Public Accounts Committee on Nov. 22nd, 2022

[Nicholas Leswick]

Yes, I'll do my best.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

—or the appropriate person can.

[Nicholas Leswick]

I'm sorry. I'm trying to follow up and satisfy—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Yes, I understand, but I'm not satisfied, with all due respect.

These are the public accounts for 2021-22, so that would seem to be a lot of loans already written off. If we were a few more years out from the launch of the Canada emergency business account and a certain number of loans were determined to be unrecoverable.... It's an enormous sum of money for us to be forgiving or writing off.

The final question is, again, will the names of the businesses getting this subsidy be disclosed?

Hello? Will the names of the businesses be disclosed?

[Roch Huppé]

That is up to EDC and Global Affairs, to be honest with you. I'm not sure if they will disclose the names of the businesses in this case.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Genuis. That's your time. I'm sure this is a topic we're going to hear about again.

I'll now turn to Mr. Fragiskatos. You have the floor for five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay, thank you.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Mr. Chair.

Thank you to the witnesses, again, for coming today.

I'd like to take a first opportunity, with my questions, to get back to basics.

Canada continues to confront a difficult situation, with respected agencies such as the IMF reporting that the next few months, if not longer, could be very difficult indeed, with the possibility of a global recession. Canada would certainly be impacted by that. Canadians rightfully have questions about the social safety net they've come to rely on, particularly in the past few years.

This question would normally go to ESDC, but they are not here today. I'm looking at volume I. Page 221 begins with a lengthy overview of the Canada pension plan. I'll direct this question to Finance, because that would be my second option, as ESDC isn't here.

In the most basic terms, how stable is the CPP for this generation and future generations? Can we say there is real confidence in the sustainability of the CPP? I ask the question because I have many constituents who worry and look at challenges in the country. They are not unique to Canada, certainly, but faced by democracies in general. They have basic questions about whether EI is going to be there. Last week we talked about EI; this week I want to ask a question about the CPP.

Whether it's Deputy Minister Sabia who wants to take that up or others, I put it to you.

[Michael Sabia, Deputy Minister, Department of Finance]

Chair, thank you for that question.

I think it's a pretty straightforward answer to your question, and the straightforward answer is that I think the Canada pension plan is extremely solid, for a couple of reasons.

I think there are two sides to this: first, how, from a government and government policy point of view, both benefits and premiums are always on the radar screen and are judged very carefully; and, second—and I'd like put particular emphasis on this—the management of the Canada pension plan by the people who manage it. It is an exceptionally well-managed fund.

Having spent 11 years of my life in the fund management business in another fund—not CPPIB—I can say for that fund in particular, among all the Canadian pension funds—and they're all very good, and highly respected globally—the Canada pension plan and the investment board that manages the Canada pension plan I think are among the best in the world. I think my former place was actually there too. I can't not say that.

I think Canadians should feel extremely good about the quality of Canada's pension system. There's the CPP, the Canada pension plan itself—tell me to stop, because I don't want to take all your time—but then there are all the other elements of the infrastructure of pensions within Canada: old age security, the guaranteed income supplement, etc.

One of the strengths of public policy in Canada is the security of the social safety net for an aging population, which I think helps set the country apart on a global basis. I think it's very good.

[Peter Fragiskatos, Liberal, London North Centre, ON]

It's a very reassuring message, without question.

Even more reassuring would be to understand how CPP measures up against other pension plans in the G7. I don't know that you would have that information immediately available, but you did talk about deep experience in investment funds and seeing that over the years. Would you have anything on that?

[Michael Sabia]

I used to have all those numbers in my head, because the quality of their performance used to annoy me quite a bit when I was running the CDPQ.

I would say that their performance over a period of time.... It's not in any one year that you judge the quality of the performance of a fund of that size, whether it's five years or 10 years. Somebody once said that it's not the next quarter you manage for in that business, but the next quarter century. It's their long-term performance that counts. I think they, along with CDPQ and some other Canadian pension funds, stack up against almost anybody in the world in terms of the quality of those returns.

I would also say.... This is not a question you're asking, but to come back to the issues around environment and climate change, I think Canadian pension funds have been among the leaders in the world in staking out ground with respect to the importance of climate transition, and they have done that while at the same time generating really world-leading returns.

I think these funds are a huge national asset.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Sabia.

Go ahead, Ms. Sinclair‑Desgagné. You have two and a half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

I'd like to continue with the application of certain principles, accounting or financial, in the case of Crown corporations that act as financial institutions.

We know that the Caisse de dépôt et placement du Québec is a leader in the fight against climate change, notably through the Investor Leadership Network and organizations specializing in asset management, which are at the forefront of many principles.

Mr. Sabia, when you took up your position in the federal public service, were you shocked by the delay of the Government of Canada compared to other countries or parapublic institutions?

[Michael Sabia]

Could you explain what delay you're talking about?

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

The Government of Canada doesn't require its departments or Crown corporations to meet disclosure standards for environmental, social or governance criteria.

[Michael Sabia]

I think the comptroller general and the Auditor General have already partially answered your question.

At the Department of Finance, we're still working on ways to improve disclosure of environmental criteria. This is an important part of our thinking. We have created what I would call a sustainable finance advisory committee.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Can you give some concrete examples?

[Michael Sabia]

I'm giving you an example.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I was thinking of a more concrete example than a committee.

[Michael Sabia]

An important role of this committee is to advise us on sustainable finance. Let me give you this example of our efforts in this regard in order to answer your question, which is a very valid one.

In summary, we have some work to do, because we're in a transition, and we're seeing a steady increase in the importance of these issues. We'll continue to research and identify ways to improve our disclosure. That is certainly an important part of our priorities.

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Desjarlais, you have the floor.

You have the floor for two and a half minutes.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to quickly return to the Phoenix pay system and the pay administration in the public service.

I mentioned last week that the financial commentaries provided by the Auditor General state that 310,000 outstanding pay action requests existed as of March 31, 2022, which is an increase compared with 254,000 in the prior year ending March 31.

While some of these requests involved straightforward actions, as mentioned by the Auditor General when I asked about this last week, and while some examples are the many kinds of bank changes or general inquiries that Mr. Huppé provided us with last week, the AG also noted that “many others involve employees not being paid accurately or on time” and that “the level of outstanding requests has started to rise”.

I share the Auditor General's concern here, and I think probably most of the public service is also concerned.

My question is for Mr. Huppé and the Treasury Board directly. What would be an acceptable number of outstanding pay requests? That is the question I ended with last week.

I was hoping you could provide us with better clarity as to the appropriate levels of these kinds of pay requests, taking into account what the Auditor General mentioned before, which is that some are regular. I am talking about the ones that should be regularly processed, but how many of those are irregular? Of those irregularities, are many of them underpayments or overpayments, or is it both?

[Roch Huppé]

It's both, to be honest with you. There are some underpayments and some overpayments that need to be dealt with.

The issue is that we have highly complex cases in the queue right now. PSPC, which is the responsible department, is taking steps to manage the resources in a more efficient way to address the highly complex cases. Obviously, these complex cases sometimes take a lot of time to deal with.

On your question, as I mentioned last week, right now PSPC receives about 120,000 to 125,000 pay requests or cases on a monthly basis. Their target is to basically handle—in an acceptable time frame, obviously, within their set targets—95% of these.

One could believe, as I said, without giving you.... There's no magic number. I did reach out, to be honest with you. There's no magic number here for exactly what a queue would look like. As I said, there are different types of cases. One can anticipate that a rolling 5% or something of that nature would be in the normal zone.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Desjarlais.

We turn now to Mr. Kram. You have the floor for five minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today.

Page 75 of volume I talks a lot about how the Government of Canada has about $17.5 billion in outstanding liabilities related to remediation of contaminated sites. This was of particular interest to me because I represent a riding in Regina, Saskatchewan, and right in the middle of Regina there's an old railway yard that local politicians have been talking about cleaning up for literally as long as I can remember.

I am wondering whether the Auditor General's office was planning on auditing or investigating in any way how local or provincial governments can access and benefit—or have been accessing and benefiting from—these funds that are set aside for the remediation of contaminated sites.