Thank you, Mr. Chair.
Good morning. It is a pleasure to appear before this committee for the first time since my appointment as deputy minister of Public Works and Government Services Canada, which was not quite six months ago.
I have my briefing book with me and I will now introduce my officials who are with me at the table today. They are people who are familiar to you: Alex Lakroni, who is the chief financial officer and assistant deputy minister; John McBain, who, as of yesterday, was appointed special adviser to the deputy minister.
Just a word on that change, Mr. McBain was, until last Friday, assistant deputy minister, real property, but as a transition to his eventual retirement, I was able to convince him to continue to provide me with his expertise and experience for a little while yet. He looks great. I'm grateful to him to have agreed to this assignment and for his appearance before you today.
His successor, whom you also know, Pierre-Marc Mongeau, is also here today, sitting behind us, to address any questions on the parliamentary precinct projects and plans. He is being replaced by Nancy Chahwan, who is also here.
So we are ready to answer your questions pertaining to our 2013-2014 main estimates and report on plans and priorities.
Although the knowledge I acquired at the Treasury Board Secretariat will stand me in good stead in my new role, I understand that taking the reigns of Public Works and Government Services Canada is quite a responsibility. This role is very dear to me, both for its important capacity as service provider and for its government-wide responsibilities.
I believe that centralized service delivery agencies enable the government to benefit from significant improvements in terms of productivity, efficiency and economies of scale. These agencies also help the government standardize a number of administrative functions to best leverage the private sector by providing practical common solutions. By releasing departments from having to perform daily activities, these agencies enable them to focus on their mandates and priorities.
PWGSC plays a key role in the operations of the federal government. As its treasurer, accountant, central purchasing agent, linguistic authority, and real property manager, the department is home to the Receiver General, prepares the annual public accounts of Canada, and manages a cash flow of more than $2 trillion a year in support of that role. It accommodates more than 270,000 federal employees in a diverse real estate portfolio that comprises almost 1,800 locations across Canada. It manages and oversees the lion's share of government procurement, which contributes more than $14 billion annually to the Canadian economy, translates more than one million pages of text on behalf of federal organizations, and provides translation and interpretation services for Parliament.
For the 2013-14 main estimates, PWGSC's gross budget is $5.9 billion, broken down as follows. There is $2.4 billion for the rent, fit-up, and utilities of government-wide accommodation; Receiver General and central compensation administration functions such as banking fees, cheques, and envelopes; and translation services to Parliament. There is $1.9 billion related to providing optional services to departments, such as real property project management and translation services, on a cost recovery basis. We need $900 million to deliver our core programs such as central purchasing and banking, public accounts, payroll, and pension services. We need $600 million in capital for Government of Canada buildings and infrastructure.
PWGSC generates $3.3 billion in revenues, or 56% of its budget, from client departments. This results in a net appropriation of $2.6 billion. The 2013-14 main estimates represent an increase of $254 million, or 4.5%, over last year's main estimates. One of the key reasons for this increase over last year's estimates is the amount allocated to the rehabilitation of the Parliament Buildings. Work continues so as to ensure their preservation as heritage assets and national symbols, and as functioning buildings that are essential to the continuity of our national democratic institutions. The total 2012-13 estimates earmarked $247 million for the parliamentary buildings rehabilitation projects. For this fiscal year, the allocation is $261 million—an increase of $14 million as per approved project plans and schedules. The parliamentary precinct's west and east blocks are included in the rehabilitation projects for 2013-14. All major projects, including the major rehabilitation of the West Block and 180 Wellington Street, are still on or ahead of schedule and on or under budget.
Another factor contributing to the increase in our 2013-2014 main estimates is the purchase of the Terrasses de la Chaudière complex in Gatineau. The amount of $50 million would be added to our budget to complete the transaction.
During this period of downsizing, such a purchase might seem odd, but this is not a new space for the government because we already occupy the entire complex: nearly 8,000 government employees work at Terrasses.
As well, the Government of Canada had entered into a long-term lease-purchase agreement during the construction of the complex. We have earned equity through lease payments and improvements carried out over more than three decades.
The purchase also allows us to maintain the 25/75 distribution of office space between the cities of Gatineau and Ottawa.
In addition, this purchase would enable us to exercise the option contracted when the buildings were built and leased and is an excellent investment for the crown and taxpayers.
Another increase is $32 million required for the transformation of the pay administration initiative, support for the implementation of the consolidation of pay services in Miramichi, New Brunswick, and modernization of the government's 40-year-old pay system. This aligns with economic action plan 2013's emphasis on standardizing, consolidating, and transforming the way government does business to improve services and deliver efficiencies to Canadian taxpayers. These additional funding requirements are offset by PWGSC's commitment to realize its share of total government-wide savings initiatives.
This year, PWGSC will realize additional savings of $95 million, of which $67 million is associated with our 2010-11 strategic review and $28 million results from budget 2012 expenditure review savings. These efficiencies and productivity improvements are in support of the Government of Canada's commitment to ensure a return to balanced budgets. Maintaining a sound fiscal position is the most important contribution the government can make to bolster confidence and growth, and Public Works and Government Services Canada is proud to contribute to this effort.
Having set out the highlights of our main estimates, I will turn now to how these would be expended, once supply is provided by Parliament, in support of the priorities set out in our report on plans and priorities for fiscal year 2013-14. The department has one strategic outcome: high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions. Seven programs support that outcome, and both the main estimates and the report on plans and priorities set out the planned allocations for each of these programs.
The department's top three organizational priorities for 2013-14 are delivering efficient and effective services, transforming critical infrastructure, and ensuring sound stewardship and management excellence.
Federal departments and agencies, along with many stakeholders from the private sector, rely on Public Works and Government Services Canada for the delivery of effective and value-added services.
Our priorities therefore include improving and streamlining procurement processes in ail categories of goods and services, implementing the National Shipbuilding Procurement Strategy, completing the government's seven-point plan to replace fighter jets, improving the management of our real property portfolio, consolidating pay services and modernizing the computing platform to reduce costs, providing more standardized services to small agencies to help them reduce operational costs, and reducing the administrative burden for companies in the Industrial Security Program.
All of our service offerings and priority activities focus on improving performance, increasing consistency and efficiency of offer, and reducing costs for departments and agencies.
My second priority, transforming critical infrastructure, encompasses all the work to rehabilitate and preserve the buildings in the parliamentary precinct through the long-term vision and plan; delivering on a substantial program of work for our engineering assets, including something I was not aware of until I arrived at the department, portions of the Alaska Highway, for which we are the custodians; and leading the workplace 2.0 initiative for the government, which includes updating workspaces, and with Shared Services Canada, enabling technologies and work processes that create a more efficient and productive work environment.
Our third priority, ensuring sound stewardship and management excellence, speaks both to our goal to drive efficiencies within our own departmental internal services and to the stewardship role we play in ensuring the integrity of the procurement and contracting processes, which we manage for federal departments and agencies.
Safeguarding the public trust in Public Works and Government Services Canada is a priority for me and for all our employees. The department has been working diligently to protect the integrity of its operations, and more specifically, its procurement processes. Our goal is to ensure that we conduct our business to the highest ethical standards, which Canadian citizens expect us to uphold and protect.
We have a strong framework in place to support accountability and integrity in procurement. This includes a code of conduct, fairness monitoring, audits, internal investigations, policies, procedures, and governance measures. I understand we will have a chance to discuss these in greater detail at an upcoming appearance before this committee as you undertake work in this area,
In closing, Mr. Chair, members of the committee, I have come to appreciate that sound financial management is a hallmark of Public Works and Government Services Canada. We are entrusted with a large mandate, and we manage significant sums of money. We will continue to exercise financial leadership, seek efficiencies, improve service delivery, and identify opportunities for additional savings. I can assure you that our department strives to ensure consistent delivery of high-quality services to Canadians while providing value for money for taxpayers.
Mr. Chair, members of the committee, thank you for your attention. My colleagues and I will be pleased to answer your questions.
