Government Operations Committee on Nov. 9th, 2017

[Kelly McCauley, Conservative, Edmonton West, AB]

That's 75 people for $3.7 million?

[The Chair, Conservative, Tom Lukiwski]

Yes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay. What are we training them for? That's a hefty price tag.

[Renée LaFontaine]

We used our own money last year and set up a pilot program.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's not your own money. That's the taxpayers' money.

[Renée LaFontaine]

In our reference levels last year, we had money to set up a pilot program—

[Kelly McCauley, Conservative, Edmonton West, AB]

That's $49,000 per person.

[The Chair, Conservative, Tom Lukiwski]

Even though it's a legitimate ask, Mr. McCauley, we're going to have to get the answer to that in a future intervention, because now we're going to Mr. Blaikie for seven minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

Good morning. In the estimates, there's a request for about $330 million for the Canadian Armed Forces pay increase. I wonder if you have a breakdown of how much of that is a retroactive lump sum payment and how much represents ongoing costs for higher wages.

[Brian Pagan]

First, to point out, Canadian Forces obviously are not unionized. The negotiations with the Public Service set a pattern that we've applied to the Canadian Forces. These wage adjustments will impact slightly more than 120,000 Canadian Armed Forces members, both regular and reserve. The $331 million included in these supplementary estimates (B) reflect pay increases effective April 1, 2016, and 2017. Of this amount, $131.8 million is retroactive for that 2016-17 period. The balance of $201.3 million is for 2017-18.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

A little more than half are costs that year-to-year are going to be higher. Do those kinds of pay increases trigger cost-containment analysis on the part of Treasury Board or DND? When they're in a situation that they know they're going to be paying more going forward, does that trigger any kind of process where they start looking at other ways they might be able to pay less?

[Brian Pagan]

The way we approach collective bargaining is that prior to engaging unions we do analysis internal to Treasury Board Secretariat. We look at current costs, including salaries, benefits, and pensions. We compare that externally to the market and other governments and large employers, and then we will work with our colleagues in the finance department to develop a mandate, or options for a mandate, that are presented by the Treasury Board president to cabinet for approval.

The analysis you're speaking of has been baked into the fiscal framework and the mandate we currently have to bargain collectively with the public.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

The reason I ask is that there have been some cost-containment measures—I don't what else to call them—on the part of the Canadian Armed Forces in the news this week, about soldiers who participate in special operations and are paid a premium due to the nature of their work and the risks involved. The CAF has recently decided that those soldiers, when injured on the job, will have only six months to heal and get back to the job, and if they don't, then that portion of their salary will be eliminated, which heretofore was not the case.

Is there a connection between higher salaries, these salary increases, and the Canadian Armed Forces looking to reduce those costs for themselves, and as a result, having made that decision?

[Brian Pagan]

I'm afraid I can't comment on that. That decision would have been made by Canadian Forces for their members.

What I can tell you is that, again, as we approach collective bargaining, we look at projections and costs and we bake that into the forecast.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Am I understanding from you that the expenditure management branch of Treasury Board, when looking at different departments and seeing that they're going to have an increase in salaries going forward, doesn't have a dialogue with that branch of government to encourage them to take other measures, or talk to them about what measures they might take in order to contain those costs?

[Brian Pagan]

If I understand the question, I think in fact that is exactly the case. We, within my branch, examine existing costs, and we examine cost drivers and pressures. We do a comparison to the external market, and we come up with a plan to seek agreement with the unions.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Have you had any conversations from Treasury Board with the Canadian Armed Forces about making a decision, for instance, to terminate a pay premium to certain soldiers after a certain time in order to contain costs, or is Treasury Board not involved in those discussions with departments on cost containment?

[Brian Pagan]

I have not been part of those discussions. I can't speak for colleagues elsewhere in Treasury Board Secretariat. We have an office of the chief human resources officer branch—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Would it be normal for Treasury Board to discuss those kinds of measures with a branch of government before a decision is made, or does that come as a surprise to you? Do you find out about it on the news, or is that a conversation you would have had with the Canadian Armed Forces or DND prior to that decision being made?

[Brian Pagan]

It's fair to say that most benefit plans or impacts on compensation are discussed in some form or another with Treasury Board, as the employer, before they're taken.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is that the type of policy that the expenditure management branch of Treasury Board would be encouraging in other departments when that conversation is had, or is—

[Brian Pagan]

What I'm trying to convey to you is that in developing a mandate we try to have a full appreciation of the costs of that mandate, so we would not, as a matter of business, seek an agreement and introduce new costs and then turn around and reduce those benefits or cut those costs because all of a sudden it's costing us more money. The costs are forecast into the framework and are part of our mandate going forward.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Would the decision to terminate those benefits for injured soldiers after six months have been part of the discussion? Would that discussion happen at Treasury Board, or is that just internal to the CAF?

[Brian Pagan]

Again, I—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I appreciate that it's within a framework, but presumably the ministers at Treasury Board have information on the entire framework. Would that have been included in the framework presented to Treasury Board on this item, or not?