Mr. Speaker, I have the honour of tabling and presenting, for the approval of the honourable members of this House, the main estimates of the Government of Canada for the 1996-97 fiscal year.
This is my first occasion to address this House as the President of the Treasury Board. And if I may say so, I am very pleased to be here in this capacity, although I am very aware of the many responsibilities that this position brings with it.
The control of the government's expenditures, the delivery of public services adapted to the needs of Canadians, and the well-being of a dedicated and efficient public service are all significant challenges facing the Treasury Board. They are issues that I was able to examine in depth in my former portfolio of President of the Privy Council and Minister reponsible for Public Service Renewal.
I would like to take the opportunity, today, not only to discuss the content of the estimates tabled in this House, but also the process and initiatives that preceded them.
In particular, I would like to highlight the program review begun two years ago and the prospects it offers for today, the many alternatives for delivering government services, and our vision of a renewed, dynamic, and efficient public service.
The estimates submitted to this House reflect the government's main priority-which encompasses all of the others-and that is to put Canada back on the right track a track characterized by fiscal
responsibility, by more effective program and service delivery, and by harmonious and productive relations between the federal and other levels of government.
When we assumed responsibility in 1993, the government was struggling with two major, endemic problems: a deficit and a debt that were out of control, and a lack of clarity in the roles and responsibilities of the federal government. To put the country back on the right track, we had both to reduce the budget deficit and clarify the roles, responsibilities, and priorities of the Government of Canada.
Canadians clearly would not be satisfied with cosmetic solutions. They expected us to act methodically and with good judgment. This was the framework in which we launched a comprehensive review of all federal government programs and services in 1994.
We based this review on six specific criteria. First, the criterion of public interest: Was the activity still serving the public? Second, the role of the government: Did the government have a necessary and legitimate role in this activity? Third, the criterion of federalism: Could some other level of government deliver the program more effectively? Fourth, the criterion of partnership: What activities or programs could we transfer, in whole or in part, to the private sector or a volunteer organization? Fifth, the criterion of efficiency: How can we enhance the efficiency of the activity or program? And sixth, the criterion of affordability: Can the government still afford this type of activity?
This program review has been a success on many fronts. First, it has enabled the government to reduce is spending significantly. By the end of 1998-99, program review measures will have reduced program expenditures by $9 billion.
The program review decisions have also enabled the government to refocus its efforts and to concentrate on its priorities. For example, there have been almost no reductions in the programs for aboriginal peoples and those for corrections and the justice system. In contrast we have cut spending on natural resources and defence substantially and eliminated many subsidies to business.
The program has opened the door to very interesting prospects in federal-provincial relations. In particular, federal departments have a much clearer picture of their roles and responsibilities. This new vision is based on a recognition of the federal government's true spending capacity and a clear understanding of its priorities.
Our vision was evident in last week's throne speech and the subsequent statement by the Prime Minister. We are confident that it will have a positive impact on relations between the federal and other levels of government and will strengthen Canadian unity.
I have also tabled in the House, along with the estimates, a document entitled "Getting Government Right" which summarizes the government's approach to its review process and highlights the key results to date.
In addition to redefining its role and responsibilities, the Government of Canada must also attack another fundamental issue: What are the most efficient and least costly ways to deliver its programs and services? Like most organizations in the world, the government has rethought the way it delivers its services based on what many call the "client approach."
The government continues to develop ways to measure performance. It is making more use of modern technology to reduce costs and enhance service quality. And more and more, it is seeking feedback from Canadians on the quality of the services they receive. As a service provider, we must be flexible if we are to meet the expectations of our citizens. That is why we must be open to other ways of delivering our services.
But this does not mean that the government's presence will no longer be important, because it will continue to play an active role. Alternative delivery will not be appropriate for all federal programs or services. The Treasury Board will review carefully individual programs or services put forward as candidates for alternative delivery.
The government will continue to restructure service delivery where this is a sensible thing to do. A few examples will illustrate some of the ways in which we have experimented with alternative service delivery.
For example, for some years the government has been shifting its role from an operator of the transportation system to focus on developing policy and legislation and enforcing standards for safety and security. This has led to the transfer of airports to local airport authorities and the proposed sale of Transport Canada's air navigation system to a not for profit operator.
The sale of both Petro-Canada and CN Rail illustrates situations where it makes sense to privatize government assets or activities that the public sector no longer needs to retain.
Using an alternative delivery model, Canada business service centres provide single window services to small businesses from 21 federal departments and agencies and related provincial services.
Recent announcements have enhanced the development of new approaches to services. The government has announced the cre-
ation of three new organizations, a parks agency, a single food inspection service and a Canada revenue commission. These organizations, which will remain within the public sector, will be established under separate legislation.
As our experience with these new structures increases, we expect other departments and agencies to submit more candidates for alternative program delivery.
In addition, the Treasury Board has recently established a new policy for employee takeovers which will make it easier for groups of employees to take over activities their departments previously did. We already have some early examples of this process. We see real potential here to privatize or commercialize certain functions in a way that protects the jobs of former public service employees and yet allows the government to reduce costs.
Our approach to service delivery is pragmatic. Our goal is to identify flexible and efficient delivery options so that we can continue to offer Canadians the services they expect.
Each case must be evaluated on its merits and the solution made to measure in the spirit of innovation, efficiency and service to the client.
The past six years have been difficult ones for the Public Service of Canada. As a former career public service employee, I am very much aware of this fact. The significant reductions in the number of jobs have created uncertainty and anxiety among employees. For those who remain, there has been no collective bargaining and their workloads have increased. Salary increases have been suspended for five of the last six years.
I am pleased to say, that we can now see the light at the end of the tunnel. Not only do we wish to treat our employees fairly, we what them to be motivated and feel valued for the work they do for the public service.
In the near future, we will introduce measures that will help to recognize our employees' contributions and modernize our human resources practices.
I am pleased to announce that the Public Sector Compensation Act will not be extended and will expire as scheduled. This act was introduced as a temporary measure in 1991, and has been subsequently extended and broadened in its application. It has been an important component of accomplishing much needed fiscal objectives.
As the Minister of Finance confirmed in the budget yesterday, the government is on track with its fiscal targets. Now it is time to resume more sustainable compensation practices. This means that, beginning this June, we will lift the two-year suspension of annual increments, as was promised when this provision was introduced.
At the same time, we will reintroduce performance pay, the equivalent of such increments for more senior employees, which has been suspended since 1991.
Because of the timing of the application of the Public Sector Compensation Act, some junior ranks in the Canadian Forces have a salary shorfall when compared with other public service employees. We will compensate these groups by lifting the freeze on them sooner. My colleague, the hon. David Collenette, will announce details shortly.
The government is committed to returning to collective bargaining in a way that is fair to employees and to taxpayers. Many critics say collective bargaining cannot work in the present public sector environment. The success we have had with most of the unions in negotiating terms for alternative service delivery gives us cause for optimism. It shows that collectively it is possible to find better solutions to difficult issues when both sides are prepared to make a reasonable compromise, the very essence of collective bargaining.
We need to bring together at one table issues such as wages, benefits and employment security which have a cost for the employer and economic value for employees rather than dealing with them separately. Where we can increase efficiency by streamlining existing policies and practices such as the travel and foreign service directives, we will share the savings at the table.
We will ask the unions to sit down with us shortly to design such a process. However, given the difficult times ahead of us we must be cautious. Obviously with our continued need for fiscal responsibility we cannot leave determining the results of collective bargaining to a third party unaccountable to Parliament. For this reason we will introduce legislation shortly to suspend the binding arbitration in collective bargaining for the next three years.
It is clear that both the services of government and how these services are delivered must change. While it is not possible to guarantee continuing employment for all public service employees, we want to protect employees when arrangements are made to transfer activities out of public service departments to alternative service delivery structures, whether they are inside or outside the public sector.
We will introduce legislation to provide fair and reasonable conditions for employees who transfer to a new employer in such situations. We will enhance these arrangements for employees in unions with which we have entered into agreements on such transfers.
We will also introduce a series of amendments to the Public Service Superannuation Act to provide for pension vesting and portability arrangements that meet the requirements of the Pensions Benefits Standards Act. This will give public service em-
ployees the same range of pension options that other employees have when they leave their employees.
Yesterday, my colleague, the Minister of Finance, noted in the budget that more employment reductions are likely. We do not anticipate than these reductions will be as big as those resulting from previous decisions. Departments will decide during the coming months where to make these reductions for 1998-99 and establish what impact the reductions will have on employment.
We do not expect to have to extend the early Departure Incentive and early retirement incentive programs beyond their current expiry dates.
The Public Service of Canada has always been known for its competency, integrity, and hard work. I am confident that the men and women of the public service will continue to display these qualities of professionalism.
I would now like to highlight the key elements of the 1996-97 Estimates. This year's estimates package responds to concerns of parliamentarians and the auditor general about the need to make the estimates document more strategic, easier to read, and less oriented to accounting.
We have included in the package six pilot Part IIIs that test the new approach. Part III has been simplified and arranged to bring together in one section all the information related to departmental performance. We shall continue to work with parliamentarians and others to evaluate this new way of presenting information. If it is effective, we shall update the information and table more departmental performance reports in the fall.
The estimates provide details to support $157 billion in expenditure authorities for the 1996-97 fiscal year. Of this total, $45 billion must be voted and authorized through an appropriation act. The remaining $112 billion is statutory and has been approved previously by Parliament in various pieces of legislation. All those statutory programs do not require Parliament's approval.
The estimates provide information on how these programs are proceeding. Although the Minister of Finance presented planned program spending of $109 billion in his budget yesterday, this figure and the total in the estimates differ significantly.
In particular, the estimates do not include any program spending changes that require legislation. These technical differences between the estimates and budget figures can obscure the information parliamentarians need to examine departmental spending plans.
Therefore this year I am introducing a new document entitled "Program Expenditure Detail: A Profile of Departmental Spending" which provides information on program expenditures at departmental and agency levels. This document will undoubtedly help people who use the estimates to understand the implications of the program review and other changes in spending plans for the coming fiscal year.
The move to a smaller, more effective federal government means spending on programs and services will continue to drop. The government plans to spend $109 billion on programs and services in the coming year. This is almost $5 billion or about 4.4 per cent less than in 1995-96.
Let us now take a look at the challenge ahead. This government has taken a straightforward approach in its efforts to put Canada on the right track. First, we must get the deficit under control so that we have a reasonable margin to manoeuver in responding to the issues facing Canadians. Second, we must enhance our ability to assess and respond to the new pressures on Canadian society.
Finally, by relying on a motivated and dynamic public service, we must provide Canadians with a government that knows how to deliver its programs and services more efficiently and more flexibly. I know we are on the right track.