Government Operations Committee on April 19th, 2016

[The Chair, Conservative, Tom Lukiwski]

Ladies and gentlemen, I'll call the meeting to order. We do have quorum, so we'll commence now.

This is the eighth meeting of the Standing Committee on Government Operations and Estimates.

We have with us once again the Honourable Scott Brison. Thank you very much.

My first question, Mr. Brison, is do we have you for an hour?

[Scott Brison, Liberal, President of the Treasury Board]

Yes, sir.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. I appreciate your being here and I appreciate all committee members making room in their schedules as well.

Without further ado, Minister Brison, we'll turn it over to you for an opening statement.

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

I want to thank you, Mr. Chair, and all committee members for being flexible about the meeting time. I know there had been a change. Parliamentarians are very busy, and I really appreciate committee members helping accommodate us today.

I'm delighted to be back here with you, this time to discuss—

[Kelly McCauley, Conservative, Edmonton West, AB]

We were told you were bringing pizza.

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

Pizza, well, okay, but it may break Treasury Board guidelines if I tried to bring it in.

I'm delighted to be here today to talk about the 2016-17 main estimates. I'm pleased to be here with my colleagues in my department: Yaprak Baltacioglu, the secretary of the Treasury Board; Brian Pagan, the assistant secretary of the expenditure management sector; and Renée LaFontaine, the assistant secretary, corporate services, and chief financial officer. After my remarks, we'd be happy to receive your questions.

As you know, on February 23, the Government of Canada tabled its 2016-17 main estimates. These main estimates provide information to support the government's request to Parliament to approve $250.1 billion in spending to deliver programs and services in the fiscal year starting April 1, 2016.

This amount includes funding for significant initiatives noted in each separate organization's main estimates. These main estimates reflect spending proposals that are already planned and they represent "up-to" amounts.

I'd like to discuss an important issue with you now, the misalignment of the budget and estimates processes.

We had this discussion last time briefly, but looking at the main estimates you can really see a disconnect between the main estimates and the main budget, and I'm going to point out an example of that. You may ask, for instance, how can it be that a department like Indigenous and Northern Affairs is having its funding both decreased and increased? You may draw that conclusion considering that budget 2016 announced very significant investments in first nations, Inuit peoples, and the Métis Nation, totalling $8.4 billion over the next five years. Yet, these main estimates that we're discussing today actually show a decrease in Indigenous and Northern Affairs Canada's budget by over half a billion dollars. That relates to the fact that we now expect to need less in 2016-17 than the government had previously forecast for claims agreements, including land claims and resettlements related to residential schools.

This is a perfect example of why we need to look at the realignment of the main estimates and the budget. With the main estimates currently introduced before the federal budget each year, there is no opportunity for the main estimates to reflect the priorities that the government lays out in its budget.

This confusion created by the lack of alignment between the main estimates and the budget, and the resulting effect on transparency are an indication of why we ought to work together to fix this. These are the main reports to Parliament on the government's finances, so if we want to make this complex process of planning, spending, and tracking tax dollars less complex and more timely and transparent, we can make a real difference—this committee particularly, working with Treasury Board and the Department of Finance. This is why we've started discussions with parliamentarians and other stakeholders on reforms to improve the process and to give parliamentarians better and more timely tools to hold government accountable.

Australia is one jurisdiction where the main estimates are presented after the budget.

This practice allows for significant budget measures to be included in the main estimates, which helps speed up delivery on government's priorities and also provides a more coherent flow of information to Parliament. The budget sets an overall fiscal plan, and then in this context, the government asks for Parliament's approval for the appropriations. The spending plan set out in the estimates is more easily reconciled with the budget's forecast for expenses.

Closer to home, Ontario has a similar process and gets top marks from the C.D. Howe Institute for the clarity of presentation in their financial documents, from budget forecasts to appropriations to year-end results. I think we can look at models such as these, and learn and improve our own systems.

Returning to the 2016-17 main estimates for our department, the Treasury Board Secretariat, we're seeking Parliament's authority for $6.6 billion in funds, which represents a decrease of $321.6 million from last year.

Of this $6.6 billion, only $209.5 million would actually go to Treasury Board to support the operations of our department. The remaining $6.36 billion would support central votes for the rest of the government, for which Treasury Board is responsible. This includes things such as the public service insurance, government contingencies, and requirements for public service pay in areas such as parental or maternity leave, or severance pay. These funds are managed centrally by Treasury Board and are transferred to departments and agencies throughout the fiscal year as required.

If you need more information about Treasury Board's plans for 2016-17, please refer to our report on plans and priorities, which we tabled in the House on March 7. I know you all wait with bated breath for me to table my report on plans and priorities. I brought a free copy with me for your reading enjoyment today.

I would add that an interim supply bill seeking Parliament's approval to spend funds in line with these main estimates was also introduced on March 21. The interim supply sought approval for monies that would cover planned government expenditures for the first three months of the fiscal year.

With respect to new expenditures announced in the recent budget, according to the current parliamentary supply process, we will begin to present the details of those in supplementary estimates (A), which will be tabled next month.

In the time remaining, I'd like to bring you up to date on what we're doing to improve the oversight of government spending.

These main estimates include a pilot project with a vote structure for Transport Canada. In the last main estimates, this department had three votes based on the kinds of things the funding is for: operating expenditures, capital expenditures, and grants and contributions.

In these main estimates, we've expanded the grants and contributions part into three program-based or purpose-driven votes. Parliament now has a clearer indication of both what the funds are buying and which departmental programs are supported by these funds.

This pilot gives parliamentarians and Canadians more detailed information in a more useable format. The ability to exercise oversight is considered to be the most important role parliamentarians can play on behalf of citizens. To do it properly, parliamentarians need access to accurate, timely, and understandable information about government spending.

I'm committed to working with parliamentarians to find ways to make improvements. We've already taken some concrete steps. In December, for example, I came before the House of Commons in committee of the whole to present the supplementary estimates (B). I appeared with Minister McCallum. This, of course, included important new spending to support Syrian refugees.

Our government had a choice then. We could have used the less transparent Governor General warrant process, but we chose to give parliamentarians a chance to debate and question this spending.

Moreover, there's an annex to the supplementary estimates that provides Parliament with an early indication of the lapses expected for this fiscal year.

In terms of accountability, projecting lapses is a significant step forward, and it was recognized by the parliamentary budget officer, who said that it “represents an important increase in fiscal transparency”.

As we move forward, we intend on taking further steps to provide more useful information, in a more useful format, to parliamentarians.

Mr. Chair, I would like to return to the committee at the earliest opportunity to discuss these steps in detail. We all have a vested interest in improving accountability to Parliament, and I look forward to working with this committee as a partner in progress as we move forward.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Minister. I might say, just as an extemporaneous comment, that it's really a pleasure to see you volunteer your time to come back to committee. In many cases, getting a minister to a committee is not quite as easy as having one who is volunteering. Thank you for your co-operation.

We'll start with the seven-minute rounds and Madam Ratansi.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Minister, I was happy to hear that you would like to match the estimates and the budget process, that this alignment would bring about transparency, and that you're looking at the Australian model.

I have a question for you. I look at the total budgetary expenditure of $250 billion, of which over half is in transfer payments. As we look at the transfer payments that take place, I'd like to understand what your sense is of the governance structure, especially in health care, or where you transfer payments for the elderly to provinces.

What sorts of checks and balances do we have in the system when people come to us and say that they need this much money for health care, and we say that the money was transferred to the provinces? What sort of governance structure are you envisaging as you move along to make it more transparent and accountable?

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

Thank you, Ms. Ratansi. You raise an important question.

The reality is that a very significant part of our budget as a government is transfers to other levels of government. We do have a constitutional reality around things like health investment and education investment in Canada, and we are a full partner in working with provincial governments.

We do believe as a government that working in partnership with provinces on health care, as an example—and my colleague Minister Philpott is working with her colleague ministers provincially—we can actually achieve much better results in health care. Also, we can address some of the big issues facing the country, such as issues around our aging demographic, health care issues around home care, and issues around quality of life towards the end of a person's life, and things like palliative care. There are some provinces that are doing a much better job than others. We can work with some of those provincial governments to identify best practices to share with other provinces.

But in terms of accountability of provincial governments, you can only garner accountability when you're at the table and are having meaningful discussions and dialogue. As a government, we're doing that on a number of important files, health care being one of them.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

My second question is in regard to your mandate on sexual harassment, in that you want to make the workplace free of sexual harassment. When the public service employees were asked, 20% of them stated that they were facing some form of harassment.

Could you, as the Treasury Board minister, tell us what are some of the actions being taken by your department? It does affect your estimates. What actions are being taken by your department to ensure that this does not happen and that we have alleviated the problem?

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

Thank you, Ms. Ratansi. This is an extremely important issue.

We are working with the public service unions on this as well. This is something that we view as a joint effort, where there's a lot of common ground, and it's something that we intend on deepening in our work with PSAC and other unions representing the public service.

The numbers are troubling. I think there's been progress, but we have a long way to go. We're committing resources, but also, the partnership with the public service unions is going to be very important.

Incidentally, in regard to our colleague Michelle Rempel's piece that I read on this issue this week, for her to speak out as she has, as a member of Parliament and as somebody who's been a minister, reminds you of issues that continue to exist in this place and Parliament. Demonstrating leadership here is important more broadly within the public service.

In terms of some of the specifics we are working on now, I mentioned some work with the public sector unions, but Yaprak, our secretary of the Treasury Board, may have something to add to this as well.

[Yaprak Baltacioglu, Secretary of the Treasury Board Secretariat, Treasury Board Secretariat]

Thank you very much for the question. It is a very important issue, and we are acutely aware of the numbers in the public service. For us, even 1% is far too many.

For the Clerk of the Privy Council, a healthy workplace has been made a government-wide priority, and this is reflected in the deputy minister's performance accords with the clerk. Of course, a healthy workplace comes with working in a respectful workplace, and that should be free of harassment.

With regard to the Treasury Board Secretariat and our minister's role, we are the holders of the management policy, which means that we make the rules as to what is acceptable and what isn't. It doesn't matter how many rules you put in place; you have to make sure that the culture is one of respect. It is an ongoing effort and ongoing education.

As well, this year we are going to try to see if there is a way to do annual checkups on those kinds of important issues, so that it's not a case of your getting a number every three years and then you can't really hold anybody accountable, or you don't know where your problem areas are. We are looking at that as a way to have more of a real-time checkup on how the employees are feeling.

As you do appreciate, for us all—and for me, as a woman and a senior public servant—it is a critical issue, and we have to lead by example. Nobody should suffer in silence, so you have to do something about it. You have to speak out.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

My counter-question is, is there money allocated to it? For example, if you look at the budget, it talks about gender-based analysis, so you are looking at everything through a lens of gender, which is helpful when you are allocating money to anything and you have to ensure that it benefits both the men and the women. Is there anything like this that is a transparent lens, so somebody can say, these departments have taken the initiative to proactively go and ensure that their workplace is free from harassment?

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

On gender-based analysis, if I may, Yasmin, one thing that makes a huge difference is ensuring that women are at the decision-making table. It means, for instance, having a gender-balanced cabinet. I can tell you that this is the second time I have had the opportunity to serve in a cabinet, and in both cases the argument made for having more women at the table was often that it is good for women. In fact, I don't think that is the best argument. The argument I make is that you actually create better decisions, because when you have diversity at the table, you bring people with different perspectives. When we discuss policy issues at our cabinet table, gender-based analysis is inherently part of what we do on an ongoing basis. Within government, we are seeking to structuralize that.

[The Chair, Conservative, Tom Lukiwski]

Now we will turn to Mr. McCauley for seven minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Minister, I have a quick question on the interest. It is nice to see that the forecasted interest is coming down 11%, I think it was. You are saying that a large part of it is “the downward revision of forecasted interest rates by private sector economists”. I understand that this is in comparison to what we had forecasted previously. Was that also based solely on private sector economists, or was it government sector economists, or was it blended as in apples to apples?

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

The question specifically on the interest rate—

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, the composition of expenditures is showing...11.1% less than the 2015-16 estimates. They are saying that it is because of lower forecasted interest rates, compared to previous forecasts. Is it based on private sector forecasts? Was it private sector forecasts for the 2015-16 estimates?

[Brian Pagan, Assistant Secretary, Expenditure Management, Treasury Board Secretariat]

I am sorry. I just want to be very clear about the question. Are you speaking about interest payments against the federal debt, or are you speaking about interest payments on a particular government program?

[Kelly McCauley, Conservative, Edmonton West, AB]

It's on the 2016-17 main estimates, $2.84 billion.

[Brian Pagan]

The main estimates for 2016-17 total $250.1 billion, and—

[Kelly McCauley, Conservative, Edmonton West, AB]

“The amount to service the public debt anticipated” in 2016–17 is $2.84 billion, or 11% less than last year, based on private forecasts.

[Brian Pagan]

Yes, right. For many years now, the Department of Finance has developed its fiscal forecast by working with private sector economists. They take the consensus view of a number of economic variables: interest rates, employment rates, the exchange rate. They take that consensus view and use that for their modelling—

[Kelly McCauley, Conservative, Edmonton West, AB]

That is what I am asking. Is it apples to apples?

[Brian Pagan]

It is apples to apples. They have been doing it this way for many years now.