaken for an issue and another type is undertaken for existing activities, ones that are not new.

At Treasury Board, we’ve done some research to better understand what other countries are doing. Few countries conduct analyses of past events. They mainly analyze initiatives that are being planned, but we have an obligation to do both. Of course, we don’t have a lot of data we can use to inform this kind of analysis, and that’s why we are working closely with the Department for Women and Gender Equality on a multi-step plan. The data are non-existent. The information isn’t being collected right now, so we need to develop a basis to work with. We haven’t found any models elsewhere in the world that we can borrow or use. It’s a big job, but we’re at the beginning stages. We are committed to this initiative. It’s going to be transformative in that it will teach us things we never imagined, things that will allow us to better serve Canadians of all genders.

[English]

I think it’s very exciting.

Senator Dalphond: Is there a time frame for deliberations of the GBA+ guidelines? I understand that the departments are each committed to that, but each does it more or less with the same lack of basis that you describe as being in existence. I assume results might differ from department to department.

[Translation]

Ms. Murray: Essentially, Treasury Board’s role is to develop standards and policies that all departments can implement to support their work. That is Treasury Board’s job. A time frame hasn’t been set yet, but it’s going to take time. We are going to develop a framework that will apply to all departments. It doesn’t make sense for each department to develop its own. In partnership with the Department for Women and Gender Equality, mainly, but also with the departments, we are going to establish that framework.

Senator Dalphond: Thank you.

[English]

Ms. Murray: Is there anything the officials can add? Okay.

The Chair: Thank you very much, minister. As we look at the time that you’ve given us very generously, senators, we can move on to the second round but with one question each.

Senator Marshall: Minister, under vote 5, it’s called “government contingencies.” Is that something new? What would it be for?

Ms. Murray: I’ll ask Mr. Purves to open the big book.

Senator Marshall: Is it new?

Mr. Purves: No, it’s not new.

Senator Marshall: Was it in previous estimates?

Mr. Purves: It’s been around for a very long time.

You may already know that we have a number of central votes. Vote 5 for government contingencies has existed for a long time. It’s been at about $750 million since, I believe, 2000. It’s been a long time at that level.

It’s used for circumstances where there are urgencies to provide funding to initiatives, but you can’t wait for the next supplementary bill in order to get it. For instance, in circumstances such as forest fires and emergency management issues that might arise.

Senator Marshall: If it’s not entirely used, what happens to the remainder?

Mr. Purves: It’s like a bridge of cash until the next supplementary bill. Then it gets replenished.

Senator Marshall: It can’t be used for other projects?

Mr. Purves: No.

Senator Boehm: Minister, you probably won’t find this in your notes, but I’ll try it anyway.

It’s national Mental Health Week. As a central agency, the Treasury Board, of course, has the office of the chief human resource officer of the Government of Canada. There’s been a lot of work done in the past year or two in terms of trying to destigmatize mental health issues in the workplace, and TBS and PCO have a big role in that.

I’m wondering if you have any comments on that. Is this an issue that you follow closely or see as one that needs more work?

Ms. Murray: Yes, I see it as one that needs more work. With respect to the public service and bargaining agents, as you are aware, we introduced in the past legislation that reversed a bill that the previous Conservative government put in place that ended the sick leave system and had the intention at some point of creating a model for supporting public servants who were having mental or physical health problems to enable them to get back into work, if that’s their pathway.

That was never implemented by the previous government. We reversed that legislation to restore the sick leave, but we made a commitment at that time that we would work with the representatives and the public sector unions to begin to look at a way to support those who needed support. It’s not just that you’re struggling with mental health and so you have some sick leave days, but what about having sick leave days and a program to support you? That program, ideally, also prevents mental health problems by providing support before it’s at the point of needing sick leave.

That is something we’ve committed to. I can’t say we have something in the hopper at this point.

With respect to mental health and its importance to our government, we renewed the national health accord, the 10-year health accord after the 10-year accord that Paul Martin, the former Prime Minister, put in place. It was renewed early in the mandate of this government. We added two sets of funding in the billions of dollars, one of which was for helping elders stay in their homes longer.

It was support for home care. The other was support for mental health. That was then delivered to the provinces through bilateral agreements.

I know that there is a chunk of money in the estimates that is for those mental health agreements. That is for the provinces to distribute or utilize in their delivery of health care. That’s for the general public. I know there’s work to do to support our public servants on this level as well.

Senator Boehm: Thank you.

Senator Klyne: I was going to ask about the government-wide initiatives vote and why it was left with you to disburse rather than departments. I’m going to focus in on the early learning and childcare framework.

Is that to develop the framework or execute a framework agreement? Is it done under agreement; and if so, did you enter into it with First Nations, Metis, non-status and Inuit, or who is it aimed at?

Ms. Murray: I’m going to ask the officials to answer that. This is a huge priority for our government. That’s why in one of the very first budgets we allocated something like $7 billion or $5 billion over seven years to deliver to the provinces and territories. That would be bilateral agreements. They could utilize that and combine it with their childcare and early learning funding to improve and increase the services.

In this budget, Glenn, is there some more specific —

Senator Klyne: That answered the second question I wasn’t going to get to ask, but go ahead.

Mr. Purves: I’ll be very brief. There’s a lot of information that we provide on the estimates that is tabled in Parliament, but there’s an awful lot that’s also online. The vote that you’re describing, Vote 10, which is about government-wide initiatives, there are descriptions for each of these measures that can be provided.

What you’re talking about is effectively when Treasury Board authorized an allocation of about $120 million in support of high-quality, affordable and culturally based early learning and childcare services for First Nations, Inuit and Metis children across Canada. The organizations responsible for implementing include the Department of Employment and Social Development, so ESDC; the Department of Indigenous Services Canada; and the Public Health Agency of Canada.

Senator Klyne: — non-status?

The Chair: Senator, is there a question?

Mr. Purves: Non-status is part of those programs, yes.

The Chair: Is that sufficient, Senator Klyne?

Senator Klyne: I’ll go online.

The Chair: Thank you. Minister, thank you very much for the time you’ve shared with us, it’s very generous, and to your staff. They are always professional.

We continue our study of the Main Estimates 2019-20. We have before us representatives from three departments.

To the officials and witnesses, thank you very much for accepting our invitation.

First we have, from the Privy Council Office, Mr. Matthew Shea, Assistant Deputy Minister, Corporate Services and Chief Financial Officer; accompanied by Michael Hammond, Executive Director and Deputy Chief Financial Officer, Finance, Planning and Administration Directorate.

From the Department of National Defence, Julie Charron, Acting Assistant Deputy Minister (Finance) and Deputy Chief Financial Officer, Department of National Defence and the Canadian Armed Forces.

We also have Patrick Finn, Assistant Deputy Minister, Materiel.

Finally, from Innovation, Science and Economic Development, we welcome Mr. Philippe Thompson, Assistant Deputy Minister, Corporate Management Sector; and Ms. Lisa Setlakwe, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector.

We are aware that we are late due to unforeseen circumstances. I have been informed that you each has a presentation.

[Translation]

Matthew Shea, Assistant Deputy Minister, Corporate Services and Chief Financial Officer, Privy Council Office: Good evening, Mr. Chair and members of the committee. Thank you for inviting the Privy Council Office, or PCO for short, to review our Main Estimates. My name is Matthew Shea, and I am the Assistant Deputy Minister, Corporate Services Branch and the Chief Financial Officer of PCO.

[English]

I am accompanied by Mr. Michael Hammond, Executive Director and Deputy Chief Financial Officer, Finance, Planning and Administration Directorate.

The mandate of PCO is to serve Canada and Canadians by providing professional, nonpartisan advice and support to the Prime Minister and ministers within his portfolio and to support the effective operation of cabinet.

I would like to begin with a brief overview of the 2019-20 Main Estimates. PCO sought $179.4 million overall for its core responsibility, which is to serve the Prime Minister and cabinet and for its internal services. This is an increase of $13 million from the amount sought in the 2018-19 Main Estimates, which was $166.4 million. This increase includes additional funding which was provided last year through the 2018-19 Supplementary Estimates (A) to support ministers for which the Privy Council Office has responsibility, including the creation of the new office of the Minister of Intergovernmental and Northern Affairs and Internal Trade.

Funding was also approved in 2018-19 to continue to support the management and oversight of an open, transparent and merit-based process for Governor-in-Council appointments.

[Translation]

Funding has also been allocated for the Secure Mobile Communications Project.

[English]

This is offset by a decrease of funding related to the completion of the National Inquiry into Missing and Murdered Indigenous Women and Girls Commission as of June 30, 2019. There’s also a funding decrease related to PCO’s information technology modernization project as a number of projects have been completed.

Over this fiscal year, PCO will continue to be the hub across government to coordinate and provide timely, comprehensive, expert and non-partisan advice in support of the full spectrum of policy, communication, budget and legislative priorities of the Prime Minister, cabinet and cabinet committees.

PCO will continue to work with other federal departments to develop social and economic policies that will continue to grow a strong middle class, modernize international trade agreements, fight climate change, protect the environment and address increased pressures on the immigration system.

The recent Canada Youth Summit held May 2 and 3 in Ottawa marked a milestone in the Prime Minister’s mandate as Minister of Youth, as it provided an opportunity to engage youth on the government’s progress in advancing the youth agenda. Notably, the Prime Minister released Canada’s first ever Youth Policy and engaged youth on the vision of Canada Service Corps and for a Government of Canada Youth Digital Gateway. PCO will continue to provide support and advice to the Prime Minister, as Minister of Youth, in relation to the Prime Minister’s youth council, the implementation of the youth policy, Canada Service Corps and youth initiatives across the Government of Canada as well as key partners.

In the context of the upcoming election, PCO will provide guidance to departments on the caretaker convention and will lead the whole-of-government transition efforts, including providing policy advice to the newly elected government on how to launch their mandate, the formation of the new ministry, the establishment of key relationships and management of urgent and time-sensitive files.

PCO will also be responsible for government-wide coordination of transition concierge services or logistical support for the incoming government as well as departing individuals.

PCO will also continue to provide leadership on federal government measures to defend Canadian democracy and safeguard the integrity of the election, including implementation of the critical election incident public protocol. This brief summary of PCO’s 2019-20 Main Estimates touches on a few of the key means by which PCO will continue to support the clerk as the head of the public service of Canada, the Prime Minister and cabinet as part of a whole-of-government approach.

[Translation]

Mr. Chair, members of the committee, thank you for the opportunity to provide you with this context. We would now be pleased to answer your questions.

The Chair: Thank you very much, Mr. Shea.

[English]

Julie Charron, Acting Assistant Deputy Minister (Finance) and Deputy Chief Financial Officer, Department of National Defence and the Canadian Armed Forces: Thank you for the invitation to present, on behalf of the Department of National Defence, a briefing on the department’s Main Estimates for the 2019-20 fiscal year. My colleagues and I look forward to reviewing this important information before the committee.

Today I am joined by Assistant Deputy Minister of Materiel, Mr. Patrick Finn; and Chief of Programs, Major General Hercule Gosselin.

As we have emphasized in past appearances before this committee, the magnitude, complexity and visibility of the Defence budget demand a cohesive, comprehensive and strategic approach to maximizing the efficacy of our expenditures and investments. The approved Defence policy — Strong, Secure, Engaged — issued in June 2017 intensified our effort to deliver strong fiscal responsibility and prudent stewardship of our resources.

In February of this year, I presented a technical explanation on the funding model and governance framework that underpins the department’s ability to deliver the commitments made in SSE. The financial plan included in SSE means that Defence now has a clear picture of the funding committed to ensure the men and women of the Armed Forces have the support they need at home, whenever and wherever they are deployed. That includes making sure they have the right equipment at the right time to do the job safely.

On March 31, 2019, we delivered on Strong, Secure, Engaged in a transparent, accountable, effective and sustainable way. Two thirds of our capital projects identified in SSE have moved into implementation or closeout. One third of the new projects are now undergoing options analysis for delivery. Since SSE was announced, 157 of 333 projects have passed through a significant approval gate into their next phase.

While the plan extends for the next 20 years, each year Defence will return to this and other committees to provide information on the impact on Main Estimates for the year. This leads me to today’s topic on the Main Estimates.

Turning to the estimates before you, I’d like to highlight key points for the committee on page II-109 in the English version and page II-129 in the French version. I should also point out that we are comparing Main Estimates to Main Estimates. The 2018-19 estimates to date include both Supplementary Estimates (A) and (B), which for 2019-20 have not yet been determined. As additional projects are approved during the year, or as projects move into definition stage, DND’s approved funding may be impacted. These changes would normally be addressed in supplementary requests.

For 2019-20, Main Estimates represent an increase of 7.4 per cent, $1.5 billion from the Main Estimates approved for fiscal year 2018-19, from $20.4 billion to $21.9 billion. This change reflects increases across the departmental vote structure and the additional of five new votes representing measures announced in Budget 2019. The changes and additions are summarized as follows:

[Translation]

Operating funding, vote 1, would increase by $594.2 million, attributable mostly to the annual escalating cost of operations and new initiatives included in the Strong, Secure, Engaged policy starting in 2018-19 and continuing to be implemented. An example of this is the Innovation for Defence Excellence and Security program, which is also funded with external entities through grants and contributions.

[English]

Capital funding, vote 5, would increase by $6.5 million and reflects the continued effort of the department to monitor and manage its fiscal requirements to ensure value for taxpayer dollars and support for government priorities. Total capital funding at $3.8 billion is for all projects in definition and implementation stages.

This level of funding is similar to last year. Over the balance of fiscal year 2018-19, DND requested an additional $450.7 million in funding to bring total funding for capital projects to $4.2 billion. Since DND has been requesting cash as needed, the amount at this point may be less than planned in SSE. DND will continue to monitor projects to ensure this good management practice continues and that the department will use supplementary estimates to request funding as projects advance.

[Translation]

Grants and contributions, vote 10, would increase by $4.6 million to reflect growth in the Innovation for Defence Excellence and Security program, the Mobilizing Insights in Defence and Security program and the Contribution in Support of Various Sexual Assault Centres in Canada program.

[English]

The statutory allocation would increase by $220 million in light of adjustments to employee benefit plan contributions.

The five new votes reflect measures announced in Budget 2019. They’re presented separately to represent clarity of purpose and visibility.

Vote 15, $435 million, reflects the transfer of Service Income Security Insurance Plan from Treasury Board Secretariat to the Department of National Defence. Vote 20, $2.1 million, protecting Canada’s national security, supports efforts to assess and respond to economic-based national security threats.

Vote 25, renewing Canada’s Middle East strategy, continues Canada’s contribution to Canada’s engagement in Operation IMPACT.

Vote 30, supporting veterans as they transition to post-service life, reflects the commitment to better support veterans and members of the Canadian Armed Forces as they transition out of service.

Vote 35, reinforcing Canada’s support for Ukraine, Operation UNIFIER, is a continuation of an existing effort by Canada to contribute to global security.

[Translation]

These Main Estimates, Mr. Chair, reflect a determined and comprehensive effort to direct and allocate defence dollars responsibly. I would be pleased to answer any questions you have.

The Chair: Thank you very much, Ms. Charron.

[English]

Philippe Thompson, Assistant Deputy Minister, Corporate Management Sector, Innovation, Science and Economic Development Canada: I’m Philippe Thompson, Chief Financial Officer and Assistant Deputy Minister of the Corporate Management Sector at Innovation, Science and Economic Development.

Joining me tonight is my colleague Lisa Setlakwe, Senior Assistant Deputy Minister of the Strategy and Innovation Policy Sector at ISED.

We are pleased to be here to provide you with an overview of Innovation, Science and Economic Development’s Main Estimates for 2019-20.

[Translation]

Through these estimates, the department is requesting $2.9 billion intended to continue work already under way to support a strong economy that works for all Canadians, including businesses, innovators and entrepreneurs.

The Strategic Innovation Fund and the Innovation Superclusters Initiative are programs on a transformational scale. They are about nurturing a culture of innovation to accelerate the commercialization of innovative products and inspire the adoption of environmentally friendly technologies so that all Canadians reap the benefits of technological transformation in a global economy.

[English]

ISED will also continue to advance digital skills, know-how and infrastructure we have identified as necessary to promote inclusion and participation in the digital economy and prepare Canadians for the jobs of tomorrow through its suite of programs such as Digital Skills for Youth and funding provided to Mitacs Research Internships, which support work-integrated learning placements.

In addition, we will help bridge the digital divide that we know exists in Canada by making new investments to provide rural and remote regions across Canada with high-speed broadband Internet access through the Connect to Innovate program. The department will also lead work with provincial and territorial partners to develop a long-term Canadian connectivity strategy to improve access to high-speed Internet services for all Canadians.

[Translation]

As you know, Mr. Chair, the majority of ISED’s Main Estimates are for transfer payments, which represent $2.2 billion, or 77 per cent, of our planned expenditures, while our operating and capital expenditures represent $449 million, or 16 per cent. The remaining $205 million, or 7 per cent, is related to other statutory expenditures that have already been approved by parliamentarians as part of legislation or that were in prior budget implementation acts.

[English]

Something new this year, however, is that funding announced in Budget 2019 has also been included in ISED’s Main Estimates as part of the estimates reform process. This represents $93 million in new funds for 2019-20. These funds are primarily for programs such as CanCode 2.0, which will help equip more young Canadians with the skills they need in order to succeed in an era of rapid change; top-up funding for the Connect to Innovate program, which aims to expand and enhance broadband service to rural and remote communities; and funding for the Strategic Innovation Fund to support innovation in the oil and gas sector through collaboration.

[Translation]

I believe it is also important to highlight, Mr. Chair, that funding announced in Budget 2019 for future years will play a crucial role in shaping Canada’s digital landscape. One of the key measures announced in the latest federal budget for ISED is the government’s reconfirmed commitment to help every Canadian gain access to high-speed Internet at minimum speeds of 50 megabytes per second. To achieve this, the budget has announced $1.7 billion in new targeted initiatives over 13 years, primarily to establish a new national high-speed Internet program called the Universal Broadband Fund.

[English]

The Universal Broadband Fund will build on outcomes of the existing Connect to Innovate program, and focus on extending backbone infrastructure to under-served communities for the most difficult to reach communities. The funding will also support “last mile” connections to individual homes and businesses.

Included in the $1.7-billion announcement is top-up funding for the Connect to Innovate program and funding to secure advanced, new, low-latency Low Earth orbit satellite capacity. These initiatives will help bring reliable high-speed Internet access to the most challenging rural, remote homes and communities in Canada.

Moving on, you will note in these Main Estimates that there is a slight overall increase of $2.7 million compared to the previous year’s estimates. This is largely due to increases related to new funding from federal budgets and the Fall Economic Statement, which have been almost fully offset by decreases as a result of changes in the approved cash flow requirements of existing grants and contributions.

Some of the most noteworthy variations include a $390.6 million decrease for the Post-Secondary Institutions Strategic Investment Fund to the re-profile of funds to future years. This re-profile was required in order to allow projects that are currently under way and did not meet the original program deadline of November 30, 2018, to reach completion and to maximize the federal government investment.

Second is a $287.5 million increase related to new funding from the Fall Economic Statement. This is funding that has been provided to the Strategic Investment Fund to help support steel and aluminum producers which have been impacted by the U.S. tariffs and for business innovation in the forest sector.

Finally, and importantly, is a $210.6-million increase related to new funding from Budget 2018. This includes funding for programs such as the Canada Foundation for Innovation, Digital Research Infrastructure and the new Intellectual Property Strategy. All of these programs have been initiated in the last year and are currently ramping up the disbursement of grants and contributions to recipients.

[Translation]

Mr. Chair, I would like to emphasize that these fluctuations are to be expected in a department that is highly involved in the delivery of grants and contributions programs. Variations of this magnitude are to be expected given the complexity of putting in place and delivering on programs involving individual companies, individual Canadians, other federal partners and other levels of government. In all other respects, the department’s financial situation is stable.

In closing, honourable senators, I want to reaffirm our commitment to the stewardship of public resources. The resources being sought through the 2019-20 Main Estimates represent the necessary funding in order to deliver programs that are beneficial for the Canadian economy.

[English]

I would like to thank you for your time. We’re happy to answer your questions.

[Translation]

The Chair: Thank you very much.

[English]

Senator Marshall: My question is for Ms. Charron or Mr. Finn.

Ms. Charron, you were saying in your opening remarks — you referred to 157 projects of 333 projects. That’s all the projects, isn’t it, big and small?

Ms. Charron: As part of SSE, we have 333 projects listed. We also had some projects that had already started — they were in implementation. They’re not part of the 333 projects. Those projects are very well advanced.

Senator Marshall: The ones I was looking at on your website are 17 projects that are in a report called Status report on transformational and major crown projects. Would they be the majority of projects that are in the $3.8 billion, in the capital?

Patrick Finn, Assistant Deputy Minister, Materiel, Department of National Defence and the Canadian Armed Forces: Yes, those 17 are by dollar amount in what we execute. To your earlier question, the 333 are all the projects; they include infrastructure and some of our information management ones. The ones we’ve reported out and we do periodically are the vast majority of the spend. Most of the equipment would come under my authority. They, for 2019-20, represent at least two thirds of the money being spent this year.

Senator Marshall: It would be as much as two thirds?

Mr. Finn: It would. I believe the top seven are $1.75 billion.

Senator Marshall: That would probably be something like the Canadian surface combatants?

Mr. Finn: The top three on which my organization is spending money in 2019-20 are the Arctic and offshore patrol ships, a little over $300 million; fixed-wing search and rescue, similar amount; and the medium-support system, which are vehicles. Those three together are well over $900 million. The surface combatants are about a quarter of a billion dollars.

Senator Marshall: Under “Strong, Secure, Engaged,” the amount indicated there as total for the projects is $5.8 billion. It’s still possible you may request additional funds in Supplementary Estimates (A) or Supplementary Estimates (B)? Is that correct?

Mr. Finn: Yes. As my colleague said, as other projects get approved, we could come in. There are other areas that when the funds were established, when the cash phasing was created a few years ago, it was anticipatory. In some cases, their costs are not going to incur.

You mentioned the surface combatant project. We set aside money for intellectual property. Now that we’ve completed the evaluation in the bid, it’s come in much less. There are cases where we will not be drawing money.

Senator Marshall: On some you come in under; on others, you go over.

Mr. Finn: There are others where we’re delayed. We’re trying to catch up as well from what had been our initial plan.

Senator Marshall: I looked through your website for information on your individual projects. Why is there no financial information? There’s financial information there in total but not by project. I was looking for something about the Arctic and offshore patrol ships. I was looking for how much was included under “Strong, Secure, Engaged” including how much was spent this and last year and the year before and what is being projecting into the future. That information is not on your website. Why would that information not be provided?

Mr. Finn: In a number of cases, the totals are there, as you’re indicating, on charts. Generally those numbers fluctuate as we work with suppliers and within the contracts. There’s often some sensitivity around it. In some cases, you can determine labour rates and different things, which are a competitive advantage for shipyards. There’s some commercial information that limits what we portray.

Senator Marshall: I was focusing on the 17 transformational, major projects on the list. Are you able to provide us with the dollar amount included under “Strong, Secure, Engaged” for 2019-20 for each of those 17 projects? Can you also provide the dollar amount included in the 2019-20 Main Estimates, Vote 5, so we can compare the two dollar amounts?

The Chair: Can you do that through the clerk, please?

Mr. Finn: We’ll take that away. If I understand, it’s the 17 projects and what we would be spending in 2019-20?

Senator Marshall: I can read it: For each of the 17 transformational and major Crown projects, could you provide, first, the dollar amount included in “Strong, Secure, Engaged” for 2019-20 for each of the 17 projects and then compare the dollar amount included in the 2019-20 Main Estimates, Capital Vote 5, for each of those same 17 projects?

Mr. Finn: We will take that back, senator. Thank you.

Senator Klyne: I have a question first for PCO. Looking at the Prime Minister’s Youth Council, there is Canada’s first Youth Strategy. I assume you’ll be embarking upon that. I’m wondering what the terms of reference are for that strategy development. Specifically I’m wondering if it captures First Nations, Metis and Inuit youth?

Mr. Shea: There was consultation done across the country with a number of focus groups with online aspects. The end result was a policy that had a number of different subsections. One of them was related to Indigenous youth. That’s been incorporated into the strategy.

I can also tell you that the Youth Council itself is diverse. Some members have Indigenous backgrounds. Some are from the LGBTQ2S community. There are members from every province and territory. Diversity has been a major part of what has been achieved through this and what went into doing the consultations.

The end result is a policy that has a number of different areas, including environmental and Indigenous aspects, yes.

Senator Klyne: It’s coast to coast to coast?

Mr. Shea: Yes.

Senator Klyne: For ISED, I missed the Industrial and Technological Benefits reference, ITB, in all the material I have here. I probably could find it under Western Diversification. Is it just within that agency, or is ISED still behind the ITB?

Lisa Setlakwe, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Innovation, Science and Economic Development Canada: Pat may have to help me out here, but the ITB, Industrial Technological Benefits Policy program, is applied to certain defence procurement initiatives. It is delivered in collaboration with DND and PSPC and through ISED.

Within ISED, the policy lead is captured there; there’s a team within ISED. Then we work with all the regional development agencies to help us do the on-the-ground work. We’re trying to engage the business community in participating in some of these procurements. The RDAs have the boots on the ground; they all have dedicated teams within their organizations to do that work locally and with us.

Senator Klyne: You don’t have a roll-up number, aggregate, in ISED that’s devolved down to the regional agencies?

Ms. Setlakwe: No, we have a roll-up.

Senator Klyne: What is that?

Ms. Setlakwe: What is the roll-up of the value of the ITBs?

Senator Klyne: Within ISED, yes.

Ms. Setlakwe: I’d have to get back to you. It’s not an expenditure number. It’s a value —

Senator Klyne: You’re a facilitator?

Ms. Setlakwe: Yes.

Senator Eaton: For DND, we all read this week about Vice Admiral Mathias Winter writing a letter at some point, many months ago, to complain about our Industrial and Technological Benefit requirement for defence contracts, going so far as to say the F-35 would not bid on Canada’s contract unless the requirement was waived. I’m wondering, when you decided to reopen the bidding for fighter jets and not go necessarily with the CF-35, why wasn’t that letter disclosed? How important is it that our jet fighters be interoperable with our allies? Does this mean that, if we go with the CF-35, we will not have the technological and industrial benefits that we usually have with other procurements? Will this be dropped as a point of —

Mr. Finn: The disclosure of that letter earlier this week was, frankly, out of context. It was part of a broader cross-section of feedback that we got from all the suppliers on a broad range of topics. A number of them commented on our intellectual property, intellectual-benefits approach and our offsets. Others talked about the security and different aspects.

It is not disclosed, because it is the normal practice by which we interact with suppliers. In the case of this particular project, by virtue of how some of the aircraft are sourced from different countries, the governments of those countries are involved, notably in the U.S., but also the U.K. and Sweden. As we got all that information, we’ve continued to work our way through it and look at what we can do to continue to move forward.

We remain absolutely committed to the competition.

Interoperability with our allies, particularly the U.S., is extremely important, be it under NORAD, NATO or how we deploy around the world. It is absolutely essential, and it is a key requirement of the competition, noting that we’ve established it in a way that if an aircraft is not interoperable today, they provide a plan as part of their submission on how they would achieve that. Other aircraft have done that. The Eurofighter is a notable case that was brought into Five Eyes.

In the context of the industrial and technological benefits, all of the providers have continued to indicate that they can operate in that area, including the United States. The issue is some aspects of how we do it. We continue to engage with all the suppliers on how we do it.

In the case of the F-35 and the payments we’ve already made to be part of the program, the industrial benefits we’ve received have been much more significant than the payments we’ve made. We already see that at play.

We’re looking through what can be done across all of the areas. We’ve gotten comments, whether for security, schedule, budget or industrial technological benefits.

Senator Eaton: Do you have to continue to pay into the development of the CF-35?

Mr. Finn: On the F-35, senator, we have opted to continue to participate. We have it kind of firewalled from the rest. We want to make sure, should it be a successful aircraft, that we reap the benefits of our investment. We would acquire the aircraft at a lower cost than if we were to try to pursue it from some other means, such as foreign military sales.

Senator Eaton: If you go with another aircraft, you’ve still recouped your costs because of the industrial benefits you’ve so far garnered.

Mr. Finn: That is correct, senator. There are companies in Canada that have developed key technology to go into, in that particular case, a potential 3,000 aircraft. As to what would continue to happen there, we’re unsure if we would go elsewhere. As you indicate, in the context of value for money for the Canadian investment, there has been a greater amount that has already gone to Canadian industry.

Senator Eaton: High-speed Internet to all Canadians sounds wonderful and very aspirational. I’m asking this on behalf of my Inuit colleagues in the North. Will high-speed Internet reach Nunavut and Nunavik?

Ms. Setlakwe: On the commitment, you would have seen a couple different points of reference. The budget, obviously, made a significant commitment. My colleague already mentioned the projected investments. Our minister also reached an agreement with provincial and territorial ministers, his counterparts, to set that ambition for themselves. The goal is to reach 100 per cent of Canadians.

Senator Eaton: Is there a deadline?

Ms. Setlakwe: — at 50/10.

Senator Eaton: At 50/10?

Ms. Setlakwe: At 50/10. Fifty megabits per second.

Senator Eaton: I thought it was in the year 5010. None of us might be here by then.

Ms. Setlakwe: We will do it in tranches. By 2030, we hope to reach that goal.

We won’t do it alone, of course. It’s an expensive proposition.

Senator Eaton: It will be by satellite, not by fibre optics?

Ms. Setlakwe: It will depend. Different technologies will be used for different purposes.

Senator Boehm: I want to go on hot pursuit of where Senator Eaton left off. You’re involving the private sector, of course, in the Connect to Innovate. Again, is it case by case, depending on need? That’s one.

The other question is on the money. It looks like it’s $1.7 billion over 13 years, but your front-end load is only $26 million. What is the logic behind that?

Ms. Setlakwe: The first question was about how we are engaging the private sector. There’s the $1.7 billion that we’ve made a commitment on, but I also want to note that the CRTC will hopefully soon launch their fund, which is $750 million.

The budget also made reference to the Canada Infrastructure Bank, which is looking to make investments to the tune of $1 billion and leveraging from there. Infrastructure Canada also has a few different funds that can help with the investments.

The private sector is a key partner in getting us to this goal. Depending where we are making the investments, there’s a business case for the private sector to invest. Sometimes there isn’t. It’s a bit of a sliding scale. There are certain places where the private sector sees the business case in making investments, sharing with government and others in doing that and deploying. In other cases, a heavier government investment is required.

That’s all levels of government. With municipalities, when you’re looking at smaller communities where some of the service providers are not necessarily seeing the business case to deploy, we’re seeing grassroots or municipal organizations coming forward and saying, “We will administer the delivery of the service, with some incentive.”

The private sector is definitely a key contributor.

The one thing that was announced in the Fall Economic Statement was the accelerated capital cost allowance. We’ve already seen many of the service providers make investments in rural areas as a result of the ability to make those investments.

On the second line of questioning, I’ll turn it over.

Mr. Thompson: Yes, the funding profile. As my colleague said, there are a number of programs that are implicated. There is the winding down of the Connecting Canada program, ending in 2020, with a budget in the Main Estimates of $3.6 million. The Connect to Innovate has an approved budget of $256 million for 2019-20 and a budget of $90 million for 2021. This was an announcement in Budget 2019 of $85 million for topping up that funding while the other programs are being put in place. There’s funding that is in place to make sure we continue to deliver on these key programs as new money comes into play.

[Translation]

Senator Forest-Niesing: My first question is for the Privy Council Office representative. Young people are the gatekeepers of the future, and I, for one, would like to hear you talk more about the youth strategy that came about further to the recent Canada Youth Summit.

Could you tell us more about the key pillars of the strategy? Could you also tell us whether a timetable has been established?

[English]

Mr. Shea: The summit was the culmination of a lot of consultation. Starting in February 2018, the youth secretariat at PCO launched a phase of consultation across the country. There were 10,000 people consulted online or in person. That was followed by 18 in-person focus groups to go over what was heard. Ultimately, it was reviewed by the Youth Council to the Prime Minister which, as I mentioned earlier, is a diverse group of young Canadians with multiple cohorts who have come through the program.

It culminated with this policy announced at the Youth Summit, which sets out the government’s objectives and guiding principles for the next few years. It’s about leadership and impact, health and wellness, innovation, skills and learning, employment, truth and reconciliation and environment and climate change. In each of these areas, you see government policies that follow. This is that overarching policy that will drive further programming and strategies across government. This is that first step in a longer journey. I think you’ll see other departments follow suit.

Senator Forest-Niesing: What’s the expected deadline or time frame for the achievement of that?

Mr. Shea: I don’t know that they have set a deadline by which everything needs to be achieved but you are already starting to see it. ESDC launched the Canada Service Corps, which is a support of this policy. You’ve also seen Budget 2019 announce $314 million for various initiatives across government; namely, the Canada Service Corps. I think you’ll see future budgets that add programming to this suite of programs.

[Translation]

Senator Forest-Niesing: My second question is for the Department of National Defence officials. It pertains to vote 20, in particular, the economic-based security threats.

How specifically are you using this funding to protect national security?

Ms. Charron: Thank you for your question.

As far as vote 20 is concerned, the department received a total of $12 million over five years in Budget 2019. The program in question was developed in conjunction with other departments.

Given the sensitive nature of security-related information, all I can say is that we are going to address the issuing of permits and review certain international statutes as well as their impact on national security.

Senator Forest-Niesing: Does cybersecurity fit into that, or does it relate to something else?

Ms. Charron: Treasury Board hasn’t approved the funding yet. We are working with various partners to determine the scope and nature of the activities, and, yes, cybersecurity is, of course, one of the elements that falls under national security.

Senator Forest-Niesing: Thank you.

[English]

Senator Duncan: Thank you to the panel for being here.

My first question is for Mr. Thompson, I believe. Of course, I’m very interested in the new national high-speed Internet program. Senator Eaton and Senator Boehm have raised some issues. You’ve given us some details on it, like the 50/10 goal, for example.

I would like a little bit more elaboration, if you could. Is the program envisioning an application process? You talked about a mention of a meeting with ministers from across the country. I would be interested in that.

I appreciate that the goal is underserved communities, but Canada is a very diverse country and there are underserved areas. As a Canadian, I appreciate the goal to ensure we all have the same service. Also, as a Yukoner, I appreciate the foresight of previous governments that ensured the Yukon was wired and that there is incredible access. The problem is the pipe going south. Members have heard me say it before that somebody digs up a line in Fort St. John and the entire Internet goes down in the Yukon. We’ve talked about going through Alaska with some connection or other alternatives.

There’s only so many dollars available and our efforts are to underserved Canadians. Is it an application process where the Yukon would not be eligible because we have it, but may not always have the speeds?

On the point about the consultation, and I look forward to your answer on that, I would put Mr. Shea on notice that I would like to have the mandate letter for the new office of the Minister of Intergovernmental and Northern Affairs and Internal Trade.

That’s two questions in one. Thank you.

Mr. Thompson: It was solely about the Connect to Innovate program. It is a continuation of the program that was already in existence. At the original inception of the program in 2016-17, we had 892 proposals seeking $4.4 billion in investments. Of those projects, 192 have received conditional approval. The target for the original program was to connect 300 communities. We’ve more than tripled with 975 communities, including 190 Indigenous communities.

We were also aiming to connect 100 institutions and we achieved 1,100 of those institutions and deployed 20,000 kilometres of fibre network.

In the second iteration, the new funding that we are receiving through this program is for the 50 additional projects that were already assessed. Out of 892, there were 700 that were still in the queue. The objective is to connect 125 additional communities with that funding, including 20 Indigenous communities.

There is a little difference as well. The original program was aiming for a speed of five megabytes download and one upload. We are now aiming for 50 megabytes download and 10 megabytes upload. When we talk about the 50/10 rule, that’s it.

We know that to close the gap for all communities in Canada — we’re aiming for 100 per cent connectivity by 2030. It would be an investment of $8 billion to $10 billion and that’s why I said I cannot do it alone and we’re relying on partners from the federal government, also provincial and territorial governments as well as the private sector.

Senator Duncan: Is there a big map that says here’s where we’re connected and here’s where we’re not and here is where the speeds are? Could you send that to us, please.

The Chair: Can you please, Mr. Thompson, provide that through the clerk? It will be distributed to all the senators.

Ms. Setlakwe: On the point of redundancy, when there are issues that come up that you’ve referenced, this is one of the key areas within the FPT strategy that we’re developing where we are talking about things like that.

These are things that we consider when we’re contemplating applications. There probably will be an application process, of course, because it is a highly sought-after investment.

Mr. Shea: It was Minister LeBlanc who was named by the Prime Minister in this role. He’s temporarily on a leave of absence for health reasons, as was announced. I don’t have the mandate letter with me, but I can provide it to you. The Minister of Intergovernmental Affairs is really about the relationships with the provinces, while the Minister of Internal Trade is about dealing with interprovincial trade-type issues.

He was part of the first ministers meeting that the Prime Minister hosted in Montreal and held panels with premiers talking about issues of shared interest between the different provinces. As Minister of Northern Affairs, one of his main priorities has been the development of an Arctic Policy Framework as well as updating and expanding the Nutrition North program.

He’s also, in that role, President of the Privy Council and there are a number of organizations, including the Transportation Safety Board, Intergovernmental Conference Secretariat, Office of the Commissioner of Official Languages, Public Service Commission and a couple others that he has responsibilities for.

Temporarily, the Finance Minister has taken over a portion of the responsibility, as has the Minister of Crown-Indigenous Relations and Northern Affairs. The Minister of Democratic Institutions took over a couple of those small organizations because of regulations that prevent the Minister of Finance from doing that.

Senator Duncan: Thank you.

The Chair: You will provide that?

Mr. Shea: Yes.

The Chair: Before we conclude with the second round, with Senator Boehm and Senator Eaton, I have a question.

[Translation]

Before we wrap up, I have a question for the officials from Innovation, Science and Economic Development Canada. In 2016, the government set up the Post-Secondary Institutions Strategic Investment Fund, allocating $2 billion to the fund.

Can you tell us whether all the funding has been spent? The program ended in 2018, but do you plan on renewing it to benefit post-secondary institutions across the country?

Ms. Setlakwe: The $2 billion has been committed. I can’t say whether all of it has been spent, however. As for whether the program is being renewed, that decision isn’t up to me.

The Chair: Thank you. Would you please send the clerk a breakdown of the amounts that have been or will be spent, as well as the corresponding post-secondary institution, community college or university?

Mr. Thompson: I’d like to clarify something, if I may. Funding for certain projects that were to be carried out under the program has been reprofiled for the program. Specifically, that represents $123 million for 2019-20 and $45 million for 2020-21. Those are the last amounts available under the program, but we can provide you with more details on that.

The Chair: Could you also indicate who the program was meant to help in 2016?

Mr. Thompson: Absolutely.

The Chair: Thank you.

[English]

Senator Boehm: Mr. Shea, I have a question for you. When I was a deputy minister, the bane of my existence was something administered by the Privy Council Office called “deliverology.” The government is coming close to the end of its mandate. This is not really a numbers question in the sense of budget. According to the mandate letter tracker, 156 mandate letter commitments have been completed and they’re coming. You should be on track to reach 70 per cent or so, which I think was the target.

While you’re looking, I can say that, all kidding aside, this is a very innovative approach because in the past mandate letters were never shared with anyone; and, of course, they are now available for anyone in the world to see. I’m just curious as to whether, in the estimation of the PCO, things are on track?

Mr. Shea: I don’t have all of the mandate letters with me. We report them publicly, as you mentioned. I have a colleague here, if you need more detail, who is happy to come to the table. We have labelled them as whether they are on track, whether there is attention required and that comes from departments. It’s not really up to PCO to make a determination as to where we are with respect to each department’s mandate. It’s up to them to feed in. As you mentioned, we make very public what the mandate letter is. We make very public what the status is.

It’s out there for the public to see, and we don’t make a determination or analysis as to —

Senator Boehm: You would have a sense of what has been accomplished and the aggregate, would you not?

Mr. Shea: Our team responsible for that would. I don’t have an aggregate total of the 432 commitments that are found in the various mandate letters. I can endeavour to get you an answer. I know it’s on our website and it’s kept up to date.

Senator Boehm: I’d be delighted if you could get information through the clerk to us. Thank you.

Senator Eaton: Very quick little question. I’m looking at your Canadian surface combatant website and it says here under definition, the last point is:

Revised project approval for design and production engineering: Spring 2019.

Is that all in place? Is that still to happen?

Mr. Finn: We are weeks away from completing those approvals, senator. With the selection of the design, we’ve been able to bring down the more detailed of the cast phasing and the costing of what we need for each aspect of design. We anticipate those approvals within weeks.

Senator Eaton: By the time we rise for the summer, it will be done?

Mr. Finn: It will be done, senator.

Senator Eaton: Great. Thank you.

Mr. Finn: Thank you.

The Chair: Thank you to the witnesses. Thank you very much for providing information and answering our questions. Like always, I have to say that you’ve been professional. With this we say thank you very much.

Honourable senators, next week we will start the BIA Bill C-97, of which the sponsor of the bill is the Honourable Senator Boehm. We will prepare and see you next week on the matter.

(The committee adjourned.)

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