Government Operations Committee on Nov. 20th, 2012

[The Chair, NDP, Pat Martin]

Well, that's very good. Those are specifics.

Finally, is that the whole amount? Was there any in the supplementary estimates (A) or the main estimates, and will there be any subsequently in the supplementary estimates (C) or the next estimates?

[Bill Matthews]

I can't make any promises as to what might be in future estimates. I suppose we'll have that chat at the supplementary estimates (C). This, to my knowledge, is what they will need this year. If they're still in transition next year, we may have the same issue again, because estimates are for an annual appropriation. We'll have to see how they do in the future.

[The Chair, NDP, Pat Martin]

Okay.

We're going to be begin our next round with Jean-François Larose.

You have five minutes, please, Jean-François.

[Jean-François Larose, NDP, Repentigny, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for joining us.

My first question on the supplementary estimates (B) is this. Are these savings the result of budget reduction action plans, also called the Strategic and Operating Reviews?

[Bill Matthews]

Thank you, Mr. Chair.

The vast majority of the offsets you're seeing here in the supplementary estimates (B)—and there are a few different varieties—are related to savings that were identified in Budget 2012. I believe there is still the odd reduction being done for things like strategic review, because there are still some strategic review decisions being implemented. I'm looking to Sally to confirm that.

[Sally Thornton]

Yes. Of those, almost 95% are from the strategic and operating review from Budget 2012, but there are still some tails from the previous rounds of strategic reviews flowing through, and also some instances in which organizations have indicated they will not be using the funds, so we're reprofiling them.

[Jean-François Larose, NDP, Repentigny, QC]

So the answer would be yes?

[Sally Thornton]

Yes.

[Jean-François Larose, NDP, Repentigny, QC]

Here is my second question. Is the government counting on cuts to make up for those budget reallocations that were actually supposed to go towards eliminating our deficit?

[Bill Matthews]

Would you expand on that question? I'm not sure I quite understand it.

[Jean-François Larose, NDP, Repentigny, QC]

I could maybe translate it. I'll go more slowly.

Is the government counting on cuts to make up for those budget reallocations that were actually supposed to go towards eliminating our deficit?

[Bill Matthews]

What you're seeing here, the actual reductions that are in place, are the responsibility of departments to implement, because they're very much based on proposals that departments and ministers brought forward.

You'll see, as we do main estimates for next year, how each department's reference level has been impacted by the cuts. You'll compare next year's to the current year's and you'll actually see the reductions for each department.

I'm not sure if that answers the question. Did you want to add something?

[Sally Thornton]

The cuts are taken off the top at one instance, so they are realized. There are internal reallocation efforts going on throughout departments, but no matter what, those cuts are realized.

[Jean-François Larose, NDP, Repentigny, QC]

So we can anticipate more reinvestments of the savings from the reviews in future estimates?

[Bill Matthews]

The goal of the strategic and operating review was to look at both operations and departmental spending in an effort to get the government back to a balanced budget. The Minister of Finance recently tabled his economic update in terms of how that factors in. The $5.2 billion in ongoing savings will be directed towards getting back to a balanced budget. It's not about reinvestment; it's very much about meeting the government's goal of a balanced budget.

[Jean-François Larose, NDP, Repentigny, QC]

I can understand that it is difficult for you to answer. The reason is simple: the minister was supposed to be here today and the questions were more intended for him. Unfortunately, he is not here, but I still appreciate your presence.

Could you give us an in-depth explanation of the differences between vote 15b, compensation adjustments and vote 30a, paylist requirements?

[Bill Matthews]

In terms of an overall payroll package, the a salary for a departmental employee is in the department's existing reference levels.

We have certain examples of cases in which we didn't want to permanently increase departmental salaries for a given occupation group, but we recognized there were recruitment and retention issues. Doctors and nurses are a great example. They have allowances that we manage centrally, because the money for those is not put into departmental reference levels because it's not yet part of the employee's salary.

The goal of those allowances is to be temporary in nature. If we get to a point where the allowance has been temporary for a number of years, we say, “You know what? Maybe we should roll this into their salary”, and at that point we transfer the money to the departments.

This is basically compensating departments for those employees who receive these allowances, which are generally related to recruitment and retention and therefore are not part of their base funding. They're still managed in the central reserve, and we basically allocate out to departments.

I mentioned that the engineering and architects group was a big part of this one, as is the health services group, which is doctors and nurses. They're the two major components here.

[The Chair, NDP, Pat Martin]

You have about a half a minute if you want it, Jean-François.

[Jean-François Larose, NDP, Repentigny, QC]

Thank you.

What I can understand is that you are treating employees differently.

Can you give us a written summary of the different categories, the number of employees in each one and what that means for salaries and benefits?

[Bill Matthews]

Regarding the actual list of terminable allowances that are contained in these estimates, I've mentioned the two big ones, but I can run through the major groups and tell you the number of people, if that's worth doing.

In the architecture, engineering, and land survey group, there are 3,600 employees. The research group has 834. Health services, which I've mentioned already—that's the doctors and nurses group—has 2,323. We have a fourth group, applied science and patent examination, with about 600 employees in it. We have a technical services group, which has about 900 employees, and the university teaching group, which has 200.

Those are the ones with allowances that are impacting these supplementary estimates (B).

As I mentioned, sometimes if there are allowances that have been temporary for a number of years but are still needed, we formally put them into an occupational group salary level, but that's part of the collective bargaining process, so I can't really comment on changes there.

[The Chair, NDP, Pat Martin]

Your time is up, Jean-François. Thank you.

For the Conservatives, we have Peter Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair, and thank you to our guests from the Treasury Board Secretariat for being here once again.

My first question arises from the supplementary estimates (B). Could you elaborate on the transfers of $150,000 each from FedDev and the other economic development agencies? Could you elaborate on the purpose of those transfers and where the funds were transferred to?

[Alister Smith]

I'll ask Christine to answer that.

[Christine Walker]

The transfers totalled $600,000 for four regional development organizations: the Atlantic Canada Opportunities Agency, ACOA; the Federal Economic Development Agency for Southern Ontario; Western Economic Diversification Canada; and the Economic Development Agency of Canada for the Regions of Quebec. Those were the four agencies.

Each transferred $150,000 to Treasury Board, to the internal audit section of the Office of the Comptroller General. They've outsourced their internal audit functions to the Comptroller General, who will now provide all of their internal audit functions. It's a more effective and efficient model because they're small organizations, and this was part of the announcement in Budget 2012.

As for the new functions of TBS, they'll do normal internal audit functions. They'll do the risk-based audit plan, they'll perform core control or compliance audits on financial management policies and directives, and they'll do specific internal audits as requested by the regional development agency.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay, great.

So that's a streamlined, harmonized process—