Evidence of meeting #43 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spending.
A recording is available from Parliament.
3:45 p.m.
Conservative
The Chair Conservative Kelly McCauley
Welcome, everyone, to meeting number 43 of the House of Commons Standing Committee on Government Operations and Estimates, also known as the PBO's favourite committee, OGGO.
3:45 p.m.
Some hon. members
Oh, oh!
3:45 p.m.
Conservative
The Chair Conservative Kelly McCauley
We're going to 5:30. We have a hard stop at that time, so I'm going to reserve the last five minutes, hopefully, to confirm the issue on the GG, as well as the letter to the CBSA. I know we have lots of questions, so I'm hoping we can just leave that to the end and get going right now.
We have Mr. Giroux. Welcome back. It is always a pleasure to have you with us.
Do you have an opening statement for us, sir?
3:45 p.m.
Yves Giroux Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Good afternoon, Mr. Chair and members of the committee.
Thank you for the invitation to appear before you to discuss our analysis of the supplementary estimates (B) for the 2022-23 fiscal year.
I am joined today by my lead analyst on the estimates, Kaitlyn Vanderwees.
These supplementary estimates outline $25.8 billion in spending, $20.8 billion of which requires approval by Parliament. Of note, the proposed spending related to budget 2022 will total $7.8 billion in these estimates, which brings the projected total for budget 2022 expenditures in 2022-23 to around $11.7 billion.
Additionally, federal spending on the resolution of indigenous legal claims is set to increase by roughly $5.4 billion, given the government’s continued focus on identifying and resolving claims. The balance pertains to other new policy measures the government identified outside its standard financial cycle, that is, the budget or fall economic statement.
A concern that I would like to point out is that the departmental results reports for fiscal year 2021‑22 have yet to be released. This means the government is asking parliamentarians to consider and approve all new spending in 2022‑23 without knowing what results were achieved in the previous fiscal year. Parliamentarians may wish to request that the government publish the departmental results reports no later than six months after the close of the fiscal year. This would provide parliamentarians with more time for ex‑post financial scrutiny and better information for assessing the government’s budget plans and estimates.
Ms. Vanderwees and I would be pleased to answer any questions you may have regarding our analysis of the supplementary estimates (B) or other reports of my office.
3:45 p.m.
Conservative
The Chair Conservative Kelly McCauley
Thank you, Mr. Giroux.
We'll start off for six minutes with Ms. Kusie, please.
3:45 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Thank you very much, Mr. Chair.
Mr. Giroux and Ms. Vanderwees, thank you for being here.
Monsieur Giroux, in your report on the supplementary estimates you said that from 2015-16 to 2020-21 the number of FTEs grew by an average of 2.3% annually, roughly from 342,000 to 391,000.
I also have here a quote from The Hill Times saying that you estimate that “$2.3 billion of this additional spending is needed for the salaries and benefits of an expanding bureaucracy”, which would see the size of the workforce grow to around 409,000 jobs within five years.
That $2.3 billion is quite a number. What is the guiding factor for the significant increases in the public service?
3:45 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's mostly the recent and ongoing investments in various areas of government spending. For example, in the fall economic statement there were additional monies allocated to processing immigrant applications and additional funding for the CRA, so it's difficult to pinpoint one area specifically that's responsible for that growth. It seems to be rather widespread in the public service as the government increases its spending in various areas.
3:45 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
I'm sure you are aware that external outsourcing is also growing significantly, with a 75% increase from 2015. Do you think the government is overpaying for services or projects as it increases spending on both personnel and outsourcing contracts?
3:45 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's an interesting question for which I unfortunately don't have any answer, because we have not looked at the issue of outsourcing of contracts in the public service. Sadly, I cannot provide you an answer on that question.
3:45 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
I mentioned that large number of $2.3 billion. To what extent are projected expenditure increases linked to inflation?
3:45 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
They are to a certain extent linked to inflation, but they are mostly driven by the growth in the number of full-time equivalents. Inflation plays a role, of course, but that will probably be reflected later on as wage negotiations get to their conclusion, which could be compensating public servants for inflation or for slightly less than inflation. It's something that we'll be watching closely because it will have an impact on the overall personnel expenditures of the government.
3:45 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
In your opinion, do you believe the personnel costs for the public service are in line with what is seen in the private sector in Canada?
3:45 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think the growth has been faster in the public sector, generally speaking, than in the private sector, if memory serves me well. I'm saying that based on various Statistics Canada reports over the last few years, but I'd have to look at the numbers in more detail to provide you with a more detailed answer.
3:50 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Previously I mentioned growth from 2015-16 to 2020-21. In your report, you predict that the public service will go from 391,000 full-time employees to 409,000. As I mentioned previously with the link to the $2.3 billion dollars, do you think the government is allocating enough funds for these drastic increases to personnel in the public service?
3:50 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think so, because we have arrived at that projection based on government plans that have been outlined in various budgets as well as updates or economic statements in the fall. That being said, should there be additional government initiatives announced in the coming months, then this number will probably have to rise, depending, of course, on the areas in which the government announces spending.
3:50 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Further to that, can you provide more information on how you are able to predict the growth of the public service?
3:50 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes.
We look at various expenditures that are announced in the budget in the fall economic statement or in the most recent government documents and, using the nature of these government expenditures, we are in a position to determine how many public servants or FTEs that will translate into.
For some measures, it's pretty straightforward—the government announces itself how many additional public servants will be hired—but for others we have to use rule of thumb or formulas that are pretty well known to us.
3:50 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
In your report on the supplementary estimates, section 1 is titled “Why the Government Wants Another $21 billion”. Do you think the funds requested in the supplementary estimates could have been forecasted in either the supplementary estimates (A) or the main estimates?
3:50 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I personally think that some of them could have been, but the issue was probably one of readiness for supplementary estimates. It's quite possible that some of these expenditures were known but were not fully ready—for example, had not gone through the process of the Treasury Board, the group of ministers that oversees or scrutinizes expenditures—or they were not sufficiently developed by departments so that Treasury Board Secretariat did not deem them ready enough for inclusion in the mains or in supplementary estimates (A).
3:50 p.m.
Conservative
The Chair Conservative Kelly McCauley
Thank you, Mr. Giroux.
Thanks, Ms. Kusie.
Mr. Kusmierczyk, you have six minutes.
3:50 p.m.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Thank you very much, Mr. Chair.
Thank you very much, Mr. Giroux, for being here with us at OGGO once again.
Just picking up on the conversation about the growth in the public service, in looking at the period from 2018 roughly to 2021 and looking at the information on GC InfoBase, we see, for example, an increase in full-time employees of about 3,000 for employment insurance. We see an additional 3,000 for tax services and processing at CRA. We see, for example, 500 additional FTEs for the Canada pension plan.
At the same time, when you look at the total federal public service, it still represents, even with the increases, about 0.84% of the population, which is the same percentage proportion as back in 2010. In your opinion, is that a helpful number to look at to say that, yes, even though in real numbers it has increased, it's still relatively the same percentage of the Canadian population?
3:50 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I would say it is, indeed, a helpful number to put that into perspective. It's one thing to look at the absolute number. Compared to the average or to the Canadian population as a whole or compared to the labour force as a whole, it is, indeed, a good metric by which to look at the science of the public service.
3:50 p.m.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
I would imagine that more Canadians means more, for example, inquiries about CPP, more inquiries regarding employment insurance and whatnot, so naturally, I would imagine that you would need more full-time employees to handle that.
Is that one way of looking at it?
3:50 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's one potential way of looking at it. By the same token, you also would expect that with more services moving online as opposed to in-person—as has been the case with the CRA, notably—there would be efficiency gains, especially with answers to questions from Canadians. The number of FTEs per million population would not necessarily be the same in 2022 as it was in 2010, but there may very well be other factors at play. So, yes, that's potentially one good explanation, but there are other factors to consider as well.