NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 17, 1998

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[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Colleagues and everyone else here, I'm pleased to call to order this November 17, 1998, meeting of the Standing Committee on Natural Resources and Government Operations. The order of business today is Bill C-41, an act to amend the Royal Canadian Mint Act and the Currency Act, a bill that would come under the responsibility of the Minister of Public Works and Government Services.

We are pleased to have with us today Madame Lepine, who is vice-president of finance of the Mint; Madame Wetherup, who is the president of the Mint; and Madame Nadeau, who is the legal counsel for the Mint.

I understand that documents are not available in both official languages, so in accordance with the rules of the committee, we can't hand them all out. They will be distributed to you forthwith once that is remedied.

Ms. Wetherup, I think you and your colleagues have a presentation, for ten or fifteen minutes, whatever you need, but within approximately that timeframe, allowing then for members to ask questions. We welcome you, and we invite you to begin your presentation.

[Translation]

Ms. Danielle Wetherup (Master, Royal Canadian Mint): Thank you very much, sir. I'm pleased to be meeting with you today to take a closer look at Bill C-41, an Act to amend the Royal Canadian Mint Act and the Currency Act.

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When I last appeared before this committee, in May, our 1997 Annual Report had just been tabled in Parliament. At that time, I had the pleasant task of reporting that our organization, in 1997, had once again achieved exceptional results. I believe I can say that we will equal, or even surpass, this performance in the 1998 fiscal year.

[English]

Our mandate at the Mint is to supply Canadians and our international customers with coins that are high quality, cost-effective and delivered on time. We are the only mandated corporation for the production, sale and distribution of coins in Canada. Similar mandates are already shared by our major competitors, which are national mints owned and operated by foreign governments, such as the British Royal Mint and the Austrian, U.S. and French mints, just to name a few. We must balance this important role with that of a commercial entity generating financial return to our shareholders, which we achieve by successfully marketing our minting services and coinage products worldwide.

In the thirty years since its creation as a crown corporation, the Royal Canadian Mint's mandate remains unchanged. In 1987 the Mint's legislation was changed to strengthen its commercial orientation and activities. Bill C-41 is a similarly designed effort to improve the Mint's business operations and potential markets, which have changed dramatically in the past ten years.

The basic purpose of Bill C-41 is threefold: to streamline the approval process for issuing coins and coin design; to provide flexibility in governance structure of the Mint; and to increase the power of the Mint within its existing accountability structure, which will allow it to achieve its vision of global leadership in minting.

I believe Mr. Blaikie, the honourable member for Winnipeg—Transcona, put it quite accurately when he stated during the debate in the House that there are elements of the bill that are purely of a housekeeping nature. However, he, like other members, expressed a desire to have two particular clauses examined more closely to ensure that neither the Mint's reputation nor its motive are called into question. These two clauses deal with the powers of a natural person, and the increase in the Mint's borrowing authority respectively.

Giving the Mint the powers of a natural person will provide it with sufficient flexibility to meet its long-term strategic direction and achieve its vision of global leadership in minting. The powers of a natural person will allow the Mint to support its public policy role of producing domestic coinage and operating for a profit. These powers will provide the Mint with the flexibility to enter into alternate business structures such as alliances, partnerships and subsidiaries. Our major competitors, which are national mints of foreign countries, already possess these powers. Acquiring these new powers will place the Mint in a more advantageous position in relation to those competitors within an extremely competitive market. This global market demands that the Mint maintain a constant vigilance to identify new opportunities and the ability to be flexible in response.

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The advantages to Canada are clear. If the Mint is successful, it will continue to create jobs for Canadians and export Canadian technology and know-how.

[Translation]

I can say with certainty that these powers will increase our competitive advantage and that the Mint's future depends on it.

These powers will allow us to seize commercial opportunities more quickly and more effectively, thereby increasing our chances to expand our business operations. We want to become global leaders in minting, which will enable us to create high-quality jobs for Canadians.

The products, technological expertise and, above all, the employees of the Royal Canadian Mint make it a world-class organization. Bill C-41 will enable us to take a huge step forward toward our goal of becoming the global leader in minting.

However, some people are afraid that the Bill could make the Mint less accountable and that it suggests a privatization plan.

[English]

I wish to be quite clear on this point. The Mint will still be subjected to the same rigorous approval process and accountability framework that exists today to exercise any of its new powers.

The accountability framework requires the approval of the Treasury Board, the Minister of Finance and the Governor in Council. In addition, the Auditor General conducts annual audits as well as special examinations of the Mint's operation. As president of the Mint, I would expect nothing less in order to maintain our credibility and accountability.

This legislation is not a step toward privatization of the Mint. It is a much needed step toward improving the Mint's competitive position in a global and competitive environment, while continuing to ensure a secure, low-cost and high-quality supply of coins for Canadians.

Entrusting the Mint with these new powers—and it is a trust that is deeply appreciated—will give the Mint the ability and the flexibility to plan, anticipate and react in a highly competitive and changing international market. Canadian taxpayers will reap the benefits of this trust because the Mint will be more successful. I want to re-emphasize that the existing checks and balances that govern the Mint's business will still remain.

[Translation]

The other proposal which has raised some concern is the increase in the Mint's borrowing authority from $50 to $75 million.

This change will give the Mint room to manoeuvre and a security margin to meet the needs of a growing corporation. This increased borrowing flexibility is an integral part of the long- term strategic plan developed by the Mint so it can take up the challenges and seize the opportunities that the new millennium will undoubtedly present.

The main goal of this long-term strategic plan is to become the world leader in minting. If we are to achieve this, we will have to very actively seek out new markets, develop existing markets, create new products and offer added value through new structures.

In readying itself to take up future challenges and seize the unexpected opportunities that will arise, the Royal Canadian Mint must anticipate its financial requirements and give itself the means of responding to them rapidly.

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In keeping with our practice of submitting all our business plans to strict verification, we asked outside experts to analyze the judiciousness of increasing our borrowing authority, with a view to commercialization. The financial experts reported that the higher borrowing authority would help reflect current market conditions and that this decision would be sensible and realistic.

[English]

I wish to make it very clear that the increased borrowing authority does not imply the Mint needs more money. The higher borrowing authority is simply another measure designed to give the Mint more flexibility and room to manoeuvre in the marketplace. Once again, it will still be subjected to the same approval process that governs its business mandate today.

In closing, I'd like to thank the members for the opportunity to speak about the Mint. The Mint plays such an important role in Canada, but it is not often we have the opportunity to meet in such a forum to discuss our needs and our goals.

In reading over the transcripts of the parliamentary debate on Bill C-41, I was pleased and very proud to note the number of times the Royal Canadian Mint was referred to with respect and pride. It is a tribute to the team at the Mint, a world-class team that I am so honoured and privileged to be associated with. My experience has taught me there are no limits to what a skilled and dedicated group of employees can achieve together. We truly believe we can be the world's leading Mint. My dream is to make it happen.

I hope members of the committee will share this dream and provide the Mint with the tools necessary to make this dream a reality. To be a world leader in any undertaking demands the best team, the best plan and the necessary tools to get the job done.

In closing, I respectfully submit to the committee that with Bill C-41 we will get the job done, achieve our vision, and be able to even better serve Canadians. Thank you very much.

The Chairman: Thank you, Ms. Wetherup.

Just for the record, Ms. Wetherup's official title is Master of the Mint, which is the traditional title held by the president of the Mint.

I'll call on Werner Schmidt first to question, and then I have Reg, Ghislain, Raymonde and Ken.

Mr. Werner Schmidt (Kelowna, Ref.): Thank you very much, Mr. Chairman, and thank you very much for appearing. I'm sorry I was a little late and couldn't meet you before the committee assembled.

I think some of the words you spoke are certainly well reflected in your annual report focus. You deserve a lot of credit for some of the things you have achieved in the Mint. It's not something we're ashamed of, there's no doubt about it. It's a good operation and you're making money, and I think that's okay too. That's very significant.

I'd like to ask you about this accountability you were talking about and the transparency of the decision-making that needs to take place. I refer in particular to the elimination of subsection 7(4) of the existing act of the Mint, where you delete a rather significant provision. If I could perhaps draw the attention of the members of the committee to that particular section, clause 4 eliminates subsection 7(4) of the existing act.

That particular provision, at the moment, requires that if and when the Mint acts in gold, silver or other precious metals, the money to buy those metals comes from the consolidated revenue fund, and the revenues collected from the sale of those metals are returned to the consolidated revenue fund. Eliminating that subsection now eliminates the accountability to the consolidated revenue fund and the Minister of Finance. Could you clarify how, as per your statement, you will still be accountable in the same way as you were before if that subsection is eliminated?

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Ms. Danielle Wetherup: I will ask Madame Nadeau to answer the question.

Ms. Marguerite Nadeau (Senior Counsel and Corporate Secretary, Royal Canadian Mint): The subsection you see there was eliminated because it refers to a particular power that existed under paragraph 4(1)(e) of the current legislation. By eliminating the power to borrow and act on behalf of the Minister of Finance, it was not necessary to keep that subsection. This is not a power that has been used in the past. We have not purchased any gold on behalf of the Minister of Finance. When the Mint purchases gold, it does so on its own account.

Mr. Werner Schmidt: But under the new powers that are being proposed, where does it tell us you do not purchase gold, silver and other metals on behalf of the crown?

Ms. Marguerite Nadeau: There is no power now under the new legislation to buy gold on behalf of the Minister of Finance.

Mr. Werner Schmidt: But it says:

4(1) In carrying out its objects, the Mint has the rights, powers and privileges and the capacity of a natural person and may in particular

(a) procure the incorporation

—and all these kinds of things: “acquire and dispose”—

(c) generally do all things that are incidental or conducive to the exercise of its powers with respect to

—and purchasing gold, silver and coins is there.

Ms. Marguerite Nadeau: But it's not correct. The Mint—

Mr. Werner Schmidt: You are a crown corporation. Do you, as a crown corporation, act as an agent of the crown?

Ms. Marguerite Nadeau: Yes, we do.

Mr. Werner Schmidt: Then you do purchase in the name of the crown.

Ms. Danielle Wetherup: We purchase, but we are trying to clarify that we are purchasing for the mandate of the Mint. We purchase gold for the production of coins and products we are minting, not for other purposes.

Mr. Werner Schmidt: But you do act as a refiner of gold, so how does that work?

Ms. Danielle Wetherup: When we refine the gold, the company sends the gold to us. We don't pay for the gold. They send the raw material to us, we assay it, credit their account and refine it.

Mr. Werner Schmidt: And you never buy gold on behalf of the Government of Canada?

Ms. Marguerite Nadeau: The Mint does purchase gold, and I guess if you're saying we're doing so as an agent, we're still an agent. But when the Mint purchases gold, it purchases it to produce bullion coins or numismatic coins that it sells on the international market.

Mr. Werner Schmidt: So you are acting as an agent of the crown. I don't think you can avoid that. You are an agent of the crown. The current provision protects the Mint by putting this accountability clause in there. By submitting that subsection 7(4) be eliminated, that accountability vanishes, and that's not a good thing. The accountability you thought you had doesn't exist.

We have to be very careful that when you're dealing with the sorts of things you're dealing with, transparency and accountability are very clear and the trail can be followed very easily and directly, and there be a check and a balance against that. I know that's what you want, Ms. Wetherup, and I commend you for that, but I submit to you that the legislation as proposed does not legislatively provide for that accountability.

Ms. Marguerite Nadeau: The accountability framework that exists under the Financial Administration Act will continue. All of the activities the Mint undertakes from year to year need to be approved by the government, by the Minister of Finance—any borrowings. When the Mint purchases gold, it does not use money out of the consolidated revenue fund for that purpose. That's why that subsection, which was a very specific subsection, was removed.

Mr. Werner Schmidt: I think that's a very debatable point, because if the Mint goes into a deficit position, where does the money come from?

Ms. Danielle Wetherup: I have to borrow—and I was in that situation—from the bank.

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Mr. Werner Schmidt: And if you couldn't pay the loan off from the bank, then who would be liable?

Ms. Danielle Wetherup: I am liable.

Mr. Werner Schmidt: No, not as a person. You aren't liable. No way.

Ms. Danielle Wetherup: The Mint is liable.

Mr. Werner Schmidt: No. If you can't pay the debt, who's liable?

Ms. Danielle Wetherup: I'm sorry, but when we go and borrow from the banks, it is the crown corporation that is borrowing. It's not the Minister of Finance.

Mr. Werner Schmidt: But this is a very limited interpretation of crown corporation. When a crown corporation is no longer able to pay its obligation to a financial institution, who pays?

Ms. Danielle Wetherup: We are treated under a section of the Financial Administration Act as a commercial entity. We are in a position where we have a board of directors that follows the business of the Mint on more than a quarterly basis. We have monthly financial reports that are studied by our board members, who diligently make sure that our business is conducted in an efficient and responsible fashion. We have annual corporate plans that are approved and submitted to Parliament. When the Mint was in financial difficulty, the board of directors and the minister responsible ensured that there was an appropriate plan that would basically ensure the Mint would take the appropriate measures to put itself on the right financial course.

We have to take into consideration that the Mint has been operating as a commercial entity since 1987 and for the past 21 years, except for 2 years, has had a good financial return, and it has paid equity dividends of $187 million to the crown on top of $1.5 billion in seigniorage. So it is not as if the record of the Mint doesn't demonstrate an ability—

Mr. Werner Schmidt: We know that. I've said that before. I commend you on what you've done. The Mint has done a good job.

The point I'm trying to make is that we're creating policy and legislation, and the legislation itself.... While I admire you, and I respect you and trust you, that's not the issue. The issue here is that according to the law itself—as you know and I know and everybody around the table knows—a crown corporation ultimately is guaranteed by the Government of Canada. That's ultimately where it rests, because it's the shareholder.

The Chairman: We'll come back to you. Maybe this will come up in other questions. We'll let that question go for now and hopefully we can come back to it.

So I have Reg and then Ghislain, then Raymonde and then Ken.

[Translation]

Mr. Réginald Bélair (Timmins—Baie-James, Lib.): Good morning, Ms. Wetherup. I'm pleased to see you again.

In 1995, when I was Parliamentary Secretary to the Minister of Public Works, I led the debate in the House on the introduction of the $2 coin in the Canadian market. Could you tell us briefly what the benefits have been?

Ms. Danielle Wetherup: I believe that the benefits have been twofold. First, there have been very substantial savings to the Canadian taxpayer in the production of the $2 coin, savings that were in the order of $250 million starting the first year. We have also been able to collect approximately $700 million in seigniorage for the Consolidated Revenue Fund. Second, it turns out that merchants find the $2 coin extremely useful, and demand for it is constantly increasing. Generally speaking, we are delighted with the reactions we have had from business people and from people involved in small business transactions.

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Mr. Réginald Bélair: Adopting Bill C-41 would nevertheless lead to a fairly significant difference in how a new coin is introduced. You will recall that, in 1995, during the debate on the $2 coin, the possibility of it sooner or later issuing a $5 coin was raised.

The clauses of Bill C-41 seem to provide for a different process, because they would require much more comprehensive consultations with Canadians, to find out their opinions on the issuing of a new coin.

Could you explain to the committee how the minister would inform Parliament of the introduction of this 5-dollar coin? It goes without saying that this is a hypothetical question.

Ms. Danielle Wetherup: You are right in saying that this is a hypothetical question, because we have not identified any need to issue a $5 coin. But if ever the commercial demand indicated that it were desirable to issue such a coin, we would hold consultations before hand, as was the case before the issue of the $2 coin. The request would have to be submitted to and approved by Cabinet. If the government decided to study the possibility of issuing a new coin, we would have to publish the proposal in the Gazette, and then we would consult Canadians.

After the consultations, we would have to review our proposal. It might even be necessary to hold a second round of consultations, if major changes were suggested. Once a decision was reached, we would be required, in keeping with the provisions of the Act, to table a copy of the proposed order in each House of Parliament at least 15 sitting days before it is presented to the Governor in Council for final approval and signature.

Mr. Réginald Bélair: How does the government intervene in the decision-making process?

Ms. Danielle Wetherup: It intervenes during the 15 sitting days of Parliament during the discussions that take place following the consultations with Canadians.

Mr. Réginald Bélair: Okay. Thank you.

The Chairman: Thank you, Mr. Bélair.

Mr. Lebel followed by Ms. Folco, Mr. Epp and Ms. Jennings.

Mr. Ghislain Lebel (Chambly, BQ): You said a few minutes ago that this bill did not represent a step towards privatization. I would like some clarification with respect to the proposed paragraph 4(1)(b). Your legal counsel will probably be the one to answer my question. It reads as follows:

4(1) In carrying out its objects, the Mint has the rights, powers and privileges and the capacity of a natural person and may in particular

(b) acquire and dispose of any interest in any entity by any means: and

May we infer that, since it has the right to redeem its shares, it might also have the power to sell its own shares?

Ms. Marguerite Nadeau: The Mint will still not have the authority to sell its shares. Subsection 3.1(3) of the Act states that the shares of the Mint are not transferable.

Mr. Ghislain Lebel: Are these provisions included in the bill?

Ms. Marguerite Nadeau: No, but they appear in the current Act. The bill does not amend this section.

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Mr. Ghislain Lebel: I agree with you, but why does subsection 3.2(1) of the Act say that the Mint may redeem the shares it has issued? We know that shares are redeemed not at the request of the seller, but rather at the request of the buyer. The Royal Canadian Mint could therefore tell the government that it wishes to redeem the 4,000 shares of $10,000 each that it has on hand, pay the corresponding amount to the government and require that the latter return its shares. That's what this paragraph says.

Ms. Marguerite Nadeau: The government has the power to redeem the Mint's shares, but the Mint does not have the right...

Mr. Ghislain Lebel: I thought I read, in the documents I have here, that the redemption price must be identical to the issue price of the share. Subsection 3.2(1) reads:

3.2(1) The Mint shall, at the request of the Minister after consultation with the Board, redeem—

It's not the Minister, but the Mint.

—such number of shares issued to the Minister in accordance with this Act as the Minister may direct.

That's what's written in the material I have here.

Ms. Marguerite Nadeau: This section was adopted in case the government wished to reduce the Mint's share capital; the Mint would then redeem the shares held by the government. The government invested a certain amount of capital in the Mint, but the latter cannot transfer these shares; these shares are not transferable to other persons.

Mr. Ghislain Lebel: Yes, but why did Ms. Wetherup say that it was not a step toward privatization?

Ms. Danielle Wetherup: When the government incorporated the Royal Canadian Mint, in which it is the sole shareholder, it provided the Mint with $40 million in capital. If the government were to tell us that it wished to take back its $40 million, the Mint would have to purchase these 4,000 shares of $10,000 each. This would in fact be a stock switch. But we cannot sell shares. Under the Act, our shareholder is, and will always remain, the Government of Canada.

The reason we wished to obtain the powers of a natural person is very, very simple. My two biggest competitors are Austria and England. I sell circulation coinage as well as other numismatic products, including collector coins. There are distributors who take care of distributing our products to small businesses, merchants and retailers.

In Europe, there is the Hercher company. It's a family business that was put up for sale. The owners asked minting organisations if they were interested in purchasing their distribution business. I was unable to say yes. I would have had to submit a request to Parliament, to obtain permission to purchase this business. The Austrian mint, which has the powers of a natural person, purchased this German company, Hercher, which is the largest distributor of numismatic coins in Germany. In your opinion, Mr. Lebel, what happens to our interests in Germany when Hercher is owned by an Austrian firm?

Mr. Ghislain Lebel: I understand that.

Ms. Danielle Wetherup: This is the power we are trying to obtain.

Mr. Ghislain Lebel: But that's not what my question is about, Ms. Wetherup. I know the importance of recognizing your corporate entity, but I still have some reservations.

You said that the government invested $40 million, that it might wish to recover one day. It's a possibility and it's a quite commendable intention. But why would it recover its invested capital by selling its shares to the mint, rather than require that the latter simply pay it $40 million in dividends or $40 million of its profits to recover its capital outlay? Why would it sell off the shares that it holds as the Mint's share capital, when, in the final analysis, the Mint and itself are one?

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This leads me to ask the question in the following terms. If it sells its capital shares and receives $40 million in return, it won't be getting rich by taking these $40 million from the Mint's coffers; it would have to sell these shares to someone else instead. I therefore come to the conclusion that you have taken a proper view of things, Ms. Wetherup. This bill may be a step towards, or an indication that we may be heading towards the privatization of the Mint.

You confirm my fears. I respect you a great deal and I admire your presentation. However, from a legal point of view, we are dealing with something that may, in my opinion, become a nightmare for us.

I'm going to ask one last question. Do I have the time, Mr. St-Denis?

The Chairman: Yes.

Mr. Ghislain Lebel: When the 4,000 shares of $10,000 each were issued, did this represent the true value of the business?

Ms. Danielle Wetherup: At that time.

Mr. Ghislain Lebel: At that time, I presume.

Section 3.2 reads:

3.2(1) The Mint shall, at the request of the Minister, after consultation with the Board, redeem such number of shares issued to the Minister in accordance with this Act as the Minister may direct.

It is followed by:

(2) The price to be paid for each share redeemed by the Mint pursuant to subsection (1) is the issue price of the share.

I don't understand that. If, for example, you reinvest in a company, say you buy Hercher, for example, and the shares are no longer worth $10,000 each, but in fact $25,000, at that point, you will redeem the shares at $10,000 each. I don't have any problem up to there; it's tweeddledum and tweeddledee. It's still the government, it comes out of the same pocket. But if these shares are sold in the private sector, you may end up regretting it sorely. So, I don't understand this provision of the bill.

Why don't the shares rise and fall in value, according to...?

Ms. Marguerite Nadeau: The shares are not on the market.

Mr. Ghislain Lebel: But don't these shares have to represent the value of the corporation?

Ms. Marguerite Nadeau: The corporation's value is possibly higher than the value of its shares.

Mr. Ghislain Lebel: But why is it being limited to that? I don't know anything about shares, but I do know that, when I buy a share, whether it's a Bell Canada or some other share, the price that I pay is in fact equal to what is shown in the company's assets. So much the better if the assets are higher than what I pay. Usually, however, in order to form an opinion, a picture of the company and of the value of its shares, they must reflect the value of the company.

It's not the case here, and that worries me.

Ms. Marguerite Nadeau: All I can say is that, at the time, the government and Parliament thought it best to set the redemption price of these shares.

Mr. Ghislain Lebel: Not all of the people who used to be in power will end up in heaven. Did you know that?

The Chairman: Mr. Lebel—

Mr. Ghislain Lebel: Okay, I've finished.

[English]

The Chairman: We can come back to you, Ghislain, if we have time.

I have Raymonde, and then the order is going back to Ken, Marlene and Gilles.

Okay, Raymonde Folco, please.

[Translation]

Ms. Raymonde Folco (Laval West, Lib.): Ms. Wetherup and officials, I join with my colleagues in congratulating you and your Board of Directors, as well as the senior officials, for this proactive approach you are taking through Bill C-41, for the manner in which you have defined your directions and for the serious way in which you intend to fulfil your mandate. Congratulations.

I have a question that, perhaps, will allow you to develop and to indirectly respond to some of the questions asked before mine, concerning the new powers that you are requesting in Bill C-41. How do you see these new powers? How do you see them improving your competitive position in the marketplace and how do you see them helping you better fulfil your mandate? If you could frame your reply in such a way as to cover the questions asked by Mr. Lebel and Mr. Schmidt, that would be perfect. Thank you.

Ms. Danielle Wetherup: Bill C-41 does not change the Mint's mandate in any way. We must be very clear about this.

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The amendments to the Act that we are requesting are designed first and foremost to modernize it. I think that everyone realizes that it now contains some fairly outdated elements that we must eliminate.

There are two considerations that are very important for us. The powers of a natural person are very important in order to give us the same competitive advantage that the large mints currently have in the context of international trade. Their officers must be able to plan, to react and to determine their choices, and they must have the tools needed to do so.

We have to deal with a company that serves all the continents and that increasingly needs sufficient flexibility and power to meet consumer demands. The key is to have the means available to seize the opportunities that competitors can take advantage of, because currently we are definitely not in a position to compete with them.

We have the technical ability and the workforce required to become the number one mint. When I say the number one mint, I mean the largest mint in the world. At present, we are the best mint from a technical point of view, but we cannot compete as easily as the British and the Austrians because we do not have sufficient flexibility to seize opportunities at the international level, like the example I mentioned concerning Hercher.

This amendment is very important for us, in order to ensure that, in the future, we will be able to make Canada the country where people want to buy their currency.

The second element of the bill that is very important to us, is the increase in our borrowing authority. Our present borrowing authority was established in 1987. We are now in 1998. We are asking for it to be increased. What do we plan to do with that money?

There are two things. The first is short-term loans, which are very important for us. When we have a contract with the Philippines or with Bangladesh, we have to buy the metal right away. This year, we had 24 contracts with 17 countries, for which we produced over 2.4 billion coins. That's a lot. Our average used to be approximately one billion.

We are not paid for these metals until the coins are delivered. To fulfil a contract that we have with a country, we may have to pay out $10 million to buy materials. If we have, in a single year, 24 contracts with 17 countries, we need several tens of millions of dollars. This money will be reimbursed, but we must have sufficient cash flow. That's why we're asking for increased borrowing authority. We consulted an independent firm on the level of this borrowing authority. We were told that it would be prudent and wise to obtain it, given current market conditions.

Those are the two main concerns from a commercial point of view, behind our request to amend the Act.

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[English]

The Chairman: Thank you.

We have Werner and Marlene. Werner.

Mr. Werner Schmidt: Thank you, Mr. Chairman.

These sets of questions aren't going to be quite as long as the earlier ones. It's going to be a very short question, actually, and it has to do with the point that has just been raised.

Your long-term debt right now, according to this book, stands at around $10 million and your bank indebtedness right now is right around $4 million. And I'm sure you have other debts outstanding—there are accounts receivable, accounts payable and all that sort of thing—but really your indebtedness, as you record it here, is roughly $14 million. Now, the amount you can borrow goes up to $50 million and now you want to go to $75 million.

As for these current market conditions that are being talked about by your financial experts, just exactly what composes those market forces that cause you to move? You obviously aren't needing it now; you're not even using half of what you're open to borrow, and yet you want to increase your borrowing by 50% over and above what you have now.

Ms. Danielle Wetherup: It is in great part to manage our cashflow. When we get a contract, we have to basically put the price of metal up front and we are paid for it upon delivery of the coins. When you have 17 countries and 24 contracts that you issue in one year, and you are in a growth situation and you want more and more of those contracts, you basically have to have the ability to borrow to be repaid.

Bev, do you have anything else?

Ms. Beverley Ann Lepine (Executive Director, Legal Services, and Corporate Secretary, Royal Canadian Mint): Certainly the study done by the third party did indicate that increasing our borrowing authority, the degree to which we can borrow should we need to borrow, to $75 million was realistic and prudent and based on a number of ratios. Not only do we have short-term borrowing requirements, as Mrs. Wetherup has indicated, but we also have a major capital replacement plan, including replacement of high-speed presses. That capital replacement plan is a five-year program that we should be funding with debt where needed.

Our borrowings today are running at approximately $40 million. The plating facility borrowing, as you are aware, was obtained in March of this year. Notwithstanding that, the borrowing level of $75 million was looked at independently in terms of what an organization of our size needs for general capital replacement programs, given the program we have in place, as well as the short-term borrowing requirements.

Mr. Werner Schmidt: I think it makes a lot of sense. I would have encouraged you to put that into the rationale. That makes a whale of a lot more sense than simply saying it's prudent. Well, why is it prudent? Tell us the truth. Be transparent. I think that's the key here. I'm happy to hear you say that part of that $75 million is really to pay for that addition in Winnipeg.

Ms. Beverley Ann Lepine: The borrowing for that addition, for the plating facility in Winnipeg, was obtained in March of this year and the approval for that borrowing was obtained prior to the tabling of the legislation.

Mr. Werner Schmidt: I appreciate that, but it's not reflected here.

Ms. Beverley Ann Lepine: No.

Mr. Werner Schmidt: It clearly is a requirement, and I appreciate that.

The other thing, if I may make a recommendation, is that I think your cashflow requirements and these short-term borrowings are pretty significant. I can understand that very clearly. But I think it would be good to have a line in here saying how much that credit line is, what it reaches as a maximum, and for what time period it exists. I think it would be very significant to show that.

The Chairman: Are there any comments on Mr. Schmidt's comments?

Ms. Danielle Wetherup: No, they were very good comments.

The Chairman: Okay. Marlene, please, and then Gilles, Roy, and Ken.

[Translation]

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you very much. Your statements are very interesting and I must tell you that, as a Canadian, I am very proud to hear that our country is the best in the world in terms of quality. I hope that, after the amendments that we will make to the Act, we will become the leading country in the world in terms of quantity, and that we will be the world leaders on the international market.

My questions are not necessarily related and I will therefore ask them one at a time.

• 1155

First, I wonder whether an overall ceiling on borrowing of $75 million will be high enough in the medium term, if you are planing to expand our markets and increase our acquisitions. I think I understood that the third party which did the study determined that an amount of $75 million would be sufficient given your current capacity, but did they take into account the possibility of increasing your acquisitions, for example, by purchasing a company like the one Austria bought? Is the $75 million amount sufficient?

You have set up a program for 1999 Millennium Coins. This program has raised a great deal of interest in my riding. Could you tell us about this program's success? Is it producing the expected results? How is it going?

The Royal Canadian Mint announced that it made approximately $4 million in profits last year. What are your forecasts for the current year? Are the profits realized on the sale of circulation coinage to banks included under the heading of overall profits?

As my last question, I would like to talk about a little bug, the Year 2000 bug. I'd like to know how the Royal Canadian Mint is getting ready for this challenge and whether it is in a good position compared to its foreign counterparts.

Thank you.

Ms. Danielle Wetherup: Thank you, Ms. Jennings. Regarding your question on the $75 million, I would say that this amount was determined based on the capital of our corporation in the manufacturing area. Therefore, at present, our own capital requires that this amount be set at $75 million. I hope, in a few years, that I will have increased our capital to such a point that I will be obliged to come back and see you again.

Your second question concerned the 1999 Millennium Coins program. I'm delighted to see just how enthusiastically Canadians have participated in the drawing contest. We have received 50,000 submissions. The drawings sent to us by students at arts and technical schools across Canada have been judged and will be the subject of an order in council. In January, the 12 coins celebrating Canada's past will be available on the market. We will be taking out advertising in the newspapers, on television and on the radio to let Canadians know that the coins are in circulation, and also that they are available as numismatic products.

We intend to set up programs that will bring us closer to the public during the millennium celebrations. We are planing to organize picnics in the regions, field days and so on, in order to introduce the Canadian people to our promising artists. The contest winners are of all ages; there are young people as well as some older ones.

A second contest is already underway. I urge you to encourage your colleagues and your constituents to send in their submissions as part of our contest on Canada's future in the third millennium. Canadians have already reacted with great enthusiasm and pride.

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This year we have set ourselves the target of $4.5 million in profits, which we find a little ambitious, but I'm delighted to announce that our efforts have borne fruit and that we are expecting to submit a financial report that will confirm that we have reached our targets. The profits of the Royal Canadian Mint do not include seigniorage. Seigniorage is paid separately and the $1.5 billion that we made is in addition to the overall profits and the profits on the shares that we give to the government.

I would like to point out that a number of my competitors keep their seigniorage. You can imagine that, when I compare myself to mints in Austria and the United States, which have that money available to invest in marketing, I feel I am at a competitive disadvantage. So, we are in a good position, a very good position. However, given the resources that those mints have, we face unfair competition. We, for our part, must generate our profits. The investments that I make in marketing or in capital must be generated from our own profits.

[English]

Y2K, Bev.

Ms. Beverly Ann Lepine: I'm very pleased to report that the Mint is very much on target with its Y2K plans. As indicated in our annual report at the end of 1997, we intend to be fully compliant in the first quarter of 1999, and we will be. Our costs are estimated at—and I'll say “only” because I know what the industry costs are looking like on the Y2K—about $1.5 million to convert those systems that need reprogramming, and about $1.2 million in capital, which was included in our capital budget. So I am pleased to report that although there is a tremendous amount of workload associated with the effort, we are on target.

With regard to whether our competitive mints are up to speed on their Y2K issue, I must say I don't know what the status of their Y2K operations is, other than that the industry generally is—as I am sure you are aware—running slightly in a lag, particularly in non-North American situations.

The Chairman: Marlene.

Ms. Marlene Jennings: I think it might be in your interest and to your benefit to try to find out how your main competitors are doing, because if they're not as up to speed, that can create commercial opportunities for the Royal Canadian Mint. Your expanded borrowing powers and new flexible legal framework will allow you to possibly jump on opportunities that would not have been foreseen were it not for the year 2000 bug. That's not because I'm wishing bad luck on anybody, but if it's going to happen and we're in a good position, it might be of interest to you to try to do a little bit more digging.

The Chairman: Is that it, Marlene?

Ms. Marlene Jennings: Yes, it is.

The Chairman: Then we have Gilles, Roy, Ken, and Carolyn. Gilles Bernier.

Mr. Gilles Bernier (Tobique—Mactaquac, PC): Thank you, Mr. Chairman.

I want to thank the ladies for coming to meet with us this morning at our committee. We met before. You did voice your opinion; I did voice mine. I was vocal in the House. We can argue until we're blue. You will not agree with me and I will not agree with you on that one. We can agree to disagree.

There's a portion of clause 3 in the new bill that I have a problem with. Under clause 3 the authority of Parliament to vote on whether or not they want to add or remove coins from circulation would be taken away, and that decision would be placed solely in the hands of cabinet.

The way it is now, you need approval from Parliament. We as Members of Parliament are here to do a job for all Canadians. We are accountable to Canadians. I strongly believe it should stay the way it is. Would the Mint be fundamentally opposed to leaving the approval process the way it is?

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Ms. Danielle Wetherup: Monsieur Bernier, you are so eloquent. We are very, very sensitive to the role of parliamentarians and, through them, Canadians. I have received your proposed amendment. I can assure you I will diligently and eloquently discuss it with the minister. I think I have to take note of your concern.

Mr. Gilles Bernier: Okay, but at this time in committee.... I know you've seen the proposal. You know what I'm talking about. Do you have personally, as head of the Royal Canadian Mint, any problem with leaving it the way it is, as opposed to the way it is now in the new legal bill?

Ms. Danielle Wetherup: Whatever the government decides, I will have no problems with.

Mr. Gilles Bernier: I thank you very much.

The Chairman: Thank you. Roy is next.

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

[Translation]

thank you very much for your presentation. I congratulate you on your very progressive plan.

[English]

I wish my colleagues Hedy Fry and Jean Augustine were here to witness this very strong management team of the opposite gender to me. I think we need more of it, and you should be congratulated.

Ms. Carolyn Parrish (Mississauga Centre, Lib.):

[Editor's Note: Inaudible]

Mr. Roy Cullen: Thank you, Carolyn, for that correction.

I think what you're proposing here makes a lot of sense to me. But the area that concerns me somewhat, and maybe you can make me feel more comfortable, is if you're going to bid on or propose an international project, for example.... We have some companies in the private sector that are also involved in minting. We've heard a lot about Westaim, but there may be others. Maybe you could educate us on that point. What are the private sector companies in Canada that are in the same business you are in, or parts of the same business?

If you're bidding on an international project and there's a private sector company in Canada that might be bidding as well, would you bid against a private sector company? If you're bidding against a private sector company outside of Canada, frankly I couldn't care less unless it contravenes some bilateral or multilateral agreements in trade, investment, or whatever. How do you make the call? How do you manage that situation if there are private sector companies in Canada that might or will bid on a particular international project?

Ms. Danielle Wetherup: First of all, nobody's in the same business as I am in Canada. We have suppliers. You mentioned Westaim; that is one of our suppliers. But I want to give you a dimension of the type of business we're in.

This year I have sold $98 million worth of blanks. I had to buy $98 million worth of blanks to sell. I bought 85 million of those blanks outside of Canada. I've bought only 30 million blanks from Canada. I have asked Canadians, the one Canadian company we have, to bid on all of those contracts.

The market is enormous. The opportunities are very exciting. The more we do business outside of Canada, the more we are being competitive and the more people want to do business with us, because we assure them quality, timely response, and short delivery. That's our key ingredient right now. We have to have the ability to continue that.

The only time we are in competition with people is basically when we are selling or bidding for contracts. And that competition is usually with the U.K. mint, the Austrian mint, the French mint, the German mint, and then there are a whole lot of little national mints that come in and also get involved. So the fear, or the question, you are alluding to would not materialize.

• 1210

Mr. Roy Cullen: Just for the record, then, what you're telling this committee, as I understand it, is that you have not been competing with Canadian and private sector companies in this field or a similar field. In fact, what I think you're suggesting is that the more capacity you have to be internationally competitive, the more work it will create for your supply chain. And if we can take that as you've said it, then I don't have any problem, personally.

The Chairman: Thank you, Roy.

Ken Epp, please.

Mr. Ken Epp (Elk Island, Ref.): Thank you very much, Mr. Chairman.

I thank you again for coming. It almost seems as if we're old friends; we meet across the table either here or in that little room over in the Centre Block once in a while for a briefing.

I would like to begin also by congratulating you for what you have done. I think we all, rightly, can be proud of the Mint, and I want you in no way to consider that the questions I ask are meant in any way to decrease your effectiveness or your profitability. I think we all support that.

Also, as a little aside, it was only about four days ago when we were sitting in a café in my riding and the subject of the $2 coin came up. I mentioned that during the debate a miracle took place in that I gave not one but two 40-minute speeches on that one single coin. So that was rather interesting.

The Chairman: Did you only get paid $4 dollars for your speech, is that what you're saying?

Mr. Ken Epp: I didn't get paid anything for it, I think.

Also, I don't know whether this was by design or by accident, but it's really neat that although the $2 coin is a solid metal coin it has holographic qualities. I don't know whether you're even aware of it, but if you hold it up in a fluorescent light and move it back and forth, the bear comes right out and stands in front of the background. You should try that. I'll bet you don't know that. Others haven't noticed, but I noticed it quite some time ago, and so we talked about that.

And I still wish that you would have put the buffalo on it, from the guy from my riding, but maybe that will come on the $5 coin.

Anyway, coming back to the issue before us today, Bill C-41, I really think you did not intend to say something when you were making your verbal presentation at the beginning. I wrote it down in quotes, so I think I have it correctly. You said this has the same accountability process as at present. That's what you said in your statement, and yet when I read the bill, as it's proposed particularly.... And it's already been mentioned; I guess my colleague from the Conservative Party brought it up. When we have a proposal to delete a coin or to add a new coin, parliamentary approval is no longer required. Now, to me, that is a huge difference in accountability, as something that touches all Canadians.

Could you just clarify what you really meant when you said that?

Ms. Danielle Wetherup: I think I have to clarify that my accountability framework is in regard to the administration of my portfolio. In terms of the point you have raised, Mr. Epp and Mr. Bernier, with regard to the powers of Parliament, to be very candid with you, the reason we put it in was that when we introduced the $2 coin, a number of members from all parties asked us why we were going to Parliament, and whether it was necessary to take up the time of Parliament. But I get a feeling from the discussion over here that a number of you feel that it is a droit de regard that you would like to keep and I will bring this concern to the minister.

Mr. Ken Epp: I think you can expect an amendment from this committee. At least it's probably going to be put forward in this committee, and hopefully the Liberal members will not abdicate their role as parliamentarians either so that it will pass and the House will then accept this.

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All together, we have right now seven coins in circulation generally. There are very few 50¢ pieces in circulation, so we're really talking about six coins. If you add a seventh.... Once every ten or fifteen years, we make a change.

Here's the way I understand this bill. For example, we've already heard from the Mint that producing a 1¢ coin is not economical. It costs more to build it than it's worth. Isn't that so?

Ms. Danielle Wetherup: That's not so.

Mr. Ken Epp: No?

Ms. Danielle Wetherup: It costs us 0.08 of a cent. It costs us less to produce the cent than the value of the cent. We make seigniorage on the cent.

Mr. Ken Epp: Okay. Thank you for correcting me. I was under the impression that with production costs you had already passed the point of it being—

Ms. Danielle Wetherup: That's why we changed—

Mr. Ken Epp: You changed the metal.

Ms. Danielle Wetherup: We changed the metal.

Mr. Ken Epp: Yes, I'm aware of that. Okay.

But say you were to decide that you no longer wanted to support a 1¢ coin, for example. I really would like to have that debated in Parliament and taken out to the public. I appreciate that you're going to talk to the minister, and we're going to do what we can from this end. I hope we can restore that parliamentary power and keep it instead of taking it away, as proposed by this bill.

I have a question. You said that your financial experts recommended that you increase your borrowing power. I wrote this question down in my notes: Who was this third party? Who are these financial experts? Who are they?

Ms. Danielle Wetherup: We went to Rothschild Investments. They are internationally renowned investment consultants to manufacturing. They have done consultancy work for the British mint. They are known internationally. I don't think I have to talk about Rothschild. We felt that we were going to a very sound company.

Mr. Ken Epp: Yes, that's great. I wanted to get who they were on the record because you kept talking about this third party. In my mind, I had thought even of the possibility of some friend of the minister giving you this advice. He would be a third party.

Voices: Oh, oh!

Mr. Ken Epp: That was just a passing thought. It didn't stay there for long at all.

You mentioned, with respect to a question from the other side, that you wanted to have additional powers to carry out your objects. You specifically came to something I was wondering about. You talked about all of the things you want to do, including, in proposed paragraph 4(1)(b), being able to:

(b) acquire and dispose of any interest in any entity by any means;

They mentioned a competitive plant over in Europe. Do you actually contemplate, on behalf of Canadian taxpayers and your crown corporation, expanding around the world and having subsidiary organizations in different countries?

Ms. Danielle Wetherup: If this were to the benefit of the corporation, if the impact of this created jobs in Canada, and if the impact of this increased the profitability of the Mint, then I would go through the Treasury Board, the finance ministry and an Order in Council so that I would be given, I would hope, the opportunity to do that. Why should those jobs go to the Brits? Why can't they come to Canada?

Mr. Ken Epp: Okay, but if you're thinking of buying a firm that's maybe in manufacturing over in Africa somewhere, then the jobs are there, not here.

Ms. Danielle Wetherup: Okay, I'll give you an example that's hypothetical. Suppose an African nation came to me and said they would like us to consider becoming a partner in producing the coinage for east Africa. I would say, okay, the reason you're coming to us is because we are very strong technically, we have a good reputation, we are good managers, we have a good-quality product, and we are always at the forefront of new technology.

• 1220

By the way, we have developed a hologram. I hope to introduce it in the market soon for numismatics.

Nevertheless, what I would say is that I would work with you potentially on your circulation coinage, but I want to do all of your numismatic coins in Canada. That's an example where, by going into partnership with somebody, you create jobs, you transfer technology, you have Canadians who basically are hired abroad to do some management work, and you're also helping developing countries. The British mint does that right now; we don't.

The Chairman: Keep it short, Ken.

Mr. Ken Epp: Really? I have so much here yet. I gave Werner too much of my time.

The Chairman: You can take it up with Werner.

Mr. Ken Epp: There's no doubt that your new plant in Winnipeg is an industrial process. Really, the part of producing the coin blanks, although it's a little more technical and there are tests and specifications, is not really different from any other manufacturing plant. So you have already begun to do what these changes to the act will do.

I have a couple of questions with respect to the Mint.

The Chairman: Make them really short ones.

Mr. Ken Epp: Well, they'll be really fast.

First of all, how much money do you have in the Mint in that new coin plating plant right now? What is the projected cost to the end? Who owns it? Do you have a separate holding company that you've already set up presupposing that Bill C-41 has been passed, or does the Mint own it directly? Do you also, with your new powers, have intentions to put in an offer to buy Westaim?

Ms. Danielle Wetherup: The crown corporation owns it. We're on schedule, on time, and on target. Basically, 75% of the contracts are in place today, and it's running as smoothly as it possibly can run with regard to that.

Mr. Ken Epp: Do you have $30 million in it?

Ms. Danielle Wetherup: We have budgeted $31 million, and we know we'll be on target.

The Chairman: Ken, we're trying to wind up by 12.30 p.m.

Mr. Ken Epp: Let's give some of the others a chance. We will wind up by 12.30 p.m. If not, I'm going to continue.

The Chairman: Okay. Thank you, Ken.

Carolyn.

Ms. Carolyn Parrish: Thank you, Mr. Chairman.

First of all, I'm glad you clarified your borrowing powers with Mr. Schmidt. I was listening to you answer it. I think he made a good point, and I think your response was good.

I think people have to understand that even though you're a crown corporation, you're out there to make money. The point we danced around at the very beginning was that if you do lose money, it comes out of Canadian taxpayers' pockets. That's what makes you a crown corporation instead of a completely separate and independent company. So you're in the business of making money and being competitive. Much of what this bill gives you is a little bit more leverage so that you can make a bid quickly, borrow money quickly, and interim finance it. So I'm glad Werner asked you that question, and I'm glad you clarified it.

My second point is probably to Mr. Epp. I don't like being challenged with “I hope the government comes along with this, because this is democracy”. I think the minister does represent the majority of the government. I think sometimes we have debates in the House over something like this, such that when it comes to the vote the majority wins, and the minister represents the majority. I would have to really look at whether it would be worth while to have hours of debate in the House on introducing a $5 coin or if in fact there are other things we should be debating in lieu of that.

So I'm not so sure I'll be intimidated by Mr. Epp's challenge into saying that I think we should agree to that amendment, but I will listen to the arguments.

Third, I'd like to go back to the whole question of subsection 7(4). You remember that Mr. Schmidt, at the beginning, was talking to you about the deletion of this subsection, which talks of the money borrowed from the consolidated revenue fund.

My understanding as I've been working through this—I was doing it while I was listening to the other questions—is that subsection 7(4) is really redundant. When the new bill comes in and you're given proposed subsection 4(1), which says you're acting as “a natural person”, you'll be working within the framework of the Financial Administration Act. You'll going to the Treasury Board, Minister of Finance, and Governor in Council, and at some point you'll be audited.

• 1225

So really, you're taking out subsection 7(4) because it's redundant. What you've done in bringing in proposed subsection 4(1), acting as a “natural person”, is cover everything that was in subsection 7(4). And subsection 7(4) has been redundant; you really haven't used it.

Is my understanding of that clear? That bothered me while I was listening to it.

Ms. Marguerite Nadeau: Correct. We took out subsection 7(4), which referred to paragraph 4(1)(e), so we were taking out paragraph 4(1)(e) at the same time. We've simplified these powers. The Mint does have the power to acquire gold. It did have the power before. What we're not referring to is acquiring it on behalf of the Minister of Finance.

Ms. Carolyn Parrish: But by deleting subsection 7(4), you really are, in proposed subsection 4(1), just shifting it and making it more practical.

Ms. Margeurite Nadeau: That's right.

Ms. Carolyn Parrish: Okay, I want to have that really clear in my mind, because it's not as if you've suddenly said “We're not going to check with anybody any more; we're on our own.”

Thank you very much, and thanks for coming today. I think you did a great job.

The Chairman: Okay, Carolyn.

We're trying to wind up at 12.30 p.m. We do have three minutes. Ken, if you're anxious for a really short question there, we'll let you have it, and then we will thank our witnesses.

Mr. Ken Epp: Okay.

The Chairman: Be very brief, though, Ken. We want to wind up.

Mr. Ken Epp: Yes, this is going to be really brief.

I have a question with respect to the new powers that you're going to get to run your organization. In terms of procuring, it says here:

(a) procure the incorporation, dissolution or amalgamation of subsidiaries and acquire or dispose of any shares in them;

What you're saying, especially in proposed paragraph 4(1)(b), and I've already referred to it, is basically to do anything in any way that you want. Presumably that is guided toward carrying out the objects of your corporation.

What do you anticipate? When you put something like that in, it always makes us ordinary mortals think, what is behind this? What are you planning?

Ms. Danielle Wetherup: As we explained before, the type of flexibility and tools that the other mints have, for instance, to buy a distributor in Europe that basically wants to be purchased by a mint, is an example of what we are anticipating.

We were not able to move on that because we would have had to go to Parliament to ask whether we could buy a distributing company in Germany, which is our second largest market. We were not able to do that, because we needed to respond in a timely fashion. The Austrians were and the British were, and the Austrians purchased it. Now that company is owned by Austrians, and we basically feel that it is a disadvantage.

If we had wanted to purchase it and if we had had the power of a natural person, we would have had to have our board of directors, the minister, the Department of Finance, and Treasury Board agree, and we would have had to go through an Order in Council. You can't do that in a reasonable time. To try to get Parliament to approve something like that would take two years.

So that's the type of thing we are trying to anticipate.

Mr. Ken Epp: I have one more quick question, and probably this is for Beverley—pardon me for using your first name. How much money do you owe right now to the consolidated revenue fund?

Ms. Beverley Ann Lepine: Our total borrowings are running at about $42 million to $46 million, and I put it in a range because our short-term borrowings are a function of our working capital requirements and can change on a daily basis.

Mr. Ken Epp: Okay, and you do that with the consolidated revenue fund?

Ms. Beverley Ann Lepine: No, all our borrowings are—

Mr. Ken Epp: You just gave me the total.

Ms. Beverley Ann Lepine: Sorry, I should have answered that more appropriately at the beginning. All our borrowings are with private sector sources.

Mr. Ken Epp: So right now you owe zero to the consolidated revenue fund.

Ms. Beverley Ann Lepine: That is correct. We had $22,000 in the annual report at the end of last year, and that was paid back.

Mr. Ken Epp: So it's paid back, and all this is, then, is that according to your claim—and I want to get this very clear—you want to have the ability to borrow up to $75 million from the consolidated revenue fund.

Ms. Beverley Ann Lepine: No.

Mr. Ken Epp: Explain it, then, please.

• 1230

Ms. Beverley Ann Lepine: We want to be able to increase our borrowing authority to $75 million from any source—consolidated revenue fund or private sector borrowings—but it is private sector borrowings that we have been focused on.

The Chairman: Good questions, Ken.

Mr. Ken Epp: Those were good questions, weren't they? Wasn't it good that I got them in?

The Chairman: Ken, thank you, and thank you, colleagues. I remind you that we have Mr. Massé in on Treasury Board tomorrow, Wednesday afternoon, and we're going to aim to do clause-by-clause next Tuesday.

Mr. Ken Epp: A week today. Okay.

The Chairman: We also have something on Thursday, that being the Treasury Board estimates.

Mr. Ken Epp: What's the deadline for amendments?

The Chairman: Mr. Gagliano is also in on Thursday.

As for the deadline for amendments, speak to the clerk.

The Clerk of the Committee: As soon as possible.

The Chairman: We are adjourned.