Government Operations Committee on June 8th, 2006

[The Chair, Liberal, Diane Marleau]

No, it's over to Mr. Kramp.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Thank you, Minister; I may come back to this.

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

Thank you, Madam Chair, and welcome, all.

I have a number of small questions.

I see you've definitely taken some steps to increase the efficiency of Public Works, and one of them, of course, is your shared travel initiative. Could you elaborate a little further on that?

[Michael Fortier]

You were looking at the deputy; do you want him to answer?

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

I'd like the answer on that from whoever the bean-counter is who delivered the result.

[David Marshall]

Can I try, Mr. Kramp, Madam Chair?

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

Yes.

[David Marshall]

Thank you.

The shared travel initiative is really a very major effort on the part of the government. The government spends about $1.2 billion a year in travel each year. That is airfare, hotels, car rentals, meals, and so forth. We have created a central travel service that consolidates what the government is buying in this area and is able to negotiate better prices with suppliers; it also provides a very efficient service for booking and so forth for travellers.

This initiative has been going on for some time. Public Works inherited the initiative a couple of years ago. We have put in place a full team to take advantage of this opportunity.

What we've done is created a system that allows people to do online booking. As well, we are going to expand that into creating the expense reports on the system; we will then be able to answer all kinds of questions about where people are travelling to, why--

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

Have you had clearly defined results?

[David Marshall]

We've had some very defined results from this service. We've been able to provide, on average, airfare reductions of about 11% for the government as a whole. When we were approached by the school of public administration to accommodate students coming from across the country, travel and hotel, we were able to negotiate bulk prices that gave us a 25% improvement even above government rates. We are now going to extend that to the rest of the government.

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

Thank you, Mr. Marshall.

While I'm there, Mr. Marshall, I see on the main estimates that the costs of business integration services are down significantly--64.5%. It seems to be a bit odd there. There's obviously a movement to increase efficiencies and save money, and this appears to be a mechanism by which to do so, yet you're reducing it. Does that make any sense to you? Does it make any sense to me? Could you explain that a little further?

[David Marshall]

Sure.

I began this division to act as a sales force, if you like, so that clients could deal with one group, and then they would integrate all the services of Public Works to the departments.

What we found as we were operating the group was that the individual businesses were very large and needed a great deal of direct contact with counterparts in their client departments--for example, the real property people really needed to get at the planners and the people organizing real property in a large department like the Department of National Defence, and vice versa for procurement, information technology, and so forth. As well, we were making so many changes in how our service was going to operate that we really needed direct contact for that reason also. We came to a decision that it was wiser to fold that business integration group back into individual departments so that they each had their sales force, if you like, to go in. That's part of the increase in the cost of the acquisition group.

It's actually working very well. Once we're a little bit more mature, we might go back to a common sales group.

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

Thank you.

I have one other question. I can recall that on a number of occasions the Auditor General has been leading the charge for accrual accounting. I see your department is responsible for the remediation of contaminated sites. I'd like to know how far along the path you are, or where your costing comes into play on the actual remediation of contaminated sites. In other words, do you have x billions of dollars of cost of remediation? Where does it sit on the balance sheet? Is there an accrual cost that comes forward every year, or is this just sitting on a lump-sum liability?

[David Marshall]

There is, of course, a cost estimate defined before we begin. We go to cabinet for approval, to the Treasury Board and so forth. Ministers and everyone else are aware of the size of the whole obligation, but in fact the funding comes annually, so it could get changed, for example, through the life of a remediation. That is an issue.

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

I have one more question. It relates to the comments earlier from the minister and my colleague here, Mike Wallace, when we were talking about the year-end spending binge. I think many of us have seen departments.... A number of us have worked on municipal councils and at the various levels of government, and we've seen very much of that at all levels of government. I certainly have seen it at all levels of government. In order to curb it, though, there is a mentality out there that we have to provide some form of incentive, not just a level of control for which most of your observations will be on past expenditures.

Would the department have any plans to go forward to find some way to put an incentive in place to curb this year-end spending binge, Minister?

[Michael Fortier]

On this, what will help significantly is....

Perhaps because I've come from the private sector, I don't understand it. If you need a desk, you need a desk; you don't buy it on February 28. The needs come up regularly; some of them might be seasonal, but the needs come up, and they come up regardless of the month of the year.

With the super standing offers that Mr. Marshall is putting together for 34 commodities, we are always going to have the best price for 34 significant commodities across the board, so it won't matter if you're buying them on January 1, June 1, September 1; we will always have the best price. Hence, if people are just not administering their budgets properly and waiting until February, if the system works well--and it will--there will be no negative cost effect on the government or on taxpayers, because you'll be getting the same price you would have paid if you had bought it in December.

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

The same price is one thing, but possible unnecessary purchases might be different.

[Michael Fortier]

It's difficult to ask Public Works to monitor every single department here in Ottawa. We are the back office. I'm not trying to find an exit to this question, but we're the back office.

We set up the systems for people to buy. People have to use their common sense and be diligent in how they buy, but we're not doing the buying; we're setting up the system to allow these people to buy.

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

Thank you very kindly.

All I'm asking you to do is consider some form of incentive. If there happened to be 10% of the budget left at some particular point at the end of the year and they could save 5% instead of just spending that 10%, they might be able to do a carryover on a certain prescribed amount of it , so there could be some potential incentive. Let's put a carrot there, as well as a stick; that's my only thought.

[The Chair, Liberal, Diane Marleau]

My understanding is that it exists now. I think there is a 5%. I think it exists now.

We will go to Monsieur Bonin.

[Raymond Bonin, Liberal, Nickel Belt, ON]

You're all signalling that yes, there is a 5% retainer you can carry over, as we do with our budgets. Why didn't you say it?

To the deputy minister--if you knew this, why didn't you solve the problem the first time the question was asked?

Minister or senator, I don't know how I should address you—

[Michael Fortier]

Who are you angry at? Were you angry at me?

[Raymond Bonin, Liberal, Nickel Belt, ON]

I understand that you didn't know that Don Boudria corrected this situation 10 years ago. It had been established that we could reserve 5 per cent of our budget. That was corrected in the departments. When Mr. Wallace asked the question, why didn't the deputy minister mention it? I'm sure the officials are aware of that 5 per cent.

[Michael Fortier]

Probably because I answered the question, Mr. Bonin, whereas it was put to another person. Pardon me.

[Raymond Bonin, Liberal, Nickel Belt, ON]

I understand, but I wasn't attacking you, sir.