Government Operations Committee on April 24th, 2013

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

Next, about internal services costs, the government seems to say that 70% of the cuts are to back offices, and at the same time the government seems to say that internal services costs are only back office costs at a departmental or at a larger level, whereas within programs they are not considered internal services costs. So how are we supposed to measure whether you have achieved 70% of your cuts through back office reductions?

[Bill Matthews]

It's an interesting question. When we talk about internal services, we're talking about a standard list of corporate-wide services. These would include things like human resources, finance, legal, information technology, which are very standard across all departments.

Having said that, every program would have an element of back office production in it, and those are not captured by internal services.

The comment about 70% of the reductions being in the back office, I believe ties back to operating votes. That's where you'll see the money required to run the department. So a good place to look would be the reduction in operating votes for departments to see how it's been reduced during the implementation of the strategic and operating review. That would be my first check.

I don't want to spend too much time talking about our new database, but the new database will let you compare internal services very easily from a historical perspective, and it will also let you compare internal services across departments. So there is new information out there for parliamentarians to get the trends.

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

I want to ask you something about that, but first I have a question about Shared Services Canada. It is my understanding that when those expenditures were departmental they were considered to be internal services expenditures. After those expenditures have been transferred to Shared Services Canada, does that mean that all Shared Services Canada expenditure is now counted as internal services expenditures?

[Bill Matthews]

That's a really interesting question, so bear with me on this one.

We cannot say that all the costs in departments that were transferred to Shared Services Canada were internal services. That's not true. We do have some work to do on improving the consistency of our internal services in terms of how we cost them. It is entirely possible that some of the costs that were transferred from a department belong to a specific program.

For instance, if you were running a major computer to support a program, a major database specifically for a program, is that internal services or is that the cost of the program? I would suggest that you would see inconsistency in departments with regard to how they categorize those: you cannot assume that all of those costs were internal services.

The other point I'd make is this. Is Shared Services Canada all internal services? If I were to draw a comparison to Public Works, I would say not. Public Works exists to provide services to other departments, and it has its programs. Its internal services are HR, finance, and IT. Shared Services Canada would be a better place to ask that question, but I would not view all of their expenses as internal.

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

I guess my concern is that we might wave a magic wand and suddenly see a huge cut in internal services expenditures, because they're all counted as such in departments, and they go to a new place, and suddenly they're not. It would suit the government's interest to show huge cuts in back-office costs when nothing has actually changed. So that's the reason for my question.

Okay, I have a quick question on your database. I did commend you or the minister; I think it's a good move. But I said it wasn't the most exciting part; I think the program is the most exciting. One reason for that, to my knowledge, is that right now the database doesn't go into the future. The big controversies, the reason the PBO went to court, was that he couldn't get information on future plans to cut expenditures.

I would find it more exciting if it did include that, but my understanding is that, at least as of now, it doesn't. Is that true?

[Bill Matthews]

You're correct that the first release is history only. The second release will include in-year information, which we're hoping to do this year. The eventual goal is to get the future information that's in RPPs in there as well. That's where we will get to, but we didn't think it was wise to wait until it was all singing and all dancing before we released something.

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

Okay, thank you.

[The Chair, NDP, Pat Martin]

Thank you, John.

Next for the Conservatives we have Peter Braid.

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

Thank you, Mr. Chair.

Thank you, Mr. Matthews and colleagues, for being here.

Again, as many of us have mentioned today, I really appreciate all the progress that's been made with respect to our estimates study. I appreciate all of your hard work and your singing and dancing, Mr. Matthews.

My questions will focus on the main estimates specific to the Treasury Board Secretariat. I'm looking at page 349 of the main estimates and just want to go through a couple of questions there.

On budgetary voted item No. 5, government contingencies, I'm looking at the main chart on the page and just want to ask if you could elaborate on what those government contingencies are, what they may be used for, and the last time they were used.

[Bill Matthews]

Sure. I will start and I may turn to my colleague Sally to give some more recent examples. Her memory is better than mine.

We don't know what those are for just yet. This is the notion that we come to Parliament for supply through the mains and then the supplementary estimates (A), (B), and (C) typically, but not always.

Sometimes there are cases where a department cannot wait for the next supply period to get funds. So this is a vote we use to actually top up a department until we can get to the next supply period. Then the information is reported to Parliament so they can be aware of what this vote was used for.

Going from memory, it was used last year. I believe it was through supplementary estimate (C). There was an opportunity to amalgamate two buildings we have in London related to our embassy, to consolidate them. It was a time-sensitive deal. The department in question didn't have enough money to actually buy this property and wanted to take advantage of what was, in fact, a very good deal for the taxpayer. So we used this vote to top them up until we could come back to the next supply period.

In the past, it's also been used to fund Indian and Northern Affairs for things such as forest fires when they've had costs they didn't anticipate.

Sally, is there anything else?

[Sally Thornton]

Yes. The definition is basically for miscellaneous, urgent, or unforeseen expenditures. Traditionally, you see it for forest fires, floods, and claims settlements.

Then there are examples such as the London chancery, where it was the timing of making that deal because the organization needed the authorities to spend the money before the actual supply period. What happened was that we came back in the next possible supply period to inform Parliament of that use, because you had already approved the use for those purposes. So we inform Parliament and we also seek to get reimbursed any moneys that were advanced to the organization.

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

Thank you.

Moving a little further down the chart, I note on the public service insurance line a decrease of $10 million from the main estimates last year to this year, which I think is a real achievement. Could you elaborate on how you managed to achieve that?

[Christine Walker]

Yes, Mr. Chair.

The question, as I understand it, is why is there a decrease in vote 20 on insurance?

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

Correct.

[Christine Walker]

There are actually two components. The first component is the joint learning program, which is a sunsetting fund. That program actually sunsets, so that came out of vote 20 and that was $2 million.

The other part is for the public service insurance, which was a savings of $8 million. That was part of the strategic review that was done in 2008. The bulk of that saving is actually coming from the public service health care plan.

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

Looking at 2012-13 and the pay list requirements, I'm curious to know what happened between the main estimates and the estimates-to-date figures.

[Bill Matthews]

What happened between them?

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

I'm speaking of the $600,000.

[Bill Matthews]

You may recall, members, that we had to top up departments for severance. As the collective agreements were renegotiated, the agreements all included a provision to stop the accumulation of severance. But it gave employees the option of cashing out the severance they had earned to date. So that top-up was actually to resource departments for employees who had elected to cash out their earned severance.

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

Will that be a one-time top-up? Will we see that again?

[Bill Matthews]

We didn't reopen any agreements. We waited until they had expired before negotiating away the severance. So there are still some agreements in place that contain the severance clause. I would assume that the intent would be to negotiate the provisions, as has been done in the past. If that's the case, depending on the size of the department, they would need a top-up.

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

Tell us more about the increased funding for the cyber-security initiative. It sounds like a very important initiative.

[Christine Walker]

The cyber-security strategy was announced in 2010 to counter the attacks on computer networks. It was $155 million over five years, for a number of organizations. About $5.1 million of that went to Treasury Board for this year. There are basically two things that they're working on. There is the enterprise security design, and there is enhancement of capacity within the system to ensure that there is integration and alignment between the security departments.

[The Chair, NDP, Pat Martin]

That's your time, Peter. Thank you very much.

I understand that Mr. Ravignat will share his time with Ms. Duncan, but I'm going to hold you to the five minutes. We seem to stretch when this sharing happens.

You have five minutes, Mathieu.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Mr. Chair.

The minister confirmed that he would be looking at sick leave for public servants for additional cost-savings. Have you been instructed to start analyzing those cost-savings, and if so, how?