Finance Committee on Oct. 21st, 2010

[Christian Blouin]

That is a good question. Some companies make unique vaccines, but others produce vaccines that are somewhat similar. Canada has a bulk purchasing system for vaccines. Public Works and Government Services Canada is responsible for procuring vaccines and it uses a tendering process for that purpose.

The competitive system in Canada is far from perfect. That is another debate. I can come back to that. That said, the system ensures that vaccine prices in Canada are much lower compared with those in the rest of the world.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

How much time do I have left, Mr. Chairman?

[The Chair, Conservative, James Rajotte]

Two and a half minutes.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

This question is for Mr. Campbell from the Canadian Retail Building Supply Council.

In your document, you talk about forecasts and the downturn that the home building sector will experience in the coming years, for various reasons. You cite the report by the Canada Mortgage and Housing Corporation. I am concerned about the lack of affordable housing in the country. This shortage is responsible for a lot of homelessness. People do not have the means to house themselves. That is a problem.

Do you feel that the Canada Mortgage and Housing Corporation, which has accumulated an $8 billion surplus, could play a more proactive role? According to the information that we have been given, the money in their coffers far exceeds what they need to deal with contingencies.

How you would like Canada Mortgage and Housing Corporation to use that surplus to stimulate the building of affordable housing, and by doing so, increase construction activity?

[David Campbell]

That's a good point. The CMHC certainly provides a lot of data on the construction of new homes. Whether it's CMHC or lower interest rates, we encourage the government, through CMHC, to stimulate new home construction, whether or not that new home construction is on the lower end for those who require housing assistance to buy a home.

Quite frankly, I haven't looked at that type of surplus and wasn't aware of that type of surplus at CMHC. If it's there, I would suggest that it could be a great opportunity to stimulate housing at the lower end of the housing market.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

Merci.

I have been asked to switch the order just a little bit. Mr. Brison has to leave, so he's requesting that we have the next Liberal round now. Then we'll go to the Conservative round, to the Bloc, and to the Conservatives.

Go ahead, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

I'm not certain that I need a full round, Mr. Chair, but thank you very much.

[The Chair, Conservative, James Rajotte]

I know that you're very loquacious.

[Scott Brison, Liberal, Kings—Hants, NS]

Nova Scotian politicians are rarely verbose.

Thanks very much to each of you for appearing before us today.

Mr. Corbett, good to see you.

I don't think every case of outsourcing is necessarily good or efficient, but I don't think one can say that the only reasons for outsourcing are matters of convenience. I think there are some cases where we can actually save tax dollars with outsourcing and still have the same service provided to Canadians. I'll give an example. When I was Minister of Public Works, one of the things we found is that our cost of managing our seven million square metres of office space—by the way, seven million square metres of office space would make us the biggest commercial landlord in Canada if we were private sector—was 20% higher than the private sector average, the BOMA average. Plus, we were terrible managers in terms of the buildings we had. I think the Department of Health was in a building that didn't have potable water. Every morning there was an exploding bag of something under my desk when I went into work from one of the buildings somewhere. Anyway, I digress.

The fact is, when we outsourced building cleaning, and it was done in two stages, it did save $70 million per year.

Would you accept that there are some cases of outsourcing where it's fairly clearcut that there are in fact savings for tax dollars and that there's nothing wrong with that if we can make a good case for it?

[Gary Corbett]

I think you're absolute right, there's a place for it. It's just when it becomes out of whack, when we see some of the examples that I've mentioned in the brief, it's obvious it could be better served by having a full-time public service person working in it.

There are legitimate uses for outsourcing, for sure, but it's a bit rampant.

[Scott Brison, Liberal, Kings—Hants, NS]

You're saying it has to be balanced. It can't be ideological; it has to be logical.

[Gary Corbett]

Absolutely, and if we didn't mention that in the brief, then I'm sorry.

[Scott Brison, Liberal, Kings—Hants, NS]

No, no, I appreciate it.

In terms of government spending, I'm very concerned about the size of government debt in Canada. We often compare federal government debt to government debt in other countries, and we often compare it to unitary states. But if we add provincial and federal together, in Canada the gross government debt as a percentage of GDP comes up to around 81.3%. To put it in perspective, the U.S. gross government debt as a percentage of GDP is around 82%. So it's around a point difference.

Our gross government debt, and I'm talking about federal and provincial and municipal combined, as a percent of GDP is worse than the U.K. We're all reading about the U.K. today and about France and Germany. I think sometimes we've got to give ourselves a reality check. I don't want to see us having to do what they're doing in the U.K. today, but part of me thinks that we have to start having an adult discussion with Canadians and stakeholders like the public service today to prevent that from happening in a few years.

Would you have some suggestions as to ways that we could cut the cost of government? Any of you? I know that doesn't sound popular, but I don't want to be in the mess that the U.K. is in and have to make those kinds of draconian decisions in a few years.

I'm in the province of Nova Scotia, which has a tremendously high debt. You're in the province of Quebec, which has a tremendously high debt. It's particularly acute in our provinces, but this is something we have to tackle. We have small business and the public service, and I think we're all united as citizens in this. So how are we going to do this?

[The Chair, Conservative, James Rajotte]

Mr. Corbett, you've got 30 seconds.

[Gary Corbett]

I won't take long. I appreciate that. My members are very concerned. Professionals are concerned. We're watching what's happening in other countries, including Britain and Greece.

For us, we need to proactively work with government and identify ways to help save money. Who better than the people who are inside? We've brought issues and concerns, and also solutions, to government. Public servants can represent the solutions. They're not being asked, and that's part of the problem.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

I want to follow up on that topic and address this to CFIB. I appreciate your information and your members' priorities as well.

I want to ask you about slide 11. It says, “If there were to be decrease in spending, what should the priorities be?” Government administration is 82%, which is more than double the next one.

That's the challenge Mr. Brison was alluding to that we face as federal parliamentarians. When I go back home, I think people are convinced that in Ottawa there's a huge department that's bigger than all the others and is called “Waste”, and that we should just cut it and then we'll be debt free here. The route is that you go through the budget, you go through the annual financial report. You have transfers to persons—primarily seniors' benefits and children's benefits—transfers to provinces for health care, education, social assistance, etc. Those are very low priorities in terms of what people would cut. You have interest on debt, which must be paid. You have National Defence, for which we're slowing the rate of growth. You have foreign aid, which we froze in last year's budget at $5 billion.

There's not a lot of wiggle room, frankly. I definitely respect what your members are saying about their having to make savings, but I think there's a sense—your members are Canadians in general—that the choices they themselves make are tough, but I think they think the government's choices are easier than the choices they make.

The former government made some tough choices in the 1990s but had some real impact in terms of them. I would like you to address that and perhaps give us some guidance about where you would actually further cut. I take your point, say, in section 12, but we're not going to be reaching a balanced budget by 2015 if that's all we're doing.

Do you have any further recommendations on where we should trim spending?

[Dan Kelly]

We do. I think we need to look at the how of delivering services. We've given some examples of a few areas of the what--for example, economic development agencies. It is my understanding that there are 100 communications officials at Industry Canada. Is that a necessary expenditure on the part of the Government of Canada?

I know that would be a drop in the bucket, but the bigger issue our members face is that compared with those in the private sector, salaries in general are dramatically higher in the public service than in the private sector. When you add pension benefits into the mix, they're ridiculously higher than what is available in the private sector.

Unfortunately, even recent decisions on the part of the Government of Canada are making the problem worse rather than making it better. I know how tricky it can be to deal with civil service unions, but we have provincial governments looking at wage freezes, and yet the federal government is looking at fairly decent wage increases in new civil service contracts that are being signed.

We need to start grappling with our debt and deficit problems and we need to start looking at how we are spending our dollars within the civil service.

The other thing we have to consider is the productivity issue. I think many of our members believe—and I have to admit I believe they accurately believe—that often in the civil service there are two or three people doing the job that one person might do in the private sector.

I want to say—

[The Chair, Conservative, James Rajotte]

We're still debating around the margins, aren't we? We are. You don't go from a $50 billion deficit by reducing the wages of public servants. You are not going to reach your balanced budget that way.

I guess I'm challenging you to say...if you want to give us some advice on how to get there in next year's budget, now is your time to do so.

[Dan Kelly]

Absolutely, and I will. One of the specific areas that we have focused on is looking at economic development agencies. Do we need a Western Diversification any longer? Are some of these new agencies that have been created worth the money that is being expended? I have to tell you, a lot of small businesses question whether there's any value whatsoever in some of the areas the federal government dedicates some dollars in.

You are right, some of the areas dealing with pension issues are not going to get us out of the glue tomorrow. But how long can we put off looking at civil service pensions and benefits compared with those of the private sector before we become Greece? This is the challenge our members are facing.

We ask that government take a much harder line in looking at public sector contracts, wages, benefits, and particularly pensions, in order to help get us out of the glue.

[The Chair, Conservative, James Rajotte]

Okay. I have two minutes, and I know Mr. Roberts is champing.... I want to ask about another issue, but if you want to address this one, please do.

[Chris Roberts, Research Officer, Professional Institute of the Public Service of Canada]

I just don't want to let the assertion go about the gap between private sector and public service salaries. The CFIB study has I think been generally discredited because it lumps together all occupations. It doesn't control for educational attainment; it simply compares groups of occupations and doesn't distinguish between professional, highly educated knowledge workers in the private and public sectors and the unskilled and semi-skilled.

In fact, studies that differentiate those occupations in the United States show that there is in fact a public service “hit”—that is, for professionals working in the public service. They tend to be paid less, because of all the bonuses and extra packages that exist in the private sector.

[The Chair, Conservative, James Rajotte]

Okay. I have another topic, but hopefully I'll have another round to come back at it.

I have Monsieur Paillé, s'il vous plaît, pour cinq minutes.

[Pascal-Pierre Paillé, Bloc, Louis-Hébert, QC]

Thank you, Mr. Chairman.

Thank you for being here. This is not my usual committee, but I will take a turn anyway. I find this very interesting. By the way, if the Conservative Party needs advice on where to cut or give funding, the Bloc Québécois provided an excellent report for its first pre-budget consultations last year. We will be pleased to give you another copy if you would like more advice.

I only have five minutes. I would like each of you to explain to me... Mr. Brison explained earlier that Canada and the provinces had an astronomical debt. We need to find new ways of doing things in order to get rid of the deficit.

Mr. Kelly, I believe that what is happening right now in Great Britain is worrisome.

Could each of you tell me very briefly—perhaps this is even in your documents—what measure or action you would propose to the government that would cost no money but would maximize an investment through an innovative change to legislation?

What would be the priority measure in each of your areas that would maximize a committed investment, or what legislative change, etc., would really improve Canada's finances?

[Christian Blouin]

I talked earlier about prevention. Obviously, prevention does have a cost, but it has been clearly shown that it is the most cost-effective medical intervention. It leads to cost savings. That is one possible way of reducing the deficit. Health care spending would decrease. There would be lower expenses for health care and other areas if we did a better job of prevention.