Hon. Joseph A. Day:

Honourable senators, I think it would be helpful if we look at this particular report. It is a report of the Supplementary Estimates (C) for 2009-10. That is for the fiscal period ending next week, and this is the final supplementary estimate that we will see for this particular fiscal year.

You have just heard Senator Gerstein speak of the coming fiscal year and the interim funding that the government seeks to the end of June. Before the end of June, the rest of the Main Estimates for that particular year will happen, and for us the fiscal year starts April 1.

As Senator Gerstein has indicated, it might become necessary to adjust the Main Estimates to meet changing requirements, and one in particular is that the Main Estimates were prepared before the budget was forthcoming. Therefore, we should anticipate fairly quickly in the new fiscal year — I would anticipate in late April — Supplementary Estimates (A), which will be the primary document adjusting the government's fiscal plan for the year to take into account those items that appear in the budget that were not reflected in the Main Estimates.

What we are doing now is just finishing up last fiscal year, and this report provides a summary of what our committee has done over the past while since the Supplementary Estimates (C) were referred to us by this chamber. Honourable senators will know that Supplementary Estimates (C) is an extensive document. It reflects, I believe fairly nicely, a number of the requests that the National Finance Committee has made over time to try to make these particular estimates clearer to understand for someone who is not working in this particular area all the time, as the Treasury Board Secretariat personnel are. Treasury Board was responsive to our requests.

Senator Gerstein spoke about horizontal items. Basically, that means a reflection of the whole of government. All the various government departments that might be involved in a certain activity spend some money on that activity. We will see some of that later on in this report.

For example, planning for G8, G20 and the Olympics involved not just National Defence or the RCMP. There were many different departments involved. We had a horizontal view, across all the different departments, of how much each department spent on that subject matter all gathered together so we could understand what the total costs were. That was a request by the National Finance Committee to Treasury Board, to which they have responded quite nicely.

Honourable senators, the Treasury Board Secretariat personnel are always our first witnesses with respect to these particular matters. We would like to thank Messrs. Smith and Pagan for appearing before our committee and for being so forthright in answering honourable senators' questions.

At this stage, I would also like to thank all the members of the National Finance Committee, many of whom are new to this particular committee, as well as my deputy chair, Senator Gerstein, for their understanding. We received these documents very late this year because of prorogation. As a result, we had less time than normal to deal with these particular documents, since the new fiscal year comes irrespective of when we receive the documents. We have moved ahead very quickly, and it is a credit to the committee. We met during all our regularly scheduled times, plus on two other occasions, in order to move these matters forward.

I know that my deputy chair and all the members of the committee would like to join with me in thanking Lydia Scratch and Sylvain Fleury, the two analysts with the Library of Parliament, who have done a noble job in helping to draw all of our material together and put it into a form that we were able to accept in this report on Supplementary Estimates (C) and the other report that I filed earlier today on the Main Estimates for the coming fiscal year. Finally, I would like to thank to Adam Thompson, our clerk, who directed all of this. All of the staff are deserving of our thanks for helping us to look a lot better than we deserve.

Honourable senators, I will mention just a few of the items that we looked into on your behalf, some of which prompted interest by honourable senators and will result in further investigation.

One of the items we looked into was the government's response to the earthquake in Haiti. Another item was debt relief in Pakistan, which I will expand on further. We brought in witnesses from the Canadian International Development Agency, the Department of National Defence and the Department of Foreign Affairs. We also had a panel of witnesses from the RCMP, the Canadian Border Security Agency and CSIS, the Canadian Security Intelligence Agency. We also heard from Mr. Ward Alcock, who was for several years the head of CSIS but who is now in the Privy Council Office. He has been designated as a coordinator for the 2010 Olympics and for the G8 and G20, working out of the Privy Council Office.

These witnesses all appeared before us, in addition, honourable senators, to the Treasury Board Secretariat personnel. We obtained a good background on quite a number of items that will be of interest to honourable senators when you have a chance to review the report.

One of the points that must be clarified in looking at these documents is that they are divided into voted items and statutory items. With statutory items, we have previously given approval in this chamber and in the other place to spend money on certain initiatives. All the other items, the voted items, are the ones that honourable senators are being asked to approve right now.

In the voted appropriations, there is $1.8 billion. That is made up of budgetary and non-budgetary items. Honourable Senator Gerstein referred to those non-budgetary items and it is perhaps easier to think in terms of loans. That is the way, in my mind, that I can separate them. Budgetary items are the items that will be spent. For non-budgetary items, the money is actually going out, but it is intended that it will come back at some time in the future. That is important this time more than ever. If one thinks in terms of loans and operational and capital costs, the loans are intended to come back at some time.

We entered into an extensive debate — and maybe this is a good time for us to look at this — with respect to the issue of debt to Pakistan. We were told that there is a debt to Pakistan — all of the debts were brought in — of $450 million, in round figures. We were told that this was booked as a loan, but that we are now going to forgive it. I said that it is Parliament who votes for the expenditure of money. Forgiveness, or using the money for the development of schools or whatever, is a parliamentary privilege.

Honourable senators, we had an extensive debate on that issue because they said, "Oh, no. It has already been provisioned for. We did not think it was coming back anyway. Besides, it did not have to be paid for many years in the future, and we are just saying, 'Do not bother paying it back."'

Treasury Board listened to us. Treasury Board went to the Department of Justice and got a legal opinion and came back and said, "You, National Finance Committee in the Senate, are absolutely right. That money cannot be spent without Parliament voting approval."

Therefore, there was a quick change over in the House of Commons and they deemed certain activity to take place. In looking at the schedule to the supplementary estimates, honourable senators will see that the $450 million is no longer under non-budgetary, under a loan and that the $450 million has been moved in this bill, Bill C-6.

Honourable senators will recall that one of the things we always do is to compare the schedule in the estimates to the schedule in the bill.

I am giving honourable senators due notice that the schedules are not the same in that regard this time because of the due diligence that was done by our committee on National Finance.

It is not necessary for us to pass the same motion that was passed in the other place, deeming a change, because we do not adopt the Main Estimates. We do not pass a motion to adopt the budget. We do not have this dichotomy. All we have is that the schedules are different. As long as the record is clear on this matter, I can tell you that the bill has now been rectified.

Honourable senators will recall that our committee found an error in the numbers a few years ago as well. I think I am becoming an accountant because I am excited about finding things like this. It is not an apology, but an interesting change of events.

Honourable Senator Gerstein has mentioned the various major expenditures and features; I do not think it is necessary to go over those expenditures again. However, I want to mention one item to honourable senators, and that is with respect to infrastructure. We have heard a lot of discussion about infrastructure and whether the money has been spent. One must bear in mind that infrastructure programs were in place — and, they continue to be in place — before the stimulus package came along. If we look at the stimulus package only, roughly $5 billion for the last fiscal year and this fiscal year have been provided for in infrastructure. However, honourable senators, $1.4 billion of the stimulus package in infrastructure for last year was not used. We could say we will roll that money forward and spend it in this coming fiscal year. That amount would be $5 billion plus $1.4 billion. The total is $6.4 billion, when all we were able to spend last fiscal year was $3.6 billion, if I have my math correct. We should think about this situation, honourable senators. I do not want to take infrastructure money back from any community. However, if $3.6 billion was sufficient last year to help bring the economy around, and, since we already have all these other infrastructure programs in place that are not getting all the money out, if we said, Let us spend the same this fiscal year coming as we spent last fiscal year, that is $2.8 billion that we take right off our deficit right now. The question is, why not?

We hope to have the Minister of Finance appear before our committee to discuss that question and many other issues later on. That question is important, honourable senators. That $2.8 billion is a lot of money when we are running a deficit. The deficit anticipated for next fiscal year is not far off the $55 billion deficit that we experienced this year. If we can find places to save $3 billion from the deficit, and one of them is right there, honourable senators, I think that saving is worth talking about.

There was a reduction in the amount of money available for the Guaranteed Income Supplement. Some honourable senators asked questions about that decrease. It was suggested that, because the old age pension cheque is going up, maybe fewer people will need as much of the Guaranteed Income Supplement because people who receive the GIS are the lower income level people who need extra help. I think we will want to take a close look at that suggestion, honourable senators, because a decrease of $228 million in GIS to the most vulnerable in our society is something worth keeping a close watch on.

Honourable senators, there are several comments with respect to the work of Canada and Canadians in many different departments with respect to Canada's response to the earthquake in Haiti. On behalf of all honourable senators, we want to thank all those people from the many different departments who participated in that response for their tremendous work. Many were from the Canadian Forces, but certainly not exclusively from the Canadian Forces.

Honourable senators, a number of other items are worth looking at. Regarding the Olympics, there were some interesting charges. We looked at the costs of the Olympics on a horizon basis.

The Hon. the Speaker: The Honourable Senator Day's time is up.

Senator Day: Honourable senators, can I have a short while longer?

Hon. Gerald J. Comeau (Deputy Leader of the Government): My impression was that, given that this item was a bill and that Senator Day is the critic on the bill, he had 45 minutes.

Senator Day: I am speaking on the report and not on the bill.

Senator Comeau: A further five minutes, please.

Senator Day: Now that I have a further five minutes, honourable senators, I can talk on a number of different items. There are many items, as honourable senators may guess, in one of these documents. We are only touching the surface.

Many of the points are ongoing. We will continue on some of these points in the next fiscal year. We have the mandate to continue this study throughout the year and we will do so on behalf of honourable senators.

There were costs for border services at the Olympics. There were significant millions of dollars in costs for Canada Post at the Olympics. We asked questions in that regard. Canada Post had to hire equipment to test packages that were sent. There are things that we do not think about. The organizers did a wonderful job, and I think they deserve to be recognized by all honourable senators.

Senator Cordy: What about advertising?

Senator Day: Absolutely. The government set aside in its forecast an amount of $900 million for security for the Olympics — almost $1 billion. As of these supplementary estimates, namely, as of the end of March, $847 million has been requested and will be approved, assuming we accept this particular supply bill. The amount comes close to the amount anticipated in that regard.

I think honourable senators should keep one other point in mind. When we see these supply bills, we see a transfer from one place to another. We have seen transfers in the Department of National Defence, from operating to capital; and from the Canadian Broadcasting Corporation, from its operating budget to capital. CBC then had to take funds that normally would be used to pay employees to put up towers or to buy equipment because the corporation had a finite amount of money to spend to continue operating. CBC needed the equipment, so where did they get it from? Those transfers are hidden away in here and it is important for us to keep an eye on those transfers from "operating" to "capital" and from "capital" to "operating." When they start stealing from their infrastructure repairs and from their equipment to pay for their employees, it does not take long before the equipment costs much more to repair than it did in the past. We find those items tucked away in this bill, honourable senators. We will keep an eye on them on your behalf.

Honourable senators, this report is a summary of what appears in Supplementary Estimates (A). I believe the report fairly represents the major features of what appears in this bill. I commend honourable senators to read the report and, hopefully, to accept it in due course.

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