Government Operations Committee on Nov. 21st, 2006

[The Chair, Liberal, Diane Marleau]

I'd like to thank the officials from the Privy Council Office for agreeing to come before us. Unfortunately, Mr. Lynch was not able to be with us, but he did send representatives, who I'm sure will be giving us some very good answers. I want to remind you again that these people are non-political. They do not, in the end, make the political decisions; they implement them. I hope we keep that in mind in our questions.

I will start and will ask our invited guests to make a short overall statement about what PCO is and how it works, to help us all. Thank you.

If you'd like to introduce the people around you, that would be good.

[Patrick Borbey, Assistant Deputy Minister, Corporate Services, Privy Council Office]

Thank you, Madam Chair.

Good morning. I'm pleased to appear before the Standing Committee on Government Operations and Estimates today.

I'm accompanied by Mr. Yvan Roy, to my right. He is Deputy Secretary to the Cabinet, Legislation and House Planning, and Machinery of Government. He is also counsel to the clerk of the Privy Council. To my left, is Ms. Thérèse Roy, Executive Director, Finance and Corporate Planning Division. We are also accompanied by other official representatives who will provide us with support if necessary.

I am pleased to appear before this committee today to talk about the 2006-07 estimates for the Privy Council Office. PCO's last appearance before this committee was in April 2005, regarding the 2005-06 main estimates. The purpose of today's appearance is to discuss the 2006-07 supplementary estimates for the Privy Council Office.

The Privy Council Office or PCO is the hub of public service support to the Prime Minister and the Cabinet and its decision-making structures. Led by the clerk of the Privy Council, PCO facilitates the smooth and effective operations of Cabinet and the Government of Canada through the work of the PCO secretariats. PCO helps to clearly articulate and implement the government's policy agenda and to coordinate a timely response to issues facing the government and the country. It also works to maintain the highest professional and ethical standards in the federal public service.

Some of PCO's main roles are: providing professional, non-partisan advice to the Prime Minister and Cabinet; managing the Cabinet's decision-making system (including coordinating departmental policy proposals and conducting policy analysis); arranging and supporting meetings of Cabinet and Cabinet committees and documenting their decisions; advancing the development of the government's agenda across federal departments and agencies and with external stakeholders; providing advice on the government's structure and organization; managing the appointment process for senior positions in federal departments, crown corporations and agencies; preparing orders-in-council and other statutory instruments to give effect to government decisions; fostering a high-performing and accountable public service; and submitting an annual report to the Prime Minister on the state of the public service.

PCO works to ensure that the Prime Minister and the three other PCO ministers receive the highest-quality consistent and appropriate policy advice, and objective recommendations. PCO's main estimates for 2006-07 total $146.7 million.

The report on plans and priorities, the RPP, since it was tabled at a later date than normal, during this fall, reflects the Prime Minister's adjusted priorities, announced since February 6, 2006, as well as the 2006 budget. Planned spending in the RPP for 2006-07 is $129.3 million; however, this amount will increase as a result of the creation of the Air India commission of inquiry, worth this year $13.5 million, and the operating budget carry-forward of $6.3 million. With these additions, PCO's total authorities for 2006-07 will be $149.1 million.

Over the next three years, PCO intends to invest about 90% of its resources in the following key priorities: about 47% to focus on key policy areas and strengthen medium policy planning, 27% to support the Prime Minister in exercising his overall leadership, 9% to improve the management and accountability of government, and 8% to strengthen PCO's internal management practices. The other 10% represents the budget for the Prime Minister's Office and the three ministers' offices in our portfolio.

With regard to our top priority, focus on key policy areas and strengthen medium-term policy planning, the PCO will ensure greater cross-departmental coordination coherence in the execution of the government's policy agenda through a variety of communications mechanisms as well as the renewal of deputy ministers committees that will strengthen decision-making and integration on both policy and management issues; make more effective use of deputy ministers' time; provide a clearer role for associate deputy ministers; and strengthen the DM community.

We will also contribute to the Government of Canada's efforts to establish a better balance in fiscal arrangements by ensuring all governments have access to the resources they need in order to meet their responsibilities.

We will contribute to the development and implementation of domestic and international initiatives to protect the security of Canada and Canadians by strengthening Canada's national security system and advancing Canada's interests in North America and abroad.

Finally, we will contribute to the Government of Canada's efforts to forge, in partnership with the provinces and territories, a stronger federation.

The second priority, to support the Prime Minister in exercising his overall leadership, will be achieved through a number of initiatives. Since February 2006, PCO has refocused its activities to better reflect its traditional role, resulting in the transfer of certain PCO responsibilities to other government departments and agencies. The PM announced a smaller, more streamlined cabinet, structured to promote accountable, efficient, and effective government with more focus and purpose. And finally, the PCO organizational structure and processes were modified to provide effective support to the revised cabinet committee structure and deputy minister level committees. These changes are reflected in these supplementary estimates.

The third priority, improvement in the management and accountability of government, and help the government clarify its objectives and priorities. The PCO will continue to play a central role in assisting the Prime Minister and Cabinet in enhancing the overall management, transparency and accountability of government while ensuring that the objectives of increased security are met.

The PCO will concentrate its efforts to support the government in meeting its commitment to introduce and implement a Federal Accountability Act and other key measures aimed at ensuring integrity, accountability, responsibility and excellence in public administration, while developing strategies to enhance the effectiveness of the overall Cabinet decision-making process.

We will refine the governor-in-council appointment process by streamlining and modernizing that system and we will support the renewal of the public service through improved approaches to recruitment, development and management of human resources.

The fourth priority, to strengthen PCO's internal management practices, includes providing support and leadership in the successful internal implementation of the Public Service Modernization Act, strengthening the internal audit and evaluation functions through a more appropriate and effective infrastructure, and strengthening PCO's capacity to respond to its statutory obligations under the Access to Information and Privacy Acts.

PCO's supplementary estimates for 2006-07, with the exception of the Commission of Inquiry into the Investigation of the Bombing of Air India Flight 182 and the operating budget carry-forward, are reflected in the 2006-07 RPP.

The net increase of $3 million from the main estimates amount of $146.7 million is therefore due to increases of $13.5 million to support the newly created Commission of Inquiry for Investigation of the Bombing of Air India Flight 182, $6.3 million for the operating budget carry-forward to fund internal workload pressures, and $2.7 million related to the completion of the work for the activities of the Commission of Inquiry into the Actions of Canadian Officials in Relation to Maher Arar, as a result of delays in the processes adopted for screening reports.

These are offset by decreases of $13.4 million related to the transfer of responsibilities to other departments and agencies, a $5.3 million decrease related to the budget reductions to ministers' offices due to the reduced cost of the ministry, and approximately $800,000 related to expenditure review in savings for procurement.

I would like to say a few words on each of these items. First, on the commission of inquiry, many issues, as you know, remain unresolved relating to the 1985 terrorist attack on Air India Flight 182. More than 20 years have passed since this tragedy, and while Canadians have not forgotten what took place, the families of the victims remain in a state of limbo. Their concerns are largely unresolved, and it is not yet possible for them to achieve peace of mind. The families need to know what happened and what is being done to prevent such a tragedy from occurring again.

In announcing the launch of this inquiry, the Prime Minister stated that a public inquiry is the only route left to obtain answers on how the tragedy occurred on June 23, 1985.

An amount of $13.5 million is being requested to create the Commission of Inquiry into the Investigation of the Bombing of Air India Flight 182. The commission of inquiry will collect evidence and provide guidance on systemic changes to prevent terror attacks against Canadians, whether on land, sea, or in the air. This inquiry will provide recommendations to public policy and procedural questions that can continue to repair the system that allowed this tragedy to take place.

The commission expects to produce its report by September 2007. PCO will also request an additional $5.7 million in 2007-08, bringing the expected total cost of this inquiry to approximately $19.2 million over two years.

Second, on the carry-forward, Treasury Board policy allows PCO, subject of course to parliamentary approval, to carry forward 5% of its main estimates operating budget from one year to the next. The maximum eligible carry-forward for PCO for 2005-06 to 2006-07 is 5% of our budget of $125.4 million, or $6.3 million.

Finally, on the transfer of activities to other departments and agencies, in recent months PCO was reorganized to provide a stronger emphasis on its traditional roles and responsibilities of providing context, coherence, coordination, and challenge to policy development and to ensure greater clarity in the respective roles of PCO and relevant departments and agencies. These changes were completed by September 2006. A number of secretariats are being officially transferred through the 2006-07 supplementary estimates that were tabled in Parliament on October 30, 2006, with the full year effect being reflected in future years' estimates documents starting in 2007-08. These transfers represent the estimated unspent budgets as of August 1, 2006.

The transfers include the following: the Official Languages Secretariat to Canadian Heritage in the amount of $1.9 million, which is effective February 6, 2006; regulatory affairs, smart regulation, and regional communication offices to Treasury Board Secretariat in the amount of $6.1 million, which is effective July 1, 2006; the policy research initiative to Human Resources and Social Development Canada in the amount of $3.6 million, effective June 1, 2006; the transfer of the Aboriginal Affairs Secretariat to Indian and Northern Affairs Canada in the amount of $1.6 million, effective April 1, 2006; the transfer of the Borders Task Force to Public Safety and Emergency Preparedness in the amount of $600,000, effective June 1, 2006; the national science adviser transfer to Industry Canada in the amount of a half a million dollars, effective May 8, 2006; and the senior adviser for diversity, which was transferred to the Public Service Human Resource Management Agency of Canada, for the amount of $200,000, effective August 1, 2006.

This results in a net reduction of about 120 FTEs on an annual basis.

I know I'm running a little late, but maybe I'll have just one last word on the changes to ministers' offices.

On January 23, the Prime Minister announced the appointment of a new ministry. The PM created a smaller and more streamlined cabinet structure. A number of changes to the structure were made to promote accountability, efficiency, and effectiveness. As a result, changes to the structure of ministers' offices within PCO's portfolio were made, resulting in a savings of $5.3 million. I will skip the details.

As a result of the transfer of certain functions and the reductions in ministers' offices, the PCO core structure and mandate have been refocused. Consequently, the estimates of the PCO are expected to remain stable over the next few years, with, of course, the exception of commissions of inquiry.

Thank you for your patience in listening to my presentation. My colleagues, Yvan and Thérèse, and I will be happy to answer your questions.

[The Chair, Liberal, Diane Marleau]

We will now go to Mr. Bains.

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

Thank you very much, Madam Chair.

I thank you very much for the opening remarks. I'm just trying to digest all that information--usually there are notes at the beginning. I tried to take notes along the way as well, in terms of some of your remarks.

I have a few questions to ask. Initially, my reaction was that there was this restructuring that was conducted, and then there seems to be an increase of $3 million, I believe, in supplementary estimates. That's very clearly explained by the inquiry as a one-time expenditure, which makes a great deal of sense. You indicated that this exercise, if you look at this supplementary estimate summary on page 3, has the transfers, the savings, and then it has the one-time cost. So the actual saving that was done to the restructuring was only $780,000, I believe. That was because of procurement. Everything else seems to be a transfer. That shouldn't be deemed as a saving. Is that correct?

[Patrick Borbey]

That's correct. The amount of $13.4 million has been transferred to and integrated into the budget--

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

Correct. So that's not a saving, that's just a simple transfer, right? So the true saving from this entire exercise is only $780,000.

[Patrick Borbey]

Plus the savings associated with the reductions in the sizes of ministers' offices. So those are net savings as well--there are fewer salaries, fewer operating dollars being spent than there would have been previously.

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

That leads me to my second question, which is impact on jobs. I know this restructuring exercise looked at efficiencies and savings. Was there any impact on jobs with this restructuring? Were there any positions eliminated?

[Patrick Borbey]

No, there were no positions eliminated as a result of this. The people were transferred with their positions to the new departments, so it was clear that they were protected in that way and they were integrated into their new structures and departments. So no jobs were cut as a result.

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

Is the restructuring that you talk about simply a one-time exercise, or will this be taking place on an ongoing basis in terms of evaluating how the PCO works, specifically, for the transfers to other departments? Is that something you think is going to take place in the future, and if so, is there a timeline associated with that?

[Patrick Borbey]

I think we're going to constantly re-examine our structure, to make sure it does meet the needs of the Prime Minister and the cabinet.

In this case, over the years we accumulated a number of functions that we felt were not part of our traditional role and that were more almost of an advocacy nature These were things that departments and agencies should be doing. For example, in the area of aboriginal affairs, we have a very strong department that is responsible for those functions.

There was a sense that there was a need for coordination at the centre. The Clerk of the Privy Council wants to ensure that we are playing the role we should be playing, that there's no confusion in role and responsibilities, and that departments are held accountable for developing policies, implementing them, and reporting on them.

We provide context and coherence to departments. We provide a challenge function when proposals come forward, to make sure they're well integrated and that all aspects have been taken into consideration. Then we have a certain role in terms of ensuring accountability for results. But we don't get involved in the actual delivery of policies or recommendations with respect to specific areas, such as aboriginal affairs.

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

If you don't mind my asking, from your experience, in a non-partisan fashion of course, why do you think these particular additions were made over the previous years? Why were these roles and responsibilities taken into the PCO office? What was the objective or mandate or idea behind that?

[Patrick Borbey]

I think it was the result of increased horizontality. Everything we do in government has horizontal impacts. You can no longer easily identify one single department or agency that's responsible for making sure that a complex set of answers is presented to a particular problem. I think the natural tendency was, well, you need strong coordination at the centre so let's establish a secretariat that will play that role. You can understand how that can happen over time. The impact is to reduce the overall accountability for the individual departments and agencies to deliver on those results.

I think it's a natural progression in a stable, mature democracy such as Canada, where complex issues don't get resolved by the actions of a single organization. They require partnership, across government cooperation, cooperation with other levels of government and Canadian society. So it's a natural tendency. What we said is that we're going to push that accountability back to departments; we're going to make sure that one department is going to take the lead and bring the others to work together in the same way.

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

So then, how do you hold them accountable if that secretariat is not a means to do so? What other measures do you have to hold them accountable, then?

[Patrick Borbey]

Well, the way we hold them accountable, first of all, is that major proposals have to come to cabinet committee. We have secretariats that analyze, make recommendations, and bring departments together when they're not working closely enough. We have deputy minister committees that the clerk has put in place. You bring those key deputy ministers together and say, okay, let's present an overall coherent strategy on how to deal with this. You do it that way.

Plus, there are the letters sent by the Prime Minister to his cabinet colleagues. There are also mandate letters that the clerk writes to his deputy colleagues. You can also use those as a way to ensure accountability.

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

On page 4, you listed the priorities of Privy Council, and in your opening remarks you indicated percentages of costs associated with those particular priorities. I was unable to take them down. I just want to understand each one of these four priorities you listed. You listed, I guess, a component that you had costed out of where your resources went. Could you just mention that again? I'll tell you why I'm asking.

[Patrick Borbey]

It's the result of the government's restructuring, a few years ago, of the way it presents estimates with the PAA, program activity architecture. We have specific priorities that have been established. Within that, we've organized our work within PCO to support those priorities. That's what I was referring to in terms of the percentages and how they relate.

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

I want to understand where the majority of the costs are going. Are they going towards supporting the Prime Minister in exercising his overall leadership responsibility? Are they going towards internal management processes? I want to know where the money is being spent and in what category. Is that a reflection of how those particular priorities are ranked?

Usually what happens, and maybe you can help me with the logic, is that certain priorities are established, but sometimes the resources aren't there. I want to make sure the priorities are consistent with the money and resources allocated to them.

[Patrick Borbey]

The largest category, approximately 47%, definitely focuses on our policy advice in terms of key priorities and our support for the Prime Minister and for the cabinet. That is our bread and butter in terms of activities within PCO, so that is clearly where the largest resources are being spent.

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

Okay, not a problem. I wanted the number, but I will get that later.

My next question--

[The Chair, Liberal, Diane Marleau]

It's time to go to Madame Thibault.

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

Okay, I'll come back to that later.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, lady and gentlemen, for coming here today.

I want to come back to a point you raised and on which my colleague asked several questions. I'm referring to transfers. You said earlier that they would be done without having the least impact on employment. In September, the government announced cutbacks by telling us that it was going to trim the fat, cut wasteful programs, ensure value for money and efficiency savings, among other things. People came to testify about this including ministers and senior officials.

Were you concerned with efficiency savings? It seems quite strange to taxpayers and those who represent them here that these transfers are occurring without there being the slightest efficiency savings. There are no gains in efficiency for small agencies with two, three or four employees. As for large organizations such as Heritage Canada or Human Resources and Skills Development Canada, it seems likely that they could absorb that. I'm not talking here about the impact. Someone may say that we need to save jobs in the public service. I am merely talking about efficiency savings and ensuring good value for money, from a taxpayer's perspective.

How would you explain this?

[Patrick Borbey]

I think that the Privy Council Office, like all departments, has an obligation to meet objectives in terms of effective spending and efficiency savings. We have already implemented measures to cut our budgets. Those measures are based on expenditures from last year or two years ago. We cut our budgets by approximately 5 per cent over a three-year period. We are now entering the third year.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

That is not unreasonable.