Government Operations Committee on May 26th, 2009

[Martha Hall Findlay, Liberal, Willowdale, ON]

All of which may sound fine, but again, regarding the 120 days that were referred to very specifically on page 2 of the budget, you have not been able to answer me in terms of the actual amount of money.

[Vic Toews, Conservative, Provencher, MB]

That's not my responsibility, in the sense of what's--

[Martha Hall Findlay, Liberal, Willowdale, ON]

It's the Treasury Board approval that would have been based, I would hope, on money getting out of the door quickly on the basis of vote 35 approval.

[Vic Toews, Conservative, Provencher, MB]

Let me answer the question then. The question is about what approvals Treasury Board puts into place in order for the money to flow to the departments. Of the $22 billion, $20 billion has been approved. It's in the hands of the department, and they are now free to enter into contribution agreements with provinces, with municipalities, and with other third parties.

[The Chair, Liberal, Derek Lee]

That's time. Thank you.

Madame Bourgeois, cinq minutes.

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

Thank you, Mr. Chairman.

Good afternoon, Mr. Minister.

On page 4 of your speaking notes today, you say the following: « We've had to act quickly to implement the stimulus measures contained in the Plan in order to ensure they have a real impact for Canadian businesses and families. »

How can we be certain that the stimulus measures have had a real impact on Canadian businesses and families until now?

[Vic Toews, Conservative, Provencher, MB]

I can advise you that if the approvals had not been made, nothing would happen inside the government, where the necessary approvals have to take place first. As I've indicated, we are approximately nine months ahead of the regular schedule in the approvals that we have made. The next step is that after the legal approvals are in place, it's incumbent upon the departments to move that money out. Those are the announcements that are being made.

Now, with the additional agreement that we have to be able to send 25% of the federal contribution to the proponents after a contribution agreement has been signed, that will certainly continue the rather quick pace of moving this ahead. The authorities have to be in place. As you know, we couldn't have done any of this without vote 35.

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

At the Treasury Board Secretariat, you have an expenditure management system whose key component is its strategic review process.

In the case of vote 35, could you tell me if the strategic review process was properly implemented? Every four years, all departments and agencies must report, under the strategic review process. There is a year and a half left to go before they must table their reports. How will you ensure that the funds allocated to programs under vote 35 have really helped families?

Earlier on, you said you had made these funds available. But you will undertake this review in a year and a half, unless you do a careful strategic review over the next month. That is what I would like either you, Mr. Toews, or Mr. Smith, to tell me.

[Vic Toews, Conservative, Provencher, MB]

No, that's not correct. I'll let Mr. Smith get into some of the details, but there will be a report out in June, and we were just discussing that. There will be another report in September--in respect of vote 35. That's what you're asking about.

In respect of the operating budgets of departments, the operating programs, which is essentially $100 billion, give or take $1 billion--Mr. Smith can get it down to the penny--that is being handled in the strategic review. Every year we take approximately 25% of the operating programs--approximately 25%, because we started one year a little late--and the departments identify 5% of what they consider to be the poorest performing departments. They then bring that forward to Treasury Board.

So roughly somewhere between $20 billion and $25 billion a year, bring it forward, and then there's 5% of that, with recommendations for reallocation of that money. That's just prudent practice to ensure that money is being properly spent. If government departments are indicating that this 5% is the poorest performing program, then it's incumbent upon government to look at that 5% and say, “What do we do with that money? Do we reinvest it back into that department? Do we reallocate it elsewhere?” And that's what this strategic review does. It doesn't affect the ordinary running of the department until a decision has been made in that respect.

Maybe Mr. Smith can clarify that if I haven't been clear.

[Alister Smith, Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat]

I think the president has been clear.

Every year we examine up to 25% of program spending. This is money that is in departments' existing budgets, so it tends to be what we call A-base money—money for operating and other types of ongoing spending—as opposed to, say, the budget money, which tends to be new money. In some cases, there are some elements of a budget that top up some of the existing spending, but there is a difference between the two. So we will continue the strategic reviews anyway.

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

I have one final question, Mr. Minister.

On page 16 of your statement, you say: « [...] we are ensuring deputy ministers have the tools they need to fulfil their responsibilities and for managing the people [...] ». We know that Ms. Barrados worked very hard with deputy ministers to improve the staffing process. Extraordinary amounts of money have been allocated to outside firms to meet staffing needs. You must certainly be aware of this.

How is it that you state that deputy ministers should have all the tools they need to fulfil their responsibilities for managing people, whereas we are spending millions of dollars to go and find staff outside the government, and private sector firms are getting these millions of dollars?

Are you aware of this, Mr. Smith or Mr. Toews?

[Vic Toews, Conservative, Provencher, MB]

I can answer it briefly.

Sometimes there simply isn't the capacity in government to perform certain services, and the most effective way to do it is to contract with a private firm. For example, if we are looking at a large IT project like IBM, certainly we would hire IBM after a contract.... We hire a private firm, but that is on recommendation, after we go through the usual contracting process, which is an approved process.

I don't see anything inconsistent with ensuring that money is well spent by contracting out when government doesn't have the in-house capacity.

Mr. Smith, would you like to comment?

[Alister Smith]

No.

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

I am talking about the hiring of part-time public servants. I am sorry.

[The Chair, Liberal, Derek Lee]

Mr. Gourde, you have five minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much, Mr. Chairman.

Good afternoon Mr. Minister, as well as the witnesses and guests.

The government had to act quickly to ensure that Canadians would benefit from the stimulus measures under the Canada Economic Action Plan, approved by government and by Parliament. The budget was tabled in January, and we are barely into this fiscal year.

In what way has Treasury Board accelerated the government approval process, and do Treasury Board's accountability measures apply to these accelerated deadlines?

[Vic Toews, Conservative, Provencher, MB]

Thank you, Mr. Gourde. I appreciate the question.

As I've indicated, the government approval process for getting money out the door is about nine months ahead of schedule because of the processes we've adopted. The processes we adopted all comply with Treasury Board and rules and regulations. We brought in the main estimates, we introduced interim supply on March 24, we brought in the supplementary estimates on May 14, and there will be an introduction of the full supply for main estimates sometime in June. So we have moved rapidly.

One of the mechanisms we then chose to utilize to ensure that the money got out well before supplementary estimates (A) could be approved was through vote 35. Vote 35 is simply a bridge to funding. It's not a separate fund; it's not a new fund. It simply authorizes the government to expend $3 billion. Again, the $3 billion that is allocated during the April 2 to June 30 time period is allocated all in accordance with the same rules that govern the allocation of any money.

I have to thank Treasury Board staff for the work they did in approving it. Because of the way the budget, the mains, and supplementary estimates (A) were all introduced in a tight timeline, by the time we got to the internal deadlines we could not have met many of the obligations we've undertaken under our economic action plan if we hadn't had vote 35. If we had missed the deadline for supplementary estimates (A), most of the approvals that would have missed that deadline would have only been given in December. Vote 35 was absolutely crucial as a bridge funding mechanism to ensure that we had the legal authority to move that money out the door.

So we asked Parliament for $3 billion. We anticipate that it will be a little under that—probably somewhere in the range of $2.5 billion is my own estimate—but we'll see what happens by June of this year. It's been a tremendous success, and I really need to credit the staff in the Treasury Board and in the various departments who identified all of these early projects for stimulus funding.

For example, for the knowledge infrastructure fund, which was $500 million, there are announcements being made now to universities. In my own home province of Manitoba, Dr. Lloyd Axworthy, president and vice-chancellor of the University of Winnipeg, spoke highly of the commitment the government made to him just last week, noting that it was an unprecedented amount of money that the university had received under this program. And it works in cooperation with the province.

There have been many of those types of examples, in which we're now able to move these projects literally six to nine months ahead of the regular schedule.

Mr. Smith.

[Alister Smith]

There has been a very broad economic action plan at work. In addition to what the minister just described, we shouldn't forget the extraordinary financing program that has been deployed, as well as tax measures and other elements and many of the elements of the Budget Implementation Act.

Overall, all of the work to ensure that this came into play had to be done very much on an urgent basis, but also paying attention to due diligence. It was quite a requirement on the part of the public service to be able to do that.

[The Chair, Liberal, Derek Lee]

Merci.

Mr. Martin, you have five minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Chair.

Minister, the operations of government are a mystery to most Canadians. They're very convoluted and complex. They're a mystery to most of us at this committee half the time, frankly. We all know now that you can spend the money, and we've helped you with vote 35 to fast-track that spending, but it's a great leap of faith that this spending is actually having the desired results. No Canadian--I don't think any of us here--has even seen a real yardstick that we can measure progress by, and I think that's the frustration that you sense in some of the questioning here and in the House of Commons.

Vote 35 was fairly easy to understand when you stuck to the bricks and mortar. Buildings at universities and I think the Cartier bridge were specifically mentioned in vote 35. That gets people working immediately and it gets money flowing. There are things in vote 35 that are a mystery to me. The Chalk River CANDU reactor is getting $222 million to maintain safe and reliable operations at Chalk River. How do you explain that finding its way into vote 35? What was the fast-tracking urgency associated with that?

[Vic Toews, Conservative, Provencher, MB]

Vote 35 is a financial bridge for any budgetary matter, not necessarily purely stimulus matters. So provided it was a budgetary matter, that money could then be authorized prior to supplementary estimates (B). Some of these would have missed supplementary estimates (A), and then they would be put into vote 35, which would then give the authorization to spend $225 million. Now that in--

[Pat Martin, NDP, Winnipeg Centre, MB]

But that was for the purposes of this fast-tracking economic stimulus, surely. I remember the lobbying that went on when they were trying to convince us to vote for vote 35. It was all about our having to make this unusual, almost unprecedented move to get the money flowing to stimulate the economy, not to repair a nuclear reactor or for questionable politics. What I'm saying is it became sort of a catch basin for all kinds of wish lists.

[Vic Toews, Conservative, Provencher, MB]

But it was never anything but that. It was in order to achieve the budgetary matters that were set out there, including some of the stimulus matters. Anything in chapter 3 of the economic action plan is eligible for vote 35, and that's what I found very frustrating when in the House people kept on saying that this was somehow equivalent to the Liberal sponsorship slush fund.

This had nothing to do with that kind of unapproved fund, for which there was no oversight by a deputy minister, and it was just a political fund. We still don't know where all that money went to, unlike the case for Treasury Board vote 35. This is all part of a budgetary plan. The reason we required vote 35 was to approve the expenditures prior to June 30. It's as simple as that, and people kept on asking where this slush fund was, where this blank cheque was. I could never understand what people were talking about, because they'd never slow down and actually listen to what was being said.

[Pat Martin, NDP, Winnipeg Centre, MB]

So you will agree that the justification for this measure was economic stimulus? That was what was proposed to the House leaders, and I attended the meeting on behalf of the NDP where it was pitched.

[Vic Toews, Conservative, Provencher, MB]

For example, the $500 million on the knowledge infrastructure plan is a clear example of that. I could go through—