Government Operations Committee on Nov. 20th, 2012

[Bill Matthews]

I'll make a couple of my comments and then turn to my colleague for a more detailed explanation.

What you have in this document is the money that will be spent this fiscal year, and we do reference back to previous supplementary estimates. Also in these supplementary estimates (B) are the funds that are being requested to be spent this year, with specific allocations.

On the other document that is being referred to, there is a central government advertising reserve. When there are funds allocated, which could be for multiple years to certain advertising programs, it is made public what has been allocated from that central amount. What you see here is what will be spent in the current year. That other document that was referred to is actually a more longer-term view about what has been allocated from the centre.

The third piece that I'll add before I turn to my colleague is that departments can also spend money on advertising from their existing reference levels, so this is just a horizontal piece for advertising that has been requested in these supplementary estimates, and there are two major items.

I'll turn to my colleague for additional comments.

[Sally Thornton, Executive Director, Expenditure Strategies and Estimates, Expenditure Management Sector, Treasury Board Secretariat]

If I may, I'll elaborate, because it's very confusing. There are always different numbers being presented on advertising and picked up in the media from supplementary estimates and the annual report.

Basically, as Mr. Matthews said, there are two fundamental ways to fund advertising. One is through the government advertising plan, and that is reviewed by cabinet annually to address new government priorities each fiscal year. You see those in-year requests through supplementary estimates. Departments and agencies prepare proposals for review for Privy Council. They're challenged, and they're approved at that level. Then submissions go to the board. The board approves them, and they ultimately get reflected in your estimates process.

The second route is that departments can fund some advertising from their internal reference levels. You often see that in the reports on plans and priorities.

Where do you see the bigger picture as opposed to just what's in-year? Treasury Board Secretariat posts on its website a quarterly posting of all the things that have gone to the board that have been approved. Those would be any of the advertising initiatives pursuant to the government advertising plan that have the policy approval and have gone through the submission challenge process. They're posted there quarterly as they are approved and also for multi-year. As a result, the numbers on that posting are different from what you see here, because you're only seeing this year's spending in the supplementary estimates.

On the quarterly, you will see decisions made last year that have implications for this year as well. We also show when something has been taken away, so there are reductions as well.

If you want to know everything with regard to advertising, the best place is Public Works. They do a regular annual report that captures all of the government advertising.

[The Chair, NDP, Pat Martin]

Jacques, I'm afraid you're well over time. Thank you very much.

Next, for the NDP, we have Denis Blanchette.

You have five minutes, Denis.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for being here.

As my colleague said, what is in the supplementary estimates is interesting, but what is not there is also very interesting. For example, the fact that vote 30 has not increased means that your forecasts were quite accurate. So congratulations for that accuracy.

I would like to clarify one thing. Of course, the quarterly reports let us follow things step by step. Most of the budget cuts come from letting people go, of course, which is being done in a number of ways. Some employees are going to retire, others will be entitled to severance pay, others will change careers.

I would like to know one thing, right here, right now. We have asked for this several times now and, each time, we have been told that we will get the figures later. You are the central agency; you are in charge, as Minister Clement said yesterday in the House. I would like to know how many jobs have been eliminated to date and how the cuts are distributed.

[Alister Smith]

You're referring to the statement in the House of the breakdown of numbers to date.

We have provided some information in response to parliamentary questions on the breakdown by department, by portfolio. To get too precise on who is where within the various categories is complicated, because in many cases people are choosing. They are pursuing their options.

We first inform the individuals when they're affected, and we deal with the unions. That process works its way out. It's very hard to be absolutely precise on the categorization of individuals.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I agree with you; it is difficult to be precise and I am not expecting that level of detail right at this moment.

However, you will surely acknowledge that you can give us figures to a certain extent. You can tell us what the trends are and what is happening. You could perhaps make a comment at the end on the effects of the cuts. We are actually starting to see that it has been necessary to rehire people after the cuts have been made. Could you tell me about the figures and then about the effect on human resources and the budget reallocations that are necessary as a result of it all.

[Alister Smith]

There are a series of questions there. I'll start, then I'll turn to my colleagues to provide more information.

We do have an idea, as I mentioned, that we are on track, not ahead of schedule, in the reduction of positions. Now, there is attrition—that is, people in an aging workforce are leaving the public service. You have to take that into account as well as the impacts of these reviews.

As mentioned, and I won't get into repeating this in detail, we won't be able to get great precision on who is where until the process of the workforce adjustment has worked its way through the system.

That said, we have provided information on where the reductions will be, by portfolio, over the three years, and some estimate of those that are a direct result of the spending review.

I think we have provided a fair amount of information. We do track this closely. There will be changes along the way, and we will have to pick up those changes and report them.

I should also mention that we have not frozen hiring. There will always be a need for new hires in the public service, even while other people are leaving, because there are always shortages in certain areas.

Let me turn to my colleagues.

[Bill Matthews]

The announcement last week, Mr. Chair, was that 10,900 jobs were eliminated so far. The vast majority of that reduction was through attrition.

As my colleague has already mentioned, in an average year roughly 12,000 people leave the public service. They leave through retirement or they decide to make a career change. When you think about eliminating 19,200 positions over the three-year period, and you have a norm of 12,000 people per year leaving the public service, it's easy to see that a good deal of this can be done through attrition.

To date, of the 2,200 or so who have been through workforce adjustment, as I mentioned, 700 are on the surplus—

[Denis Blanchette, NDP, Louis-Hébert, QC]

Forgive me for interrupting, but are you able to provide a breakdown of retirements, which are helping you meet your objectives, and the positions that have been eliminated and that would be maintained if you were not subject to this job-elimination policy?

[The Chair, NDP, Pat Martin]

Give a very brief answer, please, Mr. Matthews.

[Bill Matthews]

Mr. Chair, of the roughly 10,900 jobs eliminated to date, I cannot distinguish between people who have retired and people who have decided to leave the public service for another career, but roughly 7,500 of those jobs have been eliminated without having to use workforce adjustment, and 2,500 or so through workforce adjustment. These numbers are going to change as we go through the three-year process.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Matthews.

Mr. Cannan is next.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you again to our distinguished Treasury Board staff. The subcommittee of our government operations committee appreciates your willingness to provide more insight into this very daunting task. We throw around numbers in the millions and billions. It's a humongous amount of money that's being appropriated here. It's not just this committee that's doing an overview of the supplementary estimates (B), but other committees as well, and I want to ensure that all of us will be responsible for that oversight.

Specifically to the Treasury Board submission that you had this morning, I wanted to clarify one of your opening comments. You talked about 63 organizations and a request to approve $2.5 billion. How many organizations overall in the government are there, and why are there only 63 specifically in the supplementary estimates (B) that you are reporting back to the committee?

[Alister Smith]

The short answer on the last part is that only 63 organizations at this point had a request for additional funds that had to be included in this document. Some departments have not had a requirement for new appropriations and had no new budget initiatives. Therefore, they would not show up in supplementary estimates.

[Bill Matthews]

Maybe I'll give a bit of additional context, Mr. Chair. There are roughly 135 organizations that could come in for funding. As already had been mentioned, this is a subset.

Supplementary estimates (B), or our fall supplementary estimates, are traditionally the biggest of the three supplementary estimates, just because of the time of year. It does give departments some time to deal with any budget funding they might want to deal with, but departments are not obligated to come in. Departments only come in for funding if they have been to Treasury Board to get a new program or additional funds approved. There's no obligation on departments, but supplementary estimates (B) are the largest of the three, typically.

If you're curious about how it relates to previous authorities at this stage of the year, on the voted front, as was already mentioned, we're at about $2.5 billion in supplementary estimates (B) this year. We're down over the previous year's roughly $2 billion at this time of year. If you go back two years to 2010-11, we're at about $8 billion less. We're about even with the 2009-10 numbers, just to give you some perspective of where that is. On the statutory front, we are at slightly less than the last couple of years.

However, there's no obligation for departments to come in. Of this 135, we have a subset, but traditionally this is the largest of the supplementary estimates.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you for that clarification.

Additional major items, as you mentioned, are just over $91 million for IRAP, the industrial research assistance, where we're investing in innovation. There's also first nations drinking water. Another one that's very important—I spent nine years in local government—is that we continue to invest in community infrastructure, with $75 million.

On page 11 of the supplementary estimates, the Office of Infrastructure of Canada request is for $122 million “to meet the government's commitments to the Gas Tax Fund to support environmentally sustainable municipal infrastructure projects that contribute to cleaner air, cleaner water and reduced greenhouse gas emissions”, which I know is very important to my community of Kelowna—Lake Country.

I spent nine years in local government working with the Federation of Canadian Municipalities. We struggled and were able to ascertain that the ongoing $2 billion commitment for gas tax was enshrined in budget. Could you clarify that this is money that ensures the $2 billion is then reprofiled for 2012-13 going forward?

[Bill Matthews]

Correct.

Mr. Chair, the question is around the gas tax. The way Parliament approves money is annual; if money is not spent in a given year, it lapses. If the department wishes to spend that money, they need to come back to Parliament and get permission to spend that money.

Because departments are not allowed to exceed their appropriations—it's against the law to spend more than what Parliament has appropriated—departments estimate the most they can spend. When you're dealing with things like the gas tax, where you're negotiating with provincial and municipal governments, there are often delays in spending. This is a case where the ideal was to spend some of that money in the previous year. It didn't happen and they're moving into the current year, but because Parliament appropriates money annually, we have to come back for that money again this year.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

That's great. I know that FCM will be happy to have that strong, stable, predictable funding that's there—

[Bill Matthews]

Sorry; my colleague wanted to add something.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Sure.

[Sally Thornton]

In this specific instance, the moneys that are being reprofiled are being reprofiled because of three jurisdictions: New Brunswick, Yukon, and the City of Toronto. There were simply delays in meeting their reporting requirements. This is to ensure that they have those resources available this year, once they meet those commitments.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

As I said, page 11 talks about $122 million, but then, in your chart on page 13, it talks about a 2.1% increase to the Office of Infrastructure of Canada. That's only $108 million. What would be the discrepancy of approximately $14 million?

[Bill Matthews]

If I recall correctly, there's additional funding in here from infrastructure beyond just the reprofile, so it's the reprofile plus some additional funds. That's why you get the increase.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Okay.

Moving forward—

[The Chair, NDP, Pat Martin]

I'm sorry, Ron, you're over your time. Thank you very much.