Government Operations Committee on May 15th, 2007

[The Chair, Liberal, Diane Marleau]

Welcome to you.

We've invited Public Works and Government Services to come and give us an overview of their plans and priorities and we think it's a perfect way for committee members to know how you do short-term planning, long-term planning, how you adjust it and so on. This is really what this meeting is about.

We'd like you, of course, to make a short presentation, and then we'll open it up for questions. If you'd like to introduce yourselves, please go ahead.

[Daphne Meredith, Associate Deputy Minister, Department of Public Works and Government Services]

Thank you very much, Madam Chair, and good afternoon, committee.

Thank you very much for this opportunity to talk about Public Works and Government Services Canada and its report on plans and priorities.

I have with me at the table today Mike Hawkes, our chief financial officer, and Johanne Bélisle, our assistant deputy minister of corporate services, policy and communications, who are really the authors of our report on plans and priorities. Mike does the numbers and Johanne writes the document, or at least her people do.

I joined Public Works and Government Services Canada about eight months ago and I am personally continuing to discover a large, diverse, and very busy department. It's one that has about 12,000 employees across the country and annual spending of some $4.5 billion.

PWGSC is the federal government's central purchasing agent, its banker, its accountant, and its real property manager. We provide services in the areas of payroll and pension, information technology, translation, communications, and audit. Each of these service offerings is large and complex, and the assistant deputy ministers in charge of them have very big jobs.

While there's not room at the table for all of them to sit here with us today, they have accompanied me here and would be very happy to come to the table should you have detailed questions on their area of business.

At PWGSC, in everything we do, we try to strike a balance between providing the government with quality services and ensuring the government's assets are well managed. Maintaining this balance is in fact one of our department's major challenges. This is why you will find in our RPP that we have two strategic outcomes. These are outcomes that anchor our business and they relate to, on the one hand, quality services and, on the other, sound stewardship.

Given the breadth of our activities, we are able to support the government's priorities in a number of ways. For example, we contributed to the development of the Federal Accountability Act. Notably, we'll be establishing the office of the procurement ombudsman, as called for in the legislation.

We support the government's efforts in the area of security. For example, we work with the Canada Border Services Agency in the development of border crossing infrastructure. We support the government's environmental efforts through our office of greening government operations, which is leading efforts across government to improve environmental performance. I understand the leader of that organization was here a couple of months ago to talk about their activities.

We're now in the third year of a broad transformation agenda to improve key back office functions of the Government of Canada, particularly in the areas of real property, procurement, and information technology. This ongoing effort to do business more efficiently and cost-effectively meshes well with the government's commitment to strong economic management.

As you would know, Madam Chair, while the focus of public attention is often on our contracting and real property activities, we at PWGSC are more than buyers of goods and services and managers of bricks and mortar.

I'd like to take this opportunity to briefly highlight a few other functions that are germane to the work of our department. While PWGSC has numerous lines of business, one critical function I'd like to mention is that of Receiver General, which is responsible for the consolidated revenue fund and the Public Accounts of Canada. Millions of Canadians rely on cheques they receive from the Receiver General every month: seniors counting on their Canada Pension Plan and old age security payments, families receiving the universal child care benefit and goods and services tax credits, as well as thousands of companies that do business with the federal government. In fact, there are few Canadians who do not receive a payment from the Receiver General at some point during the course of a year.

This amounts to more than 255 million payments a year in almost 200 countries. All told, the office handles more than $1.5 trillion in cashflow a year.

Our Receiver General function not only serves vital public needs but also plays an important role in ensuring that government spending decisions that you make as parliamentarians are carried out. When a department wants to spend money, we check to ensure that they have parliamentary authority to do so, prior to releasing the funds.

We then account for the billions of dollars spent by the Government of Canada annually in the Public Accounts of Canada, and for the past eight years the Office of the Auditor General has given us a clean bill of health with respect to this accounting. The OAG has in fact commended us as being a world leader in this regard. You may not know this, but most industrial countries do not have the capacity to account for their spending, as we do, on a consolidated basis.

And PWGSC's activity extends not only to financial integrity and accountability. We also have a role to play with respect to Canada's language and culture. Canada's Aboriginal roots, our French and English duality, and our pluralistic society help define who we are as a country.

Our Translation Bureau gives meaning to this reality by providing translation, interpretation and terminology products and services here on Parliament Hill, to the Judiciary and across the Federal Government. The Bureau's work goes beyond translating French to English and vice versa. It provides service in Aboriginal languages and in more than 100 foreign languages, as well as closed captioning.

These efforts are measured as 1.5 million pages a year and their impact is profound—helping Parliament and the Government listen to and communicate with Canadians of every background, whether it is on economic, social, environmental or cultural issues.

Our Translation Bureau stands out on the world stage for the quality of its product and its overall significance. It is in fact the second largest of its kind in the world, exceeded only by that of the European Union.

Another vital, yet little known area of PWGSC is our industrial security sector, which ensures that Canadian businesses are security cleared and thereby equipped to compete for billions of dollars in government contracting opportunities for goods and services, both here and abroad. Over the course of a year, this group processes close to 100,000 security clearances and 1,000 company inspections. We also operate the Secure Channel, the online infrastructure that enables the exchange of secure, trusted information between the government and its partners and citizens.

Let me turn briefly to the management of the department. Because of the size of our business and budget, PWGSC has placed a great deal of importance on ensuring that we have enhanced accountability, supported by stronger management controls. Over the past two years, we've made a number of organizational changes to ensure that we are well equipped to deliver on our ongoing business and our transformation agenda.

In 2005, we were the first department in the federal government to create an office of the chief risk officer. We have also created the position of chief financial officer, and a dedicated corporate services branch, and a separate human resources branch. And we continue to work on departmental initiatives to strengthen accountability and transparency, to manage risk, and to ensure a culture of integrity. Again, l'd like to refer to the Auditor General, who commented favourably in her 2003 report on what she described as PWGSC's fairly sophisticated system of internal controls.

I have talked about some of the lesser known things we do, and I would like to talk for a minute about who we are, because it's difficult in a few minutes to do justice to the scope of PWGSC's activities. Our department employs a wide variety of professionals, including translators, engineers, surveyors, auditors, geologists, architects, geomatics experts, procurement specialists, and so on. Our people range from Monsieur Maurice Joanisse, who carves the stonework in this very building, to the interpreters in the booths here; from the IT professionals who helped develop the world's first online national census last year, to the building experts behind the restoration of the Library of Parliament and the Vimy Memorial.

Madam Chair, the breadth of our mandate is wide, and our funding and management challenges are complex. Given the billions of dollars PWGSC manages and the tens of thousands of contracts it enters into each year, it should come as no surprise that challenges and queries arise.

On every occasion, we have acted promptly and decisively to improve our processes where needed and to maintain public trust.

Now, we are happy to answer your questions.

[The Chair, Liberal, Diane Marleau]

Thank you.

We will now give the floor to Mr. Raymond Simard.

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you very much, Madam Chair, and thank you to the witnesses for being here today.

I'd like to start off with the study we're doing right now on the possible sale of government buildings, because it concerns real property. We had a witness here, Professor James McKellar, who said that his experience seemed to indicate that governments are very poor managers of buildings.

At the same time, I'm not sure that we've had very clear, comparable facts about the private sector. Would you have that kind of information? For instance, if you take the nine buildings the government is planning to sell and you take nine private sector buildings of comparable age, would the private sector buildings be in as bad shape as the government buildings, or worse, or better? We don't have that kind of information. Can you provide that to us?

[Daphne Meredith]

We have a very sound information base, and we can provide you with detailed information. But I would say in general that Professor McKellar is right. I think in the public sector--and this isn't just in the federal government; it applies to other governments as well--it is difficult to compete with other public objectives for funding to repair bricks and mortar. So I think we, as do other governments, have a problem in that regard. The state of our buildings is therefore not as good as it would be in the private sector. We have an outstanding repair bill, as I think was explained to this committee at a previous hearing.

[Raymond Simard, Liberal, Saint Boniface, MB]

As a matter of fact, that's a very nice lead-in to what I want to ask next.

There was an article in the Ottawa Sun with regard to a company called Rosdev Group, I believe; the government has a lease with this private sector corporation. If I understand correctly, the federal government is the one that is on the hook to basically do all the improvements. They're talking about putting in fire alarms, installing new windows and carpets, and making other improvements to the building. I would imagine that the reason we'd be selling these buildings would be to get away from this kind of expense. It would be passed on to the private sector. That is what we're attempting to do with the nine buildings we're attempting to sell.

[Daphne Meredith]

In terms of the kinds of lease agreements we would enter into with those who buy the buildings, we would indeed want to put into those contracts assurance that the buildings would be maintained. That is part of the benefit of entering into these arrangements. It is so that they do indeed meet a consistent standard throughout our leasehold.

[Raymond Simard, Liberal, Saint Boniface, MB]

In your planning and priorities document, on page 57, it says that one of your responsibilities is to support the implementation of the Federal Accountability Act and action plan. I wonder if you can tell me--I know it's been in place now and it's been passed in legislation for the last couple of months--the concrete things you've done to respect the Federal Accountability Act. Have you developed a plan internally that has changed since the implementation of this act?

[Daphne Meredith]

We've actually followed quite a vigorous program of strengthening accountability in our department, which I think has been greatly augmented by our chief risk officer--I mentioned in my introductory remarks that we have set up this position--who's worked on reinforcing the integrity of our programs. He initiated an ethics training program that we've put 10,000 of our employees through, because as you can imagine, in a department like Public Works, which spends a large amount of money, we want to make sure that it is spent with the greatest integrity. So that's one very significant initiative we've undertaken to enhance integrity and accountability across our whole business.

There are other more concrete initiatives as well. We've been working on specific initiatives related to public opinion research and advertising. And as I mentioned in my opening remarks, we're establishing the office of procurement ombudsman, who would then bring greater accountability to our procurement process as well.

[Raymond Simard, Liberal, Saint Boniface, MB]

The chief risk officer you just spoke about, what kind of authority does that person have over the departments, for instance? One of the issues we've been facing at this committee and others is that nobody, in the end, seems to be responsible for a certain issue. So does that person have the authority to go into another department and say what we'd like to see in terms of accountability?

[Daphne Meredith]

He plays a very useful role in advising the deputy minister and me on particular issues that might come to our attention. Whether they're related to personnel or to particular files, he'll investigate and advise us as to whether they've been managed appropriately.

In addition to the ethics program, he's got ethics officers in each branch in each region, who shore up the whole organization. But not only that, he's working on reinforcing our regime of internal control. For example, if we take our acquisitions branch, highly complex processes that are used for procurement—some would say too complex—he's helping the branch head as a very important adviser to identify the key control points in those procurement processes and how we reinforce those control points without adding to the process burden we've already got. Ideally, we should end up with very tight control points, very definite accountability, knowing who's responsible for signing off on what documents, thereby allowing us to clear away some of the underbrush that can often accumulate.

Currently we have a risk officer who comes with an audit background and is very experienced in that regard, and who is invaluable to our organization in showing up those processes and making sure we've got good, as they call it, quality assurance.

[The Chair, Liberal, Diane Marleau]

Ms. Bourgeois.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you Madam Chair.

Good afternoon, ladies and gentleman. I would like to go back to the Report on plans and priorities, more specifically, to the procurement transformation initiative. Essentially, procurement must be strategically managed. I would like to know what that means. I am having a hard time understanding this document. If you apply a strategic management model, then you should be able to provide the committee with objectives that can be measured.

[Daphne Meredith]

Thank you. That is a very good question.

In terms of strategic procurement, I think one of the business strategies, if you could call it that, of our department is to move from people taking orders from other departments—simply filling orders and making contracts on an individual basis—to becoming more involved in organizing our avenues of supply. I think you'd call that a more strategic approach to procurement.

It involves taking the information we have on what the government as a whole buys, not just what a given manager buys, and looking at what those commodities are, who the suppliers of those commodities are in regions or countrywide, and how we define the commodity we want to buy in a way that will encourage a good proportion of small and medium-sized enterprises to participate, allow for aboriginal participation, allow for green procurement, allow for economy, and allow for cost savings.

That's where we want to turn our business.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I understand what you are saying. I will ask my question again; perhaps I didn't word it properly. When it comes to transforming procurement, the department would like to save money. We must be able to determine how you manage to reduce your procurement costs or keep a closer eye on procurement.

Where is that discussed in that document? Is there some part of this document that says that PWGSC wants to better manage its procurement in order to save money?

[Daphne Meredith]

On page 19 of our document we have indicators of performance that set out how we would measure our progress towards our goals. I think it's fair to say that you don't see specifics there. We say we'll measure it by the percentage of reduction in cost of goods and services, by reduction in time, yet we don't say we're going to reduce it by such and such percent this year. That's a kind of level of precision we might want to work towards in the future, very much so.

What are some of the targets we would notionally set for ourselves in those areas? In general, we would want to achieve cost savings. We've set a goal for ourselves of 10% in terms of the prices charged.

Does that answer your question?

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

The government says that it must be careful in its expenditures, that it should group together its purchases, and make full use of its buying power so that the taxpayers will get more for their money. That is what the minister has said and I see this in management's statement as well, but it isn't really reflected in the Report on plans and priorities.

You are just submitting the report to us. There is a three year projection and, in my opinion, you have made good progress over the past three years. I must make decisions, but how can I do that when you provide no percentages nor do you set any targets? There are wonderful motherhood statements, but nowhere does this report refer to an obligation to meet any type of result expressed as a percentage or any deadline to meet the objectives. The committee cannot make an informed decision or give you and your staff a pat on the back and tell you that you have done a good job. I can't even determine if the PWGSC budget has been reduced because I cannot find your objectives or any statements of your current performance. I can't put a figure on it.

We speak of transparency. But you can't assume that the members are... It's rather upsetting. You are responsible for a large budget and, what's more, the Auditor General of Canada, in every one of her annual reports, mentions accrual basis accounting. Our committee did a study on the subject. That being said, I don't think you apply accrual basis accounting at PWGSC. But you should be doing so. PWGSC and Treasury Board should use accrual basis accounting, as was requested by all members around this table.

I was anxiously awaiting your appearance here today. I wanted to ask you how, in your opinion, we can make decisions if we have nothing to go on, other than the general outlines as expressed in a rather specialized jargon. At some point, we will have to provide supplementary estimates, there will be a Report on plans and priorities, and nothing will have been adopted.

I say this because I feel it is important. I'm not sure how you can respond. It is simply an observation. What kind of question do you want me to ask? I have nothing here on which to base a question. I am sorry.

[The Chair, Liberal, Diane Marleau]

Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Madam Chair.

Welcome.

I'd like to slip to something that I find is a bit of a problem, and I would like to preface it.

I can recall a previous committee in which we were concerned with the lack of communication between various systems. In this particular case, it was a security problem: the inability to communicate effectively between our military, CSIS, border security, regular police. They didn't have the ability to effective communicate. That problem was recognized, and obviously moves were made to move in an effective manner to increase the capacity.

But now, if I may take that same sort of problem with our IT technology, we have literally a dog's breakfast of procedures and programs and departments and needs. We really haven't moved effectively towards any level of shared services.

I'd like to know how you either plan to modernize and/or harmonize or move towards shared services, so that we can have some semblance of efficiencies, instead of everybody going everywhere and not being able to move effectively. How many software programs do we have that are simply duplications, and not capable of communicating effectively between departments, etc.?

Where are you moving in this field?

[Daphne Meredith]

If you don't mind, Madam Chair, I'd like to call the head of our information technology services branch to the table.

I'd like to introduce to you Steven Poole, who is the head of our ITSB, as we call it.

[Steven Poole, Acting Chief Executive Officer, Information Technology Services Branch, Department of Public Works and Government Services]

Thanks very much, Madam Chair.

It's an excellent question. I guess the first thing to say is that we have done a lot. We have not done as much as we would like to have done, but we have done a lot. Maybe I can take a moment to describe a little bit the journey we have undertaken.

In 2004 a series of studies came out that described—I'll use your words—the dog's breakfast that exists. What Public Works was asked to do by Treasury Board Secretariat was to concentrate on what we call the IT infrastructure—not so much on the programs, but on the infrastructure, which is the telecommunications, the networks, the data centres, and the personal desktops, just to make sure that the basic IT infrastructure, which we call today the utility, is operating on a shared-service basis, and as efficiently as possible.

In late 2005, we positioned our organization to perform shared services. I'm happy to say that today we are close to 20% of the way there. So about 20% of the IT infrastructure, those services that I just described, are in fact performed by my branch.

We're not stopping there, of course. We have plans, in a very community-based way governed through Treasury Board Secretariat, to work with the other departments, and we have a series of memorandums of understanding and service agreements whereby we're continuing that journey. Our whole premise is to work with departments so that they understand the benefits and sign up with us to provide the basic IT infrastructure services.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Do you have a timetable? Is this a one-year plan, three years, five years, ten years? What are you looking at for a timetable?

[Steven Poole]

Thank you very much.

We see this journey as a five- to seven-year journey. I'll use your words, the “dog's breakfast”. It takes time to undo that. This is a result of departments working over many years in what we call a vertical way. Now what we're trying to do is work in a horizontal way. I have organizations, and we spend a lot of time working with departments to show them the benefits of doing work horizontally. What I call the IT utility, that horizontal work around desktops and your BlackBerrys and that type of stuff, doesn't need to be department-specific. It can be a utility across all of government.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Have you come up with any figures or guesstimates or predictions on percentage increase in efficiencies, both in results for programs and maybe cost savings?

[Steven Poole]

Yes. From the studies that came out in 2004 in these areas in particular, there would clearly be benefits in the area of 15% to 20% efficiencies, which hopefully could be reinvested in replacing some of the older infrastructure.

Those are the numbers that are there. We're taking a very deliberate journey, step by step, making sure that at each step of the plan we know where we are, so that we can move to the next level.