Government Operations Committee on April 12th, 2010

[Gerard Kennedy, Liberal, Parkdale—High Park, ON]

Can you provide that to the committee?

[Michelle d'Auray]

Well, they are reflected in the main estimates, Madam Chair, and they are reflected in the public accounts, so it is—

[Gerard Kennedy, Liberal, Parkdale—High Park, ON]

I'm sorry to interrupt you, but are they specifically identified under those two headings?

[Michelle d'Auray]

Which headings?

[Gerard Kennedy, Liberal, Parkdale—High Park, ON]

The idea of fixed costs, in other words future costs and--

[Michelle d'Auray]

The costs are identified in the standard objects because those are pretty well fixed by...for example, rental is one. In terms of the cost of living, those are in fact calculated by Statistics Canada and those are provided to us.

When we look at the budget impacts for operating expenditures on departments on a normal basis, we do not factor those in. So departments have to manage already within their operating budgets. Whether or not there is a freeze, those elements are not factored into when the main estimates are pulled together on a normal basis.

[Gerard Kennedy, Liberal, Parkdale—High Park, ON]

Okay, but again, the idea is to understand how well you're prepared for what is not business as normal, which is a freeze, which is effectively that choices--cuts--will have to be made. We're trying to find out the degree to which there's preparation on the part of the government and the degree to which we can anticipate at this committee what this means for the various services the different ministries are going to provide. If there's no differentiated information, if that's just left to deputies, then basically that's all we have to go on.

[Michelle d'Auray]

That's correct.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We now go on to Madame Bourgeois for huit minutes.

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

Thank you, Madam Chair.

Ms. d'Auray, Mr. Smith, good afternoon. It is nice to see you again.

Since I became a member of this committee, which was about three years ago, people have been talking about streamlining expenses. There has been a lot of talk. Unless I am mistaken, the department has been asked several times to not only streamline its operations, but to also trim some fat. The department was told to find superfluous programs that could be eliminated or replaced by new programs in the interest of containing costs.

Ms. d'Auray, in your brief, you said that there will be no salary or hiring freeze, and I would like to focus on the significance of the spending freeze. I would like to begin by talking about the reduced level of service to Canadians, and then move on to how this will affect the working conditions of employees.

When the type of radical streamlining that has been announced is implemented, deputy ministers will need to be able to meet the objectives you have set. First, have you made sure that all deputy ministers, who will have to go through this exercise, will have the same means at their disposal, and that they are all on the same wavelength? Do you have a say in how deputy ministers will scale back their operations?

[Michelle d'Auray]

Madam Chair, your colleague asked several questions.

Indeed, deputy ministers all have the same means at their disposal. Standards, policies and degree of flexibility are the same for everyone. Deputy ministers are used to managing increases and decreases, to maintaining critical services and key services and to increasing efficiency. They do so on a regular basis, for instance, by investing in the electronic delivery of services to speed up the processing of applications. If we had not made those investments, which allowed us to reorganize the way Service Canada delivers services, I am sure that the Department of Human Resources and Skills Development, for example, would not have been able to hire as many people to deal with the increase in employment insurance applications. Indeed, we had already developed and implemented the necessary measures to meet the increased demand. Similarly, when the volume of applications goes down, we will have to manage this decrease and go back to normal levels. This will have a domino effect with regard to the processing of applications elsewhere.

We also have made many improvements and have reorganized our operations. This is part and parcel of a deputy minister's job. These are the tools we use to deal with a budget freeze.

As I said in my opening statement—I repeat—we have $54 billion in operating expenses, which is probably the highest it has been in the past 10 years. It is a good thing that we are rethinking the way we operate. This often happens when more and more programs, and more and more operational activities, are brought in. So you have to take a step back and see how you can do things more efficiently.

We are discussing this matter with our OECD colleagues, and some governments engage in this type of exercise on a regular basis. Some governments reorganize 10% of their programs each year to ensure that measures, funding and human resources are used efficiently.

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

Take Correctional Services Canada. In the last few years, there has been something called “redeployment”. This involves redeployment measures that affect staff and the organization. This is a sector that is overcrowded, and where legislation and philosophies come and go. Staff cannot cope anymore. Staff has been pushed to the limit. In short, the way the department is run, including all of its internal resources, has to change.

I have with me petitions signed by Correctional Services of Canada staff, and which were sent to the Treasury Board Secretariat and to the Treasury Board. These petitions call for a complete reorganization of Correctional Services Canada. In fact, the staff does not feel safe anymore, nor do the inmates. You might say that Correctional Services Canada has just received a budget increase, but the fact remains that the damage has been done. The extra money will only temporarily fix the problems experienced by employees.

What will the Treasury Board Secretariat do to hold the deputy minister, or former deputy ministers, to account, since this mess happened under their watch in the past few years? There is a safety issue at some CSC facilities today, and which must be internally addressed.

I see that Alister Smith is nodding his head. How can we fix the problems with this department?

[Michelle d'Auray]

Madam Chair, I would say that issues related to petitions and labour relations are handled by the deputy minister and by the staff of Correctional Services. The rules governing their labour relations are sufficient to address these matters. They are doing so in accordance with the standards and mechanisms set out in collective agreements and with established procedures.

That being said, you pointed out that there was an increase in the department's operating appropriations. This will help deal with the issue of growth and cover the costs of hiring new staff.

I would like to point out that issues relating to labour relations fall directly under the authority of the responsible deputy minister. Such matters must be settled in accordance with the negotiated collective agreements.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We now go to Mr. Warkentin for eight minutes.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Madam Chair.

Thank you, Ms. d'Auray and Mr. Smith, for coming in this afternoon. We appreciate your testimony and your willingness to visit us again.

In terms of the overall freeze on spending, of course there are a number of things that come up. Could you speak about some of the opportunities and some of the things Treasury Board is involved in and maybe other departments are involved in that you're aware of in terms of the savings that government may be able to find during this time?

I've heard some of the provincial governments describing this time as an opportunity for government to change the way it does certain things. I know there's been some effort to overhaul some of the antiquated systems that are in place, specifically the payroll system, to try to reduce the cost the government incurs in that and reduce some of the stresses that are on the employees that administer that service. But there are also other places where governments are saving right now. I know that, anecdotally, construction costs and some services are actually cheaper today than they were two years ago or even a year ago. Specifically, construction cost is one that's easy to identify. We're hearing of construction projects coming in 40% less than what they were estimated to cost even two and three years ago.

Are there other services where we're seeing a reduction in the cost, or is that being identified as something that Treasury Board follows?

[Michelle d'Auray]

Thank you for the question. I think what I referred to briefly in my opening remarks is that there is a review of administrative services and operating costs of the Government of Canada, which was also announced in the budget, and to which my colleague Daniel Jean has just recently been appointed. He is going to be looking at where efficiencies and effectiveness can be found across the government.

For example, we are currently, with Public Works and Government Services, looking at the number of data centres and data warehouses we have. We have quite a few across the Government of Canada--over 120, I think. They're spread out across the country. They could be consolidated. We also need to consider, in light of business continuity requirements, that we could do maintenance a lot more effectively that way as opposed to looking at these services department by department.

For example, we have found that when departments co-locate services, when they're in the same building, we could probably drive more efficiencies by integrating services across organizations, so that we don't duplicate and have each one with a set of mailroom services or with the costs of administering some of the operating systems, such as financial systems. We can consolidate the application services for information technology. There is a range of opportunities that this will enable us to look at and to consider where the services are that I would consider to be perhaps not quite core to the government or where each department doesn't necessarily need to have its own.

We have seen in other jurisdictions--for example, in a lot of the provinces that have looked at this--that there are more effective and efficient ways of looking at what we would consider to be the costs of operating government. That doesn't affect the service delivery to Canadians; it's more about how we operate on an organizational basis across the board.

[Chris Warkentin, Conservative, Peace River, AB]

I guess that's of some interest to committee members. It certainly is for me, and I've heard it expressed by other members at this committee that this issue really is of interest to us.

We understand that even as it relates to the payroll for personnel within departments there is a possibility that we may see more efficient and effective service to Canadians with, possibly, even fewer people. So while we understand the necessity to care for the civil service and appreciate the work they do, because of the systems, in fact, it's requiring at this time more people than would be necessary if there were a more efficient or effective management structure in place.

I'm wondering if you could reference where we are in terms of the payroll system, because I think this is one of the systems that we have consistently seen break down and where we've had additional manpower dedicated to trying to manage something that effectively is an outdated system. When might we be able to see some significant streamlining on that front?

[Michelle d'Auray]

The pay system, as you mentioned, is over 40 years old. In fact, it is being looked at in regard to tendering of a new system and service.

Right now, a lot of data entry has to be done manually because, in its configuration, the current system cannot capture the data electronically. There is a lot of data entry that we are hoping to eliminate as a result. It also generates a fair number of errors. Getting errors on people's pay is not a good thing to do, and this is one of the reasons that going to a new system is pretty critical for us.

Yes, it will reduce significantly the amount of the people management of data that is currently required. We believe we can make that change using attrition, as opposed to making any other adjustments necessary. We are also having a hard time recruiting people to do essentially what is data entry, and to deal with all of the challenges around compensation, given the number of collective agreements we have and the various configurations we have to address. So we're dealing with both: a very old system that cannot adapt very quickly and a difficulty in recruiting the people we need in order to be able to do all of the manual data entry and manual consolidation of information.

[Chris Warkentin, Conservative, Peace River, AB]

I really appreciate that. That's very helpful.

Our committee has actually undertaken a study on the networking that many of our departments use, and the consolidation, or the possible consolidation, of some of that. I know there were certain departments that were looking toward that, specifically Service Canada and different partnering departments.

Is there a status update that you're aware of on that front? Or should we perhaps direct that toward one of the departments specifically?

[Michelle d'Auray]

If I may, I can briefly tell you that the work on that is progressing as quickly as our procurement process allows us to progress, if I can put it that way.

There is in fact an increased interest in migrating to a consolidated network, essentially because of security purposes at this point. A growing number of departments will be connecting to the secure network for that purpose.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

We now go to the second....

Oh, sorry, it's Mr. Martin for eight minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Don't forget the NDP.

[The Chair, Liberal, Yasmin Ratansi]

Of course I won't forget you.

[Pat Martin, NDP, Winnipeg Centre, MB]

No. Thank you, Madam Chair.

Thank you, Madam d'Auray and Mr. Smith. Welcome. It's nice to see you again.

We had the President of the Treasury Board here when he first launched his cost-saving measures. One of the things that struck me, especially as a former union representative, is that the minister, the President of the Treasury Board, tried to pass it on as some sort of example of egalitarian workplace democracy that he would allow public servants to be the ones to find the cost-saving measures, the efficiencies. Essentially, passing the buck on to public servants themselves was something to be lauded.

Now, I'm a veteran of some of the old scientific management gimmicks during the eighties and nineties--PS 2000, total quality management, quality work circles, kaizen, and all of those goofy so-called paradigm-shifting exercises we were supposed to go through. That's exactly the language we found there. We would find one task that six people would do and give them the job of finding a way to do it better. Usually what they'd do is vote to eliminate one of the six people and do the same job with five.

Don't you think--I don't even know if I have to ask you this--that one of the predictable consequences of this passing of the buck will be cuts? You can't shrink the budget without shrinking the public service. And there's no fat to be trimmed. After the Liberals got through with the public service, with the cutting and the hacking and the slashing that went on there, you're not going to balance the budget by trimming the fat in the public service. Those cuts haven't even healed yet, never mind cutting deeper. You cut right through the fat into the flesh and bones, into the very structure of the public service.

I really suspect that, first of all, this delegation of authority, this delegation of management duties, actually, to the workers to find the efficiencies is like putting a suggestion box on death row: how do you want to execute yourself, or who of your co-workers do you want to execute, just to save this money? I'm actually very concerned by what you have presented to us today.

I do have some specific questions. One of the new positions you will be creating is the deputy minister of administrative services review. Now, this is an ongoing thing anyway. Every government every year tries to find efficiencies in the administration, and cost-cutting measures. Is this a fixed-term mandate? What is the mandate of this new deputy minister of administrative services review? Is it a permanent thing you have set up, that one deputy minister will be now looking at all administrative services?