Government Operations Committee on Nov. 25th, 2010

[The Chair, Liberal, John McKay]

Ladies and gentlemen, I call meeting number 39 of the government operations committee to order.

We have a number of witnesses from Public Works, Treasury Board, and the Privy Council Office.

Before I ask the witnesses to speak, I want committee members to note that we have received a response from the OPP and it was received by the clerk in a timely fashion. It is in translation. I want to canvass the committee as to whether it could be, at this point, distributed in one language only. I can only do that with the consent of the committee, given that there is some time sensitivity with respect to this document. I'm seeking the consent of the committee to have it distributed in one language only at this point. Otherwise, it will be available by the end of the day.

Monsieur Vincent.

[Robert Vincent, Bloc, Shefford, QC]

Unless I am mistaken, it will not be tabled in both official languages.

[The Chair, Liberal, John McKay]

Yes, it's in English only.

[Robert Vincent, Bloc, Shefford, QC]

I am opposed to its distribution. It has to be tabled in both official languages.

[The Chair, Liberal, John McKay]

Not seeing permission, we'll not be able to distribute it.

We'll go to the witnesses. I'll call you in the order in which you're listed on the orders of the day, starting with the Department of Public Works and Government Services, Mr. Alex Lakroni.

Mr. Lakroni, your presentation, please.

[Alex Lakroni, Chief Financial Officer, Finance Branch, Department of Public Works and Government Services]

Mr. Chair, members of the committee, good morning.

My name is Alex Lakroni and I am the Chief Financial Officer at Public Works and Government Services Canada. With me is John McBain, Assistant Deputy Minister of Real Property Branch.

We are pleased to be here today as part of your review of the supplementary estimates (B) that were tabled on November 4.

Parliament approved the department's 2010-11 main estimates and supplementary estimates (A), which totalled $3 billion. These supplementary estimates (B) request additional funding of $153 million, including $127 million in new funding requests, plus $26 million in transfers from other government departments. This will result in a total appropriations of $3.1 billion within PWGSC. This request of $153 million is for items previously approved by Treasury Board.

I will briefly highlight the key items in order of magnitude.

As committee members know, PWGSC is responsible for, among other things, the accommodation needs of federal employees across Canada. Like last year, the greatest portion of the funds requested--$88 million--addresses this aspect of the department's mandate, specially for accommodation and real property assets management. It includes non-discretionary expenses in the form of fit-up, maintenance, and temporary accommodation costs stemming from renovations to existing assets, as well as increases in municipal taxes, utility prices, and building maintenance costs.

Another $14.4 million is needed to address the costs of office accommodations attributable to the renewal or growth of programs government-wide.

PWGSC's industrial security program plays an important role in support of the public safety and security of Canada, as well as contributing to Canada's anti-proliferation and global security priorities. It also supports the Canadian economy by helping Canadian industry prepare and participate in classified contracts domestically and abroad. The $13.3 million required this year is to modernize and transform our security processes. On two occasions the Auditor General noted that stable funding had not been dedicated to enable PWGSC to meet its objectives.

We are experiencing additional demands for essential translation and interpretation services provided to Parliament. Another $5.6 million is requested to meet that demand.

There is $5.1 million being sought for urgent repairs and upgrades to data centre building systems, and to consolidate and modernize information technology. The Auditor General's report of spring 2010 confirmed that without sufficient and timely investments to modernize and replace aging computer systems, the ability of departments and agencies to serve Canadians is at risk.

The Canadian innovation commercialization program announced in budget 2010 aims to promote innovation and support the development of small and medium enterprises in Canada. The program requires $3.8 million in start-up funding in order to fulfill its mandate of giving Canadian entrepreneurs a chance to grow and prosper. This will be accomplished by testing innovative products and services in the fields of environment, safety and security, and enabling technologies within the federal government before they test the rough waters of the marketplace.

In addition, $3.7 million in funding is being sought for pre-construction activities associated with rebuilding the Grande Allée Armoury in Quebec City. Finally, the $26 million in transfers from colleague departments consists of two parts. Fourteen million dollars pertains to funding related to accommodation charges for the Canada Revenue Agency and $12 million is associated with remediation project work on contaminated sites to be carried out by the department.

There are other smaller adjustments to the appropriations, and we will be pleased to provide additional details on these if you wish.

Mr. Chair, these represent the key items on which PWGSC is requesting additional funding. We will be happy to answer your questions.

Thank you.

[The Chair, Liberal, John McKay]

Thank you, Mr. Lakroni.

I now turn to the Privy Council Office and Marilyn MacPherson.

[Marilyn MacPherson, Assistant Deputy Minister, Corporate Services Branch, Privy Council Office]

Good morning, Mr. Chair. I'm pleased to meet with the members of the Standing Committee on Government Operations and Estimates. I am accompanied by Jean-Philippe Caron, Director of Security Operations. My introductory comments pertain to the 2010-2011 supplementary estimates (B) for the Privy Council Office. As we have several distinct items, I will speak to these without further preamble.

PCO is requesting a net amount of $1.4 million which is comprised of five specific items. The first request in the amount of $2.9 million is to enhance security to focus exclusively on the highest priority elements directly related to the security of the department, particularly the Langevin Block, which houses the office of the PCO and the Prime Minister's Office.

The purpose of the proposed funding is to upgrade the current security infrastructure relative to the safety and protection of personnel, information and assets.

The second and third requests, in the amount of $0.8 million, are for the completion of activities of the commission of inquiry into the investigation of the bombing of Air India Flight 182, which represents $0.6 million; and the commission of inquiry into certain allegations respecting business and financial dealings between Karlheinz Schreiber and the Right Honourable Brian Mulroney, which represents $0.2 million. The funds have been reprofiled or transferred from 2009-10, since expenses from the production of the final report, which were originally planned and funded for in 2009-10, were deferred to 2010-11. The funding comes from the commission's 2009-10 surpluses.

The fourth item is a permanent budget reduction of $1.6 million. On the recommendation of the Prime Minister, the Treasury Board approved amendments to the budgets for the offices of ministers and ministers of state, effective April 1, 2010, and for future years. The budgets were reduced accordingly for the President of the Queen's Privy Council and the Minister of Intergovernmental Affairs, the leader of the government in the House of Commons, the leader of the government in the Senate, the minister of state for democratic reform, and the minister of state and chief government whip. The total ongoing reduction in PCO's reference levels is $1.6 million.

The last item is also a budget reduction of $0.7 million in PCO's reference levels due to measures announced in Budget 2010. In order to control the size and operations of the federal government, departments are not funded for the 2010-2011 salary increases resulting from collective agreements. Since PCO had already received funding for wage and salary increases for 2010-2011 which were included in the 2010-2011 main estimates, Treasury Board has established a frozen allotment to reduce PCO's reference levels.

In closing, I would like to thank you for giving me this time to inform you of the ongoing initiatives in the 2010-11 supplementary estimates (B). We will be pleased to respond to your questions.

[The Chair, Liberal, John McKay]

Thank you, Ms. MacPherson.

Our third witness is Christine Walker, from Treasury Board Secretariat. I assume you'll introduce Mr. Trottier.

[Christine Walker, Assistant Secretary and Chief Financial Officer, Corporate Services, Treasury Board Secretariat]

Good morning, Mr. Chair.

My name is Christine Walker. I am the assistant secretary of the corporate services sector, and the chief financial officer of the Treasury Board Secretariat.

I have with me today a departmental colleague who will assist in answering questions. Mr. Carl Trottier is the executive director, strategic compensation management, for the compensation and labour relations sector within the office of the chief human resources officer.

We are here today to answer any questions you may have on the supplementary estimates (B) 2010-2011, specifically votes 1 and 15 for the Treasury Board Secretariat.

Through these supplementary estimates, we are seeking $138.6 million. The majority of this request is $137 million to fund departments and agencies for the increased costs associated with signing collective agreements with public servants. These amounts relate to retroactive adjustments prior to the period of April 1, 2010, when the cost containment measures took effect.

Smaller increases are also sought to support the implementation of several programs. These programs, which have been approved by the Treasury Board, include $1.7 million for the management of the classification program for the core public administration, $900,000 for Treasury Board's role in the implementation of Canada's cyber security strategy, and $800,000 for administering the Government of Canada's public service readiness plan.

These estimates also reflect the impact of the budget 2010 cost containment measures.

The secretariat will be absorbing $1.4 million related to increases governed by compensation agreements with its own personnel.

Another government-wide measure has resulted in a reduction in the amount of $800,000 for the office of the President of the Treasury Board and minister for the Asia-Pacific gateway.

We would be pleased to address any questions the committee may have on these estimates today and will provide any further detailed information the committee may require to complete its review and analysis.

Thank you.

[The Chair, Liberal, John McKay]

Thank you, Ms. Walker.

Ms. Coady, you have eight minutes.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

We certainly appreciate all of you being here today. This is a very important part of the work we do. Your information, advice, and comments are very much appreciated. Thank you for attending.

I'm going to ask some general questions first. I know that perhaps Treasury Board will be able to answer some of these, and then I'll get into some specific departmental matters.

Total estimates to date are $266.6 billion, including $261.6 billion in the main estimates, $1.9 billion under supplementary estimates (A), and $3.1 billion under supplementary estimates (B). After adjustments, total budgeted expenditures for 2010-2011 are $280.5 billion, I believe.

Given that this is a time of fiscal restraint and that the government has promised to cut back on costs and to find savings, you're coming back asking for more funds. Could you address that concern I may have, just in a general sense, that we're looking at trying to be more fiscally prudent and yet are looking for more funds?

[Christine Walker]

Thank you for the question.

In my opening remarks I noted that we were here to answer questions on supplementary estimates (B) for the Treasury Board Secretariat votes 1 and 15. This question is outside the scope of votes 1 and 15. The secretary or the associate secretary would be happy to come to this committee and address any questions of that nature.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

We did ask for the minister to be here today. I guess he would have been able to answer that question from a general perspective. Perhaps that's the person we would need to have. I would like to reiterate that I would like to have the minister here.

I'm going to ask the Privy Council some questions specifically on their estimates. In the main estimates of 2009-10, you requested funding from Parliament of $61 million for the Prime Minister and portfolio ministers for support and advice. It has risen to $74 million in the main estimates for 2010-11. We've been told that the reason for that is because of the G-8 and G-20 and because of the Olympics and other reasons like that. Now, we don't have those coming up in the next year. So my question, originally to the minister, is why we continue to have this massive increase.

Specifically on supplementary estimates (B), are you asking for any increases for the Prime Minister for support and advice?

[Marilyn MacPherson]

We are looking for a net amount of $1.4 million. In that amount, there's $2.9 million for security. That is for security for the entirety of the organization. So anything we're doing with respect to initiatives covers both the Prime Minister and all of his staff.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Yes, you did point that out in your opening remarks.

I'm specifically asking whether you are increasing any of the amounts for the Prime Minister or portfolio ministers for support and advice. I'm not asking about amounts for security. I'm asking if there are any increases being requested under supplementary estimates (B).

[Marilyn MacPherson]

No. In fact there is a decrease. The reduction for the ministers' budgets will directly affect program activity one, which is what you were referring to, and that will go down by $1.6 million as well as by a portion of the salary reduction, which will also be applied to them. I think the total amount will be $1.7 million that will be reduced from the support to the Prime Minister.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

How many employees work for the Privy Council Office and how many work for the Prime Minister's Office? Can you just tell me the change in the number of employees over the last couple of years?

[Marilyn MacPherson]

Up until last year the Prime Minister's Office had a budget of 85 FTEs, and last year, as you will recall, we came in to get funding for some chronic pressures. Part of that affected the Prime Minister's Office, and they are now at 114 staff.

With respect to the Privy Council Office, we vary considerably, because we also have commissions of inquiry. We have the Afghanistan task force, so it does fluctuate. On FTEs in 2009-10 we had authority to use 1,068 and we used 1,051, and going into 2010-11 we have authority for 1,040. But that does include the Prime Minister's Office and all of the other time-limited initiatives.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

I note that you've come back asking for $0.8 million for the completion of activities. Is it normally out of your budget, all the commission activities, for example, the commission of inquiry on Air India as well as the Karlheinz Schreiber and the Right Honourable Brian Mulroney's investigations?

[Marilyn MacPherson]

That is correct. Under the Inquiries Act, if there is a commission of inquiry that is struck under the prerogative of the Prime Minister, then it is the Privy Council Office that is responsible for the commission of inquiry.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Okay, thank you very much.

I do want to turn my attention to some other issues under the supplementary estimates (B) 2010-2011. This is under the introduction of the supplementary estimates, on page 11:

As a result of accounting changes due to the Jobs and Economic Growth Act, public debt charge forecasts from the Federal Budget are no longer a reasonable estimate of cash-basis expenditures for reporting in Estimates. This revised forecast is based on a change in methodology and better reflects the amounts to be charged to the statutory authority in 2010-11.

Can you explain the nature and rationale of the accounting changes that have been put in place? And do you believe that the accounting change with a fiscal impact of $2.9 billion can be more clearly explained than what you've just indicated? And did you speak to the Auditor General concerning the same?

[Christine Walker]

Mr. Chair, this question is outside the scope of the supplementary estimates (B) vote 1 and vote 15. As I have stated earlier, the secretary of the Treasury Board or the associate secretary would be happy to appear before the committee to answer these questions.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Mr. Chair, I think that's an indication that we do need to have the minister before committee.

Thank you very much. It is an indication, I guess, that some of the questions we have can't be answered here this morning.

Budget 2010 also announced three measures to curb government spending: a freeze on increases in departmental spending and travel, hospitality, and conferences, originally introduced in budget 2009, was maintained at 2008-2009 levels; departments and agencies would be required to reallocate internally to fund planned wage increases; and the third was that in the two subsequent years, operating budgets of departments would be frozen.

Could you elaborate, each of you, on what measures you've taken and how you've been able to take them to accommodate those cost savings and the curbing of the government spending?

[The Chair, Liberal, John McKay]

Very briefly, please.