Government Operations Committee on May 12th, 2015

[The Chair, NDP, Pat Martin]

Good morning, ladies and gentlemen.

Welcome to the meeting of the Standing Committee on Government Operations and Estimates. Today we will be dealing with the main estimates and the reports on plans and priorities of the Privy Council Office.

We're pleased to welcome to our committee, if not a regular and frequent guest, at least an annual guest, Michelle Doucet, chief financial officer. With her is Karen Cahill, deputy chief financial officer.

You are very welcome, Ms. Doucet. Please take your time to give us your opening remarks. We'll go to questions after that.

[Michelle Doucet, Chief Financial Officer, Corporate Services, Privy Council Office]

Good morning, Mr. Chair and members of the committee. Thank you very much for inviting us to speak to you today.

The chair has introduced Karen and me. It's our pleasure to appear before you today to answer your questions on the 2015-16 main estimates for the Privy Council Office as well as its report on plans and priorities for the same fiscal year.

The PCO is seeking $118.8 million in the 2015-16 main estimates. This is an overall increase of $26,000 from the amount the PCO sought in last year's main estimates.

The PCO's main estimates increase for this year is mainly related to the following.

First is an increase of $2.1 million in funding for the operations of the Canadian Secretariat to the Canada-U.S. Regulatory Cooperation Council. The goal of the Canada-U.S. Regulatory Cooperation Council, or the RCC as we call it, is to better align both regulatory systems to benefit industry, regulators, and the public, and boost North American trade and competitiveness. As part of the initial RCC action plan announced in December 2011, tangible results were achieved in such areas as product approvals, joint standards development, product reviews, and compliance and enforcement efforts. That action plan represented a significant first step in deepening regulatory alignment between Canada and the United States.

Budget 2014 reiterated Canada's commitment to the RCC for an additional three fiscal years: 2014-15, 2015-16, and 2016-17. The strategic direction for the next phase of Canada-U.S. regulatory cooperation is outlined in the RCC joint forward plan, which was released by both governments in August 2014. That plan responds directly to stakeholders' priorities and includes commitments by counterpart Canadian and U.S. departments to develop cooperative work plans across 24 broad areas of regulatory work. The additional funding will allow the Canadian RCC secretariat to continue its efforts to work with U.S. and Canadian partners to advance regulatory cooperation.

Second is an increase of $1.2 million for the creation and operation of the central innovation hub at PCO. To explain this investment, it's important to understand that the context in which policy-makers operate has shifted dramatically in recent years, and because of that, the public service must leverage opportunities to increase the speed and effectiveness of the advice and options it delivers.

Last year, in May 2014, the Clerk of the Privy Council's Destination 2020 report announced several initiatives intended to respond to this challenge, including the establishment of a central innovation hub at PCO. The hub will provide departments with expertise and advice on applying new approaches to complex policy and program challenges. The hub will also help test, document, accelerate, replicate, and scale up successful innovation across the public service. Locating the hub at the Privy Council Office will amplify and align successful initiatives across departmental lines.

Third is an increase of $0.3 million represents the portion of wage and salary increases to be paid to employees during fiscal year 2015-16, in accordance with specific collective agreements that were ratified in 2013-14.

At the time of the tabling of these estimates and PCO's report on plans and priorities, we projected a decrease of $3.4 million related to three sunsetter initiatives, namely, the coordination of government-wide information for Canada's economic action plan; the Office of the Special Advisor on Human Smuggling and Illegal Migration, headed by Mr. Ward Elcock, the special advisor to the Prime Minister on this matter; and the Beyond the Border action plan, which gives effect to the 2011 declaration signed by Prime Minister Harper and President Obama, establishing a new long-term partnership accelerating the legitimate flow of people and goods between both countries while strengthening security and economic competitiveness.

Sunsetter initiatives are those initiatives that have time-limited authorities and/or funding because they are developed for a specific purpose and timeframe. They are periodically reviewed and often renewed to ensure that the intended goal is accomplished.

Subsequent to the tabling of these estimates and PCO's report on plans and priorities, Budget 2015 has confirmed the availability of funds for all three of these sunsetter initiatives, and in due course PCO will seek approval of all required authorities to access these funds.

Fourth, there is a decrease of $0.3 million in funding for the implementation of various government-wide initiatives, including the continued consolidation of pay services, the implementation of the Canada School of Public Service's new business model, the elimination of wasteful spending on late fees and interest charges to suppliers, and the web renewal initiative.

Fifth is a $1.3 million decrease to PCO's planned voted expenditures and a corresponding $1.3 million increase in statutory expenditures due to an internal budget transfer from the operating fund, which falls under the voted expenditures, to the employee benefit plans, which fall under the statutory expenditures, to better align PCO's reference levels with its actual spending profile. The transfer has no impact on PCO's total authorities.

In addition, PCO's statutory spending is being reduced by $80,300. Following the July 2013 cabinet shuffle, there was a machinery of government change where the Hon. Denis Lebel was appointed Minister of Infrastructure, Communities and Intergovernmental Affairs and Minister of the Economic Development Agency of Canada for the Regions of Quebec. The salary and motor car allowance were moved to the office of Infrastructure Canada and therefore no longer appear under PCO's statutory forecasts.

This completes the explanation of PCO's 2015-16 main estimates.

I will turn now to PCO's report on plans and priorities for fiscal year 2015-16 to give you a brief overview of PCO's planning highlights.

To begin, it is important to note that PCO's sole strategic outcome is to ensure that the government 's agenda and decision making are supported and implemented and the institutions of government are supported and maintained. In this regard, PCO will continue to play a central coordination and advisory role to support the government in furthering its objectives pursuant to its mandate to provide professional, non-partisan advice and support to the Prime Minister and cabinet. PCO plans to meet this strategic outcome by focusing on four key organizational priorities during the year.

PCO's first priority is to support the Prime Minister and portfolio ministers in exercising their overall leadership responsibilities. PCO does this by providing professional, non-partisan advice and support on the entire spectrum of the government's policy, legislative and government administration priorities. This includes, among other things, advice on social and economic affairs; regional development; foreign affairs; national security; defence; governor-in-council appointments; intergovernmental relations; and, the environment.

The second of PCO's priorities will be to support the deliberations of cabinet and its committees on key policy initiatives and coordinate medium-term policy planning. In order to meet this priority, throughout the year, PCO will provide advice to cabinet and its committees on the overall communications strategies necessary to support the govemment's priorities. It will also provide guidance to and perform a rigorous challenge function for departments to advance policy, legislative and government administration proposals that are high quality, prepared in a timely manner, and focused on addressing priority areas identified by the government.

PCO's third priority is to enable the management and accountability of government. PCO provides strategic advice on whole-of-government transformation initiatives, public service renewal and other major management reforms, which will ultimately contribute to sound government administration, enhanced productivity in the public service, and improved services to Canadians.

To this end, the PCO will support the Clerk of the Privy Council and the Deputy Minister Board of Management and Renewal in the identification of whole of government proposals to advance the government's priority for improved efficiency and effectiveness. In addition, PCO will actively engage and collaborate with implicated departments and other central agencies in the implementation of these proposals.

In line with the major transformational initiatives taking place across the Public Service, PCO's fourth and final priority is to strengthen the department's own internal management practices. During the year, PCO will continue to implement and support the Employee Performance Management Program at PCO to meet the requirements of the Treasury Board of Canada's new Directive Performance Management, in order to promote a commitment, shared by managers and employees, to sustaining a culture of high performance in support of government priorities.

With respect to information management, PCO will enhance digital record keeping and information use and sharing practices across the department, and support ongoing compliance with the Government of Canada policy framework.

PCO will also complete the transfer of the department's pay services to the Public Service Pay Centre in Miramichi, New Brunswick, in support of the government-wide Consolidation of Pay Services Project and the Pay Modernisation Initiative.

Finally, PCO will address security and emergency management priorities by strengthening the governance structures and organizational culture related to security and emergency management and business continuity management; and strengthening the expertise of Security Operations personnel.

I would like to thank you for the opportunity to explain the initiatives related to PCO's 2015-16 main estimates and report on plans and priorities.

We would be pleased to address your questions.

[The Chair, NDP, Pat Martin]

Thank you very much, Ms. Doucet.

We'll go immediately to questions.

For the NDP, the official opposition, five minutes, Mr. Mathieu Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Chair.

Thank you for being here, Madame Doucet.

To start off, could you confirm if the Prime Minister has increased the size of his office, both in personnel and in size, and can you tell me why that would be the case?

[Michelle Doucet]

Thank you for the question.

The budget for the Prime Minister's Office and how much the Prime Minister's Office has spent on personnel is reported annually in the public accounts, which are published, generally speaking, in the fall. I believe that those numbers—and Karen may have the details on those—have remained fairly constant over the last four years.

[Karen Cahill, Deputy Chief Financial Officer, Corporate Services, Privy Council Office]

That's absolutely correct. As Ms. Doucet explained, the final expenditures will be published in the public accounts in the fall, but the budget for the Prime Minister's Office has not increased since the past year.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you.

Basically, if I'm correct in my reading of the mains, the expenditures for the public service leadership and direction program will increase to $3.1 million. I think you mentioned that as well.

I'm just wondering if this increase is related to Blueprint 2020 at all?

[Michelle Doucet]

Thank you for the question.

Yes, the increase is related to Blueprint 2020. Last year, in May 2014, the then Clerk of the Privy Council, Wayne Wouters, in his Destination 2020 report, which is very much supported by the new Clerk of the Privy Council, Madam Janice Charette, announced several initiatives to respond to the Blueprint 2020 plan. One of them was the creation of the central innovation hub at the Privy Council. We, in the estimates process that this House approves, in supplementary estimates (C) sought approval for and received approval to create the central innovation hub at the Privy Council Office. That's the increase that you see reflected in our main estimates.

[Mathieu Ravignat, NDP, Pontiac, QC]

With regard to the public service leadership and direction program, there will be an increase. I was wondering how that's going to be meted out, I guess. Are we mainly talking about programs related to training management, or are we talking about public servants in general? Will it serve to hire more public servants or is it strictly training?

[Michelle Doucet]

That's a great question.

The increase is mainly related to salaries for public servants who are working at the Privy Council Office. We're using a mix of temporary secondments and assignments, with a few full-time positions. There will be other costs that will include professional and special services and a bit of travelling.

This investment we're making supports a small, modest footprint, where everybody works together in a collaborative environment. They have a small team that we've brought into PCO, so it's an augmentation to the number of folks we have working in the PCO, and they're all public servants.

[Mathieu Ravignat, NDP, Pontiac, QC]

Okay.

With regard to your report on plans and priorities, it was projected that full-time equivalents at the PCO would decline from 851 to 835, and then the figures changed, from 844 to 842. Why the change?

[Michelle Doucet]

Mr. Chair, I'm going to ask Ms. Cahill to answer that one for you.

[Karen Cahill]

Actually, the change is related to increased salaries for the RCC, as well as the innovation hub, and a decrease for the transfer of staff to Miramichi. This is mainly why there is a difference between our main estimates and the RPP.

[The Chair, NDP, Pat Martin]

That wraps up your time, Mr. Ravignat. Thank you very much.

Next, for the Conservatives, we have the vice-chair of the committee, Mr. Greg Kerr.

[Greg Kerr, Conservative, West Nova, NS]

Thank you very much, Mr. Chair.

I welcome our visitors this morning.

On page 2 of your presentation on the main estimates, you're dealing with your regulatory process with American partners and so on. Our main study this year has been on the regulatory process, on standards councils. I think we remain almost as confused today as when we started with the process. I'm not expecting you to clear it all up, but this seems to be fitting in with part of the changes, the more robust trade issues and so on that take place between Canada and the United States. So I have a double question.

First, could you elaborate more on what is done under that authority? Second, how do you fit in within the standards process, within the council, the board and so on, and the main volunteer efforts that take place to try to stabilize...? There seems to be some communication difficulty that takes place there. If you can help us out there, it would be much appreciated.

[Michelle Doucet]

Thank you for the question.

I'd be happy to try to help.

What I'm going to do is to talk about PCO's role and the function that we fulfill out of the RCC, the regulatory cooperation council.

The RCC was created in December, 2011, falling out of the agreement that was signed by the Prime Minister and the American President at the same time they signed the Beyond the Border action plan. The RCC was created to better align both country's regulatory regimes with a view to eliminating the unnecessary duplication. The reason why that work was possible was that both countries have highly efficient regulatory systems based on compatible outcomes. But over time the way they've done it has evolved differently, and it's creating the problems to which you've referred.

When putting together the initial work plan that was announced at that time, 29 initiatives were laid out with a very focused effort on stakeholder engagement because, as you say, that conversation really infuses the work that has to be done. What followed, I think, exceeded a lot of expectations in terms of the productivity and fruitfulness of those conversations.

During the first part of that work, which took place every number of years, key initiatives included the creation of the common electronic submission gateway whereby both countries can submit applications for approval of pharmaceuticals and biological products to both Health Canada and its American counterpart, the U.S. Food and Drug Administration. This was a new enhancement to the Canadian regulatory system, and I think helpful to industry.

Another example of something positive that came out of it was regulatory oversight of the Great Lakes and St. Lawrence Seaway, where a pilot project was conducted that included 10 pilot ship inspections to explore various joint approaches. Building on those pilot projects was really kind of an incubation work where people got to test and succeed or fail.

The new joint forward action plan was released in August of 2014 and said that we're ready to mature this. We're ready to institutionalize work plans in Canadian federal departments and their American counterparts in 24 broad regulatory areas, and there will actually be public servants on both sides who are accountable for making progress.

There are a couple of interesting files that they're working on that I find useful to know. One is on the lack of common labelling for paint. We use paint here in Canada and in the United States, but the labelling is not common and the regulation around that is not common. It creates between $38 million and $50 million worth of inefficiencies for every 15 months that this misalignment persists. Imagine what industry could do with that money if they had it.

Another example is lipstick. Currently, to produce a lipstick in Canada or the United States, you need three pieces of paper and $600 in the United States or $1,000 to apply in Canada. If you want to add sun screen to that lipstick, an SPF factor, it doesn't change in the United States but in Canada it turns lipstick into a drug. The cost to get the regulatory approval for that lipstick with the SPF is anywhere between $100,000 to $200,000. That's an example of the kind of work that the RCC will be supporting departments on both sides to pursue.

[The Chair, NDP, Pat Martin]

Mr. Kerr, that concludes your time.

Thank you very much, Madam Doucet.

Next for the NDP we have Mr. Tarik Brahmi.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you, Mr. Chair.

I see in the 2015-2016 report on plans and priorities that for the next three years, no expenditures are planned for boards of inquiry. The budget was about $10 million in 2011-2012 and in 2012-2013, but today, no funding has been allocated for boards of inquiry.

Can you explain to us why?

[Karen Cahill]

I will answer that question. Thank you.

First of all, it is important to mention that boards of inquiry are established by cabinet. Be it in its report on plans and priorities for 2015-2016 or in its main estimates, PCO does not request funding for boards of inquiry. The reason for that is, if no board of inquiry is established, the money that would have been requested would then be considered to be a surplus, which PCO could not use.

When a board of inquiry is created, the money set aside for that objective is considered to be a dedicated fund, reserved only for boards of inquiry. If a board of inquiry must be established, interim authorities can support it. In the meantime, funding must be requested from Treasury Board. This explains why PCO does not have any funds set aside for boards of inquiry in its report on plans and priorities for 2015-2016.

[Tarik Brahmi, NDP, Saint-Jean, QC]

In that case, what were the $13.2 million and $11 million from 2010 to 2012 spent on?

[Karen Cahill]

It was for the Commission of Inquiry into the Decline of Sockeye Salmon in the Fraser River.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Very well.

Let's talk about the 2015-2016 main estimates. I see that there is no new funding planned for the Beyond the Border Action Plan. Does that mean that this action plan is considered to be finished and that there will be no further oversight or evaluation of it?

[Karen Cahill]

As you probably know, funding for the Beyond the Border Action Plan ended March 31, 2015. In the 2015 budget, there is funding allocated for that program. Treasury Board will appear before this committee and before Parliament to get the necessary authorizations for the future.

[Tarik Brahmi, NDP, Saint-Jean, QC]

I have seen advertisements concerning, among other things, the preclearance of goods and the fact that preclearance is becoming more widespread. This is not a program that is coming to an end. It's difficult to understand why money is not being given for this program when it has just moved on to another level.

[Michelle Doucet]

You're right in saying that the government attaches a lot of importance to this program. Of course, the preclearance agreement that was just signed and announced is a historic agreement for both countries. That's why the government, in Budget 2015, signalled the continuation of funding available for this sunsetter initiative. In my opening remarks I spoke briefly to what a sunsetter initiative is—an an initiative that, when created, has a foreseeable end date. Officials in the government make their best guess at the time of how long they think the program will need to achieve that objective.

In the case of a number of initiatives we've discussed today, whether it's the RCC or the Beyond the Border action plan, the work that's been undertaken has turned out to be quite fruitful and the government has decided to make a further investment. So that money will be available to the group at PCO that's coordinating the Beyond the Border action plan, together with other departments responsible in the Government of Canada.