Government Operations Committee on June 20th, 2011

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

Now, to change the subject almost totally, if I can, I'll go to supplementary estimates (C) for 2011. These were never voted on because of the election, and they contained expenditures approaching $1 billion--$900 million and some, I believe. As one example, Atomic Energy of Canada was going to receive $175 million for ensuring isotope production and other things.

Out of all of this money, this close to $1 billion that was never voted upon, were other sources found so that this money was spent? Or was some of it not spent? What happened?

[Michelle d'Auray]

In many respects, when the supplementary estimates, or the appropriations bill to support the supplementary estimates, were not voted, and the House was dissolved, we had to look for the end of the fiscal year to the existing sources of supply and central votes, or votes that would have remained within organizations: things or tools that we call “frozen allotments”, central votes such as vote 5, which is a kind of contingency vote.

So where there were authorities linked to the expenditures and the requirements for those organizations, under the authority granted to me by the Treasury Board, we essentially depleted those votes, but they had to be tied to the activities and the authorities for which those funds could be expended. Where the funds were expended and there were no authorities allowed, then some of those initiatives were not covered, just because either the source of funds was depleted or the authorities were not available.

[John McCallum, Liberal, Markham—Unionville, ON]

So some of these items never went through as expenditures.

[Michelle d'Auray]

A small portion of them did not go through. We were able, using the existing frozen allotments source of funds such as vote 5, the contingency, to cover the most important requirements.

[The Chair, NDP, Pat Martin]

Your time is up.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

[The Chair, NDP, Pat Martin]

Peter Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you, Mr. Chair.

I thank the officials for being here this afternoon.

To start with, I have two questions. On page 336 of part II of the main estimates, there's a reference to the workplace development innovation fund. I wonder if you could elaborate a little on that fund: the purpose of the fund, what it achieves, or what you hope it will achieve.

[Michelle d'Auray]

Thank you for the question.

There was what was called a “horizontal review” of human resources activities across the Government of Canada. A number of decisions were made as a result of that, whereby the consolidation of activities was brought to the Treasury Board Secretariat, and the creation of the office of the chief human resources officer.... Concurrently, a number of authorities were also recognized, through the Federal Accountability Act, to deputy ministers: to become responsible to take on the full responsibility for the development of their managers, their workforce. The reductions, however, that were made to the central.... We had a number of centrally funded and managed initiatives for training and development and we thought that they had run the course of their usefulness. The results were, at the outset, very productive, but as the years went by we realized that departments were probably better placed to train and develop their employees, especially in some key areas for their service delivery, their program activities.

What it didn't leave, though, was a lot of opportunity for smaller organizations that perhaps did not have the same amount of resources available to them. So there was in fact an initiative created to allow organizations that did not have a lot of resources to put forward some workforce or workplace development initiatives. This is what it is designed to cover. The proposals come from a range of organizations, usually fairly small ones that don't necessarily have the wherewithal to be able to fund some of their development initiatives.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Secondly, of course, as we know, the government is about to embark on the strategic and operating review. The Treasury Board Secretariat is of course the federal government's employer, and liaises with government departments across the whole of government.

What process or what structure will you put in place to facilitate the strategic and operating review? And how are you going to get government departments to deliver the goods?

[Michelle d'Auray]

Well, one element that was established with the creation of the cabinet when the ministry was established was in fact a separate subcommittee of the Treasury Board, the strategic and operating review committee. That committee is chaired by the President of the Treasury Board. A number of ministers are members of that committee. That is the committee that will have the responsibility to review the proposals that are brought forward by ministers on behalf of their organizations.

The process is very much as the president described, which is that 67 or so organizations will be asked to come forward with proposals for reductions of 5% and/or 10%, based on their analysis and their knowledge of their organizations and their operations' activities, the relevance and results of their programs, and which ones or which proposals could be brought forward. The Treasury Board subcommittee will in fact have the mandate to review those.

[The Chair, NDP, Pat Martin]

You have 30 seconds left, Mr. Braid, if you have a quick thought.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Can you explain how the upcoming SOR will be any different from previous strategic reviews in terms of process or structure? Or will it essentially be the same?

[Michelle d'Auray]

As the president indicated, there are some differences. The most important one I would put forward is that all organizations are being reviewed at the same time, which gives an opportunity to see the overarching impact.

The other element is that there is a distinct focus on operations. Is there a way that we can do things better? Can we be more effective? It's not so much what government does but how we're doing it. We are in a very distributed environment where every organization has the same thing as every other organization. Is there a different way in the current environment for us to do things more effectively, to use technology better?

I'll wrap up, Mr. Chair. Thank you.

[The Chair, NDP, Pat Martin]

Yes, let's call it a wrap. Thank you.

Next is Denis Blanchette.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Good day, Ms. d'Auray. First of all, you mentioned that when departments and organizations conduct their review, they ask for the assistance of arm's length external advisers.

I would like to know, on the one hand, what selection criteria are used to select these external advisers. Furthermore, can you tell us what benefit this provides to you? Have you assessed the appropriateness of continuing to call on these external resources for this type of exercise?

[Michelle d'Auray]

Thank you for your question.

The external advisers were identified in the course of these strategic reviews. Thus they were a part of the activity and the modalities of the four-year cycle of activity that has just come to a close. They advised the ministers and deputy ministers. The first objective was to find people who were first of all familiar with the operations of an organization and could provide a sort of external confirmation of the fact that the process was properly implemented.They were not necessarily experts in certain types of activities, but rather people who had the competency to confirm that the review had been well and duly done. They had to be independent—in English we say “at arm's length”. They had to be people who had no links with the organization in question, and were not already sitting on boards or committees directly related to those organizations. And so they were people who really had expertise or specialized knowledge, or had the trust of the ministers and deputy ministers.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Did you prepare some sort of assessment of their contribution? Would you repeat the experience?

[Michelle d'Auray]

If I may say so, I think that the value added in most cases was evident. Indeed, this allowed us to obtain the perspective of people from outside the activity who were in a position to confirm that the reviews had been duly and properly carried out. We also required that all of the programs and activities be reviewed. This gave Treasury Board the additional assurance that the review had indeed been completed and that all of the programs had been properly examined. And so this acknowledgment was very useful because the nature of the exercise was to confirm that the review was complete, and to review the recommendations that were made.

Would we repeat the experience? I would say that we would. Currently, the issue concerns the delays in undertaking the strategic and functional reviews, as the time frame for those is tighter than the time frame for the strategic reviews themselves were.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Let's move on. Regarding vote 20, Public Service Insurance, I'd like a very brief explanation of what this is about and why there has been a 10% increase for this year.

[Michelle d'Auray]

Thank you for your question. Vote 20 is a central vote that concerns the insurance services we offer to public servants and retirees. It is the health care plan, for instance the possibility of having medication reimbursed; it also includes life insurance and disability insurance. There are about 20 plans and types of benefits, services, that are offered in this context.

The increase is due to two main factors: the first is that the public servants are getting older, as well as the retirees who benefit from these programs, and the second factor is that the cost of pharmaceutical products has been increasing. Those are the two key factors that are behind that increase. If you study similar plans throughout the country, you will see that these two same factors have caused an increase in costs.

[The Chair, NDP, Pat Martin]

Denis, that concludes your five minutes. Thank you.

Mike Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair, and thank you, Denis, for asking my question.

In the mains there is $100 million for vote 30. Then in the supplementaries you have a vote 30a and it's up by $1.3 billion. Those are two significant numbers. Why wasn't that number covered off in the mains to start with? Why is it in supplementary (A)?

Then there's a little piece here that says “not been provided from Vote 15, Compensation Adjustments”. Are they normally covered under 15 and they're not this time? Could you just explain that verbiage to me?

[Michelle d'Auray]

I will attempt.

On the request in the supplementary estimates (A) for $1.3 billion for the pay list, it is to meet the obligations of the Government of Canada as per the collective agreements that were signed with bargaining agents representing over 100,000 employees, whereby there was an agreement to eliminate the accumulation of severance for voluntary departures. In that agreement there was also an option for members to avail themselves of an early cash-out--if I can put it that way--of their severance. Therefore, we had to provision for it. We provisioned for it on the assumption that perhaps 75% of the union members would avail themselves of this.

On the question about the timing, when the mains were prepared, the amounts and all of the collective agreements had not yet been signed. That is why you are finding them in the supplementary estimates.

[Mike Wallace, Conservative, Burlington, ON]

Estimating this cash amount as 75%--it may not be 75%, but let's say that---are we funding it all in one year, or will we be looking at the bulk for the severance piece so you can early option, are we paying for it all at once? Are we going to pay for it over years? How are we doing this?