Government Operations Committee on May 12th, 2021

[The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)), Conservative, Robert Gordon Kitchen]

I call this meeting to order.

Welcome to meeting number 31 of the House of Commons Standing Committee on Government Operations and Estimates.

The committee is meeting today at 4:42 p.m. Ottawa time to hear from the President of the Treasury Board and officials on the main estimates and departmental plans for 2021-22.

I'd like to take this opportunity to remind all participants in this meeting that taking screenshots or photos of your screen is not permitted.

To ensure an orderly meeting, I would like to outline a few rules to follow.

Interpretation in this video conference will work very much as it does in a regular committee meeting. You have the choice at the bottom of your screen of choosing “floor”, “English” or “French”.

Before speaking, please wait until I recognize you by name. When you are ready to speak, you may click on your microphone icon to activate your mike. When you are not speaking, your mike should be on mute.

To raise a point of order during the meeting, committee members should ensure their microphone is unmuted and say “point of order” to get the chair's attention.

The clerk and the analysts are participating in the meeting virtually today. If you need to speak with them during the meeting, please email them through the committee email address. The clerk may also be reached by using his cellphone number.

For those people who are participating in the committee room, please note that masks are required unless you are seated and when physical distancing is not possible.

With that said, I will now invite the President of the Treasury Board to make his opening statement.

Mr. Duclos, please go ahead.

[Jean-Yves Duclos, Liberal, President of the Treasury Board]

Thank you, Mr. Chair.

I would first like to thank the committee for inviting me to discuss the Main Estimates 2021-2022 and the Treasury Board Secretariat's Departmental Plan 2021-2022.

I am accompanied today by some senior officials in my department, whom I will briefly introduce. They are: Glenn Purves, Assistant Secretary, Expenditure Management Sector, Roger Ermuth, Assistant Comptroller General, Financial Management Sector, Office of the Comptroller General, Karen Cahill, Assistant Secretary and Chief Financial Officer, Sonya Read, Acting Assistant Secretary, Digital and Services Policy, and Tolga Yalkin, Assistant Deputy Minister, Workplace Policies and Services.

The 2021-22 main estimates seek funding for the continuation of previously approved programs and services, as well as investments to support Canadians through the COVID-19 pandemic and to establish essential conditions for a successful economic recovery. These investments include economic support to Canadian citizens and businesses, vaccine funding, expanded support for pandemic-related mental health tools, virtual care and many others.

The main estimates provide information on $342.2 billion in proposed spending for 123 organizations. This can be further broken down into $141.9 billion in voted expenditures and $200.3 billion in statutory expenditures already authorized through existing legislation. Some $22.7 billion is related to the COVID-19 pandemic response. This includes just over $10 billion for the Canada recovery benefit, the Canada recovery sickness benefit and the Canada recovery caregiving benefit.

I would like to point out some significant changes in statutory spending from last year's main estimates. These include payments to individuals under the Canada Recovery Benefits Act, which I just mentioned. Other changes of those are updates to major transfer payments, notably benefits for the elderly and the Canada health transfer, and increased climate action incentive payments published in the 2020 fall economic statement.

The main estimates exclude certain items listed in the 2020 fall economic statement which do not require annual parliamentary approval, such as the Canada emergency wage subsidy and employment insurance.

For my own department, the Treasury Board Secretariat, the expenditures listed in the Main Estimates 2021-2022 include $3.7 billion for items such as government contingencies, government-wide initiatives, paylist requirements, the operating budget carry forward, the capital budget carry forward, and expenditures related to compensation.

The remainder of the Treasury Board Secretariat's expenditures are to continue to enhance the clarity and consistency of financial and performance reporting and to support the government's response to the pandemic.

The budget also contains a little more than $3 billion for our responsibilities as an employer. These are payments with respect to public service pensions, benefits and insurance, including the employer's contributions to health insurance, salary insurance and life insurance premiums.

The department's expenditures will also be used to prepare the public service for the future, in matters such as diversity, inclusion and accessibility, and to ensue compliance with the official languages legislation.

The funds are also used for negotiations with public sector unions, and to lead the implementation of the Pay Equity Act. These activities are described in more detail in the Treasury Board Secretariat's departmental plan 2021-2022, which, as I understand it, has piqued the committee's interest.

Departmental plans play a fundamental role in the expenditure cycle by outlining and describing organizational priorities linked to the funding sought through the main estimates. The departmental plans set out the objectives and expected results for departments and how they will achieve these results throughout the year.

In the case of the Treasury Board Secretariat, I would like to highlight a few of these commitments. For 2021-22, the secretariat will support the government's COVID-19 pandemic response by providing additional guidance to departments for implementing policies, programs and initiatives related to the response.

In collaboration with Finance Canada, the secretariat will also track the impact of the government's fiscal response to inform and support decision-making and investments going forward.

Other important objectives include reducing greenhouse gas emissions from federal operations and recruiting people to the public service from communities across Canada.

In addition, the secretariat actively works to support the creation of healthy, safe and inclusive workplaces, and to speed up government efforts to achieve a public service that is representative of the Canadian population it serves.

My department is also committed to efforts to reform regulations in order to help Canadian companies be more competitive, to improve transparency, to reduce the administrative burden, and to harmonize regulations.

These reforms will be undertaken with the assurance that we will be protecting the environment and the health and safety of Canadians.

In conclusion, the priorities set out in the secretariat's departmental plan and the investments requested in the main estimates reflect the priorities of our government and of Canadians.

We continue to prioritize the way these estimates are presented, with extensive explanatory documentation which is readily accessible to parliamentarians and Canadians alike online.

Thank you again for your kind invitation to speak with you today. My officials and I would be delighted to answer any questions you may have.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Minister. I appreciate your comments.

We'll now go into our first round of questioning. We will start with Mr. Paul-Hus for six minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Good afternoon, Mr. Minister.

My regards also to the officials with you today.

Mr. Duclos, you are the President of the Treasury Board, as well as an economist. In the document that I am about to show you, you will see figure 1, dealing with the composition of expenditures in the Main Estimates 2021-2022. You will see a green circle, indicating the cost of servicing the debt.

This year's budget shows $21 billion for servicing the debt.

Does that concern you?

[Jean-Yves Duclos, Liberal, Québec, QC]

Thank you, Mr. Paul-Hus, and all my colleagues on the committee.

I am indeed an economist by training and I am also President of the Treasury Board. As such, my responsibility is to ensure that the Government of Canada's funds and efforts are directed to where the pandemic makes it important.

As an economist, I also understand, as do many others, that, if we had not invested quickly and massively to support Canadians and their companies, the result would have been terrible. We would have found ourselves not only in an extraordinary economic crisis, but also in a social crisis…

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Duclos, you know that I do not have a lot of time.

I want to know whether it concerns you. I especially want to know whether you have assessed the impact that a 1% increase in the interest rate could have on Canada's finances.

[Jean-Yves Duclos, Liberal, Québec, QC]

We know two things about that.

First, the interest to GDP ratio in Canada is the lowest it has been for almost a century.

Second, our financial and budgetary conditions are among the most enviable in the developed countries. It is important…

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

So your answer is that you are not concerned about the medium-term impact of a possible rise in interest rates for Canada and its taxpayers.

As the parliamentary budget officer has indicated, an increase of only 1% would have impacts on society as a whole and on all taxpayers.

Does that concern you?

[Jean-Yves Duclos, Liberal, Québec, QC]

The concern we absolutely must have at the moment is to get out of this crisis as strongly as we can. That is exactly what will allow us to avoid accumulating deficits, which would become greater and last longer. Those deficits would lead us into a fiscal and economic slump that we absolutely want to avoid.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

That is why it is important to be careful of unnecessary expenditures as we come out of the crisis. We could agree on that.

According to the monthly data that the committee has requested, the department estimates that it needs an additional $1.8 billion to hire additional employees or to pay for overtime.

From those amounts requested to hire additional employees or to pay for overtime, why are you not providing danger pay for the employees of the Correctional Service of Canada? Those who work in our penitentiaries are required to be there around the clock and they receive no danger pay. Can you explain that?

[Jean-Yves Duclos, Liberal, Québec, QC]

Let me make two points.

First, I would invite you to be more specific in pointing out which aspect of the main estimates you are referring to.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

An additional $1.8 billion has been requested to hire additional employees or to pay for overtime.

The unions have met with you and have asked why Correctional Service of Canada officers are not entitled to danger pay, because they are being asked to work during a pandemic.

Canadian Forces members who were assigned to long-term care facilities were entitled to danger pay, the same pay they are entitled to when they are deployed in a theatre of operations.

Why are our Correctional Service of Canada officers not entitled to that possibility?

[Jean-Yves Duclos, Liberal, Québec, QC]

Once again, let me make two points.

First, if you would like to have more information on the $1.8 billion and on the management of human resources during the pandemic, that is perfectly legitimate. However, I invite you to put the question to Tolga Yalkin, one of our senior officials, who can provide—

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

My question was specifically about Correctional Service of Canada officers. Could they receive that danger pay?

[Jean-Yves Duclos, Liberal, Québec, QC]

Very good. Thank you for making the distinction between a question about the $1.8 billion and a question about the Correctional Service of Canada officers.

Minister Blair and I have actually met with them. We are in close contact, because, as you know, the work those officers do is not only extremely important but also very difficult during the pandemic.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Can anything be done for them, Mr. Minister, yes or no?

We do not have much time. Is it possible to help them?

[Jean-Yves Duclos, Liberal, Québec, QC]

Certainly.

Minister Blair has had more direct discussions than I have with the representatives of Correctional Service of Canada officers. He would be extremely pleased to appear before the committee to talk to you about it more.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you.

My next question is about advance payments.

The Guide to Advance Payments states the following: “When the government pays in advance, it takes on greater risk and has fewer recourse options if the agreement is not respected.”

Have you warned departments about the risks of advance payments made during the pandemic?

[Jean-Yves Duclos, Liberal, Québec, QC]

Certainly.

During the pandemic, we had to be quick and effective at the same time, as you suggest. The need for speed sometimes required us to proceed more nimbly than in normal times. For example, it might have taken us months, even years, to pay the Canada emergency response benefit to workers who no longer had any support—

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

In terms of advance payments to companies, we know that hundreds of millions of dollars have been paid out. Last week, we found out that a company had received $81 million for equipment from China, or somewhere. That is not acceptable.

Now that we are talking about control measures for advance payments, what happened that allowed companies with no expertise in the medical field to receive so much money but not be able to prove that the goods bought by the Government of Canada were acceptable?

[Jean-Yves Duclos, Liberal, Québec, QC]

That is actually an excellent comment. In a situation where things have to be done quickly, we must also put mechanisms in place to make sure that the payments are made appropriately.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

So what happened last year? Is it because the controls and the mechanisms were not effective?

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Paul-Hus.

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

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

Mr. Chair, I believe I will be filling in for Mr. Drouin.

[The Chair, Conservative, Robert Gordon Kitchen]

Okay, we'll go to Mr. Kusmierczyk.