I am pleased to be here this morning to provide you with information on the arts and culture grants and contributions process in the department. With me is my colleague, Pablo Sobrino.
[English]
Pablo is the assistant deputy minister of planning and corporate affairs, so he has a broader picture of all grants and contributions within the department.
For my part, I cover most of the arts and culture funding programs--not all of them, but most of them--in the department.
Between the two of us, we hope to be able to provide you with answers to most of your questions.
You have in front of you a nine-page deck. I know that time is at a premium. We will speak to the deck
[Translation]
in order to leave as much time for questions and to speed up the process, Mr. Chair, I will move to page 2.
Since you are all members of this committee, I presume that you already understand the importance of culture for Canada's social and economic development, as well as the various programs and tools in place. I will therefore immediately give the floor to Mr. Sobrino.
:
Thank you, Jean-Pierre.
First of all, I would like to say that our department is responsible for the grants and contributions. Canadian Heritage provides close to $1.1 billion a year in grants and contributions.
[English]
We have a total of 39 programs with 43 subcomponents to those programs to administer, programs that vary from the arts and culture programs to heritage to aboriginal youth through to sport. There were 7,800 grants and contributions that we approved in 2008-09, the last fiscal year, and over 4,000 of those were approved by either the minister or the minister of state responsible for the programs.
We also administer some programs, and one of them is the Celebrate Canada files. These are files that are less than $3,000. We processed 1,400. Those are for the Canada Day celebrations.
Then our director general of sport processes the athlete assistance program cheques, which are contributions to individual athletes, carded athletes, high-performance athletes. We processed about 2,300 of those.
Our approach to managing programs is to balance both delivering on program objectives of the government while ensuring proper accountability, due diligence, and managing our risk appropriately.
Turning to page 4, there's a very brief outline of the framework that we operate under. There are three elements to it. One is the legislative framework with a number of statutes for which we are responsible that dictate the accountability regime we've put in place.
There is a policy framework that is established by the Treasury Board Secretariat. The most important policy in this business is the Treasury Board policy on transfer payments. It dictates how we are to manage transfer payments for programs.
Finally, there is a risk management framework. This is how we organize ourselves to balance risks as we process individual applications.
Much of what we're changing in terms of grants and contributions follows from the recommendations of the blue ribbon panel on grant and contribution programs. This panel met in 2007 and delivered a report, which the government then implemented in 2008 in the form of an action plan. Canadian Heritage was one of six departments that were known as vanguard departments. The six departments were asked to lead in the development of action plans.
Fundamentally, the action plan—we have 21 initiatives that I could go through, if you wish—is about communicating better with our clients, managing the risk, and improving our processes in terms of moving files through the system.
In terms of communicating better, one of the issues on which a question has come up many times has to do with the service standards, the length of time it takes to put a file through the process from application to delivery of a first payment. On April 1, 2010, we expect to be posting on our website service standards for all our programs so that our performance can be measured against those standards.
I'm just going to turn to page 6 and go back to Jean-Pierre, who will speak to the arts and culture programming specifically.
:
As my colleague has indicated, we support a wide range of activities, programs, individuals and recipient associations throughout the department, in particular in the field of arts and culture.
[English]
This vast diversity of clients goes from very small not-for-profit art and heritage organizations to much larger for-profit businesses in the cultural industries, book publishers, periodical publishers, music. So our clientele is very vast and varied.
We also have a diversity of the types of clients. We have very small, less sophisticated organizations where you sometimes have one volunteer who is involved in dealing with things like applying for grants and contributions to very large corporations that have significant internal capacity.
Because of that broad diversity and taking into account the diversity of objectives that programs have, we have designed programs to meet, on the one hand, the service needs of our clients while maintaining the accountability or proper stewardship of the money.
[Translation]
I thought it would be useful to present you with two case studies to explain what it means in practical terms, on the ground, to create a structure for programs that have a number of objectives.
The first I will talk about is
[English]
The Canada Arts Presentation Fund was created in 2001 to give Canadians direct access to a wide variety of professional artistic experience in their communities. This fund provides financial assistance to not-for-profit organizations that professionally present arts festivals or performing arts series, as well as their support organizations. To support them, we have both grants and contributions.
I'll stop a moment here; perhaps not everyone understands the difference between contributions and grants.
From a paperwork perspective, the more heavy aspect is a contribution. It's actually a contract. It's a detailed contract that is signed, on the one hand, by the crown or the federal government, and by, on the other hand, whoever is getting the recipient money. It has detailed payment schedules. It has reporting, sometimes monthly, and accounting. Oftentimes we require audited financial statements. It's a very complex system.
That is appropriate in certain circumstances, but not in all circumstances. In other cases, we use grants. Grants basically take the form of much less paperwork. There is a letter granting the amount of money. A cheque is cut, usually one single payment rather than a whole series of payments over time in exchange for reports. In the end, there's a final report that is broad in scope.
Pablo mentioned earlier that we do a risk-based analysis. In certain cases, because of the history we've had with clients or because of the amount at play, we take a risk-based analysis and go towards a grant approach rather than a contribution approach. In other cases, because of the scope, complexity, nature of the program, or the track history, we go towards the higher contribution, which administratively takes the more complex process of a contribution agreement. They're both appropriate, but one has to have the right dose in each one of them.
From the client's perspective, it's a lot easier to be in a grants situation.
[Translation]
The grant mechanism is much simpler. The analysis process is similar, but ultimately, recipients receive their funding faster. Their reporting requirements are lighter.
The assistance provided through the Canada Arts Presentation Fund is distributed as follows: 46% to festivals, 38% to series presenters and 11% for a combination of festivals and presenters. The average level of support is about 12% of eligible expenses.
[English]
The average amount is about $49,000 per applicant, but the medium amount is about $25,000. You can see that it's a relatively small amount of money for most of them.
Of the approximately 550 folks we deal with, 60% are dealt with through a grants process, even though that only represents 20% of the overall budget. That's much easier for the clients to deal with because it's that lower amount. From our perspective, it's the appropriate risk balance.
On contributions, however, we do about 240 of those 549. About 40%, in terms of the volume, are contributions, but that represents about 80% of the money.
Year to year, we try to improve that mix of grants versus contributions. For instance, in 2006-07, the Canada Arts Presentation Fund did 40% grants. In 2008 that number was nearly 60%. Next year we expect that the number will grow. We're trying to adapt to the burden that contributions create for people.
By the same token, we've also adapted by having multi-year contracts. Even when we go to contributions, there's a way of doing it in a multi-year process, which means that the client deals with us one time. We analyze the application.
[Translation]
Thereafter, a multi-year contribution agreement is reached. That is also a way to reduce reporting requirements.
On page 8, you have the Canada Book Fund—formerly known as the Book Publishing Industry Development Program, PBIDP—with an annual budget of approximately $37 million.
[English]
More specifically, it's helped to foster a strong Canadian-owned industry that delivers world-class Canadian books to readers across the country and around the world.
Now, this program has three delivery mechanisms. About 66% of the amount of money associated with the program is delivered through a formula based on the sales of the previous years. An amount then is calculated to provide it. To do that calculation across the industry takes a certain amount of time, but once you have all the information, the calculation is actually quite easy to make. This works, because you have a homogeneous group of recipients and it rewards success, but it's also very predictable. The applicants have a sense of how they will come out in it.
There are other parts of the $37-million program that are project-funded. This is more of a selective process. Applicants will come in with a marketing project, for instance, or a professional development project, or a technological improvement project. In those cases, of course, the analysis has to be done to see how and if indeed--there's always a limited number of funds--we allot the money to the most meritorious cases.
The third example is third party delivery. We have in Canada the Association for the Export of Canadian Books, an expert group that for years has been involved in marketing books on the international stage. We use their facilities to deliver that program because they do it quite well, and it's highly specialized.
When we're balancing, as Pablo was mentioning earlier, the need for an efficient delivery, on the one hand, with proper stewardship, we try to tailor-make the various delivery mechanisms to deal with this. We're always trying to improve the service to clients.
[Translation]
I now give the floor to Mr. Sobrino.
Thank you for coming today. It was an excellent presentation. I'm certainly encouraged by hearing about moving towards multi-year funding, because the issue of certainty is fundamental for any arts presenter.
My concern, though, if we're looking at an action plan, is that we have to find out where the bottlenecks are, and I'm not sure if I had that identified. I've heard a number of times that you say there are applications that weren't complete, maybe 40% or 60% of them. I could see that in a few cases, but when I'm dealing with arts presenters, they're pretty professional and know what they're doing, so I would wonder if that would be the main cause of it.
I'm looking at your grants and contributions management framework, with the legislation, the Federal Accountability Act that has to be checked off, the Financial Administration Act, the Auditor General Act, the whole policy of Treasury Board, risk management. So clearly there are a number of steps.
I don't see the minister's desk. How many projects would the minister review personally? How many of them would be grants and contributions? Does he see every one before it goes out? Is it a percentage? How does that work?
:
Canadian Heritage was selected as one of the six vanguard departments, as they're called, because of the high volumes of grants and contributions and this diverse array of programs that we have.
As Jean-Pierre mentioned, from the small not-for-profit organizations to the large corporations in the cultural field, that diversity is one of the reasons they chose us. They also asked Indian Affairs, Transport Canada, Human Resources and Skills Development Canada, Agriculture and Agri-Food Canada, and I'm trying to remember the last one. Those six departments were chosen for that reason, and the reason they chose those departments was to look at the processes.
When the blue ribbon panel went across the country, they heard from many witnesses who had exactly the same issues that you've raised, which are the delays in processing grants and contributions, the difficulty that clients are experiencing in terms of reporting, the non-standard application process. So one organization may apply to three different kinds of programs with three completely different forms and totally different requirements.
The blue ribbon panel came out with a number of recommendations, and the recommendations were simply to communicate better, to get away from a risk-averse kind of culture in terms of the treatment of files, so that you are just managing the risks, and to simplify the processes.
It raised the issue about errors in applications, for instance. One of the projects we have under way right now is to be able to apply online for grants and contributions. I'll use an example. When you fill out your passport form now, the system checks to make sure your information is going in properly. Well, essentially, that same kind of service is what we want to provide our clients, so that when they input the information the first time, it's the right information. As well, for that client who has previously applied, we already have a lot of information, so it's to reuse that information and have it verified by the client in a future application.
So that's the front-end piece, which is to get all the information right. There's the service standard piece, which is to communicate to our client on how we're doing in terms of getting the process through. And in terms of risk management, it's asking the questions that you need to actually manage the risk, as opposed to just trying to go to a zero tolerance for the risk process.
That change in culture across all departments was really one of the things the blue ribbon panel was looking at.
:
We expect that things will accelerate because there will be less error if we can get the online applications. That will take more time to do than just 2010, but that's where we're going: to have that error-checking at the front end so the client sees it right away.
And the risk assessment tool is meant to accelerate the process of what the officer does, in terms of assessing risk, and automates it, to a certain extent. That will also accelerate the process. So we do expect to see improvement.
The move to multi-year agreements will be seen by individual clients as an improvement, and the use of grants, as well—which is what we're trying to increase—will decrease the reporting burden.
I can't give you an estimate of how many cases will be affected, but there are enough cases to make the following significant. If you haven't finished reporting what you've expended your resources on in the last year, we can't start giving you more money until you've reported on your results of the previous year. So that's a risk assessment piece.
Contribution agreements require a lot of reporting. Grant agreements do not require the reporting. So that's part of the move to lessen the burden. In fact, one of the biggest pieces of feedback to the blue ribbon panel—which, I just want to be clear, was government-wide and sponsored by the president of the Treasury Board—was the reporting burden that clients face, which slows everything down.
Thank you, gentlemen.
I had my own experience this past season. My hometown celebrated its hundred-year anniversary and they received money from Canadian Heritage as a result. Maybe it's beneficial to the committee or not, but what they did--which I would implore any group like that to do--is instead of just picking up the application to be filled out first, they actually visited the office of Canadian Heritage and they were walked through the process. And it was far and above a great exercise.
One of the issues, too, is that you're dealing with volunteer fatigue. That's why it's so important to have that application process so simplified. Now, I can't give you specific examples of how you're going to do that, because an application is an application. At some point it just has to be--for want of a better term--dumbed down. It's the only term I have, but I hate using it; it's not really an apt description, but you get the idea. It's plain-speak, and I think you touched on that a little while ago. You don't want to be in a position where you're doing a lot of that backfilling, we'll say, so I understand that.
Maybe you should have some kind of a committee to look at the application process, but in that committee have somebody from the volunteer sector to do that. It's very difficult.
You mentioned earlier about a pilot project. You have a couple of pilot projects that are ongoing or finished. At what stage are they? Can you give me an example?
:
Thank you very much, Mr. Chairman.
Let's look at the steps in processing funding requests for programs, from non- profit organizations organizing festivals, etc. After having filled out the application form, the organization sends it in. Then, the program officer receives it and forwards an acknowledgement of receipt.
However, time elapses between the acknowledgement of receipt and the final response, be it positive or negative. When it is positive, it usually doesn’t cause a problem. When it is negative, people often ask us why they did not make it through the process, because no one called them to tell them what part of their application was problematic.
When the officer receives the application, if he finds something wrong, does he automatically communicate with the organization? Or does he set the form aside to consider the other applications and perhaps decide to make phone calls after the fact? Or, does he call people further on in the process?
Let's assume that an officer denies an organization's request. The organization may only receive the denial a month before the event is to be held. While they are waiting for a response, heads of organizations wonder whether or not they will be receiving the funding. Why, if there is a refusal, would that information not be communicated more quickly? In that way, people could try to strike some kind of balance or plan their programming based on a knowledge that the funding had been denied.