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.
4:10 p.m.
Chief Financial Officer, Finance Branch, Department of Public Works and Government Services
Thank you for the question, Mr. Chair.
In our strategic review proposals, we refer to this initiative, and savings are associated with it. The rationale behind it is that right now, since the late 1990s, we have been using the private sector for delivery of services. The experience with the private-sector-generated savings are proven and documented. Moving forward we would like to capitalize on that experience and use the private sector when it is relevant and appropriate to do so.
4:10 p.m.
Liberal
4:10 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
I'm interested in the source of the savings from ending the money for people who voluntarily leave. They can wait and get the money when they retire, as they did before. But will there be savings because it won't apply to new people coming into the system? Or is it because in the old system, the money would accumulate and get bigger over time? Where are the savings derived from?
4:10 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
Mr. Chair, they are around the fact that the benefit is no longer accumulated. There is a stopping of the benefit you've earned. You can get payment now or later, but you are no longer earning a benefit on a go-forward basis. So you're not adding to your benefits as you go.
That's where the savings are. As those collective agreements are negotiated or renegotiated, and that benefit is eliminated, there are savings.
4:15 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
It is also, presumably, because new people coming in won't get it.
4:15 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
The new people won't get it, and people who had it in the past will stop accumulating it. Yes, that's correct.
4:15 p.m.
NDP
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chair, and I want to thank everyone for coming today.
I'll try to be relatively quick.
First of all, Ms. Doucet, thank you for the clarification on your previous presentation. We don't hear that often. I appreciate that clarification.
Could you assure me that Commissioner Cohen knows that he has to have his report done in this calendar year.
4:15 p.m.
Assistant Deputy Minister, Corporate Services, Privy Council Office
Thank you, Mr. Chair, for the question.
I am not Commissioner Cohen.
4:15 p.m.
Assistant Deputy Minister, Corporate Services, Privy Council Office
I think it would not be wise for me to speak on his behalf.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
That was my messaging, I guess, because I don't know how many more years we can re-profile this sockeye salmon thing. I'm hoping not to see it again. Thank you very much.
I think you've done an excellent job explaining, again, that the voluntary severance was previously negotiated in labour agreements. I'm assuming that everybody got it, including management, not just those in the unions, and that it was done prior to the reductions we're seeing now. This was a plan we had to get rid of this benefit.
I have two questions on it. Is the money the individual gets pre-tax or after-tax?
4:15 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
The money is actually treated as taxable income. The money you're seeing here is pre-tax.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
It is pre-tax. Okay.
Bill, maybe you can answer this. Maybe it doesn't make a difference. This committee is looking at the process. One of the questions has been whether we go to accrual accounting or cash. I certainly understand cash accounting in this case. Would accrual accounting make any difference in how this is presented to us?
4:15 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
It would in two places. If you look to the public accounts, the liability is booked, so you're doing accrual accounting. The accrual part of this is the $6 billion liability that's already hit the surplus/deficit of the government over the years. That's the accrual piece.
We do appropriations on a cash basis, which is what the question relates to. If you were to do accrual appropriations, you wouldn't be seeing this cash. We'd say that you booked this liability over the years, way back when, and even though we are writing the cheques this year, you wouldn't actually be seeing it, because....
4:15 p.m.
Conservative
4:15 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
You would have seen it when we booked the liability over the years, gradually. That's the key difference between the issues. One focuses on cash, so we're asking for permission to spend $850 million in cash. With the other model, you would have seen a gradual 2% a year on our payroll build up.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
If somebody at this table had been smart enough to go back to the previous booking of that liability and had figured out how it's being depreciated or that the liability's been coming down, and then had asked how much we are actually spending this year—
4:15 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
That is correct.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
—based on how many people we think you're going to take off the program....
4:15 p.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
That's correct.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I think it's an excellent argument for staying with cash. Thank you, Bill.
I have one other question, and it is to our friends at Public Works.
The second item is a transfer from Public Works to Shared Services of $9 million “relating to activities now within their mandate”. That $9 million we're seeing now in supplementary estimates (A) wasn't in the mains.
Is there a new addition to the mandate that we didn't know about before? Why is it here? If you can explain it to me, Alex, I'd appreciate it.
4:15 p.m.
Chief Financial Officer, Finance Branch, Department of Public Works and Government Services
Absolutely.
Thank you for the question.
I think this is simply explained by two things. Public Works used to be Shared Services Canada, so before it split—at least a big chunk of it was—and there are two projects: one is cyber authentication, and the other is data centre redress of program integrity issues. It was a submission that was approved for PWGSC back then.
Because the split occurred in August, we did not have time to reflect this in the main estimates. So we are catching up to show that residual transfer in supplementary estimates (A), which is our first opportunity to do so.
4:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I appreciate that, but it's amazing to me that a change happened in August of last year and you could not get something into the main estimates by the end of March. I just find it hard to believe that we need nine months' lead time for the numbers to make it into the books. It's not your fault. I'm just saying the way the system is, maybe we'll see some recommended changes to that coming up. We'll see.
We've had a number of transfers. We have had a lot of departments indicate in the main estimates that they have a reduction. Actually a fair bit of the reductions come from transfers over to Shared Services.
Can we expect parliamentarians to continue to see that process? Are we done with that process now in terms of moving money over, or do we expect to see that again in supplementary estimates (B) or (C), or in next year's main estimates? Is it a partial move, or do the departments put their nose to the grindstone and transfer as much over to Shared Services as possible?
Perhaps I'll ask Shared Services or Treasury Board to answer that.
