Government Operations Committee on March 12th, 2009

[Simon Kennedy]

Mr. Chair, I can't speak to specific items in terms of what PCO may or may not advise on, or to items that were discussed. I can, however, just in terms of the member's question, indicate that PCO does provide advice on the complete range of files the government deals with. So if it were to come to issues like pay equity or issues regarding labour relations or that sort of thing, that would be an advice function we would have as well. But the central responsibility for the policy and for the work would still reside with the Treasury Board as the government's employer. But we provide advice on a range of matters, which would include pay equity.

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

You say that you give non-partisan advice. But when you get a Prime Minister, a government with a certain ideology, can you steer things, or is it the other way around? In other words, is it the Prime Minister who says that he is going to pursue his ideology, regardless of the impartial advice you give him? I'd just like this to be clear in my mind.

[Simon Kennedy]

Mr. Chair, what I would say is that Privy Council Office is non-partisan. It is staffed by public servants. Our job is to provide neutral, non-partisan advice to the government and to loyally implement the policies and programs the government establishes.

We would certainly give advice to a government on its agenda, but ultimately the government is accountable to Canadians and is elected with a mandate. So we can give advice on a program, but it's certainly not for us to decide what will and will not be done.

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

Thank you. I appreciate your answer.

Ms. MacPherson, you mentioned an increase of $5.6 million for the year 2009-10, including $2 million for funding the office of the coordinator for the 2010 Olympics. Is this $2 million budgeted solely for 2009-10, or will it be kept on afterwards? You say that it is budgeted up to 2010-11, but when will it end exactly?

[Marilyn MacPherson]

The coordinator position is held by Ward P.D. Elcock, and he was appointed in October 2007, and his mandate is to do security planning cross-jurisdictionally and for the whole-of-government approach for both the Olympics and the G-8. His funding runs over four different years at a total forecast now of $5.4 million. So he started in 2007-08 with $500,000; in 2008-09, we're forecasting $1.9 million; for main estimates in 2009-10 it's $2 million; and then for the wrap-up in 2011 it will be another $1 million.

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

There is also $0.3 million for additional efficiency savings related to the Procurement Initiative. What is this? The committee actually examines procurement methods.

[Marilyn MacPherson]

Previously in a budget there was a decision that starting in 2008-09 there would be a cut of 0.7% on all departments over $40 million to meet a fiscal deficit, so in 2009-10, already reflected in the main estimates, is a cut of $800,000. However, there is an ongoing fiscal deficit, so in order to meet that, there is a further cut of $300,000 this year. Next year it will move to $600,000 and the year after it will be up to $1 million in order to take care of the fiscal deficit.

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

Thank you.

[The Chair, Liberal, Derek Lee]

Thank you.

That's your departmental contribution to addressing the deficit.

[Marilyn MacPherson]

That's correct.

[The Chair, Liberal, Derek Lee]

Thank you.

Mr. Calandra, for an eight-minute round.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Thank you, Mr. Chair.

I appreciate that, and I will do my best to stay within the eight minutes that I'm afforded.

Thank you very much. I appreciate you coming. As you know, one of the most important things we're hearing about in our ridings and one of the initiatives that is most important to this government is the stimulus package, and more importantly the budget, getting the budget out the door and getting the funds flowing so that we can build the roads, the bridges, and the other things that Canadians are depending on us to do. Obviously the government has to work cooperatively with the bureaucracy to get this done.

I was wondering if you might be able to highlight some of the things that the bureaucracy, or the public service, is doing to help speed up the implementation of Budget 2009.

[Simon Kennedy]

A number of things have been done, and I can itemize them.

The first is with regard to the process for cabinet approvals. Work has been done to try to accelerate the normal cabinet approval process. Typically, it would be a number of months after a budget is put out that items would come forward to cabinet. PCO has been working with departments, where possible, to try to group together like items and to bring them to the cabinet system on an expedited basis.

We've been trying to work with colleagues at Treasury Board to do much the same with Treasury Board submissions. Once the policy is established at cabinet, there is then all the administrative detail of how a program will be designed, the terms and conditions and that sort of thing.

Treasury Board has been working with departments to help them develop their Treasury Board submissions, in many cases in parallel with the policy development work. So they are trying to do both at the same time, as opposed to doing it sequentially. They are trying to bring Treasury Board proposals into the Treasury Board, again on an expedited basis, grouping together proposals that are similar where that's possible.

Also, they have been working across departments in the government, looking at how various authorities can be realigned to better support the delivery of the stimulus measures. For example, where a department might have a robust risk management framework in place, that department might be given more authority than is typical to be able to go out and actually execute contracts and undertake work.

In addition to that, the government has been exploring--and certainly the public service has been supporting this--ways to streamline various approval processes. For example, if one wanted to construct a bridge, you would typically have approvals under the Navigable Waters Protection Act to look at how to streamline and reduce redundancy under that legislation.

In addition, I mentioned earlier, with regard to the whole process around appropriations, to try to find a way to accelerate appropriations.... For example, there are a large number of items set out in the Budget Implementation Act so that the appropriation authority can actually take place through the budget legislation. Once the legislation passes, departments will actually have the authority to spend. Again, typically what would happen is the spending authority would be through the supplementary estimates, either in June or perhaps in December, which would be up to eight months after the budget is typically tabled.

Altogether in that process--I don't have the figures directly--the savings would be anywhere from a couple of months to as much as a year or more in terms of the ability to roll out measures.

I would note that the IMF, in its article 4 assessment, which I believe came out yesterday, actually had some very positive things to say about what Canada is doing to try to focus on delivery of the measures in the budget.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Before being elected here I was part of the Red Tape Commission in the Province of Ontario, so accountability and how we spend taxpayers' money is extraordinarily important to me--as important as getting the money out the door. I also have a responsibility to the people in my riding to make sure that it's being done accountably.

How are we going to be reporting on how the money is being spent? How is the stimulus package going out the door, and what projects are being done? Is there a mechanism for us as parliamentarians to review that? How will we keep Canadians informed?

[Simon Kennedy]

Mr. Chair, the most obvious and I think one of the central means for accountability will be the quarterly reports that will be produced for both Parliament and for the public.

I mentioned earlier that we have set up with our colleagues in the other central agencies a regular series of meetings with departments. The key purpose of that is to actually collect the performance information that will be used to inform on the development of those reports. I think members would have seen in the most recent report tabled that there were tables for each of the main areas of the budget indicating the status of the measure in question and when funds could be expected to flow. The hope would be that in subsequent reports we'll be able to report in a bit more detail on how the actual funding is flowing.

Again, I can't speak to detail. This would be something individual departments could speak to, but certainly in terms of the proactive disclosure rules, I know a number of departments are actually posting all of the various contracts and so on directly on their website. As the Minister of Finance indicated earlier, there is an intention through the main website to be regularly reporting on how the government is making progress on the stimulus measures.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

One of the things I keep receiving at my office are e-mails and letters hungry to know specifically, or in broader terms, how the budget will help Canadians. Obviously, we do our best to explain to Canadians how this is going to help, by building roads and bridges, rebuilding community centres, and keeping people in work and getting them back to work, and how important it is to get the money out the door, so that people can see what government is doing.

I'm just wondering if you might be able to comment—and I can appreciate that this might be a bit of a difficult one—on how quickly we can expect the initiatives brought forward in the stimulus package to help Canadians, or how quickly Canadians will start to see a benefit from the massive investments we're making in communities across the country.

[Simon Kennedy]

Mr. Chair, our aim is certainly in support of the government, and I think the government's aim is to get the funds out the door as quickly as possible. Personally, I'm not an economist, and I would feel hesitant to speak about the specific timing. I think that would be a question better directed to the Department of Finance.

I can say, though, certainly from a lot of work I've done in this area, that obviously there's always some time required for the effects to be picked up in the broader economy. It's no different from being at a traffic light: if you're 25 cars back and the light goes green, your car takes a few minutes to get rolling. That's why it's all the more important to get the funds out as quickly as possible, and that's the objective set out in the measures I talked about earlier.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Mr. Chair, do I have another minute or so?

[The Chair, Liberal, Derek Lee]

You have four seconds. You've done very well, Mr. Calandra, thank you.

Mr. Martin, for eight minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair, and thank you, witnesses.

I'd like to start with two technical or practical questions regarding the estimates, which might get fairly short answers, and then I have some policy-type questions.

First of all, I note from the estimates, or from your presentation, Ms. MacPherson, that internal services amount to fully 38% of the total amount being requested. That strikes me as a lot. Most organizations would be worried if they were burning up 38% of their total budget in administration only and the rest in actual product.

How do you account for those numbers?

[Marilyn MacPherson]

Mr. Chair, PCO is a very small department and we are very centralized. We are all here in Ottawa, and we do not deliver programs, nor are we in any way regionalized. So what we have done in our department is really to focus our energy on ensuring that the people who are doing the analyses and supporting the Prime Minister and the cabinet are able to focus on that. In doing so, we are exercising economies of scale, and we have centralized as much administrative support as we possibly can inside the department.

So where you would find in other departments managers and organizations throughout those departments paying for things like printing and graphics and telecommunications, and those kinds of things, in our department it is all centralized. For example, all the furniture we pay for under internal services. We do all of the telecommunications. We pay for all of the software. We take care of all of the desktops and all of the infrastructure. We also have a messenger service that we provide internally to the department. We take care of all of the translation and all of the supplies.

So it's quite a different construct from most departments, but I think it actually is more useful for our department and it makes better use of our funds.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's interesting. Thank you.

The second question is that I notice your budget has fallen from $200 million a year in 2005-06 to $135 million now. That's a huge cut.

What is the explanation for this downward trend—not that I'm against downward trends in spending?

[Marilyn MacPherson]

I wasn't in the department for all of that period of time, but I do know there were two or three things that would have contributed to the decrease. One was that in 2006-07 there was a transfer of responsibilities out of PCO, when we returned to core business and transferred $14 million out to other departments.

There was also in that year, or the year prior, a change to the funding provided to ministers, and for our department that resulted in a decrease of approximately $5 million to $6 million.

At that time we were spending about $26 million on the commissions of inquiry. But this year, for example, we have no money for those in the main estimates, notwithstanding the fact that we're still supporting three commissions of inquiry. It's simply a matter of the timing, and we'll be coming in for supplementary estimates.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's another good answer.

I would like to ask about some specific things now, though, regarding the comment that one of your roles is to help expedite the rollout of the stimulus package and to accelerate cabinet approval.

How do you expect to be able to almost double the volume of activity packed into three months in the vote 35 money? Somewhere along the line, due diligence or scrutiny or oversight is going to have to be sacrificed on the altar of getting it out the door. What kind of advice are you giving to be able to assure people that we're not chucking the oversight or the due diligence out the window in the interests of the political expediency associated with getting this money going?

[Simon Kennedy]

Mr. Chair, I have just a couple of comments.

One is that, just in terms of sound risk management, I think the downside risks of job losses and the economy slowing further have to be taken into account in the risk management equation. When an examination is undertaken of spending, one way in which to save time and to accelerate the delivery of programing is to focus on the terms, the conditions, and the criteria that are really the most critical.

When the economy is at full employment and when times are good, for example, if the government were looking to spend on infrastructure and other sorts of things, typically what one would want to do would be to focus more effort on picking the most strategic projects.

At the moment, with job losses and with the slowdown in the economy, a key purpose of the stimulus measures is to stimulate aggregate demand. The way in which you stimulate aggregate demand is you get dollars into the economy quickly, hence the focus in the budget on short-term, shovel-ready projects.

One way to reflect that in the programming is to have a very focused set of criteria to indicate that these are the things we need to focus on in order to get that project approved. Perhaps some of the other considerations that might be there in different circumstances, such as some of the more strategic aspects and so on--