Government Operations Committee on June 14th, 2010

[The Chair, Liberal, Yasmin Ratansi]

Mr. Nadeau, you have one minute remaining.

[Richard Nadeau, Bloc, Gatineau, QC]

What type of solution have you implemented to deal with this issue?

[Andrew Treusch]

Thank you, sir. I would suggest that Ms. Diane Lorenzato answer this question.

[Diane Lorenzato, Assistant Deputy Minister, Human Resources Branch, Department of Public Works and Government Services]

Thank you, Mr. Nadeau.

Indeed, at that time, it was a challenge to recruit people for the department's compensation branch because it was not attractive. We subsequently set up a development program, insuring that employees recruited for the compensation section were at the junior level. They now participate in a development program which brings them up two levels once they have qualified and have the required skills and experience.

The development program is structured, and has coaches, mentors, classroom training and field training, so that the people no longer have to go looking for the next promotion. They are interested in staying with the department, because they have a future ahead of them.

Also, with respect to the human resources community, we have designed a promotion roadmap for the people in compensation. This helps us attract people and shows them that there is a future in other fields. This is a platform for these people.

We have applied the same principle in other sectors within the department—translation, human resources, finances, economy, acquisitions, real property—which makes the department interesting because people see that it is possible to progress in their career within Public Works Canada. That is how we have managed to turn the corner and attract more people than the number we need.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Mr. Gourde, are you sharing your time with Mr. Warkentin? You have the floor for eight minutes, please.

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

Thank you very much, Madam Chair. I too would like to thank the witnesses who are here today.

Could you explain which part of your departmental budget has been the most affected by the freeze?

[Andrew Treusch]

Again, it will be restricted to the operational part of our budget, and the priorities that you have seen in budget 2010 would not be affected. Our capital budget would not be affected, and our program allotments, if you like, would not be affected, so it will be our administrative side or our operational funds. We also have a freeze that's specifically related to our travel and to our hospitality.

So those are good examples of the kinds of things that are affected in the department. All of our operating money--that's the kind of thing where we will be needing to find $8.7 million in savings.

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

What strategies have been implemented in order to ensure that these cutbacks are made in both a strategic and reasonable fashion?

[Andrew Treusch]

Well, our CFO is here at my right, and his principal preoccupation is ensuring that our budget is in the black, is balanced. At the start of the year, we have our plans. We have our plans to deal with any financial pressures. Included in those plans will be strategies to manage our operating budget freeze. And then, on a regular basis, we examine our budget situation, all of our envelopes, against the forecast. That's led very much by the CFO and his work, but with the whole management team.

In our performance accords, financial management is a critical aspect of how we rank our senior managers. We expect them to be on top of the expenditures of their branches and we expect them to ensure that they're managing to the budget and forecasting as well as they can.

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

What lessons have you learned from past economic recessions that may help us better manage the current freeze on the departmental budget?

[Andrew Treusch]

Budget 2010...?

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

Canada has experienced other recessions or budget freezes in the past. Have we gained any experience from action that has been taken in order to have a better established strategy?

[Andrew Treusch]

That's a wonderful question, sir.

I have the good fortune of having been a civil servant through the recessions of 1980-81 and 1990-91 and the program review experience of both the mid-1990s and now. Certainly, while as a government we face some economic and fiscal challenges as we go through this recession into recovery, this is nothing like the challenge of the mid-1990s.

We entered this in a relatively better-off situation in terms of our debt and deficit load, and we're coming out of it with a sterling first quarter this year of 6.1% annualized growth. The measures will not need to be as onerous as we experienced over a decade ago.

The operating budget freeze as well is a freeze that, as departmental managers, we welcome, because it leaves a great deal of latitude to departments to allocate this according to their own needs and priorities. In the mid-1990s we had quite severe and dramatic action on the human resource side. Thousands of civil service jobs were eliminated. There was as well a staffing freeze of various incarnations. These left a legacy that some have referred to as a “lost decade”--a management gap that we've never really been able to fully regain.

We are more fortunate this time. The economic and fiscal environment is more fortuitous. Secondly, this measure of an operating freeze allocates more flexibility and helps us mitigate the human resource aspects of it relative to either a staffing freeze or a salary reduction, which would obviously make recruitment either difficult or impossible.

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

I will turn the floor over to Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Madam Chair.

I do thank you, witnesses, for being here this afternoon. We appreciate your testimony thus far.

I want to follow up on something you talked about, and that's the decade of minimal hiring. It caused a gap in terms of the escalation of that grouping that otherwise would have been hired at that point when it came to the groups that would have gone into management roles.

You spoke about demographics a little bit, and you mentioned the female component. You talked about visible minorities and people with disabilities. I'm wondering about the demographic of age. How is it right now within your department? Do you have any concerns relating to pending retirements?

I guess the question is are you as lopsided as the private sector is right now?

[Andrew Treusch]

I have serious concerns with age, I'll tell you--

[Voices]

Oh, oh!

[Andrew Treusch]

--but I think you're asking for my view of the department.

[Chris Warkentin, Conservative, Peace River, AB]

That's right.

[Andrew Treusch]

I have some age distribution figures here, sir, and I'll try to find a pithy way to summarize.

Here's one way of looking at it. The largest percentage falls in the 50 to 54 age band. That is 20% of our employees. That is followed by the 45 to 49 age band, at 16%. That indicates the aging of our demographic. You do see the results of our recruitment, though. You see, at the bottom end, that 10% of our population is under 30. You can see the inflow across the department, and you also can see people who look like me. We have between 500 and 600 persons retiring every year, out of a stock of 14,000 and 15,000 in the department. That should give you a sense of the numbers.

That demographic is worrisome. It's probably the major preoccupation of our human resource assistant deputy minister. It's not unlike other departments and it's not unlike large sectors of the private sector. One of the things we share in common, when we get together with private sector leaders, is the human resource challenge. Aging is the principal concern.

[Chris Warkentin, Conservative, Peace River, AB]

I appreciate that. I guess I was hoping you had a different answer, but it sounds like you're in line with the rest of the world.

So we'll all look to that plan. If you come up with the answer to the plan, let us know, because we have other departments that we'd like to share that information with.

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We will go to Monsieur Allen, for eight minutes.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Madam Chair.

Thank you to all for being here.

The demographics are interesting. Specifically, the age piece you talked about is clearly worrisome for a couple reasons. One is the knowledge base that one potentially loses if indeed the number escalates. When folks who are 50 to 54 make up 20% of your workforce, you're looking at losing potentially one-fifth in a very short span of time, based on pension requirements at 55, as some folks see it, or 60. So I guess one of the questions around your HR strategy is how you intend to work your knowledge folders to make sure you have that knowledge.

The other piece is that clearly you've looked at this quite rigorously. No doubt because of the freeze in your operational budget, it's an HR strategy in which it doesn't matter if you hire a consultant for a dollar less, because you really have a dollar less to start with. That being the case, do you have a strategy in place that says these are the bare bones you need to replace based on the numbers that go out the door? Do you have any specifics to that?

From what I've heard in the first half-hour or 40 minutes--you've been quite specific--this is an all-encompassing thought process when it comes to an HR strategy.

[Andrew Treusch]

Thank you.

If I may, I'll try to answer your question, sir.

Diane, please supplement me with your more expert knowledge.

Let me just start with the basic math. For a while now, we have been fixated on the renewal of the public service. Central to this has been recruitment of the next generation of leaders, and then progressively training and developing these new recruits. In round numbers, I mentioned that with the wave of retirement, we're looking at 500 to 600 persons a year. If you recall the recruitment numbers I was citing—and this was only for post-secondary recruitment—I think we're talking about 1,000 people each year over the last three years alone. So you can see the augmentation of our human resources at the base.

Given the demographics associated with these people coming into the department, we need to be upping our game on training and development, on coaching, career development, and mentoring, and on succession planning for our vital positions, and we're doing all of that.

We're doing a number of other things, but those are obviously the fundamentals of a human resources strategy. We are doing much more in those areas than we would have one, two, or three years ago. That will continue. Indeed, I expect we'll probably be doing more of that in the coming year, notwithstanding the freeze.

Diane.

[Diane Lorenzato]

Actually, I could add that we've just launched a new initiative on knowledge transfer to address that specific issue. We are concerned. There are some positions we call critical because the knowledge that comes with the position is something gained over a series of years. We've done a pilot project in one of our regions, in the Quebec region, and in one of our major branches, real property, to test our tools to transfer that knowledge. We want to institutionalize the way we transfer the knowledge that is specific to those positions.

Regarding the critical mass we need as a department to deliver on our mandate, we've asked each of our ADMs to do their strategic staffing plan. As part of the plan, they have to identify the critical positions in their organization in order to deliver on their mandate. With that, combined with the knowledge transfer, the succession planning, and the recruitment strategy, we should be in a position to fulfill our requirements.

We also have a departmental learning policy that clearly states that every employee needs to have a learning plan, and that each employee will have a minimum of three days of learning. Of course, that will fluctuate depending on where you are on your maturity growth vis-à-vis your position. Our investment in training has been constant year after year.

So we've been addressing it from different angles.