Government Operations Committee on Feb. 26th, 2013

[Bill Matthews]

Correct. If you think about the process for getting into the estimates documents, you basically have to have had money allocated in a previous budget, been through cabinet, and then to Treasury Board to get your spending plans approved. If you have nothing new, if your main estimates basically cover all your programs and you don't have any new spending, there's no need to come forward at supplementary estimates. You have to come forward only if you're planning on spending additional funds because you now have Treasury Board approval to spend.

There are many organizations that had no such requirements, so you will not see them in here. This is just supplementary estimates (C), which only represents those organizations that have additional spending requirements. Departments need parliamentary approval to spend money. They don't need parliamentary approval to not spend money. They come in only if they actually require additional funding.

Supplementary estimates (B) typically is our biggest supplementary estimates. That bore out again this year. So supplementary estimates (C) is typically one of the smaller ones. That's why you don't see all the departments here.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

In supplementaries (B) there were 49 organizations. We're dealing with the offsets. There are about $58 million in offsets. Is it normal to see that amount in 2012 reductions in supplementaries (C)?

[Bill Matthews]

In terms of the reductions related to the strategic and operating review, $58 million, they're lower than they were in supplementary estimates (B) simply because fewer departments came in. The lower the number of departments, the lower the amount of offsets we can take advantage of. We'd already taken advantage of $483 million in supplementary estimates (B), so it makes perfect sense that because supplementary estimates (C) is smaller, the amount of offsets is smaller as well.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Matthews.

Thank you, Ron.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

It's always good to have common sense prevail. Thanks for your hard work.

[The Chair, NDP, Pat Martin]

Thank heavens common sense prevails once again.

John McCallum.

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

Thank you, Mr. Chair.

I also had a question related to the London Macdonald House and Canada House, but in a different context. It's related to the $55 million being allocated under central vote 5, which is supposed to be used only for matters that are urgent or unforeseen. There is an item also under vote 5, $1 million for so-called indigent on-reserve residents. I can see why that might be urgent or unforeseen. But this planned building change in London has been going on for some years, so I don't really understand why that required a vote 5, being urgent or unforeseen.

[Bill Matthews]

Regarding urgent and unforeseen, and I'll let Sally finish the story, as you know, there are three supplementary estimates periods during the year, (A), (B), and (C). If a department can't wait for one of those to occur, sometimes we take advantage of vote 5. You did mention the other case, which was more of the emergency basis.

If I recall correctly, and I'll get Sally to correct me, the deadline to close the deal around the new property was fast approaching. I believe they needed funding and couldn't wait for the next supplementary estimates cycle to get that funding to close the deal. The thought was that it was a good deal and we should take advantage of it, so we used vote 5 to actually float the department the money to take advantage of that deal.

Do I have that correct, Sally?

[Sally Thornton]

Yes. It was simply to meet a final closing date.

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

Thank you.

This next question is for what you might call Treasury Board in its overall expenditure management role. I notice that a number of departments, including Heritage, on page 41, are claiming $68,000 in funds, “to provide a source of funds for the establishment of the Business Transformation and Renewal Secretariat of the Privy Council”. I don't think we're going to be questioning Privy Council, so I wondered if you could tell us, at least in general terms, what this secretariat is going to do.

[Bill Matthews]

I think we won't get a sense of what exactly the secretariat is doing until some future budgets potentially, but they're a transformation secretariat that's effectively looking at additional ways to save money. They've stood up a team, and they're looking at the way government delivers services, more, I think, on the back-office side. They've stood up that team, and departments have contributed to it.

I can't say what the outcome has been yet, because it's simply too early to say, but they are looking at ways to transform government, either for efficiency or to create better effectiveness.

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

So the team is still in its very early stages. It hasn't really got going yet.

[Bill Matthews]

It's been ongoing for over a year now.

Go ahead, Sally.

[Sally Thornton]

In supplementary estimates (B), you would have actually approved an amount of $1.4 million for PCO to stand up the secretariat. What you're seeing here is that while we asked for those moneys to be approved for PCO, it's not a new hit on the fiscal framework. We're actually taking that money from other departments. In effect, it's a transfer. You're going to see that in over 20 organizations as we pull the same amount, that $1.4 million, that was approved in supplementary estimates (B).

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

Okay.

I have one last question. I have a particular interest in the Rouge National Urban Park, because part of it is in my riding. I notice $3 million for that.

Can you tell us what that money is to be used for?

[Bill Matthews]

Sure. I'll start, and then I'll ask my colleague, Sally, to chime in, if need be.

With regard to the park itself, I know there are a couple of things happening. One is that some land related to Pickering airport has come free. They're actually increasing the size of the park, because there is an additional, I believe, 1,900 acres of land from the Pickering airport.

With regard to the $3 million they're getting through the supplementary estimates themselves, I'm going to turn to Sally to see if she can add to that.

[Sally Thornton]

The first portion, $2.1 million, is for Parks Canada to begin the process of establishing the park. Transport is also asking for some funds. They are contributing 1,917 hectares. The whole park should be about 5,000 hectares. This is really to launch it. They are, indeed—these are early stages—working out the boundaries and pulling it together. You'll be seeing this one again.

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

Thank you very much.

[The Chair, NDP, Pat Martin]

You have 30 seconds if you have a brief question, John.

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

I'm okay.

[The Chair, NDP, Pat Martin]

Very good. Thank you.

Bernard Trottier.

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

Thank you once again for coming here.

I want to focus some questions on vote 15. Before doing that, I appreciate some of the background material that you did provide, especially in the presentation that you gave, Mr. Matthews, on slide 5. This gives a good overall context of what's going on. Looking at the total line items and the voted line items, I see there's a downward trend, realizing that these are nominal dollars. In real terms, you can see a pretty strong trend in terms of overall spending reductions.

Is there any inflation number that the Treasury Board Secretariat uses when it does planning? Right now what would be an inflation assumption that we can use to get a sense of what these reductions mean in real terms, given that we live in a real world, not a nominal world?

[Bill Matthews]

There's no standard inflation rate we use when we're preparing these things. You would see a standard inflation rate applied more likely when the Department of Finance is doing their forecasts, particularly around statutory payments. Many of the statutory payments relate to benefits for our older population, so the demographics are changing.

I did flag two items that have gone up, the guaranteed income supplement as well as the old age security. Both of those had an increase in terms of the amount payable per recipient. So there's inflation factoring in there.

When we factor in the departmental spending plans, generally speaking there's no inflation built in. We do have something called vote 15, under which, in the past, departments would have been resourced for any increases in payroll they had to absorb. You may recall that an operating budget freeze has been in place, so many of those increases have been funded by departments themselves.

To get back to your question, there's no standard factor we use. It would be a better question for Finance, in terms of their budget planning and whether they use a standard rate.

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

Okay. Fair enough.

Getting back to vote 15, there's an adjustment of $10.7 million for compensation adjustments. Can you give us a sense of whether these compensation adjustments are because of changes in pay grades, or are there adjustments for inflation embedded in those changes?

[Christine Walker]

These are not adjustments for pay grades. These are not salary adjustments or compensation for inflation. These are really two things. They're for what they call transitional allowances and terminable allowances. They're very specific items.

Terminable allowances are usually one time and they would be negotiated again in the collective agreement. That's the reason it goes into vote 15. Then, as you said, there's a chart that shows where it will go from vote 15 to all of the departments and agencies.

What's also important here is that with the cost containment freeze, it means the departments and agencies must absorb any salary increases, which they are doing. These, again, are not considered salary increases.