THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Monday, March 8, 2021
The Standing Senate Committee on National Finance met by videoconference this day at 1 p.m. [ET] to study the Supplementary Estimates (C) for the fiscal year ending March 31, 2021.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Honourable senators and participants across the country, bear with me before we move on to the agenda.
[Translation]
As chair of the Standing Senate Committee on National Finance and on behalf of all the committee members, I feel it is important to recognize that today, March 8, 2021, is International Women’s Day. I want to highlight the contribution of women here, in Canada, and around the world to making our communities better places to live.
[English]
Honourable senators and Canadians, it is important to recognize women’s leadership in our Canadian society, from coast to coast to coast. There is no doubt in my mind that International Women’s Day is about recognizing the many contributions in business, education, front-line work, research, innovation, and without a doubt, as mothers and grandmothers, your great contribution to family values. On this, our sincere congratulations from the Finance Committee.
Honourable senators, before we begin I’d like to remind senators and witnesses to please keep your microphones muted at all times unless recognized by name by the chair.
[Translation]
Should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk, and we will work to resolve the issue. If you experience other technical challenges, please contact the ISD Service Desk with the technical assistance number provided.
[English]
The use of online platforms does not guarantee speech privacy or that eavesdropping won’t be conducted. As such, while conducting committee meetings, all participants should be aware of such limitations and restrict the possible disclosure of sensitive, private and privileged Senate information. Participants should know to do so in a private area and to be mindful of your surroundings. We will now begin with the official portion of our meeting.
[Translation]
My name is Percy Mockler, and I am the chair of the committee.
[English]
I would like to introduce the members of the committee who are participating in this meeting today: Senator Boehm, Senator Dagenais, Senator M. Deacon, Senator Duncan, Senator Forest, Senator Galvez, Senator Klyne, Senator Loffreda, Senator Marshall, Senator Smith and Senator White. Again, we welcome Senator Pate to the meeting.
I wish to welcome all of you and viewers across our country, Canada, who may be watching on sencanada.ca.
[Translation]
Today, we continue our study of the expenditures set out in the Supplementary Estimates (C) for the fiscal year ending March 31, 2021, which was referred to this committee on February 16, 2021 by the Senate of Canada.
[English]
For our first panel, we welcome from Innovation, Science and Economic Development Canada, Douglas McConnachie, Assistant Deputy Minister, Corporate Management Sector. He is accompanied by Margaret Buist, Vice-President Policy, Planning, Communications and NPMO, Canadian Northern Economic Development Agency; Lisa St-Amour, Chief Financial Officer, Federal Economic Development Agency for Southern Ontario; Cathy McLean, Executive Director, Finance and Corporate Management and Chief Financial Officer, Western Economic Diversification Canada; Jean-Frédéric Lafaille, Vice-President, Policy and Communications, Canada Economic Development for Quebec Regions; and Bill Grandy, Director General, Programs, Atlantic Canada Opportunities Agency.
Welcome to all of you and thank you for accepting our invitation.
Douglas McConnachie, Assistant Deputy Minister, Corporate Management Sector, Innovation, Science and Economic Development Canada: Good afternoon honourable senators and officials. I am Douglas McConnachie, Assistant Deputy Minister, Corporate Management Sector, Innovation, Science and Economic Development Canada.
Joining me today are my colleagues from the Regional Development Agencies, and since you took the time to kindly introduce them I will refrain from renaming them. We are pleased to be here today to provide you with the overview of the authorities that are being requested the 2020-21 Supplementary Estimates (C) and the 2021-22 Main Estimates for the ISED portfolio.
[Translation]
Innovation, Science and Economic Development Canada, or ISED, and its portfolio organizations continue to play a critical role in the government’s response to mitigating COVID-19 in Canada.
Since March 2020, the government has announced a series of measures in response to the hardships faced by Canadians and businesses owing to the global COVID-19 pandemic. As a result, the ISED portfolio has accessed a total of $4 billion in fiscal year 2020-21, to work closely with partner departments to support the development of vaccines and therapies, the tracking and testing of COVID-19 within Canada, and further investment in medical countermeasures and biomanufacturing. The portfolio also works and continues to take action to support businesses and workers affected by the COVID-19 pandemic.
[English]
I will now speak to the Supplementary Estimates (C), which is the last exercise that allows organizations to make adjustments to their respective reference levels and access approved funding for fiscal year 2020-21.
The ISED portfolio is requesting a total of $326.6 million in additional authorities through the Supplementary Estimates (C). Of this amount, $283 million is for new funding announced in the Fall Economic Statement 2020 to further support Canadians and fight the COVID-19 pandemic, to invest in a recovery that is inclusive, sustainable and creates good jobs for Canadians. The most significant increase relates to $209.7 million for the Regional Relief and Recovery Fund to further support small- and medium-sized businesses and communities across the country that may not have access to other support measures.
The funding requested by the Regional Development Agencies is in two streams: $107.7 million for small- and medium-sized businesses through the Regional Economic Growth through Innovation program, and $102 million to support businesses and communities affected by the pandemic through the Community Futures Development Corporations.
[Translation]
Mr. Chair, with this additional funding and through the regional development agencies, or RDAs, a total of $1.8 billion will now be available to support businesses and workers affected by the COVID-19 pandemic. The regional development agencies are also requesting $44.1 million for the new Regional Air Transportation Initiative, the first of a two-year investment of $206 million announced in the fall economic statement, to ensure that Canada’s regional airlines remain operational, adapt to new realities, and strengthen their resilience to continue serving businesses and communities that rely on the air sector for economic development, tourism, travel and well-being.
[English]
ISED is requesting $21.7 million for the Shop Local initiative, to support provincial and territorial chambers of commerce to develop and implement awareness-building campaigns that promote local main-street businesses in their communities. Finally, ISED is requesting $20.7 million for the Universal Broadband Fund, UBF, as announced in Budget 2019, in order to build broadband and mobile networks in underserved rural and remote areas.
Mr. Chair, I will now provide a brief overview of the authorities requested in the 2021-22 Main Estimates.
[Translation]
The ISED portfolio is requesting $10.2 billion to further respond to the hardships faced by Canadians and businesses owing to the global COVID-19 pandemic and to continue the work that is already under way to support a strong economy that works for all Canadians, including businesses, innovators and entrepreneurs. Mr. Chair, these Main Estimates represent a total increase of $1.3 billion when compared with last year, and the majority of this increase relates to funding for the response to COVID-19.
[English]
ISED is requesting $281.5 million to enhance Canada’s capacity in research and development on medical countermeasures in response to the pandemic. These investments will be made through the Strategic Innovation Fund and Genome Canada.
The National Research Council is requesting $135 million for the development and production of promising domestic COVID-19 vaccines, and for the construction of a new biomanufacturing facility adjacent to the NRC Royalmount site in Montreal.
The six Regional Development Agencies are requesting $154 million for the new regional air transportation initiative, which represents the second year of the funding announced in the Fall Economic Statement. The RDAs are also seeking access to $15.6 million — of a total investment of $52.2 million over four years announced in the Fall Economic Statement — to support Black entrepreneurs who are facing challenges due to smaller firm size, financial deterrents and other systemic barriers which have been intensified by the COVID-19 economic crisis.
These estimates also reflect increases in funding for priorities that were announced in previous federal budgets. These major items include $301.3 million for the Universal Broadband Fund to build broadband and mobile networks in underserved rural and remote areas. Budget 2019 has announced a total envelope of $1.75 billion over seven years to support the following: universal high-speed internet in rural, remote and Northern communities; $193 million announced in Budget 2018 for the 2021 Census of Population and the 2021 Census of Agriculture to conduct discuss activities; and finally, $48.5 million to modernize spectrum equipment and to prepare for a new generation of 5G wireless technology, so that Canadians can benefit from advanced telecommunications systems, technologies and applications.
In closing, I would like to reaffirm the commitment of ISED and its portfolio departments to the stewardship of public resources during these unprecedented times. The delivery of these important initiatives is supported by a strong internal control framework, fraud risk management, and robust practices for monitoring and reporting on COVID-19-related expenditures to ensure the expected results are achieved for Canadians.
[Translation]
Mr. Chair, I would like to thank the committee for giving us an opportunity to discuss these requests with you today. My colleagues and I will be pleased to answer any questions that you may have at this time. Thank you.
The Chair: Thank you, Mr. McConnachie.
[English]
We will now proceed to questions. I would like to bring to your attention, senators, that you will have a maximum of seven minutes each; therefore, please ask your questions directly. To the witnesses, please respond concisely. The clerk will make a hand signal to show the time is over.
Senator Marshall: Thank you, Mr. McConnachie, for the overview.
My first question is a general one that springs from your opening remarks. Regarding the Fall Economic Statement — the $206 million that you mention for the Regional Development Agencies for the Regional Air Transportation Initiative — there is also a bill in the House of Commons, Bill C-14, that will also provide $206 million to what looks to be your organization. Is it the same $206 million? [Technical difficulties] — the numbers correctly. I’m challenged at times to do that.
Mr. McConnachie: I don’t have the Fall Economic Statement document in front — [Technical difficulties] — the two pieces of information. I would invite my colleague from Canada Economic Development for Quebec Regions, if he has that information, to chime in.
Jean-Frédéric Lafaille, Vice-President, Policy and Communications, Canada Economic Development for Quebec Regions, Innovation, Science and Economic Development Canada: I think we could get back to the committee on this. I think the $206 million that was included in the Fall Economic Statement for the purposes of the air transport initiative — this current year, $44 million is requested for approval in the Supplementary Estimates (C).
The other legislation would be for other purposes.
Senator Marshall: It’s not the same. Okay, thank you very much.
My next question is for Mr. Grandy from ACOA, because I’m from Newfoundland and Labrador, so I’m always interested in my own province. The $10 million for the Regional Air Transportation Initiative — the minister in her remarks said that it’s to help regional airports and carriers to be ready when the borders reopen. Can you tell me who will get the $10 million? Is it based on application, and would it be like Air Canada, provincial airlines or would it be the airports? Can you give me an idea as to who would be the beneficiaries of that funding?
Bill Grandy, Director General, Programs, Atlantic Canada Opportunities Agency, Innovation, Science and Economic Development Canada: Thank you, Senator Marshall.
The beneficiaries of that funding; eligible would be regional airlines, regional airports — so not the large airports — and other parts of the ecosystem. The program is yet to be launched, but it will be an application-driven process.
Senator Marshall: Okay. So it wouldn’t be Air Canada; it wouldn’t be WestJet. I’m asking because we have had a significant cutback in service, so would it be provincial airlines? Which airlines are we talking about?
Mr. Grandy: Provincial airlines could be an eligible applicant.
Senator Marshall: The airports would be like Goose Bay, Wabush, Deer Lake, am I getting that right?
Mr. Grandy: Some are covered off under the NAS ecosystem. It would be those not covered under that, such as Deer Lake, Gander, St. John’s.
Senator Marshall: They wouldn’t be included.
Mr. Grandy: No, they would be. Goose Bay, too.
Senator Marshall: Okay. Is it based on application? It’s $10 million, which, when you look at federal funding in its entirety, doesn’t look like very much, so is it based only on application?
Mr. Grandy: It’s based on application. The total allocation for Atlantic Canada is just over $40 million over two years, which is $10 million in this year, of what you’re seeing in the supplementals.
Senator Marshall: Is it first-come, first-served and if you’re lucky, you get some, and if you’re not right off the mark, you will not get any? Is that the way it’s done?
Mr. Grandy: The exact process has not been confirmed yet, but we will be looking at the whole ecosystem in Atlantic Canada to make sure we’re fair and transparent.
Senator Marshall: The next question I have is on the Canadian Seafood Stabilization Fund for $4.5 million. Can you give us some information on that program and on who would be eligible?
Mr. Grandy: That program was targeted at secondary seafood processors.
The $4.56 million in the supplements is actually part of a holdback. It was a $62.5 million program and 5.7 was held back. It’s delivered by ACOA, WD and CED. Based on the demand we saw in Atlantic Canada, we got an additional 4.56 of the $5.7 million holdback.
The program targets three main areas. The first is storage; the second is processing, which deals with health and safety and automation-type activities; and the third is marketing.
Senator Marshall: How is the funding going to work there? Is it first-come, first-served or is it the quality of the applications? I’m trying to get a handle.
Mr. Grandy: It would be a combination of the two. It is first-come, first-served. We’re assessing based on the order of when they came through the door, but equally they would be assessed based on the quality of their applications.
Senator Marshall: These are all grants — you pay them out — but is there some sort of process, after the fact, to make sure the money was spent as per the agreement?
Mr. Grandy: With the exception of a small portion for PPE-related activities, these will be repayable contributions, so these are actually loans to clients —
Senator Marshall: So none of it is a gift.
Mr. Grandy: A small portion for health and safety — helping companies pivot as a result of COVID — is forgivable for companies that apply.
Senator Marshall: Now I’m going to move to the department, because they also have some funding there for the Regional Air Transportation Initiative: the $5.8 million. Could I have some information on that? I notice that’s also for grants and contributions.
Mr. McConnachie: Certainly, this is the same programming as my colleague from ACOA had noted. The funding has been split across several Regional Development Agencies to focus on regional routes and airports within their jurisdictions. The one qualification I would mention, in regard to your earlier comments, is that none of this funding is destined for the large major carriers. It’s my understanding that the Minister of Transport is currently engaged in discussions with the major airlines on what the conditions might be for providing additional financing outside the current measures they have been able to take advantage of, such as the wage subsidy and other measures.
Senator Marshall: Is the $5.8 million in addition to the $10 million that Mr. Grandy just discussed?
Mr. McConnachie: No, it’s a component of the overall funding, and that’s the portion that’s been allocated to the FedNor organization that reports to the department of ISED.
Senator Marshall: Do you deliver that money directly or down to ACOA and the other agency?
Mr. McConnachie: The FedNor operates, effectively, as one of the regional economic development agencies. It does not have a separate status as the others do, but it has its own administration and uses the same program terms and conditions as all of our compatriot RDAs do.
Senator Marshall: I think I have a little bit of time so I will get a start on the — do I, Mr. Chair?
The Chair: 20 seconds.
Senator Marshall: My question was going to be on the Universal Broadband Fund, but maybe one of my colleagues will ask a question on that.
[Translation]
Senator Forest: Thank you for being here. We always find it especially helpful to hear from representatives of the economic development agencies, which are important development partners in each of our regions.
My first question is about a serious issue, one my fellow senator raised, air transportation. Perhaps Mr. Lafaille can answer. How will Quebec’s portion of the Regional Air Transportation Initiative funding be distributed among regional airports and airlines?
Do you have criteria for allotting the regional air transportation funding?
Mr. Lafaille: Thank you for your question, senator.
I should start by pointing out that the initiative has not been formally launched yet, so all the program criteria that will be available on the RDA sites have not been posted. They are not available but should be soon.
The purpose of the initiative is to round out the programming my colleagues referred to, specifically, the generic programs that apply to all businesses, certain programs that Transport Canada will put in place and the portion of RDA funding for regional air connectivity, an essential requirement for economic development in the regions. Connecting people and goods is really the key, and the RDAs will be focusing on that.
I think you can expect the criteria to be explicit, as is the case for all the programs, because the impact on regional air connectivity is what we will be looking for in the project proposals.
Senator Forest: The criteria have yet to be laid out. Now, is the funding exclusively for regional airports, or is it meant for all of Quebec’s airport infrastructure?
Mr. Lafaille: The fall economic update covers the air transportation ecosystem, so the funding is not exclusive to carriers or airports. The funding is really for the entire ecosystem, to ensure it remains operational during these difficult times, of course, and to help it prepare for the gradual resumption of economic activity post-pandemic, but always with a view to weathering the storm.
When we talk about adapting to the future, we mean adapting to the measures and guidelines recommended by the public health agencies, and adequately preparing for the digitizing of materials that will be necessary for the resumption of economic activity in the near future.
In short, the goal is really to ensure the ecosystem remains operational and can prepare for the resumption of economic activity.
Senator Forest: I have a broader question now. Perhaps you can answer it, Mr. McConnachie. A number of my colleagues and I had a meeting to discuss NAV CANADA, which has already laid off nearly 900 employees.
As far as connectivity and safe travel are concerned, whether in relation to emergency measures or safe service delivery by air carriers, a number of regions in the country face a serious threat: the closure of their NAV CANADA control towers.
On one hand, the government is providing regional support for the recovery and air connectivity, but on the other hand, NAV CANADA, the corporation responsible for air transportation communications, is closing control towers. The right hand is undermining what the left hand is trying to do. Do you consult or have discussions with NAV CANADA to ensure basic and vital service is maintained?
Mr. Lafaille: Yes, our initiative is carried out in conjunction with our Transport Canada colleagues.
Our counterparts at Transport Canada are in touch with NAV CANADA authorities and other stakeholders regarding air transportation because that is the department’s mandate.
We developed our own initiative in close cooperation with Transport Canada to complement what our counterparts are doing, ultimately, with the goal of ensuring the right hand knows what the left hand is doing so that both are working together. As you know, the RDAs are not sector-oriented by nature, but tackle problems as they arise in the regions. That is why we have to rely on our counterparts to make sure our efforts complement theirs.
To answer your question, then, I would say yes. There is ongoing coordination with our Transport Canada colleagues.
Senator Forest: In my view, one of the things that makes Canada Economic Development so effective — one of its greatest strengths—is precisely its non-sector-based approach. For that reason, your support can help other sectors.
In fact, I may have a special project for you to consider. It’s an excellent plan: a fishing boat storage facility in Grande-Rivière, on the Gaspé Peninsula. Last week, we found out that the roughly $2-million project did not satisfy the requirements of Canada’s fisheries funds. In the past, Canada Economic Development has been very open to innovation and demonstrated its ability to support communities, which have already collected nearly half a million dollars for the project. Grande-Rivière is home to the École des pêches et de l’aquaculture du Québec, a major hub for fisheries.
Given the flexibility at your disposal, would it be possible to support a winter storage facility project for fishing boats in Grande-Rivière through Canada Economic Development programming? Did you receive a request to help fishers in Grande-Rivière?
I know it’s a rather specific question, but it concerns a topical issue that’s very important to our region.
Mr. Lafaille: I would have to check with my colleagues in operations; they may have received a request, but I’m not sure. Since I don’t know the answer, I’d rather not say anything now and make sure we get you the right information.
Senator Forest: I was going fishing, but I hope you’ll be able to provide an answer quickly.
The Chair: Mr. Lafaille, you can get back to the committee clerk, Ms. Fortin, with an answer in writing. Would you be able to provide the information by Thursday of this week?
Mr. Lafaille: I have taken note of it, Mr. Chair.
The Chair: Feel free to get back to us sooner, if you can. Thank you.
[English]
Senator Klyne: Welcome to our panel of experts here. Thank you for being here and for your report. I have three quick questions. One is regarding the Regional Air Transportation Initiative, but more specifically as it relates to helping to maintain associated economic activity. I’m wondering, is that aimed at the struggling tourism sector, or small- and medium-sized businesses, or some other reference to maintaining economic activities?
Mr. McConnachie: Thank you very much for the question. There is certainly a connection between the Regional Air Transportation Initiative and other industries. Obviously, by maintaining those commercial connections, it will have spinoff benefits to other industries. However, we are also requesting additional funding to support specific programming on tourism and destination marketing. Perhaps I could ask my colleague from ACOA to speak at greater length about the tourism initiatives that are in the estimates.
Mr. Grandy: The tourism estimates are focused on making sure that liquidity funding is available for tourism businesses that have been significantly impacted by the pandemic. In the Fall Economic Statement, there was a reference to the fact that up to 25% of the investments under the Regional Relief and Recovery Fund, or RRRF, would be made available to that sector. Regional Development Agencies and my colleagues are working to monitor our investments and make sure that RRRF funding is made available to that sector.
Senator Klyne: I understand. There was a reference to the Regional Air Transportation Initiative and helping to support or assist with economic activities. Is that specific to the airlines, the regional airports or other economic activities?
Mr. Grandy: As my colleague from CEDQ highlighted, airline structure is important in economic development beyond the tourism sector, so it more broadly references how it supports the economies in our respective regions.
Senator Klyne: Largely the indirect effects that it provides in the economy. Okay.
Second question, Mr. Chair. This regards the support of small- and medium-sized enterprises, of which there is a significant amount. That’s certainly required and appreciated.
The pandemic has highlighted the competitiveness of the retail sector and the relatively stable foothold that the big box stores and the online shopping marketplace have been able to secure. With reference to the number of initiatives that are there to support small- and medium-sized enterprises, I wonder if there are any strategies for the local SMEs to reinvent themselves and compete with the big box stores and online shopping.
Mr. McConnachie: Thank you for the question. Certainly, there has been a disproportionate impact on SMEs throughout the pandemic period, and for this reason the government has put in place a number of significant measures to support SMEs.
Obviously, the Canada Emergency Wage Subsidy has been extended until June 2021, and the government has increased the maximum subsidy rate to 75%, which is helping those businesses weather the current pandemic.
As to specific supports in these estimates, the government is proposing up to $46.5 million over two years to support the main street businesses through the Shop Local initiative across the country. Out of that, $12 million has been announced as part of the Canada United Small Business Relief Fund, and $33 million of funding has been proposed for the territorial and provincial chambers of commerce. All of this funding, Mr. Chair, is available not only to provide liquidity support but also to help small businesses, as the honourable senator has indicated, to reinvent themselves and create innovative ways of changing their business models to ensure they’ll be more competitive in the global economy moving forward. Thank you.
Senator Klyne: Thank you so much. The tail end of your comment was what I was hoping to hear. Thanks.
One more question, Mr. Chair. On digital transportation formation — and I don’t know if this will help Senator Marshall — the question I had about digital transformation is the following. We have been making good strides in connectivity in rural, northern and remote areas, and as connectivity has taken place, and with the broadband initiative, is there any consideration given to digital transformation? It occurs to me that now that the internet is finding its way into these communities, they need to learn how to use it. I don’t know that they’re ready to optimize the opportunities available with the interconnectivity or the broadband initiative.
Mr. McConnachie: Thank you very much. To speak to the Universal Broadband Fund, it is focused on bringing bandwidth to the underserved parts of Canada, and as you’re most likely aware, the standard is to ensure that Canadian companies and individuals have access to upload-download speeds of 50-10 in the next 5 to 10 years.
With regard to digital transformation, our Digital Main Street initiatives, including Shop Local, offer an opportunity for SMEs and Canadians to look at new ways of approaching the digital economy. I’d actually call upon my colleague from FedDev to speak to some of the more specific measures that are being put in place in this context.
Lisa St-Amour, Chief Financial Officer, Federal Economic Development Agency for Southern Ontario, Innovation, Science and Economic Development Canada: Good afternoon, Mr. Chair. At FedDev, we’ve invested over $42.5 million on Digital Main Street and $7.5 million on the Recovery Activation Program to provide assistance to over 23,000 SMEs in 130 communities across southern Ontario, to pivot their operations and embrace digital technologies for continued business growth throughout the pandemic.
Having said that, we’re partnering with the Ontario Business Improvement Area Association, the Toronto Association of Business Improvement Areas, Communitech, as well as Invest Ottawa. We’ve supported over 22,000 small businesses across Ontario to pivot their operations and guide them through business models, to help them regain their lost revenue and become more resilient and competitive as the economy recovers. This is while creating jobs for over 1,400 students.
Senator White: My question will be for Mr. McConnachie. I’m trying to get my head around the Regional Air Transportation Initiative. You said that the funding would not be available to the large airlines. However, many of the regional airlines that could apply are owned by or controlled by the large airlines. Is that correct, or would they be exempt? I’m thinking of regional Air Canada, for example. They would still have access to this funding, correct?
Mr. McConnachie: Thank you for the question. I will defer that answer to my colleague from Innovation, Science and Economic Development Canada, because I’m not certain of the specifics of who can and cannot apply.
Senator White: If I’m asking the wrong people — I’m always going to ask you, so you redirect me.
Mr. McConnachie: Certainly.
Mr. Lafaille: Thank you for the question. The program has not been officially launched yet, so in terms of eligibility we are anticipating some information about this. Officially, the program will be launched momentarily, so you will have specific criteria on the website.
We can confirm that the intent of the program is not to support the bigger airlines that are in negotiation with the Government of Canada separately. We look at the projects that are coming to us in terms of ensuring there is coherence, in the support of the Government of Canada to the airlines in general, and especially to make sure there is no duplication. I’m afraid I cannot go beyond that because it’s not officially announced yet and I don’t have all the criteria.
Senator White: More precisely, we know — and I think Senator Marshall mentioned — that some airports have gone to zero flights. I think that Sydney, on Cape Breton Island, now has no flights in and out, for example. Would there be a requirement that they reinitiate flights into those locations before they would be eligible for the funding, or are there no requirements other than to support them?
Mr. Lafaille: Again I will have to defer to the official launch of the program. What I can say is that the intent is to maintain and restore connectivity. The overarching principle is to assess the impact, in terms of ensuring that the air transportation system is operational and preparing for the gradual recovery of activities. Projects will be assessed through that lens.
Senator White: So you’re saying wait and see, because we have to wait for the official word?
Mr. Lafaille: Until the official program is launched, I’m afraid I cannot spell out all the criteria.
Senator White: The next question I have is around funding in relation to regional air. Does that only include north of 60 or does it include northern parts of provinces? I apologize if you’ve mentioned it already. I didn’t catch it.
Mr. McConnachie: We have two organizations that work in the North. The most notable is CanNor, which is the north of 60 organization. Then there’s FedNor, which is a part of ISED and is serving the northern parts of Ontario. Again, the mandates are not mutually exclusive because we do operate compatible programming across the country.
Senator White: So the 625 for regional air funding in that case would be split between those two, or is it specifically for north of 60?
Mr. McConnachie: In this case, I don’t believe that CanNor was in receipt of funding for the Regional Air Transportation Initiative.
Senator White: In relation to the funding to support small and medium businesses across the country, can you walk me through the methodology? Certain parts of the country were hit harder than others when it comes to impact on small- and medium-sized businesses. What was the methodology used?
Mr. McConnachie: Initially, when the government rolled out a wide range of liquidity supports, a number of programs were provided, many of which you will be familiar with, and I won’t go into the detail. There is, of course, the Canada Recovery Benefit, the Canada Emergency Rent Subsidy and Lockdown Support, the Canada Emergency Wage Subsidy, the Canada Emergency Business Account. The list goes on.
Many of these programs were focusing on large employers, with the idea of ensuring that they could continue to pay wages and would have the liquidity needed to not shut down. But I think there was a recognition from the outset that certain companies wouldn’t qualify for some of these large programs, and that’s where the programming of the RDAs kicks in. The most notable program is the RRRF, the Regional Relief and Recovery Fund, which is quite a significant allocation. Since its inception last year, almost $3 billion has been applied through the RRRF, both through the REGI program of the RDAs as well as the Community Futures organizations.
A condition of application to these programs is that the companies had applied to one of the larger liquidity support programs and had been refused. At that point, and only at that point, would they become eligible for RRRF.
Senator White: In terms of the regional development funding amounts, can you walk us through how it was determined what amount would go to each?
Mr. McConnachie: Are you asking for precision on a particular program or just as a general rule?
Senator White: I see $10 million for ACOA, 600 and change for CanNor, 5.9 for ISED. I’m trying to figure out how it was determined which amount would go where.
Mr. McConnachie: I will answer the question in general terms, and if one of my colleagues would like to jump in, they may.
As a general rule, the funding that’s allocated to the RDAs is done on a proportionate basis, as a function of different variables, whether it be number of employers or gross GDP of the target population. There are formulae that are typically used when funds are allocated, both for programming and for the operations of the RDAs.
The Chair: Mr. McConnachie, could we agree that if you or your officials wish to add to your answer in writing, you can do that through the clerk, hopefully before Thursday, March 11?
Mr. McConnachie: Certainly.
The Chair: If you want to add information as per the question from Senator White.
Senator White: In particular, Mr. Chair, in relation to the funding for regional airlines. I’d like to see if there are parameters around having to reopen an airport or re-establish service prior to access to funding, as an example.
Senator Galvez: Thank you very much to our witnesses for being with us today and answering our questions.
Related to the question of Senator White, when I look at the overall expenditures, they show big differences. The North received $112 million, Quebec 613, and Ontario 685. Then you have a big Western region, which received $1.74 billion, but I’d like to know whether that includes Manitoba, Saskatchewan, and up to British Columbia.
When you answer Senator White’s question, I would appreciate it if you would address not only the aviation sector but also the other sectors. I am very much interested in the innovation, and oil and gas sectors.
In these supplementary estimates, the total budgetary expenditure for Western Economic Diversification Canada is over $1 billion. This is far above the initial $62 million that was estimated previously, reflected on page 312 of the document that you sent.
It says clearly that it’s programming in Western Canada is to adjust transition for coal workers in a diverse and growing Western economy.
Could you explain to me the difference between these two numbers? Since you are saying diversification of the economy; what monies are given to other sectors in order to diversify the economy?
Mr. McConnachie: Thank you for the question. I’m not following where there’s a billion dollars for Western Economic Diversification. I can turn to my colleague from the organization to provide clarity as to their estimates request and what the rough division is between sectors.
Cathy McLean, Executive Director, Finance and Corporate Management and Chief Financial Officer, Western Economic Diversification Canada, Innovation, Science and Economic Development Canada: Thank you very much for your question. Our proposed authorities for Western Economic Diversification are the $1 billion — which you had mentioned to us — in total for this year. In Supplementary Estimates (C), we are asking for a total of $163.8 million. This is for contributions through our Regional Economic Growth Through Innovation program, as well as our Western Economic Diversification program.
You had asked which provinces this represents. Western Economic Diversification is representing Manitoba, Saskatchewan, British Columbia and Alberta.
Senator Galvez: Thank you.
In 2019, the Minister of Natural Resources confirmed that Western Economic Diversification Canada would invest half a million dollars to support CRIN, the Clean Resource Innovation Network. I am wondering whether there is an overlap or I am not understanding. Is this in addition to what was already assigned? Can you tell us what this item funds? Is it directly or indirectly related to support given to corporations in the fossil fuel sector? My next question is: If you’re giving it to the fossil fuel sector, what are you giving to the renewable energy sector?
Ms. McLean: Thank you for your question. With respect to fossil fuels and clean energy, I would have to come back with more detailed information for you. I don’t have that available here to respond.
Senator Galvez: Could you please send it as soon as you can?
Chair, do you have a date by which we should have the answers?
The Chair: Ms. McLean, the date is Thursday, March 11, or earlier, please, in writing directly to the clerk of the committee.
Ms. McLean: Thank you.
Senator M. Deacon: Good afternoon. Thank you to all of you for being here this afternoon.
I’m going to direct my question to the Federal Economic Development Agency for Southern Ontario, since that’s where I’m from, but I’m happy to hear from all witnesses on this.
These estimates contain $13.7 million to SMEs, and $752,000 for the Community Futures Network of Canada. As we are finding out more each day, this pandemic has had a disproportionate and negative effect on working women. A recent report by the Royal Bank of Canada found that nearly 100,000 working-aged Canadian women have left the workforce in the last year. This figure is more than 10 times higher than for men. Does your agency have plans to address this gap to ensure we do not embark on an uneven recovery based on gender? Thank you.
Mr. McConnachie: I’m sorry, I thought the question was directed to FedDev. I can perhaps turn to my colleague for more detail.
What I will say is the government has invested significantly in Canada’s Women Entrepreneurship Strategy to the tune of nearly $5 billion. If we look across the ecosystem within government, this includes $1.4 billion in liquidity support to the BDC, $2 billion from the EDC, $10 million from Global Affairs, and $500 million through Farm Credit Canada. Within our own portfolio, the Women Entrepreneurship Fund and the WES Ecosystem Fund have actually created some very significant investments that have targeted some of the disproportionate effects that the honourable senator was speaking to.
Perhaps I could ask my colleague from FedDev to speak a bit more about the Women Entrepreneurship Fund and the Ecosystem Fund.
Ms. St-Amour: Thank you for the question. I want to confirm our authorities through the supplementary estimates. The $13.7 million for SMEs and the $752,000 for community futures; this is not new funding. It’s a technical adjustment through our supplementary estimates. The funding was already allocated through statutory vote. We are just doing a technical adjustment on that front.
To build on the Women Entrepreneurship Strategy, we received across all RDAs an additional $15 million in national funding, available for the West Ecosystem Fund. Of that amount, $4.7 million was allocated to FedDev Ontario to fund these women-led companies. That was on top of the West Ecosystem Fund all across southern Ontario. Thank you.
Senator M. Deacon: Thank you.
My other questions have been asked. I will pass the time on to someone else through the chair.
Senator Boehm: I’d like to thank everyone for joining us today.
My question is following up on what Senator Deacon just asked. If we look at the Labour Force Survey for January, we can see that the greatest loss in jobs has been in the service sector, particularly in the part-time sector where many women work.
My question for Ms. St-Amour of FedDev is: In Ontario, are you taking into account the part-time factor as you measure this, and to see how the benefits could be stretched out? And the fact too that women — with the repeated school closures — are also more directly impacted? Are you taking that into account? What about the intersectional aspects where you can get into racialized minorities as well?
We heard Mr. McConnachie’s earlier comments about the Black Entrepreneur Fund, but some statistics show that South Asian entrepreneurs and small businesses are also being impacted. I’m wondering if you have any comments on that, please.
Ms. St-Amour: Thank you for the question. Unfortunately, I don’t have that level of detailed information with me at this time. I would be happy to proceed with a documented response.
Senator Boehm: Thank you very much.
Senator Marshall gave us the challenge at the outset on universal broadband, and I know Senator Klyne asked about that as well. It seems to me that in the last Budget Implementation Act — which was a long time ago and where I was a Senate sponsor — we had funds allocated for broadband, particularly in remote and rural areas.
We are reading a lot about the activities of several companies, including Xplornet and Starlink, putting up hundreds, if not thousands of satellites, and people are beginning to subscribe. Is there a way to measure the impact? If there’s anything that the pandemic has done, it is to make it very clear that you need internet access, whether it’s for education or for access to federal and other programs that are being rolled out. This is very important. Mr. McConnachie, do you have any comments on that?
Mr. McConnachie: Thank you for the question. It’s a very interesting notion. Certainly, from an input-output perspective, the main measures that we look at in the Universal Broadband Fund and its predecessors — the Connect to Innovate program and other similar measures — are really about the number of households and businesses connected, given that the ultimate objective of these programs is to achieve 100% connectivity at certain speeds over time.
You are right to point out that there are knock-on effects, certainly in terms of not being able to participate in the knowledge economy and what the effects would be on business. I think these are a little more difficult to measure. I’m not certain that we have the detailed performance information that we need to fully understand what the effects are at a quantitative level, but certainly qualitatively you’ve pointed out a number of the more important ones.
Senator Boehm: But you are asking for more in the estimates, so there must be a baseline that you’re looking at in terms of effectiveness. I’m wondering how this is being calculated. Maybe you could send more information through. It’s an issue that keeps coming up, and we always ask about it. It’s not just Senator Marshall. I’ve been asking about it too.
Mr. McConnachie: Thank you very much for the question. Again, most of the focus of the program is to achieve connectivity of Canadians at certain speeds. The 50 down and 10 up has been suggested as the minimum speeds upon which you need to be able to transact in the modern economy.
To the point that you raised as well about Starlink and other constellation services that are being launched, these also have the opportunity to be a tremendous game changer in the sense that conceivably, if the technologies bear out, they will allow us to deploy much, much quicker into regions where fixed and multipoint services are more difficult and costly to connect. So certainly we will provide additional information where we can on some of the more qualitative impacts, as you suggested.
Senator Boehm: I have one more follow-up on the issue of speed. What about speed of procurement and installation? Has that been impacted by the pandemic, getting the hardware, getting the crews out, laying the fibre-optic cable, that sort of thing?
Mr. McConnachie: Thanks for the question. It’s surprising that the impact has not been there. Initially, we expected that the rollout of the rapid-response plan — which is a $150 million allocation to push shovel-ready projects right at the beginning of the program — might have some delays. In fact, to date, my records show that we’ve received over 574 applications for the rapid-response stream, which over-subscribed the program by a factor of at least two. Certainly the capacity to proceed is out there, and we already have a number of projects that are underway, breaking ground, and we should be able to show substantive progress in the very near future.
The Chair: Thank you, Mr. McConnachie. You will revisit the questions that have been posed so that we can complete the answers on all five agencies, keeping in mind Thursday, March 11?
Mr. McConnachie: Certainly. I think the department, as I said, would be pleased to coordinate the response and any follow-up through the committee, yes.
Senator Duncan: Thank you to the witnesses who are appearing before us today. I want to follow up with one question on the broadband access which has not been asked: Would the officials also provide information around the cost of connectivity and what assurance we have that Canadians are not being charged one rate in one part of the country and an entirely different rate in another part of the country? In other words, if we are providing assistance to companies to provide connection, is that connection affordable?
I’d like to just go ahead now with the questions that I had for the witnesses. I truly appreciate the understanding of my colleagues and the government in support of regional and northern air transportation. I also especially appreciate the comments from the officials that they are working very closely with Transport Canada and NAV CANADA.
Air North, Yukon’s Airline, is a very good case in point regarding regional airlines and survival. The point they have made repeatedly as a key for their continued efforts is interline connection with the major carriers. I would like officials to respond in writing, if they could, to assure us that the issue of interline connection with the regional carriers is also being considered in funding for Air Canada.
Finally, my question, if I might, is about CanNor and their applications around funding. We appreciate their support for the tourism industry. In Yukon, that’s about 5% or more of our GDP. CanNor funding and their assistance for Yukon’s tourism businesses have overlooked the need for capital investment in the funding applications. Tourism businesses have made the case that they need capital investment to continue post the pandemic. I wonder if the CanNor representative could just address how that need for capital investment is being recognized in the funding that’s allocated?
Thank you. I apologize for bootlegging in all those issues. Thank you to the chair and my colleagues for their understanding.
The Chair: Mr. McConnachie, any comments?
Mr. McConnachie: Thank you, Mr. Chair. I will defer the question to my colleague from CanNor.
Ms. Buist: Thank you very much, Mr. Chair. Thank you, senator, for the question.
As you’ve pointed out, we have provided a tremendous amount of relief funding through the past year to all three territories and to Yukon in particular. We gave $15 million for Northern Business Relief Fund right out of the gate, in April of last year, and another $34.3 million in regional relief funding.
We approved 274 applications from Yukon, maintaining about 654 jobs. Generally, across the territories, more than 50% of our funding went to the tourism industry, which was very hard hit in the territories with the closure of the borders. We funded about 322 tourism applications. Those tourism applications were both through the Northern Business Relief Fund grants and the regional relief funding.
We also have our regular funding. IDEANorth is our main funding program under which we have been funding tourism businesses. We’ve received over 250 applications for this coming new fiscal year of funding. Again, many are from tourism businesses. That funding provides a range of support to the small and medium tourism enterprises in the Yukon, and to the destination marketing organizations and through the community futures. In some cases, it does provide capital funding. It depends on the nature of the application.
We look at capital for tourism infrastructure in particular in order to keep the tourism businesses open. During this difficult time in the territories when the borders are closed, international tourism doesn’t exist. We are working very hard with both the territorial governments and the destination marketing organizations. We are now turning towards economic recovery and what we can do to continue to help the tourism businesses in the North to stay alive and get ready for when the borders open. Thank you.
Senator Duncan: Could I ask the witness to specifically address the capital in more detail, that is the ability of tourism businesses to access capital? I understand this is also an issue for Nunavut and the hotel industry, particularly its access to capital investment.
Ms. Buist: Mr. Chair, I can provide more details in writing as to the types of projects we funded with respect to capital.
I don’t have the specific projects to give examples today, but in terms of hotels, we definitely funded hotels across the territories with the relief funding this past year.
But, for the larger hotels, they have access to the federal HASCAP program. We can give you more details on that. It has just been recently announced. Larger businesses across the North, like the big hotels, can access that particular program, but some of the smaller inns, the family businesses, the inns that have restaurants in them, for example, who came to us for assistance with PPE during the pandemic, and who came for assistance to keep their doors open, we most definitely provided, as I indicated, a great deal of funding. Over 50% of our applications were for tourism-related businesses, including accommodations.
The Chair: Thank you. Could you provide that in writing in order to complete the answers to Senator Duncan, and again with the time frame of Thursday, March 11? Is that satisfactory?
Ms. Buist: Yes, Mr. Chair. Thank you.
Senator Loffreda: Thank you to our panel of witnesses and experts for being here. It’s important, and especially with the acceleration of our digital economy, I will also ask a few questions on the broadband internet services.
Last week, during one of our meetings, I asked officials from Indigenous Services Canada to provide us with an update on Canada’s commitment to expand its broadband internet services in rural, remote and northern communities. We were told they work closely with your department, Innovation, Science and Economic Development. Like the rest of us, we see that you’re asking for $20.7 million for the Universal Broadband Fund and there is still a lack of high-speed internet across the country, although there has been good progress made. I have a few questions.
Can you give us an update on inroads the government has made in recent months on this front? How many Canadians still don’t have access to high-speed internet? The last numbers I saw were close to 8%; is that updated? I know there has been an announcement by the Prime Minister that he wants 98% of Canadians to have access to high-speed internet. I note that applications for the Universal Broadband Fund have been extended to March 15, 2021. Has the department received a lot of applications and when will the department start distributing these funds?
Mr. McConnachie: Thank you very much for the question, Mr. Chair. Maybe before getting to the main question, I will speak to the Indigenous aspects that the honourable senator raised at the beginning of the question. The Universal Broadband Fund set aside a specific allocation of $50 million to support mobile projects that will primarily benefit Indigenous people. This is a new investment on top of significant funding that was invested in the Connect to Innovative program, whereby 190 Indigenous communities were connected over a five-year period.
With respect to the current Universal Broadband Fund, the initial tranche of funding being sought — the $20 million this year and a significant portion of the $280 million for next year — is associated with the Rapid Response Stream. The idea there was to be able to identify projects that were shovel-ready so we could get a quick start on the funding and deployment of these networks. This has been oversubscribed. We received 574 applications to date, most of which will be funded through the Rapid Response envelope.
Another $750 million of the overall allocation is for large, high-impact projects that are transformative in nature. These will be ones that do take more time to plan, but will have a bigger bang for the buck, if you will.
In terms of targets, the Budget 2019 announcement for the UBF set a national target of 95% of Canadian homes and businesses to have access by 2026 and 100% by 2030. So that is effectively what we are targeting with the new funding that has been requested. Thank you.
Senator Loffreda: Senator Duncan has raised the issue, I think it’s important, of affordable internet. Will it be affordable? Is it affordable to all Canadians when you’re looking at 100%? Can you elaborate on that issue?
Mr. McConnachie: Certainly. To a certain extent, Mr. Chair. As the honourable senator will recognize, the CRTC has the responsibility for regulating the pricing of telecom. Although ISED has a hand in dealing with players, in terms of developing their capability and developing networks, the wholesale prices are set through a regulated process that is administered by ISED and CRTC. As we look forward, not only will ISED continue to work with the telcos to ensure that prices are affordable, but the CRTC remains available as an appeal mechanism to ensure the competitive landscape and pricing are fair to Canadians across the board.
Senator Loffreda: Thank you for that. I have another question. I would like to find out more about the Government of Canada’s shop local initiative. I think it’s so important and we all know through this pandemic that our small- and medium-sized businesses need our help. There are $21.7 million in these estimates for this program, and I am aware of similar programs in the provinces and some municipalities, like Le Panier Bleu in Quebec.
Can you share with us how Canada’s shop local initiative complements these other initiatives? How is the money being spent in support of small- and medium-sized businesses in Canada? Does the federal government have a communication campaign going on? What strategies are being used to promote local businesses? Communications, strategy — more than just handing out money and funds — and how is that being handled? Thank you.
Mr. McConnachie: Thank you very much for the question, Mr. Chair.
The delivery agents for the Shop Local program are effectively chambers of commerce throughout Canada that have close ties to the local businesses. In that regard, they’re very well positioned to work with main street business to ensure funds are deployed to the areas of greatest need. I mentioned earlier in my testimony that the $46.5 million that has been allocated for Shop Local has two components. The largest component is the $33 million to support the provincial and territorial chambers of commerce. We look to collaborate with key stakeholders and communities to support development, awareness, building campaigns and promote main street businesses in the communities.
The remainder of the funding, which is the $12-million secondary envelope, has been allocated to the Ontario Chamber of Commerce to create a Canada United Small Business Relief Fund. So it is a more specific and targeted element that’s designed to help with economic recovery, and specifically for those main street businesses that have been affected disproportionately by the pandemic.
Senator Loffreda: Do I have any time left, Mr. Chair?
The Chair: No. We have to look at the second round.
Senator Loffreda: I’ll be there in the second round. Thank you very much, Mr. Chair, and thank you for the responses.
Senator Smith: Thank you to the panel.
My question: Last week the Office of the Parliamentary Budget Officer expressed concerns to this committee about the lack of spending data shared by several departments, saying it was proving difficult to get up-to-date and regular information, particularly from Innovation, Science and Economic Development Canada.
Could you please comment on these concerns raised by the Office of the Parliamentary Budget Officer? What factors contribute to this data-sharing issue which has been raised? Is it an operations issue? Is it a confidentiality issue or some other issue? Could you help us out?
Mr. McConnachie: Thank you for the question, Mr. Chair.
I’m not specifically aware of the Office of the Parliamentary Budget Officer’s testimony on a particular issue, but I can speak to the manner in which the government provides probity and clarity as to the expenditures that they make. We’re here to speak to you today about amounts that are being requested for the Supplementary Estimates (C), which are currently in the fiscal year of 2021, as well as the budgets that we would be seeking for next year in 2021-22.
Normally the process by which expenditures get reported is through departmental financial statements, which are published in June following the end of the fiscal year, and at a more detailed level in the Public Accounts of Canada, which tend to be tabled in October following the close of the fiscal year.
Again without full knowledge of what the Office of the Parliamentary Budget Officer was speaking to you about, I can indicate that we certainly are tracking all of our authorities and expenditures. Through our financial close process, which will begin on March 31 of this year, we’ll be able to provide a full and detailed accounting for all the expenditures we make in any particular envelope. I hope that’s helpful and answers the question.
Senator Smith: It’s similar to the answer you gave me three years ago when I was chairing the committee. My concern is, with the number of players involved, in terms of handing out money and the different agencies, et cetera. What I would like to understand is your ability not only to hand out money — because we talked about regional airlines, we talked about Fednav in the North — but what type of measurements are you using to track? There has to be some form of tracking mechanism other than how much money you gave out.
We talked about women’s problems three years ago; the problem of individual women being entrepreneurs. That was a big issue that you, Mr. McConnachie, talked about. Where have we progressed to and what type of results have we had? It would be helpful when you give us your report, because of the diversity and the numbers of players involved, if we could have some results so people can have some measurement. What progress have you made other than giving out money?
Mr. McConnachie: It’s a fair question. And one of the things that the Treasury Board challenges departments to do when they seek spending approval on their funding is to ensure there is a robust results framework that includes non-financial performance information that speaks to the results being achieved with the funding. Depending on the nature of the program, some of those programs have reporting requirements back to Treasury Board Secretariat. Others have external reporting requirements via the departmental reports, and departmental results reports, which are tabled on an annual basis in conjunction with the estimates.
There are also proactive disclosure reports that are published on a quarterly basis, which provide details on the amount of contribution and grant agreements that have been signed with recipients. I would note a final mechanism available to the departments is to conduct, at the end of the project, a recipient audit, where we go out to organizations and audit them from the perspective of, did we really achieve the results that we said we would, in a very detailed fashion, more so than we would do through a cursory reporting.
The final element is that the contribution agreements we do sign with recipients not only have clauses on the eligibility of expenditures, but also require organizations to use the money for specified purposes, and in the vast majority of cases, to provide information back to the departments on what they did achieve with that money. So it is a condition of the funding in most cases.
Senator Smith: I understand what you’re saying. It’s a typical boilerplate answer that you gave us three years ago. I have two questions: What’s the biggest accomplishment, as you look across the land, that your departments have been able to do? What is the biggest issue that your various departments across the land are facing?
Mr. McConnachie: Thank you, Mr. Chair. That’s a big question and I’m not sure I can attack it all. From an ISED perspective, from the department’s perspective, the health of the economy is our greatest preoccupation right now, amongst other issues.
Working within the ecosystem of government to ensure that jobs are maintained, to ensure that Canadian businesses and employers and employees are well supported through this pandemic period, so that we emerge from it with a sound economic recovery. All of those are key aspects of our minister’s mandate —
Senator Smith: What’s your biggest challenge right now? You’re giving me boilerplate answers. Try to be specific. What’s the biggest issue that you face in the North right now? What’s the biggest positive thing that you have done prior to the COVID outbreak, up to now?
Mr. McConnachie: I’m sorry, specific to the North?
Senator Smith: Specific to the various agencies that you administer to, whether the western development, whether it’s ACOA, whatever it is — your biggest accomplishment, your biggest challenge. Try to be specific.
Mr. McConnachie: Mr. Chair, it’s a very broad question and without meaning to be obstreperous to the committee, we write 40- or 50-page reports every year on the highest priorities we have for our departmental plans, and through our departmental results reports, where our greatest achievements are —
Senator Smith: All I’m asking for is one on each side. There has to be something that stands out in your mind, being the leader and one of the senior officials. I’m trying to get some information. This is why the Office of the Parliamentary Budget Officer is frustrated. They want information. They want to understand results so they can truly understand, other than how you operate the business; that’s one thing.
The Chair: Thank you, Senator Smith. To Mr. McConnachie, if you could revisit the questions that were asked by Senator Smith, and you can come back to the clerk of the committee in writing. In order to give you fairness and clarity vis-à-vis what the Office of the Parliamentary Budget Officer said, you could revisit the blues. It was March 1, exactly one week ago, that he made reference to ISED. Since it was brought up by one of our senators of the Finance Committee, I would like you to look into it, and if you can, come back to us in writing. I think we’re giving ample and due time to have a response by Thursday, March 11.
Do we agree on that?
Mr. McConnachie: Certainly, Mr. Chair, and thank you for being specific with respect to the testimony. We will look into that and respond accordingly.
The Chair: Thank you.
[Translation]
Senator Dagenais: My first question is for Mr. Lafaille. I’d like to follow up on the additional funding being requested for the Regional Air Transportation Initiative. I have to tell you that the answers didn’t really do it for me, and I’ll tell you why. I see $14 million for Quebec and $10 million for the Atlantic region, for a total of about $25 million.
Unless you looked into a crystal ball to come up with those numbers, you no doubt know what you plan to do with the money, even though the initiative hasn’t been formally launched. What criteria did you use to come up with $14 million for Quebec and $10 million for the Atlantic region? Are they merely predictions, as you alluded to in your previous answer?
Mr. Lafaille: Thank you for your question, senator. It’s a $206-million initiative over two years. The first chunks are being requested in Supplementary Estimates (C), but more will be requested in the Main Estimates.
To come up with the overall funding envelope, we examined the full range of needs, especially the impact of the COVID-19 pandemic on the regional air transportation ecosystems. That was the yardstick for determining the budget allocations. I realize that you would like more information, and wish I could tell you more, but the initiative has not been launched yet.
The project assessment criteria will be made public, so you will have to wait until then. I can’t tell you before the information is announced.
Nevertheless, the initiative is meant to promote regional air connectivity to keep the ecosystems operational, and make sure the airports, airlines and all the other parts of the ecosystem are ready when economic activity starts to pick up. In parallel, the initiative takes into account the conditions created by the COVID-19 pandemic, the additional health and safety measures and so forth.
Senator Dagenais: Can you tell us when these funding amounts will result in services for remote areas like the Gaspé Peninsula, the North Shore and the Maritimes? Should we expect excessive amounts of money to be thrown at study after study, as opposed to the actual work of carrying out projects and solving problems? The way to fix problems can remain elusive because the focus tends to be on conducting costly studies that deliver little in the way of results.
Mr. Lafaille: We are expecting the industry, itself, to submit projects, and the focus will be regional. That is why we used the regional development agencies. The dynamic isn’t the same in every region; it varies from the Gaspé Peninsula to Ontario to Western Canada.
It’s important to work with local actors — oftentimes, the provinces — to make sure our initiatives are aligned with the sector’s and community’s. In fact, the Quebec government is quite active in this area, as you are surely aware. That way, we can evaluate the project proposals and obtain the agreement of the actors in the ecosystem so that projects can move forward successfully.
Senator Dagenais: I have two questions for Mr. McConnachie. Earlier, I understood that you obtained $70 million in additional funding for seven items. I am certain that not all of that money will make it into the community, so I’d like to know how much will go towards administration.
[English]
Mr. McConnachie: Thank you for the question. I’m afraid I don’t have the administrative cost breakdown, but I would be able to provide that to you in writing following the meeting. Thank you.
[Translation]
Senator Dagenais: Mr. McConnachie, I’m from Montreal and I heard you say that you would be investing in the Royalmount project, unless I’m mistaken. As I’m sure you’re aware, the project has come under fire in the Montreal area.
I realize it’s a fine project that’s meant to be green, but the location is going to cause terrible traffic on the highways around the construction site. Can you tell us why you decided to invest in the project? It’s not a lame duck, but there isn’t a solution. We don’t really know where the project is headed. I do know, though, that numerous changes were made. What has motivated the government to participate in a project like this?
[English]
Mr. McConnachie: Thank you for the question. The National Research Council facility at Royalmount is probably the leading facility within the federal government for biomanufacturing. Of course, with the current crisis of the pandemic, one of the things that we’ve realized is that it’s very important for us to work with industry to build up domestic vaccine production capability, and the capability to produce therapeutics and other products in response to not only the current pandemic, but a future one.
The investments that are being proposed — both in the Royalmount facility and for a new biologics facility adjacent to it — will allow us to have domestic production capacity for a wide range of vaccines and therapeutics that could help us in the current pandemic, as well as future ones. They are very important strategic investments for the country, and ones we’ll continue to pursue. Thank you.
The Chair: Senators, this concludes our first panel. Mr. McConnachie, we will be very diligent to receive the information that you will provide in writing, and hopefully on the due date, Thursday, March 11. If you want to bring us additional information through the clerk, please do. We have a report. We have a common denominator, which is basically about transparency. It is about accountability, predictability and reliability.
On this, honourable senators, thank you very much. We will now suspend for two minutes in order to bring forward our second panel, which will be Global Affairs Canada.
[Translation]
The Chair: Honourable senators, we will now resume the meeting with our second panel—
[English]
Which will be Global Affairs Canada. Therefore, we welcome:
[Translation]
— Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology Branch, Anick Ouellette. Joining her is the Director of Resource Management, Yannick Hébert, Director General, Innovative and Climate Finance Bureau, Sue Szabo, and Director General, Health and Nutrition, Global Issues and Development Branch, Joshua Tabah.
[English]
Welcome to all of you. Ms. Ouellette, I have been informed that you will be making comments. I recognize you to make your comments, to be followed by questions from the senators.
Anick Ouellette, Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology Branch, Global Affairs Canada: Thank you very much for inviting me to appear before the committee. This is my first time ever, so I would kindly ask you to be indulgent with me. It is a pleasure to tell you about what Global Affairs Canada is doing to support the government’s priorities. I am going to make my remarks brief today, but I’m happy to answer any questions that you may have.
[Translation]
Let me begin by acknowledging the scope of our mandate. Served by three ministers, Global Affairs Canada, or GAC, is responsible for advancing Canada’s international relations, developing and implementing foreign policy, promoting international trade while supporting Canadian business interests, being a leader in providing humanitarian assistance around the world, and providing consular assistance to the many Canadians who work, live and travel abroad.
[English]
In order to accomplish this mandate, Global Affairs Canada operates 178 missions in 110 countries around the world. We do so in an evolving and sometimes challenging global political and economic climate. With the range of services and programs that Global Affairs Canada provides, fiscal responsibility is paramount. Our department has a number of internal checks and balances to mitigate and manage risks while enabling us to reallocate funds when the need arises. These internal controls and risk management practices allow us to be flexible and able to respond to the always evolving global climate.
[Translation]
You can see that the 2020-21 Supplementary Estimates (C) highlight a number of our department’s priorities. In Supplementary Estimates (C), GAC is seeking an increase of $1.6 billion to its current authorities of $7.86 billion, bringing total authorities to $9.46 billion.
[English]
Notably, we requested $1.225 billion related to COVID-19 response. This includes $705 million transferred from the Public Health Agency of Canada, drawn from the $1-billion envelope for strategic international partnerships approved by the Prime Minister in August 2020, as part of the allocation to Health Canada and Innovation, Science and Economic Development Canada for COVID-19 vaccines and therapeutics procurement.
A further $120 million from the fiscal framework is requested to support access to COVID-19 vaccines, therapeutics and diagnostics by developing countries. In addition, $400 million in funding will support the recovery and resilience of developing countries, related to COVID-19.
A large portion of this funding — $825 million — will support the various activities of the Access to COVID-19 Tools Accelerator, also known as the ACT-Accelerator. This global collaborative partnership leverages global stakeholders’ complementary strengths to accelerate the development, production and equitable access to COVID-19 diagnostics, therapeutics and vaccines, particularly for developing countries.
Alongside the Prime Minister’s recent announcement, as well as earlier commitments, this new funding brings Canada’s total contribution to the ACT-Accelerator to $940 million. This reflects the government’s commitment, reiterated in the Speech from the Throne in September 2020, to ensuring that people around the world have access to a vaccine.
Canada’s Feminist International Assistance Policy provides the policy framework and program tools to address the COVID-19 crisis. Programming will be guided by country needs and will be implemented by trusted partners. Resources will be targeted where they will have the greatest impact, while also reinforcing Canadian leadership and interests.
The $400 million to support recovery will go toward addressing the immediate humanitarian and development needs of developing countries resulting from the COVID-19 pandemic. Women and girls, in particular, have been disproportionately impacted by the consequences of COVID-19, and Canada will make sure that they benefit from this new funding.
[Translation]
The 2020-21 Supplementary Estimates (C) also include $341.3 million in funding to further programming specifically to assist developing countries in addressing the devastating impact of climate change.
This funding will support initiatives that will deliver results in relation to the environment and climate action area of the Feminist International Assistance Policy, reflecting Canada’s commitment to helping the most vulnerable communities adapt to climate change, mitigate the impact, and, by leveraging private sector investment, facilitate the transition to a low-carbon economy.
Initiatives will deliver on a portion of Canada’s $2.65-billion climate finance commitment by working with the International Fund for Agricultural Development, the African Development Bank Climate Fund and the Land Degradation Neutrality Fund.
[English]
The department has also requested the return of $14.1 billion of its management reserve for the Export Import Control System. The project had been funded out of the department’s management reserve. GAC is seeking the replenishment of the management reserve, which was used for costs associated with unexpected pressures in support of several other Government of Canada priorities. Continuing work on the project will ensure that the system is meeting the requirements imposed by the implementation of Canada’s new trade controls, and agreements such as the Canada-United States-Mexico Agreement.
[Translation]
Additionally, GAC has requested $17.5 million for increased costs related to currency fluctuations on operations incurred at missions abroad and payments of assessed contributions.
Mr. Chair, the funding requested via Supplementary Estimates (C) enables GAC to continue to implement humanitarian and development initiatives, take action on environmental issues, serve Canadian business, and represent the Government of Canada in this unpredictable global environment.
Thank you for inviting me to appear before you today, Mr. Chair. I look forward to your questions.
The Chair: Thank you, Ms. Ouellette. You did a great job for your first time. No doubt you’ll be back.
[English]
To reiterate, honourable senators, we will follow the rule of seven minutes.
Senator Marshall: My first question is on the presentation of the Supplementary Estimates (C) for your department. Why are there so many transfers? One the challenges I find in going through financial documents is tracking the money. I notice that $705 million from the Public Health Agency came over to you. There were some other transfers, but then you transferred money out to Natural Resources Canada.
Why wouldn’t the money be initially recorded in the proper department? Why is money shifting around?
Ms. Ouellette: Thank you for the question. I would answer by saying that we often do have initiatives that involve a number of departments. Often, there is the lead department that receives the funding, and then there’s a distribution among the collaborative departments.
I think the biggest transfer this time around, this $705 million, is a good example. The lead is the Public Health Agency of Canada with $1 billion, and then that department has transferred, notably to Global Affairs Canada, the $705 million, and to other departments for the COVID-19 response.
I would say, by and large, this is the reason why we have so many transfers.
Senator Marshall: Okay.
So for the $2.5 million that’s gone over to Natural Resources Canada for a 2019 commitment, I would have thought — that’s now two years ago — that you would have known that it was NRCan and not the Global Affairs Canada. But I’ll just move on to my next question.
The funding; the $400 million for the recovery and resilience of developing countries — and then I notice for the Public Health Agency funding that came over, the $705 million. It says developing countries, but which countries would those be? How many countries are there? There must be a finite list. Are there 25 countries or 30 countries?
Ms. Ouellette: For the $400 million for the resilience and recovery, I’ll turn over to my colleague Joshua Tabah who will be able to answer that question.
Senator Marshall: I’ll just continue my questions. I’ve only got so many minutes, so you can just start answering. I was wondering what countries, how you establish the amounts and whether you set conditions for the amounts you’re giving out.
Joshua Tabah, Director General, Health and Nutrition, Global Issues and Development Branch, Global Affairs Canada: Thank you, Senator Marshall. That’s a great question. There is a blend of different initiatives inside that $1 billion-plus that you are referring to, and a significant amount of those funds is going to global initiatives to address the specific disease. They are medical countermeasures. For example, the support we are providing to procure vaccine doses for developing countries is going to 92 different developing countries — all members of the COVAX facility.
We work with Gavi and the WHO to make sure that those countries have the systems in place to receive vaccines, and to use them in a transparent fashion for their populations that are most at need.
Within the $400-million funding for resilience and recovery, some of those initiatives are more targeted, working with Canadian partners to adjust and expand their operations in developing countries. There are several dozen countries involved there, but they are our regular developing-country partners. For the $400 million, we are working with some global initiatives, including the WHO, Nutrition International and some more targeted investments. We don’t have a specific list in that sense, but we could provide that in writing if it was of interest to you.
Senator Marshall: Yes, please. Are there certain conditions imposed on the countries, for either the ones receiving part of the $400 million or the $705 million? Is there some sort of verification process carried out to make sure that the funding was actually used where it was supposed to be used, and that it got the results that it was supposed to achieve?
Mr. Tabah: Thank you, yes. Almost none of the funds will be transferred from a government-to-government basis. The overwhelming proportion of funds will be used to support the activities of non-governmental and multilateral organizations. They have robust quality assurance and monitoring programs, and in addition we have our own requirements that are quite stringent. We carry out verification and monitoring activities, both from headquarters when conditions allow, and these days, more frequently, from our footprint abroad through our embassies and missions, where these services are actually being delivered by these non-government partners.
So, yes, the bar for applying is very high. We have relatively stringent requirements in terms of the due diligence that organizations must pass for us to be able to work with them, in terms of grants and contributions. We carry out extensive accompaniment and then monitoring of those funds that have been disbursed following the receipt of these funds.
Senator Marshall: After you disburse the funds, and you do your verification process, et cetera, is there somewhere on your website where the public or parliamentarians who are interested can go see a report or an assessment document or something?
Mr. Tabah: Yes, there is. Every project is listed through a web browser on our department website that shows the specific countries and regions that are covered, as well as the activities and intended results for all the international assistance projects supported by the department. These projects are approved but are not yet contracted — we’re waiting for confirmation of funding for that — and if the funding is approved, we will sign grant agreements and all that information will be made public on our project browser on the website, along with intended results.
We then report back to Parliament and to Canadians on the impact of those initiatives through some of our corporate reporting, including our annual report, but also through that same project browser that I mentioned.
Senator Marshall: Okay. So is there a link? Because I was on your website looking for — well, I was looking for internal audit reports, so I was probably looking for the wrong thing. Could you send the link so that I could find that?
Senator Loffreda: Thank you, once again, to our panel of witnesses and experts for being here today from Global Affairs Canada.
Today is International Women’s Day, and I want to continue addressing the $400 million of funding to support the recovery and resilience of developing countries, and specifically speak to gender equality and the prevention of gender-based violence.
How much of this money is going specifically for these two causes? You did mention and underscore how some of this money is being used and distributed, but perhaps you can share with us some real-life success stories of the impact of Canada’s contributions and the impact we’ve had in other countries.
Ms. Ouellette: Thank you for the question. Again I’ll ask my colleague Joshua Tabah to answer that question, please.
Mr. Tabah: Thank you, senator, another excellent question. The projects are not yet operational because, of course, the funds haven’t been approved and disbursed, but clearly we do have very significant intended results in terms of the gender equality integration of each one of the initiatives inside that $400-million portfolio. Also, some of the initiatives in particular do target sexual and reproductive health and rights, and gender equality.
Something that’s particularly innovative about this new basket of funding is that, for the first time, we have also dedicated funding to address the unpaid care gap that has really been significantly exacerbated and is disproportionately preventing women from supporting recovery efforts around the world.
As you potentially know, we have a robust screening tool for all initiatives to ensure that they do advance gender equality, and the majority of these projects are rated as directly contributing to increasing gender equality. Then within that portfolio, a certain number of projects — like programming with UNICEF and UNFPA, with UN Women and the Canadian organization Inter Pares — are directly supporting sexual and reproductive health and rights, or this unpaid care burden, where again we will work with Care Canada and the International Labour Organization to mitigate some of the pandemic’s impact on women in particular.
Beyond that, on our website there is additional information about how Canada is delivering on its Feminist International Assistance Policy. There is also information on some of the impact we have had over the years, which is very significant in the global health space, but also in other sectors.
Senator Loffreda: Thank you. Mr. chair, I have time for another question?
The Chair: Absolutely.
Senator Loffreda: Thank you for that response. Being sought is $341 million for funding to help, once again, developing countries address the impact of climate change through the International Fund for Agricultural Development.
I know this fund supports climate-related projects in rural areas and developing countries, but beyond money, how else is Canada contributing to this fund? We are an agricultural powerhouse, and surely we are sharing best practices with these developing countries or sending some of our experts to assist in building projects. Is there anything you can share or elaborate on that fact?
[Translation]
Ms. Ouellette: Thank you for your question.
Canada’s climate finance commitment is indeed based on the understanding that developing countries and the most vulnerable people in those countries are more affected by climate change and less equipped to cope with the effects. The $2.5 billion over five years will support developing countries as they transition to low-carbon climate-resilient economies.
The funding will support solutions in the areas of renewable energy, climate-smart agriculture and climate resilience, with a particular focus on empowering the poorest and most vulnerable members of the population, including women and girls. That is how we are fulfilling our commitment. Through Canada’s commitment to the Feminist International Assistance Policy, we are able to plan and develop international climate finance policies, while taking into account the unique challenges facing women and girls.
I will ask my colleague Sue Szabo to provide more information.
[English]
Sue Szabo, Director General, Innovative and Climate Finance Bureau, Global Affairs Canada: That is an excellent question. Certainly IFAD has been a long-standing partner of Canada. While we do not directly tie our international assistance funds, we also know that many competent Canadians are working in IFAD, as well as in many other multilateral organizations globally. If I can perhaps give you an example of one of the other funds that is in this $341 million; it’s the funding for the Land Degradation Neutrality Fund.
I speak about that because it shows a very interesting and innovative partnership, where the Sherbrooke-based project developer ECOTIERRA is implementing the LDN’s first investment project in coffee cooperatives in Latin America.
I think the other interesting element to this fund is that Global Affairs Canada is contributing to the LDN fund alongside two Canadian-based investors: the Concordia University Foundation and Fondaction, the Montreal-based labour-sponsored pension fund.
I think that’s another interesting example of how Canadians in different kinds of organizations, both public and private, are actually contributing alongside some of these major multilateral organizations.
Senator Loffreda: Thank you for the response.
Senator Klyne: Welcome to our guests.
I have three quick questions. There was $700 million transferred from the Public Health Agency of Canada to the Department of Foreign Affairs, Trade and Development to support access of developing countries to COVID-19 vaccines, therapeutics and diagnostics. Is this transfer related to Canada’s contribution to the WHO COVAX vaccination program? Are these funds being provided to other programs that Canada is contributing to — outside of COVAX — to assist nations with testing, vaccinations and diagnostics?
Ms. Ouellette: Thank you, senator, for the question.
The transfer of $705 million from the Public Health Agency of Canada comprises three elements: $230 million for procurement of COVID-19 therapeutics for low- and middle-income countries, through the UNICEF Supply Division; $220 million for the Vaccine Alliance, COVAX Advance Market Commitment, administered by Gavi, and; $255 million in vaccine therapeutics and diagnostics, what we call VTD, targeted to support, in particular, Latin American and Caribbean countries.
Senator Klyne: Is that outside of COVAX? There was one you mentioned that wasn’t within COVAX.
Ms. Ouellette: Yes. Maybe Joshua Tabah can clarify the COVAX element.
Mr. Tabah: Senator Klyne, $220 million is for COVAX. That is for doses for developing countries through the Advance Market Commitment.
The other investments are all aligned, but not directly to COVAX. Some are for the procurement of therapies or treatments with UNICEF; some are to ensure that those doses of vaccine that we’re procuring through COVAX are effectively distributed to developing countries. That’s where there is support to the World Health Organization and Gavi to ensure that the supply chains and distribution mechanisms are put in place. It’s integrated support for vaccines, tests and therapies, and that support to COVAX is a centrepiece, but there are other partners as well.
Senator Klyne: There was a transfer of $4 million from the Department of Fisheries and Oceans to the Department of Foreign Affairs, Trade and Development to help develop sustainable economic plans for oceans. Can you provide the committee with some insight in this regard? Is the funding being provided to specific programs or organizations?
Ms. Ouellette: Thank you for the question.
Yes, our department will receive $4 million from the Department of Fisheries and Oceans to support PROBLUE, the World Bank’s blue economy program.
Global Affairs Canada will disburse the requested amount through a grant with the World Bank. This funding is an increase to Canada’s initial $65-million contribution, signed through an administrative arrangement with the World Bank in October 2019. Canada’s support of PROBLUE is aligned with Government of Canada priorities, in particular promoting the health of our oceans, reducing plastic waste, marine litter and plastic pollution, and helping the poorest and most vulnerable populations in small island development states and coastal least developed countries.
Senator Klyne: In the supplementary estimates, Global Affairs Canada is requesting additional voted appropriations, which includes monies to help the developing countries with the impact of climate change. In terms of helping developing countries address climate change, you recently referenced a low-carbon economy in reducing the amount of fossil fuel energy, which I interpret as introducing and promoting renewables. Is the assistance in the form of introducing the renewables, or would you also be introducing things like clean carbon capture and storage technology while fossil fuels are used to advance the economy of a developing country?
I ask that question because I’m under the understanding that many developing countries have large untapped fossil fuel resources, and it’s their intent to use these to develop their respective economies.
My question is why not use a more pragmatic approach with a range of things, or is this strictly your program; a non-fossil fuel agenda and more on the renewables?
Ms. Ouellette: Thank you for the question, senator. Again, that is related more to the programming aspect. I will ask Sue Szabo to respond.
Ms. Szabo: Thank you for the question, Senator Klyne.
That is a very good question because developing countries, for the most part, and particularly in Africa, are facing tremendous energy deficits, which means that they cannot support the economic growth they are looking for. It also means that those on the frontiers — the last-mile customers — are often having to do without electricity, with concomitant impacts, for example, on children being able to attend school and study at night. So indeed, a lot of the support that we provide does look at various options in terms of dealing with this energy poverty.
The price points on renewables globally have come down dramatically such that renewables are a cost-effective way to address energy poverty. Moreover, once the initial capital cost is addressed, they have much lower maintenance requirements, which makes them a good part of the sustainable energy mix for developing countries.
The Chair: Ms. Szabo, could you provide the answer to Senator Klyne’s question in writing through the clerk. Again, provide it before Thursday, March 11, so we can meet our deadline for our report.
Senator White: Thank you very much and thanks for the presentation. I will touch on a couple of things.
This is regarding the $341 million going toward developing nations and climate change. Would the Polynesian islands have the ability to access that as well if they are trying to battle some of the rising seawater with wall system redevelopment? Would that be considered part of the climate change impact?
Ms. Ouellette: Thank you, senator. I believe that this is included, and I’m seeing my colleague nodding yes.
Ms. Szabo: I would add that Canada’s climate finance is for ODA-eligible developing countries, so we do respect that. That said, we recognize that many of the SIDS, or small island developing states, such as those in the Polynesian islands, are still vulnerable, even though they are no longer ODA eligible, and Canada seeks to address this by looking at regional projects that can ensure that the majority of our funding is still distributed to ODA-eligible projects and countries, but it does try to recognize some of these regional issues as well.
Senator White: Thank you very much.
I take it, in this area, there would be partnerships. Are there partnerships with countries outside of those affected? For example, would this be in partnership with the U.S. or other nations, or would this be a go-it-alone program?
Ms. Szabo: You’re absolutely right, Senator White. Because of the small size and far-flung nature of these islands — and this is also true of the Caribbean, of course — we also look at how we can provide assistance, not only on a bilateral basis but also through some regional possibilities. In the Caribbean, for example, it would be CARICOM. There are also regional groupings in the Pacific, but we work with some of our partners to make sure that those that have programs in these island areas, including, for example, the Asian Development Bank, as well as the Inter-American Development Bank, can also be programming and taking advantage of some of those economies of scale, and the capacity issues that can be built across a number of the islands.
Senator White: Would China be a partner in any of those organizations you just named?
Ms. Szabo: China is ODA-eligible, but it is now a contributor to many of these international organizations. We do not directly partner with China on any of our bilateral projects.
Senator White: Through the organizations, you could?
Ms. Szabo: Through the organizations where there is pooled funding, it is the multilateral or regional organizations that determine where the funding would go.
Senator White: I have one last question, if I may? You may have touched on it. I missed it if you did. You identified roughly $1.6 million for Canada’s global Arctic leadership. What does that look like from a spending perspective? How would that be spent?
[Translation]
Ms. Ouellette: Just a minute. I’m looking for the “1.5” reference. Do you mind if I come back to the question afterwards?
[English]
Senator White: I’m done, Mr. Chair. Thank you very much. Certainly, you can respond later if you wish.
[Translation]
The Chair: You can look into it and get back to us with an answer in writing by Thursday, March 11. Thank you.
Senator Dagenais: My question is for Ms. Ouellette. I’d like to start with the $400 million in additional funding to support the recovery and resilience of developing countries after the COVID-19 pandemic. That’s a significant amount on top of your total budget, which was already at $7.5 billion. Who decides how the $400 million will be used? Is it the Prime Minister, himself, or officials from your department?
Ms. Ouellette: Thank you for your question, Senator Dagenais. Further to the announcements, it’s actually within the department — so through our policy frameworks—that we find ways to address the immediate humanitarian and development needs resulting from the pandemic or other circumstances or crises. That assessment is done at the department level, informing the program design while ensuring alignment with the Government of Canada’s overarching priorities.
Senator Dagenais: Now I’d like to come back to climate change and the $341 million to help developing countries address the impacts of climate change. How do you measure the success and results of those program investments? Are the spending decisions politically motivated, or will the investments actually have a positive impact?
Ms. Ouellette: Thank you for your question. We do indeed make sure taxpayer money is spent wisely. I will say it again: we ensure investments are consistent with the government’s priorities, and, as I was saying, with respect to design, we see to it that taxpayers get the best value for their dollar. That applies to both the $400 million tied to the COVID-19 pandemic and the climate change funding. We also make sure the money goes to strong partners; on a more operational level, we check whether the recipients have assessed their capacity and financial viability to adequately manage the fiduciary and financial risk. Then, at the implementation stage, as my colleague mentioned earlier, we oversee the entire process on the ground. We may also carry out audits to ensure the funding is well spent.
Senator Dagenais: I have one last question. For a while now, the pandemic has been used as an excuse for everything. You received an additional $1.6 million to enhance Canada’s global Arctic leadership. What more will you do with that funding that you were not able to do before, with your usual funding, knowing that the pandemic has hit?
Ms. Ouellette: According to my notes, the $1.7 million will support the international chapter. In all, GAC has requested $62.2 million over 10 years. The Global Arctic Leadership Initiative will help to achieve some of the goals set out in Canada’s Arctic and Northern Policy Framework, including ensuring the rules-based international order in the Arctic responds effectively to new challenges and opportunities, and ensuring that northern and Arctic Indigenous peoples remain healthy and resilient. To answer your question, then, I would say it will go towards a series of initiatives that were launched a few years ago.
Senator Dagenais: Thank you very much, Ms. Ouellette.
Senator Galvez: Thank you to the witnesses for being with us this afternoon and for helping us understand the additional funding being requested.
Significant amounts are being allocated to help developing countries build resilience, address climate change, and access vaccines and therapeutics in response to COVID-19.
Regarding those three types of international assistance, I completely agree that developing countries have contributed very little to the COVID-19 pandemic and climate crisis. However, they are more negatively impacted by the effects of the pandemic and climate change, far more than a number of developed countries. They certainly deserve our assistance.
Nevertheless, with so many countries in need wanting our help, I’d like to hear about the robust selection tools mentioned earlier. I’d like to gain a better understanding of how the system works. Do you select the projects? Do you select the organizations that administer the projects? Like many of my fellow senators, I’m curious about how you make sure objectives are met.
Ms. Ouellette: Thank you for your question, senator.
As I said earlier, we have a model, an investment plan that we follow for the distribution of funding. As you can imagine, there’s never enough to go around. The investment plan takes into account the Government of Canada’s international commitments on climate change, for instance, through the Feminist International Assistance Policy to help sub-Saharan Africa. It depends on decisions made by cabinet, but the Middle East Strategy is an example of a priority area.
That is how we are able to distribute the funding across the various initiatives. It’s quite complicated, to be sure, but we manage thanks to that robust mechanism and investment plan.
I’ll build on what was said earlier about results. GAC receives a number of reports that help it track results — and not just once the project is complete, but also throughout the process. The people responsible for the programs conduct assessments and review the results, and if need be, programs are adjusted accordingly.
For example, this year, because of the pandemic, the department had to make additional payments. On top of the funding requested in the various estimates, we had to reallocate funding internally, precisely to respond to the pandemic.
Senator Galvez: Obviously, the pandemic is slowing things down, even in a developed country like Canada. Not even the Senate or Parliament is following its usual sitting schedule. Developing countries tend to face additional challenges such as schools remaining closed, and government departments and banks having trouble.
What kinds of challenges are you expecting to encounter, and how do you plan to tackle them? I’m referring, of course, to allocating the money, and implementing the planned projects and programs with the funding we have given you.
Ms. Ouellette: You are right: the challenges are many. The way we work, we rely on our staff on the ground for guidance; they help us make any necessary adjustments and focus on COVID-19-related challenges. We also need to be creative in how we go about conducting assessments, audits and missions. An inspector colleague of mine recently carried out a virtual audit, so we review our practices to make sure we can monitor and track projects.
Senator Galvez: I have one last question.
Global Affairs Canada is requesting funding to enhance Arctic leadership. Can you tell me which countries are involved and how the money will be invested?
You also said the money would help support Indigenous peoples. Do you mean Indigenous peoples in other Arctic countries? Where exactly is the funding going?
Ms. Ouellette: Thank you for your question.
As you may know, the Global Arctic Leadership Initiative used to be known as the Northern Dimension of Canada’s Foreign Policy. I have the list of organizations, but not the list of countries you are asking for. I may be able to provide that information, but the initiative involves mainly organizations, councils—
[English]
— Gwich’in Council International, Arctic Athabaskan Council, Inuit Circumpolar Council, Yukon University.
[Translation]
I’d be glad to send you the list, if you would like.
The Chair: Thank you, Ms. Ouellette. You can send the information directly to the clerk by the deadline, Thursday, March 11.
[English]
Senator M. Deacon: Thank you very much. My first question may appear to have a similar tone, but I do want to ask it anyway, and acknowledge that we have folks here today that are also sitting on the Foreign Affairs Committee of the Senate, including the chair, Senator Boehm. We’re looking at some pretty significant international issues in which Canada will certainly have a variety of roles.
You talked about young girls; girls in developing worlds in a couple of different ways so far this afternoon. Globally, girls and girls’ rights have made great strides in the last 50 years. For instance, 50 years ago, only 49% of primary school-age girls in lower- and middle-income countries were in school, compared with 71% of boys. Pre-pandemic, that number was about 90%, which we are celebrating.
Historically, the girls are disproportionately affected by disasters like the ones we face today. In 2014, Ebola forced the closure of West African schools in the same way. While the boys returned, many of the girls did not.
COVID has shut schools over a broader swath of the developing world and the response to closed schools means different things on different continents. As a result, it has been suggested that 13 million child marriages which might not have happened in normal times might go ahead over the course of the next decade.
As part of our Foreign Affairs work, we have been talking and meeting with a number of different leaders of countries and NGOs on this. These estimates commit $400 million to support the recovery and resilience of developing countries. I wonder how it will be used to ensure we do not lose so much of the momentum and ground we made up in girls’ rights around the world, specific to education and learning.
Ms. Ouellette: Thank you for the question. Yes, indeed, the department puts a lot of effort around women and girls in its various programs, projects and initiatives. This encompasses the feminist policy framework, and that is really important.
We have specific targets for gender equity as well, as part of that feminist policy, to ensure that women and girls are well represented. As well, we have 10% in education. I believe that by next year or the year after, our development budget must account for 10% in education. This is what I can say today.
Senator M. Deacon: I look forward to hearing more about that as time unfolds.
My second question is connected to vaccines and Canada’s role in getting the world vaccinated for COVID-19 — again, another international leadership piece.
My question concerns the surplus vaccines that Canada has ordered, and we’re aware of that. If all goes as planned, we should receive surplus vaccines by the fourth quarter of 2021, and there are promises of even earlier. Will we be directing the surplus towards poorer countries when the time comes, to ensure vaccines are not wasted if not needed in Canada? If so, will this be part of our contribution to COVAX?
On that front, COVID vaccinations will become an annual event. Are there long-term discussions on how Canada and our allies will assist the rest of the world with these annual vaccinations? I see some money in the estimates to support the recovery and resilience of developing countries in our fight against COVID-19. I’m wondering if these are the kinds of programs this money might be going towards. Thank you.
Ms. Ouellette: Thank you for the question. My understanding is that any surplus of the vaccine will go to developing countries. Before I make that assumption, I would like to turn it over to Joshua Tabah to confirm this, as well as whether it would be considered as our contribution to COVAX.
Mr. Tabah: Thank you, Senator Deacon. A great question. In December, the Prime Minister pledged that we would share any surplus doses with the world. Minister Gould, Minister of International Development, also made a commitment that we would ensure that no dose goes to waste. My understanding, though, is that the government has yet to finalize the specific timing of when that sharing would begin, and the specific mechanisms by which it would be shared.
COVAX is the only global mechanism that is already up and running and operational. It has now delivered vaccine doses to over 20 developing countries; over 20 million doses. So it would be a natural candidate for the government to consider in terms of the mechanism used. But to my knowledge, that decision has not yet been taken.
Senator M. Deacon: Thank you.
Senator Boehm: I believe Senator Duncan has indicated she wanted to give me some of her time, but I leave that to your discretion, chair. Thank you very much.
It’s always a warm and nostalgic feeling when I get to ask questions of representatives of my former department. Ms. Ouellette, congratulations, perhaps belatedly, on your appointment. I know that the CFO job in that department is probably the most challenging in government because you have global reach.
I would like to start my questions with you, and then I will have more specific ones for Mr. Tabah and Ms. Szabo.
The more than $16 million for increased costs related to currency fluctuations on operations and also on assessed contributions: Do you see this as a normal fluctuation or has it been boosted because of COVID, and has that also increased operational costs at our missions?
Ms. Ouellette: Thank you for your question. It’s difficult to assess because from year to year the economy evolves in different ways. I would say that it’s not alarming. I’m not sure if Yannick Hébert would have the answer in terms of comparison to previous years. Again, it’s difficult to assess because there are so many things that can happen from one country to another in terms of their economies, which can influence the operation at mission, and then influence the variation in terms of the foreign currency.
[Translation]
The Chair: Mr. Hébert, can you elaborate on that and introduce yourself?
[English]
Yannick Hébert, Director, Resource Management, Global Affairs Canada: Thank you, senator. I would like to add that these fluctuations vary from year to year, as pointed out by Ms. Ouellette. What we’re dealing with when we come to prepare the Supplementary Estimates (C) is that it’s a snapshot at a certain time. That snapshot was taken in December, and as of today some of those fluctuations have gone down or up. So it’s always a catch-up. Sometimes we benefit from those fluctuations and sometimes, unfortunately, it is an extra expenditure for the Government of Canada. I would echo Ms. Ouellette in saying that these are part of the normal operations and not necessarily something that we would directly attribute to the COVID situation we’re currently faced with.
Senator Boehm: Thank you. My next question is about the $20 million for the Trade Commissioner Service Electronic Client Relationship Management System. Is this the replacement for the TRIO system, which has already gone through two iterations, or is it to modernize TRIO?
Ms. Ouellette: Thank you for the question. This was through a TB submission approved in February of last year, and it’s to provide funding for the pre-work towards development of the Trade Commissioner system that we call CRM3, which is the Client Relationship Management.
In terms of whether this will replace TRIO, I’m not sure. I’m sorry, I’m too new in the department to answer that question. One of my colleagues may know. I suggest that I follow up with an answer specifically to the TRIO question.
Senator Boehm: Thank you. My next question relates to the COVAX Facility. Mr. Tabah has given us a good overview on how that is going, but of course, we’re also reading about variants in the virus, including the South African variant, and also the efficiency of certain vaccines. There has been scientific evidence to suggest that some are more efficient than others, and then this has been refuted.
Is there a concern that there might be some bias or prejudice, such that the countries that can afford a more effective vaccine will be getting that vaccine and those who are poorer might not? I’m wondering if that is figuring into the thinking behind COVAX and what Gavi might be doing.
Related to that, are there any lessons drawn from large-fund contributions? Mr. Tabah will be aware of the Global Fund. Canada has made great contributions to that over the years and various replenishment exercises, but is there anything we have learned from those funds — which were also partially administered by the World Health Organization — in terms of how we can project the COVAX Facility into the future?
Ms. Ouellette: Again I’d like to turn it over to Joshua to answer that question.
For the previous question, I’ve been told that is not a replacement of TRIO, but rather an enhancement of the TRIO system.
Senator Boehm: Thank you.
Mr. Tabah: Thank you, Senator Boehm. Those are insightful questions. On the COVAX Facility, the portfolio of vaccines that is offered to all participants, whether self-financing or developing countries, is science-based.
So COVAX brought together nine different vaccine candidates from the beginning and has signed procurement agreements for over 2 billion doses. The developing countries that are receiving support from grant funding are the ones themselves that will dictate which vaccines they are seeking to access. So the only vaccines that COVAX will distribute are ones that have emergency listing approval from the WHO. These are not second-class vaccines at all.
The current vaccines being distributed by COVAX include Pfizer and AstraZeneca, the same ones that our own regulator has approved. They are working through WHO regulatory approval for additional vaccine candidates, and you’re likely to see a portfolio very similar to Canada’s own. These are high-quality vaccines that will respond to both variants and the initial situation.
So then, yes, we are drawing lessons from the large global funds. The Global Fund is an active member as part of that COVAX discussion. We want to ensure inclusive governance mechanisms where all countries have a voice to ensure that the mechanism works for them. It’s important to ensure that distribution plans are transparent and understood by all, so that these benefits flow to those intended in countries. Minister Gould actively co-chairs one of the government’s mechanisms for COVAX to ensure it benefits from the lessons we have learned in global health work over the last 20 years.
Senator Boehm: And the package does include the Sputnik vaccine and the Chinese vaccine as well?
Mr. Tabah: Neither of those is currently WHO-approved or being distributed by COVAX.
Senator Boehm: Thank you for that precision.
I have one more question; this is related to the climate change funding and the funding for IFAD, which I think is an excellent, specialized UN agency that has often been overlooked. I’d be curious to know where the focus would be. Would it be in sub-Saharan Africa, for example, or in other places in the world?
Also, Senator White asked a question earlier that has sparked my interest in the Polynesian islands. I was out there at one point when we were trying to get UN Security Council votes. That didn’t go too well, but in the end, I was told that part of the problem that is out there in smaller countries is the capacity of officials, in terms of making the proposals, filling out the applications — whether it’s Green Climate Fund or the Global Environmental Facility, the GEF — and this has been a problem. I don’t know whether that has been taken up in any way or form in terms of providing some of that capacity.
Ms. Ouellette: Thank you for the question, senator. Part of the request is $100 million for the African Development Bank for climate change. Sue Szabo would be more equipped to answer the question. Of course, we are waiting for the money, but my understanding is that at least 80% of the resources will be deployed to low-income countries that are eligible, as per the policy. I would welcome Sue’s remarks on this.
Ms. Szabo: Thank you, Senator Boehm, for that question. In fact, it ties back to many of the questions on results that other senators have asked because, in order to achieve results, we need to specify up front what our expectations are. With the IFAD initiative, we have specified up front that we expect a target with at least 50% of the funding to African countries. At least 25% of the funding will go to fragile states. In that way, we ensure at least a broad setting of the results that we expect to see.
With respect to your point about capacity and the difficulty that developing countries have in developing proposals, we are looking at that from two different directions. First of all, we look from the inside as a board member of the Green Climate Fund, as well as other organizations. We have an active agenda to try to streamline access and to simplify access to these organizations, again with indicators where we are carefully looking at the time it takes to actually access and then disburse funding as well. That is carefully monitored.
From the outside, though, we recognize there is a need to build further capacity, so we do work with organizations that, in turn, can help developing countries to both build their national adaptation plans and also build their capacity to access some of these other large global funders, like the Green Climate Fund.
Senator Boehm: Thank you very much.
[Translation]
Senator Forest: Thank you to the witnesses for being here to shed light on the funding being requested.
Let me begin by saying that I fully support the contribution to the International Fund for Agricultural Development to address the impacts of climate change. The $340 million-plus in funding is important.
Through my involvement in the Canadian Branch of the Assemblée parlementaire de la Francophonie, or APF, I have seen how important it is to work with developing nations on climate change prevention and adaptation. One of the APF’s branches passed a resolution to that effect at the beginning of the year.
Can you give us a few real-life examples of projects that received support through the International Fund for Agricultural Development?
Ms. Ouellette: Yes. Thank you for your question. Some $190 million was allocated to the International Fund for Agricultural Development. Again, the funding takes the form of repayable contributions and aligns with Canada’s priorities in relation to the environment and climate action area of the Feminist International Assistance Policy. The initiative is closely linked to one of the commitments set out in the mandate letter of the Minister of International Development, Karina Gould: to develop additional programming on the intersection between women’s rights and climate adaptation.
The International Fund for Agricultural Development is the only international financial institution and specialized UN agency dedicated exclusively to reducing poverty and food insecurity in rural areas and developing countries.
The International Fund for Agricultural Development provides grants and low-interest loan to governments and developing nations to support agricultural projects that connect small farmers to markets, and improve production, productivity and financial services in rural areas.
As you know, Canada is a founding member of the fund and plays an important role in its administration. The fund is continuing to expand its climate integration agenda throughout its portfolio, in keeping with its pledge to invest at least 25% of its US$3.5-billion investment portfolio on activities that support climate change adaptation and mitigation during the 11th replenishment of the fund’s resources.
I’d like to add one other thing, if I may. Thus far, during this period, the International Fund for Agricultural Development has approved more than US$736 million in climate financing for developing countries, which represents 36% of all approved financing, mainly for climate change adaptation.
Senator Forest: Does your department establish the eligibility criteria for projects? I understand the broad objectives, but does your department determine the specific types of projects, for instance, soil re-fertilization or forest renewal? Are those criteria determined with UN partners, or by you? How are the eligibility criteria for selected projects determined?
Ms. Ouellette: My understanding is that the criteria are established by councils or working groups, which Canada sits on. I will now defer to my colleague Ms. Szabo for confirmation and further details. Thank you.
[English]
Ms. Szabo: Thank you for that question. Indeed, the organizations themselves — and this is one of the reasons why we work with such strong organizations, like IFAD — are really able to work with countries in determining the overall criteria.
What is also increasingly important in the climate space is to make sure we are looking at what countries themselves want to do. For example, countries are right now rethinking their nationally determined contributions — what they will contribute to global mitigation — and their national action plans. As much as possible, we are also trying to ensure that we are helping countries to support these robust plans that move them forward individually, but also contribute to the global goals that we have set for mitigation and adaptation.
Senator Smith: Thank you. I have a couple of quick questions. With respect to vaccines, we know some countries have been impacted more than others, and some have had more success in terms of their rollout campaign. My question relates to the safety of Global Affairs staff around the world. What is the department doing to ensure that consular and embassy staff around the world are safe and have access to vaccines when the time comes? Is there a plan for vaccinating your staff who are stationed around the world?
Ms. Ouellette: Thank you for the question. Yes, it’s super important to keep our staff around the world safe. You may know that we repatriated some of them from countries that were more affected by COVID. The department made a judgment call, country by country, to repatriate those employees.
I know there is currently a discussion with the Public Health Agency in order to determine the plan for our employees who are still abroad to get the vaccine. Again, it’s case by case and country by country, depending on their capacity to have such vaccines and distribute them. We may have to send vaccines over there, and send doctors and nurses in order to make sure the administration of the vaccine occurs for our employees, but this is still in discussion.
Senator Smith: Thank you. Closer to home, your distribution centre in Ottawa plays a major role in your organization’s missions around the world, namely with correspondence and courier services. In February of this year, a news article pointed to several confirmed COVID-19 cases at the centre, which caused a reduction in staff and service levels. Has Global Affairs implemented contingency plans to ensure that the parts of the operations that are critical — during this time in the department’s missions abroad — are online and functioning at normal levels?
Ms. Ouellette: What is your question? Sorry, I missed your question.
Senator Smith: There was a story earlier in February about some of the employees at your distribution centre getting COVID, and we just want to understand. Have you implemented a contingency plan to ensure that the parts of the operations that are critical to the department’s missions abroad are online and functioning at normal levels?
Ms. Ouellette: Yes. Sorry for that. Yes, indeed. The sanitation measures were already in place within the department, but sometimes COVID-19 plays a trick on us. Right from the get-go, we sent home those employees and any other employees around them who worked with them. Then we made sure that we had a plan in order to have a team A and a team B, in particular for the IT folks. That needs to be in place to make sure that we are able to do a swap should team A be affected by a case; to send those people home and bring team B onto the premises to offer services. Those were the actions that we took. Of course, a lot of communication was necessary to reassure all the staff that the sanitation measures were done and continue to be done.
Senator Smith: Thank you.
The Chair: As we conclude, I’ve had three senators looking for a second round, starting with Senator Marshall, Senator Loffreda, and last but not the least with this department, Senator Boehm.
Senator Marshall: Thank you very much. I just want to follow up. Several of my colleagues mentioned the funding for Canada’s global Arctic leadership, and you are going to respond in writing. Could you also include a reference to the fact that this was a budget initiative from 2019, and the funding is $6 million or $7 million a year, I think, over each of five years? If you could relate it back to the budget funding so we can see exactly what’s happening there. Thank you very much.
Senator Loffreda: If we can quickly take a minute to discuss Canada’s contributions to international organizations, in these estimates we have about 40 organizations receiving payments from Canada for our participation in these organizations. Amounts vary from $1,000 to $1.7 million. Can you explain — maybe in writing, if we don’t have the time now — to our committee how these agreements are drafted and how Canada pays its fees? Is it a one-time payment once a year or is it a recurring payment? I was surprised to see that these additional funds are being asked for through Supplementary Estimates (C). I assumed that participating countries would know at the beginning of the year what their admission fees were. Thank you for that clarification.
[Translation]
The Chair: Ms. Ouellette, can you answer the question now, or would you prefer to follow up in writing?
[English]
Ms. Ouellette: I can answer that question, certainly. Canada does have membership in international organizations. On behalf of the Government of Canada, Global Affairs Canada pays its annual assessment to 58 international organizations, including 12 that are related to UN peacekeeping operations. The reason for the fluctuation into the Supplementary Estimates (C) was related to changes in the international organization budget and the foreign currency fluctuation, as we were discussing earlier. This is why there is a change in the Supplementary Estimates (C).
Senator Loffreda: So it is mainly due to the foreign exchange. Thank you.
Senator Boehm: Thank you very much. This follows the line of questioning of Senator Smith. If there is an employee abroad in the foreign service who has to come back to Canada to deal with a dependent or to deal with a family matter, do they have to go into the mandatory quarantine hotel situation, the way other returnees would?
Ms. Ouellette: Thank you for the question. As you may know, there is a foreign services directive that allows the department to bring people back. In those particular circumstances, yes, there is a quarantine that is needed, although I must admit that the instruction tends to change from week to week.
We are following the health authority’s instruction in order to make sure that the people come back safe and that it is okay for their family or friends who are around them. So that question of quarantine is something we are looking at.
Senator Boehm: Thank you. I know the foreign service directives reasonably well because they used to apply to me, and they were not designed for something as strange and baffling as this. My only suggestion would be to try to support the employees as much as possible, because going into a hotel in a mandatory fashion and paying the $2,000 yourself is probably not what they intended to do.
Ms. Ouellette: You are right, and we are looking at the options to make sure they are not financially disadvantaged. We are looking at other means, like the travel policy, to see if there is a possibility of covering the funds of the hotel fee.
Senator Boehm: Thank you very much.
The Chair: To Ms. Ouellette, with your team and especially in a time where it’s International Women’s Day, and your first appearance with Global Affairs Canada, I can certainly say that you have been very professional, informative and very insightful. On this, we all have the same common denominator.
[Translation]
Transparency, accountability, predictability and reliability, as demonstrated by Canada throughout the world.
We would like the written answers to the senators’ questions by the deadline of Thursday, March 11. Ms. Ouellette and the members of your team, please be sure to provide the information to the clerk, Ms. Fortin, by the deadline.
[English]
On this, honourable senators, this is the conclusion of our estimates, Supplementary Estimates (C), in order to prepare for the tabling of our report. Therefore, our next meeting will be on Thursday, March 18, at 10 a.m. EST, where we will consider a draft report for the study of Supplementary Estimates (C) to be tabled in the Senate of Canada.
I see that we do not have any additional senators that would like to ask a question. To the witnesses, thank you very much.
(The committee adjourned.)