Evidence of meeting #46 for Government Operations and Estimates in the 39th 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.
Liberal
The Chair Liberal Diane Marleau
I will call the meeting to order and welcome back the minister, the President of the Treasury Board.
Mr. Toews knows how it works. He has been here before. Perhaps we will give you the floor and let you have your say, and then we'll give you a hard time after.
Mr. Toews.
Vic Toews ConservativePresident of the Treasury Board
Thank you, Madam Chair. I am looking forward to the questions and the hard time.
Madam Chair, honourable members, I am pleased to be with you this afternoon to discuss the 2007-08 main estimates for the Treasury Board of Canada portfolio organizations.
I am joined today by Wayne Wouters, the secretary to the Treasury Board of Canada Secretariat, or TBS; Nicole Jauvin, president of PSHRMAC or the Public Service Human Resources Management Agency of Canada; and Coleen Volk, assistant deputy minister, corporate services branch, Department of Finance; David Moloney, assistant secretary, expenditure management sector, TBS; and Su Dazé, senior financial officer from PSHRMAC.
In my introductory statement, I'd like to present the Treasury Board portfolio of priorities in the context of strengthening public sector management and public service renewal. I am referring to our efforts to make government more effective and realign our priorities along the needs and expectations of Canadians for their government.
After l've concluded, the witnesses and I will be pleased to provide details on the allocation of the funds in the main estimates and respond to your questions and comments.
The Treasury Board portfolio includes the Treasury Board of Canada Secretariat, the Public Service Human Resources Management Agency of Canada, or PSHRMAC, and the Canada School of Public Service.
I'd like to start with the secretariat, which serves as the administrative arm of the Treasury Board. Its mission is to ensure that the government is well managed and accountable, and that resources are allocated to achieve these results.
In fulfilling this mission, the secretariat plays two key central agency roles as a management board and the budget office of government. Through these functions the secretariat also supports the Treasury Board in its role as the principal employer of the public service. In carrying out these functions, the secretariat plays an important leadership role across government in advancing an integrated management agenda.
Today, l want to focus on both of these program areas.
As the management board, our 2007-08 priorities include strengthening governance, accountability, and management practices, including commitments to implement the Federal Accountability Act.
As the budget office, we are strengthening results-based expenditure management, including commitments to support renewal of the expenditure management system. We are already seeing the fruits of our efforts in these areas.
On the management board side, we have successfully led efforts to develop and implement the Federal Accountability Act. We have moved forward on policy renewal, including undertaking reviews of three key policy areas as announced in the federal accountability action plan: financial management, procurement, and grant and contribution programs. We have made progress in strengthening the management accountability framework, an increasingly important tool for tracking departments' progress in improving their management competencies and highlighting deficiencies. We have supported service transformation initiatives. And we have been working on labour-management relations, which should provide us with a good basis for negotiating 24 of 27 collective agreements later this year.
On the budget office side, we have put in place the function for a new expenditure management system. This has included strengthening the quality of financial and expenditure information, working with our central agency partners on our blueprint for the expenditure management system renewal, putting in place plans to strengthen program evaluation, and moving forward with the management resources and results structure policy. This will provide a government-wide approach to the collection, management, and reporting of information.
Looking ahead, we intend to build on this progress. l would now like to highlight a few of the commitments we have in our business plans throughout the portfolio.
Our number one priority is to continue to ensure the seamless implementation of the Federal Accountability Act and action plan across government. We have made great progress to date. Since last December, when the act received royal assent, we have moved swiftly to implement the act, and we will continue on this track until every measure is in force. By implementing the Federal Accountability Act, we are delivering on our promise to make government more accountable.
This is one of the most comprehensive and complex pieces of legislation ever passed in this country, and fully implementing it will take time. But it's worth it. The act and action plan will help restore Canadians' trust in their public institutions and lay the foundation for the more effective government Canadians need and deserve.
As part of our effort to improve accountability in government, we will also continue to renew our suite of policies to clarify the management responsibilities of ministers and deputy heads. We will also continue our efforts to strengthen public sector management by measuring and reporting on management performance through the management accountability framework.
One of the cornerstones of accountability is responsible spending. That is why the government announced directions for a new expenditure management system focused on the priorities of ordinary Canadians. Through this system we are developing a framework for the development and implementation of the government's spending plans and priorities within the limits established by the board.
The new expenditure management system will improve the way departments manage and evaluate the performance of their programs. It will also improve the way cabinet reviews the relevance, funding, and cost-effectiveness of existing programs, and the rigour with which it examines new funding proposals. It will enable us to manage spending more tightly and ensure that government spending achieves results effectively and efficiently. The outcome will result in more oversight and accountability in government.
This new approach to expenditure management is good public administration that will support the following: managing for results by establishing clear responsibilities for departments to better define the expected outcomes of new and existing programs; decision-making for results by ensuring that all new programs are fully and effectively integrated with existing programs, and by reviewing all spending to ensure efficiency, effectiveness, and ongoing value for money; and finally, reporting for results by improving the quality of departmental and government-wide reporting to Parliament.
Through ongoing reviews of all departmental spending on a four-year cycle, the new expenditure management system will make government more efficient and will ensure better value for Canadians' tax dollars.
Let me now turn to the work of the Canada School of Public Service and PSHRMAC.
The Canada School of Public Service serves the learning needs of federal public servants. Key among these is “required training”, as identified in the Treasury Board policy on learning, training, and development. This means making sure that public service employees and managers have training in all the core functions of government, including human resources and financial management.
Looking ahead, its priorities are to deliver and develop individual and organizational learning products to support the public service in meeting the needs of Canadians.
As the focal point for people management in government, PSHRMAC, the agency, leads the development of workplace policies and practices in areas such as learning, official languages, employment equity, and values and ethics. It is also responsible for a number of programs related to employee development, particularly of managers and executives in the public service.
With all components of the Public Service Modernization Act now in force, the agency is focusing on putting in place the mechanisms and infrastructure to support the modernization and renewal of the public service. One result will be increased staffing flexibilities for managers, which will in turn strengthen government accountability.
By strengthening and streamlining how government works, the Treasury Board portfolio is leading the way in making government work better for Canadians. This leadership is important for Canada and Canadians' interests.
A strong, well-functioning, accountable public sector is a competitive advantage. The modernization of public sector management is a challenge that is being addressed across most, if not all, OECD nations, including the United States, Australia, France, Germany, and the United Kingdom.
Canada must keep pace with these broader efforts, and that takes leadership. That's why we are implementing and supporting the Public Service Modernization Act, the Federal Accountability Act and action plan, and the renewal of our expenditure management system. These initiatives affect all of government. They are complex, and their successful implementation requires support and resources. That's why the government has supported growth and resourcing for the Treasury Board portfolio.
Put simply, if we are to meet the aspirations and needs of Canadians in a competitive world, we must make the shift to more accountable, results-based management in the public sector. The estimates we are here to review today reflect this central goal and our commitment to providing leadership in ensuring that Canadians have a government that acts responsibly, rewards integrity, and demonstrates clear accountability—the government Canadians need in the 21st century.
Thank you. I would now be pleased to answer any questions you may have. Or more accurately, I think, my officials will answer the bulk of questions; I will assist where I can. Thank you very much.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Thank you very much, Madam Chair, and I'd like to thank the minister and the witnesses for being here this afternoon.
Where I'd like to start is with some of the issues that really jump out at you when you're looking at these estimates.
The first question with regard to the main estimates would be this. The budgetary expenditures are $210 billion, but the actual total is $230.8 billion. And then we talk about reconciliations and net adjustments for a substantial amount. The question is, is it normal to have this kind of discrepancy? What kinds of items would be included in these reconciliations and adjustments, and what are they exactly?
Could I get that explanation, please?
David Moloney Senior Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
As the question pointed out, there are what we describe as “adjustments to reconcile”—to the update, in this case; we update to the latest fiscal framework. Given that these estimates were tabled before the 2007 budget, we're reconciling back to the fiscal update.
Secondly, we have what's called a net adjustment, from “net” to “gross” basis of budget presentation.
You ask if these are normal. The second one is new as of last fiscal year. The Auditor General had for a number of years been recommending that the government move its overall basis of presenting to Parliament its spending and revenues from a net basis to a gross basis. What that means is, for example, that some individual departments will receive revenues directly, and their vote wording allows them to re-spend those revenues—perhaps a parks entry fee, or purchasing a publication from a department.
What we are proposing that Parliament vote, through the estimates, is access to the consolidated revenue fund. That is by nature a net amount of spending, so we need to show Parliament that each of the individual departmental pages in the estimates shows what revenues are credited to a vote and re-spent, and then what additional amounts Parliament is being asked to approve through an additional vote. There are some $14.8 billion of those adjustments. That's in the net adjustment.
The “adjustments to reconcile” reflects a different sort of gap, if you like, between the accounting bases. That's the “near cash” versus “accrual” basis, which the committee has had quite a number of discussions around. Given the fact that the estimates are not yet on an accrual basis, we have a further substantial, multi-billion dollar adjustment there. That is a difference that has been in place since 2003, when the budget moved to accrual.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Okay, thank you.
The second question is with regard to the Treasury Board Secretariat's actual increase in the budgetary estimates, a $401.9 million increase. I guess part of it is explained through the Toronto waterfront revitalization. I understand that, and I understand that it will be moved out of Treasury Board and into Environment at some point in the future.
The second cost seems to be the public service insurance. Again, there's a 9.9% increase. When you look at everything else, that seems to be very high. Apparently this is a cost that's risen by $1 billion over the last 10 years.
Can you explain exactly what this is, why it has increased so rapidly, and why we can't foresee these increases?
Wayne Wouters Secretary, Treasury Board Secretariat
It is true that your first point is that the Toronto waterfront revitalization initiative is reflected in the main estimates of the Treasury Board Secretariat, but of course in January of this year, as a result of the change in ministers, that particular initiative has now moved to the Department of the Environment. But since the main estimates had already been finalized, we could not make the adjustment. So that will be reflected in the supplementary estimates that will be tabled as part of supplementary estimates (A) in the fall. So it'll be a net-in and net-out.
The other increase you've noted is the increase in vote 20, which is the public service insurance increase of about $164 million. This is the result of a number of factors. We have seen increasing costs in our various plans, whether that be the health plan, dental plan, and the like. The cost of these services is similar, I guess by way of comparison, to what provincial governments are seeing in some of these plans. It's true in our public service plans as well. Drug costs are going up significantly.
As well, often the substitution for surgery is the prescription of drugs, and of course our plan does cover off all of those costs. And the membership continues to increase in the plan because when you retire you're still eligible for these plans. So each year—and we are back to hiring significantly in the public service, so that's having an impact as well, and of course the aging of the public service.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Would it be possible, sir, for you to provide us with maybe a detailed list of those increases? That would be interesting.
Secretary, Treasury Board Secretariat
I think we could try to break that down more than, clearly, what you have in the estimates. We can try to do that.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Thank you.
I have a question for the minister with regard to the Public Appointments Commission. There's $1 million that is set aside for that, and I'm just wondering where it's at. I'm assuming that everything's in place, that it's functioning.
If I'm not mistaken, the chair of the CBC has been open for the last six months, and we understand that there's not even a process in place to replace that person. It seems to me that the CBC is a fairly important institution and that we should be looking at that in the very near future.
Can I have some kind of response on that?
Conservative
Vic Toews Conservative Provencher, MB
Yes, I will, but just before I get to that, you had directed the question to me and the secretary in respect of the breakdown of the health care costs. I do have some background on that.
The estimate of $164 million is attributable to the following: $138.8 million increase for health care and other insurances; $27.5 million increase for provincial health payroll taxes; $1 million increase for a Quebec parental insurance plan; $0.6 million increase for provincial health premiums; $0.3 million increase for health and other insurance plans for employees engaged locally outside of Canada; $1.1 million increase for the Quebec retail sales tax; and $3.04 million new funding for a joint learned program between the PSAC and the Public Service Human Resources Management Agency of Canada.
Conservative
Vic Toews Conservative Provencher, MB
On the CBC, on the issue of the head of the commission, as you know, the government brought forward the name of a very distinguished individual. The opposition chose to defeat that nominee, and at this point the issue remains within the Prime Minister's purview and he will appoint the individual at the appropriate time.
I think that we are all concerned that--
Liberal
Conservative
Vic Toews Conservative Provencher, MB
I believe some of the background work has been done, but I don't believe as a commission it is up and running.
Liberal
Raymond Simard Liberal Saint Boniface, MB
With regard to the Office of the Registrar of Lobbyists, is it the same thing? It's not up and running either, although the Accountability Act was passed some months ago?
Conservative
Vic Toews Conservative Provencher, MB
On the Federal Accountability Act, I can indicate that before the amendments to the Lobbying Act can be brought into force, regulations have to be developed prescribing the form and content of the monthly returns. I announced those public consultations. We have conducted those public consultations, and we're now in the process of developing options for the regulations based on the results. We are also conducting a selection process for the position of the Commissioner of Lobbying, who will administer the act when the regulations have been completed.
Liberal
The Chair Liberal Diane Marleau
Thank you.
At one of our previous meetings we were told that while the Public Appointments Commission exists on paper, it has no employees. I believe the last employee left about a month ago. I haven't heard of anybody else going to that, so right now there's nothing there. I just wanted to add that because it was said here and you might not have been here when that happened.
Madame Bourgeois.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Thank you, Madam Chair.
Good afternoon, Mr. Minister, ladies and gentlemen.
Mr. Minister, in your statement, you often spoke of results-based management, decision-making, and reporting. If there are results to be achieved, it means that the needs have been properly defined.
Now let me ask you if you have a plan. If you do, with regard to the public service, was it presented to our committee so that we can see whether, in fact, the budget management that you referred to yields the expected results?
Senior Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
The chair spoke of the renewal of the current expenditure management system. Regarding the results-based aspect, we intend to step up our current efforts to apply results-based management. For example, since 2005-2006, every department presents specific objectives to Parliament to justify its expenses. In fact, the expenses are targeted towards specific objectives. This is followed by a brief description of the departments' activities in view of the said objectives.
The government is currently studying a procedure that would provide more details on the results of each activity. In the annual performance reports tabled before Parliament in October or November, the government wants to see concrete results that can be objectively measured and evaluated. This is not really a change. It will allow us to get more detail, and to broaden a procedure that has already been in place for two years.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
I understand all that. In the minister's statement, especially with regard to the Canada School of Public Service and the agency, I noted that there were major changes in personnel management due to the demographic crisis that we will be facing in the years to come. I also noted a substantial cut in the budgets of the school and the agency. I think that they both go hand-in-hand. If I had ambitious projects for the school and for the agency, I would normally have a working plan to justify my expenses or any reduction in my expenses.
Could you show us the management plan that I already discussed with Ms. Jauvin? Last Tuesday, I requested a strategic plan. How do you expect us to evaluate your work if there is no plan except for a few flowery sentences? We trust you, but I would like to see your plan. I imagine that anyone involved in management would know what strategic planning is. We also spoke of integrated planning so that we could see the splendid results promised by the minister. Mr. Minister, how do you expect us, in a year or two, to evaluate your results if we have no documents to show what you have decided and where we are going?
Conservative
Vic Toews Conservative Provencher, MB
Before I turn it over to Ms. Jauvin to answer the question, I want to just express my support for your concern about dealing with the demographic change in the public service. That is a very important issue.
It was something that, for example, I learned firsthand when I was in the provincial government in Manitoba back in 1998. We were negotiating contracts with the RCMP, and we were told at that time that within five years, one-half of the RCMP officers would be eligible for retirement. We had incredible struggles trying to get sufficient RCMP officers, since they act in Manitoba, Saskatchewan, Alberta, and to a large extent B.C. as the municipal police forces. They're contracted to the provinces.
To our amazement, the federal government at the time shut down RCMP Depot training in Regina. So instead of putting out about 1,000 officers a year, they just shut it down. That complicated the issue of retirements, first of all, and then, by shutting down the training at the RCMP Depot, we've had to play catch-up for years.
Take a riding like mine, for instance, in rural Manitoba; I was just speaking to the staff sergeant in Saint-Pierre-Jolys, and he has six of thirteen positions filled. It's a tremendous burden our RCMP officers are facing. Our government has responded by trying to catch up not by training 800 to 1,000 a year but by boosting recruitment up to 1,800 a year. It's putting a lot of pressure on the RCMP to get that.
That left me with an impression, as a former civil servant as well as a provincially elected individual, with regard to the importance of training and also bearing in mind demographics. Clearly that was an example of demographics not taken into account, coupled with a bad policy decision.
Liberal
The Chair Liberal Diane Marleau
Thank you very much.
We're going to go to the next questioner.
Mr. Moore.