Government Operations Committee on April 12th, 2021

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

We'll now go to Ms. Vignola for six minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Mr. Purves, thank you very much for joining us today.

I have read the document entitled “TITAN GUIDANCE—COVID-19 Expenditures” and I have seen the initiatives that have been undertaken. I also saw that each department establishes its own targets and the calculation methods it uses to reach them. I wondered why the Treasury Board was not setting targets for the departments.

[Glenn Purves]

Sorry, Ms. Vignola, but when you say “targets”, are you talking about the actual spending authorities that have been set out?

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

In your speaking notes, you say: “Organizations are responsible for determining how best to identify the appropriate estimated expenditures. Organizations are best placed to provide explanations on the amounts and corresponding activities.”

Why do organizations determine their own targets? Why are there not external checks, or at very least, targets set by the government? Why are the calculation methods not standardized? It seems to me that it would make your work [technical difficulties] easier also.

[Glenn Purves]

I think what we're referring to is related to the $2.4 billion that was listed.

Perhaps, Mr. Ermuth, you have a better line of sight on this and are able to answer Ms. Vignola's question.

[Roger Ermuth, Assistant Comptroller General, Financial Management Sector, Office of the Comptroller General, Treasury Board Secretariat]

Great, thank you.

In terms of the $2.4 billion and the flexibility for departments to determine their approach towards what they're capturing above and beyond the measures, what this really comes down to is time. For example, when we are tracking the expenditures of time, for my time in a policy centre supporting COVID, I would be putting an estimate of how much in a given week or month I put towards that.

We provided high-level guidance in the package that Mr. McCauley was referring to, with some questions and answers. We provided detailed explanations of what each of those categories was. Whether [Technical difficulty—Editor] 20% and whether or not there's a threshold, we recommended that 50% of a person's time was left up to the departments, to a certain extent.

In terms of the expenditures related to the measures that Mr. Purves was talking about, that would be pulled.... The departments would be looking at what they had actually spent on those specific measures.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Are the methods used for those checks standardized?

If not, why not? It seems to me that it would be more effective and more economical, as well as providing better transparency.

[Roger Ermuth]

Yes, absolutely. One of the goals is to try to have consistent and relatable data coming in.

In terms of the program expenditures, where departments are looking at the measures in particular, its pretty clear. Some of the bigger challenges start to come in again in terms of the $2.4 billion that we referred to, where departmental management have to make best estimates of what, and how much time, would be going towards those activities.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

[Technical difficulties] basically to be more transparent.

How frequently do departments have to enter information into the Titan application? How is that information subsequently validated?

[Roger Ermuth]

The data is entered into Titan on a monthly basis. Departments collect the data from within their own departments. The data is signed off at the departmental level and then entered into Titan. When it's entered into Titan, at the Treasury Board Secretariat we then do some high-level spot reasonableness checks of the level of expenditures, looking for any anomalies, etc. But at the end of the day, again, the information is the departments' information. In terms of what and how that gets rolled up at the end of the year, again that data would be rolled into the public accounts and there's the validation that would go along with that at that time.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Is all the information entered into Titan made public?

[Roger Ermuth]

At this point, in terms of the data that we've provided in terms of the March 17 report, that's the information that we have. That's all of the data that we have rolled up in that report. I think the question becomes if there's a desire for the committee to see more information in a greater level of granularity, then we can obviously take that into account.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

Is my time up, Mr. Chair?

[The Chair, Conservative, Robert Gordon Kitchen]

Sorry, I couldn't hear you there for a second. The buzzer just went off now, so, yes, your time is completed.

Thank you, Ms. Vignola.

We'll now go to Mr. Green for six minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you.

Mr. Ermuth, you talked about reasonableness checks. Is this a process and procedure that is applied throughout the Treasury Board Secretariat for all expenditures? Does the TBS have a reasonableness check for all major projects and spending across departments?

[Roger Ermuth]

In terms of the role the Treasury Board Secretariat plays, for different levels of information, there are different levels of review. I would like to note that at the end of the year, we work very closely with our colleagues at the Office of the Auditor General to make sure that the information that is captured is audited and reviewed.

[Matthew Green, NDP, Hamilton Centre, ON]

I will give you an example.

In a previous meeting we had somebody testify that in their costing estimates for the surface combatant shipbuilding strategy, it was the Treasury Board policy not to include taxation in the overall estimates of costing.

Is that a policy of the Treasury Board Secretariat?

[Roger Ermuth]

The inclusion of the taxation is not my area of speciality, in terms of my knowing that. We can definitely get back to you on that.

[Matthew Green, NDP, Hamilton Centre, ON]

Mr. Purves would probably be able to answer that better, Mr. Chair.

Mr. Purves, do you count in your total costing for estimates the expenditures [Inaudible—Editor] process for procurement?

[Glenn Purves]

Mr. Chair, I think probably Mr. Ermuth is referring to a colleague at the OCG who might be better placed to answer that question. We would be happy to get back to with an answer on that.

[Matthew Green, NDP, Hamilton Centre, ON]

It's unclear to me how you can't answer the question about whether or not the Treasury Board Secretariat would include taxes in its considerations of reasonableness as an estimate included in procurement. Help me understand how you....

Let me ask the question another way. When you're doing reasonableness checks on procurement on contracts, is it often the case that you would include taxes in the total estimate?

[Glenn Purves]

Mr. Ermuth.

[Roger Ermuth]

Again, Mr. Chair, on this one I'll have to come back to you. In terms of the costing [Technical difficulty—Editor] for reasonableness, namely, of the costs that are being proposed, we would be able, in terms of the calculation of taxes, to be able to determine the appropriate tax rate. But as to the exact policy in terms of what or how taxes are handled through that process, as I said, I would have to come back to you.

[Matthew Green, NDP, Hamilton Centre, ON]

I'll just remind you that in the surface combat shipbuilding program, there's a material difference between what the Parliamentary Budget Officer has costed—$77–$82 billion—versus what the Department of National Defence has costed, which is [Technical difficulty—Editor]. That seems to be a material gap, which to me would be flagged in the TBS for a reasonableness check. If what I'm hearing now is that if this hasn't been the case and you're unfamiliar with that file, I look forward to your response.

I'm understand that one of the ways in which we hold departments [Technical difficulty—Editor]. Is that correct?