Government Operations Committee on March 10th, 2015

[The Chair, NDP, Pat Martin]

Good afternoon, ladies and gentlemen. Welcome to the 41st meeting of the House of Commons Standing Committee on Government Operations and Estimates.

We are convened here in the presence of our minister, the Honourable Tony Clement, president of the Treasury Board, who will address the main estimates. I think without any....

Mr. Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Chair, thanks for the floor.

We only have an hour with the minister. I'm just wondering if we could dispense with the opening comments, given that we have them in written format, and go right to the questions.

[The Chair, NDP, Pat Martin]

That's rather unorthodox. I'll put it to the floor.

Is anybody—

[Greg Kerr, Conservative, West Nova, NS]

We have to hear him speak.

[Chris Warkentin, Conservative, Peace River, AB]

We're here early; I think we can probably—

[The Chair, NDP, Pat Martin]

I don't think we have the consent, Mr. Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

Okay.

[The Chair, NDP, Pat Martin]

We'll go directly to the minister, ask him to please make his opening remarks in five or ten minutes, and then we can open it to questions from the floor.

[Tony Clement, Conservative, President of the Treasury Board]

I'll try to restrict my remarks, Mr. Chair. I don't want to overstay my welcome, certainly, but I want to thank members of the committee for the opportunity to speak about government-wide 2014-15 supplementary estimates (C), and of course, the main estimates for 2015-16.

I'll also speak briefly about the Treasury Board Secretariat's main estimates for 2015-2016.

I should say that I have with me today officials from the Treasury Board Secretariat, including Yaprak Baltacioglu, the secretary of the Treasury Board. Mr. Brian Pagan is with us. He's the assistant secretary of the expenditure management sector. Daniel Watson is with us. He's the chief human resources officer for the Government of Canada. We also have with us Mr. Bill Matthews, the Comptroller General of Canada.

Of course I'm happy to take any questions after a brief statement.

I'll begin with the 2014-2015 supplementary estimates (C) for the fiscal year ending March 31, 2015.

As you know, the series of supplementary estimates, of which supplementary estimates (C) are the last every year, are part of the regular parliamentary approval process.

They ensure departments and agencies can receive the necessary funding to move forward with their planned initiatives to meet the needs of Canadians.

The 2014-15 supplementary estimates (C), which were tabled in the House of Commons on February 19, provide the information Parliament needs to consider the government's request for spending authority as we come to the fiscal year-end. They reflect expenditures the government set out in budget 2014 or in previous budgets. Specifically, the supplementary estimates (C) provide information on $1.8 billion in voted appropriations for 41 organizations, as well as information on a decrease of $1.3 billion in net statutory expenditures.

As the President of the Treasury Board, I can definitely provide some details on the funding being sought by the Treasury Board Secretariat through supplementary estimates (C). My department is seeking in total about $646.2 million. This includes $400 million to fund increases to vote 30, which is the government-wide vote managed by Treasury Board Secretariat to cover the legal payroll obligations of the Government of Canada.

This increase is primarily driven by the cash out of employee severance benefits accumulated to 2010. As you know or may remember, eliminating the accumulation of severance benefits for voluntary departures is a key part of the government's commitment to ensure that public sector compensation is both reasonable and affordable. We expect that eliminating severance will provide ongoing fiscal savings of about $500 million per year.

Through supplementary estimates (C), the Treasury Board is also seeking $246.2 million for vote 20. This is related in part to increased costs of the service income security insurance plan, which has been under some financial pressure. The pressures relate to low interest rates and an increase in the number of medically released armed forces members following the Afghanistan mission who are eligible for benefits under the plan.

As we approach the end of the fiscal year, the voted budgetary estimates, including the main estimates and supplementary estimates (A), (B), and (C), have all totalled about $93.4 billion. These estimates continue to reflect the success of spending restraint undertaken by the government. This, of course, underpins our ongoing commitment to keep taxes low and return to a balanced budget by 2015.

Let me talk briefly about the main estimates, Mr. Chairman.

Mr. Chair, I would now like to turn to the government-wide 2015-2016 main estimates, which were tabled in the House on February 24. These main estimates reflect the government's resource allocation priorities for the 2015-2016 fiscal year, starting on April 1.

Parliament will be asked to approve the voted expenditures. These amounts represent maximum “up to” ceilings or estimates, and aren't required to be fully spent during the course of the year. The actual expenditures are found in the Public Accounts of Canada, published every fall.

These estimates, combined with the reports on plans and priorities, the public accounts, the departmental performance reports, all help inform Parliament and hold government to account for allocating and managing public funds.

With respect to these main estimates, they provide information on $241.6 billion in planned budgetary expenditures for the next fiscal year. This includes $88.2 billion in planned voted expenditures and $153.4 billion in statutory expenditures. These include $499 million for the Canada job fund and job grant to help equip Canadians with the skills and training they need to fill available jobs; almost $448 million for the Canada First defence strategy for the modernization of the Canadian Forces; $315.6 million in funding for the operations, repairs, and maintenance of the Jacques Cartier and Champlain bridges; and a $203.2 million increase in funding for Infrastructure Canada's Building Canada fund.

This is for projects that are already under way and can continue to receive the funding they require. Of course, any planned expenditures announced in the upcoming budget will not be reflected in these main estimates but in future estimates that are tabled before the House.

Mr. Chair the 2015-2016 main estimates continue to reflect the ongoing success of the cost-cutting measures the government has put in place. There have also been significant statutory increases to elderly benefits and the Canada Health Transfer. And new spending is focused on creating jobs.

In fact, major transfers to persons are forecasted to increase by $9 billion in 2015-16, to $148 billion. As I said, this includes increases to elderly benefits such as old age security and the guaranteed income supplement and allowance payments, but it also includes the Canada child tax benefit and the universal child care benefit, to provide families with the resources to support child care choices.

To be respectful of members, I'll skip over the TBS-specific 2015-16 main estimates. I can certainly answer any specific questions related to that.

Let me just say in conclusion that strong fiscal management is vital to our country's long-term prosperity. I'm certainly proud, as President of the Treasury Board, of the measures that our government has taken to manage spending during the economic downturn to ensure Canada's continued prosperity. The many accomplishments in this area are reflected in these estimates.

Thank you. Merci.

[The Chair, NDP, Pat Martin]

Thank you, Minister Clement, and for your brevity. That leaves us more time for questions.

We'll go right to the first five-minute round of questioning for the NDP, Mathieu Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Mr. Chair.

Thank you to the President of Treasury Board for being present, and of course, to all of the other members of the panel today. Thank you for being here. It's nice to see you all back.

I want to open up with the Shared Services Canada project, particularly with regard to the email systems.

Minister, can you confirm that the email services will be outsourced to a private firm and what impact that has had on cost?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

As I understand it, there was an open competition for that contract. I believe Bell Canada was the winner of the open competition. I think Shared Services Canada does report to Public Works, and then Public Works reports to Treasury Board on major IT projects. That is the state of it. Of course, the project is ongoing. It has not been completed yet, but we're hoping this will make some sense out of what is an antiquated, and quite frankly—

[Mathieu Ravignat, NDP, Pontiac, QC]

In the context of some rather significant cuts to Shared Services Canada, how are you going to ensure security in this new environment?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Actually, Mr. Ravignat, the advice I remember we got at the time was that one reason the old system was subject to attack was that we had over 100 email systems. Having a single system with much more robust protection against cyber-attacks was actually better for preventing cybersecurity breaches.

[Mathieu Ravignat, NDP, Pontiac, QC]

Fair enough.

Can you confirm how much of the funding will be allocated to cybersecurity and IT security going forward?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

We're marking that question down, and we'll get that information to you.

[Mathieu Ravignat, NDP, Pontiac, QC]

If that would be possible, that would be great.

I'd like to talk about some of the benefit changes at the Treasury Board, particularly with regard to accumulated severance pay. How many public servants have opted to take their accumulated severance pay at this point without leaving the public service, and what is the cost?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Mr. Matthews might have some information on that.

[Bill Matthews, Comptroller General of Canada, Office of the Comptroller General of Canada]

I do, and Brian Pagan can fill in some additional detail if need be.

This starts with the negotiation of collective agreements as they expire. The significant chunk that's remaining is made up of the employees who work for the Canada Revenue Agency. That's about 26,000 of the 28,000 remaining public servants who are not on the new regime. The rest are there. Just over $2 billion has been paid out so far.

In terms of the numbers, we're seeing around 75% of employees opting for an immediate payout of some sort. They can ask for some cash right up front or all of it up front, or they can defer it. Of that 75% asking for some payment up front, the vast majority—92%—ask for the whole balance. In terms of the remaining liability for severance—because there will still be a liability on our books for those who elect not to cash out or for those who are not getting the new regime—we were sitting at around $6 billion back in 2010. As of March 2014, when we closed the last fiscal year, we were down to about $3.36 billion, so that's the state of liability.

[Mathieu Ravignat, NDP, Pontiac, QC]

Okay. Thank you for that.

The Canadian press reported that between 2010 and 2014, $131.5 million in voted appropriations were not used by the Economic Development Agency of Canada to support SMEs and the social economy throughout Quebec.

The funds that were promised for economic development were not spent either. The budget of the Economic Development Agency of Canada for the regions of Quebec allocated to regional economic development was reduced by $13.2 million, that is to say 27%.

Why is Quebec being treated in this way?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Generally, for each department and regional agency, it is important to ensure that we have the projects that work best for job...

[Mathieu Ravignat, NDP, Pontiac, QC]

Why are these cuts targeting Quebec directly?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

It is the same thing in all of the regions. If a project is not valid for a given region, the minister responsible can decide to refuse it.

I could just say that is habitual and it is generally the case. We want excellent projects to be part of the regional economic development in all parts including Quebec. That's sort of how the system works.

[The Chair, NDP, Pat Martin]

Your time has expired, Mr. Ravignat.

Next, from the Conservative Party, we have Chris Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Minister, thank you so much for being here. We appreciate the fact that you and your officials have made yourselves available to spend this next little while with us.

I was reading a national columnist this last week, and there was an expression of concern about the estimates process and the ability of the average Canadian and possibly of parliamentarians to understand it. Certainly he, as a member of the media, was confused by the estimates process. I think it's important for people watching this and for those who don't fully understand the estimates process that you explain in general terms how Canadians should look at the estimates. Maybe you can also explain some of the things that have been done to help people understand the estimates and some of the recent things that have happened.