Government Operations Committee on March 9th, 2017

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Weir, to your original point, I want to be very clear. We do not regret as a government consulting Canadians on this, and we will never regret as a government—

[Erin Weir, NDP, Regina—Lewvan, SK]

Except you ignore the results of that consultation.

[Scott Brison, Liberal, Kings—Hants, NS]

—consulting Canadians on any issue. We may not always come to a conclusion with a clear path forward, but it will not be for lack of consultation and engagement. We believe that is essential, on this and many other files.

[Erin Weir, NDP, Regina—Lewvan, SK]

Another item in the supplementary estimates is a transfer of $350 million along with 19 federal dams to the Government of Saskatchewan.

[Scott Brison, Liberal, Kings—Hants, NS]

Yes.

[Erin Weir, NDP, Regina—Lewvan, SK]

The Government of Saskatchewan is running a huge deficit. It's desperate for cash. It's selling off assets. I'm wondering what kinds of assurances the Government of Canada has that the Government of Saskatchewan will actually use that money to maintain the dams, and that it will not privatize or sell off any of those assets that are now being transferred.

[Scott Brison, Liberal, Kings—Hants, NS]

This has been a discussion between the federal government and the provincial Government of Saskatchewan for some time. Yaprak, who has been around longer, I think, than Ralph Goodale, for goodness' sake. No, I don't know about that. Sorry, but she has been around a long time. I'm just joking. Yaprak has been here a long time. She just said, “Forever”.

These discussions have gone on forever. What this represents is a resolution of an issue that is good for the citizens of Saskatchewan and Canada. Yaprak may want to add to this, because she has more institutional memory of the specific file, but I believe that this is actually something that has been a discussion, and the resolution of which reflects a shared responsibility and good governance.

Yaprak may want to add to this.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, Minister, we won't have enough time, but if you want to provide additional information through the committee in a written form, we would appreciate that.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you once again, Minister, for your appearance and the appearance of your officials here today.

[Scott Brison, Liberal, Kings—Hants, NS]

If I can, thank you very much. I want to thank my officials. These are fantastic officials who work hard every day. I'm kind of like the show horse; they're the workhorses. They know their stuff, and they do great work.

[The Chair, Conservative, Tom Lukiwski]

I think the show horse analogy is a bit of a question of perspective.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much for your time. I appreciate that. All the best.

[The Chair, Conservative, Tom Lukiwski]

We will suspend for a couple of moments, colleagues, as we await our next witnesses to approach the table.

[The Chair, Conservative, Tom Lukiwski]

Thank you, colleagues.

Colleagues, just before we ask Madame Lemay for her opening statement, I must tell you that we need about five minutes at the conclusion of this intervention to deal with the votes on the supplementaries.

We have to get out of here before 11 o'clock because another committee comes in at 11. We went slightly over time with our first witnesses, but I'm sure that was only because Minister Brison wanted to be quite comprehensive in his responses. I hope we can be a little shorter and more on time with this set of witnesses.

Madame Lemay, I thank you and your officials for being here. We'll get right at it. I understand that you have an opening statement. Following that, we'll go directly into questions. The floor is yours.

[Marie Lemay, Deputy Minister, Department of Public Works and Government Services]

Thank you, Mr. Chair.

Mr. Chair, and honourable committee members, I'm pleased to be here to discuss Public Services and Procurement Canada's departmental performance report for the fiscal year ending March 31, 2016, and the 2016-17 supplementary estimates (C).

Given the committee's interest, I would also like to take the opportunity to update the members on the progress that we're making on stabilizing the pay system—if that is okay with you—and to address employee pay problems.

Sitting beside me are Marty Muldoon, our chief financial officer; Lisa Campbell, who is the assistant deputy minister for marine and defence procurement; and Kevin Radford, the ADM for real property.

Public Service and Procurement Canada has a broad mandate to provide key services that support other departments and agencies, parliamentarians, and Canadians.

As the government's real property manager, purchasing expert, linguistic authority and pay and pension administrator, PSPC supports and facilitates the operations of departments and agencies. This is in keeping with the overarching goal set out in the minister's mandate letter: to ensure that the services provided in her portfolio are delivered efficiently and in a way that makes citizens feel respected and valued.

While many think of PSPC in terms of procurement or pay, the department's role in government operations reaches far beyond that.

For instance, through the Receiver General function, it manages over $2.2 trillion in cash flow of federal money in and out of the Consolidated Revenue Fund.

It provides pension services to more than 850,000 members of Canada's military, RCMP and public service.

It issues more than 339 million payments per year, including old age security, Canada pension plan, child benefit payments, and EI payments. It manages about $18 billion's worth of procurement on behalf of departments, of which over one-third goes to small and medium businesses. It manages the crown-owned real estate portfolio, with an estimated value of $7 billion. It also produces the Public Accounts of Canada, including the audited financial statement of the Government of Canada.

With regard to the Departmental Performance Report in 2015-16, the department made progress in numerous areas. For example, we significantly advanced the modernization of the Parliamentary Precinct. The Wellington Building rehabilitation was completed and work advanced on the West Block, the Government Conference Centre and the new Visitor Welcome Centre. These projects were and continue to be on time, on scope and on budget.

The department continued to invest through the Build in Canada Innovation Program, which matches businesses with innovative products and services with the needs of federal departments. Since last April, contracts valued at over $20 million have been awarded to 42 companies. Approximately 80% of companies in the program commercialize their innovations within one year of their contracts ending.

Through the national shipbuilding strategy and the defence procurement strategy investments were made to equip the Canadian Armed Forces and Canadian Coast Guard, while creating jobs and economic benefits for Canada.

The department completed the land acquisition for the new St. Lawrence corridor bridge project and entered into a contractual project agreement.

The promised review, as you will know, of Canada Post was completed last year. The government is currently preparing its response to the report prepared by this committee, “The Way Forward for Canada Post”.

Let me take a moment on Phoenix. Since Minister Foote was here last year before this committee on November 29, our priority has been to move toward prompt processing and short waiting times to get us to a steady state.

To do this, we executed a three-part plan to increase capacity, efficiency and transparency.

Steady state means that 95% of transactions are processed within 20 working days, which is our established service standard for most transactions. We see that there has been progress in moving toward that objective.

First, to increase capacity, we have reassigned most of the compensation advisors working on the backlog to the queue. We are prioritizing specific areas to allow us to reach steady state one transaction category at a time.

Working with the unions, we identified parental leave and disability leave as the first two priority areas. And we set targets to reach steady state for parental leave by the end of March, and for disability leave by the end of April.

We are on track to meet these targets. In fact, new requests for maternity or parental leave will be processed within 20 days of receipt at the Pay Centre, 95% of the time.

The vast majority of parental leave transactions in the Pay Centre that are outside of our service standard have been addressed, and employees will start receiving their top-up payments on March 22.

Once we have reached a steady state in these two categories, we will shift our focus to other categories. We're starting to process more transactions than we receive. This is a key milestone. It means that both waiting times and overall numbers of the pay requests awaiting processing will start to decrease.

The second element of our plan is efficiency. We're implementing technical enhancements to decrease processing times. For example, we recently introduced a new enhancement to automate calculations for past actings. Requests for acting pay that are entered into the system by departments at the start time of the acting period have been automated since the implementation of Phoenix, but now we have automated the past acting, which required very lengthy manual calculations.

This new enhancement will decrease the time needed to process these transactions. Right now there are close to 100,000 of those transactions awaiting pay processing at the pay centre, and they represent about 30% of our current workload.

To ensure we effectively manage this large volume of work, they will be processed in a controlled and focused manner between now and June. The plan is for employees to start receiving payments on March 22.

The third part of our plan is increased transparency. To ensure that employees have useful information, we are now posting monthly dashboards, which spell out how we are doing against our service standards and the estimated wait times for various transactions.

The wait is interminable for employees whose pay has been affected, and we are well aware of that. I would like to be able to tell them that everything will be settled tomorrow, but it is still going to take several months, even though we are making progress.

As summer approaches, we are paying special attention to student pay to make sure last year's issues are not repeated. We want to be able to provide timely and accurate pay to students joining the public service when the required documents are sent by their department to the Pay Centre at least 10 days before their start date.

Lastly, let me touch on tax implications. In February, we issued over 440,000 tax slips for 2016 for the 300,000 employees. We recognize that tax preparation can be confusing, especially given the pay issues. That's why we've equipped our call centre to make sure that we could have additional help to guide employees who have questions. They can contact the call centre, and we can connect them with specialized support or directly with Canada Revenue Agency.

As we have said on several occasions, all employees deserve to be paid. I know this is difficult and has sometimes created intolerable situations. We constantly remind employees that they are entitled to an emergency salary advance and to priority payments if they are in a precarious situation. There is no reason for them not to be paid.

In conclusion, under the main estimates, $2.9 billion was sought. Under the supplementary estimates (C), the department is requesting additional funding of $105.6 million, primarily for federal real property management. Taking transfers from other departments into account, the net amount we are seeking is $99.9 million.

The major items are $27.9 million to continue remediation work at the federal contaminated sites such as the Alaska Highway in northern British Columbia and the former Sambault garbage dump in Quebec, $19.3 million to reduce risks associated with the rehabilitation of the Esquimalt Graving Dock, $18.7 million to account for the fluctuation in expenses related to real property management, and finally, $18.2 million to modernize the heating infrastructure of federal buildings in the national capital.

Mr. Chair, we have more than 12,000 employees located in every part of Canada who all share the collective goal of demonstrating integrity, efficiency, and transparency, and care deeply about delivering high quality services to our client departments and Canadians.

Thank you for your attention, Mr. Chair and members of the committee. My colleagues and I will be pleased to answer your questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Madame Lemay.

Colleagues, because of the shortness of time and because we will have another committee who requires this room starting at 11, I believe we will only have enough time for one full seven-minute round of questions. Following that, we will go into the votes on the supplementary estimates that we've just examined.

Mr. Drouin, I believe you're up for seven minutes, please.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I thank the witnesses for being here. I know this is not the first time you appear before the committee. Thank you for being available and for appearing here.

I want to talk about the procurement process for acquiring new jets. I know it's been subject to criticism from the opposition.

Help me understand this. From 2006 to 2015 Canada has not procured any jets. Is that correct?

[Marie Lemay]

I will turn it over to Lisa to confirm because she has been around for that period.

Is this the only question?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Yes.

Have we procured any jets?

[Lisa Campbell, Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services]

We have not.

We have been supplementing the existing fleet. Canada has been dealing with an aging fleet and that's why the government is committed to replacing it with an open, transparent, competitive process, and also looking at a potential interim acquisition.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I recall in 2011 the government of the day had given us a price tag on the F-35, and then, oops, it suddenly ballooned. Now there's a capability gap that we need to fill, and we now have to sole-source 18 new Super Hornets. The opposition is criticizing us because we're sole-sourcing but they want us to sole-source an F-35. I don't understand that logic. I'm not going to ask for your comments on that.

In July 2010, they launched a so-called procurement process. Can you explain to me what the difference is between that and this new procurement process?

[Marie Lemay]

I'll say a few words on the current process. It might be important to note that we have quite a bit of information on our website too. We've been trying to be as transparent as we can with the Canadian public on this. You will see that we are doing two procurement processes concurrently. One is for the full replacement of the fleet and one is for the interim replacement.

Lisa, if you want to touch on the difference that would be helpful.

[Lisa Campbell]

Thank you for the question.

I would invite you to visit our web page as the deputy said.

This work started last summer with consultations by our department, the Department of National Defence, and the Department of Innovation, Science and Economic Development Canada going to see the main manufacturers of fighter aircraft to do some early industry engagement. As a result of that work last November we announced two procurement processes, as the deputy said. Work is starting now on a full competitive process for permanent replacement of the fleet. Also, the other process is exploring the interim acquisition through foreign military sales of some Super Hornet Boeing aircraft to supplement the existing aging fleet.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

In that full procurement process obviously bidders will be able to bid on that potential RFP. If Lockheed Martin decides to move forward on a potential bid they'll be invited. Our sole-sourcing to Boeing is not going to impede their ability to participate in the new procurement process, is it?