Government Operations Committee on Feb. 15th, 2011

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

Please be brief, Mr. Tsang.

[Alfred Tsang, Chief Financial Officer, Department of Human Resources and Skills Development]

I think the biggest reason is the incremental resources the department received as a result of the economic action plan. If you include the grants and contributions, there are increases in the statutory programs because of the rate increases--the payment is a little bit more--and the demographics.

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

It's quite possible. I see that you did not have the same figures as me. We can probably come back to that.

One issue really bothers me. You said that there is natural attrition, that vacant positions are not filled and that this automatically has an impact on the services to citizens. You provide a lot of services, and you deal with a good number of sectors. What is the impact on the services? We already provide services in our own ridings. I am going to let my colleague come back to the matter.

[Ian Shugart]

Actually, I said that attrition gives us some flexibility. I didn't say that we would not make up for some of the attrition rate. It's a matter of judgment for us. We need to see what the demands are. That will guide our choices as a department.

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

Very good.

[Robert Vincent, Bloc, Shefford, QC]

Thank you. I am going to continue along the same lines.

Where we're from, three full-time employees do the work for the departments, whether it's passports, employment insurance or the guaranteed income supplement. Three people in my office are assigned to these duties, which makes no sense. The employees of each MP, in their constituency office, do the work of the departments whose budgets you have decreased and where there have been reductions in staffing.

In that regard, you said 250 employees and 750 others for 2011-2012. At some point, I will no longer be able to pay these people. You said a decrease of $4.1 million has to be applied. But I saw in your budget that, simply on the side of travel costs, the planned decrease was $5 million. So I don't see the need to dismiss or lay off employees if you are already recovering $5 million. I would like it to be possible to keep a few more employees in the employment insurance offices and in a few others. I would like to hear your comments on this.

[The Chair, Liberal, John McKay]

You have one minute, Mr. Shugart.

[Ian Shugart]

I told Mr. Vincent that, in all sectors, there are a lot of expenses and savings. We need to spend and invest in services, whether it's people, technology, the development of systems that measure levels of service, or other things still. We get indications from some of our system parameters.

How well are we doing in our delivery?

We want to make sure that

the services are really being provided to Canadians. This means that sometimes we have to recruit people. In other cases, it's a matter of developing and investing in technology. We always want to make sure that employees are competent and fully motivated to serve Canadians. There are two sides to expenses: saving money and investing. It's a little complicated, but it's our reality.

[The Chair, Liberal, John McKay]

Thank you, Mr. Vincent.

Mr. Holder, go ahead for eight minutes, please.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank our guests for attending this morning.

I listened with great interest to how you are doing what you're doing. I've heard your presentation. You've talked about having things, it seems to me, well in hand in terms of how you're going to deal with the issue of the challenges that, frankly, all Canadians face. What Canadians are asking this government to do, and I believe governments across this land, is to spend more appropriately within its means. We've talked at some length about how this recovery is fragile. I think there is some great news coming forward, but clearly it's still fragile, and I think we have to be sensitive to it. So I admire the approach your department has taken.

What I've heard over the past number of weeks as we've discussed, for a number of meetings, departmental freezes is that there doesn't seem to be a plan. My sense is that you have a plan. It's fairly clear from what you've presented and how you've responded to some of the questions.

I have two questions.

How would you respond to the question that you have a plan in terms of the implementation of the budget freeze? Second, and perhaps the critical question that Canadians would ask and citizens from my city of London would ask, what is the impact on Canadians in terms of the service levels they can expect as a result of some of the decisions your department has had to make, sir?

[Ian Shugart]

We do our very best to begin with the service levels. We can only spend what Parliament has voted for us. The statutory programs with respect to the amounts and eligibility drive themselves, in a sense. We're responsible for managing the operating budget and delivering, in as efficient a manner as possible, those statutory programs, together with the other more specific programs, grants and contributions, and so on. Our whole ethos at HRSDC is to serve Canadians as effectively as possible, so in fact we do have service standards. On employment insurance, for example, our standard is that the applicant receives the response within 28 days 80% of the time. We are currently exceeding that service standard. The same applies in other programs. And we have in place the system to measure on a weekly basis. Our senior executive will receive on a weekly basis, and the senior leaders in Service in Canada more frequently than that, notice of how well we are doing.

Now, we make mistakes. It is a huge system. Every Canadian at some point will receive services through our department. We are fallible. From time to time, we make mistakes, but we're proud that we are working to service standards. We can tell when we don't make that standard. Our workload monitoring systems tell us why we haven't made that service standard, and we can act to correct it.

Our system is based on people, and it's based on an information technology platform. Stripped down, those are essentially the major components of our operating expenses in delivering benefits to Canadians. We have to use the operating budget available to us as best we can to plan the investments in information technology. We indicated in our report on plans and priorities that the maintenance of our information platform, our information technology, is one of the corporate risks we have to manage, and we have an investment plan to keep that platform current.

The part that is the most flexible, because employees make their own decisions, is the employees who go in and out of the system. As an employer, we have an obligation to make our department as good a workplace as we possibly can. But then there are the actual mechanics of how many people we need, at what levels, with what training, and how their effort is deployed so that we can deliver the services.

[Ed Holder, Conservative, London West, ON]

Thank you for those comments.

One of the things I need to agree absolutely with Mr. Regan on is the quality of our public service and the work that your department does. I think it's compelling when you say every Canadian, all 33 million of us, will at some point be affected by your department. That is a huge responsibility.

Sure, you make some mistakes. Well, heck, we all do, frankly. But I think you've maintained your standards, and your commitment going forward to those service standards is very compelling.

You said that for the fiscal year 2011-12, some 950 employees who were hired for an indeterminate period will retire and that there will be another 750 who will quit or move to another department. That's not a net 1,700, to be fair. That's 1,700 people who are out of your department. I also heard you say there will be a 3,000-employee reduction due to the termination of the infrastructure stimulus plan. That's three times more than the Parliamentary Budget Officer had forecast. I find that interesting.

I want to make that point because I think it speaks to the issue of where we are going to find savings in various departments. There's no question that the infrastructure stimulus plan had some upward impact on our budgetary situation. I would suggest that we are in a downward spiral of deficit reduction. In the upcoming budget you're going to see a clear plan to reduce that deficit and achieve a balanced budget by the year 2015-16. I think that's extremely important.

You have some 1,700 employees who will retire, move to other departments, or quit, and you have the 3,000-employee reduction as a result of the infrastructure stimulus plan. Do you have a sense of how you're going to replace them? What number might be replaced?

[The Chair, Liberal, John McKay]

Mr. Shugart, you have less than half a minute.

[Ian Shugart]

Chair, as I indicated to the member's colleague, that gives us a certain amount of flexibility. I don't know today how many of those we would replace, but I can tell you the approach. They will be selected to meet very specific, defined operational needs. That's why we have in place vacancy management committees in each of the parts of the organization. It's so they can assess what we do with every vacancy created by departure, by whatever means. When there's a need operationally to fill positions, we will do that.

[The Chair, Liberal, John McKay]

Thank you, Mr. Shugart and Mr. Holder.

Mr. Martin, you have eight minutes, please.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair.

Thank you, Deputy Minister Shugart.

We undertook this study to try to ferret out some kernels of information about what the government's plan really is to pay down this behemoth deficit. Just to set the frame of what our investigation is, we're frustrated that the government was bragging from the rooftops of every building in the country as they spent their way to get through the recession. The spending was extremely public. But now when we ask what the plan is to pay down the deficit, all of a sudden that's a deep, dark secret. That's a cabinet confidence, if you will.

I have a feeling that you know more than you're telling us in this paper. It's beautifully written, by the way. Who wrote your presentation today?

[Ian Shugart]

Well, a few of the words are my own.

[Pat Martin, NDP, Winnipeg Centre, MB]

Did you contract it out?

[Ian Shugart]

No, no. That would have been a collaborative effort between our finance and HR staff.

[Pat Martin, NDP, Winnipeg Centre, MB]

It is beautifully written, and it's very carefully written, but it doesn't tell us very much, with all due respect. Your massive, mega portfolio--I remember when it was cobbled together under Lloyd Axworthy and people thought it was perhaps too massive--has been a favourite target for raiding when governments get into trouble.

Marcel Massé, when he needed to try to balance their books, raided the $30 billion surplus in the public service pension plan, with no negotiation. He pulled it out. This government, when they needed the $54 billion surplus in the EI fund, just made it so.

You codified it. You made it legal, essentially, by establishing a new fund.

They've always looked at HRSD to balance the books, because you deal with some of the biggest numbers. You're at $44 billion in the 2010-11 estimates. You have 27,000 staff. You manage billions and billions and billions of dollars. The government is looking to HRSD once again, I suspect, to help them dig their way out of this deep, deep hole.

What is the name of the committee you sit on with other deputy ministers?

[Ian Shugart]

Deputy ministers meet in a variety of areas.

[Pat Martin, NDP, Winnipeg Centre, MB]

But what's the name of the plenary meeting? Is it chaired by the Clerk of the Privy Council?

[Ian Shugart]

Well, it's a weekly meeting of deputy ministers.

[Pat Martin, NDP, Winnipeg Centre, MB]

What do they talk about? They must have a plan. They won't tell us the plan. Is what goes on at that meeting a cabinet confidence? It can't be; it's not cabinet.

[Ian Shugart]

It may refer to matters that are related to cabinet. We would discuss, Chair, everything from how we collectively manage human resources to how we improve our performance at parliamentary committees.