Good morning, Madam Chair.
My name is Mike Hawkes. I'm the chief financial officer of Public Works and Government Services Canada. I'm here to discuss how the Department of Public Works and Government Services has contributed to the expenditure restraint initiative recently announced by the President of the Treasury Board.
I'll do my best to answer your questions when I have completed these brief opening remarks.
The President of Treasury Board has announced measures to reduce federal spending by one billion dollars. Every department and agency, including PWGSC, has been asked to contribute to this savings target. Our department's contribution totals approximately 47 million dollars. These savings will be allocated to support the government's priorities.
PWGSC's contributions have been earmarked from three areas: the department's revolving fund surpluses, totalling $40 million; the real property investment fund, totalling $5 million; and the Canadian identity grants program of $2.4 million per year.
Let me provide some brief details on these, Madam Chair.
Surpluses in PWGSC's revolving funds result from good management practices. Through the continuation of these practices, surpluses in our revolving funds are likely to continue to accumulate, allowing us to take this reduction of $40 million at this time.
Under the expenditure review measures announced in 2005, PWGSC committed to gross savings of over $1 billion over a five-year period by better managing its portfolio of real property assets. To help the department achieve these savings, an investment fund of $100 million had been anticipated, resulting in net savings to the government of $925 million.
However, PWGSC did not seek the first $20 million of the funds that had been set aside for fiscal year 2005-06. By adjusting our priorities, the department can achieve its billion-dollar savings by reducing the size of the investment fund to $75 million through a reallocation of internal resources. Therefore, PWGSC is contributing an additional $5 million from the current investment to the Government of Canada's overall savings initiative.
Through the Canadian identity grants program, the government provided grants and contributions to Canadian groups and individuals to increase the understanding and appreciation of Canadian identity and to develop social awareness.
This program was administered by the former Communications Canada organization, which was integrated into PWGSC in April 2004. Since this program has been eliminated, we are in a position to contribute its annual budget of $2.4 million to the expenditure restraint initiative, in support of the government priorities.
PWGSC is leading the ongoing government-wide transformation of federal procurement and real property practices. In addition to achieving significant savings through this business transformation, our department is proud of its contribution to the Expenditure Restraint Initiative.
Madam Chair, members of the committee, I would welcome any questions you might ask.