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Evidence of meeting #50 for Government Operations and Estimates in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was question.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Christine Walker  Assistant Secretary and Chief Financial Officer, Corporate Services, Treasury Board Secretariat
Michelle Doucet  Assistant Deputy Minister, Corporate Services, Privy Council Office
Alex Lakroni  Chief Financial Officer, Finance Branch, Department of Public Works and Government Services
Gina Rallis  Senior Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Shared Services Canada
Bill Matthews  Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
Pierre-Marc Mongeau  Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services
Benoît Long  Senior Assistant Deputy Minister, Transformation, Service Strategy and Design Branch, Shared Services Canada

4:20 p.m.

Chief Financial Officer, Finance Branch, Department of Public Works and Government Services

Alex Lakroni

As far as PWGSC is concerned for this fiscal year, this is the last time you're going to see it. There is a residual amount that is similar for next year, so you will see it in supplementary estimates next year and that will be the end of it.

4:20 p.m.

NDP

The Chair NDP Pat Martin

Thank you, Mike.

Next, for the NDP, we have Jean-François Larose.

4:20 p.m.

NDP

Jean-François Larose NDP Repentigny, QC

Thank you, Mr. Chair.

I want to thank our guests for joining us today.

I am both worried and reassured. Currently, we are looking into the discrepancy between supplementary estimates (A), (B) and (C). The numbers do not add up, and there are some intangibles. We are not talking about a crisis, but about contingencies that should be known about ahead of time.

My question is for all of you.

You seem reassured that there will be practically no departure from what is currently on the table, since you have learned from the changes that have been made. However, I would like to know whether there will be any surprises in the future. Currently, the budget is not clear. We see it as a Trojan Horse, but that does not stop you from presenting real figures and saying that everything is under control. That's what we hear regularly, but that's not what we saw last year. I believe that taxpayers have the right to know where you stand in terms of the future.

Do you expect there to be any intangibles, or do you have everything under control?

4:20 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

I will start.

In terms of surprises, if the idea behind the question is that supplementary estimates represent a surprise, I would like to assure you that's not the case. We will be bringing forward supplementary estimates (B) and likely (C). The reason that's not a surprise is that in order to get approval to spend money, even though it's been announced in the budget, departments need to spend time designing programs and getting approvals from Treasury Board as a cabinet committee before they can be included for spending and presented to Parliament.

So I don't view amounts in supplementary estimates (A), (B), or (C) as a surprise. They are simply a matter of giving departments appropriate time to design programs, respond to questions, and challenge functions internally before an item is ready to be presented to Parliament for spending authority.

If the theory is that supplementary estimates represent a surprise, I just wanted to assure you that's not the case. Our system is based on a budget, which is largely a policy document, and then coming to Parliament for approval to spend cash, which is understandable from a parliamentarian's perspective, after having gone to Treasury Board to receive the appropriate approvals and challenge functions. That's the logic behind the system.

We will be back for supplementary estimates (B) and likely (C), so you will see us again, but not from the perspective of a surprise.

4:20 p.m.

NDP

Jean-François Larose NDP Repentigny, QC

That sets my mind at rest. Actually, this is exactly what I wanted to hear. That being said, when the budget is tabled by the government, we expect a consultation to take place with the people on the ground. As for our committee, this famous information distortion seems to be problematic. Will the estimates be available at the same time as the budget? What will be the time frame? Will we have enough time to study them? Over the course of the year, some figures are submitted to us, but by the time we start assessing the previous budget, we are already in the next year and the new budget.

Do you think that everything that is currently being implemented will continue? Do you think you have the necessary tools to continue making sure that expenditures remain in line with the commitments made to Canadians? This question has already been asked in the past, and I think Bill Matthews answered it brilliantly.

4:25 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

Thank you.

Yes, I am absolutely convinced that we have the tools we need to make those decisions.

At the same time, the critical thing for us is to understand what's in the budget and then track when it comes to Parliament for spending authority. So we do have the appropriate system to do that, and we'll continue to do that.

I think what's also key, though, is the study this committee is currently in the midst of undertaking, and we do look forward to recommendations on how to improve the information we give to parliamentarians. But I will assure you that from an internal management perspective, we have the tools we need.

4:25 p.m.

NDP

Jean-François Larose NDP Repentigny, QC

Thank you.

4:25 p.m.

NDP

The Chair NDP Pat Martin

Perhaps I might build on that point in the context of the study that we do have under way, which, as you know, has been ongoing and very interesting. We're all seized of it. Both Jean-François and Mike hit on the same general question to me: don't you think that the main estimates should, to the greatest extent possible, be the best estimate of all spending, program spending and anticipated project spending?

It would be more honest for the layperson trying to follow the dollar and to understand what the estimated spending is for this next fiscal year. For instance, if you had an idea there would be $242 million further needed for the rehabilitation of the parliamentary precinct, could you not have put $200 million of that into the main estimates and fine-tuned it down the road for the supplementary estimates? It would be a little more accurate. People would have a bit better picture of what the main spending is going to be of the government that year.

It seems to me it's Treasury Board's approval that holds up the ability of the other departments to accurately reflect that anticipated spending in their main estimates. Is that a fair assessment?

4:25 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

Maybe I will start and see if colleagues want to offer anything from a departmental perspective.

It does go to the heart of the role of the Treasury Board, and I'm not speaking of the Treasury Board Secretariat, but Treasury Board, the cabinet committee. Our system for expenditure control is very much based on the challenge function and additional details that departments need to submit before they get spending authority.

You're quite right, from a projection perspective, could departments actually project in a document what they would like to spend during the year, what they think they will spend? Yes, they could. By putting that number into an estimates document that goes to Parliament and is the basis for an appropriation act—remember, this is the key for parliamentary control over spending—I think you'd be circumventing the role of the Treasury Board, which is where you get a key challenge function. And these estimates do support the appropriation acts, which is Parliament's fundamental control over spending. So if you were to actually include additional dollars in those documents, without having been through the challenge function of the Treasury Board and the approval of the Treasury Board, I think you'd be potentially risking one of our key controls, which is that departments can't spend money until they've been through Treasury Board, which then eventually goes to Parliament.

I'm not sure if departmental colleagues want to....

4:25 p.m.

Chief Financial Officer, Finance Branch, Department of Public Works and Government Services

Alex Lakroni

Thank you, Mr. Chair, for the question.

Thank you, Mr. Matthews.

I am in full agreement with my colleague.

In the main estimates, one would expect to see the ongoing programs that are approved. So you’ll see funding for those. Certain programs are not approved in time, but it's not because of a lack of will from the department or the Treasury Board Secretariat. For instance, take the parliamentary precinct. These are large projects, very complex, and they are interrelated. When I make sure these approvals are secured, the due diligence is secured. So when we say it's on time and on budget, it's because a lot of work was done behind it. If we don't secure the approvals, we don't put the items for votes so we have access to the cash.

In this case, the timing of the approval for the parliamentary precinct came after the timeline of the main estimates. The other thing is that departments have RPPs, the reports on plans and priorities, to articulate what they plan on spending. In these RPPs you would find the plans of departments—what they intend to spend—but Parliament doesn't vote on RPPs; Parliament votes on what is approved and sealed by the Treasury Board, which is the main estimates plus supplementary estimates.

4:30 p.m.

NDP

The Chair NDP Pat Martin

Thank you. I think it was important to clarify that.

Bernard has been waiting. You have five minutes, Bernard.

June 6th, 2012 / 4:30 p.m.

Conservative

Bernard Trottier Conservative Etobicoke—Lakeshore, ON

Thank you, Mr. Chair.

Thank you for coming in today, and thank you for participating in your parliamentary obligation, which, as you know, dates back probably to Runnymede and the Magna Carta, and the crown asking Parliament for permission to spend money. It's a tradition that has served us fairly well and we're always looking to improve it. We've been studying that process as part of our committee.

One of the things that King James and the commoners probably didn't anticipate was the formation of Shared Services Canada.

I want to ask our officials some questions on something that's near and dear to my heart. I've worked with international organizations that have been doing this kind of thing for years. One could argue that the Government of Canada is probably 10 or 15 years behind what other large organizations have done in terms of consolidating their information services.

I want to talk about the transfer of funds. An amount of $21.6 million is being transferred from other organizations.

Could you explain why the bulk is coming from Transport?

4:30 p.m.

Senior Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Shared Services Canada

Gina Rallis

Thank you very much for the question.

Three departments are transferring funds: PWGSC, Transport Canada, and also a very small amount from FINTRAC, which is really an adjustment as a result of the data validation. My colleague Mr. Lakroni has explained the transfer from PWGSC.

From the point of view of Transport Canada, it is really in terms of making an adjustment as we've done the reconciliation. They were originally projecting to provide this amount of money through revenue, and given that this is part of our core mandate, it is being proposed to be transferred as part of appropriations.

4:30 p.m.

Conservative

Bernard Trottier Conservative Etobicoke—Lakeshore, ON

Have other departments already transferred funds, and are future departments transferring funds to join the enterprise effort of Shared Services Canada?

4:30 p.m.

Senior Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Shared Services Canada

Gina Rallis

As part of the establishment of Shared Services Canada, we provide IT infrastructure support services on a mandatory basis to 43 departments through two orders in council, the first on August 4, which was the transfer from PWGSC in terms of the resources, and the second on November 15, which was the remaining 42. We have indeed received the transfers in terms of people and resources.

There is a bit of ongoing work on data validation to make sure we have done the appropriate due diligence vis-à-vis the transfers, but, by and large, the 43 departments we are now supporting with e-mail data centres and networks have indeed transferred their employees and the resources necessary for us to operate on their behalf.

4:30 p.m.

Conservative

Bernard Trottier Conservative Etobicoke—Lakeshore, ON

You mentioned it's mandatory that departments join this effort of Shared Services Canada. How do you know that you're providing good value to those departments? There's no bidding process when it comes to looking at external competitors for this, so how do you assure your clients that you are providing them with good value?

4:30 p.m.

Senior Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Shared Services Canada

Gina Rallis

Thank you for the question.

If I can back up a step, we provide mandatory services relating to e-mail data centres and network to 43 departments, but we also have other organizations that use our services. Our services to those organizations are considered optional and are offered on a fee-for-service basis.

How do we ensure that we have appropriate services and that our client partner departments are comfortable? Through our report on plans and priorities, you may have noticed that one of our identified priorities is governance, in ensuring that we've got appropriate incident response.

We are in the process, this year, of elaborating business arrangement agreements with the 43 departments where we're able to articulate the relationship and responsibilities, including some of our key performance indicators. The departments are then able to have a sense of what they can expect from us as we move forward.

4:30 p.m.

Conservative

Bernard Trottier Conservative Etobicoke—Lakeshore, ON

Could you describe some of the elements of that value case, other than reducing costs? How would you describe the service you're able to provide that you weren't able to provide before creating Shared Services Canada?

4:35 p.m.

Senior Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Shared Services Canada

Gina Rallis

Departments in the past have been responsible for providing, in their own silos or their own verticals, IT infrastructure services. Each department has had responsibility for its own e-mails, data centres, and networks.

Shared Services Canada was created with the view to provide an enterprise view for the whole Government of Canada. We're able, then, to have better response time because we are able to leverage the entire IT bench on behalf of departments. Where you might have one department that may have some fragile IT infrastructure, we are able now, because we have a whole-of-government perspective, to actually tap into the resources that may have existed previously in departments, but to do it on behalf of the whole Government of Canada.

4:35 p.m.

NDP

The Chair NDP Pat Martin

Thank you, Bernard. Your five minutes is up.

Next is Denis Blanchette.

4:35 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

Thank you, Mr. Chair.

Mr. Matthews, you said earlier that severance will make it possible to save a lot of money. Earlier, you were asked how those savings will be made. I found your answer to be fairly vague. I would like you to be a bit more specific, given the importance of those savings.

What do those savings consist of?

4:35 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

I'll try to be clearer, but thank you for the question.

Quite simply, under the current regime, an employee...there are slight variations, but generally speaking, for every year an employee works, he or she earns the right to one week of severance. So if you think about one week of salary, when someone who has worked for 20 years leaves the public service, he or she is entitled to a payment that's worth 20 weeks of salary.

Under the new agreements that have been renegotiated, the employee no longer gets that benefit. The obligation to pay an employee one week of salary for every year worked on a go-forward basis disappears. So that's the savings. We've effectively eliminated a benefit.

I mentioned that the rough estimate is $500 million a year, once all is said and done. The actual amount will depend on how quickly we can negotiate the remaining agreements. There are some 27 agreements. I believe we've already discussed how many have been negotiated.

Some of those agreements have yet to expire. We are not reopening agreements that have not yet expired. But as agreements expire, when we renegotiate collective agreements, we will be negotiating away that clause.

4:35 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

Thank you.

My next question is for the Shared Services Canada people.

I would like an update on your progress. In order to be able to generate economies of scale, among other things, you will first have to do some work. For instance, you will have to strengthen your telecommunication lines, increase the capacity of your servers and replace many things. Consequently, you will have to spend a lot of money before you can make any savings at all.

Do you think you will achieve any savings during the first year and, if not, when do you expect to be able to do so?

4:35 p.m.

Senior Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Shared Services Canada

Gina Rallis

Thank you very much.

Actually, our organization was created to ensure that government operations are sound and healthy in terms of technological infrastructure. The second part of our mandate really has to do with transformation.

Because of the fact that we now have an enterprise-wide organization, bringing together 43 different departments in terms of the way they've been negotiating contracts, whether it relates to telephony or the way they've been implementing some projects, we are able to consolidate in terms of those efficiencies just by bringing together that whole perspective.

A very concrete example would be to talk about some of the contracts, whereas before departments were actually negotiating contracts for telephony on an individual basis, by the sheer buying power we're able to negotiate cheaper. That's just an example in terms of the efficiencies.

4:35 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

Are you telling me that, in terms of telephone services, the federal public administration has not concluded an all-inclusive contract and that everyone is negotiating their own contract? Are we still at that stage with regard to the federal public administration?