Evidence of meeting #29 for Public Accounts in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was plans.
A video is available from Parliament.
5:05 p.m.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
Obviously the next logical part, then, is regarding the interest off that. That's not a cash payment. Again, that's also the same kind of methodology.
Correct?
5:05 p.m.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
That's very good. Thank you very much.
I'll go to Mr. Watson.
5:05 p.m.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
I will hopefully get another round at some point, Mr. Chair.
5:05 p.m.
Conservative
5:05 p.m.
NDP
The Chair NDP David Christopherson
Thanks, Mr. Albas. I appreciate the cooperation.
Madam Jones, you have the floor, ma'am.
5:05 p.m.
Liberal
Yvonne Jones Liberal Labrador, NL
Thank you, Mr. Chair.
Thank you to our guests today for your presentations.
I've been listening to questions from my colleagues, and I'm going to refer to paragraph 1.49. The question is for you, Mr. Watson.
It was noted in the report that the secretariat's pension and benefits sector started a draft funding policy for public service pensions in 2010. I know you have talked a bit about it already, but let's fast forward to 2014.
Can you give me an update? Is the policy still in draft form and why has it been so long, or why has so little changed with regard to this commitment that goes back four years?
5:05 p.m.
Chief Human Resources Officer, Treasury Board Secretariat
Thank you very much for the question.
Under the existing legislation, there is already a requirement that the plan be invested in a way that it works towards the goals that are set by the chief actuary—in this case, 4.1%—in a way that doesn't bring undue risk to the fund.
We recognize that we need to go beyond that and do a funding plan. We've begun work on that. When we did the significant changes related to sustainability, in 2012, that was a considerable amount of work to make sure that we got that right for what is probably the biggest, or at least one of the biggest, pension plans in the country. The funding plan work has not advanced as quickly as it would have had we not done that, but we continue to work on that, and we expect to have that done sometime in the next fiscal year.
5:10 p.m.
Liberal
Yvonne Jones Liberal Labrador, NL
Okay.
I don't know, Madam, if you would like to add to that comment in any way.
5:10 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
I have no real comments to add.
5:10 p.m.
Liberal
Yvonne Jones Liberal Labrador, NL
Okay, thank you.
My next question, again, is related to paragraph 1.42, and I know that my colleague Mr. Giguère has already raised some pieces around this, but what I found in the report that stuck with me was that you indicated that the secretariat officials stated to you in their audit that they had conducted some analyses on other pension designs, but at the same time they were not prepared to share any of the analyses, any of the information, and any of the evidence to support the design of the plan and the steps that they had taken. This causes me grave concern, because we're dealing with thousands of Canadians who are very dependent upon what happens and on how these plans are being managed to ensure the sustainability of it is there for them and for their families.
I think all of us in this room as well as everyone else who's in a position in Parliament want to ensure that those guarantees are there for Canadians. I have great difficulty always when I am asked to take someone's word that they've looked at something and that this is the best possible option. I'm looking at it from the view of people who work in the RCMP, the Canadian Forces, and the public service, and I'm saying to myself, “Is this acceptable?”
So my question would be to the Auditor General. How can you properly do the analysis that you need to do if you don't have the information and the evidence to support the audits that you're working on?
And I would say to Mr. Watson, why would you not want to share this information to verify that the Government of Canada has made the best decisions possible in the interest of Canadians?
5:10 p.m.
Chief Human Resources Officer, Treasury Board Secretariat
I would just say I think it's important to differentiate between the evidence around the decisions we did make and the decisions we didn't make. The assumptions that support the decisions that we did make are assumptions largely based on the work of the Chief Actuary, and those actuarial assumptions are available in various reports. They are quite detailed, and I'm happy to talk about those in a briefing. What's being talked about in the section that you referred to are the decisions we decided not to proceed with.
In terms of understanding what we use as assumptions, including things such as the $7.7 billion that is set aside to deal with longevity issues that might change, those are all very public parts of our decision.
5:10 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
Mr. Chair, perhaps I could add our perspective. As the member pointed out, access to information is essential and crucial to the nature of our work. We would not be able to accept a representation by management and government and then conclude that work is acceptable without seeing adequate evidence. That being said, in this particular case we were concerned about whether there are ways and means of assessing sustainability on an ongoing basis.
So when the government indicated that in leading up to the budget 2012 there were certain provisions made, there were a number of analyses done, we basically wanted to know if that due diligence had been sufficiently carried out. When the evidence wasn't presented to us, we just could not reach a conclusion based on that and give them the benefit of the doubt. But that did not stop us from coming to the conclusion that really there needs to be an upfront acknowledgement that they would do this on a systematic and periodic basis. There have been a number of conversations over the course of the audit to ask if Treasury Board would be doing this, or another entity, and whether somebody has the responsibility to carry out the assessment of sustainability on a regular basis. That was never made clear all through the audit, leading right up to the conclusion of the audit. Hence we made that recommendation, and there's receptiveness on the part of the government to actually take that on.
Coming back to the question of access, it is fundamental, but in this particular case it did not prevent us from coming to a major observation and recommendation that we wanted to get to, and that's why we just basically noted it for information and did not go further with that.
5:15 p.m.
NDP
5:15 p.m.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
Thank you, Mr. Chair.
Going back to Mr. Watson, under page 8, speaking of budget 2012, the changes that the government did make, it says here that “...will result in cumulative savings of over $2 billion for Canadian taxpayers by the 2017–18 fiscal year”.
So just as a very quick question, that's about $400 million a year. Is that correct?
5:15 p.m.
Chief Human Resources Officer, Treasury Board Secretariat
It's $2.6 billion. That's what we've calculated for four years, 2017-18, and $900 million-a-year after that. So it's $2.6 billion divided by four.
5:15 p.m.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
It says $2 billion for taxpayers, so $2.6 billion is the estimated amount?
5:15 p.m.
Chief Human Resources Officer, Treasury Board Secretariat
That's the amount that I work with.
5:15 p.m.
Conservative
5:15 p.m.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
That's a very good thing to have.
Ms. Cheng, I just want to give you a compliment. I've been in municipal circles—and, obviously, here for close to three years—and no one has really defined sustainability in the fiscal sense, so it's just very nice to read a document that actually defines it. Full kudos to your office for doing that.
I did have another question for Mr. Watson.
If you go to page 17, my question arises here, at the very top: “At the time we were completing this audit, the Secretariat (Pension and Benefits Sector) was still not fully staffed”. I think that goes back to the ongoing capacity need.
Can you just give us an update on where that is now?
5:15 p.m.
Chief Human Resources Officer, Treasury Board Secretariat
These are highly specialized staff, as you can imagine, unlike say, staffing or classification, whom you'd find in every department across government. These are very specialized people.
We have just recently made some significant hires and continue to do so, but it is one of the areas in the economy where people who are this good at this type of issue are in high demand.