Government Operations Committee on May 18th, 2017

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

It's going to take significant investments. There are investments obviously in IT and systems, but also in the inputting and management of that data and the people required to do that. We have increased resources through satellite offices. We've increased resources in Miramichi. We have increased resources in departments and agencies. We will continue to do that.

[Erin Weir, NDP, Regina—Lewvan, SK]

Can you provide a breakdown of the $140 million between those different uses?

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

In fact, there will be more investments to doing this, and I can tell you the investments reflect both the human resource and the IT challenges.

I want to come back, Mr. Weir. Where you and I are on the same page is that there is an absolute commitment to fixing this. This is one that our Prime Minister shares—

[Erin Weir, NDP, Regina—Lewvan, SK]

Is there a commitment to providing a breakdown of this $140 million? Is that something you can provide to this committee?

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

—and we will back it up with the resources that are required to do this.

[Erin Weir, NDP, Regina—Lewvan, SK]

Is that something you are prepared to provide to this committee, a breakdown of this $140 million? It struck me that the government is saying that Phoenix was supposed to save $70 million a year, and that's only going to use up two years of savings. I hope there's some methodology that's more convincing than just multiplying $70 million by two.

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

I can assure you that we are making the kind of strategic investments that we believe will help fix this, but it is very clear. From the outside looking at Phoenix, and the situation, it may look simple to you. I can tell you it's not.

[Erin Weir, NDP, Regina—Lewvan, SK]

I think it's a very complicated problem. That's why I'm asking about it.

In particular, I'm wondering if you're going to be able to come back to the committee with a breakdown of how this $140-million figure was calculated.

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

First of all, in terms of the investments we're making, we will invest and we will continue to invest, and we will get this done.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

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

It has been, from a public policy and an operational perspective, a huge challenge.

[Erin Weir, NDP, Regina—Lewvan, SK]

I appreciate that you might not have the numbers off the top of your head. That's fair enough. I'm just wondering, and I think this is, essentially, a yes or no question, whether you can come back in the next couple of weeks and give us a breakdown of that $140-million figure.

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

In fact, most of that money—

[The Vice-Chair, Liberal, Yasmin Ratansi]

Minister—

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

PSPC, as a department, is seized with this as one single department. That's where the Phoenix pay system rests. At Treasury Board, we are the employer, but PSPC operates the pay system. We work closely with them and we view our responsibility to work closely with them and to fix this, as the employer, as being very serious. But the specific operations of the Phoenix pay system rest in PSPC.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you, Minister.

We now go to seven minutes, Ms. Shanahan.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you, Madam Chair.

Hello, Mr. Brison. It is always a pleasure to welcome you to the committee.

As you know, I am also a member of the Standing Committee on Public Accounts, and we are eagerly awaiting the auditor general's report, to be released in the fall.

My riding of Châteauguay—Lacolle is not known for having a lot of federal employees. That said, a surprising number of people have told me they were let go under the previous government and have been called back to deal with this problem. Everyone is getting down to work to try to sort this problem out.

My question, which is also a concern to my fellow citizens, pertains to the Canada child benefit. I note that the Main Estimates include a change in statutory spending, that is, a reduction in the universal child care benefit. That was the old program. Our government has in fact replaced it with the Canada child benefit to put more money in the hands of the families that need it. I am talking about the real difference between fiscal measures and statutory measures.

Can you explain this change?

Could you explain more clearly to parliamentarians how this change in statutory spending can be compared to the fiscal measures that implement the Canada child benefit?

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

Thank you very much for your question, Ms. Shanahan.

The universal child care benefit was a transfer payment included in the Main Estimates. The Canada child benefit, on the other hand, is delivered through the tax system. Fiscal spending is not included in the Main Estimates.

The Main Estimates tabled in May, after the budget, would include the table reconciling the planned spending for 2017-18 with the forecasts in Budget 2017.

This is an example of the Canada child benefit. The new program is delivered through the tax system. It's a progressive measure that is phased out as family income goes up, whereas the previous universal program was delivered through program spending. As a result of that, they were accounted for differently. There is a confusion here that would be more easily explained if the main estimates followed the budget and there could be a reconciliation of those two.

In fact, the Canada child benefit has a significantly higher value. It's actually $23 billion, and again, as a progressive measure it means, for example, that a single parent making $30,000 per year with one child would be $6,000 better off, tax-free, over the previous system.

Again, one of the measures, the universal one, was accounted for differently in terms of spending versus the tax-based approach of the Canada child benefit, a progressive tax-based approach.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you for that, Minister.

I can certainly attest to the comments I've had from citizens in my riding, appreciating that they didn't get any nasty surprises at tax time. The money they received in their bank account they get to keep for their families.

Continuing on that theme around the difference between statutory and other types of spending, in 2017-18 Treasury Board is anticipating a $103-million decrease in its statutory forecast from the amount presented the year before. This decrease is due mainly to an adjustment to the employer contributions made under the Public Service Superannuation Act and other retirement legislation, and the Employment Insurance Act.

Could you or a member of your team talk to us about what the legislative amendments are behind this decrease in statutory expenditures, and what percentage of this forecasted decrease is due to an adjustment to the employer contributions? Talk to us a little bit about that.

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

I'm going to ask Renée to answer that specific question. It's in her wheelhouse.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Excellent.

[Renée LaFontaine, Assistant Secretary, Corporate Services Sector and Chief Financial Officer, Treasury Board Secretariat]

Thanks very much for the question.

In terms of the statutory payments that are made each year to make sure the public service pension plan is financially sound, there are really two types of inputs that go in. They are what the employees contribute through their paycheques, and what the employer pays in terms of their fair share of the service costs to maintain the pension plan.

In addition to that, we get actuary reports every couple of years. According to section 6 of the Public Pensions Reporting Act, those actuarial reports have to come to us. Right now our pension plan, from a financial sustainability perspective, is in a bit of a deficit, and, over years, we have been paying these lump sum annual payments to the deficit.

The last actuarial report that was provided to us and was tabled in Parliament on January 25, 2016, actually said we've been doing well in paying down these actuarial deficits and they have actually reduced the amount we have to pay by $103 million a year.

That's the explanation.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you very much.

We now go to the five-minute round.

Monsieur Clarke.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Thank you, Madam Chair.

With regard to the Phoenix fiasco, there are new excuses every month. If half the energy and time spent on blaming the previous government had been spent on finding practical solutions quickly, perhaps we would not still be talking about this today.

I would like to share with my fellow committee members a conclusion from an internal report by S.i. Systems, which was submitted to Public Services and Procurement Canada, or PSPC, in January 2016. It is similar to the Gartner report, which you commissioned in February, Mr. Brison. The internal report submitted to the department stated that all the necessary employees were working in Miramichi and in other compensation sectors. The real problem, it said, was the backlog of cases that you would not acknowledge until March and April.

Now that we have a good idea of the scope of the problem, we know that the backlog is part of it. For several months, your government has come up with a new excuse, saying that the previous Conservative government laid off 700 people. Moreover, as I said yesterday—and I would like Ms. Shanahan to hear this—, can you confirm, Mr. Brison, with due respect for your Liberal colleagues, that your government laid off 250 compensation experts from February to April 2016?

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

Thank you for your question. Once again, it is the previous government that is responsible for laying off 700 compensation professionals who processed the pay in the public system. It was a bad decision, which left our government short of human resources for the implementation of this system.

I can assure you that dealing with this problem is a priority for our government. It is our responsibility as the current government. We take our responsibilities relating to this problem very seriously. And we will resolve it with the help of PSPC, all departments, and our departmental task force.

Let me reassure you that it is our responsibility as the government to resolve this problem and that we will resolve it.