[English]
Good morning.
On behalf of my colleagues, I'd like to thank the committee for the invitation to appear today to discuss our department's supplementary estimates (C) for 2012-2013 and our main estimates for the fiscal year 2013-2014.
As you noted, Mr. Chairman, Minister Ashfield will join us in the proceedings shortly and will have opening remarks to make, so I intend to keep my comments very brief.
If I could, Mr. Chairman—and thank you for your kind words—I would like to begin by telling the committee how honoured I was to be appointed Deputy Minister of Fisheries and Oceans on January 14, 2013. As some of the members may know, I have had the pleasure of working in eight federal departments for almost 30 years. For over 15 of these years, I've served at the assistant deputy minister, associate deputy minister, and now the deputy minister level. I feel very fortunate in that regard.
Members may also know that over the last 20 years or so I've had the occasion to work in a few different positions in Fisheries and Oceans Canada and had the opportunity to work alongside the coast guard, and I'm very grateful to have been given the opportunity to return to DFO as the deputy minister.
[Translation]
Mr. Chair, I know that committee members have a full appreciation of the important work that is undertaken by the department and the Canadian Coast Guard, on a daily basis. And I know, based on the number of times I have appeared before the committee in past years, that there is an appreciation of the efforts of the men and women of DFO and the Canadian Coast Guard to implement such an important and challenging mandate.
In the short time since my return, I have had the opportunity to reacquaint with old colleagues in DFO.
[English]
I've met many new colleagues since my return to the department a few weeks ago. Mr. Chair, I feel very capable and very fortunate to have inherited such a dedicated and accomplished senior management team at DFO and CCG. A few of these colleagues are with me today and, I believe, are not strangers to this committee.
With me are David Bevan, on my right, our associate deputy minister;
[Translation]
Marc Grégoire, commissioner of the Canadian Coast Guard; France Pégeot, senior assistant deputy minister of strategic policy;
[English]
Kevin Stringer, who's our assistant deputy minister of ecosystems and oceans science; and Trevor Swerdfager, assistant deputy minister of business transformation and program policy.
Once again, Mr. Chair, I thank the committee for the opportunity to appear here today.
If the committee is in agreement and there are no questions for me, I would ask our CFO, Roch Huppé, to provide the committee with an overview of our 2012-2013 supplementary estimates (C) and our main estimates for 2013.
Thank you for giving us the opportunity to present a brief summary of our supplementary estimates (C) for 2012-2013, and our proposed main estimates for 2013-2014.
[English]
To this effect, I have provided all of you with a short presentation deck that I will use. I will skip right to page 3 of the deck and start off with a short summary of highlights of our supplementary estimates (C).
Basically what you see in front of you is a status update of our spending authorities for the year 2012-13. At the same time here last year, I presented the main estimates for 2012-13, and we were proposing a budget of $1.665 billion. During the course of the year, obviously we've had some budget adjustments, mainly through the supplementary estimates process. What we're showing now is that for the year, we will have just over $1.9 billion in spending authorities.
Now relating to supplementary estimates (C), the net effect on our budget is a small decrease of the net impact of $320,000. I'll go through the details. Although this is a small decrease, it doesn't mean that we have not brought in any additional funding through these estimates. Actually, we're bringing in just over $6.8 million of additional funding. It's just that this additional funding is being offset by surplus spending authorities within vote 5, our capital expenditures.
I'll move you to page 4. Here's a summary of that new additional funding that we're bringing into the department for 2012-13. The first item is close to $2 million, relating to revenues stemming from the sale of property. When the department proceeds with the disposal of real property, we get funding back through Public Works, and we're entitled to respend it on the same type of activities.
The second item is over $1.7 million in relation to the United Nations Convention on the Law of the Sea, what we refer to as UNCLOS. Basically this is an item that was part of our sunsetting programs last fiscal year, and for which budget 2012 provided us with renewed funding of close to $5 million over five years.
The third item is just close to $1.5 million relating to the Asian carp initiative. Budget 2012 provided the department with $17.5 million over five years, and basically $1.5 million is our requirement for year 2012-13. As well, $1.1 million is in relation to the definition phase to renew the helicopter fleet for the Canadian Coast Guard. That's basically funding that was obtained through last budget also, budget 2012, which was included in the $5.2 billion fleet renewal announcement.
There is $269,000 relating to government import regulations and border processes for commercial trade. This is a horizontal initiative, which DFO is part of. It's led by the Canada Border Services Agency. DFO received $1.4 million over three years in relation to that. There is $229,000 relating to the cleanup of oil spills. Basically, when the coast guard provides assistance for the cleanup of these spills, we're entitled to recover expenditures from the company that was liable for it.
For the remainder of the supplementary estimates (C), what we call transfers between votes, as you may know, the department or the minister doesn't have the authority to move money from vote 1 to vote 5. I have put in an appendix with a full listing of these transfers. I will not go through it, but if you have any questions on any of these, I'll be happy to answer them.
I'll move you to page 5 right now, and I'll go through a summary presentation of our main estimates for 2013-14. On page 5 what you see is a summary under vote 1, operating expenditures. We're seeking just over $1.1 billion, of which $740 million is for salary expenses. Under vote 5 are capital expenditures, $360 million, and 75% of that funding is in relation to the Canadian Coast Guard for fleet and shored-based assets.
Under vote 10, the grants and contributions program, we see $59 million. It's pretty stable in comparison with last fiscal year from a main-to-main comparative. The two last items, which are statutory in nature, are contributions to our employee benefit plans, $130 million, and the Minister of Fisheries and Ocean's salary and motor car allowance, $100,000. This brings the total ask for 2013-14 to $1.668 billion, compared with $1.665 billion in 2012-13. So there is a slight increase of $3.1 million.
I will go in a few minutes over the key increases and key decreases when comparing the main estimates of last fiscal year with 2013-14.
The three next pages I will go through quickly. This is basically a breakdown of our proposed main estimates of $1.668 billion between our different program activities. The department has 26 program activities including the internal services activities. So page six shows that, under the economically prosperous maritime sectors and fisheries strategic outcomes, which include our programs that support sustainable and effective use of Canada's water resources, we are planning to spend over $421 million. You will note that 61% of that spend lies within the two first program activities: the integrated fisheries management, that is, the management of commercial and recreational fisheries; and the small-craft harbours program.
You will note in the fourth column, under vote 10, $41 million under the aboriginal strategies and governance. So 70% of our grants and contributions funding is in relation to that program activity.
On page seven, under the sustainable aquatic ecosystems strategic outcome, which consists of programs that contribute to the conservation, protection, and sustainability of our aquatic ecosystems, we're planning to spend just shy of $239 million, 70% of which, in this case, is to be spent in compliance and enforcement. This includes monitoring and surveillance activities for fisheries protection.
In last year's mains, fisheries protection was called habitat management. The funding proposed this year is $58 million, which is stable in comparison with last fiscal year. It was also $58 million under habitat management.
I'll move you to page eight. Under strategic outcomes, we have safe and secure waters, which includes the programs that contribute to maintaining and improving maritime safety. A large part of this spend is related to the Canadian Coast Guard. They are planning to spend over $721 million, and 80% of that spend comes from the two first program activities: fleet operational readiness, which ensures that our fleet and our ships' crews are ready to operate; and shore-based asset readiness.
Under vote 5, capital expenditures, you'll notice that close to $270 million is planned to be spent against these same two program activities, which represents 75% of our spend in the area of capital expenditures.
The last point is under internal services. Our projected spend for the coming years is $286 million, compared with $296 million in the main estimates of 2012-13. Out of the $286 million, there is $115 million that relates to our real property spending. Fisheries and Oceans is one of most important departments from an asset-based perspective and includes our real property footprint.
I'll now take you to page nine to talk about the key increases that cause a variance from last year's mains. The first item is $76.7 million for Canadian Coast Guard vessel life extensions and the mid-life modernization program. That funding came through budget 2012, and it's part of $5.2 billion announced for fleet renewal. Some $316 million of that $5.2 billion goes to this program. The second item is $20 million for the acquisition of offshore science vessels and the management of the fleet procurement program.
In the management of the fleet procurement program, the department also received $5 million as part of the $5.2 billion announced in the last budget to support this program. The remaining is basically cashflow in relation to the acquisition of the offshore science vessels.
I'll just make the point that this funding variation does not necessarily mean new money or money disappearing from the budget. It basically also relates to how we use the money. For example, if we get $100 million to build a ship, and it's going to take five years, we will not spend $20 million every year. The cashflow will vary from year to year in building that ship. Therefore, for the offshore science vessels, this is a cashflow fluctuation.
There's $10.4 million related to compensation for collective bargaining agreements. Basically, every year we get an adjustment to our salary budget in relation to the collective agreements.
There's $8 million to protect wildlife species at risk. This was a program that was sunsetting last fiscal year, and for which we had renewed funding in budget 2012. The department received $24.6 million over three years for that initiative.
There's $6.6 million relating to the modernization of the regulatory system for major resource projects, what we refer to as MPMO. Again, this was a sunsetting program in last fiscal year for which we received renewed funding as part of budget 2012. We actually received $21 million over three years.
The last item on this page is $5 million in relation to the Digby Harbour Port Association, for repair of the wharf. Through budget 2012, we received $7.4 million for that. We've used $2.4 million in this fiscal year, so basically $2.4 million was brought into the supplementary estimates, as was announced in budget 2012. It was not included in the main estimates of the last fiscal year. This year the $5 million that we will require in 2013-14 is actually reflected in the main estimates of this year. This is why it's causing a variance of $5 million.
On page 10, dealing with decreases, the first item is $37.9 million relating to strategic review measures as announced in budget 2011. Budget 2011 announced a reduction to our budget of $56.8 million, so that's the additional portion, basically, with a conditional reduction that will bring us to that $56.8-million reduction.
The second item is $23 million relating to the mid-shore patrol vessels. Basically, in budgets 2005 and 2007, the department received $212.5 million for the acquisition of these vessels. This is simply a cashflow. It's not a reduction in funding. In last year's main estimates, there was $92.5 million projected to be spent on this, and in this year's main estimates we have $69.4 million for that program. So there's a variance of $23 million.
The third item is $16.7 million relating to the completion of the new aquaculture program initiative. This is a program that's actually sunsetting in March of this fiscal year. Back in 2008 we had received $70 million over five years, so any potential renewed funding in relation to that, if any, would be coming through the normal process and would appear in budget 2013. Obviously, it would not be reflected in these main estimates.
Also, there was $14.3 million in relation to the repairs as a result of the storm that happened in December 2010, mainly in the Atlantic regions. The department had received, through budget 2011, $57.3 million in additional funding to repair the small craft harbours, $43 million of which was spent in 2011-12, and $14 million in 2012-13. Therefore, in 2013-14, the money disappears as it was used for the repair of these wharves.
There was $13.4 million in relation to the second-year reduction of strategic and operating review measures, as announced in budget 2012.
The last item is $11 million relating to the acquisition of the polar ice breaker. Again, here's a cashflow variance in how we used the funding that we got for that particular bill.
I'll close off by saying, on the last page, obviously as I mentioned, any budget decision, any funding decision that would affect DFO's budget for the coming year as a result of budget 2013, which will be tabled soon, is not reflected in these main estimates.
[Translation]
Thank you very much, Mr. Chair.
:
Thank you, Mr. Chairman.
In terms of the first part of your question, Mr. Allen, the objectives of the program really were fourfold.
The first objective was to improve the environmental regulation framework for aquaculture in this country. We have made substantial advances towards that goal, particularly, but not only, in British Columbia. You're probably aware that we have had a new Pacific aquaculture regulation in place for a couple of years now. The program lying underneath it, so to speak, is up and running and has moved forward significantly. We've also been working on the development of regulations with respect to the release of aquaculture substances. That regulation has not been completed; it is in the works and has been for some time. There are a whole series of technical issues associated with its drafting, but we are making progress towards improving the regulatory regime overall. The intent was never to be able to say, that's done, and move on to something else. Regulatory improvement was viewed, and still is, as a continuous improvement process.
The second objective of the program was to improve our science base, and in fact over half the funding in the program went into science to support the regulatory initiatives, but also to understand aquaculture more generally.
The funding in that program was back-end loaded. In the five-year profile of the program, we invested more heavily in science in years three, four, and five on the logic that in the first two years, we'd spend time thinking about and identifying science priorities. Rather than just hiring a series of scientists and asking them to study something, in essence what we said was, let's look at the priorities around that. So the science funding was back-end loaded a little bit.
As a result, many of the scientists who have been engaged and doing work are still at that process now. Again, we've made significant progress in our science results, but that was never intended to be something that you would say is finished, per se.
The third objective of the program is to support technology innovation in the industry, with an emphasis on green technology in particular. As you will know from your study on closed containment, the department and the government more generally through the SD Tech Fund has put fairly substantial investments into things like closed containment and other matters in the innovation envelope. Again, that work continues.
Finally, the fourth objective of the program is to position the government to put out a sustainability report that identifies, with a series of criteria, ongoing sustainability issues with respect to aquaculture. That report has had a series of methodological developments, if you will. When we started that, it wasn't something you pull off the shelf and say, here's how that's done. So the methodology of that has evolved and we have a report that is forthcoming shortly.
Those are the four objectives of the program, and I would say all of them are well advanced. None of them are what I would describe as complete, so to speak.
:
The Asian carp initiative, as you point out, that was announced in the budget last year was for $17.5 million over five years, and as you point out, with $1.5 million to get the project started this year.
The overall objective is to address Asian carp. Prevention is number one: preventing Asian carp from getting into and establishing themselves in the Great Lakes area. There's a $17-billion recreational and commercial fishery in the Great Lakes, and there are other issues to be concerned about as well. So prevention, outreach, research is one of the four pillars with respect to the Asian carp program.
The second piece is early warning, including both traditional and genetic, or warning systems in key areas. We look at the Welland Canal, we look in other key areas where Asian carp may be able to get into the Great Lakes system. But there is also something called eDNA, which is a new genetic type of research that we're doing.
The third area is response, including internal preparedness in collaboration with Ontario and the U.S. We're working very closely with the Ontario government and the U.S. government on responding if the carp are able to get into the Great Lakes system, that is, being able to fish them out and being able to take other appropriate actions to address them, including identifying the areas where they're likely to be, where the habitats are, where they're going to be the most comfortable and most likely to establish themselves. That's the third area.
The fourth is management, meaning collaborative border work with Canadian Border Services and our U.S. colleagues in identifying these as they come across the border.
Those are the objectives.
This year, as you point out, there is $1.5 million spent. We really have two foci this year. One is to put in place the facilities and equipment to deliver the full field program starting this coming summer, and the second is conducting some research, such the study we did on the Welland Canal, including how the fish move through that canal. We did some tagging and checking to see what happens, and we have some receivers in the Welland Canal as well.
We also, as I say, purchased some of the facilities and equipment, including remodelling two existing labs in our Burlington facility. We have a trailer that is built for Asian carp, which can move around the Great Lakes, and other equipment so that we're ready to get going full time in 2013.
:
Thank you, Mr. Chairman. As I have said many times, it's good to be seen. Thank you for the kind words. Whether my health stands up or not I guess depends on how this committee meeting goes.
Good afternoon, and thank you for inviting me to appear today to discuss the main estimates of Fisheries and Oceans Canada. I want to thank my deputy, Matthew King, and other members of our department's management team for starting the discussion with committee members earlier on. I understand that Matthew has already introduced all of the staff who are here with me today.
Our chief financial officer, Roch Huppé, has presented the highlights of our main estimates to you already. The figures they contain represent a snapshot in time of government spending plans. Our fiscal outlook for the year ahead will be reflected more fully in the budget that will be presented later this month by my colleague, the .
Before I get too far into my remarks, let me take the opportunity to thank this committee for your excellent work. You have been studying two important topics, closed containment salmon aquaculture and aquatic invasive species, and I look forward to receiving your reports.
Officials from my department have appeared before you on a number of occasions to discuss DFO's role with respect to the threat posed by invasive species and the need to work with international partners to combat it. To that end, I was proud to announce last year an additional $17.5 million over the next five years to prevent the introduction, establishment, and spread of Asian carp into the Great Lakes. As Asian carp are not yet established in the Great Lakes, it's important that we take action now to prevent their introduction.
Now let me take a few minutes to share with the committee members how we are advancing the strategic objectives of Fisheries and Oceans Canada as we head into fiscal year 2013-14. In the coming year, we'll continue to be guided by three strategic outcomes: economically prosperous maritime sectors and fisheries, sustainable aquatic ecosystems, and safe and secure waters. I understand that Roch has presented an overview of the DFO main estimates for 2013-14. You will note that one of the significant increases in our spending is the $76.7 million allocated for Canadian Coast Guard vessel life extension and the mid-life modernization program. This work will extend the life of vessels that have served us well in the past and enable others to reach their full operational life through modernization.
Our government is proud to invest in the coast guard to make sure it has the ships it needs to do the job. In fact, we have made unprecedented investments in the Canadian Coast Guard, including $5.2 billion to the coast guard in our 2012 economic action plan. That was on top of the roughly $1.6 billion we invested in the previous six years. To date, this has included critical spending for new mid-shore or patrol vessels, scientific research vessels, a new hovercraft, and Canada's first polar icebreaker. It also includes the completion of major repair work on 40 of our large vessels and the acquisition of an additional 98 new small craft and boats.
Last month, I had the honour of travelling to Newfoundland and Labrador to announce the government's $360-million investment to extend the life of several vessels in the coast guard fleet. This funding will benefit the shipbuilding industry across the country and build on the government's priority to support jobs and growth. This investment will extend the lives of 16 coast guard vessels across Canada and complete mid-life modernizations on two existing hovercraft over the next 10 years. Important work on the CCGS Amundsen is already under way and creating economic opportunities for Canadians.
We call that investing where it counts, making sure the coast guard has the ships it needs to do its job and helping to develop the Canadian shipbuilding industry across the country. We will continue to revitalize the coast guard fleet so it can maintain its focus on keeping our waterways safe and accessible, including in Canada's north, while creating jobs and economic growth across the country.
Renewing our fleet is taking place within the context of the Government of Canada's national shipbuilding procurement strategy by Public Works and Government Services Canada. The strategy aims to support a vibrant Canadian shipbuilding industry while also ensuring the highest value for public funds. My colleague , Minister of Public Works and Government Services, recently announced a series of preliminary contracts under this procurement strategy, valued at a total of $15.7 million for joint support ships for the Royal Canadian Navy and a polar icebreaker and offshore fishery science vessels for the Canadian Coast Guard.
Industry analysts have estimated that our shipbuilding strategy will contribute 15,000 jobs from coast to coast to coast, and over $2 billion in annual economic benefits over the next 30 years. I am proud to be part of a government that is following through on its commitment to build ships in Canada. The shipbuilding procurement strategy will mean long-term jobs and economic growth for the country, stability for the industry, and vital equipment for our men and women in the Royal Canadian Navy and the Canadian Coast Guard.
Let me turn now to Canada's fisheries sector, which continues to go through fundamental changes driven by significant and unprecedented shifts in global economics, market demand for sustainable seafood, and environmental realities. We have reviewed and updated our approach to fisheries protection. The amendments make our regulatory review and approval process more effective and efficient, while strengthening our protection for fish and fish habitat. In addition, we will now be able to identify ecologically sensitive areas that require additional protection.
As I mentioned when I was here last year, many parts of our old regulatory system were not effective. Rules were applied differently in various regions of the country and often we lacked the regulatory muscle to enforce regulations. We were creating red tape reviewing perhaps as many as 95% of small projects that simply did not need that level of oversight. All the while, we were diverting limited resources away from our main task: protecting commercial, aboriginal, and recreational fisheries.
Under the new act, we will strengthen our ability to work with our partners—other levels of government, conservation groups, and the private sector—to protect the productivity of Canada's fisheries while providing much-needed clarity to Canadians. We believe that by improving our partnerships, be they with provincial, territorial, and municipal governments; aboriginal organizations; conservation groups; and others, we can improve the protection of our fisheries resources. For anglers, the changes to the Fisheries Act recognize the importance of the recreational fishery and provide protection to these fisheries to support their productivity now and in the future.
For conservation groups, the changes allow the minister to enter into agreements that enable the groups to undertake measures to enhance fisheries protection. For industry, the changes provide greater clarity on the types of activities that will be reviewed by Fisheries and Oceans Canada. These include regulations clarifying Fisheries Act changes and timelines for issuing permits.
For provinces and territories, the new measures enable further opportunities for partnerships and working together, including broad agreement-making authorities. For landowners and municipalities, the new measures provide regulatory certainty as to whether and how the fisheries protection provisions apply to them.
We are also committed to supporting the sustainable development of the Canadian aquaculture industry. Aquaculture is an industry that creates wealth because it relies almost exclusively on export markets for its revenues. Our government is proud to support the development of aquaculture. It is an industry that is helping meet growing global demands for fish and seafood, and also creating jobs and growth in communities right across Canada.
As the industry continues to grow, we will provide management and regulation to ensure wild fish stocks are protected, and that aquaculture in Canada is developed in an economically viable and environmentally sustainable manner. That will allow the industry to continue to bring economic and social benefits to Canada and assure the public that there is a sound regulatory regime in place. We will continue working with the industry to ensure that we build on the progress to date and confirm Canada's place as a world leader in sustainable aquaculture.
Another very important initiative our government is taking is the Canada-EU trade agreement, which will greatly benefit Canada's fish and seafood industry. The EU is the world's largest fish and seafood market, with a global import market averaging $25 billion annually during 2009-2011. Current EU tariffs on Canadian fish and seafood products average 11%, with peaks of 25%. These high tariff barriers would be eliminated under an ambitious Canada-EU trade agreement. Eliminating tariff barriers would increase sales of Atlantic Canada's world-class fish and seafood products in the lucrative EU market of 500 million consumers. This would directly benefit the fish and seafood industry in Canada and create more jobs, higher wages, and greater long-term prosperity.
Finally, our government understands that science is crucial to the sustainability and growth of Canada's fisheries and oceans. Science remains the backbone of this department. Fisheries and Oceans Canada is mandated to protect Canada's fisheries, so much of our scientific work is related to fisheries management and conservation. Our approximately 1,500 scientific staff members do a wide range of research on Canada's oceans, in addition to their many other duties including providing support for fisheries protection provisions and species at risk. They do work in Canada's Arctic, an important priority for this government and for Canada. We have class-leading hydrographers who provide charting services to the marine and transport industry. We have an excellent team working on ways to protect Canada's fisheries from aquatic invasive species like Asian carp.
Our scientists are working with colleagues in other departments and with academia to provide advice based on the most current knowledge on a range of important matters. These are just a few examples of the great things our scientists at Fisheries and Oceans Canada are doing for Canadians. We are proud of their work and will continue to support them. We take seriously our responsibility to conserve and protect these resources and to ensure that they contribute to the economic prosperity of our country today and for future generations.
I'd like to thank you very much. I'd be happy to address any of your questions.