Government Operations Committee on May 29th, 2023

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

I want to ask what percentage of the $3.4 billion is focused on greening...roughly. I'm not going to hold you to it. I just want to get a sense of it.

[Paul Thompson]

I'd be reluctant to put a number on the table. We could certainly look at that.

As my colleague, Wojo, was suggesting, greening is a core element of many projects that we're doing, particularly on the energy source. That's the biggest bang for the buck, if you will. If we can change to lower-carbon sources of energy for heating and cooling....

We have the district heating and cooling project in the national capital area, and we are buying renewable energy certificates across the country as well. Those are the biggest sources of greenhouse gas reductions in our investment portfolio right now.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I'm out of time.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, sir.

We'll have Ms. Vignola for two and a half minutes.

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

Thank you, Mr. Chair.

I don't have much time, but I just want to share my concerns about the CP‑140 Aurora replacement. We're talking about the only aircraft currently available to replace this model, but it's already been announced that production of the replacement aircraft will end. There's no talk about the future, about what's coming or what will be available in the short and medium term. Personally, I'm concerned.

That said, I'd like to ask Mr. Perron a question.

With regard to cloud computing, there are various initiatives to improve the services provided to partner departments. I would hope that all departments are partners and that they're not in competition.

What business cloud computing services is PSPC considering authorizing? Who provides those services?

[Sony Perron]

All departments have access to cloud solutions. Across the country, eight vendors who meet our safety standards have prequalified.

The demand is very diverse. Some departments will want to use cloud computing to place outside services on these platforms, which have a great deal of elasticity. Other departments will want to use cloud platforms to build information services for the purpose of sharing information with Canadians or with external partners. There are multiple needs.

The beauty of cloud computing is its elasticity and its ability to meet the demand during the peak period, without clients having to build a monster infrastructure, so that they only pay for what is consumed.

Your question leads me to say that cloud computing has experienced significant growth. Annual expenditures in this area have gone from $3 million three years ago to just over $100 million last year.

There has been a large increase, but the needs are varied. A number of departments use cloud computing on a very specialized basis. About 4% or 5% of our application operations are in cloud computing, or even 8%, according to the latest figures I saw. So it's very variable.

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

You mentioned that eight companies had prequalified. Have any arrangements been made with them in terms of procurement? If so, are these arrangements for the next 80 years, as we've seen elsewhere?

[Sony Perron]

No, these are agreements that we have to renew periodically. We are currently developing a process to refresh those agreements. We are in the engagement phase with industry to review our tools.

Obviously, when a department deals with a vendor to install an application, we don't want to have to transition every two or three years. So we need these agreements to apply for a good period of time. This does not mean that no other vendors will be able to enter into the circle in the future.

A number of governments elsewhere in the world have reached exclusive agreements in order to have better rates and better arrangements with vendors. We'll have to take a serious look at those options to see who is giving us the best bang for our buck when we use cloud services.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Go ahead, Mr. Johns.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you again for being here and for the important work you do.

Through you, Mr. Chair, I would like to ask the witnesses if they would be willing to table the staffing plan around the payments and accounting and the federal pay administration question I had earlier, which the minister didn't have a chance to respond to, as well as the postmaster-provided model question that I had from Canada Post. I'd like to ask for permission from the chair if the committee would support that request.

[The Chair, Conservative, Kelly McCauley]

Is it agreed, colleagues?

[Some hon. members]

Agreed.

[The Chair, Conservative, Kelly McCauley]

It is so.

[Gord Johns, NDP, Courtenay—Alberni, BC]

That's super. Thank you.

Can you talk about what the process will be for assessing the 3% in cuts to public services proposed in section 6.1 of the budget? Who will be consulted and informed, and what will be the priorities and the terms of reference as well?

[Paul Thompson]

Thank you for the question.

These initiatives, as you know, were announced in the budget. They're being coordinated by the Treasury Board Secretariat, and each department will receive essentially its target for both the operating expenditure reduction and the one you mentioned earlier, Mr. Johns, on the reduction in professional services as well. Those are both being coordinated, and each department will receive its instructions, essentially, or the targets for reductions in their own spending areas in those two areas.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Will labour be consulted through this process?

[Paul Thompson]

With respect to professional services in particular?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Yes. What's the process for assessing which previously promised programs will be delayed or cancelled? Also, given that your government's commitment is cutting billions from contracting out and management consulting in the latter part of your answer, who's going to do this work moving forward? Is it coming back in-house? Where is the money in the budget for that? Was this work unnecessary all along?

[Paul Thompson]

As the minister indicated, there is this review going on regarding the use. It includes the McKinsey review, but it has broader connections into the use of management consultants more broadly. Minister Jaczek and Minister Fortier will be tabling their report on their findings of the internal review, but it will have some connections to how decisions are made and whether or not a given task should be contracted versus done in-house. These are value-for-money decisions that public servants make every day on how we are going to execute a particular task. There are a number of scenarios we talked about earlier where outside resources are needed, such as if it's a specialized skill set we don't have access to or a time-limited requirement, so—

[Gord Johns, NDP, Courtenay—Alberni, BC]

The 400% for highly paid consultants is quite outrageous, I think.

Thanks.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Johns.

Next is Mrs. Kusie, please, for five minutes, and then we'll finish up with Ms. Thompson for five.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

I'm wondering how real property spending this year will be affected by the full implementation of the common hybrid work model for the federal public service in March 2023. How will real property spending be affected, given this new policy?

[Paul Thompson]

Thank you for that excellent question.

This is a very dynamic area for all organizations to figure out what kind of office portfolio is needed for the future.

We are renewing our 10-year plan for offices and taking into account the new hybrid work model. It obviously reduces the overall requirement for office space, which is being taken into account in the decisions we make on lease renewals and what buildings in the Crown-owned portfolio we will retain versus dispose of. Obviously we see an opportunity for a fairly significant reduction of office space in the coming years.

There were opportunities even before the pandemic because we weren't using them optimally. Add on to that the hybrid work models and we see a significant opportunity to consolidate office space and at the same time pursue greening, accessibility and some of the others, in order to have a smaller footprint but be more built for purpose. That project is continuing, with every department specifying their future needs.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Perhaps you could expand on that for the committee, in terms of what the plan looks like, to first of all determine the space that might be over what is required and then the asset management of what the space that is no longer required looks like. If I could go even one step further, perhaps you could tell us what projected revenues might be five years, 10 years and 25 years out.

Could you give an overview as to what that process looks like, please?

[Paul Thompson]

We're midstream in that process, so I don't have the final results.

There will be a track of potential savings, obviously, from terminating leases that will be no longer required. There would be some revenues from the disposal of assets that are no longer required. There are also investments needed along the way. Even if you're disposing of a building, you sometimes need to invest in it to get the market value.

All of that work is being undertaken in conjunction with departments, which are specifying the actual floor space they can best anticipate needing in the coming years. There's a lot of consolidation of departmental plans that is going on and coming together into an updated strategy.

Our previous target was to reduce the portfolio by 40%. We now think we can reduce it closer to 50%, as a target.