Government Operations Committee on Oct. 17th, 2006

[The Chair, Liberal, Diane Marleau]

Welcome to our guest, the President of the Treasury Board, the Honourable John Baird. We're happy you could make it on such short notice.

I'm going to ask the indulgence of the committee to move any discussion on motions until after the minister's presentation. If you're in favour, we'll do that.

As you know, we allow you to make a short presentation, and then we open it up for questions.

Mr. Baird, if you want to introduce the people with you, the floor is yours.

[John Baird, Conservative, President of the Treasury Board]

Thank you, Madam Chair. It is always a great pleasure for me to come before you to talk about my work as president of the Treasury Board.

I am accompanied by David Moloney and Wayne Wouters. We are here to answer all your questions about government operations.

Thank you, Madam Chair.

I welcome the opportunity to discuss the tighter approach to expenditure management and responsible spending adopted by the government since we took office and the savings measures we announced on September 25.

In my opening statement, I'd like to provide a high-level overview of three issues: first, why we're taking these measures; second, how they're being implemented; and finally, third, what this means for the future. After that, my colleagues and I will be happy to answer your questions on the specific details of our expenditure management initiatives.

Let me begin first with the principles, the reasons for these measures. Nearly a year ago, Canadians elected a new government on the promise of greater openness and greater accountability. Nowhere is this promise more important than on the issue of how government spends. Canadians have told us that they expect their hard-earned tax dollars to be invested responsibly in effective programs that meet their priorities. They're concerned about waste in government programs.

Unfortunately, the expenditure management system we inherited is not up to meeting the challenge of those concerns and of those expectations. Over the past decade or so, an incremental approach to funding decisions has become entrenched as a way of doing business. Many would be surprised to hear that the government is spending about $5,000 a year more for each Canadian family of four in programs and services than it did just five years ago, in 2001.

Over the past five years, total program spending has grown, on average, by 8.2% annually. In 2004-2005, growth in spending reached 14.4%. It's clear that a new approach is required, and we've already taken steps in the right direction. The Federal Accountability Act, our first piece of legislation, will establish important new checks and balances and enable Parliament and Canadians to see more clearly where tax dollars go and how they are applied against measurable results.

The vital next step is to renew the government's expenditure management system to position us to spend better on behalf of the people of Canada to ensure that we get maximum value. This will involve making important improvements in four key areas: enhancing the quality of information that departments provide to support cabinet and government decisions; reviewing existing programs on an ongoing basis so that ministers have the performance information they need to make sound decisions; ensuring that departments focus their management effort very explicitly on the need to achieve and demonstrate value for money; and finally, better reporting to Parliament and Canadians where we spend taxpayers' money, what we achieve with it, and whether they're getting good value for money, so the government can be held to account.

Madam Chair, this brings me to my second issue: how we deliver on the first step to do more responsible spending; that is, delivering our budget 2006 commitment to secure $1 billion in savings. As I announced on September 25, 2006, achieving the $1 billion in savings will be accomplished through tighter and more disciplined management of spending, which actually started on the first day we took office, and through the results of the review of programs we conducted and announced in September.

Let me tell you how we conducted the review. Building on the directions and the criteria set out in the budget, we adopted a rigorous approach and took responsible decisions to ensure that federal spending achieves results, provides good value for money, and most importantly, meets the priorities of Canadians. I worked with my officials to review spending plans from past budgets and consulted ministers to identify programs and spending in departments that do not meet the criteria we had set out in the budget.

In July and August, a committee of ministers established by the Prime Minister met three times to review savings proposals in detail and ensure that they met the budget criteria. The savings proposals were then considered and agreed to by cabinet. We have made some tough but responsible choices on behalf of Canadians. The list of savings totals $1 billion and it reflects the savings we identified in those programs that had unused funding because of lower take-up or because the objectives were being achieved through other programs, those that did not provide good value for money, those that could be delivered more effectively by streamlining or consolidating, and those that were not meeting the priorities of Canadians.

Let me give you a few examples of cuts made within my own Treasury Board portfolio. The previous government had decided to spend an additional $20 million to support regional ministers. We believe that the existing funding of $3.8 million is sufficient for that purpose and decided not to proceed with additional spending, saving $20 million for Canadians.

By eliminating uncommitted funding for government-wide initiatives, we will achieve savings of $18.5 million. This is funding that is no longer required, from past government-wide initiatives.

A reduction in program funding for the Public Service Human Resources Management Agency of Canada should generate more than $83 million in savings, and this includes eliminating funds set aside for the previous government. There was more than is required to proceed with necessary classification work.

Savings of over $9 million will be achieved by reducing low-priority training for federal employees at the Canada School of Public Service. The school has a budget this year of $89 million to deliver its programs. We will save $9 million over two years, while ensuring the school's resources are focused on core federal learning priorities.

I can provide many more examples of the significant economies, but in the interests of time I'll move on.

I'd like to conclude my opening remarks by focusing on the future and how the government will continue to ensure it is generating the best possible value for taxpayers' dollars. Responsible spending is the cornerstone of accountable government. Furthermore, responsible spending is not a one-time exercise; it's the way this government intends to manage tax dollars year in and year out. These reforms signal a fundamental change in the management culture in the federal government, a change that is essential for ensuring ongoing fiscal discipline and measurable results on the issues that matter most to Canadians.

All Canadians have a direct stake in the success of the exercise. Canadians are solidly in favour of a plan for managing spending and the need for the government to make decisions based on clear criteria and on measurable results. Our expenditure management system will lay the groundwork for disciplined and well-informed decision-making and transparent reporting. The government intends to be open and straightforward with Canadians regarding the public finances. Making this vision of accountable, transparent government a reality will require a better way of managing overall spending throughout the Government of Canada, with a much stronger focus on results.

Going forward, the government will make responsible spending the norm by requiring that all new and existing programs go through a systematic and rigorous examination. This will ensure that this government only approves funds that are actually needed to achieve measurable results, in a way that is effective and that provides value for money. Our new expenditure management system will be built on the principles of fiscal discipline, managing the results, and maximizing value for money. This government's new direction in spending management is a clear departure from the wasteful ways of the past.

Through these initiatives, Canada's new government will ensure significantly greater transparency, accountability, and value for money in all federal spending. We will settle for nothing less. That's why this undertaking is at the centre of this government's management agenda.

Thank you, Madam Chair.

[The Chair, Liberal, Diane Marleau]

Thank you, sur.

Mr. Bains from the Liberal Party, you have the floor.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you very much, Madame Chair.

Thank you very much, Minister, for coming today.

I've listened to your opening remarks and you've clearly indicated a set of savings. You gave examples, which I appreciate, but somehow there were some examples that were missed. I just wanted to highlight those that you have not brought to the attention of the committee in your opening remarks: the $5 million cut from Status of Women Canada; the $10 million elimination of the youth international internship program; the $11 million elimination of the first nations and Inuit tobacco control strategy; $18 million for the literacy skills program, which I will come to later on; $55 million for the youth employment initiative; and $6 million for the court challenges program, to just name a few of the cuts that you didn't indicate.

You indicated that the decision to make these cuts was based on the premise that you wanted to eliminate waste and that you wanted good value for money. In your opinion, concerning these cuts for women, for aboriginal people, for youth, and specifically for minorities, for literacy skill programs, are they considered a waste and not a good value for money?

[John Baird, Conservative, Ottawa West—Nepean, ON]

We have only eight minutes for this round, so let me respond to the first two examples you listed.

The cuts, for example, at Status of Women Canada are on the administration side, not on the grants and contributions side. I think if you look at the ratio of administration to the grants and contributions side, it would probably be among the highest in the public sector. We want to focus on results, so rather than making the easy decision of cutting the grant budget, we wanted to ensure that we have a more streamlined administration. There are very few departments of that size, if any, that have the type of regional operation that it does, for such a small budget.

I'm not sure if all of the cuts that were made by the member for LaSalle—Émard in 1995 have been reinstated. I'm not sure if it has been brought up to the level that he inherited. But with respect to aboriginal people, yes, we eliminated the aboriginal effort to combat smoking. Smoking cessation efforts were not successful in that regard, and that's what we were spending public dollars on. We measure our commitment not on how much money we spend, but on the results that we get, and the Minister of Health will be coming forward with a program that will hopefully actually lead to smoking cessations for the market they're targeting.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I appreciate the feedback on this.

The question I had was on the literacy costs to the program, the $17 million or $18 million that was cut. Since we tend to quote from the newspapers, I'll quote you with respect to the cuts to literacy needs. You said that “we've got to fix the ground-level problem”--kids who don't learn to read properly in school--“and not be trying to do repair work after the fact.”

Do you still believe that the literacy cuts should have been made, specifically with respect to adults? Do you still believe they don't need these things?

[John Baird, Conservative, Ottawa West—Nepean, ON]

It is a gross distortion to read that into any comments I've made.

I was forced earlier this month, two weeks ago, after the member for Wascana had quoted me falsely, to challenge him to table tapes of the quotes he'd attributed to me. In fact, when he did table them, they didn't quote me as he said they would. I got up on a point of privilege. The member for Wascana has refused to retract his comments, while the tape he provided did not have me saying what he had repeatedly told the House.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Did you say what I just quoted?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I don't know about the exact quote that you read from the newspaper. I would encourage the member opposite not to believe everything he reads in the newspaper.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I'm just following your lead from question period.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I took my own experience as someone from our province of Ontario. In Ontario, federally and provincially, we spend more than $20 billion on education, training, and learning. We provide supports to pre-school programs, primary and secondary levels, the post-secondary level, and colleges and universities. We provide funds for immigrant settlement and adult education. In my community, this happens within four school boards. We provide substantial funds to EI, through social assistance. We provide substantial funds through the labour training agreement.

All these things have infrastructures in place. We have to ensure that each one, whether it be for children, youth, or adults, achieves success in teaching people how to read. Rather than develop a federal program for something that is clearly provincial jurisdiction, rather than try to clean up the failures of previous systems, we should work to ensure that for all Canadians—children, youth, or adults—there is a good system in place. We have increased support in many of these areas, particularly immigrant settlement. In the Department of Human Resources and Social Development, they spend $28 million on enhanced language training. We're spending an additional $900,000 on essential skills and workplace literacy, $73 million on the workplace skills strategy, $2.6 billion for aboriginal education programs, $4.4 million for computers in schools, over $1 million for adult education skills in the Maritimes, $63 million for the sector council. I could go on and on.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I appreciate that.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Rather than have duplication, we should try to get it right the first time—or at least the first ten programs that we provide literacy training to.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

That is a fair comment. You're saying that the federal government should focus on national productivity, a more skilled workforce, a more competitive economy. But I hope you are aware of this: if Canada could boost its literacy rate by even 1% relative to the international average, its productivity would increase by 2.5%. I want to bring that to your attention when you talk about the federal government having to be careful—

[John Baird, Conservative, Ottawa West—Nepean, ON]

Should we set up a 16th system to try to encourage people to—

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Please allow me to finish, Minister. I want to bring this to your attention, because you question why adults should be receiving literacy program skills. I want you to understand that there are some 9 million Canadian adults whose inability to read is holding them back. Approximately 5.8 million can't cope with the demands of a typical workplace, and the remaining 3.2 million can't even read medicine bottles, job applications, or election ballots. These are important issues that you need to address and talk about.

I'm not going to go back to the earlier comment and refute what you said. It's “he said, she said”. The cuts speak for themselves. You clearly indicated that the federal government has no role to play when it comes to literacy. So when you talk about national productivity and a more skilled workforce, it seems like rhetoric. The C.D. Howe Institute last fall came out with a report indicating that if there were an increase in literacy of even 1% it would improve our productivity.

It bothers me a great deal when you talk about productivity, waste, and mismanagement, while cutting literacy, which is very important to our productivity and to adults as well.

[John Baird, Conservative, Ottawa West—Nepean, ON]

But, Mr. Bains, we deal with facts.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I was stating the facts to you right now. These are all facts of the C.D. Howe Institute.

[John Baird, Conservative, Ottawa West—Nepean, ON]

We have Hansard. We spend tens of millions of dollars recording what we say so that we have an accurate record of what was said.

You just said two things: that I questioned the need for adult literacy--I never did that, never said that, never suggested that--and that I said the federal government had no role. I never said that, never suggested that, never felt that, never believed that. You have to deal with facts, sir.

And when the facts are misrepresented, you bet your boots I'm going to call them to task. The member for Wascana has done a huge disservice to his personal reputation when he tabled proof of allegations that he had made and his own proof was zero. They were not true. I think that at some point if people have to misrepresent quotes and basically invent ammunition, perhaps their case isn't strong enough, and that does a real disservice.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

No, no, I'm not inventing anything here.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I never said--

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I'm just saying the facts right now. I'm telling you right now that there are nine million Canadian adults whose inability to read is holding them back.

[John Baird, Conservative, Ottawa West—Nepean, ON]

But the fact that you're not addressing my point now, sir, suggests your argument is morally bankrupt.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I'm saying there are approximately 5.8 million who can't cope with the demands of a typical workplace. These are facts.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Your allegations are without moral authority, sir, because you have quoted me--