Evidence of meeting #142 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was purpose-based.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Brian Pagan  Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
André Lapointe  Assistant Deputy Minister, Corporate Services and Chief Financial Officer, Department of Transport
Marcia Santiago  Executive Director, Expenditure Management Sector, Treasury Board Secretariat

12:25 p.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Thank you.

If I may reply, that is a response to an order paper question that I filed on this point. I filed it after the committee meeting that the motion refers to because I didn't get an answer from the President of the Treasury Board.

What I would say is that there is a basis for calculating what the cost would be. I understand what the legislation says. I think what you'll find if you talk to those workers is that they're saying this arrangement worked well for the last three years. Also, of course, in Parliament we have the luxury of being able to amend legislation, so the fact that current laws prohibit something doesn't mean that we can't allow it by amending the legislation.

What they're interested to know is what the cost would be, because if it's a really high cost, then it might be unreasonable to expect Canadian taxpayers to subsidize their ongoing participation in the public service plan. Their estimation—they hired an actuary—is that the cost is actually very low. Government presumably has a sense of what it has cost over the last three years to keep them in the plan under the current provisions of the public service pension act. They'd just like to know what it has been costing the government for the last three years. There is a way to figure out what it's been costing per year for the last three years.

It's really hard to believe that the government went ahead and made a decision after negotiating with them for two years and, I might add, giving them the impression that this might actually be possible. They've started a campaign to try to keep themselves in the pension plan only in the last couple of months, when they started getting that answer instead of the answer they had been getting for the last couple of years, which was that this might actually be possible. I think they feel a bit led on, but they still want to work constructively with government because they are really eager to stay in the pension plan.

It's not just for themselves. I think it's also important to say that where I'm from in Manitoba, we have an AECL site that's about to move into a decommissioning phase. A lot of those workers have worked and lived in Pinawa for a long time, but some of them are 15 years, say, into the plan. Instead of sticking around for the decommissioning, they're starting to say that maybe they need to be looking elsewhere for work, and maybe they want to be somewhere else. I think that losing that kind of site-specific knowledge on the cusp of the decommissioning process isn't very good.

There's a question, I think, of a moral obligation to these folks who are in a pension plan and would like to stay in it, but there's also a logistical consideration, which is whether it makes sense to be losing people with experience and site-specific knowledge on the cusp of important projects. All they're asking for is to know what the government estimates the cost has been over the last three years to keep them in the plan, even though they weren't technically working for the government. Even though they were performing all the same work on all the same sites with all the same equipment, they were no longer technically working for government. Nevertheless, they were still in the plan.

All we're asking for is to know what the government thinks that cost has been over the last three years so that they can go back to government with a proposal. That may include some legislative amendments, but I don't think that's the end of the world. We were just talking about legislative amendments to change the control structure for votes, and nobody said that because the current law doesn't permit it there's no way we could possibly do it. Instead we had a good conversation about what kinds of amendments we might make to the law in order to enable something good to happen.

They're just asking for what it has cost. We've been doing it for the last three years. I think it's reasonable. When Treasury Board was here in November, I think they more or less agreed that it was reasonable. They said that they were looking into getting those numbers and that as soon as they had them they would share them with the committee. It's hard for me to believe the government made that decision without having the numbers, so presumably they have them. The workers would just like to have that information shared with them so that they can try to work with government to find some kind of solution.

I felt the need to respond to Madam Ratansi's citing of that order paper question. It's true that I did ask that question. I've asked that question in many forms, as many as I possibly can, and as soon as I have the answer, I can stop asking the question.

12:30 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you very much, Mr. Blaikie.

Seeing no other names on my speakers list, I will read the motion into the record once again. Then we'll have a vote on the motion.

12:30 p.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Could we have a recorded vote, please?

12:30 p.m.

Conservative

The Chair Conservative Tom Lukiwski

It can be a recorded vote, Mr. Blaikie, certainly.

The motion reads:

That, pursuant to Standing Order 108, the Committee request that the Treasury Board Secretariat provide information no later than Tuesday, July 3, 2018, pertaining to the participation of employees of Canadian Nuclear Laboratories in the Public Service Pension Plan, in particular an “assessment of what the cost to government would be in terms of allowing them to remain in the plan”, as was committed to by Treasury Board Secretariat officials during the Committee's meeting of Thursday, November 9, 2017.

The motion is on the floor. All in favour?

(Motion negatived: nays 6; yeas 3)

Thank you, Mr. Blaikie.

We are now back to our round of questions. We're still on the seven-minute round.

We're starting with Mr. Jowhari.

12:30 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

Thank you, Mr. Chair.

It's good to have you back, Mr. Pagan and Mr. Lapointe.

I want to take a step back. In setting up this pilot, what were the key considerations? Why was Transport Canada picked and why were grants and contributions picked as a line item?

12:30 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Brian Pagan

Thank you.

That's a very good question in terms of understanding how we approached this pilot.

There were two primary risks identified with moving from a big aggregate vote to smaller votes, and we've touched on those. They are the increased complexity and the rigidity or challenges in managing cash flow between demand-driven programs, challenges that could negatively impact the delivery of programs and services. We also considered the cost and practicality of making changes to financial systems and business processes.

Above and beyond those risk factors, we looked at a number of other criteria, including the number of programs within an existing vote and the existence of unusual patterns or spikes in activity that could bump up against a vote ceiling during the fiscal year.

These were the principal reasons we limited the pilot to grants and contributions. There are a number that have very regular spending patterns and that easily fit within an existing purpose. On that basis, we approached Transport Canada in 2016-17 to undertake a pilot in that grants and contributions space.

12:35 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

Mrs. Santiago's brief statement mentioned CFMRS, which I think is the financial system you guys are using.

12:35 p.m.

Executive Director, Expenditure Management Sector, Treasury Board Secretariat

Marcia Santiago

That's of the Receiver General.

12:35 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

There is some limitation from a coding block that kind of inhibits you from being able to move into a larger pilot or a different pilot or a bigger chunk of money or a different line items in the estimates. Can you expand on that one?

12:35 p.m.

Executive Director, Expenditure Management Sector, Treasury Board Secretariat

Marcia Santiago

That's right.

It's because the system we use to prepare the estimates is built on SAP, and I'm not sure.... They are built on Oracle. These are relatively new, and they are still evolving systems.

We have, as I said, relatively new instances of these financial systems on our side of the pilot. To be honest, I'm not even completely sure what the foundational information and architecture of CFMRS involve. I suspect it was completely built from the ground.

12:35 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

What, for us, were the key lessons learned as they relate to the system? The next step is for us to go to three or four departments and a larger number. With this system, or with the code as a constraint, how is that going to...?

12:35 p.m.

Executive Director, Expenditure Management Sector, Treasury Board Secretariat

Marcia Santiago

As Mr. Pagan said, the immediate lesson is that we need to give the Receiver General and CFMRS at least four to eight months—and probably closer to eight months—in lead time for them to be able to basically build enough workarounds to let their system accommodate a few extra departments. If we go much past that, the RG has only flagged that it will be costly and effort-intensive. We haven't actually said what it's going to be, although it's in all departments. Until we give them what the upper limit is, they can't give us a complete cost.

12:35 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

What do you mean by “upper limit”? Is it a dollar value or the number of...?

12:35 p.m.

Executive Director, Expenditure Management Sector, Treasury Board Secretariat

Marcia Santiago

“Upper limit” would be the number of departments.

12:35 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

Okay.

12:35 p.m.

Executive Director, Expenditure Management Sector, Treasury Board Secretariat

Marcia Santiago

Right now we have something in the order of 200 expenditure-based votes in the estimates. If we were to go to the full 300 or so purpose-based votes, that would probably break the systems.

12:35 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

Okay.

You mentioned two items. One was transfers between votes, and the other one was carry-forward. Mr. Pagan, can you explain what the carry-forward is?

12:35 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Brian Pagan

Currently most departments are on an annual appropriation that ends at fiscal year-end, March 31st, but within that annual appropriation there is a construct of a permitted carry-forward amount. In the operating budget space, departments can carry forward up to 5% of their main estimates amount. This was introduced back in the early 1990s. It was a recommendation from the Auditor General and from a public service task force at the time to deal with the notion of year-end spending, which used to be known as “March madness”.

It's a sensible construct to incentivize departments to use the money in a future year for the program and service rather than spending it on something unplanned. That regime has worked, I think, very well over the past 25 years. It's been reviewed by the Auditor General and parliamentary committees. In fact, it worked so well that after the first two years, it was increased from a 2% carry-forward to a 5% carry-forward. It's stayed at that level for operating votes ever since.

In 2011 we introduced the concept of a capital budget carry-forward with the exact same principles: rather than having money lapse or spent at year-end on something that wasn't a priority for the department, they could carry forward their capital budget into the future year for approved programs and services—

12:40 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

Thank you for that one.

You mentioned financial systems, process changes, and legislative recommendations. We talked about the first one and the third one.

What are some of the key business process changes that needed to take place?

12:40 p.m.

Conservative

The Chair Conservative Tom Lukiwski

You only have a very, very little period of time to answer the question.

12:40 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Brian Pagan

It was primarily forecasting, looking at your demand requirements and making sure that you're forecasting appropriately for year-end.

Mr. Lapointe may have some other insights.

12:40 p.m.

Assistant Deputy Minister, Corporate Services and Chief Financial Officer, Department of Transport

André Lapointe

No, as Mr. Pagan said, we had to pay closer attention to the behaviour of the individual programs in each vote.

12:40 p.m.

Liberal

Majid Jowhari Liberal Richmond Hill, ON

Thank you, Mr. Chair.

12:40 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Colleagues, since we have limited time left, I would suggest we have two last interventions, one from the government and one from the official opposition. Then we'll have a brief recess while I suspend. Then we'll go in camera and hopefully have some very brief remarks on drafting instructions.

Go ahead, Mr. Kelly, for five minutes, please.

12:40 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

I'd like to go back to some of the comments that came in response to one of Mr. Blaikie's questions.

Ms. Santiago, you mentioned the limitation of the contingency vote in the event of a catastrophic problem in a larger department through which the numbers would just overwhelm the limited funds in vote 5, and that it would necessitate an appeal to Parliament to have additional funds.

Isn't that somewhat the point? If there was something catastrophic in a large department, should that not come to Parliament's attention? Shouldn't there be a necessity for a vote in Parliament to reallocate money to deal with a large-scale failure?