Government Operations Committee on Feb. 26th, 2013

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

In the compensation adjustments in vote 15, are there any increases in the number of positions?

[Christine Walker]

No.

[Bill Matthews]

If I may, Mr. Chair, terminable allowances is an awful term, because it does give the connotation of termination. It has nothing to do with termination. It's an allowance that was intended to be temporary in nature.

If we have a particular job classification where we know that the private sector is paying more, and we have a retention issue, we will top up base pay with a terminable allowance. If we get to the point where we see that it's actually a permanent adjustment in the compensation for this type of individual—nurses would be a great example—we will roll those allowances into the base salary structure once we're convinced it's a permanent structure. But the allowance itself is meant to be temporary in nature, and that's why it's called terminable. It has nothing to do with termination.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Thank you.

Finally, in your presentation you talked about the use of some spending for horizontal items. Maybe for the benefit of the committee and for Canadians in general, can you explain the use of horizontal items? Is that an increasing trend within the Treasury Board Secretariat? Is more and more spending going through horizontal items? What does that mean compared with the opposite, which would be vertical items?

[Bill Matthews]

There are two pieces there. There has been increased effort in the last few years to give additional attention to horizontal items. They're items where more than one department is receiving money for a linked initiative.

Members of Parliament, when they were studying estimates in the past, were concerned that if they only saw the bits in each department, they would never see the whole picture. By putting in some additional pages to flag horizontal items, members, when they study things like the Copenhagen Accord, can see which departments are getting money. They get a picture of the whole initiative.

Can I say there's an increasing trend to multi-department initiatives? I'm not sure that's true necessarily, but there is certainly an increasing trend to provide additional disclosure around those things.

[The Chair, NDP, Pat Martin]

Your time is up, Bernard.

This concludes our first round. We have enough time for one government and one opposition speaker in round two.

In the interim, I want to take the opportunity to ask you this, Mr. Matthews. One of the tools we use in trying to plow through the estimates is the report on plans and priorities. Now that the main estimates have been tabled, when can we expect the report on plans and priorities to help us with our deliberations?

[Bill Matthews]

Mr. Chair, I cannot give you an exact date just yet, but I can tell you that it will be earlier than last year. I would expect it in the next few weeks; I can't say for certain which exact date, but coming in the next few weeks.

[The Chair, NDP, Pat Martin]

Okay. Fair enough.

Mathieu, five minutes.

[Mathieu Ravignat, NDP, Pontiac, QC]

Well, earlier than last year is encouraging. Thank you. Glad to hear it.

I want to go back to the question I asked you in my last round, about the current state of the cuts to the public service. You said in your response to me that you were pretty sure, Mr. Matthews, that most of the savings were in backroom or internal services.

We know that the PBO disagrees with that assessment. Since you're in the bowels of this, and you're the expert, why is there a discrepancy between...? What's the methodological problem here?

[Bill Matthews]

There are two points that I'd make.

Operating efficiencies are different from internal services, and 70% of the cuts are in operating efficiencies.

Just to give you an impression of the distinction, internal services are HR, finance, legal, all that stuff. Operating efficiencies are a little bit broader. If we decided we could deliver a program with less travel, that's an operating efficiency. It's not internal services. It's not a reduction in terms of how the program is delivered, or the program itself; we're just delivering it more efficiently.

I would say that 70% of the cuts or reductions in operating efficiencies are more than just internal services. There is some confusion around that.

The second part of your question, around the confusion around the Parliamentary Budget Officer's numbers and the numbers from Treasury Board Secretariat, we have a process in place where we have the same numbers he does. It would be useful if we could see his reports in advance so that we could actually work through the disputes. I think we would all agree that Parliament is not well served when we get two sets of numbers out there.

So he's put his numbers out. We've looked at internal services. We see a 6% reduction versus the previous year; he has an 8% increase.

We can't recreate his numbers, but I think we would all agree that we would be in a better situation if we had a chance to agree on those numbers before they were produced.

[Mathieu Ravignat, NDP, Pontiac, QC]

I certainly agree with you, Mr. Matthews, but really here also it's the qualitative analysis of these numbers. The Parliamentary Budget Officer is saying there are clear impacts on front-line services, that cuts are occurring on front-line services, that those cuts do account for some of the savings the government is pursuing. It's also a difference in interpretation. How do you explain that?

[Bill Matthews]

I don't think I recall seeing something from the Parliamentary Budget Officer where he's been able to articulate impacts on front-line services. There is that distinction I mentioned between internal services and operating efficiencies. I believe the Parliamentary Budget Officer's concern was if he wasn't seeing the reductions in internal services, it must be services that are being impacted. As I mentioned, we don't agree with his number on internal services, and we're talking about operating efficiencies, which is a lot more than just internal services.

[Mathieu Ravignat, NDP, Pontiac, QC]

I have another quick question, if I have the time.

[The Chair, NDP, Pat Martin]

You have two minutes.

[Mathieu Ravignat, NDP, Pontiac, QC]

When it comes to giving direction to departments to make savings, were there any guidelines from Treasury Board with regard to savings in backroom internal services and avoiding, obviously, savings that would have an impact on front-line services to Canadians?

[Bill Matthews]

When this initiative was launched, two things happened. The Treasury Board Secretariat set the expenditure base for each department. That's important because we excluded certain things from the base. For instance, major transfers to Canadians and the provinces were off the table, so they couldn't cut those. The logic is you can only cut what's in your base.

We also said to departments that at least a proportional share of their savings had to be operating efficiencies. They could not achieve their target simply by eliminating one big program.

When we communicated each spending base to each department, we were able to say, “Here's your grants and contributions portion. Here's your operating portion. A proportional share of your 5% and 10% spending reduction options has to come from operating.” I can tell you that every single department came forward with proposals that had at least a proportional share from operating. They did all respect that guideline.

Those were the guidelines that were set.

[Mathieu Ravignat, NDP, Pontiac, QC]

Is there a post evaluation?

[Bill Matthews]

Is there a post evaluation in terms of...?

[Mathieu Ravignat, NDP, Pontiac, QC]

In terms of having an impact on front-line services.

[Bill Matthews]

Not that I'm aware of.

[Mathieu Ravignat, NDP, Pontiac, QC]

Or the impact on internal services.

[Bill Matthews]

Certainly, we know what was brought forward by departments and we've reduced the appropriate vote, operating versus grants and contributions. That forces departments to make the reductions where they planned in the first place. From my perspective that gets us what we need.

[Mathieu Ravignat, NDP, Pontiac, QC]

Okay. Thank you.

[The Chair, NDP, Pat Martin]

Thank you. That's right on time.

We just have time for Dan Albas for a tight five-minute round, and John McCallum has asked for a 30-second question at the end, and I'm inclined to agree to it.

It's five minutes for you, Dan.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Thank you very much, Mr. Chair. I'm really happy you're finding the efficiencies here today.

Thank you to our witnesses today. I certainly appreciate your presentation and your knowledge on the subject.

Earlier the chair mentioned reports on plans and priorities. I believe, Mr. Chair, there was a report submitted by this committee, and one of the recommendations in that particular report said there's a clear linkage between the RPPs and supply, and that to have those reports as soon as possible or even to have them at the same time as the main estimates would be ideal. To hear that the RPPs are going to be coming forward earlier than usual is a step in the right direction.

In linking the RPPs, I did have a question regarding vote 15c, which is on page 120 of the supplementary estimates. I'm a big believer in linking projects, the RPPs, strategically. On the compensation adjustments, I think Ms. Walker has done a very good appraisal of what it is and what it is not. Obviously, it's not a salary transition; it's a transitional allowance. I do have here your RPP in regard to this. I believe it's under program activity two, which is people management, from last year's RPP.

Could you take a moment and link what this particular item is and how that relates to your RPP? Where's the department headed in this direction?