We make sure that it's spent, I guess.
Thank you, Mr. Chair.
I would like to thank the committee for inviting us to appear before you today. My colleagues have been introduced. Thank you for doing that.
If it pleases the committee, in lieu of an opening statement we will provide you with a brief presentation on the government's management agenda and the role of the Treasury Board Secretariat.
I have provided a deck, which I'll try to refer to as we go through this. Rod Monette will also speak to part of this deck. I will focus my remarks on what we see as our management agenda within the government and the public service and on efforts to make government more effective for Canadians.
I will outline the strategic approach we are taking in the four areas that are cited on page 2 of the deck: spending on the right priorities, management performance in support of innovation, modernizing people management, and building systems to support effective operations.
Rod will then describe for you the innovations in financial management, including what the chair already referred to, which is our policy on internal audits. His office is currently leading and playing a vital role in supporting deputy heads as we move towards a more principles-based, risk-sensitive, and results-focused management culture.
I will conclude with some of the challenges we face as we move to implement this agenda.
I should also note that we have provided as annexes some additional information in three areas you had expressed a particular interest in: the estimates process, Policy Suite Renewal, and the Management Accountability Framework.
Overall, I think more effective government means a number of things: first, focusing spending on the right priorities, programs, and policies; secondly, strengthening the capacity to respond to the changes and challenges affecting Canadians, and this is a particularly difficult time for Canadians; and finally, developing a workplace equipped with the people and tools to deliver high-quality services.
Making government more effective for Canadians will require a renewed management regime based on the following concepts. First, the regime should be based on principles, not characterized by excessive and ineffective rules that emphasize process over performance. Secondly, we need to be more risk sensitive, to make sure that rules or regulations that we've put in place are proportional to the risks they are intended to address and do not stifle innovation and creativity. Finally, we need a management regime that is more results focused.
We need to build on this Canadian advantage. We believe, from the point of view of public sector management, that we are a world leader using results-based information systematically in resource allocation decisions to align resources with high-performing or priority programming.
What is our overall strategic approach? At its core, management is about aligning people and resources to a common purpose and delivering the best results for Canadians effectively and efficiently.
Our management agenda is built on four components that align our resources to the goal of increasing the effectiveness of government for Canadians.
More specifically, there are four key areas.
First, we must spend on the right priorities. Here there is a need for a more disciplined and broad-based approach, which we feel we are now implementing.
Second, we need to improve management performance in support of innovation. Here the concern is that oversight and control are currently overly centralized and somewhat burdensome, inhibiting judgment, discretion, and innovation.
Third, on the people management side, efforts to position the public service as a workplace of choice are somewhat constrained by our ability to attract and retain talent and to enable and motivate workers to perform.
Finally, we need operating systems to support effective operations. Our internal and external delivery is supported by somewhat complex and outdated processes and IT systems.
As you can see, these challenges cover all three of the Treasury Board's central roles as government and management office, budget office, and employer.
We have taken actions to strengthen the government's ability to identify and address priorities and spending plans within the fiscal limits established by the budget each year. We have in fact renewed our expenditure management system. We have a new expenditure management system that's been in place for a couple of years. It has three key areas.
First, there is the whole question of managing to results for all spending. Here, in order to achieve better results for Canadians, all programs and spending must have clear performance indicators that demonstrate how results should be achieved and success measured. Sometimes it is more difficult to establish those results or outcomes as part of governing programming, but I think we have made huge strides in this area. We are continuing to work with departments to mature our capacity to define and measure program results. This results-based information is the key to unlocking departmental capacity to align resources so as to clearly define results.
The second area is what we call upfront discipline for new spending.
We are working to ensure greater rigour for new spending proposals. New spending proposals will be linked to the government's priorities and be assessed against existing programs and results.
Work in this area is benefiting from the wealth of financial and non-financial information now available through various tools we've been working on on performance management: increasing our whole evaluation capacity, our audit capacity; assessment of overall management capacity, which we do through our tool called the management accountability framework; and strategic reviews.
That brings me to the third area of how we're improving expenditure management: strategic reviews of existing spending. How do you bring better discipline to new spending? How do you bring better discipline to existing spending? Each year we are reviewing, through the Treasury Board, between 20% and 25% of program spending to ensure alignment with government priorities and assessing effectiveness, efficiency, and value for money. Every department that's required to do this must review every program they have--it's part of the comprehensiveness test--looking at programs that are perhaps no longer relevant and where funding could be reallocated to meet other priorities. As noted in budget 2009, savings identified in the latest round of our review for that year, for 2008, will total about $586 million by 2011-12, allowing for reallocation of funds to meet other government priorities.
The next area is slide 6, managing performance in support of innovation. This is the second pillar of our management agenda. Let me discuss some of the actions we have taken to create room, we think, for public servants and government to develop innovative solutions to address the needs of Canadians.
The so-called web of rules is a case of government, we would say, overregulating itself. The web of rules initiative aims to eliminate what we see as ineffective and unnecessary rules; streamline our reporting burden, which we talked about somewhat the last time I was here; and modernize our administrative processes and systems.
The box highlights some initiatives being carried out by TBS and departments in what is truly a government-wide effort. I think it's fair to say that we will always need rules. Government is run by a set of rules. It's a question of having the right rules to deal with the right issues and the right risks.
A key element of the web of rules initiative is what we call the Treasury Board's policy suite renewal. What we have done here is look at all the policies departments must comply with, all the policy instruments to ensure clarity of roles and the streamlining of requirements. We are in the process of simplifying and strengthening the rules, reducing the number of policies from about 180 to 44, 90% of which will be completed by the end of this fiscal year.
On page 7, addressing the rules themselves is necessary, but not sufficient to generate a management regime conducive to innovation.
Rethinking oversight and ensuring that risk management is in place to support intelligent risk-taking and innovation is critical.
In a dynamic and complex environment, intelligent risk-taking plays a significant role in strengthening government capacity to recognize, accommodate, and capitalize on new challenges and opportunities. If you have an organization that's governed too much by rules, you really are not managing to any risk; you're trying to avoid all risk. And we think that has been a bridge too far.
We are changing how TB does business with departments to enable it to target oversight primarily to the highest risk areas.
Departments will have increased capacity and autonomy to innovate and take risks, which is crucial to providing Canadians with effective government in a challenging and rapidly changing economic environment. If they can determine or indicate to us they have the management capacity in certain areas, such as procurement for example, then they'll be given more authorities and there will be fewer requirements to come to the Treasury Board to seek approvals.
Articulating management expectations and standards and assessing capacity is also required to promote a culture of intelligent risk-taking.
And on a related note, our management accountability framework, or MAF, allows the government to identify areas that are generating high or low levels of management performance. We've been doing this assessment now for six years. We think we have a very sophisticated tool that can assess trends in management performance across government over time and within individual departments and agencies.
We think this helps to create a management agenda more attuned and responsive to different needs and capacities. I would also say that many countries around the world are now coming to assess and look at our tool here as to how we assess performance overall.
Slide 8 looks at people management.
The third pillar of our management agenda is the modernization of people management.
I understand that today the committee did not want to specifically address human resources matters at this session, and so in the interests of optimizing our time today, I will not address this subject in detail. As you may know, Michelle d'Auray has just been appointed to the new position of chief human resources officer within the secretariat. Perhaps she would be prepared to come and talk about human resource management at a future meeting.
Slide 9 is on building systems to support effective operations. Again, effective government requires an operating environment that helps rather than hinders public servants in realizing their potential and ensures that attention and resources are achieving results for Canadians.
Currently we are plagued--I'd say that would be the best word--with a patchwork of disparate and outdated processes, systems, and technology. It was all built up department by department. I know this committee has talked a lot about shared services, and we do feel that is the way to go. Instead of modernizing and investing in IT systems department by department, how can we bring some of these together to do that?
We are currently developing a government-wide service strategy and options to modernize service delivery across areas of management. We are looking at innovative approaches such as bringing departments together into clusters or more centrally shared services, as I've already noted, with various degrees of outsourcing—I think that's another option that many provinces are using, and we feel we could do more in that area--and opportunities for greater public-private partnership in this area.
We're also working on some early deliverables, one being to look at the whole question of pay modernization--which I believe this committee has had some discussions on--and modernizing that legacy system. We're looking at desktop services. We have so many desktops; how can we perhaps look at managing those more collectively across government?
Those would be some of the comments in that area.
Let me turn to the Comptroller General on the financial management side.