NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES

COMITÉ PERMANENT DES RESSOURCES NATURELLES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 28, 1997

• 1107

[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Welcome to our first session in what might be called a briefing session.

We have with us today Jim Stobbe, assistant deputy minister, government operational service, who is with Public Works and Government Services Canada. With him is Denis Paquet, manager, parliamentary affairs. I believe you may have others—Charles is with you as well, I think, Jim.

Colleagues, we have approximately an hour with officials from Public Works and Government Services, and then we'll follow with an hour with Privy Council witnesses.

The purpose of these sessions is of a briefing nature so that we can become more educated—for lack of a better phrase—as to the function of the department and the current issues of the day. I have asked Mr. Stobbe to speak for up to 10 minutes so that there will be lots of time for questions from members.

Without any further ado, we will commence, and Mr. Stobbe, we'll ask you to make some opening remarks.

Mr. Jim Stobbe (Assistant Deputy Minister, Government Operational Service, Department of Public Works and Government Services): Thank you, Mr. Chairman. We have distributed a deck that is an overview of the department. I've been asked to speak to an overview of the department and its various mandates.

What I would propose is to go through very briefly each slide in the deck. There are 11 of them, and it shouldn't take too long.

The Department of Public Works and Government Services was created in 1993 by merging Public Works Canada, the former Department of Supply and Services, the government telecommunications agency from the Department of Communications, and the translation bureau from the Secretary of State. There were about 19,000 people at the time.

The new department is a common service agency and provides common services to all line departments. There are about 158 line departments and agencies that we service, the largest ones being Revenue Canada, Human Resources Development, and the Department of National Defence.

• 1110

The department is the landlord. It's the chief procurement officer. It's the receiver general. It provides translation services, various real property services, consulting and audit services, and it has a significant management information technology component.

There are currently about 11,500 people in the department. They operate out of the National Capital Region, plus five regional offices across the country in Halifax, Montreal, Toronto, Edmonton, and Vancouver. They manage expenditures of about $5.3 billion: $1.7 billion is appropriated to the department and the other $3.6 billion is appropriated in other government departments, and those funds are made available to the department to provide services.

The services provided by the department are provided for in a whole myriad of statutes. The Public Works and Government Services Canada Act, Federal Real Property Act, the Financial Administration Act, the Public Service Superannuation Act, and the Municipal Grants Act all provide the mandate for the department's operations.

The department's goal as a common service agency is to provide best value for taxpayers, recognizing the importance of government values of prudence, probity, and transparency. Our motto with respect to this is that by doing what we do best, we allow line departments to do what they do best, which is deliver government programs. By doing it centrally, we are able to not only realize economies of scale and create centres of expertise, but we're also able to provide a level playing field for such things as contracting and provision of government-wide infrastructure.

The department has eight key business lines. The largest of those is real property services—and I'll get into that in a little bit. We're also the receiver general, the treasurer, and the chief accountant. We're the government's paymaster; we provide compensation to public servants and former public servants. In supply operations we're the chief procurement officer. Government telecommunications and informatics services provide a large part of the government electronic infrastructure.

We have a group of professionals, Consulting and Audit Canada, who provide consulting and audit services to other departments. The translation bureau provides simultaneous translation to government departments, and indeed to the House of Commons. We provide operational support to the department in terms of its administrative functions.

We did have another business line, Canada Communication Group, which performed the functions of the Queen's Printer. Canada Communication Group was successfully privatized last year, and we're in the process of doing the wind-up of that privatization.

As the custodian of real property, we're the custodian of about $7 billion worth of holdings. That's about one-third of the government total. Basically we have six million square metres of space: about 54% of that is crown owned, about 36% of it is leased, and about 10% of it is leased to purchase. We are the mandated supplier of office accommodation for the Government of Canada. We provide accommodation for 160,000 employees in 2,500 locations across the country. We administer 3,000 leases, with rents of over $500 million a year. We have annual expenditures in this program of about $1.2 billion, of which $270 million is capital to keep government assets in good order. We administer payments under the Municipal Grants Act, which is about a $420 million statutory program, of which the Public Works and Government Services Canada component is $135 million and $285 million reflects holdings by other government custodians.

• 1115

As the Receiver General for Canada, we bank and disburse all public moneys. The annual cashflow in fact is about $1.3 trillion. We maintain the accounts of Canada; we prepare the government's annual financial statements and account for all government expenditures. We manage the daily cash balances of the Government of Canada, which over the past year have been about $5.4 billion, which we keep in interest-bearing accounts. We manage the accounting systems, which last year processed about $150 billion in budgetary expenditures and $141 billion in budgetary revenues. We issue about 190 million payments, on behalf of all government departments, the biggest departments being Human Resources Development and Revenue Canada. About 60% of those payments or about 115 million of them are now by direct deposit. We save about 50¢ in direct costs every time we convert a cheque to direct deposit.

As the government's paymaster, we administer payroll for about 240,000 public servants. We also provide payrolls to the RCMP, to the House of Commons. We provide pension services to former public servants, former members of the Canadian Forces, and former members of the RCMP and the House of Commons. We administer the public service health, dental, and disability insurance plans.

As the government procurement agency, we annually contract for about $8 billion worth of goods and services in about 17,000 categories. We issue about 90,000 contracts annually. We manage major procurements under major crown projects, largely on behalf of the Department of National Defence. We are very focused on ensuring access and fairness throughout the process. We rely very heavily on electronic advertising and an open and competitive bidding process.

Here is a sidebar comment. We changed the supplier of our electronic advertising system yesterday. The open bidding system has been replaced by a system called—and I don't know why it's called this—MERX, which is a cheaper and much more user-friendly system. It went live yesterday.

The department also provides a series of other services, such as information and telecommunications. Not only do they provide information and telecommunications support to the department but they also provide a telecommunications infrastructure for the government as a whole. As for translation, we have about 1,100 professionals involved in translation services. We dispose of crown assets, both those that are surplus and those that are acquired under the seized property program. We manage the travel and the relocation contracts. We provide a full range of real estate and property management services. We are the government centre of expertise for architecture and engineering services. I spoke about Consulting and Audit Canada. We have a standards group that establishes standards that we use in procurements, and we provide operational support.

• 1120

In terms of the major challenges facing the department, we have to complete our program review. There has been a substantial reduction in terms of the department as a result of program review. It has largely involved managing human resources. Since the department was created, we've gone from 19,000 employees to 11,500, while at the same time maintaining service levels.

We have to adapt to government reforms, whether it's alternate service delivery and increased flexibility in choice for government or changes to the mandating legislation, such as could occur in the area of pensions. We have to adapt to technology change. Basically, all of our services rely heavily on technology, and clearly our department is key to reducing the overall cost of government.

So those are my remarks, Mr. Chairman. If there are questions about the department, I'd be happy to attempt to answer them. If I don't have the expertise, we'd be happy to find the answer for you.

The Chairman: Thank you for staying very close to the ten minutes we had allocated for witnesses' presentation.

We'll invite questions from members, and we'll start with an opposition member. Is there a question from Reform, Mr. Gouk?

Mr. Jim Gouk (West Kootenay—Okanagan, Ref.): Yes, I have a couple. I'm going to try to keep them very brief so that we can get moving.

On slide 8, you talk in terms of the bidding process. What is the low-end dollar amount that requires a competitive bid? Secondly, after a contract has been let, what is the dollar amount that you can go to for extras before requiring re-tender?

Mr. Jim Stobbe: Largely as a result of the work of one of the predecessors of this committee, the threshold for requiring a bid is $25,000. It had been $30,000, but the predecessor of this committee had recommended to lower that amount to $25,000, and the Treasury Board agreed. So I think the answer to the first part of your question is $25,000.

The answer to your second part is not quite as simple. It really depends on what type of good or service you're acquiring—and you'll understand that in my role in the department I'm the receiver general and not the chief procurement agent—and it depends on how you've acquired it in the first place. If you have contracted using the electronic bidding process, the delegated authority, both to our minister and to other ministers, is higher than if you used another competitive process, which is higher still than if you used a non-competitive process.

So if I can answer your question in terms of what most ministers of the crown have for services, ministers of the crown are delegated by Treasury Board authority to enter new contracts for services if they've used a de-electronic bidding system, up to $2 million.

Mr. Jim Gouk: Let me just make sure I have this straight. What I was asking was this: If a contract is already let and there's an overage—

Mr. Jim Stobbe: That's right, and we also have amendment authority. I believe that's what you're referring to. Ministers of the crown have authority to enter into a services contract of up to $2 million if that opportunity is competitively bid on in the electronic bidding system. They can subsequently amend that by up to $1 million.

• 1125

Mr. Jim Gouk: I've lost you somewhere. We are saying they have authority to enter into contracts of $2 million, but they still have to go to competitive bidding.

Mr. Jim Stobbe: They have to go to competitive bidding, and then they can enter a contract based on the results of that competitive process.

Mr. Jim Gouk: What is the $2 million? Is that a ceiling?

Mr. Jim Stobbe: That's a ceiling that ministers have. After that, they must come through the Department of Public Works and Government Services.

Mr. Jim Gouk: And then they can amend that by up to how much?

Mr. Jim Stobbe: Up to $1 million.

Mr. Jim Gouk: That's without further bids.

Mr. Jim Stobbe: Yes, without further bids.

Mr. Jim Gouk: That's interesting.

Mr. Jim Stobbe: For services contracts non-competitively, ministers of the crown have the authority to enter a non-competitive contract for services of up to $100,000 should they choose to do so, and they can amend that by $50,000 after it has been awarded. If the contract process is competitive using the electronic bidding system, our minister, as minister in charge of procurement, has the authority to enter into a contract for $20 million. He can subsequently amend that for $10 million.

Mr. Jim Gouk: This is a single instance, but it suggests others. I ran across a defence construction contract that had a pre-qualification screening. They invited people to pre-qualify, and a big, fairly reputable, company was eliminated because it did not provide the information Defence Canada was looking for. I saw the document Defence Canada had used, and it was a narrative letter that had to be interpreted in terms of what was really being looked for. Obviously, this company interpreted wrongly. Is there a move towards very clear, point-form standardization for pre-qualification and requests for tender?

Mr. Jim Stobbe: I'll provide a general answer, but we'd really have to get my colleague Alan Williams to address the specifics on any particular contract.

We are constantly seeking ways to better define the requirements so that when the request for proposal goes out competitively firms that are interested in bidding on it have a very good idea about what the requirement is. It's quite simple—actually, it's never simple. On goods procurement, it's easier than it is on services procurement. With goods, tables are tables, chairs are chairs. On services, we're often contracting for value added, so it's a lot more difficult to be as precise as possible. We are, however, constantly striving to improve the precision with which we describe the task for which we're seeking proposals.

Mr. Jim Gouk: The last question I have is on slide 11, which talks about increased choice in flexibility for departments. I have to assume that it's broader, and I'm looking at it from the perspective right now of a member of Parliament.

There are quite a number of supplies that we can get through the department at no cost to our MOB, but there is no possible way that you can supply fax paper, pads, pens, and so on, by procuring them here and sending them halfway across the country on an ad hoc order. They can be bought more cheaply locally, but then they of course go on the member's budget. I would assume this type of thing happens in other departments as well.

Is there some rule by which we can equalize this if, for example, I can save the government money by procuring something in British Columbia for my office, but not be penalized by having it put on my budget when it otherwise wouldn't be? In other words, level the playing field so that we can help the public service save money.

Mr. Jim Stobbe: I'm not an expert on budgetary processes for the House of Commons, but as part of the program review exercise for our department, we have gotten out of the stocked item supply business. We no longer procure, centrally warehouse, and ship to individual departments or branches in departments across the country. We're out of that business.

• 1130

More often, we now enter into supply arrangements with suppliers of office supplies. They can be local arrangements in which the arrangement is bid competitively and a standing offer is set up for the winning bid. It could be local or it could be national if there is a national supplier. Departments would draw down on that standing offer in accordance with the conditions that were part of the contract and competitive process.

The Chairman: Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chair.

Just to clarify something in my own mind, Mr. Stobbe, is Mr. Alan Williams one of your peers?

Mr. Jim Stobbe: That's correct. He's the assistant deputy minister of supply.

Mr. Roy Cullen: So if we had questions about procurement or real property services, I guess you're not the person to—-

Mr. Jim Stobbe: I can speak generally to the topics, but if you want to get into the detail on procurement, we could arrange to have Mr. Williams come in to talk to the committee. If you want to get into detail on real property, I would suggest that we have Mr. Nurse come in to talk to the committee. He is our assistant deputy minister of real property services. It was my understanding that we wanted an overview of the department today.

Mr. Roy Cullen: Okay.

I have a few questions. I'll start with a couple on the year 2000. I gather Government Services is the lead department on converting computer systems to this year 2000.

Mr. Jim Stobbe: We're the lead department for converting our computer systems to the year 2000. We have a myriad of computer systems. For instance, public service payroll is highly automated. The systems we use to issue payments to the 190 million receiver general payments a year are very highly automated. The systems we use to consolidate all of the cash deposited to the receiver general across the country are very highly automated. If those systems aren't year 2000-compliant on January 1, 2000, we're in a little bit of trouble.

Mr. Roy Cullen: I appreciate that little bit of clarification—and we are also in a little bit of trouble, particularly going into an election year.

I'm wondering about two things. First of all, is there a functional lead on this? If you're looking at converting all departments, there's a certain finite number of resources—programmers, systems engineers, systems analysts. Who has that functional lead on this? With respect to government services, I'd appreciate your candid comments, because there's still time to move if things are not moving at a speed that we would like. Are we going to be ready? That's my question.

Mr. Jim Stobbe: Before I get to your question, I should add that we have a procurement role in terms of acquiring the resources necessary to ensure the conversion of all systems to the year 2000. There is a very great demand for systems analysts who can do this work, as you point out. We have therefore developed a procurement strategy to ensure that those people will be there when the government needs them.

Specifically, is there a functional lead? Yes, there is. The functional lead rests with the Treasury Board and the chief information officer, who is an officer and an official of the Treasury Board Secretariat.

Mr. Roy Cullen: So we could ask him or her that question.

Will you be ready with respect to government services?

Mr. Jim Stobbe: We have a very detailed plan. We believe all of our systems will be converted by April 1, 1999. That is where our plan is headed. It requires a lot of effort, but not all of our systems need to be upgraded.

• 1135

We have a plan, it's under way, and we're on target.

One of the big questions is when the vendors will be ready, because a lot of the things we do are dependent on vendors such as IBM and Microsoft and all of the vendors of the operating software we use. Their software has to be year 2000 compliant. Getting all of those pieces in order is a massive undertaking, but we're confident that our services will be there.

Mr. Roy Cullen: I'm going to leave that one because I sense some of my colleagues want to pick up on it too and I think that would useful.

That sounded like a fairly guarded answer. Obviously you're not a crystal ball gazer, but it's a pretty important issue.

With respect to government bidding and procurement, I looked through the estimates and I see you're attempting to make the OBS, the open bidding service or whatever it's called, more user-friendly. From my discussions with private sector people I know...although it's a great tool they still find it cumbersome. So I think that's a useful direction.

Another aspect is the access of small business to the government procurement scheme of things. As you know, not all small businesses are geared up as well as some large businesses are.

Could you comment on those two elements?

Mr. Jim Stobbe: There are two things. As I mentioned earlier, the open bidding service, which has been the vehicle through which government procurement opportunities were transmitted electronically, was replaced yesterday. A new service is up. It's called MERX. It is provided not only to the federal government but also to a series of provincial governments by a company called CEBRA, which is a subsidiary of the Bank of Montreal. That—

Mr. Roy Cullen: What is that acronym?

Mr. Jim Stobbe: MERX. I don't think it is an acronym; I think it's just a word.

That service relies very heavily on Internet technology. It is by all accounts much easier for suppliers to use. It's focused and it's a lot cheaper. A full service operation right now will cost about $108 a year. If you subscribe to the bid matching service, each bid match is 50¢, whereas the OBS was $395 a year, including 20 matches. So, first, it's cheaper, and second, the technology's a lot different.

In fact, just to browse government procurement opportunities for both the federal government and the provincial governments that have opted to join it, you don't need to register and you don't need to pay anything. You get free browsing capacity. Only when you want to get the documents on a particular bid do you have to register and pay a fee. There's a lot more information publicly available.

In fact, Mr. Chairman, if the committee really wants to see it, we could arrange for a demonstration of MERX for the committee members. I know the previous committee was interested in the open bidding system, and we did do a demonstration on that as well. It's Internet-driven, and my understanding is that small and medium-sized businesses like this technology a lot better than the previous technology.

Also in terms of small and medium-sized businesses, during government technology week held last week in Ottawa the minister announced a roll-out of Contracts Canada, which is another initiative that was essentially sponsored by the predecessor of this committee.

• 1140

This is an attempt by 17 government departments to provide a single focus for procurement opportunities for all business, but largely focused on small and medium-sized business.

Indeed, we have a brochure here that we could make available to members that deals basically with selling to government. It provides a single window for suppliers to register to do business with Public Works and Government Services Canada, and that will be extended to other departments. It provides an Internet site that contains all of the contracting awards that the government has made over the last year, and you can go in and see what contracts were let for what departments and who won them.

So there's a tremendous amount of additional information associated with Contracts Canada.

The Chairman: Obviously, if people across Canada can have better access to government contracts, that is better for all.

Mrs. Vautour.

Ms. Angela Vautour (Beauséjour—Petitcodiac, NDP): What factors are taken into consideration when deciding who gets a contract in relation to taxpayers' dollars? I'll give you an example of where I'm going with this.

There was a contract in New Brunswick that was denied because of $1.79. I'm trying to see what the problem is, whether the decision was wrong, once it's reviewed. Can something be improved there to make sure that things like that don't happen and people do get the best value for their dollars?

At the end it is cost-fixed—because I don't think that one is.

Mr. Jim Stobbe: First, the minister has asked for a third-party review on that particular contract. In a couple of weeks we will have the results of that review.

To answer your question more generally, best value to the crown is absolutely the settlement criterion that's used in awarding contracts. If two proposals are exactly equal, the cheapest one will win the contract every time.

Ms. Angela Vautour: And in this case?

Mr. Jim Stobbe: In this case the proposal was $1.79 more expensive than the other one.

Ms. Angela Vautour: So obviously you are only looking at the proposal, not at the cost attached to changing a contract.

Mr. Jim Stobbe: I don't know in this specific case whether there was a requirement in the contract to address that or not. Presumably that will come out in the third-party review. But you could presumably structure a request for a proposal that would have to take that into consideration.

The Chairman: Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): I understand there was a permanent reduction of approximately 7,500 people effected in the workforce.

Mr. Jim Stobbe: That's correct.

Mr. Carmen Provenzano: What would be the corresponding payroll savings that relate to that reduction?

Mr. Jim Stobbe: I think our average salary is about $40,000 a year.

Mr. Carmen Provenzano: Just a ballpark figure.

Mr. Jim Stobbe: About $280 million, unless my mathematics is wrong.

Mr. Carmen Provenzano: I guess I'm not going to get too far with my overview.

What percentage of the services that were provided by those 7,500 people who were cut from the workforce are part of the out-source or transferred? What would be the cost of the out-sourcing, and what's the net benefit realized from the reduction?

Mr. Jim Stobbe: I could give you a more precise figure if I could go back to the books, but it will be around 1,200 that were privatized or outsourced in one form or another.

• 1145

The biggest piece of that is the Canada Communication Group, where there were about 1,000 people and we were losing money. The Canada Communication Group ran on a revolving fund, which means they sold their services to other government departments. They were losing money.

As part of the sale, the company that bought Canada Communication Group provided job offers to 650 some employees, I believe. Those employees are now employed by the company that bought Canada Communication Group, so there are about 1,000 there.

There are also some contracting-out situations in our information technology and information management group, called GTIS, and this is largely in the area of cheque production, where we have contracted out for people to come in and run our machines on a cyclical basis, as we have cyclical requirements.

But that is not the end of it. We have just completed a request for proposal to look at the management of 18 packages of properties and buildings that the crown manages, and we have proposals in today that are currently being assessed to do that. Currently about 700 employees of the department are doing that work. We expect that the proposals we've received from the private sector will be evaluated over the course of the winter, and if the criteria are beneficial to the crown, we will proceed with contracting perhaps around April of next year.

The request for proposal is structured in such a way that potential suppliers of this property management service are encouraged to do what the St. Joseph Corporation did when it bought Canada Communication Group, which is to offer jobs to the existing employees, and we have every expectation that they will.

Mr. Carmen Provenzano: But my question really is, is there information currently available that allows the calculation of net economic benefits where a workforce is reduced? Here we have 7,500 employees who have been permanently cut from the workforce. Is there information currently available that will make us understand what the net economic benefit is?

Mr. Jim Stobbe: We could undertake to provide information that would do that. The vast majority of these reductions have been due to consolidations. When these three departments came together, overhead was consolidated quite dramatically and had no impact on service at all. When we did program review, there were further consolidations and efficiency gains, largely due to a technology dividend.

We have gone from 150 million cheques a year to about 80 million cheques a year, and that had a considerable impact on how many cheque production sites we had, how many had to be manned, and all of that. There are efficiency gains to be made on that, outside of paper and postage savings.

• 1150

So I would say the majority of these reductions have been straight efficiency moves, and not related to a change in the way the service is delivered. But we could undertake to provide to the committee where these 7,500 FTE reductions have taken place and what the circumstances were.

The Chairman: I think you had a point of order, Jim Gouk.

Mr. Jim Gouk: Yes. I just wanted to ensure that when that answer is provided, it's provided through the committee and circulated to all members.

The Chairman: Okay, Mr. Stobbe?

Carmen, were you done?

Mr. Carmen Provenzano: Yes.

The Chairman: Jerry Pickard, please.

Mr. Jerry Pickard (Kent—Essex, Lib.): Thank you very much.

The year 2000 controversy on updating has become a major issue across the country, and certainly everywhere. It seems to me the problem is created because we have a four-digit year in our computers. Why can't we move to a two-digit year and deal with those problems, i.e. instead of dealing with 2000, we deal with 97, 98, 99, 00, 01, 02? Why can't we simplify computer systems? It will cause no overlap. Nothing goes beyond the two digits in our computer systems today.

Mr. Jim Stobbe: I'm not a technology expert, but my understanding of the problem is that most of the legacy systems in operation today use two digits, and when the year 2000 comes up and it says “00”, it does not compute. They don't know whether it's 1900, 2000, or 2200.

Mr. Jerry Pickard: That's my point. Here you're talking about a four-digit system. Revert to a two-digit system.

Mr. Jim Stobbe: We're out of two digits, in my understanding. I'm sorry. We have an expert on information technology who runs the government telecommunications and informatics service and he could probably provide you and the committee with a lot more detail on the year 2000 bug. But it's not unique to government; that's my understanding. It's recognized that....

Mr. Jerry Pickard: Okay.

Mr. Jim Stobbe: Sorry.

Mr. Jerry Pickard: There's no need to go any further with that, but it just seems to me a simple solution to move to—

Mr. Denis Paquet (Manager, Parliamentary Affairs, Department of Public Works and Government Services): From what I've read, it's on a two-digit system. That's the problem precisely. If it were in four digits, it would just jump to the year 2000. With two digits, 00 means we're back in 1900. The computer won't differentiate between the last century and the next one; that's the problem. The way I understand it, we are on a two-digit system, and that's the problem. But I'll have more information for you if you want.

Mr. Jerry Pickard: The second question is this. The Auditor General has taken issue with our contracting process and all that is going about. It's my understanding that we have moved tremendously forward with regard to transparency, with regard to having outside sources analyse our system and move that forward. Maybe you could give us some comments about exactly what Public Works has done in the last year or year and a half in order to improve that contract bid process.

The Auditor General suggested that Public Works had to get its act together. I'm certain there are aspects you could bring forward showing that you have moved tremendously forward in that area.

• 1155

Mr. Jim Stobbe: First, not all government contracting is done by Public Works and Government Services Canada.

Certainly in services contracting, as I pointed out earlier, a significant amount of authority lies with all ministers of the crown. In regard to goods, indeed, our minister, the Minister of Public Works and Government Services Canada, has the majority of the authority. In fact delegation of authority to acquire goods is limited to $5,000 in other government departments.

With respect to the contracting that Public Works and Government Services Canada has done, a lot of attention has been focused on how much of it is sole-sourced—how much of it is done without a competitive process. Over the last several years, in the contracting that Public Works and Government Services Canada has done, we've focused on reducing the amount that's done without a competitive process, and indeed it has gone down. I believe it's gone from 50% to 35% of the total contracting we do that is now not subject to the competitive process.

That doesn't mean it's not made public. Indeed, when we procure under a sole-source arrangement, we provide what we call an advanced contract award notification on the electronic bidding system so that people know we are about to let a contract without a competitive process. If there is a supplier who demonstrates that they are able to do that, then we'll compete it. So we've really focused on trying to reduce the amount that is done without a competitive process.

Having said that, it must be recognized that there are things for which there is only one supplier. We only have one supplier of CF-18s. We only have one supplier of an awful lot of our military hardware. Those requirements of our suppliers clearly are sole-sourced.

But where there is an opportunity for a competitive bid process, it has been our focus to try to maximize the extent to which the competitive process is used in awarding contracts. And to date we have been successful; we've been moving in the right direction.

Mr. Jerry Pickard: So our sole-sourcing is basically in certain areas that can only be serviced by one type of equipment, such as CF-18s, as you mentioned? Replacement parts for that are usually sole-serviced because there's only one supplier of that material.

Mr. Jim Stobbe: Certainly those situations require sole-sourcing. I wouldn't want to tell you those situations are the only ones that are sole-sourced. Clearly there is still sole-sourcing going on, but it's our focus to try to reduce that.

Mr. Jerry Pickard: Thank you, Mr. Stobbe.

The Chairman: We'll wind up with the last two questioners, starting with Madame Girard-Bujold, and then Ovid Jackson.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): At the start, you talked about Canada Communication Group and said that it was privatized in March 1997. Did you say that this privatization agreement led to a reduction of 7,000 FTEs, but that the new company has made job offers to 620 people?

[English]

Mr. Jim Stobbe: St. Joseph Corporation made job offers to about 650 of the employees at Canada Communication Group, and they're all there working at St. Joseph.

[Translation]

Ms. Jocelyne Girard-Bujold: Initially, how many employees were there?

[English]

Mr. Jim Stobbe: At the start there were about 1,000 in the Canada Communication Group.

[Translation]

Ms. Jocelyne Girard-Bujold: You said that the privatization is not completed. When will it be?

[English]

Mr. Jim Stobbe: The privatization has been completed. The bookkeeping associated with closing a business.... It was run as a business, with a set of financial statements and income and disbursements. We're in the process of getting rid of the assets at sale, the process of collecting outstanding accounts receivable. That has been going on throughout the year. By the end of this fiscal year all the books will be closed and Canada Communication Group as an entity within government will be taken off the books.

• 1045

[Translation]

Ms. Jocelyne Girard-Bujold: Second, you said that you were currently negotiating proposals regarding real estate services. What do you mean by that?

[English]

Mr. Jim Stobbe: During the summer the government identified 13 opportunities. Each opportunity represents a bundle of properties Public Works and Government Services Canada manages for the government. We identified 13 opportunities for the private sector to take over real property management. Basically, each one of these opportunities represents managing a selection of buildings for which Public Works and Government Services Canada is the custodian in each province.

The requirements of the proposal were that the company that would make proposals would have to do it 10% more cheaply than Public Works and Government Services Canada currently does it. Part of the evaluation criteria was that companies that were interested in doing this, if they offered jobs to existing public servants who were doing them, would get more consideration than companies that didn't.

Those opportunities were posted last summer, and we got a lot of interest. Indeed, for the 13 packages we got 62 bids across the country, from I believe 14 different companies. We're currently evaluating those bids to see if they meet the conditions we require, with a target that if there is a proposal in here that meets the requirements we will post it. We might be in a place to contract for those by the spring. Currently 750 public servants are doing work that could be affected by this process.

The Chairman: Mr. Jackson.

Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Thank you very much, Mr. Chairman.

Carmen Provenzano, in his question.... I think Mr. Stobbe could have explained a little better exactly what program review is in his department, because I think that's the driver for all the departments in getting the best service for Canadians.

Could you quickly explain what it meant in your department to get this functioning and to give the best service to Canadians?

Mr. Jim Stobbe: Program review touched basically every part of the mandate of our department. Because by and large we are not a department that delivers programs to individual Canadians, with the exception of receiver general payments, the focus of our program review exercise was on efficiency and how we could do the job more cheaply, with fewer resources, without impacting on our ability to deliver to client departments.

• 1205

The biggest component of the reduction was in real property services, where over the life of program review we are going to reduce $150 million from the cost of managing real property in the department.

Another big component of program review was the shift out of paper-based delivery to electronics. What that allowed us to do, especially in the area of payments, was to move from 7 cheque production centres to 4. It allowed us to move from 13 paymaster offices across the country to 4, because we didn't need the capacity to process paper any more.

At the same time, service levels on delivery of payments to Canadians, Canada pension plan and old age security, didn't change at all.

Public servants continued to get paid, so really, the focus on those areas was very much how to deliver the same services cheaper. Indeed, that has been the watchword throughout the program review.

I mentioned earlier that we got out of our stocked-item supply program. We found that we couldn't deliver it as well as the private sector could deliver those things to line departments, so we closed our stocked-item supply. That was about 300-odd employees.

Finally, we've concentrated on overhead—that is, the amount of management support we need to run the department. That has been a target really since the department has been formed. There have been substantial overhead reductions in the organization since Public Works and Government Services Canada was created.

The Chairman: Thank you, Mr. Jackson, and Mr. Stobbe and Mr. Paquet, thank you for your time with us. No doubt this will provide fodder for some future business in due course of time.

Colleagues, we'll take a one-minute adjournment as we switch witnesses.

• 1208

• 1210

The Chairman: Colleagues, I would invite you back to the table and we'll continue today's briefings.

We have officials from the Privy Council Office, led by Ronald Bilodeau, associate secretary to the cabinet and deputy clerk of the Privy Council.

Mr. Bilodeau, I'd ask you to introduce your colleagues, and, if you would, to bless us with roughly a 10-minute presentation, allowing members sufficient time to ask questions thereafter.

Mr. Ronald Bilodeau (Associate Secretary to the Cabinet and Deputy Clerk of the Privy Council, Privy Council Office): Thank you, Mr. Chairman.

I will be very brief and I will turn to my colleagues to provide more information.

I want to introduce my colleagues: Madam Elizabeth Nadeau, assistant deputy minister, corporate affairs, Service ministériel; Dr. Peter Harrison, who's the head of the La Relève task force for the reform of the public service; and Mr. Michael Horgan, deputy secretary, intergovernmental affairs for policy and communications.

Mr. Chairman, I'll initially talk very briefly about the office, because I know members are generally familiar with it. The office was set up right after Confederation initially to assist the Prime Minister with cabinet meetings, notes, and minutes. Over the years it grew as very much a cabinet secretariat office.

[Translation]

The clerk of the Privy Council has three responsibilities: she is the Prime Minister's Deputy Minister, the Secretary to the Cabinet and the Head of the Public Service of Canada. The position of clerk, as senior public servant, includes in fact three mandates.

The clerk provides advice to the Prime Minister regarding the Cabinet's operations, the organization of government initiatives— including the appointment of senior officials—in terms of developing government policies and generally coordinating the department's business.

[English]

The clerk of the Privy Council has the functional responsibilities to advise the Prime Minister on all of this, the cabinet machinery, the senior appointments, and co-ordination of the activities of various departments.

We also support four other ministers who are in the Prime Minister's portfolio: the deputy prime minister, the president of the Privy Council and minister of intergovernmental affairs, the House leader in the House of Commons, and the leader of the government in the Senate. There is support for those ministerial functions. As well, we provide corporate support for the commissions of inquiries and the royal commissions when they are established.

There are basically six secretariats. Mr. Chairman, members have received a document with the org chart and the titles of everyone. I think that provides background to what I'm talking about. We're essentially talking about an operation that has about 500 officials in it, 200 of whom are in corporate support to the Prime Minister, other ministers, the Privy Council, and to royal commissions, and 300 who support the other missions of the cabinet office, senior appointments, security and intelligence, and other advice to the Prime Minister. I think it gives you a little bit of a scoping of the size of the office.

Perhaps I should turn to my colleagues briefly to supplement my remarks, Mr. Chairman, on each of the two areas we've chosen to cover with you this morning: the public service La Relève initiative, and then the intergovernmental sector, which is a fairly large office inside the Privy Council Office. It's an important area to cover with you.

[Translation]

Mr. Peter Harrison (Associate Deputy Minister and Head, La Relève Task Force, Privy Council Office): Mr. Chairman, thank you, Mr. Bilodeau.

[English]

In our fourth annual report to the Prime Minister on the Public Service of Canada, the clerk of the Privy Council and secretary to the cabinet addressed the La Relève, which is a call to action and a commitment to the renewal of human resource management within the public service.

• 1215

[Translation]

She was describing the quiet crisis under way in the public service today due to a prolonged period of fundamental change, deep staff cuts, salary restrictions, the aging of staff and the active recruiting by the private sector of public service professionals.

[English]

In the last eight months, Mr. Chairman, significant progress has been made. Deputy minister champions were nominated to provide leadership and action on key corporate initiatives. These include the implementation of an accelerated development program for executives, the creation of a pre-qualified pool, and the establishment of a collective management regime at the assistant deputy minister level.

There have also been improvements to entry-level development programs such as the management trainee program and the career assignment program. There's been significant support for various groups of employees throughout the public service and there's been a consultation process with administrative and support staff, which was called the Workforce of the Future and was held from coast to coast in six different cities across the country. It focused on pride and recognition in the public service and a broad dialogue on values and ethics.

La relève plans were submitted and developed by every federal department and central agency. Six major functional communities, which means, for example, communications, comptrollership, human resources, informatics, policy, and science and technology communities, also looked at the challenges they face. In addition, regional councils, which is the heads of federal departments in each of the provinces, looked at the challenges they face.

[Translation]

Last April and May, a committee of deputy ministers chaired by the clerk studied the briefs and the plans which were submitted. Central agencies noted problems identified throughout the system and looked for ways to turn things around whenever possible.

The report entitled "Valuing Our People" was published following consultations across the country with 600 public servants.

We also produced a CD-ROM combining the 8,000 pages of analysis and presentations made by the Department, including regional briefs and broad-based initiatives. These documents have been widely distributed within the public service and outside.

[English]

At their retreat in July 1997 deputy ministers reviewed the progress. They reviewed the information on CD-ROM and defined a course of action for the next three years.

On October 15, just several days ago, the publication of the document “La Relève: A Commitment to Action” took place. Copies have been provided to the committee, and I will provide copies of the other documents I've mentioned.

This report takes stock of what has been done to date. It describes what will be done in order to meet the challenge of ensuring we have in place a public service that is world class and capable of serving citizens and supporting democratic institutions into the next millennium.

As the deputies indicate in the collective message that appears at the beginning of the document, and which each of them signed, this document isn't a master plan; it isn't a blueprint, but rather it's a beginning. It's a base on which employees and managers at all levels are invited to build. Many of the actions contained therein, Mr. Chairman—and there are in the order of well over 1,000 specific actions—are under way, and others will be happening shortly.

Furthermore, regular progress reports will be produced so that we can assess the extent to which progress has been made. Much remains to be done to ensure that the public service continues to be a modern and vibrant institution and capable of meeting the needs of Canada and of Canadians now and in the future.

[Translation]

Mr. Chairman, following the audience, we'll provide you with the documents we have mentioned.

[English]

Mr. Michael Horgan (Deputy Secretary, International Policy and Communications, Privy Council Office): I have just been asked to give you a little bit of an oversight of the intergovernmental affairs part of PCO. Clearly, we're the part of the Privy Council Office that provides support and advice on policies and communications related to federal-provincial relations, the evolution of the Canadian federation, Canadian unity, and on aboriginal affairs.

We're headed by a deputy minister who has really a dual reporting relationship. On the one hand, we report through the deputy minister to the Minister of Intergovernmental Affairs. At the same time, as with the rest of the Privy Council Office, we report through the clerk to the Prime Minister and cabinet. In addition, we also serve the minister who is designated responsible for Métis and non-status Indians.

• 1220

Intergovernmental affairs itself is broken down into two groups: an intergovernmental operations component and an intergovernmental policy and communications component. The intergovernmental operations side is really responsible for providing an integrated view of the federal government's relations with the provinces across the entire government policy agenda. For example, there's a provincial analysis group that provides advice to the minister and to the clerk and the Prime Minister on the overall management of federal-provincial relations. This group would monitor the situation in the provinces and territories, monitor issues, advise on trends. These would be the groups that deal with the intergovernmental affairs departments of the provincial governments.

This group would also have responsibility for organizing such things as first ministers meetings and briefing the Prime Minister on bilateral meetings he's having with other premiers.

There's also a co-ordination and advisory services group. This is really a group that provides service to other government departments with advice on intergovernmental negotiations on major issues. For example, in the past we've had negotiations with provinces on labour market agreements, environmental harmonization. So this would be a group within PCO that advises departments on the intergovernmental aspects of those negotiations and to provide an integrated view from a federal-provincial perspective.

There's a strategic analysis group on intergovernmental operations that really provides the government with advice on non-constitutional means for modernizing the Canadian federation and non-constitutional issues related to the government's approach to national unity.

Finally, in the intergovernmental operations side of the intergovernmental affairs branch there's the aboriginal affairs secretariat, which is headed by an assistant deputy minister. This provides advice and support on aboriginal policy and on constitutional issues related to aboriginal peoples, as well as on the federal-provincial dimension of aboriginal relations. This group would be responsible for co-ordinating intergovernmental consultations on federal policy development in the area of aboriginal affairs. It also supports a minister. At this point it's Mr. Goodale who is designated as the federal government's interlocutor for the Métis and non-status Indians. This group is essentially a secretariat serving that minister in his function. That's the intergovernmental operations side.

Turning to intergovernmental policy and communications, which I'm the deputy secretary for, we're really responsible for providing strategic planning and advice on issues more directly related to Canadian unity.

We have a strategic planning group that concerns itself with broad issues related to unity, supporting the government in achieving its unity objectives. This would be a group, for example, that would keep track of what's going on with things like the nine premiers who met in Calgary. They had a declaration of principles, and we sort of monitor what is following on in terms of that process.

There's a constitutional affairs division, which is responsible for advice on constitutional change per se. For example, this would be the group that supports the minister in terms of sponsoring the Quebec and Newfoundland schools' bilateral amendments that are ongoing at the moment.

We have a policy and research group that undertakes medium- to long-term analysis on issues related to federalism in Canada and elsewhere. This is a research group monitoring what's going on, liaising with the academic community, the outside policy community, on issues related to federalism and federalism studies.

Finally, we have a communications group that serves the Minister of Intergovernmental Affairs. It is a sort of communications staff that administers such things as speech writing, press releases, parliamentary affairs, question period, letters, the standard kind of thing that a communications group in a department does for a minister. In addition, that group would provide advice to other government departments on sort of intergovernmental communications issues on government-wide activities and initiatives.

Essentially, that's a brief overview of what we do in the intergovernmental affairs part of PCO.

The Chairman: Thank you, Mr. Horgan.

I think we can proceed to questions. Mr. Gouk and then Mr. Cullen.

Mr. Jim Gouk: I have one area of questions. I've been quickly looking at this book entitled “La Relève: Valuing Our People”, and it talks here of the need to have salaries that attract the brightest and the best. It goes on to discuss such other needed things as workplace design, technology, all to make things better for the people.

• 1225

This is probably a good initiative, given that morale, to a greater or lesser degree, tends to be a bit low in the public service at the present time. I was wondering how you square that against the fact that your salary has been frozen for the last six years and the department has just finished handing out $12 million worth of bonuses to top management.

Mr. Ronald Bilodeau: Mr. Chairman, one of the biggest challenges, obviously, is motivating everyone who works in the public service to stick to their job and be satisfied with the job over the long term. In the short term, as the government has had to reduce expenditures in a number of areas, there have been significant reductions in the numbers of public servants and the pay has largely been frozen for many years. As we come out of this period of restraint, it's very much our hope that for all levels—not just executives but entry levels, people who have been in for a few years who aspire to become executives—the recompense, the rewards, will more reflect their contribution to Canadian society.

As you've seen, some of the collective groups have decided to sign agreements coming out of the post-freeze period, and we are very encouraged by that. There have been some groups that have been without review of their remuneration for many years. Some have had minor adjustments, but largely it's been pretty flat, Mr. Chairman. We're hoping that clearly for executives...we must face the retention of executives as well. As you know, the private sector is drawing on many of our colleagues and has quite lucrative packages to offer them, so we're hoping that at all levels remuneration and compensation will better reflect the contribution people are making.

Peter, I don't know if you have a more focused answer, but there is, very much in the spirit of La Relève, Mr. Chairman, that notion of pride of service and compensation and remuneration that reflects the contribution at all levels, not just executives.

The Chairman: Mr. Harrison.

Mr. Peter Harrison: To add briefly to Mr. Bilodeau's comment, it's quite clear that the question of remuneration is an issue. I think what we've found is that it's not the only issue. It is not just an issue of compensation, but what people are looking for throughout the public service is a working environment whereby they can be more efficient, so they can deliver services to citizens more effectively.

What you find in this document is in fact a series of statements and recommendations from the grass roots. This is from the 600 people I mentioned across the country who were asked, what is the challenge you as individuals face, and how do you need to be supported in terms of doing that? Clearly, one of the things that comes out of this is that the significant number of things that would help in making the Public Service of Canada more efficient and effective can already be done. They do not require shifts in legislation. They do not require changes to regulations. What they do require is a focus on managing the public service differently in a modern environment.

Mr. Jim Gouk: The problem I see is that there may be all kinds of things of concern to employees, like technology and workplace design, as mentioned in your booklet, and of course remuneration. When everybody is frozen, it just becomes one of several items, but when they remain frozen while significant bonuses are given out to other people, rightly or wrongly—and I would suggest in many cases more on the right side than the wrong side. A lot of working-level people say that top managers are the co-ordinators of our output but we have to put this effort out. Without our effort going out, the goals and priorities of the department aren't going to be realized and we're not getting recognized for that. It becomes more of an issue when the mould where everybody's in a freeze is broken and you suddenly start getting these bonuses, and we're talking fairly sizeable bonuses in many cases, too.

Do you not feel this is a step backward from what you're trying to realize in the value of our people, the initiative you've taken to recognize the need to make these people feel better about their work and be more motivated, by jumping the gun on new salaries and offering these kinds of bonuses prior to the time you are able to do anything for working-level people?

Mr. Ronald Bilodeau: Mr. Chairman, the sequencing is important, and over a short period it will be important to do that review for all the groups. As I mentioned, it is under way for those who are covered by collective agreements. Some bonuses were paid for the fiscal year 1996-97. On balance, they do not represent large amounts compared to the bonus systems offered in the private sector, but they do represent meaningful adjustment in some cases.

• 1230

So as Mr. Harrison has indicated, it's not just a question of compensation. Compensation is very much one of the elements—compensation at all levels.

The sequencing might have been different. It happened to be coming out in that order. It was covered by legislation. In some cases, the public service pay freeze was covered by statute, so it was not possible for the government to get at the groups covered before other groups.

I think, Mr. Chairman, the point there is that the sequencing is important, and the efficiency and equity of the process involved.

The Chairman: Thank you, Mr. Gouk.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman.

Thank you, gentlemen, and Ms. Nadeau.

The three areas I'd like to cover, although we may not have time unless we have a second round, are the role of the Privy Council Office in policy-making; public sector renewal, which we've touched on; and devolution, the changing role of the federal government from a policy perspective.

Coming back to the role of the PCO in policy-making—and I recognize that policy-making at the federal level is a highly complicated and complex process—I wonder if you could shed some light on the role of the PCO in making policy, with a particular emphasis on the interaction of the PCO with the PMO, the interaction of the PCO with the ministers' offices, with deputy ministers.

Maybe you could describe your role, as you see it, in terms of adding value. Is it an integrating role? Is it a co-ordinating role? Is it adding value in the sense of specific policies, even if there is not a co-ordinating aspect to it?

Mr. Ronald Bilodeau: Mr. Chairman, the document reflects that the biggest task of the Privy Council is to support the Prime Minister and the cabinet structure. There are secretariats that do that from week to week and month to month.

They operate on both a short- and long-term basis. They help organize meetings of ministers where they discuss policy issues and they look at the longer term to implement the Speech from the Throne and other expressions of policy of the government.

So it's both long and short term. There's a social committee, there's an economic committee, and there's the full cabinet. So it's through that work in helping to advise on policy, helping the chairpersons of those committees, and helping the Prime Minister, obviously, chair the cabinet.

It's expressed in terms of some analysis, but mostly it's co-ordination of work done by the departments and assessment of the work done by the departments, helping them along, working horizontally. Departments tend to operate very vertically, and the Privy Council Office operates more horizontally to bring the economic sector departments together and the social sector departments together.

In practice, officials in the Privy Council will work with the chairperson of the committee. They will work with his advisers, as well, somewhat, but mostly it's the chairperson himself or herself, and the members of the committee. They will prepare briefings on the issues being discussed and very much help the chair manage the meeting.

The relationship with the Prime Minister's office is an important one, as well, on all that I've mentioned: assisting with the cabinet meetings, assisting with policy. In practice, the Prime Minister's office is organized by sector, so persons in the Privy Council who work in the same sector will deal with their counterparts.

It's very much like a line department. I believe you just heard from Public Works and Government Services. In the minister's office there would be an expert on accommodation. The official would work with that expert as well. So it resembles the day-to-day life of a department on a small scale.

In summary, it's policy co-ordination and advice, Mr. Chairman, working with the cabinet and the committees, and working very much with the Prime Minister's office, day to day.

Mr. Roy Cullen: Thank you. I would love to get into a case study on global warming, say, but perhaps that's for another day.

Looking at renewing the public service, there's been a lot of information out there talking about the low morale and the “brain drain”. It was mentioned that salary is not the only factor but one of a number of factors. You talked about managing the public service in a different environment.

I'm wondering if you can paint us a bit of a picture of how we can improve the commitment of the public servants and their job satisfaction. If people are happy with their job, they're going to serve us all better. What are some of the key dimensions we need to really move on?

Mr. Peter Harrison: One of the documents I referred to, “La Relève: A Commitment to Action”, which came out on October 15, indeed goes into some very practical issues. It isn't a small book.

I don't believe it is the one you're looking at, sir.

The Chairman: It's going to your office directly, Roy.

• 1235

Mr. Peter Harrison: Yes, but if you wish, we can provide extra copies.

If I can speak in terms of managing the public service on a day-to-day basis by public servants, there are really several levels. One is clearly the need for corporate action. Outlined here are things where only with the approval of Treasury Board ministers, for example, or the Public Service Commission, can change take place.

You will notice in the section that deals with this that there are some very significant things. Compensation is one issue, but there are other issues relating the whole question of eventually moving to recruitment and getting employment balance in terms of representing the people we serve under retention strategy. So there are things at the corporate level.

There are also things where the corporation, if I may use that term, at the level of the public service as a whole, needs to support departments in what it is they're doing, things that go beyond the bounds of those departments. So you'll see a number of very key things relating to how that support is provided.

For example, there are programs to help people in terms of getting the broader experience, the horizontal aspect Mr. Bilodeau referred to, programs such as the career assignment program and others that exist, where the support can be given. That too is key.

At the level of the departments, most of the tools are in the hands of the departments themselves in terms of supporting their employees. I think you will read in this document that changing morale and improving morale, giving people the sense of contribution, includes everybody. It's the employee herself or himself; there's a key role for management, and there's a key role for the institution.

You'll also notice in a number of the documents that it is felt by people in the public service all the way across Canada that recognition by the democratic institutions, by politicians and by the public, is important in that, but it's part of it. I think it would be fair to say that it is not an easy challenge and that the toll that has been taken, because of the factors I mentioned earlier, outlined in Madam Bourgon's report to the Prime Minister, cannot be changed overnight. The document here I think should be read in terms of the spirit in which it was written, which is a commitment to actually move and do things as opposed to a blueprint.

The sense I have, having met in the last eight months with literally thousands of people across the country who work in the Public Service of Canada, is that action is what is being looked for to move this around.

This document, however, talks about a period of three years. Maybe it will take five years, maybe it will take seven. Moving an institution in the direction in which you suggest clearly will take a significant amount of effort and support.

The Chairman: Mr. Cullen, is that okay for now? Maybe we'll have time to come back.

Mr. Roy Cullen: Okay.

The Chairman: Madam Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold: Since the beginning, we are talking about the morale and the lack of motivation of public servants. You also said that you provide advice to the Prime Minister and to the other ministers regarding policies they should implement to deal with this situation. Don't you think you should advise the Prime Minister and his ministers to address as quickly as possible the issue of pay equity within the Canadian public service? It would demonstrate to public servants that positive steps are taken to motivate them, and that would also improve their morale.

Mr. Ronald Bilodeau: Mr. Chairman, it is clear, I believe, that the pay equity issue is very high on the list of concerns taken into consideration by the Prime Minister and the President of the Treasury Board. It's a very complex and broad issue which affects many people and has an impact on employees' satisfaction. You are right to point that out, Madam. There are also other elements, including human rights and the question of financial impact.

I can assure you, even if, personally, I haven't worked on this recently, that it remains one of the main issues and one of the main challenges we face regarding the management of our human resources and that, together with our colleagues at the Treasury Board, we try almost daily to address it. I hope we shall soon find a satisfactory solution.

• 1240

Ms. Jocelyne Girard-Bujold: I am very happy to know that not a day goes by that you do not try to solve this problem. Thank you.

[English]

The Chairman: We'll go to Madam Vautour.

Ms. Angela Vautour: I have just a couple of observations. I find it a bit ironic that you're looking at how to improve morale in the office while 45,000 jobs have been cut or will be cut in the federal sector. There's more work, there are fewer workers, a salary freeze, pay equity not settled, contracting out, which is always dealing with different groups, bonuses to upper management; and once all that is done, we go and spend more dollars in studying what is not working in our workforce. I think it's very clear what is not working.

I don't have a question, because I don't think you can answer it, but having worked in the sector for 14 years, I can say it's not the same thing. We know where the cuts are coming. It's always in the public sector that the jobs are cut. I took part in the first program review under Canadian Heritage. It was to find cuts. In the end we created four district offices. We know management got taken care of by doing that.

There is room to manage better, but we have to look at the management level and stop advising to cut at the grass roots, where service to the public is being affected. Do you also do studies of what is happening with services to the public?

Mr. Ronald Bilodeau: The program review cuts and the reductions in the public service have been major; I think we all acknowledge that. We hope those who have been affected directly and had to leave left with proper compensation. Losing your job is never pleasant, and we recognize that, but we believe the departure benefits or the retirement benefits help mitigate at least partially the impact on the persons involved.

We certainly hope those who remain...and there is a factor of unsettlement for those who remain as well, because as all these people have left the work has changed and the pressure builds on those who remain to work harder and harder. Mr. Harrison and his colleagues are very much working to make the workplace better; financially better, we hope, but a workplace better in general terms, in terms of who you work for and how you work, and in job satisfaction. If there is job satisfaction, we're ready to take a lot of shortcomings in other areas.

It remains a large institution, with 200,000 persons, and it doesn't turn around in a day, but I believe Madam Bourgon's efforts...and it's the first time there's been such a systematic focus on human resources. It's not something we boast about, because it should have been done long ago, I agree with you, Madam.

You asked, however, how we deal with the public, and about serving the public. I believe in the past this committee has heard from the secretary of the Treasury Board and the president of Treasury Board. Much work is being done on new delivery arrangements and client satisfaction. The focus is both on the people inside, working in the government, and on the satisfaction of the client, so if you phone the human resource department or the public works department you don't wind up talking to yourself on the tape. It very much has to be both internal motivation of the staff and service to the public. I'm sure your committee, as it moves ahead in its deliberations, will want to look at that.

So I agree, Madam, that it has a major impact, and I hope we will address it properly.

The Chairman: Back to Mr. Cullen.

Mr. Roy Cullen: When we look around us, there are many departmental responsibilities that are being looked at in the context of agencies. I'm thinking of food inspection, tax collection, and more recently parks.

• 1245

From a political point of view there are a number of MPs who feel that the Canadian government is getting more detached from individuals across Canada. I wonder from a policy perspective what the public policy rationale is for moving to a number of agencies in a number of different areas. Is there any sort of generic policy push on this?

Mr. Ronald Bilodeau: An agency can certainly be focused on one or two objectives better than a department in some cases. If you have more autonomy to run national parks, one could argue that the way you do it and the efficiency with which you do it could be enhanced if you had more delegated authority and more decentralized authority. I think that's what's behind this concept, to specialize the folks working there, in a sense, on their mission. Give them more administrative and management flexibility. But it's important also that we keep the focus on the public service at large, that these institutions are not so remote that they become not part of the public service family.

I believe the policy has been successfully implemented in a couple of instances. You mention the taxation agency; that's still before us. It's still not done, as you know, and I believe there's some implementation that remains on the park side as well.

In the private sector, the trend is to decentralize decision-making and facilitate client-business relationships. There's a little bit of that philosophy in that policy, recognizing that Canadians and the Government of Canada are not consumers, that they're not clients, that they have rights, and that even in a more commercial or more operational agency type, you must serve them as fully as a department.

But it's felt that you can decentralize a bit, maintain the minister's accountability and protect it, but decentralize so that there's a more modern management in a sense. At the limit, if everything is an agency, the centre would become very small and the public service would be very different, and that's a risk we have to guard against.

I believe if you look at other countries in the world, we're not the most bold and not the last either in this field. As you know, in the U.K. they've done significant development, and in New Zealand and other places. It's pretty well a trend for management reasons, but I think it has to be balanced all the time against the policy objectives of having a public service that is across the board. I agree with you.

The Chairman: Madam Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold: Once again, I am going to ask you to use your authority within the Privy Council.

I leafed through your document and by accident, I noticed, on page 10, something about focusing on the client with empathy and sensitivity. I find that rather ironic, because currently, with voice mail, this is not the way clients are treated. It's a real pain for the people who need to access government services.

The number of complaints and the level of frustration is absurd, both on the client side and on the manager's. I don't know who invented that, but I can tell you that I, and all the others who have access to... In my constituency office, we get hundreds and hundreds of complaints about this.

Are you going to use your authority as advisor to the Prime Minister's office and to his ministers to try and get them to decide, to convince them that they should, as soon as possible, get rid of these things which are a source of eternal frustrations on the part of the public, and to replace them by people who have a heart, and who are sensitive and sympathetic?

Mr. Ronald Bilodeau: Mr. Chairman, Ms. Girard-Bujold is quite right when she says that the services provided by public servants should be delivered, as often as possible, in a personalized way. People prefer to speak to a human being behind a counter, even if they have to wait in line, rather than to deal with a computer or a recording machine.

I have personally expressed my serious concerns about the use of those devices internally. Sometimes, I call Ms. Nadeau and I end up talking to her machine. Nobody likes that, but unfortunately, this is part of modern life. We have to continue improving the delivery of our services to the public. Steps have been taken in this regard and pilot projects are soon going to be undertaken. But we also need some feedback from our clients, which you get every day directly as members of Parliament. It is important that you give us your views on this issue.

I cannot make the commitment that voice mail is going to be eliminated; it would be a very bold move and anyway, things would not change overnight. However, I can assure you that for the Treasury Board and indeed for all departments, the service we provide to the public is a growing concern. We have to follow in the steps of private sector companies which do not survive if the service they provide to their clientele is not good.

• 1250

If we want our own clients to be satisfied, the service we provide has to be good. We are reviewing the best practices which would allow us to do this, and your comments are quite valuable. I share your reservations regarding voice mail. I agree that we should find more modern, more efficient and more human ways to serve Canadians. Your point is well taken.

[English]

Mr. Jerry Pickard: I totally agree with my colleague across the way.

I just want to make a comment.

I hope that PCO will take into account the vehicles by which the public can gain access to people to listen to their concerns and work within it. Each time voice mail is set up in such a fashion that it is a complicated issue, those complaints then get shifted out of the department's realm and often end up in my office realm. Many of my colleagues perceive this is happening more and more.

There's absolutely no question that, when the efficiencies are looked at, sometimes the departmental efficiencies, which may well be working, turn out to be complaints that an MP receives on a daily basis. It does create problems for our operation. You see, our budgets haven't been increased. Our budgets aren't broadened in order to deal with those extra complaints and services that we end up having to deal with, but in fact by the decisions that are made you do increase, and over the years have increased dramatically, the workload on my office. I see that as a continuing bite into my ability to do my job.

When consideration is given, if we are making major alterations, the communication channel in every community is quite open to an MP's office, or that MP doesn't get elected again. As a result, we pay a burden, we pay a pretty heavy price, for some changes. I hope that's held in consideration.

Mr. Ronald Bilodeau: That is obviously a key concern. The role of the member is an important one in all aspects, but service to the public by government departments should also be a key priority.

As you hear from departments in your work over the coming months, I believe you will be putting emphasis on government operations and how they're delivered. You're in a very good position in this committee to ask those kinds of questions.

I responded earlier to Madame's comment that sometimes our focus is unduly internal in the public service, that we have a lot of focus about the inside but in the past we haven't focused enough on service to the client and we have sometimes relied on artificial mechanisms such as voice mail. There's no substitute for dealing with a person at the counter if you're going into a line department. I can simply make note that, in advising on our day-to-day work and in improving the way the public service delivers, we won't lose that in our objectives.

Mr. Jerry Pickard: One of the points I would emphasize, though—and it has happened more and more, I would guess, within the last three years—is it appears as if many departments use voice mail as a screening mechanism rather than a point of communication. As a result of using it as a screening mechanism, it gets thrown back at me every day.

I, frankly, am quite perturbed by a lot of telephone calls I make.

How many times do departmental officials respond, “I'm not at my desk right now”? It's automatic after the first ring. Check it out. It is not a good, functional service when it's being used as a screening tool.

Mr. Ronald Bilodeau: Absolutely. The intent is to facilitate communication, and if it's used as a way of not communicating—

Mr. Jerry Pickard: It is.

Mr. Ronald Bilodeau —I entirely agree, sir, that it defeats the purpose.

Ms. Angela Vautour: I just want to continue on that same line. If we're really concerned about service to clients...we just lost our Canada Employment Centre in my region, which used to deal with 5,000 claims a year. Now people are waiting two hours in the office closest to that office to file a claim. There are not enough clerks there to help them out, and they want them to use a computer, which nobody knows how to use.

• 1255

On top of that, it wasn't a long distance call for those 5,000 people to the local Canada Employment Centre and now it's a 1-800 number to Bathurst, where they leave a message. Then they call the Canada Employment Centre closest to us, and once in a while they can return a call, counting on the fact that those 5,000 people are now going to that same Canada Employment Centre without any more resources being provided. I can't see how, in any way, shape or form, service to clients was considered in making such a drastic decision.

On top of that, they now wait eight weeks to get their first one-week cheque because the government can't process the claims fast enough for the people to be able to get their first cheque within five weeks. Now it's eight weeks. Certainly service to clients was absolutely not even at the bottom of the list of priorities when that decision was taken.

The Chairman: That was more of a comment than a question.

Ms. Angela Vautour: It's a comment, a form of information.

The Chairman: Okay.

Do you want to leave it at that or do you want to say anything, sir?

Mr. Ronald Bilodeau: I can only say that it's an example where there's work to do to improve the service delivery. We can make a note of it, and perhaps the member should pursue it as well with the responsible department. We'll bring it to the attention of our colleagues.

The Chairman: If I may then, on behalf of all colleagues around the table, I will say thank you to you, Mr. Bilodeau, and to your colleagues for attending today. No doubt we've just seen the tip of the iceberg, one of the great mysteries of government operations, and the PCO maybe in particular, but it is a mystery that I am sure is there to serve all Canadians well. There may be occasion to have you visit with us again sometime.

I will ask my colleagues to stay on for a moment. We will excuse our witnesses.

Colleagues, the clerk has handed out to you a suggested set of witnesses for the greenhouse gas issues. We haven't contacted anybody yet but we will start doing that in the next day or two. Have a look at that draft and please get comments back to me. I'd be pleased to receive them.

I wish to point out that where you see two witnesses in the same hour, for example, Pembina and Sierra, I suggest that they both sit at the table and each give a five-minute or six-minute presentation. Then our questions can be directed to both or either so that we have the whole hour with those two.

We'll have them both at the table—okay, Roy?—and we will be a bit more efficient in terms of our time and their time. They'll be notified of this ahead of time. Your advice on that would be appreciated.

With that we're adjourned.