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37th PARLIAMENT, 2nd SESSION

Standing Committee on Government Operations and Estimates

EVIDENCE

CONTENTS

Monday, March 17, 2003

1110

The Vice-Chair (Mr. Tony Valeri (Stoney Creek, Lib.))

Mr. David Bickerton (Executive Director, Expenditure Operations & Estimates Directorate, Comptrollership Branch, Treasury Board of Canada Secretariat)

1115

1120

1125

Mr. Tony Valeri

Mr. Robert Mellon (Director, Estimates Production, Comptrollership Branch, Treasury Board of Canada Secretariat)

Mr. Tony Valeri

Mr. Ken Epp (Elk Island, Canadian Alliance)

Mr. David Bickerton

1130

Mr. Ken Epp

Mr. David Bickerton

Mr. Ken Epp

Ms. Judy Sgro (York West, Lib.)

Mr. Tony Valeri

Mr. Ken Epp

Mr. Tony Valeri

Mr. Ken Epp

Mr. Tony Valeri

Mr. Robert Lanctôt (Châteauguay, BQ)

Mr. Ken Epp

Mr. Robert Lanctôt

Mr. Tony Valeri

Mr. Robert Lanctôt

Mr. Tony Valeri

Mr. David Bickerton

1135

Mr. Tony Valeri

Mr. Ken Epp

Mr. Robert Lanctôt

Mr. David Bickerton

Mr. Robert Lanctôt

1140

Mr. David Bickerton

Mr. Robert Lanctôt

Mr. David Bickerton

Mr. Tony Valeri

Ms. Judy Sgro

Mr. Robert Mellon

1145

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Mr. Robert Mellon

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

1150

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Mr. Tony Valeri

Mr. Robert Lanctôt

Mr. Tony Valeri

The Vice-Chair (Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance))

Mr. David Bickerton

Mr. Paul Forseth

1155

Mr. David Bickerton

Mr. Paul Forseth

Mr. David Bickerton

Mr. Paul Forseth

Mr. David Bickerton

Mr. Paul Forseth

Mr. David Bickerton

Mr. Paul Forseth

Mr. David Bickerton

Mr. Tony Valeri

Mr. Robert Lanctôt

Mr. David Bickerton

1200

Mr. Tony Valeri

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. David Bickerton

Ms. Judy Sgro

Mr. Tony Valeri

Mr. Dennis Kam (Executive Director, Finance and Administration, Corporate Services Branch, Treasury Board of Canada Secretariat)

1205

Mr. Tony Valeri

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Tony Valeri

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Tony Valeri

Mr. Dennis Kam

1210

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Tony Valeri

Mr. Paul Szabo

Mr. Dennis Kam

Mr. Paul Szabo

Mr. Dennis Kam

Mr. Paul Szabo

1215

Mr. Dennis Kam

Mr. Paul Szabo

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Szabo

Mr. Dennis Kam

Mr. Tony Valeri

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

1220

Mr. Dennis Kam

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

Mr. Tony Valeri

Mr. Robert Lanctôt

1225

Mr. Dennis Kam

Mr. Tony Valeri

Mr. Roy Cullen (Etobicoke North, Lib.)

Mr. Dennis Kam

Mr. Roy Cullen

Mr. Dennis Kam

Mr. Roy Cullen

Mr. Dennis Kam

Mr. Roy Cullen

Mr. Tony Valeri

1230

Mr. Tony Valeri

Mrs. Jane Billings (Assistant Deputy Minister, Corporate Policy and Infrastructure Branch, Department of Public Works and Government Services)

1235

Mr. Tony Valeri

1240

Ms. Liseanne Forand (Assistant Executive Director, Communications Programs and Services, Communication Canada)

1245

Mr. Tony Valeri

Mr. Paul Forseth

Ms. Jane Billings

Mr. Paul Forseth

Ms. Jane Billings

Mr. Paul Forseth

Mr. Rodney Monette (Assistant Deputy Minister, Operations Branch, Department of Public Works and Government Services)

Mr. Paul Forseth

Mr. Rodney Monette

Mr. Paul Forseth

Mr. Rodney Monette

Mr. Paul Forseth

Ms. Jane Billings

Mr. Paul Forseth

Ms. Jane Billings

Mr. Paul Forseth

1250

Mr. Rodney Monette

Mr. Paul Forseth

Mr. Rodney Monette

Mr. Paul Forseth

Mr. Tony Valeri

Mr. Robert Lanctôt

Mr. Rodney Monette

Mr. Robert Lanctôt

Mr. Rodney Monette

1255

Mr. Robert Lanctôt

Mr. Rodney Monette

Mr. Robert Lanctôt

Mr. Rodney Monette

Mr. Robert Lanctôt

1300

Mr. Tony Valeri

Mr. Rodney Monette

Mr. Tony Valeri

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

1305

Mr. Rodney Monette

Mr. Roy Cullen

Mr. Rodney Monette

Mr. Roy Cullen

Ms. Jane Billings

Mr. Roy Cullen

Ms. Jane Billings

1310

Mr. Roy Cullen

Mr. Tony Valeri

Mr. Ken Epp

Ms. Liseanne Forand

Mr. Ken Epp

Ms. Liseanne Forand

Mr. Ken Epp

Ms. Liseanne Forand

Mr. Tony Valeri

Ms. Liseanne Forand

Mr. Ken Epp

Ms. Liseanne Forand

Mr. Ken Epp

Mr. Tony Valeri

Mr. Ken Epp

Ms. Liseanne Forand

1315

Mr. Ken Epp

Mr. Tony Valeri

Mr. Ken Epp

Ms. Liseanne Forand

Mr. Ken Epp

Mr. Tony Valeri

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Robert Lanctôt

Ms. Liseanne Forand

1320

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Robert Lanctôt

Ms. Liseanne Forand

Mr. Tony Valeri

Ms. Judy Sgro

Mr. Rodney Monette

Ms. Judy Sgro

Mr. Rodney Monette

Ms. Judy Sgro

Ms. Jane Billings

1325

Ms. Judy Sgro

Ms. Jane Billings

Mr. Tony Valeri

Mr. Paul Forseth

Ms. Liseanne Forand

Mr. Paul Forseth

Ms. Liseanne Forand

1330

Mr. Paul Forseth

Ms. Liseanne Forand

Mr. Paul Forseth

Ms. Liseanne Forand

Mr. Tony Valeri

CANADA

Standing Committee on Government Operations and Estimates

NUMBER 013

2nd SESSION

37th PARLIAMENT

EVIDENCE

Monday, March 17, 2003

[Recorded by Electronic Apparatus]

Á (1110)

[English]

The Vice-Chair (Mr. Tony Valeri (Stoney Creek, Lib.)): I'd like to call the meeting to order. The order of the day is, pursuant to Standing Order 81(5), the study of supplementary estimates (B) for the fiscal year ending March 31, 2003.

I'd like to welcome Mr. Bickerton and Mr. Mellon, who I understand will begin this session today by providing us with a course in estimates 101 to give us a basic understanding of the estimates.

As we move through the day, we will have representatives of various departments who report to the Standing Committee on Government Operations and Estimates as we go through each of their individual departments and their supplementary estimates.

I will turn it over to the witnesses to begin. I think we will have an opening statement, and I believe members do have a deck in front of them they can use to follow through, and then we will be into questions.

Welcome, and please begin.

Mr. David Bickerton (Executive Director, Expenditure Operations & Estimates Directorate, Comptrollership Branch, Treasury Board of Canada Secretariat): Thank you, Mr. Chairman.

We have prepared a slide presentation, and it has been distributed by the clerk. We don't have an opening statement per se; we will simply lead you through the material.

[Translation]

It is a pleasure for me to be here today to respond to a request for information concerning the Supplementary Estimates and Contingencies Vote TB Vote 5.

The government's use of Supplementary Estimates dates back to Confederation. You will note that these are an integral part of the government's budget cycle and that both format and content have evolved over the years.

The Supplementary Estimates consist of two elements: the Blue Book, tabled on February 26 by the President of the Treasury Board, and the appropriation, or supply, bill to be tabled in the House on March 25.

[English]

On slide 4 we see how the government has, through its budget delivered by the Minister of Finance, set its overall spending plan. The most recent budget, as you know, was delivered on February 18, 2003. The main estimates were tabled approximately one week later, on February 26, 2003.

As you see on this slide, there is some material that's included in the introduction to the main estimates to try to provide an explanation as to how the process works. It is not possible to reflect all the budget decisions in the main estimates, given the nature of the budget preparation and the proximity of the tabling dates. The main estimates have, for a large number of years, traditionally included the reference shown on this line, but the president's press release also includes a similar reference to the need for supplementary estimates during the course of the year.

On slide 5 we see how, because of the timing or lack of approved program initiatives, it is not considered appropriate to include all spending in the main estimates. The funding for items not included in the main estimates is held in reserve and managed by either the Department of Finance or the Treasury Board pending program submissions from departments or the passage of enabling legislation in Parliament. Once these items have been approved by the Treasury Board or enabling legislation is passed, the funding is requested from Parliament through supplementary estimates.

If a new program is approved by new legislation with statutory funding, the supplementary estimates are used to provide an update to Parliament for information purposes only. The new airport security organization is a case in point. That was included in the budget bill last year; it included the statutory funding for the first year and it is included here for information.

The Treasury Board Secretariat manages the process for supplementary estimates through call letters to departments and the preparation of the blue books and the appropriation bills.

[Translation]

Moving on to page 6, the government decides when to table the Supplementary Estimates and the supply bill, in accordance with the Standing Orders of the House of Commons.

Currently, there are three supply periods during the year. The period extending from December 11 to March 26 coincides with the tabling of the Supplementary Estimates (B) and of the Main Estimates. Supply bills, which are scheduled to be tabled on March 25, will seek spending authority for items applicable to the Supplementary Estimates and interim supply for the coming year. The supply period extending from March 27 to June 23 coincides with the tabling of supply bills seeking spending authority for 2003-2004. The June 24 to December 10 supply period is reserved for Supplementary Estimates (A).

[English]

Slide 7 shows a number of the purposes for supplementary estimates. As stated in an earlier slide and in the government's part I, the estimates do not include funding for items that either require further planning and development before spending authority is passed by Parliament or are pending legislation.

The government signals its intent to seek supplementary authority through sups over the course of the year. Just to give you some examples of items relating to sups (B) in 2002-03, the government is seeking parliamentary approval for a variety of items shown on the slides. For example, in the vote transfers on page 89, the Department of National Defence is requesting a transfer of $281 million from its capital vote to its operating vote to address in-year workload pressures. As to new programs announced in the budget, this was in the budget of 2003. On page 89 again there's an additional amount for National Defence for increased operating costs of $270 million.

For debt write-offs, if you look at page 48 and the Department of Citizenship and Immigration, there's a request to write off $665,000 in outstanding immigration loans.

There is also an item on page 64, amongst others, where we're asking for a new and increased grant--in this case it's an increase to a grant--for HRDC to maintain support to provincial or territorial student assistance programs.

One of the last items we have there is an operating budget carry forward. This is a policy of the Treasury Board to allow departments to carry forward funds they've identified during the course of the year. Most of these items are included in the sups (A), but there are one or two in sups (B), and if you look at page 42 and the CRTC, you'll find that information there.

Á (1115)

[Translation]

Moving on to page 8, the Blue Book format used for the Supplementary Estimates has not changed over the years. The Blue Book provides information about each department listed in the Supplementary Estimates. Information pertaining to TB Government Contingencies Vote 5 was added in the early 1990s to address concerns raised by the AG and parliamentary committees.

[English]

Page 9 just gives an indication, as I mentioned earlier, of information on statutory programs. The supplementary estimates are used to provide Parliament with updates on forecasts for statutory programs. These statutory programs have already had their spending authorized by separate legislation in the past. These items are included in supplementary estimates for information only in order to present a complete picture of government spending.

All statutory items are included in the main estimates by the Minister of Finance, and they are based on the most up-to-date information available at that time. Updates to statutory forecasts are made during the course of the year and are reflected in these supplementary estimates. You'll note that overall the supplementary estimates reflect that decrease of $500 million in statutory payments.

If you look at slide 10, you'll see that in the process in the House the supplementary estimates are tabled in the House by the President of the Treasury Board, and the process for dealing with these estimates is set out in the Standing Orders of the House. The actual timing is negotiated with the government House leader's office and the opposition parties. Sups are normally tabled approximately three weeks prior to the last allotted day in the supply period, that is, ending March 26. The supply bill is normally dealt with on the last allotted day in the supply period, and that will be done on March 25.

In accordance with the rules of the House, the supply bill is passed through the three readings in one sitting. This is the meaning of the “expedited passage” through the House, and the timelines are shown on the slide.

For your information, as you made reference to Standing Order 81(5), under the Standing Orders the supplementary estimates, when tabled in the House in February, are automatically referred to the appropriate standing committees of the House. The president then provides a list of the votes on the standing committees to which each vote is referred. This process has not changed in many years.

Under the Standing Orders each committee reports or is deemed to have reported back to the House not later than three sitting days before the last allotted day in the supply period. On the last allotted day for sups (B), normally an opposition day--this is on slide 12--the expedited guillotine procedure comes into effect 15 minutes before the time provided for debate expires. This would normally occur around 5:30 p.m. The House then deals with the opposition motion being debated, whether it is votable or non-votable.

All other motions are disposed of without further debate, and they move to reading the appropriation bill. The appropriation bill is given three consecutive readings, with the House meeting as the committee of the whole for the second reading. Once the appropriation bill is passed, it goes on to the Senate for consideration.

Á (1120)

[Translation]

For your information, I have included information on the process for passage of supply bills in the Senate. As a rule, the Senate has three weeks to hear testimony on the Supplementary Estimates. Once an appropriations bill is tabled in the Senate, it is usually given three readings on different days. After 3rd reading, the appropriations bill is passed by the Senate and moves on to the Royal Assent stage. Once the bill has been given Royal Assent by the Governor General, authority to spend the supplementary funds is granted to the departments, in accordance with the objectives set out in the Estimates.

That concludes my brief presentation on the Supplementary Estimates process.

I would now like to review Government Contingencies Treasury Board Vote 5, which is described on page 14.

The practice of seeking funding from the Government Contingencies Vote has existed since Confederation. This slide shows the current wording of the Government Contingencies Vote. That wording has not changed much in the past 20 years. The AG, the Senate National Finance Committee and the Public Accounts Committee have all raised some concerns about this particular item.

[English]

On slide 15 we've provided some additional information for your information. The vote wording, as you saw on the page before, is broad, and it does give the government flexibility to deal with a variety of circumstances. It can be used to supplement existing votes and provide interim parliamentary authority for high-profile items. It can be and is used to deal with items that occur outside the normal estimates cycle.

Using the authority in the vote wording, the Treasury Board can, once the supplementary estimates are approved, reuse any moneys that have been allocated. The Treasury Board has set its own rules in dealing with this authority and has been more restrictive than the vote wording allows. For example, other than for paylist shortfalls, there is no permanent supplement of other votes I can find that has happened in the last 20 years.

Slide 16 gives you an example of two of the criteria or guidelines the Treasury Board has approved in considering requests from departments for access to vote 5 for temporary funding and authority. The Auditor General, in her report last year, identified eight guidelines. Four have been formally approved by the Treasury Board, and an additional four, as the Auditor General pointed out, were added by the Treasury Board Secretariat to respond to certain changing circumstances during the 1990s.

The two most significant guidelines are shown on the slide. These guidelines are issued by the Treasury Board and used by the Treasury Board Secretariat to formulate the recommendations to Treasury Board ministers. All requests for access to vote 5 are approved by the Treasury Board as specified by the vote wording.

There is just some additional information as far as vote 5 is concerned on slide 17. The vote wording provides for permanent allocations to the department to cover certain non-discretionary salary costs. These include severance pay and maternity or paternity leave. These costs are not controllable by the departments, and they are not included in departmental reference levels. The moneys are normally transferred to departments at the end of the year, at the time the departments are closing their books and starting to prepare their public accounts.

The current vote limit of vote 5 is $750 million, and it has remained at that level for the last three years. If you look at it compared to the overall spending, the $750 million represented approximately 1.3% of voted appropriations or approximately 0.4% of total spending for the government as a whole.

Just to give you a sense of what is going on now, you'll see on slide 18, in response to the recommendations of the Auditor General, the Senate finance committee, and the public accounts committee, that the Treasury Board Secretariat is committed to reviewing the guidelines. The review will consider the possibility of developing a policy on the use of vote 5. As well, we will be looking at the possibility of actual changes to the vote wording that was on an earlier slide.

In conclusion, Mr. Chairman, the last slide talks about the way ahead. The Minister of Finance has in his most recent budget indicated the government is considering additional measures relating to improved reporting to Parliament. Certainly, this committee is seized with that particular topic. Amongst other items, this commitment includes a review of the use of vote 5 and how it is reported to Parliament.

Mr. Chairman, I hope that gives you some background, and I'll be pleased to answer any questions you may have at this time.

Á (1125)

Mr. Tony Valeri: Mr. Mellon, do you have anything to add?

Mr. Robert Mellon (Director, Estimates Production, Comptrollership Branch, Treasury Board of Canada Secretariat): No, that's fine.

Mr. Tony Valeri: Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): Thank you.

Thank you, guests, very much for being here. I appreciate this presentation.

We're primarily talking about vote 5 here today, but I'm interested in the total estimates procedure. I have a great curiosity about something. It's my impression and, I think, the impression of many Canadians that government spending in Canada is out of control, that people get to spend money whenever and wherever they want to, and that parliamentary approval is almost a joke in the sense that it's always given automatically. We in Parliament have never yet been able to change the estimates in a meaningful way. The closest we came was when we took away $72 million for the gun registry, which they put in the round just before Christmas, but generally it doesn't seem to make any difference.

I have a question for you. This is a very important one and is related directly to that gun registry thing. These guys asked for $72 million. Now, if they didn't need it, they shouldn't have asked for it, so presumably they needed it to continue the program. Yet when the money was turned down, there was never a glitch in the system; it still carried on. Where did that money come from? Where did they continue to get money to run that program if in fact Parliament had turned it down?

Mr. David Bickerton: I heard two questions. One talked about overall government spending. The other was on the Department of Justice specifically.

The Minister of Finance sends out the total spending in his budget, and the Treasury Board Secretariat is responsible for managing program approvals and departmental spending against that. If you look at the main estimates that were tabled in Parliament on February 26, I think there is a note that says the total spending is about $170 billion.

Probably two-thirds of that relates to statutory programs where the money has already been authorized by Parliament, so a supply bill will be introduced to receive the balance of the funding. There is a difference between the total planned spending and the main estimates, and this is money held in reserve by both the Treasury Board and the Department of Finance pending Treasury Board submissions from departments. Once those are approved, if there is funding associated with them we put moneys in the supplementary estimates to seek the necessary approval from Parliament.

So it is a very controlled process. All of the submissions for program funding are approved by the Treasury Board on their way to Parliament for approval through the supplementary estimates process.

Á (1130)

Mr. Ken Epp: So do you ever decline anyone?

Mr. David Bickerton: There are submissions that may not get put forward. There are submissions that go back for further clarification. Only when the Treasury Board ministers are satisfied that the necessary controls and financial frameworks are there do the moneys actually get authorized for inclusion in either the main or supplementary estimates.

Mr. Ken Epp: Then I have a question with respect to this $72 million. It was turned down by Parliament. How did it ever get past Treasury Board? In your report here, in your slides, and in your words you say these people have to provide justification. One of the reasons for the supplementary (B), the vote 5 stuff, is that there hasn't been sufficient work done in planning or in justification of it.

Again, the work on the gun registry isn't finished yet. We have asked over and over in the House for the minister to say how much it will cost to finish the current set-up, and how much--

Ms. Judy Sgro (York West, Lib.): Point of order, Mr. Chairman.

I'm just trying to understand the process. Just so I know how wide the parameters are here, I thought we were to do the overview of what the departments were doing and how they achieved what Mr. Epp is looking for, but not specific to one particular issue.

Mr. Tony Valeri: In this particular instance the witnesses are providing us with an overview of how the supplementary estimates work.

Mr. Ken Epp: And I'm using an example.

Mr. Tony Valeri: Yes, but I would caution you not to expect Mr. Bickerton to give you a specific response to your question, since he's not equipped to deal specifically with the Justice issue. He could respond from the standpoint of how the estimates process works and how the supplementary estimates work and give you that kind of technical answer. But if you're looking for a response from Mr. Bickerton as to why the minister has done or not done the following, you're not going to get that from him.

Mr. Ken Epp: Thank you, Mr. Chairman, but I'm looking at exactly that principle. We have been asking in the House--I'll just restate this because it's very germane here--how much it will cost to finish this program, and after that how much it will cost per year. Those are the answers that have not been forthcoming.

I'm assuming that if the minister doesn't know the answers then Treasury Board probably doesn't know the answers. So how did it ever get passed if you have this process? This is an example of something that seems to have passed right through your office to Parliament, without anybody really knowing what the cost will be. The study hasn't been finished, yet it has been approved.

Mr. Tony Valeri: I don't think Mr. Bickerton could give you a response on the numbers, but I think he could respond by explaining how that process might work.

[Translation]

Mr. Robert Lanctôt (Châteauguay, BQ): You work in the Comptrollership Branch. If you're not able to answer that question, I have to wonder what we're doing here.

[English]

Mr. Ken Epp: Let him answer, Mr. Chairman.

[Translation]

Mr. Robert Lanctôt: The question is very specific. It is directed to the person in charge of the Branch. I'm sorry, Mr. Epp. A question has been asked. If the Directors cannot answer a question like this, I have to wonder what kind of questions we'll be able to put.

[English]

Mr. Tony Valeri: I suggested that he respond on the process.

[Translation]

Mr. Robert Lanctôt: It's a specific question, but what kind of general questions can we ask if we can't get an answer to this one?

[English]

Mr. Tony Valeri: Mr. Lanctôt, maybe you're missing my point. I suggested that he could respond, so if you could allow the witness to respond we might get the answer.

Mr. David Bickerton: The Minister of Justice has appeared before the public accounts committee to respond to questions related to the costs, but I'm really not in a position to answer on that. I would like to try to give you some explanation of the processes involved.

The Minister of Justice has committed to provide additional information on the cost of the firearms program in the upcoming report on plans and priorities and the departmental performance report. This plans and priorities document will be tabled in Parliament next week, I believe, and additional information should be provided there.

On the supplementary estimates (A) and the withdrawal of the moneys, the moneys were approved by the Treasury Board and were requested in the supplementary estimates. When the decision was taken to remove that money from the supply bill, the Minister of Justice committed to minimizing the program costs until he had an opportunity to make an additional report. My understanding is that his response in the public accounts committee indicated he has taken steps to minimize the costs, reduce discretionary costs, and reduce payments to certain partners until the next supplementary estimates are considered by the House next week.

He has authority under his general operating vote to spend those moneys on the costs of the programs that are within his mandate, and that is what he's doing. He will be using the additional approval in the supplementary estimates (B) to pay the bills to the end of the year.

Á (1135)

Mr. Tony Valeri: Mr. Lanctôt.

Mr. Ken Epp: My time is up already. I was just getting started.

[Translation]

Mr. Robert Lanctôt: Thank you, Mr. Chairman.

Over the past five years, the sums provided for in the Main Estimates have clearly increased. Can the same be said of supplementary estimates? Are supplementary estimates used to underestimate surpluses and are votes used to quietly spend surplus amounts that have existed for years? How have supplementary estimates been used over the past five years compared to the Main Estimates?

[English]

Mr. David Bickerton: As I mentioned in my opening remarks, it is a normal part of the supply process that the government, in part I of the estimates, indicates that for any items that either don't have the necessary approvals or require further development approval by Treasury Board are not put in the main estimates. This is a normal part of the supply process. It really hasn't changed in many years.

On whether the government uses the supplementary estimates to adjust some of its cashflows, that does occur in the form of adjustments to the statutory programs. The Minister of Finance uses the main estimates to include the best forecasts of the statutory programs that he is able to do at that time.

There have been adjustments in both supplementary estimates (A) and supplementary estimates (B) as the numbers have become more refined. In fact, in supplementary estimates (B) there's a net decrease of about $500 million in the statutory payments, based on the latest forecast. This is all done within the total planned spending set out by the Minister of Finance.

[Translation]

Mr. Robert Lanctôt: I understand, but over the past five years, has recourse to supplementary estimates increased? In other words, does it happen more frequently that departments do not give specific numbers and use supplementary estimates to pay for initiatives? How has the process evolved over the last five years? Are departments increasingly turning to supplementary estimates?

Á (1140)

[English]

Mr. David Bickerton: I'd say it hasn't changed over the last five years, Mr. Chairman. We have been holding in about 5%, which is passed through supplementary estimates each year.

The numbers may vary from one year to the other, but I would say that on average the main estimates include about 95% of total government spending, and the supplementary estimates fill in the remaining 5% approximately, with all the pluses and minuses.

[Translation]

Mr. Robert Lanctôt: Thank you for that answer.

I'd like to broach a subject of particular interest to me as well, namely firearms. When we talk about supplementary estimates, we note that authorization was given only for general spending. While we did not conduct any investigations as such, we did go through the Blue Book to identify exactly where the funds were being spent, and we noted that virtually all Justice Department expenditures included in the supplementary estimates targeted firearms. Why then not show clearly that the money was going to this particular program? As MPs, we would have had a clear picture of where the money was going, instead of having to conduct investigations. The public would have been informed much faster.

I have a second question for you. Since you knew the funds had been earmarked for a particular program, how is it that the situation was allowed to drag on without the alarm being sounded to warn you that something wasn't quite right? What happened? I understand that the department can earmark the funds for whatever purpose it wishes, but as comptroller, why did you not hear any warning bells sound and why did you not ask yourself some questions? Why did you wait until the AG, the media and the opposition uncovered a problem of this magnitude when the process had gone through the Justice Department and through the Comptrollership Branch? How did all of this come about?

[English]

Mr. David Bickerton: In the research we've done right from the outset of the new program, where items have been included in the supplementary estimates they have always been identified as a separate line item within the supplementary estimates. This practice goes back to about 1995-96. So the information was clear.

We are looking at ways of trying to improve the information to Parliament. Indeed, if you actually look at the plans and priorities document tabled by the President of the Treasury Board last year on behalf of the Minister of Justice, firearms were identified for the first time as a separate program. I think this is an attempt to try to improve the clarity and visibility of the major components of their operation. It is being run within one of the business lines of the Department of Justice, but I think they're looking to and are committed to trying to improve the information presented to Parliament.

Turning to the second part of the question on how we know where the money is going and how it's being spent, the information is approved by Parliament through either the main or supplementary estimates. It's included in the plans and priorities document tabled in Parliament. Each year as part of the public accounts, firearms have been identified as a separate line.

There are accounting requirements the Department of Justice is required to follow, which they've done. Where they were required to make separate reporting for the firearms program, they have done so. We'll be looking to see what other information we may be able to present in upcoming documents, either in terms of projected costs or a wrap-up of historical costs. In fact, in his appearance before the public accounts committee, the Minister of Justice has committed to doing this, and we at the Treasury Board Secretariat are working with him.

Mr. Tony Valeri: Okay. We'll come back to you in the second round.

Madame Sgro.

Ms. Judy Sgro: Thank you.

Good morning.

In running through the process, if we use HRDC as an example, the department takes those estimates to the committee and reviews them with it.... I just want to make sure I understand the full process here. Once the department has put their budget together and their estimates, the process is that they go before the HRDC committee.

Mr. Robert Mellon: If the HRDC committee so wishes.

Á (1145)

Ms. Judy Sgro: So it's not necessarily a given, just if it's requested by the committee and the chairman.

Mr. David Bickerton: Part of the material that is used by the President of the Treasury Board in tabling these documents is a list of votes and the committees to which they're referred. That's done each and every time information is tabled in Parliament. Whether the committees, such as this one, choose to call witnesses is entirely up to them, but in wrapping up the process, the committees are deemed to have reported back within three days of the last supply day.

Ms. Judy Sgro: So an ideal process would be that all committees would review those budgets.

Mr. David Bickerton: Yes, I think that's correct.

Ms. Judy Sgro: And at that point, would it go back to Treasury Board?

Mr. David Bickerton: Once the committees have reported back...it would be reported back to the House, and then when the appropriation bill is tabled in the House, the votes would take place.

Ms. Judy Sgro: So once the department has their budget prepared, they go before Treasury Board. How much time is spent on a budget like HRDC's or that of some of our big departments through the Treasury Board? How much time do you spend reviewing the budget with the department?

Mr. David Bickerton: I don't think I have a precise answer that I can give. There are a number of analysts working within the program sectors of the Treasury Board. In some cases, in smaller organizations, they may have one or two. In organizations such as HRDC, there may be a large number of analysts dealing with submissions and with requests coming in from departments.

The recommendations in the form of a Treasury Board submission are made by the secretariat to the Treasury Board, and Treasury Board makes the decision as to whether they approve the program or program modifications.

Ms. Judy Sgro: So throughout that whole process there's a lot of work that goes on between the departments and Treasury Board.

Mr. David Bickerton: Yes, that's a fair statement.

Mr. Robert Mellon: I think it's an important point to know that any item that appears in the supplementary estimates specifically must have prior approval from Treasury Board ministers, and that prior approval is based on a Treasury Board submission that the department prepares, Treasury Board Secretariat reviews, and then recommends to ministers.

Ms. Judy Sgro: So it's a fairly thorough process. So I assume when Treasury Board has approved this, that means a thorough examination was done of the reason for the request of the funding, a program evaluation per se.

Mr. David Bickerton: That's a fair statement. Program evaluations are a component that are used both by the departments and the Treasury Board Secretariat to assess the efficiency and effectiveness of a program. We're using them in formulating recommendations for either renewal, changes, or wind-up of programs.

Ms. Judy Sgro: Once the budget is approved, do you do any other monitoring? For example, if we had a recession and all of a sudden a lot of people were claiming EI and there was going to be a budget impact halfway through this process, would anybody flag it? Would the department come to you and say, we're going to be in trouble further on because we're having a big draw here on a particular part of our budget that we weren't able to foresee, or would you just wait until you get to supplementary estimates and receive a huge request from a department?

Mr. David Bickerton: I think the monitoring of major programs like that is done really from three perspectives. One is the department itself, the other is the Department of Finance, and the Treasury Board Secretariat is monitoring it as well.

So it isn't only when the supplementary estimates are presented that we find out where the departments are in terms of the major spending programs.

Ms. Judy Sgro: Right, because you would see that on a monthly basis anyway.

Mr. David Bickerton: I don't know that I could commit to a monthly basis, but it would certainly be regular reporting or follow-up with departments. Many of the program analysts have daily and weekly contacts with the departments for whatever components of the programs they're responsible for.

Ms. Judy Sgro: I have one further question.

Again, I don't know if this is Treasury Board's role or not, but regarding year-end spending, when we're reaching within a four-month forecast of the year end, are there any brakes put on to what looks like extra funding that we can hold on to at the end of that year, so we don't end up...? What usually ends up happening in most places is they spend it on a variety of things, even if it's a third-level requirement, just because they have the money in the budget. Is it Treasury Board's role to do that, or is it up to individual departments to handle?

Á (1150)

Mr. David Bickerton: It is one of the responsibilities of the Treasury Board to set the accounting policies for the government. There are a number of policies in place to monitor expenditures to the end of the year. Indeed, there are some accounting policies to allow departments to record expenditures in the old year after the end of the year. That's part of the normal accounting process. We do some analysis in terms of the spending patterns, but it's quite normal that if you look at monthly expenditures, there will be a higher proportionate cost toward the end of the year, as they are looking to wrap up all of their accounts and have them properly reflected in the year concerned.

Ms. Judy Sgro: Has there been any thought, though, of attempting to put a freeze toward that period of time? We all know how it works in the department, and it's not necessarily a great thing to be doing. Would it not be helpful to look at that last quarter and say that no extra spending will be going on in the last three months that isn't approved on an individual basis?

Mr. David Bickerton: I think that is the case now, Mr. Chairman. There are accounting rules to require that in order to be charged to a particular year the good or service has to be rendered before March 31. Departments have the authority and the appropriation from Parliament to spend money for program purposes irrespective of when they occur during the course of the year. They are required to put whatever controls are in place in order to not overspend their appropriations. The controls are there to ensure that. It may look like some additional spending toward the year. It is still for program-related purposes and within departmental approvals.

Mr. Tony Valeri: Thanks, Judy.

If you look at your agendas, we were scheduled to go from 11 o'clock to 11:45 with Mr. Mellon and Mr. Bickerton, essentially to provide us with an overview of the supplementary estimates, and we are now scheduled to hear from the Treasury Board Secretariat, along with the Department of Public Works and Government Services. Can we move to the actual reviewing of specific estimates now, which would keep us on time with respect to our agenda? The only answers we would be getting from both Mr. Bickerton and Mr. Mellon would be process answers. If you want to go into the second part of our agenda today to look specifically at supplementary estimates for departments and programs that are responsible to report to the committee....

Monsieur Lanctôt.

[Translation]

Mr. Robert Lanctôt: I have one last general question, Mr. Chairman.

[English]

Mr. Tony Valeri: Then we'll go to a second round here. That will put us a little behind--three minutes. Can we keep our second round questions very tight?

Mr. Forseth and Mr. Lanctôt.

The Vice-Chair (Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance)): Thank you.

On page 10 of your slides, you say supplementary estimates (A) are normally considered in the supply period ending December 10, and supplementary estimates (B) in the supply period ending March 26. The way those are printed up, do supplementary estimates (B) include for information supplementary estimates (A), so that it's a wrap-up, or are they two stand-alone printed supplementary estimates?

Mr. David Bickerton: Mr. Chairman, they are indeed two separate documents. The appropriation bill that supports the supplementary estimates (A) was passed in December. In the pages of the supplementary estimates (B) we do identify items that have been voted through previous estimates. The opening balance would be the main estimates plus the supplementary estimates (A), and then there would be an explanation of the additional requirements or adjustments to spending for supplementary estimates (B).

Mr. Paul Forseth: What is the document then that finally wraps up the main estimates and all the supplements, so we have the total picture for the year at the end? What documents is it that puts it all together?

Á (1155)

Mr. David Bickerton: In terms of accounting, it's the public accounts, which are tabled in the House of Commons in October.

Mr. Paul Forseth: Okay.

On page 17 you say that the current vote 5 limit is $750 million. Is that limit for the full budget cycle per annual cycle, or what is the authority limit? Can repeated requests come for $750 million. What are the brackets around that?

Mr. David Bickerton: Mr. Chairman, I believe the answer is that it is somewhat of a revolving authority. Amounts are approved by Parliament at the beginning of the year at $750 million. Where we make allocations of a temporary nature pending supplementary estimates, that draws this money down. Once the supplementary estimates are passed and the items for which we've given temporary finances receive their own funding, that money reverts to vote 5.

Being a very simplistic person...that would top the account back up to the $750 million for dealing with additional requests from December through March.

Mr. Paul Forseth: All right. What you're really saying is there is no such thing as a $750 million limit. It's only for accounting purposes, for where you started subtracting the numbers.

Mr. David Bickerton: At any one point in time, we cannot authorize an amount greater than $750 million.

Mr. Paul Forseth: Okay.

Mr. David Bickerton: And the bulk of that money normally lapses at the end of the year, because the only things we leave charged against that are pay list shortfalls, as I mentioned during the presentation.

Mr. Paul Forseth: One last question. Is there any rule that you know of about issuing press releases concerning actual specific planned spending numbers before they're actually tabled in the House?

Mr. David Bickerton: Mr. Chairman, I don't know of any rules. I believe this may be addressed later today.

Mr. Tony Valeri: Okay.

Mr. Lanctôt.

[Translation]

Mr. Robert Lanctôt: The Main Estimates list a department's expenditures, for example, an expenditure for purchasing a number of buildings. Since a department does not purchase a building in the space of just a few months and since decisions are made in advance, why not provide a general indication in the Main Estimates that there will likely be additional expenditures and that relevant information will be provided in the supplementary estimates? What worries us, and likely many Canadians as well, is the fact that increasingly, supplementary estimates are used to spread surplus funds around. Putting it another way, our initial vision...

We were talking about the third quarter. Ms. Sgro was wondering why there was no cut-off point and why departments weren't simply made to wait for the next Main Estimates? If the point is to list spending requirements, why wait for the supplementary estimates when these could be included in the Main Estimates?

[English]

Mr. David Bickerton: Mr. Chairman, if I could start with the presentation material in the main estimates, I think if you look at the main estimates document, the thick blue book, you will find for departments such as Public Works and Government Services Canada a listing of some of their major capital projects where they do try to identify projects they're undertaking, be it acquisition of buildings or fit-up of buildings, that involve major sums of money. And they report on an annual basis the money spent to date, what's coming up in the main estimate cycle, and future years. I think other departments do the same thing.

We do also ask them in the plans and priorities document that is going to be tabled in the House shortly to provide further explanation as to what the additional capital projects are and a more fulsome explanation of their capital projects that are going to be undertaken by the department.

Supplementary estimates are used on occasion to provide additional funding within the government's overall planned spending for a number of items, including things such as acquisition of buildings. I believe you'll actually find that Public Works and Government Services Canada sups (B) does include an item for the acquisition of a number of buildings in Ottawa.

I tend to agree with the member that these are not things done on the spur of the moment, that there was significant planning underway, but I wouldn't be in a position to respond to that.

Â (1200)

Mr. Tony Valeri: Madame Sgro.

Ms. Judy Sgro: I'm just following up on the role of Treasury Board in getting a full understanding of what we need. I don't want to have expectations of you that are not valid.

In my mind, the Treasury Board was the ultimate.... Once you approved it, I would always feel confident that you had done the full analysis, and so on, of the department's request. Yet the Auditor General seemed to have some issues about whether or not Treasury Board was really analyzing in enough depth some of the requests of the various departments.

Are you taking any steps to try to improve the analysis that is ongoing, given the Auditor General's comments?

Mr. David Bickerton: Mr. Chairman, I'm not sure I would be in a position to respond to this.

Certainly, the observations of the Auditor General are taken very seriously. We're working to see how we can improve both the work we do and the information reported to Parliament, so that you, as the decision-making body, have the information you need to approve program spending through the estimates process.

Ms. Judy Sgro: Can I continue on the assumption that when Treasury Board authorizes the estimates you are confident that everything will follow the way you have given approvals?

Mr. David Bickerton: Mr. Chairman, the Treasury Board takes its recommendations from the Treasury Board Secretariat and approves programs. If it is not satisfied, then the submissions would not be approved.

To better serve Parliament, we are looking to see how we can improve the quality of the analysis we undertake.

Ms. Judy Sgro: Thank you very much.

Mr. Tony Valeri: I'd like to thank our witnesses for providing us the overview this morning.

I will suspend for one minute while Mr. Kam from the Treasury Board of Canada Secretariat comes to the table.

Mr. Tony Valeri: Resuming our session, pursuant to Standing Order 81(5), the study of supplementary estimates (B) for the fiscal year ending March 31, 2003, I'd like to welcome Mr. Dennis Kam, Executive Director, Finance and Administration, for the Corporate Services Branch, Treasury Board of Canada Secretariat.

Welcome, Mr. Kam. Do you have an opening statement or something to offer the committee before we ask questions?

Mr. Dennis Kam (Executive Director, Finance and Administration, Corporate Services Branch, Treasury Board of Canada Secretariat): I do not have a formal presentation per se, but I have just a point to make.

The two items in the supplementary estimates of the Treasury Board Secretariat are typical cases, which relate to Mr. Bickerton's presentation. There is a simple grant authority with no additional funding, and then a type of collective vote is used to deal with non-discretionary spending to distribute the spending from this vote to all departments, based on the estimates' requirements per collective agreements. So there are two straightforward items, which probably illustrate the versatility supplementary estimates present to the government in terms of seeking authorities from Parliament.

Â (1205)

Mr. Tony Valeri: Okay.

Mr. Forseth.

Mr. Paul Forseth: Relating to the request for salaries, benefits, and whatever, can you describe the timeline of when the agreement was concluded and why it has to come up in the sups rather than in the main estimates. Certainly we have a pretty good idea of what salaries and benefits are going to be for the next year, especially when positions are controlled by full-time equivalents or FTEs. So maybe you can give me some timeline on why this had to come on the sups side.

Mr. Dennis Kam: Sure.

First of all, it should be pointed out that the main estimates include provision for salaries and wages pursuant to approved collective agreements, but they do not include a forecast. So all that is put into the main estimates is the authorities or requirements pursuant to approved agreements. Agreements are being negotiated all the time. The agreements we're dealing with here have been negotiated, and some of them go back retroactively to 2000-01 and 2001-02, but they've only been concluded subsequent to the finalization of the main estimates for the current year. The government's planning cycle is ongoing, but only approved items are built into the estimates.

In this case, we have several agreements that were concluded after the main estimates were finalized. I have a list of these agreements: the financial administration group; the foreign services group; the executive group; the law group; and Health Canada biologists; and the Canada Customs and Revenue Agency.

Mr. Paul Forseth: Okay, what are the specifics of, or what is the increase of, the foreign group?

Mr. Dennis Kam: I don't have that, but I can provide it to the committee in detail later on.

The total amount allocated is $12.4 million. Part of that is retroactive and part of it will be an annual ongoing adjustment to the budget of Foreign Affairs.

Mr. Paul Forseth: Right, because that particular item was of great consternation to several committees in considering the whole operations of government and how our foreign people were really out of sync. It has been an ongoing issue.

Does this satisfy that ongoing problem, as far as you know?

Mr. Dennis Kam: I'm not in a position to say, as I'm in finance and administration. I can ask for that information.

Mr. Paul Forseth: Okay, thank you.

Mr. Tony Valeri: Monsieur Lanctôt.

[Translation]

Mr. Robert Lanctôt: I don't know if the question is too specific, but on page 58, under the heading of Foreign Affairs, we note a grant of $30 million for the Centre for International Governance Innovation. No additional information is provided. What explanation is there for this grant request?

As was the case with foundations, millions of dollars are allocated and no controls whatsoever are in place. This is another case of a grant being awarded. A substantial sum of money is involved, namely $30 million, and no details are provided. Is it possible to extract information from supplementary estimates? The sum of $30 million is nothing to sneeze at. What kind of checks do you do before approving a grant of this magnitude?

[English]

Mr. Dennis Kam: I'm not in a position to answer that. I'm here to speak to the supplementary estimates of the Treasury Board Secretariat. You would have to ask officials of the foreign affairs department.

Mr. Tony Valeri: I think the point that Mr. Lanctôt makes is an ongoing issue for committee members. While financial information is provided, we often lack information helping members to understand what it really means. Providing additional information would enhance the scrutiny of the supplementary estimates. Part of the mandate of the committee is also to look at the process, so while you may not be able to answer the question, I think the point Mr. Lanctôt is making is that additional information is required in these documents for us to be able to do our job better.

Mr. Dennis Kam: This can be directed to Mr. Bickerton. The Treasury Board Secretariat is responsible for the form and content of the estimates and spells out the template. I'm aware that for many years the secretariat sought feedback from parliamentarians on what information they wanted in these documents. I'm sure they would welcome that sort of feedback.

Â (1210)

[Translation]

Mr. Robert Lanctôt: Continuing in a similar vein, I think the Government Operations and Estimates Committee was created precisely to...I do not attend meetings of the Subcommittee on the Estimates Process, but I'm surprised nonetheless. Each time I do come here -- and I was at the last meeting -- information always seems to be in short supply. This committee was struck. I have questions and I want answers. I'll do my homework today and read the Blue Book, but what about getting the information I need to do my job as an MP? I've asked you a question, and you've responded that my question is too vague, that you're not here for that reason and that the question would be better put to Foreign Affairs. Yet, this committee was specifically created to address this problem. It's not possible for each department or each committee to do an in-depth study of the budget. That's why the Committee on Government Operations and Estimates was created, along with the Subcommittee on the Estimates Process. I believe we need to have the information in order to do our jobs properly. We bring to light irregularities.

A $30 million grant to the Centre for International Governance Innovation is a considerable sum of money. You're a manager and you're telling me that I should direct my question to Foreign Affairs. Yet, you approved this grant. That means you must have reviewed the application. How extensive a review is done before grant funds are approved? Or do you merely rubber stamp grant applications? We have surpluses and funding is approved through supplementary estimates. That's what I was talking about earlier.

Do you understand what I'm saying? We want to do our job. What's up with all of this? I trust that the Treasury Board Secretariat reviews applications before giving its approval. Is that in fact the case? Yes, or no?

[English]

Mr. Dennis Kam: The secretariat does analyze these requests, but again, I'm not in a position to answer the question.

I'm in corporate services branch. That is my situation. I provide financial services to both the Department of Finance and the Treasury Board Secretariat. I'm not involved in analyzing the budget proposals or the Treasury Board submissions coming in from departments. I produce Treasury Board submissions myself to submit to Treasury Board dealing with the secretariat's requirements and Finance requirements. So I'm on a different side of the table, in that respect.

It is fair to ask those questions, and officials from departments and from Treasury Board Secretariat should be in a position to respond to you if you identify the appropriate officials. Mr. Bickerton is probably better placed, but still not the best placed, to answer that question.

Mr. Tony Valeri: Mr. Szabo.

Mr. Paul Szabo: I have just a couple of questions.

On the discussion about the adjustments for contract settlements, I assume a good chunk of those would be retroactive settlements.

Mr. Dennis Kam: Yes, $18 million was retroactive.

Mr. Paul Szabo: What would be the general split of the retroactivity as opposed to the prospective amount?

Mr. Dennis Kam: In terms of the net requirement of $93 million--that's actually $93 million gross--$18 million was retroactive and $75.5 million was an annual requirement that tops up the salary budget for this year, and as we go into each subsequent year there will be an adjustment. There has been an adjustment made in each subsequent year in the budgets of the various departments that are implicated here.

Mr. Paul Szabo: With the government moving to accrual accounting, is there anything here we should be aware of in terms of trying to assess performance based on a comparison of the numbers accounted for on an accrual basis as opposed to the estimates? How do we put our minds around that?

Â (1215)

Mr. Dennis Kam: At this point the estimates are prepared on a cash basis, not an accrual basis. Accrual accounting has affected the reporting. Public accounts were presented on an accrual basis and the Department of Finance now prepares the annual budget--for this first time this year--on an accrual basis. But the public accounts will report against appropriations on a cash basis and do a reconciliation to the budget and to the overall financial statements, which are prepared on an accrual basis.

So at this point, appropriations are not affected by accrual accounting.

Mr. Paul Szabo: Would it be fair to assume that it would probably be not a good thing to accrue or make a provision for prospective contract settlements?

Mr. Dennis Kam: No, certainly not in the Treasury Board, not in the estimates material. Certainly, in preparing the budget the Department of Finance will set up a contingency provision for expected collective agreements. It has to. In putting together an overall fiscal plan, one has to make provision for those sorts of costs, and the Department of Finance has very elaborate forecasting models and consults extensively with private sector forecasting firms to get an idea of how much to set aside.

There is a reserve that's established in the fiscal plan of the Government of Canada. When these collective agreements are settled and provisions are made in the estimates, they are sourced from that reserve that's set aside in the fiscal plan by the department.

Mr. Paul Forseth: Are they published?

Mr. Dennis Kam: No.

Mr. Paul Szabo: Finally, I have a due diligence question. Are you aware of anything of an unusual nature in the supplements that we should be concerned about?

Mr. Dennis Kam: No, there's nothing unusual. As I said, there are two classic examples here. The first item is simply a $1 vote since funds are being reallocated within the contribution vote to fund a small grant, a $20,000 grant to the OECD. That's a more effective way to get an international study done, one that will involve 10 countries looking at methodologies or approaches for reallocation pursued by various national governments.

The other case, as I said, is just a collective vote that's used to simplify the process. It's all related to collective bargaining. We could have distributed that across all departments and agencies, but then we would have about eighty or ninety separate supplementary estimate items in this book all doing the same thing, all asking for funding for collective agreements.

Mr. Tony Valeri: We're on to the second round. Mr. Epp, you have three minutes.

Mr. Ken Epp: Thank you.

I was going to ask about that $1. Why have $1 in here to hide something that is way bigger than that? Why not just put the big thing in? You're taking $20 million from one fund and giving it to another, and it doesn't say that. All it says is, we're going to put $1 more into this fund.

Mr. Dennis Kam: It's actually $20,000, and the explanation is given below.

The reason it's $1 is because we're not asking for any additional appropriated funds to carry out this authority. We're simply seeking authority to make a grant under the royal prerogative. There's a convention in the estimates that all grant items are considered to be legislative in nature and have to be listed in the estimates even if we don't need the money. In this case the department does not need the money but needs the authority from Parliament to make this payment, so that's why it's $1.

Mr. Ken Epp: Do you have the authority without this? I should probably ask that in the negative. Don't you have the authority without this to transfer certain funds between allocations that were previously anticipated? If you have a surplus in one area and you're short in another, surely you don't have to come back to Parliament for every transfer like that.

Mr. Dennis Kam: Any transfer between votes requires parliamentary approval, yes. There can be reallocations within a vote, but transfers between votes require parliamentary approval. As I said, the listing of a grant requires parliamentary approval. Even though we have funds available in our contribution vote, vote 2, we cannot pay a grant without parliamentary authority.

Mr. Ken Epp: So when we vote on 2b, we're really giving you parliamentary approval for this transfer?

Mr. Dennis Kam: To make that grant, yes.

Mr. Ken Epp: Even though it says, here's the $1 you want, it's really approval for something else. It's convoluted, but I guess that's the way Parliament and the Canadian government work.

The next question I have is, what is the relationship between your group and the finance department? I understand the finance department has economists, they're projecting government revenue, they come up with this glorious thing called the budget, and it's a big red-rose-in-the-lapel, new-shoes thing. But obviously, the nitty-gritty of the government operations comes out of Treasury Board. How do you relate those?

I'm curious, for example, about the relative number of staff you have. They have all these expensive economists over there who couldn't keep us from going almost $600 billion into debt. You probably don't have that kind of facility; you're more a bookkeeping part. Do you actually make submissions to finance for inclusion in the budget? How does that work?

Â (1220)

Mr. Dennis Kam: You're getting into a very complicated question, Mr. Chairman, but I can tackle this a bit.

Really what you need is a briefing, and you probably should ask for a briefing on how the government's expenditure management process works. Then you'll get the involvement of Privy Council Office, Department of Finance, and Treasury Board Secretariat; the three combined are considered the budget office for the Government of Canada.

Other governments, such as Australia and the U.K., have a budget office, which is in one organization. In our model, the Westminster model, we have three different key stakeholders or players in the budget office: PCO, which supports the cabinet decision-making process; the Department of Finance, which prepares the fiscal plan and provides the macroeconomic management advice; and then Treasury Board Secretariat, which is concerned not only with resource allocation but with general management policies.

You have to remember that in Treasury Board, in addition to the resource allocation sector, there is also a large branch, in fact our largest branch, which is Human Resources Management, the official employer. There's a staff relations dimension of human resources, and there is the Official Languages Branch as well. There's also the Comptrollership Branch, which does financial administrative policies, and we have other corporate branches. The secretariat is in fact somewhat larger than the Department of Finance because of those diverse roles.

At the same time, there's one Corporate Services Branch, as I said earlier, that supports both departments. At one point back in the 1960s Treasury Board Secretariat was a branch of the Department of Finance. As a result of the Glassco report it was recommended that Treasury Board Secretariat be created as a separate agency, but because administration was supporting the Department of Finance, it was decided to maintain a shared administration for the new Treasury Board Secretariat and the old Department of Finance.

Mr. Ken Epp: Have you given any thought at all to consolidating this and making it more efficient?

Mr. Dennis Kam: Well, it's set out in the Financial Administration Act.

Mr. Ken Epp: But you could make a recommendation, and legislation can be changed.

Mr. Dennis Kam: That is true, but there was a recommendation by a royal commission to create a separate agency to bring another perspective, a central agency perspective, to the management of government and also to give more emphasis to management practices within the government.

The Department of Finance, as I said, is focused on fiscal monetary policy management of the overall expenditure plan. Treasury Board Secretariat is more largely focused on good management practices throughout government. I think the feeling in Glassco was that the concern with management was swamped by the other concerns in the Department of Finance, with fiscal management. The view was at that point--

Mr. Ken Epp: I have just a closing comment, Mr. Chair, if I may.

I think your management of government departmental expenditures has been lacking, at least in the 10 years I've been close to it here as a member of Parliament. I think you haven't done a good job, and I also think you should give some serious thought to managing the Treasury Board itself.

The fact that boondoggle after boondoggle has occurred actually lands in your office as a responsibility. So you need to beef it up, that's all I'm saying. Beef it up.

Mr. Tony Valeri: Thanks, Mr. Epp.

I'm sure you'd have some difference of opinion here around the table with respect to the management, but nonetheless you are entitled to your opinion.

Monsieur Lanctôt, if you have a supplementary, go ahead.

[Translation]

Mr. Robert Lanctôt: I have a brief question. Consider this example. The Canadian Intergovernmental Conference Secretariat is asking for several million dollars through supplementary estimates, and yet, in the Main Estimates, the indication is that funding levels remain stable. Considering that an additional $1 million plus has been requested for this year, why continue to provide for the same amount in the Main Estimates? We know that additional funding is being sought for this year. Why continue with projections that are below what has already been requested for this year? The figures are already off base.

Â (1225)

[English]

Mr. Dennis Kam: We can take note of the question, but I'm not here to speak to the Privy Council Office's estimates. That question and some of the other questions could be answered by the Treasury Board Secretariat or by departments through a written response, or you could have the witnesses come to your meeting.

Mr. Tony Valeri: Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

Thank you, Mr. Kam.

I just have a brief question. You're the financial manager for the Treasury Board Secretariat. To what level are the expenditures controlled? I see in the book here there are objects of expenditure and sort of broad categories of personnel, information, and professional services.

The department sets up the budget at the beginning of the year. Toward the end of the year are you allowed to move money around within the different groupings of expenditures? Is it managed to a lower level or a higher level? How is that done?

Mr. Dennis Kam: Since 1994-95, when the government introduced operating budgets, there has been a hierarchy of budget allocations. First of all, the total estimates are allocated to the department and minister. The minister delegates authority down to the deputy, and the deputy delegates to branch heads and funding centre managers within that. So there's a hierarchy of budget.

At any level in the hierarchy managers are free to reallocate amongst the various objects of expenditure. Obviously they have to make provision for non-discretionary requirements. If you have people on the payroll you have to provide for that, unless you have a plan to adjust up or down the level of FTEs you're planning to employ.

But there is freedom, as long as you live within your overall budget limit. That's the discipline. You're free to choose the instruments you wish to use to deliver the results you promised or have committed to. At some point that may involve using contractors as opposed to regular employees, if you're dealing with something that's very specialized and short term. If you want to hire people, you use goods and services money; or you use some surplus salary money, convert that into goods and services money, and hire a contractor.

Mr. Roy Cullen: That seems to make sense. So that can be dealt with internally in the department. There's a hierarchy of sign-offs but it doesn't have to go to Treasury Board. Is it reported finally to Treasury Board?

Mr. Dennis Kam: The final results are reported in the public accounts.

Mr. Roy Cullen: But that's it.

Mr. Dennis Kam: Yes. No further authority is required from Treasury Board unless one wishes to move money between votes, for example, if there were excess funds in the capital vote and one wanted to.... Mr. Bickerton identified that Defence was transferring some surplus capital money into the operating vote. That would require a Treasury Board submission and estimates.

If a department wished to make major allocations between programs that had been explicitly approved by Treasury Board and that had policy implications, there'd be a need for the department to go back. But if a department respects the cabinet-approved policies, and reallocations are made at the margin and don't compromise the approved set of policies, it is free to reallocate and make adjustments.

Mr. Roy Cullen: Thank you.

Mr. Tony Valeri: Thank you.

Before suspending again to bring forward our next witnesses, I would just like to remind members that we will later today be considering votes 2b and 15b.

Thank you very much, Mr. Kam, for coming before us. As you've seen from the questions asked, members have a level of expectation that more information is required to do this job properly. As we proceed through the day and do our work as a committee, we hope to put forward some of those recommendations to the proper people, who might enhance to process for members generally. So thank you very much.

I will suspend for a few minutes.

Â (1230)

Mr. Tony Valeri: We're resuming our hearings this morning pursuant to Standing Order 81(5), the study of supplementary estimates (B) for the fiscal year ending March 31, 2003, specifically considering votes 1b and 5b.

I'd like to welcome representatives from the Department of Public Works and Government Services, and also Communication Canada. Please introduce yourselves. I see a prepared statement, so perhaps we can go to that. Then members will have questions, I'm sure.

Mrs. Jane Billings (Assistant Deputy Minister, Corporate Policy and Infrastructure Branch, Department of Public Works and Government Services): Mr. Chair, members of the committee, good afternoon, bonjour.

I'm Jane Billings, the assistant deputy minister of corporate policy and infrastructure for Public Works and Government Services. I'm with Rod Monette, who is the assistant deputy minister of operations, and my colleagues, Liseanne Forand and Chantale Cousineau-Mahoney, from Communication Canada.

Both Liseanne and I have very brief introductory statements to start off the proceedings. Then we'll be very pleased to answer questions.

We're very pleased to be here today, on behalf of Public Works and Government Services Canada, as part of your review of the supplementary estimates (B) tabled in the House of Commons on February 26, 2003. This is the department's first appearance before this new committee since its creation last fall, and we look forward to a long and fruitful relationship with the committee.

I'd like to first explain the scope of our operations in this very large department. PWGSC provides common services to departments and agencies across the country. We accommodate more than 190,000 public servants and parliamentarians, and manage six million square metres of office space in some 2,500 locations.

We're Canada's largest purchasing agent. In 2001-02 we administered more than 60,000 contractual transactions worth more than $10.4 billion.

We maintain Canada's accounts and carry out the federal government's banking activities, which total $1.1 trillion each year. The department is a key agent in the delivery of the government's strategic information and technology infrastructure.

We provide management and audit consulting services, as well as translation and interpretation services.

As you can see, PWGSC works behind the scenes to ensure the Government of Canada meets its commitments to Canadians.

In the 2002 Speech from the Throne and the 2003 federal budget we saw laid out before us a new and ambitious agenda for the government, with a clear focus on climate change, health care, and building competitive cities and healthy communities. We play a key strategic role in the implementation of this national agenda in both the long term and the short term through our close work with some 100 departments and agencies.

Â (1235)

[Translation]

We will also continue to play a leadership role in electronic service delivery across the government in the context of the Government On-Line initiative. We will be at the leading edge of sustainable development by making our operations environmentally friendly. Through joint efforts with other government departments, we help preserve Canadian heritage buildings in communities across the country. We also work hard to highlight the presence of the federal government in these communities and concentrate our efforts on being a “good neighbour”. In each of these areas, Mr. Chairman, we strive to deliver value with the Canadian taxpayer's money in a transparent and accountable way, through modern management practices.

All this brings many challenges. One of the biggest challenges, though, is to meet the growing demand of client departments. As part of our efforts to meet this challenge, we undertook a reorganization of our operations in 2002. We feel that we are now in a better position to respond to the needs of other government departments at the best cost possible to taxpayers.

The main thrust of the reorganization was to create an Operations Branch, of which my colleague, Mr. Monette, is the ADM. Within the Branch are Client Service Teams. These teams each support a specific department. This new organization structure provides for cost-effective, one-stop shopping for clients to meet their accommodation, real property, procurement, telecommunications and informatics needs.

[English]

But with the expansion of client departments, their needs of accommodation and services are also growing. This brings me to focus on the topic of the day, the review of the supplementary estimates (B).

We welcome the fact that the committee is devoting time to the review of the supplementary estimates. For our department this involves a lot of money, $186.9 million. This amount has been approved by the Treasury Board and we're now seeking parliamentary approval.

There are three main causes driving the government's increasing requirement for office space in the national capital area. The inventory of our office space has aged and several buildings need major renovations. We need to replace leases that are expiring, and we need new office space to accommodate the evolving needs of the Government of Canada.

The largest item in our supplementary estimates is the proposed acquisition of the Skyline campus here in Ottawa's west end. Treasury Board has already approved $96 million for the purchase of the facility, and negotiations to purchase are ongoing.

Mr. Chair, that concludes my opening remarks. We'll be pleased to answer questions following the statement of my colleague.

Mr. Tony Valeri: Madame Forand.

Â (1240)

Ms. Liseanne Forand (Assistant Executive Director, Communications Programs and Services, Communication Canada): I have a few brief opening comments on behalf of Communication Canada. I'd like to mention just briefly what our mandate... [Technical difficulty--Editor] ...that are in our supplementary estimates.

Communication Canada was established in September 2001 through the merger of the former Canada Information Office and the Communications Coordination Services Branch at Public Works and Government Services Canada. The mandate of Communication Canada is to improve communications between the Government of Canada and Canadians. We seek to achieve that mandate through a variety of programs, services, and initiatives that together represent an integrated and comprehensive communications effort on behalf of the government as a whole, organized around the needs and interests of the public.

In particular, we provide information on programs and services offered by the Government of Canada directly to the public through the 1-800-O Canada call centre, the Canada site, attendance at fairs and exhibits, the new sponsorship program, and the citizen information initiative. We also offer services that make information from other departments and agencies available to the public, for example, through the Canada Gazette, Canadian government publishing, and the depository services program.

[Translation]

We provide support to departmental communications throughout government with services such as Publiservice, the Public Service Intranet site, administration of the electronic media monitoring licence and coordination of promotional and public opinion research activities.

[English]

Finally, in order to make our services and those of other departments as responsive as possible, we monitor public needs and interests through public opinion research, media monitoring, and analysis of the inquiries we receive at the call centre and the Canada site. These functions and others are set out in the Government of Canada communications policy that was issued by the Treasury Board on April 1, 2002.

For the current year, Communication Canada main estimates amount to approximately $125 million. After supplementary estimates (A), the budget increased to $133.1 million. In supplementary estimates (B), an additional $1 million is added, and an amount of $40,000 is transferred out, for a net increase of $960,000. The increase of $1 million is for funding directed to the Government of Canada publications online project, commonly known as the e-bookstore project, as part of the Government On-Line initiative led by Treasury Board.

The total value of the e-bookstore project is $10.3 million over four years, which includes $6 million from the Communication Canada A-base and $4.3 million in GOL funding. The purpose of the project is to provide Canadians with single-window access to Government of Canada publications. This is being done in response to a demonstrated public need for centralized government information, for improved access to that information, and for improved searching capacity. It also responds to an internal government need for streamlining operations and improving customer service.

Much has already been accomplished in the project, which was initiated in 2001. A new catalogue content management system enabled us to launch the new Government of Canada publications website in the summer of 2002, and that website provides access to over 100,000 free and priced publications and information on how to order them or consult them in the nearest library.

The funding allocated to the project this year and through 2005 will cover, among other things, the development, purchase, and implementation of a new inventory, order, and sales management system, including integrated and secure e-commerce capability. The project is being managed under the terms of an MOU and a project charter approved by Treasury Board Secretariat and in full cooperation with Treasury Board, Public Works, and other GOL partners.

I'd like to say just a few words about the second item included in supplementary estimates (B) for Communication Canada, which is a transfer of $40,000 to the Canadian Centre for Management Development as Communication Canada's contribution to the learning and innovation seed fund. The deputy minister's committee on learning and development endorsed the establishment of the seed fund and its administration by CCMD as a means to encourage innovation and experimentation in the area of learning to help ensure that employees in the public service have the skills and knowledge necessary to develop and implement policy, to respond to change, and to manage government programs and operations efficiently and effectively. Communication Canada's contribution to this initiative is tangible evidence of its support for continuous learning in the Public Service of Canada.

That concludes my remarks, Mr. Chairman. Thank you again for the opportunity to outline very briefly Communication Canada's mandate. I am also available, with my colleague Chantale Cousineau-Mahoney, who is the chief financial officer for Communication Canada, to answer any questions you might have.

Â (1245)

Mr. Tony Valeri: Thank you.

Mr. Forseth.

Mr. Paul Forseth: Concerning Public Works, I see in the first line $6 million is being transferred out. Where's it going?

Ms. Jane Billings: This item is a transfer related to the work being done at Argentia, and it's no longer required. It's part of the Argentia Management Authority funding. It doesn't need to be spent this year. It's being reduced and moved into next year.

Mr. Paul Forseth: Argentia, that being in Newfoundland?

Ms. Jane Billings: Yes.

Mr. Paul Forseth: There was a project there. Did that project wind down? Tell me what happened, why the planned funds are no longer needed there.

Mr. Rodney Monette (Assistant Deputy Minister, Operations Branch, Department of Public Works and Government Services): I have some of the details, Mr. Forseth. The Argentia project has been by and large completed, at least from our point of view, I believe. We have been in a process of talking with the community about handing over certain responsibilities to them. In terms of our budget requirements, we no longer have that same budgetary requirement.

I don't have the specific dates with respect to our handing over those responsibilities, but that's something I'd be pleased to provide to you or get for you.

Mr. Paul Forseth: It would be interesting to look at that project to see if the grand plans in the beginning were ever realized. It's interesting, I have been to that project and looked at that.

Tell us about Skyline. What is that all about?

Mr. Rodney Monette: Mr. Forseth, the Skyline project is a fairly significant acquisition. It's here in the national capital region. It's a fairly big campus. If you're familiar with the Ottawa area, it's located close to Merivale Road and Baseline, where they come together.

The prime tenant in there now is Nortel. Because of the change in the high tech sector in the national capital region, they no longer have this requirement. At this time, Nortel no longer needs that much space, and they're phasing out. We have requirements in the Ottawa area for more space. It represents a good investment right now for the Government of Canada.

Mr. Paul Forseth: Who's planned to go there?

Mr. Rodney Monette: We haven't actually purchased it and finalized it, but the plan is that Agriculture Canada will go there, along with the Canadian Food Inspection Agency. That's the overall plan. They're in buildings that are old.

Mr. Paul Forseth: We have Bill C-25 before us. Under that bill, it consolidates a whole set of training components. I understand there's a significant training component with Public Works that still remains in Public Works. It's not going to get consolidated as part of that plan. Can you tell me why that significant training component is not going to be consolidated with the rest?

Ms. Jane Billings: Each department is responsible for training its employees and has moneys in its budget that are established to in fact train employees as necessary. Where we actually purchase the training, whether it's going to be this consolidated centre for management training or whether it's other training that we need in some of the technical specialties we have, is really at the call of the individual managers. Throughout the years we go forward.

Mr. Paul Forseth: But I take it that for offering computer training government-wide, that's still going to stay within Public Works.

Ms. Jane Billings: At the moment the plan is for the institute to remain within Public Works.

You're referring to the institute that was established to provide technology training largely to public servants. It's a very major institution. It's in partnership now with Dalhousie in the Maritimes to offer masters' degrees in this particular area.

I understand there had been discussion of consolidating, but because the new centre under Bill C-25 is going to be largely on public administration and the Technology Institute is technology and government, there was agreement to keep it separate.

Mr. Paul Forseth: That's fine.

I have one last question related to the comment: “Through joint efforts with other government departments, we help preserve Canadian heritage buildings in communities across the country.”

The specific buildings I would ask about are armouries. In my city we have a wooden armoury, which is the oldest wooden armoury in the British Commonwealth. Yet most of these units are militia units. They're reserves. They are having a tremendous difficulty on an operational side because they're having to use their funds for bricks and mortar. These buildings are essentially telling the Canada story and are really highly regarded by the community, yet we have perhaps the threatened closure of these buildings, which the communities don't want.

The solution appears to be that heritage buildings, especially the maintenance of the buildings and the looking after them, could be transferred out of the military budget and looked after perhaps under your mandate.

Â (1250)

Mr. Rodney Monette: Thank you, Mr. Forseth.

I'm not familiar with that particular case, and I believe it is the case, as you've alluded to, that many of these buildings are now in the DND portfolio. Having said that, being responsible for public works for the Government of Canada, we do talk with departments about whether or not we should be transferring parts of their portfolio to ourselves. For example, with the RCMP, we've done that sort of thing so that we can look after their requirements.

I can't comment on that specific armoury, Mr. Forseth.

Mr. Paul Forseth: It's not just one armoury. The Western Command had a large public meeting in Vancouver. It was to do with the Beattie Street Armoury and a bunch of others. They are all heritage buildings and all these in the greater Vancouver area are militia units. It was a choice as to whether they were going to have soldiers or they were going to have buildings. That was a major recommendation coming out of that consultation process with the community. I was wondering if you had heard of that and what could be done in that regard.

Mr. Rodney Monette: I don't have any particular information on that. Again, I believe that those properties are administered by DND at this time, and we haven't had any specific discussions with them about that particular area at this time.

Mr. Paul Forseth: I hope it is done.

Mr. Tony Valeri: Mr. Lanctôt.

[Translation]

Mr. Robert Lanctôt: Thank you, Mr. Chairman.

My initial questions are directed to Public Works and Government Services representatives. Regarding the acquisition of the Skyline Campus, has this proposal been in the works for some time? When exactly was the decision made to negotiate the proposed acquisition of the campus? Was this a recent decision? Why is such a substantial sum of money involved? We're talking about $97 million out of a total of $186 million requested in supplementary estimates. That represents over half the total amount. Why is this item not included in the Main Estimates? Because the government is using surplus funds. What is it trying to hide? Why is approval being sought through supplementary estimates for such a substantial sum of money?

Mr. Rodney Monette: Thank you very much, Mr. Lanctôt. When we drew up our estimates for this year, we didn't have that information because we hadn't yet decided to acquire the Skyline Campus.

[English]

At the time of the main estimates, we hadn't decided to purchase this, so it was something we decided to look at through the course of the year. Our negotiations with them--in fact, we're still dealing with them on various elements of the purchase--is something that has happened through the year. When the main estimates were done, we hadn't yet decided to go ahead with this and we hadn't in fact done our negotiations with them at that time. We didn't know at that time we were going to do this.

[Translation]

Mr. Robert Lanctôt: You stated earlier that negotiations to purchase were ongoing. Why not wait until the next budget instead of seeking authorization through supplementary estimates? You say negotiations are ongoing. Projections put the cost of this acquisition at $176 million. Approval is being sought for $96 million. Why include this amount in supplementary estimates? Why not wait until the acquisition process is completed? Who knows, perhaps the negotiations will fall through.

[English]

Mr. Rodney Monette: Mr. Lanctôt, at any point in time, across the country, we look at a number of different investment opportunities, and as a big realtor what we try to do is to look at ones that have good potential, that are good buys for the Government of Canada. Of course, as regards Skyline, it wasn't really until we identified it as a possibility, and also I guess at the point where we had some discussions with Treasury Board that funding could be possible for this, that we really got serious about it.

What I'm saying is that at any point in time, we try to understand the environment, but it's not until we get a signal that funding could be available or there's a real potential to have this happen that we would put it in estimates. If we did put it in estimates, or if we did put all of those things in estimates, our estimates would be grossly over what we would actually be able to purchase.

Â (1255)

[Translation]

Mr. Robert Lanctôt: But that doesn't explain why it was included in supplementary estimates. Why not wait until the acquisition of the campus was a sure thing? As I see it, because there's a little extra in the kitty, the government is scouting about to see if it can pick up something interesting on the market. Was there a genuine need for such a facility? I'd like to know when you decided it was necessary to acquire the campus. I don't know how much office space there is, or how many buildings we're talking about. I really have no idea. When was the decision to acquire the campus made? What were the department's real needs? When did the negotiations start? You say that these are still ongoing. Is it simply a matter of finding some interesting way of spending the surplus for heritage reasons or, as you were saying earlier, for Canada? Is this expenditure really necessary, or could it have been avoided?

[English]

Mr. Rodney Monette: With respect to when the estimates for 2002-03 were prepared, we normally finalize our numbers in January, before the year starts. That means that for the numbers for this year's estimates we would have been finalizing them in December 2001 and January 2002. That's quite a long time ago.

That far back, we didn't know exactly what might come on the market, what might represent a good buy. As an example, we could be talking with somebody about a particular purchase, but if the price wasn't reasonable, we'd have discussions with them. As the year evolved, conditions in that market might change such that the prices came down and it might become a good purchase. At that time we would have further discussions with Treasury Board to say, gee, there's a good price here; it's a good buy and it's something we should consider doing. We'd have discussions with Treasury Board, but it's hard to do that in many cases before the year starts. Sometimes we can and sometimes we can't; it depends on the circumstances.

[Translation]

Mr. Robert Lanctôt: I like the first part of your answer. If you were already aware of this in 2001-02, why was this not listed as an expenditure item in the Main Estimates? You knew of the need at the time. It didn't hit you out of the blue. The decision was made in 2001-02 to take steps to acquire this campus. Why wasn't a note included in the Main Estimates explaining that additional expenditures were likely? The amount being sought represents half of the total for which the department is seeking approval. Based on what you're now telling me, this amount should have been included in the Main Estimates.

[English]

Mr. Rodney Monette: Well, it's a very good point, and perhaps what we need to be looking at is how we provide information around things that are being planned or under consideration. If we put it in the estimates, that means you would be voting on it as a parliamentarian. If we did that for all projects that were speculative or that we were just thinking about, you would be voting or we would be asking Parliament to vote on a great deal of money that in most cases probably wouldn't be spent. We'd have very high estimates, and it would in fact tie up taxpayers' money or the potential for taxpayers' money when for many of those things we wouldn't spend it.

Perhaps what we need to find is a way to give you a better sense of how we do our planning and things that are under consideration, of how that process works, maybe not for estimates but--

[Translation]

Mr. Robert Lanctôt: Here's what I'm getting at. This committee should be involved in the estimates process, as we have just been. I was trying to show you -- and I think all committee members now realize it -- that we are presented with a fait accompli. A total of $96 million in supplementary estimates is authorized for a facility without members having had any opportunity whatsoever to debate the matter. The recently created subcommittee should take advantage of information like this during the negotiation phase and argue that things need to change and that more funding should be allocated to health care, for instance, or to persons with disabilities, instead of the government spending money on a campus which, in my view, is not really needed. Do you understand what I'm saying?

That's the point I was trying to get across today and I hope that our reports will call for more information about funding requests that have yet to be approved, because we're discussing estimates. We should be able to report that it makes no sense to approve requests of this kind. That's what the subcommittee, or the standing committee, should really be doing.

Thank you very much for your answer.

· (1300)

[English]

Mr. Tony Valeri: I'm a bit puzzled. Maybe I missed it in the exchange, but I thought you would have responded by saying that this type of acquisition is something you would have outlined in your report on plans and priorities.

Mr. Rodney Monette: Mr. Chair, as you were having an exchange with Mr. Lanctôt, my colleague passed me a note and gave me the exact date. We started discussions on the Skyline campus in October 2002, so that was well after the report on plans and priorities and estimates came into being or was finalized. At the time the main estimates were prepared we didn't have that information, so it wouldn't have found its way into our report on plans and priorities. What we would have had in our plans and priorities were things we knew about at the time and also some information about how we do our planning and some of the general sorts of initiatives we want to undertake across the country.

Mr. Tony Valeri: Thank you.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman, and thank you to the witnesses.

This is just a quick follow-up on the Skyline. That is or will be a capital acquisition?

Mr. Rodney Monette: That's correct, Mr. Cullen.

Mr. Roy Cullen: Now, the DND is not rumoured to be going in there. There was a story recently talking about DND; that would be another location outside town if that moves forward, would it?

Mr. Rodney Monette: We haven't yet finalized Skyline, but we think that Agriculture Canada and the Canadian Food Inspection Agency would be a good fit if that were to be purchased, yes.

Mr. Roy Cullen: But for DND it's no; that would be a separate thing. It was just something I read in the paper. There may have been no substance to it.

Mr. Rodney Monette: With respect to that article in the paper, at this point in time we don't have any negotiations underway.

Mr. Roy Cullen: You mentioned in your presentation that the amount you're looking for, $187 million, is a lot of money, and I think we'd all agree with that. When we look at the additional accommodation of forty-odd million dollars, would those be amortized costs? Would those be additional rents or would there be some capital in there as well?

Mr. Rodney Monette: For the most part, Mr. Cullen, that additional $40 million you see is part vote 1 and part vote 5. If you look at your tables, you'll see there's about $31 million for vote 1. That $31 million is actual operating, and those things are leases and the cost increases.

Mr. Roy Cullen: And what is the $9.7 million?

Mr. Rodney Monette: That's actually capital. That's our vote 5 and those are our capital costs.

Mr. Roy Cullen: So the $31 million is for leases.

Mr. Rodney Monette: That's correct.

Mr. Roy Cullen: Now, how does that compare with the total amount you'd pay out in that particular year for leases?

Mr. Rodney Monette: In any given year we would spend about $800 million or so on--

Mr. Roy Cullen: What's that in terms of percentages? Do the math for me.

Mr. Rodney Monette: It's about 2.5%, something like that.

Mr. Roy Cullen: Now, would that be normal? Do you ever come under? Would 2.5% over the original estimate be the norm, or is this unusual, or what?

Mr. Rodney Monette: I believe you would see that figure varying from year to year, depending on the market conditions across the country, and sometimes it would be a little bit different. I don't know if it has actually come under; I'd have to ask my colleagues on that.

Mr. Roy Cullen: It probably hasn't, though, knowing how the world works.

You must have a process with all the departments where they give you their needs assessment and their property. It's not an exact science, clearly, but would these arise out of some unforeseen new programs? How do we even get to a position where we're out by 2.5%?

Mr. Rodney Monette: Basically, what we would try to do before the year starts is to put down our best estimate for what we think various lease increases would be. At various times in the year there might be things that happen where we perhaps don't get the rates we would expect. In some cases we just don't know until we've entered into a negotiation on certain leases through the year.

Mr. Roy Cullen: So this would be mostly a price-driven change, not a volume-driven change.

Mr. Rodney Monette: It's primarily price. There's a little bit of volume in there but it's mainly price.

Mr. Roy Cullen: Are some departments better than others in terms of predicting their requirements? I'm not asking you to rat on them.

Mr. Rodney Monette: I would say that some are better than others.

Mr. Roy Cullen: Some are better than others. Okay, maybe over coffee one day we'll find out who.

I have a couple of questions left, and if it's not fair to ask you, then let me know.

When your previous minister, Mr. Goodale, was in the House defending his estimates and I was sitting behind him, I put a couple of questions to him. I thought it was a great format. In fact, if there were more House time, we should do all the estimates like that--though maybe not for the officials; for them it wasn't such a great deal.

Two things bug me. One was the question of looking at capital costs and public accommodation from the point of view of life cycle. For example, we go out for bids on a building, let's say, or develop a proposal or whatever to meet a certain department's needs. I have a couple of companies in my riding, companies that make modular flooring, but because they have to bid on capital costs, their bid is usually higher. They tell me that because their costs up front are higher and no one seems to be looking at it on a life cycle basis, even though they have lower operating costs....

If you have to change the accommodation, it's modular, right? You can put in more wires...I don't know exactly how it works. Is it totally based on capital costs or is it project cost driven? Is there some weighting given to ongoing operating costs? The ongoing operating costs are picked up by the departments, right? It doesn't really affect the Department of Public Works so much; the department has to pick that up. Is anyone looking at that?

· (1305)

Mr. Rodney Monette: Mr. Cullen, we normally would try to look at all the costs associated with a project, whether they be capital or operating, and also over a period of years. We would assess them on a present-value basis. That would allow us to determine whether or not a capital project would be better than leasing or a lease to purchase. So we bring them back to current dollars and try to compare them.

Mr. Roy Cullen: But is any weight given to that in the formal process?

Mr. Rodney Monette: I'd have to ask--

Mr. Roy Cullen: If you're just bidding on the capital costs, I'm not sure there is. I'd like to know if there is. That would be the way to do it, to present-value everything back to day one. If the formal process is to look at the bids just in terms of the capital costs, there might not be an accommodation for that. If there's a way to respond to the committee, I'd really appreciate an answer on that, because it's something I've been working on for awhile.

The other thing is the MERX. I raised it with the minister. In fact, I have a private member's bill that deals with user fees. Would you call the MERX a user fee?

Ms. Jane Billings: The current fees on MERX are definitely user fees.That service is totally paid for by potential suppliers and others who want to access the information on what the government wishes to buy and what RFPs are available.

Mr. Roy Cullen: So it's a proprietary service. The users pay. The fee just went up to $30 or so a month. What I was complaining about was that there didn't seem to be a very thorough public consultation process, and I don't know if an impact analysis was done. The minister, who had just arrived in that portfolio, undertook to follow up, but I'm not sure what happened to that.

My private member's bill says that if you're going to bring in a user fee or an increase, there's a fairly rigorous process in terms of performance standards, demonstrating cost pressures, benchmarking against other jurisdictions, etc.

Are you familiar with the MERX fee and how it's derived? Do you know if there was a lot of consultation?

Ms. Jane Billings: The situation with MERX was something of an anomaly, Mr. Cullen. We were in contract with the providers of MERX, and the contract was coming to an end last spring. At that time we were also working on the e-procurement system. Of course, the electronic bidding system, which is what MERX provides, is an integral part of the overall electronic procurement. We were doing the analysis on how to make this into one package, and we would eventually go out and look for suppliers who would provide it to us in an integrated fashion.

Also, the accessibility of the service, given that it was a user fee service, was a big issue. We did have quite a lot of consultation with business on the type of model that was preferable for this type of electronic bidding service for access to government opportunities. The provinces use the system as well.

Fundamentally, we ran out of time on the MERX contract before we were ready to go forward with the overall electronic supply chain. So we extended with the Bank of Montreal at that point. The system has been sold since then. As part of the extension, the prices went up quite dramatically. A lot of cost analysts went over the books. The cost increases were justified based on the costs that were being incurred by the organization. But we recognize that they were relatively dramatic in terms of percentage.

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Mr. Roy Cullen: Did you look at--

Mr. Tony Valeri: Actually, your time is up, Roy.

Mr. Epp, second round, three minutes.

Mr. Ken Epp: Thank you.

My questions are for Communication Canada. I felt sorry you were being ignored.

A voice: They don't mind.

Voices: Oh, oh!

Mr. Ken Epp: This is almost $1 million for a computer system. How sure are you that it's not going to grow beyond this? We have some recent examples of computer systems that have just gone amok.

An hon. member: They were putting them out the door before they used them.

Ms. Liseanne Forand: Thank you for the question.

The amount that is included in this year's supplementary estimates is $4 million; that's for this year's additional funding from the Treasury Board for this project. The whole project is estimated to cost some $10 million over four years, and that has been accounted for and planned for since 2001. The project was approved actually in 2001 as part of the original Government On-Line series of projects. We have a good handle on the costs that are involved.

This is a computer system; it is an electronic system. What it's intended to do is bring all of the government's publication holdings.... We have about 125,000 publications in our catalogue right now, many of them no longer in print, many of them still in print. We get some 86,000 orders a year. Before what people had to do is call individual departments to find what individual departments had.

What we've done is consolidated the whole Government of Canada catalogue into one place, and we've made it available online so that people can go to the Canada site, or through whatever means they want, and find Publications Canada, and then they'll be able to search by subject mattter, by title, by author, department, and any other information they have. Already this year we've had over 250,000 visits to the site. At this point people can fill out an order form online, but then they have to fax it or call in to actually make the payment, and they have to send the payment in separately because we don't have the e-commerce capacity.

Essentially what we ultimately hope to have is something like Chapters Online or Amazon.com, where anybody can go and find any publications they want from any department of the Government of Canada. That's really what Government On-Line is trying to do. They're trying to make it easier for Canadians to access programs and services in one location rather than having to go to a variety of departments.

Mr. Ken Epp: Would it be possible to have some of the shorter publications available in PDFs so you can just print them?

Ms. Liseanne Forand: Yes, absolutely, that's available now. If you want to go visit the site, you'll see that electronic documents are available. The other thing is it will tell you--with your postal code--what library closest to where you're located has the document on hand so you don't necessarily have to buy it, or order it, or even download it.

Mr. Ken Epp: You have had some bad publicity due to having thrown away a bunch of computers that were never taken out of the boxes; the servers were obsolete before you finally got to install them. I think that was your department. Was it? Who was that? It was in the papers....

Ms. Liseanne Forand: No.

Mr. Tony Valeri: This has been denied by Communication Canada, I might add.

Ms. Liseanne Forand: Communication Canada has only been in place since September 2001.

Mr. Ken Epp: But this only happened last year. There was a large order of computer servers and they were rendered obsolete before they were used, so they threw them out or put them up for surplus. That wasn't you, then.

Ms. Liseanne Forand: Not us.

Mr. Ken Epp: It's Public Works, though. It's definitely Public Works.

I have one last question.

Mr. Tony Valeri: Is it a quick one, Mr. Epp?

Mr. Ken Epp: It is very quick.

I asked a question regarding advertising at sports events in Canada in the House. Actually, it was Mr. Szabo who spoke on behalf of the government and, in that instance, announced that the government would no longer be advertising at the Grey Cup and at the National Hockey League, and so on. So how come we don't have in your estimates a big surplus that you're turning back to the government? Because that's an expenditure you planned on doing--

A voice: $40 million.

Mr. Ken Epp: --and now it's cancelled.

Ms. Liseanne Forand: The announcement that was made on December 17, 2002, was that the government would no longer using the new sponsorship program to do sponsorships at professional sports venues. In the past--and that includes this year, 2002-03--there were amounts from the sponsorship program used to sponsor the Grey Cup, some NHL teams, the Grand Prix in Montreal, the Grand Prix in Three Rivers. And it was announced that as part of the new measures in place with the new sponsorship program, which is strictly for not-for-profit organizations, professional sports venues would no longer be entitled to receive sponsorship funding within that program.

· (1315)

Mr. Ken Epp: We're running out of time here, but I want to press you on this. I had some complaints from constituents at the Grey Cup that these little silly balloons you blow up that say, “Yay, yay, I'm Canadian” are just a total waste of money, and some of my constituents were very upset that the government was spending money on that. Have you done any...?

There is one thing called communicating with Canadians on government programs, how to access things, that type of thing. But that type of stuff, why do you do it? Have you ever done a study on what benefit accrues to Canada and Canadians, and government and taxpayers, because you do that? What would happen if you didn't? Nothing. Why do you do it?

Mr. Tony Valeri: I don't think Madame Forand is in a position to answer that particular question.

Mr. Ken Epp: Let her. I want to see what she'd say.

Ms. Liseanne Forand: We have done quite a bit of research on the kind of information that people want from the Government of Canada. And you're absolutely right, that they want information on programs and services offered by the Government of Canada.

What we try to do, for the most part, in our advertising and our marketing programs is to give them either information on programs and services, like programs and services for seniors, or for children, or the general guide that is sent to every household, or we provide information on access channels on the 1-800-O Canada, or Canada.gc.ca, to say to people, if you want information, if you need it, this is where you can go to find it.

So in terms of both the new sponsorship program as it has been newly designed and will become effective April 1, and for all of the advertising we do, that's really what we're trying to do. I think you'll see in the future that regarding any sponsorship materials you see, if there is an event in your province that receives some sponsorship funding from the Government of Canada, what we will likely be doing there is giving out information on our programs and services and maybe having a little booth with a guide for children and families, or seniors, or some information on the Canada site or the 1-800 number.

So that's really the way we're orienting our communications, because, as you say, Canadians have been telling us that what they want from the government is information about programs and services.

Mr. Ken Epp: So no more made-in-China blow-up balloons.

Mr. Tony Valeri: Mr. Lanctôt, and then last question to Madame Sgro.

[Translation]

Mr. Robert Lanctôt: Thank you, Mr. Chairman.

I find it rather amusing to hear talk of this new program. Mr. Epp, non-profit organizations cannot use the Sponsorship Program which represents $40 million. However, as you surely know, at least $400 million is available through the advertising program. I wouldn't worry if I were you. Surely they will look to other programs to take advantage of the CFL or the Formula One in Montreal and we hope they do. However, it's regrettable that only the Sponsorship Program has severed all direct ties with these companies. The same cannot be said for the advertising program.

Why does the change only apply to the Sponsorship Program and not to the advertising program, under which $400 million is available, not just $40 million?

Ms. Liseanne Forand: Sponsorship and advertising are two different things. In 2001-2002, the last full year for which we have data, the Government of Canada spent approximately $212 million on advertising under the program.

Mr. Robert Lanctôt: A total of $212 million.

Ms. Liseanne Forand: And that included $126 million solely for media positioning. The money goes to buy air time and to place ads in the print media, which leaves slightly under $100 million for advertising, that is creative activities or television or radio productions.

Mr. Robert Lanctôt: I'm trying to understand. What exactly do you mean by media positioning?

Ms. Liseanne Forand: It accounts for $126 million.

Mr. Robert Lanctôt: Does it means advertising fishing trips to Trois-Rivières in fishing season or a hunting trip courtesy of the Government of Canada?

Ms. Liseanne Forand: No, the $126 million spent on media positioning represents all of the money spent to purchase air time, either on television or radio, or to buy advertising space in the print media, whether daily or weekly newspapers, regional or ethnic publications.

· (1320)

Mr. Robert Lanctôt: Yes, but advertising involves selling things, like a one-week hunting trip...

Ms. Liseanne Forand: Media positioning largely involves the Government of Canada's major advertising campaigns, for example, its anti-smoking campaign, DND's recruitment campaign, advertisements about Canada.gc.ca. and about ways of accessing the Government of Canada. A variety of campaigns were developed over the course of the year.

Mr. Robert Lanctôt: We now know that $996,000 was earmarked for IT. That's not an enormous sum of money, but it is close to $1 million. Why did you not try to recover some of the controversial sums of money allocated under the Sponsorship Program? Among other things, a hunting and fishing show slated for Quebec City was never held. No one mentions it any more. There's a considerable amount of money that could be recovered. What steps are you taking in this regard?

Ms. Liseanne Forand: To begin with, the sums included in the supplementary estimates were for the on-line library proposals. These amounts were initially approved on a preliminary basis in 2001.

Regarding any outstanding amounts for sponsorships awarded last year or in previous years, a process is under way to recover this money. I don't have all of the details and I probably couldn't share them with you even if I knew more. I don't quite know the status of these files, but some are still pending. Some funds have been withheld.

Mr. Robert Lanctôt: Exactly how much money are we talking about here?

Ms. Liseanne Forand: I couldn't say.

Mr. Robert Lanctôt: Could you possibly get that information and pass it on to the committee?

Ms. Liseanne Forand: I'll make some inquiries. We'll find you whatever information we can get our hands on.

[English]

Mr. Tony Valeri: If you could send that to the clerk, I would appreciate it.

Thank you, Monsieur Lanctôt.

Madame Sgro.

Ms. Judy Sgro: Given the comment that you made earlier about how you had to submit by December 2001, both from a planning and priority perspective, your budget for the following year, which would have come out now.... Again, our budgets aren't always coming out on the same day anymore, so when you submitted that by December 2001, it was for the year 2003?

Mr. Rodney Monette: Yes, 2002-03.

Ms. Judy Sgro: So when you're doing that, that is pretty far to be able to look into this thing . But given the fact that everything we do has such humongous dollars and there's so much pressure on us--there's no crystal ball--how do you do the planning and the growth, knowing that things will change, different areas will come up? How do you do that planning fairly far in advance to be able to give yourself some sort of horizon so that you don't get the kinds of comments about one thing and another? I don't know how you avoid doing that in the kind of department that you would have.

Mr. Rodney Monette: Thank you, Ms. Sgro.

In the planning we do, we do the best we can to look at changes in things such as population shifts and population growth. We look at things such as how the economy is doing. For example, in the national capital area, where the high-tech sector has had a bit of a shift, we would take that into consideration and try to anticipate opportunities that might arise there. So I think there are some longer term trends that you can look at that are helpful in terms of predicting, but as you point out, you can never know exactly what might happen.

A perfect example would be the impact, for example, the events of September 11 had on the world and on many of us, which obviously couldn't be predicted. What's important in our process is that when we do have to make adjustments through the course of the year, we can explain them, and people understand them, and they make good sense.

I take it the committee has questions and concerns around that. It's our responsibility to make sure that if we do adjust from the plan or the budget, we can explain this and ensure that they have the same level of understanding and transparency.

Ms. Judy Sgro: On the issue of sustainability, and given the fact that we as a government are looking at trying to use sustainable development as a way of maintaining our buildings, and so on, that's going to have an impact. How are you responding to the whole issue of our direction on sustainability, given that Public Works is such a big landowner in Canada?

Ms. Jane Billings: Thank you for the question.

We feel that our department has a major contribution to make in the field of greening government. Through the Federal House in Order, the federal government as a whole has committed that by 2010 it will reduce its greenhouse gas emissions by 31% compared to 1990 levels. So far, we've achieved a very large proportion of that, about 50% of it. The balance will come down by way of 50% from federal buildings and fleets and another 50% from renewable energy. Since we manage the federal buildings, and we make available the choice of vehicles for federal purchase of vehicles, and as well we purchase energy and are working very hard to identify renewable energy sources, we feel that we can make major strides in there in terms of how we're buying.

Our emphasis is on energy conservation in our real property inventory; greenhouse gas emission reductions; water conservation; office waste reduction; construction and demolition waste reduction, where we've avoided putting major amounts into garbage sites because we've been able to recycle some of the materials, in fact most of the materials; and as well, environmentally responsible land use management. So we have initiatives along a number of these areas, including what we do on green procurement, including the federal buildings initiative, and so on, across all of these fields.

· (1325)

Ms. Judy Sgro: The energy costs alone, I expect, would be enormous, given the changes that have already happened. Again, there's going to be an impact on our budget. Are you aggressively pursuing that now, given some of the ongoing pressures we're facing today?

Ms. Jane Billings: For example, in the federal buildings initiatives we have an innovative program whereby departments are encouraged to work with the private sector to identify opportunities for investments to be made in making buildings more environmentally friendly, with the savings from the energy reductions being guaranteed by the private sector to pay their contract, and work being shared with the actual department as well.

Since we started that program, we've generated over $6.5 million in annual energy savings just from that program alone, and we're continuing with other departments to explore having more initiatives underway under that rubric. We've had 29 so far, representing about $40 million in energy investment in total. We're continuing to work in that area. It's a major program and a major success as a program.

Mr. Tony Valeri: Thank you.

Mr. Forseth has one quick question he'd like to get in before we adjourn.

Mr. Paul Forseth: Concerning the new sponsorship program, do I take it there's $40 million in that basket? Considering the issue of regional fairness, do you have any system to divide up that $40 million in the next fiscal year—so much for Quebec, so much for Ontario, so much for British Columbia? With all these non-profit societies applying, how do you sort out all of these many applications coming into one basket? Do you have some quotas, so that in the end we don't have the same thing—a disproportionate amount of sponsorship money going to Quebec?

Ms. Liseanne Forand: Thank you, Mr. Chair.

Yes, indeed we do. We have a system put in place for the new sponsorship program that reviews each application for eligibility. As you know, you have to be not-for-profit; you have to be a certain kind to be eligible to start with. Then through use of a software program, point scores are assigned for a whole variety of qualities, attributes, and factors having to do with the clientele, the region. We also want a rural and urban balance, so it would seek to balance things off through all of those aspects. We're keeping very close track of all the applications we receive by region, by province, and by rural and urban delimitations.

Yes, it's the minister's intention, as he announced, to ensure that the program is regionally balanced. We are not setting up firm quotas from the beginning. We'll have notional allocations per region and per province, and then some amount that will be used for strategic investments, looking at particularly targeted audiences such as youth or seniors. But the overall objective will be to ensure that the distribution of the funds and the sponsorship, on a value basis, is regionally representative.

Mr. Paul Forseth: Does this word "notional" mean, somewhat, representation by population?

Ms. Liseanne Forand: No. It starts out that way, just because we don't know. Because it's a program based on applications, you can't be sure from the beginning what the full picture of your applications is going to be. You have to keep some in reserve to be able to respond. But the objective, ideally, would be to have a perfectly representative distribution of funds across the country.

· (1330)

Mr. Paul Forseth: So when I look at the boards of Maple Leaf Gardens or the Montreal Forum and see a big sign on the hockey boards that just says "Canada", I take it the purpose of that is for the NHL television rights, so that people across North America can see this "Canada". I know that to have "Canada" painted on that board costs an awful lot of money. Can sponsorship continue to buy those, or is some other fund buying them?

Ms. Liseanne Forand: The sponsorship program has paid for that up until now and will no longer, as of March 31, 2003. With the new program starting April 1, those boards or such ads will no longer be paid for from the sponsorship program. What the minister said when he announced the changes was that we would look at advertising opportunities should they arise in these areas, but they would be considered on the same basis as any other advertising: What's it worth on a BRP basis? How many eyes are going to look at it, and what kind of eyes? Is that an audience we're going for? What's the regional distribution? At this point, we have no arrangements in place with professional sports leagues for paid advertising.

Mr. Paul Forseth: So it's not going to be sponsorship, then. Will some other department look after just straight—

Ms. Liseanne Forand: At this point, there are no arrangements in place past March 31, 2003, or the seasons that were paid for under last year's sponsorship program.

Mr. Tony Valeri: Thank you.

Just before we break, I want to remind members that we will be in this room, 362 East Block, at 3:30. We will deal with each separate vote at that time.

I also want to thank the witnesses for their information. Thank you very much.

The meeting is adjourned.